1983-05-03

GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Monday, May 2, consideration of the motion of Mr. Lalonde that this House approves in general the budgetary policy of the Government.
The Acting Speaker (Mr. Corbin):: The Chair should inform Hon. Members that when the debate was adjourned yesterday there were six minutes left in the period allotted for questions, comments and answers following the speech by the Hon. Member for Moose Jaw (Mr. Neil). Therefore I should inquire at this time whether there are any further questions or comments before recognizing another Hon. Member.


Mr. Taylor:: Mr. Speaker, I have a question for the Hon. Member for Moose Jaw (Mr. Neil). The Hon. Member has had extensive experience in banking. He carries a law degree and is also a farmer. It is very thrilling to see the emphasis which the Hon. Member for Moose Jaw puts on farming. I enjoyed his remarks very much indeed but the Hon. Member for Moose Jaw did not have time to deal with the Western Grain Stabilization Fund. Does he have any suggestions as to how we can make the Western Grain Stabilization Fund a little more palatable to the western Members?


Mr. Neil:: Mr. Speaker, at the present time the Western Grain Stabilization Fund pay-out is based on a five-year average. It does not appear there will be a pay-out this year. The farmers in the west are suffering from financial difficulties because of low grain prices and high input costs. If the Government were prepared to bring in an amendment to the Act which would base a pay-out on a three-year average rather than a five-year average, there would probably be a payment of $150 million this year which would be quite an injection of money into the economy of western Canada. This would not only help the farmers but the machinery dealers and the whole economy of western Canada.


Gordon Edward Taylor: Mr. Speaker, I do not have a further question for the Hon. Member for Moose Jaw but because of his extensive knowledge of agricultural matters I would like his comment. At the present time many farmers in the Province of Alberta, I suppose all through western Canada and perhaps right across Canada, are having such a difficult time on the
land that they are taking other jobs to keep their farms viable and ongoing. When a farmer works out he puts himself in a position under the Income Tax Act where he can claim only a $5,000 loss. Does the Hon. Member for Moose Jaw have any suggestions with regard to the Income Tax section?


Douglas Charles Neil: Mr. Speaker, it appears to me that many of the farmers who are taking extra jobs are doing so because they are having difficulty meeting their financial commitments. It would require just a simple amendment to the Income Tax Act to enable farmers to benefit from the write-offs of their usual expenses in farming. I can understand the situation of hobby farmers not being entitled to claim their full deduction of expenses in their farming operations, but certainly where a bona fide farmer is doing his utmost to raise money to keep his farming operation going, the Government, I think, is obligated to bring in the necessary amendment to enable him to write off his normal expenses.


Mr. Bloomfield:: Mr. Speaker, I have a question for the Hon. Member.


The Acting Speaker (Mr. Corbin):: Order, please. The Hon. Member is not in his seat; therefore I cannot recognize him.


Hon. Donald J. Johnston (Minister of State for Economic Development and Minister of State for Science and Technology):: Mr. Speaker, it is indeed a privilege to rise today to express my support, optimism and enthusiasm for the budget which was presented in the House by my colleague, the Minister of Finance (Mr. Lalonde). The budget offers strong medicine, not only to deal with the acute problem of unemployment today, but also with the chronic problem of slow productivity growth that Canada has experienced over the past decade.
Technology development is central to both these issues. I am confident that the proposals I present today for a technology policy for Canada will restore our ability to confront the demands of the 1990s with a healthy, productive and vigorous economy. I am pleased that the budget has dedicated over $700 million for technology development in the next two years. Never in the history of the country has such an effort been made to enhance the Canadian technology base.
Technology is changing many dimensions of our lives at an unprecedented pace. Communications, automation, new materials and consumer electronics are all having a profound effect on our livelihoods and on our view of the world. Some of

May 3, 1983
The Budget-Mr. Johnston
these changes we welcome; some we resist. But either way they represent a force that we cannot ignore.

Technological innovation in the work place may create new jobs and new wealth, but it may also eliminate existing jobs. This Government is determined to show leadership in supporting the development of new technology that will be to Canada's best advantage. We are also determined to have all Canadians share in the benefits that new technologies will bring. Changes are always upsetting and can often be painful. On the other hand, we must realize that we have no choice. We must keep pace with developments and change when the world changes. If we want to continue to enjoy the high standard of living we have today, we must be ready for the opportunities tomorrow will bring. Canada is not the only country that is faced with this climate of uncertainty.

At the Economic Summit held last June in Versailles, this issue was of such priority that a special working group was established to address the world-wide concern about technological change and development. The group reached a consensus on many issues, especially on the awareness of the profound effects of technological change on all nations. Its final report emphasized the theme that technology, while not a panacea for our economic ills, is a powerful instrument which can forge a better future for us and for our children.
Any period of transition such as the one we are now experiencing through technological change is exacting and stressful. The working group emphasized the need for a special program to promote the flexibility, adaptability and mobility of labour. Its report is optimistic that technological innovation will build the jobs of tomorrow. Canada has been quick to respond to this challenge, and, over the past few months we have been examining how a technology policy can best work for us. We have had to take a hard look at the nature of technology itself and to take an equally hard look at how technology interacts with our Government and with our economy.
Technology is all-pervasive. It touches each and every aspect of our lives. Any policy that addresses technology development must recognize this. To be fully effective, a technology policy for Canada has to act with and through economic, fiscal and industrial policies. Technological advances give the lifeblood to our manufacturing and resource industries, but a technology policy also has to influence, and be influenced by, our social policies. It has a profound effect on employment, our health, our environment and even our general lifestyles.
Nor can technology policy be considered in isolation from science policy. The basic research fundamental to scientific progress has often provided the inspirational source for remarkable leaps in technological development. The time has passed when we can comfortably address each of these areas separately. If we are to compete in this increasingly competitive world, and still maintain our standing of living, we must
have a forum that can address technology development as an integrated policy with separate but synergistic components.
Because, as I said, science policy and technology are allpervasive and because at the federal level science and technology range across programs in all major Departments-Communications, Environment, Agriculture, Energy, Fisheries, Health and Welfare, National Research Council, to name a few-I am pleased to report that the Prime Minister (Mr. Trudeau) has established a special subcommittee of Cabinet on technology development which will be dedicated to achieving the integration of policy elements and to advancing technology development in all sectors. Each Minister of the subcommittee has the authority, the resources and the influence to bring about the required changes through creating new programs or through adapting existing ones to specific policy areas. Each Minister contributes a unique and essential point of view to the continuing development of a technology policy for Canada.
The first task of the subcommittee has been to confirm our policy direction for technology development in Canada. This has been done. Our objectives are set. Indeed, some of these objectives have already been translated into action in the budget. We have also, however, established a policy framework which will maintain the budget momentum, guide our progress and concentrate our energies on long-term objectives. It is this technology policy which I would like to present to my colleagues in the House of Commons today.
The first objective of the technology policy is to strengthen the Canadian economy through the creation, application and diffusion of state of the art technologies. Second, we intend to manage the process of technological development so that Canadians are aware both of the opportunities and the problems that may arise. Well-informed Canadians will make the right choices for themselves and for this country. Third, we must ensure that the benefits of technology development are shared equitably among all Canadians in every region. Last, but by no means least, we must encourage a social climate that places a premium on scientific and technological excellence, curiosity and innovation. These are the values that will guarantee our progress.
[ Translation]
These are the general objectives for technology development in Canada and they set the parameters of the party by which we shall be guided. A detailed technology policy, however, must also consider the contribution that each sector of our society can make to technology development and the impact of technological change on every aspect of our lives. In this respect, the Federal Government has specifically defined the objectives related to each particular sector. Here are a few of the objectives that illustrate the extent of the present Government's commitment to our technological future.

Our objectives relating to the business sector reflect the primacy of the private sector in initiating innovation and new
May 3, 1983

investment. We will support the initiatives of the private sector by encouraging an over-all business environment that supports investment, innovation and enterprise. Our commitment here can be seen in the tax structure we have established to encourage investment in research and innovation. Canadian tax incentives for research and development, even before this budget, have been among the world's richest. We can look at Japan, West Germany, United States, France, Great Britain or Sweden and we find that, with the single exception of Singapore, Canada has the most beneficial over-all tax structure for research and development. Tax benefits for industry in terms of forgone revenue to the Government are calculated to be over $200 million in 1983.
The budget has significantly enriched this package. It has, for example, introduced important changes to the investment tax credit which will particularly benefit small firms and significantly broaden the application of the tax credits. The budget has also made proposals which, as a former tax lawyer, I am particularly pleased to see as they simplify the research and development tax incentives and make them more effective. These proposals are expected to contribute a further $100 million in industrial incentives for research and development. They have been put forward in the form of a paper for consultation which calls for comments by July 1, 1983, to ensure early implementation of the proposals.
Another federal Government objective in relation to the business sector will ensure that current industrial support programs for technology development continue to be effective and that Canadian firms have access to the most productive, up to date technologies available. In support of this objective, the Government will spend $20 million over the next two years to expand the National Research Council's Industrial Research Assistance Program. In particular, the Field Advisory Service and the Technical Information Service will now expand their current services to include small and mediumsized businesses, greatly assisting the diffusion of needed technologies to all companies across Canada. This is one part of the $100 million that the Government has committed to new technology initiatives over the next two years.

As far as labour is concerned, the federal Government's main objectives concern our ability to predict the effects of technological change in order to minimize its negative aspects. Mr. Speaker, I am convinced that most people will welcome the realization that new technologies will do away with many boring and repetitive tasks. I have every reason to believe that people are eagerly waiting for a chance to get one of the interesting and better-paid jobs that will be created as a result of new technologies. In fact, under the heading of training assistance, the Budget has earmarked an additional $155 million for human resource development programs.
The Budget-Mr. Johnston

Another objective of our technology policy is to encourage labour-management mechanisms on all levels to encourage joint planning for technological change. We will also support organized labour in its study of issues brought about by this change and its preparation and efforts to deal with them. The federal Government has approved $10 million to be spent over the next two years to encourage business and labour to establish a centre for productivity and employment growth. Negotiations with respect to the establishment of this centre will be led by my colleagues, the Hon. Charles Caccia, Minister of Labour, and the Hon. Ed Lumley, Minister of Regional Economic Expansion.
The federal Government would also like to foster a core of excellence within the university structure which conducts research relevant to industry. To support university research and enhance its contribution to technology development, the federal Government will increase the funding of the Natural Sciences and Engineering Research Council by almost $27 million over the next two years.
It is also an objective of our technology policy that industry become more aware of the research done in universities, and at the same time that science in the universities and federal laboratories be better attuned to the opportunities in the industrial world. The federal Government will spend $9 million over the next two years to strengthen joint university-industry research and technology efforts.
[ Translation]
This Government intends to make sure that R&D carried out in federal laboratories will support the requirements of industry within the framework of our economic objectives. Our programs and policies will be designed in accordance with these objectives. We shall be examining federal research programs to find out whether there are certain areas in which they could be better attuned to the needs of industry. The communications sector is one in which we are particularly interested. Canada has a world reputation for excellence in this field, and so that we may continue in this direction, my colleague, the Hon. Francis Fox, who is in the House today, the Minister of Communications-


The Acting Speaker (Mr. Corbin):: Order! This is the second time the Hon. Minister has mentioned the name of one of his colleagues in the House. I must remind him that he should refer to his hon. colleagues by their title, the name of their riding or their position and not by their own name.


Donald James Johnston: I apologize, Mr. Speaker.
The Minister of Communications (Mr. Fox), who is in the House right now, has proposed establishing a non-profit corporation that would belong to the Government and others and would carry out R&D in the related fields of telecommunications, space technology and information processing. A task force, consisting of representatives from industry, the universities, and Government, will be established to assess the

May 3, 1983
The Budget-Mr. Johnston
viability of this proposal. We have earmarked $250,000 for conducting this study.
The federal Government is also determined that Canada meet the challenge of the emerging new technologies.
To make sure that Canada benefits fully from new developments in the increasingly important field of biotechnology, the federal Government is committing $22 million toward implementing a national biotechnology strategy. This strategy will support research networks-involving Government, universities and industry-which will concentrate on using biotechnology to improve the use of Canada's resource base and industrial development.
Microelectronics is also an important area for Canada's technological future. The federal Government will be establishing an initial fund of $7.5 million over two years to support the development of a national microelectronics design network. The funds will help establish a university-based, computer-linked network of design and testing stations for very large scale integrated circuits. About thirty universities are expected to participate in the expanded design network which will be closely integrated with the current work of industry in the microelectronics field. These facilities will help train the manpower critical to the expansion of the Canadian microelectronics industry and make an important contribution toward the creation of a technologically oriented work force for Canada.
Success in all these initiatives depends on the awareness of science and technology on the part of the public.
I am pleased to announce that the federal Government will sponsor a national "Canada Tomorrow" conference in the fall of 1983 which will highlight the effective management of technological change, especially as it affects the working Canadian and industry and trade in this country. This forum will bring the various sectors involved in technology development together-that is, labour, business, universities and Government-to form a deeper understanding of each other's requirements and concerns.
[ Translation]
The provinces also have an important role to play in the technological development of our country. Over the last few years, our activities in this field have increased tremendously. The federal Government intends to work together with the provinces in order to achieve a co-ordinated and harmonious blend of objectives, policies and programs that will launch Canada's recovery.

The Government's commitment to technology is evident, both in the level of current support to research and innovation and in the strong support which the budget has given to research and technology.
The Special Recovery Capital Projects Program has allocated $290 million over the next four years to establish 15 new or expanded research and training facilities. Projects are expected
to substantially expand research capabilities to serve the forest products, fisheries, agri-food, manufacturing and mining industries. In addition, $ 180 million has been allocated for the accelerated procurement of high-technology electronic and communications equipment.
As part of this program I am pleased to inform the House that my colleague, the Minister of National Defence (Mr. Lamontagne), has just announced today in St. John's, Newfoundland, the purchase of high technology communications equipment for the Canadian Forces valued at more than $67 million. These purchases include: $19.5 million for the search and rescue satellite project which will provide advanced technology to help locate aircraft and ships in distress; $38 million for a military aeronautical communications system which will be installed at various bases across Canada; $5 million for new high frequency receivers to upgrade the current communications networks; and $5 million for new CW20 microwave communications systems at selected bases across Canada. In addition, the Minister of National Defence announced the allocation of over $20 million to improve helicopter search and rescue capabilities in Canada.
As I said at the outset, over $700 million has been set aside in the budget for technology development. This is in addition to the $3 billion that the federal Government had already budgeted for technology support in the 1983-84 Estimates. It also does not include, and I emphasize this, the $200 million of forgone tax revenues for current R and D expenditures, nor the $185 million the new tax changes and proposals would add to that basic figure.
We must now turn that large and important investment into action. Central to this success is the concerted, co-operative and combined action of all sectors. We now have the policy structure and the fiscal support to push forward Canada's technological advance. It is now up to us to take advantage of the opportunities at hand to build towards a prosperous 1990.


Mr. Thacker:: Mr. Speaker, I have two questions for the Minister. One of the most recent high technology programs which could be brought in by the Government is the long baseline radio telescope which is proposed for across the country. Does the Minister know if that project is going to go ahead? Second, would its headquarters be at the University of Lethbridge, which I gather from the scientific data is the logical place for that headquarters?


Donald James Johnston: Mr. Speaker, there has been no decision taken as yet with respect to the baseline array. Much interest has been expressed in the Hon. Member's own constituency of Lethbridge. I myself, as the Hon. Member may know, have met with representatives of that community, including the President of the University of Lethbridge. Of course, it is a very exciting proposal and a very expensive proposal. It is, indeed, one that deserves close study and that is being done, I understand, by the National Research Council at the present
May 3, 1983

time. However, no decision has been taken with respect to that particular project.


Blaine Allen Thacker: Mr. Speaker, the Minister might comment as to whether he, in his own mind, believes that it is a high technology project and whether it would fit within the 100 projects which the Government has envisaged. However, my second question goes on to another very important research facility in my riding at Lethbridge called the Animal Diseases Research Institute. The Minister knows from his days in the Treasury Board that we have some very top scientists working under very antiquated conditions and in outdated buildings. I am wondering if one of the 100 projects would be new capital spending for the Research Institute in Lethbridge.


Donald James Johnston: Mr. Speaker, as the Hon. Member probably knows, I have over-all responsibility for the Special Recovery Capital Projects Program in terms of its moving forward and its co-ordination and implementation. I have said in the past, and would reiterate today for the benefit of Hon. Members of the House, that the specific projects will be announced in the very near future, as they become ready for announcement, by the line Ministers responsible in each case. I would hope that all of the projects will be announced within the next several weeks. I would only ask the Hon. Member for Lethbridge-Foothills (Mr. Thacker) to bide his time and await those announcements as they are made.


Mr. Deans:: Mr. Speaker, yesterday I asked the Minister's colleague about the whole question of plants which just simply close down and move away without any concern for the community or the workers involved, and there are many examples. The Minister speaks about technological changes which must take place and the new technology which must be introduced into Canada. I do not disagree with him for one moment. However, has he addressed the question of what corporate behaviour we could require from those companies which operate here, which receive considerable benefit from our tax structure and which demand in many ways that communities expend tax dollars to create an infrastructure which enables them to operate efficiently and effectively? And how do we demand from them a level of corporate behaviour which requires them at least to sit down with the people most affected, the Governments, the employees, the municipal officials, to discuss their plans in advance and the way in which they might live up to their responsibility to those communities?


Donald James Johnston: Mr. Speaker, I would emphasize that, with respect to this whole question of management of technological change, I doubt that there is any area more important and of more concern to the Government, and obviously to the Hon. Member, than the issue of appropriate measures for labour adjustment. That is why there has been proposed the establishment of a national technology productivity centre, whatever the name may ultimately be, to address the very issues which the Hon. Member raises in his question. I am convinced, and I believe members of the community who are very familiar with technological changes as they are taking place across the
The Budget-Mr. Johnston
western world are convinced, that the pace of change and the capacity of our system to take advantage of change in order to improve our productivity would depend very much on the extent to which we address that very issue.
We intend to move forward and do everything we can, Mr. Speaker, to identify the extent of the problem which, as the Hon. Member probably knows, is a subject of some debate- the extent to which these changes will impact on the workplace in the short term and, perhaps more importantly, in the long term. We see short-term impacts, for example, in the clothing, textile and footwear sectors.
As the Hon. Member knows, we have established the Canadian Industrial Renewal Board which has as one of its mandates attempted to address adjustment, to bring new industries into communities affected either through the reduced activity in plants or through the modernization of plants. Because both have their impact on employment levels; there is no doubt about that.
All I would say, Mr. Speaker, is that the question raised by the Hon. Member is very much on our minds and is specifically addressed in the technology policy paper, and will be specifically addressed by my colleagues, the Minister of Labour and the Minister responsible for DRIE, the Department of Regional Industrial Expansion, as they go forth to try to set the terms and conditions among labour and industry leaders for the establishment and operation of the centre.


Mr. Blackburn:: Mr. Speaker, as the Minister knows, microtechnology, microprocessing and robotronics will be replacing assemblers in many of our industries; in fact, they already have. This is a process which has been going on for a number of years. In fact, Alvin Toffier told us about it five years ago. In view of the fact that it is estimated that some
400,000	assemblers in Canada will be displaced by robotics and microprocessing by 1985, in view of the fact that at the present time there are virtually no facilities for retraining anywhere in Canada which would accommodate a substantial number of employees, and in view of the fact-and I will give a specific example-that in Brantford, Ontario, at Mohawk College, if your Unemployment Insurance benefits have run out, if you are on a retraining program in high-tech, if you are married and have two children, you receive $106 a week to exist on, I would like to know what the Minister and his Department are going to do specifically to address this problem of 400,000 assemblers being displaced by robotronics and microprocessing, with woefully inadequate facilities not only at the present time, but which will continue to be woefully inadequate right down to 1985? What is being done to assist them?


Donald James Johnston: First of all, Mr. Speaker, I am not certain that I can verify the number of 400,000, but whatever the number may be it is clear, as I mentioned in my earlier response, that Government, industry, the labour movement itself and the provincial Governments all have to be brought together in a concerted action plan to address the issue of job displacement and retraining.

May 3, 1983
The Budget-Ms. McDonald
I infer from the Hon. Member's question that he feels that steps which have been taken today have been inadequate. I believe the programs which have been designed and brought forward by my colleague the Minister of Employment and Immigration (Mr. Axworthy) have been very creative and very effective. In fact, I doubt that at any other time in the history of this country, or in the history of many other countries, there has been such ambitious programs brought forward to address the very problem which the Hon. Member raises in his question. I point out that in the budget speech of the Minister of Finance, when dealing with the issue of technology, the Minister said, and I quote from Hansard at page 24667:
Moreover, workers will have to acquire new skills and knowledge throughout their working lives. With this in mind, I am allocating tonight an additional $155 million for human resource development programs. This will bring to $1.2 billion this year the funds allocated for skills development in occupations that are significant for economic growth.
I would suggest, therefore, Mr. Speaker, that indeed the Government has made a very important and major contribution in addressing the very problem which the Hon. Member raises.


Mr. Bockstael:: Mr. Speaker, the Hon. Minister of State for Economic Development (Mr. Johnston) referred in his talk a little earlier to the budget proposals to create industrial incentives for research and development. I would like to ask if these industrial incentives are to take the form of a tax incentive for research and development. This may be applicable to some corporations but there are corporations which may not want, or be in a position to take advantage of, tax incentives. Are there any recommendations which the Minister wants to make in that regard?


Donald James Johnston: Well, Mr. Speaker, it is not so much a question of making a recommendation; it is a question of identifying what is being provided. There are special tax investment incentive provisions provided, including the flow out of a tax incentive to new equity purchasers of corporations, which I suggest could be very valuable indeed to some of the firms who are not in a position to take advantage of some of the write-offs which would enable them to acquire effectively more equity.
In addition to that, of course, I referred during the course of my comments to certain specific proposals-


The Acting Speaker (Mr. Corbin):: I really regret to interrupt the Hon. Minister, but the time allotted for questions and comments has expired.


Ms. Lynn McDonald (Broadview-Greenwood):: Mr. Speaker, there is a lot wrong with this budget. It is a real travesty. It is shortsighted. It looks up to the next election, but it does not look much beyond it. It does not look to the long-term future of the country. Therefore it is irresponsible. It is unfair. It continues the practice of "Those who have, get more", and it is hypocritical. It is full of contradictions throughout. There is the appearance and then there is the reality when you look underneath the appearance and see who actually is going to pay for the programs and is going to benefit from them.

This is not a recovery budget, it is a wait-and-see budget. As an instrument for creating jobs, it is entirely inadequate and powerless. The special recovery program will spend $4.8 billion over the next four years, in other words, an average of $1.2 billion per year. However, if we consider that the Government's monthly bill for unemployment insurance benefits is over $1 billion, the so-called recovery program is certainly not much, compared with this country's unemployment problem. This is wait-and-see, not recovery. We are waiting for the economy to recover elsewhere, especially in the United States, Japan and Europe, and then Canada will resume its traditional role as a supplier of natural resources. The budget mentions programs to encourage research and development in industry, but the proposals it contains will, in our opinion, be totally ineffective. When a problem is not fully understood, the remedy is often useless, due to poor diagnosis. In this case, the Minister has failed to realize that the reason for the lack of research in industry in Canada is the! multinational system. Canadian branch plants and multinationals do not invest in research and development here, because their parent companies do not want them to.
The budget goes on to mention that it is not the fault of Canadian tax incentives, because they are at least as substantial, if not more so, than in other countries. So what does the Government propose to do. Increase tax incentives! There is no mention of the structural reasons for a lack of investment in research and development, and there is no discussion of the real problems. It is a fact that countries like Japan, the United States, Sweden and the Federal Republic of Germany devote a far greater percentage of their gross national product for research and development than we do. Let us consider countries that are financially more independent than we are, where the economy is controlled by that country's citizens, and where companies tend to invest more in research and development than we do with our financial dependent economy, that is controlled from outside by the multinationals. I am afraid that unless we tackle the basic structural problems, we shall not be able to provide the remedies that are required.
There are two parts to this Special Recovery Program; Public Works and Special Recovery Capital Projects. While these may be good in themselves and some projects will certainly be useful, they are generally small projects because it is a pork-barrel budget. These projects are opportunities for Cabinet Ministers to tour the country to announce projects, hold press conferences, turn sod and cut ribbons.
There is no doubt that some needed work will be done; facilities will be built, transportation improved and tourist facilities upgraded. But in certain respects the budget reveals a serious lack of understanding of what is essential, especially
May 3, 1983

with regard to research and development and high technology procurement.
In this respect the budget is drastically in error by what it does not do. It does not begin to ask why we do not conduct adequate research and development in Canada, why we do not export enough and why our enterprises do not have enough incentives to do this. The budget does not address the root causes. However, the budget attempts to be more than just a summary of expenditures and revenue for the next year. There are four-year projects mentioned. There are copious supporting documents. There are projections and analyses, but these are self-serving analyses. No matter how many appendices, tables and graphs are provided to the Minister, they will do very little good if the right questions are not asked.
There are Special Recovery Incentives for Private Investment. This is where the budget moves from a slight touch of Keynesian economics to an enthusiastic endorsement of Reaganomics. The rich have to be bribed with ever more generous gifts to invest their money while low and middle income Canadians are called upon to make sacrifices for national recovery, as in the six and five program or later in the budget when there are tax increases.
This part of the budget is wrong not only because of its inequities, it is misguided. Incentives are provided for businesses to expand but Canadian businesses are working at an average of only 70 per cent capacity. They could be expanding considerably now, a full 30 per cent, without adding any new capacity simply because of under-utilization.
As well, there is the Special Recovery Export Financing Fund. Certainly we are all in favour of stimulating exports, but what this budget proposes is hopelessly inadequate because it does not address the real structural problems inhibiting export in the multinational system. Many branch plants are forbidden to export because they are not to compete with the companies in the parent system.
The Minister is concerned in this program about increasing the deficit and crowding out investment in future years when the recession will presumably be over. Therefore, he has funded it by a special recovery tax. Who is to pay this tax? Consumers are to pay. There is an increase in the manufacturing sales tax from 9 per cent to 10 per cent and a similar increase for construction materials, alcohol and tobacco, although not to be effective until October, 1984 or probably after the next election. An increase in the sales tax is wrong because it certainly is regressive. People with lower incomes pay a higher proportion of their income in sales tax than those with higher incomes. It continues the trend of Liberal Governments to raise taxes mostly from individuals. We will see more evidence of this later in the budget.
The next part of the budget consists of tax giveaways to corporations. Again, we see the trend continued with the manufacturing sales tax where the tax burden on corporations is reduced and increased on individuals. During the 1950s, taxes in Canada were paid roughly half and half between corporations and individuals. Presently, four-fifths are paid by individuals and only one-fifth by corporations.
The Budget-Ms. McDonald
There are changes to the mining depletion allowance, which is already high. It will be made deductible against nonresource income of those who finance mining ventures. While we are all agreed that mining is an important industry, should it be given this much favouritism? Mining has been hard hit not for lack of investment but because of the world recession. It is already highly favoured in taxes compared to other Canadian industries, such as the textile industry, which is an important employer in Canada and pays a much higher proportion of its income in taxes than do mines. Mining provides jobs in the mines and associated services but does not provide manufacturing jobs where there is a better return for the investment dollar in terms of job creation.
Furthermore, Canada imports almost all of its mining machinery and equipment, so that means that we will be providing more jobs for people in other countries, mainly the United States and Europe. Yet we have been given as a reason for not cutting income taxes the fact that Canadians would purchase imported goods. It seems the Minister does not realize that corporations import too, and mining companies import enormously. This is why the NDP has advocated in its industrial strategy the development of a manufacturing sector that could serve our resource industries instead of developing natural resources only. The two should go together; but we see no attempt to move in that direction in this budget.
In housing we see the continuation of the principle that "those who have get more". There is an increase of only 2,500 units planned in the 1980s for social housing. This is an area where we badly need additional housing, certainly in my riding and across the country. But most of the program is devoted to those who can afford to buy a new home.
The demand for more co-ops is often met with the argument that middle-income people are subsidized in co-ops, people who do not need it, yet here we are seeing subsidies of $3,000 in home owner grants to people who can afford a new home. There are provisions in the RHOSP Program, which is a system of tax deductions and as such is an advantage to people who are better off. This plan allows people to withdraw funds for the purchase of furniture and appliances. Certainly we are in favour of stimulating consumption to get people back to work but our concern would be to find efficacious and equitable ways of doing it. Using the tax deduction system to do it is regressive and unfair.
In child benefits, again we see that the appearance and the reality are different. Measures are announced "to provide additional income support for lower income families, working parents and others in need". The child care expense deduction is increased and this, of course, is welcome for the reason that existing provisions were certainly inadequate. But the way the additional relief has been given in objectionable. Tax deductions benefit high earners more than low earners, and people below the taxable income level not at all.
A great commotion was made over continuing the Child Tax Credit, which is advantageous to low and middle income

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The Budget-Ms. McDonald
earners. It will be continued at the present level when otherwise it would have been dropped. But this is simply giving back what had been taken away. Why was the Child Tax Credit increased? Well, because the Family Allowance was reduced. If the Minister had not reduced Family Allowances in the first place, he would not have had to get into this juggling act of changing funds from source to source.
The Minister is paying for the so-called additional benefits by deindexing the child tax exemption. Since the exemption system is regressive, this is not a bad idea; but a better way would have been to reform fundamentally the whole child support system. It is fraught with inequities and this budget does not address those inequities; it does not come up with a better system, which is what we need. The end result is that people with children will be paying higher taxes in the future, so that this so-called additional income support disappears. The net gain to the Government over the next four years is $585 million from people with children. It is a juggling act. The Minister bounces money from one hand to another, and in the end he ends up with more and families end up with less.
Finally, the budget announces a few innovations which are presumably supposed to make us think the Government is really looking to the future and dealing with basic problems. We are going to have a national centre for productivity and employment growth, and who can be against that? But what confidence do we have that it will even direct the required attention to the real problems? Certainly the budget does not. Is it just going to be another bureaucracy putting out glossy annual reports? Is it going to focus attention on productivity of the worker and not on the structure of industry? Is it going to follow the advice of the Minister of Employment and Immigration (Mr. Axworthy), who does not seem to be against importing mining machinery from Sweden or foreign control of our economy, but becomes a positive nationalist when it comes to looking at other countries for their ideas on how to control their own economy. We recommend considering social democratic experiments in Western Europe and looking at the low rates of unemployment. According to him, it is not Canadian to look at social democratic countries in Western Europe, but it is okay to import massively from them and not develop our own economy. If this is the kind of thinking we are going to see at the national centre for productivity and employment growth, we can predict it will not do any good.
To conclude, Mr. Speaker, there is a lot wrong with this budget. It is a Conservative budget, full of giveaways to corporations. It is a sly and tricky budget, a pork-barrel, preelection budget. It is unfair. It continues the trend of shifting the burden of taxation on to individuals from corporations. It is shortsighted and does not deal with the real problems of our economy.
The Minister's kerfuffle with the zoom lens has been a boon to the Tories who otherwise would have had very little to criticize in this budget. But to anyone concerned with longterm welfare in this country, it is a pitiful miserable exercise.
I must compliment the Minister for the opportunity he has provided to Cabinet Ministers to pretend something is happening and the clever way he has disguised tax increases in delayed sales taxes and deindexing deductions. But I want to assure him that my Party will do all in its power to expose these sneaky tricks and provide constructive criticism, to outline alternatives, and to direct attention to the real problems undermining our economy and to stress equitable ways of raising taxes so that the burden of running our national economy will be fairly shared. We have an entirely different approach to the budget from what we have seen so far, Mr. Speaker, and we will continue to work for those kinds of alternatives.


Mr. Friesen:: Mr. Speaker, I note with interest the comments of the Hon. Member for Broadview-Greenwood (Ms. McDonald), and I must say that I would agree largely with her general comments regarding the budget. But she referred to the provisions regarding housing, specifically the $3,000 grant to the people who want to buy a house, and then compared that to the minuscule amount provided to co-op housing. Does the Hon. Member know what the subsidy is for co-op housing per unit on the life of the mortgage, since she is casting aspersions on that program?


Lynn McDonald: Mr. Speaker, I could not give a figure and no figure is given in this budget. No amount is given, even for the assistance to co-op housing, simply the number of units; 2,500 units are specified at no particular amount.


Benno Friesen: Well, Mr. Speaker, if she will check with CMHC officials, she will understand that this is 2 per cent money we are talking about concerning co-op housing. That is, the Government pay in subsidy form all the money on the mortgage except for 2 per cent which the co-op picks up. When interest rates were highest the subsidy per unit was in the area of $500,000 over the life of a mortgage. Now, with rates lower. I am sure it must be down to about $250,000 or $300,000, which is still a substantial subsidy for those co-ops. It is by no means low-cost housing. It may be low rent housing but not low-cost housing.
I ask her to comment on the relative subsidy comparison between the $3,000 grant for first-time home buyers and a subsidy for co-op housing which could be as high as $300,000 over the life of the mortgage. I then ask her to comment as to whether or not the provisions of CMHC are adequate in making sure that only low-income people live in those co-op housing units, because I can assure her that many middle-class people are taking advantage of that good benefit.


Lynn McDonald: Well, we have to compare unit by unit. To my knowledge CMHC does not provide the necessary material to do this. Right now co-ops normally have a 25 per cent limit on the number of people at subsidized levels. Many co-ops would be quite happy to go up to 50 per cent but the rules forbid them from doing this, so they would have a much higher proportion of people with low incomes in them. Co-ops certainly in my riding are comprised on average of low-income people but the Member certainly is right, there are some people in the middle income level.
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I think CMHC should provide data so that comparisons can be made in a careful way. CMHC does not do this. They do not analyse their subsidies by income level at all. There is no ceiling on this and we do not know to what income group the subsidies are actually going. I tried to find out at the time I was housing critic and the information was not available. CMHC had never collected the information. So I am afraid I cannot answer questions when CMHC does not collect the data.


Mr. Jim Peterson (Parliamentary Secretary to Minister of State for Economic Development and Minister of State for Science and Technology):: Mr. Speaker, I am pleased to be able to rise on this occasion to deal with the question before us in the House today, which is the introduction of the new technologies into the structure of Canada's productive machinery; in other words, our economics in Canada.
First, I would like to outline several of the measures that have been taken in the past which bring us to this point in our discussion of the budget today. In 1979 we decided that Canada's performance in terms of research and development was far too low. In 1967 we had reached a level of 1.2 per cent of Gross National Product that was being spent on research and development of the new technologies. From 1967 to 1976 this level of 1.2 per cent of Gross National Product fell to an all-time low of .96 per cent of Gross National Product. In 1978 and 1979 in a responsible fashion we set out to do a great deal about this. We set new, realistic targets. We set a target of 1.5 per cent of Gross National Product by the year 1985 that would be devoted to the new technologies through research and development.
This is not something which the NDP would like perhaps because it is not all being done by the Government alone, but by the Government and the private sector. We felt the major responsibility for creating new research and development in Canada rested with the private sector, that it rested with those firms making the products and having the responsibility for marketing them. Fully one-half of our increased commitment of 1.5 per cent of GNP would have to be satisfied by the private sector. One-third would come from the federal Government and the remaining one-sixth would come from universities, foundations and provincial Governments.
I am very pleased to announce today that we have more than met our targets to date. At the end of 1982 we reached 1.34 per cent of GNP being spent on R and D. I project that we will surpass our 1.5 per cent target by 1985, and I am pleased to announce that both the federal Government and the private sector have exceeded their targets in bringing us to this level.
I must respond to some comments made by the Hon. Member for Broadview-Greenwood (Ms. McDonald), primarily because I think she is doing a disservice to the people we are endeavouring to serve and because she is in total conflict with the official Opposition critic of the New Democratic Party, the Hon. Member for Kamloops-Shuswap (Mr. Riis).
I want to talk about the $2.4 billion in programs that we are using to generate immediate employment. We have been in favour of infrastructure improvements in order to get jobs
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going and to accelerate the deployment of capital to bring the jobs onstream now that have been waiting a couple of years on shelves in various areas. These are things that are needed to improve our competitive structure. Perhaps they are institutions which we have to have but which might have been delayed because of the tough economic times we have been facing. We are bringing these forward with $2.4 billion in projects. For the Hon. Member from Broadview-Greenwood to have the audacity to criticize this type of thing-the job creation, the infrastucture improvements and the improvements that will take place in our competitive position because of what we are doing in this area-is, in my view, nothing more than cheap politics.
The Hon. Member from Broadview-Greenwood failed to mention the Special Recovery Program of another $2.4 billion which will be directed over the next three years to help accelerate our recovery from this recession. This includes many incentives for the private sector to help it build up equity bases and to help sell equity capital, to help investors get involved and to increase our exports. What I am particularly proud of is the help this program will give to our industrial infrastructure based on numerous technologies.
Why, I ask in this House, must we always be looking for the cheap shot and why must we always be against something? I have heard some good ideas from Opposition Members in the past. Certainly our capital works project is one project that is agreed to by the official NDP Finance critic. I think when we face serious economic times we should pool our collective expertise, not make cheap political points. We should try to find solutions to the problems that we face.
I would like to comment on what I think are some of the roads that we should be taking in the future so as to increase Canada's productivity and our ability to compete. If we cannot compete internationally, then I am not really sure that we will ever be able to make an economic recovery. We are a trading country. We are dependent upon foreign markets for our produce. But just as important as our raw materials, we are dependent upon foreign markets for the type of manufactured goods that will create jobs in the future. Here again we get into the whole area of high technology.
I believe the public sector and the federal Government have an opportunity to lead in implementing new technologies and in making the public sector more productive. The taxpayers have a right to the best productivity that we can generate. The new technologies, computers, word processors and so on will help us here.
There is a second aspect to the federal Government's role in this area. By using the capacity we have-because we are a huge employer of white collar workers-and by using the federal Government as a laboratory, not only do we improve our own productivity but we can set the lead for the private sector to follow in terms of the new techniques that we can develop which can in turn be passed to the private sector. In other words, we have an opportunity to be leaders in the public

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sector in terms of increased productivity by utilizing new technologies.
I was somewhat alarmed to learn the results of a study done by the Ontario Government task force on microtechnology. It indicated certain attitudinal barriers in Canada, that Americans are much more optimistic about what new technologies will do for workers. Canadians, on the other hand, are much more afraid they will be displaced by new technologies and that they will lose their jobs. Americans felt that new technologies will increase their productivity and will make their jobs more interesting. They are far less concerned about displacement.
I want to address that issue particularly because it affects a great number of women in our workplace today. There is a fear that women will be displaced by utilization of new technologies, new machinery and new techniques. To those who are concerned generally and to those who might have concerns arising out of the Ontario Government's task force report, I would refer them to the commission of inquiry into technological change in Australia. That study indicated that there would be an adverse impact on female employment in areas such as telephone operators, bank tellers who are being replaced by the Green Machine, or cashiers being faced with automated cash registers. On the other hand, the study found that there would be incredible opportunities for women in the work force because of the new technologies.
Recent studies conducted in Ontario pointed out that this depended upon the structure of our industry and our business. For example, there are 46,000 charitable organizations in Canada, each of which has at least one female worker. They will not be displaced by new technologies. They can become more productive, more efficient and accomplish a great deal more using the new technologies. They will not be replaced.
Another study indicated that in Ontario the average number of employees in a firm was only four. Almost every one of them employs women. These women will not be replaced by machines which can do things ten times as quickly as the old method. They will have their productivity improved; they will not be replaced. We have to ensure that each new business in Ontariao or, for that matter, throughout Canada has access to the new technologies and knows how to use them.
Approximately 40 per cent of businesses are using updated or newer technologies at present in Canada. This means there is a tremendous market for new machines, new software and new programs. Also this means that many more people have to be trained in how to use them. I am not sure whether this should be strickly the responsibility of the federal Government, as the New Democratic Party implies. It seems to me that the vendors of this equipment who want to have it in the workplace, sell it or lease it, can play that role very adequately. They can train people in the new technologies. This does not mean that the Government does not have a role to play in retraining. Despite the fact that it is not within our constitutional confidence we, the federal Government, by default have
had to make enormous commitments to new training techniques.
I look to a higher level of sophistication and specialization by women in the work force. Their role will not simply be to process data but to interpret it and to make management decisions which are necessary and inexorably flow from the new technologies and data they produce. The education of women is of some concern to me. By 1985 it is predicted that we will need 8,000 engineers and Ph.D. graduates in science and will fall short of that mark by 50 per cent.
The Science Council of Canada has just published an excellent booklet entitled "The Science Education of Women in Canada". It shows that girls in high school 15 years of age and under who drop out of the sciences, physics and maths are doing so at twice the rate of boys. In other words, women are not taking those subjects in high school which will equip them to deal with the new types of technologies which Toffler's "The Third Wave" has brought upon us. This deprives many women of flexibility in career choices. Also it means that in the future we will have fewer women who are capable of assuming management and leadership roles in universities, Governments and industry. We have a duty to bring this type of information to the attention of young people who are at that critical path in their lives when they must determine their career opportunities.
We have a great opportunity in our service sector not to worry about losing jobs but actually about increasing them. "The World Challenge", published by Jean-Jacques Servan-Schreiber, referred to the opportunities that align us, the developed world, by helping to develop the Third World. Not only do we have a moral obligation to see that the Third World becomes industrialized, developed and that its people achieve a higher standard of living, but in so doing there lies tremendous opportunities for Canadians.
I do not want to see our foreign aid budgets cut back, particularly as they apply to Canadian consultants being hired to go abroad and help disseminate these new technologies which will have the possibility of elevating the standard of living of the Third World. In so doing they will also increase the ability of the Third World to buy Canadian technology and services.
Another route at which we should look is one which would take advantage of Canada's unique position in North America and the existing strength of our service sectors. By looking creatively at our system of international tax treaties for the avoidance of double taxation and which deal with withholding taxes, international capital flows and amendments to the Income Tax Act, Canada could become an international financial capital centre, and multinational companies around the world would use Canada as a basis for servicing their capital. They would be taking advantage of our financial institutions, banks, trust companies, loan companies, insurance companies as well as our accountants and legal profession. Money would be coming into Canada which would otherwise have never had an opportunity or a need to come here. This type of approach could vastly increase employment in our
May 3, 1983

service sector and it could put Canada at a crossroads in international capital flows in order to bring Canada even more to the centre of what is our true destiny, that is, a leader in international business and international trade. It could bring our country even more to the forefront of what really is our true future.
I have tried to address what I think are some of the concerns I hear expressed by the electorate of Willowdale and by people who come to see me. The point has been raised by Opposition Members that the new technology is something to fear because it will get rid of jobs. It will require new investment in human capital. It will require individuals themselves to make the effort to learn new ideas and to retrain themselves to cope with the new world they face. I do not look upon this as a threat. It is a challenge and a tremendous opportunity for Canadians to increase their productivity by bringing onstream the new technologies, by working with them, and by using them as our servants in order to increase our standard of living and our ability to compete. We can do it. It is an opportunity that is not a threat. The new technologies are the bit that we will use to drill our way into a new world of international competitiveness based upon exports, long production runs, manufacturing, and a much greater use of the new technologies.
I am pleased that the thrust of the new technologies is one of the linchpins of our new budget. It is one of the reasons the budget was so well received by Canadians from all walks of life.


Douglas Charles Neil: Mr. Speaker, I do not very often congratulate a Member of the Government on his comments, but the Hon. Member's speech was very constructive. It was a good speech. I agree with him about the importance of research and development and to make public corporations and the various levels of Government aware of that importance.
I have one or two questions I would like to put to the Hon. Member. He indicated that the Government had met its target as far as expenditures on research and development are concerned. He gave a figure of 1.5 per cent of the Gross National Product. Could he indicate the Government's target for research and development in agriculture and whether he feels that target has been met?


James Scott (Jim) Peterson: Mr. Speaker, I would be pleased to obtain that information. I do not have the figures on the specific breakdown. I know that we have taken a lead in terms of the new installations in Saskatchewan in dealing with hydrology and the very important impact that has on agricultural producers. You cannot produce crops in Saskatchewan without having a very good reading of the types of soil conditions and particularly the water content.
I am proud to say that Canada has been a leader in the area of agriculture. Our agricultural sector deserves a tremendous compliment. The Holstein cow, for example, is regarded throughout the world as probably the best giver of milk. With the new open transplants and the ability to preserve and ship
The Budget-Mr. Peterson
semen around the world, Canadian cows are probably in almost every country of the world that is a milk producer.
We have in the past developed the single best type of wheat, No. 1 Northern. This has required a great deal of innovation, research and development. It does not mean that we have achieved everything we want to in the realm of agriculture, but the agricultural technology developed in Canada is probably without parallel in the world.
Part of our CIDA program involves disseminating this new technology for agriculture around the world. The Hon. Member makes a very valid point. There is probably as much value added in science and technology that goes into producing that kernel of wheat which is now a world leader in export markets as in some of our newer manufacturing plants.
If the Hon. Member's point is that we are going to neglect our traditional industries as they may not appear to have high-tech involved in them, it is a misunderstanding and I hope Members on all sides of the House will address and deal with that directly.


Douglas Charles Neil: Mr. Speaker, there is no question that the research that has been done by the Department of Agriculture over the years is some of the finest in the world. Unfortunately, however, if one examines the Estimates over the past number of years, one will note that the increase in the budget for research and development in agriculture is about 1 per cent. It has fallen far behind the rate of inflation in this country. This is unfortunate, because if we are to increase our production of grain and other crops, we must not only keep up to date but keep ahead of other countries as far as research and development is concerned. If nothing else, I hope that the Hon. Member will impress upon the Minister of Agriculture (Mr. Whelan) and the Minister of Finance (Mr. Lalonde) the importance of research and development in agriculture, not only by the Government but by the private sector.
It is rather unfortunate that it took the Minister of Agriculture a number of years to release some $9 million of prairie farm assistance money to an organization in the prairies interested in research and development. The matter has been discussed for several years. Only today a news release came across my desk showing that some $9 million had been turned over to this organization from the old PFRA fund, $9 million of farmers' money that had been held since 1972, non-interest bearing. If that money had been turned over years ago for research and development, just think of the progress that could have been made in the private sector in co-operation with the public sector.


James Scott (Jim) Peterson: Mr. Speaker, I am not familiar with the particular issue raised by the Hon. Member but I will certainly be pleased to look into it. The point he makes about the necessity for continually re-evaluating what we are doing in the field of agriculture is critical. I look at opportunities which Canadian consumers have to save money and to buy Canadian. Why do people necessarily have to purchase fresh fruit and vegetables from abroad during our winter months? During our summer months we can grow more than enough to feed all

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Canadians, if we are prepared to put it into cans. With a little research and development, possibly using solar energy or the new types of energy which we have in abundance, we can grow fresh fruits and vegetables all winter at very little cost, maybe even at a saving compared to the cost of imports.
This goes back to one of my other pet projects in this area. Why are Canadian consumers not more aware of the tremendous opportunities we have to exercise the sovereignty of our buying dollar when we go into the stores to "Buy Canadian"? Why do they not look for the "Made in Canada" label? I would venture to say that in the stores you can find comparable quality at a comparable price for Canadian-made goods. Even if you have to pay a couple of pennies more because other countries have an advantage in certain areas, why do Canadians not exercise their right as consumers to help their fellow producers?
Why do all Canadians not engage in a mutual self-help exercise? The agricultural area is a perfect place to start looking at this. This is something we can do every week when we visit the shopping market. Another point which the Hon. Member makes-


The Acting Speaker (Mr. Corbin):: Order. Under the procedure, a Member should not abuse the time for questions and replies. The point has been replied to and another Member is seeking the floor.


Mrs. Mitchell:: Mr. Speaker, I am very interested in and totally in agreement with the statement of the Hon. Member regarding self-sufficiency in food and more production of food in Canada. The Hon. Member has a little more influence in Government than we do. Would he actively support a job-creation program and economic development project that would encourage and give assistance to the development of food producer co-operatives and consumer food co-operatives? If every community could have solar greenhouses which were operated co-operatively, with start-up funds from the Government, this could be greatly expanded. Would the Hon. Member consider this special project and work within his Party and Government to that end?


The Acting Speaker (Mr. Corbin):: The Parliamentary Secretary has 30 seconds to reply.


James Scott (Jim) Peterson: Mr. Speaker, yes, I certainly see the co-op movement as one which has taken off on its own without the necessity of Government intervention, because enterprising individuals feel that they can derive benefits by working together. They do not need the heavy hand of Government to legislate or fund them. There are many co-ops that have established themselves without Government support. I have a great deal of respect for many of the co-ops I have seen. We see co-ops in financial institutions, we see them in many small towns in rural Ontario, we see huge co-ops that work very effectively in the west. If enabling legislation and the removal of some red tape impediments is all that is necessary, fine. I want to consider the question of how much public funding
must go into these co-ops, since they have already demonstrated in many areas that they can produce dividends without the necessity of dipping into the taxpayers' pockets in order to make them feasible.


Hon. Allan B. McKinnon (Victoria):: Mr. Speaker, it is a pleasure to rise and take part in this debate today. It is indeed a very important debate on a very important budget. In many regards this budget is like no other budget we have had. I realize that there is to be a vote on the budget. There was a vote last Thursday, one that was remarkably close. Only 15 votes separated the two sides. Unfortunately, the NDP was otherwise engaged, 12 of their Members being absent for the vote. This prevented the difference from being narrowed down to three votes. One must realize that 12 Members, nearly 40 per cent of the NDP's strength, were away; it is 37.5 per cent, I believe. We have grown to expect that when the Liberal Government is in danger, the NDP will rush to their rescue, whether it means rushing away from the House or rushing into it.
This budget has a deficit of a size that is astonishing to the world, I suppose. I was listening to the radio this morning and heard that there is concern that the American deficit is not being looked after by the United States Government. If the United States Government does not do something about the size of its deficit, it will have a dramatic effect on the markets in the world.
On a per capita basis, their deficit is about two-thirds of that of Canada. In other words, our deficit is about 50 per cent higher per person than that of the United States. The deficit in the United States is causing some concern throughout the world, though their deficit is relatively modest compared to ours.
The budget has created this enormous deficit of $31.4 billion. We seem now to have the worst of all possible worlds. It is bad that the deficit is extraordinarily high, but this can usually be excused on the basis that it will create jobs. However, reading the figures of the Minister of Finance (Mr. Lalonde) on the job situation and when he expects the unemployment rate to ease off, it is not apparent that the unemployment rate will ease off in the future. We have both worlds at their very worst; high unemployment and a high deficit running side by side into the future.
In the past, budget speeches and Throne Speeches provided an opportunity for Members with special interests to present speeches that were not necessarily relevant to either the budget speech or the Throne Speech. Things are getting worse these years. As Mr. Speaker will well remember, it has been so long since we have had a Throne Speech that I am not certain that anybody will remember how we deported ourselves. It seems to me that the last Throne Speech in recent memory was way back several years ago. At that time, Members had the opportunity to speak during those speeches. New Members of the House could make mainden speeches on any subject they chose. I must say that I miss the free and easy-going debates of those days. I would highly recommend to the Government that
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it screw up its courage and try to have one more Throne Speech while it is still in power.
The budget debate to date has been extremely interesting. There have been some remarkably good speeches. We have just heard a couple of speeches that I thought were of outstanding quality. While I disagree with almost everything the Hon. Member for Broadview-Greenwood (Ms. McDonald) said, I believe her words accurately represent her feelings. We have just heard a good speech on the budget from the Parliamentary Secretary to the Minister of State for Economic Development (Mr. Peterson) as well. I feel it is a pity that the Minister of Finance never gets to hear any budget speech but his own. We listened to his speech and 1 feel he should return the compliment once in a while and appear in the House to hear what the rest of us, including some Members of his own Party, think of his budget.
I would like to speak about the effect the budget and the fiscal policy of the Government might have on the defences of this country. The projected budget of the Department of National Defence looks fairly good on paper, but it is based upon a faulty premise. For many, many years the Department of National Defence has operated according to its own inflation model. That is, calculations were conducted every few months to indicate what the inflation rate would be over the next few years.
As the years go by, the Department of National Defence has become a very large user of high technology equipment and materials. The Department of National Defence has more expenses and a higher inflation rate than any other Department. Consequently, because of the inflation model that is followed, the DND index would likely show an inflation factor of 15 per cent when the CPI was running at, say, 12 per cent. Treasury Board accepted this rate and would use it in its calculations to give the Department of National Defence an increase in real terms, as it is known. Treasury Board would add in the 15 per cent plus 3 per cent if it was hoping for a 3 per cent increase.
The Department of National Defence must now take a different tack. The Minister of Finance, presumably with the concurrence of the Prime Minister (Mr. Trudeau), has decided that this is too good for DND so he will force it to use the Department of Finance's model to calculate the inflation rate starting next year. This will result in an entirely false figure for an increase in real terms based on a inflation rate that will be considerably lower than the actual inflation rate on the commodities that Defence must buy, particularly if it is reequipping itself.
The Department of National Defence certainly needs an increase in purchasing power in real terms because, particularly in the early years of what have come to be known as the Trudeau years, the Government was so determined to wither the Department of National Defence and reduce it in size that it froze the budget in an inflationary cycle and consequently the Department had a bitter choice to make. It was thought that this choice would only affect the Department for one year, perhaps 1969 or 1970. The Department decided that it would hold on to its strength in manpower and cease to maintain
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buildings and buy equipment, believing that the following year, as it had been assured, things would be back to normal. Well, things did not get back to normal for three or four years, and by the end of that time not only was DND without replacement equipment for those four years, but in addition it finally had to cut its manpowers strength, and down it went to its present level.
The Department of National Defence sunk so low that at one time its capital budget represented only 9 per cent of its total budget. This is really a shocking figure because in this modern world between 25 per cent and 30 per cent of the defence budget must be spent on capital equipment such as tanks, ships and planes to maintain a modern, capable force that can accomplish the tasks that one would expect of one's national defence forces. In the forecast of the Minister of Finance, between the 1981-82 budget and the 1985-86 budget spending will suddenly be cut by $392 million on top of the other cuts.
The budget produced in June, 1982 by the Secretary of State for External Affairs (Mr. MacEachen), when he was Finance Minister, as a kind of last gasp effort to do a job of which he was incapable, cut $200 million off the DND budget, to be spread over the next two years. The present Minister cut a further $230 million as a kind of rival gift, to be spread over 1983-84 and 1984-85. When making the cuts at that time the Minister of Finance noted that they would "require some adjustment in the nature of the programs we had planned to undertake". How much more adjusting can we expect the Department of National Defence to make?
We then have the rather ridiculous scene of the Minister of National Defence (Mr. Lamontagne) at a conference of defence associations pointing out that DND is due to receive $20 million for "increased readiness and sustainability". This could take the form of ammunition, equipment, spares or even personnel and could involve either the regular or reserve forces. When compared with the $430 million that has been taken from the Department within a year, it can be seen that this leaves quite a deficit. Even with the current budget which allocates $75 million to DND, it is still down $335 million. This is not going to make a difficult cash flow situation for equipment programs any easier.
I should like to say a few words about employment programs that are being discussed these days, Mr. Speaker. DND is supposed to receive $60 million this year and $15 million next year for the Extended Youth Training and Employment Program. Under this program 5,000 people are to be trained and paid the same as recruits in the regular force, but they will officially be Class C reservists with no pension or benefits. They can be had a little cheaper that way. DND officials have been quoted as saying they were as surprised as I was at the low 5,000 figure, as they had expected as many as 20,000.
What will happen to these 5,000 people when their training is completed? Why will the Government not build on this

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program and make use of the young people who have one year's training? That would be an ideal time to increase the manpower ceiling for the regular forces and to make use of the people who have already gone through an extensive part of their training. It would give them the opportunity of staying on after the employment program ends.
In the last few days we have heard of a conflict between the Minister of National Defence and the Minister of Employment and Immigration (Mr. Axworthy), who has been trumpeting his great NEED Program over the land. The purpose of this program is to employ on a short-term basis people who have exhausted their Unemployment Insurance benefits. The Department of National Defence is to be one of the beneficiaries of this. But it must have work that needs to be done, so it simply fired term employees to make room for NEED employees. Many of these term employees have worked for the Department for years. After a fixed term they must be rehired if they are to continue working there. It is an "in" joke in the Department that the term ends on March 31 and on April 1 these people are rehired. In the last five years only 15 term employees have been discharged and that includes, as far as we can discover, 14 who went out on pension.
The two Ministers seem to be working a double shuffle using a revolving-door principle. They have let hundreds go from what those people had considered to be fairly permanent jobs and they apparently intend to hire people who have exhausted their Unemployment Insurance benefits. A year from now the process can be reversed: they can rehire those who were let go last month and let the people go who were hired this month. The result simply is a doubling of the cost of the work being done.
I should like to move on to the capital programs now and concentrate on the navy because I worry more about the naval equipment program than about anything else when it comes to re-equipping the forces at the present time. The Leopard program to supply the army with a certain number of tanks has pretty well been completed. The CF-18 program is moving along to help the air force. Unfortunately, the equipment for the navy is so long in production that I believe politicians do not like to support it as they are not likely to see the finished product within three elections or so. That makes it difficult for politicians to give the program the support they should.
A year and a half ago the Minister of National Defence, speaking to the Conference of Defence Associations, issued a press release saying that we needed five more Gate vessels to replace the old ones that had been in service for years. Strangely enough, this item disappeared from the Estimates this year. When we asked about them we were told that they were still somewhere but were not a high priority, despite the fact that when the Minister announced them with some fanfare a year ago last January they had a very high priority. Now they have just disappeared.
There is a long list of naval equipment programs, Mr. Speaker. In the Standing Committee on External Affairs and National Defence Committee on March 17 this year I asked for a list of programs but I have not received it. There are many major equipment programs that have not been approved
by Cabinet. The Canadian patrol frigate program will run into billions of dollars, but only $60 million has ever been approved by Treasury Board. The Minister has turned over to Cabinet the decision as to which of two consortia will build the patrol frigates. We are very concerned about the rumours we hear from the Treasury benches-"skid row" as it is otherwise known-about the possibility of that choice being made for political reasons rather than on the basis of the best plan for the best ship. I hope the fact that Scan Marine is totally surrounded by Liberal constituencies will not direct the contract to the wrong consortium simply for political reasons.
While I am on the subject of the Canadian patrol frigates, Mr. Speaker, I might say that there is no way any shipyard in Canada can find the skilled personnel needed to complete the program. If one shipyard were to get the order for the six frigates, there is no way it could build them within the time frame that has been set out. There are not that many technicians who are able to work in any of the existing shipyards in one location. This Party had suggested-although we do not demand author's rights-that it might be a very good idea to build two ships in the Maritimes, two in the St. Lawrence valley and two on the West Coast. That would help not only to maintain a withering industry but to revitalize it. We do have the skills in our people to be able to carry out this kind of work, and I hope that when the Government makes the decision, first, it will not be on political grounds and, second, it will be one that will spread the benefits across this country the way they should be, and not concentrated where the Party which is temporarily in power has a greater strength.
I see that my time is up, Mr. Speaker. I would like to compliment the previous speakers on their presentations in this important debate and I look forward to any questions they might have.


Benno Friesen: Mr. Speaker, I know the Hon. Member speaks out of a wealth of experience. The one area he did not touch on, however, in the budget had to do with the recruitment program for cadet training and, I suppose, in other jocular terms, getting young people involved in the Armed Forces for a one-year training program. Would the Hon. Member comment on the budget provision in that area in terms of the number of people it would affect and how prepared the Armed Forces are to help?


Allan Bruce McKinnon: Mr. Speaker, General Withers, the Chief of Defence Staff, pointed out not too long ago that they would not be able to train people with their present budget. If they had a sudden requirement for training large numbers, they simply would not be able to provide it. This is a situation which would get much worse if there was an emergency where they would not only have to provide for any reinforcements, but it would take their most experienced people away from their regular units. There is a terrible shortage in that particular area.
May 3, 1983

As far as cadet training is concerned, there is really nothing more important. There is no particular area of the force which is more important than cadet training. We did have some wonderful cadet training camps but they have been starved for funds over the years. That seems to be one of the places, unfortunately, which the Government has restricted far more than it should have over the last few years. Consequently, all kinds of cadets who wish to go to summer camps are not able to do so because of lack of funds.


Benno Friesen: Mr. Speaker, I have a further question regarding the frigate program which the Hon. Member mentioned. Does he see any movement on the part of the Government to do any of this construction in the Vancouver-Victoria area?


Allan Bruce McKinnon: Mr. Speaker, the fact that that would make an awful lot of sense does not mean that the Government is going to do it. As I said earlier, there is no shipyard anywhere in the country which could take on the job of building six frigates and finish them in the time frame which has been laid down for the ships to be ready. As everyone knows who has studied the situation, by 1991 we are going to have a ten-ship navy at the rate we are going. If they were to put those six frigates into one shipyard to be constructed, it would be 1993 before we get back up to a ten-ship navy, which is generally not thought to be satisfactory to any Canadian.


Mr. Reid (Kenora-Rainy River):: Mr. Speaker, my question to the Hon. Member is with respect to the Cruise missile, the discussions which have gone on and the confrontations about the possibility of having Canada provide air space for the plan to test the guidance system of the Cruise missile. Has the Hon. Member and his Party taken an official position on whether or not this is desirable?


Allan Bruce McKinnon: Mr. Speaker, it is the position of the Conservative Party of Canada that we should encourage, and our Government should encourage, the superpowers to negotiate at the disarmement table in Geneva in order to make enough progress towards restricting and controlling nuclear weapons in Europe that it would not be necessary to deploy the Pershing II or the Cruise missile in Europe. These talks are going on. President Reagan has made a major concession in that he no longer insists on the zero-zero option which seemed to be the main stumbling block at the time. He has given ground on that. I hope that the U.S.S.R. would make a counter offer at this time.
If all else fails, if these negotiations are non-productive, then NATO is going to have to go ahead with the commitment it made in 1979 to the West European nations that it would deploy the Cruise missile and the Pershing II. If it comes to that-and that will be the last resort-then this Party will not complain about the Government authorizing the testing of the Cruise missile at Cold Lake.


John Mercer Reid: I would assume from that answer, then, Mr. Speaker, that the Hon. Member and his Party accept the logic of the NATO two-track proposition.
The Budget-Mr. McKinnon


Allan Bruce McKinnon: I hesitate to point out to the Hon. Member, Mr. Speaker, that this Party was in power when the two-track system was adopted.


John Mercer Reid: That has not prevented the Conservative Party, Mr. Speaker, now that they have moved to the Opposition, from changing their policy on other things. Therefore I wanted to ensure that at least in this policy the Conservative Party has continued to carry on a one-track policy.
My second question for the Hon. Member concerns the testing of the Cruise in Canada, particularly guidance systems. As I understand the purpose of the testing of the Cruise in Canada, it is not necessarily to test the guidance system which would be used in a European context, but rather to test the guidance system which would be useful in a North American context as well; in other words, a more elaborate testing of guidance systems as they have developed.
In the event that the two-track policy fails, that there is an unwillingness or inability to come to an accommodation, would the Hon. Member then be prepared to proceed with the testing of the Cruise missile for North American purposes as opposed to testing the Cruise missile guidance system for European purposes?


Allan Bruce McKinnon: Mr. Speaker, there is a great deal made by uninformed people about this testing of one type of missile when there is a different kind going to be deployed in Western Europe. If we were to test the Cruise missile, that is, air launched, in Cold Lake, if it comes to that, and if the Government decides to go ahead with it-it has kept its option open- the purpose of the test is to test the guidance system and it is identical in both of these otherwise not similar weapons. They are both Cruise missiles, but there are two kinds. One is made by one company and one is made by another. They are both going to use exactly the same guidance system, and that is the connecting link. It really makes no difference. It simply is cheaper in one way to launch it from the air in order to carry out the guidance system test, which is what my understanding is of what is going to be tested at Cold Lake, if indeed any tests are going to be conducted at Cold Lake.


The Acting Speaker (Mr. Corbin):: Is there a disposition to call it one o'clock?


Some Hon. Members:: Agreed.


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


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
[Stage Direction]
May 3, 1983

[Stage Direction]
[ Translation]

Mr. Gaston Gourde (Levis):: Madam Speaker, the final adjudication of the frigate construction contract for the Department of National Defence is approaching. The Minister repeated not long ago that he was expecting a final decision before the House adjourns for the summer. In its April 30 issue, the Financial Post gave an analysis of the situation and indicated quite clearly that National Defence officials tended to favour the offer made by the consortium located in St. John.
Madam Speaker, in a speech I made not long ago on the subject, I indicated that Quebec shipyards have demonstrated their leadership in the Canadian shipbuilding industry. The decision to be made by departmental officials and Cabinet will, of course, be based on considerations of a technical and qualitative nature. However, they will also have to consider, first of all, the extent of the benefits to Quebec, and second, the quality of the workmanship involved, and third, the considerable technological advantage to our province if a Quebec shipyard is awarded what appears to be the contract of the century.
Speaking on behalf of the riding of Levis, I am counting on a decision that will be based on all of these considerations.


NATIONAL REVENUE	-


DELAYS IN MAILING REMITTANCE FORMS
Mr. Mel Gass (Malpeque):: Madam Speaker, I would like to address a problem that a small business in my constituency is experiencing with Revenue Canada. A machinery dealer called Layton Green Incorporated, which operates out of Albany, P.E.I., has been fined by Revenue Canada for sending its taxation remittance forms in late for the months of January and February, 1983.
The taxation remittance forms, which are a record of paid deductions, in the form of Canada Pension Plan, unemployment insurance and income tax, which are deducted for the employees' salaries, must be sent to Revenue Canada in St. John's, Newfoundland, by the tenth of the following month. Layton Green Incorporated has, on occasion, not received these forms until on or past the due date. Therefore it is unable to have these forms mailed to St. John's on time. The firm is prompt in completing the forms and mailing them once they are received, but cannot help the fact that it does not receive the forms in time to meet the due date. It has been unjustly fined a percentage of what was listed in the taxation remittance forms for January and February, 1983.
I urge that Revenue Canada ensure that its taxation remittance forms are mailed in time to allow businesses to send them back before the tenth of the following month and not expect businesses to pay fines for a delay which Revenue Canada or Canada Post has caused.

[ Translation]


DISARMAMENT
Mrs. Celine Hervieux-Payette (Montreal-Mercier):: Madam Speaker, in view of the statements made by the New Democratic Party and groups of citizens concerned for peace, I would like to state in this House that I will march and work with pacifist movements when they demonstrate for disarmament in front of Communist countries' embassies as often and as strongly as they do in front of the Parliament buildings. As an elected Member of this House, it is my duty to preserve the fundamental values recognized by the Canadian Parliament, such as the freedom of speech. That is why I urge all Canadians concerned for world peace to denounce the presence of Soviet weapons and military advisors in Cuba if American assistance to El Salvador is to stop. I also urge them to protest against the Soviet occupation of Afghanistan, the Soviet repression in Poland against union members and the Polish people, the installation of Soviet missiles in Syria and the presence of 330 SS-20 missiles with three war heads all aimed at European capitals.
Madam Speaker, the freedom we enjoy in our democratic countries cannot be based on the naivety of unilateral pacifists. Working for peace is part of our duty as Canadian parliamentarians. That is why I would like all Members of this House to reflect seriously on the consequences of an intervention not intended to result in a controllable bilateral disarmament. Canada must continue to support this option which is the only valid one, so as to safeguard the freedom of all Canadian men and women.


AIR TRANSPORT
Gordon Edward Taylor: Madam Speaker, last year a radio licence for a light aircraft was increased to $40 and representations were made to the Department and to the Minister, and it appeared that the price would be reduced in 1983. It has not been reduced, and again farmers and businessmen who operate light aircraft are being charged $40 for a licence for the radios in their aircraft while Canadian registered ocean liners, the largest ships afloat, operating out of Canadian ports, only pay $20 per annum.
May 3, 1983

In the United States there is no fee at all for licences for radios in aircraft because the Americans recognize that the radio is not an entertainment item but a safety item. The Canadian Government requires the radio, and then charges an excessive fee for the licence. These same farmers and businessmen are asked to apply the six and five restraint program to their operations, but the Government sticks them with this enormous increase.
I strongly urge the Minister to roll back this fee or, alternately, make it the fee for a five-year period or, better still, wipe it out altogether, as radio is an integral part of the aircraft. Will carburetors be licensed next? Surely the Government and the Minister of Communications (Mr. Fox) know that the private aircraft industry already contributes substantial sums of money to the federal Treasury through taxes collected for fuel, and also provides jobs. The Minister of Finance (Mr. Lalonde) is pleading with the private sector to co-operate. Here is an opportunity for the Government to show that co-operation is a two way street.


BANKS AND BANKING
Mr. Rod Murphy (Churchill):: Madam Speaker, today in The Globe and Mail we read how a bank magazine is telling bankers how to close down plants successfully, keep information away from Opposition MPs, manipulate the press, and hold press conferences away from the affected plants so the workers cannot respond. At a time when Bishops in Canada have talked about economic morality, it is disgusting and typical to see banks looking at PR techniques which are not concerned about the workers or the people who are suffering through foreclosures.
Madam Speaker, I call on the Canadian Bankers Association, which owns the magazine, to disavow that statement, to disavow any claim of authorship for the remarks made in that article. Canadians are suspicious of banks at a time when houses and farms are being foreclosed, but if they are going to allow that kind of article to stand it will be just another nail in the coffin of the Canadian banking system.

[Translation)


UNEMPLOYMENT INSURANCE ACT
Mr. Remi Bujold (Bonaventure-Iles-de-la-Madeleine):: Last Friday, Madam Speaker, I was very interested and almost delighted to read the statement of the Hon. Member for Winnipeg-St. James (Mr. Keeper) concerning amendments to the Unemployment Insurance Act with respect to maternity
benefits. The night before, during a committee meeting, the Minister of Employment and Immigration (Mr. Axworthy) stated that he was prepared to introduce amendments with a view to including maternity benefits and other changes in the Unemployment Insurance Act if the New Democratic Party would agree to adopt that Bill quickly so as to enable the Government to implement those changes, keeping in mind the heavy work load of Parliament.
After that conciliatory offer by the Minister, Madam Speaker, we have yet to hear from the Hon. Member for Winnipeg-St. James whether his party would be prepared to agree to such amendments, and especially to give unanimous consent so that the Bill might be adopted as quickly as possible. Madam Speaker, the Hon. Member is posing as the defender of women's interests throughout the country, so he should now give us a clear and final answer to pave the way for that Bill including those amendments to the Unemployment Insurance Act.


AGRICULTURE
Blaine Allen Thacker: Madam Speaker, research and development are the essence of progress in any society. This truism, however, receives hardly any recognition in our country where research, and agricultural research in particular, are given second priority. As a result the challenges offered by developing new varieties and new crops and more productive ways of farming can be lost to us forever. This, in turn, will hamper Canada's future capability to catch up with increasingly competitive international markets and to meet the targets set up by our agri-food strategists.
It is essential that our researchers start now to build the foundations for research in subjects like genetic engineering, improved energy efficiency, and waste utilization.
Researchers and scientists have expressed their concern about the curtailment of research funding and the shortage of qualified staff. Yet Cabinet appears to turn a deaf ear to all the criticism and continues to defend cutbacks in research staff so badly needed and so short in supply.
The Minister of Agriculture (Mr. Whelan) is obviously aware of the publication by his own Department "Challenge for Growth-an Agri-food Strategy for Canada". The authors of the publication do not share the Minister's contentment with the status quo in our research, and point out losses in Canadian agriculture due to the inadequate support of research.
May I suggest that the Minister have a closer look at this document and familiarize himself with the lost opportunities.

May 3, 1983


RAILWAYS
Mr. Stan J. Hovdebo (Prince Albert):: Madam Speaker, I wish to draw the attention of the House to the misrepresentations being made by the Minister of Transport concerning Crow rate retention. The Minister told the House on Friday that retention is the position of only the New Democratic Party and the National Farmers Union. That is not so. Crow retention is also the position of a majority of grain producers and people of the West.
I can demonstrate this quite easily by referring to my own Prince Albert region, which is a typical grain growing area. To date I have received one single letter backing the Pepin proposal for Crow change. For Crow retention, I have tabled 3,500 signatures on petitions in the House and I have 2,000 individual endorsements of retention. I have also received specific letters backing retention from 23 towns, villages, and rural councils. They include the communities of Hudson Bay, Choiceland, Canwood, Marcelin, Rosthern, Carrot River and Shell Lake. The same support came from the rural municipalities of Kinistino, Spiritwood, Garden River, Kelvington, Ponass Lake, Arborfield, Buckland, Torch River, Willow Creek, Blaine Lake, Fleet's Springs, Canwood and Birch Hills.
The Council and Chamber of Commerce of the City of Prince Albert have also supported retention. This is support from one small segment of the Province of Saskatchewan. The essence of democracy is having the consent of the governed. The Minister has ignored that essence.


Madam Speaker:: Order.


ANTI-SEMITISM TAUGHT BY ALBERTA SCHOOLTEACHER
Mr. David Smith (Parliamentary Secretary to President of the Privy Council):: Madam Speaker, it was with utter disbelief that I watched a report carried on the CBC Journal last night concerning the firing of an Alberta teacher, Mr. Keeg-stra, who had been teaching anti-Semitic trash to his students for over 14 years.
In an interview Mr. Keegstra confirmed his belief that Jewish conspirators had caused the French Revolution, the U.S. Civil War, the assasination of Lincoln, and he also trotted out the ridiculous allegation that the Jews had started the First and Second World Wars.
He went on to defend some of the ideas of Adolf Hitler, and even questioned whether the Holocaust had, in fact, occurred. He challenged the interviewer to produce the evidence.
What shocked and horrified me, and I speak as one who visited the Holocaust memorial in Jerusalem last month, was that, notwithstanding his own admission that he had been teaching his students this garbage, numerous school officials, including his principal, schoolboard officials, fellow teachers and officials of the Teacher's Association, had continued to defend his right for some time to continue teaching, on the assumption that it would stimulate discussion. As a Canadian and a Christian I was stunned to learn of this seeming indifference of responsible people in our school system to such blatant racism. Hopefully, we will all learn something from this sad episode, namely, that we must be ever vigilant to prevent the ugly seeds of racism in any form, including anti-Semitism, from poisoning the schoolchildren and the minds of our youth.


Some Hon. Members:: Hear, hear!


NATIONAL REVENUE
Benno Friesen: Madam Speaker, National Revenue has an interpretation bulletin number IT-225 which defines a handicapped person for income tax purposes. For its purposes, a handicapped person is one who is confined to a bed or wheelchair for more than 12 hours a day, a substantial part of the day or night. That is a definition not designed to help the handicapped but to help income tax officials make easy decisions in classifying people.
Some three and a half years ago this House unanimously passed a resolution during Private Member's Hour asking Finance officials to redefine that particular bulletin and change the definition of a handicapped person for income tax purposes. That still has to be done.
I note with interest that in the last budget presented by the Minister of Finance he has graciously doubled the deduction allowed to parents for educational purposes of their children because he wants to help comfortable, middle-class parents. Meanwhile, those parents who want to assume the responsibility for the training of their children who happen to be handicapped are left out and not taken care of.
It is time that the officials of the Tax Department of National Revenue took their responsibility seriously and looked beyond the pretty "obstacles" report which does not require the Government to do anything. It seems to me that the goal of this Government is to do all things that are pretty but that do not obligate it to spend any money.
May 3, 1983



ORAL QUESTION PERIOD


Hon. Erik Nielsen (Leader of the Opposition):: Madam Speaker, my first question is directed to the Minister of Energy, Mines and Resources. He will recall saying last February 18, as reported at page 22982 of Hansard, in answering questions and participating in debate with respect to the Coalgate coverup:
This money was under the control of the Government of Nova Scotia.
He will also recall saying, as reported at page 23193 of Hansard:
There is no direct or indirect payment to Mr. Gillespie of Government money.
Can the Minister say whether he was aware, at the time he made those and other statements, recorded in Hansard with respect to that matter, of the existence of the contract between the Government of Canada and Veba Oel Entwicklungs-Gesellschaft (Voeg) of Gelsenkirchen-Buer, in Germany, amounting to $17,000 of Canadian Government money going to this firm for the purpose of conducting a study with respect to the reduction of coal to oil for the Cape Breton Synfuels Project? Was he aware of that contract when he made those statements?


Hon. Jean Chretien (Minister of Energy, Mines and Resources):: Madam Speaker, I was not aware of that contract, but I have checked the record today. Indeed, there was a contract with that company which was signed in January.
As the Hon. Member should know, there are about 20 liquefaction projects that have been studied over a long period of time with the help of the Department of Energy, Mines and Resources.
The nature of this contract was to make sure that the technique used by Veba was one that should be explored. In fact, none of the projects has taken that technique as a means to liquefy coal into natural gas. In fact this contract was signed so that this other form of liquefaction could be explored. We did that with a company which had the best experience, the one which operates in Germany.
The information that we have, or will be receiving from it, will make it possible for the Government to decide which is the best way to liquefy coal. Indeed, the study has proven so far that the Veba technique is even better than any of the others that have been proposed by the 20 different groups that have made proposals to the Canadian Government. The purpose was to explore a technique that had not been proposed by the Synfuels Projects or any of the other 19 projects that the Department was studying.
Oral Questions


Erik Nielsen: The length of that answer reminds me of Shakespeare, "Methinks thou doth protest too much." Simply translated, the answer is yes, the Minister was aware of the existence of the January 28 contract. It is passing strange that the only project for the liquefaction of coal happened to be in Cape Breton.


INQUIRY RESPECTING ANY KNOWLEDGE BY DEPUTY PRIME MINISTER OF CONTRACT
Erik Nielsen: Madam Speaker, my next question is directed to the Deputy Prime Minister. On February 21, 1983, as reported at page 23039 of Hansard, he said, when speaking of the funds with respect to the Coalgate coverup:
The funds are not within the... decision of the Government of Canada.
Can he say at the time that he made that and other statements of record on Hansard, on this matter last February, whether he was aware of the January 28 signed contract between the Government of Canada and Veba Oel with respect to this matter?


Hon. Allan J. MacEachen (Deputy Prime Minister and Secretary of State for External Affairs):: No, Madam Speaker, I was not aware of any such contract.


Erik Nielsen: That rather surprises me because I thought that the Deputy Prime Minister was fully familiar with every aspect of this arrangement that was going to be conducted in his own riding.
My next question was to be for the Minister of Finance who is not here. He made similar statements last February.


REQUEST THAT CONTRACT BE TABLED
Erik Nielsen: Madam Speaker, my fourth question was for the Prime Minister who also made more emphatic statements, and he is not here. Therefore I will put my final question to the Minister of Supply and Services.
Is there available for tabling in the House the contract of January 28 between the Government of Canada and Veba Oel which allotted $17,000 of moneys of the Government of Canada for the purpose of investigating the feasibility of the liquefaction of coal for the Cape Breton project? If it is available, will the Minister please table it?


Hon.   J.-J. Blais@Minister of Supply and Services: Madam Speaker, a contract was indeed concluded at the request of the Department of Energy, Mines and Resources between my Department and the Voeg Company of Germany for an amount of $17,000 and as this contract involved a marketable development in high technology, one of the terms of the contract was that it remain confidential.

May 3, 1983
Oral Questions


REQUEST FOR COMMITTEE INVESTIGATION
Erik Nielsen: Madam Speaker, this now seems to be a clear indication of the extension of the original coverup. We have the admission of the contract by the Minister of Energy, the admission of the contract by the Minister of Supply and Services, the bald statement by an officer of Veba Oel that that contract concerns the Cape Breton Synfuels project, and that project alone, and the Minister is now telling this House that he is not prepared to table the contract.
In view of this extension of the coverup, will the Deputy Prime Minister now reconsider what the Government refused us last February, namely, an investigation of this whole affair by a standing committee of this House so that we can have that contract produced, get to the bottom of the facts in this case, and wipe aside this continual coverup of the Coalgate affair?


Some Hon. Members:: Hear, hear!


Hon.   Allan. J. MacEachen@Deputy Prime Minister and Secretary of State for External Affairs: Madam Speaker, I thought the Hon. Member had received all the information he required.


Erik Nielsen: You didn't tell us about this one.


Allan Joseph MacEachen: I was going to say there were bushels of documents tabled in the House by the Minister of Energy, Mines and Resources-


Erik Nielsen: You didn't tell us about this one.


Allan Joseph MacEachen: -with respect to the synfuels project that may occur at some point, hopefully, on the island of Cape Breton. I do not see what additional information the Hon. Member could possibly want.


Erik Nielsen: Just the contract.


MINISTER'S STATEMENT ON USE OF FEDERAL FUNDS
Mr. Harvie Andre (Calgary Centre):: Madam Speaker, my question is for the Minister of Energy, Mines and Resources. In February when this Coalgate affair came up, the first excuse the Government provided was that it was outside the two-year quarantine period. When that would not stand up to examination, the Deputy Prime Minister said that the guidelines were really just guidelines and not rules. When that would not stand up the Prime Minister and the Minister of Energy, Mines and Resources said not a cent was coming out of the federal Consolidated Revenue Fund, that the money was all coming out of the Nova Scotia Consolidated Revenue Fund. We now find that third and final answer does not stand up to examination either.
Will the Minister, who said he did not know about this contract, at least have the decency to stand up and withdraw the statements he made in February that, in fact, no federal
funds were spent on this project from which Mr. Gillespie stands to make so much profit?


Joseph Jacques Jean Chrétien: Madam Speaker, I think the Hon. Member wants to stir a controversy about nothing. I said there were 20 projects-and I have the list here-of different organizations in Canada that proposed to the Department and engaged with the Department in a liquefaction process for Canadian coal. There are universities and research groups all across Canada. None of these 20 groups has proposed to the federal Government this technique that has been used effectively in Germany by that company for over 50 years. The Department said it was just normal to find out whether this technique would apply to the 20 projects. We had a contract with the operators of the technique in Germany for the amount of money revealed. They have processed some coal to make natural gas. The technique was to be asserted against all the 20 projects, not only the one referred to by the Hon. Member.


Erik Nielsen: There was only one.


Joseph Jacques Jean Chrétien: If Hon. Members want, I could read into the record the 20 other groups that have had some liquefaction projects under study with the Department of Energy, Mines and Resources.


Harvie Andre: Madam Speaker, the Minister is trying to get us to believe there are 20 groups looking at Cape Breton coal. The scientist with Voeg, Ulrich Graeser, said that his understanding of his discussions here in Ottawa was that the test was for the Cape Breton synfuels project, Mr. Gillespie's project-the project he is continuing to cover up. The Minister is in danger of extending his misinformation to this House, in danger of misleading the House even more than he has, if he continues on that line.


REQUEST THAT CONTRACT BE MADE PUBLIC
Harvie Andre: Madam Speaker, the Minister of Energy, Mines and Resources indicated when he tabled his documents that all documents relevant to the Cape Breton synfuels project had been tabled.


Erik Nielsen: Not this one.


Harvie Andre: We now know that was an inaccurate statement. If the Minister did not deliberately mislead the House at that time, will he admit that he did not have all of the documents because of his lack of information, and will he now carry through on his commitment and make sure that contract is a part of the documents revealed to the public?


Joseph Jacques Jean Chrétien: Madam Speaker, I said earlier that we are dealing with 20 different coal liquifaction projects to transform coal into natural gas. We received various proposals and the
May 3, 1983

scientists of the Department of Energy, Mines and Resources noticed that none of the groups involved had suggested the Veba system. They therefore concluded that, in order to have a realistic view of the whole situation, the possible application of this system to Canadian coal in the 20 projects submitted to us had to be determined. With this in mind, a contract was signed with this company to determine whether the German Veba system might be adapted Canadian coal. Cape Breton coal was sent to the company. Alberta or British Columbia coal could also have been sent. Moreover, the studies show that the project mentioned by the Hon. Member this afternoon was not the only one involving Nova Scotia coal. Once again, I would like to point out that this project is not directly related to Synfuels, since it was a comprehensive study that included the 20 projects. I stand by what I said during the debate last February. Since then, I have tabled all relevant documents in my possession concerning the facts directly related to the Synfuels project.


INCOME TAX
Ian Deans: Madam Speaker, I want to raise a real scandal with the Prime Minister. The Government expects to recover $4 billion from Canadian taxpayers over the next four years by reducing the benefits from the federal Tax Reduction Allowance. It is quite clear that this will shift the burden from those who can afford to pay to many who cannot afford to pay.
For example, a family earning $15,000 a year will be faced with a 281.9 per cent increase; a family earning $20,000 a year will be faced with a 22 per cent increase, and a family earning $100,000 will face only a 1.3 per cent increase. Surely the Prime Minister recognizes this is regressive, that this shifts the burden of tax from those who can afford to pay to those who cannot afford to pay. Is the Prime Minister prepared to reconsider this move in an effort to try to balance the tax burden in Canada.?


Hon. Paul J. Cosgrove (Minister of State (Finance)):: Madam Speaker, the point raised by the Hon. Member really was the thrust of an article appearing in The Globe and Mail this morning which put it in terms of regressivity. I would urge the Hon. Member to consider that his reference is merely to one aspect of the budget. He must consider, for example, the result of the budget in providing some additional 600,000 jobs to Canadians of low and moderate income, between 1982 and 1984. This is of importance to those Canadians looking for help or for the ability not only to pay taxes at whatever rate but the ability to have meaningful and well paid jobs, or jobs, period.
Oral Questions
I urge the Hon. Member to consider that the major thrust of the budget with all its changes is geared to providing meaningful employment to thousands of Canadians who will then be in positions to address the issue of minor changes in tax structures.


Ian Deans: If the Minister should ever rise again to answer a question, perhaps he might consider why those who can afford it are being asked to pay less in this effort to provide jobs for people, and those who cannot afford it are being asked to pay substantially more.


TAX REDUCTION SOUGHT FOR AVERAGE WORKERS
Ian Deans: Madam Speaker, I want to return to the Prime Minister, if I may. Two years ago the Government similarly reduced the tax rate for those people in upper income brackets. It lowered the tax rate by nine points for those persons earning $134,000 or more. At the time the Government said that this was compensated for by the closing of loopholes. Quite clearly the budget of the former Minister of Finance did not in fact close the loopholes; many of them were left in place.
Is the Prime Minister now prepared to consider, given that we need jobs and that Canadians must be able to purchase in consumer products manufactured in Canada, a similar kind of tax reduction for average Canadians who are working hard but are only earning $15,000 or $20,000 per year?


Paul James Cosgrove: Madam Speaker, the Hon. Member is being very selective in his choice of initiatives in the budget and his analysis of the budget of 1981. For example, he did not take into account the employment expense deduction for lower income workers which was specifically requested by members of his caucus. Representations were made specifically to the Minister of Finance on that particular change in income tax. He did not take into account the child benefit system and the increased child care expense deductions in the budget. He totally ignored them. He gave us a one-sided imbalanced picture of the budget. I wish he would be more forthcoming in those areas where there is assistance over and above providing jobs to Canadians of low and middle income.


Ian Deans: It is apparent that I will have to deal with this Minister anyway.


TAX BURDEN OF LOWER INCOME GROUPS
Ian Deans: Madam Speaker, will the Minister explain why people earning $15,000 or $20,000 a year should be asked to carry far more of the burden of cost than those earning $100,000 a year and above?


Paul James Cosgrove: Madam Speaker, I thought I indicated that the provisions of

May 3, 1983
Oral Questions
the budget-for example those provisions dealing with incentives for housing-are designed not only to provide affordable housing to Canadians, not only to provide jobs for Canadians in the construction and repair of housing, but to provide grants of $3,000, for example, for Canadians buying homes and grants of $3,000 for Canadians of low and moderate income. These grants are not reflected in the figures about which the Hon. Member has talked.


Some Hon. Members:: Oh, oh!


Paul James Cosgrove: They are immediate benefits available to Canadians which impact upon their income, upon their ability to pay taxes and, more important, upon their ability to have employment and to have affordable homes.


THE ADMINISTRATION
Hon. James A. McGrath (St. John's East):: Madam Speaker, my question is directed to the Minister of Energy, Mines and Resources. The Minister made reference to funding for the liquefaction process applying to 20 companies, yet I have in my hand a Cabinet document dated September 13, 1982. It is a memorandum to Ministers on the financial, energy and regional development implications of supporting a coal liquefaction facility in Cape Breton Island. It made two recommendations to the Minister of Energy, Mines and Resources. One was an offer to the consortium-and we are talking here about Scotia Coal Synfuels-"of additional federal financial support for a technical re-evaluation of the project, focusing particularly upon processes which would utilize higher ratios of natural gas to coal and offer a higher saleable product yield". That is the end of the quotation from the Cabinet briefing document of September 13, 1982, just about the time the Minister was assuming his present responsibility.
Also I have a letter of January 7 from Mr. Gillespie-


Madam Speaker:: Order, please. The Hon. Member cannot quote from too many documents. He should be asking his question. I am sure from the quotes he is now trying to give the House that he could just ask his question, not give the quotes.


James Aloysius McGrath: Madam Speaker, very simply I want to ask the Minister how he reconciles that with his reply in the House today to the Hon. Member for Calgary Centre, and also with the replies in the House in February, whereby the Government explicitly denied that there was any direct or indirect federal funding to this project.


Joseph Jacques Jean Chrétien: Madam Speaker, the contract with Veba was undertaken in order to have a new technique that could apply to the 20 projects. It was not directed to the synfuel project. It was to know this technology that none of the 20 project
sponsors had discussed in their presentations to the Government.


Erik Nielsen: Table the contract.


Joseph Jacques Jean Chrétien: We wanted to know what was possible with that other technology, and to have the information from the ones who controlled the technology, the German firm. This is why we signed a contract with them. We wanted information to permit us to evaluate the 20 projects as presented to the Government.


MINISTER'S KNOWLEDGE OF CONTRACT
James Aloysius McGrath: Madam Speaker, could the Minister tell us specifically-and I am making reference to the replies in the House on February 21 as reported at page 23042 of Hansard-when he became aware of this particular contract for $17,000 which was signed in January with a West German firm specifically in aid of the Scotia Coal Synfuels Project?


Joseph Jacques Jean Chrétien: Madam Speaker, I learned about this contract yesterday.


LETTER FROM ALASTAIR GILLESPIE-PURPOSE OF GOVERNMENT EXPENDITURES
Hon. Ray Hnatyshyn (Saskatoon West):: Madam Speaker, my question is also directed to the Minister of Energy, Mines and Resources. The question before the House is not the matter of Mr. Gillespie's involvement but the question of whether or not Ministers must tell the truth, the whole truth, and nothing but the truth, in this House-the question of morality in Government.
Mr. Gillespie suggested to Dr. Phillip Read in a letter of January 7, 1981, that the particular German company, Voeg, which is the one we are talking about, should be consulted at a preliminary stage. He said, "Phase I is a technical and economic evaluation of the proven process, Sasol, and near term processes under development particularly in the United States by the Department of Energy and others, and at least one in Germany." Will the Minister not now admit that moneys have been spent by the Government, not through Nova Scotia, but directly for the benefit of Mr. Gillespie's project?


Joseph Jacques Jean Chrétien: Madam Speaker, it is to the contrary. The Gillespie project was proposing a different technique and we wanted to know about all techniques. We wanted to find out if the German technique could apply in the Canadian situation, if it would be useful in all the projects, not only Synfuels but every one of them. I mentioned 20 different projects-some in British Columbia, some in Alberta, some in Ontario and some in Nova Scotia-that were proposing liquefaction as a technique to utilize coal. We wanted to know about the Veba technology. We signed a contract with that company to know if the technology could apply to every one of the projects in Canada, not only the Synfuels one.
May 3, 1983


Ramon John Hnatyshyn: The Minister in effect is calling Mr. Graeser of Voeg and Mr. James Kelly of the coal liquefaction section of his own Department liars. That is really what it is when he says that this was not to be used for Mr. Gillespie's benefit and project.


MINISTER'S STATEMENTS
Ramon John Hnatyshyn: Madam Speaker, I want to ask the Prime Minister in terms of information given to the House how many times the Minister is able to mislead the House, and how many times he is able to give us wrong information before the Prime Minister asks for his resignation.


Joseph Jacques Jean Chrétien: Madam Speaker, I have been very candid with the House. I know the Hon. Member likes to indulge in dirt throwing. I will not go to his level. I would rather be cleaner. I gave the explanation which I received from the officials of my Department today, that there were 20 projects and that we wanted to know about this German technology. If he wants to play in the dirt, he will be alone.


EXTERNAL AFFAIRS
Mr. Bob Ogle (Saskatoon East):: Madam Speaker, my question is addressed to the Prime Minister. It has to do with Central America. I would like to tell the Prime Minister that I was very happy with his statements in the press conference in which he indicated that Canada had a separate and distinct policy in Central America, but I was extremely unhappy with what I would call the wishy-washy approach that came out of his meetings in Washington.
Yesterday, Guillermo Ungo, President of the Democratic Revolutionary Front in El Salvador, in a press statement, declared that the United States has a right to stop the spread of communism. That is true. That is what Ungo said. What is the Government of Canada prepared to do now to help the initiatives to bring about negotiations in the El Salvadoran war?


Right Hon. P. E. Trudeau (Prime Minister):: Madam Speaker, since I had that meeting last week with the President, I do not believe we have taken any recent initiatives. I indicated that our position was one of support for the President of the United States when he suggested that all parties be party to an agreement not to interfere in any way in Central America. I remind the Hon. Member that his Leader, the Leader of the New Democratic Party, said that he agreed with President Reagan on that.


Robert Joseph Ogle: I think what my Leader was agreeing with was staying out of the situation.
Oral Questions LATIN AMERICAN COUNTRIES' PEACE INITIATIVE


Robert Joseph Ogle: Madam Speaker, this morning I was informed by the Nicaraguan Embassy that a new wave of 1,200 men, including Hondurans, is invading Nicaragua at this time. Last week I spoke to Bishop Raul Corriveau, a Canadian bishop in Honduras in the Diocese of Choluteca. He informed me that in that region next to the Honduran border there are some Somocista camps, as well as an airport taking in supplies. Would the Prime Minister of Canada be willing to have Canada take more serious initiatives to become involved with the Contadora Pact, a group of nations trying to bring about a peaceful solution?


Pierre Elliott Trudeau: Madam
Speaker, the Hon. Member is aware that a group of Latin American countries-Mexico, Venezuela, Panama, and Columbia I believe-have taken some initiatives to try to bring peace to the area. That seems to be a very worth-while initiative. We hope that they in some way wish to assist all of us to achieve the end that apparently the New Democratic Party, the Liberal Government, and President Reagan agree on, the end that there be no outside interference in the area. Certainly we are willing to assist in the attaining of that objective.


THE ADMINISTRATION
Hon. Jake Epp (Provencher):: Madam Speaker, I would like to direct my question to the Prime Minister. It relates back to the liquefaction project. Throughout the questioning in February on this issue the Prime Minister kept insisting that the money was not federal money, but in fact came from Nova Scotia. As reported at page 22982 of Hansard for February 18, 1983, among other things the Prime Minister said, "These funds were the Consolidated Revenue Fund of the Government of Nova Scotia." It is quite clear now that the federal Government in fact did sign agreements, and the Minister of Energy, Mines and Resources just finished stating that they wanted this information and that it could apply to all projects and, therefore, would also apply to the Gillespie project as well, no matter how he puts it.
How could the Prime Minister make the statement on February 18 that it was Nova Scotia money, not federal money, and therefore there was no benefit to Mr. Gillespie, and yet today we find that the federal government has committed at least $17,000 to Veba Oel Entwicklungs-Gesellschaft?


Pierre Elliott Trudeau: Madam Speaker, I have not followed this question enough today to know that any funds have been paid to Mr. Gillespie. I have not gathered that in the questions asked or in the answers given. Is there an allegation that Mr. Gillespie has received

May 3, 1983
Oral Questions
some of this money that the federal Government has paid to this German company?


PRIME MINISTER'S STATEMENT
Arthur Jacob (Jake) Epp: Madam Speaker, the Prime Minister has constantly been saying that there was no federal money and, therefore, there was no direct or indirect benefit to Mr. Gillespie. He said both. The Minister of Energy, Mines and Resources now says that they wanted to know this technique because it could apply to various projects, and obviously the Gillespie project would be one of them, so that is both a direct and indirect benefit to Mr. Gillespie. How can the Prime Minister keep insisting that his Government, signing contracts and committing federal funds, is not giving any of these benefits directly to Mr. Gillespie?


Pierre Elliott Trudeau: I must apologize again, Madam Speaker. I am really not conversant with the details of this, but just listening to the questions of the Hon. Member it seems to me a little bit fanciful to suggest that if some research company discovers knowledge which will be available to all Canadians that in some way is a benefit paid to Mr. Gillespie by the federal Government, directly or indirectly. Is that what the Hon. Member is saying?


CIRCUMSTANCES SURROUNDING SIGNING OF CONTRACT
Hon. Don Mazankowski (Vegreville):: Madam Speaker, I have a supplementary question for the Minister of Supply and Services. The Minister is obviously aware of the existence of the $17,000 contract which was signed in late January. Did the Minister then undertake to advise the Prime Minister, and indeed other Members of the Cabinet, of the existence of this contract? If so, what was the Prime Minister's response? If he did not advise him, why did he choose not to do so?


Hon.   J.-J. Blais@Minister of Supply and Services: Madam Speaker, the contract is a relatively small contract. The Hon. Member will note it is for $17,000. It is a contract which would have been negotiated and executed by my officials in accordance with their delegated authority. Therefore, I was not made aware of this contract until this morning, which is the normal course of events because it became a matter of inquiry by the press.
I might indicate, as was indicated by the Minister of Energy, Mines and Resources, that the contract is one of many that my Department has negotiated in the research and development area, indeed, in the liquefaction research area. I can name a number of others. I have a list here: Nova Scotia Research Foundation Corporation, Catalytic Enterprises Limited of Sarnia, University of Regina, Sandwell-Beak Research Group, Toronto, University of Victoria, Ontario Ministry of Energy-


Madam Speaker:: Order.


INQUIRY RESPECTING MINISTER'S ACTIONS
Donald Frank Mazankowski: Madam Speaker, the Minister of Supply and Services is clearly aware of the Cabinet document dated September 13 which offered the consortium the kind of funding assistance to which he has referred. When this issue was raised in the House of Commons in February, the Cape Breton coal liquefaction project, several of the Minister's colleagues denied that any federal funds were spent on behalf of that project.
We have before us an admission by a representative of the Germany company with which the contract was made that, indeed, the contract will have a direct relationship and direct bearing upon the Cape Breton coal liquefaction project. The Minister should have had the knowledge that this contract was awarded, if he was doing his job. Having regard to the statements in the House of Commons, why did the Minister not undertake to apprise himself of the contracts that would have been signed? Why did he not attempt to set the record straight rather than acquiesce in and foster the kind of coverup in which his Cabinet colleagues and the Prime Minister were engaged?


Hon.   J.-J. Blais@Minister of Supply and Services: Madam Speaker, the hon. gentleman must know, having read the release that he received in his office yesterday, that in the month of March alone my Department dealt with more than $36 million worth of research and development contracts. There are a large number of contracts that we negotiate on behalf of Energy, Mines and Resources on a regular basis. Indeed, the Department of Energy, Mines and Resources is involved in acquiring technology in the areas of its interest, including coal liquefaction.
There is nothing unusual about this contract. The amounts were payable to the German company. There are a large number of contracts that have a clause which protects the confidentiality of the dealings between the parties because of the sensitive nature of the technology that is being acquired by the Government of Canada. There is nothing unusual about that.
In terms of this particular technology, and this company, West Coast Transmission had a contract with this company with reference to this technology, for testing western coal. The Saskatchewan Oil and Gas Corporation evaluated its own lignite coals as a result of the use of this particular technology. Does the hon. gentleman across the way suggest that Mr. Gillespie was somehow involved in that particular transaction as well?


REQUEST THAT CORRESPONDENCE RELATING TO CONTRACT BE TABLED
Hon. Bill Jarvis (Perth):: Madam Speaker, my question is directed to the Minister of Supply and Services. He has indicated that his officials negotiated a contract with the West German company. Am I correct in presuming that related to or pertinent to that contract was correspondence between the
May 3, 1983

company in West Germany and his Department, and likely between Energy, Mines and Resources and that company? If that presumption is correct, would the Minister then undertake to table the correspondence related to or pertinent to that contract?


Hon.   J.-J. Blais@Minister of Supply and Services: Madam Speaker, usually the exchanges that are sensitive are embodied in communications of all sorts. I will review the terms of the contract to see if any of the communications can be transmitted.


William Herbert Jarvis: Correspondence.


Mr. Blais:: Madam Speaker, that is the current practice, including correspondence. I wish to reiterate, though, that the contract was a perfectly normal contract like a large number of contracts of similar kind that my Department has negotiated.


CONTENTS OF CONTRACT
William Herbert Jarvis: I look forward to the Minister's review of that correspondence and its eventual tabling. With respect to the contract itself, the Minister has said that the only reason for his refusal to table was the sensitive marketing conditions contained in the terms of the contract. I therefore ask the Minister of Supply and Services if he would be willing to table that contract having deleted therefrom those provisions related only to marketing, the apparent reason that the Minister is unwilling to table the document.
[ Translation]


Hon.   J.-J. Blais@Minister of Supply and Services: Madam Speaker, something has obviously been lost in the translation. The sensitive issue did not relate only to marketing, but to all the technology exchanged between the various parties, and if Canada is to acquire a share of the world technological market, Members opposite will have to recognize that we must often meet the requirements of the exporters of this technology in order to protect the confidentiality of the information given to us.

Oral Questions
as well as older women on pensions. There is a great need for affordable housing for these women. I would ask the Minister if he will study the recommendations in this report and consult the CMHC to provide special priority for funding to the particular housing needs of older women, including renovations of existing homes, and more accommodation for single women in their middle years, as most of the present accommodation is for families or pensioners, and a number of other specific recommendations.


Hon. Romeo LeBlanc (Minister of Public Works):: Madam Speaker, I have not yet seen this report but I will obviously look at its recommendations to see if we can go some way toward implementing the Hon. Member's suggestions.


LABOUR CONDITIONS
Margaret Anne Mitchell: Madam Speaker, my supplementary question is directed to the Minister of Employment and concerns the recommendations regarding extension of employment opportunities for older women. We on the task force were told that older women wanted jobs so they can remain independent and so that they can pay into the Canada Pension Plan. They have raised Canada's children and they now want a fair break. They want a job and they want a paycheque. I know the Minister has some programs in effect, but will he give higher priority to employment strategies for mature women, and will he also expand training and support services, help to change the prejudiced attitudes of employers, and expand essential community service jobs in other fields of employment that are particularly relevant to older women?


Hon. Lloyd Axworthy (Minister of Employment and Immigration):: Madam Speaker, in response to the Hon. Member's question I would say that I certainly agree with the sentiments expressed in that report. That particular group of people in our society is a group that does deserve special attention.


HOUSING
Margaret Anne Mitchell: Madam Speaker, in the absence of the Minister of Employment I direct my question to the Minister responsible for housing. My question concerns a task force on older women, the recommendations of which were released today. The task force made a number of very important recommendations, one of which concerns the lack of affordable housing and accommodation for women, particularly women in their middle years who are living alone,
I would like to point out, Madam Speaker, that in the past year we have substantially expanded employment services directly targeted for women who are in those circumstances. We have opened some 10 special women's employment centres in major metropolitan centres, and we have also expanded the Outreach Program for women from some 14 projects to some 33 projects, all designed to provide that kind of support, counselling and guidance. I would also report to the House that, under the new National Training Act, we are now in consultation and discussion with women's groups across Canada to develop strategy related to women and training. I hope to be in a position to bring forward the details of that strategy some time in the next month or two.

May 3, 1983
Oral Questions NATIONAL REVENUE


INCOME TAX FORMS-SUGGESTED USE OF GRAPHICS TO ASSIST ILLITERATE
Mr. W. Kenneth Robinson (Etobicoke-Lakeshore):: Madam Speaker, my question is directed to the Minister of National Revenue. The Movement for Canadian Literacy states that 70 per cent of Canadians read so poorly that they cannot understand information brochures sent them in the mail by governments.


Some Hon. Members:: Oh, oh!


William Kenneth Robinson: The Movement for Canadian Literacy also states that nearly seven million Canadians are unable to complete their income tax returns for the same reason. In view of the complicated nature of the income tax form and tax brochures, will the Minister consider implementing in his Department the graphics approach to the income tax return form that I had illustrated and demonstrated for his predecessor?


Hon. Pierre Bussieres (Minister of National Revenue):: Madam Speaker, naturally, I would appreciate any simplification of the forms that taxpayers must complete to file their income tax returns, and if the Hon. Member has any suggestion, I shall be very happy to listen to him.


THE ADMINISTRATION
Mr. G. M. Gurbin (Bruce-Grey):: Madam Speaker, my question is directed to the Minister of Energy. The Minister of Energy has suggested that there were 20 companies involved in the consortium that were interested in the Synfuels Project and the research project. Does the Minister of Energy know the difference in the chemical composition of coal deposits from Province to Province and from deposit to deposit, the difference in sulphur content, the difference in hydrogen carbon ratios, and does he know whether or not it was coal from the Cape Breton area that was to be tested?


Joseph Jacques Jean Chrétien: That is what I said, Madam Speaker. In this case, the coal sent to the German company came from Cape Breton, but in fact, there have been several Cape Breton coal liquefaction projects involving several companies and not only Synfuels. There have been other similar projects, and since the chemical composition of coal from one place can be completely different from that of coal from somewhere else, it was important for us to know whether the German method could be used with Canadian coal. The German company made its first test
on Cape Breton coal, but additional tests could be carried out later on Alberta or British Columbia coal.


POSSIBILITY OF REGIONAL BENEFIT
Gary Michael Gurbin: Madam Speaker, my supplementary question is directed to the same Minister. Will the Minister at least admit that the most direct benefit that could be gained by this project would be for the area where the deposit came from and for the consortium that is applying for that Synfuels Project?


Joseph Jacques Jean Chrétien: Madam Speaker, I believe that every region that has coal would benefit from the application of that technology. Of course, if they had received the coal from Cape Breton first, we would have had that information first. I concede that point, but it is completely outside the scope of the Synfuels Project. It was meant to equip the Department with enough information to appreciate the value of all of the projects.
While I am on my feet, may I say I am very surprised to see all these people who propose to support the Member for Yellowhead (Mr. Clark), who is involved in having children of seven years of age voting at the convention, being sanctimonious today. That makes me sick.


Some Hon. Members:: Oh, oh!


PRIVILEGE
Mr. Doug Lewis (Simcoe North):: Madam Speaker, I rise on a question of privilege arising from responses today by the Prime Minister (Mr. Trudeau), the Deputy Prime Minister (Mr. MacEachen), the Minister of Energy, Mines and Resources (Mr. Chretien) and the Minister of Supply and Services (Mr. Blais), especially in response to questions which were raised in the House in February of this year. Each of these Ministers of the Crown has misled the House with respect to the Scotia Coal Synfuels Project and the financial role of the federal Government.
There is no obligation on any Minister to answer a question posed in this House. We are even prepared to admit that there was no intention to mislead the House in this case. But surely when Ministers answer questions about their areas of responsibility, they are obliged to make sure that those answers are as accurate and truthful as possible. That obligation is on every Minister of the House. It is incumbent on them to make sure of this when something comes to their attention or when they have tabled a document and have said, as did the Minister of
May 3, 1983

Energy, Mines and Resources on February 24, as reported at page 23193 of Hansard:
Yesterday I tabled in the House-


Madam Speaker:: Order, please. The Hon. Member seems to be raising a question of privilege because he feels that some of the facts given to him by certain Ministers are not exactly accurate. I must remind the Hon. Member that a dispute arising between two Members on an allegation of facts does not fulfil the requirements of parliamentary privilege according to Article 19 of Beauchesne.
Hon. Members know that these disputes about facts are marvellous subjects for debate, but they do not meet the requirements necessary to raise a question of privilege in the House. I would urge the Hon. Member to try to ascertain the facts through other means, namely through Question Period, which was abundantly done in the course of today's Question Period.
There will be other occasions when the Hon. Member will be able to find out about the facts or even to prove that they are not accurate, but this cannot be done through a question of privilege. I am sure he knows that.


Douglas Grinslade Lewis: I appreciate your suggestion, Madam Speaker. Specifically on February 24 the Minister of Energy, Mines and Resources said:
Yesterday I tabled in the House all the documents I had in my possession.


Madam Speaker:: Order. The Hon. Member is simply continuing his remarks. Will the Hon. Member please resume his seat. I can see the Hon. Member is simply continuing his presentation. He was interrupted precisely at that part of his presentation for a very good reason. I felt to begin with that he was arguing a potential question of privilege. I have now told him that he does not have grounds for a question of privilege so I cannot see how he can continue to argue it. At any rate, the argumentation of a question of privilege cannot take place in the first instance, only when the Speaker has found a prima facie case of privilege.


Douglas Grinslade Lewis: Madam Speaker-


Madam Speaker:: No, the Hon. Member cannot keep getting up and arguing. There is no question of privilege in these particular circumstances. The Hon. Member has to accept that. Those are the rules.
Is the Hon. Member for Calgary Centre (Mr. Andre) rising on a question of privilege?


Harvie Andre: Madam Speaker, I have a question for the Chair first. I thought I was aware of the precedents. I recall in particular a decision by the then Speaker, the Hon. James Jerome, on a question of privilege raised by the Hon. Member for Durham-Northumberland (Mr. Lawrence) regarding whether it is a breach of the privileges of the House for a Minister of the Crown deliberately to mislead the House. That arose in the kind of paradox that
Point of Order-Mr. Lewis
we are in today, because it is contrary to the rules to make an accusation of deliberately misleading-


Madam Speaker:: Order. Order, please.


Harvie Andre: Madam Speaker reads minds?


Madam Speaker:: I have determined there is no question of privilege in the presentation made by the Hon. Member for Simcoe North. The Hon. Member for Calgary Centre is talking about some precedent which might have occurred in the past and is asking a question of the Speaker. The Speaker does not teach procedure in the House, only indirectly through an accumulation of the knowledge that can come out of the rules. The Speaker certainly is not going to answer a question from the Hon. Member for Calgary Centre on some hypothetical situation which might occur in the House or one which has occurred in the past on which he wants me to comment. This is not the role of the Speaker. That is why I am interrupting the Hon. Member.


Harvie Andre: Madam Speaker, I have a point of order. I should like to serve notice that my privileges as a Member may have been breached because I am unable to make argument; and Madam Speaker is reaching a decision about my argument before she hears the argument. That is a breach of my privileges.


Madam Speaker:: I am sorry. I just want to remind the Hon. Member that he prefaced his presentation with "First I want to ask a question of the Speaker". I have told the Hon. Member that I will not answer questions about matters of procedure; I rule only on matters of procedure. I do not answer questions on matters of procedure. Members are at liberty to study procedure and come into the House and make points of procedure, but the Speaker does not answer questions on procedure.


POINTS OF ORDER
Douglas Grinslade Lewis: Madam Speaker, I gave you notice of this point of order earlier.
Notwithstanding the provisions of any Standing Order, I rise seeking the unanimous consent of the House to restore to the Order Paper the motion moved by my colleague the Hon. Member for Provencher (Mr. Epp), and negatived by the House yesterday, which called for the inclusion of property rights in the Charter of Rights.
On behalf of Her Majesty's Loyal Opposition I would be prepared to offer that an Opposition Day be turned over to the consideration of the motion, and that, at the end of the day, the motion be deemed to have been referred to the Standing Committee on Justice and Legal Affairs; that the Committee report thereon no later than June 7, 1983; and that the said report be disposed of no later than June 30, 1983.

May 3, 1983
Point of Order-Mr. Lewis
If unanimous consent is forthcoming, Madam Speaker, I would be prepared to move that motion at this time. I point out to the catcallers on the other side that there have been discussions with the Government House Leader and he may wish to reply to this proposal.


Hon. Yvon Pinard (President of the Privy Council):: Madam Speaker, basically, the proposal is acceptable to the Government. However, those of my colleagues who expressed certain reservations were quite right to do so, since it is not clear from the proposed wording that the motion would not challenge the confidence of the House in the Government. When we spoke a while ago, I suggested to my colleague a version that would dissipate any doubt in this respect and that would make it abundantly clear that the motion would not be considered as a motion of non-confidence in the Government. Therefore, if that aspect were included, the proposal would be far more acceptable than it is now.
Furthermore, the proposal is also acceptable, and again I say basically, since the wording used to include property rights in the Constitution is substantially that proposed by the Prime Minister of Canada (Mr. Trudeau) himself. And it is also basically acceptable because everything would be settled before the end of June. However, I had one reservation regarding the debate on the report prepared by the committee, and I believe my colleague, the Member for Simcoe North (Mr. Lewis), agreed with my suggestion to limit debate to a maximum of one day. Therefore, if my hon. colleague has in fact agreed, this should be included in the text, with the indication that the motion is not to be considered as a motion of nonconfidence.
Finally, I think it is important that at tomorrow's meeting of Parliamentary House Leaders, we should decide whether, even if the Opposition relinquishes an Opposition Day, it would be in order for an Opposition Member to move the motion. It could be moved by the Government and seconded by the Opposition parties. That is a matter that should be discussed. We could also proceed on a day set aside for Private Members' Business. Therefore, as far as the minor but significant details are concerned, I think the text should be improved, but basically, in any event, we are in full agreement with the Official Opposition.


Ian Deans: Madam Speaker, I wondered why the House Leaders for the Government and the Official Opposition were sneaking around behind the curtain; now it becomes clear. I had delivered to me not five minutes ago the proposal that they have been discussing for a while. I will need some time to discuss it with my caucus before we give any response to the request.


Yvon Pinard: Madam Speaker, I would like to make it clear to my colleague that I have never refused a House Leader, whether of the Official Opposition or of the New Democratic Party, the opportunity to come and talk to me. The proposal comes from the House Leader of the Tory Party (Mr. Lewis). He came and talked to me. I took it for granted that he would talk to the House Leader of the NDP (Mr. Deans). In so far as I am concerned I would never refuse to talk to the hon. gentleman or refuse to talk to the House Leader of the Opposition. They are making the proposition. I am willing to listen.
The Hon. Member says he wants to consult his caucus. That is fine with me. We have a House Leaders' meeting tomorrow at 1.30; therefore he will have the time to consult with his caucus tomorrow morning.


Douglas Grinslade Lewis: Madam Speaker, the whole idea of the discussion between myself and the Government House Leader was to try to reach some agreement which would bring property rights into the Constitution. The position of the NDP on this matter has been well known for some time. As a matter of respect to the Speaker and this House, we do meet behind the curtains, but we do not meet with sneaks.


Some Hon. Members:: Oh, oh!


Erik Nielsen: Madam Speaker, there are two questions which have not been answered with respect to the questions put by the Government House Leader. First, we make very clear that in giving up one of our Opposition days to the Government, the relinquishment of that day would not carry a vote and would not be considered as a want of confidence motion. The vote is not attached. Second, his suggestion with respect to the report stage lasting one day is acceptable to us, particularly in light of the fact that there would be almost six or seven weeks of committee study on top of the several months which have already gone by in discussing the matter before the Special Joint Committee of the House and the Senate and in the House itself. I believe those are the two conditions which he mentioned. To set his mind at rest, it will not be a want of confidence matter; and we are perfectly agreeable to the one day at report stage.


Yvon Pinard: Very briefly, Madam Speaker, if it is that clear, I suppose the hon. gentleman will have no opposition to being included in the text of the motion that it is not a non-confidence motion, and that not more than one day will be required once the report is made. The only point left which I raise is that if we are to proceed on Government time, even if it is a day given by the Opposition, we might want to discuss tomorrow who should move the motion. Since we are dealing with this on Government time, I have never seen a motion moved by an Opposition Member. The question will be, therefore, should it be moved by the Government, seconded by the Opposition, the two Opposition Parties, or should we proceed on a Wednesday on Private Members' Business? That remains to be settled.
May 3, 1983


Erik Nielsen: As for Private Members' Business, we cannot answer for that. That is a matter for Private Members and not any Party. However, with respect to the formalities of moving the motion, it really does not make any difference to us. The main thing is to have property rights entrenched in the Constitution. Since it was our idea initially, we would be perfectly happy to have the Prime Minister (Mr. Trudeau) or a Minister of the Crown move the motion and we can second it. In all other respects, with respect to the intervention by the Government House Leader, nous sommes d'accord.


Yvon Pinard: In that case, Madam Speaker, it is clear. Provided that consent on the three points is included in the motion, there is absolutely no problem with us. We agree and we are proud because the wording is that which was proposed by the Prime Minister (Mr. Trudeau) himself at the beginning.


Ian Deans: Madam Speaker, we will certainly give this proposition all the consideration it deseves. As you know, Madam Speaker, we are very eager to see the rights of Canadians to own their own homes and farms in the Constitution, and we will do whatever we can to expedite getting that right into the Constitution. I will be in a position on behalf of this caucus to meet with the two-


An Hon. Member:: Sneaks.


Ian Deans: -fellows from the other Parties to discuss a suitable way of accomplishing this tomorrow. Until then I hope to be able to have time to look at the implications and determine whether there are any further negotiations required in order to come up with a satisfactory motion which will satisfy everyone's needs.


Madam Speaker:: Order. The Speaker is certainly not against the House Leaders of the different Parties reaching an agreement on certain matters. However, it seems to me that a lot of negotiation has taken place on the floor of the House. Indeed, the real place for those negotiations to take place is either behind the curtains or in somebody's office. I understand that there is no point in my asking if there is unanimous consent; more negotiations must take place and I take note of that.


MR. MUNRO (ESQUIMALT-SAANICH)-REPLIES GIVEN DURING ADJOURNMENT DEBATE UNSATISFACTORY
Mr. Donald W. Munro (Esquimalt-Saanich):: Madam Speaker, I rise on a point of order which arises out of the proceedings last evening during the adjournment debate. My understanding of the adjournment debate is that it is to permit an Hon. Member who has a question to obtain more information during the adjournment debate than is possible during the
Point of Order-Mr. Donald W. Munro
Question Period. I had hoped to put a question to the Minister of Fisheries and Oceans (Mr. De Bane) in Question Period on April 27, but he was not present. The question was taken by the Secretary of State for External Affairs (Mr. MacEachen), who misheard my question, I suppose. In any event, he did not answer it. I therefore asked if I might go on the adjournment debate.
Last evening the Adjournment Debate took place, and believe it or not, Madam Speaker, the Parliamentary Secretary to the President of the Treasury Board (Mr. Lang), who knows even less about West Coast fisheries than the Secretary of State for External Affairs, stood in his place to answer my question. He was the only Hon. Member on that side during these discussions and I felt it right and proper to bring to his attention through Hansard, and I am bringing it to your attention, Madam Speaker, as a point of order, that this is not a very satisfactory way to have the adjournment debate. One is not getting the amplification in the answers to the questions one has put-


Madam Speaker:: Order. The Hon. Member might have a very legitimate grievance but it certainly is not a point of order. It has nothing to do with any rules having been transgressed. The Hon. Member obviously is not satisfied with the kind of debate which he was able to have last evening, but perhaps he will seek an occasion to provoke that debate at some other time and I trust that he will then receive satisfaction.


David P. Smith: Madam Speaker, I would just like to point out that the Parliamentary Secretary was in fact speaking for the Government last night.


Donald W. Munro: Do I take it, Madam Speaker, that I must raise this question as a question of privilege in order to obtain satisfaction in the House?


Madam Speaker:: No, that is not what the Hon. Member should understand from what I just said. I told him he did not have a point of order. I told him that he possibly had a grievance. He can pursue that grievance in other circumstances, but it is not a question of privilege. A grievance is not a question of privilege; the Hon. Member knows that. I would refer him to the authors, whom he knows as well as I do, in order to refresh his mind as to what does constitute a question of privilege; but a grievance does not. Dissatisfaction with the manner in which a debate has taken place in the House of Commons certainly is not a question of privilege. I can understand the Hon. Member's frustration. I can sympathize with it, but I cannot hear him on a question of privilege nor even on a point of order.
25106

May 3, 1983
Order Paper Questions



ROUTINE PROCEEDINGS


Paul James Cosgrove: for leave to introduce Bill C-151, an Act to provide supplementary borrowing authority.


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

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
David P. Smith: Madam Speaker, the following questions will be answered today: Nos. 4,568 and 4,729.
[ Text]


Mr. Hawkes: 1.	Did the Minister of National Health and Welfare write a letter to Mr. E. J. Korhomem, President of the Confectionery Manufacturers Association of Canada, dated October 14, 1982 and, if so, is the Prime Minister aware of this fact?
2.	Does the Prime Minister and his Cabinet condone the implied threat of unspecified government action that is inherent in the letter and, if not, what action does the Prime Minister intend to take to reassure Canadian companies and their employees that they will not be subjected to ministerial threats for obeying the laws of Canada?


David P. Smith: 1. As a result of this question and consequent inquiries, the Prime Minister is now aware that the Minister of National Health and Welfare wrote a letter to Mr. E. J. Korhomem, President of the Confectionery Manufacturers Association of Canada, on October 14, 1982.
2. Having examined a copy of the letter in question, the Prime Minister sees only an appeal to Mr. Korhomem for his assistance in achieving the government's objective of not encouraging Canadian children to take up the tobacco smoking habit in later life; a habit that creates serious health risks.


Mr. Scott (Victoria-Haliburton): 1.	How many senior citizens were required to pay income tax quarterly in 1982?
2.	What amount of revenue was generated from installment payments by senior citizens in 1982?
3.	What amount of revenue was generated in penalties from senior citizens who did not properly make installment payments in 1982?


Pierre Bussières: Data for the 1982 taxation year are not yet available. The data for the 1981 taxation year are as follows:
1.	312,389 senior citizens were required to remit installments on a quarterly basis.
2.	Amount of revenue generated from installment payments: $720,422,778
3.	Amount of revenue generated from installment interest: $31,479,968


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


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


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Lalonde that this House approves in general the budgetary policy of the Government.
Hon.   J.-J. Blais@Minister of Supply and Services: Madam Speaker, I am pleased to participate in this debate. Although it is drawing to a close, there are still certain points deserving public attention.
First of all, I should like to commend the Minister of Finance (Mr. Lalonde) for bringing forward an excellent document which has gained almost general acceptance. Of course, such acceptance stems from the fact that many Canadians have rightfully claimed to be the authors of one part or another of that document.

Indeed, Mr. Speaker, it has never been previously my experience that so many individuals and groups of Canadians have claimed some portion of the budget as their own. Within our own Liberal Party caucus we have had indications from individual Members of Parliament that such and such a measure was included in the budget as a result of their intervention. Indeed, Mr. Speaker, even Members on the other side have claimed some authorship. No doubt that is because there has been a large measure of consultation.
May 3, 1983

I want to give some examples. Two Opposition Members who spoke yesterday in this House indeed indicated previously their approbation of the budget. I draw your attention, Mr. Speaker, to the Midland Free Press in which the Hon. Member for Simcoe North (Mr. Lewis) described the budget thus:
The MP said Tuesday he was pleased with the Government's plan to expand the mandate of the Federal Business Development Bank. The FBDB will provide greater support for small business and include a new investment banking capability to help meet the capital needs of promising small companies.
"That's what small business is looking for," said Lewis.
The MP also was pleased with the phasing out of the standard $100 tax deduction claimed in lieu of itemized deductions for charitable donations and medical expenses.
The lifting of existing limits on investment tax credits is "healthy," said Lewis, the Conservative House Leader.
I would hope, Mr. Speaker, that with that sort of endorsement we will see the Opposition House Leader vote with the Liberal Party and the Government on the occasion of the final adoption of this measure. I call your attention as well to the Enterpriser Bulletin of Collingwood, Ontario, where the Hon. Member for Grey-Simcoe (Mr. Mitges) is quoted as follows:
Grey-Simcoe MP Dr. Gus Mitges said the special projects should help the unemployment situation.
"A lot of the budget is pointed in that direction," he said.
"You've got some good things for farmers and the doubling of the child care deduction is a good thing," he said.
I say again that I invite that Hon. gentleman, when the time comes for the vote, to vote in favour of the budget and join the Government Party in so doing.
The last Member I would like to quote is the new Hon. Member for Timiskaming (Mr. MacDougall), which is just north of my particular region. He is quoted as follows:
For Mr. MacDougall, the budget did contain some good news. He cited the one month extension of the $3,000 federal grant to new home buyers, to the end of May, 1983. He also praised the Home Ownership Savings Program referred to in the budget.
While he approved of the investment tax incentives introduced by the Finance Minister-
That shows the high level of excellence of this particular document and the amount of approbation it is receiving throughout the whole of the community.
I would also like to indicate what happened on the street the day after the budget was brought down. The Toronto Stock Exchange rose by 43.75 points, the most impressive postbudget rise since records have been kept at the Toronto Stock Exchange. The dollar went up two-fifths of a cent as a result of this budget. Indeed, Wall Street indicated that it praised the budget for its philosophy and structure. For Wall Street to have indicated approbation of this budget based upon economic philosophy and structure, Madam Speaker, is really a welcome development.


The Acting Speaker (Mr. Corbin):: Order. If the Hon. Member was addressing his remarks to the Chair, he would notice that I am not wearing robes or a skirt!


Jean-Jacques Blais: Yes, Mr. Speaker.
The Budget-Mr. Blais

I apologize, Mr. Speaker. Of course, the other problem is that I would like to speak to the issue of capital projects because, as it has been pointed out, over $1 billion will be allocated through procurement.

Indeed, when the $2.4 billion was approved in the budget for capital projects I was most pleased, because of that amount over $1 billion will be invested through procurement. As you know, Mr. Speaker, my Department is very interested in showing its colours in terms of effective negotiation of contracts. Comments have been made by Opposition Members to the effect that indeed there might be some difficulties through the allocation process where there may be some favouritism manifested. I want the House to rest assured, Mr. Speaker, that the total operation will be in accordance with the contract regulations and the Financial Administration Act, and it is our responsibility and the responsibility of this House so to ensure.
There is going to be fast-tracking-and I think the word is well chosen-of the operation within my Department because preliminary approval of the projects is granted immediately by a subcommittee of the Priorities and Planning Committee. I sit on that subcommittee, Mr. Speaker, and I can assure you that the process is being followed very expeditiously and that most of the projects have already received approval.
The other way in which fast-tracking is accomplished is through increased contract delegation to individual Departments, which means that we can go into the marketplace and through the tendering process negotiate contracts for higher amounts without having to submit the application to Treasury Board for approval. That is one way of fast-tracking. The other way is by setting up a special recovery projects board which involves Deputy Ministers who will ensure that all of the bureaucratic impediments are removed in order to accelerate the process. Again, I spoke of the approval process which has been delegated to a subcommittee of Ministers of the Priorities and Planning Committee.
You will recall that we made the claim that we would reduce the approval time from the time the requirement was identified to the time the work was put in place by 50 per cent. That is exactly our intention and it is exactly what we will do. We are killing two birds with one stone, Mr. Speaker. First of all we are creating jobs, there is no doubt about that. The second point is that we are putting in place a highly desirable infrastructure, and we are procuring goods required by the Government of Canada and its agencies. I would like to quote from the Minister's budget speech. He said:
The projects will focus on six key areas; transportation, research and training facilities, resource development, vessel procurement, land and tourism development and high technology procurement. The projects are future-oriented, aiming to build and upgrade research and high technology centres, transportation infrastructure and other facilities and services that will enhance the long-term growth potential of Canadian industry. They will provide much needed support for several currently weak sectors of the economy, such as construction, shipbuilding, Fisheries and forestry.
May 3, 1983

The Budget-Mr. Blais
Hon. Members will recall that we announced two of those major projects on Monday of last week. One was the purchase of the water bomber. In effect, we are putting $147 million aside in order to purchase up to 36 water-bombers form Canadair in Montreal.
May I indicate that this is the first example of co-operative procurement between the federal and provincial Governments. It is fitting that this should take place because we are dealing with a typically Canadian technology. The Canadair CL-215 water bomber is known internationally as the "Canadair". It is the aircraft that is most often identified with the Canadian Aerospace Industry in the International field.


Donald W. Munro: Mr. Speaker, I rise on a point of order. Is the Minister prepared to table some documents testifying to the comment that he just made that it is known internationally as a great airplane?


The Acting Speaker (Mr. Corbin):: That is hardly a point of order. Hon. Members should know that there is a provision for questions following an Hon. Member's speech. Perhaps he could wait until that time.


Jean-Jacques Blais: If the hon. gentleman was as well travelled as he claims, he would have known that countries including China and France refer to this aircraft as the "Canadair". It is the only aircraft manufactured specifically for waterbombing activities.
In addition to that, I announced the acceleration of the construction of the 11 Coast Guard ships. That is a program involving $780 million. We will be building six 1100 series icebreakers nav-aid tenders. We will also be building two 1050 series nav-aid tenders with icebreaking capacity and two smaller 800 series. Furthermore, we will be replacing the Labrador which is now 33 years old and is one of the fleet icebreakers of the Canadian coastguard. That involves a contract that we estimate in the vicinity of $100 million.
In sum total, the amount to be invested is approximately $780 million. Of course, that does not include the frigate program which we will be approving at the end of June or beginning of July. It does not include the DLEX, the destroyer life extension program that DND has in place for which I am letting contracts to shipyards throughout the country on a regular basis. It does not include the TRUP, the Tribal Class Update Program which has not yet been approved by Cabinet. We are dealing with sizeable amounts that will be invested by the Government of Canada in the shipbuilding industry in the very near future. In these particular instances that I have described, the criteria that has been identified for fast-tracking are being met. The major amounts of the expenditures will be expended within the next two years and the work will begin within the next six months.
In addition to that, the selection of the process of the specific projects was based upon Canadian content. We insisted that those projects which were selected had to maximize Canadian value added in order to create jobs in the Canadian marketplace. Moreover, we wanted a large number of the dollars to go into the manufacturing sector because that
is where the jobs are and where our experience has not been the best.
One would recognize that, when considering the creation of jobs, the incidence of job creation is greatest where the value added to the product of service is the greatest. In the extracting industries, the jobs tend to be fewer per dollar invested than in the manufacturing sector. We have a rule of thumb in my Department which states that if we invest $1 million in the resource extraction sector we create one job; if we invest $1 million in the manufacturing sector, we create 15 jobs. The ratio is quite impressive.
Canada's weakness in the past has been its lack of concentration on the manufacturing sector. The proof is in the pudding. When one studies our DRIE figures and breaks them down, although we have a surplus in trade, it can be seen that we have a major and growing deficit in end products. I am not talking about semi-processed goods but end products or manufactured goods. We rose to over $20 billion in end products deficit in 1981. The last figures I have show that we will not be very far from that mark for 1982. Therefore, we are looking at a deficit of $20 billion in end products in Canada.
Another rule of thumb in my Department is that for every million dollars we spend on procurement on end products we create or maintain 70 direct or indirect jobs. If you eliminated that $20 billion in end products deficit and multiplied it by the 70 jobs per million dollars expended, you would create 1.4 million jobs, which is very close to the total number of unemployed as defined by Statistics Canada today. Indeed, we must increase our activity in the manufacturing sector.
I am pleased to find that I have a very strong ally in that opinion. I read an article in Monday's Globe and Mail which was entitled "Canada at Crossroads: Crosbie. Tory Candidate Outlines His Plans". I would like to refer to some of the comments that the Hon. Member for St. John's West (Mr. Crosbie) has made because I agree with them. I believe that he is at last showing his true Grit colours by espousing quite openly in his leadership campaign some of those policies that we have been developing and implementing for many years now. In dealing with manufacturing, which of course is the thrust of my speech, he said:
The Canadian Manufacturing sector faces some severe problems in the near future.
We must limit the fragmentation of the Canadian market by negotiating a Code of Conduct binding on all Governments. In particular, we must seek an agreement limiting By-Provincial procurement policies.
I agree fully with him and I have been doing that for the past two years. Indeed, I have met twice with my colleagues at the provincial level to deal with this exact issue.
The benefits we have obtained from those progressive policies have been the water bomber which I have just described. The water bomber procurement is the first prime example of strategic goods being purchased jointly by the federal and provincial Governments. We are contributing our $147 million and asking the provincial Governments to do the same. They have already indicated that they are prepared to do so.
May 3, 1983

The Hon. Member also talked about the question of world product mandating. I have been dealing with that issue since I have been Minister of Supply and Services. I have implemented world product mandating with every large corporation that has been supplying goods to the Government of Canada and doing so with a great deal of success.
We are removing any remaining tax disincentives to exports. This budget deals exactly with that. It says that for Canadians working abroad on specified activities, the current deduction for overseas employment income will be replaced by a tax credit of 80 per cent of the Canadian tax payable on up to $100,000 of such overseas income. In the past there have been some complaints that people would not want to go abroad because they face a burden on their income as a result of doing that. We had representations by exporters to put in this provision and we put it in. An amount of $180 million was put into the budget in order to promote exports.
I see, Mr. Speaker, that you are getting up, and that means you want me to sit down. I will be pleased to do that. But I just want to tell you, Mr. Speaker, that Members of the Opposition have recognized, as I indicated initially, the excellence of this budget, and I am looking to their support when the time comes.


The Acting Speaker (Mr. Corbin):: Order, please. Are there any questions or comments?


Benno Friesen: Mr. Speaker, the Minister dealt at length with the fact that his Department will be responsible for many of the contracts that will be let as a result of this budget. Is it the policy of his Department to grant contracts to individuals- with respect to the budget or outside of it-who are reserve officers of the Canadian Armed Forces and, therefore, are paid by the Canadian Government, or would the Government consider that a conflict of interest?


Jean-Jacques Blais: Mr. Speaker, we are not in the business of granting contracts to individuals who are otherwise employed by the Government of Canada. In effect, I would have to look at the specific instance which the Hon. Member wishes to call to my attention before I could give additional responses. If there is any conflict of interest, then that conflict of interest is called to our attention and, of course, it disqualifies the bidder.


Benno Friesen: Mr. Speaker, I would draw to the Minister's attention Contract No. VAN-32-07838A-


James Scott (Jim) Peterson: I know it well.


Benno Friesen: I would point out to the Minister that that is a contract let for the second year in a row over the objections of other businesses in the area. For the second year in a row a contract was let to a reserve officer of the Canadian Armed Forces, and supposedly there has been some embarrassment. Is it the policy of the Government to grant contracts to reserve officers? Purportedly the Government has done so. If I can believe the Minister, he has just said that that would be
The Budget-Mr. Blais
considered to be a conflict of interest. If that is the case, will the Minister look into this and see what happened?


Jean-Jacques Blais: Mr. Speaker, I did not say in this particular sense there was a conflict of interest because I do not know this particular case. I am a bit concerned that the hon. gentleman, knowing that I was defending my Estimates in committee this morning, did not ask this question or give me notice of it so that I could provide him with a better reply. As to what sort of limitations are imposed upon reserve officers in terms of dealing with the Government of Canada, I cannot provide him with an answer immediately. But surely reserve officers or personnel with the reserve forces are usually people carrying on their normal businesses in the private market. Whether there is a conflict of interest depends upon the specific case drawn to one's attention and what the circumstances are surrounding the particular case.


Mr. Sargeant:: Mr. Speaker, I would like to direct a question to the Minister about the Canadair water bomber sale to which he alluded in his speech. While I share the Minister's assessment of the plane as to its quality, I cannot be quite as enthusiastic about the sale. Last week when the announcement was made, we were led to believe the sale would be for 36 water bombers. However, in the Minister's speech today he said the sale was for up to 36 water bombers. As I understand it, the federal Government's commitment is for four only at this point but for another 16 if the Provinces match the federal Government. In other words, if a province buys one, the federal Government will buy one. It seems to me that if the Provinces do not buy any of these water bombers, then it is not much of a deal at all. If some of the Provinces do not agree to buy any, then it is less of a deal than the big deal the Government would have us believe. Would the Minister care to comment on that, please?


Jean-Jacques Blais: Mr. Speaker, I thank the Hon. Member for agreeing with me that this is the best aircraft for the purpose in the world. Often Canadians do not take sufficient pride in their own accomplishments in the technological area. I commend the hon. gentleman for recognizing that this particular aircraft is indeed very worthwhile. I invite the hon. gentleman to see a demonstration-


Terence James (Terry) Sargeant: I have seen one. The Manitoba Government flies them.


Jean-Jacques Blais: That is right. The Manitoba Government has been interested in the water bombers for some time. As a matter of fact, if one looks at the experience of those Provinces that have the CL-215s, one will see how effective they have been in controlling forest fires. Manitoba and Quebec are two examples. As far as Quebec is concerned, that Government has already agreed to purchase additional numbers. The Province of Ontario is going to cabinet and will be purchasing additional numbers as well. We have every hope other Provinces will see the usefulness of the aircraft and will purchase their first aircraft. I might point out to the hon. gentleman that we were in a position where we had to put our cash on the table before

May 3, 1983
The Budget-Mr. Korchinski
the Provinces came in. We went to the Provinces with two officials. There were negotiations and the Provinces saw the necessity of acquiring a water bomber fleet. They indicated the number to us. They said to us that before they could act credibly on this matter they would have to have some indication of seriousness on the part of the Government of Canada, and until the budget was brought down there have been no indications that the money would be put on the table and that it would be made available for the procurement. Until that time it was very difficult for individual cabinets at the provincial level to start dealing with the issue. Now they are dealing with the issue and I am very optimistic they will be meeting our expectations.
The other point, of course, is that by having a production run at Canadair at Montreal one is in a position to be competitive in the international markets. Because there were so few domestic orders for the CL-215, Canadair's marketing efforts in the international marketplace were not very aggressive. Indeed, one of the conditions we have imposed in terms of this particular program is that Canadair seize this opportunity to resume aggressive international marketing in order to sell those 20 aircraft that we described in the plan we made public last Monday.


The Acting Speaker (Mr. Corbin):: Are there other questions or comments? Debate.
The Hon. Member for Mackenzie (Mr. Korchinski).


Mr. S. J. Korchinski (Mackenzie):: Mr. Speaker, I welcome this opportunity to make a few comments on what I call the Rip Van Winkle budget. Suddenly the Government woke up to the facts of life, suddenly it realized what was happening in the country; and suddenly in its sleep it rolled over on the other side. Suddenly the Government realized that there are out there two million people who are unemployed. To a large extent this Government contributed to that figure.
Over the years as I have watched the operation of the Liberals in office I have often seen them introduce legislation which goes to the extreme. Liberal Governments go too far and then allow considerable debate in the House, out in the country. Then they slowly withdraw. We hear Liberals, say, "Look how wonderful we are. Look at what we are doing for you." What Liberal Governments do is draw in the reins and then loosen them. It is much like going fishing. Liberals think the public will forget what they have done to them. The Liberals wonder what happened to the Gallup poll and why they are down in the polls. Can you imagine anyone who has been a lifelong Liberal losing his business, losing the result of his efforts over the years, and yet still turning to this very Government and voting Liberal again, Mr. Speaker? Why should anyone do that only to get kicked in the teeth again? After all, some of these businesses could not be sold because they are defunct, and who would buy a business going broke? Who would buy a collapsing business? Where would that businessman turn to for his retirement income? He has nowhere to turn, and suddenly the Government comes along and starts lending money. Most of us have just gone through the exercise of preparing our income tax returns. High income and low
income earners alike have to contribute toward the recovery program which the Government is initiating.
Why is it necessary to destroy the initiative and expertise of businesses, in some cases forever, and then turn around and say that it is necessary to retrain? Retrain for what? Can we imagine what students leaving high school or perhaps dropouts think about their future? They know that the Government is offering a plan but they do not know where to go. They wonder what is the future of this particular industry or that particular field. Can we imagine what they are faced with when trying to make up their minds about what to do?
All of us in our teens had to make decisions as to what we hoped to do with our lives. Oftentimes our plans did not turn out, but at least we were able to sit and ponder and hopefully plan and train ourselves for the future. It was an agonizing experience, even at the best of times, to decide in which direction to go. Can we imagine what any young student goes through today when trying to make that decision?
The Government is going to retrain and it is designating the particular fields in which to retrain. I have visited some Communist countries and I was told that once Governments decide that a person should go into a particular field he or she is stuck for life. Regardless of whether or not one likes the particular field after a few years of experience, one is stuck for life. There is no longer any room for initiative or incentive in our country because the Government has destroyed it.
Government Members talk about wrestling inflation to the ground. They did not wrestle inflation to the ground; they wrestled the people to the ground. People are flat on their backs, and the Government comes along with programs and says, "Look at these wonderful things".
A few years ago the Minister responsible for the Canadian Wheat Board came through with the LIFT Program. I referred to it as the "Lower Income For Tomorrow" program because he told farmers to take land out of production and to put it into summer fallow. Today we have another LIFT Program. This time I call it, "Lower Incentives for the Troubled". The Government still has a LIFT Program because it has a LIFT mentality.
The Government comes along and destroys incentives and then it says that it will do things for Canadians. We have a $31 billion deficit. It is spending money which it does not have. The Special Recovery Program itself will not be paid for immediately. It is to be paid for later. As if we would not notice it, it will sneak up from behind and hit us when we are not watching. It is part of the Government's "fly now pay later" program. This is exactly what the Government has been doing with its deficits. Deficits are only deferred tax.
Members of the Government seem to have a fixed mentality. They simply come up with programs, and then a few years down the road ask the people to pay for them. They think that we will not notice it, that it will just be another burden. They take great pride in their six and five program and say that it
May 3, 1983

was responsible for controlling inflation. How silly can they get? The six and five program was not responsible for controlling inflation. High interest rates made it impossible for businessmen to replace the stock on their shelves. High interest rates stopped farmers from purchasing machinery. High interest rates caused manufacturers to wonder whether or not they should expand, and of course they did not. When they use that type of mechanism they do not take into account the fact that people make plans. When they make plans, they anticipate that their incomes will be such and such. They look at their returns for the past few years, they know what they are manufacturing or producing, they anticipate the market and perhaps calculate the price. They know what their revenues should be and what some of their fixed costs will be. They plan over a period of years. Then they buy pieces of equipment based upon the fact that the interest rate will be 12 per cent. They project five years down the road and, lo and behold, the Government intercedes and slaps on a 23 per cent interest rate. How can such individuals, as intelligent as they may be with all their expertise and knowledge in their fields, cope with that situation? What for?
Today we have to reverse our thinking. We will not find such people. Does the Government think they are silly enough to go back into the fields, uncertain as they are as to what it will do next? If the Government had wanted to provide these people with initiatives, it should have taken into account some of the purchases which were calculated on the basis of their projections and anticipated expenditures. It could have categorized the interest rate and taken those purchases into account. It was possible. Those who had already made purchases based upon anticipated income could have been left at a fixed rate of interest. Another level could have been set for those people who had to replace inventory or stock. If it wanted to create incentive, it could have increased the rate at another level and made it possible for businessmen to stay in business. It could have taken into account the undesirability of an over-expanded or over-heated economy. It could have said that it would restrict the money available and told people not to expand at this particular time because inflation was a great problem. It could have restricted it without having to destroy business at the same time. That would have retained many people in jobs and many businesses in place. Instead, the Government pounced on everyone-the ones with low incomes, the ones with high incomes, the ones who had purchased refrigerators or some other essential for their homes. It pummelled manufacturers that had been in business for many years, and then it provided a little incentive. It gave a few grants here and there. It said, "We will be good to you and give you grants in order to create jobs". It was a kind of hat trick.
I recall a man by the name of John Turner standing across the way as the Minister of Finance. At that time he introduced a measure to remove the ceiling on farm improvement loans. The press says that some day John Turner will be the Leader of the Liberal Party. The Liberals may want him, but I certainly do not want him around this place. When he removed the ceiling, he said that a lot of money would be available. We
The Budget-Mr. Korchinski
warned him of the danger of removing that 5 per cent ceiling, but he said there would be more money available.
For a while his prediction came true. Then the rate rose from 5 per cent to 7 per cent and then 8 per cent. People grumbled a bit, but they were still accommodating. When it shot up to 12 per cent, people became jittery, wondering where the economy was going, but they adjusted. When it reached 23 per cent, lo and behold, they could not pay the interest, never mind the principal. The banks, Financial institutions and the Farm Credit Corporation said there was a lot of money and that to get it, you need only sign on the dotted line. Today these same institutions are calling in the loans saying, "That's it. There is no more money".
What happened to the money that John Turner predicted would be available? If you look at Hansard for that time, you will see that that is what was said. What has happened to that money?
I receive many calls and letters from people in financial trouble. Farmers are going bankrupt. They are being taken to court and their assets are being sold. A Bill has been introduced by a Private Member to try to help those who took the advice of the Government and the banks.
I have had experience with the banks. When I was refused money by one banker, I went to another banker. I am sick and tired of these bankers who obviously are not accommodating. They will not even listen to you. They ask why you were not a customer previously. That banker may not realize that I am sick and tired of trying to deal with my former banker who is no longer accommodating but only interested in a profit for his branch. His interest is not my interest, but I have to live with it. When you try another bank, you get the same result. It is as though there were a network between the banks.
My constituents who call and write to me are telling me the same story. Over the years one of my constituents, a farmer, purchased land from other farmers. He has created jobs in that area. He has built up assets. Because of inflation, the land value went up to $2.5 million. He controlled a large part of that area. All of a sudden he had to dispose of everything. In the process, he will put a dozen companies out of business because he was their major customer.
The Government does not have to use the taxpayers' money. It need only talk to the banks. I have written to the Minister with regard to the Small Business Development Bond. His reply was that he cannot interfere. If he cannot talk to the bankers, who can? Certainly not the man who needs the money. It is only as a last resort that people write to their Member of Parliament, who in turn contacts the Minister of Finance (Mr. Lalonde), the same Minister who says he cannot do anything about it. The Minister can do something about it. He can ask the banks to be more accommodating, to allow a little more time. It is not necessary to tax those earning the minimum wage in order to make a recovery. This can be done without using the taxpayers' money if only the Government

May 3, 1983
The Budget-Mr. Korchinski
will take the initiative. The Government is slapping the wrist of the businessman. It is not able to talk to the bankers.
I now want to deal with the housing aspect. The Government announced an increase of 2,500 units in the social housing area. This is a sensitive area. As soon as you talk about social housing, people immediately think of the penniless and the destitute. I have access to information which leads me to believe that when there is a vacancy, it is filled by the next in line, even though that person may be borderline and might better fit into another scheme.
Once someone is in such a housing unit, you cannot put him out. Then there are those who, knowing something about an individual in social housing, because they do not have as much revenue, believe that they should be entitled to social housing as well. Because one person is entitled to social housing, there could soon be a line-up of people who believe they are entitled to it as well because they think it is Government policy. Therefore, the Government must be very careful. It may be necessary to have a rental supplement or possibly some kind of means test and not have to use the taxpayers' money as a subsidy. I understand the average subsidy is approximately $4,000 per unit. I understand that not in all cases is the taxpayers' money used for people who are in desperate need of shelter and have no other way of obtaining it.


The Acting Speaker (Mr. Corbin):: Order. I regret to interrupt the Hon. Member, but the time provided for his speech has expired.


Gordon Edward Taylor: Mr. Speaker, I have a question for the Hon. Member. With regard to the need for housing, has the Hon. Member any comments on how the budget could provide incentives to home buyers without adding to the budgetary deficit?


Stanley James Korchinski: Mr. Speaker, there are several ways of accomplishing this. One item sadly missing from the budget was an insurance scheme so that those having to renew their mortgages will not be saddled with the high interest rate simply because they must renew their mortgage at a time when interest rates are high. I asked the Miniter in the House whether any consideration was being given to this. I believe that an averaging out scheme can be accomplished without using any taxpayers' money. This does not necessarily have to be compulsory nor does it have to cost the Government-when I say Government, I mean the taxpayers-money because additional insurance can be taken out at a small additional premium to ensure that over the next few years your mortgage will not suddenly be increased from 12 per cent to 19 per cent or 20 per cent.
If the Government could work out the details of such a scheme, then the people who pay for the mortgages and pay for the premiums would not be playing what I call "renewable roulette". Renewable roulette means that if your mortgage rates are high, you are stuck paying that high rate. In my own case, I had a mortgage at 12% per cent, and lo and behold, the
time for renewal came and I had to renew at 16% per cent. If my mortgage were to come due today, I would be lucky. But it is not so. In other words, it is possible to work out such a scheme.
While I am on my feet, I would just like to comment on one other aspect and that is the $10,000-


The Acting Speaker (Mr. Corbin):: Order. That is hardly allowable under the rules of the recent practice of questions and comments. Are there further questions? The Hon. Member for Bow River (Mr. Taylor).


Gordon Edward Taylor: Mr. Speaker, I have one further question for the Hon. Member for Mackenzie. With reference to the western transportation initiative, has the Hon. Member any comments on how this proposal would affect a recovery program?


Stanley James Korchinski: Mr. Speaker, I can comment on that because the Minister of Finance mentioned that in his budget and suggested that this would be one of those megaprojects that he talks about. On the one hand he will create jobs by building a railway, he calls it double-tracking or fast-tracking, but where will he get the money to do this? He will get the money from the farmer.
You know that the farmer is one of those enterprising individuals who does not need to be spurred on. He does not need to have salesmen knocking at his door. He is looking for salesmen because he always has need for a battery, for a tire, for electrical equipment, for new machinery, for new saws, for new hammers, for new refrigeration equipment, you name it. The farmer has need of everything. His needs do not fall into one particular category. A homeowner can only buy so many items, but out on the farm it is an entirely different story. Every industry benefits from the farmer.
Lo and behold, the Government wants to withdraw out of Saskatchewan alone $1 million a year that it claims will help create jobs. Why withdraw that money? That money might best be left in the hands of the farmer because he is a great purchaser. Why do you think farmers are so deeply in debt to the Farm Credit Corporation and to the banks? Because they enjoy buying products that will enable them to work as efficiently as anybody else does. In fact, the farmer is more efficient because he has been buying implements.
The Government's program will supposedly create jobs, but it will create jobs for only a few years. In the meantime, the program will destroy the established farmer. I personally know farmers who are hanging on by their fingertips. The Government is going to take more money away from that individual who is a great spender in order to create jobs. That again is a typical Liberal philosophy: take away and then give back.


Mr. Roy:: Mr. Speaker, I have a question for the Hon. Member for Mackenzie (Mr. Korchinski).
I certainly do not think that pessimistic speeches like the one we just heard are going to help Canada's economy. Anyone
May 3, 1983

who reads the newspapers will see that this budget, which has been called by some people the key to Canada's future, can give the economy a boost if we are all willing to give it a chance.
When the Hon. Member said the Minister of Finance (Mr. Lalonde) should have taken action and spoken to the banks' representatives, I would have liked him to give us further details, because he did not indicate what the Minister of Finance was supposed to say to the banks. Was he referring to the need for lower interest rates in Canada compared with the United States? I may remind him that, when he says the Minister of Finance is mortgaging Canadians, in Canada savings represent about 13 per cent of disposable income, which is twice as much as in the United States. The message given by the Minister of Finance is a message of optimism which appeals to the private sector and is aimed at developing our economy.
I would have liked to hear what the Hon. Member has to say about interest rates.


Stanley James Korchinski: Mr. Speaker, I thought I had made that clear, though the Hon. Member thinks I did not. Perhaps my message did not come across as clearly as I had hoped. At that time I did say that I expected the Minister of Finance to sit down with the bankers and tell them that rather than foreclose and take these people to court, they should just give them an extension and let the farmers work out their own salvation, give them a little more time. There is no point in destroying an enterprise that has been built up through hard work, borrowed money and a lot of sweat, only to find out that another job must be created. Rather than calling in the debts immediately, all the banks need to do is to give the borrower more time. I suppose the banks are entitled to operate their own business, but it is strange that the banks spend so much money in other countries. They lost a lot of money in other countries and now they are trying to recover it on the backs of the enterprising individuals who create the jobs in Canada. If the banks can lose money outside of Canada, then they can take a chance on Canadians. That is what the Prime Minister (Mr. Trudeau) said. All I am asking the banks to do is to take a chance on Canadians.


Marcel-Claude Roy: Mr. Speaker, I would mention that the Hon. Member for Lambton-Middlesex (Mr. Ferguson) introduced a Bill to help those farmers to whom the Member has referred, but the Tories are against that Bill. We on this side want to help the farmer through this legislation introduced by the Member for Lambton-Middlesex.


Stanley James Korchinski: Mr. Speaker, if the Hon. Member had been following the comments made with reference to that particular Bill, he also would have followed the criticism that came from people who are in the business themselves. One of the criticisms is that their source of credit would dry up. That is the danger involved in this. You do not introduce a Bill simply
The Budget-Mrs. Hervieux-Payette
because the title sounds good. You are really deceiving a lot of people because a lot of farmers out there believe that the banks will not foreclose the minute that Bill is passed. That may happen, but at the same time the source of credit is dried up. What farmers need today is credit and cash to buy fertilizer, feed, fuel, tractors, repairs, chemicals, everything. If you dry up that source of credit, then you put them out of business right away. That is just what that Bill might do.


Céline Hervieux-Payette: Mr. Speaker, I think that for well over a week now, Hon. Members, especially on the Government side, have been very pleased not only with the kind of budget that was brought down by the Minister of Finance (Mr. Lalonde) but also with the enthusiasm it has generated across the country. I think that a sensible person reading the general comments made in various circles would agree that this budget is indeed a budget of hope and economic recovery, and also one that gives Canadians an opportunity to put the economy on the right track by using the comprehensive measures it contains. I think Canadians were ready for this budget.
Mr. Speaker, for the information of my colleagues, I would like to quote part of a speech made by Mr. Frazee at the Canadian Club of Montreal on April 25, that is, after the budget was brought down. Mr. Frazee, who never minces his words when referring to the economic policies of the Liberal Party of Canada, said that on the whole, the budget deserved praise. It acknowledged that creating permanent jobs was exclusively up to the private sector, and it would undoubtedly create a favourable climate in that sector. Since Mr. Frazee is one of many businessmen who for several years has been urging Ottawa to take action in this respect, I must say that I am very pleased. The construction industry needed strong stimulation, and it received it. Protectionism had to be firmly rejected and it was. The specific problems of farmers were taken into consideration. A short respite was granted to the energy sector. The mining industry and research and development were stimulated and the purchase of capital goods encouraged.
Mr. Speaker, in other words, the wishes of all Canadians who were consulted in recent months by the Minister of Finance, who managed to hold one of the broadest and most comprehensive rounds of consultations among all social groups in Canada and who produced this budget-the wishes of all these people were given consideration, and I think the budget is able to create a climate that will restore confidence to all our constituents.
Mr. Speaker, I would like to deal more specifically with two measures that interested me in this budget, since my colleagues have already had a chance to discuss other aspects. First, however, I would like to point that this economic recovery budget will provide for direct job creation in the short term

May 3, 1983
The Budget-Mrs. Hervieux-Payette
and stimulate investment as well, with $2.4 billion being earmarked for longer term investments, and all this without cutting social programs. Mr. Speaker, I was one of those who worried that family allowances might be affected by the budget. A number of groups had emphasized the need for a more restrictive reallocation of funds, but I think that the principle of universality was nevertheless maintained by the Minister of Finance, and as a Liberal, I am very proud of this fact.
The same applies to pensions, Mr. Speaker. The Government did not yield to the temptation to select groups that were in serious trouble, and we have been given the assurance that the income supplement for pensioners will remain fully indexed. I believe that this recovery budget has remained true to the traditional concept of liberalism, which is that the poor should not have to suffer because of the country's economic problems and that economic recovery is to be achieved by harnessing the efforts of all members of society.
Personally, I find that one of the dynamic aspects of this budget is the measures that will stimulate recovery in the construction industry. The latest figures published April 26, 1983, show that Canadians are gaining confidence and that a drop in interest rates, as a result of our successful monetary policy, means that the forecast for 1984 is for from 165,000 to
185,000	units compared with 80,000 in 1982. 1 think that is very significant and that this will not only help to stimulate the construction industry, which is the driving force of the economy, but also all related sectors such as electrical appliances and home furnishings. In this area, the Minister of Finance kept his word and introduced measures that will remain in effect from April 19 until December 31, 1984, including the possibility for Canadians to save up to $10,000 of their income tax free for the purpose of building a home. As a precautionary measure, the Minister has maintained the $3,000 program for the time being, but since the transition period will be very short, I think the emphasis should be on the $10,000 plan. This proposal is not discriminatory. It is aimed at all those who want to build a home, and I hope, Mr. Speaker, that, as forecast by the Royal Bank, Canadian men and women will be confident enough to build these 180,000 homes in the coming year, thus providing regular, satisfying and well paid jobs to Canadians throughout the country.
Those who were well advised to invest in a Registered Home Ownership Savings Plan before April 19, 1983 will, of course, benefit from a proposal which will encourage the purchase of consumer goods, and I believe that this program will be very challenging. Those who had already thought of buying a home but had not yet done so and who would now like to use what they had invested in an RHOSP to purchase furniture, appliances and other furnishing for their home, will now be able to use the money they have saved over the years tax free; in this regard, I share the hope of the Minister of Finance that those Canadians will buy Canadian in the knowledge that our
Canadian industry always strives for competitive quality and prices.
Mr. Speaker, the second matter I want to deal with is another very dynamic program which will be implemented later this year and which, in my opinion, will enable Canadian businessmen to put their business back on a sound financial footing. I am talking, of course, about the Special Recovery Share Purchase Tax Credit. After presiding on a House subcommittee on finance which produced a unanimous report on this subject, in June 1982, I believe that in the end we can be proud of the fact that the Minister of Finance decided to introduce this incentive which will encourage Canadians to purchase equity in Canadian businesses. We have known trying times when interest rates were going up and the only alternative was to wait for the demand to go down. If we ever have to go through that experience again, and I trust this will never happen, I believe that a better business capital structure will allow us to absorb such pressures much more easily and at much less cost and that measures such as this one will enable us to meet more than one objective.
Indeed, Mr. Speaker, if Canadians begin to invest through equity in their own companies, not only will they benefit from the increased value of their equity through dividends-taxable, of course, but not at prohibitive rates-they will also be able to promote their ideas and combine their efforts, particularly if they are employees. That was the idea behind our Committee on employee participation in profits, equity and decisionmaking. When we tabled our report, Mr. Speaker, we were convinced that the Government would have to introduce tax measures to spur business financing simply through investment of profits in companies and the issue of shares to employees instead of higher wages, something which makes competition ever more difficult.
Mr. Speaker, the measure which was adopted by the Minister of Finance will lower the cost of new shares issued to investors and make it a more interesting proposition. Investors will be allowed to use that 25 per cent tax credit to reduce their federal income tax. I suggest that the figure of 25 per cent is very significant, showing as it does that the Minister of Finance is firmly committed to the economic recovery which is the central thrust of this budget. I think that the budget amply demonstrates the will of the Liberal Government to guarantee the recovery through the private sector.
In conclusion, Mr. Speaker, I would remind businessmen and small companies in my riding-or even larger corporations which are sometimes already financed through shares issued on the public market-that even private companies are eligible under the program, which will make it easier for employees to sit at the bargaining table with management officials and have a say in the decision making process. In my opinion, we cannot emphasize strongly enough the fact that an incentive mechanism such as the special tax credit will pave the way for much closer co-operation between labour and management.
May 3, 1983

Mr. Speaker, the budget contains many other outstanding measures. I wanted to single out the construction recovery program and the special recovery capital projects because I was among those who were concerned with the lack of job creation measures for groups of workers who found themselves in difficulty. I think that the budget meets all my aspirations as a Member and, thanks to this initiative, I hope that all businessmen-all men and women in Quebec as far as I am concerned-will do their share and avail themselves of the measures in the Lalonde budget.


The Acting Speaker (Mr. Corbin):: Questions, comments? Debate.


Hon. J. Robert Howie (York-Sunbury):: Mr. Speaker, first of all, I would like to commend my colleagues who have participated in this debate and who have made very valuable contributions.
My remarks relate to development measures contained in the budget and focus on the Department of Regional Economic Expansion which we refer to as DREE. The division of DREE into two parts and its burial in two other Departments of Government, is not a matter of rejoicing in the areas of Canada which suffer most from problems of regional disparity. The Government is announcing the funeral of DREE, not the celebration of the birth of a more effective instrument of regional development. Those of us who mourn DREE's demise do so for the lack of direct successor. We are not blind to imperfections in DREE's concept and execution. Nor, on the other hand, do we seize this occasion merely to blame the Government for all the deficiencies of DREE. It is imperative, however, to ask what we can learn from the experiences of DREE and from the Government's regional development policies generally over the last ten to 15 years. Only in light of answers to these questions can we judge the appropriateness of measures introduced by the Minister of Finance (Mr. Lalonde) and by the Minister responsible for DREE in his excellent comments a little earlier in this debate.
In 1969, the Government made a strong commitment to reduce regional economic disparities with the formation of the Department of Regional Economic Expansion. The Department's expenditures expressed as a percentage of gross general expenditure peaked in 1970-71 at $330.8 million, or 2.1 per cent of gross general expenditure. These expenditures have declined each year since then, hovering at about 1.1 per cent of gross general expenditure in each year since 1978-79. In terms of constant 1971 dollars, departmental expenditures in the Atlantic region peaked in 1970-71 at $184 million. They declined to $108 million in 1977-78. During that period, DREE's spending in Atlantic Canada declined by 41.2 percent. Despite all the rhetoric concerning current and future initiatives, the record clearly shows that the Government's commitment to regional economic expansion has been severely diminished in recent years.
The Budget-Mr. Howie
Let us look at some of the lessons of DREE. There is no lack of documentation on the subject: annual departmental reports, specially commissioned evaluations, and coincidentally-since it was not done in anticipation of DREE's demise-the report of the Senate Finance Committee on Government Policy and Regional Development. Differences of opinion exist within these documents, but there is also a remarkable degree of consensus. Clearly, the effectiveness of incentives to regional economic development is tied closely to other Departmental policies and activities. There have been many cases where two policies or programs have worked directly against each other. But beyond that, there has been a generally unfavourable climate for regional development, created by measures not specifically formulated with an eye to reducing regional disparities. Transportation policy is a good example. Just when a revolution in communications technology would make it possible for firms to locate head offices away from the largest population centres, the Government guts the regional passenger transportation system in the Maritimes.
The tax structure in this country, to the extent that it has discouraged risk and innovation, has actually worked against new initiatives in less developed regions. Government procurement policies have systematically discriminated against smaller firms. The targets of regional development policies have not always been thoroughly defined. There has clearly been a political temptation to draw the circle too widely. The inclusion of a huge population centre negates the object of incentives for firms to locate some distance from large makets.
In economic development there are federal responsibilities, provincial responsibilities, and shared responsibilities. The provincial Governments in the wealthier Provinces are better able to discharge their responsibilities than are Governments of less wealthy Provinces. The General Development Agreements recognized this and provided for assistance from the federal Government to less wealthy Provinces to help them in their development efforts. The weakness of the GDA was that it did not provide for the integration of programs in the area of federal jurisdiction into the total development effort of the Province. Divided responsibility for economic development should be recognized, and the need for co-ordinated federal and provincial efforts should also be recognized, so that all development activity is oriented to the achievement of common objectives.
The federal Government should have a primary interest in regional economic development since only through an effective federal regional development effort can Canadians in all parts of the country achieve reasonably similar employment and income levels. Furthermore, in the less wealthy Provinces, it is only with federal Government assistance that smaller areas of high unemployment and low income can move toward national standards.
With respect to research and development, it is essential to close the technology gap between richer and poorer regions. Once our most skilled people are able to stay in the poorer regions, we will begin to achieve the critical mass needed for further innovation and expansion. Scientific and technical

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The Budget-Mr. Howie
research and development simply must take place within the regions if they are to address the particular needs and opportunities which exist there for economic expansion. The Government, with the co-operation of provincial Governments, can foster this kind of regional opportunity. It is in this light, that the Government's stalling on a project such as the Maritime forestry complex in Fredericton is inexcusable, all the more so when the declared reasons for this stalling are so blatantly partisan and when the Government is ready to go ahead with a similar project in Thailand.
DREE followed a sound strategy when it focused on growth centres within depressed regions, but in latter years has signalled a departure from the practice of building on strengths. We have a classic example in New Brunswick where the Fredericton, Saint John, Moncton triangle was excluded from the 50 per cent investment tax incentive credit. The Government's scatter-gun kind of approach has often been inefficient and unreliable. It has occasionally involved heavy expenditure on infrastructure and incentives, only to have the project collapse or require permanent subsidization because of particular localized conditions in an industry or a company. The case by case approach has also inevitably ignored or conflicted with provincial planning and priorities. It is not surprising in this regard, that DREE's greatest successes have occurred under the auspices of the General Development Agreements.
We have learned from DREE that the best investments of Government funds are generally in viable, productive enterprises. DREE grants have found consistently better returns when used for expansion and modernization as opposed to start-ups. We need more effort to determine which are viable manufacturing enterprises in the long run-usually those related to the resource base of the region-and more willingness to promote the appropriate market research and management and manpower training. Apart from infrastructure, planning has been too much of the short-term variety. Again, we have been up against political temptations, as even a Senate Committee with a Liberal majority has admitted. Ultimately, only a viable manufacturing enterprise has the potential to move a depressed region toward self-sufficiency.
Transfers of various kinds are unquestionably necessary to ensure to all Canadians a satisfactory standard of living and acceptable social and educational services. But study after study demonstrates that transfer payments alone just find their way back to the wealthier parts of the country. They do not have a permanently stimulative effect, and they do nothing about the causes of regional disparity. Even the well-intended policy of moving some federal bureaucratic establishments out of Ottawa to the regions had a very limited effect on local demand, especially beyond the construction phase. We have learned from DREE that the goal of regional development must be to lessen dependency. This is the only permanent way to narrow down disparities. This approach is unfortunately being impaired by the federal Government's continuing deficit crisis.
In the fat years, the Government's generous transfer programs promoted dependency. Now that Ottawa is having to cut back, it is picking fights with the Provinces over medicare and post-secondary education-in short, finding any possible pretext for financial retrenchment. Tragically, despite many genuine accomplishments, DREE has scarcely made a dent in the problem of dependency. With these lessons of DREE in mind, Mr. Speaker, I would like to outline some of my specific concerns regarding the breakup of DREE and the new initiatives for regional development which have been introduced in the federal budget and elaborated by the Minister responsible for DREE.
First, to replace DREE in part with the Ministry of State responsible for economic regional development and to require it to inflict a developmental dimension on other Departments of Government is like asking a fly to chase an elephant. The fanfare that has preceded MSERD is, I fear, little more than bureaucratic jargon. Unless the Prime Minister (Mr. Trudeau) personally heads MSERD and unless he personally leads the attack on regional disparity, line Departments in times of restraint will not accept any challenge other than the existing bare bones of their responsibilities. The absence of a single Department or Minister exclusively committed to regional development does not augur well. The mandate to foster development in all regions is double-talk. It is the negation of a concerted attack on regional disparity. In that sense it can truly be said that MSERD may be absurd.
The principle that all Government Departments should be sensitive to regional needs is fine in theory, and particularly appropriate now that regional equality is a goal enshrined in the Constitution. But it is meaningless without a specific designation of responsibility within each Department. We have no assurance that such a designation will be made. I am specifically concerned about how, after all the bureaucratic shuffling has been accomplished and areas of responsibility redesignated, certain obvious priorities for regional development are going to be realized. One of these priorities is the identification of possible foreign markets and the establishment of contact with potential foreign joint investors who already have their own market contacts. Yet that portion of the old Department of Industry, Trade and Commerce with its international expertise is now going to External Affairs, which is not likely to give much attention to the needs of, for example, the Atlantic region, unless it is specifically directed to do so.
Another major area of concern is the General Development Agreements. The decision of the Government to allow existing GDAs and the subsidiary agreements under the umbrella provisions of the GDAs to expire on termination is indeed regrettable. Nothing could be simpler than the General Development Agreements themselves, and nothing could be more appropriate to the needs of the areas being served by the subsidiary agreements than those agreements which, in fact, are the product of negotiation and study by the two levels of Government involved.
May 3, 1983

Now it is clear that the Government has less determination than ever to co-ordinate its initiatives with those of the Provinces. It has no designated successor to the GDAs. It proposes a Regional Development Fund, which invites a political and bureaucratic free-for-all, the search for winners rather than a consistent long-term policy.
When we discuss disparities, the Atlantic region comes first to mind because its underdevelopment is long-standing and pervasive in contrast to pockets of underdevelopment within wealthier regions forced into temporary economic hardship caused by specific dislocations such as market demand or changes in technology. It is therefore appropriate for us to focus our efforts in this region. There are other reasons as well. Historically, the Atlantic region has been a victim not only of natural economic forces but also of political decisions, going back at least to the First World War. These political factors have been well-documented by historians and Royal Commissions, and I need not dwell on old grievances.
Politically and culturally, the Atlantic Provinces are identifiable societies with historic roots, a record of substantial contributions to the life of all Canada and the collective will and capacity to reverse the trend toward stifling dependency which has characterized their recent past. In our generation, we have witnessed the remarkable revitalization accomplished by our neighbouring society in Quebec. The support of the federal Government has been crucial to that revival.
I would strongly insist that while smaller, less powerful politically and less developed industrially than Quebec was, even at the start of the quiet revolution, the Maritime communities are equally worthy of such consideration. To deny that consideration would constitute clear evidence of discrimination, to use the term which certain Hon. Members opposite are fond of using when their ambitions are frustrated. I would like to believe that the bold new programs and initiatives announced by the Government will conscientiously avoid that kind of discrimination. But I do not see assurances that they will.


Mr. Campbell (Cardigan):: Mr. Speaker, I listened with interest to the Hon. Member who just concluded his comments. I would like his view on one of the observations he made. If I understand him correctly, he has the view that there are limited permanent benefits from relocation of federal Government Departments or sections of federal Government Departments. I suppose I have a vested interest in this matter, but in my view the effect is exactly the opposite in that at the beginning you have the additional salary dollars going into a particular area. That naturally creates demand for goods and services both for the Department and also for the additional employees working in the area. I wonder if the Hon. Member might clarify exactly what he means by little or limited permanent benefits?


J. Robert Howie: Mr. Speaker, I thank the Hon. Minister for his question. He correctly interpreted it as being limited because there is certainly a benefit from any Government Department relocation in terms of salaries, personnel and employment, and most particularly in terms of initial construction. I use the
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adjective "limited" quite advisedly because I have differentiated in my remarks between a Government Department and industry. An industry generates other line industries, perhaps small component parts industries in terms of spin-offs, and other industries. There are differing estimates as to the job creation factor; for every one in industry, it is five outside in terms of spin-offs. For Government Departments, it is one in and two out. Government Departments buy supplies for individuals, some centrally and some locally, but they do not have quite the magnitude of impact that an industrial development would have in terms of buying primary products, components or elements which can be reshaped, remanufactured with value added, and create more jobs through this stimulation. Certainly we in the Maritime Provinces very much welcome both factors, but the point of my address was this. The Maritime Provinces have approximately 47 per cent of their gross revenues coming in the form of transfer payments from Ottawa. We desperately need a tax base established by secondary manufacturing in order to enable our Governments through increased tax revenue, both personal and corporate, to increase their incomes and decrease their dependency on the central Government. We cannot tax Government Departments, and this is one salient difference and another reason why I used the word "limited".
I appreciate the impact that Departments have in that region, particularly of Veterans Affairs in Charlottetown. It employs many people and does have a good impact. As well, there is the Pensions Branch in New Brunswick. These are important, necessary and very welcome employers in the Maritimes.
But we also need industries. We need an industrial base which we do not have now. As the Hon. Member knows, the Island is heavily dependent economically on its primary resource base. A primary resource based economy is the first hit, the hardest hit and the last to recover in times of a recession. We most certainly need all the help we can get, and I thank the Hon. Member for his contribution.


W. Bennett Campbell: I have a brief supplementary question. Would the Hon. Member not agree that the relocation of Departments and agencies to the area would not only provide salary dollars and expenditures in the area but create the potential for the establishment of a processing or manufacturing industry? Would he agree that a relocated Department or agency could foster the development of a small industry in an area where the demand might not have existed at the time? In other words, I do not disagree with his observations in terms of getting the maximum spin-off, but would he not agree that the relocation can in fact complement the development of that demand which could lead to further manufacturing opportunities within Atlantic Canada, for example?


J. Robert Howie: Mr. Speaker, I certainly agree with the Hon. Member that an increase in the consumer population can stimulate and create a market for industrial development.

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We have two basic concepts. One is that if we are to look at efficiency in terms of industry, we must have regard for industries that can be built in terms of their optimum capacity. Many of our resource based industries, particularly in forestry, not only require our domestic markets but world markets as well in order to operate to optimum capacity. Industries that are looking at world capacity require very different incentives than industries that require domestic market capacity.
We certainly have need for both in the Atlantic Provinces. We still are net importers of much of our major food components. There is substantial room for expansion in this particular field.
Our fisheries industry has not been mentioned in the budget but it has been shown that our processing plants have a lot of unused capacity. Yet our fisheries industry is a substantial importer of deck hardware, navigational aids and equipment. This is where the big money is and it is another area in which I think we can move toward a transformation of the unused capacity that exists in this particular primary product area to a manufacturing concept that can employ more Canadians who live in the Atlantic Provinces.
I certainly agree with the Hon. Minister that we have a great need to increase our consumer demand and population in this regard. That essentially was his question and I do agree with him. I expect, seeing him nod, that he agrees with me that we also need a secondary manufacturing base.


Robert Joseph Ogle: Mr. Speaker, I am pleased to have the opportunity to speak during the last hour of the budget debate which has been taking place for six days. We will soon be voting on the budget.
I would like to direct my remarks to two areas that have been touched upon by other Members but not explained, in my opinion, in any great detail. Members from both sides of the House have particular areas of concern that affect them and their constituencies. As well, Members on the Government side have special areas of concern either in the role of Minister or Parliamentary Secretary to a Minister.
Hon. Members and Canadians will remember that at the beginning of this year the social action department of the Canadian Catholic Conference of Bishops presented a statement which concerned ethical reflections on the present economic situation. As we are all aware, that document received a great deal of discussion. Many supported all of its contents and some supported certain sections while others disagreed with certain sections, with the entire document or with the whole basic principle that the Bishops had no right to speak on economic matters. While I have a special link with the Bishops, it is my personal belief that they do have a right to speak on moral matters, economic matters and social matters which concern the lives of people.
Yesterday, the American Catholic Bishops spoke very strongly against the arms build-up. There will be Americans who will be upset about that today. I believe that the Bishops had a perfect right and a duty to speak on a subject that is
causing so much immorality, that is, the destruction of the planet.
The Bishops' statement in Canada had two basic principles upon which they built their reflections. The first concerned the preferential option for the poor, afflicted and oppressed. The Bishops said:
In the tradition of the prophets, Jesus dedicated his ministry to bringing "good news to the poor" and "liberty to the oppressed". As Christians, we are called to follow Jesus by identifying with the victims of injustice, by analysing the dominant attitudes and structures that cause human suffering, and by actively supporting the poor and oppressed in their struggles to transform society. For, as Jesus declared, "when you did it unto these, the least of my brethren, you did it unto me".
The second principle that the Bishops' statement was structured upon was this:
The second principle concerns the special value and dignity of human work in God's plan for Creation. It is through the activity of work that people are able to exercise their creative spirit, realize their human dignity, and share in Creation. By interacting with fellow workers in a common task, men and women have an opportunity to further develop their personalities and sense of self-worth. In so doing, people participate in the development of their society and give meaning to their existence as human beings. Indeed, the importance of human labour is illustrated in the life of Jesus who was himself a worker, "a craftsman like Joseph of Nazareth".
In light of those two principles, I would like to speak on what this budget has done in general and whether it fulfilled what the Bishops were speaking about when they issued their statement.
The first principle of preferential option for the poor is one that has developed in Latin America in the last 20 years. It is a social principle based primarily on the teachings of the Catholic Church and others as well, but particularly on the social teachings of the Pope. That principle was that when it came to the necessity of taking an option in any particular economic situation, the option would be for the poor, unemployed, aged, sick, children, and those without power. They should be looked after first, and the other areas of society could then have the opportunity to be cared for.
I suggest that in the preparation of the budget that principle was never even considered. The unemployed, the aged, the students without jobs and those without power in the society are still without power and not looked after.
The Minister has indicated that the unemployment rate is not going to change. The budget is not directed toward changing the number of people who would go to work. The budget is directed at starting a stimulus in the economy somehow but the number of people still suffering as underprivileged will remain the same. Perhaps for all intents and purposes the number could go up. Twelve per cent of the work force is out of work. The Government admits that unemployment is not going to go below 11 per cent for four years. Again, that is only a supposition. The figure could still rise.
In Canada at the present time, as you are aware, Mr. Speaker, and as Members of the House are aware, the top 20 per cent of Canadians receive 42.5 per cent of the total personal income, while the bottom 20 per cent receive only 4 per cent.
May 3, 1983

It is figures such as these that indicate to me at least that this budget does not change the basic situation in Canada and that the poor are still the ones who will suffer because of what the budget does not do.
On the other hand, to show that the preferential option has not been made on behalf of the poor, the Government is giving $2.67 billion in corporate tax breaks while personal income tax, again taking in a mass of people at the bottom, the poor in society, will be up by $3.5 billion and sales taxes will be up by $2.4 billion over the next four years. This indicates that the people at the bottom, the poor, are the ones who will benefit least from the budget.
The second principle which the Bishops outlined in their document of January is the principle that human work is a right for people. A person cannot really grow, perform his or her role and be perfect unless he or she has the opportunity to do something creative and to do it in companionship with other people.
The burden of just being unemployed, the anger of a person who cannot do anything is a terrible thing. I am sure anybody who does his constituency work knows what it is like to have people who are unemployed come to see him. These are people who have looked for work, have been to the employment agency and have tried to get a job but cannot, and this is dreadful. They carry a tremendous burden. They feel they are worthless. They say they are no good. I hear it said all the time. I am sure you have heard it said, Mr. Speaker, because I am sure you are doing your constituency work. It is that feeling that shows the second principle has not been respected and that in this budget the right for all people to have a job has not been respected.
The budget indicates that businesses would benefit. I have heard many Members say in the House, and Members who represent the business sector have all quite clearly said, that businesses will benefit. The bishops have warned that even if companies recover and increase their profit margins, the additional revenues are likely to be reinvested in more labour saving technology, exported to other countries or spent on market speculation or luxury goods. If money moves in that direction, it does not necessarily mean that more people will work. All of us who have any sense at all of how technology is moving into society are aware that jobs will be harder and harder to find and create in the present economic situation unless it is planned that everyone in society will have a job. It may mean in the future that we will have to start looking for areas of activity in human life that we do not classify as jobs now. We will have to find other ways in which all of the wealth that a country like Canada can produce can be redistributed in a way that all people will benefit from it in a just way. At the same time they must experience the value, the feeling and the knowledge that they are doing something creative. The distribution should not be simply because a person does not have a traditional kind of job. There will be less and less of the traditional kinds of jobs. Another way will have to be found so that distribution will take place. In that respect I would say the
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budget does not fulfil the principles outlined by the Bishops in their statement of early January, 1983.
I want to speak now for a few minutes about my area as a critic, which is international aid and development, and how the budget has affected that area as far as I can see it. First, I was happy to see that the Minister of Finance (Mr. Lalonde) did pay some attention to the international scene in his budget. Unfortunately it was more of a passing scene. Likewise I would be critical of the Bishops' statement on the ground that, although, to my mind, it correctly identified the fact that the problem Canada was suffering from was not unique, that it was an international problem, in their judgment of how the problems could be remedied they did not in my view address it in an international way. I criticize the Biships' statement for being incomplete in that respect.
The Minister in his budget speech did outline some points on the international scene. Fie indicated the interdependence of nations and that we cannot forget the least fortunate ones. I might mention, for instance, the North-South dialogue in which the problem of the recession, the depression, or whatever you want to call it, that has taken place was correctly phro-phesied and seen prior to its occurrence by the independent committee under Willy Brandt. This North-South study was done several years ago. That same group of people are now working on their own because their commission has officially come to an end. They produced just recently a new little booklet called "Common Crisis" which updated their previous positions on how the world has to tie together-the North and the South, the rich and the poor-to bring about some kind of human existence to the whole planet. In this booklet, to which the Minister alluded in his budget, they indicate the area of trade. There were other areas not specifically mentioned by the Minister in relation to the international situation because the Brandt people indicated it is necessary to have employment resolved in an international manner. Aid would have to be looked at in an international way, and the great problem of international credit and the massive debt load of the Third World creates a special problem. The debt load of the South amounts to at least $600 billion or more. Many of the countries that were just beginning to develop and were making a few breakthroughs have fallen behind and have almost crashed under the load of their debt. This is not only true of little countries, which are in the worst situation, but it is true also of large countries such as Brazil, Mexico, Nigeria and others. Even though they have wealth and an economic base that was beginning to build, that same economic base has fallen, it fell in the last year. All those different setbacks because of the North-South link will affect Canada as well. These things are not mentioned in the budget as far as I can see.
The Minister stated in the little budget booklet entitled "Budget in brief' that tariff rates will be looked at in a special way. On page 14 we find:
Lower rates of customs duty on some $10 million in annual imports from developing countries, under the General Preferential Tariff, are being implemented as recommended by the Tariff Board.

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That is good. However, let us put that in relation to the fact that the capacity of developing countries to import has fallen $100 billion, according to the Brandt people. That is what the developing countries are not able to buy from or trade with those who are rich, in other words, the North.
Now we come to how Canadians in general look upon what Canada should be doing as a country in its aid to the developing world. This is a complicated and large field. The difficulty we have right now is in knowing where the Canadian aid program is going. We have not had a president of CIDA for almost six months. 1 feel the frustration of the people in CIDA because they do not have a president to enunciate clear policies.
In the past year, in non-governmental organizations, such as church organizations, the YMCA and various funds for the care of children in the developing world, Canadians gave more percentage-wise than the year before, even though it was during a period of recession. Canadian people still have a generous attitude toward help. That is an extremely important matter of which the Government should be aware. We have heard Members of the House speak against aid. They have the right to speak against some aid because it is not aiding anyone other than some company in Canada. Canadians are interested in aid and have shown their interest by raising private donations to help other countries in the developing world. I have been told by people in charge of non-governmental organizations that that is generally the case across the board.
It is important for the Government to remember, when it talks about international institutions and replenishing the International Monetary Fund, the World Bank or any one of the development banks around the world, that Canadians are basically generous when it comes to helping those who are in worse straits than themselves. This is true across society, including those who are poor in Canada.
Referring to the book entitled, "Common Crisis", the writers of it, under the chairmanship of Willy Brandt, identified the same thing about which I am talking, how people by themselves, one on one, in small non-governmental organizations have a natural desire to help other people. They have noticed this trait in other countries as well. One thing they proposed-and I would like to go on the record here as proposing it-is that Canada should join with other countries that have this powerful non-governmental orientation to see whether or not there should be an international body of non-governmental organizations around the world so that the direction and the work of these private agencies in communities throughout the world could be channelled through an international facility not unlike the IMF or the World Bank.


Mr. Nickerson:: Mr. Speaker, I would like to ask the Hon. Member a question with respect to the first part of his speech. I was unable to determine whether he was running for the job of a Cabinet Minister or a cardinal. I would like to know what makes the Hon. Member for Saskatoon East (Mr. Ogle) think that God is a socialist.


Robert Joseph Ogle: Mr. Speaker, first I would like to thank the Hon. Member for his very clear and quite obviously unbiased question. I assure him that I am not running for cardinal or for a Cabinet seat. I really do not think that God has voted recently. I am sure that on many occasions He must have a difficult time understanding the struggles of human beings.


Margaret Anne Mitchell: Or she.


Robert Joseph Ogle: "Or she" as the Hon. Member for Vancouver East (Mrs. Mitchell) just said. He must have a difficult time understanding how human beings struggle to solve the problems of the human condition.
I would like to relate my feelings to the Hon. Member. I learned about God in the Judeo-Christian tradition. My tradition-and I would expect his tradition-has come down through the Bible and the Judaic background of the Christian principles of the New Testament.
In my understanding of those books, beginning with the Old Testament, they clearly identify the role of a good Jew as being to love God with his whole heart, whole soul and whole mind and to love his neighbour with the same force. That was redefined by Jesus when He came to give us the principles of Christianity. In that tradition that is the way I understand God.
The words we use today to describe how people treat each other in economics vary. Some people lump it under the term "free enterprise". I would be glad to ask my colleague whether he would be willing to enter into a discussion on whether God is a free enterpriser. On the other hand, other people will lump the way men and women treat others under the term "Communism". I could ask anybody whether God is a Communist, and they could answer whatever they wanted. But according to my conscience and according to the way I understand what both charity and justice mean in the Christian tradition, I quite clearly believe that the socialist way of thinking about taking the creation of the world and distributing it in such a way that all people benefit from it is closer to my understanding of how God asks us to live our lives than are other principles which could be set out. I would be glad if the Hon. Member would rise and explain to me whether he thinks God is a free enterpriser.


Mr. Breau:: Mr. Speaker, obviously the Hon. Member has reflected upon this very serious question in the past in view of what he has chosen to do in life.
Turning to the intervention of the Bishops in questions of the economy or questions of society generally, does the Hon. Member agree that when people make interventions with the authority of God, or are perceived by the public to be speaking with the authority of the church, it is important to draw a line between being an inspirational force for Catholics, all Christians or all members of society, and commenting, analyzing or criticizing the means used by Government, which really brings people into the political arena? I realize that the Hon. Member has chosen to be in the political arena. That is all right because
May 3, 1983

when he does that I believe he does not speak with the authority of God or of the church. Does he see the difference which I see clearly? If so, where does he think the line should be drawn?


Robert Joseph Ogle: Mr. Speaker, the question of the Hon. Member for Gloucester (Mr. Breau) is definitely on target in the discussion that I initiated in my speech today. However, it is a little too complicated to answer fully in the time allotted to me.
First, let me say that the Bishops, in teaching people about morality, have the right to speak about the morality of any sector of the society. For example, they have the right to speak about the Hon. Member's marriage, whether or not he is living it properly. I believe they have a right to speak in areas concerning morality.


Herb Breau: In public?


Robert Joseph Ogle: I am just talking about different areas of peoples' lives which involve moral issues. There are moral issues involved in their personal lives and in their social lives. I believe the Bishops have the right to speak about the morality in the military. To speak about morality and put it into a kind of cloudy area has no meaning. They have to talk about what is going on. They have to risk talking about what is going on, even at the expense of being inaccurate in some of their appraisals. As a group of Canadians, people who are part and parcel of our society, in the same way that medical, industrial and labour people or any other group of society, they have a right to speak as Canadians, speaking from their base and from their authority on the questions of society, including the economy. It is easy to make judgments sometimes about particular moral events, but when it comes to the social fibre, the structures that oppress people in real situations, it is much more difficult to speak clearly, but it has to be spoken and spoken in the concrete.


Herb Breau: Mr. Speaker, I have never heard the Member speak elsewhere. He knows what I mean. He is pretty good here at skirting a question. He has not answered my question. I was not asking about the right of the Bishops to speak. Everyone in this country has the right to speak; bishops, priests, members of Parliament and the public. There are no absolutes in this. It is a question of judgment and balance.
What is the Hon. Member's view as to where the line is drawn between being an inspirational force for society and discussing the means of Government, which is really politics? I am not asking him to talk about the rights of the Bishops or the wisdom of the Bishops. Everyone in this country has the right to speak. I am asking for his judgment as a politician who has been elected to this House on where the line should be drawn.


Robert Joseph Ogle: Mr. Speaker, first, what the Hon. Member said would give the impression that there are two camps in the world, one in which there is religion and one in which there is
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Mr. Fisher
not. I do not agree with that principle. I believe there is only one world, and that morality takes place throughout the world. If you are going to speak precisely about a moral question, you have to do it in the context of what is taking place. For that reason, I believe the Bishops have a right to speak about a moral question in the here and now.
The Member indicated that if they did so, they would lose their inspirational value. I challenge that. I feel the Bishops became much more inspirational to many more Christians in Canada because they spoke about the realities of what is going on. It may be that they did not inspire the Member because they spoke against what his Government is doing.


Herb Breau: Be serious.


Robert Joseph Ogle: I am serious. I remember well the statement the Hon. Member made to the press. I feel that they, as well as other moral leaders, have a right to speak on that. Maybe the Hon. Member and I should continue this discussion outside the Chamber.


Mr. Deputy Speaker:: The question and answer period having expired, the debate may be continued only with unanimous consent. Is there unanimous consent?


Some Hon. Members:: No.


Mr. Deputy Speaker:: There does not appear to be unanimity-


Gordon Edward Taylor: Mr. Speaker, I rise on a point of order. I notice that the Hon. Member for Mississauga North (Mr. Fisher) was very anxious to shake his head.


Mr. Deputy Speaker:: That is not a point of order. There does not appear to be unanimous consent.


Gordon Edward Taylor: Mr. Speaker, the other day the Hon. Member for Mississauga North raised a great hullabaloo because the movement in our debate went from one side to the other.


Mr. Deputy Speaker:: That is not a point of order.


Mr. Douglas Fisher (Parliamentary Secretary to Minister of Finance):: Mr. Speaker, it is a pleasure for me finally to get a chance to talk on a budget that I have personally been involved with since the Minister started his pre-budget consultation last December with so many groups from the private sector.
As I listened to his decisions on budget night, I came to the conclusion that this budget is one that stresses fast action on job-creation, especially for those who need jobs the most. This is a budget that stresses rapid action by Government in key economic areas right across the country to get our recovery going. This is a budget that stresses relief for business to finance and to encourage their growth so that long-term recovery and long-term job-creation will be possible.
I personally welcome the considerable public support that we have heard since budget night. Let me quote a few examples from the private sector. In the area of small business, John

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Bulloch, President of the Canadian Federation of Independent Business, was quoted by Canadian Press on April 19 as saying:
A combination of good politics and sound economics. Business will generally give high marks.
Mr. John Kyle of the Canadian Chamber of Commerce was quoted in The Gazette of April 20 as saying:
It sounds as if he listened to the business community.
Mr. Brian Aune of the Investment Dealers Association of Canada said:
A carefully thought out program to help the private sector in the recovery.
On jobs, another issue that has been contentious in this debate, let us listen to our constituents. Mr. Norman Godfrey of the Housing and Urban Development Association, a good Torontonian, is quoted in the April 20 Globe and Mail as having said:
The pro-business budget will generate confidence and create jobs.
Mr. Kenneth Nisbet of Westinghouse Canada Limited was quoted as follows in The Globe and Mail of April 21:
The Government's sudden attention to job-creation in the private sector is encouraging. It adds up to a better climate for the people who employ people.
John Grant, an investment economist, on the April 20 CTV National News said:
There is going to be a stronger expansion than we had guessed the night before the budget.
Pat Johnston of the Canadian Federation of Independent Business was quoted on CTV Canada AM as saying:
So on balance we are very pleased. People are now more confident. And confidence actually will create more jobs than tax breaks.
Those are important statements from the private sector on small business and jobs. When you look at a more general reaction to the budget, you get equally positive feedback. Terry Elder of the accounting firm of Deloitte Haskins and Sells is quoted in the April 26 Toronto Sun as follows:
It demonstrated Finance Minister Marc Lalonde is willing to listen-and act upon-the requests of the small business community.
In its editorial, the Ottawa Citizen on April 27 stated:
Evidence of Canada's economic recovery is mounting, and tends to confirm that the federal Government's approach in last week's budget was the right one.
Those are all positive comments from people in the private sector, key replies to some of the criticisms we have heard here.
How is it that this budget came about? I mentioned that I was involved in the consultation process from December onward. We met with representatives from every corner of the country, from every part of the private sector. I personally sat in on meetings with mayors, reeves, housing industry representatives, the Canadian Labour Congress, the co-operative and credit unions, small business, the Canadian Manufacturers' Association and the Canadian Bankers' Association. The Minister of Finance (Mr. Lalonde) canvassed as many representatives of Canadians as he could find. He listened to them. He took their ideas and threaded them together to create the budget. That, Mr. Speaker, is why we are now hearing so
many Canadians say that they approve the budget. He listened, he absorbed the ideas, he acted on them, and people are now gaining confidence in his decisions.
What did the people tell us during that long process? Well, first they told us not to be afraid of more Government spending, as long as it is wise spending. We got that input from both business and labour. We were encouraged to take up a program of permanent public works that would add to the wealth and the inventory of our country. We have done that. Take a look at what is contained in the budget. There are 100 projects that will stimulate key sectors from coast to coast. Look at the efforts in housing. Look at the efforts in construction. All of these will add up and create lasting monuments to our recovery.
Mr. Speaker, you and I know about the marvelous impact such efforts can have. For example, take a look from coast to coast at the heritage left from centennial year. What town, what corner of this country does not have a little library or a little monument to centennial year? In the same way, we are now embarking upon key efforts to stimulate the recovery with permanent public works.


Some Hon. Members:: Hear, hear!


Douglas Glenn Fisher: Mr. Speaker, that is something that the private sector advised us to do, and we are doing it.
The second thing the private sector told us to do is to use tax incentives and to rely on the private sector, and especially to allow the private sector to alleviate its losses through the tax system. We have done that. Take a look at the $2.4 billion in tax incentives and growth incentives that are contained in the private sector portion of the budget. That $2.4 billion will make the recovery permanent for small and big business coast to coast. That was an idea that we received from the private sector and we acted on it.
Finally, the private sector told us that confidence and recovery would go hand in hand. Take a look at how the private sector has reacted since that time. Eric Owen of the Canadian Manufacturers' Association in the April 23 Financial Post said, and I quote him proudly:
The Minister has done his homework and taken constructive criticism.
Barbara Morrison of the Canadian Federation of Independent Business said to the Vancouver Sun on April 20:
The most important thing about this budget is the attitude. It's the change of attitude that will give business encouragement.
Sam Hughes of the Canadian Chamber of Commerce said to the CBC program "Sunday Morning" on April 24:
We do have to offer him constructive balanced advice and as long as he keeps acting on it we're going to keep applauding.
Finally, returning to the Canadian Federation of Independent Business, John Bulloch told the CBC program "The House" on April 23:
It's going to make our members feel more positive about the country, it's going to make them feel more positive about reinvestment.
May 3, 1983

That, Mr. Speaker, means that business will be more positive about growth and new opportunity and new jobs because the Government had listened to them. They are enthusiastic because, right from the beginning, we went to Canadians and listened to them. We heard their advice and acted on it.
The private sector is excited because we have given it a chance to recover and to recover permanently. We have given it a chance to expand and to create jobs and to go back to work. All Canadians join us in applauding that goal.
As I have said, there are three basic themes in this budget. One is to create work quickly for those people who do not have work now, and we have dedicated over $700 million in the budget above and beyond money already dedicated by previous budgets. So today we have a total of almost $1.5 billion dedicated to direct job creation.
We went to the private sector and asked them to start growing through tax incentives and through incentives for investment. That is the second part of our budget. $2.4 billion will go into that. As I mentioned, the public works program will start to accelerate the recovery in key areas right away, and $2.4 billion more will go into that.
What has the Opposition had to say about this? Frankly, I have listened to six days of debate here, debate that I believe has been kind of dispirited and disjointed. I do not see any real focus to the criticism. There are some points, however, that 1 would like to raise and answer right now.
The Tories, for example, have taken up their classic wail about the level of the deficit. In doing so, they have demanded that we cut Government spending despite the benefits I described that will be derived from that spending. Of course, we have heard a variety of voices over there, some saying, "Well, let us get busy and cut the deficit," and others saying, "Let us get busy and increase our programs". Well, having listened to all of that, I suppose we should take our advice from one of the leadership candidates, Mr. Michael Wilson from Etobicoke Centre, who said, as reported in the Globe and Mail-


Mr. Deputy Speaker:: It is the usual practice to refer to Hon. Members by their constituencies.


Douglas Glenn Fisher: The Member for Etobicoke Centre, Mr. Speaker, and I stand corrected. I apologize for my error. The Member for Etobicoke Centre (Mr. Wilson) said in the Globe and Mail two days ago that if he went to work at his very hardest, the best he could do is to get the deficit down to $29 billion. One does not know where those $2 billion would have been cut from. I suspect that if we were to follow the typical Tory example, those cuts would come from the backs of working Canadians.
Mr. Thomas Maxwell, from the prestigious Conference Board In Canada said to the CBC program "As It Happens" on April 20:
I can't see any major financial problems associated with the deficit or the projections they have in their budget.
The Budget-Mr. Fisher
I agree with Dr. Maxwell. I believe that the spending we have undertaken in the budget will be a key element in our recovery at this time. It was not done flippantly or carelessly. It was done to stimulate recovery and to use the great mechanism of the Government's influence to help lift the level of economic activity as swiftly as possible.
Another complaint we have heard from the Conservative benches, particularly from Members like the Member for Mississauga South (Mr. Blenkarn), is the great complaint that we are raising taxes. That complaint ignores the previous advice they gave us about cutting the deficit. It also ignores the fact that the tax increases we have in this budget will come at a time when the recovery is here and we will be able to afford the extra taxes. We are not implementing these taxes now when the recovery is still young. We will wait until it is in its full maturity, until people can afford to pay a bit extra. In late 1984 and early 1985, we will begin to ask for a little extra money to pay for the recovery that we will be enjoying then.
Equally, we have heard from our friends from the NDP the same kind of twisted logic. The Member for Saskatoon East (Mr. Ogle) just told us that every Canadian has the right to work. This is a significant change from the debate that we have heard previously both from Members of that Party and other Members in the House. Previously we urged and fought for 50 years to give Canadians the support of their community when they cannot get work. That is a very important difference. Yet when we do find ways to create jobs through youth employment programs, summer programs, the NEED Program, how are these programs described by the NDP? They are described as a process of raking leaves as if efforts to create genuine work can be written off and demeaned by that kind of slander. I do not agree, Mr. Speaker.
In my riding the budget has brought a real benefit to consumers. In my riding the incentives offered in the RHOSP are going to stimulate home building and the furniture industry. Our home builders, developers, construction people and their employees are going to benefit from that new program.
I have received a letter from Erindale College, University of Toronto, written by Dr. Paul Fox, the Principal of that outstanding institution. As we know, the federal Government will put $290 million into 15 new research centres across the country. Dr. Fox writes:
I am glad to hear that the government is considering sponsoring fifteen high tech centres. Jeff Fawcett, the Dean of Science, and I would like to discuss the matter with you at your earliest convenience.
I will be happy to tell Dr. Fox that I will be pursuing one of those centres for Mississauga to complement the vigorous research industries there, with computers, the defence industry and in the electronics industry. I hope the Minister of Science and Technology (Mr. Johnston) and his associate, the Hon. Member for Willowdale (Mr. Peterson) are listening because I want one of those centres in Mississauga, the heart of research and development in Canada.

May 3, 1983
The Budget-Mr. Fisher
In my riding jobs are a key issue. People see how we have stabilized business opportunities, the way we have put cash back into the hands of business and the way we have given them incentives to expand. These are the ways to create permanent jobs and that is welcomed.
Ordinary families in my riding welcome the high Child Tax Credit that has been continued. People in my riding welcome the high child care expense deduction at $2,000 per child. That is a welcome benefit for working parents in Mississauga and all across Canada. Ordinary working people in Mississauga welcome the higher work expense deduction so that people can claim either $500 or up to 20 per cent of taxable income.
Young people in my area want to join Katimavik. When the Streetsville Secondary School band played on the steps of Parliament Hill last week, members of the band asked me for application forms as several students wanted to work there for the year. Young people in my riding welcome the higher student loans. They welcome the extra money for Summer Canada. They are glad to see the Youth Internship Program and the extra opportunity in the Armed Forces.
Above all, Mr. Speaker, families in Mississauga and across Canada welcome the extra money in direct job creation. In my city we have seen improvements made to our parks. We have seen a new computer program brought into the library system. Co-operative housing has been upgraded. Private business is starting to take advantage of NEED grants. All of this is happening in Mississauga, and it is typical of the job-creation programs that are going on from coast to coast.
I should like to conclude by quoting a comment made by Dr. William Mackness, chief economist of the Bank of Nova Scotia who said:
I think that there is a tremendous amount of pent-up demand in the North American economy. We've not built enough automobiles, appliances, homes now for several years. The biggest impediment, I think, in the way of a long and sustained recovery is the level of interest rates. They are too high. I'm optimistic that they'll come down considerably, and on that basis. I'd look forward to a long vigorous, sustained recovery.
[ Translation]


Mr. Deputy Speaker:: It being 5.45 p.m., it is my duty, pursuant to Standing Order 64(8), to interrupt the proceedings and put forthwith every question necessary to dispose of the motion now before the House.

The question is on the main motion.
Is it the pleasure of the House to adopt the said motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


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


Some Hon. Members:: Yea.


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


Some Hon. Members:: Nay.


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


Mr. Deputy Speaker:: Call in the Members.


Madam Speaker:: I declare the motion carried.


[Stage Direction]
Motion agreed to.

Yvon Pinard: Madam Speaker, I would like to designate Friday of this week as an Opposition Day.


Madam Speaker:: It being past six o'clock, the House stands adjourned until tomorrow at two o'clock, pursuant to the provisions of Standing Order 2(1).
At 6.14 p.m., the House adjourned, without question put, pursuant to Standing Order.

Wednesday, May 4, 1983