1983-02-15

PRIVILEGE


Mr. Doug Lewis (Simcoe North):: Mr. Speaker, I have no wish to interfere with the Orders of the Day and the proceedings today, but I would like to bring to your attention at this time, in view of the fact that it is the earliest opportunity to raise a question of privilege, that the notice with respect to the organization of committees may not have been in order or may not have been delivered to Members in time.
It is our belief on this side that inadequate notice was given of the organization meetings of certain committees of the House, and that this lack of proper notice constituted a breach of order or a breach of privilege of Members of the House. I would like to reserve my right to comment further at three o'clock p.m. today.
1 would also give notice that at that time other Members of the House, including other Parties of the House, may wish to address the same question of privilege.
[ Translation]


Hon. Yvon Pinard (President of the Privy Council):: Mr. Speaker, I think this notice means that more time is going to be wasted. The Hon. Member for Simcoe North (Mr. Lewis) can come and see me and discuss any irregularities there may be, and we shall then see whether there is a case for taking corrective action. However, what the committees do is strictly their own business, and nothing can be done about it here in the House without a report. Aside from that, I am prepared to meet the Hon. Member, and if he has any discrepancies to report, he can point them out to me and we shall try to correct the situation. It is unfortunate, however, that he is trying, this morning, to give notice once more that he is going to waste our time. I hope it will not be necessary to waste another day, and that we will be able to settle the matter between ourselves. Instead of raising questions of privilege, all the Hon. Member has to do is to consult with his fellow house leaders.



MR. CROSBY-APPLICATION OF PERMANENT AND PROVISIONAL STANDING ORDERS

['The occupant of the Chair certainly cannot comment on the matter raised by the Hon. Member for Victoria in the context in which he makes his remarks. I think the best course to follow now would be to take that matter under advisement.']
Mr. Howard Crosby (Halifax West):: Mr. Speaker, I would like to raise a point of order similar to the one raised by the Hon. Member for Simcoe North (Mr. Lewis) in relation to the
application of the new Standing Orders, in particular Standing Order 69(4)(b). My point is contrary to the one raised by the President of the Privy Council (Mr. Pinard).
The Standing Orders regulate the activities and affairs of the House of Commons. They make very clear that Members of the House of Commons are entitled to participate in committee work. By giving 24 hours' notice through their Whip they will be permitted access to committee. It is recorded in the business of the House that yesterday we approved, at approximately 3.30 p.m. o'clock, the report of the Striking Committee which established the standing committees of the House. It now being after eleven o'clock, less than 24 hours later, those very Standing Committees are meeting.
The point must be recorded in the House of Commons right now that this is a rather strange procedure if a spirit of parliamentary reform is to prevail in the Chamber. We have no alternative but to record the facts as they are taking place and to consider what is our position as individual Members and as the Official Opposition to the process which is taking place.
I join with the Hon. Member in making the same reservation and asking your indulgence, Mr. Speaker, to allow this matter to come before the House of Commons at an appropriate time.


Mr. Ian Deans (Hamilton Mountain):: Mr. Speaker, if I understand correctly what has just been said, the point that is to be raised at three o'clock has already been made. If it is a matter of adequate notice, is it not simply a matter that can be dealt with forthwith, and then we can get on with the business? I do not often urge upon people to do things they do not want to do, but it would seem to me that if the point just raised by the Hon. Member for Halifax West (Mr. Crosby) is the same point that the Hon. Member for Simcoe North (Mr. Lewis) proposes to raise after the Question Period, then it is appropriate to raise it now, and, therefore, it must be raised at the earliest possible moment. If he is aware of it, the matter must be debated now. Let us have the discussion, let us have the ruling and let us get on.


Douglas Grinslade Lewis: Mr. Speaker, I rise on a point of order. Unlike the House Leader for the New Democratic Party, I would like to move away from all the facts and figures, but if we are pressed into it now, that is fine.
I refer you, Mr. Speaker, to this pamphlet called "A Guide to Committees of the House of Commons of Canada" published under the authority of the Speaker of the House of

February 15, 1983
Privilege-Mr. Crosby
Commons. I refer in particular to page 6 of this pamphlet where it states:
Notices of committee hearings are sent to committee members and are printed each day as an appendix to the Votes and Proceedings-
Yesterday we had quite a bit of discussion about the question of what Votes and Proceedings means. I would like to draw your attention to page I of Votes and Proceedings for Monday, February 14, 1983. We are informed that the Special Committee on Standing Orders and Procedure will meet, that the Justice and Legal Affairs Committee will meet and that the Public Accounts Committee will meet. Today at or about nine o'clock a.m., our Whip's office was advised that the Standing Committee on Finance, Trade and Economic Affairs would meet, that the report of the Auditor General to the House of Commons for the fiscal year would be discussed in committee; and then we find that the Agriculture Committee will meet and that the Communications and Culture Committee will meet.
We are making the same point that we made yesterday, and that is that democracy rests on notice. We have no difficulty getting our people to committee meetings when we have notice of them. I suggest to you, Mr. Speaker, that goes for all sides of this House. It is about time that the Members were informed and given plenty of notice as to what is going on. Party bias can then come into play, the Party situation and whether or not you are a Member of the Government or of the Opposition. But I suggest to you that this place has to operate on notice, Mr. Speaker. That notice was not given with respect to those committee meetings.
If we are going to be effective in committee, just as we argued yesterday that if we are going to be effective in the House, we need notice and information. Surely in committee we need and are entitled, as Members of Parliament and as suggested by the Speaker's Office itself, to proper notice. That is our point of privilege.


Howard Edward Crosby: Mr. Speaker, in response to the suggestion of the Hon. Member for Hamilton Mountain (Mr. Deans), I am prepared to state my point of privilege in very clear and unequivocal terms, if that is desired. I am prepared to make a motion in relation to that point of privilege which is that I, as a Member of the House of Commons entitled to equal rights with all other Members, did not have the opportunity to serve on standing committee meetings which were called for 9:30 a.m. and 10:30 a.m. this morning. Because I received no notification of those meetings, I was unable to be substituted as a Member of any one of those committees that met at 9:30 or 10:30 this morning. I will list them for you, Mr. Speaker. They are Finance, Trade and Economic Affairs; Justice and Legal Affairs; Public Accounts; Agriculture; Communications and Culture; and Fisheries and Forestry, which I attended. I could not be substituted because there was no opportunity for my Whip to provide 24 hours' notice to the Clerk of the House to permit me to become a regular alternate Member of any one of those committees.
By way of a motion, I would suggest that it would be appropriate to refer this matter of the calling of committee meetings to an appropriate committee of the House for study in order to see that all Members have the benefit of the provision that I referred to earlier, Standing Order 69(4)(b), which gives us the right to be substituted on standing committees on 24 hours' notice. That right was unceremoniously and unilaterally taken away from us by person or persons unknown.


Ian Deans: Mr. Speaker, having listened to the points that were made and having read the Standing Orders, I would say at the outset that it may well be a point of order that Members of the House of Commons are entitled to be given sufficient notice to allow them to attend the sittings of the House and the sessions of the committees. Since there is a rule which requires 48 hours' notice on substitution, then the same rule must surely apply to the calling of meetings. Members must be given sufficient time to substitute prior to the meeting being called to order. We were not aware that the committees were to meet this morning. It was therefore not possible for Members who were unaware to be at the meeting. Neither was it possible, under the Standing Orders, to substitute.
The issue here is the unfairness of the situation. It is quite clear that if a Member is not given adequate notice of a meeting, which is 48 hours, in order that he or she may attend, it is not possible to substitute another Member because the Standing Orders do not permit it.
I suggest it is indeed a point of order; I do not think it is a question of privilege. I suggest that the Chair should rule that meetings of committees should be preceded by adequate notice being given to each and every Member so that they can attend or arrange for a substitute to attend in their place. In order for that to occur, it follows that there must be 48 hours' notice of the calling of the meeting.


Yvon Pinard: Mr. Speaker, as I indicated earlier, I am willing to meet with the House Leaders within the next five minutes in my office or wherever they wish so we can clarify this situation. We do not insist on having the committees organized this morning. We thought that it was urgent for the House to be able to have its committees working, but if they do not like the idea and would prefer more notice-I am told that Tory Members attended some of those committees this morning and were very happy- and want to undo what has been done, we are willing to discuss it.


Howard Edward Crosby: Garbage.


An Hon. Member:: Who told you?


Yvon Pinard: It was the Tory chairman, as a matter of fact.
I am saying that if the House Leaders who are here this morning are willing to meet with me, let us not waste the time of the House and proceed with debate. We will meet right
February 15, 1983

now. If we cannot settle the matter, they can return with the subject whenever they want.


Douglas Grinslade Lewis: Just once more, Mr. Speaker. I am not going to sit here and listen to any more comments from the Government House Leader. When we raise a question of privilege, as far as I am concerned I object to its being referred to as a waste of the time of the House. You decide that, not him.


The Acting Speaker (Mr. Corbin):: The Chair has listened to the comments of Hon. Members. The Chair recognized the Hon. Member for Simcoe North on a point of order. Once recognized, he proceeded to submit a question of "privilege".
I would like to draw to Hon. Members' attention Standing Order 20(2) where a procedure is laid out for the giving of notice of matters of privilege other than one arising out of the proceedings in the Chamber during the course of a sitting. I think Hon. Members would be well advised to adhere to that usual procedure and give proper notice in writing, if Hon. Members cannot in the meantime resolve the matter raised under the points of order before the continuation of the sitting later on this day. In any case, I think we should proceed to Orders of the Day.



Hon. Allan B. McKinnon (Victoria):: Mr. Speaker, I rise on a point of order.


The Acting Speaker (Mr. Corbin):: The Hon. Member for Victoria rises on another point of order?


Allan Bruce McKinnon: Yes, another one. Mr. Speaker, I am simply asking for some clarification and guidance on our future behaviour in this House concerning rising on points of order. In yesterday's debate, the Speaker pointed out in pretty firm tones, as recorded at page 22816 of Hansard, the following:
I will hear the Hon. Member for Hamilton Mountain (Mr. Deans). I will not hear any other Member.
Further on, the Speaker said:
Order, please. Hon. Members will understand that 1 have heard enough commentaries on this point of order.
I was in the House on February 3 and raised an objection to a philosophical debate which was going on under the guise of points of order raised by two Hon. Members from two different Parties. The order of business was the Old Age Security Act, which I rather wanted to debate and proceed upon in the hopes that we could change the mind of the Government about the indexation rule which it was attempting to apply to old age pensioners. At that time the Acting Speaker said:
There is no way that the Chair can refuse to see an Hon. Member on a point of order.
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At that time I asked the Acting Speaker a question as follows:
Mr. Speaker, we have a very important Bill in front of the House concerning old age pensions. I wonder if you could not see any further points of order and let us get on with that Bill.
In reply, the Acting Speaker stated:
There is no way that the Chair can refuse to see an Hon. Member on a point of order. That is not an option open to the Chair, unless, of course, the House wishes to provide a very clear-cut order to the Chair in that regard.
Now I am completely puzzled. Was the Speaker right yesterday when she said she would not see people and that she had heard enough, or was the Acting Speaker correct on February 3 when he said that there was no choice open to the Chair? Perhaps Your Honour could guide us in this matter.


Yvon Pinard: Mr. Speaker, the Hon. Member for Victoria (Mr. McKinnon) is reflecting on a decision rendered yesterday, and it is a shame that he wastes the time of the House in the way he is now.


The Acting Speaker (Mr. Corbin):: The occupant of the Chair certainly cannot comment on the matter raised by the Hon. Member for Victoria in the context in which he makes his remarks. I think the best course to follow now would be to take that matter under advisement.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Monday, February 14, 1983, consideration of the motion of Mr. Lalonde that Bill C-139, to amend the Statute Law relating to Income Tax (No. 2), be read the second time and referred to a Committee of the Whole.
Mr. Scott Fennell (Ontario):: Mr. Speaker, I would like to discuss the Bill which is before the House today. I must discuss it in somewhat general terms because of the reduction in the time available.
In the budget and comments by the previous Minister of Finance, it was indicated that this measure was housekeeping. I would call it state control and intervention. As we all know, with regard to income tax forms it is up to the individual to understand the Act and to make out his own form, keeping his own files and determining, on his own, the amount of taxes which should be paid; and then it can be challenged by the Department of National Revenue.
The President of the Institute of Chartered Accountants for Ontario recently gave a speech wherein he stated: "Even tax professionals admit they have difficulty understanding". Before we know it, there will be a new budget, a new tax Bill.
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February 15, 1983
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There has been something like over 500 changes to the Income Tax Act when it was revised in 1972.
It is beyond the capability of many Hon. Members in the House to comprehend this Bill. It is not possible for many chartered accountants to understand it, other than those who specialize in tax accounting. It is becoming too cumbersome. It is at a point where the average person cannot understand it. Furthermore, there is a discrepancy in that the cost of professional help is not permitted as a deduction for the average wage earner but is only permitted for people with very high incomes who can afford to pay for it whether it is a tax deduction or not.
Those are some of the points I wanted to speak to in general on this Bill because I feel we are being very unfair to the Canadian public.
Since the November, 1981 budget, chaos has reigned in Canada. Thousands of small businesses have gone bankrupt. The energy industry in Alberta has fallen apart. Alberta, a successful Province, is having to borrow money at this time. This is all a direct result of the Government tax laws that have been passed since February 18, 1980.
Specifically, I would like to deal with a few points in this Bill. I come from a part of the country where the automobile industry is the life blood of my constituents. General Motors has had to lay off thousands of people. There are many other people in related service industries who have lost their businesses.
These occurrences are beyond the recession that we are suffering, which I believe has been largely the fault of this Government. The taxation measures introduced in this Bill have also damaged our automobile industry. Companies leasing cars now have to extend these deals into four or five years for their salesmen as a result of this Bill. The lifeblood of a salesman is his automobile and he can no longer get around as quickly, because a four or five year old car will obviously be in the garage some part of the time for repairs. The Government, at a time when salesmen's incomes are being reduced, are now charging them tax on the use of a vehicle that is their lifeblood. This has reduced the sale and leasing of automobiles, which has hurt the automobile industry. It has hurt all the service industries around the automobile industry and has also harmed the sales people, who are so important to this economy.
Let me go on to one other area of this Bill that I take exception to, and that is the life insurance industry. The life insurance industry has provided great amounts of money for investment in Canada through savings of individuals. Admittedly, the Government has deferred the law for a year or two down the road, but it is so greedy to grab the tax on the income when it is earned, rather than taking the opportunity it has always had to grab the tax on the income when a man needs the money, that we are discouraging people from providing for the future.
You know as well as I do, Mr. Speaker, that constituents who were employed in the forties, the fifties and the sixties and who are now retired are suffering because the money they saved is not adequate to provide them with a decent way of life. To put this provision into this Act is a disgrace. Perhaps the Government's position on this is to control all the people so that they are totally dependent on the state. I think that this is unacceptable to the people of this country.
In Canada, when we need new industry, when we need expansion of residential units in the housing industry, when we need growth to support this fine country, the Government cut out one half of the capital cost allowance. Then, to be tricky, it considered the soft costs in building as capital costs so that a developer cannot write them off. The result of that is to increase the cost of rental units to the people of this country. The cost of rental units now is so high that it is difficult to apply the old formula that no more than 25 per cent of one's income should be spent on rental of living accommodation. By pushing it up, people must spend almost 50 per cent of their income to provide housing.
The next point in the Bill I come to, which refers to small business, is the SBDB. As Members know, this was developed by our Government, proposed by our Government and then abused and torn apart by the Liberals. It was meant to encourage industry, small business, to grow in this country. It was an encouragement for people who put their money in to be able to get lower cost loans. It was not enough, I must say from a personal point of view, but it was a start.
What has this Government done? It has now presented this only for bankrupt firms. I have talked to the banks about this. A company that is in trouble needs a lot more than a 34 per cent reduction in its interest cost. If you are going to help people who are in bankruptcy, you should put a moratorium on their interest rates until they can get their cash flow back to what they require to pay their debt. This does not solve the problem of those to whom it is addressed. This is an area that this Government and the Minister of Finance (Mr. Lalonde) should address in the next budget.
There is one part of the Bill I am delighted with. Due to the complexities within the Act, even the Department could not remove deductibility of interest on borrowed funds. The Department could not find a way to take this Provision out. It got up to 16 pages and then had to throw in the sponge. It could not get it out of the Act. I say thank God, because it should not come out. Canadians are too inclined to keep their money in their socks rather than put it out for investment. The few entrepreneurs we have left in this country need every encouragement to invest in our industry in order to get people employed and make profits so that our industry can grow and we can be less dependent on the multinationals.
Unfortunately, the Government did find a way of getting interest deductibility under Registered Retirement Savings Plans. Those are funds that were necessary to go directly into investment in industry in this country. Is it the Government's
February 15, 1983

wish to destroy private enterprise? Is it their wish not to give any encouragement to private entrepreneurs but simply to build colossal Crown corporations? I do not stand for that. It is time we help the small-businessman in this country to survive and create the employment that is so desperately required.
One further point is scientific research and development, which is so important in this day. Look at what the Japanese have done with the tremendous resources they have applied to it. The Government even cut into scientific research and development so that you cannot deduct on an accumulated capital basis.


The Acting Speaker (Mr. Corbin):: Order. I regret to interrupt the Hon. Member but the time allotted to him has now expired.


Mr. Dan McKenzie (Winnipeg-Assiniboine):: Mr. Speaker, Bill C-139 which we have before us now is the result of three budgets that have all been a disgrace to this nation and have failed miserably when in actual fact the Government introduced them in an effort to make the economy of Canada work. In my view, the Bill we are now dealing with assists only in preventing the economy of the country from working and, therefore, should be significantly amended or withdrawn.
On June 28, 1982, the then Minister of Finance announced that the mortality gain of corporate-owned life insurance will no longer be a qualified receipt of a corporation's capital dividend account and thus life insurance proceeds will be indirectly subject to a death tax of approximately 34 per cent. Many qualified individuals have begun to speak out against this latest attack on Canadian-controlled, privately-owned corporations because it violates the concept of integration of corporate and individual taxation.
If this proposal becomes law, the death benefit proceeds of a corporate-owned policy paid out to shareholders will become taxable in the hands of the shareholders. By not allowing the death benefit to be paid out tax-free to shareholders through the capital dividend account of a private corporation, the use of corporate-owned insurance for the buy-out of shares in the event of the death of a shareholder is effectively nullified.
In asking Canadians to pay tax on income that they have not yet received, the Government is once again creating a major disincentive to investment. The lifeblood of our economy will be undermined by taxing businesses and individuals to the point that Canadians will no longer be able to provide for themselves for retirement and will become totally dependent on Government support.
The free enterprise system and the higher standard of living it provides for everyone depends on the existence of incentives for people to work harder, more efficiently and more creatively. In asking Canadians to pay tax on the accrued income of whole life insurance policies, the Government is attacking the most important conveyance of investment of which many Canadians avail themselves. Despite changes since the original proposal of June, 1982, disincentives still remain for the purchase of certain types of policies, such as the exempt life
Income Tax
policies which would be taxed if converted to annuities before the termination of the 20-year term.
Through the taxation of deferred annuities, the Government intends to deprive every taxpayer of the only safe and economically sound way of combating inflation with whatever money he or she manages to save on an after-tax basis. By introducing a similar tax on permanent life insurance, the Government intends to swell the ranks of widows who are totally dependent on welfare.
The vast majority of Canadians find it increasingly difficult to combat the ravages of inflation in trying to meet their retirement income objectives. Extraordinary efforts and sacrifices are required to make the necessary savings. Instead of discouraging these savings by tightening the tax noose around the basic retirement vehicles available, the Government should expand retirement savings opportunities by increasing RRSP and pension contribution limits and by allowing investment of tax-paid dollars in interest-sheltered deferred annuities.
The hardest hit will be low and middle-income Canadians who will gain little or nothing from the lowering of marginal tax rates and will lose proportionately more from partial deindexation. The increased taxation of employee benefits will hit hardest at those in the lower and middle-income brackets. It will encourage employees to seek higher wage settlements at a time when moderation is required.
Limitations on retiring allowances, on termination benefits and on the $1,000 pension income deduction will make it harder for Canadians to prepare for their retirement years. The taxation of accrued income on some whole life insurance policies will affect what is for many Canadians a major source of retirement savings. The non-deductibility of interest on money borrowed to purchase an RRSP will discourage personal investment.
The abolition of IAACs will hurt many small-businessmen and farmers who wish to set aside money for their retirement years, years in which their income will be considerably less. General averaging, which involved no judgment call on the part of the taxpayer as to his future income, has been abolished. In its place, this Bill will introduce a complicated measure called forward averaging. To benefit from forward averaging, the taxpayer must decide on the basis of tomorrow's "guesstimated" income whether or not he should opt for forward averaging.
In the disastrous budget brought down by the former Minister of Finance in November, 1981, dividend credit on stocks was reduced to 22% per cent, replacing the 25 per cent that was originally promised by the Liberal Government. This action is very serious as far as industry is concerned. No doubt with the Government action people will leave their money in the banks. Why risk their capital and take reduced dividends? No, leave the money in the banks where it is advantageous to the investor due to Government action.
Why are you, the Liberal Government, discouraging investments in industry with your dividend reduction? We need industrial expansion, not the stagnation that is being

February 15, 1983
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encouraged by your policy. The one thing you have accomplished with this legislation is making financing for industry more difficult. At this time in our failing economy we need financing for industry more than ever. We certainly do not need to make it more difficult. Without well financed industry our Canadian economy is nothing.
I think one of the most important aspects of this legislation is the fact that Canadians have invested in Canadian industry, with the understanding from the Liberal Government that they would receive a 25 per cent dividend credit on their stocks. With no discussion between the Government and anyone concerned, suddenly this dividend credit is reduced to 22% per cent. Can anyone in the Government say this is the incentive needed to bolster our sagging Canadian industry?
If an employee has the use of an employer-owned or leased automobile for non-business purposes, he is considered to be in receipt of a taxable benefit. The amount of the taxable benefit is based on standby charges. Prior to 1982 the standby charges were 1 per cent of the purchase price of the automobile per month if the car was employer-owned, and one-third of the lease cost if the car was leased. In June, 1982 the Government changed this to 2 per cent and two-thirds respectively. This standby fee is now an exorbitant charge. The Tax treatment of cars used in business is in the process of significant change. The implementation of minimum taxable standby benefits to employees will discourage the use by employees of company-owned or leased cars.
This excessive taxation of personal benefits from company cars will encourage employees who need to use a car on their jobs to supply their own vehicles and receive a corresponding adjustment in their remuneration. Then the employees will seek to deduct automobile ownership and operating expenses to put themselves in a better tax position. In many marginal cases the Department of National Revenue will challenge the right of an employee to deduct automobile expenses.
One of the conditions which now must be met in order for a commission salesperson to claim expenses is that the employee be "ordinarily" required to carry on the duties of his employment away from the employer's business premises. The expression "ordinarily" has for many years been interpreted by the Department of National Revenue to mean "most of the time", rather than "regularly". One such example of a marginal case is the subject of a recent decision of the Federal Court's trial division that, if not overturned on appeal, will represent an important victory for taxpayers. In this case, The Queen v. Patterson, the Department disallowed a relatively small claim for automobile expenses. The Queen's Court found the meaning of the word "ordinarily" as equivalent to "normally" as opposed to "rarely".
Because of this court case, more work will have to be done by a Committee of the Whole. The Department of National Revenue is basing all its cases on the word "ordinarily" and this has now been overruled by the Queen's Court. I believe under these circumstances that until a Committee of the
Whole has investigated this aspect of the current legislation, this portion of the Income Tax Act is non-applicable.


Mr. Gus Mitges (Grey-Simcoe):: Mr. Speaker, 1 am very happy to join in this debate today. The Bill now before us, C-139, is probably one of the most important series of tax amendments and measures to be presented in the House of Commons for some time. We should not be rushed into passing this omnibus Bill without first dissecting and analyzing what it offers Canadians and what it does to overhaul our tax system.
As has been said many times before in this House, Canada is in the middle of its worst economic crisis since the great depression. Unemployment has shot up to an unbelievable 12.4 per cent; over 1.5 million people are out of work. This does not include the thousands who have given up looking for work or those who only work part-time because they cannot find fulltime employment. Bankruptcies among small businesses and farmers have reached what can only be called astronomical proportions.
A brief outline of the figures shows the extent of the damage. Small business bankruptcies hit 8,055 in 1981, up 22 per cent over 1980 and 43 per cent over 1979. In the first 11 months of 1982, 9,962 businesses went bankrupt, an increase of 37 per cent over 1981 and an incredible 65 per cent over the same period in 1980.
Our farming industry has not fared any better. In the first 11 months of 1982, 384 farms were forced to close down, a 49 per cent increase over the same period in 1981 and an 87 per cent increase over 1980. Investment in Canada has almost completely dried up. Foreign investment, acknowledged to be essential for any sustained economic growth and recovery, has concluded that the tax laws and economic policies pursued by this Government make our country a hostile environment in which to invest and do business.
A brief look at Bill C-139, an Act to amend the Income Tax Act, shows just how complex and far reaching are the changes the Government wants to make. For example, it proposes to discourage savings for retirement through RRSPs. It does not allow for the deduction of interest costs on funds borrowed to invest in RRSPs. There is no tax incentive for Canadians to prepare for their future retirement or even to invest in Canada. For those who do not have an adequate pension plan at work, or for those who want to put a little away for a rainy day, this amendment is bad news indeed. By limiting indexation of personal income tax to the six and five program, this Government is giving itself a major stake in inflation, because as inflation stays high or goes up it receives greater revenue. This is nothing short of an underhanded tax increase. If the Government wants to increase taxes it should do so above board.
We are also opposed, Mr. Speaker, to any tax increases on employee benefits such as an automobile, retiring allowances and employee loans. To take this away is simply a tax grab. It hurts the performance of a company already facing bad times and its ability to attract the best possible talent. Any proposal to tax this area should be withdrawn.
February 15, 1983

We also oppose the replacement of income averaging annuity contracts with a system of forward averaging, and believe the current system should be maintained. Annuity contracts allow individuals to spread over a number of years the tax they pay in the event of a large increase in income from the sale of, say, a farm or small business. The difference between an IAAC and the Government's scheme is that in the former case the money is left with the private sector to invest in their choice of trust company or insurance company, to in turn invest in the private sector, while under the Government's scheme the money goes to the Government and it decides where to invest it. This point is important because we believe very strongly that this money, like all forms of investment, would be more productive if not tampered with by the Government. We believe our economy would be better off if it is left in the private sector. The Government's forward-averaging scheme is simply another attempt to get its fingers into the investment pot and take more revenue from the taxpayer.
We also object to the Government's attempt, Mr. Speaker, to tax individual insurance policies if they are rolled over into an annuity. That tax will increase anywhere from 25 per cent to 50 per cent depending on how old a person is at the time. This could hurt policyholders at the very time they can least afford it, for example in the face of an emergency.
Another change we oppose is the gutting of the Small Business Development Bond so that it no longer provides for expansion or development assistance. We believe the Government should encourage expansion to create badly needed jobs and investment. As it stands, the bond has been narrowed down to a bail-out bond.
Changes to the capital cost allowance proposed in this Bill will reduce the amount of private-sector investment in new equipment and plants, not to mention new jobs.
Hidden in another part of this Bill, Mr. Speaker, is the fact that the Government proposes to end a very important and time-honoured principle of our tax system, that of confidentiality of income tax information. Under this provision, privileged information such as the name, address, occupation and the like can be given to other federal Departments for research work and analysis. This is very dangerous, Mr. Speaker. We have to ask why this measure is needed. How detailed will this available information be? And how does this square with this Government's pledge to enact freedom of information legislation and ensure personal privacy? What mechanism will the Government offer to make sure this tax information is not abused, because once in the wrong hands, this information could be used to deny services to Canadians for reasons they may not be aware of and against which they therefore cannot defend themselves.
I do not think there is any question that in order to break the never-ending and vicious circle of the recession, the Government must first restore business and consumer confidence and offer some sort of stability in the marketplace. If this is accomplished, Mr. Speaker, there is no doubt in my
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mind that the public will once again make the consumer purchases they have been putting off for so long. The bottom liner to recovery is restoring confidence, so that Canadians who are traditionally very high savers will begin to spend once again. We must also send clear signals to the business community to restore desperately needed investment and, thereby, badly needed jobs.
First, Mr. Speaker, in my opinion, we should clear the way of Government overregulation to encourage the risk-taker, the entrepreneur, to invest and create jobs.
We should also reduce the deficit the Government has allowed to mushroom to approximately $24 billion from $11 billion in November, 1981.
We should put strong reins of acocuntability on our 306 runaway Crown corporations by following the clear recommendations of the Auditor General's report. We should make it a priority to bring some sense of order to Government spending and the growth of Government. When you have a problem, you simply do not throw money at it in the hope that it will disappear.
Bill C-139, simply put, is a Bill that needs a major overhaul. Instead of clarifying the tax laws, the Bill adds to the confusion. Many of the provisions, some which I have mentioned, should therefore be reconsidered.
What is really needed, Mr. Speaker, is a reduction in Government interference in the marketplace. Before it goes on dictating policy and rules of behaviour to private enterprise, the Government should first gets its own house in order. It should seriously try to reduce the size of the deficit. It is not the private section that needs to be whipped into line as much as it is the Government that needs it. Private sector inflation is roughly 8 per cent, while Government costs are nearly double that. This, obviously, is where the problem lies.
Finally, Mr. Speaker, if we want to bring about renewed economic growth and recovery the Government must lead the way by creating the proper atmosphere. This Bill does just the opposite. It creates far more problems than it solves.


Mr. Dan Heap (Spadina):: Mr. Speaker, I am very glad to have an opportunity to speak against Bill C-139, which deals with amendments to the Income Tax Act. It is very unfair in two general ways and in one particular way that concern me very strongly.
In general, what the Bill does is to lower further the taxes on the rich individual or on corporations and to raise further the taxes on people of middle income or low income, thereby further widening the gap between the rich and the poor.
Another point that I am concerned about because of the large number of immigrants living in Spadina is that it will unfairly tax money that those immigrants and immigrants in other parts of Canada send to their relatives overseas; but I will return to that point, Mr. Speaker.
In the time available to me it is not possible to go into all the detail of how the Bill will reduce taxes on people of high income. I want to quote from a booklet issued recently entitled

February 15, 1983
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"The New Canadian Tax and Investment Guide", which has this to say:
-the wealthy investor will pay the same rate even if his investment income increases from, say, $200,000 to $300,000 in a given year. While the MacEachen Budget has been promoted as an attack against the rich, a close analysis of these numbers will show that the rich are virtually unaffected. For the rich and the super rich the budget provides a 10 per cent decrease in tax rates.
That point has been made several times already and 1 think it is indefensible. The newspaper columnist, Don McGillivray, has estimated that people earning over $25,000 per year will together be saved $1 billion in taxes as a result of this legislation.
One particular but very important example of how the Government continues to take from those who can least afford to pay is that the child care allowance remains at $1,000 even though it may cost $300 per month to put a child in daycare so that the parent can work. Compared to the generous business expense allowances contained in Bill C-139, that is shockingly low.
At a time when unemployment insurance benefits and health benefits-which are an indirect tax and are enforced directly or indirectly by federal budget cuts-have gone up by as much as 40 or 50 per cent, direct taxes on people of low-income are being raised while taxes on high-income people are being lowered. That policy has been followed almost consistently since World War 11.
In 1950 individual income tax accounted for a little over 50 per cent of total taxes and corporation taxes for slightly under 50 per cent. By 1980, thirty years later, individuals were paying 76.6 per cent of the taxes, three quarters, while corporations, instead of paying half, were paying 23.3 per cent.
Members who spoke previously mentioned the terrible environment for business that has been caused by taxation yet the figures show that the amount of taxable profits taxed in wartime was 50 per cent. That has now dropped to 37.4 per cent. It seems that corporations and businessmen have far more of their taxable income to reinvest now than they had a generation ago. In fact, in 1979 over half of the corporations in this country paid no tax at all. So the situation has been very favourable to rich individuals and corporations and very unfavourable to poor and middle-income people, and this Bill makes things even worse.
The most serious thing the Bill does to make it worse for low and middle-income people is that it deindexes the exemptions. Exemptions which should have been indexed at 11 per cent are now to be indexed at only 6 per cent. That probably means that $100 or $200 will be taken out of the pocket of the average person. With 15 million taxpayers, that means that probably $2 billion or $3 billion will be lost by low and middle-income people and put into the coffers of the Government to be spent on corporations.
Two or three years ago the corporations, which together paid $11 billion in taxes, took out $15 billion in grants and tax expenditures. That is a 36 per cent rate of return, Mr. Speaker. If you are a big corporation, it meant you put in $11 and got $15 back from your friendly Government. The difference
of $4 billion had to come from low and middle-income people. That is the way the Government is going to get it.
I strongly support the proposition of the Leader of my Party that people who earn over $40,000 per year, including Members of Parliament, should pay a surtax. With a reasonable surtax on high incomes we could readily get the money we need for economic development. Instead of people earning over $25,000 per year getting a tax cut; it will be people who earn under $25,000 per year will get a tax cut.
I want to turn now to the matter of the money that immigrants send to relatives overseas. Immigrants have been coming to this country ever since our ancestors were immigrants, and even longer than that. Generally speaking, they have worked hard. Often they came because it was the only way they could support their dependants in the old country. Many dreamed of bringing their dependants over here and some were able to realize that dream. Those who have not been able to, often continue to meet their obligations of supporting their dependants who live overseas. According to Clause 76 of this Bill, they will now not be able to do that with tax exemptions, except for a spouse or child. The Government has been so sure of this that this provision appears in this year's income tax forms.
The Government took a whole year to bring this legislation before Parliament. It is not really interested in whether or not the legislation is passed because it will tax the people anyway. It will take money from them which it predicted a year ago but did not bring such a measure to Parliament until the last few weeks.
I protested against this a year ago, on November 17, in a motion under Standing Order 43. I challenged the principle and pointed out that the people who were asked to do the hardest work, the people who are asked to be responsible citizens, were being tax penalized for being responsible citizens and for saving money to send to their relatives overseas. It is argued that some of them cheat. I do not deny that probably some of them do, but does that mean that Canadian-born people do not cheat on their income tax? Ridiculous! We do not cut out the huge gifts to corporations because we sometimes find a corporation or an expensively-paid professional cheating on income tax.
I should like to refer to a letter from Albert Wu, president of the Chinese Canadian National Council, directed to the Minister of Finance (Mr. Lalonde), in which he gave the rationale for the opposition of his organization representing Chinese people across Canada. It reads:
The move to eliminate the tax deduction for overseas dependents would unjustly penalize recent immigrants, most of whom eke out a livelihood in Canada with poorly paid jobs, and whose parents and dependent relatives still reside in their countries of origin. They are the people who most need relief from the economic difficulties impinging on them. The proposed elimination of tax deduction for overseas dependents would only serve as evidence of the accusation that the Canadian Government treats immigrants as second-class citizens.
February 15, 1983

This was backed up by letters sent to every Member of Parliament. 1 am advised that at least 50 Members of Parliament have replied favourably. This was also backed up by 2,000 petitions and by another 400 which I will bring in. 1 urge Members of Parliament, even if they intend to pass this Bill in the clause-by-clause reading during Committee of the Whole, to vote against Clause 76 because it works a very specific injustice on the immigrants in our country.


Mr. Bill McKnight (Kindersley-Lloydminster):: Mr. Speaker, I join with my colleagues on this side to take part in the debate to draw to the attention of Members on the Government side, particularly Members of the Cabinet, the inequities in Bill C-139. It is probably the most complex that Bill presented to the House since 1971. This Bill runs to some 297 pages in length and it took the Government 389 days, or over a year, to bring it forward. Now we are limited to ten minutes of debate on a Bill which affects every Canadian taxpayer.
The Bill contains changes to the November, 1981 budget, the December 18, 1981 budget, the June 28, 1982 budget, and the October 27 budget of the present Minister of Finance (Mr. Lalonde). I would like to take a look at some of the changes and bring to the attention of the House, in the brief time I am allowed, the condition regarding imputing rent or imputing income. We understand that there will be legislation to impute income from low-interest loans to foreign subsidiaries. I recall to the House the statement of the former minister of finance on March 19, 1982, wherein he said:
I have attempted to allay the concern by stating categorically that the Government never had any intention, does not presently entertain any intention, nor will it entertain any intention in the future to tax imputed rent. That is the end of the matter as far as I am concerned.
We would have hoped that that was the end of the matter, but once again I draw to the attention of the House the situation faced by a constituent of mine. I brought this matter to the attention of the Minister of Finance on November 23, 1982. My constituent was imputed income; he was an incorporated farmer who was assessed $9,000 imputed income from the rental of a $75,000 home. That should put it into context and alert the people of Canada to the fact that the Government is intent upon imputing income to justify its expenditures, which now run to over $26 billion more than its income.
In my part of Canada, as in other parts of Canada, Canadians are uncertain. I regognize the uncertainty of the people of Canada regarding the Income Tax Act, but it is not the fault of the Opposition that the Government has taken over a year to bring forward legislation to put into law the Bill we are now discussing.
I wrote to the Minister of Finance on October 1, 1982 concerning the present income tax regulations relating to capital gains on the transfer of farm land. The present law provides that deferrals of tax are provided on transfers of farm property by a farmer to his or her child or grandchild. 1 have a situation in my riding where such a transfer was made by a mother to her son, who happened to be single. The son died in a tragic accident and left the land again to his mother. Now Revenue Canada is saying that tax is payable on the capital gain assessed on the transfer back one generation. I wrote to the Minister on October 1 requesting information and a report
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on my constituent. I Finally received a reply on January 6, 1983, in which the Minister wrote:
While I sympathize with the circumstances of your constituent, the income tax laws must be general in their application and exceptions cannot be made in individual cases.
I was not asking for exceptions in individual cases. I was asking that the Government look at the transfer back from generation to generation when tragic circumstances deprived a family of the value of its farm, so that it is not fixed in stone. I wanted the Government to recognize that there are tragedies which happen in families so that the transfer could be returned. Most farm families in this day and age work to transfer their land from generation to generation. There are times when it must be transferred to leave the farming operation intact, so that it is not broken up or sold because of a demand put on them by Revenue Canada.
Also I should like to draw to the attention of the House the change in the income averaging annuity contracts, designed to protect capital gains over a period of years. It was just a deferral of tax, it was not a tax benefit. The tax would be paid, but when it was less harmful to the savings of individuals. Most people in my part of Canada, as well as in other parts of Canada, involved in farming and small business have as their only nest egg their farm or small business to set aside for retirement years. Also most people dispose of that asset, their small business or farm, when they are ready to retire. They use the proceeds to continue enjoying whatever years are left to them. If they do not have these proceeds, they are forced to fall back upon the Government. If the Government would allow individuals to provide for their own retirement without taxing before the retirement comes into effect, it would be less of a burden upon the Government of Canada and other taxpayers.
Before the November, 1981 budget, the farmer could claim a reserve on the taxable capital gain portion of the proceeds of his land which he had not received at the time of sale. He could bring that portion of capital gains into income when the proceeds were given to him or when he receives the proceeds.
Let us use the example of an unmortgaged farm with a 1972 Valuation Day value of $80,000 which the farmer sells for $260,000. That is a lifetime of work by a man, a woman and usually the children. He has a capital gain of $180,000, half of which, $90,000, is taxed at 50 per cent, leaving $45,000. That does not even consider recapture of capital cost allowance which could make the situation worse. Let us say this person receives $60,000 down on his farm and takes back a mortgage for 20 years, paid back in equal annual instalments of $10,000 plus interest. These payments represent the retirement income of that farmer and his wife. In the year of sale he could claim a reserve of $69,231 against the taxable capital gain of $90,000, and only $20,000 would be brought into income. The next year he receives $10,000 on his mortgage. He claims a reserve of $65,769 and must bring $3,462 of the $10,000 received into income.

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Under the November, 1981 budget this farmer would be taxable on the entire $90,000 in the year of disposition, the year of sale, regardless of what he received. Considering the farmer may be taxable on the sale of his inventory and may be taxable on recapture of capital cost allowance, it is likely that $45,000 in tax would be paid on the $90,000 capital gain at 50 per cent. However, it leaves the farmer in this example with $15,000-the $60,000 downpayment that he had minus $45,000 he has to pay in tax-


The Acting Speaker (Mr. Corbin):: Order, please. The Parliamentary Secretary to the Minister of Finance (Mr. Fisher) rises on a point of order.


Mr. Fisher:: Mr. Speaker, I have a quick question for the Hon. Member, if he will permit it.


The Acting Speaker (Mr. Corbin):: Order, please. Questions can only be put if the Hon. Member agrees to receive them in the first place.


William Hunter (Bill) McKnight: Mr. Speaker, I would be very pleased to answer the question of the Parliamentary Secretary if he would allow me the ten minutes allotted to me. If I can continue and get finished, the Parliamentary Secretary can then ask me his question. I am told I have 30 seconds.
The farmer in my example would have only $15,000 left out of the $60,000 he had received to provide for his retirement. If the farmer had received a downpayment of only $40,000, he would have to make up $5,000 from somewhere so as to make his payment to the Government.
I see that you are rising, Mr. Speaker. This Bill is unacceptable to people who have worked all their lives in order to look after their retirement.


Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, I will not be the first to refer to the 295 pages of this document. It is a complex tax revision document, and that is all it is. It revises the tax structure in certain respects only. The complexity of that document coming at this stage in the tax year is absolutely inexcusable conduct on the part of the Government.
We are now in the middle of February. Tax consultants and tax advisers have been writing to me, and I am sure they have been writing to the Ministers, about getting tax legislation available to them so they can advise and prepare tax returns for their clients. This Bill is composed of 295 pages of nitpicking here and nit-picking there, changes here and changes there. This is one of the most complex documents I have had the misfortune to examine in this House.
I have a suggestion for the Government which I make in all sincerity. I suggest to the Government, any government, that it provide an index for a document of this complexity so that a person can find out where you are in respect to Child Tax Credits, to RRSPs, or to changes in this part of the tax regime or the other. An Index is definitely needed.
There is one other change that I would make with reference to the preparation of Bills. No individual in his right mind or
by himself can work through a document of this complexity without a great deal of help. Fet me give you an example, Mr. Speaker. Open the document at page 179. I was looking for the reference made by the Hon. Member for Spadina (Mr. Heap), which was Clause 76. I do not even know what section of the Bill page 179 deals with unless I leaf back, and it is possible that I may have to leaf back several pages. However, in this case it is only one page. But in all fairness to Members of Parliament, tax consultants and even to Ministers, at the bottom or the top of the page reference should be made to what section in being dealt with. In this case, what is it? What does it turn out to be? It is Clause 76. There are other pages like this which continue a section from a previous page or several pages earlier.
I sincerely suggest that, in order to simplify documents of this complexity, those two changes be incorporated in any other tax measure or complex Bill of this sort. I would ask that there be an index or a guide at the beginning so that anyone in his right mind-and I hope we are all in our right minds because with this document we are going out of our minds quickly-can look through the document and help people who need and want help in preparing their tax returns ten weeks down the line. Those two suggestions I toss out. They are free. I ask the Minister to take them up. First, produce an index; and second, let us have a section reference on the pages where the section itself is not mentioned.
There is one other great unfairness inherent, as far as I can see, in all our tax legislation, and that is the requirement to pay taxes before the revenue is earned. I think this is iniquitous. I am thinking of pensioners in particular. They do not have enough square cash to get into the market but they do buy something which they think is safe, and that is a Canadian Government bond. In many cases the bond interest is paid on November 1 or at some specific period during the year. Yet since they are required throughout the year to pay quarterly instalments of taxes, they are required to pay tax on revenue that is not going to be seen until November 1. When will any Government correct that stupidity? Either the revenue should be paid quarterly whereupon the tax can be paid quarterly, or the tax should be forgiven until the revenu has been received. I think it is wrong that people should have to pay a tax on revenue that they have not yet received.
Another unfairness in the system to which I would like to refer is tax-free benefits under certain forms of revenue, such as workmen's compensation benefits which are tax-free whereas unemployment insurance benefits are taxable. Why should that be? Another example is the disability insurance plan. While it may be arguable that unemployment insurance benefits are taxable, why are disability insurance plan benefits not tax-exempt? There is a disability involved, as there is a disability involved in the workmen's compensation plan. Why has that parallel not been made?
February 15, 1983

These are reforms that ought to be included in the tax structure. It may add a few pages to this document but, as has been said in the House this morning, we need a fundamental tax revision so that we do not have this nonsense of adding amendments to existing law. There should be a clean sweep and a refocusing by this Government on revenues so it can decide where taxes can best be applied.
Sick leave is another taxable benefit. This is obviously another area where there is no equity between workmen's compensation and the sick leave benefits. I believe that this area also deserves examination.
In the time 1 have left I would like to comment on the matter of confidence in this Government as a result of the manner in which it has conducted the affairs of the nation. I had a table prepared for me which shows for a 20-year period, from 1962 to 1982, the amount of personal savings that are sitting in savings accounts in Canada. These are personal savings, not RRSPs. I did not have this table prepared specifically for this debate, but I was interested to have this information when I learned of the reluctance people had to invest because of their lack of confidence in the Government. It was a startling revelation to me when I read this table. I thought that the amount of savings might solely be related to the interest rate that banks were paying on savings, but I think there is more to it than that.
I will relate these figures in billions of dollars. For example, in 1968, when the Government assumed office, there was $13 billion and more in savings. The next year it was $15 billion, then $16 billion, $17 billion, $19 billion, $24 billion, $29 billion and the figure for 1981 is $90 billion in savings accounts in this country. That is an indication of the lack of confidence in this Government.


Mr. Mark Rose (Mission-Port Moody):: Mr. Speaker, I am pleased to participate in this debate. I hope to confine my remarks to the ten minutes which I have, but to make sure that I do I will state my conclusions and suggestions first. I believe I have a couple of proposals for those Members on the other side who might be interested in hearing some positive suggestions.
An unemployed professional visited me a few weeks ago and said that he had been looking for jobs all over the world during the last year. He said that it cost him approximately $3 for every resume that he prepared. Added to that cost were post office charges and the cost of a typewriter to type over a thousand resumes. That represents the cost of trying to find a job. He told me that it would be very helpful to him, and perhaps many others, if those costs could be considered as legitimate expenses of seeking work. These expenses would also help others such as schoolteachers who have either just been graduated or have been terminated. I believe this is a reasonable proposal to help those who face those legitimate expenses.
I also want to talk briefly about tax discounters. Beginning at approximately this time of year, there are people who
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desperately need money who go to tax discounters. These discounters will take a person's estimated refund and discount it up to 50 per cent. While we do not need to condone this practice, it is a reflection of how many people need the money immediately and cannot wait until their refund has been processed.
I do not think it would be very difficult to include the expected tax refund over the next five years in the new income tax forms. Why not set up a regime in which people who need this service can get it either through the banks or the credit union, the Government or the Income Tax Department, so that they can receive their tax refund when they need it? They could pay a reasonable fee, but not 50 per cent. In this way they are protected from those gougers who operate fraudulently, or at least immorally. Many people need those refunds desperately.
I would ask the Government to consider those two suggestions. One is for the provision of a public discounter; the other is to recognize the legitimate cost of seeking employment. If the Government recognizes business expenses such as martini lunches or travelling expenses for businessmen, it should also consider expenses to those who are not in that bracket.


Daniel James Macdonnell Heap: And the legal cost of cheating OH IP.


Mark Willson Rose: 1 would like to return to my introduction. It concerns the general theory of taxation. Our Party believes that taxes should be based upon a person's or a company's ability to pay. Our general criticism has been that we do not believe taxes are based on ability to pay. We believe the present regime does not reflect that but distorts it through the various incentives such as PIP grants, give-aways to the nuclear industry or favouritism toward entrepreneurs.
A distinction is made on how incomes are made. I think all of us remember when Mr. Benson dealt with the Carter paper and the theory of a buck is a buck, and that no matter from whence it comes it should be taxed equally.
Our main criticism of the tax system is that it operates unfairly. It discriminates against those who do not have the ability to pay. Taxes should be based entirely on the ability to pay. A system should be introduced outside of the Income Tax Act which provides incentives, when needed, to an industry or a certain class of people. In other words, affirmative action to assist certain groups of people.


Mr. Cosgrove:: The home buyer.


Mark Willson Rose: The home buyer. They can be assisted outside of the tax system. While a tax incentive could be invoked as well, I certainly hope that it will reflect need and not be available in the same proportion to people who do not need it.
In that instance, the argument might be made that higher income people buy larger houses. Therefore, they need greater incentives to buy those bigger houses. I do not know whether I can entirely agree with that one.

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What concerns us is that the Bill before us now will raise the taxes for a family of four making $20,000 by $125.00 a month. I will check my figures, and someone else will if I do not, but if they are correct, that will probably amount to an increase of 27 per cent if one includes provincial taxes, and I mentioned this yesterday. The taxes of a person such as an MP, who is at the $50,000 a year income level, will rise only 13 per cent. If one wants to stretch it even further, persons earning $500,000 a year will actually have a drop in their tax rate of 17 per cent. The Government will counter by saying: "There are not very many of those people, and if you do soak them", as the Hon. Member for Ottawa Centre (Mr. Evans) said the other day, "you will destroy their incentive". I just wonder how much a progressive income tax would destroy the incentives of the Ian Sinclairs and Samuel Bronfmans, whose incomes are at least between $1 million and $2 million a year.
Although I do not want to debate the whole matter over again, the Hon. Member for Ottawa Centre said that he disagrees that the Government should take more than 50 per cent of anyone's revenues. 1 do not think that happens because, as mentioned by my friend, the Hon. Member for Spadina (Mr. Heap), the effective tax rate for business, no matter what the real rate is, is really only 37 per cent. That figure is not true for all businesses. It is even less for some businesses in some years, notably for the banks. So we do not buy that one.
Again in reply to the Hon. Member for Ottawa Centre, he disputed my figures on the basis that I was discussing the total tax and not just the rate. If that is the case, where the rate falls but the total tax bite goes up must be a perfect example of the old shell game. We know that there is a massive attack on the incomes of Canadians. Our standard of living is being savagely attacked, so the Government lowers the tax rate. I will tell you what the Government increases. It increases the cost of energy by, say, 30 per cent. It increases interest rate costs. It freezes wages. It raises health insurance premiums, cuts Family Allowances, cuts old age pensions and retirement benefits and then has the audacity to say; "Oh, but the rate went down. You have all those extra costs, but the rate went down, so how can you fault us on that one?"
I do think it takes a great deal of intelligence to find that out or perhaps I might not have discovered it, but nevertheless that is exactly what is happening and it is the perfect example of the old shell game. Lower the rate and fool around with the deindexation of pensions, and that is what you have-a massive attack on the standard of living. No matter what one says about the tax rate, it does not hide that issue at all.
This is not only true in Canada; it is true in the United States as well. This is where I have problems with the view of the Hon. Member for Ontario (Mr. Fennell). In the United States, the idea was that if the rate for the wealthy was lowered, that would somehow increase business activity. That was the theory, a kind of supply side economics.


Mr. Cullen:: Trickle down.


Mark Willson Rose: I do not think it has been too successful, but that was the suggestion and it is what was done in the United States. Under the new Reagan budget, the share of tax savings of the $10,000 earner was only 33 per cent. For the $20,000 earner, savings were 21 per cent, and for those earning $100,000 or over, 17 per cent. By far the largest share of total U.S. taxes is paid by those peole who have the lowest incomes, 36 per cent.
It is not just me saying this. The Black Caucus of the United States, which represents poor peole, is also saying it. If the kind of program which favours the rich and soaks the poor is to contribute to our recovery, why is it that the Americans are now $200 billion in debt? The fact is that it has not worked.


Paul James Cosgrove: They did not adopt it.


Mark Willson Rose: No, but the Government has adopted something very similar to it. It is going in that direction. I have discussed this here and given some examples of how it has increased the cost of everything people buy and has then lowered their incomes. That is what the Government has done. It has frozen their incomes. That is precisely what it has done.


The Acting Speaker (Mr. Corbin):: Order. The Hon. Member for Lethbridge-Foothills.


Mr. Blaine A. Thacker (Lethbridge-Foothills):: Mr. Speaker, I am absolutely amazed that on second reading of a Bill which is some 295 pages in length, which increases taxes on every Canadian who lives in this country, there are no Government Members rising to speak. This is second reading stage. This is where we are discussing the principles of-


Jack Sydney George (Bud) Cullen: Mr. Speaker, I rise on a point of order. Our Members have spoken and I think we owe it to the Opposition to listen. We have spoken to the Bill-


Mr. Taylor:: Not today.


Jack Sydney George (Bud) Cullen: -in order to find out if there is anything new and different. We have not heard anything today.


Mr. Epp:: All two of you.


Blaine Allen Thacker: Not one Liberal Member has risen today to speak to this massive Bill.


Paul James Cosgrove: You were not here.


Blaine Allen Thacker: I am the sixth Conservative to speak. In a minute, Mr. Speaker, Liberals will hear how their Party has sabotaged every farmer in this country.


Mr. Smith:: Rubbish.


Blaine Allen Thacker: If any farmer votes Liberal in the next election, he will be voting to cut his own throat, because this Bill so far as farmers are concerned is all bad. The result will be more taxes, more Government, more forms and a genuine loss of income. The Pepin proposals with respect to transport would be quite satisfactory if it were not for the fact that the

February 15, 1983

Government has placed so many taxes on gas being used by farmers.
There are millions of acres of land in Western Canada which produce extra food for the world and bring this country something like $6 billion worth of foreign exchange. Every acre has to be gone over four or five times a year. The seed bed is prepared in the spring, it is then seeded, chemicals are placed on the crop as it is growing, it is swathed, harvested and then must often be worked in the fall. That amounts to six operations. It takes two hours to fly over these acres in Western Canada, yet there has been a Government tax amounting to 60 cents on every gallon of gasoline and some 40 cents on diesel fuel. The Pepin proposals would be nothing for the western farmers to absorb if it were not for these other taxes.
What are the losses? First of all, farmers have lost the right to general averaging and we now have this new forward averaging. I want to say how that is hurting the farmers. They have lost block averaging which permitted farmers to average over a five-year period. Now if they have a sale of a capital item, the block averaging is interfered with and they cannot block average during that five-year period. That will result in distortions and will cost them more for accounting fees and legal advice.
Before this legislation, a farmer almost always sold his land by way of an agreement for sale or would sell it outright and take a mortgage back. Based on the productivity of land, those agreements for sale were almost always over 15 years and in some cases were over 20 years. The fact is that, as a result of the huge Government deficit and the inflation which results, the value of land has risen much higher than the productivity of the land would justify.
Now when a farmer sells the land to the next generation or even to a stranger, and if that stranger or son or daughter cannot raise the money from some financial institution-and they certainly cannot from the Farm Credit Corporation because it does not have enough money-then the farmer who is selling it is forced to finance it. Based on the productivity of the land, the agreement must be for at least 15 years and often 20 years. Under these tax changes, if the agreement is within the family the maximum length of the agreement is ten years. If the farm is sold to someone outside of the family, the agreement can last only five years.
This means that a farmer is not free to sell to whom he might wish, either to someone within his family or perhaps the neighbour's boy who was born and raised in the community and wants to be a farmer. These farmers want to keep their communities alive. It is impossible to sell the land if there is a five-year payout deadline because the productivity of the land cannot justify it. So what happens is that it goes into the hands of large corporations or into the hands of foreigners who purchase land through trust agreements or fictitious companies.
We are also coming to a situation where the land is not as productive as it once was. I hope to make a statement in the
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next few days which will show that the salinity of the soil in Western Canada is increasing at dramatic rates. Within 10 or 15 years we are going to have a shortage of food in this country because the soil salinity in the western plains is increasing enormously.
I am amazed that Government Members are not speaking on this subject. I would like to hear why they feel that farmers can pay these extra taxes, because I am telling this House that they simply cannot. This is not a tax on capital gains, it is a tax on capital per se. We know from all of the evidence that huge deficits caused inflation, which caused the fair market value of land to go higher than the productivity will justify. The Government is taxing that increase, saying that it is a capital gain, but in fact it is purely an inflationary gain. If the indexing formula for the ordinary cost of living were applied to the 1971 value of the land, it would be obvious that there has been no gain and that all of the farms that are being sold now should not have any tax applied to them.
However, a tax is applied, and I have just worked out an example for an average sized farm in the drylands area, which could be about 1200 acres. That land now sells for about $600 an acre. That leads to a taxable capital gain of $250 per acre. Therefore, on the sale of a 1200-acre farm the farmer could expect to pay $124,200 in the first year because the forwarding averaging means that the farmer has to pay all the taxes as at the date of sale. Over the next five years if it is sold to a stranger, or ten years if it is sold within the family, the farmer applies for a tax credit and gets some taxes back. It is impossible to sell under an agreement for sale and to raise $124,200 tax in the first year on a small farm, a mere 1200 acres. 1 suppose in Ontario and Quebec a farm of 300 acres or 400 acres would be the equivalent. It simply cannot be done, and I would like to hear Liberal Members give me an example of where it is being done successfully. We are talking to farmers every day and we know that it has become an impossibility.
There is an even more serious dimension with forwarding averaging for farmers which relates to the situation of a retiring farmer who dies before the agreement is paid out. I wrote to the Parliamentary Secretary and he had his officials send me some documents on this. They did not tell me what was in this explanation, I found it on my own. I am not saying that they tried to mislead me, but they certainly were not telling me everything. Before this tax Bill came in, if a farmer had sold his land under an agreement for sale for 15 years and had the misfortune of dying after five or six or ten years, the estate could be kept going and the capital gains could continue to be spread out over the rest of the period of the agreement. The agreement could pass to a wife or children or other beneficiary, and could be carried on.
Under this new forward averaging provision, Clause 120.1 (2)(b) sets out the rules that apply when a taxpayer dies at a time when he had an unclaimed accumulated averaging

February 15, 1983
Income Tax
amount. That simply means that he was spreading out the forward averaging. He still had some tax credits to get. In the year of death the accumulated averaging amount not brought back into income in that year is taxed as if one-third of the amount thereof were added to his taxable income in each of the three years preceding the year in which he died.
That simply means that if a man sells to his son on a ten-year basis but dies after three years, all of the accumulated taxes due then are applied to the three years before he died. This means that the state, the Liberal Government, is taking a massive amount of that person's farm. That is going to result in increased cost of food, make it impossible for young farmers to carry on, and that is going to impact on us, we who live in the cities, because we will be standing in food lines.


Gordon Edward Taylor: Mr. Speaker, I want to deal with some individual income tax cases. One of the things that is most irritating to me and, I suppose, to hundreds of Canadians is the bureaucrats who just do not treat the people decently, and that is putting it mildly. There is too much arrogance shown in some of our Revenue offices. Some of the personnel are excellent but some are terrible. I think the Minister should know what is going on in the field. As a matter of fact, in some cases the bureaucrats are running the Government, not the Ministers.
I want to give one or two examples to show that I am not simply making a wild statement but that I can back up what I am saying. For instance, the Small Business Development Bond can provide $500,000 to an individual company. One of my constituents thought it over and figured that if he could get the money within a month he did not have to borrow the whole amount. Being considerate of others and considerate of the Government, he borrowed barely what he needed, $370,000. But that money did not arrive for several months, and by that time the interest rate had gone up and up and up. So consequently, because of inflation, rising interest rates and the delay in getting the money, the $370,000 was not enough. He then said he would like to get the balance of that $500,000 but was told that he was not allowed to because he could only have one bond, that that is the law. I checked and that is so.
I went to the Minister of Finance (Mr. MacEachen) at the time and outlined the problem. He said that it did not seem right, that the man might lose everything if he did not receive the balance, and I agreed that that was exactly right. The Minister said he would see what he could do about it and, true to his word, he made provision for the purchase of the second bond, as long as the two bonds did not total more than $500,000, which was sensible and reasonable. He sent me a letter dated February 10, 1982, and I quote:
This is in reply to your letter dated December 15, 1981 concerning the Small Business Development Bond (SBDB) program.
Enclosed you will find a copy of a press release outlining new rules which will allow a qualifying corporation that is in financial difficulty to issue more than one bond provided that the total principal amount of all bonds issued by the corporation does not exceed $500,000. This proposal will enable your constituent to obtain additional funds under the SBDB program.
I was delighted when I received this letter, and so was my constituent. That was in February of 1982. My constituent immediately went to the lender of the money, and since that time he has been trying unsuccessfully to get the additional amount of $130,000. In spite of the fact that the Minister himself authorized it, the bureaucrats said no. They put up this reason, that reason and the other reason.
It is not fair to the Government or to the Minister and this is why I am bringing it to the attention of this House. I appreciate the fact that the Minister understood the problem but the bureaucrats have refused to comply. I am now dealing with another Minister who is looking into it. But surely when a Minister changes the regulations to permit this type of thing, the bureaucrats should not say no and put up obstacle after obstacle after obstacle. My constituent still does not have the $130,000. He is on the brink of collapse; that is how bad it is. As long as bureaucrats run the Government, that will happen. It is time some of these bureaucrats were told where to go. Fire them; get rid of them if they cannot obey the rules of the Minister who sets out the policy.
That is one case. I want to deal with another case that is very serious. I am sorry the Minister is not here because I previously brought this matter to his attention. In 1975 one of my constituents sent three $1,000 instalments to Revenue Canada. I have photocopies of the cheques which went through a bank in Calgary. Revenue Canada did not credit him or his partner with the money. They started to make inquiries almost right away. They went to the bank and to Revenue Canada. There were many letters back and forth. In November, 1979 the matter was brought to my attention. I went to the then Minister. On November 6, 1975 he said that the records had been destroyed. This was after five years. They go after individuals for seven years, yet Revenue Canada destroys its files before that period. In 1980 they had already been destroyed.
The Minister said that although the records had been destroyed, they did have an indication that on November 6, 1975 $2,000 was returned to the bank because the bank had not said to whom it was applicable. I cannot understand that. The names were on the cheques. I went to the bank and asked what had been done with the $2,000. The bank said their records had been destroyed. Each of these two taxpayers is out $1,000 because Revenue Canada destroyed their records and the bank destroyed theirs. Who is left holding the bag? That is $2,000 of hard-earned cash. It is not satisfactory for someone in Revenue Canada to say that they destroyed their records and wipe their hands of the case. That is not fair.
One of my constituents sent in $1,000 for which he did not receive credit. I want that man to get credit. If it is the fault of the bank, let it pay up. If it is the fault of Revenue Canada, let it pay. The money was received by Revenue Canada and Revenue Canada should look into it, not simply say they have closed their books and cannot be of any help.
February 15, 1983

A civil servant said to me: "We have closed our books, we don't want to talk about it any more". Whether he wants to talk about it or not, I am going to talk about it, because my constituent is out $1,000. It is up to Revenue Canada to find out whether the money was returned to the bank. If so, it is up to the bank to produce the $1,000. This money did not grow on trees. This farmer, his wife and his family had to work hard for it. We want this $1,000 accounted for.
I wish I had time to go into more detail. However, there are a couple of other cases I want to deal with. One was brought to my attention the other day. In 1977, a tax accounting firm opened up. It completed income tax returns for those in the community. As most farmers do not like to complete their own income tax forms and the fee was fair, they had this firm complete them. They thought it was being done by an accountant, so they signed the form, made out a cheque and sent it all to Revenue Canada.
In 1983 one of these farmers-I understand that others now face a similar situation-received a notice from Revenue Canada saying that the income tax forms were not completed properly and they wanted more money, $12,800. That is the first the farmer had heard about it since 1977. The farmer offered to re-do the 1977 return if the firm had made an error, but Revenue Canada would not accept that. They will not accept a new form. They said he was not allowed to file a new one.


The Acting Speaker (Mr. Corbin):: Order. 1 regret to interrupt the Hon. Member but his speaking time has expired.


Arthur Jacob (Jake) Epp: Mr. Speaker, I want to put a few comments on the record respecting the income tax legislation, specifically as it relates to the case of a farmer in my riding. I am sure that other Members who represent rural ridings have been noting the number of people coming into their offices and complaining about the tax system and the manner in which the tax Department is treating individual taxpayers. I am not talking about the perennial argument of: "Why are my taxes what they are?"
There is a deep sense among a number of these people that they are being mistreated by Revenue Canada and that the tax regulations are being interpreted in favour of the tax Department rather than the taxpayer. In fact, there is a growing sense among many of them that while in Canada under the rule of law one is innocent until proven guilty through the due process of law, in tax matters the opposite is the case that you are guilty and remain so unless you can prove your innocence.
That is not an idle comment I make. Experience has dictated to many of my constituents that that is the manner in which many in Revenue Canada-it would be unfair to say everyone-treat their files. Let me give a specific example. The Income Tax Act is complicated. I do not think anyone in this House pretends to know every implication that will flow from this Act. My example involves a farmer and his wife. He was working with CP Rail in Winnipeg. They live on a small farm in my riding. His earnings with CP Rail were invested in the
farm. The wife and children worked on the farm. The perennial argument developed that the expenses he incurred on the farm and the investments he made in it could not be used as a tax deduction against the income he earned with CP Rail. He argued with Revenue Canada about which expenses were legitimate and which ones were not. CP Rail eventually laid him off. He was getting unemployment insurance. Meanwhile he continued to work on the farm. He had the hope that he would be recalled by CP Rail, but his job was eventually terminated so there was no hope of recall.
Even though this man only works on the farm, he is not regarded as a farmer by Revenue Canada. I argued this with Revenue Canada. He is not working for CP Rail. He is unemployed; his job has been terminated; there is no opening; the job has been declared obsolete. He is living on the farm. How is he classified? Revenue Canada argue that he cannot be a farmer because his farm is not viable. I asked when it has ever been Revenue Canada's responsibility to decide whether an economic pursuit of a Canadian is viable or not.
I intend to continue when the Bill is again before the House. [Translation]


The Acting Speaker (Mr. Corbin):: Order.
It being one o'clock, I do now leave the chair until 2 p.m.
At 1 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.

[Stage Direction]
[ Translation]

Mr. Alexandre Cyr (Gaspe):: Madam Speaker, I would like to remind Hon. Members and all Canadians that today is the eighteenth anniversary of our national flag. On December 15, 1964, at about 1 a.m., the Members of this House approved the report of the Special Committee on the Canadian Flag. Twenty-one Members who took part in that historic vote are still sitting in the House today. The Senate of Canada, by a Resolution dated December 17, 1964, recommended that the new Canadian flag be adopted. The Proclamation was signed on January 28, 1965, by Her Majesty the Queen of Canada, Elizabeth II, and countersigned by the Right Hon. Prime Minister Lester B. Pearson and the Attorney General of Canada, the Hon. Guy Favreau.
Ten years ago today, the Hon. Lucien Lamoureux, Speaker of the House, proceeded to unfurl the Canadian flag in the House of Commons for the first time.
Madam Speaker, hon. colleagues, you will agree with me that those two historic events deserve to be given particular emphasis in the House today.

February 15, 1983


SEARCH AND RESCUE
Hon. James A. McGrath (St. John's East):: Madam Speaker, on this day one year ago the world's largest offshore drilling rig, the Ocean Ranger, capsized and sank in a storm 195 miles East of St. John's. The entire crew of 84 was lost.
While I salute the brave men and women of the Canadian Armed Forces and the Canadian Coast Guard on carrying out their search and rescue responsibilities, it is important to note that they must discharge this responsibility over an area of 1.8 million square miles and 11,000 miles of coastline, with resources which leave them under-equipped and undermanned. This situation remains unchanged today despite the findings and recommendations of various judicial inquiries during the past 14 years. The Government's lack of action on those recommendations is emphasized by the Minister's own admission that Canada does not have a search rescue contingency plan to cope with a major marine disaster.
Furthermore, Madam Speaker, I note that the Ocean Ranger disaster has been the subject of not one but three U.S. inquiries, including a Congressional inquiry, and that, while there is a federal-provincial Royal Commission, it is important that this House note that this matter has never been the subject of a parliamentary committee. I would therefore urge that the whole question of search and rescue be referred to an appropriate Standing Committee of this House in order that all major inquiries be studied, including the findings of the Cross Report and the Mahoney Inquiry into the sinking of the Arctic Explorer.


CANADIAN WHEAT BOARD
Mr. Robert Bockstael (St. Boniface):: Madam Speaker, the Canadian Wheat Board is setting new export records for grain. There is no doubt Canadian grain producers can meet world demand for grain. Where there is doubt is in the area of delivery systems, grave doubts that the railway system can handle grain shipments. The western transportation initiative is aimed at providing the rail infrastructure needed to allow grain producers in western Canada and producers of other goods and commodities to take advantage of export opportunities. The expansion of the western economy to meet its potential cannot happen unless an efficient rail system exists to meet demand. The western rail system could face huge bottlenecks and delays if the western transportation initiative were not implemented.
At the mid-point of the 1982-1983 crop year, the Canadian Wheat Board has sold 13.5 million tonnes of grain. That is up from the 11.9 million tonnes sold at the same time last year. At the end of the 1981-1982 crop year Canada set a record for exports of about 25 million tonnes. For Canadian grain exports
to grow there must be certainty among buyers that Canada can deliver. For western producers to expand their activities there must be certainty that grain will be delivered. Expansion of the western rail system will mean both producers and buyers can be certain the grain will get through.
The Government of Canada will spend $3.7 billion over the next four years as part of the transport initiative.


Madam Speaker:: Order, please.


THE ECONOMY
Mr. Dave Nickerson (Western Arctic):: Madam Speaker, a review of the data reveals a distinct correlation between the Government's annual deficit and the rate of unemployment. In direct contravention of the outdated Liberal-NDP Keynesian economic doctrine, the relationship is directly proportional instead of indirectly proportional. For instance, in that fateful year 1968 when the Prime Minister (Mr. Trudeau) first took office, the deficit was $500 million with 350,000 unemployed. In 1975 the deficit was $5.5 billion and unemployment
700,000.	In 1981 the deficit was $13.5 billion and unemployment 900,000. Now the Minister of Finance (Mr. Lalonde) is proposing a $26 billion deficit, which means unemployment, misery, and the threat of breadlines for over 2 million Canadians.
On December 8 last year Iona Campagnolo, President of the Liberal Party, stated in Charlottetown, "The time for public hatred of the Liberal Party has passed as Canadians adapt to their decline in affluence." Let me warn the Liberal Government that unless its members change their disastrous financial policies and reduce their obscene deficit, and consequent unemployment and human hardship, the decline in affluence witnessed to date will be benign in comparison with that yet to come.


Madam Speaker:: Order.


CANADIAN NATIONAL RAILWAYS
Mr. Bill Blaikie (Winnipeg-Birds Hill):: Madam Speaker, recently the Minister of Transport (Mr. Pepin) has been making a big deal out of all the jobs which will flow out of the new railway investment to be made possible by the proposed changes in the Crow rate. Yet, only days after he announced his proposals, the CN hastened to announce that the massive lay-offs scheduled for May 1, 1983, were not going to be cancelled and that the Crow rate had nothing to do with the lay-offs.
Yesterday the CN was successful in obtaining permission from the CTC to abandon 20 per cent of its rail line in Prince
February 15, 1983

Edward Island-another victory for the so-called "rationalization" of services, and a defeat for the real needs of real people and real communities. One is reminded of the false promises made in July, 1981, by the same Minister of Transport about the glorious new investment in transcontinental passenger equipment that the VIA cutbacks would make possible. Instead, existing transcontinental passenger equipment and service have been allowed to deteriorate, and no new investment in this kind of equipment has been made. VIA continues to preside over the death of passenger train service.
One can only hope, Madam Speaker, that it is not too late for the Government to show some enlightened leadership for a change when it comes to rail policy. The Minister could redeem himself by cancelling the lay-offs, by cancelling the abandonment of lines in P.E.I., by keeping the promises he made about transcontinental passenger service in 1981, and by adopting the NDP proposals on the Crow which would give us even more jobs without making an already struggling farm community pay for them, and without endangering a way of life on the Prairies.


ST. LAWRENCE SEAWAY LOCKAGE FEES IMPOSED ON SMALL COMMERCIAL VESSELS
Mr. Joe Reid (St. Catharines):: Madam Speaker, the very existence of 40 or more communities having ports on the shores of the Great Lakes and which cannot be serviced by full-sized vessels is being jeopardized. The St. Lawrence Seaway Authority initiated a policy to discourage the use of smaller ships using the Welland Canal, and imposed a lockage fee for such smaller commercial vessels which amounted to five times the rate for full-sized ships. This lockage fee, initiated in 1982 and doubled for the 1983 season, will, as the Seaway Authority intends, add an additional $3,500 to the round-trip cost of using the Welland Canal, and put many commercial shipping interests out of business.
Many shippers using larger vessels are dependent on the supply delivery of these small commercial vessels, and one port after another which cannot handle such larger vessels will close down, throwing more people out of work, and allowing ships and facilities to rot and depreciate-all of this following a disastroius shipping season when every advantage and opportunity is required, and when there is no pressing demand to increase the capacity of the Welland Canal. Maybe the Minister of Transport (Mr. Pepin) will encourage the St. Lawrence Seaway Authority to take a second look at this unwarranted surcharge.
S'. <9. 21


THE LEADER OF THE OPPOSITION
David P. Smith: Madam Speaker, an article in today's Globe and Mail states that the Leader of the Opposition (Mr. Nielsen) has distributed a speech to residents of his constituency in which he endorses remarks made by the Hon. Member for Capilano (Mr. Huntington). In a constituency report he repeats a statement made by the Hon. Member for Capilano, which says:
Has it occurred to you that the capitalist system is being buried under the advancing forces of world socialism; that world leaders of these socialist forces are in control of the Canadian Government; that the hangman's knot for Uncle Sam's neck is being made in Canada-


Some Hon. Members:: Hear, hear!


David P. Smith: Madam Speaker, I think it is important to point out to the Leader of the Opposition that surely we have reached the time where we have sufficient political maturity in this country that we can have our differences without making such misleading statements, which are divisive and untrue.


Some Hon. Members:: Oh, oh!


David P. Smith: Madam Speaker, we on this side of the House believe in social justice within a free enterprise system; we believe in initiative and the work ethic; and we will stand up for it.


Some Hon. Members:: Hear, hear!


CANADA POST CORPORATION
Mr. Girve Fretz (Erie):: Madam Speaker, recently I read a report from the Post Office outlining how great their service was and what a large percentage of letters get through on time. It is interesting that there was a flurry of advertising and reports indicating how well Canada Post was performing, just before the postage increases today.
Coincidentally, I received several letters from constituents which dampened my enthusiasm. In one letter from Fort Erie, a woman pointed out the amount of time letters took to arrive from various destinations to her home. A letter from Japan arrived in only eight days, while a letter from Buffalo, N.Y., just five miles away, took ten days, and a letter from Montreal took 19 days. In another letter a gentleman from Smithville pointed out to me that a cheque for a considerable sum had been mailed from Nova Scotia 21 days before its arrival in that town. In the interim, the payee lost over $400 interest.
I submit that, in the light of the current cost of mailing a letter, the postal administration must endeavour to provide more efficient service and to eliminate costly and useless advertising.

February 15, 1983



Mr. Laverne Lewycky (Dauphin):: Madam Speaker, in an address given a year ago this month Mr. Michael Warren stated that the threefold objective of Canada Post was to attain financial self-sufficiency, better management-employee relations, and his number one priority, improved postal service.
Today we have a two-cent increase for mailing a letter in Canada, almost doubling the 17 cent rate in effect but 14 months ago, and a 6 per cent rise in the cost of mailing newspapers, advertising, and small parcels. The head of the Canadian Union of Postal Workers is calling for the postponement of these increases until management-employee relations improve, and service is maintained and expanded.
So what, then, has happened during the intervening year? As far as Dauphin riding is concerned, I have received an absolutely astounding series of complaints from constituents on every conceivable aspect of their so-called postal service. I have letters concerning postal rate increases, letters protesting the shortage of rental boxes, the withdrawal of Saturday rural route service, the systematic reduction of post office operating hours, threats of outright closure, and letters about possible forced retirement.
I have a resolution protesting present regulations pertaining to utility bills, petitions calling for the reinstatement of withdrawn postal facilities, and letters from municipal councils voicing the sentiments of just about every Canadian when they ask me just what exactly is Canada Post's present service policy? The response that my constituents and I-


Madam Speaker:: Order.


MARINE TRANSPORT
Mr. J. M. Forrestall (Dartmouth-Halifax East):: Madam Speaker, the day after the collapse of a bridge spanning a shipping lane in Halifax, on the St. Lawrence, or in Vancouver, families of those who will assuredly suffer the loss of loved ones will not ask why it was that the federal authority would not accept primary responsibility for bridge abutment protection; they will ask why it was not done.
Five bridges in Canada have been identified as "high risk", requiring protection against collision. To date no agreement to resolve this potentially disastrous situation is apparent. Tragic consequences of bridge collapses from Sweden to Japan, from Canada to Australia, from U.S. to India, are too well known for us to continue to ignore remedying this problem.
Already we have learned of the difficulties the Halifax-Dartmouth Bridge Commission experienced this year in obtaining full insurance coverage for Halifax's two harbour bridges, pier protection being cited as the principal reason. We know that 70 per cent of such accidents can be linked to
human error. Ship traffic passing under the MacKay and MacDonald bridges in Halifax will increase this year to upwards of 1,800 transits.
I say to the Government, resolve this problem before God takes the matter out of our hands. Having said that, I appreciate the progress that has been made-


Madam Speaker:: Order.


PRESENCE IN GALLERY OF FORMER LEADER OF NEW DEMOCRATIC PARTY
Madam Speaker:: I am sure Members will want to applaud one of their former colleagues who is in our gallery today, the former Leader of the New Democratic Party, Mr. Tommy Douglas.


Some Hon. Members:: Hear, hear!



ORAL QUESTION PERIOD


Mr. Don Blenkarn (Mississauga South):: Madam Speaker, my question is directed to the Minister of Finance. Will the Minister confirm that he said that in this House on October 27, as reported at page 20081 of Hansard:
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.
Did the Minister say those words, did he mean those words, and will he now keep his promise?


Hon. Marc Lalonde (Minister of Finance):: Madam Speaker, indeed I indicated my intention in that statement on October 27. That was my intention at the time. As the Hon. Member knows, however, his Party has been dragging its feet on passing the necessary legislation to deal with income tax amendments resulting from previous budgets. In the meantime, even though this Income Tax Bill has not been passed, it is important that the Government be provided with the necessary borrowing authority to fulfil its obligations. That is what I have done. It is not the first time that a very good intention has been sidetracked by Opposition tactics that delay adoption of good measures for the people of Canada. I hope that the measures will be passed soon by Parliament and then I will be able to introduce my budget.
February 15, 1983


Donald Alex Blenkarn: Madam Speaker, the Minister knows that the Income Tax Bill has been before the House for only three and a half days since it was introduced on December 7. The Government has been dragging its feet. The Government has been producing and pushing forward legislation that has nothing to do with the problems of the country.


PROVISION OF FINANCIAL STATEMENT
Donald Alex Blenkarn: Madam Speaker, may 1 ask the Minister why only last week, when he was asked about the fiscal position of the country, he said that he would be coming in with an additional borrowing bill and at that time would give up to date figures? Did he mean what he said a week ago? If so, why has he changed his mind? When will the Minister come clean with Canada?


Mr. Crosbie:: The answer is never.


Marc Lalonde: Madam Speaker, if ridicule killed, there would be a lot of dead bodies on the Tory benches.
What I indicated was that if and when the borrowing authority bill is introduced, I will make a full financial statement as to the situation of the Government for 1982-83. I have said that. It is the Conservatives who yesterday prevented the adoption of the Bill on first reading and prevented me from doing it at eleven o'clock this morning as I would have if we had followed normal procedure.
If we can get to the borrowing authority Bill I will be very happy to come forward, at that time. I will be the first speaker on that Bill before anybody else is required to speak. I will give all information as to the excellent financial situation of the Government.
As far as the premise of the Hon. Member's question is concerned, I would remind him that the income tax Bill was introduced early in December, and then other very urgent legislation was presented to Parliament having to do with the six and five program. Again the Opposition filibustered those Bills day after day and we had to resort to time allocation to get them passed. The Hon. Member cannot take refuge in his argument. If the income tax Bill has not been considered more often, that is his Party's fault, and he should realize that.


DELAY IN PASSAGE OF INCOME TAX BILL
Donald Alex Blenkarn: Madam Speaker, the Minister knows that the Government controls House business. If it was important to get the income tax Bill through, why did he not bring it in for debate? The answer really is that, as a Parliament, we cannot be expected to deal with a borrowing authority bill unless we have received written projections of where we stand this year and where we are going next year, what the revenues are, what the expenses are, and what the national deficit amounts to.


An Hon. Member:: What is your question?
Oral Questions


Donald Alex Blenkarn: What is the deficit? Is $26 billion borrowing required or is it not? Where are we going?


Marc Lalonde: Madam Speaker, the Hon. Member said that Government controls the business of the House. The Government House Leader yesterday tried to get first reading of a Bill, which the Opposition prevented us from considering by resorting to all kinds of tactics, including challenging the rulings of Madam Speaker for two hours. That is on the record. It is quite obvious what the Opposition can do in the House to prevent it from dealing with the urgent affairs of the country. We had a very good example of this yesterday.
As far as the income tax Bill is concerned, I remind my hon. friend that for several months last summer the Parliamentary committee had the draft income tax Bill, which he himself participated a great deal in reviewing. The parliamentary Committee considered this Bill for several weeks, heard witnesses and made recommendations. I have taken most of them into account. Parliament has had plenty of opportunity to consider that legislation. Again, the Opposition should blame only itself it we are not further advanced.
As far as the last point raised by the Hon. Member is concerned, I have indicated that, as soon as we can get consideration of the borrowing authority Bill, I will be very happy to come forward with whatever figures I can in terms of fiscal year 1982-83. As far as fiscal year 1983-84 is concerned, I have to remind my hon. friend that I expect to be able to present a budget in which all the estimates for 1983-84 will be put forward.


CALL FOR INCREASED GASOLINE TAX
Hon. Michael Wilson (Etobicoke Centre):: Madam Speaker, my question is also directed to the Minister of Finance. Yesterday in a speech the President of Petro-Canada called for a tax increase through an increase in the price of gasoline. This morning on "Canada AM" the Minister suggested that a tax increase might be appropriate to control the size of his enormous budget. Would the Minister explain how these threats of tax increases will give Canadians any confidence whatsoever to go out to buy a new refrigerator, a new stove, or a new house?


Marc Lalonde: Madam Speaker, the threats of tax increases do not come from me. The Hon. Member referred to a speech made by Mr. Hooper, I believe. I indicated that I have received many representations and suggestions, including some having to do with tax increases. At the same time I have to say-and this is what I indicated this morning-that we have to look at alternatives. If we do not want to increase the deficit, obviously we have to look at the possibility of increasing revenues. We cannot do like the Tories are trying to do all the time, having their pie and eating it too; is that the expression?


Some Hon. Members:: Cake.

February 15, 1983
Oral Questions


Marc Lalonde: Having	their cake and	eating it too.	Verysimply, we are	looking	at reallocating	expenditures,	evencompressing some expenditures if necessary. We did this last October, for instance, to the tune of $1.1 billion. Another alternative is to	borrow	the money to finance all programsnecessary for the people	of Canada, and	the third one	is to
raise taxes. These are the three options. None have been eliminated and none are being retained particularly at the present time. I am working on the preparation of my budget. I am consulting very extensively with the people of Canada, I think more than has ever been done in the past. I hope that out of those consultations will develop a broad consensus on a budget my friend will be able to support.


Michael Holcombe Wilson: The Minister said this morning that he was thinking seriously of increasing taxes. Surely he has not heard that from the consultations he has gone through over the past few months. Surely the Minister knows that a tax increase will reduce jobs, will force lay-offs and more bankruptcies.


MINISTER'S POSITION
Michael Holcombe Wilson: Madam Speaker, since the reason Canadians are not spending money today is because they fear they will lose their jobs, how can the Minister justify his lack of understanding of the economic consequences of a tax increase just as we are coming out of the recession? Just when we need it least, he talks about it.


Marc Lalonde: Madam Speaker, it is not a problem of lack of understanding on my part. 1 suspect that it is a lack of hearing on the part of the Hon. Member. He tried to report what I said this morning-


Michael Holcombe Wilson: I saw it.


Marc Lalonde: He says that he saw it. I advise him to listen rather than only see.


Michael Holcombe Wilson: I have listened too.


Marc Lalonde: If he had listened he would have heard what I said. Frankly, if it pleases him, I could tell him that I am seriously considering a tax increase, seriously considering a tax decrease, seriously considering maintaining the deficit where it is, seriously considering increasing it, and seriously considering decreasing it. He can have his choice.


Mr. Andre:: Talk about having your cake and eating it too.


Marc Lalonde: When the budget comes, he will know which options I have retained.


Some Hon. Members:: Hear, hear!


Mr. Broadbent:: 1 hope the Minister will seriously consider creating a few jobs for Canadians.


AUTOMOTIVE INDUSTRY
John Edward Broadbent: Madam Speaker, 1 have a question on the same subject matter for the Minister of State for International Trade. Would he confirm a report out of Tokyo today that he has reached an agreement with Japanese auto producers, which incredibly involves two points? On the one hand, it will permit the Japanese to increase their export for cars into Canada by 16,000 more during the next six months than they exported into Canada in the last six months. On the other hand, the Minister has failed completely to get a Canadian content provision comparable to what the Americans achieved and announced yesterday in the United States, which will guarantee that one Japanese car company along will produce an additional 12,000 jobs for American workers.
Hon. Gerald Regan (Minister of State (International
Trade)): Madam Speaker, I find the Hon. Member's interpretation of the results of our discussions in Japan to be rather unique.


John Edward Broadbent: And accurate.


Mr. Regan:: Let me tell him why they are not accurate. First of all, we have obtained an interim agreement with the Japanese with reference to their forecast of shipments of cars to Canada for the first six months of this year. That is established at a figure which is 11,000 less than for the first six-month period of last year.


Some Hon. Members:: Hear, hear!


Gerald Augustine Regan: And it is without any prejudice to either side in our negotiations for the entire year.
Let me say secondly to the Hon. Member that the timing of my visit to Japan related to the quadrilateral meeting of the trade ministers of the European Community, of the United States, Canada, and Japan. But we felt in this country that it was important to have a six-month interim agreement with the Japanese while they were carrying on their negotiations with the Americans, because of the fact that otherwise there would be no check on how many cars would be coming in while the negotiations continued. To make the interim agreement was in the best interests of Canada. The one we have made is advantageous. Indeed, whereas what they are proposing to do with the Americans is to remove merely the numbers they had for the last fiscal years, ours is the more highly advantageous arrangement.


ACCESS TO CANADIAN MARKET
John Edward Broadbent: Madam Speaker, first of all the Minister should know that in the auto industry they compare trends. I have pointed out to him that he has just permitted the Japanese to export 16,000 more cars in the coming six months than they exported to Canada in the last six
February 15, 1983

months. If the Minister wants to do a year-over-year comparison he also knows that his agreement will permit them to export year-over-year many thousands more in the coming year compared with last year. I would like him to deny that.
Will he confirm that he has just agreed with the Japanese that they can have guaranteed access to 22 per cent of the Canadian market and that he has not obtained what the Americans obtained, a guarantee for production in Canada? Did the Minister not go to the Japanese and say to them, "If you want access to the Canadian market, that is fine; but if you are to sell to Canadians, you have to produce jobs for Canadians just like you do in the United States"?
Hon. Gerald Regan (Minister of State (International
Trade)): Madam Speaker, considering the home town and the city the Hon. Member represents, I would have thought that he would have a little better idea of trends in the automobile industry than he does. He referred to trends. If he wants to refer to the trends he will find that imports and shipment of cars in the first half of the year have always been greater than in the last half of the year. He should take his time to check on that and ask me on another day, if he wants.
Let me next say that he is applying some sort of new math of which we have not heard yet, when he tries to say that the agreement we entered into would mean more cars coming in during the year. We have made an agreement for the six-month period which is statistically for 11,000 less than for the same six-month period last year, the time of year that has always been the heaviest for shipments. Let him put that in his pipe and smoke it.


Some Hon. Members:: Hear, hear!


Gerald Augustine Regan: Let me also say to the Hon. Member that this is an interim agreement. We wanted an interim agreement because the former agreement had expired on December 31. We are carrying on discussions with the Japanese in relation to industrial co-operation. We are most anxious to try to arrange to have a greater amount of manufacturing in the country. Let me point out that Toyota has already agreed to a wheel factory in B.C.-


Madam Speaker:: Order, please.


Gerald Augustine Regan: -but we are seeking much more.


Madam Speaker:: Order, please.


Some Hon. Members:: Hear, hear!


John Edward Broadbent: Madam Speaker, it will not be the first time that Liberals have applauded ignorance.


Some Hon. Members:: Hear, hear!


Some Hon. Members:: Oh, oh!


John Edward Broadbent: There are 14,000 auto workers on lay-off in Windsor, in Oakville, in Oshawa, in Toronto and in Quebec.
Oral Questions
They will not be amused by what the Minister has just agreed to in Japan.


PROGRESS OF NEGOTIATIONS
John Edward Broadbent: Madam Speaker, why was it that the Americans were able to get production agreements in the past for cars, production agreements in the past for trucks, and as recently as yesterday, and I repeat, just one firm alone, Toyota, has agreed to produce, in a joint venture with General Motors, 12,000 additional jobs, while the Minister goes to Tokyo and for all his talk comes back with zip all for Canadian workers?


Gerald Augustine Regan: Madam Speaker, as I have said to the Hon. Member, we already have an agreement with the Japanese to establish a wheel factory in British Columbia. We do not consider that anything other than a beginning.
There is no question but that all Canadians must place a high priority on working out areas of industrial co-operation with the Japanese because they have shown themselves to be pretty successful in the automobile market. There is no question that the United States, with a market ten times as large as the Canadian market, has been able thus far with its muscle to achieve some movement, but not in relation to numbers-if you like to compare the numbers going into the American market.
Let me say in relation to the car workers who are laid off in this country that that they would be far more satisfied with the concerned effort I am making to bring down the number of cars imported than they are with the empty rhetoric which the Hon. Member is using.


Some Hon. Members:: Hear, hear!


PETRO-CANADA CHAIRMAN'S SPEECH ON ENERGY POLICY
Harvie Andre: Madam Speaker, my question is for the Minister of Finance. Yesterday in a speech in Toronto the Chairman of Petro-Canada recommended that the Government tear up its energy policy and move to world prices for crude oil. Given that Petro-Canada is a multi-billion dollar window on the industry as well as an instrument of public policy for the Government, can the Minister indicate whether the Chairman of Petro-Canada cleared his speech with the Government prior to giving it? If not, could the Minister tell the House what purpose was served by this speech since the Chairman of Petro-Canada surely could pick up the phone and pass on his views to the Government?
Was the Chairman of Petro-Canada flying a trial balloon for the Government or was he trying to initiate a change in public opinion so that the Government could abandon its

February 15, 1983
Oral Questions
election promises without suffering any of the fallout that might otherwise be the case?


Marc Lalonde: Madam Speaker, I can certify that the Chairman of Petro-Canada did not clear his speech with the Minister of Finance and, as far as I know, with no other Minister or Department.


John Carnell Crosbie: He is a "hopper" of his own.


Marc Lalonde: Petro-Canada is a Crown Corporation. It is operating at arm's length from the Government, and the Chairman of Petro-Canada is free to speak his mind on many subjects and he has done this in the past. There is nothing new there. Mr. Hopper came up with a suggestion. I said 1 would put it in in the "hopper" of suggestions I have received.


Some Hon. Members:: Hear, hear!


Harvie Andre: Madam Speaker, the multi-billion dollar window on the industry does not seem to be serving that purpose. We know that the former Vice-President of Petro-Canada, Joel Bell, had a hand in writing the energy policy. It is safe to assume that the Chairman of Petro-Canada may have a hand in unwriting it.


REQUEST FOR INTRODUCTION OF ENERGY TAX CREDIT
Harvie Andre: Madam Speaker, my supplementary question is also directed to the Minister of Finance. With the exception of areas where a current price war exists, Canadian consumers are paying more at the pump for gasoline than are American consumers, even though American consumers are supposed to be paying world price. Will the Minister commit to this House that, should we adopt this suggestion from the billion-dollar-window on the industry to move to world prices, he will, simultaneously, being in an energy tax credit along the lines of that contained in the Crosbie budget of December, 1979, to ensure that low-income Canadians will not have to face the added burden of this increase in crude oil prices on top of the already excessive taxes, including, of course, the tax for Petro-Canada's empire building?


Marc Lalonde: Madam Speaker, the Hon. Member is still indulging in the same old rhetoric, and I am sorry to say that as time goes by, he does not seem to be getting any wiser. I can inform the House Member that his suggestion will be filed with all the other suggestions I have received and it will receive the same serious attention. When the time comes to bring down a budget in this House, the Hon. Member will see how I intend to deal with the matter he has raised.


PRESENCE IN GALLERY OF MINISTER OF FOREIGN AFFAIRS OF NICARAGUA
Madam Speaker:: I would like to draw the attention of the House to the presence in our gallery of a distinguished visitor in the person of Father Miguel D'Escoto Brockman, Minister of Foreign Affairs of Nicaragua.


Some Hon. Members:: Hear, hear!


PRESENCE IN GALLERY OF MODERATOR OF THE GENERAL ASSEMBLY OF THE PRESBYTERIAN CHURCH IN CANADA
Madam Speaker:: I would also like to draw the attention of the House to the presence in our gallery of Right Reverend Wayne Smith, Moderator of the General Assembly of the Presbyterian Church in Canada.


Some Hon. Members:: Hear, hear!


DISASTERS
John Carnell Crosbie: Madam Speaker, my question is for the Minister of Transport. A year ago today the Ocean Ranger sank off the East Coast of Canada. Last Wednesday in this House when the Minister was asked by the Hon. Member for Annapolis Valley-Hants whether he could assure the House that the deficiencies found to be part of the cause of the tragedy had been corrected, that the proper safety procedures are being followed, and that the proper equipment for the men on oil rigs is available, the Minister said this:
Madam Speaker, I cannot, and I am sorry about that.
Is that answer of the Minister correct, or can the Minister assure the House that proper safety procedures are being taken, that proper equipment for the men on oil rigs is available, and that the Government has taken steps to avert any repetition of this tragedy?
The answer given in the House last week is an indictment of the Government and of the Minister and, as a result, thousands of people are concerned about the fact that apparently nothing has been done in the last year. What is the Minister's response now? Could he tell the House what has been done, and can the people now rest easy?


Hon. Jean-Luc Pepin (Minister of Transport):: Madam Speaker, may I tell my hon. friend that the responsibility for rigs comes under the Department of Energy, Mines and Resources. I think he is aware of that. Would he accept the proposition that I ask the Parliamentary Secretary to the Minister of Energy, Mines and Resources to answer the question, because he has been following the matter very closely?
February 15, 1983


Mr. Dave Dingwall (Parliamentary Secretary to Minister of Energy, Mines and Resources):: Madam Speaker, no one doubts the seriousness of the subject matter to which the Hon. Member refers, and as a result of the seriousness of such a situation, the Government of Canada has taken very, very strong action with the co-operation of the Government of Newfoundland. As you are probably well aware, Madam Speaker, the Hickman Commission was set up. I might add that Mr. Justice Hickman is the Chief Justice of the Trial Division of the Newfoundland Supreme Court. They have those matters under consideration at the present time.
With regard to the report that was released in the United States, I think it premature for me to make comments on a report that is an interim one which will not be delivered to Canada for some three to four weeks.


REGULATIONS AND INSPECTION PROCEDURES
John Carnell Crosbie: Madam Speaker, my supplementary question is for the Prime Minister. Last week the Minister of Transport did not say he knew nothing about the subject. He said on behalf of the Government that there were no proper safety procedures now being followed, there was no proper equipment for men on the rigs, and he could give no assurances. Now the Parliamentary Secretary gives us some historical kind of answer.
Can the Prime Minister or his Government give assurance that in the last year steps have been taken to change the regulations, to change the inspection procedures to ensure that safety comes first on the offshore, that the Government is now taking better inspection procedures, that more inspectors have been appointed, and will he have his Minister come before a House of Commons Committee to explain what the Government has done, or have 12 months passed-


Marc Lalonde: It was on CBC this morning.


John Carnell Crosbie: -with nothing done to protect people who work on the offshore?


David Charles Dingwall: Madam Speaker, I find it somewhat ironic that the Hon. Member for St. John's West would wait for a year to go by before raising this particular subject matter.


Some Hon. Members:: Oh, oh!


David Charles Dingwall: If he had a real interest at heart he would have come before the Standing Committee on Natural Resources and Public Works and made that question known to the Minister.


John Carnell Crosbie: What is the answer, you turkey?


David Charles Dingwall: To be very brief, the answer is yes.
Oral Questions


CANADA-UNITED STATES TEST AND EVALUATION PROGRAM TESTING OF CRUISE MISSILE
Miss Pauline Jewett (New Westminster-Coquitlam):: Madam Speaker, my question is directed to the Prime Minister. The former Secretary of State for External Affairs, now Minister of Justice, confirmed on several occasions last year both in the House-notably on March 18 and April 29-and in the Standing Committee on March 24, that Canada had agreed in principle to the testing of the U.S. air launched Cruise missile. Although the former Minister regretted it had become public knowledge when he said in Committee that he was "indeed disturbed at the leak of this matter", he still did confirm the agreement. Can the Prime Minister assure the House that Canada can get out of this Cruise testing deal with the U.S., thereby bringing hope to millions of Canadians?


Right Hon. P. E. Trudeau (Prime Minister):: Madam Speaker, I do not want to fall into the trap of words that the Hon. Member may be unintentionally setting. It is not a matter of getting out of the agreement to test the Cruise. There has been no agreement to test the Cruise.
Since yesterday's exchange with the Hon. Member's Leader I have had the documents verified, the Cabinet decision verified and the exchange with the U.S. verified. Indeed, we have talked of weapons systems testing. I concede, and I did yesterday, that people know, we assume, and Cabinet Ministers assume, that the United States will ask us to test the Cruise. But the purpose of the Cabinet decision was to make it a two-stage process so that we would have an umbrella agreement on the testing of weapons systems, so that we would be able to refer to the umbrella agreement in the future to ensure that certain conditions were met, such as Canadian knowledge, Canadian participation in the scientific knowledge of any tests, Canadian ability to control or interrupt the testing, and so on.
I repeat yesterday's answer. After verification, 1 can only find an agreement in Cabinet to authorize the Secretary of State for External Affairs to enter into negotiations for a weapons system testing, and the statements of the then Secretary of State, if looked at carefully, indicate that he was talking of a process and that there is a second stage, which is the Cruise. That second stage has not been reached in Cabinet decisions.


Pauline Jewett: Either the Prime Minister is being disingenuous or he is saying that his former Secretary of State for External Affairs was constantly misleading the House and the Standing Committee. It is either one or the other. Time and again he confirmed the existence of the agreement.


REQUEST THAT TESTING NOT PROCEED
Pauline Jewett: Madam Speaker, the former Parliamentary Secretary, the

February 15, 1983
Oral Questions
Hon. Member for Sault Ste. Marie, said on April 29, 1982, as reported at page 16751 of Hansard:
Are we to break our agreement with the U.S. on testing of the Cruise missile in Canada?
They have all said that there was an agreement. I ask the Prime Minister now is it possible for the Government of Canada to call this deal off? Is it possible to call off the deal and, as I said, thereby give hope to so many Canadians?


Pierre Elliott Trudeau: Madam Speaker, I can only repeat my previous answer to the Hon. Member. There has been no cabinet decision to test the Cruise. There has been a Cabinet decision to authorize the Secretary of State to negotiate a weapons system testing.


Pauline Jewett: No.


Pierre Elliott Trudeau: The Hon. lady says no. She knows more about Cabinet decisions than I.


Pauline Jewett: I believe MacGuigan.


Pierre Elliott Trudeau: Then, if she believes MacGuigan, we will wait until he enters the House and the hon. lady can ask him her question.


FISHERIES
Donald W. Munro: Madam Speaker, my question is for the Minister of Fisheries and Oceans. He will be aware that there is a delegation of responsible fishermen from the West Coast representing the PTA and the Federation. They have been seeking a meeting with him and I hope that the Minister will be able to see them before they leave. They came here at their own expense.
One of the questions they want to ask him concerns the relationship between the Pearse Report, the buy-back program in the Pearse Report, and the restructuring and rationalization of the fleet as proposed in the Cruikshank Report. Is he prepared to make any comment in the House today on that particular aspect of the matter?


Hon. Pierre De Bane (Minister of Fisheries and Oceans):: Madam Speaker, as the Hon. Member knows, I met with the Pacific Fishery Advisory Council, and all the different associations were present. They gave me their views and asked me for some time to study the whole implication of that Report before making their position known. I readily agreed to their offer.
My Deputy Minister met with them about two weeks ago. I will be in B.C. myself for a few days, beginning next Friday, hopefully to meet with the Advisory Council to get their views on that issue and other issues that are major topics in the Pearse Report. I will be there within a few days.
With respect to the Hon. Member's question about the delegation, I will certainly study that matter.


Donald W. Munro: The Minister will know that they have been seeking a meeting with him. They came at their own expense. He has already been in trouble in British Columbia and I am sure that he does not want to get into that sort of trouble again. It is much better that he meet the peole who come to see him than having to go out to see them.


REQUEST THAT CANADA-UNITED STATES SAL MON FISH ERY AGREEMENT BE TABLED
Donald W. Munro: Perhaps the Minister would be prepared to make some comment on the bilateral agreement between Canada and the United States on the salmon fisheries question. Will he agree to have that particular agreement tabled and examined in the parliamentary committee?
[ Translation]


Pierre De Bané: Madam Speaker, I do not know to what incident the Hon. Member is referring. If he is referring to a specific incident, I should be grateful if he would let me know what his own position would have been, instead of making insinuations. As far as the salmon treaty with the United States is concerned, 1 am pleased to report that negotiators for our two countries have already initialled the agreement to be submitted to both governments some time during the next few months. At that time, the two governments will, of course, have to take a position on the matter. As far as Canada is concerned, I can inform the House that the initialled document seems to be fair to both parties, and I have already said as much to the United States Ambassador. I also hope this stage of the confirmation of the agreement will be submitted to Cabinet some time during the next few months.


HOUSING
James Aloysius McGrath: Madam Speaker, my question is directed to the Minister responsible for housing. Fast week, in one of his musings, the Minister publicly suggested that rents should be based on 25 per cent to 30 per cent of gross income-income before taxes. The Minister can deny that he said it, but it was reported in the press.
Given the fact that 40 per cent of householders in the country are renters and that the average rent in Canada today is approximately 17 per cent to 18 per cent of gross income, this would mean a massive rent increase. More important, it would discriminate against low income families because the Minister mentioned nothing about shelter allowance. Was the
February 15, 1983

Minister correctly quoted, and perhaps he can give us the advantages of his musings in the Flouse?


Hon. Romeo LeBlanc (Minister of Public Works):: Madam Speaker, as a former journalist perhaps I have the humility of saying that there are times when journalists get their writing garbled and, in fact, misrepresent what someone has said in a rather lengthy interview. This was the case.
Under no circumstances did I advocate that people should pay rent on the basis of their income. There was discussion on the issue of availability of rental units, and I did reflect to the journalist those reasons which the industry had given me for not going ahead and building as many rental units as we might need in the country. We then went on to discuss rent control, and I indicated very clearly that this was a provincial jurisdiction, that it was not my judgment to make, but that surely there could be a way to help people concerning affordability of housing, that is, to help those who perhaps were paying more than 30 per cent of their income, as we had done in the mortgage renewal plan that my predecessor brought in some time ago.
I flatly denied in Vancouver having advocated what the Hon. Member represents in his question. I flatly deny it again, and I am simply saying that we will try to give Canadians as many houses and apartments that are affordable as possible.


Some Hon. Members:: Hear, hear!


James Aloysius McGrath: I was merely quoting from a story in the Toronto Star, which is not in the habit of misquoting Government Ministers.


Some Hon. Members:: Since when?


CANADA MORTGAGE AND HOUSING CORPORATION
James Aloysius McGrath: Madam Speaker, concerning the subject of low-income families, the Minister just voted in this House on a provision to hold Family Allowances and Old Age Pensions to the six and five formula. How can he reconcile that with a 200 per cent increase in directors' fees for Canada Mortgage and Housing Corporation? Directors' fees have now risen from $150 a day to $450 a day.


Some Hon. Members:: Oh, oh!


James Aloysius McGrath: How can the Minister reconcile that with a Government policy which would hold families and old age pensioners in this country to an iniquitous six and five formula?


Some Hon. Members:: Hear, hear!


Roméo LeBlanc: Madam Speaker, on the first question, I checked the tape of the
Oral Questions
interview and I can assure the Hon. Member that there were no gaps of 18 minutes or less on the tape that I checked. So, I very clearly stand by the statement that I made concerning the whole rent control issue.
Concerning the other matter, the new fee schedule was submitted in April of 1982, on April 28 to be precise. 1 might say to Hon. Members that the directors of CMHC have not received any kind of increase in their fees since 1946. I suspect that Hon. Members of his House have seen substantial increases in their own salaries over a period of 37 years.
I might say that the limited number of directors on this board, dealing with very large amounts of money, make them entitled to the normal fees of officers of other Crown corporations who, I suspect, in many cases discharge less responsibilities than these directors do. It was a matter of judgment, but I also think-and in this I appeal to all Members of the House-that it may very well have been a matter of fairness.


Some Hon. Members:: Hear, hear!


FISHERIES
Mr. Ted Miller (Nanaimo-Alberni):: Madam Speaker, my question is directed to the Minister of Fisheries and Oceans. The Government is proposing a scheme on the West Coast which will allow one seine vessel to fish two areas under the herring roe fishery this coming March. The effect of that proposal will be to throw 200 fishermen, crewmen on those seine vessels, out of work.
In view of the representation by the Native Brotherhood of B.C. and the UFAWU, both organizations representing crewmen on those same vessels, will the Minister reject proposals coming up through his Department and, indeed, protect those 200 jobs in a Province which already sees 250,000 people out of work? Will the Minister protect those jobs, or is this the first phase of implementing the Pearse Report which calls for a reduction by 50 per cent in the number of fishermen in the B.C. fishing industry?


Pierre De Bané: Madam Speaker, I will certainly very carefully study the representations of the Hon. Member, but surely he should realize that when we shorten the fishing season or reduce the number of entrants, participants in the fishing industry, it is precisely in order to manage the resource in a responsible fashion. Sure, we could allow as many fishermen to fish as he would like, but next year I could not perform miracles and make the species reproduce, and then, of course, we would have to face the consequences.


Mr. Baker (Nepean-Carleton):: This is the parable of the loaves and the fishes.

February 15, 1983
Oral Questions


Pierre De Bané: We are to manage the resources in the most responsible fashion possible, and I try to have input from every user group, every participating group.


INDIAN AFFAIRS
Mr. Jim Fulton (Skeena):: Madam Speaker, my question is directed to the Minister of Indian Affairs and Northern Development. I am sure the Minister is aware of the memo released earlier this month which was approved by the Prime Minister, recommending that the Liberal strategy be to "reduce native expectation, particularly as it relates to the Constitution conference". Examples of this policy abound, ranging from the termination of the megaproject impact fund to the termination of the $345 million for Canadian economic development.
With the Constitutional conference just a month from today, I wonder if the Minister would explain why yesterday, at the parliamentary hearings into Indian self-government, evidence was brought forth that the Minister plans and fully intends to reduce, if not eliminate, funds to tribal councils. Would he explain why he is doing that at this time? Would he also explain the policy of the Government concerning the Constitutional conference? Is it completely to undermine it, and the confidence of native people in this country, before it happens?


Hon. John C. Munro (Minister of Indian Affairs and Northern Development):: Madam Speaker, the answer is no to both questions. There is no intention to obliterate funding for tribal councils. As the Hon. Member should know, having spoken with some of the Indian leadership, and certainly the head of the AFN, we are adopting a positive attitude toward the Constitutional conference and, in fact, Indian leaders who were present at the ministerial conference have stated so publicly. Maybe the Hon. Member has chosen to ignore those statements.


CANADA MORTGAGE AND HOUSING CORPORATION
Hon. Erik Nielsen (Leader of the Opposition):: Madam Speaker, my question is supplementary to the question directed by the Hon. Member for St. John's East to the Minister of Public Works. Can he confirm to the House that among those Members of the Board of Directors of CMHC who have come in for this Liberal largesse, based on the new Liberal math, in which 6 per cent and 5 per cent equal 200 per cent, are included Frank J. Callaghan, President of the Liberal Association of Prince Edward Island; Sylvia Sutherland, a defeated Liberal candidate in Peterborough during the 1980 election; Christine
McKee from the University of Manitoba, ombudswoman and associate of the Minister of Employment and Immigration when he taught in Winnipeg; and, rounding out the list, Jacques Plante, President of the Quebec City Chamber of Commerce, and Ben Wosk, a furniture dealer in Vancouver, prominent contributors to the Liberal Party of Canada? Are those the recipients of the Liberal largesse, a 200 per cent increase, despite the Government's six and five program which the Cabinet stated on repeated occasions would be applicable to all Crown corporations and agencies?


Some Hon. Members:: Hear, hear!


Roméo LeBlanc: Madam Speaker, I again underline the fact that the submission was on April 28, 1982, which was before the six and five program was initiated.


Some Hon. Members:: Oh, oh!


Roméo LeBlanc: Madam Speaker, I have sufficient respect for people who support the other side not to think that just being Members of that Party or contributing to it-although I question the wisdom of that-should disqualify such people. I have met the members of the board and I know that they are very hard working. I know that they are devoted to working for housing. I make no apologies for that fact.


Some Hon. Members:: Hear, hear!


Erik Nielsen: An interpretation of that answer is a confirmation that all of the five individuals named by me are devoted Members of the Liberal Party of Canada.


Some Hon. Members:: Does that exclude them?


Erik Nielsen: No, it certainly does not exclude them, but I suggest to Hon. Members opposite that the trough is getting pretty full.


Some Hon. Members:: Hear, hear!


TRAVELLING EXPENSES
Erik Nielsen: Madam Speaker, does this same Liberal approach-


John Carnell Crosbie: Headed by "Oinker" Macdonald.


Erik Nielsen: -attempt to justify expenses of $250 for travelling three hours or less, and $450 for three hours or more? Is that a fringe benefit to the new math of the Liberal Party?


Roméo LeBlanc: Madam Speaker, as I said before, the salaries of the members of the board had not been increased since 1946. The Hon. Member, the Acting Leader of the Opposition, has seen more increases in his last 37 years. What the Hon. Member forgets to point out in his long question is that, in their own right, members of this board are qualified Canadians and, frankly, I do not see
February 15, 1983

why having one political faith or another should disqualify deserving and competent Canadians.

[ Translation]



THE ROYAL ASSENT

['I would not require it. It is up to the Member to judge whether he needs to raise his question of privilege now that some arrangement has been set up by the different Parties. As a matter of fact, I think that is the better resolution to that particular problem as far as I can see from the notice which the Hon. Member had the courtesy to send me.']
Madam Speaker:: 1 have the honour to inform the House that a communication has been received as follows:
Government House Ottawa
February 15, 1983
Madam,
I have the honour to inform you that the Honourable W. Z. Estey, Puisne Judge of the Supreme Court of Canada, in his capacity as Deputy Governor General, will proceed to the Senate Chamber, today, the 15th day of February, 1983, at 4.05 p.m., for the purpose of giving Royal Assent to certain bills.
I have the honour to be,
Madam,
Your obedient servant,
Edmond Butler
Secretary to the Governor General



Madam Speaker:: I have the honour to inform the House that the Clerk of the House has laid upon the Table the three hundred and ninety-third report of the Clerk of Petitions stating that he has examined the petition presented by the Hon. Member for London-Middlesex (Mr. Bloomfield) on Monday February 14, 1983, and finds that it meets the requirements of the Standing Orders as to form.

[English)


PRIVILEGE
Madam Speaker:: 1 have a question of privilege in the name of the Hon. Member for Halifax West (Mr. Crosby).


Howard Edward Crosby: Madam Speaker, as you know and as I indicated to you in my letter, the question of privilege relates to the notice required for the summoning of meetings of standing committees. Since I raised the question originally in this House this morning I have spoken with our House Leader, the Hon. Member for Simcoe North (Mr. Lewis), who indicates that some arrangements are being made that may resolve this problem. If I could, I wish to defer the
Order Paper Questions
question of privilege to a later date, or if you require I could withdraw it altogether.


Madam Speaker:: I would not require it. It is up to the Member to judge whether he needs to raise his question of privilege now that some arrangement has been set up by the different Parties. As a matter of fact, I think that is the better resolution to that particular problem as far as I can see from the notice which the Hon. Member had the courtesy to send me.



ROUTINE PROCEEDINGS


[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
David P. Smith: Madam Speaker, the following questions will be answered today: Nos. 1,325, 3,363, 4,285, 4,341, 4,637, 4,653 and 4,674.


Mr. Friesen: 1.	(a) What individuals went to the Cannes Film Festival in 1980 at the expense of the Canadian taxpayer (b) for what purpose were they sent (c) what were their personal allowable expenses per day?
2.	What was the total cost to the taxpayer of Canadian participation at the Festival and how was the money spent?
3.	Did Mr. Michael McCabe attend the Festival and, if so (a) what were his
(i)	personal allowances (ii) other allowable executive expenses (b) what was the total amount spent by Mr. McCabe?
4.	(a) What is the name of Mr. McCabe's accountant (b) did he attend the Festival at the expense of the taxpayer and, if so (i) for what reason (ii) what was the cost?
5.	(a) On what date was Mr. McCabe employed by CFDC as Executive Director (b) how many weeks of paid holiday did he receive annually (c) since his appointment as Executive Director, how many weeks was he away from his office and not on official business?
6.	What credit cards were issued to Mr. McCabe in the name of CFDC and what were the credit limits?
7.	Was Mr. McCabe asked to tender his resignation as Executive Director of CFDC and, if so, by whom?
8.	What is the agreed cost of Mr. McCabe's severance pay?


David P. Smith: I am informed by the Department of the Secretary of State, the Canadian Film Development Corporation and the National Film Board as follows:
In so far as the Department of the Secretary of State is concerned:
1.	(a) Mr. Ian McLaren-Director of the Cultural Industries Division: Mr. Jean Lefebvre-Chief of the Film Festivals

February 15, 1983
Order Paper Questions
Bureau of the above-mentioned division; Mrs. Jacqueline Bro-die-assistant-chief of the Film Festivals Bureau.
Under contract to the Film Festivals Bureau: Mr. Gilles Carle, director; Ms. Carole Faure and Mr. Fewis Furey, stars of the Canadian film in competition; Ms. Micheline Lanctot, director of the Canadian Film selected for screening in the Director's Fortnight; Ms. Darcy Dunton, press officer assistant; Mr. Michael Spencer, Canadian member of the Cannes
jury-
(b)	(i) Mr. McLaren to meet foreign government officials involved in film and film policy, and to negotiate a possible film co-production agreement with Australia.
(ii)	Mr. Lefebvre, Mrs. Brodie to co-ordinate the Canadian presence at the festival events, to meet with film festival directors from around the world, to do cultural promotion for Canadian film productions, to organize and manage the participation of the Canadian films selected for showing by the festival and to help promote these films through the various events connected with the official screenings of the Canadian films in the festival, to promote Canadian films with the (approximately) 1,000 members of the world film press in attendance.
(iii)	Mr. Carle, Ms. Lanctot, Ms. Laure and Mr. Furey were brought to Cannes to help promote their respective films. It should be noted here that the Festivals Bureau provides this service as a matter of policy, only for Canadian films which are selected for showing by major film festivals. The bureau deals exclusively with these films, and with films which are entered in the film market. (Participation in any film market is on an inscription basis. Anyone can participate. But participation in festivals per se, is only possible after a complex selection process by the festival organizers and overseen by the Festivals Bureau.)
Ms. Dunton worked under contract for the Bureau as press assistant.
The Bureau paid the travel expenses (Montreal-Cannes, return) of Mr. Spencer. The festival paid his expenses at Cannes.
(c)	Department of the Secretary of State employees' per diem at Cannes were those allowed by Treasury Board Travel Directives for Government employees on travel status in France, 150 francs per day (approximately $40), plus 14 of this amount for incidentals.
Contractees were paid their travel (economy class) to Cannes. (For Mr. Carle, Ms. Laure and Mr. Furey, only the Paris-Cannes, return portion was paid), plus five days at government travel per diem rates, plus their hotel rooms, if they accepted to stay at a government-rented hotel, Ms. Dunton was paid a flat fee of $3,000, covering her travel, her expenses and her salary. Hotel rooms were rented by the Bureau in December and were paid for by the Bureau.
2.	It should be noted that governmental costs at Cannes were shared by the Film Festivals Bureau (which handled the participation of Canadian films in the festival) and the CFDC
(which handled the marketing and sales promotion of Canadian films).
Total cost to the Film Festivals Bureau was $117,950 which breaks down as follows;
(1)	Selection process:	$25,246(2)	Promotion and publicity:	59,281(3)	Travel (staff & contractees):	13,001(4)	Administration, rentals, shipping, etc.	20,422
On the date this question was asked, all costs on this exercise have not yet been received nor processed by Finance. Costs stated here, however, are true costs as evaluated by the Cannes administrator.
3,	4, 5, 6, 7 and 8. To be answered elsewhere.
In so far as the Canadian Film Development Corporation is concerned:
1.	(a) and (b) The following people went to Cannes at the Corporation's expense:
Michel Vennat, Chairman (first week)
Michael McCabe, Director
Pierre Thibeault, Acting Director (second week)
Jacques Dick, Administrative Director Ken Rosenberg, Artistic Director (first week)
Mireille Gousse, secretary Nicole Boisvert, secretary
David Novek, advertising and public relations officer.
All these people attended the festival as representatives of the Corporation to promote the dissemination and sale of Canadian films and direct CINEMA CANADA operations. The Corporation's chief administrative officer, Mr. Jacques Dick, went to Cannes to administer the Film Festivals Bureau's and CFDC's budgets.
(c) For support staff: $75 per day. Officers are reimbursed on presentation of vouchers.
N.B. Cannes is not a film festival; it is four world-class film events taking place together. Each of these events functions autonomously and is directed by separate organizations.
The four Cannes events are:
(1)	The Festival competition and the "Un certain regard Section";
(2)	The Directors' Fortnight;
(3)	The Critics' Film Week;
(4)	The Film Market.
These four separate events constitute the Cannes Festival. It is attended by 30,000 to 40,000 film professionals (producers, distributors, exhibitors, directors, film press, actors) from around the world. Among these are approximately 2,000 film press persons, sent there by their newspapers, magazines, radio
February 15, 1983

and TV stations. The Cannes Film Festival is the annual film convention of the World.
Cannes is the first event in the festival year. Many of the preparation costs (especially those attached to the selection and pre-selection costs) serve all through the year. These costs are charged to Cannes because they are initiated in time for Cannes.
For the first time ever, in 1980, a Canadian feature film was selected to open the Festival. Producers and countries of the film selected to open or close the Festival must "host" and therefore pay the cost of the Festival's opening or closing reception. The Film Festivals Bureau obtained Treasury Board approval (No. 770954, May 20, 1980) to pay its share of this extraordinary expense.
2.	The Corporation's expenses totalled $230,945 broken down as follows:
Rental of stands, equipment and so forth	$ 36,245
Travel and shipment of goods	46,700
Promotion and advertising	145,000
Rental of a cinema	3,000


[Stage Direction]
Order Paper Questions
the period 1976 to 1982, Poland and Canada were signatories to the following agreements:
Bilateral
1.	Air Transport Agreement
2.	Long Term Grain Agreement
3.	Long Term Grain Agreement
4.	Long Term Grain Agreement
5.	Agreement on Mutual Fisheries
Relations
6.	Agreement on Mutual Fisheries
Relations
Multilateral
A.	Convention on the Prohibition of
Military or any other Hostile Use of Environmental Modification Techniques
B.	Geneva (1979) Protocol to the
General Agreement on Tariffs and Trade
May 14, 1976 (Transport Canada) November 25, 1976 (Canadian Wheat Board)
April 19, 1977 (Canadian Wheat Board)
October 4, 1979 (Canadian Wheat Board)
May 14, 1976 (Fisheries & Oceans Canada)
May 14, 1982 (Fisheries & Oceans Canada)
December 10, 1976 (External Affairs)
June 30, 1979 (External Affairs)
(c) It would be impossible to calculate the cost (if any) of the multilateral agreements and the air transport agreement.
3.	(a) (i) and (ii) $2,500 (meals and room), $5,000 (hospitality expenses), (b) $7,500.
4.	(a) Not known to the Corporation, (b) not at the expense of the Corporation.
5.	(a) June 1, 1978, (b) four weeks per year, (c) To be consistent with the provisions of the Canadian Human Rights Act Part IV we are not providing personal information.
6.	Visa-Chargex. Credit limit: $3,000.
7 and 8. See Part 5 (c) above.
In so far as the National Film Board is concerned:
1.	(a) F. Macerola-Deputy Government Film Commissioner, A. Lafond-Area Representative, Europe (Paris), (b) Promotion. (c) Canadian Government Travel Allowances for Paris plus necessary hospitality.
2.	For transportation, meals, accommodation, representation, hospitality, advertising, shipping of promotional material, etc.-$12,120.
3.	4, 5, 6, 7 and 8. To be answered elsewhere.
The fisheries treaties give allocations of fish in Canadian waters to Polish vessels in return for purchases by Poland of Canadian fish products. As a result of Poland's current economic difficulties, it is unable to buy the amount of fish products which both sides would prefer. However, in 1982 Poland was obligated to buy products worth $1,000,000.
As for the long term grain agreements, the 1979 treaty expired at the end of 1982. It provided government-guaranteed credit for the purchase of up to 1.5 million tons of grain during each of the three years of the agreement.
2.	The Government of Canada has made a contribution of $500,000 to the International Red Cross in response to its appeal for food, medicine and clothing for Poland and has also provided two grants totalling $300,000 to the Canadian-Polish Congress to assist its relief efforts. Unfortunately, the Government has no way of knowing the total quantity and value of food, clothing and medical supplies sent to Poland by private organizations and groups.
Mr. Kushner: !. During the past five years, how many bilateral and multilateral agreements were reached in which both the Canadian and Polish Governments were signatories and, in each case (a) what was the nature and duration of the agreement (b) which departments and/or agencies were involved in both Governments (c) what was the cost to the Government?
2.	During the past two years, what was the total quantity and value of (a) food (b) clothing (c) medical supplies that were sent to Poland by both the Government and other groups and organizations to alleviate shortages of such goods there?
Hon. Allan J. MacEachen (Deputy Prime Minister and
Secretary of State for External Affairs): 1. (a) and (b) During


Mr. MacKay: 1.	What amount was allocated to the Ceskoslovenska Obchodni Banka of Prague, Czechoslovakia by the Export Development Corporation in (a) 1981 (b) 1982?
2.	What products were sold to Czechoslovakia by Canadian firms under this allocation and, in each case, what were the amounts involved?
3.	What sales to Czechoslovakia were made by Velan Inc. of Montreal in (a) 1981 (b) 1982 and what were the products and the dollar values?
4.	In (a) 1981 (b) 1982, did Velan Inc. sell any valves to Strojexport of Prague, Czechoslovakia and, if so (i) what kind (ii) what are the valves customarily used for (iii) were the same kind of valves or similar valves

February 15, 1983
Order Paper Questions
manufactured in the past by Velan Inc. for the benefit of the United States Navy?


Gerald Augustine Regan: 1. EDC allocations to the Ceskoslovenska Obchodni Banka of Prague totalled $3,013 million in 1981 and $178,691 to date in 1982.
2.	In 1981, a gravimatic casting system (EDC financing- $1,586 million) and valves ($1,427 million) were sold to Czechoslovakia. This year, add-on financing to the same valve transaction was concluded ($178,691).
3.	Velan Inc. was the company involved in the above mentioned EDC valve transactions. The dollar value of the contract is a commercial confidential matter that is obtainable only with direct permission from the firm.
4. Valves were involved, but their end use is unknown. A technical comparison between the type of valves sold to Czechoslovakia and to the United States is a matter to be dealt with by the makers of the product.


Mr. MacKay: Since 1967, was the Government involved in any way in sales to Communist countries of products manufactured by Velan Inc. of Montreal and, if so, in each case, what was the (a) nature of the involvement (b) value of each sale (c) country of destination of the products (d) nature of the products and what were the products customarily used for?
Hon. Gerald Regan (Minister of State (International
Trade)): In addition to providing its customary trade development assistance to Velan Inc., the Export Development Corporation (EDC) has provided financing as follows:
Date	Amount	CountryMay, 1977	3,876,935	U.S.S.R.April, 1978	5,706,900	U.S.S.R.March, 1979	7,757,612	U.S.S.R.September, 1981	1,427,000	CzechoslovakiaFebruary, 1982	178,691	CzechoslovakiaJune, 1982	4,700,000	HungaryJuly, 1982	1,800,000	Czechoslovakia
There was no EDC financing prior to 1977 for sales to Eastern Europe.
In all instances the products exported were valves. There is no information regarding the end use to which the valves were put.


Mr. Beatty: 1.	How many persons are employed full time by CBC news within Canada?
2.	How many of these persons are not Canadian citizens and, of these, how many are not landed immigrants?
3.	What are the descriptions of the jobs filled within CBC news by persons who are neither Canadian citizens nor landed immigrants?
4.	What is the policy of CBC news covering the hiring of persons who were not Canadian citizens nor landed immigrants prior to their employment?


Hon. Francis Fox (Minister of Communications):: 1 am
informed by the Canadian Broadcasting Corporation as follows:
English Services Division:	548
French Services Division:	289
Ottawa Area:	30
2.	Ten of these employees are not Canadian citizens. All ten are landed immigrants.
3.	Not applicable. See answer to Part 2 above.
4.	The Corporation's policy, covering those occasions when qualified persons are hired who are not Canadian citizens, is to ensure that the provisions of the Immigration Act are respected.


Mr. MacKay: 1.	Was there an independent investigation by Canadian authorities of the alleged automobile accident of December 4, 1982 in Moscow in which an employee of the Canadian Embassy, Mr. Michel Leroux, had died and, if so, what was the result?
2.	Who was the owner of the automobile involved in the accident?
3.	Did the Canadian Embassy request the Soviet authorities to have access to the automobile after the accident for the purpose of an examination and, if so, what was the response received?
4.	Was the automobile examined by Canadian authorities after the accident and, if so, what was the result of the examination?
5.	What was the title of Mr. Leroux's job in Moscow and what were the duties involved?
6.	Was an autopsy performed on Mr. Leroux and, if so (a) by whom (b) what was the cause of death?


Hon. Allan J. MacEachen (Deputy Prime Minister and Secretary of State for External Affairs):: 1. Yes Investigation of the accident was undertaken by officials of the Canadian Embassy, Moscow. Witnesses to the accident were interviewed, conditions of the road at the time of the accident were surveyed and an examination of the car was undertaken by competent Canadian officials. The finding of the investigation was that Mr. Leroux's death was the result of an accident.
2.	Mr. Michel Leroux.
3.	Yes. Soviet authorities complied with this request allowing the Canadian mechanic at our Embassy in Moscow to carry out a thorough examination of the vehicle in question.
4.	Yes. The vehicle was examined on a number of occasions by Canadian officials. While damage to the vehicle as a result of the accident was extensive, the car was found to be mechanically sound. It was determined that the accident occurred as the result of icy conditions on the road where the accident took place.
5.	Mr. Leroux was a clerk with a diplomatic designation as attache. He worked in the consular section of the Canadian Embassy and was performing clerical duties associated with the family reunification program between Canada and the U.S.S.R. '
February 15, 1983

6.	Yes. (a) The Canadian Embassy doctor, who is a British physician attached to the British Embassy, examined Mr. Leroux immediately following the accident and confirmed his death. An autopsy was subsequently carried out by a Soviet pathologist, (b) The finding was that Michel Leroux died instantly as the result of injuries sustained in the car accident.


Mr. Friesen: Did the Government provide any assistance to the World Plan for Creative Intelligence, the Transcendental Meditation Movement or any other group under the direct or indirect authority of the Maharishi Mahesh Yogi and, if so (a) what was the nature of the assistance and on what date was it given (b) what were the names and addresses of the groups which received assistance?


Hon. Serge Joyal (Secretary of State):: In so far as the
Department of the Secretary of State is concerned: No. (a) and (b) Not applicable.


David P. Smith: 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.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Lalonde that Bill C-139, to amend the Statute Law relating to Income Tax (No. 2), be read the second time and referred to a Committee of the Whole.
Arthur Jacob (Jake) Epp: Madam Speaker, prior to the lunch break I was making the point that I had a constituent who had been employed by CP Rail and also had a farm. When his employment ended at CP Rail we were still not able to convince Revenue Canada that in fact his vocation was farming only. I think it is important for the Minister of National Revenue (Mr. Bussieres)-and 1 wish he were here- to understand that there are judgments being made by Revenue Canada personnel, judgments which I believe have nothing to do with the Income Tax Act.
For instance, this person whose only income now is farming was told by Revenue Canada that, because his farm was not viable, he therefore was not a farmer; but they agreed that he had no other income other than from farming. They asked me the question: If the farm is not viable, how could he remain on the farm? I told them that if they understood anything about farming in previous years they would know that he and his
Income Tax
family had invested in the farm and obviously had not needed the farm income to support themselves on a day by day basis, but now that the only income they had was from farming, they obviously would invest less in the farm and have to take more of the profit for their day to day expenses. That, to me, seems a rather obvious approach, but to this day Revenue Canada officials have not accepted that approach.
In fact, I think there is a real concern when auditors go into these places to audit. I contact the auditor and the auditor says: "I do not have to speak to you; you have to speak to someone else in the Department." I suggest when Members of Parliament phone on behalf of their constituents, having been authorized to do so by their constituents, that that is not the approach that people who are getting paid by the public purse should take. Yet that is the attitude they do take.
I am sure that every Member in this House knows of cases where a spirit of decency and fairness has not been shown by Revenue Canada personnel. The regulations are now so complicated that average, ordinary Canadians who cannot expend large sums on tax preparation are concerned that the tax Department as such is seen more as confiscatory; that is, confiscating income and investments that people have rather than be fair to them.
I had another case concerning a gentleman who had sold a small service station and had to repossess it, and then subsequently sold it again. He was taxed on the capital gain from the service station that he had to repossess and then re-billed, because after he had sold the service station a second time, when he got the cash he bought averaging annuities, RRSPs, but did not do so after the first sale because he had no cash. He had not received any cash as the buyer defaulted. Yet Revenue Canada levied tax on a capital gain from the first sale although no revenues were realized.
What I am saying is that there has to be a different approach. I am not saying that people should not pay their taxes, but I am saying that many of the Revenue Canada people operate on the basis that a taxpayer must prove his innocence rather than they must prove the case that their assessment is correct. I believe it is true that many of them operate on that basis.
While we can argue about details and regulations and legislation, back on the farm and on the street where average Canadians are trying to make a living people have today a fear of the manner in which Revenue Canada assesses taxes on income earned. It seems to be very quick to add income and very slow to look at legitimate expenses. That raises this question. I wonder to what extent Revenue Canada has reveived instructions from this Government to try to recover whatever money it can because of the national deficit. As I speak to Revenue Canada people, their attitude to my mind is one not of being fair to the taxpayer but rather that it is seen much more as a collection agency against the taxpayer.

February 15, 1983
Income Tax


Howard Edward Crosby: Mr. Speaker, as you know, at this stage of the debate on second reading of Bill C-139 to amend the Income Tax Act we have but ten minutes to indicate our views on the legislation and all its ramifications for the people of Canada. It is no wonder that with that kind of time limitation we are accused by people like J. Lyman Maclnnis, President of the Institute of Chartered Accountants of Ontario, of being less than thorough in our review of legislation as individual Members of this House of Commons. In fact, in speaking to a group in Toronto-where else would it be-the gentleman said this:
The greater tragedy is this. There are 284-
He does not even know how many Members of Parliament are elected in Canada.
-284 men and women sitting in the House of Commons in Ottawa who continue to enact this kind of legislation.
He is referring to the Income Tax Act of Canada.
Don't try to tell me that these people understand what they're passing. My guess is there aren't more than a handful who have any idea what the real effect is of the income tax laws they enact. We obviously had one Minister of Finance who didn't know.
I think we all know he is talking about the Hon. Member for Cape Breton Highlands-Canso (Mr. MacEachen) and his disastrous November 12, 1981 budget. The fact is that all of us in this House of Commons are tarred with the same brush, this brush of not caring, not studying the laws we enact and not taking action to prevent the passing in this Chamber of laws that will have unfortunate ramifications for the people of Canada.
I say that because that situation is entirely unfair. Members on the Opposition side do not have the opportunity for briefings from Government officials. They do not have the background material and support, the statistical analyses that are given to Members of the Government when they present Bills, but we all have to share in the blame. That is why we stand on this side of the House of Commons, speaker after speaker, and protest the manner in which this legislation is being run through the House of Commons and the manner in which it will be implemented later on by a bunch of uncaring bureaucrats in the Department of National Revenue, who will see this not as a method to finance the massive undertakings of the Government of Canada, but simply as a method to extract money from the people of Canada. There will be no humanity to it. There will be no philosophy to it. It will simply be the mechanical process of taking the money out of the hands of the Canadian people. That is why I want to dwell very briefly on the philosophy of this legislation.
In income tax laws and laws that extract revenue from the taxpayers, there is no philosophy. That is a mistake that the then Minister of Finance made in this House in his budget speech in November, 1981. He talked of equity. You do not talk of equity in relation to tax measures. There is no equity. Equity would indicate that no money should be taken from the people of Canada in the form of taxation. The money should
be raised in other ways that do not require individuals to contribute in a direct way.
The fact of the matter is that we need money to finance necessary and essential programs. That is what is called into question in these budgets every day in this House of Commons. The Government of Canada is extracting money from the people of Canada to pay for programs that are not necessary. It is extracting money from the people of Canada to pay for programs that are unessential and designed and intended simply to keep the Government of Canada in power. They are programs that the people of Canada do not need and cannot afford. The tax process goes on and on and there is no philosophy, no principle, involved in it.
The Minister of Finance in November, 1981 tried to pretend that there was a principle involved. He said that he was going to bring equity into the tax system. I have already explained that it is simply a method of getting dollar bills into the national treasury. It has no connection with equity.
Maybe in employing the system one should be fair among those persons who have to pay the taxed amounts, but there is no way that you can come up with a concept of equity. We found that out in the month that followed November, 1981. We found that the Minister's attempts at equity were ill-advised and did not result from any consultative process with the people and organizations involved.
That was the disaster, the disaster that is reflected in Bill C-139 today-because the tax measures that are contained in Bill C-139 flow from that November, 1981 budget. They flow from the program introduced by the same Minister in June, 1982 when he introduced the six and five program. They flow from the measures his successor introduced in the House of Commons in October, 1982 in an attempt to remedy and resolve some of the problems created by his predecessor.
What we have to do is call the attention of the people of Canada to this kind of incompetence, this kind of fiscal mismanagement that results in the need to tax and tax, and tax again, the people of Canada. You cannot attack these provisions one by one as the President of the Institute of Chartered Accountants said, because you have to characterize them as all bad. There is no real reason for them. The only reason is that the Government is spending vast amounts of money.
In November, 1981 the Minister forecast a budget deficit of $11 billion. In June, 1982 the budget deficit had risen by several million dollars. In October, 1982 the prognostication was $19 billion. It then went up to $22 billion. Now, this very day in the House of Commons, the Minister of Finance (Mr. Lalonde) tells us the budget deficit is $26 billion. If you do not think that has anything to do with taxation, Mr. Speaker, let me tell you what does have to do with taxation. When you divide the number of wage earners in Canada, which number around 10 or 11 million, into $26 billion, in addition to the other amounts that are recovered by the tax system, you realize the financial burden that Canadians face.
February 15, 1983

What does it have to do with other matters like inflation? Every taxpayer in Canada who lines up at a bank for a loan has to realize that the Government of Canada has been there before, paying for its budget deficit, to borrow $26 billion from financial institutions in Canada and abroad in order to finance this massive deficit. That is why the interest rate goes up and the ordinary Canadian taxpayer has no chance in the face of this fiscal mismanagement. There are millions of these taxpayers. We do not want to forget that there are 14.7 million Canadians who filed tax returns in 1980 and 15.1 million who filed in 1981.
The ramifications of the changes in the tax system are of extreme magnitude and affect virtually every person in Canada. The end result is that those people who are faced with inflation, which although it may be on the decrease now in the face of unrestricted Government spending is bound to increase in the future, are the victims, as well as the millions of jobless in Canada. We have 1.6 million people who are unemployed and still looking for work and we have another one million people who have given up looking for work. There are over three million people in Canada who have unemployment problems. They are the victims of this fiscal mismanagement.
All we can do is spend more money and increase taxes in order to solve the problem which the Government has created. There are many activities and actions that the Government has failed to take over the years in relation to the tax system and revenue-gathering processes in Canada. I have a statement referring to a report about underground money transactions. Do Hon. Members realize that experts have indicated that underground financial transactions in Canada amount to almost one-quarter of the total economic activity? There is something in the area of $53 billion involved in so-called underground transactions. What is the Government going to do about that? Is it going out to find out who these people are who do not respond to the tax system, who ignore our tax system? No. It goes down to Nova Scotia, seeking out a few fishermen who risk their lives every day to go on the high seas. The tax officials are hitting them with assessments, going back over their tax returns and extracting money from them.
They are doing the same thing with people who want to run a small farm to support their family. They are going back and saying: "We are not going to allow you any expenditures, Mr. Farmer, because we think you are an employed person and you are not going to benefit from the tax system". Why don't they go after the criminals? Why don't they go after the drug dealers? Why don't they bring in these billions of dollars in revenues from the underground money transactions that are now taking place in Canada and that have been established by scientific reports?
1 want to speak about one item in the tax Bill. That is all I have time for. It is the Government's treatment of pensioners. I asked the Minister of Finance in the House of Commons in December, 1981 whether he would recant on his taxation provision that would deprive senior citizens in Canada of the benefit of the $1,000 exemption in respect of pension income. I thought he indicated at the time that he would. He has been
Income Tax
battling back and forth with that ever since. It has been raised in comments, newspapers, tax reviews and so on.
When I look at Clause 67 of this Bill, I do not see where the Minister of Finance has recanted from that onerous provision at all. I want to raise that objection because when the question was put to him in front of the people of Canada he expressed great sympathy for senior citizens who were trying to provide for their old age. I know of no more onerous provision in this entire Bill C-139 than that which deprives senior citizens of a $1,000 income tax exemption if they are involved in another registered retirement savings plan.
If that is the attitude of the Government towards our senior citizens, then I have real concern for the future of Canada. If the Government thinks the Canadian people want to extract money from our senior citizens merely to fatten the Government so it can spend money on Dome Petroleum or help Bombardier and all those other activities it is engaged in, then we are in a sorry state in this country.


Hon. Roch La Salle (Joliette):: Mr. Speaker, I believe that this Bill demands that we take a few minutes to remind Canadians how controversial this Government's administration has been. The Bill before the House today is more or less a reflection of the four budgets that were brought down since 1981. After all the corrections, amendments, and mistakes corrected twice over, we finally have here a thick slab of legislation which accountants and especially taxpayers will have a lot of trouble understanding. In any case, it is our duty on this occasion to criticize the Government roundly for poor management, poor planning, for commitments it failed to meet and, of course, for the promises it made to Canadians in order to try and win their support. If we consider all the changes that were made, we realize to what lengths the Government is prepared to go to obtain the support of the Canadian people.
I am referring to the four budgets brought down since 1981. They include a host of amendments which are sometimes very harmful, particularly to the poor. This legislation will not affect the rich but it will affect people on very low incomes who are least able to absorb some of the reductions and changes that affect Canadians directly. However, what is really incredible, Mr. Speaker, is the fact that since November 1981, starting with the predecessor of the present Minister of Finance (Mr. Lalonde), we have had 48 changes in the budget forecasts, while the present incumbent who was appointed last October had already made incredible mistakes, and I am referring to his miscalculation of the Government's deficits, borrowing requirements and projected borrowing requirements.
Mr. Speaker, to the Canadian people, to Canadians watching us, it was clear that for several months, after the Right Hon. Prime Minister (Mr. Trudeau) got rid of the former Minister of Finance who is now Secretary of State for External

February 15, 1983
Income Tax
Affairs (Mr. MacEachen), it was thought that his successor might prove to be better at financial forecasting. There was also the consideration that it was perhaps embarrassing for the Right Hon. Prime Minister of Canada to ask the then Minister of Finance to resign because his budget, his budgetary forecasts and his general administration had proved to be a complete failure. However, I would have thought that the present Minister of Finance would come up with sounder proposals and better planning so that Canadians in general and businessmen in particular would have some idea of where the Government is going.
There has been no improvement, however. Today, some pertinent questions were asked about Petro-Canada which is once more about to make the Government renege on its promises regarding oil prices and the world market price. Yesterday, the Minister of Finance announced he was very disappointed that the deficit would be even greater than expected, that he would have to borrow, several more billion dollars, and so, that government spending is increasing more and more. And today, the Minister of Finance is telling us once more that he will have to find new sources of revenue. Where is he going to find them? According to him, he has no choice. He was unable to accept some of the cuts in Government spending.
To err is human, I understand that. On the weekend I read in the paper that the Minister of Labour (Mr. Caccia) refused to recognize and, in fact, disclaimed any responsibility for a mistake which is costing his own department a million dollars because of commitments made to certain employees. As 1 see it, Canadians will not be able to tolerate that sort of thing much longer. I think it is important to remind Canadians of the mistakes being made in various departments, the mistakes made by the Minister of Finance and the changes he was obliged to make, not because the Government was reluctant to introduce these new taxes, but because the Opposition did its job, and because on this side of the House, we fiercely defended the interests of Canadians, who in turn helped us by their response to various surveys which indicated that this Government's popularity was declining. Of course, some Liberal Members, although secretly and never in the House, expressed their concern about the Minister of Finance and finally forced the Prime Minister of Canada to get rid of the Minister who is now Secretary of State for External Affairs. That did not help matters, Mr. Speaker. It did not improve the situation very much, it has not reassured Canadians, and today, the present Minister of Finance is already demonstrating an incredible lack of direction. I agree with the Auditor General that this Government has lost control over its spending, and I think it is absolutely necessary to bring out all these facts and to show the Canadian people the unmitigated mess this Government is making of governing the country.
Mr. Speaker, it is clear from this piece of legislation that the Government is again going to rob the poor, Canadians who are looking for work and who are waiting for the Government's
miracle policies to create jobs and give hope to the unemployed and especially to young Canadians who are getting desperate in a way they have never been before, because of rising unemployment. The Bill before the House today, and I want to make this quite clear, clearly reflects the Government's poor administration, its erroneous forecasts and the truly incredible mistakes made by people who are supposed to be running the country and give Canadians a set of positive economic policies.
However, there are no such policies, and instead, we have had forty-eight so-called remedies. I think it is important to remember that in less than three years, the Government has had to introduce forty-eight changes in its four last budgets, because they contained incredible mistakes-mistakes that were made by the present Minister of Finance's Cabinet colleagues and which he has had to correct, and worst of all, Mr. Speaker, the present Minister of Finance was a party to these forecasts and mistakes when he was responsible for Energy, Mines and Resources. In Cabinet, he endorsed so many erroneous decisions that would seem incredible to the average businessman who must be wondering about the manner in which we are being governed. Mr. Speaker, you know as well as I do that administrators with this record of incompetence, and I think the word is rightly chosen, would be hard-pressed to find a job in the private sector today. Mr. Speaker, that is why we are demanding more and more room for the private sector, but unfortunately, that is not the philosophy of this Government. Through the measures before the House today, this Government is directly competing with the private sector, which has demonstrated that it can provide far more effective management than the Government has been able to produce to this day. In the circumstances, Mr. Speaker, I think it is important to remind Canadians about the poor management and government this country is getting, and to express the hope that Canadians will soon be asked to pass judgment on this Government, and I sincerely hope that this will happen, Mr. Speaker.


Mr. John Gamble (York North):: Mr. Speaker, one of the handicaps of the new Rules as they apply to speeches in the House is that within a brief period of ten minutes, a topic of the kind confronting us today, namely an examination of the provisions of Bill C-139, must be discussed. Even general comments are difficult in connection with this extensive piece of legislation which is 292Vi pages long and covers a statute which, with its accompanying explanatory notes, as some of my colleagues on the other side would recognize, would stand in the CCH compilation, two feet high. It would require the steady attention, I submit, of a Member of this House who wished to understand the provisions of the Income Tax Act, during a two-year sabbatical from this place spent in a monastery where he was not confronted with any kind of distraction.
February 15, 1983

On a number of occasions I have dealt with one of the great problems of the Income Tax Act and that is, its inscrutability. This piece of legislation has become so complex over the years that the average citizen cannot hope, under any circumstances, to understand and to cope with its provisions. It has become so difficult that it is a labyrinth through which few people can find their way. For those unfortunates who happen to be caught in its pernicious clutches, it is a quagmire which, in many cases, has strangled many Canadian taxpayers.
The circumstances that confront us today are that rather than deal in any fashion with a simplification process, the Government has chosen to pile amendment upon amendment-to add, not subtract, from the great bulk of the wretched statute itself. We are confronted, I submit, with a bureaucratic plan to choke off the freedoms and rights to retain property and income that should be well recognized as pertaining to all Canadian citizens. What has happened is that over the years we have seen a gradual erosion in the base left in the hands of the taxpayer, which he can claim to be his own.
Some time ago when the first income tax was introduced in 1917, to become effective in 1918 as a temporary wartime measure, the concept of taxing income was very simple. It involved a process whereby an individual or business collected a certain sum of money, and a portion of that money was allocated to taxes. In the early years, that portion was relatively small. It became apparent to those intent upon collecting more revenue, that it would expedite the receipt of the funds required by Government for its plans, some of them foolhardy and some of them necessary, if they might extract the tax before the money was actually in the hands of the taxpayer. The concept of payment on an accrual basis developed, so that corporations and individuals who fell into certain categories were taxed on the basis of having established an arrangement which entitled them to receipt of income, even though they had not in fact, received that income. The results of the process were simple. The Government collected its money and maybe-just maybe-the taxpayer collected the income on which the tax had already been paid.
In this Bill we find a further and most interesting refinement. We are not now concerned only with collecting tax before the income has been received, a circumstance from which the business community and the individuals have suffered for some time. We are now caught in the predicament where the taxpayer in certain professions, is to be taxed on the basis of the work he has done with respect to which no account has been rendered. The concept is that if there is work in progress undertaken by a professional taxpayer, of the kind categorized by the Act, that taxpayer must pay a portion, not of the bill he has rendered, not of the income he has received, but of the work he has done. The whole purpose of this scheme is to put money in the hands of the Government before the citizen has had a chance to put in his pocket the income upon which the tax is based.
I suspect that the next move to expedite the early return to the revenue of a fund generated as a consequence of the work
Income Tax
of Canadians, is to contemplate a tax on the basis of an idea that is conceived in the mind of a taxpayer which later gives rise to work in progress which, in turn, gives rise to the dispatch of an account. The mere concept that I might do work for someone should give rise, I suspect, at a later date, to the belief that, having thought of doing some work, I should pay tax to the Government with respect to the profit I might generate in the event that the work were ever undertaken.
One of the problems with respect to this new development is that there will be a determination of the fair market value of the work that is done, prior to the dispatch of the account. This, I submit, will involve individual taxpayers in the professions caught by the provisions of this amendment, with an obligation to retain advisers who can value the work which has been done. There will be a constant badgering by the officers of the Department of National Revenue who will argue that the value placed upon the work is not high enough. I fully recognize that the reserve for doubtful accounts, assuming that an account is ultimately rendered, will still apply. These provisions have long proved to be a mechanical problem confronted by taxpayers who have any desire to regiment properly the way in which they plan their tax affairs.
Let me say what in my view the provisions of the Bill should include. In today's circumstances they should obviously make provision for tax reductions and not tax increases. The Minister of Finance (Mr. Lalonde) has stood in the House and proclaimed the great benefits which are to befall taxpayers as a result of the passage of the legislation. Let me remind the Minister and the House that the Bill contains a deindexing provision which will automatically have the effect of increasing taxes for Canadians generally. For that reason it is offensive, because it has the effect of increasing the true rate of tax that has to be paid.
Inflationary pressures creating illusory-I say illusory and not real-assumptions of income increases ought not to give rise to payment of tax at a higher rate. They ought not to give rise to a diminution of the real value of the deductions which are permitted under the provisions of the Act prior to the introduction of the Bill and the computation of income. Those benefits enjoyed by Canadians will disappear by the passage of this legislation, and Canadians should be aware of that.
May I say one final thing with respect to the Bill as it relates to the inclusion in income of an element of whole life insurance policies. The provisions can be found in Clause 5(1), and I will direct my attention to them in Committee of the Whole. Unfortunately, they leave the right to determine how those amounts are fixed to the Governor in Council, and not to the House of Commons. I submit that is objectionable.


Mr. Doug Neil (Moose Jaw):: Mr. Speaker, like the Hon. Member who just spoke, I find myself locked in to a ten-minute speech when there are many things I want to say with respect to the specifics of this Bill. I look forward to Committee of the Whole hearings when we can deal with the specifics, but at this time I should like to make some general comments.
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February 15, 1983
Income Tax
In a speech within the last two weeks, a senior partner of Touche Ross and Company of Toronto, Mr. J. Lyman Mac-Innis, who is also President of the Institute of Chartered Accountants of Ontario, said:
The Canadian Income Tax Act is an unmitigated mess!
Every chartered accountant, every tax lawyer, every tax consultant and every taxpayer of Canada would agree with that statement. He went on to say in his address:
-for decades it's been a well-established rule or jurisprudence that income tax laws be written in clear, unmistakable language. This is so because it is a self-assessing system. The most quoted statement by a court in this respcect says:
"It is not enough to attain a degree of precision which a person reading in good faith can understand, but it is necessary to attain, if possible, a degree of precision which a person reading in bad faith cannot misunderstand. It is all the better if he cannot pretend to misunderstand it".
The present Income Tax Act, the amendments over the years and this Bill are incomprehensible. I would suggest that they are incomprehensible to everyone except those academics in the ivory tower who draft legislation. Those people, if forced to live in the real world, would not survive because they could not make a living; they would starve to death because they do not understand business, either small or large, and they do not understand people.
Several years ago in the House, during consideration in Committee of the Whole, the then Minister of Finance agreed to a minor amendment to the Income Tax Act. It was an amendment which every Member of the House and I suspected, when it came in, would constitute one paragraph. When the amendment finally came in, it consisted of two full pages of sections and subsections. I pointed out the absurdity of such an amendment, which could have been simple, to the very man who had the responsibility of drafting the particular amendment. He said to me, "You really do not understand the problems in drafting legislation, despite the fact that you are a lawyer". He went on to say, "We are now computerized. This legislation is designed for the computer, not for the taxpayer". Mr. Speaker, the computer does not pay the taxes; the taxpayer pays the taxes.
Thus we have confusion, confusion not only in the Department, but confusion in the minds of taxpayers. They are left in a real quandry. What can the taxpayer do when he runs into a problem, if he cannot afford or does not necessarily want to hire a chartered accountant to help him with his return, a fairly simple T-l return? He can call a toll-free number. Every district taxation office has a toll-free number. What happens if a taxpayer phones and poses the following question: "1 have a problem with my income tax return; what is the answer?" First of all he discovers that the response of the Department is not binding on the Department. If he follows the advice he receives, he has no certainty that when he files his return it will be accepted. Also I suspect that all district taxation offices are the same. If one phoned and asked the same question on more than one occasion, quite frequently one would receive different answers as a result of the phone calls, different answers to the same question. Not only that, in the last two or three years, with the confusion which has existed because of budgets and
no income tax amendments before us, taxpayers have come into my office and told me that they have phoned the toll-free number and the voice at the other end said, "We do not know what the answer is; go and see your Member of Parliament." Then the individuals came to me thinking that I had all the answers to their problems, yet these people in the Department who are answering the telephones are supposedly the experts.
Another route which the taxpayer can take is the interpretation or information bulletin route. He can go through the whole list and find a particular interpretation bulletin that fits his case, that is, if he can find the list of the interpretation bulletins. Having picked up the interpretation bulletin, he has to sit down and try to figure out what it indicates. That can be a very interesting exercise. I say this because one discovers that what is contained in the bulletin is sometimes different from what is contained in the tax guide accompanying the tax return itself.
1 recall a recent case where one of my constituents filed a return claiming a deduction for registered retirement savings plan contributions he made. He made the deduction based upon his earned income. It was quite clear in the guide and in his return. After several months he received an assessment notice from the income tax Department advising him that he was not entitled to the deduction. But it did not say why. Nowadays these assessments come out and one cannot tell what they say or what they mean. It used to be that 15 or 20 years ago, when the income tax Department re-assessed a person he could look at the document and know where he had gone wrong or know where the Department had gone wrong in re-assessing him. This does not happen nowadays because the computer does it, that all-wise machine.
Finally, after several months my constituent discovered that while he had a substantial amount of earned income, he had claimed a loss on rental income which was deducted from his earned income and he was not entitled to the deduction. I could go on at length citing examples, but I see my time is up. Simply, I would like to say that I think the time has come when it is very important-as a matter of fact it is vital-that the Government take the necessary steps to set up a committee, not comprised of people from the ivory tower, but of people who have day-to-day knowledge of the Income Tax Act and of individuals who have to prepare their own income tax returns, so that there will be a comprehensible Act which people can understand without having to spend money and hours of argument with the Department over their taxes.


Mr. Cyril Keeper (Winnipeg-St. James):: Mr. Speaker, I welcome the opportunity to participate in the debate on Bill C-139 which I have here in my hands, an Act to amend the statute law relating to income tax. This is a rather large and heavy piece of legislation. It is very complex. In fact, it is so complex that it was necessary for the Government to put out a smaller version of the Act which was called "Explanatory Notes to Bill Amending the Income Tax Act." The Explanatory Notes are also quite lengthy. I mention this to point out that
February 15, 1983

income tax legislation in Canada has become most complex. These 300 pages contained in Bill C-139 that are being added to the existing Income Tax Act, already 700 pages or so long, really just piles complexity upon complexity. This means that it is very difficult for an individual to fill out his or her income tax form and very difficult for an individual to understand the nature of the tax system as it exists today. It is very difficult for an individual to evaluate the income tax system and, therefore, to pass judgment on what the Government is doing.
Simplicity would better serve the level of information which the public should have. Simplicity would also better serve justice.
I will attempt to give some meaning to this most complex document in the few minutes I have. I have examined the document to the best of my ability. The document impresses me in terms of legislation as being unfair and as being a sleight of hand, because it implements part of the six and five program. It is a sleight of hand as it affects inflation, and this document is here with us today as a result of the last three budgets which the Government brought down, that of November, 1981, the budget of June, and then the economic statement given by the present Minister of Finance (Mr. Lalonde). This document is here as an economic statement, and as an economic statement, it is totally inadequate.
One does not need to peruse the document to realize that any citizen living and working in Canada, particularly those who do not have the opportunity to work, does understand that the last three bugets have had no real impact upon the economic situation in this country. These amendments are unfair. Let me illustrate by pointing to the tax rates in this country. I have two points in this regard. First, the November budget lowered tax rates for upper-income Canadians in return for what is to be the taking away of certain exemptions allowed under the income Tax Act. Therefore, the move was supposed to be fair. But while the Government lowered tax rates for upper-income Canadians and backed down on the closing of loopholes that existed before, it has left us with a very unfair tax system.
I have the taxable income table before me. In terms of taxable income-and keeping in mind that taxable income is probably three-quarters of a person's income-if a person was earning anything from zero taxable income up to $24,464, with the exception of one category in which there was a small decrease of one per cent, there was no decrease in the taxable rate of income. In other words, for anyone earning up to $24,000 of taxable income, which may mean something like $30,000 to $32,000 of real income, there is no tax break flowing from this document. However, if you earn more than that, you get a two or three percentage point break in the marginal tax rate. But what is most interesting is that if you have taxable income of $86,000 up to $133,000, your tax rate drops by 5 per cent, and if you are earning more than $133,000, your tax rate drops by 9 per cent. Therefore, if you
Income Tax
are in the upper-income salary group, you get a significant decrease in your tax rate.
To make that point once more, let me quote from a book entitled "The New Canadian Tax and Investment Guide" which stresses this point. It reads:
-the wealthy investor will pay the same rate even if his investment income increases from, say $200,000 to $300,000 in a given year. While the MacEachen Budget has been promoted as an attack against the rich, a close analysis of these numbers will show that the rich are virtually unaffected. For the rich and the super rich, the Budget provides a 10 per cent decrease in tax rates.
These tax amendments are unfair. They continue to add to the unfairness of the tax system by giving very high tax rate gifts to the very rich in this country while giving nothing to those in the lower income group. In fact, those in the lower income brackets are penalized. They are given a tax increase by virtue of the fact that the indexation of tax exemptions is capped by the Government. Lower income people get a tax increase without a matching tax decrease.
I want to mention also that over a number of years the burden of taxation has fallen more specifically upon individuals than upon corporations. I have a couple of figures to illustrate this. In 1952, 53.7 per cent of tax revenues came from corporations and 46.3 per cent came from individuals. The latest statistics for 1980 show that 30.5 per cent of tax revenues came from corporations and 69.4 per cent came from individuals. In other words, as far back as 1952, corporations paid over 50 per cent of the tax revenues of Government, but today they are paying some 30 per cent. A major shift has occurred in the tax burden. It has shifted from corporations to individuals. This reflects an attitude prevalent in the United States. For example, President Reagan had the courage of his convictions when he said that he found it difficult to justify the existence of a corporate tax. As Canadians we understand that corporations are citizens. If they are going to be good citizens, they have to pay their way and pay a fair share of the cost of running this country.
What this Liberal Government across the way has done, as well as past Conservative Governments because the statistics I quote go back to 1952, is while talking a good line about justice and fairness and including those words in its budgets, not recognizing that its actions speak louder than its words. It has reduced the burden on corporations and increased it on individuals. While President Reagan has the courage of his convictions when he says he does not believe in corporate tax, the actions of this Government indicate that it no more believes in corporations paying their fair share than the American Government does. That is unfair and unjust.


Paul James Cosgrove: He withdrew that comment.


Cyril Keeper: He should have withdrawn that comment. This Government should withdraw the legislation before this House which is continuing the trend of leaving the burden of paying for Government in this country upon individuals while letting the corporate sector off with only a very light share of the cost of running this country.

February 15, 1983
Income Tax


Mr. Bill Kempling (Burlington):: Mr. Speaker, I rise to say a few words about Bill C-139. Ten minutes is hardly enough time to discuss a Bill that has some 133 changes in it.
In the 1980-81 period, there were 350 changes made to the Income Tax Act. Those changes have not all been digested by the business people in Canada until now. We now have another 133 changes to add to those. The result is confusion or, as my colleague said when quoting Lyman Maclnnis, "The Income Tax Act is an unmitigated mess".
I do not intend to talk at length about the corporate side since it has the ability to hire tax accountants, tax lawyers and experts to interpret the Act and have them plead their case to National Revenue and solve their problems in that manner. I am more concerned about the average citizen. In the eyes of most Canadians, National Revenue is a Government unto itself. I can tell you, Mr. Speaker, from listening to people who come to my office, that National Revenue is feared more than most police forces. I think it is deplorable to have that condition exist in this country. They have the power to put a small businessman into receivership at whim, and have done so on a number of occasions. They can put one's job in jeopardy by threatening to garnishee wages.
As we know, many payrolls today are computerized. A program does not exist to accommodate the garnisheeing of wages. Consequently, most employees who are faced with this problem find themselves in their employers' offices being told that if they do not settle the matter perhaps there will not be a job for them. The employer does not want to go through the reprogramming of the payroll and other procedures to accommodate the employee. In many cases, the taxpayer has a legitimate reason for not paying the taxes but has no real avenue of appeal.
National Revenue has the power to harass Canadians. It can harass a person into submission, and I suggest that this happens every day. A number of people have come to my office to tell me of harassment of one type or another by National Revenue. They will send a notice which says that if they do not hear from an individual in 30 days, they will take certain action. In many cases it involves obtaining records and information to satisfy National Revenue, which takes longer than 30 days. However, National Revenue says that if they do not hear a response within 30 days they will garnishee wages or seize assets and sell them. This is the type of harassment that occurs. The horror stories that are told to Members of Parliament about the harassment from National Revenue would fill many volumes.
I raised the question in the House of the centralization of the income tax records in several centres remote from large population areas with the Minister of National Revenue (Mr. Bussieres). As a result of this centralization, many people have difficulty having records returned to their local taxation centre to be adjudicated locally.
A major difficulty is that one cannot simply read the Income Tax Act and understand it. It is incomprehensible. For
instance, if National Revenue refers to a certain section of the Act, the average Canadian, who will go to the library to read that section, is unable to understand it. As a result, individuals feel absolutely frustrated.
I have had representations from many business people on the changes in the capital cost allowance. At a time when businesses are pressed for cash and their cash flows are in difficulty, at a time when the Government is urging them to invest capital, expand their plants and hire more people, they are hit with a capital cost allowance that is really unrealistic.
I am sure that every Member has had representations made to him by salesmen who drive company-owned vehicles. The treatment they are receiving leaves a lot to be desired. Many salesmen have told me that it is fair if National Revenue wants to make changes, but they should be given time to adapt. Many of these salesmen are working on term leases for their automobiles. They would like to have a year or two to effect this change. But this provision was just dropped on them, and many will suffer severe financial loss as a result.
I said that many people feared National Revenue more than the police. Is it any wonder? One simply has to look at Bill C-139 and read almost any page. For example, I will read some of Section 65, and you can tell me if you really understand this, Mr. Speaker. I think I know what the answer will be. Section 65 states:
(1)	All that portion of paragraph 110( 1 )(a) of the said Act preceding subparagraph (i) thereof is repealed and the following substituted therefor:
'(a) the aggregate of gifts made by the taxpayer in the year (and in the five immediately preceding taxation years to the extent of the amount thereof that was not deductible in computing the taxable income of the taxpayer for any preceding taxation year) to'
(2)	Paragraphs 110( 1 )(b) and (b.l) of the said Act are repealed and the following substituted therefor:
'(b) the aggregate of gifts made by the taxpayer in the year (and in the five immediately preceding taxation years, to the extent of the amount thereof that was not deductible in computing the taxable income of the taxpayer for any preceding taxation year) to Her Majesty in right of Canada and Her Majesty in right of the provinces, not exceeding the amount remaining, if any, when the amount deductible for the year under paragraph (a) is deducted from the income of the taxpayer for the year, if payment of the amounts given is proven by filing receipts with the Minister that contain prescribed information;
(b.l) the aggregate of gifts of objects that the Canadian Cultural Property Export Review Board has determined meet all of the criteria set out in paragraphs 23(3)(b) and (c) of the Cultural Property Export and Import Act, which gifts were not deducted under paragraph (a) or (b) and were made by the taxpayer in the year (and in the five immediately preceding taxation years...
And on it goes. I defy anyone to interpret that. If one went to the best tax lawyer or chartered accountant in the country to ask them to interpret some of these sections, one would find that they do not know. All they can do is to take the case, put it to National Revenue, rely on their response and perhaps plead the case if they do not like the response. Business depends on knowing where it is going. It has to know what the tax laws are, what the market is and what price they can charge. They just cannot understand or comprehend what is in the Act.
February 15, 1983

I believe that it is time that we put a stop to the changes in the Income Tax Act and reassessed the situation. Having done that, perhaps we can have the entire Act revised.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
[English |

Mr. Deputy Speaker:: 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 Bow River (Mr. Taylor)-National Parks- Quality of Banff waters supply, b) Implementation of study's recommendations; the Hon. Member for St. John's West (Mr. Crosbie)-Disasters-Training of crews-regulatory changes b) Appearance of Ministers before committee; the Hon. Member for Surrey-White Rock-North Delta (Mr. Friesen)- Trade-Request for imposition of surtax on imported potatoes, b) Effect of imports on Fraser Valley farms.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Lalonde that Bill C-139, to amend the Statute Law relating to Income Tax (No. 2) be read the second time and referred to a Committee of the Whole.
Mr. John Bosley (Don Valley West):: Mr. Speaker, I wish to make a few remarks regarding Bill C-139 in an attempt to impress upon the Government, even at this late stage, the representations that I know every Member of the House is receiving from dozens of constituents and businesses. I am sure that Your Honour's mail, like mine, continues to contain complaints about the anti-investment attack, which is still continued in the Income Tax Act amendments originating in the November 1981 budget. It is, simply put, a tragedy. The Government of this country continues to press forward with an income tax proposal, the basic attempt, purpose and thrust of which is to squeeze every nickel and dime out of every Canadian taxpayer that it can find, at a time when what is needed in the Canadian economy is a recognition at long last that there is no recovery possible in the country from taking more from Canadians and spending it through Government.
Canadians witnessed the six and five program and are now witnessing an attempt, according to the Minister of Finance
Income Tax
(Mr. Lalonde) to try to justify an ever greater deficit. Presumably, we will see income tax amendments following his next budget which will attempt to pay for those increased deficits or ameliorate those deficits in some way by squeezing more taxes out of an ever shrinking Canadian pie. This tragedy can perhaps be no better expressed, in my personal experience in my own riding, than by two cases with which I am currently dealing with regard to the Department of National Revenue, which will have the responsibility of implementing this Act.
A young man in my riding is struggling to work as a photographer. Despite perhaps wiser counsel, he set himself up in business last year. As most Canadians would know, that took incredible courage in these times. He discovered at the end of the year that the Department believed and claimed that he owed sales tax to the tune of approximately $3,000 for materials that he had used, money he did not have because his business had just barely started. In fact, he had no way to pay the money. When he went to discuss that matter with the Department of National Revenue in the beginning, it arranged to allow him to pay on a limited basis, perhaps $100 a month. Because he had no business-most Canadians are finding throughout the country today that there is very little business to do-he was in default for one month. The answer of the Department of National Revenue was to tell him where the bankruptcy branch was, upstairs. He called me, and it was only under threat of raising the issue in the House of Commons that the Department chose not to put another Canadian small-businessman into bankruptcy, another on top of the thousands of individual Canadians and small businesses that have gone bankrupt today as a result of the economic policies writ large in the Bill.
I might say that I guess it depends on the mind of the Department of Revenue how much money one owes. In another case in my riding, the Department has issued a third party notice to the tenants in a small building, instructing them, because of an arrears case involving the building's owner, that in the future the tenants are to pay their rent to the Department of National Revenue. Those are interesting notices, third party notices, because they set out the size of the indebtedness which the tenant or the Canadian taxpayer owes, so that the tenants, in this case, will know that they do not have to pay more than that particular gentleman owes. Interestingly enough, the amount that particular gentleman owes the Department of National Revenue is $4 million some odd dollars and 86 cents. It fascinates me that when someone owes $4 million, the Department recognizes that perhaps it is best to keep that person in business, but when someone owes $3,000, it does everything it can to put that person out of business. It is almost as though it were part of a concerted policy from Ottawa to drive everyone into being an employee or a liability of the Government of Canada.
Much has been made of the changes since the November budget, and there have been dozens of changes, many of them

February 15, 1983
Royal Assent
forced by this Party. Elowever, the Bill still does contain some of the worst anti-investment provisions the country has ever seen. For the ordinary Canadian, for example, a very sensible right which encouraged Canadians to borrow for their retirement years in order to invest their money in Registered Retirement Savings Plans, has been taken away. Why, is beyond me. Why a Canadian, one who is prepared to invest in his or her future, should be penalized by the Government, is totally beyond me.
Capital cost allowance remains, despite protestations to the contrary, restricted to 50 per cent of its previous value. That will have an incredibly damaging effect on any potential for coming out of the recession. In fact, in my own area of policy interest, which is cultural policy, we are confronted with a most interesting anomaly concerning this particular question. The Minister of Communications (Mr. Fox) travels the length and breadth of the country and says in every speech that the continuance of 100 per cent capital cost allowance is absolutely essential to the survival and development of the cultural industries of Canada while, the Government continues with its plan, contained in the Bill, to cut the capital cost allowance to 50 per cent. We therefore hear the Government saying to those who are trying to make jobs and protect our cultural integrity and development-



THE ROYAL ASSENT

[Stage Direction]
A message was delivered by the Gentleman Usher of the Black Rod as follows:
Mr. Speaker, the Honourable Deputy to the Governor General desires the immediate attendance of this honourable House in the Chamber of the honourable the Senate.
Accordingly, Mr. Deputy Speaker with the House went up to the Senate Chamber.
And being returned:
Mr. Deputy Speaker:: 1 have the honour to inform the House that when the House did attend His Honour the Deputy to His Excellency the Governor General in the Senate chamber, His Honour was pleased to give in Her Majesty's name the Royal Assent to the following Bills:
Bill C-672, an Act to change the name of the electoral district of Dauphin- Chapter 137.
Bill C-131, an Act to amend the Old Age Security Act (No. 2)-Chapter 138.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Lalonde that Bill C-139, to amend the Statute Law relating to Income Tax (No. 2), be read the second time and referred to a Committee of the Whole.
John William Bosley: Mr. Speaker, I will continue for the few minutes that are left on Bill C-139. Before we adjourned, I was reminding the House that capital cost allowance provisions have been, in effect, publicly attacked by the Minister of Communications, and that I hope at some point that the Government, either that Minister or other Ministers affected, will indicate clearly to those in the cultural industries in Canada what the long-term plan for that provision is.
Let me say, for my part, that the protection and development of Canada's cultural industries, both for their job creating potential and for the development of our cultural integrity, is far too important to be arbitrarily and unilaterally cut in half by an income tax amendment. I might say that those involved in those industries have been pressing the Government since 1977 for the adoption of the recommendations of the Disney report, which would have had the effect of strengthening and encouraging the ability of individual Canadians to play an active role in the development of our culture. It fascinates me that income tax time after income tax time and budget after budget the Government has done nothing with those recommendations, and effectively this Government's single income tax measure with regard to cultural development in Canada in the last five years since the Disney report has been to adopt the capital cost allowance provisions and to attack those industries. That is clear to those industries, and it is tragic that it is not clear to the Government.
One other matter that deeply concerns me, in particular, is the continuation of the attack on small businesses, notably, such matters as the fact that the Government continues to stick with the small business dividend distribution tax. This is hardly a time to say to the small businesses which are in deep trouble that if they should be making any profits during this period of time and wished to distribute them to their investors-in many cases they are family-owned operations-there will be a new special tax placed on those distributions. That is very unfortunate. Right now, in my own community of Toronto, every week more small businesses collapse. At at time when we need to encourage people to invest and develop through the small business sector, we are debating an income tax Bill whose cumulative effect, because of that change, the decrease in the dividend tax credit, the changes in the automobile depreciation allowance and the effect that is going to have and so on, to make sure by tax policy that more small businesses will collapse and that it will be more difficult for people
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to begin a small business. In fact, Mr. Speaker, the discouragement for people to invest anywhere in Canada grows.
Equally, for example, prior to the November 1981 budget, Canadians were beginning to discover the advantages to them, as employees, of taking loans from their employers to buy shares in their business, and that is something that some of us in the business sector use in order to encourage employees to do that. It is a shame that the Government chooses to destroy one of the few remaining sources of capital for small businesses.
Finally, let me deal with one large measure, if I may, that affects a great number of my constituents, and that is, the continued attack on the life insurance industry. Admittedly, there have been some changes and some of the worst parts of the measures have been withdrawn, but it is clear to those in the industry that a continuing and unfair tax on a preferred form of tax investment is being made in this Bill.
In conclusion let me remind those who watch this that today we heard one of the Ministers protesting that we are never going to see a future income tax amendment, based on their income, to tax those who live in apartments. That was in Question Period today. I wish to remind all those affected by this Bill that it was when it was first brought in we saw the first introduction of an intent by the Government, which I am sure will be in the next one, to put a tax on those who own homes.


Mr. Len Gustafson (Assiniboia):: Mr. Speaker, as a farmer and a businessman I consider it a privilege to speak in this House on Bill C-139 on the general direction of the income tax Department. It has caused a great deal of problems in terms of people being able to project their business operations and look ahead into the future with some optimism because they do not know where they are headed.
The Bill before us today contains some 130 changes. It is a clear indication of the direction in which this Department is going. This is very frustrating for the taxpayers of Canada. If there is anything that should be straightened out in this country, it is that some clear-cut direction should be given to people so that they can understand what the taxman requires of them. All you have to do is to look at this Bill to see how complex it is. The average citizen does not understand it.
There is a major problem plaguing the farm circle and business circle. The Government is circulating volumes and volumes of paper. It takes a tax lawyer and an accountant to understand them. I suggest that many times they do not even understand. It will take two to three years to iron out the whole direction because of the changes brought in this past year by the former Minister of Finance.
The accountants in my riding are confused. They continually phone my office about the problem and ask whether there is any solution. We look forward to a budget in April that will be even more confusing to the taxpayer, more confusing than any in the history of this country.
This is a very serious situation. The Government set up a Royal Commission. I am sorry, Mr. Speaker, I was not aware
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there was to be a change in the Speaker's chair. I thought you were cautioning me.
The Government has set up a Royal commission to inquire into the economy. One of the greatest problems we face in terms of the economy is that business people and farmers do not know in what direction they are heading. They cannot plan their business affairs. If this Government is going to be put on a sound economic footing, it must begin by writing the rules in a clear and simple fashion which people can understand. I would like to single out some specific areas.
Since 1971 the Income Tax Act and the matter of addressing the capital cost allowance and capital gains tax for farmers and businessmen has been battered around. I do not remember an election in which the Liberal Government did not promise it would address the problem of capital gains on farms. I suggest the problem is just as severe for small-businessmen. On many farms the tax has been paid by three generations. Even though the tax has been paid by one generation and the next generation, when it is passed to the third generation, it must be paid again. We have a system in this country which is counterproductive. It has reached the point where the Government has almost taxed people out of business. The taxes now being brought in are so restrictive that they are counter-productive to the country's welfare. If there is to be an inquiry or Royal commission into an area of the economy, it should first study the Income Tax Act. If we are to have the type of incentive that is needed for production, we must address this very serious situation.
What about the incentives for the small-businessman? Once you tax to the point where you must pay out $1 for every dollar that goes into your pocket, you question whether it is worth-while. In all the years I have been in business, I have been hiring men for my farm operation and my business operation. There is very little incentive for a man to work overtime. Once he is earning a reasonable wage, if he wants to earn an extra dollar in overtime, the biggest part of it will go to the taxman. Why should he worry and bust his back working a few extra hours just to make an extra dollar?
The whole system is backwards. There might be a good argument made for a tax system that goes in some other direction. There should be an inquiry into the very serious problem that exists with regard to taxation.
I would like to deal now with the capital gains tax on the farmer and the misuse of that. In 1971, the average quarter section in my area was worth about $10,000 to $12,000. Today it is worth approximately $60,000 to $80,000 a quarter section. The farmer paid tax on every dollar that went into buying and then maintaining the farm throughout the years. Today when the land is being passed from one generation to the other, especially in cases where the farmer cannot afford to give it away and must sell it, the taxman wants 50 per cent of every dollar for taxes.
Let us take the example of someone with an annual income of $20,000. The tax on the quarter section of land on top of

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that $60,000 means an additional $30,000 taxable. Therefore, tax must be paid on $50,000. The tax is very high. It is $25,000. What is happening is that the Government moves in and takes that person's quarter section of land. The farmer finds himself in a position where he cannot retire. What did the former Minister of Finance, the Member for Cape Breton Highlands-Canso (Mr. MacEachen) do for the farmer?
I receive call after call from farmers who have built up a small herd of cattle and want to roll over their land to the son. They want to sell the cattle and retire on the income they receive. That was the only retirement savings plan the farmer had.
I received a call from a farmer in a small town north of where I live. He said "Len, what do I do? I have hired the auctioneer. I have made arrangements over 20 years to build up a retirement plan and the Government is putting me right out of business. What should I do? Should I cancel the auctioneer? Should I send out notices saying that the sale is cancelled?" There must be some long-term planning if businessmen in this country are to be productive. I ask that the Government and the Department look into this very seriously and change some of these directions which have such a massive effect on our economy.


Mr. Vic Althouse (Humboldt-Lake Centre):: Mr. Speaker, 1 would like to address the changes to the Income Tax Act brought in with Bill C-139. These changes have accumulated because of the several budgets and financial statements presented to this House since November, 1981. In effect, it is a catching up of old business which has been before this House for more than two years. I want to discuss a few of the things in this Bill which will affect taxpayers in my riding and, to quite an extent, taxpayers right across the country. Because my riding is generally a rural riding, I want to deal with a couple of items which affect farmers as well as a great many small-businessmen.
First of all, one of the major changes proposed in the November budget was the elimination of the income averaging annuity contract, to be replaced by a system of forward averaging. As a result of the initial budget there were a great many people across Canada, small-businessmen and farmers, caught in the unhappy position of being suddenly forced to pay tax on the total sale price of their farm or small business even though the purchase price was being paid over time. A great many of these people found themselves in the position of owing more money to the tax Department than they had received as a down payment for the farm or business. Some of those provisions were changed in subsequent announcements. I was pleased to see that, because I had risen in this House in December, 1980 to point out in some detail the kinds of problems being created for farmers in my part of the country, and in eastern Canada as well, by that particular change. I think the forward averaging proposal deals in part with the difficulty, but I have great difficulty in understanding why it has to be an "either or" kind of proposal. I do not see why people who already had an IAAC could not continue, or those considering selling out could not use that method if they were
more comfortable with it instead of going into the forward averaging method proposed in this Bill.
Another item which people will become aware of, if they are not already, when they do their income tax is the change to the capital cost allowance. As anyone who has started to fill out his income tax for us already knows, any equipment, farm or otherwise, bought in 1982 is eligible for only a 15 per cent capital cost allowance, rather than 30 per cent. This has created a great many problems, not only for farmers in my area but for machinery dealers as well. Farm equipment is still being sold, farmers still have to buy, because equipment does wear out. However, the tax incentives have been considerably lessened with the halving of the capital cost allowance in the first year. Granted, new machinery is still eligible for the machinery tax credit, which has the same effect as pre-paying your income tax, so to speak. That in itself has got the attention of a great many people in rural Canada. Farm machinery dealers from across Canada were lobbying just two months ago in Ottawa, asking the Government to make that investment tax credit available on the difference between the value of the new machine and the value of the old machine, and have it apply to used machinery as well as to new machinery. They made a very persuasive argument, which I hope the Minister of Finance (Mr. Falonde) will have noted. The proposal is more equitable and provides some assistance to people who are dealing in farm machinery. It will make it easier for them to sell the used equipment taken in trade.
The one major omission in this Bill has been alluded to several times today in the House, that is, the lack of any changes to the capital gains tax as it affects farmers and small-businessmen. In spite of the fact this Government was elected on a promise-one of the few made with regard to agriculture-to change the capital gains tax and move the valuation day from the end of 1971 to the end of 1974 and index it thereafter, we have not seen it in this budget. Perhaps the next budget this Government offers will deal effectively with the program as promised. However, we think that does not go far enough. We think there is a great deal to be said for an exemption for the first $100,000 of capital gains. As is done in the Province of Saskatchewan under the NDP, this would put farmers and small-businessmen on a comparable basis to home owners in large cities. They would have an equivalent amount of tax-free retirement income, so to speak, just as people in large cities who retire have the home they have paid for during their lifetime free of tax so they can sell it and move into an apartment in their retirement years. We think that should apply to farmers and small-businessmen as well.
Looking at the over-all proposal before us, we note, as will all taxpayers if they use their calculators when they receive their pre-printed tax forms, that the indexing of the spousal and child exemptions will be at 6 and 5 per cent instead of the real rate of inflation. They will also note when they start looking at the tax tables that for the bulk of people in my constituency, as is the case across Canada, who have taxable
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incomes below $24,000 there is no tax saving. However, there are tax savings for the 25 per cent of the population who earn net taxable income in excess of $25,000.
So the tax cut which was touted by the Minister of Finance in November, 1981 is effectively a tax cut only for the top 25 per cent of the income earners in this country. I think that indicates the Government is continuing to pursue its policy of increasing taxes on middle and lower income people and lowering taxes for the upper income people and larger corporations. I think we only have to look back at the record to see that in 1960 income tax in Canada rose from 59 per cent to 69 per cent in 1980. The share of income tax that corporations paid fell in the same period from 42 per cent to 31 per cent. The force of the tax law is falling more heavily on the 75 per cent of our population that has a net taxable income of less than $24,000. I think we should all object to this in the hope that the Government will react in the next budget to provide a tax break for those people.


Hon. Don Mazankowski (Vegreville):: Mr. Speaker, Bill C-139 represents the final misguided attempt to incorporate the provisions of the November, 1981 budget. Thrown in with them is a grab bag of provisions emanating from the June and October budgets as well. I do not think there is any question that the November, 1981 budget was the most anti-investment, anti-business, anti-growth, anti-farm, anti-individual and, indeed, anti-confidence budget that the country has seen in 50 years. It generated a tremendous amount of opposition. Something in the order of 45 changes have been adopted since it was brought in, and we see the remnants of that budget being incorporated now in Bill C-139. It makes one wonder why, in the face of widespread opposition from all sectors of Canadian society, the Government would embark upon the implementation of such an ill-conceived measure.
The November 1981 budget was a disaster, not only in terms of its contents but because of the fact that it broke the bond of co-operation by the governments' unilateral action, without the customary consultation. It was obviously written by bureaucrats who had not considered how its implementation would affect the average taxpayer and businessman. For one thing, it incorporated retroactivity. The immediate effect of the changes was a great deal of uncertainty, and they further contributed to destroying the climate of confidence in the country. I do not think any of us can recall a time when major tax reform was implemented in a similar manner.
The Minister of Finance (Mr. Lalonde) indicated that the changes are positive steps in the right direction and that it is only common sense to incorporate a better system. We welcome the changes that have been made but I wonder about my friends opposite who voted en masse for the 1981 budget. They should hang their heads in shame, Mr. Speaker. The former Minister of Finance has been totally repudiated by the present Minister, and he should have the decency and the integrity to resign. All Hon. Members opposite voted for the budget knowing very well of its negative implications for the Canadian
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economy. They should consider whether they put the interests of their country ahead of the interests of the political survival of the Minister or of the Government. They should hang their heads in shame about that too. It is nonsense for them to talk about a stable tax environment now when they have already contributed to the uncertainty and instability that face us.
I should like to read some very quotable quotes from remarks made earlier by the Minister of State for Economic Development (Mr. Johnston) when he held another portfolio. On November 16, 1981, as reported at p. 12787 in Hansard, he said:
The budget that was tabled by my colleague the Minister of Finance on November 12, is a very important step in that process of tax reform, a step which I hope will be pursued in successive budgets.
He went on to say:
-this budget-will contribute to productivity, economic growth, job creation and reduced inflation.
That is what he said the budget would do. The country, the business community, Members of this House, upon notice, realized that such was not the case, and the Minister had to withdraw the guts of his remarks. He went on to say, as reported at p. 12790 in Hansard:
My colleagues and I congratulate the Minister of Finance for responding so directly to the plight of those Canadians who are suffering from high interest rates, for the thrust of restraint and deficit reduction and for the very creative steps toward long overdue tax reform.
On December 18, 1981, the then Minister of Finance, speaking of the budget, as reported as p. 14236 of Hansard, said the following:
-is a strategy for creating permanent jobs and growth, not just for this month and next month, but for next year and the years after that. I am convinced that is the right strategy and the one we must continue to follow.
What a laugh, Mr. Speaker! What nonsense! What hypocrisy! My goodness gracious, imagine a Minister of the Crown making that kind of proclamation when today we are faced with an unemployment rate in excess of 13 per cent, which means probably 2 million people unemployed. That is the situation in the country-it is lacking in confidence, lacking in growth. There is sheer despair and anxiety out there.
Previous speakers spoke about the contents of Bill C-139, saying that it is one of the most complex Bills ever introduced in the House. That is so; it is probably the most complex since the reform measures that were introduced in 1971. Speaker after speaker alluded to the fact that what we need is not another 300-page tax Bill, but a simplication of the current tax system to make it more readily understood by the people who foot the bill.
There is universal condemnation in the House and throughout the country about the need for tax reform directed toward simplication, not the kind of document that is before us and which is going to add to the complexity of the Income Tax Act.
In its submission to the Standing Committee on December 14, 1982, the Canadian Chamber of Commerce stated as follows:

February 15, 1983
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Income tax legislation, especially as it relates to Canadian-controlled private corporations, is becoming so complex that it is all but incomprehensible to the businessmen who are paying the taxes.
But what about the private taxpayer, the ordinary individual who may have some investment income? He cannot rely upon his own expertise to decipher this garbled document in the way that would assist him to file his tax return. Over the years we have accumulated a tax system that has hindered economic growth, hindered investment, hindered the average individual from participating in the productive growth and enterprise of the country. The Bill before us only adds to that complexity.
Some Members told us about their experiences with the Department of National Revenue and the difficulties they encountered trying to determine what legislation applied to certain cases. If we do not clean up our act, Mr. Speaker, what is at stake is the total integrity of the tax system. It must be understood and supported and have the confidence of the people, otherwise the whole system will break down.


Mr. Benno Friesen (Surrey-White Rock-North Delta):: Mr. Speaker, I am pleased to be able to participate in this debate on the revisions of the Income Tax Act, Bill C-139, as it gives me an opportunity to intervene on behalf of some of my constituents and some taxpayers of Canada. Under the present regime, two Departments of Government perform a giant pincer movement as the armies did during World War II. One army goes around in one direction and the other goes the other way in an effort to trap as many people in the centre as they can. On the one hand we have the Minister of Finance (Mr. Lalonde) doing his work as one arm of the pincer movement and on the other the Minister of National Revenue (Mr. Bussieres) through the income tax Department moving in the other direction to cut off as many taxpayers as possible and to garner as much as they can into the coffers of Government.
What is remarkable about the debate is that the Liberals are not debating it. I have sat here for two hours this afternoon during the debating part of this session, and not one Liberal spoke. I sat here during this morning's session for an hour and a half, and not one Liberal spoke. When the Secretary of State for External Affairs (Mr. MacEachen) presented his budget as Minister of Finance, I remember there were Government backbenchers going around the country saying that it was a bad budget. I remember the Hon. Member for Kitchener (Mr. Lang) saying that the provisions regarding the tax structure for life insurance were bad, but he came back to the House and voted for the measures. We have that spectacle recurring time and time again with Government Members on the one hand privately opposing everything the Government does- philosophically they might be opposed to it-but on the other hand coming into the House and voting for Government measures. Somewhere along the line they know that in the future there will be parliamentary secretaryships available to them. When they leave the Chamber, there might be a commission, they might be appointed to a board, or perhaps they will be citizenship court judges, but some kind of favour will be bestowed on them if they stay in line as long as they are members of their caucus. Thus they vote; but today they are
not speaking. The Government can willy-nilly do pretty well what it wants with measures like this.
I think we have before us a Bill which underscores the perspective of the Government that all money in the country belongs to the Government, except that which it allows taxpayers to have through its gratuities. This is underscored through the language of the former Minister of Finance when he first made some of the proposals on which we have now seen some backtracking.
During the fateful budget debate of November 1981, the House will recall that the Minister was then talking about loopholes. That concept indicates that everything current belongs to the Government but that some sneaky taxpayers have found ways around what really belongs to the Government, and that now we have to close off the loopholes. Those loopholes were called provisions by previous Ministers of Finance, or some other innocuous term. They were specifically designed to provide an incentive to the taxpayer so that he could keep as much money as possible and reinvest it in the economy, because that was the productive centre of Canada.
But the good Member from Cape Breton decided that the Government was more productive and needed the money more than the taxpayer, and suddenly they were loopholes. As the bottom of that lies the perspective that everything belongs to Government except that which, through the kindness of its heart, it allows taxpayers to have. Because of this concept, the Canadian taxpayer feels overtaxed. It has become an onerous burden to him. I believe that every taxpayer knows that the Government is entitled to a fair share of the income of Canada in order to run programs. There is a fair share, and somehow there is a kind of subconscious line for the taxpayer which he knows is legitimate for the Government to take, but he also has a kind of intangible sense of rightness and, when that is violated by the Government, the taxpayer becomes incensed and feels he has been wrong.
After that happens, the taxpayer can easily justify finding ways around it. He will look for ways to dodge the tax Department and the provisions within the Income Tax Act.


Blaine Allen Thacker: The underground economy.


Benno Friesen: As the Hon. Member for Lethbridge-Foothills (Mr. Thacker) says, we get an underground economy. We have the spectacle of the Government creating a nation of potential tax dodgers. With it comes a kind of subtle load of potential guilt for the taxpayer because he has broken the law. Historically the Canadian citizen does not want to be a lawbreaker. He wants to obey the law, but the onerous burden of tax creates potentially a nation of lawbreakers with the concomitant guilt.
Let me illustrate what the Government has done. I do not mind saying that I am not a total illiterate in language. I am a burnt-out English teacher, so I do not think I am totally illiterate. I want to read what the tax law says regarding reasonable standby charge for the minimum amount. The jargon reads:
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-where the employer or the person related to the employer owned the automobile at any time in the year, an amount in respect of its cost to the employer equal to the percentage thereof obtained when 2 per cent is multiplied by the quotient obtained when such of the aggregate number days hereinbefore referred to as were days during which the employer or the person related to the employer owned the automobile is divided by 30 (except that if the quotient so obtained is not a full number and exceeds one it shall be taken to the nearest full number or, if there is no nearest full number, then to the full number next below it), or-
Then comes the next Clause. As I say, I am not a total illiterate in the English language, but I cannot understand that. It is supposed to be an attack on employee benefits so that an employee can no longer use this dodge or an employer cannot provide for an employee a dodge regarding the use of an automobile.


Blaine Allen Thacker: That is called an incentive.


Benno Friesen: Yes, that was the incentive. One thing is sure. Most taxpayers in Canada will not understand that if they read it. They do not know what are their rights. They do not know what are legitimate deductions for them. Thus they are confused and have to find accountants who in turn, find a whole barrage of accountants to help them interpret it, and all of them will disagree. The Government has created a whole new cottage industry for Canada; it is no longer a cottage industry, it is actually a major industry in Canada. This was all in the name of ensuring that the Government could get everything it could. It was written in that obscure language for fear that some guy would slip through the net.
The bottom line is that the tax law now indicates that the taxes on a car will be always adjudged to be new; it will never depreciate. If I could find a car made in North America which never depreciates, I would like to get one. I think I would pay above market value for it. The tax Department does not see the car as depreciating, so the person who gets that benefit or incentive from the employer is punished for taking it, because he will now be taxed for several years on a car which is old. Who would be crazy enough to do that? The whole thing is based on the fact that the taxpayer has no rights; it all belongs to the Government except-


Mr. Deputy Speaker:: I regret to interrupt the Hon. Member but his allotted time has expired.


Mr. J. R. Ellis (Prince Edward-Hastings):: Mr. Speaker, I congratulate the Hon. Member for Surrey-White Rock-North Delta (Mr. Friesen). I want to tell him that of course the Government never intended that he or anyone else should understand the language of this Bill. I am particularly pleased to follow the Hon. Member for Vegreville (Mr. Mazankowski) who dealt with some of the complexities of this piece of legislation. As a matter of fact, for a moment, since we had not discussed it, I thought he might have headed off in the direction which I intend to take with regard to Bill C-139.
The area with which I want to deal is a complex one, that is, the impact of this piece of legislation on the air transport industry. I would like to begin by saying very bluntly that the viability of the Canadian airline industry will be jeopardized by the imposition of further economic constraint as proposed by amendments in Bill C-139. Specifically, I want to point out
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that Clause 38, Sub-sections 2, 3 and 5 and Clauses 123 and 125 of the Bill, in conjunction with the National Energy Board Act and the Energy Administration Act, are of particular concern. The House will recall the ill considered provisions of the transportation fuel compensation recovery charge provision of the October, 1980 budget which applied during the period from May 1, 1981 to January 1, 1982. One stated reason for the imposition was to protect cheap domestic oil resources from being tankered by foreign carriers. That charge was rescinded in order to avoid arbitration under Canada's bilateral air agreements to establish that it was a breach of such treaty obligations. Money collected was repaid to foreign air carriers initially. Later, in recognition of the difficult financial situation of the Canadian air transport industry, that industry was also forgiven the levy.
I understand that this Bill will be referred to the Committee of the Whole. This will specifically exclude any representatives from the air transportation industry from having any input into the deliberations on the Bill. It is possible, because of the complex interrelationship with the National Energy Board Act, as I have pointed out, and the Energy Administration Act, that without a thorough examination of these amendments as they apply to the airline industry, the adverse effects may go unnoted during the debate.
The urgency for passage of the Bill for every tax paying Canadian is very clear. This, however, cannot contribute to derogation of the duty to protect the Canadian public from the significantly adverse effect of the proposed clauses about which I am talking. I am convinced that the public interest will be served only if the offending clauses, none of which directly affect the public, are referred to the Standing Committee on Finance, Trade and Economic Affairs where a thorough hearing can include the opportunity for spokesmen from the Canadian airline industry to document the detrimental effects of the legislation as proposed.
During the Committee of the Whole I will attempt to have those few clauses withdrawn and referred.
We now have the situation where the Government seeks to put in place a new system of tax, clearly identified as such by the remarks of the Minister of Finance (Mr. Lalonde) in this House on November 8, 1982, to continue the inequities of the compensation recovery charge, which I mentioned a moment ago. The Canadian air transport industry is in more difficult circumstances now than it was then. It is in no position to assume an additional financial burden. Newspapers are full of ads of airlines selling seats at discount rates in an attempt to keep some manner of business. We know that airlines have dropped certain cities from their itineraries. We know the pinch is being felt by all in the Canadian air transport industry. Furthermore, the need to protect Canadian resources no longer exists as world oil prices have not risen as anticipated, and indeed may fall still lower.

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As was the case with the recovery charge, a new taxation system is clearly in breach of Canada's bilateral agreements. It invites a request for arbitration or price retaliation against Canadian airlines. The tax measure is seriously flawed in logic and in law. It has already been challenged, as the House may well know, in federal court. As yet there has not been a decision in that case. It will be challenged further, as a constitutional issue that is, as being interference by the federal Government in a marketplace under provincial jurisdiction.
The convoluted measures to extract a tax, so discriminatory against the air mode of transportation, are highly suspect as to their effectiveness. All depends on the assumption that oil suppliers will be in the 50 percent tax bracket in order that the Government may reap tax revenue. Such an assumption in these times is merely very poorly founded. What will be created is a windfall revenue for the oil companies and a further blow at the corporate health of all air carriers.
I intend to ask when we get to the Committee of the Whole portion of the discussion of this Bill that those clauses I have enumerated be referred to a separate committee to see if we can deal with them in some particular depth, and ask the Government to come to its senses and change them. The Government has been through this once before. Surely it is not new. The Government has had to retract before. The Government had to pay the refunds then, and surely logic would indicate that the Government will have to do it again.
This is a very short dissertation on one very important part of this Bill to a very important industry in Canada. I would like to take more time and attack some of the other clauses in the Bill, but I know my colleagues have done an extremely effective job on that, and I will conclude on this particular point by asking the Chair to give this every consideration.


Mr. John McDermid (Brampton-Georgetown):: Mr. Speaker, we have been waiting 15 months for Bill C-139, which contains amendments to the Income Tax Act. It is something that started one evening in November, 1981. I can remember that evening very clearly when the Hon. Member for Mississauga North (Mr. Fisher) defended that great budget of the then Minister of Finance. He and I were debating the budget on a local radio station in Brampton. He was extolling the virtues of that budget, a budget which has been changed some 45 times. If the then Minister of Finance had an ounce of honour in him at all and believed in the tradition of parliamentary democracy he would have been long gone from this Cabinet.


Donald Frank Mazankowski: And so would the Parliamentary Secretary.


John Horton McDermid: The debate that evening in November on Radio Station CKNW in Brampton proved one thing. It was clearly won by the Progressive Conservatives that night because most of the things defended by the Parliamentary Secretary to the Minister of Finance (Mr. Fisher)-how he ever got there, Heaven knows-


Howard Edward Crosby: That is why.


John Horton McDermid: Yes, that is why. He defended the indefensible. As I said, most of the things defended by the now Parliamentary Secretary have been taken out of the budget. It shows that there is no honour over there at all, not even in the Government's appointments. I cannot believe that he is there.
I have a couple of things I want to discuss here this evening. The first is the very excellent speech given recently in Ottawa by J. Lyman Maclnnis, President of the Institute of Chartered Accountants of Ontario. This speech has been referred to earlier in the House. The contents of his speech pointed out very clearly the problem we have in the House of Commons in taking a look at a document which includes a number of amendments and is 300 pages long. We are asked to discuss this intelligently in the House of Commons and, in fact, pass the Bill rather quickly.
I watched the Minister of Finance (Mr. Lalonde) on "Canada AM" this morning with great interest. I watched and listened carefully to him yesterday and today in Question Period. The main theme of what he was saying is that the Opposition is delaying this Bill. I believe this is the fourth day of debate on this Bill, which was originally introduced on December 7 of last year. It represents a compilation of three budgets that this great country of Canada has had to suffer through. The Minister of Finance is now telling us that we are holding the Bill up and, as a result, holding up the business of the House because he cannot bring in another budget. It did not prevent the Government from bringing in budgets before. It brought them in so fast that Canadians did not know where they were.
I listen quite often to J. Lyman Maclnnis on radio station CFRB in Toronto. He spends a great deal of time studying the tax laws, and he spoke about this Bill. I believe it is worthwhile giving one example of what we as Parliamentarians who are not trained in the law have to put up with. I will read from paragraph 56(1 )(s) of the Act.


Paul James Cosgrove: That should take up four minutes.


John Horton McDermid: The Minister of whatever it is now-they keep moving him around-says that I am taking up four minutes. I think it is important to put this on the record. The Minister takes up far too much time in the House as it is. He has no right to criticize any other Member of Parliament in the House of Commons for taking up time.
Let me quote from Section 56. It reads:
Without restricting the generality of Section 3-
We have to go back to Section 3. It reads:
-there shall be included in computing the income of a taxpayer for a taxation year, the amount of any grant received in the year under a prescribed program of the Government of Canada relating to home insulation or energy conservation by the taxpayer, other than a married taxpayer who resided with his spouse at the time the grant was received and whose income for the year is less than his spouse's income for the year, or the spouse of the taxpayer with whom he resided at the time the grant was received, if the spouse's income for the year is less than the taxpayer's income for the year to the extent that the amount is not required
February 15, 1983

by paragraph 12(1 )(u) to be included in computing his or his spouse's income for the year or a subsequent year.
I see one of the Elon. Members from Montreal looking puzzled, asking what I am saying.


Mr. Tousignant:: I am listening.


John Horton McDermid: What did it say? That was Mr. Maclnnis' and our point exactly. I will give him the translation, for his benefit as well as mine. It means that if you receive a home insulation or energy conservation grant you have to include it in income. Unless your spouse has higher income, then he or she has to report it. That is all that it says.
Would it not be so much simpler for the poor taxpayer and the poor Member of Parliament who has to try to wade through this monster if it were put into that kind of language? When the Government begins to play with the tax law, I challenge it to take the tax law that it has now and put it into some semblance of order so that the individual at home who has to fill out the tax form can understand what he or she is doing. It is becoming increasingly complicated for Canadians to pay tax.
While we are discussing the tax Bill, I would also like to comment on the Department of Revenue. I have with me a file from a case that involves a reassessment of an individual who started a full time horse-breeding operation. The Ministry of Revenue forced him into bankruptcy, and I mean forced into bankruptcy. They have probably the most effective collection agency in the world.
I am not sure of the experience of other Hon. Members, but for some reason there has been an inordinate amount of bullying by the Ministry of Revenue in the last year. There has also been an inordinate number of rebates for which my office has taken considerable time in attempting to locate. Most of them, quite coincidentally, are over $1,000. It makes one wonder if they are not holding back those funds as long as possible because the Government is shy of cash over there. Obviously, it is shy of cash because we will be debating shortly its request to borrow $5 billion. It has already borrowed approximately $31 billion in the last 20 months. And we will be debating about another $5 billion.
I want to conclude my brief remarks by saying that there are about 12 sections in Bill C-139 that we feel are wrong and on which I will be concentrating once the Bill goes through committee. Those sections need correction before the Bill is passed.
The Government has caused uncertainty about the economy of this country to every Canadian, including airline employees and even those with life insurance policies. The three budgets have affected absolutely everyone in the country in a negative way. They have caused a great deal of uncertainty. Once the Bill goes to committee, there are a number of items which we think should be withdrawn, and we ask the Government to give careful consideration to those changes.


Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, anyone who has been listening to this debate on
Income Tax
income tax amendments will have detected a theme which is quite significant. The Hon. Member for Edmonton West (Mr. Lambert), who was the first speaker on this side of the House on the amendment, pointed out that the cause of all the trouble was that the philosophy of those who enforce the Income Tax Act was wrong. That philosophy is that the money belongs to the tax collector and not to the individual who earned it. This philosophy, that the individual has to prove his right to his own money, is the cause of the problem. This is true whether it applies to businessmen, farmers or other individuals.
We heard the same theme from the Hon. Member for Moose Jaw (Mr. Neil). Hardworking people simply do not understand that philosophy.
After the Benson reforms came in nearly a decade ago, schools were opened for accountants all across the country to study them. Every accountant who attended those schools has confessed to me that he is still unable to understand the system even after attending such a school. Yet they are the people from whom we have to seek help to fill out a simple income tax statement. The point originally made by the Hon. Member for Edmonton West is still true.
Years ago, newspapermen used to sit in the gallery and listen to the debates. One journalist in particular made a living as a humourist as a sideline. His humour took the form of reading the instructions in the telephone book on how to operate the telephone. It was the most humorous dialogue on a serious matter that one would want to hear. Eventually, Bell Telephone amended the directions to make them more understandable.
That is the advice that we are giving the Government. This has gone beyond a joke. We have heard two examples in the House today from Members who read sections of the Income Tax Act. The humour is there. Even a self-confessed schoolteacher cannot understand it. Even the son of a Minister cannot understand it.
My point is obvious. The remarks that were made by the accountant, as mentioned by the Hon. Member for Brampton-Georgetown (Mr. McDermid), were that no more changes should be made. His conclusion on the whole matter was, "Please do not make any more changes or amendments until we learn to understand what has already been done". However, his second proposal, which was not referred to by the Hon. Member for Brampton-Georgetown, is that what we must do during the next two years is to have someone rewrite the Income Tax Act in English.


Some Hon. Members:: Right on.


Francis Alvin George Hamilton: Bell Telephone manages to do it, the insurance companies now produce policies in English, and rather than being a subject of humour, let the matter be handled on the assumption that the ordinary person should be able to understand what he is being asked to fill out.

February 15, 1983
Income Tax
This subject is as old as our history. Ever since the Normans came into England and took around the Doomsday Book and recorded every little thing in one's house or cottage which was then taxed, people have been fighting tax collectors. I have seen a nation ruined trying to fight tax collectors. We are not far behind in Canada. The Hon. Member for Surrey-White Rock-North Delta (Mr. Friesen) intimated what the danger was. France is a nation on its knees, economically, because it has developed as a nation which has been able to beat the tax laws, and we are very rapidly moving into that position in Canada. In order that we survive that ruin must be dissolved in the long run.
1 want to make a positive suggestion which applies not only to the Bill but also to what I hope comes forth in the next month or two in the new budget. I think that every Party in the House would like to see the nation move more and more toward the most reliable form of energy that we have, namely, renewable energy. As I consider the budgets and programs of the Government over the last number of years in trying to carry this philosophy out, supported by all Parties, it has been ruined in every case by the language when it is put into law, ruined by the regulations which come out to administer the law, and then triply ruined by the forms one must fill in to gain use of these particular programs.
My suggestion is very simple. Let us write our regulations in the budget paper on renewable energy very simply. Let us simply say in the budget issued in the spring that we have been trying for years to use renewable energy in preference to nonrenewable energy for the safety of the nation and also because in many cases it is cheaper, cleaner, and in our interest to do it. There should simply be a resolution which says, in English, that all the tax laws applying to renewable energy companies and individuals who utilize renewable energy are the same for the people who use the energy as for the mining industry and for the oil and gas industry. That simple clause should be written in clear, Anglo-Saxon English, and then it should be ensured that the regulations speak just as frankly. We should get this renewable energy industry going. Since the Government is-


Ian Deans: I rise on a point of order. Briefly, I just wonder if the Hon. Member might indicate whether he would also include it in French.


Mr. Stewart:: Yes, and in Portuguese too?


Francis Alvin George Hamilton: Mr. Speaker, the Hon. Member displays an unhappy characteristic. He is a barrack room lawyer, and if he does not understand what that means, he should join the Army.


Some Hon. Members:: Hear, hear!


Ian Deans: I know exactly what it means. 1 am just tired of the lecture.


Francis Alvin George Hamilton: Mr. Speaker, the people of Canada, for their economic and security interests, want to shift from one form of energy to another. It is cheaper, cleaner and safer. The Government wants it. The
Opposition wants it. We have had task forces and reports, yet because of the very nature of the language in which we draft our laws, most of the Income Tax Act, the regulations and then the forms one must fill out, the program flows to a dead halt. All the Government can do is to offer grants, and if the grants are unobtainable because of the complexity of the forms, the program stops there, too.
I make that suggestion seriously because I see hundreds of individuals across this country and smaller companies going out to do their level best to translate the research of scientists into a provable operation of manufacturing in Canada. Developments in the field of renewable energy are of use to us and I see the tremendous potential. One can understand the feelings that I have when I speak on this subject.
The Minister knows that I have been speaking in this manner ever since I came here. One of my opening remarks as a new Member 26 years ago was that there is more money in trees than in grass, and I am not referring to marijuana. I am referring to grass used to produce grains or anything else. Everyone laughed at that time. It was great for the cartoonists across the country, showing me as Johnny Appleseed. I did not have the figures then which I have compiled in the last 20 years.
At this very time I am holding in my hand the most recent report of the University of Saskatchewan, which has done something which we have known about for 25 years. It has taken the ordinary aspen poplar tree and, on a continuous basis, is harvesting 42 pounds of oil from every 100 pounds of sawdust from the aspen tree.
The people of Ontario are on their posteriors economically, and the people of Quebec are sitting in the same spot. People are unemployed all over the place, in the Maritimes, all through the northern Prairies and all through British Columbia. Here a group of university people have demonstrated what the scientists said years ago was possible, that one could take 42 pounds of oil from a common poplar tree. We know from the American work that we can take 90 pounds of oil from 100 pounds of pine tree. I am simply asking, what stops us from moving in and using it? It is the way in which the tax laws are framed and the regulations come out. Instead of the so-called marginal farmers of Ontario trying to get along on an income of $30 or $50 per acre of production, that same acre, growing trees, could serve a useful purpose and provide 500 gallons of oil every year. This would be sulphur-free, cleaner, safer and, of course, much cheaper.


Mr. Deputy Speaker:: I hesitate to interrupt the Hon. Member but the time allotted to him has expired.


Yvon Pinard: Mr. Speaker, I rise on a point of order. If Hon. Members of the Official Opposition are interested in debating the second reading stage of the Bill even longer, I would confirm that we on this side are willing to give the unanimous consent required to sit beyond normal hours. I would like to believe that the Opposition is not intending to filibuster, and I therefore seek unanimous consent to sit beyond six o'clock
February 15, 1983

tonight in order to complete the second reading stage of the Bill.


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


Some Hon. Members:: Filibuster.


Mr. W. C. Scott (Victoria-Haliburton):: Mr. Speaker, we have heard comments by the Hon. Member for Qu'Appelle-Moose Mountain (Mr. Hamilton), and I would like to comment, before I go any further, on one of the very striking points he made. He said, "Please put our legislation in a language that the layman can understand". I have heard this plea ever since I have been a Member of this House. It seems to me that when the Government drafts a Bill, the more it can confuse the people of the land, the happier it is. The Government does not want the people to know what is in the Bill or to understand it. Nobody can argue that. Consider the metric system. There was no better way to inflate prices and confuse people than through the implementation of the metric system.
When Bill C-139 first came before the House I contacted a group of chartered accountants in my constituency, well before Christmas. I asked them what their opinion of this Bill was. They said it was very confusing and was discrimination against the small businessman and the small farmer because it forced them to hire chartered accountants that specialized in their field to make out their forms. They no longer could cope with this at home around the kitchen table. This does not just apply to the small businessman and to the farmer; this applies to the rank and file.
The new rules, they said, would require them to re-evaluate the structure of their business and probably re-organize, and that such a re-organization would be too costly for the small income businesses which would have to absorb any additional costs of the new set-up. They said that intermediate and larger companies would be forced to evaluate the cost value of reorganization before the end of the year, and the question was whether or not the cost of a re-organization would be offset by the benefits reaped by adjusting to the new laws. They said that big businesses that could readily absorb accountants' charges for finding loopholes in the new legislation are the only ones which easily benefit from this Bill and, again, this Government has discriminated against the farmer, the small businessman, and the labourers in our society.
On a point by point basis, these are some of the comments that this firm of chartered accountants made to me. On the use of employer's automobile and imputed interest benefits, they said:
Computation of these benefits will be more time consuming and therefore compliance becomes more expensive from an information return preparer's point of view.
Shortly after Christmas, I received a letter from a constituent who had been forced to close his business for the reasons that:
Income Tax
A small business or farmer who is paying 14 to 16 per cent interest for inventory or equipment capital cannot be competitive with larger organizations.
He said that a small business or farmer does not have the high volume turnover to enable him to pay for these costs, coupled with the high interest rates of 14 to 16 per cent, which he is paying.
He also said that:
A small business or farmer is a self-employed individual and cannot support through his own labour a 14 to 16 per cent interst rate.
He cannot support this interest rate, plus the cost of the bookkeeping involved.
Concerning the reason why Government laws and policies cause small businesses to fail or close their doors, the reason given was:
A small business does not have the resources to comply with every Government law and/or policy which can amount to as many as 20 separate agencies or departments.
A small business or farmer does not have the time or capabilities to keep abreast of new, changed or violations of all Government laws and/or policies.
A small business or farmer does not have the impact to alter or formulate Government laws and/or policies that may upset or jeopardize their future.
As to the reason why the economic and competitive forces have reduced the ability of the small business or farmer to survive, he said:
Big business and big Government limits the choice of self direction.
Big business and big Government thwarts the small business and farmer from maintaining a competitive pricing policy.
Big business and big Government create laws and policies that control the initiative and ingenuity of small businesses and farmers.
Big business and big Government tax the small business and farmer beyond their will to survive.
In conclusion, he recommended:
I have devoted a lot of time to putting these thoughts on paper. They reflect not just our situation but many others across the length and breadth of this country. Any advice or help that you can give to assist us in our financial hardship would be most appreciated.
I ask the Minister of Finance (Mr. Lalonde), what can 1 tell that gentleman? Telling him that he is but one of many in the same situation will not solve his problem. How can I say that it is not the Government's intention to regulate or to tax the small-businessmen out of business when Bill C-139, which increases the regulations and the taxes imposed is being discussed? How can I tell a farmer that Bill C-139 will not hurt him when the Bill limits the payment period of capital gains tax to five years if the property is sold outside the family, and ten years if it is sold or transferred to the children? He will have to pay taxes on money not yet received.
The point made by this constituent's letter is quite clear. Recovery in this country will not take place until this Government realizes that it must get off the backs of the small businesses, farmers and the private sector in general. The Canadian Federation of Independent Businessmen has been co-operating constructively with the Minister of Finance in an attempt to make him realize this. This Bill is a backward step in this process. I urge the Government to reconsider.

February 15, 1983
Income Tax
Another thing I want to draw to the attention of the House is this. Last year they moved, for a portion of my constituency, the postal address and postal station for income tax. It was taken to Sudbury. I think we have a very effective Minister in Sudbury and probably 500 employees look very nice in his community, but my people, which number many thousands, were always used to sending their income tax returns to Belleville. Why was this done? Was this a cost sharing program by the Government or was it some more of this rank patronage that exists within the ranks of this Government here today? This is just another case where dollars and cents could have been saved and a small portion would have been withdrawn from the backs of the taxpayers, the small-businessmen, the labour community and the farmers within our country. But this goes on. How can we have any sympathy for a Government which carries on practices like this? It is time that the people of Canada woke up and said, "We have had enough of this."
I hope that the Minister will pay some attention to these remarks coming from this side of the House. I notice that it is the Members of the Conservative Party who are standing up here and preaching for the people in need today. We do not hear too much from the other Parties, only the odd interjection. This is what is taking time and costing the Government money. Let us get on with the business of the country and bring out sane and sound legislation.


Yvon Pinard: Mr. Speaker, just now, I made an offer to the Opposition parties to find out whether they were acting in good faith and whether they were really interested in working productively in Parliament, and also whether they were prepared to give unanimous consent for the House to work a little harder than usual by sitting after six o'clock-under the New Standing Orders, we are not obliged to sit evenings-because the Bill now before the House is particularly important and urgent. A number of Progressive Conservative Members have already spoken, in turn, to the Bill, and if they were really anxious to have this legislation passed, they would agree to sit a little later than six o'clock to have the second reading stage concurred in. In the circumstances, Mr. Speaker, if Hon. Members are prepared to listen to my offer to the Progressive Conservative Party, and if they are really anxious to see Parliament function ... Mr. Speaker, I think I should be given an opportunity to speak. The Opposition Whip is baying like a bloodhound to stop me from having my say.
I may, if the Hon. Member wants to hear me, express myself in his language.

Here is my proposal to the Opposition, Mr. Speaker. I do not intend to present a motion. I do not intend to oblige Hon. Members to muster twenty-five votes against a motion I could present under the new Standing Orders. I am asking them to show the Canadian people whether they really want tax refunds to be made as soon as possible, and they can speed up the process by accepting-


Mr. Deputy Speaker:: Does the Hon. President of the Privy Council intend to present a motion? What does he intend to do right now?


Yvon Pinard: An interesting question, Mr. Speaker, and 1 am going to answer it right away. I intend to repeat what I have just said. Before you asked the question, I had just finished explaining that I did not intend to present a motion.


Mr. Deputy Speaker:: I shall repeat the question. Is the Hon. Minister raising a point of order?


Yvon Pinard: Mr. Speaker, I wish to take part in the debate. 1 believe I am entitled to ten minutes, and if I am not allowed to speak, I shall sit down.


Mr. Deputy Speaker:: In that case, the Hon. Minister has the floor.


Yvon Pinard: First of all, on a point of order, Mr. Speaker. I would like to ask the unanimous consent of the House to sit after six o'clock, in order to give Progressive Conservative Members an opportunity to continue debate on second reading and subsequently refer the Bill to a Committee of the Whole House.
I am therefore asking formally, on a point of order, for the unanimous consent of the House to sit after the usual time of adjournment and complete second reading of the Bill this evening, so that Canadians can receive their tax refunds as soon as possible.


Mr. Deputy Speaker:: The President of the Privy Council has asked for the unanimous consent of the House to sit after six o'clock this evening.
Is there unanimous consent, yes or no?


Douglas Grinslade Lewis: Mr. Speaker, I rise on a point of order in reply to a suggestion of the President of the Privy Council (Mr. Pinard). I would point out that we have organized our debate to have speakers here today. We have other Members who may wish to speak on the next occasion the President of the Privy Council deems to call this Bill, which he claims we are stalling. We have the speakers. Those opposite do not seem prepared to support the Bill at this stage. I am afraid we cannot give unanimous consent.


Mr. Lyle S. Kristiansen (Kootenay West):: Mr. Speaker, there are one or two points that I want to deal with during the course of the debate. One has to do with the lack of provision-
February 15, 1983


Some Hon. Members:: Oh, oh!


Lyle Stuart Kristiansen: Mr. Speaker, could you call for order. One point I want to make in a very short submission has to do with the lack of provision in this Bill to allow for tax incentives for the renovation of heritage properties in Canada. While we had a great many reservations about the November 1981 budget, many of us were pleased to see a provision which got rid of one of the incentives for destroying heritage property in this country. For the sake of those Members and for Canadians who were concerned about the preservation of our longstanding structures and the labour of love over the past century which has gone into the creation and then the maintenance of these, we were pleased to see that provision in November 1981.
The community of the Hon. Member for Kingston and the Islands (Miss MacDonald) and my own of Nelson, B.C. have a great deal at stake in the maintenance of the programs of the Heritage Canada Foundation. I live in what is probably one of the oldest communities in western Canada. It is not just a few people on a committee but a host of citizens across this country who feel very strongly about our heritage and about these buildings, which have been part of the history not only of our own families but of those we have worked with and known over the years.
We do not want a series of strip cities across Canada. We do not want to see repeated in this country Chicken-Little joints stretching for miles on end, where one end of the country begins to look exactly like the other. We all have our own individual history. This makes us unique and special.
Surely it is not too much to ask that the Government give special consideration to the representations it has received from myself, other Members, communities and cities across the country asking it to go the second step. In November 1981 it dealt with the former incentive to the destruction of heritage buildings. It could now decide in a general or in a specific way to deal with heritage sites in terms of certain dates of construction and give special tax incentives. This would help save what is left of the cores and the history of various communities.
When our heritage buildings are destroyed, a little of each of us and a little of this country dies. I ask, on behalf of thousands of Canadians and hundreds of communities vitally concerned, that at the appropriate time the Government give consideration to putting in place such measures.


Mr. Robert Wenman (Fraser Valley West):: Mr. Speaker, if only I could give to the House Leader quick and easy passage of a Bill that he says is somehow for the benefit of Canadians. I wonder how this Doomsday Book, which is in fact the Income Tax Act, will benefit Canadians by its passage. It will not benefit them. It will hurt the very productive generator that could give us recovery. Instead of its being packed with possibilities of creating recovery for this economy-


Yvon Pinard: Mr. Speaker, I rise on a point of order. I want to welcome back the Hon. Member. However, I wish he would speak to the Bill. We would be glad to listen to his speech for once.
Adjournment Debate


Robert Lloyd Wenman: I wish it were not drawing so close to six o'clock. I could give a bit of information about the damage this income tax Bill is doing and the damage this Government is doing to the small business community in my riding. When I get a small-businessman that has been taken down one, two, three, four, the whole community starts collapsing as a result of a repressive Government which demands too much of the productivity of this nation. I want to talk about this, not for one minute or half a minute, but for ten minutes today and ten minutes the day after and every other chance I get. The economy of this nation is in trouble right now.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Gordon Edward Taylor: Mr. Speaker, for over a year now, the people of Banff and the tourists who visit Banff have been plagued with a disease called "Giardia". A Public Health Notice is placed in most hotels and restaurants and other public places which reads:
Due to the presence of Giardia in the Banff water supply, until further notice, all residents and visitors are advised to boil water (for five minutes) prior to drinking, and use boiled water for cleaning teeth, washing of fresh vegetables, food and other non-cooked food.
Signed
Parks Canada, March 29th, 1982
Giardia is an organism which exists in two forms: first, as a free-living trophocyte-the reproductive stage; second, as an encapsulated cyst which is the most commonly found form outside the host organism. Only the cystic form is infectious to man. The trophocyte is destroyed during passage through the early stages of the digestive process while the cyst survives the initial stages of digestion until it reaches the small intestine where environmental conditions support the emergence of the trophocyte form.
The effect of Giardia on people includes diarrhea, abdominal cramps and weight loss, with recovery in two to six weeks; a small percentage of those suffering from Giardiasis may have severe disease.
Authorities who have had experience with the Giardia cyst, advise that there are two methods to eliminate Giardia cysts from water. One consists of removal by filtration and the other entails the use of chemical treatment such as chlorine or iodine. One authority states that 99 per cent of all cysts introduced into a water treatment plant can be removed by the

February 15, 1983
Adjourment Debate
processes of coagulation, flocculation, sedimentation, and dual-media filtration.
From what I have already said everyone can understand the concern of the people of Banff, those who have already contracted the disease and those who must live with the possibility of doing so. If the water is not treated within a reasonable time, it will mean a reduced number of tourists for Banff and tourism is the life blood of Banff. The Banff water system now has no facilities except chlorination to control the Giardia lamblia cysts, and chlorination becomes less effective at temperatures below 5 degrees Centigrade. It is therefore evident that the only way to really purify the Banff water supply is through a filtration water system.
Parks Canada engaged a well-known engineering firm in Calgary to study the situation and a report was issued in July, 1982. The firm of engineers state:
Current knowledge of treatment processes used to control these cysts indicates that only a relatively sophisticated treatment plant would provide removal with an acceptable level of risk. At the same time such a plant would produce water meeting the drinking water standards all year round. This system, generally known as a 'conventional water treatment plant', would use coagulation, sedimentation, filtration, and disinfection processes.
The engineers recommended six alternatives, the preferred one involving the Bow River gravels aquifer only. The initial cost of Phase I of this would be $10.2 million. This involves the development of the gravels in the Bow River including collector wells and a pump station, construction of a direct filtration water treatment plant on Tunnel Mountain, relocation of the existing heating plant to Tunnel Mountain, construction of raw water transmission main connecting the water intake of the water treatment plant and construction of a treated water storage reservoir relocating the present system to standby.
From the above it should be noted that the cost will be substantial, but the Department has been taking more than $6 million out of Banff each year and the water supply is a basic requirement. Every possible step should be taken to eliminate this parasite from the water of Banff at the earliest possible time.


Mr. Denis Ethier (Parliamentary Secretary to Minister of the Environment):: Mr. Speaker, it is certainly nice to see at least one Tory who wants to sit beyond six o'clock.


Constantine George (Gus) Mitges: How many have you got?


Denis Éthier: Mr. Speaker, the Hon. Member has shown continuing interest in the problem of Giardia Lamblia which has been causing discomfort to the residents of Banff. He has asked when the Minister of the Environment (Mr. Roberts) will authorize a water filtration plant in Banff to eliminate the possibility of the water supply being a source of the parasite.

As the Minister explained to the Hon. Member in the House on February 8 of this year, Environment Canada asked a firm of consulting engineers, Stanley Associated Limited, to prepare a study to determine how the problem could be corrected.
The Department is now following the recommendations of that study, recommendations which will lead Banff to a parasite-free water supply.
Of all the options presented in the engineering study, each included the construction of a storage reservoir for the water. A contract for the construction of this reservoir has been prepared, and it is expected that the reservoir will be ready for use by the fall of 1983.
The Hon. Member knows that because of the efforts of Parks Canada staff in drilling wells and bringing water into the system the incidence of Giardia has already been much reduced. The consultants recommended wells as the best source of Giardia-free water. This is why Parks Canada proceeded with the drilling of the wells immediately. Only in the event that volume from the wells was not sufficient would treatment of surface water by filtration become necessary. If these measures are proved to be ineffective, then installing the most expensive option, that of a water filtration plant, would be the next consideration.
I am happy, however, to report that the results of very recent test drilling have indicated that more than sufficient volume of well water is available to meet the requirements of the town.
The Minister understands the Member's sense of urgency in having this problem dealt with as speedily as possible. Once the new source is brought on stream with the existing wells this year, and after the reservoir has been constructed, the possibility of the town water being a source of Giardia lamblia infection should be eliminated.


DISASTERS-TRAINING OF CREWS-REGULATORY CHANGES. (B) APPEARANCE OF MINISTERS BEFORE COMMITTEE
John Carnell Crosbie: Mr. Speaker, a year ago today one of the worst marine tragedies in the history of Canada occurred on the east coast when the Ocean Ranger, an oil drilling rig, foundered and capsized in a bad storm with the loss of 84 lives. Many of those people had lived in my district of St. John's West.
A week ago we questioned the Minister of Transport (Mr. Pepin) in the House, in light of the report that had been made in the United States by a national board of that Government. It found that the tragedy was due to the failure of the management of the oil drilling rig to properly train the crew. It found that the crew was not properly trained in the operation of the ballast system of the rig. It found that they were not properly trained how to manually operate the ballast control system if anything happened to the electrical system. It found that there was no proper safety equipment and the like available.
There have been no findings by any Government agency in Canada. The Government of Canada has never come before this House or before a committee of this House to tell us what,
February 15, 1983

in its view, happened, or to tell us what it is doing to see that this does not happen again.
Last week the Minister was asked if he could assure the Elouse that the deficiencies the board in the United States found to be the cause of the tragedy had been corrected. He was asked if he could assure the House that proper safety procedures are being followed and that proper equipment for the men on the oil rigs is available? His astounding answer is recorded at p. 22649 of Hansard as follows:
Madam Speaker, I cannot, and I am sorry about that.
Hundreds of thousands of people are sorry about that, Mr. Speaker. How could a Minister stand in this House a year after the tragedy and not be able to assure the people of Canada that proper safety procedures are now being followed, that proper equipment is now being used on the oil rigs and that the deficiencies have been corrected?
Today when 1 had a chance to question the Minister again, he frankly admitted that he knew nothing about it and asked me to direct my question to the Parliamentary Secretary to the Minister of Energy, Mines and Resources (Mr. Dingwall). He knew nothing about it. When given an opportunity to say that steps have been taken by the Government, the parliamentary secretary said nothing, he knew nothing, he acted like a know-nothing and, in fact, he said that I had never raised the issue before. If he goes into the files in his Department he will see the letters that I wrote to the Minister of the day, that fugitive from energy who is now in finance. I wrote on May 4 last year, on June 3 last year, on July 28 last year, asking him to refer these matters to the proper parliamentary committee so that he could bring the public and Parliament up to date on what steps the Government had taken to change the regulations and the inspection procedures: has he appointed more inspectors; are they now ensuring that ballast training is being given? The Minister wrote me on September 9 and coolly refused to do that. He said it might invite partisan wrangling in the House. He said a Royal Commission had been appointed to look into the matters. We are not interested in waiting another two or three years for a Royal Commission report while everybody has gone to sleep, with perhaps another tragedy occurring, Mr. Speaker.
We want to know from the Government now what regulations it has changed and how. Is COGLA negligent or not negligent? What inspection procedures has it changed or how? What training courses is the Government now insisting on? I am told that there is still no course required for ballast control operators-there is still no course required by the Government. They are supposed to take a two-week stability course, but there are no written guidelines for such a course. The officials cannot say whether rig personnel might have to undergo a certification program similar to the requirements of the Department of Transport. They require ship officers to have at least a two-year program in ballast control when they go on ships. What kind of administration is this? It is criminal negligence.
Adjourment Debate
The people who have brothers and fathers working on oil rigs are entitled to know from the Government what steps it has taken in the last year to change the situation. The Government claimed to have jurisdiction. The Minister of Transport, who deals with maritime matters, the sea and marine matters, rose in the House last week pretending he knew everything, but giving us no assurances; and this week he rose to say that it is not his jurisdiction, that it is the jurisdiction of the Department of Energy, Mines and Resources. What do they know in the Department of Energy about marine stability and ballast controls? Surely that is the province of the Ministry of Transport.
When the Parliamentary Secretary answers me today, I implore him to tell the House that the answer of the Minister of Transport of last Wednesday was incorrect, that the Government can and will give assurances that proper safety procedures are now being followed, and give assurance on behalf of the Government that proper equipment is now available on oil rigs and that the deficiencies of the National Transportation Board have now been corrected. That is his duty. If he cannot do that, then he and the Minister of Transport should resign because they should not have the effrontery or the gall to stand in the House one year later and not be able to give those assurances when there are hundreds of men out on the rigs today.
We had a storm just two days ago in Newfoundland. It was not as bad as the one last year. We will have more storms this year. This Government which claims jurisdiction cannot give Canadian people the assurance that it has made changes.
We are in the shameful situation where the United States, a foreign Government agency, gives a report and we get nothing; when the Members of the sovereign House cannot get Ministers to come before committees to answer. The Minister has said that he will come before the Committee. He cannot do that too soon. He must do so next week.


David Charles Dingwall: Mr. Speaker, the Hon. Member has asked what changes in procedures have been implemented to prevent a recurrence of what we all know as the Ocean Ranger tragedy. I am pleased to advise the Hon. Member on this matter and to reassure workers who are employed in offshore operations of the safety measures which are in force.
All workers on offshore drillships and related equipment have been provided with survival suits. Rescue boat equipment has been upgraded. Marine emergency training has been accelerated. These types of measures will ensure survival in the unlikely event of an accident.
The qualifications of all supervisory personnel employed in offshore operations have been reviewed and assessed. This is an ongoing procedure to ensure that all persons in control of an operation are thoroughly trained in all of its phases.
Operators of offshore drilling rigs are required to ensure the safety of their equipment through thorough inspections and a certification process. The inspections are carried out by

February 15, 1983
Adjournment Debate
certification societies and by the Canada Oil and Gas Lands Administration. The inspection societies include: the American Bureau of Shipping, Lloyds of London Register of Shipping, and the Norwegian shipping authority.
The responsibility of these agencies is to certify that a drilling vessel which is about to be moved to a drilling location is safe and fully operational, and to perform follow-up inspections to maintain the high operational standards required for ocean drilling. In other words, the operator must keep its certification valid.
The Canada Oil and Gas Lands Administration makes its own inspections in addition to those carried out by international shipping authorities.
After the loss of the Ocean Ranger, all drilling vessels were immediately checked for recertification. The Canada Oil and Gas Lands Administration in particular has required that oil companies ensure that ballast control systems can be operated by emergency power and that instructions are clearly understood by every crew member.
The co-operation of industry is indicated by the fact that a joint task force of the East Coast Petroleum Operators Association and the Arctic Petroleum Operators Association is conducting a study of operational standards and will be reporting to the Government soon. This recommendation will further assist in the certification process.
The actions which I have briefly reviewed provide assurance that safety of operation is a matter of most importance in the development of Canada's oil and gas resources in offshore areas. As this development proceeds, with its great potential for regional and national benefits, safety will remain the first requirement.


TRADE-REQUEST FOR IMPOSITION OF SURTAX ON IMPORTED POTATOES. (B) EFFECT OF IMPORTS ON FRASER VALLEY FARMS
Benno Friesen: Mr. Speaker, at a time when the small business community has been beaten to its knees and is fighting for its life, the Department of National Revenue has displayed a new level of aggressiveness, a new zeal for efficiency in collecting past taxes. That is why I rose in the House two weeks ago to ask the Minister of National Revenue (Mr. Bussieres) about this new brand of zealousness which displays itself in National Revenue garnishee 100 per cent of the income of small businesses on accounts outstanding. This matter came to my attention some weeks ago. Since that time, and since I raised it in the House, I have realized to my shock that this seems to be a kind of epidemic across Canada in which all National Revenue offices seem to be engaged.
I want to put on the record some of the things that have been going on in the name of National Revenue. One taxpayer told me that officials send notice by registered mail to the clients of a company whose accounts are outstanding, but the company is notified by regular mail. Company officials face
the embarrassment of having someone with an account receivable phone up and ask, "Is your company still solvent? Is it in trouble with the Government?" This procedure has been confirmed by officials from National Revenue.
The company in question asked the tax people, "What happens if you take all of my income, because I will not be able to pay my employees?" Revenue officials replied "That's your trouble. You can go to the Labour Relations Board", a hearing of which would be six months down the road. When asked, "When will I be notified?" National Revenue replied, "You will get that notice in a day or three". That was a nice flippant response. When the owner of the company indicated that payment was coming, the official-and I have this confirmed in a letter from National Revenue-not only wanted to know when the money was coming but from where the taxpayer was going to get it; as though it was any business of National Revenue where the money was coming from.
Those are just some of the things that are going on.
I want to read into the record a letter from National Revenue to this person.
In reference to the Revenue Official, the letter reads in part:
-agrees that he inquired about the source of the funds, but advises that his interest related to the facts that there would be additional monies due for the month of November 1982 remittance and on your personal tax account.
That does not matter, Mr. Speaker; it is: none 0f the Department's business.
I have a letter here from Revenue Canada Taxation to an accounting firm. I want you to notice, Mr. Speaker, the kind of language that is being used. This letter reads in part:
-I do not expect my collection staff to be satisfied with partial payments or tentative arrangements. Had details of accounts receivable not been given by telephone, it would have been-duty to attend the company's offices and obtain this information from the books and records for the purpose of issuing demands on third parties.
I further fully support the refusal to withdraw such demands until payment has been received. This follows the department's policy set out in paragraph 11 of Information Circular 75-16R-
I wish National Revenue was that careful following regulations outlined in some of its other pamphlets.
Another notice came to me just today. A constituent spoke to officials regarding a return going back to 1977-1978. He thought he had worked out the problem by agreeing to have correct RHOP receipts issued by the bank to the Department, as well as providing receipts for expenses incurred against commission. The Department claims he owes them $9,506.
What did Revenue do? It got in touch with the bank in question, through a third party notice. As a result, the Registered Home Ownership Plan has been terminated. The $9,506.99 has gone to the Receiver General and the balance has been given to the taxpayer. This is all taxable income for 1983, which raises his income level. Therefore, he will be taxed at a higher rate. In addition, he will never be able to open another RHOP, since only one can be issued to an individual in his lifetime. That was the conduct of National Revenue.


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February 15, 1983

Finally, I have a letter from a distraught mother of a young businessman. She says:
My son is in business for himself, until this recession making a decent, honest living for himself, his wife and three small children, as a fireplace builder and bricklayer.
Several times in the past year he has done jobs for people, who have been unable to pay him, either the work he has done or the materials he has used, thus making him unable to meet some of his debts.
Last October the income tax people got on to him for what he owed them. They wanted to know what he was doing about it. He told what and where he was working, and that he hoped to be able to pay his taxes from his earnings for that job. They instantly, the same day, garnisheed his payments from the firm he was working for, so that he had to scrimp to pay for the materials used.
This past week, the income tax people have phoned again, to say that the aforementioned firm had gone bankrupt, so that they-the income tax-had not been able to get the garnisheed money from them. So, back to my son again, $6,000 plus the interest which has accumulated since October. I think that this is monstrous! My son might as well be on welfare, has worked himself to death for people who will not or cannot pay, and the Government.
This is the kind of attitude the Government displays when businessmen are on their knees.
[ Translation]


Mr. Marcel Dionne (Parliamentary Secretary to Minister of Agriculture):: Mr. Speaker, I wonder whether my answer is altogether relevant to the Hon. Member's question. I am a little embarrassed, but nevertheless, I shall give the House the details I have here.
The Hon. Member is probably aware that as a result of favourable growing and harvesting conditions in 1982, the potato harvest in Canada and the United States was very abundant. Prices paid to producers throughout Canada, and
Adjourment Debate
not only in British Columbia, are low. However, because of increased imports of potatoes in Western Canada, the Minister of Agriculture (Mr. Whelan) asked last November that a surcharge be placed on all eating potatoes imported in the Thunder Bay and Western customs regions.
After examining this request, the Minister of Finance (Mr. Lalonde) concluded that a surcharge was not the best way to deal with the situation. The reasons for his decision were forwarded to associations representing the interests of British Columbia's potato producers.
The Hon. Member is probably aware that the authority to impose a surcharge lies with the Minister of Finance, pursuant to Section 8(2) of the Customs Tariff. Consequently, the Minister of Agriculture has no authority to impose the surcharge. It should also be pointed out that potatoes coming from the U.S. are not dumped on the Vancouver market, as might be implied by the Hon. Member's question. By definition, dumping is a practice that consists in selling goods on foreign markets at prices that are lower than those set for the domestic market. Since the price in the United States is the same, there is no question of dumping in the strictly legal sense of the term.


Mr. Deputy Speaker:: 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 6.25 p.m. the House adjourned, without question put, pursuant to Standing Order.

Wednesday, February 16, 1983