1982-07-07

Mr. Jack Shields (Athabasca):: Madam Speaker, the new postal regulations being brought into effect by the Canada Post Corporation will cause the closing of rural post offices across Canada on Saturdays. It is apparent that absolutely no thought was given to the rural and farming communities of Canada or their lifestyle, because they rely on the post offices being open on Saturday to conduct their business. Saturday is farmers' day in the small communities across our country as is evident by the resurgence of Saturday farmers' markets. I therefore move, seconded by the hon. member for Kindersley-Lloydminster (Mr. McKnight):
That this House direct the minister responsible for the Post Office to direct Canada Post to provide service on Saturdays for rural Canadians according to their needs.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


ELIMINATION OF SATURDAY RURAL DELIVERIES-MOTION UNDER S O. 43
Mr. Mel Gass (Malpeque):: Madam Speaker, the new Canada Post Corporation is now seriously considering cutting 2,831 Saturday rural delivery routes throughout the country. The fact that this is even being considered shows that the government has no idea of the importance of Saturday delivery of weekend newspapers and other mail for rural customers. Therefore I move, seconded by the hon. member for Hastings-Frontenac (Mr. Vankoughnet):
That this House instruct the Minister of Consumer and Corporate Affairs to guarantee rural customers that rural post offices will remain open on Saturday and that Saturday delivery will continue in rural areas.


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


Some hon. Members:: Agreed.


THE ECONOMY
Mr. Dave Nickerson (Western Arctic):: Madam Speaker, the Mitterrand government of France is now reaping the bitter harvest of its socialist ideas. France has devalued its currency and imposed wage controls on its citizens. Therefore I move, seconded by the hon. member for Brampton-Georgetown (Mr. McDermid):
That the Government of Canada now cease its blind following of French socialist policies of devaluation and wage controls and take immediate steps to restore confidence in our currency and allow market forces to establish the true value of Canadian labour.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


INDIAN AFFAIRS
Mr. Fred King (Okanagan-Similkameen):: Madam Speaker, this House is aware that the fifth report of the Standing Committee on Indian Affairs and Northern Development, by unanimous motion of the entire committee, made recommendation that the minister appoint an independent inquiry into certain activities of the B.C. regional office. The House may not be aware that the minister has not put in place any type of review despite the recommendation of officials of the department which he heads. Therefore I move, seconded by the hon. member for Cariboo-Chilcotin (Mr. Greenaway):
That this House require the Minister of Indian Affairs and Northern Development to take steps immediately to provide the independent inquiry into the activities of the regional office in Vancouver specific to the affairs of the West Bank Indian Band as well as other economic development ventures, which was demanded by the standing committee.


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

July 7, 1982


Some hon. Members:: Agreed.


Some hon. Members:: No.


NUCLEAR ENERGY
Mr. Bill Blaikie (Winnipeg-Birds Hill):: Madam Speaker, the Minister of National Health and Welfare has consistently rejected the requests of the concerned citizens of Algoma-Manitoulin to look into the safety of the proposed uranium trioxide refinery in Blind River, Ontario. The uranium refinery in Port Hope, Ontario, has been found releasing radioactive waste into the atmosphere exceeding permissible concentrations; AECL has acted irresponsibly in issuing licences and inadequately monitoring radioactive emissions at the Port Hope refinery, and AECL is now allowing another uranium refinery to be built at Blind River, Ontario. I move, seconded by the hon. member for Beaches (Mr. Young);
That the Minister of National Health and Welfare advise the Minister of Energy, Mines and Resources to discharge the AECL of its duties and responsibilities in the proposed Blind River refinery immediately, and that an independent team of inspectors be established with the mandate to enter the Port Hope refinery to undertake an independent base line health study and decide whether the Blind River refinery should proceed.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

[ Translation]


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 end the debate on second reading, thereby ignoring the urgency of this legislation, I move, seconded by the member for Beauce (Mr. Lapointe):
That this House should consider the bill without delay, in order to give it second and third reading, and that it should sit outside its ordinary sitting hours so that the bill may receive royal assent before the summer recess.


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


Hon. Erik Nielsen (Yukon):: Madam Speaker, 1 understand there have been discussions between the Minister of Consumer and Corporate Affairs (Mr. Ouellet) and our spokesman, the hon. member for Hamilton-Wentworth (Mr. Scott), with respect to the disposition of this bill.
It is my understanding that the minister has said the government would be amenable to setting up a special subcommittee of the Standing Committee on Health, Welfare and Social Affairs to refer the subject matter of the bill to that committee for inquiry by the special subcommittee so set up. In return for that, it is my understanding that the proposal is that the bill go through all three stages, including committee of the whole. If the government is prepared to confirm that proposal, as well as confirm the ability of the subcommittee to examine the report of the board of inquiry into the effects of UFFI, we entirely agree to that proposal. If the government is prepared to make that commitment, we are prepared to put the bill through on Friday.


Mr. Ray Skelly (Comox-Powell River):: Madam Speaker, the first thing is that the matter of expediting passage of the bill is extremely important. Certainly the general feeling in this House is that that bill should pass quickly through the House on second reading, move from second reading to committee study, and certainly it should come back. But there are several items that would be conditional there, I am sure.


Some hon. Members:: Oh, oh!


Raymond John Skelly: All members of the House would accept the following principles, I am sure. Discussions have been going on between the Conservative critic responsible for this matter, the New Democratic Party member responsible for this matter, and the minister. What has come to pass over a period of time is that there has been confusion, and the minister has been working hard with those members and other critics to resolve that confusion.
If I might just make another few quick statements as to where the confusion arises-


Mr. Hnatyshvn:: Right there.


Raymond John Skelly: -it starts from the following.


Mr. Baker (Nepean-Carleton):: You are talking it out.


Raymond John Skelly: 
Some hon. Members:: Time!


Raymond John Skelly: Beyond that, he has given an indication that he would produce a reference to his House leader asking for a special subcommittee, since there is not time remaining, to consider this matter and facts that were not allowed to come out in front of the board of review, such as who approved this substance. That information is vitally important in the legal action which will result.


Some hon. Members:: Question!


Raymond John Skelly: Madam Speaker, the minister, myself, and the critic for the Conservative Party have been working vigorously to resolve this. There are some conditions which will expedite passage of this bill quickly through the House, and I am certain that we know them. Deliver us the board of review report; give us the reference to the subcommittee to carry out this study-


Some hon. Members:: Question, question.


Raymond John Skelly: Have the minister call another meeting with the home owners and deliver to them his commitments in writing so that there are a set of minutes which express the minister's-


Madam Speaker:: Order, please. It being 2.15 p.m., I must interrupt the debate. Oral questions.


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


Madam Speaker:: The Chair cannot entertain points of order at this time.


Erik Nielsen: Madam Speaker, yes, you can.


Walter David Baker: Yes, Madam Speaker, you can. We would understand.



ORAL QUESTION PERIOD


Mr. Bill Clarke (Vancouver Quadra):: Madam Speaker, my question is for the Minister of Finance. The minister will know that over 1.5 million working mothers in Canada who must pay child care expenses have been victimized once again by the minister's latest budget which has left unchanged the child care expense deduction. Child care costs have soared. The minister, by deindexing personal exemptions, will force these working mothers to bear a portion of the $1.3 billion extra tax to be generated by this measure.
I want to ask the minister again why this injustice was not changed despite repeated demands from this side of the House,
Oral Questions
despite representations by women's groups to the minister, and despite recommendations of the federal task force on domestic workers, which recommendations were released by the Department of Employment and Immigration in 1981. The task force said that child care expenses are as legitimate as other business expenses.


Hon. Allan J. MacEachen (Deputy Prime Minister and Minister of Finance):: Madam Speaker, I disagree with the hon. member when he states that the budget has victimized persons raising families. In fact the capping of the indexation on family allowances has been more than compensated. For families receiving the child tax credit there is an increase for this year of $50. The hon. member ought to know that the most needy families, 1 believe those with incomes of less than $30,000, have been more than fully protected as a result of the capping of indexation on family allowances.
The hon. member raises, of course, another question, namely, the over-all matter of how child care expenses are treated under the Income Tax Act. As I have had occasion to tell the House on previous occasions, the matter is the subject of a review by an interdepartmental committee under the leadership of the minister responsible for the status of women.


PLIGHT OF SINGLE-PARENT FAMILIES
William Hillary (Bill) Clarke: Madam Speaker, does the minister not realize that the $50 extra child tax credit is a small token when compared to the extra burden of the $1.3 billion tax increase which these women are going to have to pay and the extra tax that they are having to pay because of the child care expenses. These average about $4,000 a year while the minister allows them a deduction of only $1,000 per year per child. This is way in excess of the $50. According to the report of the National Welfare Council, 41.5 per cent of families headed by women were below the poverty line in 1980. These women desperately need the relief that this side of the House and these groups are requesting.


Allan Joseph MacEachen: Madam Speaker, I think it is important to keep separate the issues which the hon. member has raised in his two questions. The first issue that has to be examined is the impact of indexation of family allowances on recipients of the child tax credit, namely, those families most in need in the country. For those particular families whose family allowance indexation will be capped there will be a more than compensating payment in the child tax credit. As I recollect, the loss per annum per child is about $17, and again for this year the child tax credit is $50 per child. For those families the result of the budget is to make them better off. That is one aspect that has to be clarified.
The hon. member has also drawn in quite a separate issue, and that is how the whole question of child care expense is treated under the Income Tax Act. That has not been dealt

July 7, 1982
Oral Questions
with or affected in any way in the budget, nor was it intended to be affected, because the matter is worthy of very serious attention. It is a matter of concern. Many groups have expressed an interest, with the result that at present it is under the interdepartmental examination I have mentioned, with a view to having some conclusions and recommendations which might be dealt with at a later date. I would ask the hon. member please not to mix up quite separate issues in the way he has done in his two questions.


William Hillary (Bill) Clarke: I think it is this minister who is mixed up.


INTERDEPARTMENTAL COMMITTEE REPORT
William Hillary (Bill) Clarke: Madam Speaker, my supplementary question is directed to the minister of state responsible for the status of women. Some four months ago in the House, and again today, the Minister of Finance said that he cannot act on child care expense deductions because the interdepartmental committee, which I understand the minister of state heads, has not found it possible to reach a conclusion. Will the minister of state tell the House when this committee will be reporting, so that some action could be taken on behalf of these people?


Hon. Judy Erola (Minister of State (Mines)):: Madam Speaker, the Minister of Finance was completely correct when he said that it is a very complex question which requires a great deal of study. I should like to assure the hon. member that we have been studying it for the past six months, and that we will be making a report shortly to the Minister of Finance.


PUBLIC SERVICE
Mr. Gordon Taylor (Bow River):: Madam Speaker, my question is also directed to the Minister of Finance. It involves about 120,000 retired public servants, 30,000 retired Armed Forces people, and 5,000 retired members of the RCMP. Given that former public servants who worked from 30 years to 50 years for the federal government contributed 6.5 per cent of their earnings for basic pensions plus one per cent for indexing in order to secure a full pension when they retired- this was not only a condition of their employment; it was confirmed by law in the Supplementary Retirement Benefits Act-and given that the June budget has capped the indexing of these pensions at 6 per cent, under what authority is the government doing this? Why is the government breaking its promise to former employees who are in the sunset years of their lives, by cutting off part of their pensions when many of these people are barely making both ends meet now?


Allan Joseph MacEachen: Madam Speaker, the hon. member
referred to the full pensions which are being received and will be received by retired public servants. Obviously there is no intention to affect the pension rights of retired public servants. What is intended is to cap the indexation at 6 per cent. Public servants will obviously receive increases in subsequent years, but the increases will be 6 per cent and 5 per cent. The impact, of course, of that capping of indexation can be minimized, and will undoubtedly be minimized as we make progress toward the 6 per cent target for inflation.
The hon. member should join us in the campaign to bring about a 6 per cent inflation rate because, in so doing, he will be coming to the aid of these retired public servants. The hon. member asked under what authority. Obviously that authority will be sought from Parliament by way of legislation in order to achieve the objectives of the government.


Gordon Edward Taylor: Changing the law might make it legally right, but it will not make it morally right. This is actually a double cross of people who worked from 30 years to 50 years to build up pensions and who are not now in the $30,000 bracket which the minister mentioned but are having a hard time making both ends meet; and the minister will now take some of that away from them.


FUNDING OF INDEXING
Gordon Edward Taylor: Madam Speaker, will this not really make every public servant of the federal government today wary of the fact that they are now contributing toward pensions and make them worry about the future when some future government may suddenly cut their pensions in half? This is not playing the game with former employees. The act makes present employees wary of this particular thing. I suggest to the minister that this is confiscation of something that does not belong to the government. Is not the index fund already able to carry full indexing?


Madam Speaker:: Order, order!


Allan Joseph MacEachen: Madam Speaker, 1 am not quite sure what the question was because I did not hear the peroration of the hon. member. However, I would tell him that I do not believe that public servants will be wary of this action because I think that retired public servants will understand the reasons for this change, and the reasons why a sacrifice is asked of them. If the hon. member has read some newspapers he will have noticed that a number of retired public servants were quite prepared to accept this policy and not accept the rather defeatist attitude of the hon. member.
I would remind the hon. member that while the pensions of the public servants are indexed and will continue to be indexed, the pensions of most retired persons from the private sector are not indexed at all.

July 7, 1982


THE ECONOMY
Hon. Edward Broadbent (Oshawa):: Madam Speaker, my question is directed to the Prime Minister. It concerns both the consistency and the credibility of the government's so-called war on inflation. Yesterday in the House, the Prime Minister said, in response to a question, that no matter how high inflation goes, workers would be expected to hold their wage demands down to 6 per cent or, in his words, legislation would have to be considered.
Just a week ago the Minister of Finance said in the House, when dealing with the same question, that the question of comprehensive wage and price controls was not in the cards. Will the Prime Minister clarify this uncertainty? Are wage and price controls a possibility that will be inflicted upon the people of Canada this fall, or are they not?


Right Hon. P. E. Trudeau (Prime Minister):: Madam Speaker, I am very grateful to the leader of the NDP for giving me this occasion to clarify my answer which, I agree, if taken out of context, could mean that I was advocating the introduction of over-all controls. That is not what I meant.
If I may refer the hon. member to the context in which I gave the answer, there had been a series of questions, including some asked by members of his own party, concerning regulated prices of commodities. My answer should be added to the answers given by the Minister of Finance in that sense, that we are trying to control regulated prices. We are going to try to do it by-


Mr. Crosbie:: Osmosis.


John Edward Broadbent: Smoke signals.


Pierre Elliott Trudeau: -by the word of the budget. There may be some cases where prices may have to be controlled by legislation. That is all that 1 wanted to indicate. There was no other intention on my part, and I apologize if there was confusion. But 1 once again refer the hon. member and other commentators to the context. I was not referring to over-all price and wage controls.
I repeat what I have said previously, and what the hon. member has quoted the minister as saying, that we have no plan and no intention to introduce over-all price and wage controls. We have confidence that the Canadian people, if appealed to, and if they think it is fair, will co-operate, as some members opposite are hesitant to do. They will co-operate in reducing inflation from 11 per cent to 6 per cent so that we can remain in the competitive game with the United States and other societies which have reduced their inflation.


Some hon. Members:: Hear, hear!


FUTURE RATE OF INFLATION
John Edward Broadbent: Madam Speaker, 1 would like clarification on a second question concerning the efficacy of the government's approach to holding down prices.
Oral Questions
It is quite clear what it plans to do-in an unfair way in our view-with wages in this country. In terms of the price approach I would ask the Prime Minister, given the answers he provided today on this question and that the Minister of Finance and others provided yesterday, which clearly indicated we will not get legislation to control prices, even within federal jurisdiction, like we are in controlling wages, is there any good reason for the working person in this country to believe that inflation will be held down to 6 per cent in the coming year.


Pierre Elliott Trudeau: Madam Speaker, I would imagine that that answer could only be given from the point of view or the perspective one holds of the willingness of the Canadian people to co-operate voluntarily to reduce the plague of inflation. I must point out that in his preamble the hon. member seemed to indicate that he did not quite understand my answer.


John Edward Broadbent: No, I did not. I thanked you.


Pierre Elliott Trudeau: I indicated that, in the case of public service wage guidelines, we are introducing them so that the rates will be 6 per cent and 5 per cent over the next two years. I indicated, repeating what the Minister of Finance said yesterday, that we intended to see prices operate in the same way, reaching levels of 6 per cent and 5 per cent. In some cases, and that is the matter of legislation to which I was referring yesterday, it might have to be legislated, as in the case of special prices which cannot be brought down otherwise. But, as a general rule, the Minister of Finance indicated in the budget and in subsequent answers that we intend to have the various boards and those who administer prices implement the 6 per cent and 5 per cent prices, with the exceptions explained by the minister.


INCREASE IN GOVERNMENT REVENUE
John Edward Broadbent: I am sure, Madam Speaker, I appreciate the answer, but 1 frankly say that 1 do not believe inflation can be held down to 6 per cent this year. I do not believe the people of Canada believe it and, most seriously, in-


Some hon. Members:: Oh, oh!


John Edward Broadbent: -the context of government policy, I do not believe the government does. I pin my assertion on this question: if the government genuinely believes that inflation will be held down to 6 per cent in the coming year, how could it make budget forecasts that would provide almost $1.5 billion in additional revenue from those who pay taxes, from family allowance recipients and from pensioners? The whole assumption of the budget is that the government will get additional revenue, about $1.5 billion, which can only come in if inflation is well beyond 6 per cent. I would like the Prime Minister to respond to that.

July 7, 1982
Oral Questions


Pierre Elliott Trudeau: Madam Speaker, the hon. member has complained several times in this House because expenditures and revenue projections had to be revised. This is obviously one case where we will have to revise the projections when inflation comes down to 6 per cent this year or next year.
The hon. member quite unequivocally states that he does not believe that a 6 per cent rate of inflation can be reached this year. I think he is right, and we are not attempting to do that this year; we are attempting to do it next year, and that is what the budget states. That is why the 6 per cent cap on the indexing of pensions and so on will be affected as of next year, not this year. Whether the hon. member believes that it can be reached next year or not, I say that this government does, if we have the co-operation of the Canadian people.
The question the hon. member should be asking is: should we be bringing inflation down to 6 per cent? Since we see that our main competitor and trading partner, the United States, is in the 6 per cent or 7 per cent range, is it not important and imperative that we bring inflation down to 6 per cent?


Some hon. Members:: Hear, hear!


Mr. Andre:: Wrestle it to the ground!


Pierre Elliott Trudeau: Therefore, it is not just a figure picked out of a hat. It is an imperative figure if we want to remain competitive. The only question we must then ask is: can Canadians reach that by force of will, co-operation and sharing, or must they be legislated, forced into doing that? We on this side, because we are small and big "1" liberals, believe that we can appeal to the Canadian people to have this kind of co-operation.


Some hon. Members:: Hear, hear!


PRIME MINISTER'S COMMENT ON POSSIBLE INTRODUCTION OF LEGISLATION
Right Hon. Joe Clark (Leader of the Opposition):: Madam Speaker, my question is also directed to the Prime Minister. As reported in yesterday's Hansard at page 19044, he said:
-6 per cent inflation can only be reached voluntarily if people co-operate. Otherwise, there will have to be legislation.
The reference was clearly with regard to legislation affecting people. That is the unquestionable interpretation of the language that he used. He was referring to people, not agencies. Will he tell the House of Commons exactly what is the kind of legislation affecting people, to which he referred yesterday?


Pierre Elliott Trudeau: Madam Speaker, 1 thought I had explained that in an answer to the question of the Leader of the New Democratic Party. I can only refer the Right Hon. Leader of the Opposition to that answer. I do admit that there was some confusion since the
interpretation given far and wide was that 1 was referring to over-all controls. I can give the Leader of the Opposition the assurance that I did not refer to over-all controls. The reference to people concerned people in the private sector who are asking for increases higher than 6 per cent, for instance, from regulating boards, those who would apply to the CRTC and to the CTC, and the people on the boards themselves.
What 1 am saying is that people in the opposition, as well as the opposition collectively, must accept that 6 per cent is an imperative goal that we must reach. They must also accept that it can only be reached voluntarily or by the force of legislation. And people will do it.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: What people will do if they are given the chance, either nationally or in the three byelections which have not been called, will be to throw this government out.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


APPLICATION OF CONTEMPLATED CONTROLS
Charles Joseph Clark: I am
interested in knowing precisely what kind of legislation the Prime Minister was threatening in his reply yesterday. Was he saying then, or is he saying now, that the legislation respecting controls being contemplated by the government will affect only regulatory and other agencies?


Pierre Elliott Trudeau: Madam Speaker, the answer is that in that question and answer exchange, yes, I was referring to regulated prices, and that was the question I was attempting to answer. When the Leader of the Opposition says that the only interest of the people is in throwing this government out, that may or may not be true, but 1 do think that it explains the attitude of the Leader of the Opposition and of his whole party. He does not want inflation to come down to 6 per cent.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Harvie Andre: Wrestle it to the ground!


Pierre Elliott Trudeau: He wants this appeal to the free co-operation of the Canadian people to fail so that, not having reached 6 per cent inflation, he will be able to brag that the budget failed. He will not be concerned about the failure of the Canadian people to compete with others.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: I trust that when the Prime Minister is prepared to tell us to what other fields he intends to apply legislative controls, he will advise the House.
July 7, 1982


REQUEST THAT SPECIAL COMMITTEE REVIEW GOVERNMENT EXPENDITURES
Charles Joseph Clark: Madam Speaker, let me come to another question which will deal with the problem of inflation in the country. It relates to government spending. The Prime Minister will know that on several occasions I have proposed the establishment of a special committee of this House of Commons to inquire once again, in an exhaustive way, into the spending estimates of the Government of Canada to find where we can save millions and perhaps hundreds of millions of dollars. We know that the government is spending $110,000 to teach Madam Benoit how to cook in metric.


Some hon. Members:: Oh, oh!


Charles Joseph Clark: We know that the Government of Canada is spending $500,000 to buy free briefcases for public servants. We want to know what other savings we can make. We want this Parliament to be effective in finding and saving hundreds of millions of dollars in government spending that need not be spent.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Will the Prime Minister, in the interest of fighting inflation, let the people who sit in this Parliament conduct that kind of inquiry? Will he agree right now to make a reference which will establish a special committee, or allow a standing committee to review the estimates, to save hundreds of millions of dollars in spending which the government need not be spending?


Pierre Elliott Trudeau: Madam Speaker, just as the first question indicated the will of the opposition, which is to ensure that we fail in bringing inflation down to 6 per cent, the second question indicates how he intends that that failure be achieved, because he talks about Madame Benoit rather than facing the issue as to whether inflation can be brought down in Canada voluntarily through co-operation by the opinion leaders, the political leaders, whether they be the premiers or the leaders in this House. That is the first question-can it be done voluntarily or must it be done by legislation? In answer to the question, I have indicated that I do not intend to legislate it. The legislated means are already before the House as they apply to the public servants and to members of this Parliament. The other possibility I indicated had to do with regulated prices, but I had not intended, nor do I intend to indicate that there is any form of over-all controls contemplated.
The hon. member made a suggestion about controlling expenses. There is such a thing as a Public Accounts, expenditures and estimates committee of the House of Commons. If the opposition wants to do its job in this committee, it can search out expenditures that can be cut. If it does that, it will be doing a service to us all. I do not say that some expenditures
Presence in Gallery
cannot be cut. 1 am saying that you cannot attack the thrust of this budget and evade it by talking about Madam Benoit or Mr. Gerussi. The question is: do we want inflation to come down or not, and are we prepared to co-operate?


Some hon. Members:: Hear, hear!


POWER OF PARLIAMENT
Charles Joseph Clark: Madam Speaker, the fact is that you do not get inflation down when you run $20 billion deficits. A way to reduce a $20 billion deficit is to eliminate spending on unnecessary projects and undertakings. The Parliament of Canada is the only agency which has the authority and the power to identify and eliminate that spending, if the government gives its permission to a committee to look for those savings. Why will the Prime Minister not give Parliament the power to look for those savings and save hundreds of millions of dollars of spending that we do not need to be wasting?


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Madam Speaker, the Right Hon. Leader of the Opposition asks why we do not give Parliament the power. The answer is very simple. Parliament has that power. The Public Accounts Committee is there. The estimates committees are there. Department after department can be looked at, and suggestions made. They can do that just as easily as any special committee set up by the hon. member. The right hon. member's question suggests that the way in which we can reduce the $20 billion deficit is to make such cuts. I put to him that probably we can bring down the deficit so much by making some cuts, and we are happy to have him find and state areas where we can make savings. I just want to remind the House that the percentage of total spending by government in the area of goods and services is the same today as it has been for the last ten years. The real way in which we can bring down the $20 billion deficit is by getting this society to grow economically, and to grow economically-


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: If the path of economic recovery can be followed, the way in which it can be followed is by bringing inflation down to 6 per cent or below. That is the way to reduce the deficit.


PRESENCE IN GALLERY OF MINISTER DELEGATED TO MINISTER OF INDUSTRY OF FRANCE, RESPONSIBLE FOR ENERGY
Madam Speaker:: I have the honour of drawing the attention of the House to the distinguished presence in our gallery of

July 7, 1982
Oral Questions
Mr. Edmond Herve, French Minister delegated to the Minister of Industry, responsible for Energy.


Some hon. Members:: Hear, hear!


EXTERNAL AFFAIRS
Mr. Ian Watson (Chateauguay):: Madam Speaker, my question is for the Prime Minister. Has Canada been invited to participate in the most recently announced international peacekeeping force in Lebanon? If not, does the Prime Minister envisage any circumstance whereby Canada could take part in an international effort such as a peacekeeping shield, which would relieve the pressure on the suffering civilian population of Beirut and would permit Canada a role in the ultimate goal of a larger, permanent, Middle East settlement?


Pierre Elliott Trudeau: Madam Speaker, I believe it is fair to say that Canada has an unblemished record in so far as peacekeeping operations are concerned. I believe we participated in every such operation, barring one, set up by the United Nations since its inception. Therefore, we certainly would be happy to assist in ways in which we could.
As the Secretary of State for External Affairs said very recently, and to my knowledge, we have not been approached to participate in any such operation. If we were approached, we would bring the same kind of consideration to the matter that we have in the case of previous requests, whether that participation would be in line with the desire of the various parties to the conflict. Perhaps even more important, as the Secretary of State for External Affairs said, would it be under the aegis of the United Nations? If these two conditions were not forthcoming, we would obviously be much less interested in such participation.


MINES AND MINING
Mr. Jim Fulton (Skeena):: Madam Speaker, my question is directed to the Minister of State for Mines. The minister knows that the mining industry is in a severe state of depression; 10,000 of 25,000 miners in Quebec are laid off, 10,000 out of 19,000 in British Columbia, and 40,000 more in Ontario, the Yukon and Newfoundland, meaning that over half of the work force in the mining industry in Canada is out of work at this time. In Calgary on June 3 the minister promised incentives to the industry, particularly the juniors. Can the minister explain, in light of the recent budget, why there were
absolutely no specific initiatives to help the mining industry get going again?


Judith A. Erola: Madam Speaker, as I have stated on a number of occasions in this House, the problems with the mining industry are due to the fact of world prices. Last evening I met with the chief executive officers of most of the major mining companies. They reinforced that statement by saying that the Government of Canada had no effect on mineral prices. The fact is that these prices are a world market situation that will not improve until the world economy, particularly that of the European Common Market and the American market, improves.
In the meantime, this government is taking every measure possible to alleviate the suffering of those who are out of work, through the use of such things as Section 38. I have stated on a number of occasions in this House that I am dismayed at the lack of appreciation of Section 38. I would urge members on the other side, particularly in those areas where there is a heavy mining industry, such as British Columbia, to inform the companies and the people of those communities of Section 38 and its possibilities.


LOANS TO MINES IN OTHER COUNTRIES
James Ross Fulton: Madam Speaker, my supplementary question is directed to the Minister of Finance. I am sure he is aware that earlier this week the United States Senate announced that it would stockpile about one million tonnes of copper in that country to keep its sagging copper mining industry going. The government's much touted mining task force, which was supposed to travel around this country, has not done any travelling except once to Newfoundland.
With nothing in the budget, can the minister explain why the government just gave $200 million at 10 per cent interest to the El Cerrejon coal mine in Columbia, and $100 million at 10 per cent to the Rio Tintaya coppero mine in Peru? Does the minister not think that money at 10 per cent to some of the Canadian mining operations would help to keep the more than 60,000 miners in Canada at work?


Allan Joseph MacEachen: Madam Speaker, would the hon. member suggest that we not engage in these international transactions?


Some hon. Members:: Yes.


Allan Joseph MacEachen: Does he suggest that we not engage in these projects in other countries, that provide very substantial job opportunities in Canada? Is he suggesting that we add to our unemployment by refusing to participate in opportunities that are available to Canadian firms abroad? Is that his view?
July 7, 1982


THE ECONOMY
Miss Pat Carney (Vancouver Centre):: Madam Speaker, since the Prime Minister is unable to explain how he can achieve a 6 per cent rate of inflation when his government has increased its spending by 20 per cent, my question is addressed to the Minister of Finance. Madam Speaker, thousands of Canadians are in danger of losing their jobs because their employers are so crushed by interest rates that they are in secret bankruptcy; they are in a state of soft receivership. The only reason they keep going is so that they can quietly dispose of their assets and retire their debts, rather than unload them at firesale prices. And, Madam Speaker, I am talking about forestry companies-


Madam Speaker:: Order. Hon. members will notice that questions and answers have been quite long and that there have been exchanges that have very much resembled debate during the question period. I would urge hon. members, during the time that is left, to be very brief in their questions, and other members to be very brief in their answers.


Pat Carney: Madam Speaker, since the government is prepared to stand aside and see small and medium-size companies go broke, why is it willing to bail out the big companies like Massey-Ferguson, Dome Canada, and possibly Maislin Industries?


Allan Joseph MacEachen: Madam Speaker, I will be brief and say that the premise of the hon. member's question is wrong. In the budget we have provided several hundred millions of dollars to ensure that small business will survive.


Some hon. Members:: Hear, hear!


SIZE OF GOVERNMENT DEFICIT
Pat Carney: Madam Speaker, my supplementary question is also addressed to the Minister of Finance. I refer to his inability to understand how bad economic conditions are in western Canada. This is the reason his government cannot elect any members west of the Red River valley.


Some hon. Members:: Order.


Pat Carney: My second question has to do with the minister's projection of a $20 billion deficit. His ministers and his deputies tell us this is based on a third quarter and fourth quarter recovery.
Since the Maritime fishing industry is depressed, since Quebec companies are going bankrupt, and B.C. companies are shut down in forestry, and the mining industry is shut down across the country, where is this miraculous third quarter and fourth quarter recovery going to take place? How
Oral Questions
can he justify the $20 billion deficit on a third quarter and fourth quarter recovery? What is the real size of the deficit going to be?


Allan Joseph MacEachen: Madam Speaker, in the interest of brevity, the real size of the deficit is the size projected in the budget statement.


INDUSTRY
Mr. Gordon Gilchrist (Scarborough East):: Madam Speaker, the rhetoric and recovery are astonishing here in this exchange regarding this budget.


Madam Speaker:: Order. For the rest of the question period, briefly, questions.


James Gordon Gilchrist: The communications industry has become prominent in microelectronics and it has raised many millions of dollars and has created jobs. The imported computers, on the other hand-


Some hon. Members:: Oh, oh!


Some hon. Members:: Order.


James Gordon Gilchrist: May I base my question, Madam Speaker-


Madam Speaker:: That is a preamble, obviously, if the hon. member knows what a preamble is. If he would go directly to the question, it would be very helpful.


James Gordon Gilchrist: I am trying to arrive at a conclusion, Madam Speaker.


Some hon. Members:: Oh, oh!


An hon. Member:: Arrive at a question.


Some hon. Members:: Oh, oh!


James Gordon Gilchrist: Will the Minister of Finance consider amending the budget further to enhance the opportunities of the computer section of our high technology industry, which is suffering a $1.75 billion deficit for last year, in contrast to the communications industry which generated a profit last year, and vitally needed dollars, and jobs?


Allan Joseph MacEachen: Madam Speaker, 1 think that the last two questions from the two members of the official opposition show how confused their policies are.


An hon. Member:: Oh, oh!


Allan Joseph MacEachen: The first hon. member belaboured me in several questions about the size of the deficit, and how terrible

July 7, 1982
Oral Questions
it was. Then, the next questioner got up and said, "Add to the deficit." That is their economic policy.


Some hon. Members:: Hear, hear!


REQUEST THAT GOVERNMENT INVEST IN HIGH TECHNOLOGY
James Gordon Gilchrist: Madam Speaker, I would ask this supplementary. Would the minister be prepared to amend the budget to invest in high technology, not add to cost, to create the $4.5 billion worth of jobs which were lost to Canadians last year while we spent the money keeping foreigners employed, and help the vitally needed job-creation sector and the wealth-generating sector of Canada through support for high technology in the budget?


Allan Joseph MacEachen: Madam Speaker, we have already been giving extensive support to research and development and to high technology-


Charles Joseph Clark: Out of the country.


Allan Joseph MacEachen: -in Canada. That has been evident in many of the firms that are participating effectively in high technology industries, including Mitel. The hon. member is asking for enriched tax incentives. The effect of that would be to reduce revenues and add to the deficit. That is the deficit which his right hon. leader said a few moments ago was too high. When are you going to get your act together? Why do you not take your Wednesday mornings to discuss economic policy instead of the leadership of the party.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


PUBLIC SERVICE
Mr. Jim Manly (Cowichan-Malahat-The Islands):: Madam Speaker, in the last reported year, former civil servants received an average pension of only $7,915 per year, and surviving spouses a magnificent total of $2,171 per year. My question is directed to the President of the Treasury Board. How can the government justify robbing former employees of the indexing factor when they have already paid 1 per cent of their income to cover inflation? Will the government be asking private pension plans to follow this method of fighting inflation by robbing former employees?


Hon. Donald J. Johnston (President of the Treasury Board):: Madam Speaker, as has already been pointed out, most of the private pension plans do not have the indexation benefit. The hon. member overlooks this completely in that inflation next year, with the help of all Canadians, and with
the help of members in this House, will be at 6 per cent, and accordingly no one will suffer.


An hon. Member:: Will you resign when it goes beyond 6 per cent?


PENSIONS
Mr. Neil Young (Beaches):: Madam Speaker, my supplementary is directed to the Minister of Finance. The minister knows that any reduction in the purchasing power of pensioners has to come from food, shelter and clothing. If the minister cannot guarantee that inflation will come down to 6 per cent in 1983 for pensioners, will the minister give pensioners a guarantee that he will retroactively make up the difference between 6 per cent and the actual rate of inflation in 1983?


Allan Joseph MacEachen: Madam Speaker, I would be in a better position to provide that guarantee if the hon. member and members of his party decided to get behind the government and reach the objective of 6 per cent inflation.


CHARTER OF RIGHTS
Hon. Bryce Mackasey (Lincoln):: Madam Speaker, my question is addressed to the President of the Treasury Board as the minister responsible for Bill C-124. The minister indicated in question period that it was not his intention that Bill C-124 would in any way supersede the provisions of the Charter of Human Rights or the provisions of the Canadian Human Rights Act. The question is whether or not he is prepared to introduce an amendment to that Bill C-124 to remove confusion and ambiguity, particularly in Clause 9 which does leave the impression that legal interpretation could mean that Bill C-124 does to some degree minimize, negate or offset the provisions of the Human Rights Act.


Donald James Johnston: Madam Speaker, indeed I would not read Clause 9 that way, but if there is any ambiguity in that section, and I believe that there may be, I will move to ensure certain provisions of the Canadian Human Rights Act are enforced with respect to people getting equal pay for work of equal value, as was raised by the member for Vancouver East yesterday, that will be taken care of and those rights will not be affected.
July 7, 1982



THE ROYAL ASSENT

['1 have the honour to inform the House that the Clerk of the House has laid upon the table the reports of the Clerk of Petitions stating that he has examined the petitions presented by hon. members on Tuesday, July 6th 1982, and that he finds that they meet the requirements of the Standing Orders as to form.']
Madam Speaker:: 1 have the honour to inform the House that a communication has been received as follows:
Government House Ottawa
July 7, 1982
Madam:
I have the honour to inform you that the Hon. Brian Dickson, Puisne Judge of the Supreme Court of Canada in his capacity as Deputy Governor General, will proceed to the Senate Chamber today, the 7th day of July, 1982, at 5.45 p.m., for the purpose of giving Royal Assent to certain bills.
1 have the honour to be.
Madam,
Your obedient servant,
Jacques Noiseux Deputy Secretary to the Governor General
* *
*



Madam Speaker:: 1 have the honour to inform the House that the Clerk of the House has laid upon the table the reports of the Clerk of Petitions stating that he has examined the petitions presented by hon. members on Tuesday, July 6th 1982, and that he finds that they meet the requirements of the Standing Orders as to form.



POINT OF ORDER


Erik Nielsen: Madam Speaker, I rise on a brief point of order arising out of the conduct of the proceedings under Standing Order 43.
You will recall that at the end of the 15-minute period normally allotted for motions under Standing Order 43, I attempted to raise a point of order. The Chair commented at that time that it was impossible to do so, undoubtedly thinking that the proper time was at the end of the question period.
I submit to you, Madam Speaker, that it was never the intention behind the rule changes to confine the raising of points of order and questions of privilege strictly to the end of the question period. Today's proceedings is evidence of how the strict application of that sense of the rules is very wrong.
It was my intention to raise the point of order and to suggest that the Chair seek the unanimous consent of the House not to see the clock and to put the question on the motion under
Point of Order-Mr. Nielsen
Standing Order 43 that was before the Chair. It does no good for me to raise the point of order at this time because we are 45 minutes beyond the event.
Probably all members on the government side, and certainly all members in the official opposition, would have liked to have seen that question put.
I would suggest, Madam Speaker, that in the future the Chair entertain points of order of that nature. It will be necessary for the Chair to hear a line or two at least in order to establish whether a valid point has been raised. Perhaps the Chair might take that into consideration in the event that similar occasions might arise in the future. I merely raise it for that purpose at the present time.


Raymond John Skelly: Madam Speaker, certainly the Chair was correct in handling the matter the way it did. If a clever stunt is about to be pulled, the correct procedure would be that there be consultation on an important process such as this. The assumption that this took place in conjunction with the Conservative and Liberal members on this is not quite correct. There are serious matters to be criticized, and I think Your Honour was absolutely correct in the procedure followed.


Madam Speaker:: My knowledge of the rules is that points of order may not be entertained in the course of hearing motions under Standing Orders 43 or in the question period. That is not in the Standing Orders of course, but it is my understanding of the way this particular matter was to be interpreted so as not to take away from the period normally devoted to motions under Standing Order 43 or to question period. It is my understanding that the whole House came to an agreement on this particular point.
I might point out to the hon. member for Yukon (Mr. Nielsen) that at the time he raised his point of order-now that the Chair is aware of what his point of order was-there would not have been much point anyway, because I had already interrupted the hon. member for Comox-Powell River (Mr. Skelly). It was 2.15, and the motion could not be put to the House at that time because it was past the time at which those motions can be entertained.


Erik Nielsen: Madam Speaker, I am sure you would be the first to agree that the House, collectively, is the master if its own processes, and the House would be the first to insist upon the application of that fundamental principle.
Since the rule changes, both of your predecessors allowed both points of order and questions of privilege to be raised during that one hour period and, indeed, during the 15 minute period preceding it.
I would suggest that before coming to any conclusion and basing that on the record-something which would be very difficult for the House to live with-it might be prudent to examine the occasions in the past upon which your immediate

July 7, 1982
Petitions
predecessor and your predecessor once removed allowed such questions to be raised in the period in question. I certainly would not want to see a precedent set here different from the precedents set by your predecessors.


Madam Speaker:: I understand that this agreement had been reached in the course of the time when my predecessor was in the chair. Elowever, I can check the time at which that decision was reached. I would be the last one to disagree with the hon. member that the Elouse is master of its own proceedings. I am entirely in the hands of the House, and it is because I am entirely in the hands of the House-although I might have liked to entertain the point of order the hon. member wanted to raise-that I had to abide by what is the practice. As far as my knowledge can take me, the practice is that points of order may not be entertained at the time at which the hon. member raised it.
If the House wants to change this, that is perfectly all right with me. I will abide by it when I get instructions from the leaders of the different parties that they want to change the proceedings.


Mr. Jacques Olivier (Longueuil):: Madam Speaker, I rise on the point of order raised with regard to a motion presented under Standing Order 43 this afternoon. I should like to point out that the hon. member for Yukon (Mr. Nielsen) resorts increasingly to his privilege as House leader of the official opposition in an attempt to alter the Standing Orders of the House, while on the other hand constantly refusing to bring them into the twentieth century. Madam Speaker, he, himself, resorts increasingly to points of order to waste the time of the House, while we know full well that the decision reached by both sides of the House-


Madam Speaker:: I am afraid the hon. member is starting a debate, which is legitimate although not at this time.


Mr. Blaine A. Thacker (Lethbridge-Foothills):: Madam Speaker, I have never heard such nonsense in my life. I sit on a special committee to change the rules of the House-


Madam Speaker:: Order, please. That too, is debate I am afraid.



PETITION


James Ross Fulton: Madam Speaker, I rise to present a petition signed by 25 Members of Parliament from the New Democratic Party caucus regarding the government's delay in appointing a Canadian chairperson to the International Joint Commission. This important bilateral body deals with such
issues as acid rain, the flooding of the Skagit Valley and the pollution of the Niagara River and Great Lakes. It is in dire need of a chairperson so that these important issues, such as the Garrison, can be dealt with.
Canadians are fed up with this government and its lack of concern for anything but its own survival. Since the Prime Minister is not capable of calling byelections or selecting someone for the IJC position, the Secretary of State for External Affairs (Mr. MacGuigan) should refer the matter to the Standing Committee on External Affairs and National Defence so that an appointment can be made expeditiously and without more Liberal pork-barrel politics.


Mr. McGrath:: Madam Speaker, I rise on a point of order. It seems to me it is without precedent for members of this House to be permitted to avail themselves of the Standing Orders in orders of the day to petition the House. I have never seen that happen before. I wonder if it is within the rules.


Madam Speaker:: I must say that I was surprised. I have not checked that, but the Clerk tells me that members may petition the House. I hope I am right.



ROUTINE PROCEEDINGS


[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. 4,236 and 4,281.


Mr. Herbert: What was the total cost of the renovation at 1616 Dorchester Boulevard West, Montreal to provide accommodation for the Department of Employment and Immigration and how many square feet of usable space are there?


Hon. Paul J. Cosgrove (Minister of Public Works):: The
cost of renovating the building was paid by the landlord and is not known to Public Works Canada. Moving and set up costs for the Department of Employment and Immigration amounted to $505,977. The space occupied by the department is 4,429 square metres of rentable space which equates to 4,346 square metres of usable space.


Mr. Herbert: Was the system for solar heating of hot water for washing purposes installed at the (a) customs and excise educational centre Phase I at Rigaud, Quebec (b) customs and excise educational centre Phase II at Rigaud, Quebec (c) Veterans
July 7, 1982

Hospital, Ste. Anne de Bellevue, Quebec and (i) if so, at what cost (ii) if not, on what date and at what estimated cost are the installations to be completed?


Paul James Cosgrove: (a) No.
Phase I of the project at Rigaud, Quebec is now incorporated into Phase II. (b) Phase II of the project at Rigaud, Quebec is presently under design and it is expected to be completed by February, 1983 at an estimated cost of $398,000. (c) No. The solar project at Ste. Anne de Bellevue, Quebec, was halted at the preliminary design stage based on budgetary allocation priorities.


David P. Smith: Madam Speaker, if question No. 4,287 could be made an order for return, this return would be tabled immediately.
[ Translation]


Madam Speaker:: The questions enumerated by the parliamentary secretary have been answered. Is it the pleasure of the House that question No. 4,287 be deemed to have been made an order for return?


Some hon. Members:: Agreed.


Mr. MacKay: 1.	What are the benefits available to sick and disabled members of the RCMP and to their dependents?
2.	Are the benefits equal to or less than those available to members of the Armed Forces and their dependents?
3.	Do RCMP personnel have the benefit of pensions advocates as do members of the armed forces?
Return tabled.


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


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


Gordon Edward Taylor: Madam Speaker, yesterday I asked the parliamentary secretary if he would check on question No. 2,329 which has been on the Order Paper since April 2, 1981. I would like to know when we can expect to get an answer.


David P. Smith: Madam Speaker, the hon. member will be delighted to learn, I have no doubt, that my inquiries are well under way in regard to his request as of yesterday.
Business of the House MOTIONS FOR PAPERS


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


Madam Speaker:: Shall all notices of motions for the production of papers be allowed to stand?


Some hon. Members:: Agreed.


BUSINESS OF THE HOUSE
Mr. Pinard:: Madam Speaker, there is something I should like to clarify for the House. On June 17, 1982, and I am referring to page 18551 of Hansard, I gave an answer to a member of the New Democratic Party concerning Bill C-60 and said to him then that the bill would be proclaimed before the end of June. Before giving him that answer, I had consulted the minister sponsoring the bill, the Minister of Energy, Mines and Resources, who had told me that it was entirely possible and in fact had confirmed that the bill would be proclaimed before the end of June. After my answer of June 17 to the hon. member for Kootenay East-Revelstoke, the Minister of Energy, Mines and Resources advised me that, owing to certain events, it would not be possible to proclaim that bill before the end of June.
Under the circumstances, with a view to setting the record straight and explaining the answer I gave to the hon. member for Kootenay East-Revelstoke, I should like to say to him that when I gave my answer 1 did so on the strength of the information provided to me by the minister responsible for the bill and that subsequently, owing to certain events, the minister told me that it could not be done. I would therefore urge the hon. member for Kootenay East-Revelstoke to ask the Minister of Energy, Mines and Resources why the bill could not be proclaimed before the end of June. I wanted to put these remarks on the record so that in all fairness the hon. member be given an opportunity to ask for an explanation which the Minister of Energy, Mines and Resources is quite prepared to give.


Erik Nielsen: Madam Speaker, I believe the hon. member for Athabasca (Mr. Shields) has also taken an interest in this matter and had also addressed questions in the House with respect to the proclamation of that bill. The government House leader has indicated that there were certain events causing this delay. I wonder if he has an explanation of just what those events are that are causing the delay in proclaiming the bill?


Yvon Pinard: I have just indicated, Madam Speaker, that I was inviting the hon. member for Kootenay East-Revelstoke,

July 7, 1982
The Budget-Mr. C. Lapointe
and to that extent any other member in the House, including the colleague of the hon. member for Yukon (Mr. Nielsen), to ask those questions of the minister responsible for Bill C-60, the hon. Minister of Energy, Mines and Resources who is prepared to give the proper explanations.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Tuesday, July 6, 1982, consideration of the motion of Mr. MacEachen that this House approves in general the budgetary policy of the government.
Hon. Charles Lapointe (Minister of State (Small Businesses and Tourism)):: Madam Speaker, I am very pleased with this opportunity to take part in the debate on this very important budget brought down by our colleague, the Minister of Finance (Mr. MacEachen) on June 28. My concern will, of course, be mainly with measures affecting small and mediumsized businesses in Canada. However, before I go any further, Mr. Speaker, I shall first take a few moments to outline what, I feel, should be the attitude of the various economic partners in Canada. Mr. Speaker, it is this attitude that is proving to be a prime factor in our struggle to get this country out of its present problematic situation.
Only last week, I had an opportunity to speak in Toronto at a conference on small- and medium-sized businesses organized by the Financial Times, and the theme of this special conference was: Private enterprise-How to make it survive and prosper. The theme was very apt, in view of the recession that is affecting industrialized countries the world over. Falling growth rates, rising prices and continuing unemployment, that is the general situation today, to a greater or lesser extent.
As the Minister of Finance said in his budget speech, the present recession is affecting both developed and developing countries, and the tragic part is that some of the causes of this recession are beyond our control. This was more or less the point that the Chairman of the Economic Council of Canada was trying to get across when he said two weeks ago that we should not expect Canada to get the world out of this recession on its own. A recession, Mr. Speaker, has a number of causes. Whoever is in government, in business or in the labour sector will be quick to blame one of the other sectors or economic partners and make them out to be the cause of all the ills besetting us today. Some people feel that the unions have made life too easy for workers, whose productivity has gone down while wage demands have become excessive. Another view is that businessmen and women should reduce their profit margins and thus slow down price increases. And it seems that
everyone, Mr. Speaker, feels that governments at all levels should reduce their spending. Granted all these statements have some truth to them, and there are things to be criticized in every group. But I also feel, Mr. Speaker, that this is part of the problem. So many of our economic partners in society today tend to look only to their own interests, and as a result, it is too often overlooked that any action taken by unions or business or government will inevitably have an impact on the other groups. Because of our isolationism, we cannot forget that society consists of a number of groups that are interrelated and that any action by one will have an impact on the others. A union trying to obtain wage increases for its members that are equal to or in excess of the inflation rate often forgets that in doing so, it is actually feeding inflation. On the other hand, businessmen or women who regularly decide to increase prices in order to compensate for failing incomes, are also giving inflation another nudge upwards. The fact is that we are just like the dog that is chasing its tail. Everyone knows he will never catch up with it.
To get out of our inflationary spiral and create a sound economic climate, we must make the necessary sacrifices now. Of course, in this network of relations between the main economic partners, governments are also part of the solution. They have often been described as organizations that try to please everyone and succeed in pleasing no one. There is some truth in this as well. All the members of this House and the members of the government have a duty to strike a sometimes very fragile balance between often conflicting demands by the various groups that constitute our society. This situation often leads to results that may or may not be very popular. For instance, establishing social programs or protective measures to help people cope with economic problems will be seen as socialism by some, while to others, granting tax rebates to business is tantamount to helping the rich become richer. In fact, Mr. Speaker, there are a number of politicians opposite who do very little to correct the latter impression. However, before we can break the inflationary spiral which is the principal cause of our economic problems, we shall, whatever our activity sector may be, have to look beyond our immediate surroundings and get out of our isolation. We must try to understand the needs and aspirations of others. And before getting together, we must get rid of our prejudices. It will not be easy, especially if demands are made in anger, whether through the media or in this House. Some major steps in this direction have been made during the last few months, for instance, by the Minister of Finance, who with some of his cabinet colleagues went on a Canadian tour of consultations with business and labour. I read in yesterday's Toronto Star that the Prime Minister (Mr. Trudeau) and the Minister of Finance will be meeting the President of the Canadian Labour Congress, Mr. McDermott, some time on Friday, and Friday
July 7, 1982

afternoon, the Minister of Finance and the Prime Minister are having a special meeting with prominent businessmen.
Personally, since 1 became responsible for the portfolio for small businesses, I have tried to maintain frequent contacts with directors of small and medium-sized businesses in Canada, and 1 shall continue to do so. My point is that I shall continue to present to my cabinet colleagues the views of Canadian businessmen and women. Mr. Speaker, such contacts or discussions, as I said before, must be positive, because the task before us is overwhelming. This is what the Minister of Finance referred to in his budget speech, when he spoke of solidarity. Regular discussions between the major economic partners in Canada are therefore necessary, but we also need strong leadership. That is why, in his budget, the Minister of Finance asked parliamentarians to set an example to other Canadians. I therefore am fully supportive of the measure aimed at reducing salary increases of members, senators and ministers. As the House is aware, the measure consists of a rollback of the increases we obtained at the beginning of this year. Furthermore, all public servants, and there are more than 500,000 men and women in this category working for Crown corporations, the Armed Forces and the public service, will receive salary increases of not more than 6 and 5 per cent over the next two years. With my colleagues, I am convinced that the responsibility of the public service with respect to inflation is not any greater than that of other sectors in Canada. However, the rest of society must understand that legislated restraint at the federal level must be followed very soon by voluntary restraint in other sectors. As pointed out in the budget speech, the alternatives, namely, increased inflation and recession or more extensive controls, do not afford a very attractive prospect. Although the indexing factor for pensions and income tax will also be limited in 1983 and 1984, namely, to 6 per cent and 5 per cent, the government has given those least able to protect themselves the assurance that they will not be destitute. The child tax credit has been increased by $50 and will continue to be fully indexed to help families with modest incomes. Everyone receiving the guaranteed income supplement in addition to the old age security pension will get a supplement to the G1S payment offsetting fully the limitation on indexation of old age security payments. As the minister announced in his speech, veterans' pensions will continue to be fully indexed.
As the Minister responsible for small businesses, Mr. Speaker, I am very pleased to be able to support the forceful measures announced in the June 28 budget. Although some small businesses are experiencing problems, like most of my colleagues in this House I have been receiving a tremendous amount of mail from entrepreneurs who want to expand their businesses or set up new ones. The $400 million assistance program to reduce interest costs for small businesses undertaking new investment is a new program that is being added to the
The Budget-Mr. C. Lapointe
many existing programs that are helping small businesses in Canada.
Speaking about these other existing measures, Mr. Speaker,
I would like to urge my colleagues on the other side to agree to extend the application of the Small Businesses Loans Act, which expired on June 30, 1982, as proposed in a bill tabled two weeks ago, so that financial institutions, caisses populaires and credit unions can continue to guarantee loans to small businesses. Everyone supports this legislation, Mr. Speaker, starting with small businesses, financial institutions and all the members of this House. Members opposite tell me that they need two days of debate. I find it strange that they would jeopardize the interests of small businesses for the vainglory of being able to say that they had two days of debate in this House. I therefore hope that hon. members opposite will agree to extend the application of the Small Businesses Loans Act to give small businesses access to the capital which they so badly need.
However, to come back to the $400 million announced in the budget to help small businesses undertaking new investment, this means that, over a period of two years, small businesses eligible for the program will be able to reduce by 4 per cent their interest costs on certain investments made between June 29, 1982, and March 31, 1983. This 4 per cent reduction in interest rates will apply to loans of a minimum of $10,000 and a maximum of $500,000. Small-business men, fishermen and farmers who purchase goods subject to depreciation or who finance research and development projects will receive as an incentive grants totalling $200 million this year and $200 million next year. If we add this up quickly, Mr. Speaker, we see that $400 million in grants at an interest rate 4 per cent lower than current rates means that small businesses, fishermen and farmers in Canada will have access to loans totalling $5 billion. This means that there will be an opportunity for small-business men, fishermen and farmers to demonstrate their dynamism, as they have always done in the past, and to prove that they are truly the backbone or the basic fabric of the Canadian economy. I am convinced that entrepreneurs, Canadian businessmen and women will take advantage of this measure which will help them gain access to capital at reduced interest rates for investment purposes.
It should be noted that this program does not replace the Small Business Bonds Program announced in the budget of last November. Small businesses, fishermen and farmers in financial difficulty remain eligible for the bond program for refinancing purposes.
In response to the wishes of hundreds of small businesses, in its budget of June 28, the government has also postponed to January 1, 1983, the 12.5 per cent tax on small business dividends. The purpose of this measure was to encourage small businesses to reinvest funds which could otherwise have been paid out as dividends. As this tax has been further postponed I hope that small businesses will continue to reinvest these funds

July 7, 1982
The Budget-Mr. C. Lapointe
in view of the cash flow problem which they are facing because of high interest rates and the present recession.
In another area, Mr. Speaker, since 98 per cent of building companies in Canada are small businesses, the grants totalling $300 million for the purchasers of new houses and the firsttime buyers of existing houses should stimulate substantially the building industry. Contractors owning small businesses represent 52 per cent of the building activity in Canada. Those engaged in house or apartment building should therefore be responsible for creating a large part of the 118,000 new jobs resulting from these grants. The initial $30 million allocation to the home renovation plan will be increased to $60 million, adding new stimulus to the housing industry. These direct grants under the small business investment assitance programs and the housing programs will have a snowballing effect on a whole range of other small businesses, from the mobile canteens visiting the construction sites, from hardware stores like we all have in our areas to building materials firms, sawmills, furniture manufacturers, etc. Mr. Speaker, the new jobs and economic activity generated by these two initiatives will contribute significantly to economic recovery.
The government had a rather narrow margin for manoeuvre between reducing expenditures on the one hand and the need for stimulating the economy on the other. In my view, the areas that will benefit from this stimulus, namely small businesses, housing, farmers and fishermen, were the optimal target for such stimulative action.
Some years ago, Mr. Speaker, Mr. Dennis McDermott, the then president of the United Auto Workers was asked what was in his view the best way to stimulate the automobile industry. His answer was interesting. He answered at the time, and I quote:
Put the housing industry back to work, and my workers will get their jobs back.
So, Mr. Speaker, it is my view that the new housing program coming on top of all the programs announced in the November budget will not only help create 118,000 new jobs in the housing area, it will in turn give a shot in the arm to the automobile industry among many others.
Along with his June 28 budget, the Minister of Finance, tabled a discussion paper on possible investment measures, in order to stimulate discussion on how to ensure access to capital to small businesses. As indicated in the budget, a committee of prominent Canadian economists and tax experts has been given the responsibility for studying the feasability of various proposals. What is the purpose of the white paper tabled and the committee that started meeting on Monday, Mr. Speaker? It is to study measures intended to tax interest earned only to the extent where it exceeds the current inflation rate for Canadians investing funds in a new form of term deposit. Second, to tax capital gains on that part only that exceeds the inflation rate, in the case of Canadians purchasing common
shares of Canadian corporations. Third, to provide a 3 to 6 percentage point reduction on mortgage rates for new homes. Fourth, the possibility for small businesses, farmers and fishermen to secure loans for new capital investment at interest rates lower by 3 to 6 percentage points than prevailing rates.
The committee shall table its report by the end of September on the feasibility of those measures. It is important that the committee table the report soon, in order that the approved initiatives can be implemented as soon as possible.
It is also important to note, however, that the need for these initiatives and others to reduce government expenditures is dictated by inflation. Were it not for the specter of inflation, the confidence in our Canadian economy under normal conditions would be enough to encourage investments and job creation.
Such is the budget message. We must fight inflation together, while ensuring that jobs will be created and that no one among the less fortunate will suffer.
As 1 said, at the beginning of my remarks, I urge our economic partners to better co-operation. We cannot go on bickering from opposing positions. Prejudice and sour comments can do no more than hide the real problem. Mr. Speaker, we all belong to a country with a tremendous potential but going through difficult times. With our vast human, intellectual and physical resources, we can get out of this predicament.
I should like to conclude by quoting in part remarks which the Business Council on National Issues directed three weeks ago at my colleagues of the Cabinet:
This is clearly a time when productive discussion is most likely to flow from considering prospects for the future rather than recriminations related to the past. The occucpants of a lifeboat at sea are not likely to improve their chances of survival by arguing over how they got there. However, it is useful to know where lies the nearest shore.
Mr. Speaker, the Minister of Finance is showing us this shore by setting up a recovery course of 6 per cent instead of maintaining a recession course of 12 per cent.


Mr. McDermid:: Mr. Speaker, I rise on a point of order. I was wondering whether the minister would accept a question.


Charles Lapointe: Yes, Mr. Speaker.


John Horton McDermid: The Minister of Finance (Mr. MacEachen) announced in his budget a small business investment grant which would reduce interest costs by 4 per cent to a small business financing the purchase of a new depreciable property. In view of the amount of vacant space which is available due to plant closings and bankruptcies, would the minister consider asking the Minister of Finance to extend that grant to businesses that are willing to purchase existing vacant properties so


July 7, 1982

that these may be taken up and these small Canadian businesses can in fact expand?
[ Translation]


Charles Lapointe: Mr. Speaker, 1 find the hon. member's suggestion interesting. At the present time, I think, however, that the development or expansion aspect of the grant program to reduce interest rates by as much as 4 percentage points must be implemented. After being in effect for eight or 12 months if we realize these $400 million were not used quickly enough, we could still adjust the program, and it is in this connection that I find the hon. member's suggestion most interesting.


Raymond John Skelly: Mr. Speaker, 1 think 1 understand why the Minister of State for Small Businesses and Tourism (Mr. Lapointe) is having such difficulty explaining the situation to the hon. member for Bramp-ton-Georgetown (Mr. McDermid). Basically his understanding is that it is pointless to quarrel in a lifeboat about how one got there. Certainly some consensus on where the boat is going is the important part, but the minister missed the point, that is, that the lifeboat is absolutely full of holes at this point, and it is every man for himself. That is a true description of the state of affairs in Canada today. Of course, the lifeboat is the Government of Canada and its budget.
I approach this debate with some trepidation. I feel almost like a novice because this is the first opportunity I have had to speak in a budget debate on economic matters. I am almost a maiden in the lifeboat. I am confused. I have heard government members across the floor make some excellent, spellbinding speeches. I listened to an individual for whom I have tremendous respect, namely, the Minister of State for Finance (Mr. Bussieres), give a very learned and detailed speech. He gave percentages, facts and figures on complicated investment programs, but when I talk to people in my riding I realize that he might as well have been speaking Latin. In some instances our function as communicators fail.
The speech by the Minister of State for Small Businesses was excellent in terms of the detail and the concepts involved, as well as his explanations, but he might as well have been speaking Latin. His speech was excellent until the lifeboat analogy at the end. When we listen to government members we hear that they have identified the problems all by themselves, that they have developed the programs all by themselves and that they are better than sliced bread. But in reality that is not the perception of people outside the House. They are confused; they are wondering what is happening. I am confused.
I listened to the member of the official opposition from the province of Quebec when he made his speech last night. His speech was typical of those of many of the members of the official opposition. When he talked about the budget document I heard him say that it must have been put together by hypocrites, brigands and incompetents. 1 am confused because I
The Budget-Mr. Skelly
know many of the members opposite and they do not fall within that category. They are individuals who work very hard and are very conscientious. I know that individuals in the official opposition share the same sentiments about those members because they certainly are those kinds of people. Therefore, I am confused and I think that confusion extends to most people in the country.
We have been given many figures, which in most cases are quite accurate. Hon. members have talked about unemployment running at 11 per cent and inflation running at 11.5 per cent. They have talked about increasing bankruptcies of farmers, fishermen and small businesses, as well as the plight of home owners. They talked about the rising deficit and the incredible government spending. There is no point in repeating those facts and figures now because they are well known to the House and the people throughout Canada.
While we have gone into great detail in attempting to be technicians manipulating the finances of Canada, I suggest that we may have forgotten one small but important aspect of our function, and that is our job of being communicators. I believe that the people of Canada are completely confused about the budget. They do not understand the budget process or its purpose. I believe that Canadians are becoming even more confused when they sit down to try to rationalize the cost of running this place, which is somewhere between $100 million and $120 million a year. It must be very confusing for them to figure out a balanced cost-benefit analysis of the operation of this entire place. As communicators, I suggest that it is our job to attempt to clarify that confusion for Canadians. In fact, I am hard pressed, and certainly other members are hard pressed, to attempt to understand what we have done in a constructive manner for Canadians when we see this document put before us today.
1 have concluded that there are five steps to this budget process. While it certainly cannot be examined in a simplistic way since it is such a complex document with many supporting assumptions and facts, it might help me and hopefully some others to attempt to do that. I think the budget is mainly concerned with the identification and priorization of problems. In order to identify what those problems are, a consensus and co-operation are required at the outset.
It is interesting to note that we have profound disagreements with the government. It says that inflation is the major problem, while we have said that it is not the exclusive problem. We believe there are a combination of problems, such as high interest rates, unemployment and high inflation. As well, these are symptoms of much deeper problems, which the budget itself does not address and which the entire budget process has ignored. It is important to note, however, that there has been great confusion in the country and a loss of confidence in the government which, through the process of osmosis, has led to a great loss of confidence in the operation of this place. If our economic recovery begins with the identification and priorization of our problems and we cannot even agree on what those

July 7, 1982
The Budget-Mr. Skelly
problems are, how can we communicate to the people what our principal difficulties are?
Once these problems are identified by whoever is responsible for that, the next step is to develop programs which address those problems. Hopefully these programs will prove beneficial in the long run. While the government talks about sharing the burden and tightening our belts, surely these programs can only be developed with consensus and co-operation and a commitment to sacrifice and share. Unfortunately, there are widely varying points of view on this subject in the House.
It is interesting to note that these splits occur in different ways. The government sees high inflation rates as the problem and therefore takes a monetarist approach which involves the application of restrictive and repressive restraint programs as a cure. This approach, when reduced to its final form, will result in the strangulation of the economy in order to kill demand and expectations, which unfortunately lead into a recession when they occur in the prevailing circumstances in the country today. We do not agree that this is the main problem. However, it is interesting that it appears that this is the program which has been designed and preferred by the official opposition as well. Therefore, there is consensus, in spite of the inflammatory terms that have been used. The definition of the program and the identification of the problems by the Conservatives are the same as the government's, but I think the government has outflanked the official opposition to our right. This policy brought in higher interest rates than the Conservatives were willing to bring in and higher energy rates than the Conservatives were willing to bring in. It is surprising that the government has seemed to have outflanked the Conservatives on our right.
The next step in the budget process seems to be an analysis and explanation of the costs of those programs. People seem to be confused about this aspect as well. While the government attempts to fulfil its role as communicator, with the Minister of State for Finance speaking Latin last night and the Minister of State for Small Businesses speaking Latin today very effectively, it has not really communicated the essential message to Canadians. The government appears to want to spend about $78 billion this year in the execution of its programs. In order to spend this money it wants to create a $20 billion deficit. It is telling Canadians that its programs will not stop high unemployment, the bankruptcies of small businesses, farmers and fishermen, and it will not prevent home owners from losing their homes, nor will it reduce the deficit or improve the efficiency of its spending in Canada. It essentially wants to spend $78 billion and run up a $20 billion deficit in implementing programs in which the people do not have confidence. Canadians still anticipate that the economy will continue to sink. I have not heard one member of the government stand up and say that the economy will turn around and improve. This anxiety is a result of a failure of communication at the first level as well as a failure in the entire concept of presenting these facts.
The fourth step in the budget process involves an explanation of how revenues will be raised. Certainly these programs must be developed. The costs have to be assessed and then an
explanation given to the people of how these revenues will be raised. The government's explanation was fairly clear, I suggest. It was that these revenues have to be collected from non-tax sources and through taxation. The government listed a number of those sources.
The fifth step concerns the matter of taxation. This is one aspect of the budget in which individuals responsible for promoting this document must be scrupulous and work carefully to explain two particular reasons for taking money from the pockets of the taxpayers. One is that the money is needed and will be well spent, and the second is that the burden or liability for tax is spread fairly. However, this is not what the government has done. It has indicated more clearly than in any of the other steps in the process that the money will come out of the pockets of civil servants. This money which is to fight its anti-inflation program will come out of the pockets of senior citizens and people on fixed incomes and from a rather clever increase in the taxes of middle and lower-income Canadians. Ultimately this will reduce the spending power of that group of Canadians who might have been able to help reverse the trend which is occurring in some parts of Canada, had they received some modest stimulation.
So it strikes me that the budget process has five steps in it, and that it is very confusing for people. 1 think the government has missed the point in the whole exercise. When one observes how those five steps work, one finds that the government is telling people that it wants to spend $78 billion and incur a $20 billion deficit, mortgaging the future of Canadians on programs which no one really believes will resolve the problems that seriously affect Canadians.
The budget and the process through which the government has gone over the last few months is really communicating a message to people, and they are beginning to react and to respond. It is interesting to find that in a budget such as this, which attacks civil servants or the public service and which encourages the provinces to attack their civil servants, and which reduces already abysmally low pensions in this country by reducing the ability of the fund to keep up with the inflation rate, one is communicating one message. But certainly when the government turns around and, no strings attached, hands $2 billion to the oil companies which are being pressed, but not as pressed as the small businesses in the 16 communities in my riding which are going bankrupt, bang, the government is communicating its message, which is, "Goodbye and good luck." But when the oil companies begin to squawk, our old buddies like Imperial Oil and the others we have mentioned in the House, the government whips out the cheque book and writes a cheque for $2 billion, no questions asked, no strings attached. My colleague points out that under the petroleum incentives program they will be handed another $6 billion, but that will occur in time, of course. However, the government is communicating a message, and that message is being translated into an attitude and a reaction in the minds of people.

July 7, 1982

The Minister of State for Small Businesses developed the appropriate analogy. The people are getting the message that the government and the country are similar to a lifeboat full of holes, and maybe it is every man for himself. Look at Olds-Didsbury. Look at my riding. When the Western Canada Concept, which I guess is the equivalent of separatism in the west, arrived in my riding a year ago, it managed to draw six people to a meeting. But now there is such a turnout that it cannot hold meetings in the rooms which have been booked, and the meetings are held in shifts. There are signs throughout my constituency, "We have had enough". "Let's free the west", as the bumper sticker says. One should compare a lifeboat full of holes with writing a $2 billion cheque for the oil companies with no strings attached and then wishing the businesses, home owners, fishermen and forestry workers who are out of work, "Goodbye and good luck". These programs do nothing for forestry and nothing for fisheries. They are essentially left on their own. Even a recovery, because of poor economic planning, will not assist them.
The other matter is the bail-out of Dome. Again, we in this House are quite prepared to look at a set of companies which develop because of the lack of a competition policy. There is a lack of any sense of control involving the question of whether the development of these megacorporations would be in the interests of Canada, yet we develop them. They ran into enormous problems, but now the government whips out its cheque book and says, "We will help to bail you out", and the bank is behind them. That communicates the message, "Goodbye and good luck" to small businessmen, fishermen, farmers, those who are out of work, those who do not have any chance of employment. But when Dome comes to the door or the trough, when the banks come to the door or the trough, or when the oil companies come to the trough, they are paid off, bang. Maybe it is just poor communication and maybe I do not understand what the government is doing although, on the other hand, maybe I have a good idea. But my impression is that the government has really failed in its job as a communicator because I do not understand it, the people in my riding do not understand it, and the people of western Canada do not understand it. I bet that when we go to the polls the next time-and a change of government will not resolve this- the people will not understand it, and it will be, "Goodbye and good luck" to the present government.
So, where are we? In this sort of sad state of affairs there seem to be three problems. I would like to share my insight for whatever benefit it may be to the members of the House of Commons and the people I represent because, being confused, I can only try to develop some kind of empirical observations and try to interpret them. The government has forgotten the purpose of the government process. It is really an accountability process by which the people who represent Canadians stand up and say, "These are what we see as the problems, these are what we see as the programs that will solve our problems, and these are the costs and how you have to share them." It is not a small triumvirate sitting at the front desks on the other side of
The Budget-Mr. Skelly
the House with an all-seeing eye that perceives the problems in isolation, develops the programs in isolation and then randomly imposes the costs on Canadian society without consideration of fairness or equity. It is a shared process, or there is no support.
One of the main problems is that that organization, the government, has failed to understand what the budget is. It is an accountability process. We had better get back quickly to that fact.
Concerning accountability, remember that the people to whom we must communicate are hon. members of the House who directly represent the millions of people in this country. If that communication fails, then everything done will be a failure.
The second main problem is the process of consensus and cooperation. This is a very complex nation with different accessibility to benefits. Ultimately, what we have is a problem.


The Acting Speaker (Mr. Blaker):: The hon. member for Pembina (Mr. Elzinga) rises on a point of order.


Mr. Elzinga:: I regret to interrupt the hon. member's comments, as important as they are. We on this side of the House find it despicable that hon. members opposite, in the government, cannot maintain a quorum in the House of Commons when we are discussing a budget that they supposedly feel is so important. We just want to put you on notice, my friends, that this budget will not be passed if you do not maintain a quorum.


Raymond John Skelly: The point I was making is that there are basically three main problems in this process. One is that the government has forgotten that a budget process is one of accountability, and that is vitally important. The second is that the programs developed and the costs shared must be determined by co-operation and consensus. Essentially, the government has destroyed the sense of community within this country because it is made up of a small group of people who make the decisions, which ultimately exclude everyone else. There is one federal government but ten provincial governments. The federal government is but one player, yet it conducts a budget exercise without inviting them to participate. There are municipalities in this country whose budgets are larger and whose effect is greater than those of some of the provinces. However, they are not brought into the process. Large businesses, and in fact small businesses, are certainly a factor, as well as organized labour and those who have no power, basically those people living on fixed incomes without organizations to represent them. If they are not part of this process of consensus and commitment, then we will all be in serious trouble and we will ultimately see the destruction of the sense of community in this country. We hear, for instance, from the province across the river which says, "Our objectives and ambitions are not being fulfilled and we would like to separate." We see the development of the Western Canada Concept, which now has firm roots in Alberta and Saskatchewan and is growing in Manitoba. Therefore, the destruction of

July 7, 1982
The Budget-Mr. Shelly
the sense of community in this country is a serious problem which lies in the way this budget and other programs in the House are constructed.
I would point out one other factor, namely, the operation of the Thirty-second Parliament, which has two basic characteristics. One is an incompetent government. When one steps outside this House, one finds no hesitation in saying that it is a fact that the government is incompetent. Many of the people who have prime control have been here too long and have lost their sense of commitment and their belief in the potential of this country. They have said, "We have tried it all before and we cannot do anything. We must weather the storm." But there are people behind that government, behind those front benches, who seem to have ideas but are being held back. Maybe as the change occurs, maybe as we remove the leader, maybe as we remove the Minister of Finance and Governor Bouey, the symbols of this repression, something new will come forward. But basically, the government is tired and incompetent. It is a tough bullet to bite, but the other characteristic is that the official opposition is unscrupulous in its operation. I am not referring to individuals, because I know that some are sincere and honest, but certainly at the leadership end of that organization there is a group of people who confine themselves on the floor of this House to screaming and yelling at the Speaker, essentially showing contempt for parliamentary democracy and the foundation of government in this country. That has happened too many times, my friends and colleagues. The ultimate result is that they are not here to fulfil a responsibility to provide constructive alternatives to what has been suggested. They are here basically to disrupt for the basest of political reasons, a grab for power. I suggest that this can be rectified. It is the basic policy of a small group of individuals and it is a function of leadership. When you attack people over there and destroy them personally rather than attack the government with alternatives and constructive criticisms, you are doing a tremendous disservice to the entire operation of democracy in Canada.
Basically the government has failed in its understanding of the budget process and the need for accountability. Basically they have failed to understand the need for consensus and cooperation in the entire process. Ultimately, they are incompetent, tired and in need of change within their own organization. Survival is what is at stake.
Unfortunately, the official opposition in providing a service to Canadians has been basically dishonest. They have attacked and eroded the strength of parliamentary democracy in Canada. They have failed in this intellectually honest process of providing constructive criticism by attacking personalities. It is much like the trick of the ancient Roman emperors who preferred to bait bears and shed blood to distract people. They do this rather than provide constructive alternatives and state the policies they would put in place if they were in government. Believe me, it is obvious and lacking in their operation in the House.
What is the answer? There are four short points. Parliamentary reform will not make the House work better. Good faith and a commitment to an effective operation will. If we combine those two, parliamentary reform to make the process more efficient and to allow for greater integrity and personal performance based on supporting this institution, we will find more confidence and understanding of what we are doing. The second is government policy. Basically we are not talking about high interest rates, high inflation and high rates of unemployment. We are talking about a real disease in this country, the lack of a long-term industrial strategy to develop this economy. I am talking about the long term, the long haul commitment, the kinds of things people in this country can identify with.
The government has studiously avoided that. Why? I do not understand. Many Canadian sask for an indication of where we are going in the long haul so that they can make the sacrifices and work together. They want to know at least where they are going. All that most of them know is that fishermen and many businesses are going down the drain, and the budget will not help. It has been stated before that if we are going to establish and strengthen the sense of community in this country, we cannot suddenly drop a bomb in this chamber like the bomb that was dropped the other day, and hope that anyone will support it. There has to be more effective cooperation and consensus in developing those documents.
I now come to my fourth point or resolution. Certainly there are many more. Others will put forward more constructive ones. My final point is that there have to be some symbols of good faith. The operations of this House since the beginning of the Thirty-second Parliament have created confusion and a lack of commitment in this country, especially in the economic sphere. I ask other members of the House what kinds of symbols of good faith and sincere interest do we really have? I suggest you cannot do what this budget purports to do without a mandate. 1 know that the government will never resign and call an election. The Conservatives know that. Everyone knows it. That is impossible. However, that should be done as a result of a mandate, not just an ad hoc, off-the-wall arrangement.
If they were to offer to people Bouey's head or the head of the Minister of Finance (Mr. MacEachen), basically it would indicate a change. It would be a symbol of good faith. Maybe we should have a replacement. Somebody new from the back benches might help.


Miss Coline Campbell (South West Nova):: Mr. Speaker, I am pleased to have an opportunity to speak in this debate on the budget brought down by the Minister of Finance (Mr. MacEachen) last Monday evening, a budget which in my view responds to the economic circumstances of the country at this time.
This budget offers Canadians a way to put an end to the recession and to speed our progress toward recovery. In this effort, it calls on all Canadians to join in the solution and creates a climate where other governments, business, labour and individual Canadians will be able to work collectively
July 7, 1982

toward bringing inflation down, which in turn will bring recovery within the interdependent context of our international economic relationships.
The policy of this government in its June 28 budget, while maintaining the framework of current monetary and fiscal policy, is to intensify its efforts to lead Canada out of economic recession. The thrust of the Minister of Finance's budget is to restore confidence, confidence in the future where inflation is reduced.
To do this the budget has a four-part action plan: first, bring inflation down to at least 6 per cent through a nationwide collective effort; second, reduce the impact of high interest rates, especially for small businesses, farmers, fishermen and home owners; third, create over 300,000 jobs through direct government action and indirectly through improvement in the investment climate; and fourth, maintain the integrity of our social security system.
Our social security system is a comprehensive system and one of the best in the world. It provides for the cost of bringing up children, for complete medical and hospital services for everybody, for retired people and for elderly people with no or very little income.
How will the June 28 budget bring about this four-part action plan? It will do it by attacking inflation, attacking high interest rates, reallocating funds to create jobs, housing incentives and tax proposals. I would now like to deal in greater detail with each one of these.
The first goal is to attack inflation. The immediate objective for all Canadians must be to cut inflation nearly in half. We must move from a close to 12 per cent inflation to a 6 per cent recovery. There are many forces acting on the Canadian economy which are outside of Canada's control. The high interest policy in the United States is a good example. Another example is that Canada is a trading nation and partners with whom we deal are also suffering from the effects of the worldwide recession and, as a result, international markets for our products are weak.
However, there are areas which we can control and which are within our control. One is our inflation rate. If we are to be competitive on the world market once the recession is over, then our cost structure will have to be lowered or we will be priced out of the world market on which we depend to market our resources.
Therefore, the government wants to reduce our inflation rate to 6 per cent over the next two years. To do this the government is asking all Canadians to share in the effort. The indexing factor applied to personal exemptions and tax brackets for the 1983 taxation year will be 6 per cent, and in the 1984 taxation year it will be 5 per cent.
The pay raises in the public service, which includes the Armed Forces, the RCMP and Crown corporations, will be limited to 6 per cent next year and 5 per cent the year after. Salary increases made in January, 1982, for Members of Parliament, cabinet ministers and Senators will be affected immediately by being reduced to 6 per cent for the rest of the year and next year and 5 per cent the year after that. All regulating prices under federal jurisdiction will be monitored.
The Budget-Miss Campbell
This will affect such areas as public transportation, communications and foodstuffs.
Effective January 1, 1983, increases in indexed social payments will be limited to 6 per cent and in 1984 to 5 per cent. These limits will apply to old age pensions, family allowances and public service pensions. However, they will not apply to people who receive guaranteed income supplements, which will be double-indexed to account for the reduction in the old age security; nor will these provisions apply to veterans. Those families who receive a child tax credit will see an increase of $50 in 1983 when they file their 1982 child tax return. This increase of $50 will offset the reduced indexation of the family allowance which will start in January, 1983.
What does this mean for old age security and family allowance recipients? In July of 1982 persons receiving old age security received $235.17. They would have received in January, 1983, $251.73. However, with the 6 per cent indexation introduced in the budget, they will now receive $249.23 in January, 1983. Those receiving family allowances would have received next January 1, $29.87, but with the 6 per cent indexation they will receive $28.87. As can be seen, indexation will continue but is being reduced to 6 per cent in 1983 and to 5 per cent in 1984.
The federal government wants to show Canadians that the fight to reduce inflation is serious and that all areas which the government controls will be working to see that inflation is cut in half over the next two years.


Some hon. Members:: Hear, hear!


Coline M. Campbell: The government is offering the challenge to all sectors of Canadian life to help reduce inflation. My own premier has accepted this challenge, and I hope all Nova Scotians, both in the public and private sectors, will see that by reducing inflation to 6 per cent the over-all buying power of their money will be enhanced.
Without the central theme of the budget committing us to restraint, there is no doubt that we would be caught in the vicious spiral which the Minister of Finance spoke of in his budget speech, when he said that this vicious spiral means that inevitably incomes chase prices, which in turn chase incomes and, he added, no one wants to be the first to accept a lower increase in pay. The government has now moved to face this challenge head on, calling on all Canadians to help the nation achieve its goal of recovery by lowering our demands on the economy.
I would now like to deal with the attack on high interest rates, the reallocation of funds to create jobs and funds for housing incentives. The government will not add to the present deficit but rather will reallocate the funds which will result from the 6 per cent and 5 per cent indexation. Some of these funds will be directed immediately to provide relief from high interest rates for small-business men, farmers, fishermen and home owners. It will do this by making available grants of up to $3,000 to help home owners with mortgage renewals costing

July 7, 1982
The Budget-Miss Campbell
more than 30 per cent of their gross family income. It will give relief to small businesses-and this includes fishermen-now, immediately, by reducing their borrowing rate by 4 per cent. It will provide more assistance for Canadian farmers by reducing their interest rate by 4 per cent, through the Farm Credit Corporation.
With the reallocation of funds the government plans to create jobs. Along with lowering inflation and lessening the impact of interest rates, we must also find and create jobs for the many unemployed. The goal of the budget is to create over 300,000 jobs over the next two years. The budget provides an immediate $1.4 billion for direct jobcreation and other initiatives. A sum of $300 million will go to existing programs that stimulate job creation in the private sector. Another $200 million will be added to direct job creation. This will bring this fiscal year's direct job creation to $657 million. This is over and above the new national training program financed at a level of $1 billion to modernize Canada's training system and prepare workers for the jobs of tomorrow.
Another $400 million will go to the housing industry. Furthermore, $400 million will go toward reducing the interest costs by up to 4 percentage points for two years on borrowings by small businesses and fishermen-both incorporated and unincorporated-to finance new investment in research and development. The program here will apply to loans to small businesses by financial institutions which will qualify for the new assistance program. These loans must be used toward financing purchases after June 28, 1982, and before March 31, 1983, of new depreciable property to be used in an active business in Canada. This will include government guaranteed loans to small businesses under the existing Small Businesses Loans Act. The program will also finance the expenditure on scientific research after June 28, 1982, and before March 31, 1983. It is important to note that loans which would go toward the purchase of land, automobiles or property for lease, will not qualify. This interest relief program should benefit businessmen who must borrow to make new job-creating investments.
Another $100 million will go to the interest assistance program for farmers in distressed financial conditions who require a loan and associated interest rebate to survive over the short term. This program will be administered under the Farm Credit Corporation for the next two years. The loans will be made at the regular Farm Credit Corporation interest rate, but a rebate of 4 percentage points will be provided for the first two years of the loan. Over the longer term, the new proposal for the indexed term deposit certificate will be in place to provide assistance on high interest rates for businessmen, fishermen, farmers and home owners.
I want to turn now, Mr. Speaker, to the matter of housing incentives. To start the recovery of the housing construction industry, the government offers a dynamic five-point program. First, the Canadian home ownership stimulation plan will provide a $3,000 grant to all buyers of a new home and firsttime buyers of an existing home. The program is effective as of June 28, the night of the budget. Buyers must first make a
down payment of at least 10 per cent, over and above the $3,000 grant. An existing home is a unit that has already been occupied and must be purchased before December 31, 1982, in order to qualify for the $3,000 grant. A new unit is a home which has never been occupied, or it is one that must be started before December 31, 1982 and purchased before December 31, 1983. The program is limited to homes with a value of up to $100,000 for most areas of Canada and in all areas of Nova Scotia.
People who want to build their own homes are also eligible for the plan. The grant will be available to owner-builders when the interest adjustment date is set on the mortgage by the financing institution. The next plan had been in existence but has been changed. Under the budget, the Canada mortgage renewal plan allows home owners who have to spend more than 30 per cent of their gross family income as a result of renewing their mortgage to be eligible for a grant of up to $3,000 to help offset the higher interest rates on their mortgage renewal. This plan will be in operation until the end of 1983.
The third proposal provides increased funding for the Canada home renovation plan, which makes available a 30 per cent grant for home renovations on contract work of a minimum of $2,500 and up to $10,000. The $10,000 contract would qualify for the maximum grant $3,000. The 30 per cent grant applies to home owners whose gross family income is $30,000 or less; above $30,000 there is a decreasing grant available up to gross family income of $48,000. This program will be in existence until the funds of $60 million are exhausted, and it has been very well received in South West Nova and elsewhere in Nova Scotia.
The fourth incentive to the housing industry is the non-profit and co-operative housing 1982 allocation which has been increased by 2,500 units. This will be of interest to many areas in Nova Scotia where people have built new homes under the co-operative housing program of CMHC.
Finally, the federal government's commitment to available rental housing was reaffirmed under the Canada rental supply plan for new rental units in a tight market.
The tax proposals contained in the budget are also interesting, and all Canadians will be able to take advantage of them. The Minister of Finance has set up a committee of prominent Canadian businessmen, accountants and economists to advise on the new tax proposals in the budget. The committee has already met with the Minister of Finance and will meet again. Their recommendations on the implementation of the investment initiatives should be forthcoming over the next few weeks.
The two new proposals of the budget are, first, the creation of the new indexed term deposit that would pay the investor tax-free interest on that part of the interest earned that reflects inflation. Funds accumulated in this way would be directed by the financial institution to purchasers of new homes and to
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small businesses, farmers and fishermen investing in new plant and equipment at interest rates from 3 per cent to 6 per cent lower than market.
The second proposal is for a new registered shareholder investment plan where the investor puts his money in a fund that buys publicly-traded common shares in Canadian companies. The capital gains on the shares would be taxable at half rate as before, but only to the extent that they exceed the inflation rate.
Mr. Speaker, I have tried to speak on the many areas of the budget which are of interest to my constituents as well as other Nova Scotians and Canadians. The member who spoke ahead of me talked about communications. I challenge members opposite to read the budget papers. They will be effective if all Canadians are to fight the present recession and high inflation rates.
The economic situation facing the country is serious. Most of the industrial world shares the twin burdens of high unemployment and high inflation. There are no quick fixes, no easy solutions, but the budget now before the House offers a combination of proposals and a course that will, I am sure, lead to recovery. It is in this spirit that the Minister of Finance called on Canadians for their collective effort in overcoming our difficulties. I am confident that we can overcome these difficulties and return to better times.


Hon. Flora MacDonald (Kingston and the Islands):: Mr. Speaker, the hon. member for South West Nova (Miss Campbell) has admonished the whole country and asked us to read the budget. I must tell her that one of the problems the country has is that people have read the budget and that they have been affected by the last two budgets brought in by the same Minister of Finance (Mr. MacEachen), so they are not really willing to take him at his word or take the Liberal Party at its word any longer.
When the Minister of Finance announced on June 22 that he would introduce a new budget to the House the following Monday, we in the opposition had some reason to believe that, after weeks and months of argument and debate and our telling the minister about the paucity of his economic programs, all this was finally beginning to have an impact.
The almost daily deterioration of all the economic indicators in this country, triggered by the minister's first budget and greviously aggravated by his second budget-that downward slide had at last, so we thought, brought this hear no evil, see no evil government to its senses.
Statistics have been used again and again in this chamber and across the country-statistics on unemployment, bankruptcies, foreclosures. We thought they had become so horrifying that not even this remote and autocratic government could ignore them any longer. Finally, the minister indicated on June 22 that there was to be a change. Finally there was to be a response to the calamity taking place in the country. Finally there was to be a new budget, tinkering here and changes there-call it what you will but at least there was to be some action.
On June 28, budget night, we got that action. This time the Minister of Finance surpassed himself. Given a third chance at
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budget-making-although why he should have merited a third chance after all the damage he has done to the country only the Liberal caucus knows-he again managed to swing and miss. Not for him a comprehensive plan to relieve high mortgage rates and thus provide a widespread and permanent boost to our housing industry. Instead, he offers a one-time freebie that will do nothing to alleviate the 20 per cent mortgages that have to be paid year after year. Then he includes a vague proposal to reduce mortgage rates that will be examined and studied until late this year, even thought 70 per cent of all mortgages up for renewal this year will become due between June and October, in other words, before that committee has a chance to report and have its recommendations implemented.
Not for the Minister of Finance measures that would stimulate the private sector or increase productivity or tackle head on the appalling cost to this country of 1.5 million Canadians who are unemployed. That cost will be reduced only as job opportunities open up.
Instead, in the face of an additional $2 billion pay-out from the unemployment insurance fund since last November, the minister increases direct job creation by a measly SI00 million this year. With 1.5 million unemployed, that measly $100 million will produce jobs for perhaps 30,000 Canadians. What about the other million-plus Canadians who are unemployed? What all about all of those others who are going to be facing lay-offs between now and the end of the year? Oh, yes, he did promise to create jobs through something he calls "levered investment incentives". I wish he would explain to the business people of my riding what he means by levered investment incentives. Better still, would he just spell it out in plain English?
There was a time, it would seem, a time like this, that the minister would be called upon to take bold measures. Instead, what he does is raise his head up out of his bunker, survey the state of disaster all around him, and then duck down again. He ignores the crippling damage of high interest rates. He ignores the fact that government spending will increase 20 per cent this year over last year-no restraint on government spending. He ignores his own miscalculation of the deficit; it has gone from $10 billion to $20 billion in a period of seven months. Obviously simple mathematics is not one of the strong points of the Minister of Finance. He ignores all these calamities as he prepares to hunker down again. Instead, he selects and sends out the front line troops to Fight off the onslaught that his previous budgets have triggered. Who are they? Well, he shields himself behind the elderly, the unemployed, and the people with lower and middle incomes. In one last vain attempt the minister tries to shield himself and his government from the havoc that he and his colleagues have created year after year as they piled up deficit after deficit. It is not working, Mr. Speaker, and it is not going to work because the people of Canada have had to pay for the government's mistakes and the

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mistakes of the Liberal Party for just too long. They have had to pay in terms of lost jobs, lost homes, high interest rates, spiralling fuel costs and, ultimately, in lost hopes, shattered dreams, insecurity and anxiety, and they are just unable to take any more.
What the people of Canada have to say to this government, Mr. Speaker, simply and clearly is this: we do not believe you. We do not believe the deficit is all due to the deterioration of the economy. We do not believe that $20 billion is all for unemployment insurance claims. We do not believe that every man, woman and child in Canada has cost this government $1,000 more than they have contributed in tax upon tax upon tax. They are saying: we do not believe our economic nightmare is the fault of American interest rates or Arab oil. They are saying: we believe it is the fault of an arrogant bunch of callous, cynical and cold-hearted incompetents who should not be trusted to run a parish bingo, let alone the finances of one of the most richly endowed countries in the world.


Some hon. Members:: Hear, hear!


Flora Isabel MacDonald: If there is one single thing that Canadians from coast to coast can agree upon, it is their lack of confidence in this government. This above all is the problem in Canada. The present budget has done nothing to alleviate the situation. However, Mr. Speaker, I honestly believe that no matter what this government would do at this point, it simply would not work because they have eroded the faith of ordinary Canadians. They have destroyed the trust that must exist between the government and the people. They have spent their substance in riotous living and now they are asking ordinary Canadians to pay for it. Is it any wonder that Canadians have become cynical, disheartened and frustrated?
Meanwhile, the government casts around looking for a solution to its problems. When will the Liberals realize that they cannot provide the solution because they are the problem? They are the problem because of the deception that they practise on the Canadian people. They are the problem because they fail to keep their word and because they say one thing and do another. How often have we heard from the Liberal Party the words "the just society", or "social justice and equity"? How often have we heard those words being mouthed? The November budget laid great emphasis on that word "equity". What a hollow mockery this present budget makes of the concepts of equity, fairness and compassion! Nowhere, sir, is this more blatant than in the harsh measures the government is taking to partially deindex personal income tax and partially deindex old age pensions and family allowances.
I would like to direct the attention of hon. members, Mr. Speaker, to that question of deindexation for a few minutes. Ten years ago the former leader of the Progressive Conservative Party, the hon. Robert Stanfield, began advancing a long overdue change in government policy. He said that people should not be bumped into higher personal income tax brackets unless their real incomes increased. He said it was wrong to have a tax system which took a larger and larger share of
people's incomes as inflation rose, without governments ever having to come back to Parliament to openly raise taxes. He said this was a deceitful way of going about increasing the government's revenue. He said that such a system not only defrauded the taxpayer but made government irresponsible and less accountable to the people's representatives.
When Mr. Stanfield first put that idea forward, it was spurned by the government of the day. During the 1972 election the then minister of finance, John Turner, argued that such a system would cost the treasury too much money, it was unnecessary because he said inflation was just a temporary problem, and the Americans did not do it so why should we? Then in October of 1972 the government lost its majority, barely holding on to a plurality in the House of Commons. Mr. Turner decided that a flip-flop might be in order and on February 19, 1973, he brought in a budget which pledged to index personal income tax brackets and exemptions fully to the rate of inflation beginning in the 1974 tax year.
Nor was this to be a short-term experiment. Speaking for the government, a government led by the present Prime Minister (Mr. Trudeau) and including the present Minister of Finance and the present Minister of National Health and Welfare (Miss Begin), Mr. Turner described his policy as "a lasting solution to this problem should inflation continue". He noted that a worker whose wages had risen only enough to maintain purchasing power in the face of rising inflation could be worse off under the then existing tax system because his higher nominal income would push him into a higher tax bracket. The government's stated intention, according to Mr. Turner, was to eliminate that unfair and unintended result from our tax system. Mr. Turner bragged that through his policy Canada was joining a very select group of countries which have eliminated the hidden revenues accruing to governments through the effect of inflation on a progressive tax system. His words leave no doubt that the policy shift was to be a permanent one in his words "a lasting solution should inflation continue".
In light of what happened on June 28, there is an echo of the poetic worthless pledge of some of the treaties with the native peoples where we find these words: "As long as the grass grows and the rivers flow." Because, Mr. Speaker, lasting solutions in the Liberal dictionary turn out to last nine years. So fundamental and so permanent did Mr. Turner consider this policy that he described it as "a major innovation in tax philosophy and practice" which though not complex would "take some time for people and governments to adjust to". Consequently, he concluded that it should come into effect only the following year.
When Mr. Turner brought in this measure back in 1973, inflation was 5.8 per cent. That is when he decided that the Liberal government should index the tax system up to 6 per cent. The step was so momentous that it was going to take a year for the country to adjust to it. Now with inflation at the rate of 11.8 per cent, double what it was in 1973, the Liberal
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government is taking the first opportunity to deindex it to 6 per cent.
What will be the result of this reversal of policy of the Liberal government? People not now paying taxes will join the tax rolls even though they have had no real increase in income, and people now paying taxes will pay more. The real hyprocri-sy of the government's position is revealed in the government's own tables in its Budget Papers. These are found on pages 13 and 29. There the government projects that it will take in SI.3 billion between January 1, 1983 and March 31, 1984 as a result of this deindexing of personal income tax. In the process, the government will increase the tax burden on every group of taxpayers, except married couples with children earning less than $12,000 a year. Let me repeat that. The tax burden will be increased for every group of taxpayers except one.
Such a projected revenue increase of $1.3 billion is an admission by this government that it does not expect the program announced in the budget to reduce inflation to the 6 per cent and 5 per cent levels for 1983 and 1984. If it did, there would be no revenue gain for the government from partial deindexation. Yet the government said it is going to make $1.3 billion on the move. The government itself does not believe that it is going to be able to wrestle inflation down to 6 per cent. Otherwise, the government would not have put forward those revenue projections.
Similarly, an expenditure reduction of $260 million is forecast between January 1, 1983 and March 31, 1984 because of the partial deindexation of the family allowance and old age security pensions. Again, this assumes inflation will rise faster than 6 per cent in 1983 and faster than 5 per cent in 1984. In effect, the government is asking the beneficiaries of these programs, the beneficiaries of old age pensions and family allowances, to take significant cuts in both 1983 and 1984.
True, a few low-income families-with children receiving the child tax credit will come out ahead initially because the enriched tax credit more than offsets the reduction in family allowance due to partial deindexing. But by the end of 1984, according to the program, almost all families will lose because of the cumulative impact of partial deindexing for the 1983 and 1984 tax years. That is something the Minister of National Health and Welfare does not talk about. She does not mention the cumulative effect of deindexation.
Old age pensioners fare even worse. True, the poorest of them, those who qualify for the guaranteed income supplement and the spouses' allowance, do not gain; they merely do not lose under the new arrangements. But those who do not qualify for the guaranteed income supplement-the more than one million pensioners in this country, and here we are talking about many single people with total incomes starting at less than $8,500 a year and couples with total incomes starting at less than $14,500-will lose $80 in 1983-1984 and an additional sum of money in 1984-1985. That is what will happen to them.
The income of these people was indexed to inflation in the first place according to the policies of the Liberal government, copied and borrowed from Mr. Stanfield. But we gladly gave it to them because it was recognized that the elderly have no
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levers to bargain effectively for higher incomes to offset the ravages of inflation. They do not have the levers other groups in society have. Thus it was felt that the purchasing power of their incomes should be protected. That protection, and the principle of equity it embodied, is now to be eroded for at least two years; or should I say, until the Liberal government meets its long overdue accountng with the voters of this country.
The erosion of equity this government is smugly presiding over hits you again, Mr. Speaker, when you examine the partial deindexation of the personal income tax on various income groups. Let me give the analysis of one economic consultant. Patrick Grady of Ottawa, in making his calculations, assumed an indexation factor of 11.7 per cent for the 1983 tax year and 9 per cent for the 1984 tax year. His findings show that the single taxpayer's partial deindexation will raise the effective tax rate for those earning $7,500 by 1.5 per cent in 1983, while those earning $100,000 will see their tax rate rise by only 0.9 per cent.
Now, that is equity? Where is the equity in this? A 1.5 per cent tax increase for those at the lower end of the salary scale but a less than 1 per cent tax increase for those who are well off, those in the $100,000 bracket. How can any member opposite justify that? Have they no conscience at all? Particularly, how can members opposite justify that after the budget of last November when the government cut tax rates for those earning $30,000 or more per year, with the biggest cuts coming for those making $50,000 a year? The social reformers in the Liberal Party, if there are any left-and I am looking at my friend, the hon. member for Lincoln (Mr. Mackasey)- should hang their heads in shame at meekly accepting such regressive measures. Yet I would say that far from wearing sackcloth and ashes this government has the audacity, in the same budget in which it is socking it to the working poor, to publish a paper entitled "Inflation and the Taxation of Personal Investment Income", in which we find this statement:
The current indexing system has protected Canadians from large tax increases ... It operates well for income from wages and salaries, pensions, social security receipts and other transfer payments.
That is what the government says about the current indexing system. But then it goes on to gut that system for the next two years. How inconsistent, how inequitable, can a government be within the confines of a single budget? The government seems determined to plumb the depths of both those qualities-inconsistency and inequity. At the same time it becomes the profiteer, the chief beneficiary from deindexing the tax system. It is the one agency which makes money out of inflation. It is in the government's interest to keep inflation high.
The Minister of Pinance who once prided himself on his social conscience now seeks to rectify his mistakes, to correct his past blunders by going after the pensioner whose income is $700 per month. He is the new Ebenezer Scrooge but he now has an accomplice-the Minister of National Health and Welfare. She has not only rejected universality and equity by
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allowing the Minister of Finance to deindex those pensioners receiving only old age security, but she has casually turned her back as if she had no responsibility for them whatsoever. She said on budget night: "I can live with it and they, the pensioners, can live with it too." That is a very callous remark coming from anyone, but particularly from someone who does not have to live on $8,000, $9,000 or $10,000 per year.
She may indeed have battled for the cause of pensioners in cabinet. I would hope and trust that she did, but she lost out. She is losing out in another battle as well. Indeed, I am afraid that she is losing out in the major war which must be waged in the name of pension reform.
What has happened to the much publicized pension reform which the minister has been enthusiastically promising us for over a year now? She promised it last summer, she promised it last fall, she promised it this spring, she promised it this summer. Now, once again she has said that this much-trumpeted green paper on pension reform has been postponed until next fall. By the time we see the paper, I fear it will no longer be green but grey from old age, from being postponed for so very long.
What is clear is that pension reform is no longer, if indeed it ever was, a priority of the government. Poor people who are living below the poverty line are no longer a priority of the Minister of National Health and Welfare. Why is it that essential social programs always have to be the first to be cut? The minister's promises of the past year now seem very hollow indeed. She accepts a cutback of $100 million in payments to pensioners as a result of the budget.
Instead, she could have argued for a cut of $100 million from the $670 million spent on the rental of premises by the government in the national capital region. It could have been cut if renting were carried out at the cost of average rental space throughout the national capital region. But it did not come from cutbacks in government rental. She could have argued for a reduction of $100 million in the amount spent on professional and consultants' fees which comes to more than $1 billion in the budget this year. That amount could have been cut back by $100 million. She could have asked that $100 million be taken from the $1.6 billion spent on the personal costs of ministers, such as motor car allowances and other personal expenses. That $100 million could have come out of that $1.6 billion. She could have argued that the $250 million spent on information and advertising by government be reduced to provide additional revenue. She could have argued for a reduction in the $2.2 billion spent on utilities, materials and supplies this year. She could have argued for a reduction in any of those areas but obviously she did not, so pensioners have to bear the brunt of a $100 million cutback as a result of the budget.
I said at the outset that there is a deep and fundamental loss of confidence all across Canada in the government. It comes about as a result of measures such as the ones about which I have been talking. There is no sector of our economy, no group of our people, no region of our country which is not affected by
that loss of confidence. This House may divide as it did last night 144 to 130 on the question of confidence, but make no mistake, Mr. Speaker, the country, our Canada, does not divide that way. The country is united in its rejection of any confidence in the government. I dare hon. members on the government benches, the Prime Minister, his cabinet and all Liberal backbenchers to have the courage to go to the country to find out what the people think.


Jean-Guy Dubois: Mr. Speaker, in fact- and I am reacting to the words spoken by my colleague-after June 28, or to be more specific, after the House adjourned on June 30,1 did go to my riding and I certainly was not afraid to ask what people were saying about the budget. Naturally, many people who listened to the budget speech by the Minister of Finance (Mr. MacEachen) on Monday, June 28, were wondering which measures applied to which economic sectors and which individuals, and many of my constituents in Lotbiniere made the following comment, more or less: the budget seems to have some very good provisions, and according to the minister's speech, it seems we have the mechanisms to deal with the present situation, with inflation and with the recession, and that Canadians are being given the means to face up to the situation through the various programs announced in the June budget.
When I hear members of the opposition talk about the status of the Canada Pension Plan and family allowances and the problems in these two areas that come under the jurisdiction of the Department of National Health and Welfare- when I hear them say, for the sake of making political capital, that the people receiving these payments will be penalized and will have problems and that they are the ones who are going to suffer real hardship as a result of the June budget-Mr. Speaker, when I hear them speak this way, I have to protest, and I want to tell these people on the other side of the House that they are just indulging in petty politicking and trying to make the public and senior citizens believe they are going to suffer as a result of the budget. As far as the old age pension is concerned, the base payment is $239.73 in July, in October it will be indexed, and on January 1, 1983, it will be $249.23, as a result of the 6 per cent ceiling, otherwise it would be $251.73. However, these payments will continue to be indexed every three months. About 47 per cent of 2,368,569 Canadian pensioners are receiving the base pension. If they have the base pension, Mr. Speaker, this means they have other sources of income to live on, they have other income to make ends meet, and that income could be $15,000, $25,000 or $30,000. But whatever the pension system, old age security is a universal system and whether you have an income of $30,000 or $40,000, you get the base pension.
I think Canadians are aware of this situation, namely, that payments will continue as before until January 1, and then
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they will be $2 less, but what is really important to Canadians is that nothing has changed for the remaining 53 per cent who are receiving the entire GIS or part of the supplement. In fact, the slightly lower indexation of the base pension will be entirely compensated for by double indexation of the GIS every three months, starting January 1, 1983. As far as the GIS is concerned, 1 think senior citizens in this country should know that a person who receives the guaranteed income supplement does not have sufficient income, statistically speaking, to live on the base pension alone. In fact, it means that the individual has no further sources of income. On the other hand, people receiving the base pension only have other sources of income which enable them to cope.
I would like to explain to Canadians and to the people in the riding of Lotbiniere what the situation is regarding double indexation, and what happens to those who will only receive the base pension. Double indexation will be applied to the GIS every three months, starting January 1, 1983. The July 1982 GIS payment will be as announced a few days ago, that is, a maximum of $240.67 for a single person and $185.55 for each spouse. Next January, these figures would normally be $252.61 for a single person and $194.75 for each spouse, but with double indexation, the cheque will be $255.11 for a single person and $197 for each spouse. In fact, people receiving GIS payments will be receiving more according to the measures in the June 28 budget. In any event, 1 think that trying to make political points on a subject like this is in very poor political taste. Earlier in the House, there were references to the status of people receiving the base pension only, and in fact, over 1983, people receiving the base pension will be receiving $55 less, and indexation will be 6 per cent instead of 11 per cent.
Mr. Speaker, as far as the base pension is concerned and the $55 per pensioner that the 6 per cent ceiling has made available for other uses, does the House think that these pensioners would not be happy to see that money spent on community development programs that will help people work and help the children and grandchildren of these senior citizens to find work? I am referring to senior citizens who are receiving only the base pension and who have other sources of income. I am sure they would have no objection, because I met senior citizens who are receiving only the base pension and considering the other sources of income they have, I think the $55 in question would be very usefully spent on job creation. I must protest most energetically against the insinuation that we are trying to make political points with senior citizens, and I can assure our senior citizens that job creation is very important for young people who are having trouble finding work. This money will be spent on putting them to work. That is the real situation, Mr. Speaker, and the important thing to remember in connection with what 1 said earlier is that starting January 1, 1983, GIS payments will be increased. People receiving GIS will be better off than they were before the budget. So there is
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no reason to act like alarmists and indulge in petty politicking on the subject of senior citizens. And now, how does the budget affect family allowances? At the present time, family allowance, which is now $26.91 per child unless there is a different rate in Quebec and Alberta would normally go up to $29.87 by next January, but with the 6 per cent ceiling, it will only go up to $28.52, $1 and a few cents. Over 1982, the total allowance for one child will therefore be $322.92. In 1983, this figure would normally be $358.44 but will now be $342.24.
The rate of indexation will be 5 per cent in 1984. However, what is important with regard to family allowances is that of the 3,636,851 mothers who receive the allowance in Canada,
2.5	million are also entitled to the child care tax credit. These women will not be affected by the budget. The important thing to tell the Canadian people, Mr. Speaker, is that if the spouse's income is less than a certain amount-I believe it is now something over $20,000-the child care tax credit can be claimed. Those who need it most will therefore benefit from the budget of June 28, 1982.
In this regard, I want to point out that the child care tax credit, which amounted to $261 non-taxable per child this year and should have gone up to $293 in 1982, will be increased by another $50 as compensation and will therefore amount to $343 non-taxable per child in 1983. This will compensate for the capping of family allowances for the next two years. Once again, this is what happens in the case of a universal allowance system. Does the person with children and a family income of $50,000 or $40,000 a year need the child care tax credit more than someone with an income of $20,000 or less? That is why, as concerns the child care tax credit, deductions are made from a taxpayer's income, since those who are more hard-pressed need more money. This is what the budget of June 28 does. It provides $50 more and increases the amount from $293 to $343. Therefore, all Canadian mothers who are entitled to the child care tax credit because their spouse's or their own income is less than a designated amount will receive $50 more. These are the facts Mr. Speaker. This is not the proper time to play politics concerning family allowances and the pension system in Canada. This is important since, out of 3,636,851 mothers,
2.5	million are entitled to the child care tax credit, and they are the ones who will benefit and receive $50 more. This is the important thing to tell the Canadian people instead of trying to indulge in petty politics about this issue. That is why I wanted to begin my intervention by speaking about these two issues, the old age security pension and family allowances.
Mr. Speaker, other programs announced in our budget were received enthusiastically, at least in my own constituency. These programs deal with housing and concern the renovation of Canadian homes. This program will benefit construction workers, contractors, of course, and also realtors. Since June

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28, many realtors in the major city of my constituency, Vic-toriaville, have telephoned me about this $3,000 grant to find out how it would be paid, and 1 must say that they were very happy to learn the facts. How many homes have been built by contractors who unfortunately cannot find a buyer? A great many! And how many contractors who could have started building new homes are not doing so because of the mortgage payments potential buyers would have to pay? The program which was announced on June 28 in the budget will benefit these people, Mr. Speaker. What I am trying to do is to explain these programs so that the Canadian people will know what we have done following the representations made by realtors, builders and representatives of the housing industry to help this sector, because it is often said that if the building industry is running smoothly, the wheels turn by themselves. The $3,000 grant will apply to the purchase of new homes, whether condominiums, duplexes, triplexes, row housing or single family units. The important thing is that a prospective buyer may opt for either a new home or an existing home. And if a person has never owned a home and wishes to buy an existing home and if that person is a first-time purchaser, he will be eligible for the $3,000 grant. There are, of course, certain conditions to be met.
So, two possibilities are covered. The situation where we have a new home on which construction has started by a certain date, a new home that has already been built but has never been lived in and, what is important to many couples, homes that are several years old. This is an opportunity for people, including young couples or even older couples who have never owned a home, to pay less for an existing home which may be 10, 12, 15, 25 or 30 years old and qualify for the $3,000 grant.
There is, of course, the 10 per cent down payment which must be considered, but even so, $3,000 is still quite substantial, considering the present interest rates. 1 also think that, to people who are trying to cope with the present situation in the construction industry, this program will be very important, especially those who were laid off for several months last year, because obviously, contractors-and quite a few have already called my riding office-are aware of the situation and are going to start building houses, and even with the present uncertainty regarding interest rates, a person who qualifies for the $3,000 grant has at least that, and in my view and not only in mine, Mr. Speaker, but also according to many of the people in my riding, it is a real incentive for this sector to get back on its feet.
What about other programs that already exists and that were well received when they were announced and even more so when we decided to allocate additional funds 1 am thinking of the Canadian home renovation plan. One of the existing programs is the RRAP for rural areas. To qualify for the
program, a municipality had to have a certain number of inhabitants, and many Canadians had been asking their members for programs for municipalities that did not have the requisite population for the RRAP.
That is why the Canadian government introduced the Canadian home renovation plan under which people would receive up to a certain percentage, namely, 30 per cent, which in many cases could amount to $3,000. Many contractors and people involved in home improvement were very pleased with this program to which $30 million was allocated. On June 28,
1982,	the Minister of Finance added another $30 million, thus enabling people whether they lived in a municipality, whatever the population-except for the RRAP program in rural areas-whether they lived in a municipality, a town of 50,000, 100,000 or 200,000 inhabitants, and provided they met the income requirement, to qualify for the renovation plan. I see my colleague for Quebec East (Mr. Duquet) and 1 am sure that people in Quebec East will be taking advantage of this program. In fact, they have already started to do so, and now more people will be able to benefit as a result of the additional funds that have been allocated. Another important aspect that was well received and which has not been given much attention by the official opposition is the last program I am going to discuss. There is also the Canada Mortgage Renewal Plan. It has been extended from November 12, 1982 to December 31
1983.	And there is a provision under which homeowners who must allocate more than 30 per cent of their gross income to mortgage payments will be eligible, after June 28, for a nontaxable cash grant of up to $3,000. The significant aspect is that interest deferment will no longer be required before someone becomes eligible for a grant.
Those are the programs announced in the budget which have been acclaimed by contractors, construction workers and realtors who represent a sector of economic activity which is vitally important in my riding and in my province. After those announcements by the Minister of Finance, a good many people were so enthusiastic that they made a series of phone calls in the ridings of Quebec-in mine, certainly-to let my colleagues know how pleased they were about this new housing policy.
I also read a few Toronto area newspaper articles stating just how relieved the construction industry was about this. 1 think it was in The Toronto Sun, and there was also an article along the same lines in The Globe and Mail. During the few minutes I have left, Mr. Speaker, I would like to mention the job creation budgets of the Department of Employment and Immigration. One thing I find very important in that department is the Canada community development Program. Over a period of two years, $300 million will be earmarked for community development projects and other direct job-creation programs. Community development projects create employment through local organizations which are responsible for
July 7, 1982

launching and supervising the projects. It is a major undertaking which has been a source of employment for many Canadians. Quite true, such projects or programs provide work for periods lasting ten, 15, 20 or 25 weeks, but a lot of people who joined those programs were able to gain experience and then join the regular labour force. Still in the same vein, it has been said that $150 million will be spent on construction activities related to federal projects including, among other things, marinas and regional airports.
While 1 am on the subject of marinas, I might mention that not long ago I attended the opening ceremonies of a marina in Lotbiniere which had been built partly under a community development program and partly with the assistance of the Department of Fisheries and Oceans, with grants of $25,000 and $30,000 respectively. The people who worked on that project were very proud of their achievement on opening day, because they had played a part in the tourism development of the municipality of Lotbiniere and were able to acquire skills in a specific field. Since the work was done in a shop, they gained good experience and with their new skills they were able to offer their services in other fields. My riding was allotted $680,000 last year under the community development program, and I did not hear any negative remarks. On the contrary, I heard nothing but praise about that program and all the people in my riding expressed the hope that such programs would be maintained so that they could undertake new projects which could hardly be launched if it were not for those programs.
Quite a number of municipalities are seeking financial assistance to develop tourism and similar projects, and one of the very important programs of the Canadian government is the community development program. I want, therefore, to congratulate the Minister of Finance for allowing his colleague the Minister of Employment and Immigration (Mr. Axworthy) to allocate additional funds to these job-creation programs. I should like to return briefly to the housing programs; because I dealt with the housing industry, I must also mention other categories of people who will benefit, namely the dealers who sell lumber, hardware, iron, wrought iron and-I have in mind some people who play a very important role in my constituency of Lotbiniere and the Bois-Franc region-furniture makers. As 1 said a while ago, if the construction industry is indeed at a standstill, there are some industries which may be worse off financially and employ-mentwise. So, if the building industry gets going again, it being the wheel 1 mentioned earlier, furniture manufacturers will sell their products to furniture stores, who will sell them to young couples buying homes. This means that three or four more building related industries will take on a new lease of life. 1 am sure those people too will welcome the impact of the housing programs.
Much has been done for small businesses. My colleague, the hon. member for Charlevoix and Minister of State for Small Businesses and Tourism (Mr. Lapointe) had the opportunity
The Budget-Mr. Shields
this afternoon to deal with his Department programs: $400 million will be made available to small-business men, farmers and fishermen; interest rates will be reduced for them and also-I shall close on that point-quite a few people made representations to their MPs concerning the plight of farmers. Well, in his budget, the Minister of Finance, as stated more specifically on page 25 of the budget papers, declared that additional amounts of money, namely $100 million would be allocated over the next two years, in addition to which farmers in dire straits will be able to avail themselves of loans totalling $200 million, under the program. There again a 4 per cent interest rate rebate is available. It will also be possible for farmers to obtain Small Business Bond financing.
There then, Mr. Speaker, you have some of the components of the budget 1 wanted to mention; when I heard the motion of the opposition about the situation of pensioners, and family allowances, and after hearing allegations made previously which would have people believe that money will be saved on the backs of pensioners and mothers, the main point I wanted to make is this: adjustments have been made and benefits will result despite the fact that some pensioners on the basic pension rate may have to pay the Government of Canada taxes which will help the Canadian people as a whole through job creation: to my mind, that is important, Mr. Speaker.


MESSAGE FROM THE SENATE
The Acting Speaker (Mr. Blaker):: I have the honour to inform the House that a message has been received from the Senate informing this House that the Senate have passed the following bills, without amendment: Bill C-105, an act to amend the Canada Business Corporations Act; and Bill C-108, an act to amend the National Energy Board Act (No. 3).




[Stage Direction]
The House resumed consideration of the motion of Mr. MacEachen that this House approves in general the budgetary policy of the government.
Jack Wendele Shields: Mr. Speaker, I am happy to participate in this budget debate today. I wonder whether some hon. members, possibly the hon. member for Lincoln (Mr. Mackasey), the hon. member for Scarborough Centre (Mr. Kelly) or the minister from Grand Falls-White Bay-Labrador (Mr. Rompkey), could tell me how they could

July 7, 1982
The Budget-Mr. Shields
support a budget brought into this House which claims it is going to attack inflation and justify a $20 billion deficit. How in God's name is that going to fight inflation? That $20 billion deficit contributes to inflation. That one single item should point out to members of this House the idiocy of the budget and what it is doing. In seven months, November to June, the deficit has doubled. This is not only contributing to inflation but is eroding the savings of people and causing a loss of jobs.
The Minister of Finance (Mr. MacEachen) did not know what he was doing with his November budget. It stifled investment in this country from coast to coast. He said he was going to plug some loopholes and soak the rich, but the rich got away scot-free. The minister aimed for the rich but hit the middle-income families, the mainstay in our society. It is they who were hit with his November budget. The minister stifled investment across this country, absolutely killing the resource industry and the oil industry in the western provinces, causing the loss of a great many jobs.
What are the problems facing Canada today? Basically there are three; unemployment, high interest rates and inflation.
Let me deal first with unemployment. People across this country are frightened. They are frightened that they will lose their jobs and not be able to get another. They are frightened about what would happen if their unemployment insurance ran out. Would they have to go on welfare? Let me deal with some of the problems in my area of northeastern Alberta. Unemployment there is at an all-time high. Certainly there is a recession in the world, but of all countries, Canada was better equipped to face a downturn in the economy than any other country in the western world.
What did the June 28 budget do for the millions of Canadians affected as a result of high unemployment? In one part of the budget it was indicated that $800 million, close to a billion dollars, will be spent on make-work projects. However, when you really go through the document and begin to analyse it, you see that the total amount earmarked for job creation in Canada is about $150 million. Talk about misrepresentation!
Go with me for a moment to the pre-National Energy Program days and the first budget. Go with me for a moment to the second budget of last November. Let us remember what the climate of the economy was then. Let us remember the investment that was waiting to develop the oil sands in northeastern Alberta. Let us remember that Imperial Oil was ready to go ahead with the Cold Lake project, a direct capital investment of some $13 billion creating right across this country, from coast to coast, in virtually every province, 200,000 jobs.
Do you remember the Alsands consortium at the point they were two years ago before this government came to power, ready to invest $13 billion and create jobs virtually in every province from coast to coast? That project was right in the very heart of my riding. It did not affect only northeastern Alberta and the Athabasca riding; it would affect the riding of the member for Lincoln. It would also affect the riding of the
member from Scarborough Centre. Both he and the member from Lincoln recognize this fully.
Instead, what happened was a disaster. We hear excuses from the Minister of Energy, Mines and Resources (Mr. Lalonde), consistently saying: "We were ready to go ahead and we still are; they could go ahead but it is not economically viable any more." He compares these two megaprojects in northern Alberta with the one in the Colorado oil shales that Exxon decided not to go ahead with in the United States. He always fails to point out that in the Exxon project and the Colorado oil shales, the recovery cost per barrel of oil in that project was in the neighbourhood of $80 to $85 per barrel. It was a form of hard rock mining. The oil was in shale, and they do not know how to handle it yet. The technology is in place today to produce oil by the in situ process in the Cold Lake area and by the mining process in northeastern Alberta at Fort McMurray, the Alsands project. The technology is in place to produce it at close to world price.
I agree that there is not much margin for error. I agree that there is a possibility that world oil prices could drop, causing some hardship. But think for a moment of what is happening today. We are importing energy at world prices, paying in American dollars what we must buy on the foreign exchange with Canadian dollars. We are buying 400,000 barrels of oil per day from Mexico, from Saudi Arabia, from Venezuela, using American funds for which we must exchange Canadian funds. That means putting pressure on our Canadian dollar, an outflow of capital.
What would have happened, and what could happen if this government came to its senses, is that it could have gone to Germany and Japan and said: "Gentlemen, we know that you people are starving for oil. We know that over in Germany security of supply is the main and paramount thing you want for the next century or for the next two or three decades. We invite you to invest in a massive project to develop the oil sands, because locked in those oil sands is an amount of reserves every bit as much as now exists in the Middle East in the Arab countries." Hon. members may not know this, but the total reserves in the Athabasca, Alberta oil sands exceed the reserves that are presently in the Middle East. I am talking about known reserves.
To me, Germany would be happy to invest, Japan would be happy to invest, the United States would be happy to invest, if we said to them: "Help us develop, help us produce from these oil sands; and when we reach oil self-sufficiency, we will sell you the surplus." We would be protecting ourselves at the same time as we would be helping ourselves and helping those countries in the western world.
There is a precedent for this. Why do you think, Mr. Speaker, that Japan went in with Dome Petroleum and loaned them money for development in the Beaufort Sea? Do you not think that Japan recognized an opportunity where we might find in the Beaufort developments or in the offshore enough oil for our needs and that we may then sell to them? Do you not think that the Japanese government did not realize at that point in
July 7, 1982

time-we can go back three years now-that Canada is a country they can have a secure supply of energy from? Those countries that do not have the necessary oil to keep their economy rolling would be happy to invest in this country? But not under the present national energy policy as it was implemented. That is because this Minister of Energy, Mines and Resources, when he introduced through the Minister of Finance the first budget that became the national energy policy told the world that we are thieves in this country. He said, in effect: "We will enter into a deal with you, but believe me, we will steal from you down the way because we are going to change the rules." That is outright theft of assets of foreign investors. My head hangs in shame when 1 think of it.
Do you not think, Mr. Speaker, that we would not have the megaprojects going and employment at an all-time high, that we would be looking right across this country, that we would be looking to other parts of the world for skilled labour? We would be saying that we need so many welders, that we need technical people. We would be encouraging our young people to go to universities and to technical schools. Instead, what is happening now is that those young people are telephoning my office, as 1 am sure they are phoning the offices of other members, and are asking where are the jobs that this government promised to them. They ask: "Where are the jobs for which I enrolled in university four or five years ago?" They ask: "Where are the jobs in the oil industry that I was promised when I enrolled in petroleum engineering?" They ask: "Where are the jobs in accounting that I was promised when I enrolled in commerce?" Indeed, they ask: "Where are the jobs for teachers; I was told they would be needing teachers in 1982?" And then they ask: "Indeed, where can I get a job- period-nothing else, I just want a job. I went to university for three or four years", or "I went to technical school", or "I am graduating from high school and I cannot get a job." That is what we are doing to our country. That is what we are going to continue to do to our country as long as we allow this Liberal government with its present policies to exist in Canada.
I want to tell you, Mr. Speaker, that I was home on the weekend at Fort McMurray. I received a call from a gentleman 1 have known for ten years. This man is a qualified tradesman. He said he had an emergency and would like to talk with me. I am telling this House now something I hope all members will listen to, including the member from Scarborough Centre. I want them to think about this for a minute. I went to his home. His wife and family disappeared into the bedroom because he wanted to talk to me privately. He said: "Mr. Shields, Jack, I have a problem; I have no money and 1 have no food in the house, and we have not had anything since lunch." The children ate the last of the cereal. He took me to his fridge; there was nothing in it. He had run out of unemployment insurance and he was too damned proud to walk down to the social development agency and ask for welfare. That is what we are facing in this country and it is getting
The Budget-Mr. Shields
worse. I hear one of those cheeky members opposite saying "We told you."
Mr. Speaker, in the pre-national energy policy days investment was begging to come into this country to develop some of our resources. We should not be importing 400,000 barrels of oil a day at a cost which is loaded on that very taxpayer who cannot feed his family and himself and who must now go on welfare. When that man was employed he was paying taxes and we were importing oil from offshore. Is that reasonable and intelligent? I do not think it is and I do not think that most Canadians think so either.
I have spoken to lawyers in my riding who tell me that in 10 or 15 years of practice they have never experienced a year with more divorce applications. A milestone was reached last month in Fort McMurray when there were more divorce actions before the courts than in any prior month. One reason for this was desertion, because men could not bear to go home day after day and tell their wives they could not get a job. Put yourself in the place of the man who cannot feed his children or that man who saw his children eat the last of the food that was in the house and was too proud to go on welfare or call a neighbour and say he was broke. That is the sort of situation people are facing. As a result, many men just leave because they cannot face their wives and family day after day.
Unemployment is not just a figure that shows 1.5 million or two million people out of work. It means the breakup of families, desertion and in some cases suicide, wife beating and child abuse. Funny things happen to people when they lose their self-respect and that is what is taking place today.
The government can do something about all this, Mr. Speaker. Instead of introducing massive job-training programs it could enter into long-term deals with countries like Japan and Germany. It would be simple and straightforward and those countries would develop our resources and create jobs. They would invest their money if they were guaranteed security of supply. We need only consider what is happening with that gas line that is going into Europe from Siberia. Some of the member NATO countries are telling Germany and France not to buy gas from Siberia as that will make them subject to the economic whims of Russia.
There is gas everywhere in this country, Mr. Speaker. It is a saleable commodity that we should develop. We should encourage investment from offshore because we do not have the money to invest in the tar sands megaprojects ourselves. We must rely on outside capital and we all know that. It is just common sense. We should go ahead with these projects and contribute to the security supply of our NATO allies and various friendly trading nations like Japan. Instead, we find that Japan is going to ship us ten more cars this month than last month. Of course, the government realizes that does not look good politically so the entry of the cars is delayed. At the same time, however, the Russian Lada, which sells here for $6,000, is being dumped on our market. The whole situation is

July 7, 1982
The Budget-Mr. Shields
crazy, Mr. Speaker, and I have to sit here and listen to hon. members opposite attempt to justify this so-called budget.
We still depend on the Middle East for security of supply of oil. Our purchases from that area are draining our dollar reserve because we must buy U.S. dollars to pay for it. That puts pressure on the Canadian dollar and so, in order to attract more dollars, interest rates must be raised. With just one megaproject, interest rates would drop by at least 2 per cent. It would be a signal to the world that we realize we made a mistake and that we intend to get the oil industry back on stream to lead us out of this economic mess.
We want and need foreign investment in this country, Mr. Speaker, but the government does not seem to realize that. It is concerned with getting after the civil servants and nailing them with a 6 per cent increase. It will become known as the 6 per cent government. It was going to wrestle inflation to the ground two years ago but now it will wrestle it to 6 per cent.
What can be done about high interest rates, Mr. Speaker? The deficit can be reduced. If the government was responsible to an annual meeting of shareholders it would be doing something about that today. The Minister of Finance brought in a budget in November and seven months later he admits he was 100 per cent wrong. Having said there would be a $10 billion deficit, he now says it will be a $20 billion deficit. He may be a nice man, kind with admirable qualities, but he should not be allowed to remain in the job. He made the fundamental error of forecasting a deficit that was 100 per cent wrong. In any other line of business he would lose his job.
How can the deficit be reduced? One way would be for the government to admit that it does not need a $150 million or $200 million budget to run advertising programs in all its departments. We are going to cut back to $50 million at a direct saving to the taxpayer of $100 million. I say that you do not commit to capital projects when you do not have the money. You do not build a new embassy in Washington when the facilities that our embassy staff now occupy will do them for two, three, four years, or however long it takes until we have the money and can afford to build. When I questioned the Prime Minister about whether he would cut back in those areas, he said, "Well, I am sure the hon. member could find lots of areas to cut back, lots of building projects." What building projects do we want to cut back? I say, Mr. Speaker, that every project on the books right now which is not deemed an emergency should be stopped.
We talk about irresponsible corporations and so on. I am sure all hon. members read the paper, but let me point out what happens to Imperial Oil when they feel the pinch. They have shareholders that they have to report to, so what are they doing? They are laying off and cutting back their staff by 500 people. They have curtailed all capital expenditure and are retiring the president of their company three years early. I am
sure that many hon. members would agree with me that it is too bad we could not retire the present leader of this great corporation of Canada three years early. However, maybe if they think hard enough, work hard enough at it and listen to what their constituents are telling them, they just may find enough courage to do it.
I want to turn for a moment to the leader of the NDP, Mr. Speaker. 1 listened with real attention to his remarks on the first day of the budget debate. He said we do not want less government, we want more government. That was his message. We want lower taxes, lower interest rates but more government. How in God's name do you pay for more government without taxes or higher interest rates? You cannot, it is ridiculous, but again that is the NDP. We hear the hon. member for Vancouver-Kingsway (Mr. Waddell) repeatedly saying that government should get more involved, that it should go out and buy not little oil companies but big ones. What is the matter with Imperial? He fails to recognize that if the government does not have the money to do it, the taxpayer is going to be whipped again to pay for these astronomical bills and debts which the NDP would build up. That is totally and absolutely irresponsible.
In closing, Madam Speaker, I would just like to say that the biggest problem facing our country is unemployment, which problem could be addressed very quickly if we were to encourage investment from offshore. As I said, Germany and Japan, countries which do not have an oil supply, could come in and start developing the oil sands where there are massive reserves on the condition that, once we reach self-sufficiency here in Canada, we will then sell them the surplus. We will have lots of takers because in five years it is going to be security of supply once again that is most important. We will have those takers, and once that happens, Madam Speaker, we will have jobs right across the country. We are a sparsely populated country and we could be selling some of the abundance of reserves we have in oil, coal and minerals to countries that do not have them but who do want security of supply.


Madam Speaker:: 1 regret to interrupt the hon. member, but I believe his time has expired.

[ Translation]


MESSAGE FROM THE SENATE
Madam Speaker:: I have the honour to inform the House that a message has been received from the Senate informing the House that the Senate has passed Bill S-24, 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, to which the concurrence of this House is desired.

July 7, 1982



THE ROYAL ASSENT

[Stage Direction]
A message was delivered by the Gentleman Usher of the Black Rod as follows:
Madam Speaker, the Honourable Deputy to the Governor General desires the immediate attendance of this honourable House in the chamber of the honourable the Senate.
Accordingly, Madam Speaker with the House went up to the Senate chamber.
And being returned:
Madam Speaker:: I have the honour to inform the House that when the House went up to the Senate chamber, the Deputy Governor General was pleased to give, in Her Majesty's name, the royal assent to the following bills:
Bill C-116, An Act to establish the Cooperative Energy Corporation and the Cooperative Energy Development Corporation-Chapter No. 108;
Bill C-115, An Act to establish a national program for occupational training-Chapter No. 109;
Royal Assent
Bill C-61, An Act respecting young offenders and to repeal the Juvenile Delinquents Act-Chapter No. 110;
Bill C-43, An Act to enact the Access to Information Act and the Privacy Act, to amend the Federal Court Act and the Canada Evidence Act, and to amend certain other Acts in consequence thereof-Chapter No. 111.
Bill C-106, An Act respecting energy monitoring and to amend the Energy Supplies Emergency Act, 1979 and the Oil Substitution and Conservation Act- Chapter No. 112;
Bill C-107, An Act respecting motor vehicle fuel consumption standards- Chapter No. 113;
Bill C-103, An Act to amend the Petroleum Administration Act and to enact provisions related thereto-Chapter No. 114;
Bill C-105, An Act to amend the Canada Business Corporations Act-Chapter No. 115;
Bill C-108, An Act to amend the National Energy Board Act (No. 3)- Chapter No. 116.
It being six o'clock, the House stands adjourned till tomorrow at two o'clock p.m., pursuant to Standing Order 2(1).
At 6.08 p.m. the House adjourned, without question put, pursuant to Standing Order.

Thursday, July 8, 1982