1983-03-08

GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Thursday, March 3, 1983, consideration in Committee of Bill C-139, to amend the statute law relating to income tax (No. 2)-Mr. Lalonde- Mr. Corbin in the Chair.
On Clause 3-Fair Market Value On Clause 16-Professional Business
The Assistant Deputy Chairman:: Order. When the Chair rose to report progress on Bill C-139 last Thursday, the Hon. Member for Mississauga South moved an amendment, and upon the advice of Hon. Members the Chair took the amendment under advisement. The Chair is now in a position this morning to rule on the acceptability of that amendment, and the Chair finds that it is well within the scope of the Clause which the Hon. Member for Mississauga South seeks to amend.
Therefore, I shall now read the amendment for the consideration of the Committee:
That Bill C-139, an Act to amend the statute law relating to income tax (No. 2), be amended in Clause 3 by adding, immediately after line 33 at page 6, the following new sub-section:
"4.(1) For the purpose of sub-section 1, the cost of the property, that is, the work in progress at the end of the taxation year of a business, means those costs which are directly related to a specific work in progress of the professional but excludes (a) any cost associated with the time incurred by the professional or any other non-employed professional associated with him and (b) any costs associated with the general overhead of carrying on the business which is a profession."
Debate is upon the amendment.


Mr. Cosgrove:: Mr. Chairman, I believe that upon the introduction of the amendment by the Hon. Member for Mississauga South I did have the opportunity of alerting the Chair that the amendment was unacceptable. It introduces an unnecessary complexity to what all Hon. Members would agree is a complex matter, and the amendment is not necessary because we believe that the provisions of the Act in the statement of the former Minister makes the objective behind the motion unnecessary. Finally, and probably more important, we believe that the amendment could restrict taxpayer flexibility. Therefore we are puzzled or somewhat perplexed by the move of the Hon. Member for Mississauga South.
For those reasons, Mr. Chairman, the Government cannot accept the amendment and would urge all Hon. Members, for the sake of keeping the Act less complex by not introducing unnecessary items, with the taxpayers' benefit in mind, that they not accept the amendment. We are prepared to illustrate the intentions of the Government in this matter forthwith.


Mr. Blenkarn:: Mr. Chairman, the Minister has indicated to this Committee today the attitude of this Government with respect to complexity and fairness, and its attitude towards what it says and what it does. The Minister, on December 18, 1981, cited in this House rules with respect to determining the cost of work in progress by a professional, and we have codified that in the amendment presented to this House. It is clear to us at this point that what the Minister of Finance says, the Minister of Finance does not mean. What this Government says, this Government does not mean.
Sir, it is on that basis that the total perfidy of this Government is demonstrated daily to the people of Canada. We, however, are not going to spend a great deal of time today on Clause 3 and Clause 16. We think in the interests of moving Bill C-139 ahead that we would like to vote on the amendment and vote on Clause 3 and Clause 16. We see no particular point in delaying the passage of an income tax Bill. We think, though, it is absolutely necessary that the House fully consider each Clause of the Bill. The House had an ample opportunity last Thursday to consider Clause 3 and Clause 16 and we would have liked to bring those Clauses to a vote then. Unfortunately, because of the delaying tactics of the Government, we were not able to do that.
Speaking to the amendment, sir, and to the main motion- because I am going to suggest that the amendment be put and then the main motion on Clause 3 and Clause 16-may I say, further to the perfidy of the Minister, that he claimed that a professional would have the advantage of the small business tax rate and allowances. He knows that in this very Bill small business was gutted and destroyed. He knows that he put a 12.5 per cent distribution tax on the earnings of small business so that when they are distributed to the owner of the small business he is subject to even more tax than the earnings of ordinary wage earners. Indeed, the Minister made it impossible for small business to operate behind a corporation, and we will be dealing with that later. But to suggest that professionals are going to be treated the same as small business is to say that professionals are going to be hurt and hampered the

March 8, 1983
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same as small business, and that there are no advantages in a small business.
Let us deal with Clause 16. We on this side suggested that the Minister at least include notaries in the exemptions in Clause 16. We have not seen an amendment from the Minister with respect to that. The Minister mentioned amendments to Section 125 of the Income Tax Act which deals with the incorporation of professional companies and a tax rate for those companies of 33 per cent. He knows that he cannot amend Section 125 of the Income Tax Act without a Ways and Means motion. However, He could amend Clause 16 without a Ways and Means motion because that would be a reduction of taxes. We have not seen that amendment from this Minister because, again, what this Government says is not what this Government does. It says one thing and it does the opposite.
Let us now put the questions on the amendment, and on Clause 3 and Clause 16 without further amendment.


Roderick Blaker: Is the House ready for the question?


Some Hon. Members:: Question.
Amendment (Mr. Blenkarn) negatived: Yeas: 13; Nays: 25.


Paul James Cosgrove: Mr. Chairman, I propose that we agree to the suggestion of the Hon. Member for Mississauga South and proceed to a vote on Clause 3.


Roderick Blaker: Is it agreed?


Donald Alex Blenkarn: Mr. Chairman, the two Clauses were grouped; therefore, I suggest we vote on Clause 3 and Clause 16 at the same time.


Roderick Blaker: Is it agreed?


Some Hon. Members:: Agreed.


Roderick Blaker: Shall Clause 3 and Clause 16 carry?


Mr. Riis:: On division.
Clauses 3 and 16 agreed to on division.
On Clause 4-Amounts receivable in respect of services, etc., rendered


Donald Alex Blenkarn: Dealing with Clause 4, Mr. Chairman-


Paul James Cosgrove: I rise on a point of order, Mr. Chairman. At the beginning of these proceedings in Committee of the Whole deliberations on Bill C-139, I indicated that there were a number of technical amendments, most of which were relieving in nature. Before the Hon. Member for Mississauga South rises to speak on Clause 4 which is before us, no doubt he would want me to provide Hon. Members with the technical amendments to the Clause.
There are two such technical amendments. I know that it is usual procedure to introduce one and to have it debated. I would suggest again that in order to assist Hon. Members opposite, the two technical amendments to Clause 4 should be introduced at this time so that Hon. Members would have an opportunity to look at them. I would propose, with the concurrence of Hon. Members opposite, that these amendments be introduced at this time and be dealt with as we deal with Clause 4, with a vote at the end of our deliberations.


Donald Alex Blenkarn: Would the Minister introduce at this time the amendments to Clause 4? Might we suggest to him that the reasonable way to proceed with technical amendments is to circulate them to the Opposition Parties and to those in his own Party who are interested prior to the debate, so that there will not be any delay in the debate while Members are looking them over.
I make that suggestion to the Minister in an effort by this Party to move this Bill forward as quickly as we can, yet at the same time making sure that there is ample time for discussion.


Paul James Cosgrove: I offered that and I asked for the consent-


Donald Alex Blenkarn: You did not.


Paul James Cosgrove: -of all Members opposite to accept the technical amendments which we have, as read and moved. Those were my opening comments in Committee deliberation on this Bill. If the Hon. Member is now indicating that he will consent to that-


Donald Alex Blenkarn: No.


Paul James Cosgrove: He is not consenting. What can I do? He asked me to introduce them but will not give consent to having them read. Without knowing how Hon. Members opposite intend to treat of amendments as they are introduced, I do not know if it would be in the interest of expediting the Bill that I should indicate the intention without getting agreement that they be received as read into the record.


Nelson Andrew Riis: Mr. Chairman, to make the point clear to the Minister, the original position he presented was to table the technical amendments to the entire Bill.


Donald Alex Blenkarn: He wanted to introduce them and move them.


Nelson Andrew Riis: Yes, he wanted to introduce them and move them. We felt that a more appropriate step would be to circulate the technical amendments-and we have no qualms about introducing them quickly-so that we would be familiar with them after looking at them and studying them prior to dealing with that Clause. Then we could move them with haste. As the Hon. Member for Mississauga South stated, we are interested in getting this Bill through as quickly as possible.


Paul James Cosgrove: Then give us consent.

March 8, 1983


Nelson Andrew Riis: We are interested in getting to some of the more controversial clauses as quickly as possible. Rather than spend needless time in this kind of fruitless discussion, it seems to me that a way to facilitate it would be for the Minister to circulate his technical amendments to all Members present. This would enable us to study them so that the minute we come to that particular Clause we could move their introduction and deal with them very effectively.
In the spirit of co-operation and in the spirit of moving this legislation through as quickly as possible, would the Minister consent to circulating all technical amendments so that Hon. Members opposite and Members of his own back bench will have a chance to study them? Then we could deal with them, Clause by Clause, as we come to them in the deliberations.


Paul James Cosgrove: Obviously, Mr. Chairman, we are no further ahead than we were in my first offer to have the amendments accepted as moved. Therefore, I have no option but to move the two amendments to Clause 4, and I would like to move them in order. It is moved by myself and seconded by the Parliamentary Secretary to the Minister of Finance:
That subclause 4(8) of Bill C-139 be amended by striking out lines 19 to 22 on page 12 and substituting the following:
"terest in a prescribed debt obligation, an amount determined in prescribed
manner shall be deemed to accrue to the taxpayer as interest on the obligation
in each taxation year during which he held the interest in the obligation."
Second, it is moved by myself and seconded by the Parliamentary Secretary:
That subclause 4(12) of Bill C-139 be amended by striking out lines 37 and 38 on page 13 and substituting the following:
"(12) Subsection (4) is applicable in respect of amounts that became
receivable after December 31, 1982 in respect of the period after that date."


Roderick Blaker: Order. So that the Committee may proceed in an orderly fashion, the Chair will put the first amendment moved by the Minister to the House.


Mr. Lambert:: When we get to it.


Roderick Blaker: When we get to it. Therefore, the debate is now on Clause 4.


Donald Alex Blenkarn: Mr. Chairman, with the permission of the Minister, may I suggest that we deal with some matters that can be cleaned up relatively quickly. From our side's point of view with respect to Clause 4, we are prepared to let pass Subclause 4(1).


Roderick Blaker: Order, please. I apologize to the Hon. Member for Mississauga South, but the Chair should read the amendment moved by the Hon. Minister, put it to the Committee at this time, so that debate can proceed in an orderly fashion. Is the Hon. Member for Edmonton West rising on a point of order?


Marcel Joseph Aimé Lambert: Mr. Chairman, I find that the Minister's idea of procedure in Committee of the Whole varies a great deal from the practice of the House.


Paul James Cosgrove: No.
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Marcel Joseph Aimé Lambert: All right, he knows better. May I suggest that we take Clause 4(1), 4(2) and 4(3), and if there is to be an amendment to Subclause (4), then the Minister propose his amendment. But to slide in three or four amendments and have the Minister of State for Finance put them is not acceptable to us until time for debate. Therefore, why put them? The Chair finds itself out of order.
With the greatest of respect, my suggestion, is a lot easier. I think the Minister of State for Finance could find another Minister to propose the amendments-I see he has one now- because the practice here is not for a Minister and his Parliamentary Secretary to propose amendments, but another Minister. Let us get that squared away, too.


Paul James Cosgrove: Mr. Chairman, one Member from the Opposition rose and asked that I produce the material so Hon. Members could have it to look at in advance while debating the Clause. I offered it to Members to look at while debating Subclause (1), Subclause (2) and Subclause (3) before getting to Subclause (4) and (12). That is exactly what is asked for. Now another Hon. Member has risen and said "Don't do that."


Marcel Joseph Aimé Lambert: Mr. Chairman, the Minister is insisting on moving. I do not think he has the right to move the amendment since he is piloting the Bill. He has to hold the amendments until it is reached. My colleague from Mississauga South said distribute them. Distribution of amendments has been done here since time immemorial. No matter whether you are in a standing committee or in Committee of the Whole, you put out the amendments and, therefore, have a chance beforehand to look at them. The Minister shakes his head. I will bow to his superior wisdom of membership in this House of two or three years.


Roderick Blaker: Order, please. First, I would like to thank Hon. Members for their comments. There would be two ways to proceed but I sense following Members' comments that it would be wise to proceed with debate on Clause 4. When the question is put on the individual Clauses or Subclauses, at that point we could properly put to the House the motions to amend and dispose of them at that time. Unless Hon. Members wish to go immediately to those Clauses, I will recognize the Hon. Member for Mississauga South on Clause 4.


Donald Alex Blenkarn: Mr. Chairman, I would like to expedite things here. From this Party's point of view, we are prepared to pass Clause 4(1), (2), (3), (4) and (5) without debate.


Paul James Cosgrove: Mr. Chairman, am I to assume that includes Subclause (4) and amended, or is it Subclause (8) which is the first amendment?


Donald Alex Blenkarn: Mr. Chairman, if the Minister would follow me, I said we would pass without debate Clause 4(1), (2), (3), (4) and (5).

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Paul James Cosgrove: We are in agreement.


Donald Alex Blenkarn: Elis amendments deal with Clause 4(8) and Clause 4(12). If the Government is in agreement with that, would the Government also be prepared to group the balance of Clause 4 together with all of Clause 5, together with Clause 21(11) and Clause 54(3), in one debating period?


Mr. Fisher:: Mr. Chairman, could the Hon. Member give us the numbers again?


Donald Alex Blenkarn: Mr. Chairman, the balance of Clause 4, which would be Subclause (6) onward, all of Clause 5, Subclause (11) of Clause 22 and Subclause (3) of Clause 54. I say that because those particular Clauses deal with annuities and insurance. They also deal with the whole hideous concept of accrual of interest not yet paid and treating it as income in the hands of individuals and corporations. Be that as it may, the same principles essentially apply in those Clauses. I suggest that we proceed in that fashion.


Paul James Cosgrove: Mr. Chairman, indeed there is logic in the proposal suggested by the Hon. Member for Mississauga South. We believe that there is a relationship between the Clauses that he has touched upon.
There are two difficulties. The first one is with respect to the question of technical amendments. We have indicated that we have amendments to Clause 4 which I have already alerted Hon. Members to. In addition, we have amendments to Clause 5 and Clause 54. I submit that logically we should place those amendments before Hon. Members to assist them in debate.
Second, I would be interested in the Hon. Member's comments as to how we should finally dispose of the items. Is the Hon. Member proposing that when the House votes on Clause 4, the results of that vote on Clause 4 with the Subsections that have been accepted would also apply to Clauses 5, 21 and 54 as amended?


Donald Alex Blenkarn: Mr. Chairman, the answer to the latter question is yes. We would say that there would be one vote on the balance of Clause 4, all of Clause 5, Clause 21(11) and Clause 54(3). We would be prepared to accept, and treat as read and moved, the amendments to Clause 54, Clause 4(8) and Clause 4(12), although they are obviously subject to debate.
We suggest that the debate range through each of these specific provisions as we proceed, because they are all interrelated. The defeat of one Subclause would throw the whole matter out. We should deal with them all together because, if not, it would be a hideous package.


Nelson Andrew Riis: Mr. Chairman, I certainly agree to proceed in that fashion. In an effort to move through this Bill as quickly as possible, am I correct that the Minister indicated that he has an amendment to Clause 54 that he wants to present as well which is of a technical nature?


Paul James Cosgrove: Clause 5 as well, Mr. Chairman. The Hon. Member for Mississauga South did not touch upon the amendment to Clause 5.


Nelson Andrew Riis: I am very encouraged by the way we seem to be able to begin grouping Clauses in an effort to move this through. I want to remind the Minister that we would be facilitated in our efforts to group the various Clauses and Subclauses if we had his list of proposed amendments. We would then have an idea of where those amendments are. I would ask the Minister, in an effort to expedite these proceedings, if he would circulate all of these so-called technical amendments that he will be introducing so we may peruse them.


Paul James Cosgrove: Mr. Chairman, when I first rose in the House on deliberation of the Bill, I offered to do that for the very reasons that are apparent today. The Hon. Member for Mississauga South said no. He said that they would not agree to have them treated as moved. The Hon. Member has now offered to treat all of the amendments to Clause 4, Clause 5 and Clause 54(3) as moved. What difficulty do Hon. Members opposite have in treating all of the technical amendments in the same way? I can produce them.


Mr. Hawkes:: Mr. Chairman, I would indicate to the Minister that backbenchers spend a lot of time in committee. It is common practice in committee for the Government to circulate proposed amendments without moving them. Occasionally, an Opposition or Government backbencher suggest improvements to Government amendments that can be improved. Those improvements can actually be made before the amendment is moved. That facilitates the process. It facilitates the argument and the movement of a Bill through the House and committee.
Circulation of amendments is very different from moving them. Once an amendment is moved, it must be disposed of. When it is circulated, it can be reviewed and suggestions can be made. It can be changed before it is moved.
Surely that is the way to facilitate the procedure. It is common practice in every committee of the House. This is the first time I have ever seen a Minister being obstinate about circulating proposed amendments before they were moved. I do not understand why he is doing it and why he wants to delay the Bill.


Paul James Cosgrove: Mr. Chairman, in order to assist the Hon. Member for Mississauga South, I would bring to his attention that officials have indicated to me that there are three additional Clauses that deal with life insurance or annuities. They are Clause 22, Clause 102 and Clause 26(4). As we begin discussion, perhaps he could consider whether he wishes those to be included as well.
In response to the Hon. Member for Calgary West, I am indeed attempting to follow the practices and precedents of the House. The procedure that was followed on the last occasion when major changes of this ilk were brought to the House was that the amendments were put, accepted as introduced, read
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and moved. They were then distributed. That is not my experience because I was not in the House in 1971, although perhaps the Hon. Member was. That is the advice I have from my officials and that is what I was trying to do. I was attempting to observe the practice and precedent of the House.


Marcel Joseph Aimé Lambert: It is my recollection that it was handled in the same way that my colleague from Mississauga South is attempting to do it now. The point is that until an amendment is reached, it is not moved. I am sure the Minister will agree that we have proceeded with amendments in recent years in that way. The Bank Act is an example. Both the Opposition and the Government can show the proposed amendments. Discussions then take place through the usual channels. Suggestions can be made for improving amendments. But there is no formal moving. I do not know why the Minister insists upon that. What he has just disclosed to my colleague does not help at all. We would like to see them and this can simply be done by circulating them. At the appropriate time the amendments are moved.


Paul James Cosgrove: Mr. Chairman, the Hon. Member is renowned for his memory. It is my brief experience in the House that Hon. Members look to senior Members of the House for their experience and comments on former practice. Perhaps the Hon. Member could assist me by producing a record of the approach that was taken when this type of amendment to the Income Tax Act was last before the House.
My information on the record of the proceedings of the House, which is what I am acting upon, is that the tax reform Bill, C-259 in 1971, was dealt with in the way that I proposed at the outset. That is, the Government's intention is obviously not known until the Government takes the step to move the amendment. Otherwise, they are not amendments; they are ideas or thoughts. We could be back to where we started three years ago in terms of looking at amendments to the Bill.
Our proposal is to give them the validity of the intention of the Government. We would move them and, as was the case in 1971, unanimous consent is given that they be accepted as the intention of the Government by way of amendments. Hon. Members opposite will look at them and if they have suggestions to make in the Committee of the Whole, we would be more than pleased to consider them.


Donald Alex Blenkarn: Mr. Chairman, briefly reviewing the Minister's suggestion about adding further groups, we would have some difficulty with Clause 22. However, we certainly could add Clause 102 to the grouping. If the Minister will leave us some time to determine the exact relationship, we may well be able to accommodate him by adding a Subclause of Clause 22 and the Subclause of Clause 26. However, we would like to consider that for a moment.
In any event, if we could deal with the balance of Clause 4, all of Clause 5, all of Clause 102, Subclause 21(11) and
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Subclause 54(3), that would be satisfactory at this point. However, as I said, we would reserve the right to co-operate with the Minister even further by adding further Subclause as might be appropriate after we have an opportunity to consider the matter in more detail. Is that satisfactory to the Minister?


Roderick Blaker: Order. The Chair has attentively listened to comments of Hon. Members. The Chair must be concerned with the orderly procedure of the work of the committee. It may be one thing for Hon. Members to agree to circulate among themselves amendments before they are formally put to the House, but it is another matter for the Chair to be considerate of Hon. Members' rights in putting those motions to move amendments in their proper order as debate takes place on each of the Clauses. There is some incipient difficulty involved in the way in which Hon. Members seem to want to agree to proceed. The Chair should remind Hon. Members that it may be one thing to agree to debate the subject matter coming under a number of various Clauses, but it is quite another matter to dispose of them.
The Chair should remind Hon. Members, for example, that if we were to group together Clause 21 and Clause 54 for debate and then for disposal, it would not be possible at a further stage of debate to come back and reopen those Clauses unless there was unanimous consent. That may be a difficulty of which the Chair should warn Hon. Members.


Nelson Andrew Riis: Mr. Chairman, in conversation with the Hon. Member for Mississauga South, we have determined that there should be one short change to our recommendation. We should be dealing with Subclause 21(11) instead of Subclause 22(11).


Donald Alex Blenkarn: That is right.


Nelson Andrew Riis: I just make that comment for clarification.


Douglas Glenn Fisher: Yes, I wondered about that.


Roderick Blaker: Let us understand each other. We are grouping these various proposals for debate, but the Chair will place them before the House for their disposal as we reach consideration of the individual Clauses. That is the Chair's understanding of the procedure by which we will be guided over the course of the next few hours. Is that agreed?


Some Hon. Members:: Agreed.


Roderick Blaker: It was agreed earlier that we follow the suggestion of the Hon. Member for Mississauga South and deal next with Clause 4(6).


Donald Alex Blenkarn: Clause 4(6), yes.


Roderick Blaker: First of all-


Donald Alex Blenkarn: Well, Clause 4.


Roderick Blaker: -let me put before the House the following question for its consideration: Shall Subclause 4(1) carry?


Some Hon. Members:: Agreed.

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Roderick Blaker: Shall Subclause 4(2) carry?


Some Hon. Members:: Agreed.


Roderick Blaker: Shall Subclause 4(3) carry?


Some Hon. Members:: Agreed.


Roderick Blaker: Shall Subclause 4(4) carry?


Some Hon. Members:: Agreed.


Roderick Blaker: Shall Subclause 4(5)
carry!


Some Hon. Members:: Agreed.


Roderick Blaker: We will now hear debate on Subclause 4(6).


Frederick James (Jim) Hawkes: Mr. Chairman, we have grouped together a number of amendments to the tax Bill. One of the major consequences if this particular group is accepted is that it will become more difficult from many Canadians to prepare for their own retirement. In other words, it is an attempt through the tax system to remove the flexibility of individual Canadians in preparing for their retirement. Future generations of taxpayers will have to assume an obligation to assist people in retirement, because the tax legislation under discussion today would make it more difficult for them to prepare for their own future.
First, could the Minister tell us why the Government believes we should penalize Canadians who want to prepare for their own retirement? Why is the Government moving in that direction when it is already known that retirement problems are likely to be more horrendous in an economic sense down the road?


Douglas Glenn Fisher: Mr. Chairman, I congratulate the Hon. Member. He has hit on a core question here, one which will undoubtedly be discussed at length. In September we heard the very useful comments of the Hon. Member for Edmonton West and the Hon. Member for Ottawa Centre in the Finance Committee concerning these precise issues.
The Hon. Member is really asking us about the whole question of deferral of taxation, of using accrual rules to measure income and thereby to measure tax liability. I suggest to him, as a general answer in reply to his general question, that from our point of view accrual is the fairest way of measuring income and, thereby, of measuring tax liability.
If we were to allow open-ended deferrals, then people would end up taking advantage of those open-ended deferrals ad infinitum and defer their tax forever instead of paying it at some self-determined date. I suggest that the Hon. Member has entered into a very ripe area of debate and that, if he wants to deal with this question, he would Find that transcripts of the discussion of the Hon. Member for Edmonton West and
the Hon. Member for Ottawa Centre at the committee hearings in September would be very useful guides to him.


Mr. Smith:: Enlightening.


Frederick James (Jim) Hawkes: Sometimes Governments do things without recognizing the consequences to all sectors of society.


David P. Smith: Not us! Heaven forbid!


Frederick James (Jim) Hawkes: I would like to begin by raising the issue involving charitable foundations. One of the time-honoured methods whereby individual Canadians may contribute to charities is through the purchase of some type of life insurance policy which would come due at some date in the future. The benefits of such a policy then go to a charitable foundation. A Canadian may designate a charity as the beneficiary of a policy and contribute to the policy for 20 or 30 years, let us say, with the view in mind that at the end of that time the charity will benefit. However, if this legislation passes, then every three years throughout that 30-year period, or ten times, the charity will receive a tax bill. The charity will be poorer.


Marcel Joseph Aimé Lambert: Not the charity.


Frederick James (Jim) Hawkes: If the charity is the named beneficiary, will the charity have to pay a tax bill at any time?


Paul James Cosgrove: Mr. Chairman, the implication in the question of the Hon. Member for Calgary West is that all forms of life insurance policies will be subject to the three-year accounting for income purposes. While that was a proposal in the section that was first introduced in the budget of November, 1981, there were subsequent amendments in June. As well, there were extensive consultations between the representatives of the life insurance industry, the Canadian Health and Life Insurance Association, and the Association of Life Underwriters, not to mention, as I am reminded, Members on both sides of the House, on the implications of the changes. The result of that was by way of an amendment to the definition of an exempt policy, which takes the policy totally outside of the rule that calls for the three-year accounting. I am led to believe by members of the life insurance industry that 90 to 95 per cent of all life policies sold henceforth would be exempt.
The answer to the question regarding a charitable organization or any Canadian looking for two things, protection and whatever investment opportunities they see in the life insurance policy-and that is for the individual purchaser to determine-is that the option would be to purchase a vehicle that is exempt and outside the rule that requires the three-year accounting. The rule and definition for such a policy is that it is a policy paid over a 20-year payment period. The answer is to look to the insurance representatives to find an insurance vehicle that is not subject to the provision, that is designed to look at long-term tax deferral.
I might indicate that it was after months of discussion with Hon. Members on both sides of the House and representatives
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of the industry that this kind of approach was worked out, recognizing that the insurance industry for years has had a preferred place in terms of offering protection to Canadians. In addition to that, of course, it offers to some Canadians financial protection or investment.
The decision by the Minister to amend so as to provide this exempt class, as I say, is in the Bill before us or in the amendments which we will move, Mr. Chairman, when you tell us we should move them. 1 would like to buttress my observations by assuring the Hon. Member that I have, for example, the concurrence of the Chairman of the Canadian Health and Life Insurance Association as to its final accommodation between the Government and the industry, as represented both by CHLIA and LUAC. I am referring to a communication dated February 14, 1983 from the Canadian Health and Life Insurance Association, Mr. Ian D. Mair. He says in part: "As a result of these amendments and others dealing with the health insurance capital dividend account that have been agreed to by your officials and the association, our concerns with Bill C-139 have been resolved. We share the view that the consultative process that has taken place over the past year has been very useful and we have no doubt that there will continue to be close co-operation with your officials in discussions on the draft regulations dealing with the taxation of life insurance policies."
The representatives of the Canadian Health and Life Insurance Association are in agreement with the amendment. Looking at the specific case raised by the Hon. Member for Calgary West, the Chairman and Chief Executive officer of the Life Underwriters' Association of Canada similarly says in a letter dated February 10, 1983: "Thank you for your letter of February 10 in which you state your intention to present to Parliament a number of technical amendments related to the taxation of life insurance policies acquired before December 2, 1982. These amendments to Bill C-139 further clarify the grandfathering, the so-called anti-abuse rule, for existing life insurance policies. They represent the combined effort of your officials and representatives of CHLIA and LUAC and our association is very satisfied with the amendments agreed upon. We also agreed with your officials on amendments to the draft regulation. These amendments will complement the above amendments. We are satisfied with the progress made and only some drafting by your officials remains to be finalized."
The short answer is that pre-1982 policies are not involved. They are not affected. There is a large exemption now by way of amendment to exclude, I am told, 95 per cent of business done by life insurance companies. The option to a person who is concerned about the three-year accrual basis is to inquire which policies permit the exemption category and thus do not attract the rule that calls for an accounting on a three-year basis of interest accumulation and life policies.


Frederick James (Jim) Hawkes: Mr. Chairman, will the Minister read into the record a letter he has from any charitable group that is happy with this?
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Paul James Cosgrove: Mr. Chairman, I do not have any specific letter. There were submissions. There was discussion with the charitable organizations. If their choice is simply as I indicated, that they can buy policy A or policy B, and policy A makes them exempt while policy B gives them a problem, what problem do they have? They can make the choice to opt for the policy that exempts them from the implications of the rule. I would say that any life insurance agent in Canada would be able to assist any charitable organization in that identification.


Frederick James (Jim) Hawkes: Mr. Chairman, the basic pattern evolving for charities was ten-year, single premium and right to borrow against it. Are they excluded or do they have to change their whole method of funding?


Paul James Cosgrove: Mr. Chairman, we would have to know whether the Hon. Member is referring to examples of existing policies or whether he is addressing the situation where the charitable organization is looking to make an investment, committing funds to the purchase of a policy for the future. As I have indicated, the rule for exemption is 20-pay life. I am told by the industry that that covers 95 per cent of their anticipated business for the future. Therefore, the charitable organization would look to the acquisition of that kind of policy so as to take advantage of the exemption.


Frederick James (Jim) Hawkes: Mr. Chairman, I think we finally have it on the table. What the Minister is telling the charities of this country and people who want to contribute to them is that they should change their pattern. A 10-year pattern is not acceptable, a 20-year pattern might be. We have heard a lot about the satisfaction of the life insurance industry. But the issue here is the patterns which charities and charitable foundations in this country were evolving, developing and working hard on, patterns in which they invested considerable time and dollars, and this tax Bill will hurt them. I commend to the Minister a conversation with some charitable foundations to find out if what I say is correct or not.
I believe we have identified the problem with the charities, so I would like to move to the issue of matrimonial law, which is under provincial jurisdiction and is changing rapidly across the country. The Minister will know that today a report was released from Statistics Canada which indicates that the probability of a marriage ending in divorce has gone up to 40 per cent in a very brief period of time. It was 30 per cent. Matrimonial law requires the splitting of assets in more and more jurisdictions and has been interpreted that way by the courts. These Clauses are dealing with investments for retirement, and I would like to ask whether or not the Government has considered the tax implications in the court system, what the courts may order taxpayers to do with respect to splitting these assets? If the court could so order those assets split, are those two people going to have a tax liability which they neither anticipated nor need at that particular juncture in their lives? What are the courts going to decide taxpayers must do with these kinds of assets? Then, what is the tax collector

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going to do? Is he going to take money away from those two people?


Paul James Cosgrove: Mr. Chairman, the Hon. Member prefaced his question by saying he realized that this was a matter of provincial jurisdiction, that is, the issue of settlement of property rights. The law itself, the legislative authority, is, first of all, a matter of provincial jurisdiction and, as we know, that law varies. The legislation itself pertaining to the respective rights of spouses varies from one Province to another right across this country.
Second, the court, the Bench which rules and interprets the law, is under provincial jurisdiction. Therefore, this House does not have any authority over what the law will be nor, indeed, can we try to guess in advance how a court in any particular Province would interpret the legislation of the various Provinces. Without having a specific Section, Clause or case before us, it would be very difficult to guess what a court would do. And 1 do not believe that the proceedings of this Committee, or of this House, would really be advanced in that exercise. I do not believe we can try to guess what any court, whether it is a court which is interpreting implications of tax legislation inter-spouse for company purposes, for personal purposes, for relationships, or any kind of relationship. It is not useful for us to try to hypothesize what court rulings will be.


Frederick James (Jim) Hawkes: 1 do not believe it is a particularly complex question, Mr. Chairman. Let us assume that one spouse in a marriage has a whole-life policy which has accumulated quite a bit in an assets sense. The court orders them dividend into two policies. At that moment in time, when that occurs, are those two people liable for tax which they would not be liable for if the plan had been allowed to continue over the 20 years?


Paul James Cosgrove: Mr. Chairman, if the policy was purchased pre-1982, and I assume so from the question, it is not affected by the law. If the policy is an exempt policy, it is not affected by the accumulation. So it is very difficult, without putting some specifics on it, to guess what a judge would do, or what kind of situation he would be presented with. However, again we are told by the life insurance industry that the majority of policies are presently exempt and will be exempt in the future, so that in the majority of cases the question would not even arise.


Mr. Darling:: Mr. Chairman, I would like to make a few comments and direct a question to the Minister. I suppose I should at this point declare a conflict of interest, as I have had a life insurance contract to sell life insurance since 1938. Therefore, I am reasonably interested in Bill C-139 and, of course, the many ramifications with respect to life insurance.
I was interested to hear the Minister read letters from the heads of the life insurance industry and also from the Life Insurance Association. 1 have been in touch with, and received letters from, these people, naturally not recently, but I presume the letters will start coming in now that this Bill is back in the House.
I believe the predecessor of the present Minister of Finance, when I questioned him in the House, stated that the problems had been solved. As a result of that I immediately wrote to the President of one of the major life insurance companies and asked him if, indeed, the problems were solved. His answer came back to me in words to this effect: "Mr. Darling, if you had been condemned to be executed and then had a reprieve and were told that you were not to be executed but you would have one arm and one leg cut off, you would certainly consider that a very good alternative." That is one thing which I would like the Minister to comment on.
There is another matter which I would like the Minister to comment on. This insurance clause, Clause 5, affects, I suppose, Mr. Chairman, a minimal number of people. 1 believe only 13 million people approximately are policyholders who are vitally interested in this Clause. I know that many Hon. Members on both sides of the House have received letters from life insurance agents in their ridings raising this question and are presumably very worried about it. I am wondering if the Minister could come up with some reasonable figure with respect to the question raised recently in the House as to how much money is going to be received from this.
I am aware that the present Government is so hard up for money it would probably "skin a louse for its tallow", and they are going to use every angle possible. I believe it was on the work in progress issue that one of the Members asked the Minister how much money the Government was going to derive from that, and, of course, the officials there went through the books and came up with a figure of, I believe, $20 million on one angle and $20 million on another angle. That is $40 million. I am curious whether the Minister's officials would go through their books and tell us how much the Government expects to take out of the life insurance policyholders across Canada by even considering taxing life insurance.
The present Minister of Energy, Mines and Resources, when he was the Minister of Finance, brought in this very same measure and all hell broke loose. I suppose it was bombarded from every angle. As a result, in his wisdom the Minister withdrew it. The Hon. Member for St. John's West, when he was Minister of Finance, brought in a budget which did not please the Canadian people, although I am sure they would now be delighted to welcome it with open arms.


Mr. Cullen:: We will see.


Stan Darling: You bet your life you will see. Of course, when the present Secretary of State for External Affairs brought in his budget, his high-priced help again sneaked this measure in and he got it through. We know, of course, what happened there. That was back in November, 1981. There then was a sort of a changing or relaxing on June 28, 1982. The present Minister of Finance then made revisions in his so-called statement or budget of October, 1982.
I am wondering how much the Government is going to get out of this and how is it going to police it with the millions of
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policies across the country which have cash values attached. The policyholders themselves do not even know what the cash value of their policies is. How much does the Government feel it is going to get out of this, compared with all the hassle and problems, the lost votes and probably a good many lost seats in the next election? 1 believe the Government would be well advised to withdraw this provision.


Paul James Cosgrove: Mr. Chairman, I thank the Hon. Member for disclosing his professional expertise. I do not consider it a conflict of interest in dealing with this issue. After all, presumably all Members have the confidence of their electors to assume responsibility as a Member of the House because they have expertise in some area or the other. The Hon. Member is not alone, of course, in his expertise in dealing with life insurance. The Hon. Member for Thunder Bay-Nipigon, for example, is a man who has somewhat the same background and is able to draw on his practical experience and make representations to the Department and the Government. Obviously the Government was assisted by Members who, although they may not be licensed agents, represent those areas and constituencies that we all recognize contain the home office of many life insurance companies. 1 am thinking, for example, of the Members from Kitchener or London East and London West who have the advantage of getting firsthand reaction to the budget proposals and who made representations to the Government. All these Members did what we expect from Hon. Members, and that is to bring their own particular background to bear on Government proposals and make recommendations for improvement or change. Secondly, they acted as good Members in their constituencies and acted to bring the representations of their constituents to the Government in considering the implication of this legislation in so far as it affects life insurance policies and annuities.
I did not have the advantage, Mr. Chairman, of listening to the conversation between the Hon. Member and the president or executive officer of the life insurance company referred to by the Hon. Member, but I really cannot do any more than introduce to the House the letter written to me by the President of the Canadian Life Underwriters or the Canadian Health and Life Insurance Association representatives who have made submissions. We did have a great amount of dialogue. There was a discussion between Members of Government and industry representatives. I think all Members received representations from their constituents.
The Government recognized the special role that the life insurance industry plays in the bigger scheme of things, and it recognizes that Canadians look after their own responsibilities by the purchase of life protection. This provision deals not only with life insurance policies but with annuities, and you have to bear that in mind. The Hon. Member for Mississauga South asked that we combine these because there is a philosophy that runs through the whole piece. We have to keep in mind that a number of these financial instruments serve different purposes. However, in recognition of the social value of the life insurance policies providing protection to the individual, paid for out of his own pocket without relying on Government, we moved to
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the definition of an exempt policy, the 20-pay life which we are told by the industry in effect exempts the vast majority of policies that will be sold in the future.
In recognition of some of the further difficulties and other submissions that were made, we went a step further. For example, even in those cases of life insurance beyond the exempt definition-in regonition, for example, of the fact that Canadians look to life insurance policies for loans at a time of financial difficulty-we said that withdrawals through loans will be exempt. All policies prior to 1982 are exempt to begin with, but for Canadians bying a non-exempt policy in the future and who look to that policy for cash purposes in times of financial difficulty, we said we will further extend the exemption in those cases.
Moreover, we all recognize that a disabled person, or someone who becomes disabled through an accident and looks to the accumulated cash available to them, should be able to call on the cash value of those policies without the imposition of the three-year accrual on income build-up. They would be able to annuitize immediately without attracting tax which would otherwise apply.
To recap, we think we have dealt fairly with the industry and policyholders generally by not touching policies purchased prior to 1982. Many letters which I received, and I am sure which many other Members have received, were from people who had purchased policies prior to 1982 and who thought that they would have to account on the three-year accrual basis, but it does not apply. Prior to 1982, whatever the kind of policy the new changes do not apply.
In addition, I am told that the companies were moving towards the marketing of policies which by and large fall into the exempt category in any event, so the vast majority of the business of the life insurance companies will not be affected. For the 10 per cent or so of policies which are affected by the three-year accrual analysis and imposition of tax, we have exempted anyone looking to cash surrender value because of a financial crisis; and anyone who becomes disabled and for that reason has to fall upon the cash value of the policies is also exempt.
Finally, the question of annuities was the most difficult issue because we found that the purchase of annuities was becoming a tax haven.


Donald Alex Blenkarn: That is absolute nonsense.


Paul James Cosgrove: It was becoming a tax haven for those Canadians who have the ability to employ professionals to give them financial advice on how to defer income over a longer term. It was quickly seen that if we projected the value of the haven for the purchase of annuities and the use of deferred annuities as a way of avoiding or deferring tax over the long haul, our analysis was that over two years it was worth a recapture of approximately $75 million by the Government to assist it in meeting its obligations.


Stan Darling: Mr. Chairman, the figure the Minister has come up with is $75 million. That is the difficulty. There is one

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other thing that 1 want to emphasize-and I must say that I agree with the Minister on this-and that is that no policies that have been in effect prior to December 2, 1982 will be affected.
I have sold a lot of insurance over the years. The Minister mentioned 20-pay life, which was suitable for a small family. A great majority of people bought straight or whole life insurance-"pay till you die". In that case, even after a number of years the cash value will never equal the amount of premiums paid in. I own policies which are probably 30 or 35 years old and are worth a few thousand dollars, but I have paid more than that into them. I know that they are home free anyway.
People are approaching life insurance differently these days, Mr. Chairman. I wonder why the Minister's officials have been using the rubber hose on him and on his predecessors to get them to include this life insurance provision in the Bill. There will be little or nothing invested in new policies because the people who are buying insurance today are buying term insurance for protection. Anyone is an idiot to buy a life insurance policy for an investment-and I represent a life insurance company-with the great deals that are around today, even with lower interest rates. No one is going to pay $48 or $49 per year for 20 years for a $1,000 endowment, as they used to do for investment or for education or whatever. People who want pensions are saving for their old age with annuities. As Members of Parliament we get a real break, much more than anyone else, even with the annuities that the Minister says are tax dodges-or words to that effect.
I am trying to get down to brass tacks, Mr. Chairman. I suppose the Minister's officials will not concede that this provision is not going to be worth the money that will be spent trying to enforce it. There are certain laws which the Government in its stupidity, brings in and then, in its wisdom, realizes it cannot enforce. The Minister of Communications finally threw up his hands on the problem of dishes for TV reception. Regulations could not be enforced.
The Minister is not dealing with individual policy-holders who have $1,000 or $5,000 insurance policies, but with millions across the country. It might be possible to check a multimillionaire but he would not have insurance policies that the Government could get its claws on even if they were taken out after December, 1982. The multimillionaire would be buying protection insurance or investing in real estate and other things that give a better return on investment and can be easily liquidated.
I wonder why the Minister wants to continue with this. I have a couple of hundred letters from policyholders and about 50 letters from insurance agents whose livelihood depends upon this activity. Of course, they are screaming blue murder, and the Minister has softened things a little in order that they may continue in business.
I should like the experts to tell us what percentage of policies will be subject to tax from December, 1982 onwards.
How much money will they produce and when is the Government going to get it? The policies did not go into effect on December 2, 1982. It will be 10 years before they have any cash value. Even policies that will have a reasonably high return will not have it in the early years. They will certainly not wipe out the deficit. I do not know how many years will go by before they produce five cents.


Roderick Blaker: Order, please. The Hon. Member's time has expired.


Marcel Joseph Aimé Lambert: Mr. Chairman, I should like to say that as a matter of principle I wonder why the Government introduced this particular motion. We all know that in the normal course of events a great deal of life insurance was bought with cash-paid dollars, or savings. To that extent only, the earnings of the policy could be taxed. In the case mentioned by the Hon. Member for Calgary West, there was no deferral of tax unless the entire premium was claimed as a donation to a charity, and then there was only a partial allowance.
The Minister has been at pains to show, in derogation of the November 12 budget, that in December of that year the Minister of Finance made a switch because the original budget proposal covered all insurance. All existing insurance was going to be subject to the three-year accrual rule. Policyholders would pay tax on money they would never see. That is unjust.
Then there was a change that grandfathered all present policies. There were further changes as well. The Parliamentary Secretary will know that last August and September, when representatives of the insurance industry appeared before a subcommittee of the Finance Committee which was hearing representations on the then Ways and Means motions, they were most exercised and protested vigorously.
Now the Minister is proud to read into the record letters from the Life Insurance Association and the Life Underwriters association stating that the problems have been resolved. Perhaps I could agree with the Hon. Member for Parry Sound-Muskoka that the industry was prepared to lose half an arm. The industry will not lose, of course, but policyholders will because it is they who will be taxed, not the industry.
If 95 per cent of business that is to be written in the future is going to be in the exempt categories, what is the purpose of this exercise? Will that 5 per cent yield $74 million? That is utter tripe. There is not that much life insurance written yearly. Will 5 per cent written since December, 1982 produce taxable revenue? And not only taxable revenue, but revenue? I cannot see that an individual buying an annuity, even on a 20-year or whatever is a non-exempt basis at the present time, is going to be eligible for a deferral of tax.
If I make payments into an annuity plan, I make them with tax-paid dollars. The income earned on that investment shoud not be taxed. It is not received by the individual. There are many instances, as the Hon. Member for Calgary West indicated, where there are court ordered divisions of annuity
March 8, 1983

plans as a result of divorce or judicial separation. We must ask who has paid it, who is being taxed and who has been taxed.
I will repeat one of the big complaints, and that is the complexity of the Income Tax Act, as well as the cost and difficulty of compliance. Now, in order to aim at a wee sparrow or even a smaller bird, there is trotted out a legislative blunderbuss. They are very complicated provisions. Either the individual requires the help of a good insurance agent who will have gone through quite a period of indoctrination in order to know just what is what or he or she may unwittingly step into a tax position. For what purpose? 1 suggest that the proposal was disreputable in the first instance; it was disreputable to start. There is nothing which legitimizes its antecedents. Now we have page after page of amendments by the Government which are incomprehensible to 99 out of 100 people. The Government is insisting that they be included in this particular Bill. Why? I am wondering whether the Government is reduced to the position where it has to go out and sweep the streets in order to collect some horse droppings as a possible substitute for fuel; perhaps it will be a source of biomass.
The tax system is incomprehensible. The Minister was not at the Committee this last summer. I do not like to refer to the officials who are before him because they are part of the system, but they were not present this summer either when group after group complained about the complexity of the income tax law. Frankly, one can no longer assess oneself outside of the fact that one would be drawing a salary, would have a wife and no other dependants; then if one had no income from other sources, one might be able to complete a return. Anything beyond that and the individual has to go to an accountant for tax services. If one is in business, owns property or is a farmer, then he or she definitely has to seek expensive tax advice.
That defeats our system. The very complexity encourages evasion. 1 am not referring to avoidance; I am referring to evasion, such as people working at a second job and saying: "No pay cheques; pay me in cash once a week". These could be service jobs such as plumbing, paper-hanging or painting done after hours outside regular employment. There is a total subterranean, shall we say, industry right across the country.
I know Hon. Members on the Government side are not interested in this. Perhaps they are engaging in some of it themselves. Some of them may be moonlighting. Money from moonlighting is never accounted for. But it arises either because the rates of tax are too high or tax reporting is too complex. These are the only reasons for moonlighting, aside from the funds gained, of course. Surely Hon. Members opposite, whether they are new here or have had some exposure to the income tax provisions, know this. I do not like this particular provision and I intend to vote against it. It is simple; we do not delete, we just vote against.


Paul James Cosgrove: Mr. Chairman, the Hon. Member raised a question concerning the rationale for the amendments to the Act which deal with annuities and life insurance and concerning the reason for the changes. Albeit that we may be adding to the length of the Income Tax Act, it is designed to serve Canadians by putting a tax on income. In fairness to all
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Canadians, all sources of income should be considered as legitimate ways for the Government to realize resources to meet its obligations. It was an analysis of where income was realized by people, how it was generated, and whether the pre-1980 tax system which is presently in place treated all sources of income fairly and therefore all Canadians fairly.
Before 1981, annuities were taxed only as the income was received by the recipient annuitant in payments. This resulted in taxes being paid roughly at the same time as receipt or accrual. We know that in some deferred annuities payments are put off until some time in the future to give the person the advantage of not paying tax on the income earned by that invested money in the interim. Therefore, such deferred annuities were put in an advantaged position. There was no tax payable until some time in the future; and if one deferred the tax long enough into the future, no tax was payable. Therefore, people who took advantage of it were not contributing toward the revenues of Government to serve all Canadians, themselves included. Thus they had an advantage.
Let me give a specific example of the tax advantage. Perhaps it did not matter when interest rates were 5 per cent and is indicative of why the Government is now moving at this time. Let me take the example of SI00 being put into a bank account for 20 years and compare it with the same amount being put into an annuity for the same period of time. The bank account would accumulate interest annually for 20 years. For the $164 deferred annuity the after-tax cash would be less than $20 more. While interest rates were at 5 per cent, there was not much advantage in the deferral scheme on annuities, a little advantage but not much.
Let us take a look at interest rates at 10 per cent and interest rates above 10 per cent that we have seen in the last few years which change that situation dramatically. Take the same amount in the same period. I am looking at after-tax cash in the bank account of $100 at 10 per cent, which is $265. But for the deferred annuity, the advantage for the same period of time becomes $125 more. That is a comparison of the two options for investment and shows the inequity.


Stan Darling: You cannot get the annuity money out.


Paul James Cosgrove: It shows that for the annuity $125 more is realized, on which there is no tax levied. Therefore, there are no resources to the Government, as I say, during that period of time. The person who uses the bank account is at a disadvantage to those people who use professionals and the device of deferred annuities.
What does that mean in terms of revenue drain if we look at the actual experience in those years in which interest rates were remarkably higher than our previous experience in this country? The revenue drain becomes significant-horse droppings possibly to the Hon. Member opposite but to the tax system it is $75 million.


Marcel Joseph Aimé Lambert: Nonsense.

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Donald Alex Blenkarn: Nonsense. All you have done is ruined the capital markets. Wake up! It is never $75 million.


Paul James Cosgrove: That can be used to great advantage by the Government.


Some Hon. Members:: Oh, oh!


Paul James Cosgrove: This I have illustrated. 1 have given you the $100 unit and shown how that difference is accounted for. I have given you the best analysis of the Government as to the result according to our best calculation for over a year, producing a revenue drain of $75 million.


Marcel Joseph Aimé Lambert: To a socialist, that makes sense.


Paul James Cosgrove: We got into this discussion on equity and fairness. If the tax system for all Canadians is to be fair, it should treat all Canadians in the same or parallel manner in terms of the way in which they invest money.


Marcel Joseph Aimé Lambert: That is the socialist way.


Paul James Cosgrove: There is no fair treatment if, for example, you treat deposits, GICs, or bank accounts differently from the deferred annuity, which was becoming very popular. It was a way of extending the Government's program. The provisions of the Act passed by this Parliament, allowing a deduction of $5,500 on the RRSP contribution was designed to be available to all Canadians. In fairness, we said if that plan is available to all Canadians, that is a way in which we can give a break and an incentive to Canadians to provide for their own retirement. But then people began adding the deferred annuity to the plan. They were getting around that provision and taking unfair advantage by, in effect, extending the RRSP deductions by the vehicle of the deferred annuity. But that is only available to those Canadians who have the resources to add on to the $5,500 deduction and to those financial institutions that are in the business of annuities. It was for that reason, to treat all Canadians fairly and all sectors in the economy, financial institutions and businesses in the same way under tax law, that the changes were introduced. That is the basis. First, fairness to Canadians who are in receipt of income. Second, fairness to all different types of financial institutions so that they, in the marketing of their products, are treated equitably and, in other words, comparably, by the income tax system.


Donald Alex Blenkarn: It is absolutely stupid.


Marcel Joseph Aimé Lambert: Mr. Chairman, now we are getting down to the philosophy behind those changes. With all due respect to the Hon. Member for Kamloops-Shuswap, it is pure socialism this Minister is going after, straightforward socialism. He talks about taxpayers having an advantage. It is the same as was proposed last summer by the officials, that the owner of a small business should be in the same position as a man on salary. There is no difference as far as the income tax return is concerned. That is why there was a proposed increase in tax on the small business dividend. But the Minister and his officials have lost sight of the reason why we had deferred annuities and annuity plans. People were saving up, people were denying
current spending. In other words, they were not living right up to the collar so they would have a greater income after retirement or when they needed it. I know that today, in the eyes of a lot of people that is a strange philosophy. One is supposed to come to the state with holes in one's trousers, pockets empty, and say: "Here I am. I have drunk it. I have spent it. Now keep me."


Roderick Blaker: I must inform the Hon. Member that the 20 minutes allotted to him have expired.


Marcel Joseph Aimé Lambert: Mr. Chairman, 1 will object to that. I have not spoken for 20 minutes. Speaking is not cumulative. Speaking is at each interval. If I am interrupted or I yield the floor to another Hon. Member, I get another 20 minutes. My time is not cumulative at any one time on any one Clause. Therefore, I have been speaking for about three minutes only at this particular time.


Roderick Blaker: Order, please. I fully appreciate the Hon. Member's comments and concern for his speaking time, but it has been the practice in the House in Committee of the whole, I am informed going back to 1975, that Hon. Members' time is calculated on the basis of comments they wish to make, the Minister's response and debate continuing for a period of 20 minutes each.
The point raised by the Hon. Member for Edmonton West is quite valid strictly speaking according to the Standing Orders. But the Chair in this instance is being guided by the ongoing practice since 1975. Of course, I would not want to treat an Hon. Member differently from another Hon. Member. It would be sheer pandemonium if I were to give one Hon. Member more time than is accorded by the practice in place in recent years and treat another Member differently, guiding myself strictly by the provisions of the Standing Orders. We are in Committee. Members may wish to indicate in which fashion they prefer to proceed. This morning and in recent days the Chair has been guided by the practice put in place since 1975.


Nelson Andrew Riis: Mr. Speaker, while I take some exception to my hon. colleague's introductory remarks, I do feel he is pursuing a very valid point. Knowing from his past performances that he would likely respect a short extension in order to allow him to complete his remarks, our Party is quite prepared to give him our share of the unanimous consent so that he can finish his remarks.


Paul James Cosgrove: Mr. Chairman, I would agree with that sentiment. The Hon. Member for Edmonton West has long experience in the House. I think we would be advantaged if he continued the point he is making. I would go further than that. The Hon. Member said that he thinks now the discussion is linking up. He believes he has identified the difference between the approach of the philosophy of the Government and that of himself. I would appreciate his concluding his remarks on that issue by addressing the point made in the Financial Post of
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July 4, 1981. It is not known to be a socialist or communist rag.


Roderick Blaker: Order. The Minister is no longer on a point of order, he is now debating. There being unanimous consent to allow the Hon. Member for Edmonton West to continue his remarks, the floor should go to the Hon. Member for Edmonton West at this time.


Marcel Joseph Aimé Lambert: Mr. Chairman, while I do not want to create a precedent because I wish to come back to the point, 1 want to thank Hon. Members for their consideration. At this time 1 will abide by that interpretation, Mr. Chairman, but I suggest that you are wrong. Otherwise, I can ask a question lasting one minute and the Minister can take 19 minutes to reply and thereby exhaust my 20-minute period. I suggest that that is totally and utterly wrong.
Having said that, I will come back to my earlier comments. An investment in an annuity or any other plan is a saving for the future. When that investment is made, the money is then available for investment by the insurance company or others who hold the contract with regard to the annuity. Now, however, the idea is that the difference in income averaging contracts, annuity contracts and forward averaging will be paid to the Government. The Government says that that money must go to it.
The participating beneficiary of an annuity contract does not draw anything until the contract matures. The original inducement for a person to save was that his or her tax rate would be lower because of their reduced income. The Government now says that all taxpayers are not being treated alike. Everyone is free to buy an annuity contract if they wish to save money. It only depends upon what a person wishes to spend. Now there is every disincentive to save as a result of the Income Tax Act as proposed not only in this Clause but all through the Bill. The individual begins to rely more on a state-operated plan such as the Canada Pension Plan and Old Age Security. That is what drives up the demand for higher Old Age Security and has created the demand for the Guaranteed Income Supplement. It all comes from the state.
The Minister says that the state requires this interim taxation on life insurance contracts every three years because it needs the money. Why does the state need the money? It wants to have everyone dependent on it. Governments at the provincial level as well as the federal level take great pride in implementing programs and telling people how they will benefit from them. The Minister of National Health and Welfare is a classic example of this. There are many other examples as well. These same Ministers who start these programs turn around the following year to ask for more money and therefore more taxes. The Government needs the money. However, it is only those Ministers who put spending programs into place who say the Government needs the money.


Mr. Lang:: Why did you go against restraint?
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Marcel Joseph Aimé Lambert: I will oppose that in this particular instance. The Hon. Member for Kitchener made some unintelligible comment about why did I vote against the restraint program.


Peter Joseph Lang: Restraining the OAS.


Marcel Joseph Aimé Lambert: I voted against restraint on the OAS because people had been put into that position at the Government's insistence. I voted in favour of six and five. However, I believe to take it out on the backs of senior citizens is wrong because they will be hit twice. It is clearly in the Bill that the indexing of allowances will go to six and five. This comes ten years after the great white knight, John Turner, introduced the OAS. Now, the Hon. Member's Government will cut it back.
To return to my comment, this difference in philosophy is where I have parted company with the Government over the years. The Hon. Member from Sarnia knows this very well. That is why I am a Conservative. I contend that the individual who wants to save money should be allowed to do so. That money then becomes available for investment elsewhere. The reason there are shortages of capital is that the Government will be borrowing another $20 billion to clean up the market. There will not be any money left for industry or other Governments. 1 find this incomprehensible.
I apologize to my hon. friend for Kamloops-Shuswap when 1 say that this is pure socialism. He is not a pure socialist and, to that extent, he feels somewhat offended. This is part and parcel of the philosophy of Carter, which is that a buck is a buck is a buck. This so-called theory of equity, even though Parliament rejected it, has been shoved back into the system at every opportunity.
This situation reminds me of that of many years ago, which the Minister may not remember. The initial conferences that were held prior to the war with regard to sharing revenues and other programs heard many proposals at that time. The Provinces did not like the way they would be implemented and turned them down. Beginning immediately after the war, one proposal was shoved in by the bureaucrats, then another and another. To that extent, the pre-1940 plan was implemented. We are now seeing the piecemeal implementation of the Carter philosophy. This House roundly rejected it 13 years ago. Now Hon. Members opposite who were not here then take these proposals like candy offered by a doting parent. They think that this tax legislation that has been put forward is from Heaven and divinely inspired. They do not question it.
I part company with the Government over the philosophy that is behind this feature and others in the Bill. It is for that reason that I have spoken for this length of time, and I am glad that I have.
[ Translation]


Mr. Deputy Speaker:: Order, please. It being one o'clock, it is my duty to rise, to report progress and request leave to consider the Bill later this day.
Progress reported.

March 8, 1983


The Acting Speaker (Mr. Corbin):: It being one o'clock, I do now leave the Chair until two o'clock this afternoon.
At 1 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.

Mr. Henri Tousignant (Temiscamingue):: Madam Speaker, I am pleased to be able to inform the House and the Canadian public that, thanks to constant efforts by the industry and the Canadian Government and the negotiations conducted by our colleague, the Minister of State (International Trade) (Mr. Regan), this morning at 9:30, the U.S. Department of Commerce made a preliminary decision to the effect that it did not consider there were sufficient grounds to levy a surtax on Canadian lumber exports to the United States. This preliminary decision is to be reviewed on May 23, when a final decision will be made, and we have every reason to believe that the initial decision will not be reversed. Otherwise, Madam Speaker, some 70,000 Canadians would be in danger of losing their jobs. There is therefore reason to rejoice.


INTERNATIONAL WOMEN'S DAY
[Stage Direction]
EMPHASIS ON THEME: "WOMEN AS SURVIVORS"
Hon. Erik Nielsen (Leader of the Opposition):: Today is International Women's Day, a day when women in cities across Canada and most western countries commemorate women's struggle for economic equality. The theme for this year's commemoration is "Women as Survivors", Madam Speaker. This theme is most appropriate when we examine the plight of working women in Canada. Over 50 per cent of all women, single or married, are in the paid labour force, 67 per cent of all women under 45 years of age.
From January, 1982, to January, 1983, the unemployment rate among women rose by 43.4 per cent for a total of 605,000 Canadian women. To the problems posed by the current economic devastation in Canada, we must add the tremendous threat which the impending high technology revolution poses for women. Because women are concentrated in the clerical
and sales occupations which are most likely to be affected by the new technology, as many as one million jobs presently performed by women may disappear by 1990. Of course the new technology promises to bring with it new jobs, but the skills gap between the old jobs and the new ones is often too great to be bridged by on the job training and personal initiative alone.
The Government must begin to put in place retraining programs which are specifically targeted at the groups most affected by the high tech change. As I have indicated, one of the hardest hit groups will be women. Lest the Government not be overly concerned about the effects of massive unemployment among women, let me point out that if all of the women in two-income earning families lost their jobs-


Madam Speaker:: Order.


Erik Nielsen: -the number of Canadian families-


Madam Speaker:: Order.


Some Hon. Members:: Hear, hear!


Mr. Trudeau:: Do it again. It might have been all right.


Erik Nielsen: Cut off at the pass.



Mrs. Therese Killens (Saint-Michel):: Madam Speaker, in New York City on March 8, 1908, women working in the garment industry took to the streets to demand abolition of the working conditions that had caused the death of 128 workers at the Triangle Shirtwaist factory in New York City.
In 1911, delegates to an international conference in Copenhagen proposed that March 8 be set aside as the day on which the demonstration would be commemorated.
Eighteen years before Canada recognized women as persons, women workers throughout the world were meeting on this date to mark their contribution to the labour market.
Today, on the 72nd International Women's Day, the Federal Government has published a brochure called The Government of Canada and Women. It is a guide to all federal programs and services offered to women. The brochure is available from the Canadian Unity Information Office, by whom it was prepared.
The Federal Government has always defended the principle of equal rights for women, and by publishing this brochure, it hopes that women will become aware and take advantage of the many services, programs and studies the Government has
March 8, 1983

initiated in order to provide a better service to the majority of the people of this country.


NEW EMPLOYMENT EXPANSION AND DEVELOPMENT PROGRAM
Mrs. Jennifer Cossitt (Leeds-Grenville):: Madam Speaker, 1 am concerned with the Government's promise last November to create 60,000 new jobs under the NEED Program which, to date, has in reality only created a maximum of 4,300 new jobs in Canada-another Liberal promise broken.
In my riding of Leeds-Grenville there are approximately
4,000	people without work, yet only 40 new jobs have been initiated to date. Even this number is actually misleading in that three of these positions are for jobs which would normally be done by federal Government term employees. In fact federal Government Departments are utilizing the NEED Program to fund projects which they would normally undertake to fund from their own departmental budgets, thus creating the impression that these budgets are keeping pace with inflation and are well within the six and five guidelines. What we have here is a sham, a redistribution of funds from departmental budgets into the NEED Program, and the illusion of job creation.
In real terms, the nearly two million unemployed people of this country will not be beneficiaries of the $200 million in job creation. In my opinion these funds are not being used for the purpose for which they were intended, the creation of new jobs to put people back to work. Once again we find it difficult to believe in the credibility of the Government which promises to help those in need when, in actual fact, it is just juggling figures to make itself look good.


INTERNATIONAL WOMEN'S DAY
Mr. Vic Althouse (Humboldt-Lake Centre):: Today, Madam Speaker, is International Women's Day, which provides opportunity for us to recognize the tremendous contribution made by women to our society and to reaffirm the necessity of allowing them the opportunity to work and to receive compensation for their work in whatever way they choose. Farm women, in particular, are part of an economic team which is most often a family, yet these women must fight for the smallest compensation and are still among one of the most under recognized groups in our society.
As an example, recent census data state that only 4.3 per cent of the Saskatchewan female labour force actually worked
on family farms or businesses for no pay. Unfortunately, either a bias crept into the questionnaire in its administration, or the men filling out the forms did not recognize the contribution of their wives, mothers, daughters, and sisters.
The true cost of producing food is not currently reflected by the prices farm families receive for their products. Society should and must pay just compensation for farm families so that fair wages can be paid for all work on the farms. Only then can farm women, along with farm men, receive a return for their labour, contribute to pension plans, and achieve the sort of financial independence and security taken for granted by many men and women in our society.


CALL FOR MAINTENANCE OF DOMESTIC OIL PRICE STABILITY
Mr. Bill Yurko (Edmonton East):: Madam Speaker, there can no longer be any doubt that the most beautiful and talented young ladies live in Edmonton, as was again evidenced last night by the results with respect to the Miss Teen Canada Pageant. Both this year and last year the award has been won by a young lady from Edmonton.


Some Hon. Members:: Hear, hear!


William J. Yurko: The Minister of Energy, Mines and Resources, while appearing before a committee several months ago, advised that the new Government direction in the energy sector is "stability and decisiveness", and that he would not be recommending any new taxes on the oil and gas sector in the forthcoming budget. This sector of the economy is suffering from instability. World oil prices are being subjected to severe buffeting and fluctuations.
In Canada the formula for setting domestic oil prices contained in the September, 1981, Canada-Alberta Oil Agreement is redundant. It is imperative that domestic oil price stability be maintained for the next several years to assist in the economic recovery of the nation. Therefore I ask the Government to follow its new directions in the energy sector and act with decisiveness to impose stability by fixing the domestic price of old oil at $29.75 per barrel until this price reaches the world price, and then keep it there.


Madam Speaker:: Order.


STATUS OF WOMEN
Mr. Jack Masters (Thunder Bay-Nipigon):: Madam Speaker, this past year has been a particularly significant one for Canadian women. We saw the Charter of Rights and Freedoms entrenched in our new Constitution. We saw the first

March 8, 1983
woman appointed as a Justice of the Supreme Court of Canada, and the first ever federal-provincial conference of Ministers responsible for the status of women. We saw significant changes to the laws with regard to sexual assault, and increased awareness and debate on wife battering, divorce, pensions, sexual stereotyping in media, pornography, microtechnology, and part-time work.
I would like to pay tribute on this International Women's Day to all Canadian women. Especially I would like to pay tribute to one Canadian woman who has been so instrumental in furthering women's rights, the retiring Senator Florence Bird. Women owe Senator Bird a great debt for her pioneering work as Chairman of the Royal Commission on the Status of Women and for her continuing efforts toward the principle of equality.
It is my concern, however, that much of the progress in the past year has been as a result of consultation and action on the part of this Liberal Government, and so much of what needs to be done lies within the domain of the Provinces. For instance, just yesterday the Conservative Government in Saskatchewan announced the abolition of the women's bureau in their Labour Department. Can this be the same political party that federally is trying so hard to con Canadian women into thinking they are concerned about them? I ask women-


Madam Speaker:: Order, please.


FINANCE
Stan Darling: Madam Speaker, I could not help but note the remarks of the Minister of Finance (Mr. Lalonde) over the weekend in which he proposed to play the federal deficit or the people of Canada-it was not absolutely clear which-like an accordion.
When it comes to his musical ability, methinks the Minister is much too modest. He is a veritable one-man band. Not only is there his one-way accordion, which always expands but never has to contract in order to be able to expand again, but there is also the bagpipes at which the Minister is adept. He blows and blows to keep the bag full of hot air, and hopes the rest of us will be impressed with his fingering. Of course there is his harp, which makes wonderful music as long as we listen to it with our eyes closed. It is only if we open them suddenly that we notice that the strings are being pulled by former Members of the Liberal Cabinet.


INTERNATIONAL WOMEN'S DAY
Mr. Svend J. Robinson (Burnaby):: Madam Speaker, I am pleased to join with my colleagues on International Women's Day to urge the Government to implement two key recommendations of the Canadian Human Rights Commission of particular concern to women. First, the Canadian Human Rights Act should be amended to clarify that discrimination on the basis of sex includes discrimination on the basis of pregnancy or childbirth. As well, the Act should make very clear that sexual harassment, a serious and widespread problem in the workplace, will not be tolerated. Canadian women would thus be ensured that unfavourable treatment resulting from a refusal of sexual attentions, as well as the unwanted and unsought reception of sexual advances, would be prohibited under the Act.
While the recently tabled amendments to the Act did include these long overdue changes, other provisions in that Bill, in particular the offensive reference in proposed Section 14(2) to the possibility that a person may "behave or is likely to behave in an unduly disruptive manner unacceptable in the individual's environment" have jeopardized passage of the Bill.
It is the strong and unanimous view of representatives of the disabled community as well as national women's groups and many others that this Section opens a dangerous loophole which allows people's attitudes and beliefs toward minority groups and women to be legitimized as bona fide job requirements rather than constituting discrimination. While Clauses 9(3) and 25 remain problems, if the Government removes this dangerous Clause 14(2), we will support speedy passage of the Bill to extend the rights of the physically and mentally disabled and ensure that women are protected from discrimination on the grounds of pregnancy, child birth, and sexual harassment.


Madam Speaker:: Order.

[Translation}


STATUS OF WOMEN
Mrs. Celine Hervieux-Payette (Montreal-Mercier):: Madam Speaker, International Women's Day is dedicated to women's struggle for equality throughout the world. It is a day of hope, on which one of the main objectives being promoted is to achieve greater social justice. Against this background, Madam Speaker, I invite my Opposition colleagues to join the Government's team in implementing the report submitted to the House by the Committee on Indian Women's Rights and to proceed fortwith to amend the Indian Act by restoring all their rights as soon as possible to Indian women by amending Section 12.1(b), thus restoring their fundamental rights to Indian women and their descendants.
March 8, 1983



ORAL QUESTION PERIOD


Hon. Flora MacDonald (Kingston and the Islands):: Madam Speaker, my question is directed to the Minister of Finance. Yesterday the Minister proposed to his provincial counterparts that the six and five formula be applied to the federal cash transfer payments for health and post-secondary education, in other words, a cutback of almost $700 million from what these payments would otherwise have been. This in effect would amend the Federal-Provincial Fiscal Arrangements Act which was passed just a year ago. Will the Minister assure the House that no change will be made in the fiscal arrangements for health and post-secondary education unless it is in the form of an amendment to the Fiscal Arrangements Act to be brought before the House and debated separately?


Hon. Marc Lalonde (Minister of Finance):: Madam Speaker, I am pleased to inform the hon. lady that she is misinformed. At no time was there any discussion about modifying, in any way, shape, or form the payment formula for health expenditures. Contributions by the federal Government under the health programs will continue exactly as before. In that regard, whoever informed her was misinformed. I am happy to clear up this situation quite categorically. The discussion between the Ministers of Health will continue on this program, discussions that were undertaken in the last year. As far as the formula payments are concerned, they are going to continue exactly as they are.
As far as the payments for post-secondary education by the federal Government are concerned, the Hon. Member knows that many Provinces have set very strict limits to any increases in their payments to post-secondary education. I have indicated that I am considering the possibility of increasing our payments for post-secondary education by 6 and 5 per cent over the next two years. This would represent, next year, an increase of $256 million in the payments that the federal Government would make to the Provinces. In addition, the federal Government is also considering reallocating resources so that there will be more funds going to young people in all areas, particularly in the area of training, in order that they will be better equipped to deal with the job market in the next decade.


REQUEST FOR DEBATE ON AMENDING LEGISLATION
Flora Isabel MacDonald: Madam Speaker, the question that I put to the Minister of Finance has still not been answered. I asked whether he would assure the House that any change to the Fiscal Arrangements Act would come before the House by way of amendments to that Act and be debated as a separate measure. That was the question I asked.
Oral Questions
May I ask him at the same time, since he indicated that there will be cutbacks in post-secondary payments to the Provinces, from what they otherwise would have been, to assure us specifically that no change in the fiscal arrangements relating to that program will be made that will result in unequal per capita transfer payments being made to any of the Provinces?


Marc Lalonde: Madam Speaker, I am sorry if I did not answer the first question by the hon. lady, but there were several points that were wrong in her preamble. I took too much time answering the preamble and forgot the final question.


Flora Isabel MacDonald: I understand you forget a lot.


Marc Lalonde: If the hon. lady would put a straight question, she would get an immediate answer. If she would not go around beating the bush, putting all kinds of wrong information in her questions, she would get answers to her questions.


Erik Nielsen: You did it to the Prime Minister. You misled all of us.


Marc Lalonde: I want to tell the hon. lady that if the payments for post-secondary education were to be increased by only 6 and 5 per cent, this would imply a change in the Fiscal Arrangements Act. Obviously no such thing would take place without coming before Parliament and having the Act amended accordingly.
As far as the second question that she raised is concerned, the formula is based on the per capita grants. I have not heard any suggestion that the system of per capita grants would be modified. No consideration is being given to changing the payment per capita formula that exists at the present time.
As I indicated, discussions took place with the provincial Finance Ministers concerning the advisability of increasing the payments for post-secondary education to the Provinces by 6 and 5 per cent over the next two years.


GOVERNMENT POSITION ON EDUCATION GRANTS
Flora Isabel MacDonald: Madam Speaker, I am sure the Minister understands that the per capita payments are in fact based on a process of equalization between the tax points and the cash payments. Therefore, if there is a straight six and five cutback to the Provinces in the cash payments, it could result in an unequal payment to the "have not Provinces". That is what I wanted him to make sure he dealt with, so that that would not happen as far as the have not Provinces are concerned.
I would also like the Minister to tell us why, at a time when enrolments are increasing in universities, and when many young people are being forced back into the universities because of the high unemployment rate, the Government is taking the unusual step of reducing what would have been its payments in post-secondary education, causing tremendous hardship in this field.

March 8, 1983
Oral Questions


Marc Lalonde: Madam Speaker, again there are so many wrong statements in the hon. lady's question that I will have to take them one by one. There is no question of a cutback by six and five per cent. What is being discussed is an increase of six and five per cent in the payments to the Provinces under post-secondary education payments by the federal Government.
I remind the hon. lady that several Conservative Provinces have planned increases in post-secondary education of less than six and five per cent. She should bear this in mind.
Second, the payments are going to be made under the formula which has been traditionally in operation. The only difference is that they would be increased by six and five per cent. There is no reason to believe that this would lead to unequal increases between Provinces.
I would remind the hon. lady that if we were to reach any such conclusion-and 1 have discussed this with my colleagues-it would be on the basis also of an increase over and above what was paid this year, when there was, indeed, a very large increase in enrolment in post-secondary education. In this case, there is a very large base from which to start.
Also, I would like to point out to the hon. lady that the federal Government has also increased substantially the amount it is allocating to young people, particularly students, whether it is in the form of summer jobs, where we have increased the amount of money going to young people this summer from $120 million to $170 million. The moneys allocated under the National Training Program have also been increased very substantially, so our young people will be better equipped to cope with the job market in the years to come.


FUNDING OF HEALTH CARE
Frederick James (Jim) Hawkes: Madam Speaker, my question is also directed to the Minister of Finance. The Minister will know that we have had an increase of 4 per cent in the unemployment rate in the last year. That kind of unemployment rate increase is accompanied by an increase in the demand on the health care system. Stress related illnesses have grown by approximately 20 per cent in the last year, and those illnesses include heart attacks, ulcers, and alcoholism.
The Minister indicated that he has no plans for an increase in payments for health care. Does he believe that that statement is justified when in fact demands on the health care system are growing? Should he not be considering, with other First Ministers, an increase in money for the health care system, and should that not be substantial?


Marc Lalonde: Yes, Madam Speaker, and this is exactly what we are going to do. I do not know whether the Hon. Member was in the House when the Hon. Member for Kingston and the Islands asked a question
about health payments. I indicated then that our payments under health care program will increase very substantially next year, and that the existing arrangements which we have with the Provinces are going to continue without any change at all next year. Therefore, our contribution to health care in this country is going to continue to be very, very significant, indeed, in the billions of dollars every year. That is what is taking place at the present time and will continue next year. No change is planned.


REQUEST FOR INCREASED FUNDING
Frederick James (Jim) Hawkes: Madam Speaker, to be too precise sometimes is to attempt to mislead the House. The planned increases, according to Bill C-97, are to take care of inflation. 1 am speaking about an increase in demand which is caused by the Government's bad economic policy. Demand goes up as well as inflation. I am asking whether or not there will be any consideration by Cabinet, those backbenchers over there, which will provide an increased amount of money to the health care system in real dollars, not just inflationary dollars? Will you meet that demand with money?


Marc Lalonde: Madam Speaker, I shall try answering in French, since the Hon. Member seems to have misunderstood the answer I gave in English. I pointed out that the Government of Canada is spending billions of dollars on contributions to health care in Canada. Under our agreements with the provinces, the amounts are increased each year according to a formula that ensures the provinces are receiving an annual and very substantial increase in the funds they receive for health services. Under this formula, which will be maintained, the amounts received by the provinces in the coming year will be even greater than what they received in previous years. Therefore, the Canadian Government's contribution to health care for Canadians, including hospital services and medical care, will continue to increase in the years to come.


PRESENCE IN GALLERY OF DELEGATION OF BELGIAN PARLIAMENTARIANS
Madam Speaker:: I have the honour of drawing the attention of the House to the distinguished presence in our gallery of a delegation of Belgian Parliamentarians headed by Mr. Jean Defraigne, Speaker of the Belgian House of Representatives.


Some Hon. Members:: Hear, hear!
March 8, 1983


FEDERAL-PROVINCIAL FISCAL ARRANGEMENTS EDUCATIONAL PAYMENTS TO PROVINCES
Hon. Edward Broadbent (Oshawa):: Madam Speaker, my question is directed to the Minister of Finance as well. It concerns his acknowledgement that the Government is now going to apply its six and five program to post-secondary spending. At a time when not only young people, but adults who have not been able to get a job, are returning to universities and community colleges in increasing numbers, and at a time when many Provinces, if not a majority, have a greater need for money, how could the Minister justify the Government's plan to apply the six and five guidelines to post-secondary spending, when he knows that what is involved is really a cutback in the amount of money which would otherwise have gone to this sector, and at a time, in particular, when such spending is labour intensive and would be creating more jobs?


Marc Lalonde: Madam Speaker, the Hon. Member is probably aware that many provinces have restricted increases in spending on the post-secondary sector to less than 6 per cent. In fact, some provinces intend to maintain the status quo next year, without any increases in spending at all. However, the decision on how much money is to be earmarked for post-secondary education rests with the provincial authorities. As far as the Federal contribution for next year is concerned, if we apply the 6 and 5 formula it will increase by $256 million over what will be paid this year, in other words, next year, the Canadian Government will be contributing nearly $3.9 billion to post-secondary education in Canada. I may point out that this is a very substantial sum.
Second, I may remind the Hon. Member that the Government of Canada is also spending hundreds of millions of dollars on youth training through training programs provided by the Department of Employment and Immigration. The Canadian Government also has a student assistance program which provides loans and also a summer employment program with a budget of $170 million, compared to $120 million for last summer. These are real contributions the Canadian Government is making to help young Canadians, while ensuring that the money will go directly to young people.


John Edward Broadbent: Madam Speaker, the Minister answered about ten questions I did not ask. Because Conservative provincial Governments are taking socially regressive and economically foolish steps in cutting back on post-secondary education is no reason the federal Government should follow suit. That is the important point.


Some Hon. Members:: Hear, hear!
Oral Questions


EFFECT ON WOMEN
John Edward Broadbent: Madam Speaker, since today is being celebrated around the world as International Women's Day, is the Minister aware that, in this sector where he is about to make cutbacks, well over 50 per cent of the people affected by job losses are women? How can he justify that to the women of Canada, particularly today?


Marc Lalonde: Madam Speaker, I find it strange that the Hon. Member is talking about cutbacks when we are going to increase payments to Provinces by $256 million, and when he himself says there is no guarantee that that money will go to post-secondary education. The basis for that is his own argument that the Provinces are not necessarily allocating that money to post-secondary education. He knows this is the case in many Provinces.


John Edward Broadbent: Bring in a Bill and make them do it,


Marc Lalonde: Even so, we are increasing significantly the amount of money going to that sector.
I have also indicated the other things we are doing to ensure that the young women as well as the young men of this country are going to benefit directly from federal programs in the areas of training, student loans, and summer jobs. These are things we are doing, and we are going to continue, Madam Speaker. I think the record of the Government of Canada in that regard stands up very well when you look at it objectively.


GOVERNMENT POLICIES ON STATUS OF WOMEN
John Edward Broadbent: Madam Speaker, we in this House should be aware of precisely what is involved. So far the Government has applied its six and five program to pensions, and over 54 per cent of pension recipients are women. It has applied six and five to family allowances where the vast majority of recipients are women. It is now going to apply it to the education field where the vast majority of working people are women. As applied by this Government, the six and five program is nothing less than an anti-women program.


Some Hon. Members:: Oh, oh!


John Edward Broadbent: The Minister is smiling at this, but I know lots of women will not find it funny. I ask the Minister how he can take a step that will affect disadvantageously those trying to get higher education at a reasonable cost, and at the same time take a whack at the ordinary woman in this country precisely at a time when she needs more assistance, not less?


Marc Lalonde: Madam Speaker, the arguments of the Leader of the New Democratic Party are so far-fetched that quite frankly, I find it difficult to keep a

March 8, 1983
Oral Questions
straight face. Anyone who uses arguments like these must be really short of ammunition to defend his case. In any event, I am very happy to see that the Leader of the New Democratic Party found out that today was International Women's Day. I may remind the Hon. Member that the Government concerned itself with the status of women well before the Hon. Member started to take an interest in the problem, and that the policies implemented by this Government during the last fifteen years with respect to the status of women are innovative policies that compare favourably with those developed by any other country in the world. I would ask my hon. colleague to look at any other country in the world, including those being governed by a socialist government. He will realize that the Government of Canada is definitely in the forefront as far as the status of women is concerned.
* *
*


UNITED STATES DECISION ON CANADIAN LUMBER EXPORTS
Miss Pat Carney (Vancouver Centre):: Madam Speaker, my question is addressed to the Minister responsible for International Trade. The Minister will join with hundreds of thousands of Canadians who work in our forest industry who are relieved to learn that the United States does not plan on levying countervailing duties on our lumber exports to the U.S. However, as he knows, today's decision is an interim ruling only, and it can be appealed and possibly reversed when the final decision comes down in May. What assurances can he give the House that the Government will pursue every effort and every avenue to ensure that duties will not be imposed and Canadian jobs lost?
Hon. Gerald Regan (Minister of State (International
Trade)): Madam Speaker, certainly the news we had from the United States today is of the best possible quality. I thought for a moment that the Hon. Member was going to try to make bad news out of it.
What has happened is that the U.S. Department of Commerce has made a preliminary finding that there are no subsidies on the export of Canadian softwood products to the U.S. market. Those exports have a value of more than $2 billion, and until we found other markets at least 40,000 jobs would have been lost in this country if the U.S. had decided to levy countervailing duties.
I am very happy about the fact that the provincial Governments, the industry, and the Government of Canada worked closely together to see that the claims were fully rebutted. I think the decision today is a great victory for that co-operation. It is true that it is a preliminary finding, but the process that leads to a final determination on May 23 is merely one of verifying the accuracy of the facts placed before the U.S. officials. So I am extremely confident that we are well on the way to a final victory in this matter.
May I also say to the Hon. Member, through you, Madam Speaker, that the reason she can be confident about the future is the fact that the Governments involved have worked together with the industry, without politics playing any part, to see to it that the Canadian interest was protected.


Some Hon. Members:: Hear, hear!


Pat Carney: Madam Speaker, I would like to remind the Minister that, when it comes to economic policy, our Party does not have to make bad news; his Government is quite able to do that itself.


REQUEST FOR REMOVAL OF GRANTS
Pat Carney: Madam Speaker, the Minister is ignoring the fact that there are hearings scheduled on April 14, he is ignoring the fact that there are teams of U.S. investigators who will come to Canada to confer with the industry about this finding, and he is ignoring the fact that there could be some reversal of this ruling. Will the Government act to remove those irritants which do exist, specifically some of the DREE grants and loan programs which were found to be a form of subsidy, and thereby remove any basis of appeal by U.S. lumber interests?


Jack Sydney George (Bud) Cullen: You are being very helpful.


Hon. Gerald Regan (Minister of State (International Trade)):: Madam Speaker, I think the Hon. Member shows a lack of understanding of the process and what is involved here. First of all, while the finding was that there was an insignificant amount of subsidy in the existence of some tax advantages and DREE grants, these were not at a level sufficient to warrant a countervailing duty. I would hardly see a very strong argument for doing away with something which is not in breach of the American regulations, if it results in creating Canadian jobs.


Marc Lalonde: Typical Tory.


Gerald Augustine Regan: The Hon. Member does not realize that the fact that this finding has been made is an indication that the U.S. Government has withstood political pressures and made a proper factual finding, which is a good indication of the fact that we have the best relations with the United States we have had in a long time.
* *
*


FINANCE
Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Madam
Speaker, my supplementary question is addressed to the Minister of Finance and concerns the status of the federal agreement on established programs. Today's newspapers
March 8, 1983

report that the Minister of Finance of Ontario made the following statement yesterday after the federal-provincial conference: "The Federal Government seems prepared to maintain the existing financing formula for health programs, but wants to change the calculations for postsecondary education grants, while at the same time seeking wider control over college and university curricula." Can the Minister comment whether the Minister of Finance of Ontario did make that statement to the effect that the Federal Government wants to interfere in a provincial jurisdiction through wider control over education?


Hon. Serge Joyal (Secretary of State):: Madam Speaker, I would say to the Hon. Member that that statement is totally unfounded. In the course of numerous meetings with my provincial colleagues in the past five months, it has always been agreed that any discussion pertaining to the funding of established programs would have to do exclusively with taxation issues and that it would not have any impact on the orientation to be taken by high schools and universities, in keeping with our Constitution which acknowledges full provincial jurisdiction in the field of education.


STATUS OF WOMEN
Mrs. Margaret Mitchell (Vancouver East):: Madam Speaker, my question is directed to the Minister of National Health and Welfare. Statistics Canada reports that 40 per cent of marriages end in divorce, leaving more and more women alone in later years. I should like the Minister to comment on what older women told the NDP Task Force on Older Women. They said such things as, "My only hope is to die young so I won't be a burden on society in my later years"; "Em terrified of being unemployed and alone", or "I feel like a second-class citizen since my husband's death."


Madam Speaker:: Order, please. Will the Hon. Member please ask her question.


Margaret Anne Mitchell: What does the Government intend to do for such women in their middle and older years, who are the most deprived of our citizens?


Hon. Monique Begin (Minister of National Health and Welfare):: Madam Speaker, I would not want us, especially us women in this House to amuse ourselves at the expense of women on this International Women's Day. If the Hon. Member for Vancouver East is now trying to help a woman who says she has a problem of loneliness in her old age, she is not doing so. On the contrary, she is laughing at this problem because the truth of the matter is ... Iam not trying to say that the Government has done great things, but for many
Oral Questions
years, we have been making steady progress to guarantee that senior citizens, especially those who live alone, three quarters of whom are women, will have pensions which will bring them above the poverty line. The Hon. Member is well aware that we still have to find some funds to make the final step across this line and that it is not so easy at the present time. However, she forgets what we have been doing regularly to ensure that these women, who do not receive a pension at the age of 64 or 61 because the age of eligibility for the federal program is set at 65, and therefore had to rely on provincial welfare payments, which were much lower than-


Madam Speaker:: Order! Order!


Margaret Anne Mitchell: I can assure the Minister that I am very serious about this problem, Madam Speaker.


PROPOSAL TO ESTABLISH STANDING COMMITTEE
Margaret Anne Mitchell: Madam Speaker, my supplementary question is directed to the Minister responsible for the status of women. Yesterday the Minister claimed that a standing committee on the status of women requested by both Opposition Parties would ghettoize women and be regressive. I should like to ask the Minister why such a committee would be regressive when it would deal with all women's issues, would be a focal point for action, would require all Government legislation and programs to be studied, and would be a reference point for women's organizations?
Will the Minister consult with women's organizations to obtain their views on this matter and, if they agree, will she then press for a standing committee on the status of women?


Hon. Judy Erola (Minister of State (Mines)):: Madam Speaker, I could not take the motion put forward yesterday very seriously since it was a non votable motion and since there were very, very few Members of the Opposition present to participate in the debate.
One of the reasons why I do not prefer to have such a committee is that the issues that affect women are not issues that affect women alone, they are societal issues that must be studied in the broadest possible way by every Member of the House and by all Canadians. What the Hon. Member for Vancouver East is suggesting is that we ghettoize the problems of women. Is divorce a women's problem? Is child care a women's problem? Are pensions women's problems? No, they are problems in which we must all participate.
Oral Questions INDUSTRY

March 8, 1983


RESEARCH AND DEVELOPMENT-REQUEST FOR INCREASED ASSISTANCE
Hon. George Hees (Northumberland):: Madam Speaker, 1 have a question for the Prime Minister, because I do not want him to feel left out today.
The United States and Japan both spend twice the percentage of their Gross National Product on research and development that this country does. This enables them, and has enabled them, to take a great many important orders away from Canadian producers, because of lower prices, better quality and design, and it has enabled them to increase their share of the Canadian market from 19 per cent 15 years ago, when the Prime Minister took over, to 31 per cent today.
Is the Government giving any consideration and, if not, will it give consideration to offering the same incentives to Canadian industry to increase its research and development as are offered in the United States and Japan, so that our industry can do a great deal more research and development and, in so doing, become more competitive and win more orders and more jobs for Canadians?


Pierre Elliott Trudeau: Madam Speaker, I am happy that the Hon. Member is showing interest in this particular subject. Perhaps he realizes that he is not talking of spending by the federal Government in terms of percentages compared to the Government of Japan. He is looking at just one aspect of this. No doubt his remarks are addressed mainly to the private sector and to the university sector. The university sector, of course, is being assisted by the federal Government through some research grants.
The figures the Hon. Member is quoting are quite misleading because they seem to indicate misinformation on his part, that there is only one source of R and D, whereas there are many in a country.


George Harris Hees: Madam Speaker, I can assure the Prime Minister that the figures I have given come right from Statistics Canada and are accurate figures. They show that those countries have increased their share of our market from 19 per cent, when he first took over as Prime Minister, to 31 per cent today. That is very serious.


REQUEST THAT PRIME MINISTER TAKE ACTION
George Harris Hees: Madam Speaker, I would ask the Prime Minister if he would stop putting this matter aside, as he always does, take it seriously, and start to do something about it while he is still in office. I can assure him that it is later than he thinks.


Pierre Elliott Trudeau: Madam Speaker, I can assure the Hon. Member that I am not challenging his figures. When he talks about twice the percentage of GNP, is he talking of the percentage by the federal Government as opposed to the national Government of Japan, the percentage spent by the universities, or by the private
sector? If he says his figures are accurate, perhaps he can enlighten me on that.


George Harris Hees: I am talking about the total.


INCOME TAX
Mr. Tom McMillan (Hillsborough):: Madam Speaker, my question is directed to the Minister of National Revenue. Yesterday in reply to a question from my colleague, the Hon. Member for Simcoe North, the Minister said that he expected Parliament to pass the Government's massive income tax legislation, Bill C-139, before the end of March, in which case the time allocated for issuing income tax refunds this year would be the same or about the same as last year.
If Parliament is not able to pass Bill C-139 before the end of March, will the Government withhold income tax refunds due to taxpayers across the country until the legislation is passed, which could be as late as May, or even June?


Hon. Pierre Bussieres (Minister of National Revenue):: Madam Speaker, I am a bit surprised at the pessimistic assumptions made by the Hon. Member, since this morning, I attended the proceedings of the House which was sitting in Committee of the Whole, and I realized that we had made very substantial progress in the debate on Bill C-139, and I am still convinced that we shall be able to pass this legislation well before the end of March.


EXPLOITATION OF TAXPAYERS AWAITING REFUNDS
Thomas Michael McMillan: Madam Speaker, I will repeat my question. If Parliament does not pass Bill C-139 by the end of March despite the Minister's optimism, will the Government still withhold income tax refunds due Canadians?
While the Minister is answering that question, would he also answer this one. Does he know that it is the Government's foot dragging on income tax returns that is forcing desperate Canadians into the hands of fly-by-night firms that will pay on the spot cash to Canadians for their tax refunds before they are received from the Government? If he does, would he at least arrange to have processed on a priority basis the income tax returns of Canadians in desperate need in order to avoid that kind of exploitation?
[ Translation]


Pierre Bussières: Madam Speaker, I am surprised, and not agreeably so, at the alarmist comments the Hon. Member makes so often, and I would like to ask him to stop making assumptions that are
March 8, 1983

likely to alarm Canadian citizens. He should encourage Canadians to complete their tax returns as soon as possible and to return them to the Department of National Revenue. I would ask the Hon. Member to co-operate with other Members of this House in expediting the passage of Bill C-139, and then we shall be able to mail out refunds at the same rate as we did last year. Right now, there is no reason to panic and make alarmist speeches. Instead, it would be better to ask people to complete their returns as soon as possible, and to get them back to the Department, and I think the Hon. Member himself should co-operate with other Members in this House in expediting the passage of Bill C-139.


PUBLIC SERVICE
Mr. Leonard Hopkins (Renfrew-Nipissing-Pembroke):: Madam Speaker, my question is directed to the President of the Treasury Board. In light of the allegations raised yesterday by the Hon. Member for Mississauga South that the Government had increased the number of managers in its top Departments by 78 per cent as a way of skirting its own six and five restraint program, would the President of the Treasury Board provide a concise and factual explanation to clarify the validity or indeed, the lack of validity of those allegations?


Hon. Herb Gray (President of Treasury Board):: Madam Speaker, the figures mentioned by-


Some Hon. Members:: Oh, oh!


Herbert Eser (Herb) Gray: -that Conservative Member yesterday simply reflect the bringing together into one management category of 55 various groups which were previously listed separately. All these people were previously managers, and the conversion of people into the new management category has not resulted in mass promotions. In fact the management category compensation plan is specifically referred to in Bill C-124, and all the people in question are strictly subject to the six and five guidelines.
I might add that this program was first announced in 1980 by my predecessor, and he further announced its implementation in April, 1981. I wonder where the Hon. Member for Mississauga South has been, obviously not paying attention to an obvious and self-evident program.


LABOUR CONDITIONS
Ms. Lynn McDonald (Broadview-Greenwood):: Madam Speaker, my question is directed to the Minister of Labour who, I am sure, is aware that equal pay for work of equal value
Oral Questions
has long been one of the prime objectives of the women's movement, that is, not just to get it legislated, which we now have in the Canadian Human Rights Act, but to get it implemented. Also I am sure he is aware that, with women earning only 60 per cent on average of what men are earning, unequal pay is widespread and not merely the subject of isolated cases with which the Canadian Human Rights Commission might deal. What is the Minister's Department doing to see that their is implementation in the corporations under his jurisdiction?


Hon.   Chas. L. Caccia@Minister of Labour: Madam Speaker, I remind the Hon. Member that the principle of equal pay for work of equal value has been and is a principle which has guided the Liberal Government for many years. It is because of this concern that the previous Parliament passed legislation for the formation of the Canadian Human Rights Commission under which this principle is included.
In reply to the specific question of the Hon. Member, under Part III of the Code we have inspectors in the field who can file complaints with the Human Rights Commission for employees under federal jurisdiction. But let me remind the Hon. Member that 90 per cent of the work force is under provincial jurisdiction. If she looks across the country from British Columbia to Newfoundland, including the Province which is run by an NDP Government, she will not find, except for one Province, legislation for the provision of equal pay for work of equal value.


Lynn McDonald: Of course it is true that only 10 per cent of employees come under federal jurisdiction, but it does not cheer us up at all to say that, because the Provinces are not doing enough, somehow we should ignore that 10 per cent.


Madam Speaker:: The Hon. Member is not supposed to argue when asking her question. If she has a question, I will allow it.


COMPILATION OF STATISTICS
Lynn McDonald: Madam Speaker, what ammunition is the Minister of Labour prepared to provide for the trade union movement and for the women's organizations which are working for equal pay for work of equal value, by having inspections, by reporting statistics, and by providing accurate data so that year-by-year comparisons can be made? Perhaps the Minister is aware that series have been discontinued which show the widening gap. Is he prepared to re-institute them? Is he prepared to make this material available so that people who are concerned will actually see this comes about and does not really remain only a principle?


Hon.   Chas. L. Caccia@Minister of Labour: Madam Speaker, certainly we are always preoccupied with improving the system of filing complaints with the Human Rights Commission. This is why we have Part III under the Code. But the best answer to the Hon. Member's question is the fact that

March 8, 1983
Oral Questions
last year 3,300 federal Public Service sector workers came forward and filed complaints with the Commission. The same can be said of some 500 Government librarians and registered nursing assistants who came forward and obtained a settlement in pursuance of this legislation.


THE ADMINISTRATION
Hon. Perrin Beatty (Wellington-Dufferin-Simcoe):: Madam Speaker, my question is directed to the Prime Minister. Is the Government planning a review of the conflict of interest guidelines? If so, could the Prime Minister assure the House that the review will take the form of a study by a parliamentary committee and not simply be an in-house review?


Pierre Elliott Trudeau: No, Madam Speaker.


POSSIBILITY OF REVIEWS
Henry Perrin Beatty: Madam Speaker, is the Prime Minister saying no to both elements of the question? Specifically, will he answer whether he is planning any form of review of the conflict of interest guidelines as a result of the Gillespie affair?


Pierre Elliott Trudeau: Madam Speaker, I have been considering the possibility of improving those guidelines. I was certainly distressed at the way in which they have been interpreted in the past few weeks, practically treating former Ministers as non-persons. I would be happy to hear the views of the Opposition as to how we should treat its former Ministers who are lobbying the Government. We have not heard much about that. I am reflecting upon the possibility of looking at those guidelines, of considering improving them. I have made no decision as to how or when it should be done.


INQUIRY RESPECTING REPRESENTATIONS
Erik Nielsen: Madam Speaker, my supplementary question is directed to the Prime Minister. Has he received any representations from Michael Pitfield or from any of his Cabinet Ministers with respect to suggestions as to changes in those guidelines?


Pierre Elliott Trudeau: Well, Madam Speaker, I could say that it is none of the Hon. Member's business, but the answer is no.


ADMINISTRATION OF JUSTICE
Mr. W. Kenneth Robinson (Etobicoke-Lakeshore):: Madam Speaker, my question is directed to the Solicitor General. Provincial social services Ministers at a meeting recently stated that the federal Young Offenders Act will put thousands of teenagers in jail and deprive them of the chance to rehabilitate and, further, that the Act will jail youths who otherwise would be handled by social workers. Will the Minister advise that this will not be the result of the implementation of the Young Offenders Act?


Hon. Bob Kaplan (Solicitor General of Canada):: Madam Speaker, the disposition of particular cases will remain in the hands of the courts and in the hands of the judges. I was surprised to read that, because the whole purpose of the Young Offenders Act is to open the door wider to community-based corrections in which young people are punished for their crimes in ways other than by incarceration. I think a number of Provinces are unduly emphasizing in their discussions with me the extent to which incarceration ought to be used for young people. My own view is that it should be reserved for crimes of violence, in particular, and for individual young people who cannot be handled in the community in any other way. It should be a last resort. I am disappointed to hear Provinces suggesting that in some cases it ought to be a first resort.


NATIONAL PAROLE BOARD
Mr. David Kilgour (Edmonton-Strathcona):: Madam
Speaker, I have a question for the Solicitor General about the practice of gating, mandatory supervision. The Minister will know that the Supreme Court of Ontario has said that the practice of gating is illegal, and that the Federal Court has said that it is legal. What is the Minister's view? Does he not agree that, rather than waiting a year or a year and a half for the Supreme Court of Canada to settle the question, he should bring forward legislation in this Chamber immediately to clarify whether or not gating will be permitted?


Robert Phillip Kaplan: Madam Speaker, I agree that gating is a very important power that should reside within the criminal justice system so that those individuals-and there will be a very small number-who approach mandatory supervision and are easily spotted as being walking timebombs, in effect, can be kept behind bars for the whole sentence imposed upon them by the courts. But I do not think that the court's determination will take as long as the Hon. Member suggested.
March 8, 1983

I am glad to report to the Elouse that yesterday leave was obtained by the law officers of the Crown to appeal to the Supreme Court of Canada. We intend to ask for an expeditious hearing and resolution of the matter. I would indicate that, in the meanwhile, the Parole Board is continuing to impose gating in appropriate circumstances. 1 have given the assurance that if the Supreme Court of Canada takes away the gating power of the Parole Board, I would move quickly to bring before this House-and I hope I will have the Hon. Member's support-some measure to restore the authority to gate in the limited cases where it is proper.


ADMINISTRATION OF JUSTICE
David Kilgour: Madam
Speaker, my supplementary question is addressed to the same Minister. I do hope that, while he is waiting for the Supreme Court decision, the Minister will take full responsibility for every murder committed by inmates on parole. Madam Speaker, can the Minister tell the House how many individuals accused of murder are now either on parole or under mandatory supervision?


Robert Phillip Kaplan: Madam Speaker, I am not sure whether I fully understood the question of the Hon. Member, but I can tell him that every day there are about 2,000 inmates under mandatory supervision and we now use gating or the power to put some of them back in jail. No inmates are now free who would still be behind bars if the Board did not use that power. I can assure the House that the Parole Board does use that power at the present time and that it will continue to do so while we are waiting for a decision from the Supreme Court of Canada.



ROUTINE PROCEEDINGS


Lynn McDonald: for leave to introduce Bill C-675, an Act to amend the Broadcasting Act.


Some Hon. Members:: Explain.


Lynn McDonald: Madam Speaker, my Bill is a very short one. It consists simply of a provision to incorporate into the Broadcasting Act provisions which are now in the broadcasting
Time Allocation
regulations regarding abuse on the basis of race, religion or creed. The purpose of my amendment is to add the word "sex" to the list of groups which are not be abused by comment or pictorial representation, and to see that this is part of the Broadcasting Act which gives direction to the CRTC in formulating policy and further regulations.


[Stage Direction]
Motion agreed to, Bill read the first time and ordered to be printed.

Paul James Cosgrove: That, in relation to Bill C-143, an Act to provide supplementary borrowing authority, one additional sitting day shall be allotted to the consideration of the second reading stage of the Bill; and
That 15 minutes before the expiry of the time provided for Government business on that day, all proceedings before the House shall be interrupted, if required, for the purpose of this Order and, in turn, every question then necessary in order to dispose of that stage shall be put forthwith and successively, without further debate or amendment.


Madam Speaker:: Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


Paul James Cosgrove: Madam Speaker, the Bill before us today can be described quite simply as a measure required by the Government for prudent financial housekeeping.
The economic statement delivered last October by the Minister of Finance (Mr. Lalonde) made it clear that the extent of the borrowing authority that had already been granted to the Government for the current fiscal year was not sufficient to meet the financial requirements to the end of that period.
Let me quote from that October 27 statement the following two sentences:
I have also made it clear from the estimates I have presented that further borrowing authority will be required before the end of this fiscal year. In the budget I intend to present early in 1983, I will review again the fiscal situation for the current fiscal year, set out estimates for 1983-1984 and future fiscal years, and then seek additional borrowing authority as required.
In his meeting with the provincial Finance Ministers yesterday, the Minister of Finance repeated his intention to proceed with the budget as soon as possible, but in the interim, and during the immediate post-budget period, interim borrowing authority sought by this Bill is required.
Members opposite have feigned shock and amazement at the present Bill. They are not fooling anyone. There have been protests about the inclusion of interim borrowing authority to

March 8, 1983
Time Allocation
apply to the next fiscal year, but this is not a new procedure and the interim amount granted will be deducted from the amount to be set out for 1983-1984 financial requirements in a subsequent Bill.
In their frantic and frequent efforts of late to thwart the smooth operation of Parliament while they attempt to get their own act together, Members of the Official Opposition have added insult to the financial injury they are causing the Canadian people by stalling this and other legislation before this House. They have so little respect for the intelligence of Canadians that they would have us believe they are dragging their feet on this matter and others because they do not have sufficient information. I would draw their attention to the
6,000	pages of Main estimates material tabled two weeks ago today by my colleague, the President of the Treasury Board (Mr. Gray), as ample indication of how the money will be spent.
To refresh their memories, I would point out that in tabling the Main Estimates the President of the Treasury Board indicated that almost two-thirds of these budgetary Estimates are slated for statutory expenditures based on continuing authority given by Acts of the current or previous Parliaments which determine the basis whereby individuals, businesses, provincial and other Governments become entitled to receive federal funds.
The Main Estimates show in great detail the wide variety of programs being carried on by this Government living up to its responsibilities of assisting Canadians who have been buffeted, as we all know, by the worst recession we have experienced in this country in some years.
They reflect a 21 per cent rise in cash payments under the Established Programs Financing Act whereby the federal Government contributes to the financing of hospital insurance, medicare, extended health care and post-secondary education. They indicate a $2.9 billion allocation to Unemployment Insurance as we anticipate a slow recovery in employment prospects during our gradual recovery from the recession. These funds are committed to assist in that area.
The Estimates show a 21 per cent increase in federal contributions to the Provinces, for example, under the Canada Assistance Plan. The federal Government pays for 50 per cent of eligible provincial and municipal expenditures for assistance payments, welfare services and certain health programs. We also cover one-half of the costs of child support services such as foster care, daycare and a broad array of other family and social support services.
If Members opposite are still in doubt as to how the money will be spent, I would mention that the Main Estimates also spell out a number of new initiatives undertaken by the Government, including the Small Business Investment Grant Program, the New Employment Expansion Development Program or the NEED Program.
I find the allegation that Parliament is being kept in the dark as to the disposition of the funding under consideration particularly ironic because I, as Minister responsible for finance in areas such as the Insurance Department, have been requested by the Standing Committee on Finance, Trade and Economic Affairs to answer questions on Estimates dealing with those expenditures. Other Members of the Government have been requested to substantiate the expenditures listed in the Estimates which the President of the Treasury Board has already tabled in the House.
I find it ironic and not really worth arguing with Hon. Members opposite when they say they do not have enough information to gauge what the expenditures are for. Will they not attend any of these committee meetings? Are they not going to ask questions of Ministers? I cannot believe that.
Without this interim authorization, the borrowing activities of the Government would be constrained in the early months of the new fiscal year, which is a period when all Members appreciate the Government usually faces heavy cash requirements stemming from the payment of tax refunds and from other seasonal factors.
The point that we urge upon all Members, if we have to repeat it, is that if borrowing powers are limited during that period, the Government would be precluded from prudent planning of its debt program and would not be able to take advantage of developing market situations. This could be costly not only to the Government, but could impact upon provincial Governments in their borrowing activities in the market and upon the private sector in its participation as well in the capital market. As I said, it behooves the Government and Parliament to proceed in an orderly way with the legislation before it because it comes down to the issue of good financial housekeeping.
Bill C-143 is but one of a series of measures being undertaken by the Government to provide the financial setting for the development of a national strategy for economic recovery.
There were a number of questions asked about Bill C-139 during Question Period today. That is another Bill which Hon. Members, at times, had requested the Government to proceed with quickly in order to bring about some economic stability and stability to the private sector so it would have an idea of how to plan for the future. It is in the context of bringing that improved stability to the private sector that Bill C-143 is part and parcel of the Government's program. We are reviewing priorities. We are preparing a budget and we are reviewing these matters in an attempt to proceed without adding to the deficit.
In the circumstances, proposals for future Government action involving either increased spending or revenue reduction will have to compete with a wide range of other needs as expressed to us by Canadians generally. We have made it clear that we are seeking areas where we can act in close co-operation with business and labour in order to strengthen the financial health of the private sector and its ability to expand and prosper. We have indicated that this legislation will assist the Government to deal with the market in an orderly manner.



March 8, 1983

1 conclude by saying that, in the consultations that we have had with the private sector for the preparation of the budget and the prospect of financial recovery in a wider sense, I was impressed by the participating groups and their willingness to recognize that we must all set aside our differences and work together toward a sense of national purpose and a renewed spirit of co-operation. We would ask that Members opposite demonstrate a similar desire to get Canada back on the road to economic recovery. Giving this matter speedy consideration by the House would be a good first step.


Pat Carney: Mr. Speaker, 1 rise today to protest strongly the Government's attempt to gag debate on the borrowing Bill by introducing time allocation on Bill C-143. We feel that this Bill is far too important to be stopped before the Government can be held accountable for its spending.
I listened with sheer amazement to the Minister's comments during the presentation of his argument. I did not recognize any sense of shame or discomfort over introducing a borrowing Bill of this size. The Government has effectively asked for a blank cheque to borrow $19 billion just for the next few months. The Minister suggests that this is prudent.
1 would like to put that $19 billion into perspective. That $19 billion is the size of the Government's entire budget ten years ago. It is 12 times what the Government spends on postsecondary education. It is 13 times what the Government spends on employment programs. That $19 billion of borrowed money is 15 times what the Government spends on housing. It is nearly double what the Government spends on old age pensions and is four times what the Government spends on medicare. It is eight times what it spends on Family Allowances. That amount is double what the Government is paying in Unemployment Insurance benefits. It is more than double what the Government spends on defence.
At the present time, the public debt charges represent the fastest growing envelope of expenditure. Public debt charges now amount to 21.7 per cent of all Government payments. The Government has made a nation of promise into a nation of debtors. It still will not say what it needs the money for. Despite the Minister's comments about the Estimates, he has not provided any forecasts for his spending for the next few years. The Government has not provided any forecasts for spending since 1981. What information it has provided has been grossly inadequate. It has kept delaying the presentation of its budget. It has given us no fiscal framework upon which to judge its requests. The Minister of Finance (Mr. Lalonde) says that he will play the budget deficit like an accordian. He is playing some very sour notes.
In the absence of all of this information, the Government has tabled spending estimates totalling almost $90 billion. That is a 17 per cent increase over the 1982-1983 Main Estimates, despite what the Minister and his colleagues say. At the same time as the Government is asking pensioners and families to sacrifice income and abide by the six and five restraint program, its own Estimates show that Government spending continues to escalate wildly.
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The Minister has spoken of the need to increase social support services. Let me relate some of the other spending increases that are planned. The public debt charge is up 10.7 per cent from last year's Main Estimates. The number of management positions has increased 78.3 per cent over the last year for the 11 largest Departments. The Estimates for the Department of Agriculture have increased 14.3 per cent over last year's Main Estimates. Accommodation costs alone for the Department of Industry, Trade and Commerce are scheduled to increase by 40 per cent. There is no reason given for that.
The cost of FIRA is forecast to rise 14 per cent. The total Estimates for the Department of Justice are up 10 per cent. The Main Estimates for the Department of National Defence have been increased by 11 per cent. The Main Estimates for the Department of National Health and Welfare have increased by 13 per cent, but National Revenue is increasing by 9 per cent. The total Estimates for the Solicitor General are up by 16 per cent. All of these increases are taking place in this age of six and five. All of this is in the name of social services.
Let me give some more examples of Government spending. In terms of employment, the Canada Employment and Immigration Commission is now spending more on unemployment than on employment. In Transportation, subsidies to VIA Rail will increase 49.3 per cent to $755 million in spite of cutbacks in service last year. In terms of transfer payments, the Minister ignores the fact that payments to Crown corporations will jump 30 per cent, to $3.8 billion this year. Transportation and communications costs are up 16 per cent on a Main Estimates to Main Estimates basis. Professional and special services are up by 16 per cent, rental costs by 19 per cent and purchased repair and upkeep is up by 45 per cent.
This is not compassionate Government spending; this is Government spending which is out of control. How can we even trust these figures? Last year more money was added to total spending through Supplementary Estimates than through increases in the Main Estimates. All sense of Government accountability and Government responsibility has clearly been cast aside, and by gagging this debate, the Government is saying: "Trust us. Forgive us our past mistakes; we will try to do better." We cannot do that because someone must call this Government to account. Future Governments, a Conservative Government, and future generations will be paying for the present Government's mistakes, and no attempt to stop debate can cover up that fact.
The mistakes of the Government have been too horrendous to ignore. This is the Government which ran up the deficit in prosperous years and entered the recession with a $10 billion deficit. It took 113 years, from Confederation to 1980, for the net federal debt to total $68.6 bilMon. In four years, Ottawa will have more than doubled the net federal debt, from the $68.6 billion in 1980 to $152 billion. The Liberals will have done it.

March 8, 1983
Time Allocation
The economy is in a very precarious state right now. According to Statistics Canada, 1982 was the worst year for the economy since 1933. As one indication in the manufacturing industry alone, the capacity utilization in the fourth quarter was at its lowest level, around 63 per cent, since Statistics Canada began keeping records more than 20 years ago. In the last quarter, real GNP dropped 2.8 per cent from 1981 on a year to year basis. It is the first time since figures were kept on a quarterly basis that GNP has dropped in six consecutive quarters.
Against this dismal background, the leading indicators show that there will be a recovery this year, but that if it occurs, it appears as though it will be a very weak one. For instance, Dominion-Ames Securities gives 50/50 odds of a 1 per cent GNP growth this year and possibly 3 per cent next year. Wood Gundy is a little more optimistic, predicting that real output will grow at a 3.6 per cent annual rate between the fourth quarter of last year and the fourth quarter of 1984. The Conference Board forecasts real growth of only 1.2 per cent this year. All of these predictions indicate that this is not an economy which can easily manage to absorb borrowing of the magnitude the Government is running up.
The key to recovery will be confidence. Consumers and investors must have confidence that there will be jobs and markets before they will begin spending and investing. By demonstrating that it is bankrupt in terms of money and policies, the Government threatens to kill confidence and choke off our fragile chance for recovery, because confidence dies when Government plays with the numbers and gives forecasts which prove to be wrong or refuses to provide any forecasts at all. It dies when Government stifles debate and refuses to explain and justify its spending and avoid accountability.
The Government must explain where it is going and what it is doing with our money. We must start reducing the deficit. We must start limiting Government spending. We must start creating a positive and open investment climate. We must start reducing the burden of Government and unnecessary regulation. There are positive measures which can be put in place. The Government is clearly not able to make those moves.


Nelson Andrew Riis: Mr. Speaker, I quite frankly do not believe that we are hearing Hon. Members rise today to speak against the motion which has been introduced to allocate time for discussion of Bill C-143. I suspect that to the general public, allocating time sounds like a reasonable gesture.


Some Hon. Members:: It is.


Nelson Andrew Riis: However, what it means is that the Government has decided to stop debate on the question.


Some Hon. Members:: No, no.


Nelson Andrew Riis: It has decided to gag debate. It has decided that it has had enough at this stage of the proceedings and that it is
no longer prepared to continue with this open, free parliamentary discussion.
The Liberals say: "Listen, we have spent nearly seven days discussing Bill C-143, and certainly after seven days we have heard enough". I think the Government needs to be reminded that we are discussing a Bill requesting authority to borrow $19 billion. That amounts to something like $2.7 billion a day. If the Government thinks that is enough public discussion and examination at this critical stage of principle, then 1 think the Government has once again shown us that it has lost touch with reality.
I could not believe the Minister of State for Finance (Mr. Cosgrove) as he stood in his place today and said: "Listen, those people in the Opposition are feigning shock and amazement. They are bluffing. They are acting surprised when they obviously are not."


Some Hon. Members:: Oh, oh!


Nelson Andrew Riis: I would ask the Minister of State for Finance whether he has spoken to a normal person in the last six months. Has he gone out and sat in the coffee shops and gone up and down the streets of his constituency?


An Hon. Member:: Yes, he has.


Nelson Andrew Riis: Has he spoken to a single normal person in this country? If he has, then he knows very well that Bill C-143 is causing everyone in the country to shake their heads in utter disbelief. Then the Minister went on to say: "But yes, they want their tax returns". What do tax returns have to do with Bill C-143? Again it demonstrates the inability of certain Hon. Members opposite to deal with and grasp the seriousness of the request which is before Parliament today.
I want to remind the Minister of State for Finance that most Canadians admire the concept of Parliament and strongly care about this institution. This is evident from one end of the country to the other. We have seen it develop over hundreds of years, but it has now progressed to a point at which the Government of Canada is making a mockery of the institution of Parliament by going against the very fundamental nature of Parliament. After all, when one considers the fundamental mandate of Parliament, one finds that it is to collect taxes and to spend those collected taxes wisely. Bill C-139 indicates that this is not being done with any sense of justice, fairness and fair play.
While certain institutions are having their marginal tax rate reduced, most Canadians are having it increased. People earning taxable incomes in excess of $133,000 will have a marginal tax rate drop of 10 percentage points.
Certain institutions in the country, and 1 will only name the Royal Bank of Canada as an example, will be able to use the existing tax structure to accumulate profits. Last year, 1982, which was a so-called difficult year for the banks, there were profits in excess of $320 million. How many dollars in taxes did the Royal Bank of Canada pay last year? I did not pay a single penny in income tax. That is the kind of news received
March 8, 1983

by ordinary Canadians who then shake their heads in disbelief when Hon. Members opposite stand up and say: "We are abiding by the true sense of Parliament and are collecting taxes in a just, fair and equitable fashion".
How is the Government spending those taxes which have been unfairly derived, I will say, from the public of Canada? The Government then comes forward and says: "We will now spend those moneys and will ask Parliament to approve the expenditure of $19 billion, but we will not tell you how we will spend that money. We will not utter a single sentence which will give Canadians a clue as to how their moneys will be expended." That is a pig in a poke. As an Hon. Member said previously, that is like asking someone to sign a blank cheque. No one believes that that is a sensible approach to managing the country's finances.
I will say that Hon. Members opposite are doing everything possible to make a mockery of this institution. Now, today, by asking Members of Parliament to be muzzled, to stop discussing this $19 billion, by saying that it has heard enough, the Government once again shows the kind of arrogance, insensitivity and uncaring behaviour which it has come to demonstrate time and time again. 1 suspect that Canadians now simply shrug their shoulders in the manner of that infamous Gallic shrug of the Prime Minister (Mr. Trudeau) when he said: "There is nothing that can be done. These people are out of control. They have no idea as to what fiscal responsibility actually means." I remember that not many weeks ago the Prime Minister stood up and said: "We are now committing ourselves to stimulating the economy in an effort to create jobs". Then yesterday the Minister of Finance (Mr. Lalonde) stood up and said: "Hold it, we have now changed our minds. We will not really stimulate in terms of job creation; we will leave it to the private sector." That man must believe in fairies and leprechauns. Anyone today who believes that the private sector will be the springboard for recovery does not understand what is going on in the Canadian economy.
With regard to the capacity existing in the plants, mines and factories of this country, it will take months and months to get back to the point where we left off. With the level of confidence that exists in the investment sector, businessmen will not fall over themselves at this point to stimulate the economy and get things going. No businessman will do that when there are two million people out of work, essentially on the dole of one kind or another, and hundreds of thousands of other Canadians are threatened with job loss, assuming they will lose their jobs, are laid off prematurely this year or are having an extended vacation period. In other words, Canadians know full well that their purchasing power is being eroded on a daily basis. They are not going to run out and stimulate the economy by making large much-needed purchases, spending their hard-earned money in an effort to get the rebound under way.
I want to dissociate the Party I represent, the New Democratic Party, from the position that the catalyst or springboard
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is going to be the private sector. They want to see some leadership from the federal Government before they spend their money, and so they should. Before they expand and invest their shareholders' money, they want some idea from this Government where it is going, what its policies are, what are its long and short-term programs and its economic and longterm strategies.
For Members opposite to stand up and say to the business community and the consumers of Canada "have faith in us", "have confidence in Mr. Trudeau and his Cabinet" is asking too much. There are simply too many incidents that have occurred which have proven that we cannot have faith in this Government in terms of providing economic and social leadership in this country.
I close by saying that we in the New Democratic Party feel that if there is one thing we should be doing today to take a major step in confidence-building in this country, it is not to terminate the debate on Bill C-143. It is too important a Bill. It involves too much money to have debate curtailed, to have the Opposition voices muzzled.


Mr. Andre Maltais (Parliamentary Secretary to Minister of Industry, Trade and Commerce and Minister of Regional Economic Expansion):: Mr. Speaker, some Hon. Members have been explaining why they are opposed to the Government borrowing money to stimulate the economy, and at this point I would like to point out that during the past year, the parties opposite have, in fact, been urging the Government, because of the economic recession that is affecting Canada as it has been affecting other industrialized countries, to create jobs and to put workers on the road to prosperity.
Mr. Speaker, what is astonishing here is not so much the Government's deficit as the Opposition's lact of intellectual currency. They are having trouble making any worthwhile suggestions for helping Canadians get back to work and getting this country on the way to recovery.
Mr. Speaker, if we consider the present situation, it is clear that the problems are very serious and that people are going through extremely difficult times. Both Government and Opposition Members are fully aware of these problems, but sitting in the House and making speeches and especially repeating the same thing over and over again is not going to help us find any real solutions.
Mr. Speaker, I have been listening to these speeches today, and most of them seem to demonstrate that the Opposition is completely incapable of proposing any serious solutions in the House. The Opposition has been asking: What is the Government going to do with the money it borrows in the years to come? I would like to give a few examples of what the Government is going to do with this money. However, first of all we should understand that the Canadian Government has a budget of $90 billion. Now, when loans are contracted, it is normal to check what percentage the loan is of existing funds. A $19 billion loan compared with a total budget of $90 billion

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is a very clear example of a situation in which proper ratios are respected.
However, Mr. Speaker, although at this time we do have a very substantial deficit that is raising highbrows in the country, it is probably advisable for the Government, in difficult times such as these, to use the money for specific projects that will be a good investment for several generations. Remember what the United States did during the depression. At that time, the Roosevelt Administration invested funds in basic infrastructures which are still being used today in 1983, and which were built in the 1930s and 1940s.
Here is one example. In Eastern Quebec, including the Gaspe area, people are awaiting the start of an economic recovery program that was announced in 1982 by the Right Hon. Prime Minister of Canada (Mr. Trudeau). Part of the funds that will be borrowed will make it possible to invest over $100 million in this area, thus giving the people that have been hardest hit by unemployment in this country a chance to have durable infrastructures and young people a real chance to set up a framework for long and prosperous development.
Often, Hon. Members tend to compare apples and oranges. If we look at Vancouver or Montreal or Toronto, we see that most of the services are in place and that the people who live there have just about everything they need for work and recreation. However, if we look at the remoter areas of this country, to the south, east and west, we see that those areas have been neglected for years, for various reasons. Nevertheless, these people are also entitled to develop their region. The Gaspe program is estimated at about $100 million, funds that will be used to build piers and airports, to stimulate the local fishing industry and make it competitive, and to offer young people a future that will be worthwhile.
There is also the Kirby Report which was tabled in the House a few weeks ago and contains 57 recommendations. In its working hypotheses it urges injecting $200 million into the fisheries in eastern Canada to make the industry competitive and thus create new jobs and access to new markets. These are very specific proposals. Furthermore, there are regions in eastern Canada that lack certain infrastructures, and that is where we are going to invest the amounts Parliament is being asked to ratify.
Mr. Speaker, perhaps we could consider the airport situation in the riding of Bonaventure-Iles-de-la-Madeleine. For years, the Iles-de-la-Madeleine airport was abandoned. A while ago, the Department of Transport invested millions of dollars to make the airport suitable for both passengers and airlines, in order to simplify access and to stimulate economic activity in that area. The same applies to airports on the Middle and Lower North Shore, and I am thinking of the airports at Havre-St-Pierre, Cheverie and Lourdes-du-Blanc-Sablon, airports which were practically non-existent. Granted, an airport 3,500 feet long costs an average of between $4 million and $4.5 million. So at this stage, the Government needs money to build these infrastructures. Mr. Speaker, if we
borrow the money, for these infrastructures, they will last for ten, fifteen or twenty years. That is what we should consider. If the money were borrowed just to pay current outstanding debts, that would be unacceptable. However, the money is going to be used for capital investment and the result will be an asset to the country.
Mr. Speaker, the same applies to piers. Both in the East and the West, there are structures that have been abandoned. The people want to participate in the country's economic recovery, and they need infrastructures. With these funds we will be able to improve existing facilities and create new ones to help vital sectors of our economy develop as they should.
As I was saying a while ago, this Parliament's greatest problem is that hon. Members opposite are bankrupt of ideas. Canadians, therefore, do not want us to hear about deficits, but would rather consider the challenges which may result from the present situation. One needs only compare that situation with that in the United States, France and also Great Britain to realize that the problems are just about the same. What really matters at this stage is for us to properly manage the negative growth, the recession, in order to come out of it with the best possible record as regards individual and corporate citizens as well as the Government.
I suggest, therefore, that if Hon. Members opposite want to act in a responsible manner, they should make an effort to offer solutions, show imagination, because imagination is exactly what is needed to start the economy moving again. For the time being, opposition Members are satisfied with rehashing the same old stories dealing with hypothetical situations, without ever coming up with worthwhile remedies. I hope the Progressive Conservative Party Leadership Convention will bring out new ideas to ensure Canada's prosperity for now and the future. When one compares our situation in Canada with that of other countries-I see a number of opposition Members who travelled abroad recently-one soon realizes that Canada is better off than other countries coming out of this crisis. It is always easy to scare people with prophecies of doom and gloom.
Mr. Speaker, I think that the worst part of the crisis is over and that we must look to the future, with the hope that the borrowing power the Government is now seeking will accomplish what the opposition parties and Hon. Members on both sides of the House really want, namely, new jobs and the economic recovery of this country.
Mr. Speaker, there are important projects on the North Shore which have been shelved for many years and which the Government wants to see moving again with this money. There are for instance the Pointe-Noire project, the fishing development in Port-Cartier, the Schefferville Recreation Center- which already has the support of the federal Government which pays its administrative costs-the Schefferville Ski Resort, and the reason the Government is stepping in is
March 8, 1983

because the Iron Ore Company has stopped paying for these services. And thanks to the Canadian taxpayers the Scheffer-ville people can enjoy these services in spite of the current hard times.
I hope, therefore, that our hon. colleagues opposite will show a greater sense of responsibility by accepting to end these discussions and dispose of this bill, which will trigger an immediate upturn in our economy, for Canadians no longer want talk but action.


Mr. Stan Schellenberger (Wetaskiwin):: Mr. Speaker, this is the second time in a few months that 1 have risen to address the subject of closure. The Government continues its old practice of pushing and shoving, then using a club to get what it wishes rather than using the time-proven method of consultation, full information and then negotiation to get its legislation through. This group under the Prime Minister (Mr. Trudeau) gives us little or no information, instead of full information. Instead of consulting, it tells us it knows what is best for us. Instead of negotiation, it says to the House of Commons, "Stuff it! If you do not like what we want, we'll just push it through with Standing Order 75 anyway".
Let us look at the record. This Government has used Standing Order 75, 19 times, counting this time. Is it any wonder, given this process and the process, which 1 will outline, of introducing this Bill, that we are questioning it? Is it any wonder, given the actions of this Government in the last few weeks-and I will just speak about the last few weeks- regarding the actions of the Minister of Finance (Mr. Lalonde) and the Secretary of State for External Affairs (Mr. MacEachen) in the coal project, and the money wasted there, or the payment of $800 per day to Mr. Macdonald to check into the economy? We all know what is wrong with the economy. There are many people out there unemployed who would like one-eighth of $800 per day just to keep them going. With the constant examples of waste and questionable spending, which are put before this House by the Auditor General and by Hon. Members of Parliament each and every day, is it any wonder that we, the Opposition, are questioning the Government when it puts before us a borrowing Bill of this magnitude? The Minister says, "Well, you have before you this great book of Estimates", I believe he said there were thousands of pages, I cannot remember how many.


Pat Carney: Six thousand.


Stanley Kenneth Schellenberger: Yes, 6,000 pages. Open for scrutiny there are the great spending practices of the Government. Well, every Hon. Member of Parliament knows just how well you can scrutinize the Estimates by looking in that big Blue Book. It is impossible to go through it adequately without the proper staff. The Government is using this absolute power- and that is what the closure motion is, absolute power-and we are questioning the ability and the practice of this Government to use this method time after time after time. We can
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only hope that the Government will be remembered for what it has done and by the way it is using the power which Canadians have given to it, or which it has taken for itself.
Rather than building confidence, which is so necessary in this country at this point, this Government asks first for $5 billion, then for $14 billion, or $19 billion all in one bite, in one piece of legislation. Is it no wonder that such a deep psychological barrier exists in this country? No activity is taking place. The psychological barrier is in place and, as a result, we have a self-fulfilling predicament. We have lower than anticipated revenues. The Government tells us we need more revenue because business taxes are down. Why are business taxes down? Because businesses are going into insolvency, bankruptcy, or just trying to save themselves as we go through this recession which we have been put into. We have more unemployment, therefore there are fewer people paying taxes and, as a result, we have less consumer spending and fewer businesses which are able to survive. It is a self-fulfilling predicament which goes round and round. People who have the ability to participate in consumer spending are concerned that they may be next. As a result of this thinking they are putting their money into savings when they should be spending that money and helping the country get back on its feet.
Instead of a borrowing Bill of this magnitude, Mr. Speaker, if the Government needs some money for the next few months it should present a borrowing Bill of less magnitude and then a plan for recovery to put confidence back into the private and public sector and get us on the road to recovery. What do we have instead? We have Bills presented to us to implement budgets which have done nothing but create a lack of confidence in this country, and we have this borrowing Bill. Instead of assisting business, we have raises in taxes, increases in UIC premiums, the Provinces have increased Workmen's Compensation payments, federal Government increases of 12.5 per cent in small business taxes, a 50 per cent decrease in capital cost allowances in the first year, and limits in interest deductions for new capital expenditures. If these are the kinds of positions which are put forward to create confidence in the business section, it is just not there, Mr. Speaker. Instead, we have the largest borrowing Bill in Canadian history, a Bill which has been introduced without any formal forecast.
A few figures were thrown out by the Minister of Finance and they are supposed to be adequate for the House of Commons to accept a $ 19-billion borrowing Bill. No new budget was put before us as the Minister of Finance promised he would do before coming to Parliament for additional borrowing. We have the Government saying instead, "Trust us. Give us this $19 billion. We need it to start off the spring on the right foot." Is it any wonder, Mr. Speaker, that we are debating this Bill, or trying to, that we in the Opposition are placing squarely before the Government the kind of record it has and the kind of change which we would like to see in this country through debate? We are asking for forecasts. We are asking for reasons. We are asking for logic. We are asking for some hope for the businessmen, the farmers, the workers and

March 8, 1983
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consumers of this country, who are desperately seeking that kind of hope and confidence for fiscal year 1983.
What can those Members of Parliament say to their constituents? They have to say, "Well, we are adding to our gross debt". It is now $134 billion. Given the musings of the Minister of Finance it will be over $160 billion next year. One in every four tax dollars goes to pay interest on that deficit. This is horrendous. When we ask the Prime Minister or his Minister of Finance to set up a committee where Members of Parliament can bring forward examples of waste and areas where expenditures can be cut, we get a great, big no. What do we get from the Minister of Finance? We get a borrowing Bill followed by closure. This country needs confidence, but in the last number of weeks we have had every kind of legislation except that which will assist this country to gain the confidence it needs to rise out of this recession.
We need job creation and venture capital, Mr. Speaker. But what has happened? Capital has gone elsewhere. It has gone into savings, gone to other countries, gone to pay ever increasing taxes and interest, or gone to lower business debt in order for businesses just to stay alive. Instead of programs to put this money into productive ventures, we get Government Bills to borrow more, and then debate is cut so that Members of Parliament cannot adequately discuss what is being put before them. It would be all right if the Government asked for borrowing authority and then set out a plan as to how it intends to spend the money, apart from what is shown in the Blue Books. It would be all right if the Government could in fact provide examples to show that it was spending this money productively in providing pools of venture capital for small businesses and removing the disincentives to go to work. Instead, we see that this Government is really just a great consumer of wealth, a great spender of capital; not on productive things but on the kinds of things that we have seen over and over again to be unproductive. The Government has to borrow money just to pay interest on its debt, and our financial picture continues to get worse and worse.
That is why I and other Members in this House are opposing today the use of closure. We want negotiations rather than debate being cut off.


Mr. Louis Duclos (Montmorency-Orleans):: Mr. Speaker, I have been following this debate which has now been going on since February 17, or for close to the past three weeks, and what strikes me is the weakness of the points made by Hon. Members opposite, whether from the Official Opposition or from the New Democratic Party. Basically, what do we hear? Primarily we are told that the Canadian Government has lost control over its expenditures and, as far as the Opposition is concerned, there is no question of handing the Government a blank cheque by allowing this $5 billion borrowing authority for wrapping up the 1982-83 fiscal year and providing for the
1983-84 fiscal year with a $14 billion borrowing authority, when we know that the estimated deficit for the 1983-84 fiscal year could approximate $30 billion, as stated by many observers.
I would like to point out that if the Government needs $14 billion for the 1983-84 fiscal year, it is because in its capacity as a good manager it has to plan its drive on the money markets to avoid having to do so at the same time as the provinces and large private corporations.
Mr. Speaker, what are the actual facts? Is it fair to suggest to the Canadian people that the federal Government has lost control over its expenditures? Let us look at the figures, the specific and actual data giving the exact picture. Not taking into account the debt service the federal Government's expenditures in 1975-76 accounted for 20.5 percent of the Gross National Product. In 1981-82, six years later, still excluding the debt service, the percentage had decreased from 20.5 percent of the GNR to 16.2 percent. Some way say that there have been significant changes as from the 1982-83 fiscal year, and so will it be in 1983-84.
Clearly, the Government could not stay on that course, because of the horrendons economic conditions that affected not only Canada or North America but the entire world, the whole of the industralized nations, Mr. Speaker. If Hon. Members opposite would reel out of their shells and have a look at the world in which they live, if they would look beyond the limits of North America, they would realize that governments throughout the world are facing deficits. We only have to look at what is going on in the United States. Although their administration is headed by a gentleman who was elected on the commitment to balance the budget, after a few years they are facing a record deficit, the likes of which had never been seen over the years.
Mr. Speaker, how come the deficit increased that much? For the simple reason that, first, revenues have been lower than they would have been under normal economic conditions, and second, because expenditures in turn have been higher than they would normally have been had we had a six or seven percent unemployoment rate and real economic growth of 4, 5 or 6 per cent per year, when in fact we had negative growth.
Mr. Speaker, it stands to reason that during an economic recession there is more unemployment, people earn less money and pay fewer taxes. In addition, businesses record losses or reduced profits. Consequently, taxes on corporate profits are lower as well. Slower economic activities and decreasing oil prices have resulted in a sharp decline in Government tax revenues generated by the petroleum sector. As for expenditures, one does not have to be a mathematical genius to figure out that if we compare 1982-83 and 1983-84 for instance, we will have to spend $1.8 billion more for servicing the public debt in 1983-84 than we do this year. Expenditures for unemployment insurance will be almost $2 billion more next year, simply because the Government must bail out the unemployment insurance fund which cannot be self-financing when
March 8, 1983

benefits paid out are unduly high. Under the Canada Assistance Plan, the Federal Government pays 50 per cent of all provincial welfare benefits, and those expenditures are expected to increase by $558 million. The Home Ownership Stimulation Plan has been so successful that we will spend $240 million more than expected this year, and that will spur the housing and construction industry. I would not say that the Government is spending money as if it were going out of style, Mr. Speaker! For established programs financing, hospital insurance, health insurance and post-secondary education, the government spent $5.4 billion in 1982-83 and will spend this year $6.6 billion, or $1.2 billion more than last year.
I would like to take this opportunity to denounce the hypocrisy of the Opposition. I recall that when we were discussing the renewal of the financial arrangements last spring, all Opposition Members criticized the Government for being too hard on the provinces and for not granting them enough fiscal transfers, which, they claimed, would enable the provinces to assume their responsibilities. If we had listened to them, we would have added billions of dollars to the budgetary deficit.
Mr. Speaker, our budgetary deficit is obviously substantial. We must not try to hide this fact and we must be honest, but it seems to me that in view of the very high level of savings in Canada-and we know that Canadians now save 13 per cent of their available personal income-and, most importantly since, as long as the process of economic recovery has not begun more fully, the private sector is not very active on the capital market, the Government is essentially only taking over for the private sectof and I am convinced that the private and public sectors will not compete on the capital market to the point that it would cause interest rates to increase.
Mr. Speaker, when I say that the public sector is taking over, and I know that provincial governments must also do their share, it means for instance that over $2 billion were spent these last few months on job creation programs. Of course, this is reflected in the deficit, but would the federal government act responsibly if it left the unemployed to their fate, especially in cases where they have exhausted their benefits and must go on welfare?
Mr. Speaker, I think that there is an attempt to dramatize the budgetary deficit. In the case of Canada, between 90 and 95 per cent of the national debt, the Government debt, is owed to Canadians, which means essentially that it is owed by Canadians to themselves.
Mr. Speaker, since my time has nearly expired, I would like to invite the Government to act as quickly as possible. I believe that the Opposition Members have had quite enough time. They have had a reasonable opportunity to explain the reasons for their opposition to the bill, however unfounded they might be. In a democratic system, they have the right to explain their reasons for not agreeing and for objecting to the granting of a borrowing power to the Government. In my opinion, the time
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has come to take whatever means are necessary to put an end to this debate, so that we might continue to work at solving the economic problems of Canada through other legislative proposals.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
[ Translation]

The Acting Speaker (Mr. Corbin):: Order. It is my duty, pursuant to Standing Order 45, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the Hon. Member for Winnipeg-Assiniboine (Mr. McKenzie)-Bilingualism-(a)	Special recruitment of
francophones for employment in civil service (b) Effect on English-speaking Canadians; the Hon. Member for Erie (Mr. Fretz)-Environmental Affairs-(a) Pollution of Niagara River-Proposed action by province of Ontario (b) Access to information on dump hazards; the Hon. Member for Skeena (Mr. Fulton)-Aboriginal Rights-Possible effect of Gulf Oil development in Northern Yukon.



ROUTINE PROCEEDINGS


[Stage Direction]
The House resumed consideration of the motion of Mr. Cosgrove:
That, in relation to Bill C-143, an Act to provide supplementary borrowing authority, one additional sitting day shall be allotted to the consideration of the second reading stage of the Bill; and
That 15 minutes before the expiry of the time provided for Government business on that day, all proceedings before the House shall be interrupted, if required, for the purpose of this Order and, in turn, every question then necessary in order to dispose of that stage shall be put forthwith and successively, without further debate or amendment.
Mr. Bill Domm (Peterborough):: Mr. Speaker, today we are objecting not just to limiting debate but to closure on a very important matter dealing with borrowing by the Government without the information that is necessary in order to make an honest judgment on the matter. I was amazed when the Hon. Member for Montmorency-Orleans (Mr. Duclos) said that the deficit of the Government was expected to be somewhere in the neighbourhood-and I stand to be corrected-of $30 billion. I have not heard that figure from the Government benches

March 8, 1983
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before. I wonder if the Hon. Member has brought this to the attention of the Minister of Finance (Mr. Lalonde).


The Acting Speaker (Mr. Corbin):: Order, please.


Louis Duclos: Mr. Speaker, I rise on a point of order.


The Acting Speaker (Mr. Corbin):: The Hon. Member for Montmorency-Orleans (Mr. Duclos) rises on a point of order.


Louis Duclos: I should like to mention to my hon. friend in the Official Opposition that many observers expected the deficit to reach $30 billion. I have never said that the government's deficit would amount to $30 billion. I think the record should be set straight.


The Acting Speaker (Mr. Corbin):: Order, that is debate. The Hon. Member for Peterborough (Mr. Domm).


William Henry (Bill) Domm: Mr. Speaker, 1 would be really surprised that a Member of the Government would refer to an estimate of $30 billion as having any authenticity whatsoever if there were not some justification in his mind that it is possible. He went on to say that this is a weakness in our argument when we are supposed to have known this for some time. I would remind all Hon. Members of the Government that it is not so long since the Government was talking about $10.5 billion. If it thinks that we in Opposition are the only people in Canada concerned about a possible $30 billion deficit without seeing a budget to justify not only the $5 billion it is asking for but an additional $14 billion today, then it is sadly mistaken.
The people of Canada are opposed to the likelihood of a deficit of $30 billion. It is not we who will have to pay back that debt, but our children and our grandchildren and our great grandchildren. They will have to pay back a deficit that is beyond the control of Members on this side of the House because the Government resorts to closure, to limiting debate, in order to borrow money without the necessary information to justify it. I challenge the next speaker to tell the Members on this side what business in the country could run its affairs the way the Government thinks it can run the nation.
The Minister of Finance is on record as saying there would be a new budget before more borrowing authority was sought. As reported in Hansard for October 27, 1982, he said:
In the budget I intend to present early in 1983, I will review again the fiscal situation for the current fiscal year, set out estimates for 1983-84 and future fiscal years, and then seek additional borrowing authority as required.
At the Standing Committee on Finance, Trade and Economic Affairs on May 31, 1982, the former Minister of Finance, now the Deputy Prime Minister (Mr. MacEachen), had this to
say:
I do not think it would be appropriate to ask the House for additional borrowing authority until I have laid out in some detail an update of both the economic situation and the fiscal situation.
Surely the Government today does not treat lightly the borrowing of these billions of dollars without giving the Opposition the opportunity to examine a fiscal policy that would justify such expenditures. It is not satisfactory just to
table the Main Estimates in the House because, by themselves, they are insufficient evidence of the need for additional funds. In Supplementary Estimates C there are some things that disturb the people of the country and that require more explanation. Is the pit bottomless, Mr. Speaker? Is it the understanding of the Government that for as long as it is in office it intends to come back here because it has a majority, bring in the requirements for more moneys, give them two, three or seven days of debate, never present a financial budget in the House, and expect us to accept willingly the estimates for additional funds to cover additional deficits which have never been explained in detail to Members of the House of Commons? It is totally irresponsible, it is unacceptable. I am absolutely amazed that the Government Member who just spoke would treat the matter lightly and make statements about the "weakness" of our arguments as we object to an additional $19 billion, $14 billion or $5 billion, as required by the Government, without bringing in a budget.
If Hon. Members opposite would like some horrendous nightmare stories such as the ones documented in the House over the period of many months and years concerning inappropriate spending of Government, I am prepared to give some examples which, with all due respect to the Government, it cannot really justify.


An Hon. Member:: Let us hear a few.


William Henry (Bill) Domm: All right, I will give the Hon. Member some and see what he thinks about them. When we talk about taxis and about taking the people of Canada for a ride in its request for funds, let me indicate that between March 1, 1980 and May 31, 1981, the Government paid out $3.5 million in taxi fares. The largest single bill from any Government Department was perhaps appropriately from Transport Canada for $422,000 worth of taxi bills. At current Ottawa taxi rates of $1.20 per mile, this is enough to go around the world 120 times. With no effort to control that growing budget, they come back here and ask for $19 billion.
Let us talk about telegrams for a minute. Between March 1980 and June 1981, the Government spent $16.7 million on telegrams, cables and other wireless communications. Even Canada Post does not trust its own mail, as it spent $260,000 in that period of time on telegrams.
What about hospitality? I do not know whether they are celebrating the appointment of a new Finance Minister or the appointment of a Minister in another Department who is as irresponsible as the Minister of Finance, but let us refer to the Government's treatment of hospitality. In fiscal year 1981-82,
11 Government Departments spent a total of $10.4 million on hospitality, food, booze, and authority for it, as required, was given.
If the Hon. Member opposite think that these kinds of requirements are justification for a budget, that it has seeded
March 8, 1983

itself many times over since it was first introduced in this session of Parliament way back in history, then I think he is sadly mistaken. He is mistaken if he is under the impression that we should accept it without argument and that the $30 billion deficit, as projected, is justified to Canadians.
Perhaps it would be helpful in the last few minutes, having been provoked into trying to justify the inappropriateness of these required moneys, if I made a couple of observations which might bring some sanity into the spending of Government, the deficit and its cash requirements. The deficit today is equal to 28 per cent of all our expenditures. For every $4 the Government spends, it must borrow $1. There are only two ways to finance a deficit. First, we can print more money, and over the past 12 years the Bank of Canada has monetarized a total of $12 billion on the Government's financial requirements. The other way to handle the deficit is by borrowing money. In 1982, borrowing by the federal Government accounted for 51 per cent of all new security issues placed in Canada. Borrowing of that magnitude clearly must have an effect upon the supply and demand for money and thus upon interest rates which must be borne by the private sector.
The Government's October budget forecast a record deficit of $23.6 billion this year, and already the Government, with all due respect, is blabbering in the House about the possibility of a $30 billion deficit without our ever seeing another financial statement dealing with a true economic budget so that we could look at the forecast over a reasonable length of time for justification.


Miss Aideen Nicholson (Trinity):: Mr. Speaker, when introducing the borrowing authority Bill now before us, the Minister of Finance (Mr. Lalonde) drew a distinction between the financial requirements of the Government and the Government's deficit. They are different, the figures are different, but they are also clearly connected.
Obviously we have to be concerned about the deficit. With over 20 per cent of Government revenue now going to service the national debt, this is certainly a time to be prudent about Government spending, even though it must be said that Canada's national debt in the form of Canada Savings Bonds, Treasury bills and Government of Canada bonds is largely held by Canadians and, as with such a debt, repayment and interest charges represent a recycling of money within the Canadian economy.
Canadians have been saving a great deal of their incomes at rates much higher than Americans, for instance. There is a vast pool of savings to be recycled in our economy and federal borrowing requirements, although heavy, should not constrain private borrowing.
A large part of our deficit is recession-induced, a fact with which Opposition Members have not dealt in their speeches. Government spending is not out of control, to use their phrase. The deficit is high and borrowing requirements are high because of the world recession, because the world economy has been virtually stagnant for the past three years.
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In Canada, revenues are down. Personal income tax is down because so many people are unemployed. Sales taxes are down because consumers are buying less. Business taxes are down because profits are low. At the same time as Government revenues are down, Government spending has increased on social programs to protect Canadians from the worst effects of recession. Unemployment Insurance payments alone have increased by 133 per cent. Payments to the Provinces under the Canada Assistance Program are also up.
We have in Canada a very good system of automatic stabilizers which goes into effect to help our citizens when times are difficult. It is a system which has been built by Liberal Governments over the years and of which we can be proud. It is interesting that in the very extensive consultations of the Minister of Finance as part of the pre-budget exercise, when he met with leading industrialists from all over the country nobody suggested that the safety net be cut from under those Canadians who are feeling the pain of recession most.
Clearly Government expenditures will be reduced, Government revenues will increase and the deficit will be reduced when the economy recovers and Canadians return to work. This is obvious, yet not one of the Opposition speeches on the borrowing authority differentiated or dealt with measures which temporarily increase the Government's borrowing needs but will result in increased revenues in coming months.
Apart from the fact that $6 billion will shortly be paid out in tax refunds-not an inconsiderable stimulus which will be injected into the economy-there were, in the last year, programs designed to stimulate the housing industry. The popular $3,000 grant to new home owners has represented a substantial expenditure of Government funds, but those expenditures created jobs for unemployed construction workers who are relatively high earners and, therefore, make a sizeable contribution in personal income taxes. Those expenditures to stimulate the housing market helped create demand for building materials, appliances and furnishings, thus creating jobs for other Canadians who, in turn, will be freed of the necessity to collect Unemployment Insurance and who will again become taxpayers. Similarly, the increased Government expenditures on direct job creation and on training are an investment in the future.
Throughout the discussion on this Bill the Opposition has attacked Government spending, but it has failed to put forward alternatives. One of the Conservative leadership candidates has now been quoted as saying that his Party has to stand for something other than for just replacing the Liberals. This is an interesting statement from a Member of a Party which has held three major conventions without any policy discussion.


Mr. Epp:: That is not true.


Aideen Nicholson: Perhaps the leadership convention will finally be the forum when Conservatives tell us what they are

March 8, 1983
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for. In the House of Commons they tell us only what they are against.


Arthur Jacob (Jake) Epp: We had a policy convention in Toronto in May.


Mr. Scott Fennell (Ontario):: Mr. Speaker, I did not expect the Hon. Member for Trinity (Miss Nicholson) to end her speech so quickly, so I have been caught unawares. The point the Hon. Member gets from the Minister of Finance (Mr. Lalonde) that this whole situation is caused by a world recession-


Nelson Andrew Riis: Is not true.


Thomas Scott Fennell: That is right, it is not true. The Hon. Member for Kamloops-Shuswap (Mr. Riis) said that is not true. That is one point on which we do agree. Canada has greater opportunity than any country in this world. We should not have suffered through the recession as we did. We have all the natural resources. We have more than any other country in the world and we are doing nothing about it. I maintain it is entirely due to the incompetence of this Liberal Government that brought this country down on its heels for the last 15 years.
On borrowing Bills, the Government should give the public and Members of Parliament an explanation so that we can all understand. We keep getting every two or three months new amounts which the Government wants to borrow. Could the Government not present to the House the amount of money that is outstanding, to whom it is owed, when it will become due, and give an explanation? The Government should explain why the Government needs the additional amount. Together with that, I believe the Government should bring in the amount it estimates will be created in specie. We get a tiny, little picture on everything from the Liberal Government. We do not get a complete picture with which we can work. We get only little bits and pieces. I request the Minister of State for Finance (Mr. Cosgrove) tc! discuss this point and give us a total picture so that Canadians will know the predicament which this additional borrowing will cause us.
I read through some notes on this borrowing and I find that of the total, about $2 billion will be carried over to the next year. We are talking about $5 billion and $2 billion being carried over. Then there is another $14 billion. We do not know how long that will last. Surely the Government has an over-all opinion as to how long that amount will last. The Government leaves us with such little information that we cannot assess these Bills properly and do the research required. Furthermore, we cannot the Government brings in a Bill on borrowing before we have a budget which would tell us how the Government will spend the money. This is not treating Canadians with dignity. This is not treating this House with dignity. We are not given an opportunity to discuss these Bills appropriately. We do not have all the facts.
The Estimates are wonderful if one has the sense to assess what part comes under a super Ministry and what part comes under a direct Ministry. The Estimates have hidden amounts throughout. Certain programs are tucked away in every
corner. We have tried to simplify it. My friend, the Hon. Member for Capilano (Mr. Huntington), has come forward along with with one of your Members, Mr. Speaker, to present a proposal which will enable Members of Parliament to work with a real purpose and to come up with some answers. Then we will know what is happening. I do not think the Government knows what is happening. I do not think the Government knows where the money is being spent. If the Government does not know, how can we in the Opposition, lacking information, be expected to know? Why does the Government want $19 billion now when it is talking about a $90 billion budget? Does the Government know now how much of that money will be required this year, next year, and the year after? We do not have enough information to know what the debt is at the present time. We have been told various amounts. We have been told it is $122 billion at the end of 1983. 1 heard another comment that it was $137 billion. I do not know how many billions it is. It is beyond us. We do not have our hands on it. We talk in the House but we do not really have our hands on these amounts. That is why we are fighting closure today.
This subject of borrowing should be taken to committee. Closure should not be imposed in the House of Commons on this matter. This matter should be taken to committee so we can ask questions of the Ministers. They are responsible to the people of Canada. We are not getting the information in this House. The only place we can get it is in committee.
As an aside on that point, Mr. Speaker, I was a member of the Standing Committee on Public Accounts. One day I asked exactly the same question-


The Acting Speaker (Mr. Corbin):: Order, please. I regret to interrupt the Hon. Member, but the Chair sees two other Members standing and holding a conversation in the House. Out of respect for the Hon. Member who has the floor, Hon. Members should try as much as possible to hold their conversations elsewhere.


Mr. Lewis:: Mr. Speaker, I wish to present the apologies of my colleague, the Solicitor General (Mr. Kaplan) and myself, to the Hon. Member for Ontario (Mr. Fennell).


Thomas Scott Fennell: Mr. Speaker, as an aside, I hope perhaps those two gentlemen were having a discussion having something to do with mandatory supervision, a subject which is very close to my heart. As the Minister walks out of the House, I hope he hears those few words and takes some action.


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!


Thomas Scott Fennell: I could get into a debate of a whole hour and a half on that subject, but I will stay with the matter under debate, that is, closure. We fight closure because we are not given the information we require. We must get this information. I accept that during the good times we built up social justice programs to such an extent that at this point we cannot cut back. The people who benefit from these programs are the ones who suffer the most. The one thing this Government is

!
March 8, 1983

not doing is dealing with the problem. We have a fixed cost for social affairs. But we are doing nothing to build up the economy of the country to create jobs through the private sector so as to get Canada in a positive position, in view of potential that we have. The Government is not moving ahead quickly enough to encourage industry. Industry is being discouraged.
There was a marvelous show on the CBC last Saturday about farmers and how they got into their present situation. The story explained how bankers encouraged them to borrow money at nine per cent. When the rates went up to 25 per cent they were put out of business. It is the Government's responsibility to assist those people because they are not being treated fairly. It was the Government that was responsible for interest rates increasing to 25 per cent, not the farmers. That is my point.
The Government should be providing grants to certain industries that can, through the use of the Department of National Defence, create a high technology capability that cannot be afforded in other circumstances. The Minister of National Defence (Mr. Lamontagne) will appreciate that the majority of the new technology that has been developed in the U.S. came from National Defence and NASA. We should be given grants to National Defence not only to build up our forces and equip them but to carry out the extremely expensive research that is required to remain competitive.
My next concern involves medium-sized industries which are trying to switch to the new technology. The Government provides for some research and development, but the critical costs which those industries incur while getting into production are so great that a tax relief should be provided. Ultimately, employment will be created.
Attention must be given to new and expanding industries. A new business which is just beginning cannot afford the full interest rate costs. Today, as a result of the SBIG, the rates are down from 16 per cent to 12 per cent. We cannot afford to capitalize as much of the interest costs as we have in the past. It makes us non-competitive with the rest of the world. In Japan, for example, consider the involvement of expanding companies that are moving into advanced technology. They receive free loans because the Japanese realize that if the interest on the capital is compounded, no company will be able to start production economically.
I repeat that I believe that the Government's management of the country is disgraceful. It is time that it told us all of the facts and gave us enough information so that Canadians can adopt a policy which can make us one of the greatest countries of the world. It was a former Liberal Prime Minister who said that the twentieth century belonged to Canada. We are in the last 17 years and we do not seem to be progressing.


Leonard Donald Hopkins: Mr. Speaker, I wish to comment on three main areas, and add some miscellaneous remarks. First, I wish to comment on the Canada-Ontario General Development Agreement as it applies
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to Renfrew County. Second, I will comment on the Canada-Ontario General Development Agreement as it applies to eastern Ontario, and finally, I will talk about the forestry programs.
As you know, all three of these items involve federal-provincial relations. When we become involved in federal-provincial relations on financial issues, it causes curious results. There is always a tremendous competition between the different levels of Government as they try to take credit for what is taking place. As a result of this competition, people perceive this Parliament as working in an atmosphere of confrontation, which is true. People perceive Members of Parliament as constantly fighting and the various levels of Government as not getting along with each other. Therefore, individuals have developed a certain disdain for politics.
In response to that I would say that it is the positive results that come from these debates and from the federal provincial and municipal relations that really count. Sometimes, however, those positive results become lost in the fray of confrontation in legislatures and inter-governmental relations.
An example of this was an agreement involving Renfrew County and the City of Pembroke, where plans were developed to conduct a mineral survey of the region, a survey of the forest species of the region, the introduction in the City of Pembroke of a new water filtration, sewage disposal upgrading plant, and a new industrial park. The reason for that project is clear. At the turn of the century when the forest industry had declined in the Ottawa Valley, there was nothing brought in from the private sector to replace it. AECL was brought into Chalk River, and National Defence base was enlarged. I see the Minister of National Defence in the House today and I wish to tell him that if he wishes to increase the base further, we would certainly welcome it because we appreciate having the Armed Forces base in that area.
With respect to the Renfrew County and the City of Pembroke GDA with the Province and the federal Government, which was signed on December 7, 1977, the wheels ground very slowly. The program had commenced prior to the 1979 federal election. Plans as to what would take place were well formulated. When the Conservatives came into power in 1979 and a new Minister was appointed, possible changes in policies were envisaged, and the project received a major setback. That setback came when the Mayor of Pembroke received a letter from the then Minister of DREE, the Hon. Member for Central Nova (Mr. MacKay). With regard to the three projects of the industrial park, water filtration and sewage plant, he said:
I certainly appreciate the fact that government assistance may be needed to help expand the economic base of this slow-growth area of Ontario, and your personal concern to solicit help for the City of Pembroke. However, during this period of spending restraint by governments, my Department is hard-pressed to fund even existing programs, and therefore any new commitments can only be considered if there is a very high degree of urgency. Under these circumstances, I am not persuaded that assistance for Pembroke can be priorized until the restraint on federal spending can be eased.

March 8, 1983
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People were very concerned about the water situation. He went on to say:
The interim period could be used constructively to revise and strengthen the Phase II proposal. For example-
Listen to this. This was the industrial strategy introduced by the then Minister of DREE:
-consideration for the industrial park could be strengthened if it were supported with a list of prospective tenants. Moreover, I understand there exists some confusion regarding ownership of the land on which the park is to be developed.
Does it mean that if one wants to get an industry started in the local community, one has to indicate one's desire to have that industry in the region but first an industrial park must be built if the region agrees? There could be a delay of two or three years, but it would finally get there. That was the message that was sent out.
This project was further hampered by another incident which occurred on June 21, 1980. Prior to that, on May 21,
1980,	the new Minister of DREE, the present Hon. Member for Matapedia-Matane (Mr. De Bane), wrote to the provincial Treasurer of Ontario and stated:
In the case of Pembroke, I am sympathetic to the requirement for the industrial park itself-
He went on to elaborate. Then, one month later, after receiving the letter from the federal Minister of DREE, the provincial Treasurer stood before a Conservative Party meeting in the riding and said, "We sense the federal Government has been withdrawing support for infrastructure programs, and if so, Pembroke's new industrial park could be in jeopardy". One can imagine how that hit the local press. Shortly thereafter, the federal Minister of DREE, along with two colleagues from eastern Ontario, the present Minister of Supply and Services (Mr. Blais) and the present Minister of State for Mines (Mrs. Erola), went to Toronto. The Province seemed to be absolutely astounded that there was so much support. 1 suppose that when the provincial Treasurer made that statement in front of that Tory meeting, he thought he would be a hero and could dump the blame on the federal Liberal Government for not doing anything. However, when he was suddenly confronted with the fact that we were taking a strong stand, that changed the whole picture. The end result was-


Philip Derek Lewis: Are you riding a white horse?


Leonard Donald Hopkins: -that the Minister of DREE discussed the matter further with the Province of Ontario. Then the DREE Department submitted a plan to the Ontario Government in the summer of 1980. We never heard from the Ontario Government until late in November when the provincial Treasurer of Ontario had to bow out of the federal-provincial meeting and could not be there to discuss the situation.
Nothing else was heard from the Province until June 12 of
1981,	when the provincial Treasurer wrote to the Minister of DREE requesting a meeting. Throughout this time the controversy was continuing all across the region. It was being said that the feds were dragging their feet while the Province was willing to go ahead. The provincial Treasurer even wrote a
letter to the City of Pembroke saying, "We are prepared to go ahead and commit the $5.6 billion if the federal Government is willing to do likewise". Of course, this was after he had received the federal Government's proposal, about which he said nothing.
I admire Ministers who carry out these kinds of federal-provincial relations and still stick to their guns. Of course, these are the sort of squirming federal-provincial relations which should be laid out in the open so that we can make other arrangements in the future with a little more dignity and with a little more respect for each other.
The end result was the Liberal Minister of DREE approved the project. He met with the provincial Treasurer here in Ottawa and came to an agreement the first time they met thereafter. It could have happened months before, but it did not because the Province did not approach the federal Government for months after the proposal was made. This is not the way to handle federal-provincial relations, and we must adopt a more constructive approach and put a time frame on these matters thereafter.


Mr. Sid Parker (Kootenay East-Revelstoke):: Mr. Speaker, it is unfortunate that I must take part in a debate on a borrowing authority Bill for which closure has been sought when it concerns a request for more than $19 billion. The House has been told that there must be closure in order for the Government to carry on with its business. I want to discuss some of that business for a few moments, if I may.
It is disturbing to see the kinds of things happening in my riding, and to hear in Ottawa about the main corridor of VIA Rail and the passenger services which must be accommodated here. There have been problems involving crews on passenger trains in the West which have had to call in the RCMP to take drunk people off the trains. This is affecting their duties on the trains. There have also been cases of rape on trains. It is difficult for conductors to carry out their duties. As well, passengers have been overbooked. This has been caused by the action of the Government. The Minister of Transport (Mr. Pepin) has brought in legislation without even presenting it to the House, making sweeping changes to VIA Rail, affecting transportation services to which people are entitled.
The Hon. Member for Trinity (Miss Nicholson) referred to job creation programs. I would like to emphasize the problem in my riding where the federal and provincial Governments have allocated almost $1 billion to develop the Northeast Coal Program. At this time, 2,000 workers in my riding are laid off for six weeks, with the possibility of being laid off for another four weeks because of stockpiling of coal going to the Japanese, the very same market for which the Government is providing extra funding. I want to say in all sincerity that if the Government is to enter into those kinds of programs, and if that is in the best interests of the country, there should be orderly marketing to protect the towns and villages involved. When I see billions of dollars being spent and the high level of deficit, and those kinds of problems being created, I want to
March 8, 1983

say, "Shame, shame on the Government which would cause that to happen".
At the present time the Minister of Transport is proposing sweeping changes to the Crowsnest Agreement without even bringing them before the House for its consideration. Literally billions of dollars would be granted to the railway system, besides the changes to the Crowsnest Agreement, which could literally destroy the grain markets of the Canadian economy. The Government has made such proposals without debate of any kind in the House.
The Premier of the Province of British Columbia, on a tour of my Province, came into my area and said what a great venture it would be and how it should be carried out. I received a resolution from the municipal councils in my riding endorsing the proposed provisions in the Crowsnest Agreement. However, we have not even had the opportunity to see nor to debate those very basic changes the Government is proposing, which could create some very serious economic problems across Canada.
Those are the kinds of problems the Government is creating. I say that it is no wonder we have such a large deficit. The Government should be sincere about doing something about the deficit instead of attacking Family Allowance benefits, the cheques of senior citizens, and the pensions of public servants. It should devise a program so that there is equity in these projects for every dollar allocated to the railway system. Then, as it started to develop, the money could be paid back. We are certainly in full agreement that the transportation system must be upgraded across Canada. However, we do not agree that money should be given, for instance, to CP Rail, which has done nothing but drag its feet and take money from the Government over the years, exploiting it and using it in other areas without carrying out its commitments. It is a shame that the Government would make those kinds of changes with regard to pensions, the indexing of Family Allowances and so on.
I would like to refer to the Minister of State for Mines (Mrs. Erola) who is responsible for the status of women. Her riding is Nickel Belt. I think it is appropriate to let the people hear what she has done. An editorial letter was captioned: "Sweeping statements are unfair to thousands of Canadian women." This was printed in the Sudbury Star of January 17, 1983. It reads:
I strongly object to your insinuation that unemployed, childless women contribute nothing to Canadian society.
I am a childless unemployed Canadian woman. My husband and I remain childless because we cannot have children of our own and because we feel we cannot personally accept adoption or unnatural conception. I am unemployed because, after 10 years of teaching elementary school, my husband was transferred to Sudbury. I oppose a viewpoint that brands me as a non-contributor in my own country. I further feel that your views on contribution to society are narrow and without thought.
That is another indication of this Government's attitude toward the Canadian people and how this country will be governed. There is no industrial strategy that will put people
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back to work. The deficit that we face, combined with this closure motion, is an insult to all Canadians, especially Members of Parliament who have not had an opportunity to express their views as to how this deficit may be brought under control or put to better use in order to create employment and give some future to the many unemployed who look to this Government for some direction.


Douglas Glenn Fisher: Mr. Speaker, it is time for us to move ahead in our debate on this Bill. It is time to finish this stage of our discussion, get this Bill into committee, back from committee and passed so that the Government can proceed with the other elements in its program. This is my argument because I believe we have had plenty of time for debate on this topic. Second, we know, and every practical-thinking Canadian knows, that the money is needed. Third, we know and have demonstrated, as did the Minister of State for Finance (Mr. Cosgrove) today, that there are efficient ways to borrow money that will save Canadians millions and millions of dollars, and the smooth passage of this Bill will help us with that efficiency.
Let us look at some of the fascinating statistics about our debate so far. We see that until this time Parliament has dedicated five full debating days to this Bill, which I am told represents some 15 hours and 41 minutes of discussion. During that time we have heard from 46 comrades in arms from the Conservative Party, 15 of our colleagues in the new Democratic Party, and ten Members of the Government, up until this morning.
Far more important than all of that, we have had a lot of debate on the basic instruments which led up to this Bill, the financial instruments that gave us some idea of the Government's sense of direction.
For example, we had ample discussion on the Minister's statement of last October. At that time he laid out the Government's program and its borrowing requirements up to the end of this current fiscal year. As we look at this borrowing authority Bill, we see clearly from the statement last October where the money will go. That is a very important point because the Opposition has regularly clouded that fact in its discussion. There is plenty of information available from the November, 1981 budget, the June budget and the October statement. There is plenty of information to indicate the direction of the Government's programs over the next few months.
Second, we had from the President of the Treasury Board (Mr. Gray) a detailed set of Estimates for the fiscal year 198384. Equally, we have had, and every Member of this House knows it, a pledge from the Minister of Finance (Mr. Lalonde) to produce a budget as quickly as he can. However, he said that we must clear the decks before he bring in another budget. He made it a condition that we must clear away the Income Tax Act, straighten out the borrowing authority, and clear up the six and five legislation.
We have done much of that. The Minister views it as irresponsible, and he said this in the House and outside, for us

March 8, 1983
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to introduce another budget before we finish with the legislation of past budgets. That is reasonable, and I think most Canadians accept it.
We have not pulled surprises. We have clearly told Canadians the general thrust of our program, our tax policy and our spending through the Estimates for the coming year. We have had a lot more information through the pre-budget consultations, the Finance Committee hearings and the debate on Bill C-139, the Income Tax Act.
Finance matters are the focus of parliamentary activity at this time. I was astonished to hear a Member of the Opposition stand up and say that he does not get enough information about the Government's work. That Member must be on a holiday. He must be living in some kind of cave. We have done nothing but talk about finances, budgets and the Government's general financial direction since last June.
We have all kinds of other legislation to deal with, but we have not been able to pay attention to it. Why? Because the Government has made finance and our response to the recession the number one priority, and the Opposition knows it. There is no reason why any dutiful, hard-working Member on the other side would not know what we are doing.
We do not know what they are doing. I have looked at the record of what the Opposition said today. It was a little hobby to while away the hours listening to the speeches. 1 thought it would be interesting to tell people what we heard from the ranks opposite.
Early this morning the Hon. Member for Edmonton West (Mr. Lambert), a distinguished Member of the House, told us not to tax so much. That chorus was joined in by a lot of other singers because we were discussing the Income Tax Bill. The Members were eloquent indeed about the terrible tax burden this Government supposedly is putting on the people. They said in conclusion, "Don't tax so much".
We then heard from the Hon. Member for Vancouver Centre (Miss Carney). She thinks we should cut the deficit, that we should not borrow so much. They tell us we should not tax so much and we should not borrow so much. There are several people in the Barnum and Bailey Circus running for the leadership of their Party who are saying, "Don't borrow so much". We have those two positions undeniably from the Tories.
In questions from the other side during today's Question Period we were asked why we do not spend more on health care, transfers to the Provinces, women's issues, and research and development. In one day alone we opened up billions of dollars worth of opportunity. The Tory position was made eminently clear today: Spend lots of money, but don't tax and don't borrow to get that money. Lord knows where it will come from, but it is the Tory magic program. It is a very attractive one. I would like to find out how they plan to carry it out. We look forward to the details on that.
Our friends on the left, our bosom buddies in the NDP, as they are said to be, do not have an idea at all. Their position on the borrowing authority has been completely procedural. They
say they do not like the way we are going about it. They do not say anything about what we are doing, not one word. I must correct that. The Hon. Member for Kootenay-East Revelstoke (Mr. Parker) told us that he would like to see us spend a little more money to kick drunks off trains. He went on from there to give us a very good and, I thought, heartfelt dissertation on transport policy in his riding. That was a good discussion and I can remember it clearly because it was the only good discussion I have heard from his Party. We have not had any discussion from the New Democratic Party about the direction they want to follow.
Their Leader, the Hon. Member for Oshawa (Mr. Broad-bent), said a short while ago that he wanted to cut the deficit. I remember that clearly. It was shocking to all of us who felt that the deficit was one of the rocks of the NDP. We felt that they could always he counted on to support us in this debate, but, no, there was the Hon. Member for Oshawa saying, "cut the deficit". Now we do not know, any more than we know from the Tories, whether the NDP wants to cut the deficit by lowering our borrowing, lowering our taxes or lowering our spending. All we know is that they do not like the way we are going about it. We do not know where they would go or what they would do, otherwise.
In fact, we heard from the NDP spokesman on finance matters today that he dissociates himself from the view that the private sector will lead us to a recovery.


Mr. Deans:: That's right.


Douglas Glenn Fisher: I hear them saying, that's right. How does that fit in with his Leader's view that we should cut the deficit? Would he like us to leave it all up to the private sector and cut the deficit, or would he like us to add some to the deficit and lay off the private sector? We would like to hear some of these opinions from him.
We would also like to hear a little less about the procedural stuff and a little more information such as we got from the Hon. Member for Kootenay East-Revelstoke telling us where he wants to go. We want a few ideas on principles, and a little less of this hollow procedural stuff. We will look forward, in the days to come, to some debate along that line from both sides of the House, Mr. Speaker.


Mr. Dave Nickerson (Western Arctic):: I always enjoy listening to the Hon. Member for Mississauga North (Mr. Fisher). He is one of the more eloquent Members of this House. And today, Sir, not only have we had the opportunity to listen to that hon. gentleman, but we also listened to his colleague, the Hon. Member for Mississauga South (Mr. Blenkarn). In fact, Mr. Speaker, if there has been any hijacking of Parliament done these days, it has certainly been done by the two Hon. Members from Mississauga who have just about monopolized today's debate.
What I wanted to say in this brief time which is available to me is that this imposition of closure, this use of the guillotine,
March 8, 1983

is particularly unworthy of the Government. Not only is it unworthy but it is unnecessary. The House Leader of the Liberal Party had only to count the number of Hon. Members who have spoken on Bill C-143 and he would have found that there were only a handful who had not spoken. I will let him in on a secret, Mr. Speaker. There were only about two Hon. Members on this side of the House who wished yet to speak. So in fact, what the Government has done by bringing in closure has cost them another day. What would have happened had they not brought in closure is that this debate would have ended. Second reading debate on Bill C-143 would have ended after about 20 minutes. It would have gone to committee and the work of Parliament would have been expedited, instead of being delayed as it is now. We have used this afternoon, and we will presumably use another full day on this issue, before the matter gets to committee. It is indicative, Mr. Speaker, of the Government's inability to run this House, and that is not unremarkable because we realize-


Mr. Deputy Speaker:: Order.
[ Translation]
Order please! As it is now 5.05, the two hours provided for the consideration of the motion now before the House under the provisions of Standing Order 82 have expired. Therefore, under the provisions of this Standing Order, it is my duty to interrupt the proceedings and put every question necessary to dispose of the said motion.

The question is on the motion of Mr. Cosgrove, seconded by Mr. Ouellet.
Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


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


Some Hon. Members:: Yea.


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


Some Hon. Members:: Nay.


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


Mr. Deputy Speaker:: Call in the Members.


Madam Speaker:: I declare the motion carried.


[Stage Direction]
Motion agreed to.

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
David P. Smith: Madam Speaker, the following questions will be answered today: Nos. 4,638 and 4,648.


Mr. Murphy: 1.	How many staff, broken down by job categories (a) were situated in The Pas two years ago (b) are now situated in The Pas by the Canadian National Railways?
2.	Were any of the positions transferred from The Pas to Winnipeg and, if so (a) how many (b) for what reason?
3.	Were any of the positions abolished and, if so (a) how many (b) for what reason?
4.	Does CNR intend to close all dispatching offices between Saskatoon, Saskatchewan and Armstrong, Ontario with the exception of the one in Winnipeg, Manitoba and, if so (a) how many transfers are projected and how many jobs will be lost (b) what is the rationale for the decision?


Mr. Jesse P. Flis (Parliamentary Secretary to Minister of Tansport):: The management of Canadian National Railways advises as follows:
	(a)	(b)
Job categories	Jan.1980	Dec. 1982Police	2	2Clerical	31	25Operating	88	82Dispatching	10	10Engineering	117	109Total	248	2282.	No.3.	Yes. (a) 20. (b) 12 positions were eliminated because of technological change, with benefits being made available under the Job Security Agreement to those affected. In addition, eight positions were lost because of a decline in business.4.	It is CN's intention to consolidate all dispatching into Winnipeg with the transfer of The Pas dispatching on April 24, 1983. In late 1984, it is planned to transfer the dispatching function from Saskatoon to Winnipeg.
(a) The Pas
Positions transferred	-4 regular dispatchers
-3 relief dispatchers
Three positions will remain at The Pas as operator positions.
Saskatoon
Positions transferred	-12 regular dispatchers
-13 relief dispatchers
All 25 positions will be transferred to Winnipeg.
(b) The rationale for these changes is to provide a much improved utilization of relief train dispatchers at an annual savings in excess of $1 million, through the elimination of duplication of staffs (both supervisory and train dispatchers). In addition, maintenance costs for facilities, janitorial service and other incidental expenses will be eliminated.


Mr. Greenaway: 1.	What was the (a) total (b) per unit cost of producing the Ninth Report of the Metric Commission of Canada for the period ending March 31, 1982?
2.	Was the report printed on high-gloss paper and, if so (a) on what basis was it chosen (b) who in the Commission was responsible for the selection of the paper?


Mr. David Berger (Parliamentary Secretary to Minister of Consumer and Corporate Affairs):: 1. (a) $57,552.50; (b) $4.80.
2. Yes. (a) Supplied by the printer, at no extra cost, as a substitute for the requested but unavailable low-gloss paper, (b) Not applicable.


David P. Smith: Madam Speaker, if question No. 4,525 could be made an order for return, this return would be tabled immediately.


Madam Speaker:: Is that agreed?


Some Hon. Members:: Agreed.


Mr. Siddon: What are the names of all Crown corporations established under federal jurisdiction and on what date was each established?
Return tabled.


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


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


Some Hon. Members:: Agreed.
March 8, 1983



ELECTORAL BOUNDARIES READJUSTMENT ACT


Madam Speaker:: It is my duty to inform the House that an objection, signed by the Hon. Members for Hillsborough (Mr. McMillan), Simcoe South (Mr. Stewart), Simcoe North (Mr. Lewis), Durham-Northumberland (Mr. Lawrence), Burlington (Mr. Kempling), Haldimand-Norfolk (Mr. Bradley), Western Arctic (Mr. Nickerson), St. Catharines (Mr. Reid), Waterloo (Mr. McLean), and Fundy-Royal (Mr. Corbett), has been filed with me pursuant to Section 20 of the Electoral Boundaries Readjustment Act, Chapter E-2, R.S.C., 1970 of the report of the Electoral Boundaries Commission for the Province of Prince Edward Island.
If the House agrees, I would suggest that we follow the past practice and print the text of the objection as an appendix to this day's Votes and Proceedings. Is that agreed?


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration in Committee of Bill C-139, to amend the statute law relating to income tax-Mr. Lalonde-Mr. Francis in the chair.
On Clause 4-Amounts receivable in respect of services, etc., rendered
Cyril Lloyd Francis: The House is in Committee of the Whole. The following Clauses have been grouped for debate: Clause 4, Subclauses (6) and (7), Subclause (8) with an amendment, Subclauses (9) and (11), Subclause (12) with an amendment, Subclauses (13) and (15), Clause 22, Subclause (11) and Clause 54, Subclause (3).


Donald Alex Blenkarn: Mr. Chairman, I rise on a point of order. Earlier today arrangements were made for the grouping of certain Clauses, but we have not come to a final understanding on that grouping as yet. In view of the hour, I do not think it is necessary at this point to come to that final understanding on grouping. We are working rather closely with the Parliamentary Secretary on this matter to try to come to an effective grouping of the Clauses with respect to insurance and annuities, and we pretty well have it together. May I suggest there are a number of Members who want to ask questions on the general structure of annuities and life insurance. Perhaps between now and six o'clock that might be accomplished without putting further amendments at this stage. The next day the Bill is brought forward, those amendments, with respect to the groupings that we will have determined by that time to be appropriate, can be put all at once so that we will know exactly that we are dealing with.
Income Tax


Paul James Cosgrove: Mr. Chairman, the statement by the Hon. Member for Mississauga South reflects the working arrangements which Members opposite working in Committee of the Whole had adopted this morning. More than that, we had agreed that in addition to grouping sections dealing with life insurance and annuities together for purposes of debate-


Cyril Lloyd Francis: Could Hon. Members currently carrying on conversations leave the House and go behind the curtains because it makes it most difficult to conduct the business of the House.


Paul James Cosgrove: Mr. Chairman, I indicated that the only intelligent way in which we can come to grips with the general policies affecting life insurance policies, annuities and taxation of insurance companies is by grouping. More than that, we had agreed there would be one vote which would incorporate all the Sections dealing with these through the 139 Sections.
I am in agreement with the proposal of the Hon. Member for Mississauga South. We are still trying to come to an agreement as to which of those Sections and Subclauses they will be, and how we will deal with the amendments. I think we can sort that out before our next sitting. In the interim, 1 understand there is a continuation of questions and some comments by Members opposite dealing with the Sections presently before the Committee.


Nelson Andrew Riis: Mr. Chairman, may I direct a question to the Minister regarding the now assembled list, or the grouping we have before us including quite a host of amendments to the Bill? Does this list now adequately reflect all the Government's technical amendments that it plans to table relating to this Bill? To be more specific, will the Minister be bringing forward technical amendments that we will then see added to this list at a subsequent date?


Paul James Cosgrove: Mr. Chairman, with respect to the subject that really is the first item namely, Clause 4 dealing with life insurance policies and annuities, I am told by my officials that in the material I provided to the Hon. Member-I think he has a copy in hand, which is the same as mine-those items preceded by (a) are subject to intended amendments. 1 have made those available to Members opposite, together with explanatory notes on those items. But in so far as other Sections in the Act are concerned, there could well be other technical amendments, and as I have indicated, most of them relieving. In the absence of agreement from the Official Opposition to treating those amendments as having been moved, I cannot say with certainty that the Government will move every one of those technical amendments. If we found proceedings to be very slow and we thought that, for the sake of the common good, the Bill up to a certain point could accomplish what was intended, the Government, in trying to assess that conceivably might abandon some of those technical

March 8, 1983
Income Tax
amendments. I would like to take the opportunity to offer to produce and table the technical amendments that we have prepared now if I had the agreement of Members opposite to treat them as if they had been actually moved.


Donald Alex Blenkarn: No.


Paul James Cosgrove: Then Members could have them. If we did that we could avoid the process of my making amendments available under each Section heading of the Act. I hear the Hon. Member for Mississauga South saying no. It requires unanimous consent of the Members. Therefore, I am precluded from doing that.


Mr. McKenzie:: Mr. Chairman, I have a couple of questions for the Minister. There might be some repetition here, but because of the interest in the changes which the Minister is proposing, I want to make sure that I have everything perfectly clear for the people whom I represent. My question is with regard to annuity benefits.
Any annuity benefits prior to the last budget date should be exempted from taxation. Has the Government considered the financial position of a person who does not have a great deal of money and who is getting close to retirement? Let us say this person had accumulated $4,000 or $5,000 in a policy which he or she had taken out several years ago under the previous taxation laws, and consider that the same person was given proper advice according to those taxation rules, borrowed money from his life insurance policy and moved this money into a deferred annuity. The reason for doing so was to accumulate a better income supplement for his or her old age. This income would enable this person to be less of a burden on society and better able to care for himself in his senior years. Then the November, 1981 budget comes in and the same person must pay tax on the borrowed money. The person would have been better off leaving the money in the life insurance policy. Why is the Government discouraging personal investment?


Paul James Cosgrove: Mr. Chairman, the Hon. Member's understanding is correct. The example as I understand it, was the case of a couple who had utilized, first, a life insurance policy which had been taken out a number of years ago and, second, from that cash surrender value, loans were utilized to purchase an annuity to assist with retirement expenses. Presumably that was done prior to December 2, 1982, which was the date of amendments to the proposals which were first introduced in the November budget. For that reason, that situation, that policy and the income arising, the treatment of both the life insurance policy and the annuity would not be affected by the present legislation.


A. Daniel McKenzie: I thank the Minister for his answer, Mr. Chairman. Perhaps he can clear up something else for me. For insurance contracts issued after the June, 1982 budget owned by a corporation, the net proceeds will not be paid out tax free through the capital dividend account. Can the Minister tell me why not?


Paul James Cosgrove: Mr. Chairman, the dividends can be paid out without attracting tax. I would qualify that by saying that under certain circumstances the dividends to a certain extent would attract tax. That was a very difficult area for the Department officials and representatives of the industry, the Life Insurance Underwriters Association, and it was only after extensive consultations that the Life Underwriters agreed to those cases in which the payment would be paid out and tax would be fixed only under certain conditions.
I have been given the particulars. However, I do not know whether reading a whole page of those cases where they are exempted would be useful. I could make this letter available to the Hon. Member. Suffice it to say that what I have in my hand is a letter dated February 2, 1983, addressed to me. It is signed by the Chairman and Chief Executive Officer of Life Underwriters' Association of Canada. In reference to the amendment which is here, he says, "The presentation of this amendment resolves to our satisfaction the concerns of the Life Underwriters' Association of Canada relating to corporate-owned life insurance and the capital dividend account issue." That is a recent development, dated February 2, but it has been settled to their satisfaction.


A. Daniel McKenzie: Mr. Chairman, I would appreciate it if the Minister could provide me with a copy of that letter. Perhaps some of his technical amendments might make it more clear for us.
I have one final question. Tax shelter growth provisions, such as life insurance products, are useful to people using them to support their incomes. An example is taking out an annuity or using insurance products to meet commitments during a time of financial hardship by borrowing against their policy in order to help pay for a son's education or wedding or some other major expense. In such an instance, these individuals would be keeping their insurance policy in force at the same time. Why should these people who are trying to save more money for their future be penalized by having to pay tax on either the borrowed funds or the annuity?


Paul James Cosgrove: Mr. Chairman, I am pleased to be able to repeat what I said this morning, that the old rules for policy loans continue. In effect, there is nothing in the legislation before the House that treats the policy loans differently. It was in recognition of the very case that the Hon. Member has made that that amendment was made in discussions with members of LUAC and PLIA. They have indicated their receptivity to the treatment of not only loans in cases of hardship where a policyholder wishes to take the cash down for an emergency purpose, but in all cases where disability occurs. A policyholder, no matter whether it is an exempt policy or not, is exempted, and that person can use the cash or annuitize. That is so in the case of disability. Therefore, there are two cases; loans and disability. The old rules apply, and there is nothing new.
*j

March 8, 1983


Stan Darling: Mr. Chairman, I believe the Minister was speaking earlier today about the annuity as well as money in the bank. He was giving the example that the money in an annuity would have a much better return for the policyholder than leaving the money in the bank. As I mentioned before, when one purchases an annuity, there is a front end loading in a great many of these annuities which pays the commission and costs. Certainly, if someone tries to cash in an annuity or an instrument similar to an annuity, such as an investor's syndicate, he or she will take a loss.
In the case of an emergency, the money in the bank at a slightly lower interest rate will give a better return. You cannot compare the two and say that the annuity is a better deal than the bank loan because it certainly is not. I would appreciate the Minister's comments on that.


Paul James Cosgrove: Mr. Chairman, the same point was raised, I believe, by the Hon. Member for Edmonton West in responding to my comments. That is, drawing a parallel for tax purposes between a person investing in a bank account and looking at what the return would be as compared to those people who have been, during the last couple of years due to the increased interest rates, using annuities.
I believe that it is common knowledge that there is only a certain segment of the Canadian community who were taking advantage of the annuity situation. I would refer the Hon. Member to the Financial Post article dated July 4, 1981 which was entitled "Big Sums Go Into Deferred Annuities." The article points out the reason why this is troublesome to the Government, and it should alarm all Hon. Members who are concerned about equitable treatment of Canadians with respect to investment, whether bank accounts or annuities. The article begins by saying that the smart money is moving into deferred annuities, investment that earned today's high interest rates and lets income accumulate, compounded and tax-deferred for 10 to 20 years or more. The writer further suggests that the buyers are sophisticated, well-heeled investors, perhaps a little wary of the stock market, who can afford to tie up income for a long time in order to avoid paying tax on it at current high marginal rates.
The point is that the basis for tax is income. It should be income earned under whatever circumstances. We should not permit those people who are described as sophisticated, well-heeled investors to separate themselves from ordinary Canadians because their income and their interest allows them to put off tax payments for 10 to 20 years.
The logic of that is that if you have a deferred tax indefinitely, you in fact do not pay tax.
We just finished taking a vote this afternoon. The Government came to Parliament to explain that it is pressed to go to the market for additional borrowings because of the demand which is upon the Government in difficult financial times. The result of the use of these schemes by those people called sophisticated, well-heeled investors was a loss to the Treasury
Adjournment Debate
of an estimated $75 million annually, which is not available to meet the demands of the Government in other areas.


Stan Darling: Perhaps I could give another example to the Minister. The tax department is after every nickel it can get. If there is a windfall profit made on the stock market, it takes 50 per cent anyway. You are not satisfied with that. You will not let the lucky person in the stock market agree to take their 50 per cent. The Government will say it will take its 50 per cent but will not let the individual buy an income averaging annuity to spread it over the rest of his life or a period of 10 years.
However, if one wants to become a real gambler and buy tickets on the sweepstake, the sweepstakes are home free. You do not put your claws on the sweepstake. At least, you have not thought of it yet, and maybe I should not give you the idea. I know that sweepstake winnings in the United States are subject to capital gains. I see the officials starting to blink their eyes.
What is the difference between a person winning a million dollars on the sweepstake and being comfortable for life and a farmer who works hard all of his life and sells his farm for a substantial amount-because they say that farmers live poor and die rich-and he sells his farm for that substantial amount of money for which he only gets a downpayment of $10,000. Suppose he gets cash.


Cyril Lloyd Francis: Order. I hesitate to interrupt the Hon. Member but, it being six o'clock p.m., it is my duty to rise, report progress and request leave to consider the Bill again at the next sitting of the House.
Progress reported.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the House under Standing Order 45 deemed to have been moved.

A. Daniel McKenzie: Mr. Speaker, on April 23, last year, I asked the Prime Minister (Mr. Trudeau) about a Government directive establishing special recruitment teams for the purpose of searching out and hiring francophones exclusively for employment in the federal civil service. The Human Rights Commission is currently investigating the discriminatory promotion policy of the Liberal Government, although it appears that the Human Rights Commission is experiencing great difficulty in arriving at a decision on the various cases which have been brought before it with regard to preferential treatment for francophones.

March 8, 1983
Adjournment Debate
The Commissioner of Official Languages, Max Yalden, stated in October 1982 that it is time that the federal Government told the country what its official language program was all about. Today I am calling on the Parliamentary Secretary to request that the Government and the Cabinet enact, as law, Paragraph 7 of the House of Commons Resolution on official languages dated June 6, 1973, or to otherwise adopt the contents of my Private Members' Bill C-666, an Act to amend the Official Languages Act, to ensure that English-speaking Canadians are protected against the discriminatory bilingualism policies of the Liberal Government.
In order to assist the Human Rights Commission in rendering a decision on the case which is presently before it concerning discriminatory practices based on nationality, preference being given to the French nationality, I request that Bill C-141, an Act to amend the Human Rights Act, be brought back for debate. This is essential so that the five amendments I have tabled may be implemented to include language as a prohibited grounds of discrimination. It is imperative that we have laws to protect English-speaking Canadians, due to the discriminatory language policy of the Liberal Government.
English speaking civil servants are being dead-ended because of this so-called bilingualism policy. As an example of public concern over this issue, I have just received the highest return ever from a questionnaire 1 distributed within my constituency of Winnipeg-Assiniboine and extensively throughout Ontario. The purpose of the questionnaire was to determine public sentiment pertaining to the Liberal Party's bilingualism policies and to determine general opinion on the necessity of holding an open parliamentary debate to discuss the elements of discrimination brought about by the Liberal Party's bilingualism policies. The results clearly point to the sentiment of the Canadian people. Of those responding to the polls, 98.35 per cent stated their desire for debate on these Liberal Government policies which are so blatant and discriminatory.
There have been obvious human rights violations of Englishspeaking Canadians employed in the Civil Service, the RCMP, the Armed Forces and Crown corporations. There is no doubt but that the merit system is being ignored and superseded by Government directives to give preferential treatment to francophones at the expense and to the detriment of anglophones employed in the public service.
In light of the Human Rights Commission being charged today in the Federal Court of Canada Trial division for the delay in rendering a decision on cases referring to discrimination based on the application of preferential treatment of francophones to the detriment of anglophones, I have in my hand a copy of a writ served on a Human Rights Commission directing the Commission to hold a hearing on a complaint which has been filed with regard to the awarding of preferential treatment to francophones in the RCMP. The application will be made to the Federal Court of Canada on March 17, 1983, under Section 18 of the Federal Court Act.
Is it the Liberal Government's policy to make Canada a French state? I ask this question in light of the statements
made in Halifax by the Secretary of State (Mr. Joyal). He referred to "the ambition of making Canada a French country, both inside and outside Quebec", and the task of making "Canada a French state", which he has taken on.
The Minister has also introduced a Bill that would force bilingualism on the private sector and which would impose fines and jail sentences for non-compliance. By reason of the statements made by the Secretary of State, and by reason of the existing circumstances of the Human Rights Commission, I am calling on the Government to hold an emergency full-scale and open parliamentary debate to discuss its discriminatory policies on bilingualism.
Incidentally, I have had questions on the Order Paper for a year in an attempt to obtain more information with regard to these hiring teams, what Provinces they are going into and what nationalities they will be hiring in their recruiting program. I hope we can have some concrete answers from the Parliamentary Secretary tonight with respect to these discriminatory practices.


David Berger: Mr. Speaker, because the Parliamentary Secretary had to make an out-of-town speech tonight, he asked me to answer on his behalf.
I would point out that in his answer to the Hon. Member for Winnipeg-Assiniboine (Mr. McKenzie) the Prime Minister (Mr. Trudeau) mentioned the reasons for this policy. On April 23, 1982, he stated that he was not aware of the particular Order in Council or directive to which the Hon. Member was referring. He speculated that this directive had been necessary because the attractions of Quebec City were very great as opposed to Ottawa, because very few qualified French Canadians knew they would be able to work in a language environment conducive to the kind of productivity of which they are capable. He pointed out that the position of the Hon. Member was in direct contradiction to the policy of his Party and his Leader.
In his question in the House that day, the Hon. Member for Winnipeg-Assiniboine raised the matter regarding the operations of the House of Commons. The Speaker felt it necessary to answer him, pointing out that his reference to rights in the House was incorrect. Therefore, we have a number of cases where the information put forward by the Hon. Member is not as accurate as he would have us believe.
The Hon. Member cites with great flair his questionnaire. On the basis of what he said in the House, I would suggest that it was a biased questionnaire. If this were in court, he would be told by the other attorneys that he is posing leading questions. Therefore, it is not surprising he got the kind of results he did with his questions framed in that manner.
The Hon. Member made reference to statements made by the Secretary of State, and made the ludicrous assertion that it is the policy of the Government of Canada to make this country a French state. I feel that his assertions are blatantly
March 8, 1983

ridiculous and ludicrous. It is not worth my effort or the time of this House to give him an answer.


ENVIRONMENTAL AFFAIRS-POLLUTION OF NIAGARA RIVER- PROPOSED ACTION BY PROVINCE OF ONTARIO. (B) ACCESS TO INFORMATION ON DUMP HAZARDS
Mr. Girve Fretz (Erie):: Mr. Speaker, the Niagara area is one of the most picturesque areas in North America. With its mild climate and rich soil, it quickly became one of the most heavily populated areas of our Province. Unfortunately, people are polluters. So are the industries where they work and where the goods they require are manufactured. Thus begins the tragic story of pollution in the Niagara River.
Niagara Falls is the place to spend your honeymoon. With the sun setting over the magnificent spectacle of the cascading waters, the scene is one of awesome splendour. Yet in those beautiful turbulent waters is a most disconcerting array of toxic materials. Some of the most powerful poisons known to and created by mankind are found in those waters forming the backdrop for countless romantic encounters. How tragic it is in such a beautiful setting to find such ugly chemicals as dioxin, mirex and PCBs. Today I stand in this House to outline once again these problems of the Niagara River and the deplorable lack of action to combat them.
For decades, politicians and environmentalists have been aware of the intolerable pollution taking place in this watershed. Giant chemical companies, with a lot of cash, and perhaps political clout, have been steadfastly preaching cleanup while ignoring pleas to clean up their act. They have dumped their wastes in hastily prepared sites which have deteriorated to the point that the liquid poisons within them are now seeping into the Niagara River. This, of course, is in addition to the pathetically inadequate sewage treatment plants which dump virtually untreated human waste into this once magnificent water course.
Yes, the Niagara River is lovely to look at. Yet in the early 1960s it was described as the biggest open sewer in North America. At that time, Niagara Falls, New York, was dumping raw human wastes and industrial by-products directly into the River by means of a huge pipe opening into the River of all places, just below the American falls in full view of the public!
These are not the sixties, Mr. Speaker. We know better now. We only have finite quantities of water to work with. We must preserve the quality of these waters. We have provisions for protection of the environment. We have the International Joint Commission, the Committee on Great Lakes Water Quality. Why then does the pollution continue? The laws are in place. The chemicals have been identified. We know they are there in even more dangerous quantities as the yellow barrels in the Love Canal continue to rust and allow their nauseating contents to seep through the bedrock into one of the most famous rivers in Northern America.
Is it apathy or misplacement of priorities which accounts for the fact that Niagara Falls, New York, is still dumping
Adjournment Debate
virtually untreated waste directly into the Niagara River? The modern treatment plant continues in its state of disrepair to give only primary treatment to the 65 million gallons of sewage passing through it daily. That is to say, it takes out the lumps and then adds some chlorine.
The Ontario Ministry of the Environment is aware of these assaults on the environment in the Niagara River. In a meeting with the Minister recently I noticed just how much he is aware of the problems with chemical seepage into the River. I believe he is very concerned. The Ontario Minister of the Environment has continued since that briefing in late 1982 in his efforts to negotiate a cleanup of the Niagara River, by dealing with major chemical companies and United States environmental groups. Yet how much more effective his representations would be if the Canadian Government took a much more action-oriented approach to the problem.
The main issue concerning Ontario environmentalists is the S-Area dump, which contains a mind-boggling array of deathdealing chemicals which are finding their way into the water table and into the River. It has been alleged that Hooker Chemical knows more about the makeup of the S-Area dump than they care to voluntarily admit. This matter is of enormous importance to Canadians, perhaps even more important than coal liquefaction. We need this information to undertake remedial action. Then why does the federal Government delay in offering its help to resolve the issues raised by Ontario? Mr. Parliamentary Secretary that is one of the questions you need to answer. In all fairness, it is a federal responsibility to resolve disputes of international character such as this. Once again, I ask the question to the Minister: What effort is being made to acquire the information so desperately needed on the S-Area dump? 1 do not want to hear that he is not party to these negotiations, as he mentioned in January. He should be party to these negotiations as federal Minister of the Environment. I understand, in speaking today with a representative of the Ontario Minister of the Environment, that the federal Government has agreed to raise our concerns with the State Department. When is this going to happen? We are all waiting with bated breath.
As the Member of Parliament for a constituency bordering on the Great Lakes I have spoken out on many occasions on water quality. I have read numerous reports sent out by the International Joint Commission and the Great Lakes Water Quality Group. They use great amounts of ink and paper in analysing the chemicals being emitted by various industries, and on measuring in intricate detail the substances to be found in Great Lakes water. However, little is mentioned regarding actual procedures to nail polluters and make them comply with regulations. The solution is not to slap offenders on the wrist; they should be made to clean up the mess. Not only that, when does the Minister intend to conclude his studies of pollution and do something definite about it? If there are plans to seal

March 8, 1983
Adjournment Debate
the dumps and stop the polluters in their tracks, it is high time to implement those plans.
In conclusion, I implore the Minister to take appropriate steps to wipe out pollution where he has jurisdiction, that is on Canadian soil, and to immediately enter into serious negotiations to reach a bilateral accord with the United States on similar controls in that nation. To many people's health and well-being depend on such action. Rhetoric is not enough.


Henri Tousignant: First of all, Mr. Speaker, I would like to congratulate the Hon. Member for Erie (Mr. Fretz) for whom I have great respect. I have so much respect for him that sometimes I think he is a Liberal.


Claude Girvin (Girve) Fretz: Never, Mr. Speaker, never.


Henri Tousignant: I would like to thank him for the effort he brings to the solution of this very serious situation. I will reply on behalf of the Minister in French, as it is easier for me.

The Minister of Environment (Mr. Roberts) has informed the House that the Federal Government is bringing pressure to bear upon the United States to clean up the Niagara River. This is being done at the diplomatic, administrative and technical levels. At the administrative level, the advisory committee responsible for the Niagara River which is made up of high officials has met officially six times since last year to urge that action be taken to deal with problems such as that of the S-Area dump. Environment Canada and the Environmental Protection Agency of the United States chair jointly this committee which also includes representatives from the Ontario Department of the Environment and the Department of Environmental Conservation of New York State. Through this committee, data and technical advice exchanges have greatly increased between the two countries. However, in the case of the S-Area dump, the publication of information is restricted by a confidentiality agreement between the parties involved in the case now before the court of the New York district, namely the American organizations and Occidental Chemical Corporation. Under this agreement, the EPA cannot discuss with us the details of its negotiations with the company which might lead to a future settlement. Still, the confidential agreement does not in any way prevent us from holding discussions with the American Government, and we will continue to make representations to them regarding our concerns and our interest in a settlement. Senior officials of the Department of External Affairs and their counterparts in the American State Department are actively seeking under the terms of the agreement a mutually acceptable solution to obtain information which has been unavailable so far.
On the technical level, the provincial and American organizations have decided to co-ordinate and intensify their monitoring activities under the supervision of the Niagara River Toxic Products Committee. It is necessary to collect and analyze the scientific data to pinpoint the exact sources of the
many chemical products involved, as well as to find effective remedial measures and to set priorities. The Niagara River Toxic Products Committee will publish its final report sometime in December 1983.
Some action has been taken in the case of the Niagara River. In our consultations with the United States, we are trying to find effective ways to solve the problems, and we are using every available diplomatic, administrative and technical mechanism to convince the Americans that it has become very urgent to do something to solve the Niagara River pollution problems.


ABORIGINAL RIGHTS-POSSIBLE EFFECT OF GULF OIL DEVELOPMENT IN NORTHERN YUKON
Mr. Jim Fulton (Skeena):: Mr. Speaker, my question tonight concerns the possible effect of Gulf Oil development in the northern Yukon. I hope the Parliamentary Secretary is prepared to respond to some of the points that I will put on the record.
The first question concerns aboriginal rights in the northern part of the Yukon and the second concerns the impact of the intrusion of Gulf at Stokes Point or other sites on the north slope that might make a national park a nonviable option.
This is a peculiar situation, Mr. Speaker. As a result of the Berger Inquiry, the National Energy Board, many national environmental groups and native groups requested and received the endorsation of the Government of Canada for certain lands to be withdrawn. On July 6, 1978 Order in Council No. 78568 was Gazetted. This withdrew certain lands from disposition, and included such things as disallowing the location of any claims, any gold, precious metal or mineral prospecting. Clause (b) of the Order in Council stipulates as follows:
-that the lands described in the schedule are required for a national park and other conservation purposes to order the withdrawal of the said lands, including all mines and minerals, whether solid, liquid or gaseous, easements-
It is very clear that what is being pursued by the Minister of Indian Affairs and Northern Development (Mr. Munro) is quite improper and is not supported by his colleague, the Minister of the Environment (Mr. Roberts).
On February 25, 1983, an article appeared in the White Horse Star under the heading "Environment boycotting Stokes Pt. meeting" and it states as follows:
Environment Canada is not participating in the study of potential port sites on the Arctic coast because it doesn't want to help make a decision to build a harbour it doesn't support.
Environment Minister John Roberts has publicly stated his opposition to any decision that would allow development along the north shore, especially on the Yukon's north slope.
Gulf Canada applied last summer for Northern Development Department permission to build a deep-water wintering harbor at Stokes Point. The company wants that site because it says it can accommodate its huge Conical Drilling Units.
March 8, 1983

According to Sandy Lewis, a policy advisor with Environment Canada, the department wants to distance itself from any actual decision making. "We don't want to embarass our minister," Lewis said, or "prejudice our view."
The Interdepartmental Environmental Review Committee is studying potential harbor sites along the Beaufort coast. The Northern Development Department is also examining Gulfs site selections, which include Roland Bay and King Point, as well as Stokes.
The article concludes as follows:
There is no reason the decision has to be made after the end of March, Lewis said.
Once it is made, he said, "we will have to live with it."
We have the National Energy Board ruling, we have the very lengthy, thorough and widely accepted Berger Inquiry, we have environmental groups and native groups which all support the exclusion of these lands. But, for years the Minister of Indian Affairs and Northern Development has been promoting Gulfs application to go ahead with Stokes Point, which I understand will be heard in Ottawa on Friday. It is interesting that not only is the impact on the national park proposal to be considered, but also the impact on aboriginal claims.
On February 25 the Native Press under the headline "Impact Statement ignores claims" ran a story by Lee Selleck. We have the erosion of good faith negotiations in relation to aboriginal title and we have the erosion of the park proposal. It is not that Gulf, Esso and others do not have other sites they could go to. On February 25 Gulf sent me a Telex which read in part as follows:
-Gulfs current proposal for a marine supply base at Stokes Point and the content of the environmental impact statement which outlines a range of longterm future options for eventual oil and gas development in the north, if and when sufficient commercial quantities are discovered.
The EIS will be dealt with more appropriately, as planned, during the course of the federal environmental assessment and review process.
We have a situation where Gulf, I understand under pressure from Government officials, went ahead and made an application to get Stokes Point. Their original idea was to get access to various quarries, to build a road down to join up with the Dempster, and to run pipelines down. Now all they are doing is shifting it back to a very narrow application and saying, "Don't harrass us. We just want to have a site where we can put 50 men. We will not bring in 767 jets; there will not be many helicopters. We will not do too much damage to the environment". However, by their own information, this is just the thin edge of the wedge. They want to get this limited site. They want to undermine aboriginal claims. They want to undermine the national park. Anyone in good conscience, including the Minister, has to admit that once that site is there, once Stokes Point is dredged as a deep water port, it will be a year-round facility. They will start pressuring for roads because they will say it is too foggy, that there are iceouts and whiteouts, that they cannot bring in the jet, that they must have a road. Once they get the road, they will say, "Well, we have the road; now we need the pipeline". As Dr. MacTaggart-Cowan said years ago about what is happening in the Arctic, it is destruction by insignificant increments.
Adjournment Debate
I hope the Parliamentary Secretary will address himself to the very important application that is being made this week; Gulf is applying on Friday. The Minister's own Department claimed to have a legal opinion that Gulf can go ahead and get this kind of easement or temporary permit access to the area, without the need for a change in Order in Council which was based on reports which cost taxpayers of Canada millions of dollars, through the National Energy Board and through the Berger inquiry, to have those lands set aside. If the Minister intends to go ahead and allow Gulf to do it now, the Minister of the Environment might as well resign. He is opposed to it. His officials are opposed to it on sound environmental grounds. I urge the Parliamentary Secretary to agree with the Minister of the Environment, and to take the necessary steps to deal with this matter in an appropriate manner.


Henri Tousignant: Mr. Speaker, I will try to explain the situation to the Hon. Member.
Gulf Oil has submitted an application for approval-inprinciple to locate a medium to deep draft marine support base at Stokes Point in the Northern Yukon to support its offshore exploration activities, including its new drilling systems, the conical drilling unit and the mobile Arctic caisson. The company has conducted an analysis of alternative sites along the Beaufort coast and determined that Stokes Point was the best site to meet its exploration support needs.
The Department of Indian Affairs and Northern Development is not predisposed to locating a new marine supply base at Stokes Point or any other northern slope location. It is, however, obliged to assess Gulfs need for a new marine supply base during its exploration program and to respond to its application.
The Government, having granted Gulf exploration rights and specified work commitments associated therewith, cannot now impose unreasonable operating conditions and effectively limit Gulfs exercise of its rights. Consequently, departmental officials in co-operation with experts from other Departments are conducting a facilities siting study to assess a range of harbours on the entire Beaufort coast, including not only sites on the Yukon's north slope but also sites on the Northwest Territories coast, to determine both the need and the preferred location to meet Gulfs operational requirements during the exploration phase of its activities.
In this regard, Gulf has been informed that no decision can be taken until all significant factors have been analysed and weighed, that all sites must be considered in this analysis, that new sites should be kept to a minimum in order to limit potential disruptions, that such plans should be the subject of consultation with those affected, and that the provisions of the COPE agreement in principle are to be followed in all actions.
In November 1982, Gulf applied to conduct geotechnical studies at Stokes Point, Roland Bay and King Point, both onshore and offshore. Gulf has been authorized to proceed with such studies offshore, which will provide information essential to the analysis. Gulf is aware that such authorizations

March 8, 1983
Adjournment Debate
as it might receive for such studies should not be construed as implying that eventual Government approval of Stokes Point or any other north slope location is assured.
Gulf has indicated its intention to apply this week to the Department for the land use permit which it requires in order to construct facilities at Stokes Point. No such authorization will be provided until a decision has been reached, both on the need for a new facility and on an appropriate site based on the study I referred to earlier.
Before reaching a decision on a site or on the conditions which could govern the development of any chosen site, we will be consulting the territorial Governments and appropriate local communities and native groups. Department officials
have already indicated to interested Parties that the result of the studies will be made public.
In conclusion, the Department of Indian Affairs and Northern Development is responsible for assessing proposals put forward by companies legitimately engaged in exploration activity in accordance with the law. Such assessments are, of course, conducted without prejudice to existing commitments and without anticipating their possible conclusions. In short, no decision has been made; no decision will be made unless and until all factors and interests have been taken into account.


Mr. Deputy Speaker:: Order, please. The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 2 p.m.
At 6.32 p.m. the House adjourned, without question put, pursuant to Standing Order.


THE END VOLUME XX