1983-02-07

[Stage Direction]
The House resumed from Monday, January 31, 1983, consideration of the motion of Mr. Lalonde that Bill C-139, to amend the statute law relating to income tax (No. 2), be read the second time and referred to a Committee of the Whole.
Mr. Doug Lewis (Simcoe North):: Mr. Speaker, when the House rose on the last occasion when this Bill was under discussion, I was detailing for the House the various meetings which have been held by the Progressive Conservative Party to examine in detail the original budget brought in by the late Finance Minister of the Liberal Party. I had gone through that at length. Today I want to mention some of the specific items which we were able to persuade the Government to withdraw, and then I will deal with some remaining matters concerning Bill C-139.
As a result of the efforts of the Progressive Conservative Party, the Government has withdrawn its ill-fated plan to tax employee health and dental benefits. It has delayed the implementation of the shift of manufacturers' sales tax to the wholesale level until mid-1984. It has changed the rules with regard to the small business dividend distribution tax, and that will apply only to dividends paid out of incomes earned in the taxation years starting after 1982. It has withdrawn the proposal that interest on money borrowed to earn investment income be deducted only against investment income. The automobile standby tax has been reduced from 2.5 per cent to 2 per cent. It has made significant changes in its proposal to tax whole life insurance policies and has made several improvements.
Today I want to discuss the items which have been left in, specifically with respect to employees, small businesses and farmers. The Liberal Government originally planned to sock it to all employees. For years, we on this side of the House have been encouraging unions to bargain for health and dental insurance. To our Party, it made good sense for us as a country to support the healthy Canadian family. In the original budget, the Liberal Party attacked the basic principle that families should look after themselves and decided it would tax employee health and dental plans. Now that proposal has been
withdrawn, but I want to deal at length with one item which has been left in concerning the question of mobility.
Canada is a large country, and we must encourage mobility in our economic thinking. Companies have traditionally offered interest subsidies to employees moving from one part of Canada to another where there is a housing shortage and high prices, thus costing the employee more to remain at the same housing level. In November the Minister of Finance (Mr. Lalonde) proposed to tax all interest subsidies, effective 1982. In December, 1981 that exemption was withdrawn over two years for loans that were already in effect. In June, 1982 the Government decided it would not apply to commitments made prior to the budget.
[DOT] (mo)
I am pointing out these various "back and forths" to point out to the House that the Government does not really understand the problem. It does not understand why housing loans are made. It does not recognize the need for the Government to assist Canadians to be as mobile as possible in finding jobs in these days of high unemployment.
The second reason I am pointing these out is the absolute inability of the Government to understand that you have to phase in tax changes. Tax changes cannot be made overnight. It is one thing to say that it is the intention of the Government to tax loans on housing and that that is going to be phased in. To phase these changes in overnight is something else again. That is what our party is objecting to, the immediate change in taxation policy, which means that the businesses and employees who have arranged their affairs suddenly find that the Government has changed the rules of the game.
One of the most petty rules of the Liberal Government in the 1981 budget was the decision to increase sharply the taxation of employer-owned or leased automobiles which are used by salespeople. Bill C-139 now proposes to charge employees a stand-by fee equal to 2 per cent per month of the purchase price of the automobile if the employer owns the automobile and two-thirds of the lease costs if the car is leased. In simple terms, what the Liberals are saying is that if an employee uses a leased vehicle, he or she is using that car for eight months for his or her personal purposes and for four months for the purpose of earning income, and that simply does not make sense.
There have been other things which we do not agree with in terms of employee benefits, but I want to deal with small business. Small business, as the House well knows, is the backbone of the Canadian economy and this Bill is a direct attack by the Government on the small business community.

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Small business was traditionally encouraged to invest in capital assets by the fact that a full year's depreciation or capital cost allowance could be taken in the year of purchase. Now the Government has changed all that. It is now saying that an asset purchased in the first month of the business year will be eligible for the same depreciation as assets purchased in the twelfth month of the first year.
My question to the Members on the Government side is, would it not make more sense to allow capital cost allowance to be calculated according to the month of purchase in the first year? Therefore, if the purchase was made in the first month of the business year, they could claim twelve months' depreciation. If they purchase it in the fifth month, they could claim seven months' depreciation.
This is the time for some innovative thinking on the part of the Government, not for thinking which discourages capital investment. If capital cost allowance is cut in the first year, that discourages capital investment. The reason we have so much shut-down in our manufacturing industry is because of that one provision.
The next point I would like to speak on is the Small Business Development Bond, which was originally introduced by the Progressive Conservative Government in December, 1979 to help small businesses weather the ravages of high interest rates. This was a consolidating feature which allowed small businesses to consolidate their debts on a once in a lifetime basis. There was strong support for that concept in the business community.
In April, 1980 we retained the name but changed the philosophy. In order to qualify, a small business had to be expanding. In times of economic problems, the Government wanted them to expand. Then we had the final insult. In November, 1981, to get a Small Business Development Bond a business had to be going broke. That does not make any sense at all. This Government rewards killers, spies and businesses going broke. It just does not make any sense.
[DOT] (U15)


Mr. Fisher:: Neither does your speech.


Douglas Grinslade Lewis: The Hon. Member's viewpoint has always been well respected by himself.
I want to talk about interest deductibility. If Canada is going to grow, we have to encourage Canadians to invest in Canada. In November, 1981 the Liberals proposed to eliminate the interest expense deduction if it exceeded interest income. What the Liberals did not realize was that it occasionally takes time for investment income to exceed investment expense.
It is easy to understand the confusion. After all, Arthur Erickson did not have to wait for his investment in the Liberal Party to pay dividends. Ian Sinclair has not had to wait. He signed on the blue ribbon committee in the summer and he got Bill S-31. If that was not enough, he got the changes in the Crow rate which are going to benefit only the railways. Therefore, it is easy to understand the thinking of the heavyduty supporters of the Liberal Government. They want their investment return right away. However, they suggest that the ordinary Canadian investor has to wait. Fortunately, after we explained the facts of life to the bureaucrats, they backed down.
The last group I want to deal with in speaking to Bill C-139 is the farmers. The Liberal Party and its bureaucrats simply do not understand that the family farm is the Canadian farmer's pension plan. My constituents work hard on a day-to-day basis to put something aside for retirement. That retirement plan, shall we call it, consists of paying off the family farm.
The Hon. Member laughs. I would not laugh about that. I appreciate that the Hon. Member comes from a metropolitan riding, but I would not laugh about the plight of the Canadian farmer. I do not think that is fair for a metropolitan Toronto Member to do.
That retirement nest-egg is created by paying off the family farm. What the farmer does is sell the farm and take back a mortgage. Before the Government changed the rules, a farmer could sell his farm and invest the capital gain portion in an income-averaging annuity. That allowed him to plan for retirement. He could calculate his chances for surviving and for how long, invest the money and get an annuity. The Liberals have changed all that. Just as the laughter on the other side has demonstrated, how many Liberals and bureaucrats own farms? They do not have any idea of what is happening out there, no idea whatsoever. Instead of the incomeaveraging annuity content, the farmers of Canada will now be faced with the uncertainty of general averaging.
I want to sum up now because I have had two chances to speak to this Bill. I urge the Government to bring forward Bill C-139 on a serious basis. This is the third day of debate, but in fact we only had one full day of debate before this. The second day was interrupted by a debate on Standing Order 81, plus, if you can believe it, Royal Assent in the middle of the debate on Bill C-139.
We on this side of the House urge the Government to give some certainty and finality to income tax legislation in this country by bringing forward Bill C-139 on a chunk basis so that we can have all the debate at one time and Members in every part of the House can be heard. That will bring some certainty into the lives of accountants, lawyers, small business people, farmers and employees in this country.


Mr. Deputy Speaker:: Order. The rules now provide for a question and answer period for ten minutes. Are there any Members rising to ask questions of the Hon. Member who has just spoken?


Douglas Glenn Fisher: Mr. Speaker, I want to compliment the Hon. Member for an interesting and partisan speech. He presented his point of view from a very clear bias. I would like to explore one or two of those nuances.
The Hon. Member said that mobility among Canadian workers must be encouraged and that the question of home
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loans from employers being viewed as a taxable benefit discourages this kind of mobility. I believe he said that. Taking the hypothetical case of two people working for the Ford Motor Company, one an executive and one working on the assembly line, if both of them have to move from Windsor to Oakville, it has been the practice of such companies to subsidize the mortgages of the executives but not of the workers on the assembly line. Therefore, these workers not only go without the tax-free benefit, but they help to pay for the other man's tax-free benefit. Could the Flon. Member give us some idea of how fair he thinks that kind of equation is?


Douglas Grinslade Lewis: I should start out by saying that I appreciate the Hon. Member's compliment on my speech. I must say I have no hesitancy in speaking from a biased viewpoint in favour of small business, farmers and employees.
To answer the question directly, 1 would say the Hon. Members is correct. In my opinion, which I believe would be shared by my Party, if there are going to be loans for employees who are moved by their company, it seems to me eminently fair that the loan should be for all levels of employment. We in this Party, to the best of my knowledge, make no distinction between the executive and the highly skilled worker. If Ford Motor Company, or any company, is going to make loans to enable people to transfer their place of employment without suffering, then as far as we are concerned the executive and the highly skilled worker on the assembly line should get the same break. There is absolutely no question of that. As a matter of fact, if that is happening I would hope the Government is clamping down on it.
The point remains, however, that we want to move people across this country. We want to encourage that. Mobility is referred to in the Charter of Rights, and what that means is that we want companies to flourish in Canada, including Calgary and Vancouver where house prices are out of sight. If a company has to loan a highly skilled worker or an executive money to purchase a house, perhaps there should be some clause in the contract that if there is a capital gain realized, the company would receive a piece of it. We should treat all employees equally and encourage mobility.


Douglas Glenn Fisher: Mr. Speaker, I am glad to see the Hon. Member wants everyone treated equally. 1 agree with that perspective. I would like to point out to him that there are instances in my riding where whole companies have moved and everyone, from the president to the janitor, is offered a home subsidy. That is interesting but it is the exception, not the rule. What I have described to the Hon. Member is more common, that someone working on an assembly line cannot get that kind of subsidy.
I wonder if the Hon. Member could pursue his point one step further and describe how someone moving on his own hook, as is common, from Newfoundland to the oil fields in Alberta, could get this kind of a tax break. An employee can get it, but someone moving on his own hook cannot. What is the fairness in that?
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Douglas Grinslade Lewis: Mr. Speaker, I think that the best I could do for the Parliamentary Secretary to the Minister of Finance (Mr. Fisher) is to suggest to him that those provisions are in the Act already. If he takes a hard look at them, he will find there are provisions for deduction of moving expenses. I do not have the same familiarity with the Act that 1 had, but 1 would be willing to take that up with the Parliamentary Secretary later.


Mr. Evans:: Mr. Speaker, I would like to pursue that point of the question even further. With regard to moving expenses, the Hon. Member is correct. Would he also indicate the fairness of the situation where an individual moves from Calgary, say, to Ottawa, buys a house, takes up employment, and does not receive any consideration, with respect to moving, of a mortgage loan which is tax deductible or tax free, whereas someone from Ottawa calls someone in Calgary, offers them a job and gives them an interest-free loan for the house they purchase in Ottawa? The two individuals are in exactly the same situation, but one has a tax-free or very low-interest loan to purchase a house and the other one has not. Can the Hon. Member comment on the fairness of that situation?


Douglas Grinslade Lewis: Mr. Speaker, I appreciate the Hon. Member's confirmation that in the Act there was a deduction for moving expenses for people moving on their own. I can understand that there is a problem. Naturally, under the mortgage interest and realty tax deduction plan that the Progressive Conservative Party had in place the individual who had to take up a mortgage to move to Ottawa would be looked after and would be able to deduct those expenses from income. That provision is already in our Party's platform.
However, I think the Hon. Member will find, as the Hon. Parliamentary Secretary to the Minister of Finance suggested, that different companies have different policies. What we were dealing with was this. 1 think within the free enterprise system it is equitable for company "A", which manufactures widgets, to have a different system from company "B" which also manufactures widgets, because if company "A" have that plan, they would probably be better able to encourage good employees to come to work for them. That is the situation within the free enterprise system.
As I suggested, the plan should be applied across the board. It should apply to executives and highly skilled workers, anyone who works for the company; no question about that. If the company has to move its janitor to Calgary, the janitor should get the same break as the vice-president. I have no hesitation in saying that at all.


Hon. Bud Cullen (Sarnia-Lambton):: Mr. Speaker, I welcome this opportunity to participate in the debate on Bill C-139. I was not really too surprised to find the Progressive Conservative Party, through their spokesman today, the Hon. Member for Simcoe North (Mr. Lewis), taking credit for all the changes made in the November, 1981 budget. I think he probably had his tongue firmly planted in his cheek when he made that kind of representation, knowing that back-benchers

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on this side had a fair amount to do with many of the changes which have taken place, many of them for the better. Not only do we take full credit for that, but we are prepared to share that credit with the business community and labour groups which came forward and spoke to the Minister and the Department of Finance and indicated where there were some burrs in this particular budget which had to be removed if it was going to be equitable and applicable to the whole of the country.
This Bill now represents the culmination of a great deal of work and debate, and some change. With a budget in 1981 and later financial statements, the Government could hardly be seen to be ramming this Bill through the House. It can be called new or recent because it was tabled early in December, but the contents have been comprehensibly scrutinized by the public, Opposition and Government Members, and by and large by the business community and labour groups throughout the country. So it has had a good debate. We also know that the subject matter of the Bill was referred to the Standing Committee on Finance, Trade and Economic Affairs, and representations came from that particular Committee, many of which are found in Bill C-139. So the Bill has been, I think, long, effectively and comprehensibly debated.
The problem which flows, I think, was highlighted in part by the Hon. Member for Edmonton West (Mr. Lambert) in his address on this particular part of the Bill; that is, Mr. Speaker, the process. It is no secret that anyone involved at any time with the preparing of a budget would not agree with the present method of doing so. We have yet to find a perfect method, but I think we have to keep searching to see if there is not some better way so that the kind of certainty that the Hon. Member for Simcoe North was talking about will be known to the general public and it will not require a year or a year and a half of debate before items recommended or suggested in a budget see the light of day.
Unfortunately, people who have tried that in the East have almost been hoist with their own petard. When the Hon. Walter Gordon was Minister of Finance, he thought it would be good procedure to bring in people from the business community to let them see what the bureaucrats, the Departments and the Minister were proposing and find out whether they could propose a counterbalance or some improvements on the suggestions being made. 1 thought that was a great pioneering move but, unhappily, attention was focused on the three individuals brought in from the business community. There were questions about whether they were on a leave of absence, whether certain benefits were accruing to them or to their firms as a result of advising the Minister, and not enough attention was focused on the positive, courageous step taken by the Hon. Walter Gordon in trying to improve the process.
Next came the white paper method. That offered an opportunity to muse in public about how the next budget might be put together, the sort of things that should be contained in it and the ramifications if certain steps were taken. Unfortunately, it was not regarded as a white paper but as Government
policy. The Government found itself having to defend everything in the white paper as if it were Government policy instead of a proposition offered in the hope that the Canadian public would see the things that might be possible and also see the problems that face a Government endeavouring to prepare a budget that was equitable. There was reaction against the white paper and considerable attention paid to the more reprehensible parts of it, rather than concentration on the positive aspects. As a result, that process did not see the light of day.
I served as Parliamentary Secretary to a Minister of Finance who did not particularly care for the secrecy that was involved in the budget. He felt that it was something that we inherited, but that has long since been abandoned in the Westminster system where there is more consultation with the general public. After seeing the disaster of the white paper, he decided to consult with colleagues that he trusted, Ministers who had the same responsibility to their Provinces as he had to Canada, namely, to put a budget together. They bounced ideas off each other, trying to find out what the implications of certain moves would be for Ontario, say, Quebec or for the Atlantic provinces-whether a certain action would be the correct use of tax points and so on.
All in all, people in the political arena-and 1 emphasize people in the political arena-with some knowledge of budgets, some knowledge of the process and of the impact, were able to come up with what was, 1 think, a budget good enough to be defeated in the House and, subsequently, for the Liberal Party to win an election on. It was a better budget as a result of that consultation than it would have been without.
The Hon. Member for Simcoe North claimed that the Government is prepared to rush this Bill through but he ignored the debate that has been going on since November, 1981. The Bill before us is the culmination of the many, many representations that have been made. What we have here is a study in semantics. I think the changes that have been made are appropriate, that the Bill is better because of them and the budget was better because of them. The Opposition sees this as backing down and, of course, Members of the Government, with their own particular bias, see it as the Government being more flexible. Personally, I think further changes could be made, but this is a necessary element of the present process. Until the night that the budget is read in the House we do not know what it will contain. By its very nature it demands that debate and consultation take place after the fact.
How much better it would be if we could come up with a process to do that before the fact. Some areas could be kept secret because of the stock market or because someone might have inside information. We should question certain approaches, such as indexing-whether it is worth keeping or worth the cost of $7 billion or $8 billion of Government revenues. Such things could be the subject of legitimate debate. This is not the case at the present time, because if an item is not on the bill, it cannot be discussed. All we can do is guess at the subjects the budget will cover. We debate what
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might be in the budget, only to find that it is not there and all that debate is wasted.
I think the Minister of Finance (Mr. Lalonde) is embarking on an excellent process of consultation in moving this Bill before the Finance Committee so that there can be better debate. 1 hope he will not be rushed into bringing down his next budget, however, but that he will take time to consult again with groups in order to ensure that the actions he is contemplating will not have severe and negative implications for the business community.
When the Minister spoke to representatives of business in late January, he said:
We must build the foundation for a tougher, more productive, more competitive economy. And we must do it while combatting the painful effects of a world recession that has hit Canada harder precisely because of our greater dependence on world trade.
He is saying to the business community, to workers and to the public generally, that we have to become lean and mean if we are to succeed in the post-recession market.
It has been difficult for the Government, also for the Conservatives who were once in Government, to put to rest the belief that simple solutions are possible to our economic problems, and most notably the belief that Government can do it all and can end our economic problems. The general public is much more knowledgeable today and recognizes that whether the Government works in concert with the Provinces or whether the Provinces work in concert with the municipalities, no Government can go it alone. It needs the help of the general public.
What can be done to help, Mr. Speaker? Legislators can help bring in the best possible legislation and the public has an obligation to become as productive as possible. If there is one area where the country is failing, it is in the area of productivity. I know that my friend, the Minister of Agriculture (Mr. Whelan), will be quick to point out that the Canadian farmer is probably the most productive person in the community. We must improve productivity, however, and that is not to slam labour or management. It is a clarion call to recognize one of our major problems, that we are not as productive as we need to be in order to compete.
As the Minister of Finance has said, no one would be happier than he if it were possible to solve unemployment by forgetting about inflation. That would result in fewer jobs, however, not more. Only a few months ago we had high inflation and high unemployment at the same time. The inflation rate is coming down and we have an obligation, through legislation like this, to see to it that unemployment also comes down. To the extent that the economy cannot absorb all those who want to work at the present time, the Government has an obligation to provide jobs, both short term and long term but more appropriately long term. We cannot ignore that problem. That is why money must be and is being spent to train people for the jobs that will become available so that we may be in the forefront of the economies of the western world.
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It is not difficult to approve this Bill in principle, Mr. Speaker. Any piece of legislation can be improved, but at second reading we deal with the principle of the Bill. We will deal with the nitty-gritty when it goes before committee for clause-by-clause study. The package of tax rate cuts, modification of federal tax credits and cutbacks that are proposed will result in over 93 per cent of tax filers either having a reduction in tax or no tax increase. That is a rather phenomenal thing in the present state of the economy.
1 think everyone can support the increase in the Child Tax Credit which is now $343, an increase of about $50. It could be argued that it should be more and, of course, it would be great if we could provide more. But it is significant that the Government is prepared to make this move at a very difficult time in the economy.
From time to time people will hold up the big Income Tax Act and declare that it is too complex and should be made simpler. We have heard simplistic ideas that if we take 20 per cent of someone's income and pay it to the Government-and the rest is theirs-that will solve all the problems. There is a lot of difference between an individual who earns a $50,000 salary and an individual who earns $50,000 by putting his guts, brains and everything he has-he sacrifices everything- into a small business. The tax Bill is more complicated and complex because we try to build in equities to say to individuals, to entrepreneurs, or to one who is prepared to take a chance, that the Government will back them and give them particular advantages. This is the way complexity is built into the Income Tax Act. It has to be built in in order to make income tax equitable.
There is a tendency from time to time not to go into a sunset situation but to look at some of the incentives which are in place to see whether they should be removed at the present time or whether they should be moved from a particular group and put on to another group because that group is suffering. This could be the case with a businessman, farmer, large corporation or whatever the situation happens to be at the time. We can have a look at it, and if the complexity happens to be there, perhaps we can create equity in other areas by sunsetting some of these situations. I think to be fair that is what was tried in part in November, 1981 without winning too many converts, unhappily. I think in some situations the changes which have been made have been appropriate.
I was pleased to hear the comments of the Hon. Member for Simcoe North. He almost quoted from my speech, judging from what I have written down here. I am sure I heard him say that small business is one of the cornerstones of society. I do not think anyone in the House denies that. They will gain a number of incentives in this particular Bill, signaling the Government's appreciation of the difficult times small-business owners are facing due to world-wide recession. I will cite just a few examples. First, there are the provisions of the Small Business Bond Program, thanks to the Conservatives. They brought them in and we have improved upon and expanded

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them. I think it is a better program now than it was at that particular time.


Some Hon. Members:: Oh, oh!


Jack Sydney George (Bud) Cullen: We can have an honest debate between ourselves. I think it is that kind of debate which will make this particular bond even more effective than anything they dream of in their wildest dreams-and they have some dreams on occasion. The program was due to expire at the end of 1982. It reduces interest rates by six to seven percentage points through a tax exemption to lenders. That has now been extended to the end of 1983. The limit on annual income qualifying for low small business tax rate is increased to $200,000 from $150,000. The total accumulated income to qualify goes to $1 million from $750,000. There are items in there, but as I said, we are talking about a Bill at second reading and I do not want to go into the specifics. I am sure they will be dealt with in some detail by the Minister and by members of the committee, whether it be Committee of the Whole or the Bill is ultimately referred to the Standing Committee on Finance, Trade and Economic Affairs.
In conclusion, given the present process, which everyone concedes is flawed because of the great insistence upon secrecy, after a Bill is passed-before it is passed, yes, but certainly after it is passed-we have to find out the repercussions of a particular measure in the Bill. We have to be vigilant to the actual benefits which flow. We have to decide whether we can increase the benefits or enhance them, whether the benefits are sufficient so that we can move our emphasis to another area. Also we have to be vigilant to the harmful effects of a piece of legislation and to what extent it deters an individual or detracts from being able to run a better business or being able to take advantage of a tax incentive that will have the effect of increasing the cash flow. We have to watch all these things and see to it when a new budget is drafted and we know the timing of it that we make every effort to bring to the attention of the Department of Finance or the Minister of Finance the areas where we can make changes. Thank heavens we have a budget usually on an annual basis or sometimes twice a year. It gives us an opportunity to make particular changes if they should be made.
The necessity of building as much equity into an income tax Bill, program or budget is absolutely essential in today's day and age. It is a tall order for Government, Parliament or the business community, for that matter, to try to come up with the penultimate answer so that there is equity across the board. The present Income Tax Act goes a long way toward that. It needs a lot of improvement. This particular Bill is an improvement, but I hope we will not be stalled and that we will not hesitate to make recommendations immediately to the Minister of Finance for his next budget. It is a tall order, but it is also our responsibility as those who legislate for the people of Canada.


Mr. Deputy Speaker:: The rules provide at this point for a ten-minute period of questions and answers. Are there any Hon. Members seeking to put questions?


Mr. Blenkarn:: Mr. Speaker, I was wondering whether the Hon. Member would answer a few questions. He mentioned that small business was important in the development of our economy. Could he find any provisions which specifically help small business? For example, does he consider the half capital cost arrangement to be helpful? Did it inspire people to invest? Did the 12.5 per cent tax on surplus which will be paid out in dividends inspire people to invest? Does the reserve system inspire confidence, where if a man sells his business he has to pay any capital gain within a three-year period? Is that the kind of thing which should be done by a Government that wants to help small business? Could he tell us about anything in the Bill of which he is so proud that helps small businessmen?


Jack Sydney George (Bud) Cullen: Mr. Speaker, I tried to give some credit where it was due; admittedly, I gave a small amount to the Conservatives for introducing the Small Business Bond. I also pointed out-and I will read it again in case the Hon. Member missed it-that the limit on annual income qualifying for low small business tax rate has been increased to $200,000 from $150,000 and that the total accumulated income to qualify went to $1 million from $750,000.
I would also point out, because this is specifically to what he referred, that the tax rate of 12.5 per cent on dividends paid by small business corporations will apply only to income generated in years commencing after December 31, 1982. This and other changes will significantly simplify the tax, while addressing concerns expressed by small business groups. I gather the Hon. Member was a member of the House of Commons Committee on Finance, Trade and Economic Affairs. I could deal with almost any piece of legislation and ask, for example, whether the fact that a school teacher has to pay a certain tax encourages him to be a school teacher or to go out and invest.
I could take almost any piece of legislation. The Hon. Member as a counsel knows that. I am sure that in the past he has taken medical reports and ripped them to shreds in court because a client was not hurt as much as he made out. We can all make that kind of attack. But when I talk about helping the future of Canadians, I would like to see something in a more positive vein than simply nitpicking through the Bill.


Donald Alex Blenkarn: I think the Hon. Member will agree that all we have here is a Bill that is not quite as bad as the budget of November. There have been some ameliorations as a result of representations made by this Party, by the public in general and finally by Members on his side of the House to the Minister. Could the Hon. Member advise us as to how the half capital cost allowance arrangement is helping business? How is it inspiring people to invest? Somehow the Minister of Industry, Trade and Commerce (Mr. Lumley) can say that new capital investment for 1983 is estimated to be down 8 per cent and how reducing capital cost allowances inspired it. What is the cause? Does the Hon. Member think that if we changed this and got back to a regular capital cost allowance, we would increase investment?
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An Hon. Member:: What about the standby charge?


Jack Sydney George (Bud) Cullen: I think I was as vehement as possible in my attack on it. We managed to get it down from 2.5 per cent to 2 per cent.
Any studies I have done on this particular subject seem to indicate that at best it is neutral in so far as the capital investment is concerned.
There have been a fair number of studies done in this particular area. The Hon. Member, of course, focuses in on one particular Bill rather than all of the items in place at the present time to help the small business sector. I have personally made recommendations about the manner in which small businesses might be helped with their cash flow. I would like to see small businesses aided by the creditors' relief arrangement act which was suggested by my colleague from Lambton-Middlesex (Mr. Ferguson) when dealing with farmers. I think we could broaden the scope of that so it could apply to small businessmen. Perhaps that is an idea we could expand upon rather than having it apply only to farmers.
There are openings for improvement. Rather than being negative all the time, I suggest that we find some way to help the small businessman rather than decry one or two items in a particular bill.


Douglas Grinslade Lewis: Mr. Speaker, the Hon. Member for Sarnia-Lambton (Mr. Cullen) made quite a case for consultation between the Government and business groups, labour unions and other interested parties. I have no objection to that; I can see how it may be worked out.
Can the Hon. Member give this side of the House a reason why the Government did not include grandfathering provisions and transitional provisions? Using restricted interest expense as an example, why did it suddenly say that the ability of the taxpayer to deduct that expense is gone? Why was there no transition period there?
Why did the Government take work in process and suddenly say that there is a tax on work in process as of next year-end, instead of providing for 25 per cent, 50 per cent and 75 per cent in the original budget? Why do bureaucrats not realize that these things must be phased in? Since the Hon. Member has some experience as a solicitor and has had to advise clients in private life, how does he account for the lack of transitional provisions in the original budget?


Jack Sydney George (Bud) Cullen: Mr. Speaker, the point I was trying to make is that this is one of the weaknesses of the present process. Let us be honest, it has to be adopted by the Minister. It is not something which the bureaucrats felt was appropriate in the circumstances and had to go into the Bill so it could be done immediately. I think if we had seen these proposals in a white paper we would have had an opportunity to discuss them in advance and see whether, if this is implemented, lawyers who are practising alone or in partnership find all of a sudden that they have to change their method of accounting. I agree that suddenness is something we should try to avoid.
I am happy to say that, as a result of pressures brought to bear from all sides of the House, that that particular move was
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put in rather than a snip-off at the time. There is some time frame provided to adapt to it. It also provides a time-frame within which a tax can be placed on it or other suggestions made. I think if we had a better process for drafting a budget, that sort of thing would not creep in.
When I was Minister of National Revenue, I found it almost incredible that we in National Revenue who were going to have to administer a particular piece of legislation were hardly consulted on the particular bill. If 1 made one contribution as Minister of National Revenue, it was the insistence that we be made part and parcel of the budget-making process so that we might say that a piece of legislation might be good in theory but cannot be administered. I think there should be more consultation like that between the Government, the politicians and the bureaucrats, and between Parliament and the public.


Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, I welcome the opportunity to speak on Bill C-139, an Act to amend the statute law relating to income tax. It was given first reading on December 7, 1982. Since the Bill's introduction, I have endeavoured to give it a second reading for my own information and benefit as well as for the information and benefit of the constituents whom I serve in this Parliament. But I say that it has proven to be an almost impossible task.
This Bill contains approximately 295 pages of rules, amendments, double-talk and triple-talk. I submit that no average citizen could understand it. Few Members of Parliament have even read the Bill and even lawyers have difficulty interpreting its complex clauses or stating with certainty the true budget to which these amendments apply.
At present there are four versions of the November, 1981 budget: the version that was introduced; the version as amended on December 18, 1981; the June 28, 1982 version; and the October 27, 1982 version. In addition, there have been minor announcements, and classifications on several occasions, such as a January, 1982 announcement on employee benefits. The fact is that the November budget has been amended so many times that one would literally need a program readily to understand it.
In my opinion, this Bill should not be given speedy passage as requested by Canada's present Finance Minister (Mr. Lalonde). I say this because it is far too lengthy and too far-reaching to be given speedy passage. The Minister stated at a press conference after the Bill received first reading that it is now time to end the uncertainty over our tax laws and let the affected taxpayers know precisely where they stand. He said that quick passage would let the Revenue Department get on with the task of issuing the refunds to which millions of taxpayers will be entitled. He repeated these views during debate in the House on this Bill.
I say that this is nothing more than ministerial nonsense. This Parliament should take its time to make certain that the tax laws it passes are fair and workable. It is not the fault of Members of Parliament or of the Official Opposition that the present Liberal administration brought in a budget that was so unworkable, so unrealistic and unfair, that it took almost 13

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months of chopping and changing before it could even be properly put before this Parliament. Even if this Bill is passed-and I hope it will be found unacceptable to a majority of Members in the House-Canadian taxpayers will still not know precisely where they stand because the Finance Minister has already indicated that he plans to introduce yet another budget early in 1983.
The charge that any delay will affect taxpayers is ridiculous, since tax returns will not even begin to be processed until some two months from today. Furthermore, the claim that refunds cannot be sent out until this Bill is passed is highly questionable. The Government often applies tax changes almost immediately following a budget night statement by the Minister of Finance. I have seen this happen quite often during my 25-plus years in this Chamber. If taxes can be collected in this manner, I ask why should there be a legal impediment to paying back money to taxpayers from whom it has originally been taken illegally? This Government obviously believes Barnum was right when he said that there is a sucker born every minute.
When the loopholes used mostly by the rich, and which were to be plugged by the November 12 budget, have turned out to be manholes, into which everyone including the Government is falling, then I submit that it becomes necessary for Parliament to take a careful look to ascertain whether our tax system has now become unbalanced by putting an unfair burden on lower income workers.
After reading Bill C-139, I must admit that its contents frighten me. This Bill symbolizes all that is wrong in Canada today. In my estimation, it is a bureaucratic nightmare, for only a bureaucrat, isolated from the cold reality that lies out there, sitting in a warm office here in Ottawa, could come up with this type of legislation which is causing, in effect, 1.6 million Canadians to be unemployed and businessmen from the Atlantic to the Pacific to throw in the towel and say enough is enough.
There can be no doubt that this is the worst crisis that the Canadian economy has faced since the 1930s. It is not just the continued closing of operations in Sudbury, Corner Brook or other parts of the Atlantic, the downturn in our agricultural economy, the crisis in our fishing industry which is the worst 1 have seen in my entire lifetime, or the state of the housing and forestry industries. It is also the heartbreak of hope deferred by millions of Canadians. The fact is that Government-announced turning points lead only to more disappointments.
Canadians are asking, in fear and in anger, just what is wrong with our country and our Government. Why are we in this deep depression in a land which is blessed with so many natural resources? There are, of course, many answers which could be given to that question, and some of them can be found in this Bill. This Bill calls for increased taxation of employee benefits, such as retiring allowances, employee loans, automobile benefits, deferred profit-sharing plans and personal service corporations, among other things.
To give Hon. Members some idea why 1 call this Bill a bureaucratic nightmare, I wish to place on the record, since many of my constituents will not have an opportunity to read the Bill, a sample of the wording found on some of this Bill's 295 pages as it applies to the standby charges to be paid by an employee to his employer for non-business vehicle use. I will begin on page 2 and quote only a few lines. On page 2 it is stated:
(2) For the purposes of paragraph (l)(e) an amount that is a reasonable standby charge for the automobile for the aggregate number of days in a taxation year during which it was made available by an employer or by a person related to the employer shall be deemed to be the amount equal to the product obtained when
(a) where the employer or the person related to the employer owned the automobile at any time in the year, an amount in respect of its cost to the employer equal to the percentage thereof obtained when 2% is multiplied by the quotient obtained when such of the aggregate number of days hereinbefore referred to as were days during which the employer or the person related to the employer owned the automobile is divided by 30 (except that if the quotient so obtained is not a full number and exceeds one it shall be taken to the nearest full number or, if there is no nearest full number, then to the full number next below it), or-
It goes on in this manner for two solid paragraphs. That must be the longest unfinished sentence in Canadian literature. It just boggles the mind. I ask the Minister and any Member of the Government, how can a Bill with this type of wording create stability, as stated by our Minister of Finance? That is the question I would like answered.
As if this were not confusing enough, the Bill goes on to other matters of taxation. But then, on page 25, it contains similar double-talk on the possible benefits of the company car, which are taxable if same is used by a shareholder. I ask, why were these measures not kept together, especially as they apply to automobile taxes? Of course, this is something that my mind, being that of an ordinary MP, will never understand, but it does explain one thing. It explains why every Canadian commercial traveller in Canada today is up in arms. He is literally unable to determine where he stands, what he must pay to his employer, and what he must do with the company car.
All of this type of taxation double-talk is deemed necessary in order to secure an ever-increasing amount of funds to pay the salaries of an ever-increasing number of civil servants. This horror story, and that is all I can think of to call it, was outlined in detail by Canada's Auditor General, Kenneth Dye, who pointed out in his Annual Report that not even Canada's federal Cabinet Ministers know for certain how a great deal of Canadian tax money is spent. To me, this simply does not make sense.
We have before us a Bill which seeks to plug every loophole, which seeks to get every possible penny from these working Canadians who are trying to keep this country going, while the same Government which deliberately plans to make our workers and their employers as wretched as possible takes no steps whatsoever to see to it that every tax dollar is properly and wisely spent. I ask the Government, through Your Honour, why is there this inconsistency? Why does the Government hit out so hard at the little taxpayer, but makes no
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direct effort to try to curb the unnecessary expenditures of Crown corporations?
Here is what Mr. Dye, after two years of study, had to say: "My first impression of sprawling immensity, confusion of purpose and a sense of urgency comparable to the alacrity of a turtle, remains". On page 13 of his Report of March 31, 1982, Mr. Dye states that the problem of achieving accountability is massive in its dimensions. There are more than 300 Crown corporations, including subsidiaries, employing some 263,000 Canadians. Revenues of Crown corporations for the last fiscal year were $31.9 billion and expenses were $33.6 billion. That represents a loss in one year of $1.7 billion. These are taxpayers' dollars. Most of these corporations are virtually unknown, even to the best-informed Members of Parliament and Cabinet. Yet, in the aggregate, they represent a hole in the taxpayer's pocket, resulting, as they often do, in a consistent negative return on the taxpayer's investment.
Our Auditor General has stated that it might be helpful, in visualizing the state of the problem, to think of the whole group as an economic iceberg floating lazily on the foggy Atlantic, silent, majestic and awesome. As a Nova Scotian and as a Member of Parliament from Atlantic Canada, I can fully appreciate that analogy because 1 have seen those icebergs floating, awesome, silent and majestic, on the Atlantic; and I can assure Hon. Members that while they are awesome, they are also frightening. I think that is the comparison our Auditor General wished to make so that Canadians would better understand.
The public tends to see only the upper portions of icebergs, consisting of the giants like the CNR, Petro-Canada, CBC, Air Canada and Canada Mortgage and Housing Corporation. However, the great bulk of the iceberg below the surface is less spectacular, less likely to attract public interest, less likely to receive the attention of Parliament, yet costly to the taxpayer. Indeed, Mr. Dye says: "There seems to be, deep down near the bottom of the iceberg, subsidiaries of Crown corporations that may escape all public scrutiny".
This is the real reason behind the Bill. The Government does not seem to know how our tax dollars are spent, and its own concern is to find new ways of getting more taxes from those working Canadians who are still operating. 1 presume it is necessary, in order to keep these Crown corporations running, to have restrictive tax laws like those enshrined in Bill C-139, but I personally feel that we can no longer continue turning a blind eye and a deaf ear to Crown corporations which are losing close to $2 billion annually.
Mr. Dye did pinpoint some of the losses. He told us about a device which is called a "letter of comfort", under which a Minister is authorized by the Cabinet to support the credit of Crown corporations. The amounts involved can be significant. In the last six years, for example, more than $1 billion has been advanced to Canadair through a sequence of letters of comfort. The authorized limit is $1.35 billion. This amount of taxpayers' money is at risk without what I consider to be any real, clear criteria for providing continuing support or even for
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discontinuing this kind of support. There is no assurance that $1.35 billion is sufficient.


Donald Alex Blenkarn: It is not.


Lloyd Roseville Crouse: In this period of severe recession, the Government support for such troubled companies as Massey-Fergu-son, de Havilland, Canadair, Maislin Industries and Dome Petroleum represents a very big risk. Why must the entire action be taxed to death, as in Bill C-139, for those favourite few? What are the names of the other companies, those which will belly-up to the trough to be spoon-fed by Canadian taxpayers' dollars, by this socialist Government?
The worst example of Crown corporation bungling, as outlined by our Auditor General, concerned the money made available by the Government to Petro-Canada for the purchase of Petrofina. This wholly-owned Crown corporation was used by the Government to identify, evaluate, recommend and negotiate the acquisition of Petrofina at a cost of $1.7 billion. It is one of the crimes of the Government that to date the Auditor General has not been able to assess whether the $1.7 billion invested by the Government of Canada for the purchase of Petrofina was expended with due regard to economy.
The Government feels that it must crack down hard on Canadians who may receive some amount of interest on life insurance policies purchased for the protection of their wives and families, in the event of their death, but it cannot give or refuses to give our Auditor General a detailed breakdown of the expenditure by Petro-Canada of $1.7 billion, which is an action which not only represents a callous disregard for our taxpayers' money, but one which is also affecting the very livelihood of the taxpayers from whom the money was originally taken. In my own constituency, 1 have small, independent service stations being put out of business by the unfair competition they face from stations set up by the Government Crown corporation.
When this Government is restricting tuition fees and educational deductions for young Canadians, it should ask itself why its basic accounting policies not only fail to produce a fair and honest representation of the Government's accounts, but, as reported in one case, it actually omitted $445 million of revenue that should have been included if the Government had followed its own rules. It should also inquire of itself why Government departments are still indulging in year-end spending sprees rather than turning back unspent funds at the end of the fiscal year. There is no reason why it could not do that. The Government should at least give an explanation to Parliament concerning the $219 million spent last year on overtime, even though most departments and agencies do not have adequate policies and guidelines governing the use of overtime. It should also explain why Canada is the only OECD country in the top ten in which industrial productivity has decreased.
This Government should want to know why it shows a deficit of $24 billion this year. With 24 million Canadians, that amounts to $1 billion for every one million people. If the

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Americans had that type of deficit, they would be going crazy. There are 240 million Americans, but their predicted deficit is in the range of $180 billion. For their deficit to be comparable with Canada's deficit, it would have to be $240 billion. Perhaps this is one of the reasons our dollar is worth only 75 cents in the United States.
If the Government wants to know why inflation is still at a double-digit figure and unemployment rolls are still rising, I would say that it need look no further than this Bill. This Bill is a capsule form of the gross mismanagement of Canada by the present administration. It is the collective result of three budgets in one year, ail presented to Parliament without proper thought or planning by this administration. The result is a very uncertain direction for our ship of state. This state is in the same predicament as a ship whose captain is uncertain of his compass readings. When this happens in Atlantic Canada, the captain slows down his forward speed as he creeps along. He is constantly looking for some familiar headland or marker so he can get his bearings. This all takes time, and while the captain is in this state of uncertainty, there is little or no forward progress for his ship. This situation continues until an expert checks and brings the magnets in line so that it gives a true compass bearing.
In conclusion, 1 say that our captains of industry are no different from our sea captains. They will simply plod along slowly and warily until they are convinced that their compasses are reliable and giving them a true bearing. I submit that it is way past the time when this Government should give a true course to our captains of industry so we can go forward and progress together.


Mr. Deputy Speaker:: The rules at this point permit a question and answer period of 10 minutes. Are there any Hon. Members rising to ask questions? If not, the Chair will recognize the Hon. Member for Mississauga South (Mr. Blenkarn).


Donald Alex Blenkarn: Mr. Speaker, the object of taxation for any Government is to raise the necessary money required for the public purposes of the country, and the responsibility of a Minister of Finance is to organize the economy so that it produces the best result in terms of profitability and business activity that makes the collection of tax possible. The talent of a Minister of Finance should be used to run a goose farm where he makes sure that he can pluck feathers out of the geese without annoying them so that they stop laying the golden eggs. In any measure of ability in running a goose farm, this Government, this Minister, has "goosed" the country, has made sure that the production of golden eggs has been significantly reduced and has created nothing but hissing and upset by every faction of the country from business to labour and, indeed, as expressed earlier by the Member for Sarnia-Lambton (Mr. Cullen), even from the backbenchers of the Liberal Party.
The production we have before us, Bill C-139, is the result of a mess of budgets, November 12, June 26 and now this effort of October, all supposed to do something to make the economy of Canada work. In my view this Bill that we now have before us is a Bill that assists in preventing the economy
of the country from working, and therefore it should be significantly amended or withdrawn.
When the present Minister of Finance (Mr. Lalonde) was first appointed to replace the former Minister, who was a disaster, he gave us some hope. He talked in glowing terms of the enterprise economy, how it should be the engine of growth, how we would get with it, how changes would be made that would make that enterprise economy work again. However, actions speak louder than words, and no sooner had the Minister finished his budget remarks in October than we proceeded to have $680 million of Petro-Canada money used to buy British Petroleum; we had further grants to Canadair and to de Havilland; we had the Maislin fiasco; we had the program for six and five that was supposed to reduce Government expenditures. At the same time the Minister came before us in the Committee on Finance, Trade and Economic Affairs on his estimates, and he said that he had to increase the number of persons working in his department by 48, that he had to increase the total staff in his Department by 7 per cent and that he had to increase the total wages paid in his Department by 15 per cent.
That is really the Minister's attitude here. He says that we have to make the economy of Canada grow, and that this budget and these Bills are for that purpose. On the other hand, judging by what he does, we find that the $680 million to buy more service stations and the 15 per cent increase in the wages paid in his own Department is his appropriate response to restraint.
The tax system we have in the Income Tax Act is exceptionally complicated. It is not only complicated, it is confusing and complex. Indeed, the committee that studied the proposals of June were able to call many expert witnesses before it, and 1 want to read into the record a statement made by Donald Huggett, editor of the "Canadian Tax News", a Coopers & Lybrand publication. Donald Huggett is certainly one of Canada's most expert tax authorities, and he says:
I have specialized in tax work for almost 30 years, and the law is now incomprehensible to me in quite a few cases. It is, in my view, quite unconscionable to have a law that affects almost every adult Canadian and which is understood by only a handful.
I want to suggest that the Members of this House now debating this Bill, including myself, in large measure do not completely understand the Bill, not by a long shot. I want to say that almost every Canadian does not understand the Bill, including chartered accountants and lawyers who specialize in tax problems. We have a situation where we are trying to make the economy of our country grow and produce and increase in size, and we burden that economy with legislation that is incomprehensible to most people, that is contradictory in many cases, that has no general over-all thrust to it, and that is really difficult for anyone to understand on a philosophical basis, let alone any other basis.
What is it doing? I suggest this legislation is totally antiproductive. It is causing people to go into what is called the
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black economy. People cannot understand the Bill, so why should they pay the tax in the first place? What they do is trade one good or service for another, my carpentry work for your dental work. This is going on to a greater and greater extent all the time. After this Bill passes, it will go on even more. That is the situation this Bill creates.
Let me give one example. We have the new 12.5 per cent tax on the distribution of corporate profits after the 1982 corporate year. What has happened? A great number of people who have small businesses have stripped out to private holding companies their pre-1982 surpluses so that they can pay those out without attracting the 12.5 per cent tax. More important, there is no longer any point in a small-businessman creating a surplus within his company to build the company. The effect of the 12.5 per cent distribution tax will put him in exactly the same position as though he earned the money in a personal way.
The Government says that is equitable, but the fact is that what we have been trying to do in taxation all along is to get small businesses to grow. What this statute does is prevent small businesses from growing. If small business takes advantage of the small business limit and lets the surplus grow, does anyone think that a small business will pay the 12.5 per cent distribution tax? Not unless they are really stuck or make a mistake.
What will happen is that the surplus will never be paid out, so the tax will never be paid. If the tax is never paid, there is no income tax paid by the proprietor which is attributable to his receipt of dividends. The Government will lose not only the tax on the dividends but will lose the build-up of the small business and never get the 12.5 per cent tax. That surplus will be leached out in some other fashion.
The Minister's officials know how this is done, as does the Minister of National Revenue (Mr. Bussieres). However, they have not communicated that to the Minister of Finance and his officials. The truth is that his officials are all from the ivory tower. They do not understand how business works. They do not understand the motivation of people. They produced this absolutely ridiculous legislation that will hamper, hurt and hinder the development of this country and its small-business community, with no revenue gain for the country whatsoever.
The Minister says it is too difficult to simplify the Income Tax Act. He says we live in a difficult world and therefore we must have difficult statutes. He says that when we pass an Act and give a benefit, we create a loophole so we have to have anti-loophole sections, anti-anti-loophole sections and antianti-anti-loophole sections, until the Act is a foot thick, with rulings that run seven days from Sunday, almost all of which are incomprehensible.
We really do not need to have that condition. Is it necessary that Parliament be subjected to a statute that is so complicated that Members of Parliament, the accounting profession and the legal profession cannot read it? The Members of the Government who try to enforce the statute and the courts cannot read it. Is that really necessary? I say it is not.
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Is there any reason why this Minister and this Government cannot appoint a task force committee of sensible people who are elected to this House, many with a good business background, representing constituents who are not from the ivory tower? They could go through this Act and change the system. Must we have a capital cost allowance system with 28 kinds of capital cost allowance?
Can we not integrate corporate and personal taxes so that we do not need to have various kinds of surpluses? Can we not have a situation where you either pay personal tax as your corporate tax or pay it as personal tax? It really does not matter. Can we not integrate personal and corporate income tax?
Do we really need to have tax on capital gains in view of the fact that the total receipt by the federal and provincial Governments from capital gains this year will probably be less than a billion dollars in all? Are the problems and complications in terms of reserves, all that we have heard about- annuities, evaluations, valuation dates and appraisers-all that necessary? Does any of that make Canada grow and build again? Do we really need some of the provisions in the Income Tax Act, bearing in mind that the purpose of taxation is to raise sufficient money for the legitimate purposes of the state in such a fashion that the goose does not hiss too much and continues to lay the golden eggs?
Speaking of the golden egg, we have seen what has happened to the economy of this country since the famous budget of November 12. The Minister may say that the problems of the economy are world wide, but it is strange that they are greater in Canada, and that Canada's performance in moving ahead is worse than that of 24 countries in the OECD. I suggest it is the ineptness expressed in Bill C-139 and in the budgets we have had that have been largely responsible for the lack of golden eggs being laid by our goose, the economy of Canada, a Canada to which we all belong, which we cherish and want to go forward.
In section after section, instead of wanting to make the country grow, this Government has shot itself in the foot. How can you expect people to invest if at the same time you take the capital cost allowance and cut it in half in the year when it is needed most? If a man buys a piece of machinery in order to improve the productivity of his plant, what does this Government do? It says that even though he has to pay for the machinery this year, he will not have as much tax allowance, tax holiday or tax deferral in the first year of purchase as was the case previously. In other words, the Government does not want him to buy more new equipment and be more productive. How does that work? How does it help the country grow? It does not.
The Government may pick up an extra billion dollars in revenue through corporate taxes, but when you look at the Government's own forecast for capital investment in real terms, it is down 8 per cent this year over last year and 6 per cent over the year before. As a result of that budget, capital acquisitions of a depreciable nature by companies in this

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country are down at least 14 or 15 per cent. That kind of capital cost acquisition would have attracted the full capital cost allowance. Is there not some relationship between the capital cost allowance provided for in the old system and that now provided for, indicating that this reduction in the purchasing of capital equipment is taxed induced? I suggest there is.
Dealing with the MURB problem now, the Minister was worried that people were using deferred income arrangements to make themselves wealthy while building fancy apartment houses; therefore, these terrible things should be stopped. But rather than stop that type of action, which he could have, he decided to stop all soft costs. What is a "soft cost"? It is interest expended while you are getting a project going. If you want to make a very major capital expansion of a factory, you have to start spending money today on its plan and on the architects. Pretty soon you have to spend money to clear the land and to start building. It may be a two-year project in the course of building and in many cases all of that money has to be borrowed. Up until now, those who did that were entitled to deduct from their other income the interest spent in creating the project. Naturally, they were entitled to do that. That is the business way of doing things. But this budget says that under no circumstances can you deduct your soft costs from your other income unless you happen to be in the business of an apartment builder who can deduct it from his apartment income.
A man who wants to expand his factory has to borrow money for the course of construction and cannot deduct that interest from his business profits. He has to capitalize it. I say to you, sir, that in the case of a person who wants to expand his manufacturing potential, this tax provision, is costing him 20 per cent to 25 per cent more, and this is the kind of thing which is contained in Bill C-139.
The Bill is a disaster. It is anti-productive. The Government's attitude is anti-productive. It does not matter what the Minister says; what matters is what he is doing. If he really believed what he said in his economic statement speech, he would not have included this provision. But it is there because his bureaucrats do not understand how the business community works.
With respect to the matter of capital formation, for a long time there was a provision that if somebody sold a capital asset they could purchase an IAAC and defer the tax. They would have to invest the money. They would have to pay the tax eventually, but they would invest the money.
Second, there was a provision where people were encouraged to buy insurance. Somebody said, "Look, they are getting a tax advantage if they buy insurance; they are getting a tax advantage if they buy an annuity"-because you do not pay tax on the earned income derived from this type of investment as you go. You only pay the tax when income from the annuity or the deferred investment comes into your pocket. Therefore, you are supposed to receive a benefit. This kind of investment was building capital assets in Canada and was making money available for new investment. This Bill has shot the country in
the foot by depriving it of that new capital available for investment.


Douglas Glenn Fisher: Mr. Speaker, I believe there are elements in that speech which are very disappointing. Similar comments were made by the Hon. Member for Simcoe North (Mr. Lewis) and the Hon. Member for South Shore (Mr. Crouse). We have heard three speakers this morning deliberately try to confuse the application of tax laws and the general state of the economy. For example, the Hon. Member for Mississauga South (Mr. Blenkarn) claims that a company will not buy new equipment because of changes in the capital cost allowance. That bald statement came from the Hon. Member as if somehow there is an economic environment in the country today which otherwise would warrant the purchase on a wide scale of new equipment. Yet we have heard from all kinds of groups that that is not true.
I would like the Hon. Member to focus in a little more on the distinction between the tax law, fair tax laws, and the general state of the economy. Could he now tell us why so many people in front of the Standing Committee on Finance, Trade and Economic Affairs told us that the capital cost allowance will not stimulate or depress equipment sales because the state of the economy does not warrant such equipment sales at all? Perhaps he could explain to us why witnesses told us that when he is ready to stand up here and make a claim quite to the contrary?


Donald Alex Blenkarn: The Parliamentary Secretary must have been at a different committee hearing than I was. Perhaps the Parliamentary Secretary has his minutes. I suppose I could flip through mine and quote to him chapter and verse from my good friend, John Bulloch of the Canadian Federation of Independent Business, Coopers & Lybrand, and other witnesses who were before us, as to how serious the capital cost allowance situation is.
I will particularly refer him to one witness from Newfoundland speaking on behalf of the construction industry. That witness indicated how valuable the capital cost allowances were in terms of making it possible to pay for equipment. The Parliamentary Secretary will recall that this particular witness indicated that normally they would lease the equipment for the year. Then, if they had a pretty good year, they would buy the equipment. They would buy it because of the capital cost allowance. They could take advantage of the lease and they would get that piece of equipment. The witness explained that with this particular change, that type of thing was not taking place at all. The equipment was being sent back because of the nature of the capital cost allowance. Why spend the money up front? Equipment would only be bought if it was absolutely needed and not, perhaps, on the basis that you could use it in the next construction year.


Douglas Glenn Fisher: I have just a brief follow-up on that point, Mr. Speaker. The key phrase in the Hon. Member's reply was "when they had a pretty good year". In other words, when the economy is operating at a faster pace than it is at the moment, people would exercise that kind of judgment. But they are not
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going to exercise that kind of judgment when the economy is slowed down.
The Hon. Member made an issue about simplifying the Income Tax Act. Really, what he is saying is that simplification means "Don't tax". That comes out very clearly in his comments on the capital gains tax. What he is saying is, "Clean up the Act and all these other complexities"; but what he really means is, "Why are we bothering with capital gains tax at all?"
The example of the Hon. Member is typical of what many people really mean when they talk about simplifying the tax Act. I would refer him to the testimony of the Canadian Institute of Chartered Accountants and of the Canadian Federation of Independent Business, both of whom denied that simplifying the tax Act would mean reducing it to the point where an average guy like myself, who is not a lawyer or an accountant, could read it and understand it. It is too complicated for that. And those complexities have come about because special treatment has been asked for and received. People who need to know about the tax Act understand those complexities.
I wonder if the Hon. Member would go back to the question of "simplicity" which he raised earlier, along with the Hon. Member for South Shore. The point raised was misleading because people are not going to be able to read that Act. What they are going to be able to do is learn those parts of the Act which apply directly to them. Perhaps the Hon. Member would reflect a little on the Committee's discussion about that point and give us his observations in a little better light. When he raised his comments on capital gains, he was not talking about simplicity, he was saying "Don't tax us".


Donald Alex Blenkarn: Clearly, Mr. Speaker, the Parliamentary Secretary is lacking in understanding of his responsibilities, and this House would be lacking in a responsible attitude if it said do not tax at all. We have certain obligations to perform and that requires fair taxation. But any tax system which is so complex that it deters the collection of taxes is wrong.
I would like to read into the record a paragraph on page 118:5 of the report of the Committee, the top paragraph, if my hon. friend would like to take a look at it:
While the complexity of the law is understandably a reflection of the complexity of economic reality, it does tend to create uncertainty, to add substantial administrative costs, and to erode public confidence. These in turn, would encourage tax non-compliance and undermine the very cornerstone of the Canadian tax system, namely the self-assessment principle.
I say to my friend that it cannot be so complicated that this Parliament and Members in Committee cannot deal with it. We have to make it so that we can understand it and the public generally can understand it, so that taxes can be collected as required without the needless complexity we have here.


Mr. Taylor:: I would like to make a comment, Mr. Speaker, on this capital cost allowance. The Hon. Member for Mississauga North (Mr. Fisher) is, to put it bluntly, talking through
Income Tax
his hat when he says there is no practical application and that it has not hurt the economy or sales. In one town in my constituency there were seven cancellations of combine orders. This can be documented. They had ordered the combines, and when this budget came about they cancelled them. That is one town. Is that not hurting the economy? I asked one of the Liberal Members the other day, why would you buy a combine in January, February or March? They buy it naturally and logically in the fall. Then the Government brings in a program to cut the capital cost allowance in half. There is something wrong with that program.
There is a definite effect on the economy: it has reduced sales and cost the country jobs. The Hon. Member for Mississauga North better check with some of the farmers and machine companies if he is going to continue to say these things. He is not factual at all. It has hurt the country, and make no mistake about it.


Miss MacDonald:: He does not know what a combine is.


Douglas Glenn Fisher: Well, I defer, Mr. Speaker, to the judgment of a Member from a rural area. I am not going to tell him what goes on in his riding as I, frankly, do not come from a rural riding, so I accept his observation. But I caution him on another aspect of the point that he has raised and the one that the Hon. Member of Mississauga South pursued. There is a whole tax industry at work in this country which encourages business people to make tax-related decisions rather than profit or economically-related decisions. There is a whole industry at work, and when Hon. Members raise the line of thought they have raised, they are encouraging that kind of behaviour.
I ask the Hon. Member for Bow River (Mr. Taylor) why somebody would buy a combine in December. I do not know; I do not come from a farm. It seems to me that when you have snow on the ground and no wheat, you should not buy a combine because you are going to be paying the carrying charges for that combine until you can use it. Now, I do not know but I ask the Hon. Member to explain.


Mr. Deputy Speaker:: The period for questions has expired and the Chair now recognizes the Hon. Member for Cowi-chan-Malahat-The Islands (Mr. Manly).


Mr. Jim Manly (Cowichan-Malahat-The Islands):: Mr. Speaker, although there are nearly 300 pages of this Bill which contain a wide range of changes to the Income Tax Act, we should not be misled into thinking that the Bill represents any fundamental overhaul of our income tax system. Yet fundamental reform is what we need.
In opening the debate on December 13, the Minister said that the Bill represents a substantial structural change in the system. I dispute that, Mr. Speaker. Canada needs a tax system which supports and promotes the basic objectives of our society, and we need a tax system which is fair and, at least in its broad outline, can be understood by the general taxpayer. Now, I admit that what the Parliamentary Secretary said has

February 7, 1983
Income Tax
some validity, that there are certain sections which are naturally technical, but the broad outline should be able to be understood by the ordinary taxpayer.
Because our society is always changing, we must from time to time update our laws to take account of these changing conditions. But this has not happened for a long time and is not happening today. One of the reasons for that is detailed in Colin Campbell's book "The Canadian Senate: A Lobby from Within". He points out that as one of its most basic functions the Senate acts to protect the business community from any excess of democratic or egalitarian sentiment. Perhaps if Canadians ever get serious about tax reform their first act should be the abolition of the Senate, which almost invariably acts as the protector of property in opposition to the interests of the broad base of society.
Canada today needs a tax system that will work toward the following basic objectives. Number one, full employment. New Democrats believe that the total resources of society have to be mobilized in support of full employment. At a time when technological change combines with changing world markets to eliminate thousands of traditional jobs, we need to devote our best resources to solving the problems of unemployment. This will not happen, as the Tories say, by unleashing the private sector. That way lies chaos, and perhaps the best example of that is in the American truckers' strike where deregulation over the last few months has led to such cutthroat competition that thousands of small, independent truckers today are on the verge of bankruptcy.
Perhaps, Mr. Speaker, the Tories are so obsessed with the survival of the fittest ethic that they should consider who is fittest to survive in today's world. Perhaps even the Tories could conclude that the characteristic most needed for survival in today's world is co-operation, and that is just as true of individuals, communities and nations as it is of political parties. I fear that the Tories will be rather late in learning that.
Our tax system, Mr. Speaker, should facilitate community and national co-operation for such basic services as health care, pensions for senior citizens, Family Allowance, higher education, community and national security, the elimination of regional disparities and a sound economy. Furthermore, our taxes have to support our Government for regulation and policing of such areas as the environment and foreign investment. Our tax system should support and work toward these objectives. All Members of the House would agree with the need for fairness in our tax system, but we do not all agree on what is fair. New Democrats believe that the fairest system of taxation is a progressive income tax built on the basic concept that a buck is a buck, regardless whether it is wages or capital gain. Tax incentives should be seen as tax expenditures and subject to annual review by Parliament, the same as other expenditures, and they should be tied to performance.
In the past few years we have seen a trend whereby more and more of the tax burden has been shifted from corporations to individual taxpayers. In 1952, 53.7 per cent of tax revenue came from corporations. By 1972 this had shrunk to 26.6 per cent. For individuals, however, the process was reversed. In
1952 they paid 46.3 per cent of total tax revenue, but in 1972 that had increased to 73.3 per cent. There was a slight improvement in the balance by 1980 when 30.5 per cent of tax revenue came from corporations and 69.4 per cent came from individuals. The broad, basic imbalance continued, however.
The tax system should not only be fair, it should be understandable. In the explanatory notes to the Bill there is a section entitled "Death of a Taxpayer". That has a rather literary ring to it, reminiscent of Miller's "Death of a Salesman". When Willy Loman, the salesman, died, one of his sons said that he never knew who he was. If the taxpayer never quite knew who he was, usually there was a number that helped him get by- registration number, social insurance number, UIC claim number and so on. I am certain that the taxpayer never knew all the taxes he was paying, or did he know about all the possible exemptions, reductions and loopholes available to those with enough money to hire tax lawyers or accountants. He may have heard of the over 700 Canadians who had incomes of over $100,000 per year who never paid any income tax at all and wondered how they got away with it. His tax always seemed to be deducted at source. There is material in the title "Death of a Taxpayer" for some promising young Canadian writer to write a novel or a play. I gladly donate the idea.
The Bill before us does not begin to meet our basic objectives or our national needs of being fair and understandable. Rather than a fundamental overhaul of the tax system, this Bill is a thing of shreds and patches. On the coast we would call this "gunnysack" legislation because it seems as if everything is dumped together. One exemption is tied to another with a little bit of wire here and a loophole is patched with a bit of chewing gum there. The whole thing is gunnysack legislation.
In his opening remarks the Minister spoke of the need to end uncertainty, but in the last 18 months the Government has contributed a great deal to uncertainty in the tax system. In the last few weeks, nothing has contributed more to that uncertainty than the various kites flown by different Ministers. The latest and worst example occurred on January 2, when the Minister of State for Mines (Mrs. Erola), who is also responsible for the status of women, spoke on the TV program "Question Period" of eliminating the spousal exemption. On that program she made the following statement:
When we look at the whole system of family benefits, where are we going? One of the things that I think we are going to have to take a serious look at is the whole question of spousal deduction. What is happening in our soceity today is that women-as I say, 42 per cent of them are in the work force, and yet we are allowing a spousal deduction which I consider enourmous-it will be $3,300 this year-to slip out of our hands when, in fact, those families who are able to use the spousal deduction are up at the top end of the income scale. It's only the more affluent families in our society that allow a woman to stay at home, and I feel that we should examine that and perhaps somewhere down the line re-channel some of that into where I think the critical areas are, in child care.
I wonder where the Minister has been. She does not seem to understand the average family today. Her later retractions and attempts to clarify this have only increased the uncertainty that Canadians feel. Ordinary Canadian families do not think
February 7, 1983

that they need to be shafted by the Minister of State for Mines.
In his opening remarks the Minister of Finance (Mr. Lalonde) also said that he wants the Bill passed as soon as possible so that income tax returns can be processed and mailed out. Nobody knows better than we in the New Democratic Party the necessity of getting Government cheques out promptly to the ordinary people. There have been delays in processing superannuation cheques. Last week I had a letter from a constituent who complained that the last cheque received was dated December 19. The Government deliberately withheld those cheques as a form of blackmail, Mr. Speaker, and we do not want to see the same thing happen with income tax returns. On the other hand, this legislation is too important to be pushed through. The Government should forget its attempts at blackmail. Income tax returns should be mailed out. After all, the reduced Family Allowance cheques were mailed before the House had the opportunity to deal with the legislation.
In the few minutes remaining to me, Mr. Speaker, I want to concentrate on a couple of things that I think are most harmful to ordinary Canadians. The Minister said that the Bill is based on the principle that the Canadian tax system is better off with lower tax rates applied to a broader income base. I am sure all of us, and certainly all New Democrats, would agree with that as a general principle. But the way to broaden the base is surely to increase employment at decent wages. The Bill does nothing to broaden the base in that way; in fact, its effect is quite the opposite. The Bill broadens the base by capping the indexation of personal exemptions and then lowers the marginal tax rate for people at the upper end of the spectrum.
The entire six and five program has had the effect of driving down the real incomes of ordinary Canadians. We have had to oppose the cuts imposed by six and five on wages of public sector workers, Old Age Security, pensions for public servants and Family Allowances. Even without the capping of indexation for income tax exemptions, these measures will result in the removal of $1.16 billion from the pockets of ordinary Canadians and from the economy. The Minister admitted the need for some stimulation in the economy, but he continues to depress it with the six and five program.
The partial deindexing of personal exemptions will, in effect, be a tax increase of $1.7 billion in 1983-84. As with other aspects of six and five, this will penalize lower income people at a proportionately higher rate than higher income people.
A married taxpayer with two dependent children and an income of $20,000 per year will face a 21.7 per cent tax increase. The same taxpayer with an income of $100,000 per year will pay an increase of only 3.2 per cent. In a similar manner, the lower marginal tax rate will result in a real tax decrease for those in the upper income bracket.
Taxpayers with a taxable income of $133,440 and over per year will have their marginal tax rate brought down from 43 per cent to 34 per cent. Those with taxable incomes under $11,120 per year will receive no reduction at all in the marginal tax rate. They also suffer from the de-indexing program.
In short, Mr. Speaker, we oppose the Bill because it perpetuates and increases inequalities in the rate of taxation. It is not fair, and it does not address the fundamental problems of our society, which is the need for full employment. And certainly, Mr. Speaker, it will not result in a more understandable tax system.


Mr. Deputy Speaker:: Order, please. It being one o'clock, I do now leave the chair until two o'clock this afternoon.
At 1 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.


Mr. Alexandre Cyr (Gaspe):: Madam Speaker, many Members have described the tragic economic situation in their ridings. I can inform the House that I am not very proud of the performance of the Government of Canada as far as the people of Gaspe are concerned, because we win the gold medal for the highest unemployment rate.
The labour force participation rate is extremely low. Chronic unemployment and a total lack of job opportunities for years and years explain the fact that many people are no longer part of our manpower statistics.
The unemployment rate is exceptionally high in Gaspe, where it was four times the national average in 1981. Unfortunately, this trend is continuing, and the present situation is becoming worse than critical. The most realistic forecasts are for 70 per cent unemployment, by far the highest unemployment rate of any riding in Canada.
Statistics Canada has classified Gaspe as a district that is about to "take off' in the economic sense. Madam Speaker, forestry and mining employ more than 30 per cent of our workers. However, the sawmills at Marsoui, Cap-Chat and Grande-Vallee are closed, and the newsprint plant in Chandler is not operating at full capacity. Now that the Madeleine Mines have closed and Gaspe Mines in Murdochville have decreased their activities, more than 80 per cent of workers in the forestry and mining industries are out of work.

February 7, 1983
If the situation continues, the entire Gaspe area is heading for an economic and social catastrophe in 1983-


Madam Speaker:: Order, order. The minute and a half allowed the Hon. Member has now expired.



ENVIRONMENTAL AFFAIRS


Mr. Joe Reid (St. Catharines):: Madam Speaker, the Canadian Minister of the Environment (Mr. Roberts) said the other day that the S-Area Dump on the American side of the Niagara River poses a greater threat to Canadian waters than any other United States landfill uncovered to date. At least four million Canadians and one million Americans use the waters of the Niagara River and Lake Ontario as a source of drinking water, making this perhaps the most serious environmental problem facing his Department.
When the extent of the contamination of the Love Canal was first made known, the United States Environmental Protection Agency became involved at an early date and began remedial work. That kind of remedial action was not so speedy with the Hyde Park or now the S-Area Dump; in fact the EPA is dragging its heels.
The Minister plans to visit the area some day. Well, some day is not good enough. Will he not plan to lead an all-Party representation to this area now, take it out of Party politics and treat the problem with the urgency it deserves? About
225,000	tonnes of chemical wastes are stored in the area and are leaking into the Niagara River. Can the Minister honestly and knowingly say that there is no present danger to Canadians?



RAILWAYS


Mr. Gaston Gourde (Levis):: Madam Speaker, there is not going to be a pork war because of the changes in the Crow rate. At the present time, western pork is not being brought to Quebec markets, although the selling price in the East is about $2 more than in the West. The reason is quite simple: The cost of shipping 100 pounds of pork meat from Calgary to Montreal is $8.51, which means a difference in price of $6.51 per 100 pounds. Under the new policy, western producers will be able to save on the cost of feeding their livestock which, according to the Department of Agriculture, will be $3.17 per 100 pounds in 1985-86. However, by that time, the cost of shipping meat will have increased from $8.51 to $11.02, which still leaves a difference of $5.84. The cost of shipping from
West to East will therefore continue to favour the competitive position of Quebec's pork producers.
It will, in fact, be practically impossible and certainly not worthwhile to ship pork from Calgary to Montreal, short of wanting to go bankrupt.
I would therefore suggest that Quebec farmers put the question to our political smart alecks, who are implying that the exact opposite will happen. This is the real challenge: to bring out the truth.



EXTERNAL AFFAIRS


Flora Isabel MacDonald: Madam Speaker, since January 17 when the Government of Nigeria ordered the evacuation of some two million to three million people who had come to that country from neighbouring nations, the world has witnessed one of the great human tragedies of all time. Scenes of brutality, forced marches, overcrowding of ships, and starvation have filled our television screens. Protests and appeals have been directed to the Government of Nigeria by heads of churches and heads of Governments all around the world, denouncing an action that not only inflicts tremendous suffering on millions of men, women and children, but also destabilizes neighbouring countries.
The Canadian Prime Minister (Mr. Trudeau) is a senior Commonwealth leader, but when asked what protest Canada had made to the Government of Nigeria, he merely shrugged, "Do you know the answer, 1 do not", reminiscent of his earlier famous quote: "Where's Biafra?", when dealing with the same country.
Surely as Canadians we have a right to expect that the Canadian Prime Minister will exercise whatever influence he has within the Commonwealth, and directly on the Government of Nigeria, to convey the abhorrence which Canadians feel over this forced migration, rather than display his indifference to an inhuman act which has shocked people of every race, colour, creed, religion and country-


Madam Speaker:: Order.



LABOUR CONDITIONS


Mr. Ian Deans (Hamilton Mountain):: Madam Speaker, last week the federal and provincial Governments jointly announced their job aid programs for Ontario. Hamilton was not among the recipients. This is the same city in which the Steel Company of Canada has approximately a third of its
February 7, 1983

employees unemployed, Dominion Foundries and Steel similarly has about a third of its employees unemployed, International Flarvester has virtually closed and is considering moving its computer operation to the United States, Ontario Hydro has decided to move a major part of its operations out of Hamilton, United Steel Car has hardly a soul working in its plant, and now, to add insult to injury, the federal Government has decided to move the Oceanographic Department from inland waters at Hamilton to Quebec City. Why, I wonder. Patronage, perhaps?
Close to 20 per cent of the people of Hamilton who are eligible for work are unemployed. I ask the Government to answer some questions. Why is Hydro moving? Why is the International Harvester computer operation going to the United States? Why is the Government moving its Oceanographic Department from Hamilton to Quebec City? Why is the Government not prepared to go ahead now with the placing of the orders which will ultimately be needed for the revitalization of the railroads of Canada, and thereby put people back to work in the City of Hamilton, people who are currently desperately looking for employment? I put to the Government, is it either incompetence or patronage-


Madam Speaker:: Order.



AGRICULTURE


Mr. Marcel Dionne (Chicoutimi):: Madam Speaker, I merely wish to point out to the House that personally, I think the coalition movement in Quebec was far too quick in getting off the ground with respect to the Gilson Report. The House is aware that this report is a working paper that was requested for the purpose of looking at all the drawbacks and advantages of a rate system for the movement of grain in Canada. The Canadian people, and especially people in Quebec who joined the coalition movement, should understand that the Gilson Report was a working paper, that it will be tabled in the House and that subsequently, the House will have to refer it to committee for consideration. Madam Speaker, the committee will have to meet with groups in order to hear their grievances, and subsequently make decisions. We on this side of the House, very much aware of the recommendations made by the Gilson Report, formed a working group last fall within the Quebec Caucus, for the purpose of giving further consideration to the theories formulated in this document.
Madam Speaker, I would like to add that the Quebec Caucus, mainly through its Members, has always been very attentive to the needs of agriculture in Quebec, and in this connection, in 1976-


Madam Speaker:: Order!



LABOUR CONDITIONS


Mr. Blaine A. Thacker (Lethbridge-Foothills):: Madam Speaker, concern for the unemployed has been voiced on a number of occasions. However, the heart of the matter, the young people, hardly ever receive enough consideration. Those aged 15 to 24 shoulder more than three-quarters of the over-all decline in employment and lose jobs at the rate of 20.9 per cent, against the national average of 12.8 per cent. There are
600,000	young Canadians out of work.
These are not just mere statistics as the Liberal Government appears to view the matter. In human terms this implies tragedy. A baby-boom generation turned into a lost generation, disillusionment, frustration, the feeling of helplessness and social injustice, lost time and lost capacity for productivity are the cost that the young generation pays for the economic blunders of the Government.
Canada is aging. By the year 2031 we will have one pensioner for every two workers. It is imperative that the post-war generation be now given the chance to build up the economy to provide for their future when they retire. Yet the job creation programs, of the Government are less than a drop in the bucket in comparison to the ever increasing rate of unemployment.
I urge the Government to stop wasting Canada's greatest resource-the large number of young, educated and talented people who have everything it takes to meet the cultural and technological challenges of the present day and the future, were they only given a chance to meet these challenges head on.



AGRICULTURE


Mr. Vic Althouse (Humboldt-Lake Centre):: Madam
Speaker, last week producers representing the Canadian Farmers Survival Association were in Ottawa bringing a tough message to parliamentarians-act soon to help farmers in trouble with the banks, or face a severe crisis this spring when farmers approach the banks for money to plant their crops.
They want to see the Private Member's Bill, C-653, which was proposed by the Hon. Member for Lambton-Middlesex (Mr. Ferguson), either passed by the House or tacked on to C-12, the Bankruptcy Bill, and brought into law.
Since we often forget about lobby groups after they have gone home, I want to remind Members of the House today that the Association wants an arbitration procedure put in place that will encourage a voluntary arrangement between the farmer and his creditors, that will prevent foreclosure while negotiations are taking place or an agreement is in force, and

February 7, 1983
that will impose an agreement on both parties in cases of dispute and reduce the debt without the consent of the creditor if deemed necessary.
Farm bankruptcies jumped again last year. Flowever, this year's farm income projections suggest that even worse times lie ahead. Realized net farm income in 1983 for Canada is predicted to be 11 per cent below the level of 1981. For Saskatchewan, net income for 1983 is projected to be two-thirds of the level in 1981, which is the lowest since 1973. The situation demands action. Our Party would be pleased to pass Bill C-653 in one sitting day. I ask the Government to give Bill C-653 a chance by calling it soon for debate-


Madam Speaker:: Order.



MEDICAL CARE


Mr. Stanley Hudecki (Hamilton West):: Madam Speaker, a disturbing CBC report emanating out of Edmonton indicated that a surgeon specializing in cardiac surgery is planning to leave the country since he is frustrated by the failure of his hospital to provide him with adequate equipment and support facilities to carry out important operations in his specialty safely and effectively.
Cardiac surgery in children deals with reconstructive and reparative procedures correcting a variety of congenital malformations of the heart and large blood vessels. These operations are physiological for the most part, restoring normal anatomy and function of these organs and thus assuring a normal lifespan.
These operations require not only a well trained skilful surgeon but a team effort of medical and paramedical specialists as well as appropriate nursing staff. Not only in Edmonton but in many of the large communities, with teaching hospitals staffed with well trained and knowledgeable specialists, facilities are sadly lacking to carry out ever-increasing sophisticated procedures to improve the quality of life of our Canadian citizens.
In order that Canada may continue to remain in the forefront of world medicine, those charged with formulating the proposed Canada Health Act must provide optimum conditions for medical care, particularly for our doctors with specialty training, lest the system fall into mediocrity, and Canadians are deprived of the benefits of modern advances in the field of medicine and surgery.



ORAL QUESTION PERIOD


Flora Isabel MacDonald: Madam Speaker, my question is directed to the Minister of Employment and Immigration who, I am sure, will know that there are at least 1.6 million Canadians without jobs.
Last October the Government introduced the NEED job creation program for people who would be running out of unemployment insurance benefits. At that time the Minister was repeatedly urged to step in personally and speed up the process of getting jobs approved, otherwise it would be bogged down in red tape and the jobs would not be created. That is exactly what has happened. After three months only 4,000 jobs out of a promised 60,000 have been created. Why did the Minister not take these warnings to heart? Why has he not stepped in personally in the last few months and done something to bring about the creation of these jobs, rather than have only 4,000 out of 60,000 created after that three-month period?


Hon. Lloyd Axworthy (Minister of Employment and Immigration):: Madam Speaker, the Hon. Member is obviously trying to make nothing more than a political point. She knows full well that over the past two and one-half to three months 1, Members of my caucus, and Members of the Government have spent a great deal of time working to ensure that the job-creation programs would be effectively implemented. Proof of this is that the original target date for beginning the NEED Program was February 1 and we were, in fact, able to achieve implementation beginning January 1. At that time we had targeted for 500 jobs being authorized per week. We exceeded that limit. We are now targeting 1,000 jobs per week and we will exceed that limit.
Furthermore, we have been able to sign agreements with the Provinces which have added over an additional $200 million to the Program.
Therefore, in terms of personal intervention, we have worked very hard to put the Program into place, and to gain the cooperation of the Provinces and the municipalities and the private sector. 1 would say that all this effort contrasts quite dramatically with what we heard from the Hon. Member on that side, which was nothing but a bunch of words.


GOVERNMENT POSITION
Flora Isabel MacDonald: Madam Speaker, what the Minister fails to recognize is that there are
55,000	Canadians a month who are running out of unemployment insurance benefits. That is 165,000 people without benefits since that Program was announced in October.

m
February 7, 1983

Is the Minister satisfied with the Government's record of providing 4,000 jobs for those 165,000 people? Is he telling us that is what the NEED Program was directed for in the first place? Was that the Government's goal?


Lloyd Axworthy: Madam Speaker, the Government's goal that was announced originally in the Program was for 60,000 jobs over the 18-month period of the Program. Because of the additional amount of money that we have been able to solicit and add to this part of it, we are now estimating that we can produce 80,000 jobs through that Program which is a direct result of the kinds of interventions and initiatives we have taken to make the Program work.
1 would suggest, rather than getting up in the House and simply being critical and negative, that the Hon. Member should go back to her riding and start recruiting the private sector firms and municipalities to put applications in to make the Program work.


Flora Isabel MacDonald: I want to tell the Minister that I have been in my riding. There are 6,100 people out of work there and only nine of them have received jobs from this Program. Only nine.


Some Hon. Members:: Shame!


Flora Isabel MacDonald: 1 want to tell the Minister that 200 people in my riding run out of benefits every month.


PROCESSING OF PROJECTS
Flora Isabel MacDonald: Madam Speaker, there are a number of projects pending under the NEED Program in Kingston and the Islands. Can I have the Minister's assurance today-right now-that those projects which are pending will be processed within the next two weeks, will give jobs to people within the next two weeks, and will not be delayed by red tape for another two months?


Lloyd Axworthy: Madam Speaker, the fact is that we have been working on a schedule of ten days' turnaround time from the period we receive an application from a municipality or from a provincial government office or from a private sector firm. If the Hon. Member, fulfilling her responsibilities as a Member, will go back into her riding and obtain those applications coming forward-


Flora Isabel MacDonald: They are held up in your office.


Lloyd Axworthy: -I will assure her that they will be approved on time.


Mr. Trudeau:: Too slow for him. You've got to work.
Oral Questions LABOUR CONDITIONS


UNEMPLOYMENT IN ST. CATHARINES-NIAGARA AREA
Joseph Lloyd Reid: Madam Speaker, my question is also directed to the Minister of Employment and Immigration. I want to assure him that it is not a particularly happy circumstance to rise here representing an area which, it has been said, has the largest urban rate of unemployment. More than one of every five workers is unemployed. That amounts to 21.7 per cent, almost a full percentage point over the unemployment rate of the city of Windsor, which received the bulk of the ILAP moneys. I do not want to hear, once again, an outline of the programs in existence and the benefits arising therefrom, because in the St. Catharines-Niagara area there are 33,000 persons unemployed, 15,000 more than two years ago, 11,000 more than one year ago, a job disappearance of-


Madam Speaker:: Order, please. Does the Hon. Member have a question?


Joseph Lloyd Reid: I certainly do, Madam Speaker.


Madam Speaker:: Now.


Joseph Lloyd Reid: I just want to point out that, despite the comments-


Madam Speaker:: Now.


Joseph Lloyd Reid: -of the Minister, there has been a disappearance of 1,750 jobs per month over the last two years, and my question to the Minister is-
Madrm Speaker: Order, please. When the Speaker takes the trouble to intervene to ask a Member, "Will the Member now put his question?" the Speaker really means it, and is only preserving the time of other Hon. Members.


Joseph Lloyd Reid: Madam Speaker, my question to the Minister is: without outlining the list of existing programs, what does he propose to do for the 33,000 people who are now out of work and are asking for assistance from the Salvation Army and the UAW in a kitchen assistance program that they are receiving from a voluntary service agency in that city?


Lloyd Axworthy: Madam Speaker, the Hon. Member is slightly contradictory in saying that he does not want to hear about what the existing programs can provide to help those people in need. My point is that we have programs in existence which are designed to work in different parts of the country which have been deeply hit by the recession.


Flora Isabel MacDonald: Not in mine.


Lloyd Axworthy: They range all the way from the unemployment insurance system, which provides income security for most of those workers in his area, and for those whose benefits have elapsed we have the NEED program. Like other Members of Parliament, I believe it is part of his responsibility to go

February 7, 1983
Oral Questions
into his region to work with his municipalities and private firms in the area, to develop projects which we can then review and approve, so that we can provide a work alternative to those people. Madam Speaker, if the Hon. Member does not want to hear about the existing programs-


Ian Deans: Why don't you put your bureaucracy to work?


Lloyd Axworthy: -he obviously does not want to hear about the kind of things we are prepared to do to help.


Flora Isabel MacDonald: What are you prepared to do to help? You do not speed up one thing.


QUERY RESPECTING PURCHASE OF MACHINERY FROM UNITED STATES
Joseph Lloyd Reid: The results of the existing programs are already subject to headlines. In Metropolitan Toronto, $2 million has been spent to create 153 jobs under the COED Program. The NEED Program has just been defined and explained, and it is called a "billion dollar flop".
With the number of Canadian plants which are now working at 60 per cent capacity how can it be that, in our community, Niagara College is spending $1 million or more on the acquisition of equipment, and machinery from the United States of America, rather than buying from Canadian plants where the same equipment and machinery can be acquired? Will the Minister give Canadian jobs for Canadian purposes?


Lloyd Axworthy: Madam Speaker, I would first like to comment on the Hon. Member's statement that the NEED Program is advertised as a "billion dollar flop". As we might expect, that particular quote came from a Conservative Member of Parliament. When the same Conservative Party formed the Government, it cancelled all the job creation programs which the Liberal Government had brought in and made available. Now we are hearing a very different tune. The Conservatives are calling the program a flop. The fact is that the biggest flop is what I am looking at across from me, because the Conservatives were cancelling all the job creation programs when they had the opportunity to improve them.


Some Hon. Members:: Hear, hear!


NUCLEAR ARMAMENTS
Miss Pauline Jewett (New Westminster-Coquitlam):: Madam Speaker, my question is directed to the Secretary of State for External Affairs. The Minister may not be aware of this fact, but according to the-


Mr. Prud'homme:: The Minister knows everything.


Pauline Jewett: -recently presented budget of the U.S. Department of Defense, the U.S. intends to stop production of
the present air launched Cruise missile in late 1983, with just 1,499 of a proposed 4,348 built, and to enter into the production of what the Defense Department calls "advanced Cruise missiles", with "stealth" and other new technologies.
In view of the fact that there is not much point in our testing, next winter, something which has gone out of production, and in view of the Minister's own statement last Thursday that he doubted if the U.S. would ever ask us to test the new "stealth" missile, will the Minister now exclude, from the framework agreement, Canadian participation in the testing of all U.S. Cruise missiles?


Hon. Allan J. MacEachen (Deputy Prime Minister and Secretary of State for External Affairs):: Madam Speaker, I remember the Hon. Member did ask about a new "stealth" missile. What is now apparent is that it is not a new "stealth" missile; rather, it is an improved version of existing missiles with various modifications, including stealth capacity. Therefore, the answer which I gave to the Hon. Member still stands. As the Hon. Member also knows, when the framework agreement is tabled in the House, she will see that there is no provision for the testing in Canada of any armed missile of any kind.


REQUEST THAT CANADA REFRAIN FROM TESTING CRUISE MISSILE
Pauline Jewett: Madam Speaker, the Minister is quibbling with words, as usual. The common phraseology in the U.S. is "stealth missile", when referring to the new stealth technology. Indeed, a U.S. Defense Department official said that Boeing is "now scrambling to come up with a new aeronautical design to take more advantage of stealth technology". That is what we are discussing in relation to the air-launched Cruise missile. The Minister says that there will be nothing concerning this in the framework agreement. I am asking the Minister, and I wish he would answer, this question; before the agreement is signed and given the fact that the present air-launched Cruise missile is obsolete in the view of the Department of Defense, will we explicitly state our intention to exclude any Canadian participation in the testing of U.S. Cruise missiles over our country, our territory?


Allan Joseph MacEachen: Madam Speaker, the Hon. Member is asking me to provide a particular exclusion in the framework agreement. What she will see, when the agreement is tabled, is that it provides an over-all agreement for the testing of weapons systems which could include the Cruise missile.
When any particular weapons system, any particular weapon is proposed to be tested in Canada, that particular weapon, including the Cruise, will be the subject of a separate discussion between the Minister of National Defence and his counterpart in the United States, and will result, if agreement
February 7, 1983

is reached, in a project arrangement. Therefore, it is unnecessary, in the agreement, to exclude any particular weapons system, because that is open to the Government of Canada, at any particular time, if it wishes to do so, when the project arrangement is entered into, if it is. However, I would tell the Hon. Member that it is important that there be an exclusion in the over-all agreement that at no time would Canada consider testing any armed Cruise missile over its airspace or territory.


Pauline Jewett: The Minister brings in that red herring each time. If that is the way he will sell this to the Canadian public, by saying that they are not armed, believe me, it will not wash.


REQUEST FOR STATEMENT ON MOTIONS
Pauline Jewett: (New Westminster-Coquitlam): The Minister has as much as admitted that we will, therefore, test what are called "stealth" missiles, Cruise missiles using stealth technology. I would like him to come right out and admit that, rather than just imply it, as he has done to get around what he said last Thursday when he stated that it was unlikely that we would be asked to do this, when he knows that we will be asked to do this.
I would finally like to ask the Minister, as we have asked many, many times before, since neither he nor the Prime Minister will allow us to discuss the framework agreement in this House of Commons because they do not want the Canadian public informed, since they insist upon signing it in Washington and they do not mind missiles over Canadian soil-


Madam Speaker:: Order. Order. I hope we are not going to have an avalanche of speeches like we did on Friday. Friday's Question Period was a shambles. I would like Hon. Members to keep to questions.


Pauline Jewett: Madam Speaker, I was not here Friday.


Some Hon. Members:: Oh, oh!


Pauline Jewett: Will the Minister, in light of all this, and the confusion and the alleged misunderstanding of the Canadian public, at least, when he tables the framework agreement, make a statement on motions about it?


Allan Joseph MacEachen: Madam Speaker, as the Hon. Member knows, the practice of making statements on motions has virtually disappeared in the House of Commons.


Ian Deans: We did not stop it; you did.


Allan Joseph MacEachen: I still repeat that observation, but I assure the Hon. Member that the umbrella framework agreement will be tabled in the House of Commons. It will be known to all Hon. Members, and all possible information will be available to all Hon. Members. When the framework agreement is tabled, Hon. Members will be totally free to ask questions on any point they wish on subsequent days.
Oral Questions
If Members of the New Democratic Party find it of such great importance they will be able to debate the Cruise missile on one of the opposition days which will be available to them, when those days become available. Therefore, the Hon. Member has a full opportunity to select her own priorities and there will be full opportunity for questions and debate if the New Democratic Party chooses to do so.


Flora Isabel MacDonald: That is cowardly.


Pauline Jewett: And a lot of garbage.


RAILWAYS
Hon. Ray Hnatyshyn (Saskatoon West):: Madam Speaker, my question is directed to the Minister of Transport. As the Minister well knows, input costs for western farmers have tripled in the last decade. Energy costs are up 81 per cent since 1979, and interest rates have increased by 75 per cent to western farmers. Yet the Minister introduces a program that is going to ensure the bankruptcy of many, many western farmers.
Since the Prime Minister gave us his iron-clad guarantee that there would be no change in the Crowsnest Pass rate unless there was a consensus in western Canada amongst the farming community, I ask the Minister how he can proceed with this particular program when not only the wheat pools in the prairie Provinces, not only the provincial Governments in western Canada but, as well, the provincial Government of the Province of Quebec and many members of his own caucus are diametrically opposed to this program? How can the Minister bring this program forward at this time?


Hon. Jean-Luc Pepin (Minister of Transport):: Madam Speaker, I want to rejoice first in the fact that the Conservative Government of Ontario has fully approved of this program. I want to thank the Conservative Government of Alberta which, having approved of it, said, as a matter of fact, that we did not go far enough. A number of my colleagues on the other side of the House approve of it also.
On the cost of it, I have repeated this, and I will keep on repeating it, obviously the producer of grain in the West now pays 20 per cent of the real cost of the transportation of his goods. Under this new initiative he will pay 30 per cent by 1985-86 and 60 per cent by the end of the decade, but that is less percentagewise than what he was paying in the 1950s and 1960s.
Also, I want to emphasize that the cost of transportation now represents about 2 per cent of the price of the farmer's grain. By 1985-86 it will represent about 5 per cent, and at the end of the decade it will represent 8 per cent, which is less, on a proportional basis, than what he was paying in the 1950s and the 1960s. If we go further back, in the 1940s the cost of transportation represented 17 per cent of the price of grain. So

February 7, 1983
Oral Questions
it is an adjustment that we are making now, that we had to make, because of inflation. As a matter of fact a great number of people in the West, some of them in the riding of the Member, agree that this had to be done, and it will give the farmer much more reliability and much more certainty than he had before.


Ramon John Hnatyshyn: Madam Speaker, there certainly is a consensus which is growing in this country, and that is that the policy of the Minister and the Government stinks and is unacceptable.


DEVELOPMENT OF GRAIN TRANSPORTATION SYSTEM
Ramon John Hnatyshyn: Madam Speaker, I want to direct a supplementary question to the Minister of Transport. One of the fundamental problems that we have faced in western Canada has been with respect to an efficient grain transportation system. The Minister says that part of this policy is directed toward the development of that particular system.
In view of the fact that in the policy papers brought down by the Minister and in the proposed legislation there is clearly no assurance, after this burden has been put over onto the shoulders of the farmers, that there will be an efficient and effective grain transportation system-and there is no provision for penalties to the railways-what does the Minister say about the fact that he has got the whole thing "bass ackwards" and he should in fact put the system into place and then ask the farmers to pay? Why is he imposing this cost, with no assurance that there will be an efficient grain transportation system at the end of it?


Jean-Luc Pepin: Madam Speaker, it is well known that the railways will have to give guarantees of investment and guarantees of performance.


Ramon John Hnatyshyn: It is not in there. There is nothing for three years.


Jean-Luc Pepin: Madam Speaker, in due course my hon. friend will know all the details, but if he talks about reliability, the farmer now has not got that reliability. He does not know if the capacity of the railways will be sufficient to carry his goods. But from now on he will have the certainty that the railways will have this capacity. He will know what price he has to pay; two times the present Crow rate in 1985-86 and five times by the end of the decade. He will know that on top of this, if inflation exceeds 6 per cent the Government will take over. There will be much more certainty in the system that will exist in the future than in the system that exists now. It may take some time for the Member to get that in his mind, but he will.


LABOUR CONDITIONS
Blaine Allen Thacker: Madam Speaker, as you know, youth unemployment is running at about 21 per cent versus 13 per cent generally, and that over
600,000	young people are out of work.
History has shown many times that large Government deficits lead to inflation which in turn leads to an economic collapse. Canada over the past 14 years has proved that point once again.
I want to know, Madam Speaker, is there anyone over there, the Prime Minister, or a Member of the Cabinet, or a backbencher, who ever, over the last 14 years, has stood up and spoken against those mounting deficits, year by year.


Flora Isabel MacDonald: Obviously not.


Blaine Allen Thacker: Precisely, Madam Speaker. Not one Liberal Member of Parliament from the Prime Minister down has ever spoken out about this huge deficit.


Some Hon. Members:: Hear, hear!


Blaine Allen Thacker: Madam Speaker, I have a supplementary question for the Minister of Employment and Immigration. In mid-January the Minister said that the 600,000 unemployed youth under 24 could "count on quick action toward a substantial youth employment program". In late January, the same Minister told our unemployed youth "to prepare for a jobless summer". I would like the Minister to tell us which statement is true, and how many of the 600,000 young people of this country who want a job and need a job will get one?


Lloyd Axworthy: Madam Speaker, the fact is that what 1 did say, speaking to students, was that we are preparing for a difficult summer because the intention of the private sector to hire young people over the summer months is substantially down. At the same time I indicated that this Government, hopefully with the co-operation of provincial governments, will provide for supplementary programs to give them further assistance. That is the fact and reality of what I have been saying.
I think it is only fair and honest to talk clearly and candidly with young people so we can find ways of working together and find solutions to the problems we face, to ensure that their talents and abilities will be effectively used.


INCOME TAX
Mr. Nelson A. Riis (Kamloops-Shuswap):: Madam Speaker, it has been reported that the Department of National Revenue is not going to send out tax refunds for some time. They claim that they cannot issue refund cheques until the amendments to the Income Tax Act, Bill C-139, are passed by Parliament. My question is directed to the Minister of Finance, who knows that
February 7, 1983

is a lie. It is simply not the case. Will the Minister consider abiding by the present legislation and direct his officials to issue tax refunds, where appropriate, based on legislation presently in place?


Hon. Mlarc Lalonde (Minister of Finance):: Madam Speaker, surely the Hon. Member knows that what he is proposing does not make sense. For example, he knows that tax collections have been made on the basis of budgets that have been approved by Parliament. How would he make refunds on the basis of old legislation when the tax has been collected and rebates will be made on the basis of budgets that have been approved by this House? Surely he realizes that his proposal does not stand up.


REQUEST THAT REFUNDS BE PAID PROMPTLY
Nelson Andrew Riis: Madam Speaker, based on the previous Minister's budgets, tax refunds were in fact given out last year to many Canadians based on legislation that was effective the day of the budget. I suspect that what we are seeing is the Minister trying to blackmail Parliament into keeping money from those who deserve it, in an effort to get Bill C-139 through the House prematurely. The people of Canada who deserve these refunds wish this money now. It is their money. The economy needs it.
The Minister is on record as wanting to stimulate the economy and to provide money for the consumers to get the recovery under way. Will he reconsider his position in light of what the previous Minister of Finance did when it came to tax returns, and take steps now to get the economy moving by allowing those Canadians who deserve refunds, and it is their money, to put that money back into circulation? Will he reconsider that, in light of the present state of the economy?


Marc Lalonde: Madam Speaker, we have just been exposed to a typical case of the hypocrisy of the NDP on these issues. They were the ones in January who were threatening to take the Government to court because some people thought we were going to limit the increase in the Old Age Pension to 6 per cent. The NDP said if we did that, which we never said we would do, they would take us to court for not respecting the laws of Parliament and acting before a law is passed by Parliament. Now the NDP wants us to act before a law has been passed by Parliament. They cannot have their cake and eat it too, every day, on every question. Unfortunately that is what the NDP has been trying to sell for decades, but I am sorry, it does not wash any more.
Oral Questions


UNEMPLOYMENT INSURANCE
Mr. F. Oberle (Prince George-Peace River):: Madam Speaker, my question is for the Minister of Employment and Immigration. I have given him notice of this question and I have discussed my concern with him. Is he in a position today to tell us whether the priorities have been adjusted in his Department with respect to unemployment insurance claimants or recipients taking their own initiative to attend school and upgrade their skills?
As the Minister knows, his Department purchases a large number of retraining positions in the colleges and permits people on unemployment insurance to attend courses. If someone takes it on his own initiative to do so, he is disentitled. Will there be an adjustment or a recognition of the priorities to improve our manpower skills and, subsequently, an adjustment in the regulations to permit people to attend school, particularly those who have no hope of getting a job in the next year?


Lloyd Axworthy: Madam Speaker, I can tell the Hon. Member that there is a letter in the mail to him giving him a detailed answer to the question he raised. In summary, I would simply point out that one of the difficulties in the proposal he makes is that if someone simply goes on their own to apply for a training course, that in a sense contravenes the basic formula of the Unemployment Insurance Act, namely, that in order to collect benefits you must be available for work. We waive that requirement when someone comes into an employment centre and we have record of their willingness or preparedness to take a training course. We can waive that requirement because we have foreknowledge of their interest and intent.
If someone goes on their own account and registers for a program and then applies for UI, we have not had the opportunity to do an interview to determine their eligibility or any of the other criteria. Therefore, we hold by the rule that, if they want to take a training course, they should register their intent through our employment centres so we have that on record.


ROLE OF COMMISSION
Frank Oberle: Madam Speaker, I very much appreciate the answer of the Minister. Is he now telling us that the onus of proving ability to work or proving that there is a job will be assumed by the Commission rather than the claimant? In other words, if a person enrols in a manpower training course with the consent of the UIC, in our opinion the onus should be put on the Commission or the Canada Manpower Centre to tell the person "There is now a job for you. You have the choice of either staying in the course at your own expense and being disentitled, or leaving the course and taking the job we now have available for you". Is that what the minister is telling us, because that would make sense?

February 7, 1983
Oral Questions


Lloyd Axworthy: Madam Speaker, I covered that point in the correspondence, but I would again point out that when we contract courses we are not offering them directly. We usually are under a contractual agreement with a provincially run community college or other training institute. If you contract for a 13, 26 or 52-week course on behalf of a client coming through an employment centre, there has to be some intention that they will in fact fulfil the requirements. We do not want to be put in the position where people enrol for a course and then withdraw, leaving a place open which someone else may have occupied. I am pointing out that the proposal by the Hon. Member has some merit and we will look at it, but under the present administrative circumstances it would be very difficult to have it work smoothly through the system so we could ensure that the benefits under the law are being properly drawn.


SEARCH AND RESCUE
Hon. James A. McGrath (St. John's East):: Madam Speaker, I have a question for the Minister of Transport. It deals with the report of the inquiry into the sinking of the Arctic Explorer, which was commissioned by the Minister under the Canada Shipping Act and conducted by a judge of the Supreme Court of Newfoundland. The Minister's response to recommendation No. 5 is ambiguous to say the least. What does he intend to do about recommendation No. 5, which is the most important recommendation of the report? It very briefly states as follows:
The adequacy of Search and Rescue facilities available to the Newfoundland region ought to be reviewed and additional ships and aircraft provided.
What does the Minister intend to do about that very critical recommendation of that impartial commission?


Hon. J. Gilles Lamontagne (Minister of National Defence):: Madam Speaker, as the Minister responsible for Search and Rescue, I will answer that question. The Hon. Member's question is to the point. I believe I can supply some answers to his question today. 1 have written to the Premier of Newfoundland concerning this issue. There have been tremendous improvements in Search and Rescue on the East Coast. In the last few years, for example, I can mention SARCUP, ELT regulations, SARSAT satellite, and the Cross Report.
As far as the Cross Report is concerned, I know the Hon. Member read it very carefully. I have read it, as I am sure the Minister of Transport has. Those recommendations which were not implemented to date are in the process of being implemented. We have accepted most of the recommendations in that report. As far as Newfoundland is concerned, according to a review, which I can send to the Hon. Member if he would like, a review conducted in our own Ministry, it states that Newfoundland and the East Coast of Canada are, in fact, well protected as far as Search and Rescue is concerned. The
localities at which our facilities are situated are the optimum places, and our capabilities are excellent.


DEPARTMENTAL RECOMMENDATIONS
James Aloysius McGrath: Madam Speaker, I raise these questions on the eve of the anniversary of the Ocean Ranger tragedy in which 84 lives were lost. I am prompted by the report into the sinking of the Arctic Explorer. Is the Minister telling the House that he accepts the in-house recommendations of his own Department which states as follows:
If more resources were available, they will be more effectively used in areas other than Newfoundland.
That flies in the face of a recommendation of an impartial judicial commission set up by the Minister of Transport under the Canada Shipping Act. I want to ask the Minister a question because of the credibility that is involved here. Does he intend to go with the in-house recommendations of his own Department which is obviously trying to cover its own tracks?


J. Gilles Lamontagne: Madam Speaker, I have great respect for the recommendations of Judge Mahoney on this issue. 1 have also great respect for the Cross Report and for the in-house recommendations to which he refers. We are endeavouring to make a judgment between all of these recommendations so that we may ensure the optimum protection of the East Coast and the West Coast with the facilities and the resources available. At the moment, with the capacity and the facilities that we have, I believe the East Coast is well protected. This is a judgment of my Department. The Cross Report, in fact, does not say that we should necessarily augment, more than we are at the moment, the capabilities on the East Coast facilities.


METRIC CONVERSION
Mr. Bill Domm (Peterborough):: Madam Speaker, I would like to ask a question of the Prime Minister who signed an Order in Council setting up the Metric Commission. Mr. Dave Beckman, the Executive Director of the Metric Commission, has announced the phasing out of the Metric Commission.
In light of the fact that just a week or two ago the Metric Commission advised major department stores that they could use imperial measurement in advertising floor coverings and tile, for example, Sears, Eaton's, and the major corporate chains, would the Prime Minister look into the Order in Council which specifically states Canadian units of measurement shall not be used in advertising floor covering, and bring that Order in Council up to date with an amendment allowing for both imperial and metric measurement in the advertising of floor coverings?
February 7, 1983


Mr. David Berger (Parliamentary Secretary to Minister of Consumer and Corporate Affairs):: Madam Speaker, the Hon. Member has pointed out a fact which stresses the point which our Party has tried to make consistently, which is the conversion to the metric system is a voluntary program in which over
2,000	volunteers from labour, management, and all sectors of the economy have participated. As the Hon. Member is aware, however, there are certain sectors of the economy where, for reasons of health, safety, and protection of the consumer, it has been necessary to have mandatory legislation. As far as the particular problem which the Hon. Member has raised is concerned, 1 am sure the Minister will be happy to look into it.


DEPARTMENT'S TREATMENT OF MERCHANTS IN VARIOUS REGIONS
William Henry (Bill) Domm: Madam Speaker, my supplementary question is again directed to the Prime Minister, or to the Minister of Justice. Given the fact that there is another Order in Council which prohibits the sale of gasoline by the gallon, and in light of the fact that the Government, through Consumer and Corporate Affairs, has removed the seals from pumps on which they were placed in the Province of Alberta, and has dropped prosecution charges for selling carpet by the yard in Calgary, I wonder if the Minister of Justice would look into why Consumer and Corporate Affairs, through their "meter-sneakers" or "carpet-snoopers" have prosecuted merchants in the City of Toronto while closing their eyes to the merchants in the rest of Canada.


Hon. Mark MacGuigan (Minister of Justice and Attorney General of Canada):: Madam Speaker, I am sure the Department of Consumer and Corporate Affairs is acting in accordance with the law, but I will take the question as notice and see whether there is any further information which I can bring to the Hon. Member's attention.


DEPARTMENT OF REGIONAL ECONOMIC EXPANSION
James Douglas Manly: Madam Speaker, my question is directed to the Minister of Industry, Trade and Commerce. Will the Minister confirm or deny that there are plans to close the DREE office in Victoria? If there are such plans, will the Minister tell the House why he is planning to close the Regional Economic Expansion Office at a time when the unemployment rate on Vancouver Island is over 17 per cent?


Hon. Ed Lumley (Minister of Industry, Trade and Commerce and Minister of Regional Economic Expansion):: Madam Speaker, when the reorganization of the Department
Oral Questions
is finalized, the offices which have been set up in Victoria, Vancouver, and Prince George will still be maintained.


GUARANTEE REQUESTED
James Douglas Manly: Madam Speaker, I am asking the Minister if he will give a definite guarantee that the office in Victoria is not going to be closed.


Edward C. Lumley: I am
often accused of speaking too quickly, for which I apologize, Madam Speaker. I will try to respond a little more slowly. When the reorganization of the Department is finalized, DREE will have an office in Victoria, in Vancouver, and in Prince George.


Some Hon. Members:: Hear, hear!


REQUEST FOR IMPOSITION OF SURTAX ON IMPORTED POTATOES
Mr. Benno Friesen (Surrey-White Rock-North Delta):: My
question is directed to the Minister of Agriculture. Would he tell us why he refuses to recommend to the Minister of Finance, or take action himself, to impose a surtax or a tariff on American-grown potatoes being dumped on the Vancouver market?


Hon. E. F. Whelan (Minister of Agriculture):: I am sure the Hon. Member knows, Madam Speaker, that trade between our two countries, the United States and Canada, is very important, especially the potato industry, the processed product, seed product and table stock product. And it is generally in our favour.


EFFECT OF IMPORTS ON FRASER VALLEY FARMS
Benno Friesen: Madam Speaker, is the Minister saying he is willing to have the farms of the Fraser Valley developed into industrial parks in order to preserve trade with the United States?


Eugene Whelan: Madam Speaker, the Hon. Member knows full well that what he mentioned is not under my control. It is under the control of the provincial Government. If it wants to re-zone anything in the Fraser Valley, or any provincial Government wants to rezone any land, it is its business, and it has been doing that in some of the area which he refers to, without any consultation with us whatsoever. That is a provincial jurisdiction. What I am saying is that we consult with the farmers, not only in the potato industry in British Columbia, but in Alberta, Manitoba, Ontario, and the rest of Canada, when we talk about using a countervailing duty or surcharge or anything to control imports.

February 7, 1983
Oral Questions FINANCE


SIZE OF NATIONAL ACCOUNTS DEFICIT
Donald Alex Blenkarn: Madam Speaker, my question is directed to the Minister of Finance. I wonder if the Minister could advise us, now we are within two months of the end of the fiscal year, what his national accounts deficit will be?


Marc Lalonde: Madam Speaker, I would indeed hope that before the end of the fiscal year I would have an opportunity to come forward with the detailed figures in that respect. As I indicated on October 27 with respect to the borrowing requirements of the Government, it was likely that I would come back before the end of the fiscal year with additional borrowing requirements. At that time I would hope I would be able to give the up-to-date figures.


EXAMINATION OF ESTIMATES
Donald Alex Blenkarn: Madam Speaker, what new arrangements has the Minister to control expenditures? Has the Minister given any thought, when the estimates are produced, to have a special committee go over those estimates, to trim them back so we will have some type of priority with respect to Government spending, particularly at this time when we have to do so much job creation?


Marc Lalonde: Madam Speaker, the President of the Treasury Board will table the estimates later this month, at which time he will indicate exactly what the Government has done in that respect. I hope that when my hon. friend sees these estimates he will recognize that the Government has trimmed the estimates as much as one could without hurting jobs in the public sector, as well as jobs in the private sector. Indeed, I believe he will find, when examining those estimates, that the Government has put top priority on helping job creation in all sectors of the Canadian economy.


FISHERIES
Hon. John C. Crosbie (St. John's West):: Madam Speaker, my question is for the Prime Minister. He will know that the unemployment rate in Newfoundland is the highest of any Province, and that the fishing industry is suffering particularly badly at the moment. Plants are closed at Ramea and Fer-meuse and many other locations in Newfoundland. Can the Prime Minister tell the House whether the Government has made a decision as to what assistance it is going to give to the industry, the fishermen, or the fish plants involved? Has it made a decision on the recommendations of the Kirby task force and when these decisions will be announced and acted on?


Pierre Elliott Trudeau: Madam Speaker, I would defer to the Minister of Fisheries and Oceans for an exact date, but I would predict that it is likely to be within two or three weeks.


GOVERNMENT POSITION
John Carnell Crosbie: Madam Speaker, do I gather from the Prime Minister's remarks that a decision has been made by the Cabinet? Apparently his Minister of Fisheries and Oceans put up a cockamamie suggestion that the four major companies in the industry be nationalized and the Government would go in and own, control, and run the industry. Has that been tossed out, as it should have been? Has a decision actually been made on what is going to be done with reference to the East Coast fishery? Is that why he can now tell the House that there will be an announcement within two or three weeks? Are the decisions now made by the Cabinet?


Pierre Elliott Trudeau: Madam Speaker, in this Government they are. I do not know about the Government to which the Hon. Member belonged.


PETITIONS
Madam Speaker:: I have the honour to inform the House that the Clerk of the House has laid upon the Table the three hundred and eighty-fifth report of the Clerk of Petitions stating that he has examined the petition presented by the Hon. Member for Churchill (Mr. Murphy) on Friday, February 4, 1983, and finds that it meets the requirements of the Standing Orders as to form.


U500)   PRIVILEGE MR. CAMPBELL (CARDIGAN)-NOTICE OF QUESTION TO BE RAISED
Hon. W. Bennett Campbell (Cardigan):: Madam Speaker, 1 had intended to raise a question of privilege today and I gave you due notice. However, considering the fact that the Hon. Member for Vancouver-Kingsway (Mr. Waddell) is not in his seat this afternoon, 1 wish to reserve my right to raise my question of privilege when he is present.
February 7, 1983


MR. RIIS-COMMENT OF MR. LALONDE DURING QUESTION PERIOD
Nelson Andrew Riis: Madam Speaker, I rise on a question of privilege based on earlier comments made by the Minister of Finance (Mr. Lalonde) when, in an interchange between he and I, I remarked that the 1981 tax returns are based on present legislation and I understand from officials of Revenue Canada that they have been instructed not to process any income tax returns until new legislation is passed. I believe the Minister of Finance indicated that was his position.


Madam Speaker:: Order. I was somewhat distracted when the Flon. Member started his question of privilege. However, he did send me a note during Question Period which stated that he wanted to raise a question of privilege. 1 assumed it flowed from today's deliberations, but he seems to be speaking of some other general problem. 1 must tell the Hon. Member if he has a question of privilege of that nature, that is to say, not flowing from the deliberations of today, that he would have to give me a statement about the question of privilege and raise it at another time.


Nelson Andrew Riis: Madam Speaker, with that clarification, indeed my question of privilege does arise out of today's proceedings when the Minister of Finance indicated that the Government was unable to proceed with income tax refunds which rightfully belong to Canadians until certain legislation is passed. My position, Madam Speaker, was that year after year income tax returns are processed and refunds given based on existing legislation, as occurred in 1981. Yet I believe the Minister of Finance said it was not going to occur in 1982.


Madam Speaker:: Order. That is not a question of privilege. The Hon. Member is simply continuing debate, and he cannot use a question of privilege to continue debate. If he wants further clarification, he can ask further questions of the Minister.



ROUTINE PROCEEDINGS


Hon. Monique Begin (Minister of National Health and Welfare) moved:: That, in relation to Bill C-132, an Act to amend the Family Allowances Act, 1973, one sitting day shall be allotted to the consideration of each of the report stage and the third reading stage of the Bill; and
That 15 minutes before the expiry of the time provided for Government business on those days, any proceedings before the House shall be interrupted, if required, for the purpose of this Order and, in turn, every question then necessary in order to dispose of the stage of the Bill then under consideration shall be put forthwith and successively, without further debate or amendment.
Time Allocation
She said: Madam Speaker, I am introducing this motion for time allocation on Bill C-132, an Act to amend the Family Allowances Act of 1973, because I believe it is essential that this Bill receive the approval of this House as quickly as possible. Some may say that since we sent the Family Allowance cheque of January with an increase restricted to 6 per cent, it is no longer necessary to speed up debate and pass this Bill immediately. Well, we were given legal advice, of course, to the effect that we had the authority to send cheques to mothers with the 6 per cent indexation instead of full indexation. But that does not obviate the need for parliamentary approval.


Donald Alex Blenkarn: Why are you using closure, then?


Monique Bégin: I will explain in a few minutes, if Hon. Members want to listen and give me a chance to speak. We will not go on, say, until December, 1983. That would not be reasonable at all. I think the earliest possible passage of this Bill in this House and the other place is essential.
Hon. Members know that families, in this case mothers, were advised in the June budget of the six and five program, and specifically for that group of Canadians we would limit indexation to 6 per cent in order that everyone does their share to fight inflation and bring it down to the figures of six and five which we gave as our objective. When inflation was 12 per cent, we said to Canadians: "Let us try and bring it down to 6 per cent in 1983". It would have been 10 per cent the next year, and we said: "Let us try and bring it down to five in the year 1984".
Now, some people would say that the television, newspaper and radio commentary which always follows and explains a budget might not have been enough to make sure everyone was aware of the Government's plans. Therefore, in the August Family Allowance cheque I sent an insert which was short, quite clear and very factual, giving all the details to make sure that everyone understood the purpose of this decision of the Government. Since that time we have had, of course, several discussions in this House.
Now, I will come to the point of why it is so urgent to pass this Bill as soon as possible. Mothers were told that to make sure we were not creating any hardship, all mothers receiving the Child Tax Credit, either in full or part, would get an additional $50 on the coming Child Tax Credit to make up for any loss of indexation in the Family Allowance for the years 1983 and 1984.
Perhaps I should continue in French because I do not know quite how to say this in English.

The mothers are going to benefit from the provisions of Bill C-132, because in the last seven months, since last June, inflation has already dropped so far that the mothers who receive the Child Tax Credit, that is, those who need it, will be better off under this program.

February 7, 1983
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This additional $50 for all mothers receiving the Child Tax Credit-and let me point out this means two out of three mothers in Canada-is included in the Bill which follows mine, and that is why there is no reason my Bill should not be passed rapidly. It is contained in Bill C-139, an Act to amend the statute law relating to income tax. This is the main reason why any delay in passing Bill C-132 would prevent the mother receiving additional money through the Child Tax Credit in time. The forms have been sent but nothing can be paid out until Bill C-139 has been passed by the House.
There has been a lot of discussion on the Bill and I fail to see who could oppose it. When the Official Opposition was the Party in power, it wanted to abolish the universality of Family Allowances. That would be very dangerous, Mr. Speaker, but that Party has always wanted to do away with the program, never quite undertanding why it existed in the first place.
I think we are taking a rational approach in this Bill, and according to the mail 1 have received up to now, the vast majority of Canadians support it. We are saying that the country is in a difficult economic situation, as are all industrialized countries. The first objective is to fight inflation, to bring it down to 6 and 5 per cent to start with and then, as soon as possible, to lower it further. But we must not do this on the backs of those most in need, who in this case are the mothers.
Since there are many families that are single parent units, no one will get mad if all mothers with a Child Tax Credit, or a partial Child Tax Credit, receive an additional $50 to make up for the loss of full indexation of the Family Allowance. This is extremely generous, Mr. Speaker. We might have decided instead that the $50 additional provided in Bill C-139-which I hope will be passed very rapidly by the House to give that additional money to mothers-is very generous and should have been graduated to the mothers who get only a partial Child Tax Credit because the family income is over $26,000.
It is not often in today's society that children receive some benefit; it is usually given to the seniors. As the Minister is, in a way, the special voice of mothers in Cabinet in this case, looking out for the well-being of children, I am not going to oppose more money for the Child Tax Credit. Because it is a program which is targeted to those most in need, it means a benefit for very low-income mothers. It also means that those on the threshold of the middle class, the people who will be in the real middle class later, the young couples with young children who do not yet have enough money to meet all the expenses incurred in bringing up a family, will benefit.
I am sure that all Members of the House will recognize the fact that 32 Members have been involved in discussions over the last few weeks, back to last fall, when we started discussing the Bill in the House, and in committee where we heard witnesses. I should like to thank the Chairman and members of the committee, as well as the witnesses that were heard, for their contributions. It is surprising that the debate has already
occupied so much time of the agenda of Hon. Members. I hope the Bill receives speedy passage in order that we may proceed to Bill C-139 and ensure a better Child Tax Credit to two-thirds of Canadian mothers.


Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, I must say that the arguments of the Minister on why the Government has to apply allocation of time, or closure, to this Bill do not add up to much. First of all, we know that regardless of what Parliament does, the minute the officials who run this country see an excuse for a tax change to be introduced through a Ways and Means motion or any other method, they immediately apply it whether it is passed or not. That has been the practice for 30 years so I am not going to get into that argument now.
I am glad the Minister is in the House because she knows and understands what I am about to say. Bill C-132 regarding Family Allowances is another attack on the families of Canada. Families cannot be divided according to their wealth. Over and over again Parliament has tried to find a way to apply a means law. When the last major amendments to this Act were brought in, all parties agreed that the plan should be universal and the only means test should be the application of the Income Tax Act on a progressive scale.
I return to my First statement, Mr. Speaker. This attack on the family is small in terms of dollars and cents. The Minister made a good case that for those earning less than $26,000 per year the Government would try to compensate them for the loss in the Child Tax Credit. She is quite right in that. But the principle of this legislation is that it is part and parcel of a policy of rationalization by the senior mandarins of the civil service who cannot appreciate that when you apply a rational thought, it must be applied with equity and justice. I do not care whether a family has an income of $10,000 or $30,000 per year, Mr. Speaker. Under the laws of Parliament, regardless of the wealth of the parties they receive the Family Allowance. That is what Parliament ruled, supported by every Party.
The history of this is long, Mr. Speaker. During the days of the last war, politicians in all western countries sought to build the morale of their troops engaged in war who worried about their families at home. In the United Kingdom there was the Beveridge Report and in Canada the Marsh Report. All the mandarins of the civil service of the day, who were growing in power, accepted the proposition. In 1942 the concept was introduced and the starting place was the family. There was debate and, of course, division of opinion. Finally, every Member of the House voted for it, with one exception.
I was one of the then young men who was asked for an opinion. I was going overseas, leaving two young children and a wife at home. If I did not come back my wife and family would get a pension of $50 per month. I knew I would be much happier if there was something for the children when they were growing up. All parties accepted the document.
With this latest move, in the interest of restraint we would reduce voluntarily, and in some cases compulsorily, the
February 7, 1983

increased income of some people in order to help control inflation. The Party I speak for agreed to the six and five proposal for those who were making money and contracts were altered to that effect.
Common sense, equity and justice, however, say that this should not be applied to people who cannot defend themselves. The amounts involved are small but the principles involved are great. Every Member of Parliament has had a shame riding on his back for the last eight or ten years that he cannot get rid of. The Minister knows what it is and I know what it is. We pass laws based on our best reasoning, and when those laws are ignored by our masters, the mandarins who run the country, we say nothing and do nothing. The only person on the other side of the House that I have ever seen admit the discrimination and injustice of it is the Minister. This matter does not affect the Minister of Finance (Mr. Lalonde) or the Prime Minister (Mr. Trudeau) because they know who their masters are and who they have to obey. These great rationalists who think they know how better to run the country say that six and five should be applied to everyone regardless of justice, equity or morality. They will do it.
1 want to return to the key thought. Under the morality of this Parliament, we decided that regardless of wealth every child up to 16 years of age, and 18 years of age if attending school, would receive Family Allowances. This decision by Parliament is being ignored every day by the irrational mandarins who run the country and who run Cabinet. Sure, the Bill will go through. Sure, they will put closure on it. But as they apply closure, let their conscience recognize that they will carry this scar until they die.
I am not unaware of the fact that we tend to be fraudulent and full of scam as Members of political Parties, but on occasions such as this let us face the fact that we are rushing through this Bill for the convenience of a few people who want it out of the way. It does not make any difference to the cheques going out or the amounts of the cheques. We in Parliament have a duty. This is a talking place and we have a right to talk in this place until every soul in Canada has heard our voice. But that voice will never be heard as long as others who want to be masters decide that no news of this parliamentary debate gets out to the people of Canada. Until every family in Canada has a chance to hear why those of us on the Opposition side are opposed to this legislation, we have a right to continue talking. Until the media realizes that it must tell the story of what is happening in the House, we will continue battling and fighting.
I am as ashamed as I know the Minister is that we continue discrimination against teenagers. Now we are loading an extra burden on families. Families are under attack all over the world, but no place are they more under attack than on the North American continent. The families for who we should be fighting, regardless of race, nationality, colour or religion, are the one institution around which we must all rally to protect at
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every turn. We are not protecting them in letting this perhaps small but significant amount go through.


Some Hon. Members:: Hear, hear!


Nelson Andrew Riis: Mr. Speaker, I am pleased to rise and address the House on this critical issue this afternoon. 1 watched very carefully as the Minister of National Health and Welfare (Miss Begin) stood up and called upon Members of the House to support this motion applying time allocation or closure. I watched her very closely. I listened very carefully to the words she used. I noticed a quaver in her voice as she delivered her words. I listened carefully to the way she phrased her sentences and I noticed that there was a lack of commitment in what she was saying. Also I noticed there was uncertainty in some of the points she was making. I watched her body language and noticed that she was not looking directly at Hon. Members opposite when she was speaking. I noticed that she was using body language, in a sense, to communicate the following to Members of the House: "I do not believe in what I am saying, I do not believe in the words that I am uttering. What I am saying is to be disallowed or ignored because it is not what I want to say, but I am forced to stand up and say it because the Government, senior mandarins or certain Cabinet Members have forced me to rise in the House of Commons to muzzle Parliamentarians from speaking out against a Bill which will deindex Family Allowances".
It is not surprising that the Minister spoke in a quavering voice. She understands clearly what the Bill is communicating to Canadian citizens from the East Coast to the West Coast. I have listened carefully to Ian Sinclair, chairman of the blue chip committee which is to advise the Government on the six and five program. Mr. Sinclair said that the six and five program was really causing damage to the economy of Canada, that we must take steps to encourage economic development to stimulate the economy, and that strangling more life out of the economy was not in our short-term or long-term best interests.
Then I looked carefully at a man who presumably advised the Government often on these matters, the Governor of the Bank of Canada. I noticed what he did to his retirees. He indicated that he did not believe in the six and five program, and for that reason the increase in their pensions this year will be 11.5 per cent, not 6 per cent or 5 per cent. Anyone would know that now is not the time to identify a group of women and children in Canadian society and ask them to bear the attack against inflation.
The Minister indicated that she put the mothers of the children of Canada on notice back in the June budget, that they knew it was coming and therefore it should presumably legitimize today's action of closing off debate on this particular Bill in Parliament.
I recall other Members, particularly on the Government side, saying that they have not received a landslide of letters from mothers or from thousands of children writing in about the decreases in the Family Allowances which they would have expected starting in January. Of course they have not, for two

February 7, 1983
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reasons. First, the mothers of Canada are not organized and do not become involved in letter-writing campaigns, as do certain other well-organized lobby groups. Certainly the children of Canada do not. But more important, 1 do not believe that the mothers of Canada believe or believed that the Government would do this. After all, they know they were not one of the causes of inflation. The paltry Family Allowance cheques which went out every month were not fuelling inflation. I suspect they heard in the budget discussions that indeed the Government would delimit the indexing of Family Allowance payments and they simply refused to believe it, it seemed so incredible. Then the Minister of National Health and Welfare said: "Listen, while we are reducing your income on this side, we will increase it on that side through subsequent legislation on the Child Tax Credit". She said that they would pass legislation some time in the future that would provide an increase in the Child Tax Credit to compensate for this loss.
This is asking a great deal of the Canadian public. They listened to the previous Minister of Finance who on occasion after occasion stood up and made promises. First he said that he would tax dental programs for employees. Later he changed his mind and said that he would not do it, that he would tax medical premiums. Then he again changed his mind and said that he would tax investment money used by people to purchase Canadian stocks. Then he changed his mind again. The previous Minister of Finance changed his mind 37 times. Yet the Minister of National Health and Welfare advises confidence in the Government because it will deliver what it says. I believe that is asking too much of the people of Canada, to have faith in a Government that has let them down on so many occasions.
We should consider what is happening today from another perspective as well. It deals with the psychology of the Canadian society. Today we have a country that is looking for strong political leadership. Canadians realize that our economy is floundering. We are like a ship at sea with no rudder. One day we lurch this way, and the next day we lurch back that way. We see a Government of Canada that is going from crisis to crisis. It tries one program, then another, tries a stimulus here while raising taxes there, gives a tax break to upper income earners and increases taxes to the middle income Canadian. We see a Government that is obviously out of control.
The people of Canada are asking for strong political leadership at this time. They are saying that we need someone who will stand up to show us where the problems are in our economy and how to fight inflation, and how to stimulate the economy. They want someone who will tell us how to encourage investor and consumer confidence. What the people of Canada do not want is a Minister who stands up in the House of Commons to say that the Government wants to take money from the mothers and children of Canada during these difficult times. The Government does not want to hear any more debate in the House of Commons on this issue and therefore introduces a measure called time allocation to cut off the
debate on this issue and to muzzle particularly Members on the Opposition side of the House to prevent them from pointing out the shortcomings of this legislation and pointing out the shortcomings of the political leadership that this legislation demonstrates.
There are dozens of countries in the world that envy a Parliament such as ours where people can hear two or three points of view on an issue. They can then draw their own conclusions on the subject in the comfort of their own home or workplace. It is important that the people of Canada have an opportunity to hear the various sides of an issue. We have heard some very convincing arguments as to why this legislation that will remove money from mothers and children of Canada is not the appropriate step to be taken at this time.
I remind Members of an earlier time when I indicated that the Chairman of the blue chip committee said that it is now time to change from this paranoiac adherence to the six and five program. The best thing this Government could do is to send a clear signal to Canadians across the country that in the interests of fair play and justice it will pull out this particular Bill that is before us now and, more important, will not go ahead with de-indexing of Family Allowance payments.


Mr. Jesse P. Flis (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, I would like to address my comments today to the motion before the House under Standing Order 82 which is to limit debate on Bill C-132. It is important to understand what the purpose of this debate today is really all about. It is whether or not a reasonable amount of time has been given to discuss this Bill in general principle. We have heard the Members of the Opposition speaking of everything except Bill C-132. This is certainly not a good use of Parliament's time. I ask, what is the purpose of parliamentary reform as expressed in the amended standing orders of December 22, 1982?


Donald Alex Blenkarn: I would like to know.


Jesse Philip Flis: This is certainly not good use of parliamentary time.


Donald Alex Blenkarn: You brought in closure three times in three weeks.


Jesse Philip Flis: The purpose of parliamentary reform is to make Parliament more effective and better able to respond directly to the needs and wants of Canadians.


Donald Alex Blenkarn: Closure three times in three weeks.


Jesse Philip Flis: However, if we insist on wasting our time by constantly repeating arguments that are many times filled with misinformation and allegations that are wrong, then we are not using Parliament effectively. We are not representing the concerns of our constituents who elected us. We are in fact hampering the whole parliamentary system and its effectiveness.
We have had similar debates regarding the whole question of time allocation in the past. The Hon. Member for Guelph
February 7, 1983

(Mr. Schroder) stated in the House on December 2, 1982, that:
Time allocation is a good management tool ... it apportions the time effectively.
I agree with the Hon. Member completely. Given the speeches from the Opposition during this debate, they are not putting their time to good use. In fact, they are attempting to score political points by misinforming and misrepresenting what in fact the Bill is all about. I hear Opposition Members screaming that we are imposing closure. The Hon. Member for Kamloops-Shuswap (Mr. Riis) used that work today. The Hon. Member for Mississauga South (Mr. Blenkarn) used that word today, saying it was closure.


Donald Alex Blenkarn: Three times in three weeks.


Jesse Philip Flis: There is a difference, and a very important one at that, between closure and what we are proposing now, that is time allocation.


Nelson Andrew Riis: What is the difference?


Jesse Philip Flis: In the interest of presenting an accurate picture of the motion as presented, I feel I should illustrate the difference between closure and time allocation. The Hon. Member for Kamloops-Shuswap is asking me what the difference is. I might ask him to take his amended Standing Orders and refer to page 30, Standing Order 37, which describes closure as follows:
37. Immediately before the Order of the Day for resuming an adjourned debate is called, or if the House be in Committee of the Whole, any Minister of the Crown, who, standing in his or her place, shall have given notice at a previous sitting of his or her intention so to do, may move that the debate shall not be further adjourned, or that the further consideration of any resolution or resolutions, clause or clauses, section or sections, preamble or preambles, title or titles, shall be the first business of the Committee, and shall not further be postponed; and in either case such question shall be decided without debate or amendment;
Therefore, closure is a method of procedure which brings debate to a conclusion and enables the House to secure a decision upon the subject under discussion. Time allocation, however, is something totally different. Again, I would refer the same Member to page 86 of our Standing Orders, Standing Order 82. I draw to his attention exactly what Standing Order 82 says. It reads:
A Minister of the Crown who from his or her place in the House at a previous sitting has stated that an agreement could not be reached under the provisions of Standing Order 80 or 81-
Standing Orders 80 and 81 state that where the three Parties could not agree on an allotted time, then the Minister can use Standing Order 82. I continue:
-in respect of proceedings at the stage at which a public bill was then under consideration either in the House or in any committee and has given notice of his or her intention so to do, may propose a motion for the purpose of allotting a specified number of days or hours for the consideration and disposal of proceedings at that stage;
The key phrase in this Standing Order is:
-may propose a motion for the purpose of allotting a specified number of days or hours for the consideration and disposal of proceedings at that stage;
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Therefore, what we are in fact doing is limiting the time of debate.


Nelson Andrew Riis: Closing off debate.


Jesse Philip Flis: We are not closing debate. Why limit the time of debate? Those in the Opposition have already indicated that they oppose the Bill. Members of the NDP have publicly stated that they will do anything under the sun to prevent this Bill from going through. They have stated their objections, but they have not offered any alternatives. They do not propose an alternative strategy to follow-


Nelson Andrew Riis: Yes, we did. Pull the Bill.


Jesse Philip Flis: -within the framework of reducing inflation. The Hon. Member for Qu'Appelle-Moose Mountain (Mr. Hamilton) at least had the decency, honesty and respect to say that his Party does support the principle of six and five. We want to hear the alternatives within the framework of accepting the principle and philosophy of six and five.
For a debate to be truly effective, all Parties must be able not only to raise objections, but also to provide alternatives to follow. Only through this type of information sharing can we have a truly effective debate. However, it is only we on this side of the House who have proposed any type of plan to follow and who are attempting to use Parliament's time more efficiently. If Opposition Members could propose new ideas-


Nelson Andrew Riis: Pull the Bill.


Jesse Philip Flis: -and new initiatives-


Nelson Andrew Riis: Pull the Bill.


Jesse Philip Flis: -we on this side of the House would be more than willing to listen.


Nelson Andrew Riis: Pull the Bill.


Jesse Philip Flis: Unfortunately, this is not the case. Therefore, since no new ideas are expressed, it is ridiculous to continue a debate which has ceased to be a debate. I repeat that the Opposition, through this forum, has used this House of Commons to misinform the people of Canada-


Mr. Blais:: Shame.


Jesse Philip Flis: -about what this Bill is in fact all about.


Nelson Andrew Riis: Proof, proof.


Jesse Philip Flis: What is the Bill all about? Bill C-132, in conjunction with other Bills, is part of a plan of economic recovery for Canada.


Nelson Andrew Riis: It is really working well. Have you noticed how things are going?


Jesse Philip Flis: We on this side of the House have a plan. I am not sure that the Opposition does. Our plan was introduced on
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February 7, 1983
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June 28, 1982, when the former Minister of Finance tabled the budget in the House of Commons. The Budget emphasized that, in order to move toward economic recovery, we must take immediate action to bring down inflation.


Nelson Andrew Riis: You are taking money from the mothers of Canada.


Jesse Philip Flis: The central difficulty in reducing inflation is to break the expectations that inflation will remain high indefinitely. Such expectations, unfortunately, tend to be selffulfilling. Incomes chase prices which, in turn, chase incomes in a vicious spiral.
This Bill proposes to limit, only for those who can afford it, the indexation of Family Allowances to a 6 per cent cost of living adjustment in 1983 and a 5 per cent adjustment the year after. What this means is that Family Allowances which were $26.91 per child per month would have increased to $29.92. However, limited to 6 per cent, they will increase to $28.52, a difference of $1.40.


Nelson Andrew Riis: Why bother?


Jesse Philip Flis: Thus, in 1982, a mother would have received $322.92. In 1983, this amount would have arisen to a total of $358.44. Instead, it will amount to $342.24.


Nelson Andrew Riis: Oh, that will turn the economy right around, quite a bit.


Jesse Philip Flis: As a consequence of the Bill, only one-third of Canadian mothers receiving Family Allowances will receive a smaller increase than anticipated for their child benefits in the coming year. I emphasize that there will be an increase. It is not a reduction, as the Opposition would lead the public to believe. Rather, it is an increase. However, as an additional measure, those 2.5 million mothers who also receive the Child Tax Credit, will not be affected by this Bill. In effect, the Child Tax Credit, which amounted to a maximum non-taxable benefit of $261 for each child last year, and which would have been $293 in 1982, will be specially increased by another $50. It will therefore rise to a maximum of $343 for each child. This will compensate for the limited indexing of Family Allowances for the next two years to come. Therefore, with these measures, those who are most in need, those 2.5 million parents who also receive the Child Tax Credit, will not be affected by the 6 per cent and 5 per cent limits, and their benefits will in fact be increased by $50 for the taxation year 1982.
1 do not understand what the Opposition is complaining about.


Jean-Jacques Blais: They complain all the time.


Nelson Andrew Riis: Ask your constituents.


Jesse Philip Flis: Through this Bill, we are clearly asking that those families who can afford it make some sacrifices so that those less well off can be helped even more. Therefore, because the
Opposition has already stated its purpose not to support this Bill and, at the same time, does not provide us with any alternative action, I feel that we have no choice but to impose time allocation at this stage of the Bill. If the Opposition could provide some timely alternatives-


Nelson Andrew Riis: Pull the Bill.


The Acting Speaker (Mr. Blaker):: I have indicated to the Hon. Member that his allotted time has already expired. Perhaps he may wish to seek the unanimous consent of the House to continue his remarks.


Mr. Stan Darling (Parry Sound-Muskoka):: Mr. Speaker, I listened with great interest to the lesson on the difference between closure and time allocation given by the Hon. Member for Parkdale, and he read from the Bible of the House of Commons. I think we are-


Jesse Philip Flis: I rise on a point of order, Mr. Speaker. The Hon. Member offends half of my constituency. I do represent the constituency of Parkdale-High Park.


Nelson Andrew Riis: They are not offended any more.


Mr. Young:: Not after that speech.


Stan Darling: I offer my apologies to the Hon. Member. Those are both very fine areas in the great city of Toronto. I appreciate his desire to ensure that both parts are acknowledged. I sometimes have the same trouble, because I represent two great areas, the provincial districts of Parry Sound and Muskoka, and so I apologize to the Hon. Member.


Douglas Glenn Fisher: Lovely people, all of them.


Stan Darling: That is quite right.
Mr. Speaker, we are not primarily debating the merits of the Bill which will cap increases, and I am well aware that there would not be a reduction in the amounts presently paid to mothers but, rather, we are debating its principles. Because of the new rules, the Standing Order numbers have all changed and we must learn them anew, but under Standing Order 82, I believe, it is still closure, no matter how one goes around it. I say to Hon. Members opposite not to shake their heads or to say that it is so much easier. It is as though taking castor oil with orange juice were a little different from taking straight castor oil. The truth is that it amounts to the same thing and has the same effect.


Jean-Jacques Blais: No one does that anymore.


Stan Darling: As was mentioned previously, the Government has brought in closure three times over the past week. I am quite sure, although I do not see anyone from whom we might obtain information, that closure or time allocation will also be imposed on Bill C-139 after it has been debated for a few days. There is no question about that. Therefore, I might make a point of suggesting to Hon. Members that there should be a footnote on every Bill which would set out the provisions of
February 7, 1983

Standing Order 82 so that the Government can invoke closure when it feels it has heard enough from the Opposition.
This afternoon, I believe, the Minister of National Health and Welfare (Miss Begin) mentioned that some 32 Members of this House had risen to speak on this particular Bill, and that amounts to 32 out of 282, less the vacant seats. Therefore, it was not a great percentage of them.
Concerning this particular Bill, I once again point out that we are not debating the amount of money in question because, as has been pointed out specifically, the difference in the exact number of cents each month will not be astronomical, and, I suppose, will not immediately put families on welfare or push them over into the welfare bracket. We are debating the principle of the Bill. The Hon. Member for Qu'Appelle-Moose Mountain (Mr. Hamilton) emphasized the importance of the family. This is a case where the government is sort of infringing on the family. I am sure all my colleagues will agree that the one unit which stands head and shoulders above every other unit in Canada today is the family. Why should the Government do something which will disrupt it financially, even in a minor way, and one which sort of downgrades it? Last week I had the privilege of attending meetings with Parliamentarians from all over the world. It was interesting to hear the theme throughout those meetings, which was the importance of the family and how it should be upgraded in every way possible.
It has been running through my mind that the proper name for these three Bills, C-131, C-132 and C-133, is "the unholy three". There is no question about that in my view. The one which limited the increase on the old age pensions was certainly the worst for the Government to ram through, and this is the second worst. This is the reason why the idea of bringing in closure, to me, is just another slap in the face to the families. The Government can rationalize all it wants, but, as the Hon. Member for Parkdale-High Park (Mr. Flis) said, give us some suggestions.
When the dollars and cents are added and put in a bag and set in front of the desk of the Hon. Minister of Finance (Mr. Lalonde), or put in the coffers of the general funds, it is not going to be an astronomical amount. There are other places where the Government could have found that money where it is not going to hurt those in the low-income brackets.
The people who are being discriminated against today are not the ones who have caused inflation. They are not the ones who have let Government expenditures go up as high as 23 per cent, and sometimes higher. A good many of these Government Departments could have pared their various expenditures down without hurting anyone too much. As has been mentioned, I believe also by the Hon. Member for Qu'Appelle-Moose Mountain, it is probably not the idea of the Minister of Finance (Mr. Lalonde) himself, and I am quite sure it was not the idea of the Minister of National Health and Welfare, who is certainly sympathetic, but it is the bureaucrats and senior civil servants who dream up these wonderful ideas.
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I see the Minister of Supply and Services (Mr. Blais) shaking his head as if this were not right. I am quite sure that he is well aware of his power, and he is a powerful Minister because every Government agency that wants to buy, I was going to say a postage stamp but that is a dirty word these days and it will be worse after the 15th of February, or a tank or whatever it is, certainly has to go through his Department. I am quite sure that his arm is twisted by the senior bureaucrats in his Department.


Jean-Jacques Blais: It is the other way around.


Stan Darling: They say, "Mr. Minister, you cannot do this or you cannot do that". The same thing applies to the Minister of National Health and Welfare.
There are certainly a great many ways that the Government could have saved money. One of the fairest taxes, whether we like it or not, is the income tax. That was just a temporary tax that was put in, I think, in 1917 and-


An Hon. Member:: 1911.


Stan Darling: It is still with us, and I think it will be here for another few years. The income tax is a fair tax, much and all as we hate to pay it, and we probably do our best to see that we pay as little as possible.
I think it was two years ago that the highest bracket was 62 per cent, and now it is down to 50 per cent. That was a stupid move that I cannot understand. My only solution is that the advisers to the previous Minister of Finance told him there were a good many of his senior civil servants in the 62 per cent bracket, and therefore it might be more convenient and better for them if they reduced that to 50 per cent. And that is the ceiling now.
I am quite sure that Members on the other side of the House would agree that if that 12 per cent was reinstated a lot more tax would be collected than by squeezing it out of a lot of mothers, single parents and otherwise, who are finding it pretty tough to make ends meet. Why this should be done to these mothers who are in the lower income bracket I do not understand.
There are a good many families who are in a very high [DOT] income bracket who would naturally get the Family Allowance, but most of it will go back in income tax. To me it is unfair. It is a closure when closure was not needed, regardless of what it is called, and of course the Members of this Party are going to be voting against it.


Mr. Jim Schroder (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, I am pleased to have the opportunity to take part in this debate this afternoon for two reasons. One, I would like to say something about the whole idea of time management or management procedures, or whatever you want to call it, and I would like to talk a little bit about the fact that the psychology of inflation is important. I would like to talk about what effect the six and five program is having on the development of the momentum that is helping to reduce inflation.

February 7, 1983
Time Allocation
It is interesting that in this management of time the question is, have we had enough time to discuss this Bill? In second reading, we have had two hours and 45 minutes of debate. We have had 16 speakers, seven have been from the Official Opposition, five from the New Democratic Party and four have been from the Liberals. Now, at report stage, we have had six hours of debate. We have had 19 speakers, six Progressive Conservatives, 11 NDPs and two Liberals. That means that so far we have had 35 speakers. Of this the breakdown is: 13 Progressive Conservatives, 16 New Democratic Party Members and six Liberals, and the total time so far has been 12 hours and 30 minutes.
That, I think, indicates that there has been ample time for discussion of this Bill, but the other point that I think is important is the fact that the essence of this Bill really does not require the approval of Parliament, but the Child Tax Credit addition of $50 across the board, a once in a lifetime allocation of $50, does require the passage of Bill C-139, which is the Bill to amend the Income Tax Act. In order for this $50 to be available for the Child Tax Credit this year, which will help those who are most in need to cope with the situation of having to help us in this fight against inflation, it is very important that this Bill be passed.
We have heard a lot of discussion about inflation, and I do not profess to be an expert on the economics of inflation. If what I read is true, there are many different opinions about why we have inflation, and a great number of opinions about what is the best way to attack inflation. In essence, what we have been saying is that there are two ways in which we have to combat inflation. One of those is that the world recession has to be brought under control. Most of us know the very complicated reasons that are given for the fact that all countries in the western world, each of them having a different kind of government from ours, are all suffering from degrees of inflation, so we have this recession which is affecting the world in total. What we do in Canada is not going to have much effect on world matters concerned with inflation. That is not to say that we should not be doing something in Canada about inflation, helping to correct inflation in this country and helping people to cope with inflation.
What we did was to introduce the so-called six and five program in an attempt to cope with inflation in Canada and reduce the rate at which inflation was increasing, reducing it eventually from 12 per cent to 6 per cent this year and 5 per cent the following year. That is what the six and five program is all about. In other words, it is a first step in Canada toward economic recovery. It is not the only action necessary to turn the economy around, but it is the primary initiative in working toward this goal.
With regard to the six and five program and employment, a reduction in inflation is the key to economic recovery. That
includes securing those jobs we already have and creating new jobs. The Government job-creation program should be seen as a spin-off of the six and five program.
The emphasis of the six and five program has been on the urgency of getting inflation down. As inflation is reduced, consumer confidence and spending is encouraged and unemployment levels will gradually reduce or decrease. There are other purposes that are part of the six and five program, such as trying to bring down retail prices. We are having some success. The Consumer Price Index dropped to under 10 per cent in December 1982, the first time since March 1981. It dropped to 9.3 per cent.
Interest rates have decreased steadily. Interest rates of course have a tremendous impact on the construction and housing industry. We have seen what has happened with regard to restraint on federally-administered prices. We have established this in federal Departments, agencies, Crown corporations and regulatory bodies.
Wage settlements have decreased since the beginning of the six and five program. In fact, they have decreased substantially. This will decrease prices and will certainly foster Canada's competitiveness internationally.
What does this have to do with the Bill we are talking about today and the five Bills we are trying to get through this House which are related to the six and five program? The Opposition Members say we cannot continue to blame other countries for what is happening in Canada. They say we cannot continually refer to the world recession. That requires a degree of leadership. We must answer the question whether there is any light at the end of that tunnel or, as is often expressed, is there any hope?
This is why we are asking Canadians to enter this fight against inflation. This is why we have Bill C-132 to limit the indexation of Family Allowances to 6 per cent this year and 5 per cent next year. This is why we are asking Canadian families to accept this as their contribution in the fight against inflation.
We know that inflation unsettles the confidence of all, but no people more than the families of Canada. I was particularly interested in hearing Opposition Members suggest that somehow or other the mothers of Canada would not be able to understand the need for the six and five program. I say, who better than the mothers who are the managers of the families in this country, who better would realize that reducing inflation will make it easier for them to manage?
The purpose of this debate is to discuss the Bill rationally. It is to give the people of Canada an indication that this is a small price for them to pay for bringing about economic recovery and growth which, as the Minister says, will directly benefit all families by protecting them from the ravages of inflation and the resultant erosion of their budgets.
February 7, 1983



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mir. Blaker):: Order. It is my duty, pursuant to Standing Order 45, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the Hon. Member for Mississauga South (Mr. Blenkarn)-Trust Companies-Action taken by Minister- (b) Query respecting role of Minister; the Hon. Member for Victoria (Mr. McKinnon)-North Atlantic Treaty Organization-Canadian naval contribution-(b) Modernization of vessels; the Hon. Member for Winnipeg-Assiniboine (Mr. McKenzie)-Garrison Diversion-Restoration of United States funding-request that Minister take action-(b) Reported statements made by North Dakota official.



ROUTINE PROCEEDINGS


[Stage Direction]
The House resumed consideration of the motion of Miss Begin:
That, in relation to Bill C-l32, an Act to amend the Family Allowances Act, 1973, one sitting day shall be allotted to the consideration of each of the report stage and the third reading stage of the Bill; and
That 15 minutes before the expiry of the time provided for Government Business on those days, any proceedings before the House shall be interrupted, if required, for the purpose of this Order and, in turn, every question then necessary in order to dispose of this stage of the Bill then under consideration shall be put forthwith and successively, without further debate or amendment.
Donald Alex Blenkarn: Mr. Speaker, this is the third time since January 17 that this Government has decided to use the hammer for limiting time for debate. The concept of the new rules we are supposed to be operating under is to limit the time for debate by shortening speeches on report stage to ten minutes. Consequently, this motion by the Government with respect to time allocation, certainly at report stage, is inappropriate. Indeed, by the very time limitations, Members' speaking opportunities would have run out very soon had the Bill been allowed to follow the normal course.
Second, there has been no indication by this Government of the extent to which consultations were held with respect to reducing the number of speeches or setting some time when this Bill would come to a vote.
It is a sad day for this House when we have the situation where, in the middle of an income tax debate or a day set aside for an income tax debate, a Minister of the Crown rises to impose time allocation in order to limit the length of debate. It is the third time this has happened since January 17. It is disgraceful management of the House by this Government. The new rules are supposed to make the House operate better
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and make it more relevant. However, the Government uses every opportunity to ensure that these new rules do not work.
This is one of a few Bills where the Government has gone ahead and operated as though it had legal authority to do so. It has already proceeded to reduce Family Allowances. Cheques sent out in January and presumably those prepared for February are at the reduced amount. The Government says it has legal authority to do that. The Government says it does not have to straighten up the question of indexing under the present Act until December, according to the Government's own legal opinion, to handle this matter and the question of the change in the amount of the Family Allowance.
The Minister has come to this House and said in public that there are three kinds of tax measures which affect people with families. Indeed, there are probably four, and I want to point those out to this House. First, there is the allowance for children under the Income Tax Act which goes to everyone who files an income tax form on a positive basis. That is an indexed amount. It has been changed, but there is an allowance which everyone who pays positive income tax receives toward the maintenance of their children, an income tax deduction. Second, the Child Tax Credit is another form of tax allowance for children which happens to be a positive credit. Even if you do not pay income tax, you receive this positive credit of up to $342, approximately, per child. The third allowance has something to do with the spousal allowance when there is, perhaps, a single parent who declares one of the children as, indeed, a spouse. A further allowance is available there. In addition to that, Mr. Speaker, there is an allowance for babysitting or child care help to families in the tax Act.
All of these matters should be brought together into one form of allowance for children. Both the Minister of National Health and Welfare (Miss Begin) and the Minister responsible for the status of women have spoken in the last weeks on these vital tax matters. There is ample time for this whole matter to be resolved by Parliament before December of this year, yet this Minister crashes ahead with a program which she knows does not make sense. There is no justification whatsoever on this particular Bill for any time allocation, particularly in view of the statements made publicly by the Minister responsible for the status of women and the Minister of National Health and Welfare with respect to comments concerning the Income Tax Act. The matter should be reviewed, and reviewed completely.
The Parliamentary Secretary to the Minister spoke about the six and five program. We all know that that is a great, big advertising gimmick which has absolutely nothing to do with the cost of the national revenue, with the cost of Government, in this particular case. This Bill is being forced through because it is part of a general pattern, and the Government does not want to change or alter its pattern. There is no justification for forcing this particular Bill through, repeating six and five, six and five, six and five. Be damned to six and

February 7, 1983
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five. This Bill has not a heck of a lot to do with six and five at all.
The truth of the matter is there is a large increase in the amount of money being allocated to children by the Child Tax Credit in the Income Tax Act. There is an attempt to take some of it back in this amendment. The problem is that the Child Tax Credit is part of the Income Tax Act. The benefits under the Child Tax Credit go to mothers who file, or happen to file, income tax returns. In order to get the child income tax credit, you have to file the return. But when do you get the money? When the Government decides to pay out the credit a cheque is delivered which is part of an income tax rebate system, and it is a lump sum cheque.
The advantage of Family Allowance is that the cheque comes monthly to the mother. The money then can be spent monthly for the benefit of the children. The Child Tax Credit is a lump sum payment which can be used to put a downpayment on an automobile, go on a holiday, and perhaps have absolutely nothing to do with the support of children. The advantage of the Family Allowance system is that it is a monthly system, and if we are going to rely on the Child Tax Credit then it should be paid monthly to those persons who need the money to buy groceries. They do not just buy groceries in May and June when tax rebates are paid. They buy groceries in September, October, December and January. That is when they need the money. To say that the increase in the Child Tax Credit somehow is going to help families look after their kiddies is just wrong. It is not going to help them. It is a bureaucratic method of trying to solve these problems by tax adjustments, which cannot be done. What you have to do is to make sure the money is put into the hands of parents on a monthly basis so they can properly look after their current monthly bills for food, shelter, and so on. This is important to the maintenance of children. I say to the Government, therefore, this Bill is ill conceived, has not been thought out properly, does not properly address the question of maintenance of children, and does not properly reflect the payments which should be made to families to help them maintain their children.
There is ample opportunity before December of this year for the Government to form a committee to study the matter and to produce proper legislation which addresses the question of how we pay and how we look after those who are raising families, to make it more equitable for them in our society. This Bill does not do that. The proposal in Bill C-139 does not do that. It is a hodge-podge. It is a flim-flam.
The Parliamentary Secretary says it has something to do with inflation. Goodness, how are you going to solve inflation, by taking off maybe a couple of dollars from someone who gets a Family Allowance cheque, which is taxable in any event, and at the same time increasing the Child Tax Credit, so the net result of payment out by the state and payment into the state through the tax system is almost the same anyway?
Actually, Mr. Speaker, the Bill does not address the question of inflation. It does not address the question of fairness. It
does not address the question of the requirement to support children. It does not really deal with the issues at all. It is the kind of Bill which should be subject to a long debate for the very reason we have Parliaments. When you have bad legislation it should be exposed to debate by the people of Canada. The Parliamentary Secretary says we have spent 12 hours and 30 minutes. If that amount of time entitles the Government to foreclose an important issue like this, then there is something wrong with Parliament and with this Government in the way it is directing the affairs of Canada.
[ Translation]


Mr. Denis Ethier (Parliamentary Secretary to Minister of the Environment):: Mr. Speaker, I am pleased with this opportunity to express my support, not only for Bill C-132 but also for the Hon. Minister of National Health and Welfare (Mrs. Begin), and for her motion for time allocation, so that we can exercise our democratic right to vote either for or against certain measures.
I agree with the Hon. Member who spoke just now that Bill C-132 alone is not the answer to getting rid of inflation. This Bill is only one in a series of measures we must take at a time of serious economic difficulty, if we truly want to bring down inflation and put the economy back on its feet. I know that our friends opposite are not interested in supporting measures that will help to reduce inflation, because to them it is not good politics. It is not good politics to be positive. Consistently, they have always preferred to be negative-in other words, they criticize without offering alternative solutions.
Since Bill C-132 was first tabled in the House, thirty-five Members have taken part in the debate on this Bill, including sixteen from the socialist group. And yet there are Members who insist that the Minister of National Health and Welfare has no justification for using Standing Order 82. We on the Government side want to discharge our responsibilities, even if it is not always the popular thing to do. It is not popular to say that we are going to cap increases in family allowances, but we must not forget that the families who stand to suffer most, namely, those on low incomes and especially families with several children, will receive an increase of $50 per month in their child tax credit. That is far more than the amount they will have to give up as a result of capping at 6 per cent.
Mr. Speaker, I would like to say a few words about Standing Order 82 which we are invoking today. Considering the almost systematic obstruction practised by our two opposition parties, I submit that it might be necessary to invoke Standing Order 82 whenever we table a Bill. Between now and the end of this session, there are still a number of Bills to be passed, including several money Bills, and I think it is irresponsible of the Opposition to hold up the proceedings. I am accusing them of irresponsibility, as I did on the evening of July 8, when I tendered my resignation as Deputy Chairman of Committees of the Whole House. The Members opposite are not acting as true representatives of this country, that is what I said that evening, and I say it again today. You may recall the incident
February 7, 1983

on July 8 when the Progressive Conservative Members themselves had requested a vote and then left the House and did not come back.
Not so long ago, the NDP Members asked for a vote. They also left the House and did not come back.
The Canadian electorate did not give them a mandate to form a government. They were given a far more limited mandate, in keeping with their talents, namely, to provide opposition, not obstruction, which has become a habit among the Members of the NDP and their Progressive Conservative friends. We on the Government side want to discharge the responsibilities we have been given by the Canadian people. To do so, we are obliged to limit the time spent on debate, and I submit, with due respect, that this should become common practice as long as Members who are given a mandate to provide opposition insist on using that mandate to obstruct the proceedings of this House. On this side, if we are to be worthy of the trust of our electorate, we shall have to invoke Standing Order 82, whenever a Bill is tabled. Let us not forget that these irresponsible people held up the proceedings of the House for two weeks during the bells incident. I, for one, have not forgotten, Mr. Speaker. I had your job, and according to the Rules, the Chair had to be occupied twenty-four hours a day, and so it was. We did our duty. During those two weeks, the Liberals remained faithful to their mandate, and every day they came to the House, as required by the Rules. What did the Progressive Conservatives do during that time? They were travelling across Canada. You would have thought it was an election campaign. Mr. Speaker, although there is no legal obligation on these Members to return the salary they unlawfully received, 1 maintain that if they had any moral sense at all, they would pay back the compensation they received during the two-week walkout or should I say cop-out, because the latter expression is probably more appropriate.
The Opposition Members scream wolf every time that time allocation is invoked. They seem to forget that every Standing Order has a reason for being, in this case to protect us from the systematic obstruction we have seen in this House over the last two years. We have demonstrated on numerous occasions that if the Opposition has any concrete and positive propositions, we will gladly accept them. However, they seem to favour the negative approach, to the detriment of the people who have elected them.
Let us dispose of Bill C-132 and move on to other legislation.


Mr. Munro (Esquimalt-Saanich):: Then withdraw it.


Mr. Dave Nickerson (Western Arctic):: Mr. Speaker, I rise today with a sense of deja vu. It seems that every second time I rise to speak in this House, the subject matter is again closure. This is the sixteenth time that closure or time allocation has been imposed on the House of Commons during a single
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session. I can assure you that it has not been mindless opposition, such as we have just been accused of by the Parliamentary Secretary to the Minister of the Environment (Mr. Ethier). The Opposition in this House has been doing an excellent job of showing up the weaknesses in the Bills presented by the Government. It is because of this responsible opposition and because the Government is unable to refute the facts and arguments we have advanced, that it finds it necessary to use closure on so many occasions.
Bill C-132, Mr. Speaker, which deals with Family Allowance, is part of the great six and five propaganda scheme. It is part of this great public relations gimmick the Government hopes will allow it to take credit for any reduction in the rate of inflation. Of course, that is happening not because of anything the Government has done, but because we are faced with a recession, a recession which was caused by the Government opposite. That is why inflation is abating somewhat. But the very policies pursued by the hon. gentlemen and hon. ladies opposite will guarantee that once the recession is over, we will again face a period of rapid and worsening inflation. Under this so-called six and five system we have a chicken and egg situation. We are faced with inflation and we know everyone has to cut back a little, but who goes first? It is pretty evident that, in the opinion of the Government opposite, it is the little guys who have to go first. It is not the Liberal fat cats who are going first, it is the little guy, the Family Allowance recipients, the pensioners, whether old age pensioners in general or Public Service pensioners in particular. It is the little guys who have been used by the Liberal Government as cannon fodder in the war against inflation.
We on this side of the House do not approve of those tactics, Mr. Speaker. We spent about 12 and a half hours on this debate before the Government decided to impose closure. That time should not have been used to discuss this rather nitpicking Bill, as the Hon. Member for Mississauga South (Mr. Blen-karn) has explained. After all, it is very much a matter of taking a little bit here from the Family Allowances and adjusting the Child Tax Credit, all with no real net effect on Government revenues or expenditures. What we should have been using that time for was a debate on the entire Family Allowance system.
This debate was opened not that long ago by the Minister responsible for the status of women who made certain proposals, which certainly did not go down too well in my part of the country nor, I think, in others. But at least the debate was open. The question arises: should we have the universal system of Family Allowances we now have in Canada? There are arguments pro and con. Personally, I do not really need the Family Allowance, but maybe there are a number of people in Canada who do. Perhaps a better system would be to give the money at present paid to people like myself to people who really need it. We might care to look at changes of that order.
We have problems with the taxability of Family Allowances. Each month the Government mails out literally millions of cheques right across Canada, and then on April 30 of the

February 7, 1983
Time Allocation
following year you get stuck with paying a lot of that money back again. The system of monthly cheques may not be the best one for many people who may prefer the yearly reconciliation at the time of filing their income tax return. Perhaps there should be an option so that people could choose the system they want. That would save millions of dollars as Canada Post would not have to send cheques all over the country.
I have brought this matter up in committee several times but it seems that the Government is reluctant to even consider the idea of changing the system of issuing monthly cheques. The reason for this is quite apparent, Mr. Speaker. It wants that federal cheque to go into practically every household in the country, to show what a good job it is doing. It is another part of the public relations and porkbarrelling that is so often engaged in by the Government. I would have a much greater appreciation of a federal Government that did not insist on sending a piece of paper to every house every month. When it comes to improving relationships between the Government and citizens, I think the provincial or municipal level is a better place to foster this. The federal Government should look after those things that properly fall into the federal domain.
These are some of the arguments that can and should be used in a full debate on Family Allowances rather than the debate we are having today, Mr. Speaker. There are much better ways to look after the interests of children than the system which presently exists.
In the few minutes remaining to me, Mr. Speaker, I should like to return to the matter of closure. Of the 16 times that closure or time allocation-which is the euphemism for it- has been applied, at least half have been unnecessary. Usually the debate was about to end anyway but the Government brought in closure to show who was boss. It wanted to show that it could call the shots. That is the sole reason closure was applied on those occasions. I suggest that that is a dangerous precedent because familiarity breeds contempt. The House and the country is becoming so familiar with closure that they no longer take any notice of it.
I suggest that the House leaders of all Parties get together and work out a system of agreement on the time allocated for debate on Bills of the nature of the one today. Closure is a copout, and I guess this Party has been guilty from time to time as well, but not too often. I will pursue this point the next time there is a debate on closure, Mr. Speaker.
In closing my brief presentation, I want to say that I am not satisfied that closure is warranted on this Bill.


Mr. Doug Frith (Sudbury):: Mr. Speaker, I should like to take the first two minutes of my address to rebut the remarks of the previous speaker regarding time allocation and closure. He did not think that closure was necessary on Bill C-132. Part of the problem that we have had on this side of the House during debate on second reading, committee stage and report stage, is the seeming inability of the Opposition to offer a comprehensive reply to the substance of Bill C-132. In the first six minutes of his speech the Hon. Member confused time allocation and closure, but there is a substantial difference
between the two, Mr. Speaker. It seems to me that this inability to distinguish is indicative of many of the contradictions in the speeches of Members of the Opposition regarding Bill C-131 and Bill C-132.
This afternoon the Minister of National Health and Welfare (Miss Begin) referred to the number of Members who have spoken since the Bill was introduced. At last count some 35 Members had participated in debate, including 16 Members of the Official Opposition. In order to effect speedy passage of the legislation, only nine Liberals have spoken.
It seems to me that a lot of misinformation has been given out by Members of the Opposition both in this Chamber and at committee. Nowhere in the debate has the Minister or any Member of this Party said that the reason for six and five being introduced on the Family Allowance, was to save money. Since the budget of June 1982, we in this Party have said that we are primarily concerned with an attack on the inflationary psychology that seems to have gripped the Canadian public. We realized that if we were to live in an inflationary world of 12 and 10, there would be a tremendous onslaught on the social security systems that are in place. Consequently, when we introduced six and five we decided that it had to be applied across the board. I think the results shown in the last six or eight months point to our success in fighting the inflationary psychology that gripped the nation about 14 months ago. In the last three months, we have been successful in bringing the rate of inflation down to the 7.2 per cent range.
In addition, when we introduced the six and five program to our social security system, we reiterated to the House that in order to protect those who need protection most, we would also introduce several countervailing balances in the legislation. In Bill C-132 the Child Tax Credit was increased by $50 in order to protect people on the lower end of the income scale.
The Hon. Member for Western Arctic (Mr. Nickerson) referred to social security and Family Allowances as pork-barrelling. I find that difficult to comprehend, Mr. Speaker.
Some Members of the Opposition have called this Bill an attack on universality. In committee we have pointed out that there are evidently some misconceptions in the minds of Members of the Opposition about what universality is. We have steadfastly maintained throughout debate that there has been no attack on universality in Bill C-131 and Bill C-132. In both instances we have ensured that people at the lower end of the income scale would receive full compensation for our fight against inflation.
The Hon. Member for Western Arctic and others have also said that they would welcome a much wider debate on the whole social security system. We would welcome that as well, Mr. Speaker. The problem is that there never seems to be one spokesman for the Opposition Party who can offer a main platform for that Party. When the Hon. Member for Rosedale (Mr. Crombie) was Minister of National Health and Welfare in the Conservative Government in 1979, he wanted to dismantle Family Allowances.

February 7, 1983


Mr. Hawkes:: That is not true.


Ramon John Hnatyshyn: This fiction will not be believed.


Douglas Cockburn Frith: As a matter of fact, in reply to the Hon. Member for Calgary West (Mr. Hawkes), let me indicate that the former Leader of his Party gave a speech in western Canada during the election campaign prior to the 1979 election in which he questioned the need for a complete review of the social security system. In that speech he went on to say that it was his fear that, unless we came to grips with the whole area of universality, the national Government might not have the ability to maintain a strong enough central Government to keep the nation together. It is evident from the remarks of the former Leader of the Opposition and the former Minister of National Health and Welfare that the Conservative Party has yet to come up with a clear-cut position on the Family Allowance system and on Old Age Security.
The Hon. Member for Western Arctic mentioned earlier that he did not see any need for time allocation or closure on this particular Bill. My only comment in that regard would be that perhaps the Hon. Member and other Members of his Party might want to get together with their House leader. I can assure them that we on this side of the House, rather than having to use time allocation, would welcome a much freer debate, knowing that we have some co-operation from the Conservative House Leader in having speedier passage of legislation in the House.


Mr. Laverne Lewycky (Dauphin):: Mr. Speaker, in the few minutes I have I would like to voice my opposition to this closure motion and to give several reasons as to why I feel we should vote against it. It is important to have an opportunity for full and adequate debate in the House of Commons on this particular issue. When we take a look at the entire question of Family Allowances, the underlying principle is that an attack on families is being brought forward at this time by the Minister of National Health and Welfare (Miss Begin). We have had ample indication of the way in which families are being attacked. For example, the Minister of State for Mines (Mrs. Erola), in recent press statements, attacked women working in the home. But first I want to take a look at the history of Family Allowances. It is important to keep this aspect in mind. It is always good to have an historical perspective when discussing a contemporary issue. This particular issue bears well in that regard.
It was back in 1945 that Prime Minister Mackenzie King introduced the baby bonus. I suppose it could be underlined that he was a bachelor and childless. It is rather ironic that we have the equivalent of the opposite sex introducing her Bill at this time which attacks that previous positive move. Approximately three years later the baby bonus was made universal. In the early years of the 1970s the Liberal Government attempted to introduce a Bill which would have made the baby bonus selective. Fortunately, after the 1972 election we had a minority Government, and the Liberal Government of the day did not proceed with its plan "to do in" the baby bonus. In fact, during
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that minority Parliament, because of pressure from the Opposition, the then Minister of Health conducted a study and brought in a paper. In 1973 the baby bonus payments were tripled.
The reason I bring forward this historical perspective on a contemporary issue is that it indicates the wisdom which sometimes results if there is opportunity for debate or opportunity for sober second thought. In the early 1970s, in the dying days of Parliament, the Liberal Government wanted to rush through a reduction and elimination of the baby bonus. Then it had second thoughts after the 1972 election. This indicates the wisdom of second thought.
Let me take a look as well at some of the sociological arguments in favour of maintaining Family Allowances as we now know them. When we take a look at Family Allowances, I think we should keep in mind that they are taxable. They are progressive in the sense that the larger one's income, the greater share of one's allowance will be returned to the Government at tax time. The cost of administering the Family Allowance scheme is certainly less expensive than a Child Tax Credit scheme. For example, the administrative costs of Family Allowances from 1976 to 1977 were estimated to be $1.50 per child, or half of 1 per cent in total costs. The estimates for administering alternative schemes such as the Child Tax Credit was something to the tune of ten times those costs.
In addition, there are other reasons we should look positively at the Family Allowance scheme. It is a monthly program. Money is received on a monthly basis, quite often by single parents. Certainly it is easier to budget on a monthly basis than it is to receive a lump sum payment under the Child Tax Credit scheme. Another benefit of a universal Family Allowance scheme is the participation rate. So often, on selective programs such as the Child Tax Credit, many people might not be as aware of it as they should be. They might not be able to fill in the income tax forms as they would like to do. I say this from firsthand experience. As Members of Parliament, we have many people coming to our offices requesting assistance with the Child Tax Credit scheme. There are problems in terms of the incomplete take-up of programs such as the Child Tax Credit. One does not face these problems when there is a universal system such as Family Allowance.
I suppose some people want to argue that the Family Allowance system might be costlier to Government because it can defer the payment of the Child Tax Credit to later in the year. In countering that argument I would want to point out that most income taxes and other taxes are collected earlier in the year. Arguments which attempt to indicate that economically it is better if the Government can hold on to people's money until Child Tax Credit time are certainly not sound ones. It is important to take a look, not only at the historial perspective and some of the sociological considerations, but at the situations in our own constituencies.
In the couple of minutes remaining, I would like to give an indication of what would be the impact on constituencies such

February 7, 1983
Time Allocation
as the riding of Dauphin, Manitoba. It is important to keep in mind that often the Family Allowance program assists the poorer regions of the country. For example, the 1971 statistics indicated that the national household income for families was $9,367. For Manitoba it was $8,261, but for areas such as Dauphin it was $5,361. When one looks at such small household incomes one realizes the impact of the monthly Family Allowance will certainly be much greater than it would be in some of the urban centres. When one reviews the whole question of poverty in Canada, it is important to note that the Family Allowance is most beneficial to single parents and those who are poor in many regions of the country. In Manitoba alone, 63 per cent of the poor adults in that Province are female, many of whom will be affected by Bills such as this. Nearly one-third of the poor are children. It is the children who benefit from these regular monthly Family Allowance payments. Many mothers who have visited my constituency office have told me that they use this Family Allowance to provide such necessities as food, clothing and shelter. This money is made good use of by these families.
One out of every two single-parent families is poor, and many live in ridings such as mine. I think it is important that we oppose the Government's motion to limit debate on a matter as important and crucial as this. I believe that we should have the opportunity to expand on some of the ideas I have mentioned so that Members of the Government will have an opportunity to weigh some of these arguments and perhaps even have an opportunity to examine their own conscience. Moral considerations are involved in this issue as well.
I see that my time has elapsed. I thank you for giving me the opportunity to share some of these concerns. I trust the Members opposite will take them into consideration as we look at this closure motion.


Mr. David Smith (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, it seems that every time we have one of these debates it is necessary to remind Members opposite of the purpose of the debate. One thing that it is not intended for is to debate the merits of the Bill.
There is a motion before us now which cannot be debated for more than two hours-although we seem to be falling into the practice that the maximum also becomes the minimum- on whether we should allocate and specify how much further time should be spent on this particular Bill. I plan to deal with that motion rather than the merits of the Bill which has been debated over a number of days and will be debated for two more whole days in the House if this motion carries, as I assume it will.
I think it important to remind Hon. Members opposite, since they have not yet realized it, that we are not dealing with closure in this debate. The matter of closure comes under Standing Order 37, and I would invite Members to look it up in their Standing Orders. They will find that closure falls under Standing Order 37, formerly Standing Order 33. We are
dealing here with time allocation under Standing Order 82, formerly Standing Order 75 until the recent rule changes.
I suggest that the public should be made aware of the fundamental difference between these two Standing Orders. If not, I think Members of the Opposition may find themselves becoming somewhat like the boy who cried wolf. They will call time allocation "closure" on so many occasions that in the event there is a real closure motion, no one will think anything of it because they will not know the difference. If a closure motion does occur, I suspect we will then hear speeches about that really being closure as opposed to what they have been calling closure all along.
What is a responsible amount of time to allocate to any debate? This is a problem that any political Party has that is in Government in a parliamentary system. One has to walk a fine line. Parliament is an institution where ideas can be debated. When legislation is introduced, its pros and cons can be thoroughly debated. However, I think we would all concede that unending debate could lead to abuse. In fact, a Government would not be living up to its responsibility to govern if it allowed the legislative flow to become a trickle as a result of spending too much time on debate.
I think it is fair to say that this is one of three Bills which relate to the Government's six and five program. This program was designed to bring inflation under control in this country. It is a statistical fact that it has met with some success to date. While it may be arguable that the amount of progress we have made in reducing inflation in this country being attributable to the Government's six and five program may be argued, I think it is fair to say that the program's psychological impact has been headed in the right direction.
We have been debating the pros and cons of six and five as it relates to other Bills. This is not the only Bill on which six and five will be debated. As has been pointed out by prior speakers, we have discussed this particular Bill before us on December 1, December 2, December 3, in committee and then at report stage on December 17 and December 18. Prior to today there have been over 35 speakers debating this Bill. We are now in a two-hour debate in which we will probably have a total of 12 speakers because of a ten-minute time limit per speaker. We will then have two more full days of debate.
I would suggest that any reasonable, fair-minded and objective person would readily concede that that is a reasonable amount of time to argue the other side of this Bill. 1 dare say that after three or four rounds of speeches, the odds of any new pearls of wisdom or perceptive insights being brought out in debate are rather slim. I really question to what extent the public is served by what really boils down to filibuster and obstruction. Perhaps what is in the minds of some Hon. Members opposite-I certainly do not suggest this of those who are present at the moment-is that some political points can be gained by forcing us to introduce time allocation at each stage of all these Bills. Who can say whether their judgment is right? Only time will tell. Perhaps political futures will be determined on matters other than these.
February 7, 1983

There are times when it is much easier to be in the Opposition than it is to be in Government-probably most of the time. Governments must take decisions that are not necessarily particularly popular. I suppose that everyone wants more rather than less. If one conducts a survey one can probably find people who will say things that are mutually incompatible. How often do I hear from the other side that we should be working for a balanced budget? How often do I hear from the Tories that we should be trying to reduce Government spending. The Hon. Member for York-Peel (Mr. Stevens) is sometimes affectionately known as the slasher, and we think of him in those terms in a kindly way. He feels very strongly that Government spends too much. He had a Cabinet post that concerned control of Government expenditures during the previous administration headed by the Right Hon. Member for Yellowhead (Mr. Clark). When he was in office we heard a lot of noise, but when it came down to the specifics about where these cuts would actually come from, he was a little more vague.
It is a little discouraging to be castigated on an almost daily basis for spending too much money when one is trying to take some initiatives which are responsible and which apply equally to everyone in Canada across the board, in a way which does not particularly target out any one group. All of these measures are designed to bring inflation under control, and if we succeed in that, I think that everyone in Canada will be better off in the long run. That is a very desirable thing to do, but when one tries to do it, every possible roadblock is put in one's way. I think it is only fair, in deciding how much time is to be allocated, to ensure that sufficient time has been spent to hear all the arguments. We have long since gone past that stage, and a vote on the Bill at this point would really amount to constructive, responsible and effective leadership on the part of the Government.


Frederick James (Jim) Hawkes: Mr. Speaker, in the few minutes allotted to me I would like to explain to the Parliamentary Secretary and to the Liberals opposite that what we are engaged in, for the third Monday in a row, is another attempt to erode democracy. If one considers the three-year history of the Government-


Jean-Jacques Blais: Read Standing Order 75C.


Frederick James (Jim) Hawkes: -of the Prime Minister (Mr. Trudeau) and the Cabinet, one sees that the major attempt to erode democracy was in the original version of the Constitution when you sought to transfer power from the voters of this country to appointed people. We saw the next major erosion of democracy in the issue involving the bells when you attempted to use an omnibus form of legislation.


Mr. Deputy Speaker:: I remind the Hon. Member that remarks should be addressed to the Chair.
Time Allocation


Frederick James (Jim) Hawkes: Mr. Speaker, through the Chair, I would like to bring to the attention of the Liberal Party and Cabinet Members the fact that an omnibus Bill, which deals with many different issues but allows one single vote, argues against the democratic right of Members of Parliament and the democratic right of voters in this country to send us to this Chamber to make decisions on their behalf. That is why the bells rang for several days, for freedom and for democracy.
Three Mondays in a row we find the Liberal Government, supported by its backbenchers, attempting to deny Members of this Chamber the right to represent their constituents in free and open debate. We must ask whether or not there are other reasons for an Opposition to filibuster than to fill in time. Just once in three years if the Government had only listened to the Opposition when we tried to stand in the House and say, "Your legislation is wrong and bad", one would not have found so much filibustering, so much debate and so much need for clobbering us on the principle of democracy.
1 stood in this Chamber and made a speech last week which suggested that if every taxpayer gave 15 cents a month, that piece of legislation with respect to senior citizens' pensions would not be necessary. Fifteen cents a month is something taxpayers of this country would have gladly given to stop the Government from cutting pensions of senior citizens. That is the point we tried to make. We tried to make it with force, but we have no sense that the Government was listening.
When one finds us filibustering, it is because the Government is supporting a piece of legislation which is bad for the people and this nation. Let us get off the closure kick and get back to democracy. That is what the Opposition is arguing, responsibly.


Mr. Deputy Speaker:: Order! It being 5.04 p.m., in accordance with Standing Order 82, the two hours provided for consideration of the motion before the House have expired.

Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


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


Some Hon. Members:: Yea.


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


Some Hon. Members:: Nay.


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


Mr. Deputy Speaker:: Call in the Members.


Madam Speaker:: I declare the motion carried. Motion (Miss Begin) agreed to.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
David P. Smith: Madam Speaker, the following questions will be answered today: Nos. 4,331, 4,492, 4,502, 4,642 and 4,645.


Mr. Cook: 1.	During 1969, how many certificates were signed by the then Minister of Manpower and Immigration and the Solicitor General pursuant to Section 21 of the Immigration Appeal Act?
2.	Did all of the individuals against whom such certificates were signed then have recent serious criminal or other convictions recorded against them?
3.	Did any of these individuals receive a pardon for an offence and, if so (a) what was the offence and on what date did it occur (b) did the Department recognize the validity of the pardon?
4.	Were any of the individuals ever convicted of an offence or deported from another country subsequent to which courts or authorities of competent jurisdiction ruled that the events which gave rise to these actions were null and void ab initio?
5.	Do any of the individuals now have the majority of their immediate family members in Canada, either as citizens or permanent residents?
6.	Where such individuals continue to be excluded from Canada on the basis of the "reports" referred to in a Section 21 certificate, what opportunities are afforded to them or to their family members in Canada to be advised of the nature or details of the Department's "suspicions" as a means of guarding against errors or prejudice by others?
7.	Does the Minister regard this policy as fair and reasonable in safeguarding individual freedoms and rights?
8.	Was a Section 21 Certificate ever issued against any individual despite a finding by both the Immigration Special Inquiry and the Immigration Appeal Board that there were no grounds to support the Minister's contention that the individual in question posed a threat to the security of Canada?
9.	What is the policy of the Minister of Employment and Immigration and the Solicitor General respecting the continued enforcement of a Section 21 Certificate where the relevant national and international police agencies (Interpol) state that there are no recorded or pending charges, either of a criminal or civil nature, against the individual in question?
10.	Is it the policy of the Minister and the Solicitor General never to lift a Section 21 Certificate regardless of any circumstances which may have changed over time?
11.	What opportunities are afforded Canadians to safeguard their reputations and those of their relatives against errors in the personal information-gathering activities of the Royal Canadian Mounted Police and the subsequent use of this information?
12.	(a) During the period January I, 1971 to December 31, 1979, how many individuals previously ordered deported from Canada were subsequently readmitted for permanent residency (b) how many of the individuals were originally ordered deported on criminal or related grounds, including a possible threat to the security of Canada?


David P. Smith: I am informed by the Canada Employment and Immigration Commission/Department and the Solicitor General as follows:
1.	Three.
2.	No. See answer to part 3.
3.	In one case, a conditional pardon was granted, (a) Not at liberty to discuss details of the case to protect the identity of
February 7, 1983

the person concerned but, (b) the Department of Employment and Immigration recognized the fact that the person had been convicted.
4.	The Department of Employment and Immigration is aware of one case where the individual was ordered deported from a country and subsequently the order was rescinded.
5.	Records indicate that some family members were admitted to Canada but it is not possible to state whether they are still in Canada since there are no Canadian exit controls.
6.	Reports referred to in Section 21 Certificates are confidential and are made known only to the Minister responsible for immigration and the Solicitor General of Canada.
7.	This policy is applied only in exceptional cases and the information provided by the Solicitor General's office must be kept confidential to protect sources and/or individuals. The Minister of Employment and Immigration and the Solicitor General always ensure that both the rights of the state and those of the individual involved are fully protected.
8.	No.
9.	Once a Section 21 Certificate was issued against a person, he/she was required to leave the country. The case would only be reviewed if the person reapplied for admission to Canada. The Minister of Employment and Immigration would review the case in light of any information provided at the time of the new application and would consult with the Solicitor General if necessary to ensure that the grounds under which the original certificate had been issued were still valid or not.
10.	Once a hearing is finished the existence of the Section 21 Certificate on record is an historical fact. This, however, does not prevent the Minister of Employment and Immigration from reviewing the situation or taking any other action he may deem necessary.
11.	Under Part IV of the Canadian Human Rights Act, Canadian citizens can access personal information held by the RCMP concerning themselves. Furthermore, the requestor can ask for corrections on any personal information relating to him/her that, in the requestor's opinion is erroneous. If the correction is refused by the RCMP, the individual has the right to make an annotation on his/her record stating the reasons why the correction should be made. The individual has a further right to appeal to the Privacy Commissioner to ensure that any exemptions applied to the request are within the law under the Canadian Human Rights Act and that the notifications of corrections have been duly placed on the file.
12.	See response to parts 1-10.


Mr. Siddon: 1.	What was the total cost to the Canadian Broadcasting Corporation for the special program celebrating 30 years of CBC television programming, entitled "Thirty Years Plus One" aired on September 20, 1982?
2.	What amount was Mr. Patrick Watson paid as host of the special?
3.	Were other performers paid for their guest appearances on the Special and, if so, who were the performers and what amount were they paid?
Order Paper Questions
4.	Did the CBC or any other government agency expend any money for staff receptions or other private functions to celebrate 30 years of CBC television programming and, if so, which agencies and what amount did the agencies expend?
5.	What amount was spent on CBC birthday celebrations by way of (a) special radio or television programs (b) staff receptions (c) other private functions since 1977?


Hon. Francis Fox (Minister of Communications):: I am
informed by the Canadian Broadcasting Corporation as follows:
1 and 2. It has not been customary to require the CBC to provide such details of its internal management and administration as the costs involved in individual program projects or the fees paid to performers. The background to this custom is explained in detail in the reply to question No. 2,530, answered November 1, 1975.
3.	All performers were paid for their appearances on Thirty Plus One. The performers were:
Harry Rasky	Knowlton Nash	Sylvia Murphy-TateRoss McLean	Louis Del Grande	Mavor MooreJennifer Dale	Roger Abbot	Lome GreeneJuliette	Luba Goy	Lorraine ThomsonLally Cadeau	Veronica Tennant	Jack DuffyCelia Franca	David Suzuki	Billy O'ConnorPeter Gzowski	Eric Mailing	Jackie RaeGordon Pinsent	Sydney Newman	Earl CameronJohnny Wayne	Drew Crossan	Alan BlyeFrank Shuster	Alex Barris	John VernonNorman Jewison	Frank Peers	Doug LeitermanBruno Gerussi	Eric Koch	James E. DaleA1 Waxman	Robert Goulet	Susan ClarkLarry D. Mann	Patrick MacNee	Jack MillerGeorge Retzlaff	Charles Templeton	Warren DavisPeter Kent	Larry Henderson	Barry MorseLloyd Robertson	Toby Robbins	
With regard to the fees paid these performers, it has not been customary to require the CBC to provide such details of its internal management and administration. The background to this custom is explained in detail in the reply to question No. 2,530, answered November 6, 1975.
4.	Yes. The CBC's French Services Division, whose Montreal flagship station CBFT was the first Canadian television station ever to go on the air (September 6, 1952), presented a 30th anniversary gala concert which was telecast on the French network on September 12, 1982. Following the concert, there was a reception in the foyer of the Maison de Radio-Canada in Montreal for the approximately 1,000 people who had performed in and attended the gala. Including the cost of printing invitations, the reception cost $12,695.
5.	(a) The French television network presented two programs celebrating the 30th anniversary of television programming in Canada-Le 30' anniversaire and Gala du 30' anniversaire. The English television network presented one program-Thirty Plus One. With regard to the costs of the programs, it has not been customary to require the CBC to provide such details of its internal management and administration. The background to this custom is explained in detail in the reply to question No. 2,530, answered November 6, 1975.
(b)	None, (c) See 4 above.

Order Paper Questions FEDERAL-PROVINCIAL LOTTERY AGREEMENT


Mr. Reid (St. Catharines): 1.	As of the date this question is answered, what amount, on an annual basis, has been received from the provinces pursuant to the 1979 Federal-Provincial Lottery Agreement?
2.	Has any interest been earned on this money and, if so, what amount annually?
3.	Has any of this money been spent and, if so, on what project or programs and in what amounts?
4.	Is it the intention of the Government to allocate any of the fitness and amateur sport proceeds from the lottery agreement to (a) the Calgary Olympics (b) any other major athletic event?
Component IV (special projects)	5,994,000
Total	$27,667,083
National Capital Projects	8,000,000


[Stage Direction]
4. (a) No. (b) Not in a direct way: some major athletic events are funded by the Fitness and Amateur Sport Voted Base which has been enlarged as per (3) above.
David P. Smith: I am informed by the Department of Communications and the Ministry of State for Fitness and Amateur Sport as follows:
1.	Under the federal-provincial lottery agreement the following amounts have been received on an annual basis. Payments are made quarterly.
Year	Payments	Received	Cumulative1980	4	$25,576,884.43	$25,576,884.431981	4	$28,938,693.45	$54,515,577.881982	3	$23,683,417.08	$78,198,994.962.	The amounts are deposited into the Consolidated Revenue Fund immediately upon receipt. Consequently there is no interest revenue directly attributable to these funds.3.	Subsequent to negotiation of the above agreement, in January of 1980, the federal Government announced that moneys derived from the Provinces as per this Federal-Provincial Agreement were to be shared equally between programs of amateur sport, fitness and physical recreation and programs of arts and culture. However, no reference to this allocation of funds is referred to in the agreement negotiated with Provinces in August, 1979.
In so far as the allocation of these funds to the Fitness and Amateur Sport Program is concerned, a review of Main Estimates for this program demonstrates the following increases:
Fitness and Amateur Sport-Contributions Funding-as per Main Estimates
	Appropriations	Expenditures
1978-79	$25,995,000	
1979-80	21,467,000	
1980-81	22,750,000	$32,893,9131981-82	38,577,000	42,327,0001982-83	42,780,000	42,780,000 (forecast)
In so far as the allocation of these funds for programs of arts and culture: Program of Cultural Initiatives
Spent and committed
Component I (deficit)	$ 3,763,766
Component IIA (management development)	927,409
Component I IB (without deficit)	1,245,000
Component III (capital projects)	15,736,908


Mr. Baker (Nepean-Carleton): For each year since the fiscal year 1957-58, based on the accounting practices currently used by the Government, what has been the government's (a) spending on a public accounts basis (b) spending on a national accounts basis (c) revenues on a public accounts basis (d) revenues on a national accounts basis (e) interest costs on a public accounts basis (0 interest costs on a national accounts basis (g) gross debt (h) net debt?


Hon. Paul J. Cosgrove (Minister of State (Finance)):: The
table below contains the information requested in question 4,642. It should be noted that interest costs are conceptually the same on the Public Accounts and National Accounts bases. The Public Accounts data have been adjusted for consistency with the 1981-82 Public Accounts. These adjustments include:
(a)	treatment of the Post Office as a Crown Corporation throughout the period;
(b)	reclassification from liabilities to assets of notes payable to the International Monetary Fund and other international organizations, and the allocation of special drawing rights;
(c)	treatment of Old Age Security revenues as budgetary revenue and Old Age Security payments as budgetary expenditure throughout the period;
(d)	a reallocation of 1978-79 and 1979-80 Public Accounts provisions for valuation to the individual years for which they actually applied with respect to the following items:
(i)	the government's annual cost with respect to the Unemployment Insurance Account;
(ii)	loans, investments and advances deemed to be non-recoverable;
(iii)	working capital advances;
(iv)	unamortized loan flotation costs of marketable bonds and Canada Savings Bonds; and
(v)	undisbursed balances of appropriations to special accounts;
(e)	the charging to budgetary expenditures of charges made directly to net debt over the period 1958-59 to 1964-65; and
(0 other miscellaneous adjustments to place annual Public Accounts recording on a consistent basis.
The National Accounts data are already publicly available from Statistics Canada but are reprinted here for convenience.
February 7, 1983

Order Paper Questions
Federal Government: Expenditures, Revenues, Interest, Gross Debt and Net Debt
Interest	Interest
National	National	Costs-	Costs-	Gross Debt	Net DebtTotal	Accounts	Budgetary	Accounts	Public	National	at end	at endOutlays	Expenditures	Revenues	Revenues	Accounts	Accounts11*	of year	of year(a)	(b)	(c)	(d)	(e)	(0	(g)	(h)1957-58	5,581	5,606	5,267	5,504	539	539	17,702	12,2691958-59	6,596	6,263	4,973	5,486	607	607	19,392	13,1961959-60	6,271	6,560	5,669	6,307	736	736	19,962	13,6711960-61	6,499	6.815	6,047	6,500	757	757	20,424	13,9581961-62	7,331	7,355	6,190	6,858	803	803	21,728	14,7671962-63	7,517	7,466	6,377	7,062	882	881	23,080	15,5221963-64	8,055	7,728	6,803	7,541	955	955	24,828	16,6571964-65	8,684	8,153	7,910	8,549	1,012	1,012	25,920	16,9861965-66	9,193	8,719	8,628	9,312	1,077	1,077	26,590	16,7451966-67	10,957	10,024	9,408	10,260	1,156	1,156	28,105	17,0131967-68	12,427	11,336	10,290	11,189	1,270	1,270	29,708	17,7131968-69	12,927	12,621	11,507	12,696	1,443	1,442	31,971	18,1171969-70	14,439	13,837	13,800	14,815	1,676	1,677	33,178	17,6211970-71	16,130	15,823	14,380	15,734	1,877	1,875	36,774	18,0301971-72	18,306	18,075	15,941	17,820	2,091	2,068	40,238	18,8111972-73	20,560	20,812	18,351	20,614	2,274	2,301	43,252	19,8101973-74	24,067	23,801	21,346	23,987	2,548	2,547	45,677	21,1941974-75	31,262	30,810	27,581	30,763	3,164	3,164	50,997	22,9271975-76	37,890	36,560	29,512	32,642	3,909	3,908	58,025	28,3901976-77	40,381	40,323	32,020	36,095	4,662	4,662	65,761	34,6001977-78	44,152	45,558	32,093	36,159	5,473	5,473	78,528	44,8891978-79	47,641	49,467	34,313	39,821	6,857	6,857	95,702	57,1151979-80	51,844	54,645	38,936	45,337	8,339	8,340	103,626	68,5951980-81	58,589	62,861	45,398	53,286	10,501	10,500	118,461	81,2631981-82	68,913	75,205	54,068	65,177	14,948	14,368	134,107	94,869
O National Accounts interest costs should be the same as in the Public Accounts. However, full revisions are not always made to the historical data. 1981-82 will be revised by Statistics Canada later this year.


Mr. Beatty: 1.	How many lawyers does the Department of Justice currently have on staff full time?
2.	How many person-years were approved for lawyers in the Department for the fiscal year 1982-83 in the (a) Main Estimates (b) Supplementary Estimates?
3.	How many person-years were added to the Department for the interpretation of the Charter of Rights, as mentioned by the Minister of Justice on p.
112:29 of the Minutes of Proceedings and Evidence of the Standing Committee on Justice and Legal Affairs?
4.	What was the total cost to the taxpayer of (a) all lawyers employed by the Department (b) lawyers employed by the Department to help interpret the Charter of Rights?
5.	Did the Department decide that the lawyers it already had on staff were inadequate for the provision of advice on the Charter of Rights and, if so, for what reason?


Mark R. MacGuigan: 1. Five hundred and ninety-two.
2.	(a) 578, (b) 39.
3.	Fifty person-years were added to the Department to enable it to cope with the added work arising out of the Charter. Of these, 25 person-years were for lawyers. These are included in the 39 person-years for lawyers approved in Supplementary Estimates. (2 (b) above).
4.	(a) The salary cost for all lawyers employed by the Department was $20,175,000 for the first nine months of fiscal year 1982-83. (b) The salary cost for the same period for lawyers dealing with legal work arising out of the Charter was $865,000.
5.	The lawyers on the staff of the Department prior to the proclamation of the Charter of Rights were fully committed in the ongoing work of the Department. To allow it to cope with the legal work arising out of the Charter, the Department sought and obtained approval for an additional 25 person-years for lawyers for 1982-83. The work involved goes far beyond interpretation of and advice on the Charter of Rights, and includes such additional activity as a review of existing laws, regulations and administrative practices to determine the extent to which they are in conflict with the Charter, and the preparation of remedial legislation, regulations or other measures; an ongoing review of proposed legislation and regulations at the drafting stage for compliance with the Charter; and ongoing counsel work as laws and practices are challenged before the Courts.


David P. Smith: 1 ask, Madam Speaker, that the remaining questions be allowed to stand.

February 7, 1983
Income Tax


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


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Monday, January 31, 1983, consideration of the motion of Mr. Lalonde that Bill C-139, to amend the Statute Law relating to Income Tax (No. 2), be read the second time and referred to a Committee of the Whole.
Mr. Ron Stewart (Simcoe South):: Mr. Speaker, I welcome this opportunity to add my voice to the chorus of frustrated and angry Canadians who have spoken out against the disaster and regressive measures contained in the last three budgets presented by this Government. On three occasions, November, 1981, June, 1982, and again in October, 1982, this Government has had the chance to bring forward measures which would help stimulate and promote growth in the stagnating economic climate which we know now exists in Canada. Three times, Mr. Speaker, it has failed miserably. The budgets which were presented were a debacle, a "hound's breakfast", if you will. Obviously, the Government itself knew belatedly the mess it had created, knew without reservation it had produced three "clunkers".


Some Hon. Members:: Oh, oh!


The Acting Speaker (Mr. Blaker):: Order, please. The House will appreciate this rule by silence.


Ronald Alexander Stewart: Thank you, Mr. Speaker, I have all the more respect for you.
Everything this Government does points to state control, including the provisions in this tax Bill. It points to bail-outs for the large corporations, and I am afraid to think about what might happen to Canagrex when it comes back to this House. What will happen will be, of course, closure and, of course, state control. What is next, Mr. Speaker, is it the banks? What is it that will take this country straight into the real and utter debacle of socialism?
The first indication we had that these measures in this Bill were unpalatable and unworkable was when changes and amendments were hastily introduced. It was the second signal from a beleagured Government which gave indication of the serious nature of the problems it had created. The master craftsman, the architect of the first two monstrosities, the then Minister of Finance, was removed from his portfolio, and not before time. Having created havoc within the country, he was given the outside world to tinker with, a threatre of operation where he presumably can do less damage, given the levels of
respect this Government has engendered in international circles, other than an attempt at world socialism. But this shuffle of Ministers did little, if anything, to assure Canadians personally, or the business community in particular, that the economy could be turned around. Does anyone honestly believe for an instant that Canadians now feel safer, now that the Department of Finance is in the hands of the man who was directly responsible for the disastrous National Energy Program? The fire is no worse now than the frying pan was.
The new Minister of Finance (Mr. Lalonde) had the embarrassing task of changing some of the outlandish proposals of his predecessor, but in doing so, he added some objectionable ones of his own. The Bill before us today gives ample proof of this continuing debacle. There were approximately 168 provisions in the original Bill. Due to strong public opposition from the public, and from this Party in particular, some 42 changes have taken place. And the Party to my left had not very much to do with these changes. There were 42 changes, Mr. Speaker, roughly one-quarter of the provisions had to be changed, because this Government never stopped to look before it leaped. Four jumps forward, one jump back for the Canadian economy. In the meantime, confusion and chaos.
Back in December, 1981, I spoke on the Small Businesses Loans act which was directly affecting the budget at that time. I would just like to read from the record because I believe it is very interesting. It is on page 14135 of Hansard for Wednesday, December 16, 1981 and it reads:
This budget is a destroyer of initiative. It is a destroyer of any form of elitism. It is the work of warp-minded bureaucrats who cannot define the meaning of the work risk and who have never met a payroll. I am including the so-called finance minister, unfortunately. Any self-respecting minister of finance in the federal system of government that we know, any self-respecting minister who has had such public opposition of the budget and its contents from the public and from business, any minister who has made such wide-ranging changes in the tax system without consulting small business, any minister who has made a $600 million mistake, any minister who has made three major changes as an admission of error, would and should resign.
Since then, we have had 39 more changes. These changes from November 12 to December 18 include MURBs, reorganizations, reserves, capital cost allowances, soft costs work in progress, restricted interest expenses, retiring allowances, accrual of interest income, IACCs, small business bonds, loans to non-residents and employer housing loans, prescribed rate of interest, DPSPs, life insurance, life insurance policy holders, contractual commitment, airline passes, jet fuel, fiscal arrangements, charitable foundations, federal sales tax, capital cost allowances. All of these have been spoken on at length by my colleagues. Then there have been changes with regard to the automobile standby charge, corporate distribution tax, forward averaging, IACCs, life insurance, all on June 28, 1982. The litany of horrors goes on and on.
As I sat in the House, Mr. Speaker, and heard these three previous budgets, as a small businessman I could not believe the confusion and contradictory nature of the changes and proposals which have had such a serious impact on small

February 7, 1983

business in this country. I would remind the Members opposite that 65 per cent of the businesses in this country are classified as small businesses, and these businesses are the most penalized because of the inept handling of finance by this Government. This is one area which I can speak on from personal experience. Seeing and hearing these proposals-many now rescinded but most still in place-I could almost feel a personal vendetta by the Minister of Finance toward my small business and my employees, not to mention the farmer or the insurance man, etc. Let me illustrate.
Many small-businessmen and farmers, who planned on setting aside funds for their retirement, will suffer as the result of the abolition of the IAACs. The 12.5 per cent dividend distribution tax and the half year convention on capital cost allowances, a subject which has been gone into in great depth here this afternoon, will hurt small-businessmen. Married couples, who now each own a dwelling, usually a home and a cottage, will now be subject to capital gains taxes on one of the residences. The proposed tax liability for directors will discourage individuals from serving on boards of directors. Employees will now be penalized by the inclusion in taxable income of all interest subsidies from an employer, and there will be a deterrent to education through the restriction on education deductions. Employees who have the use of an employer-owned or leased automobile for personal use will now be taxed according to a complicated formula. If I have time, Mr. Speaker, I would like to go into that in great detail.
The Government is penalizing the one thing in this economy of ours which works, that is sales. A person who uses a car on company business will generate sales, which in turn generates production, and that is what we so desperately need in Canada. Canadians will no longer be allowed to deduct interest on loans taken out to purchase registered retirement savings plans. Accrual taxation of life insurance, while watered down from the initial proposal, remains a deterrent to potential purchasers.
In addition to the disastrous effects this Bill will have on the Canadian business community, it raises problems for individual Canadians. The language of the Bill is so complex as to be virtually incomprehensible. It is the most complex piece of legislation since the woebegone days of 1971 when there was supposedly tax reform. I believe Canadians deserve more. They deserve a taxation Act they can know and understand, one which is written in simple style. They do not need an Act which requires the skill of a Philadelphia lawyer to interpret every word and nuance. They do not need tax consultants to explain what it means. Just to give you an idea of what I mean, Mr. Speaker, let me quote from page 58a of the Act as follows:
Clause 20: (1) and (2). The amendment to subparagraph 44(l)(e)(iii) and the new subsection 44(1.1) would implement paragraph (36) of the Income Tax Motion, which is quoted in the note to subclause 12(6).
Subparagraph 44( 1 )(e)(iii) at present reads as follows:
And on and on. That should really make Canadian taxpayers understand what it is all about. In particular, they do not
Income Tax
need two Ministers of Finance in a row going flip-flop in their minds over the tax system, making these 40 some odd changes to date. Of course, those who suffer the most under these regressive measures are low-income Canadians who gain nothing from the lowering of marginal tax rates, and who will lose more proportionately from partial deindexation. The nondeductibility of interest on money borrowed to purchase RRSPs will certainly discourage personal investment. The Government's plan to tax benefits resulting from share purchase loans will reduce the trend toward employee share ownership. Because this Bill will deny registration for future deferred profit-sharing plans which allow an owner, such as myself, to qualify as a beneficiary of the plan, many small, owner-managed firms will not bother instituting such plans, leaving both owners and employees without job related retirement income.
I would like to take a moment, Mr. Speaker, to touch on one of the most important segments not addressed in this budget, the right of Canadians to own property and to have a tax reduction for the ownership of that property. I would like to address this as the blurb on MURB. Among those groups in society which are in drastic need of some direction and assistance from Government are homeowners and home buyers. The Progressive Conservative Government proposed making mortgage interest payments and municipal property taxes a deductible expense from taxable income. This program would have provided a major stimulus to the economy and would have aided thousands of Canadians who have a strong desire to own their own homes. I ask people to think about the fact that that program would have been coming into its final year, and think of what it would have done for those myriads of Canadians who have the ideals I have just stated. At the time the Government scoffed at the idea and rejected this important program out of hand. But what did the Government offer as an alternative? This is the interesting part. On 18 separate occasions in this House-and I have Hansard with me documenting what I am about to say-in the period from November 13, 1980 to November 16, 1981, the then Minister responsible for housing, when queried on the sorry state of housing in Canada and the Government's do-nothing attitude, referred each and every time to MURBs as the magic solution. Hansard makes very interesting reading. Every time we asked him about housing, he stood in his place and said: "MURB, MURB, MURB". Well, where are the MURBs? They have been cancelled, and so has the chance of Canadians for mortgage relief. Where in this Bill, Mr. Speaker, is there any mention of programs which will be of benefit to homeowners or home buyers? Where is the tax relief we had planned to offer? Nowhere.
We were successful, in one of the points I mentioned, in deferring the tax from the wholesale level where the Government wanted to place it, rather than on the manufacturing level where it now rests. When the Minister of Finance could not explain exactly how the measures were even going to be put in place, he said that the change would be 1 per cent or 2

February 7, 1983
Income Tax
per cent to make up the difference from the wholesale level. He said it was completely equitable. He said there would be no increase in the Government's take. Can you think of anything as ridiculous? There is a profit between the manufacturing and wholesale levels, and when you tax the lesser, who is the winner?


An Hon. Member:: The Government.


Ronald Alexander Stewart: Absolutely. These figures 1 am going to quote will give you an idea of what 1 am talking about. Does the Government realize that in addition to the people who are classed as wholesale merchants there are about 5,000 establishments classed as agents and brokers? In 1978, the last reported year, their accumulated gross sales amounted to $16.3 billion. Given the growth over the past ten years it would be safe to assume that today we have between 26,500 and 30,000 wholesale establishments in the country made up of wholesale merchants, agents, brokers, etc. When you add tax at that level, you can understand just what is going to happen to our tax system. More and more will be grabbed by the Government. No respect for the Laffer curve, no respect for what economists in this country are saying about the need for increased productivity and incentives. In 1978, the last year for which we have complete statistics, wholesalers bought $53.9 billion worth of goods, sold those goods for $70.6 billion, and had the tax been in effect then, wholesalers would have had to pay federal sales tax on the difference. Three years ago that difference was approximately $17 billion. Who would have been the winner? Who would have been the loser? The Canadian taxpayer.
Let us look for a moment at that place, as I mentioned before, where everything happens, the point of sale. Nothing in the free world happens until something is sold. It is sold by a salesman, and in today's world this country runs on rubber and petroleum. This salesman must ride in a car. His selling helps the manufacturer increase productivity and, simply put, the circle keeps on widening and we derive taxes. But you cannot keep taxing that poor salesman until there is no incentive left. Often the commissions cannot cover what this Government has done to the salesman who drives the company car.
I would like to read into the record, Mr. Speaker, a letter from the Association of Canadian Travellers which I received. It reads as follows:
Dear Mr. Lalonde:
RE: LEGISLATION PROPOSED-PERSONAL USE BENEFITS OF A COMPANY OWNED VEHICLE
Our Association of 7000 Commercial Travellers feel you should reconsider the proposed Legislation and consider the increases if necessary within the 6% and 5% Guidelines at this time.
It is of great concern that this type of Legislation was placed on all individuals driving employer-owned autos without the advice of Professional Salesmen, "The Commercial Traveller". I am sure your Department Adviser did not research this area.
This Legislation requires study because there should be several degrees of Benefit for the various Salary levels. You could also have asked the families of Commercial Travellers of the Benefits to have a Company Car filled with Advertising, Sales Record Books, Samples, which have to be moved before personal family usage is possible. You might find that Travellers do not go for
Sunday Drives. You might find that many Travellers end up with Medical problems from excessive driving.
A Company Car is worse than your own because the driver personally has to pay the parking lot dents. Most Companies will not allow the Salesman to put on a Trailer Hitch to pull a Holiday Trailer. You cannot add Tape Decks or Air Conditioning with all Firms, as these are luxuries.
The regulations seem to treat everyone regardless of circumstances in the same manner. It is completely ridiculous that a Commercial Traveller should pay in Taxable Benefits, over 3 years, for his working vehicle. A Car is a tool of his trade, like the plumber and his tools.
What would be next-tax the desk in an office because all Canadians don't have one. Tax all Office Workers because they have access to a Photocopier, a Typewriter, or the Postage Meter, etc.
Personal Insurance is high because of theft, i.e. Samples must be taken into the Motel room because some products freeze or would be stolen.
A great many Commercial Travellers that work in the Food, Drug, and Service Areas that have an employer supplied vehicle presently earn less than our Postal Workers. Many of these same Travellers will not even get the 6/5 because of the Economic downturn. Many Travellers are being asked to reduce outside trips, use less expensive Hotels, and are being advised there will be no raises this year at all.
In conclusion, our Association believes that the Standby charge, as proposed is excessive because it is based on the value to employer and not the net Benefit to the employee.
We support the suggestion by our fellow Commercial Travelling Organizations that effective date of this Legislation should be postponed until the 1983 Taxation year.
Yours truly,
A. D. McIntyre.
I most heartily concur with that letter, Mr. Speaker. This tax is not fair and is not imposed equitably. As proof of that let us make some assumptions about the use of a company owned automobile. First, we will assume that the capital cost was $10,000; second that it is company owned; third, that the operation cost is ten cents per kilometer, and fourth, that the cost of operating a standard size car is 18 cents per kilometer. Using the 12,000 kilometer rating that the Government wants to impose, the taxable benefit of the standby charge would be $2,400; operating charges would be $1,200; the cost of operation, taking 12,000 kilometers at 18 cents per kilometer, would be $2,160 and the excess taxation to the travelling salesman, who is producing trade for the country, would be $ 1,440.
When this became evident in my firm, Mr. Speaker, how many salesmen do you think were knocking on my door asking for a raise? It is totally inflationary and is opposed to what we are supposed to be accomplishing.
If we want to use a lesser amount for the standby charge below 12,000 kilometers, we can work with 10,000. In that case, the taxable benefit would be $2,000, operating charges, $1,000, cost of operation for 10,000 kilometers at 18 cents per kilometer, $1,800 and the excess taxation $1,200 or 66.6 per cent. The Bill is repulsive to individual Canadian taxpayers and small-businessmen, Mr. Speaker. I wish it could be withdrawn but I am sure that is a pipedream.
I should like to close by repeating something that I have said many times in this House and outside, Mr. Speaker. You cannot bring about prosperity by discouraging thrift; you
February 7, 1983

cannot strengthen the weak by weakening the strong; you cannot help the wage earner by pulling down the wage payer; you cannot help the poor by destroying the rich; you cannot establish sound security on borrowed money; you cannot keep out of trouble by spending more than you earn; you cannot build character and courage by taking away man's initiative and independence; you cannot help men permanently by doing for them what they could and should do for themselves-and that means without regressive taxation, Mr. Speaker.
The words of Lincoln are as good today as when he wrote them.


Mr. Deputy Speaker:: According to the rules of the House there is a period for question and answer. The Parliamentary Secretary to the Minister of Finance (Mr. Fisher) has the floor.


Douglas Glenn Fisher: Mr. Speaker, I should like to inquire about the irritation the Hon. Member has expressed about some of the changes in the tax measures. I will take, as he did, the example of the federal sales tax measures and point out to him that these reforms were introduced at the suggestion of such organizations as the Canadian Manufacturers' Association. This tax change is intended to help Canadian manufacturers and to remove a discrimination that favours imported goods. When we introduced this idea, the Association asked for additional time to consider the proposal. That was granted. Now the Hon. Member uses this, among other things, as an example of retreat and confusion and insensitivity on the part of the Government.
Perhaps he would like to tell us if he would rather we listened to him and thereby create enormous confusion, or listen to such bodies as the Canadian Manufacturers' Association, which he purports to represent.


Ronald Alexander Stewart: Mr. Speaker, if the tax at the wholesale level is equitable, perhaps the Parliamentary Secretary to the Minister of Finance (Mr. Fisher) could explain why it was imposed at the wholesale level, but not on tobacco products. That is a multi-billion dollar business and the tax could easily be collected from the manufacturer but would be difficult to collect from the wholesale tobacconist, and why does the Government not impose the liquor tax in the same way?
The Hon. Member should consider how much more simple it would be to devise a scheme of collecting those taxes on imported products at the manufacturing level instead of at the wholesale level. Perhaps the Hon. Member did not hear the odds that I gave regarding the manufacturers and wholesalers. The simplistic answer to the problem is the one that has been traditional. It is only the Liberals who walk away from the traditional without any thought; Conservatives take a really good look before making fly-by-night changes. Customs duties could be brought up very simply to go along with manufacturing. That would leave wholesalers alone.
This should be examined from the point of view of the small-businessman. Usually they are not computerized while manufacturers are, and a simple entry into the computer will handle
Adjournment Debate
this for them. Most small businesses are not computerized and it means that a tax has to be added on to each invoice, in the case of drug sundries and other things.
The Hon. Member said that he did not know what a combine was; I would suggest that he does not know what small business is either.


Mr. Deputy Speaker:: The Parliamentary Secretary to the Minister of Finance for a short question.


Douglas Glenn Fisher: Mr. Speaker, I am a small-businessman, like the Hon. Member. I should point out to him that the questions he has raised are the same ones that the CMA, CFIB and the Chamber of Commerce raised. That is why we suggested that there be a longer period available for a re-examination of the proposals. Even the Hon. Member has an opportunity to consider input, as the implementation of the proposals have been delayed. We welcome his ideas, and I will get a reply for him on cigarettes and alcohol.
I should like to ask the Hon. Member how he justifies attacking the process of listening to ordinary Canadians and calling the Government confusing and insensitive when it does listen to them and to the associations that represent them.


Ronald Alexander Stewart: Mr. Speaker, long before any of this came up I sat on a commission that considered a White Paper that was sent to the federal Government years ago. It contained not one representation, but dozens. The only person who listened to us was Mr. Rodriguez who represented Nickel Belt at that time.
I should like the Hon. Member to understand how deep this goes. Those representations were made and I should like to show the Hon. Member the letters I received-



PROCEEDINGS ON ADJOURNMENT MOTION

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

Donald Alex Blenkarn: Mr. Speaker, on January 26, I had occasion in this House to ask a question of the Minister of State for Finance (Mr. Cosgrove) regarding the affairs of Greymac, Seaway Trust and the other companies that are now under receivership or seizure by officers of the Government of Ontario.
The whole problem in relation to these trust companies has been expressed by Hon. Members on this side and, indeed, the general public. It is of major concern to the Province of

February 7, 1983
Adjournment Debate
Ontario right now. It has been bothering the House of Commons and its Standing Committee on Finance, Trade and Economic Affairs for a number of months, indeed, years.
The Government is responsible under the Constitution for banks, banking, money supply, interest rates and the various powers which go along with the creation and management of money. Consequently we have several organs of Government which are supposed to be responsible to be our policemen and to manage these affairs. We have a Trust Companies Act and a Loan Companies Act and a director. We have the Canada Deposit Insurance Corporation which insures deposits to $20,000, and hopefully that will soon be $60,000 to protect those who deposit in loan and trust companies, banks and so on. We have an Inspector General of Banks. In addition, we have the actions of the Bank of Canada and the efforts which are supposed to be made by the Minister of Finance (Mr. Lalonde) and his Department. All these actions are supposed to ensure for the people of Canada that our financial system is sound and secure.
Unfortunately there have been real stirrings, particularly in this session of Parliament, with respect to these financial institutions. The House will recall that earlier this year following a motion there was a special reference to the Finance Committee with respect to banks and bank profits. Very soon that Committee became a bank solvency committee, not a bank profit committee. In accordance with its deliberations, the Committee made reference to increasing deposit insurance to $60,000 and other recommendations to Government, all with the view to increasing the security of our financial system.
The House will also recall that when the Bank Act was before it, the former minister of state for finance gave solid undertakings, both in the House and in Committee, that he would introduce new loan and trust company provisions before the House. All we have had is a White Paper on the trust company matter, but no new statute or proposal from Government.
This matter has become quite serious. Seaway and Greymac are both federal corporations with respect to their mortgage operations. They were incorporated during the life of this Parliament. They are now in trouble. The Government has known of some of the problems for over a year. The Government has known that the officers behind Greymac in particular were involved in trying to get control of the Canadian Commercial Bank. There have been concerns expressed to the Government on the problems of Astra Trust and ReMor. The Government knows of the problems of Argosy. Prior to all this there were problems with British Mortgage and Trust and Atlantic Acceptance.
The whole question of the stability of our financial institutions is at stake. Every day that goes by with the Government stonewalling questions in the House concerning Seaway and Greymac, what it is doing and where it stands, causes further concern to depositors and others who want to deal with trust companies, loan companies and banks. In the view of this fact, the Canada Deposit Insurance Corporation Bill now before the House should be expedited. Because it cannot be expedited unless the Government undertakes that this House will have a
complete inquiry by a special committee into the activities of loans and trust companies generally, and into the activities of the Canada Deposit Insurance Corporation and the Inspector General of Banks particularly, I say to you and the House, it is absolutely essential that the Government take its responsibilities seriously and deal very quickly with new methods of regulating and controlling those who have the right to take deposits from the public, make mortgage loans and generally operate our financial system as financial intermediaries. The whole question of our system of finance is at stake. The Government has been hiding. We have had sleeping policemen on the job. There are problems and it is time for the Government to do something about them.


Douglas Glenn Fisher: Mr. Speaker, because Crown Trust Company, Greymac Trust Company and Seaway Trust Company are provincially incorporated, the federal Department of Insurance has no jurisdiction over their activities. Greymac Mortgage and Seaway Mortgage are federally incorporated mortgage loan companies licensed under the Loan Companies Act and supervised by the federal Department of Insurance. The activities of Greymac Mortgage and Seaway Mortgage have been monitored by the Department.
The Loan Companies Act stipulates that the licence of each mortage loan company shall expire on March 31 of each year and may be renewed from year to year, subject to any qualification or limitation that the Minister considers expedient. The Act also stipulates that the licence may be renewed for any term less than a year.
I can report that since March 31, 1982, for a number of reasons, the licences of Greymac Mortgage and Seaway Mortgage have only been renewed for successive periods not exceeding two months. I can also report that as early as April in the case of Greymac Mortgage and July in the case of Seaway Mortgage, limitations were placed in their licences aimed at severely limiting any significant growth in the amount of money the companies could accept from the public. Subsequent to that time, further limitations were placed on the companies' licences and additional action was taken to protect the position of their bond and debenture holders.
On January 7, 1983, the Superintendent took control of the companies' assets, pursuant to Section 73 of the Loans Companies Act, and reported to the Minister, pursuant to Section 73.1 of that act, that in his opinion the companies' assets were not sufficient, having regard to all circumstances, to give adequate protection to their bond and debenture holders. Before the Minister may take any action in respect of this report he must give the companies an opportunity to be heard; that process is now in progress.
Concerning the provincially incorporated Crown Trust, Greymac Trust and Seaway Trust, and the reason why the Canada Deposit Insurance Corporation has agreed, if necessary, to lend them funds on a secured basis to meet their
February 7, 1983

liquidity needs, all three companies are members of the Canada Deposit Insurance Corporation. One of the powers of the Corporation is to lend member institutions funds to help them meet their liquidity needs. In addition, because the three trust companies are member institutions, the CDIC stands ready to meet its insurance commitments to the companies' insured depositors, should that be necessary.


NORTH ATLANTIC TREATY ORGANIZATION-CANADIAN NAVAL CONTRIBUTION. (B) MODERNIZATION OF VESSELS
Hon. Allan B. McKinnon (Victoria):: Mr. Speaker, I rise this evening in reference to a question I asked of the Minister of National Defence (Mr. Lamontagne) on January 31, concerning the status of our destroyers and the DELEX Program. I pointed out during my question that the Canadian Navy is unable to participate fully in NATO exercises because of the unsuitability and age of the equipment. I am concerned tonight with my supplementary question which was:
Madam Speaker, my supplementary question is directed to the same Minister. We are spending over $200 million on a destroyer life extension project, as he knows, to extend the life of 16 ancient destroyers.
Gatineau has just come out of the DELEX Program, a 24 year old vessel having its life extended another eight years. It does not provide for, nor has it had installed any form of anti-missile capability. The lessons of the Falklands point to the necessity of that. These ships will not be able to defend themselves in the event of hostilities. Will the Minister tell us why they are only doing half the job of modernizing those vessels?
In answer, the Minister of National Defence stated:
Madam Speaker, the Hon. Member should know that behind the policy of the DELEX Program, which is a program to modernize our vessels, we are cognizant of the time that we will in fact be able to use these vessels. For the old class of 56 and 57, for example, we will refit them so that they can be used for another seven or eight years, until the new frigates are in service. There is no use spending millions of dollars on something that we will not be able to use in five or six years. However, on the newer class frigates there will be a more complex DELEX Program so that they will be useful for a longer period of time. It is just a question of judgment.
It is not the confusion of the answer that bothers me as much as the fact that, for a considerable length of time yet to come, we will be unable to have any naval vessels which can defend themselves in conventional, non-nuclear war. In the case of a non-nuclear war, Canada would be assigned two major roles; the anti-submarine warfare role and protection and reinforcement convoys. Any future war is likely to be over quickly enough that it will be a "come as you are" war. We will not have time to build ships after the war starts. The Falklands conflict gave military and political leaders some insight as to what can happen, and we should have learned some lessons from it.
Let us consider what the naval forces in the Western world are likely to confront in any future war. I would like to illustrate part of the Soviet capacity of surface ships and submarines. Concerning Cruise missile carriers, there are 50 Cruise-missile-carrying nuclear powered submarines in the Russian fleet at the present time. There are 20 Cruise-missile-carrying diesel-electric powered submarines in its fleet. The Soviets have just deployed a new KIROV class destroyer which carries 20 long range, or 500 kilometre range, Cruise missiles. In
Adjournment Debate
addition, there are 26 guided missile cruisers, 38 guided missile destroyers, and 28 guided missile frigates in the fleet.
The largest Soviet surface ship is the Kiev-class aircraft carrier. Two have been deployed and two more are under construction. The Kievs are armed with anti-ship Cruise missiles, anti-submarine and over-the-horizon target acquisition helicopters, anti-aircraft missiles, anti-submarine rockets and missiles, and the FORGER vertical and short-takeoff-and landing aircraft.
The common factor in recent Soviet naval developments is increasing size. Larger than their predecessors, these new ships and submarines have larger weapon magazines and greater endurance. The Soviet Naval Air Force has been receiving the supersonic swing-wing backfire bomber, which is equipped with AS-6 anti-ship missiles. That missile has a range of more than 200 kilometres. To complement the anti-ship missiles, the Soviet Union has developed and deployed two types of low-orbiting satellites for global ocean surveillance.
Having regard to ship defence, what must any modern fleet need? It needs patrol aircraft for reconnaissance. It would also be well advised to have the Airborne Warning and Control System Aircraft. This is one of the things Britain found itself desperately short of during the Falklands war. A fleet must have long range air defence missiles to attack enemy launching platforms, anti-submarine weapons such as ASROC, which is a Mark 46 torpedo on an unguided rocket, and uses a homing device to find submarines to a depth of 11 kilometres, modern depth charge launchers and ASW helicopters. A fleet needs short range point defence, such as anti-missile missiles to shoot down attacking missiles, or a sophisticated electronic countermeasures system to jam the missiles' guidance system, or a chaff dispenser. We have none of these. It also needs close in automatic gun systems.
What does Canada have? We have 23 destroyers, of which three are not operational, and only four of the remaining 20 are modern. By the time the six new patrol frigates have all been delivered, in 1991, Canada will have a ten ship navy.
The youngest ship, apart from the DDH-280s, will be an Annapolis class, which was produced in 1964. The DDH-280 has been fitted with the Sea Sparrow system which, as Commodore Healey told the Standing Committee on External Affairs and National Defence, has a very limited capability against second generation missiles. I notice that an advertisement for the Sea Sparrow states, "The Sea Sparrow has successfully intercepted missiles as well as Cruise missile type targets and has proved its ECCM capabilities". I must say that there is a certain amount of puffery in that advertisement, because the type of missiles that they can intercept are not the Exocet. In fact, Canada has no protection for its ships against the Exocet or any other sea skimming missile.
Canada's contribution to the Supreme Allied Command Atlantic this year will be the 26-year old HMCS Margaree, which has no missiles and 1960s technology. The Destroyer Life Extension Program relates to 16 destroyers. First will be the St. Laurent class which has six vessels, 27 years of age at

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Adjournment Debate
the present time. They will not get any new equipment but the hull and machinery repairs will keep them safe. The MacKenzie class has four vessels, 21 years of age. The improved Restigouche class has four vessels, 25 years of age and the Annapolis class has two vessels, only 19 years of age, and they are going to treat them the same as the improved Restigouche.
Just in closing 1 might say that the Deputy Minister of Defence at that time, on May 18, 1982 said:
The DELEX will not be fitted with a missile-to-missile capability ... Their main capability is still in the anti-submarine role. If you ended up in a surface-to-surface action where they could run into that type of missile, they would be in very great difficulty.
1 look forward to whatever the Parliamentary Secretary can say that might comfort me in this matter.


Stanley Hudecki: Mr. Speaker, I will first of all touch on the DELEX program. Quite frankly, it is rather surprising to hear the Hon. Member's concerns in this regard. The Hon. Member knows that the DELEX program was in the departmental approval process between 1977 and 1980 and in fact received Treasury Board's final approval in January 1980 when the Hon. Member was Minister of National Defence. 1 wonder if it has escaped the Hon. Member's notice that it was he who approved the DELEX program.
From the outset, the DELEX program was constrained in order to accommodate the expenditure within the DND envelope; while still permitting the continued allocation of funds for new equipment; such as the Canadian patrol frigate.
While the total cost of the DELEX program, when completed, will be in the area of $200 million, I think it is important to point out that these funds will be spread over 16 ships. The funds were assigned as follows: all 16 ships, regardless of age, went through a thorough refit, thus ensuring that they could safely proceed to sea for some additional years beyond their projected retirement date. Approximately $80 million of DELEX funds were allocated to this expenditure. The remaining funds were assigned to ships in order to maintain a combat capability for their remaining life, and were assigned to individual ships on the basis of how much longer we anticipate that they would have to remain in service before new ships could replace them.
In this division, or allocation of combat capability funds, the St. Laurent class, our oldest ships, received nothing. The MacKenzie class received approximately $7 million per ship; the improved Restigouche class received approximately $17 million per ship and the Annapolis class, our newest steam destroyers, received approximately $19 million each.
It is true that none of these older ships received an antimissile missile system. The funds available were simply not sufficient to make major changes in old ships and preserve capital for the real requirement of acquiring new ships. However, in time of imminent conflict, such changes can be incorporated into our active fleet.
However, in dealing with these newer ships we have made several high technology improvements. In the case of Gatineau and the improved Restigouche class, it has already received most of the new DELEX equipment and will receive the remainder when it is available from the production lines. These include: (a) improved secure communications; (b) improved air warning radar; (c) upgraded gun/fire control system; (d) improved electronic warfare system; (e) a new missile decoy system; (f) a nev' automated link and plotting system and (g) an improved Identification Friend or Foe system. Similar improvements will fitted in the other improved Restigouche and Annapolis classes.


Mr. Deputy Speaker:: I regret to interrupt the Hon. Parliamentary Secretary, but the time allotted to him has expired.


GARRISON DIVERSION-RESTORATION OF UNITED STATES FUNDING-REQUEST THAT MINISTER TAKE ACTION. (B) REPORTED STATEMENTS MADE BY NORTH DAKOTA OFFICIAL
Mr. Dan McKenzie (Winnipeg-Assiniboine):: Mr. Speaker, I was most distressed over the $22.33 million recently allocated by the United States Government for the continuing construction of the Garrison Diversion Project. However, I was extremely perturbed when I learned that the United States House-Senate Conference Committee had been persuaded to reinstate $4 million of funding for Garrison, originally voted against in the United States House of Representatives.
The very first legislative setback in the project's history occurred in mid-December when Congress denied the allocation of $4 million to the detrimental project. This was the only glimmer of hope for Canada's environmental welfare seen in the 18-year history of Garrison. Finally, it was felt by some, Canada had made headway in the battle to convince the United States that the irrigation project would be harmful to our waterways and Manitoba's fishing and agricultural industries.
One week later, however, the moneys were restored. As reported in the January 3, 1983 Time Magazine, Congressman Silvio Conte publicly stated in Washington that the driving force behind the completion of Garrison, North Dakota's Senator Mark Andrews urged the House-Senate Conference Committee to reinstate funding for Garrison or risk having him vote against their pet projects.
To toy with such matters of importance to Canada is, I feel, a disgrace. Whether the United States House-Senate Conference Committee decided to vote for or against the proposed funding is not the issue here. The fact is the seriousness of the Garrison Diversion Project and, in particular, that the proven harmful effects it will have are not being taken into consideration. Furthermore, for Senators to base the logic of their vote on the criterion of ensuring the life of their own pet projects is totally ludicrous.
For 18 years Canadians have been expressing their objections to the continuation of this project. It is a known fact that
February 7, 1983

if Garrison is completed, Canadian waters will be contaminated, causing Manitoba's industries to suffer. The project will result in a violation of the 1909 Boundary Waters Treaty between Canada and the United States, thereby totally disregarding the affirmation of the International Joint Commission. All evidence compiled on the project points to the disastrous consequences it would have on our country.
The facts have been presented time and time again. 1 have recommended to this Elouse on numerous occasions the need to make representation to the United States Government, airing our valid concern and objection to the completion of the project. I have been in contact with the Ambassador of the United States, His Excellency Paul H. Robinson, Jr., obtaining his assurances that in no way would the United States violate its obligation to the Boundary Waters Treaty or ignore the recommendations of the International Joint Commission.
Still there are those resolved to completing the project with utter indifference to the outcome for Canada. In The Globe and Mail of November 25, 1982, Robert Wefald, the Attorney General for North Dakota stated, and I quote:
The bottom line is the project will be built if the United States Government decides it is in our best interests.
However, according to Congressman Conte and the Joint House-Senate Conference Committee, the best interests of a country are irrelevant. It is the better interests of individual Senators' pet projects which are of prime importance and which, as proven with the restoration of funds for Garrison, come first. For this reason I feel it imperative to call upon this House and ask that immediate steps be taken to ascertain the manner in which this inane situation be dealt with.
On June 9, 1982, an all-Party Committee of the House of Commons travelled to Washington and voiced the concern of the Canadian people. It has been made obvious that again we must show our opposition to this project. I agree wholeheartedly with the recommendation of my colleague, the Hon. Member for Lisgar (Mr. Murta), that this House instruct its Ministers and give an indication to the Province of Manitoba to have a committee present itself to Washington to put up a strong showing against funding for Garrison. I must stress the need for speed due to the announced $22.33 million more now allocated to the detrimental Garrison Diversion Project.
Mr. Jean Lapierre (Parliamentary Secretary to Deputy Prime Minister and Secretary of State for External Affairs).
Mr. Speaker, I would like to thank the Hon. Member for his keen interest in the Garrison Diversion Unit Project. I would like to reassure him that this Government has more confidence in the political system of the United States than to think that, as he puts it, an individual Senator's pet project could be a base or a criterion for them to approve the project of such magnitude.
Adjournment Debate
If I may give some history, Mr. Speaker, I would say that the Garrison Diversion Unit, first authorized in 1965 by the U.S. Congress, continues to be a subject of serious concern to the federal Government, as well as to the provincial Government of Manitoba. No one on either side of the Canada-U.S. border contests the fact that if the unit is built to full size it, "would cause severe and irreversible damage to the Manitoba ecosystem and, in particular, to the commercial and sport fisheries in Canada,". This quotation is taken from the 1977 International Joint Commission Report on Garrison, which concluded that, "those portions of the Garrison Diversion Unit which could affect waters flowing into Canada not be built at this time".
The IJC Report, and this conclusion, form the foundation for Canadian opposition to the Garrison Project. We firmly believe, and have so informed the U.S. Government and Congress, that Canadian and Manitoba interests can only be protected through modifications of the project, so that there are no transfers of water from the Missouri River basin into waters of the Hudson Bay basin which flow into Canada.
U.S. authorities have recognized the validity of our position and have formally stated, as has the Ambassador to the Hon. Member, that the United States will comply with its legal obligations to Canada under the 1909 Boundary Waters Treaty not to pollute Canadian waters. Thus, we should not attach much weight to statements by U.S. State officials such as those attributed recently to the Attorney General of North Dakota, or even the Senator from North Dakota, that the Garrison Project will be proceeded with regardless of Canadian or IJC views.
As Hon. Members know, the Congress appropriated $4 million for the project for the fiscal year 1983, despite an initial rejection of this funding by the U.S. House of Representatives. The level of funding proposed for the fiscal year 1984 by the administration is $22 million. While this is a very large increase in the appropriation level, it still must be accepted by Congress. Given the initial defeat of the 1983 appropriation, it is quite possible that Congress will reduce drastically or eliminate an appropriation of this magnitude.
Opposition to the Garrison Project as currently designed is on the increase. We believe that this opposition will influence the administration and Congress to be more forthcoming in finding ways to meet domestic U.S. and Canadian concerns with the design of the project. We will follow up all reasonable means to achieve this goal. We thank the Hon. Member for his continuing support.


Mr. Deputy Speaker:: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at eleven o'clock a.m.
At 6.30 p.m. the House adjourned, without question put, pursuant to Standing Order.

Tuesday, February 8, 1983