1983-12-19

[Stage Direction]
The House resumed, from Friday, December 16, consideration of the motion of Mr. Lalonde that Bill C-2, an Act to amend the statute law relating to income tax and to make related amendments to the Canada Pension Plan and the Unemployment Insurance Act, 1971, be read the second time and referred to a Committee of the Whole.
Mr. Doug Neil (Moose Jaw):: Mr. Speaker, over the years 1 have had the opportunity to participate in debates on amendments to the Income Tax Act. During that period many excellent ideas and suggestions have been made by Members on all sides of the House who have expressed their concern not only about particular clauses in the Income Tax Act, but more often with respect to the administration of the Act. It is a frustrating experience because it is obvious that over the years the various Ministers of Finance, Ministers of National Revenue and their officials have chosen to ignore the comments of various Members. If they had listened they would at least have brought in certain amendments or reorganized their departments in such a manner that we could have a more efficient and more comprehensible tax system.
One of the major problems with income tax in this country is the complexity of the Act. Few people in Canada, including chartered accountants, are able to understand and interpret the Act properly. 1 recall that when the Hon. John Turner was Minister of Finance several years ago-


Miss MacDonald:: Who is he?


Douglas Charles Neil: -he agreed to an amendment proposed by several members who spoke in the House. It was a fairly simple amendment and we anticipated that, when it came in, a short paragraph would cover what had been sought. When it was introduced by the Minister, however, it was two and a half pages long.
It happened that I knew one of the legal officers involved in drafting the amendment and 1 told him that I could not understand why such a simple amendment required two and a half pages when it could easily have been set out in one
paragraph. His response was that we now live in the computer age and that the legislation must be drafted in such a manner that the computer could understand what was being done. A computer has no understanding, Mr. Speaker, but that is what has happened over the years to our tax structure. When a taxpayer is having problems with his assessment or if he has an inquiry, the response to it comes to him in a form printed by the computer. Basically, the taxpayer is communicating with a computer; he is not able to communicate with the individual who is responsible or who should be responsible for taxation.
As has happened in the last year or two, and I assume every Member of Parliament has had the same thing happen, if a taxpayer asks a complicated question or has a serious problem and is able to get some official on the telephone, the response he receives to his query is: "Contact your Member of Parliament". There have been numerous instances where people have phoned me because the tax department has told them to contact their Member of Parliament. But I am not a tax expert. I am not an accountant. It is the responsibility, Mr. Speaker, of those people in the department who are doing assessments to answer some of these questions. However, it seems to me that the officials in the tax department do not now understand the Act. They cannot interpret it. They cannot communicate with the computer. They can only punch in numbers. They have become mechanical. This is the frustration which many taxpayers face when they have problems.
Before I came to this place, when I was practising law, I did considerable tax work. In those days, Mr. Speaker, if a taxpayer had a problem, I could phone the tax department at Regina and tell them the problem. They would tell me to hold for a moment and they would pull the file, and unless the matter was complicated, generally speaking I had the answer within half an hour. If it was complicated, they would say perhaps we should come into the office. You would then make an appointment to go and see them with your client. They would have his income tax returns on the desk and in a matter of an hour the problem would be resolved. That, Mr. Speaker, no longer happens. Those files have been sent to Winnipeg and I believe that has happened in every province in Canada. You cannot get an answer. At least, you cannot get an answer for four, five or six months, if you get an answer then. It is a terrible situation.
I would like to give one example of an elderly gentleman who came into my office two weeks ago. He is on pension. The company which pays him his pension deducts the sum of $100 a month as a tax deduction and, presumably, remits it to the department. The gentleman in question has an RRSP so he

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makes instalment payments. He also cashed in an RRSP and the trust company deducted the tax. He was also charged interest on instalments. He did not know what it was for, but he received a bill and he paid it. He later received a receipt showing that he had paid the money, but at the same time, when he paid his instalment, that same amount was taken off his instalment payments.
He was completely frustrated so he telephoned Regina and asked how much he should be paying for instalments because he had been charged interest. He asked: "How much do I have to my credit in my tax account?" He was told, Mr. Speaker: "We do not know; there are four different accounts in your name, apparently". There was one for deductions by his former employer on his pension; one for instalment payments, one for the RRSP and one for instalment interest. They told him they could not bring these accounts together. They could not tell him how much he had to his credit. He asked: "How can 1 calculate my instalments? I do not want to pay interest. You should be able to send me a statement showing what I have to my credit". They told him they could not do it. There are four different accounts, presumably, in the computer and 1 suppose the computer, not being able to think, cannot bring all those accounts together and determine that Joe Blow has x number of dollars to his credit in his income tax account.
I would say, Mr. Speaker, that I hope the Minister of Finance (Mr. Lalonde), the Minister of National Revenue (Mr. Bussieres) and the officials of the department will sit down and read the debates in this House and realize what the complaints and problems are as expressed by every Hon. Member of this House. Then perhaps they can make a decision on how to improve our system. Unless that happens, Mr. Speaker, 1 am afraid we are in for some serious trouble in the future.


Mr. Jim Fulton (Skeena):: Mr. Speaker, 1 am pleased in some ways and not in others to participate in the debate on Bill C-2. It is a continuation of the history of both Liberal and Tory approaches towards tax law. It is a corporate welfare budget and it really picks the pockets once again of working Canadians and the poor in this country.
It has been billed as a $4.8 billion recovery program, but when you look at the Bill carefully you see that over the next four years it takes $3.5 billion in increased personal income taxes and an additional $2.4 billion in sales taxes. At the same time, by design, according to the Minister of Finance (Mr. Lalonde) and government Ministers, it will allow plant capacity to remain between 30 per cent and 35 per cent idle and somewhere in excess of 11 per cent unemployment. It is designed to give a little bit of money to the corporate sector to try and keep them quiet, $1.2 billion a year over the next four years, and to ravage $5.9 billion out of the pockets of working Canadians.
1 think Canadians have been amazed for many years, Mr. Speaker, at how unfair and burdensome statute tax law has
become in this country. It was looked at in a 1979 study here in Ottawa which concluded the following:
Furthermore, while there are more than 100 tax breaks open to all Canadian taxpayers, their benefits go overwhelmingly to the wealthy. Almost everyone gets some benefits from such basics as medical and dependent deductions; however, low income Canadians pay a larger percentage of their earnings in taxes than do the wealthy.
The disparity is profound, Mr. Speaker. The study indicated that the exemptions provide roughly 100 times greater benefit for those in the upper income brackets than those at the bottom end of the scale. That means that every time a working person pays $1 in taxes and ultimately gets it back and thinks it is great, some upper income earner gets $100 back. This Government considers that to be fair. The study goes on:
The federal Finance Department acknowledged the situation in a little publicized report called "Analysis of Federal Tax Expenditures for Individuals" which was released in November, 1981. This study concluded that in 1979 the average taxpayer with an income between $10,000 and $15,000 saved $771 on his or her income tax through tax deductions. In that same year citizens with incomes greater than $100,000 managed to save $46,000 in taxes.
That is with the same 100 loopholes. So someone with a $10,000 to $15,000 income saves $771, and those with $100,000 or more get $46,000 back. It goes on:
What is even more striking, said the Finance report, is that there were 740 individuals with incomes over $100,000 who had so arranged their affairs that they paid no federal income tax in 1979.
What kind of a tax system is operating in this country, Mr. Speaker, when that kind of disparity, those kinds of loopholes, are allowed to exist? The answer is easy. It is a system whereby those Members of Parliament sitting on the Government side vote through, or where there is a minority government they manage to con Parliament into voting through, year after year, session after session, Parliament after Parliament, golden gilt-edged loopholes for the wealthy and at the same time simply kick the teeth out of the poor and working Canadians.
Let me give a few more facts which I think home in on the problem. Canadian corporations owe the Canadian Government over $25 billion in deferred taxes. In my own constituency I frequently have Revenue Canada people chase down fishermen, deck hands, out in the bush chasing down some luckers with garnishee orders for this and that, getting them for taxes going back years and years. But how often does the Government encourage their own departments to go out and get back the deferred taxes from corporations? Never, Mr. Speaker. I cannot recall seeing, in the financial pages or in any magazine in this country, any actions taken by either Liberal or Tory administrations to try to get that kind of money back.
It is not only working people who are on wages and salaries who get hurt here, but small business as well. According to Statistics Canada, the average tax rate for large firms is now 24 per cent and for small firms 36 per cent. What kind of fairness is that? You do not have to be a tax lawyer to understand the kind of disparity that has been built into the income tax system in this country. The top 20 per cent of Canadians, as classed by income, now control 70 per cent of
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the wealth in Canada. One-fifth of Canadians have 70 per cent of the over-all wealth while the lowest 20 per cent in this country now control less than 1 per cent. It is even worse if you set wealth aside. As it stands today, 20 per cent of Canada's highest income group control 40 per cent of the national income every year, Mr. Speaker, while the bottom 20 per cent of the lowest income group have access to only 4 per cent.
In fulfilling its function as a redistributor of wealth, the federal tax system is an absolute failure. With Bill C-2 we once again see the Government, with buildings full of bureaucrats working on Bills such as C-2, failing to address the Canadian economy in any kind of a progressive or fair way.
1 am sure Canadians would be interested to know that the statute law which we are dealing with in today's debate is over 200 pages in length. It changes statute law on income tax, amends the Canada Pension Plan and also amends the Unemployment Insurance Act of 1971. The statute tax law which now exists in Canada literally fills bookshelves. There are literally dozens of feet of this bureaucratic nonsense being spewed out of this House of Commons. In fact, we could introduce into this House and this country tax laws that would fit on to a couple of pages. Anyone in the country could get it and read it and, if it was brought in as progressive kind of income tax, they could say: "At least 1 am being taxed fairly in the same way that the bank manager or the head of Gulf is." In fact, Mr. Speaker, that is not the case at all. This country historically has been, still is, and for some period into the future will be, run in terms of statute tax laws strictly for the wealthy. It takes from the poor, from those on the lower end of the salary and wage scale, 25, 35, 45 per cent and moves it on up the line so that people with $100,000 incomes get $46,000 back when they file their tax in the spring and poor people have to pay.
I would like to give you a few figures, Mr. Speaker, based on the legislation that we are passing. Next year a single taxpayer with a $7,500 income will get a $44 tax break. That is the only break there will be. In 1985 their taxes will jump by $106. The taxes of a single taxpayer with no dependants earning $15,000 will go up next year by $14 and in 1985 by $164. Now we get to the interesting figures; it all starts to come clear again. At the $30,000 income level taxes go up only $36. You have gone up 400 per cent in income but you have not even doubled the amount of increased tax. In 1985 the taxes of the same $30,000 income earner will go up $87. Then we find the real friends that the Liberal Party are after. At an income level of $75,000 this new tax Bill will mean an increase of $250. At $75,000 you are paying almost the same increase as somebody at $15,000. Mr. Speaker, it speaks for itself.
I was interested to listen to the blurred shadow speaking last week. I am glad to see him here today because I know my constituents are always interested in what the blurred shadow from St. John's West has to say on the economy. They are still ruminating on his statement from last year that he and his party would not tell anybody anything about Tory policy because if the Tory Party did that they would never get elected. It has changed a little bit. The Member for St. John's
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West (Mr. Crosbie) now says that the only way to find out what Tory policies are is to elect the Tories. Then he goes on to say when he is speaking here in the House and when he is being interviewed that if he were in government tomorrow he would continue with the general approach taken by Finance Minister Marc Lalonde.
That comes as no surprise to us in the NDP or to many Canadians from coast to coast. If we look at the voting record of the Liberals and tories on tax law over the last 25 years and how it has been set up, one can see that they have continuously voted together, no matter who is in government, to make sure that the wealthy in this country get the tax breaks so that they will continue to give them lots of money come election time.
I am sorry that I do not have more time. I have all kinds of interesting material to put on the record but I will have to wait until another day.


Mr. Bill Clarke (Vancouver Quadra):: Mr. Speaker, in contributing to the debate on Bill C-2 today, 1 want to restrict my remarks to the involvement of four principles of accounting and taxation. The first is the accounting principle of matching expenses against revenue. This principle parallels the tax principle that expenses are deductible in so far as they are laid out to produce income.
The second accounting principle is that income is recorded when received or earned. That parallels the tax principle that income is taxed when it is earned or received.
The third accounting principle is that capital cost of an item is to be allocated over the useful life of the asset involved. That parallels the tax principle that capital cost allowances, according to a legislated formula, are to be deducted in computing the income for tax purposes.
The fourth accounting principle is that net income is gross income after deduction of expenses and after providing for all losses. That parallels the tax principle that income for tax purposes is net income after losses.
The first two of those principles which 1 have outlined have been offended by the proposals in Bill C-2. The latter two principles have been offended continually since the 1971 income tax changes which prohibit a loss which is created by capital cost allowance from being deducted from other income. That 1971 erosion was the first blow in destroying the orderly provision of rental housing in Canada.
Today, let us look at the treatment of the other two principles as dealt with in this Bill. The first one affects working mothers and single parents. Under these proposals, these parents are now to be permitted to deduct up to $2,000 in child care expenses per child, to a maximum of $8,000 per family per year. Daycare, which is the most common form of child care expense, today costs about $4,000 per child per year. Even the so-called subsidized daycare centre on Parliament Hill carries a bill of $4,000 per child per year.
I ask the Minister and the House to compare the treatment of working mothers in this respect with the treatment of a

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person who has a business and hires workers to help earn the business income. The wages of workers who are hired to help earn that business income are totally deductible, but working mothers and single parents can only deduct one half of an expense that is every bit as necessary as the wages laid out in the business situation which 1 described.
The Government's proposal of doubling the meagre allowance that has been in effect during the last six years is not the answer. The allowance has been badly eroded by inflation over the past six years. The answer is that child care costs for working mothers and single fathers should be totally deductible as an expense laid out to produce income. In that way, it follows true accounting and true taxation principles.
The other offence created by this Bill is the indexed security investment plan. That proposal offends both principle one and principle two to which I referred. First, interest on money borrowed to invest in Canadian stocks, which is normally deductible, is not now to be deductible even though the dividends which will be received by the taxpayer are to be treated as income in the normal way.
Second, the taxpayer will now be required to include in income in the taxation year one half of the unrealized-I stress unrealized-gain that has accrued during the year. That offends the principle of taxing income as it is earned or received. This might force the sale of securities in order to produce the cash to pay the tax that would be payable, thus upsetting the individual's investment program.
1 concede that something was needed to correct a situation that had existed for some time wherein illusory capital gains attributable to inflation were taxed. 1 think the Government obviously agreed with that or it would not have introduced this Bill at all. This fault had existed not only with marketable securities but also with other assets. 1 suppose one could apply it to any non security type of asset such as a work of art, piece of furniture or a cottage property.
Perhaps the example of a cottage property would most easily illustrate the problem that exists. Imagine two identical properties, one on one side of the lake and one on the other side of the lake. Let us suppose that the owner of the cottage on one side of the lake, which he had owned for a long time, became tired of having the sun set in his face and decided to move across the lake to have the sun rise in his face. He could sell his cottage on his side of the lake but by the time he had realized his capital gain and triggered the tax-there is no rollover provision for that kind of asset-the poor taxpayer would be unable to afford to buy the identical cottage on the other side of the lake. Obviously that is an unfair and unintended treatment but this situation has in no way been addressed by Bill C-2.
The Canadian Institute of Chartered Accountants recently gave a good example of the bad effects of the law on taxpayers who invest in Canadian securities. It produced a table showing that at a zero rate of inflation the effective tax rate on real capital gains was 25 per cent. I believe that was the intent of the original proposals to tax capital gains at all. They were to
include half the gain and then the tax rates would apply so that 25 per cent was the effective tax rate.
Assuming an inflation rate of just 6 per cent, that 25 per cent effective tax rate, coupled with the taxation of illusory capital gains, jumps to 63 per cent. That is hardly a fair tax rate and it is higher than the tax on any kind of income in Canada today. If we go one step further to an assumed inflation rate of 8 per cent, the effective tax rate on a capital gain on Canadian securities owned by a Canadian taxpayer becomes 125 per cent.
What kind of tax system is that? In recent years we have had inflation rates of over 10 per cent, perhaps 11 per cent and 12 per cent. At 8 per cent, the capital gain is taxed away at 125 per cent. Therefore, if a person makes a nominal capital gain of $1,000 of which 8 per cent is inflationary, the real capital gain is $200 but the taxes paid of $250 on the $1,000 nominal gain is a 125 per cent effective tax rate.
Why could the proposals in this Bill not have provided for an adjustment for inflation and for that adjustment to be made at the time of the sale of the securities? That would respect all of the accounting principles for gains when they are realized and for paying tax on income or gains when they are realized. There could have been an adjustment factor built into the calculation based on the period during which the asset was owned, starting from the date of the purchase and ending with the date of the sale. We did not need to have a complex IS IP program to have Canadians do that. The Government has come up with a plan which I can only describe as being a costly, clumsy and complex way of trying to solve a very real problem which could have been solved very much more easily.


Mr. Jim Hawkes (Calgary West):: It is that time of year again, Mr. Speaker, when the House of Commons is seized with another tax Bill. The speaker from the New Democratic Party helped to remind the House that in December, 1979 there was a budget before this House that had tax provisions in it which accomplished three things. It was a financial plan for the country that was producing new jobs in excess of 30,000 a month and people were coming off the unemployment rolls and into productive participation in the country. It had provisions in it that were reducing rates of inflation and thus reducing the hardship faced by people on fixed incomes who are in difficulty across the nation. It was a financial plan that the national Welfare Council judged to be the fairest financial plan for poor people in Canada that had been produced in the decade of the 1970s. It produced jobs, it reduced inflation and it was fair. It was the fairest budget for poor people in the 1970s.
I was part of that evening in December, 1979 when members of the New Democratic Party joined with members of the Liberal Party of Canada in this House and threw out a government and a budget that would have taken care of the job situation, reduced inflation and was fair to the poor people. It will live in the annals of the history of this country. Canadians will be reminded year after year, month after month, that when faced with a real budget, a real financial
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plan that did good things for the country and for the poor people, the Liberals and the NDP threw out the government and we have had nothing but chaos, difficulty and trauma ever since.
1 stand in this House today in the full knowledge that Bill C-2 is seen as a minor piece of legislation by the Liberal Government. It contains 210 pages of minor changes to the Income Tax Act. I defy the average Canadian to be able to read it, let alone to comprehend it. I stand here as the representative of Calgary West. I think a lot about taxation.
Yesterday I flew back from Calgary. 1 come from a city that has been devastated and decimated and destroyed by the taxation policies of the Liberal Government following the philosophies of the New Democratic Party of Canada. I come from a city where over 21 per cent of the office space is vacant.
1 come from a city in which over 14 per cent of the rental accommodation is vacant. I come from a city that has an unemployment rate higher than the national average. 1 come from a city that is in that kind of trouble, not because we did not have talented, hard working human beings, willing to take a risk and willing to contribute to the affairs of this nation and to the economy, but because of Liberal tax policies. We have those kinds of people in Calgary with that kind of commitment, but we have a 21 per cent vacancy rate in office buildings, we have bankruptcies and we have devastation of human lives as a direct consequence of one factor and one factor alone, and that is the taxation policies foisted upon us by the Liberal Government with the aid and assistance of the New Democratic Party.
I heard the member from the New Democratic Party talk about corporate welfare bums. In my part of the country in western Canada, and in particular the Province of Alberta, the Liberal Government, for political reasons and political reasons alone, joined with the New Democratic Party to attack one sector of the Canadian economy, namely the oil and gas sector. They went to war with the oil and gas sector using the power of the House of Commons to change taxation policy relating to that sector. This Government went with two hands into the pockets of the people who were producing wealth. This Liberal Government just grabbed and grabbed so much of the production that too little was left in the pockets of those with the skills, the energy and the desire to work. These people were left with so little that they had to shut operations down; they had to quit drilling with their oil rigs. This is a tragedy for the individuals whose lives have been destroyed and it is a tragedy for the country. In the absence of a viable industrial sector, there is nobody to buy the cars, nobody to buy the stoves, nobody to buy the shoes or the products produced in the central part of Canada.
As I look at Bill C-2, with its new taxation policies for the country, changes in some minor areas and in some minor ways, the tragedy is that there is no recognition in this bill for the damage that has been done, in the first instance, to western Canada, but in the broader picture to all of Canada, by previous taxation policies. It would be so much more pleasant to be participating in this debate today if there were provisions
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in this new legislation to change the situation, to go in the direction of policies which were in place throughout the 1970s.
It would be so much more pleasant to be able to stand in the Chamber and be supportive of the policies that would produce economic health for the region of the country from which 1 come.
Instead, 1 have to stand in this House and bring to the attention of the House that we really do not have in this taxation document anything of significance which attacks the basic problem that exists here today. Our problem is that we have forced far too many people, 1.5 million dedicated, potentially hard working Canadians, into the ranks of the unemployed. That is better than 10 per cent of our labour force. It means that one in ten Canadians is being denied the opportunity to make a contribution to this country through work.
It is a tagedy that we have 210 pages of changes to tax legislation and there is so little in those 210 pages to encourage Canadians to take a risk, to take a chance, to start a business and to contribute. The reason is that we have had a succession of governments that are too easily and too often persuaded that taxation comes first and job creation comes second.
When the members of the NDP stand in this House and talk about corporate welfare bums, do they really understand the significance of what they are saying? They are really saying: Take the money out of the companies first and, if there is anything left over, create a job. How much better would this country be if we said to those individuals and corporations: "Take your money and create jobs". Once that was done, we would have a decent tax base in this country. We would bring in the revenue required to do the kinds of things that need to be done. The NDP and the Liberals should reverse their priorities as quickly as possible.


Mr. Jack Shields (Athabasca):: Mr. Speaker, 1 welcome this opportunity to make a couple of observations. 1 want to go back to the time when, after leaving school, I went to work for the first time. The Income Tax Act was in place, of course. When 1 received my T4 slip, I sat down at the kitchen table, figured out my tax and filed my income tax return. In those days it was very simple. It was not that long ago when as a first-time worker I filed my first income tax return.
In the majority of cases today, people must consult a tax expert because the tax laws are so complicated. 1 know there are Members of this House who, after reading this Bill, would very quickly come to the conclusion that it is full of legalese and is impossible to understand. You cannot understand the implications. In the past six weeks I have received representations from at least two dozen constituents who are having problems with their income tax returns, primarily because they cannot understand all the implications.
Let me give some examples. Two weeks ago a former clergyman came into my office. He had retired approximately two years ago. All of his working life he earned approximately $200 a month and, therefore, never had to file an income tax

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return. While still in the clergy, his mother left him the family home in Nova Scotia. He converted this home into a place for senior citizens. The cost of running the home is borne by those who live there. There have been between six and ten people living in the home.
In approximately 1973, his lawyer told him that for estate planning purposes he should transfer this home into a holding company wholly owned by himself. Two years ago he was able to secure a teaching position with the Fort McMurray School Board, where he still teaches.
Get the picture. This man is 64 years old, retired from the priesthood, never earned more than $200 per month in all his working life, was left the family home and property by his mother, which he converted to a senior citizens' home. The housekeeper looks after the home for room and board. However, he must pay the taxes and repairs because he does not receive enough money from the seniors at the home. Because he transferred this home to a holding company, the income tax department told him that he is deemed to have made a profit and, therefore, there are taxes owing since 1973. Last July he was hit with a $12,000 tax bill to cover this gain.
Last year he sat down with the income tax collection officer. He did not want to do anything wrong. When he told him he had no money, the collection officer said he would have to pay so much per month. An amount of $350 per month was settled on. This man could ill afford that and at the same time maintain the home in the Maritmes which today provides shelter for six senior citizens.
Two weeks ago the Edmonton tax office, without informing this man, garnisheed $900 per month from his salary. He either has to quit his job and go on welfare, something he would never do, or make an adjustment in his standard of living and sell the home in which these six senior citizens live.
That is not atypical. That is happening all across northeastern Alberta, particularly in the riding of Athabasca. I have received many calls regarding the income tax department moving in like vultures. They appear to have some pre-set plan. They are going to collect the money owing come hell or high water. I attempted to intervene on behalf of this gentleman because of the ignorant and draconian way the income tax department has garnisheed his wages, raising the amount from $350 to $900. When talking to the income tax people in Edmonton I was appalled by their lack of concern, feeling and understanding. They indicated that the taxpayer is constantly lying to them and it is their job to collect this money. Something is wrong when the tax collector moves in on people who are attempting to earn a living, particularly in this case where someone is providing shelter for senior citizens. Obviously this home in the Maritimes is required.
Our present tax system is self-assessing. We have said this time and again. Our whole system is based on that. If Canadians would not sit down at their kitchen tables, fill out their income tax returns and file them with the tax department, our whole system of government would fall apart. However, how are these individuals supposed to understand a tax Bill that is two inches thick and full of legalese, something they cannot
understand? Does anyone think that the lawyer for this gentleman 1 talked about would have transferred this property into a holding company if he thought it was going to trigger an increase in tax? What did it mean to him? It meant nothing. He was a man who did not earn. During the time of his obligation and career, he took a vow of poverty and therefore existed on $200 a month throughout his entire working career. 1 would suggest that early in his career he probably existed on a lot less than that. However, because he had a piece of property that he was able to attain through his family, he transferred it to a holding company. In the ordinary course of events, Mr. Speaker, he would never have done that. We must do something so that the people in the country can assess themselves properly under the Income Tax Act.


Mr. Sid Parker (Kootenay East-Revelstoke):: Mr. Speaker. I am pleased to speak on Bill C-2, an Act to amend the statute law relating to income tax and to make related amendments to the Canada Pension Plan and the Unemployment Insurance Act, 1971. 1 would like to say that we will have an additional 210 pages added to a booklet that is already over three inches thick and one which many Canadians do not fully understand.
Our Conservative colleagues have spoken about the problems of the oil companies. I would like to relate my remarks to the average Canadian working person and the total unfairness of the amendments which are before us. If I may, I would like to use a few examples. We all know that CP Rail gives $50,000 to the Liberal Party of Canada and to the Conservative Party of Canada and that CP Rail has just received billions of dollars of taxpayers' money through the changes to the Crow rate. However, I would like to speak specifically about some full-page advertisements which are being shown across Canada. We have all seen those advertisements which tell us what a wonderful company Canadian Pacific is. We have all heard the song that says: "I'm a CP Railway man," and we can bet that the Canadian taxpayers are paying for that advertisement.
I would like to tell the House how the discrepancies in the Income Tax Act affect a small farmer in my riding who is losing his farm because of the mortgage rate. That farmer has to leave his farm and go and work somewhere else. However, when he makes money and comes back to try and pay off that mortgage and keep his piece of property, he is told that his farm is not productive and he cannot use it. It is all right for the big companies, through tax loopholes, to be able to sing their songs even though they are not any more productive than the farmer. However, the small farmer needs the extra work so he has gone out, made money and come back and tried to use the money to save his farm, but is told that his farm is not productive, he is not working it and he cannot do that.
If I may, I would like to speak for a moment about taxes paid by waitresses and waiters, a matter which I have already brought up in the House. The income tax department contacted a number of waiters and waitresses in the community of Cranbrook. The assessors went back over three years and
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assessed these waiters and waitresses, some of whom are earning just above the minimum wage, up to $2,000 for tips. Those people are being assessed those amounts without any proof that they made those kinds of tips. They do not receive appropriate unemployment insurance benefits because it is not a part of their wage package. If they are laid off, the unemployment insurance that they receive is based upon the very minimum wage that they made. Where is the fairness in our taxation system? We are being asked to make amendments which would change that.
The Minister of Finance (Mr. Lalonde), when he brought down the April 19 Budget, told us that the "comprehensive system of child benefits will be targeted to those who need them the most". The fact of the matter is that the child care expense deduction will only benefit those Canadians who are well above the need level and can afford such expenses. It imposes a cost on the rest of the taxpayers who will pay to rear and educate the children of wealthy parents. People have to be making larger salaries in order to quality for the benefits that exist.
1 have heard the Conservatives talk about how the New Democrats threw them out of government. The fact of the matter is that the Conservative Government was elected on May 5 and did not have the courage to call the House in until October 11, leaving Canadians out in the cold for that whole period of time. It then brought in some policies that the Canadian people would not accept. Conservative members are talking about the poor oil companies in Alberta, but I would like to tell them that there are small businessmen, small farmers, waiters and waitresses out there who are making small wages and, through this Bill, will be carrying the load so that those big write offs can come about.
I think it is unfortunate that we must have a taxation system that is designed to help the wealthy while the lower income earners are the ones who have to foot the bill. We must put a stop to the taxation practices that are taking place in Canada. We must come up with a program which will not only be seen as being fair but will be fair to everyone. We must have a system that will not allow anyone to be able to use the loopholes that this Bill will bring about. This Bill provides for more loopholes so that these large companies will be able to find other ways of not paying their fair share of the running of the Government of Canada. That is wrong, Mr. Speaker. It is wrong that the small wage earners are the ones who have to pay the taxes while the others are able to find and use the big loopholes.
If some people are making as much as $50,000 or $100,000 a year and are not paying one cent in income tax, then surely to goodness we should be looking at that in a very serious way when changing the tax laws. We will not get those kinds of changes from a Conservative government. The fact of the matter is that Conservative governments represent those large lobbyists from CP Rail, the oil companies and the like who come to Ottawa and pick up the phone. I will use the example that was used by the Leader of the Official Opposition (Mr. Mulroney). 1 can see lan picking up the phone and saying: "Is
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that you, Brian? We have a problem here. We need a few more loopholes".
Or I can see him picking up the phone and calling the present Prime Minister (Mr. Trudeau). We all know that that will take place whether we have a Conservative government or a Liberal government. That will not help the average Canadian.
Let me ask you, Mr. Speaker, where are the lobbyists for waiters and farmers? Those lobbyists cannot afford to come here and lobby the Government to bring about the kinds of changes that they want. If we are going to have these kinds of changes, they will be made by the New Democratic Party. They will be made by a Party that represents the people of Canada and not the oil companies or CP Rail or the big multinational corporations. Until we get those kinds of changes and bring about those kinds of amendments, we will not have fair taxation practices in Canada. The average worker in Canada will continue footing the bill, whether it be under the banner of the Conservatives, the British Columbia Social Credit Party or the Liberals in Ottawa. That is the kind of legislation that is coming forward now, and we in this Party will fight it all the way.
We in this Party believe that there must be fairness, and the only way there will be fairness is by recognizing that everyone has to pay his fair share. There should be fairness in the legislation and the Government of Canada should decide how the money will be spent without allowing CP Rail to put a full-page advertisement in the newspapers telling us how proud it is of its history.


Mr. Len Gustafson (Assiniboia):: Mr. Speaker, I listened with a great deal of interest to the member from the NDP who suggested solutions that will not work. The most important change that should take place but which has not been addressed in Bill C-2, an Act to amend the Income Tax Act, is one that should create more productivity in the economy and more wealth in the country. The present tax system has been bleeding the economy at every level. We can argue back and forth about divisions in the country, and some were referred to again today, but the real problem is that the present Income Tax Act is counter-productive.
I want to give a few examples of this, Mr. Speaker. In the wheat growing districts of the country today, the tax burden is so unbearable that farmers do not deliver grain but keep it in their bins. That is serious. They do not get the same tax breaks that other areas of the economy enjoy. I believe figures were given regarding the larger corporations, but small farmers and small businesses are facing a taxation burden that is counterproductive. Until this problem is solved we cannot solve some of the other very serious economic problems in the country.
Ten or 15 years ago it was quite easy for any farmer, businessman or working person to fill out an income tax return, but today it is absolutely necessary to hire an accountant at a cost of $250 or $400 to interpret the Act and fill out the form. As well, the interpretation depends a good deal on

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the adjuster who looks the form over. Clarification is needed in this area which at present is most unfair.
We had good examples of interpretation and of long-term planning in the Budget brought down by the former Minister of Finance which was an absolute calamity for agriculture and small business. It is necessary for farmers to be able to set up a long-term retirement savings plan, if you will, while still operating the family farm. The Minister of Finance (Mr. Lalonde) introduced drastic changes that would make this very difficult for many farmers, particularly those engaged in raising livestock. The Department of National Revenue should look into this problem.
The capital gains tax is another critical area of concern. I spoke on this subject once before in the House and an Hon. Member opposite attacked me with vigour. Mr. Speaker, the Liberal Party has promised to address the valuation date in 1971 in the last three elections but there has been absolutely no change in the legislation, which is outdated and not in step with reality. This should be corrected but there is no mention of it in the Bill.
Long-term planning is very important. If we are to have a productive society, farmers and small business people must be able to make long-term plans that they can depend upon. Lack of this creates confusion in the economy and is counter-productive. We are finding that the rules are changed mid-stream. In Estevan, for instance, a concrete company was operating under a particular set of rules but then the percentages were changed and it found it came under a mining provision which made its operation more expensive. Many small businesses have run into difficulties because the Act was not clear. It should be a top priority of the Department of National Revenue to make the conditions of operation more clear and make it possible for farmers and small businessmen to plan their operations.
There is a non-productive aspect to the Income Tax Act as well. In my own operation I have had employees on the payroll for years but I find that the terms of the Income Tax Act do not offer any incentive for an employee to work overtime. When someone gives $2 to the Government and only keeps $1 for himself and incurs the usual expenses of going to work, there just is no incentive to work longer hours.
Inflation has created major problems for small businessmen and farmers. They simply cannot keep up with it and the Income Tax has not been adjusted to meet this problem.
Another area of concern is arrangements for retirement savings plans. The rules have been changed for people engaged in agriculture and now they just do not understand them. Indeed, I have on file two or three letters from accountants who do not even understand the rules, so how can the layman be expected to?
Earlier today the Hon. Member for Moose Jaw (Mr. Neil) spoke of the computer age. We have, with the Income Tax Act, found ourselves circulating paper. It almost takes a team of accountants to fill out one's income tax return. The computer age has complicated the system and by all indications it is going to be complicated even further.

The importance of addressing this serious problem immediately must be realized by the Government. If these areas are not addressed, we will see a continued decline in productivity and no incentive on the part of the people to go out and produce so we can afford those things in life which we would like to have. We must continue to produce so the Government can afford to address those areas of responsibility which certainly should be high in priority. Unless we address the Revenue Department and the Income Tax Act in a major way, Mr. Speaker, in order to bring under control some of the serious inequities which are there, this country faces problems.


Mr. Ron Stewart (Simcoe South):: Mr. Speaker, I am happy to have the pleasure of taking part in this debate because it gives me a chance to restate some of the points I was trying to make in question period on Wednesday of last week; that is, that the collections branch of the Department of National Revenue does not know what the appeals branch is doing, and vice versa. In other words, the left hand does not know what the right hand is doing. One assesses and the other collects, and like so much of what the Liberal Government gets involved in, there is no modicum of realization of where they are going.
The most important element in this debate is not income tax per se, or the payment of such. We all realize that it is here to stay. It is not that income tax is a so-called temporary measure, temporary to the extent that it was initiated during the First World War and is "temporarily" still with us, with the crushing effect it is having on Canadian business and the Canadian taxpayer.
There are some 120 changes in this Bill, Mr. Speaker, and, of course, the Bill emanates from the April Budget. It is now coming to fruition only in December, another eight months record which we are so used to seeing in this House. The best part of the Bill, in my view, is the investment tax credits, because the cash flow and capital accounts of small businesses have been decimated by the recession. I am appalled, as is the Hon. Member for Waterloo (Mr. McLean), at the removal of the $100 charitable donation deduction, which is nothing more than an unmitigated tax grab by the Government of $80 million to $100 million.
However, the greatest issue, which has been pointed out by most of my colleagues, is the complexity of the income tax system. The next most grave issue, in my view, is the attitude of the collectors of the tax themselves and the heavy-handed collection tactics which have been used in the past few years. This is something we have never had happen before. We now have a tremendously high rise in reassessments. It is noteworthy in this regard to tell the House that my accountant has had to deal with more reassessments this year than in many of the last years combined. This is due, I suppose, to the fact that the tax department seems to have upped its quotas. I say "quotas" advisedly, but we on this side of the House under-
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stand that that is exactly what has happened. How much tax justice can Canadians really expect from a department which is running a quota system?
The Government professes to believe in the value of the small business sector. Then it turns around and administers the Income Tax Act to the detriment of that very vital sector. When it comes time to harass and reassess-and both terms are becoming increasingly interchangeable and synonymous with the department-the owner of a small business is deemed to be guilty until he proves himself innocent. That is a radical departure from Canadian justice, in my view. It is a situation in which we cannot be proud, especially in light of the new Charter of Rights and Freedoms. Of course, that does not seem to apply to the operations of the tax department, as the Minister invoked the "notwithstanding" clause for his Department. Tax justice is really what we are after and this Bill does not give us very much help.
We are driving Canadians to the brink of financial disaster and in the process are denying them their fundamental rights. When a small businessman wants to appeal his assessment, he must first appeal, then he must make payment, thereby implying some kind of guilt. The process then begins. Is it any wonder that Canadians are disgruntled? It is a long and often costly process and throughout it all a small businessman's cash flow is tied up. Many of them will not appeal a small assessment because they cannot afford the court costs. 1 do not consider this justice.
This is how the contribution of small businesses to the Canadian economy is recognized. 1 would like to hear from the Minister of National Revenue (Mr. Bussieres) when he has the time-I realize he is very busy in his new-found role of Jesse James without a gun-as to why he is out to harass Canadians with reassessment quotas and inefficient administration of his Department.
However, to get back to the basic problem, the system is too complex, purely and simply, and that is why we are running into increasingly difficult situations in the administration of the Act. The amendments being brought forward by this legislation are a start, to be sure. We all recognize that. However, do they go far enough and do they really address the fundamental principles? I think not.
The Chamber of Commerce warns that the complexity of the Income Tax Act could loose an underground economy. In its brief to the federal Government a number of recommendations were made covering a wide range of areas which should be reformed. These are worthy of consideration. However, before any fundamental changes are made, perhaps we should have a moratorium on amendments to the Income Tax Act until we know exactly where we want to go. That was mentioned by this side of the House in the Crow debate, but to no avail.
This tinkering with different parts of the Act here and there is not really going to address the very real problems which Canadians are experiencing, the problems 1 have been hearing about every day in my constituency office. For example, a man who borrows $30,000 to invest in a business writes off the
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interest on that loan and then is assessed. He has to appeal. He sends in eight post-dated cheques. In the meantime his cash flow is nil and he will probably face bankruptcy. The Act was to implement a temporary source of revenue to help the Government through the war years, but obviously it is much more than that now. Changes must be made to reflect what the income tax has become and the purposes for which it is being used. We need a major re-examination of the Income Tax Act, and until that is done we should stop tinkering with it. We seem to be doing more harm than good in most cases. In the meantime Canadians continue to suffer injustices.
Mr. Lyman Maclnnis, who is the senior partner in Touche Ross and Company and President of the Institute of Chartered Accountants of Ontario, 1 believe has said it much better than any of us could. In a speech he made recently he talked about the incomprehensibility of the Act. He said, and 1 quote:
Now, I'm not going to pick out sections of the Act that deal with rare corporate re-organizations or the like. No! I'm going to deal with ordinary, every-day applications-things that affect ordinary, individual taxpayers.
Let's start with Section 56(1 )(s). As a matter of fact, if 1 want to be completely correct, in the Income Tax Act that's not a section at all. It's a paragraph. If it was just plain old 56-that would be a section. If it was 56(1), that would be a sub-section. But, because it's 56(1 )(s), that makes it a "paragraph" under the scheme of the Income Tax Act. And you have to know that in order to find your way through this mess.
Oh yes, and before 1 can even quote you what paragraph 56(1 )(s) says, you have to remember that Section 56, itself, begins with the words:
"Without restricting the generality of Section 3, there shall be included in computing the income of a taxpayer for a taxation year-" and you find that about five pages earlier than where paragraph 56(1 )(s) begins. So, the whole quotation is:
"Without restricting the generality of Section 3, there shall be included in computing the income of a taxpayer for a taxation year, the amount of any grant received in the year under a prescribed program of the Government of Canada relating to home insulation or energy conversion by the taxpayer, other than a married taxpayer who resided with his spouse at the time the grant was received and whose income for the year is less than his spouse s income for the year, or the spouse of the taxpayer with whom he resided at the time the grant was received, if the spouse's income for the year is less than the taxpayer's income for the year to the extent that the amount is not required by paragraph 12(1 )(u) to be included in computing his or his spouse's income for the year or a subsequent year".
Do you know what that really says, Mr. Speaker? It says, according to Mr. Maclnnis:
-if you receive a home insulation or energy conversion grant you have to include it in income, unless your spouse has higher income, then he or she has to report it.
Mr. Maclnnis says that is convoluted garbage and 1 agree with him. He goes on with many more examples, Mr. Speaker, section by section, of this convoluted garbage. I think you can see exactly what the Canadian taxpayer is faced with. The entire Income Tax Act was revamped in 1972, not really that long ago. The so-called reform of the Act was supposed to give us a well thought out and simpler tax system. However, since 1972 there have been more than 30 major amending Acts. There were 350 changes in 1980-81 alone, and now we have 120 more here. Two months ago the Minister of Finance (Mr. Lalonde) introduced 133 more amendments.

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Mr. Macinnis is one of the top people in this field and the essence of his argument is simply this:
The wasted manpower and dollars spent in trying to understand it and comply with it-forget the waste in trying to get around it-the wasted productive time and money spent in simply trying to comply with it, is enormous.
He makes two points which I agree with and which I think other people in this House do. He says:
1)	put a hold on tax changes for a period of eighteen months to two years, so
that we can get caught up with what has been happening to us over the last
few years;
2)	re-write the existing Act so that it is understandable by human beings with
average intelligence.
That is you and 1, Mr. Speaker, I would presume.


Flora Isabel MacDonald: Mr. Speaker, as has been said by a number of people who have taken part in this debate, if there is one thing which unites Canadians it is the fact that they all agree the Income Tax Act is the most complex and difficult piece of legislation to understand which exists in the country. Whether you happen to be from the east or the west, the north or the south, whether you are French speaking or English speaking, whether you are a Canadian whose family has been here for generations or you are a new Canadian, all agree it is terribly difficult to understand or come to grips with the complexities of the Income Tax Act. Even those who are supposed to be experts in this field, whether it is tax lawyers or accountants, actuaries or financial analysts, all agree you simply cannot find your way through the maze of complexities of the Income Tax Act.
I say it is difficult to understand, but if there is one thing that Canadians do understand, Sir, it is that the Government is trying to make a tax grab at their expense. This is being done in the amendments to the Income Tax Act which we have before us at this time. It is being done in the area dealing with charitable organizations, the voluntary sector in our society. It is being done. Sir, in a disguised way. The Government is putting forward these proposals as something which will benefit Canadians. But when you look at it then you see that it is anything but.
These proposals put forward by the Government have been condemned outright by the National Voluntary Organizations. When they were first put forward, not in this Budget but in the last one, they said:
The Coalition has proposed that the Minister of Finance eliminate the standard $100 deduction and replace it with a 50% charitable tax credit as an option to the current deductibility provisions for charitable giving. This reform would create an incentive for all taxpayers to support their voluntary groups and would make the incentive equitable between income groups. (The Government) failed to implement this proposal, known as Give & Take-
The chairman of the National Voluntary Organizations, lan Morrison, said at that time:
There is no equity for Canadian charities in ... the budget.
He went on to say that the Minister:
-said his goal was to improve fairness and equity in the tax system, but the changes he has proposed in tax treatment of charitable giving will increase
inequity by benefiting only the most affluent taxpayers, those in the top one per cent of tax brackets.
What the Government has done is to take half the recommendations made by the National Voluntary Organizations and other groups and agreed to eliminate the standard $100 deduction available to all taxpayers, but did not agree to implement the 50 per cent charitable tax credit also proposed. This is going to have a very negative impact on charitable organizations throughout the country.
1 remind you, Sir, that the voluntary sector of our society is big business in Canada. It involves some three million Canadians. Just to give you an idea of some of the facts which underline what I mean by it being a big business, there are
47.000	charitable agencies in this country. They involve the voluntary work of three million Canadians. They employ some
200.000	Canadians on actual payroll staff. These charities took in $5.6 billion in 1980, equivalent to 11 per cent of all federal Government revenue or almost 2 per cent of GNP. Their wage and benefit bill was almost $2 billion in 1980. That represents 1.6 per cent of employed workers in Canada, twice as many as are directly employed in forestry or one quarter of all employed in public administration by all levels of government. Almost three million Canadians volunteered almost 400 million hours of work in 1980. This is very big business indeed, yet the Government is moving to penalize and stifle the voluntary sector by the proposals it has put before us.
1 am sure every Member of Parliament has had letter after letter from voluntary organizations and individuals across this country, indeed from their own constituency, appealing to their humanity and sense of fairness, their sense of justice, not to implement only one-half of the proposals put forward by the Naitonal Voluntary Organizations. That is what the Government is doing with these budget day proposals. Instead of implementing the "give and take" proposals, they are implementing only the take end and not looking at the giving end. That is what so many Canadians are now protesting.
I have a letter from a gentleman in my own riding writing on behalf of the Incorporated Synod of the Diocese of Ontario to the Minister of Finance (Mr. Lalonde), and he says:
On a positive note, there is undoubtedly general approval of your decision to eliminate the $100.00 deduction. It is felt that, if anyone cares enough about their charitable giving, the amount will be considerably in excess of $100.00. Such people are in no way penalized by the elimination of the standard deduction.
Having said that, however, it must be admitted that there is widespread disappointment at your failure to do anything about the proposal for a tax credit. To have implemented this would have been a practical gesture of encouragement to those who take their charitable giving seriously.
The work of the churches is, for all practical purposes, entirely dependent upon voluntary donations. Increasingly, our budgets are obliged to include items which may be classed as social service .. . With these thoughts in mind it is our hope that you will reconsider the matter of a tax credit.
Of course, it is not there in the Budget. Another lady writing me, again from Kingston, says:
I am a retired R.N., single, and a woman. Therefore, I am not wealthy.
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That goes without saying in those circumstances, Mr. Speaker. She continues:
I like giving to certain charities. 1 find that with the present rules regarding charity giving, wealthy people can give more to charity and also get a better reduction on their income tax. If the rules were changed so that charity donations were deducted from tax instead of from taxable income this would even things out.
One of the adverse measures of this Bill, Mr. Speaker, is that it really does nothing to stimulate the voluntary sector. It stifles the voluntary sector. It does not expand its operations; it reduces its operations.
1 will close by saying that instead of encouraging Canadians to want to contribute to the well-being of their neighbours and to the country as a whole, and particularly at this time of year when Canadians want to make donations, this Bill is saying to them that if they do it in the way that the Government is proposing they will be penalized, not encouraged.


Ms. Margaret Mitchell (Vancouver East):: Mr. Speaker, I am pleased to rise, particularly after the Hon. Member for Kingston and the Islands (Miss MacDonald) spoke. I find 1 often agree with many points which she raises. It is too bad she is not the Leader of the Progressive Conservative Party. Perhaps we would have some more humane policies in the future.
Her reference to the complexities of the Income Tax Act particularly remind me of some of the people in my riding who have great concern every time income tax time rolls around. I refer particularly to the many thousands of new immigrants in my riding who do not speak English as their first language, who do not understand the income tax forms and certainly must be extremely confused about the income tax policies. As a result they often have to rely on very expensive advice which they really cannot afford. 1 appeal to the Government to make sure that there are some programs in place to help these kinds of people, and also low income people, have access to free income tax advice. In the past we have seen how some community organizations have provided this service, often training their own people. It is a good job-creation program.
I would also like to mention a concern that has been brought up repeatedly by the National Anti-Poverty Organization. That is the concern about usurers who are only too ready to bilk the poor. In particular, there are a number of loan companies that, I understand, will advance child tax credit returns early in the year when families are desperate to have this money for survival. They, of course, charge very high rates of interest for this service. That is another area that we would like the Government to give some attention to.
I would like to speak to Bill C-2, Mr. Speaker, from primarily a social policy perspective. The last Liberal Budget catered to corporate Canada at the expense of the average income earners. It ignored the needs of poor people and increasing numbers of unemployed people completely. The theory was a nice, comfortable Liberal theory that this would increase productivity and create more jobs. We know now that this has not happened to any great extent. Unemployment remains high and businesses are the winners as far as the tax system is concerned.
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Bill C-2 will do little to reverse this trend. It will add a burden to Canadians when it should be providing relief for the Canadians that are hardest hit by the economic situation of Canada as well as by the unfair tax policies of this Government. The tax changes which we would have favoured would have stimulated our economy, put more money in the hands of consumers and provided tax incentives for people to purchase needed goods which they have avoided purchasing during the last period of recession. This would help small businesses considerably.
It is deplorable, Mr. Speaker, that this Government continues to support a tax policy which overtaxes middle income people, their own supporters to some degree, provides very few tax credits for low income people, and allows many millionaires to pay no income tax at all. It just seems inconceivable and hypocritical that the Liberal Party and the Liberal Government refuses to change any of the multiple tax loopholes which allow this situation to exist. If the Liberals are bad, just think what it is going to be like if the Tories get into government.


Mr. Fisher:: Awful. You are right.


Margaret Anne Mitchell: The only solution, of course, is to elect an NDP government.


Some Hon. Members:: Hear, hear!


Margaret Anne Mitchell: Most Canadians would agree that we need a fair tax system and that this should be the Canadian Government's goal. I am sure most Canadians would feel this, Mr. Speaker. Why do the Tories and the Liberals not respond to this? Why do they not accept this as a goal and try to make some major reforms? This Bill does not do anything in the way of reform. It may do a few token things here and there, but it does nothing to relieve the basic problems of a tax system which is undemocratic and unfair. Incomes under our present system are not evenly distributed in Canada. There has been no change in this direction. The Government has not got the guts to make any major reforms.
Both the Liberals and the Tories ignore the increasing poverty in our society. They refuse to redistribute wealth through a progressive tax system or to guarantee minimum incomes. Income distribution has remained static in Canada over the last 10 years. There has been no change in the figures. Twenty per cent of the highest income earners control 40 per cent of the national income, the wealth of this country. If we compare that with the lowest income group, 20 per cent of the population in our lowest income group, have access to only 4 per cent of the national income. Is that in any way just or fair, Mr. Speaker?


Some Hon. Members:: There is no fairness.


Margaret Anne Mitchell: We can go back back to that old cliche, which is certainly the theme of this Government that "the rich get richer and the poor get poorer". The poor are increasing in numbers every day in this country.

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A just federal tax system should compensate those who are least able to cope with the current economic problems, Mr. Speaker. It should not only provide deductions for the cost of food and fuel in the north-subsidies would be an even better system-but it should also have a tax credit system so that native people who live in the north and do not depend on a cash economy so much would have the benefits and some protections.
In this Party we have long advocated a cost of living tax credit for low income people. This would be a very good time to try to implement that policy because inflation is lower. It would not cost that much to do it and it would build in a protection for people with a flexible indexing tax credit system which would really help poor people and those on fixed incomes, many of them senior citizens.
Bill C-2 is unjust, Mr. Speaker. It does not deal at all with the basic injustices in our tax system. I would like to give you a couple of other examples. Nearly 300 people who earn over a quarter of a million dollars a year pay no income tax. Is this just? Is it just that over 8,000 people who make in excess of $50,000 a year pay no income tax to the Government? Is it fair or just or even financially feasible that many profitable corporations such as the Bank of Montreal make millions of dollars in profits even in times of depression or recession and pay no income tax? It seems to me that this wealthy elite in our Canadian society must bear the major responsibility for the enormous deficit that we have in Canada today.
A progressive and just tax policy should reflect social goals, not only financial considerations. We believe that a fair tax system should redistribute wealth in an equitable way. We on this side also believe that a progressive tax system is essential to provide a form of social investment that will not only benefit individuals who need help and are hardest hit in our society but will also ensure that we have enough money to finance essential social programs.
For example, we in Canada tend to plan most of our programs from an economic point of view. We do not look at the investment in human resources and social programs. We need reforms to tax provisions for families. We can look at the regressive deductions for child care, spousal deductions and deductions for children and can see the progressive kind of policies which we have for family allowance and child tax credits. We need to review this situation and put it into a more progressive and general framework.
There are many other social policies I could deal with but I regret that 1 do not have enough time. We agree completely with the criticism of the removal of the $100 deduction for charitable donations and the complete neglect of the give and take proposals of the National Voluntary Organizations. We would like to see a reform of charitable organizations and how they are defined as well.
I see that my time is up. I had many proposals which this Party would put forward. I hope the Government will consider them in developing a more just tax system and major reforms
to redistribute wealth in this country and accommodate social needs.


Mr. John McDermid (Brampton-Georgetown):: Mr. Speaker, I am pleased to rise to participate in this tax debate. Before I begin my remarks, 1 think I should thank the former Minister of Finance, who is now Secretary of State for External Affairs (Mr. MacEachen), and the present Minister of Finance (Mr. Lalonde) for accomplishing something during their four years of responsibility of being Finance Minister, which is having Canadians become more involved in the political process than ever before. They have suddenly paid attention to what is going on in this Parliament with our taxation policy. Canadians have tended to sit back and have great faith in their governments and the tax system without becoming too involved in the process of taxation policy. I can say without any doubt that November, 1981 will go down in the annals of the history of this country as the time when people became involved in the development of their taxation system. I have never had such reaction to any tax proposals or any proposals whatsoever in all my life. Not only did people become involved, they became very aware of what a rotten job the Government is doing with taxation policy. I suggest the Government's taxation policies also helped the deficit of the post office somewhat as a result of the letters being sent to us from throughout the country as well as the lobbies that began to take place. Therefore I want to thank those Ministers for getting the Canadian people involved in what is happening in the taxation process. It is obvious that the people in my riding of Brampton-Georgetown as well as the constituents of my colleagues are not happy with what is happening.
The Bill before us is one that the Progressive Conservative Party will vote against. While there is no question that there are good measures in the Bill, there are also a lot a tax increases which Canadians will not even realize until they begin filling out their tax forms. They will not realize these tax increases in the spring of 1984 but right after the election in 1985 when they begin filling out their tax forms at that time. Canadians will not realize until 1985 that the Minister of Finance has raised their taxes. That is the sneaky part of this Bill which reflects this part of the Budget-the recovery Budget, he calls it-that he brought in in April. The Minister's nickname for the Budget is the recovery Budget, and while there will seem to be a recovery in 1984, Canadians will start paying increased taxes in 1985. If we are going to see any recovery in 1984 it will be defeated by what will happen in 1985 when Canadians begin paying those additional taxes.
The Government has been operating with smoke and mirrors for the last four years. After four years of this Government the people of this country are saying that they made a big mistake in 1980. The Hon. Member for Mississauga North (Mr. Fisher) is shaking his head in utter disgust at what 1 am saying, but I saw the poll results from his riding. I would be shaking my head too right now. As a matter of fact, I would be extremely worried about my policita! career. The average life of an MP is five years and nine months. He is not even going
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[Stage Direction]
to make it. Being associated with the Minister of Finance will not help him at all. It will hinder him.
The deficit is an issue that has not been properly addressed. People do not understand the deficit because when they hear about the amount of money involved no one, even CP, can relate to it. The deficit is in the billions of dollars. We are currently in debt for some $130 billion and if we were to make a determined effort to pay back that money which the Government has borrowed at $1 billion a year, without any interest it would take 130 years to pay it back.
The Government has indicated that it cannot really worry about the deficit right now because we are going through tough times. One of the most staggering statistics in this country is that 75 per cent of all the borrowing done in Canada is by governments. This allows the private sector to borrow only 25 per cent of the available capital. The municipal, provincial and federal governments are borrowing 75 per cent of all the available loan money, which means that interest rates will remain high. Governments can afford to pay a little more because they simply tack it on to the deficit which another government may pay later on. However, the private sector is left to scramble for the remaining 25 per cent. This situation does not lead to a recovery.
1 believe it is very important for a government to approach the method of reducing that deficit in a business-like manner. There are many examples of how this can be done. There was a recent report on the restaurant operation in this place which indicates that we can save $2 million in a year. It is the most scathing report to be released around here in a very long time. As well, that is a very small part of the operation of government.
I see by the Sergeant-at-Arms walking toward the Table that my time is up. Let me say in conclusion that this Bill contains many flaws. When it comes time to vote and proceed into Committee of a Whole this afternoon, the Progressive Conservative Party will vote against it. I want to say to Canadians that relief is on the way because this is the last tax Bill that they will have to put up with before the Progressive Conservative Party forms the next government and presents a realistic budget for the Canadian people.
Mr. Deputy Speaker:: Order. It being one o'clock, 1 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.
[ Translation]

Mr. Gaston Gourde (Levis):: Madam Speaker, in the National Assembly, the PQ majority is about to, if it has not already done so, adopt Bill 38 aimed at withdrawing from municipalities the funds they may have received directly or indirectly from the Government of Canada. This legislation, fiercely opposed by the Liberal Opposition in Quebec, has become the trademark of a declining separatist Government. After postponing the session of the National Assembly for a month, supposedly to prepare Quebec's economic recovery, the PQ Government found nothing better to do than to prevent municipalities from receiving funds that could be used to improve the well-being of the people of Quebec and put the Province on the road to recovery. The Government of Canada is being accused of distributing funds arbitrarily. In fact, Bill 38 is a prime example of arbitrary and discretionary action, since the Minister of Municipal Affairs may even decide whether or not the legislation is to be enforced. This kind of legislation is one of the reasons why the new Parti nationaliste and its leader, Mr. Marcel Leger, are not meeting with a great deal of enthusiasm. If I may, I would even go so far as to predict that, provided the Parti nationaliste actually participates in the next general election, all seventy-five candidates for this party will lose their deposit.


AGRICULTURE
Mr. Gordon Taylor (Bow River):: Madam Speaker, people of Canada, now hear this! The policies of the Liberal Government are setting the stage for unwarranted increases in the cost of food. I ask the Government how our farmers are going to stay in business with higher transportation costs brought about by its Bill C-155, higher fuel and higher fertilizer costs brought about by the National Energy Program, to say nothing about the doubling of machinery costs?
While the expenses of the farms go up and up, the returns to the farmers go down and down. In 1977 barley sold for $2.80 per bushel; in 1983 it is $2.50 per bushel. A 500-pound steer sold for 85 cents a pound in 1977, and it is still only 85 cents per pound. In the meantime the price of beef, bread and milk, almost every essential item of food, to the consumer, has increased three to four times.
The farmer is getting less and this Government is grabbing much of the increase. No wonder more and more of our farmers go bankrupt every year. If this trend continues, with the cost of everything the farmer buys increasing and almost

December 19, 1983
everything the farmer sells decreasing, farmers will not be able to stay in business and we will soon have socialized farms, and then the people will really pay right through the nose for their food. Is this the aim of this Government? Heaven help us if it is!


MULTICULTURALISM
Mr. Jesse P. Flis (Parkdale-High Park):: Madam Speaker, I rise today on behalf of my constituents to draw special attention to the efforts of the Government to protect and nurture the multiculturalism element of our country. No country in the world has been more tolerant of physical and cultural differences than Canada. No country has been more receptive to the plight of immigrants in modern times. Through the Speech from the Throne, the Liberal Government demonstrated that the pursuit of these qualities will continue to be a priority.
The Minister of State for Multiculturalism (Mr. Collenette) last week announced that he will introduce new legislation to give legal recognition to the Government's multiculturalism policy. As well, Madam Speaker, most of the requirements for Canadian citizenship will be relaxed for immigrants over 65 years of age. The Liberal Government will also continue to encourage a wider use and knowledge of the country's two official languages and will provide support to' the voluntary sector in over a thousand language instruction projects that will help 125,000 people.
We will also give early attention to the report of the parliamentary Standing Committee on Visible Minorities, and we will strengthen the law against hate literature. It is the commitment of this Government to fight for equality for all people living in Canada. The contributions of this country's multicultural groups have enriched our society, making Canada a better country in which to live. Variety, civility and tolerance are characteristics of this country that will be treasured and nurtured by the Liberal Government.


THE PRIME MINISTER
Ronald Alexander Stewart: Madam Speaker, at Tuesday's "Last Liberal Command Performance" the Prime Minister (Mr. Trudeau) told the dinner gathering that a nation's strength is not due to the size of its armies or its balance sheets, but to the size of its heart. It has become painfully obvious that the Prime Minister subscribes whole heartedly to that view. His heart is not in either defence or economic issues.
When his Government took office in 1968, the net debt was $17.7 billion. When we started this fiscal year, it stood at $120
billion. He has cut the heart out of our nation's financial stability.
In 1968 the proportion of our Gross National Product devoted to defence stood at 2.4 per cent. By 1973 it had plummeted to 1.6 per cent, and now it stands at about 2 per cent, the second lowest in NATO, the alliance from which the Prime Minister attempted to withdraw. That is heartbreaking. But what was most disheartening of all last Tuesday was to hear the Prime Minister refer to those "pipsqueaks in the Pentagon", when it is apparent that he is more comfortable with his comrades in the Kremlin.
Is this how political will is injected into arms negotiations? Is this how a Canadian leader tries to win the support of our greatest friend and ally? No. What we have here is third rate, third level diplomacy. Have a heart, Mr. Prime Minister. Call an election, and let Canadians give their hearty endorsement to a new Progressive Conservative Government.


MARINE SAFETY
Mr. Ray Skelly (Comox-Powell River):: Madam Speaker, I would like to draw the attention of the House to the fact that the Ocean Ranger drilling rig sank almost two years ago with the tragic loss of all 84 crew members, in the icy seas off the Newfoundland coast. Unprotected against the cold, no one could expect to survive in those waters.
Rear Admiral Henry Bell, Chairperson of the U.S. Board of Inquiry, said:
There is no question that some of the men would have survived if they had been wearing survival suits. We're not going to re-invent the wheel with this inquiry and prove all over again that survival suits work.
Last night, December 18, the supply tugboat Seaforth JarI sank off the south coast of Newfoundland, in gale force winds and sub-zero temperatures. None of the 11 crew members died, even though they floated in life boats for an hour and a half before being rescued. Each was wearing a survival suit for protection.
The captain and crew of the tugboat Arctic Shiko are to be commended for their speedy rescue under life threatening conditions. However, the Government is to be condemned for its failure to make these life saving survival suits mandatory. While the Government waits for the outcome of the Ocean Ranger inquiry before taking decisive action, other crews may be less fortunate. The time for action has long passed.
December 19, 1983


AIR TRANSPORT
Mr. Stanley Hudecki (Parliamentary Secretary to Minister of National Defence):: 
FORESTRY
Mr. Gerry St. Germain (Mission-Port Moody):: Madam Speaker, the devastation of the forest industry in my province is a guillotine over every job in British Columbia. Fifty per cent of all jobs in B.C. are directly related to forestry, yet the forest industry faces extinction because trees are being cut and are not being replanted. Trees take up to 60 years to grow. We have waited too long already. We cannot wait any longer. Last year the then Minister of the Environment promised $130 million for reforestation. Where is it?
If we lose our forest industry, and without reforestation we surely will, there will be unemployment in every riding in Canada. The cosiest urban ridings, no matter how far they are from the forest, will be crippled. Workers in the shipping industry, automobile industry, or any other industry, may
never realize that they lost their jobs because we forgot to plant trees.
How can such ignorance and gross negligence be defended? The Government would rather spend money on Canadair, de Havilland, and Dome, because big companies provide better publicity than little green trees. I cannot sit back while the people of my riding watch their principal industry disappear and, with it, their opportunities and way of life. Taxation without representation is immoral and unjust, but taxation without reforestation is economic genocide.


REGIONAL DEVELOPMENT
Mr. Nelson A. Riis (Kamloops-Shuswap):: Madam Speaker,
I wish to draw the attention of the House of Commons and the federal Government to a most innovative and creative effort being developed by the residents of Sicamous, B.C. The residents of this fine community decided to take the initiative themselves to kick-start the local economic recovery into life, rather than wait for government or outside interests to do it for them. By taking advantage of local human resources, local natural resources, local financial resources, local transportation resources, and a community spirit not found in many communities, a local organization called SWIM was created.
Sicamous Wholesale Industrial Management provides the over-all organization and system for the development of local manufacturing and cottage industries. It assists in developing appropriate community infrastructure not only for the manufacturing of products, but also for their marketing, promotion, and sales. This co-operative effort by the residents of Sicamous, B.C., provides ample evidence that local communities can be part of the solution for a major economic recovery in our country. By skilfully organizing local resources and utilizing peoples' fundamental co-operative inclinations, much can be accomplished.
Positive actions and positive feelings abound in the district as SWIM develops the roots of Canada's recovery process. Not only is SWIM useful in Sicamous, British Columbia, but it can be considered a model for similar communities in all regions of Canada. Thank you, Sicamous, for providing a successful economic development initiative, and a model for the rest of the country.


LABOUR RELATIONS
Mr. Dave Nickerson (Western Arctic):: Madam Speaker, convenience stores, gas stations, and similar outlets which remain open all night, or until the small hours, provide a

December 19, 1983
Oral Questions
worth-while service to the public, but unfortunately tend to attract the attention of criminals bent on robbery or other crimes. Frequently it has been observed that only a single employee is on duty, and often this is a young person. How many times have these employees been victims of attack and violence? Employers in these circumstances should be obligated to ensure the safety of their employees.
Premises should be made as secure as possible, employees should be trained in what to do when trouble threatens, regular security checks should be made and, most of all, employees should not be left on their own when their safety might be endangered.



ORAL QUESTION PERIOD


Mr. Chris Speyer (Cambridge):: Madam Speaker, my question is directed to the Minister of National Revenue. The Minister will know that there is a small subsection of auditors consisting of ten individuals in Kitchener, known as a the basic file section. As part of their yearly performance evaluation, they received an internal form called TPA232, which set forth their basic goals and a comprehensive list of quotas.
If I can very briefly quote from the memorandum which each and every one of these particular auditors received, it stated: "Each auditor should strive to meet the following guidelines, income recovery of $3 million per year." In the Kitchener area we are talking of $30 million being a quota. The Minister has consistently denied the existence of quotas. Will he now be forthright with the House and state that he has always known that there have been quotas, and how long he has known this?


Hon. Pierre Bussieres (Minister of National Revenue):: Madam Speaker, after the Hon. Member asked his question in the House a few days ago, I was informed that some specific amount had been set in the district office referred to by the Hon. Member, and I was also told that as soon as senior officials here in Ottawa-and that was before the Hon. Member had asked his question-were informed of the situation, they told the officials in charge of the district office that this was a practice that could not be tolerated, and they ordered that the guidelines be withdrawn.


MINISTER'S KNOWLEDGE
Chris Speyer: Madam Speaker, all standards of fairness and objectivity are being crushed under the
foot of expediency in this particular Department. This is not only a local problem; it is a national problem. On December 2 the union acting on behalf of the auditors met with senior management of the Department. The auditors complained about these quotas, their performance, and living up to the quotas. In addition, meetings between senior officials of the Minister's Department and the union are scheduled for early February. Does the Minister know of the existence of this problem?
[ Translation]


Pierre Bussières: Madam Speaker, I repeat that a kind of quota system indicating exactly the amounts to be recovered, and the obligation to audit so many files within a given period of time, is not a formula or a policy applied by the Department. Certainly, we do establish formulas to measure the performance of auditors, as we have done for other groups. I think the Hon. Member will agree that in the Department of National Revenue, as in other federal departments, we must try to establish criteria to monitor the quality of the work being done and also try to measure the quality of performance of departmental employees, whether in auditing or any other field. However, I have assured the Hon. Member that no specific quotas as defined by the Hon. Member have been set for our auditors.


PRODUCTION STANDARDS AND TABULATION OF THIRD PARTY IRREGULARITIES
Chris Speyer: Madam Speaker, I regret to say this, but the Minister has demonstrated a sense of incompetence that makes him unfit to hold the office of Minister of National Revenue, and I ask for his resignation.


Some Hon. Members:: Hear, hear!


Chris Speyer: Back to the Kitchener situation. Not only did these auditors receive in writing quotas of $3 million per year each, they also received stipulations that there had to be a minimum of 25 T133 leads of good potential per year. A T133 lead is a third party irregularity. In addition, there was a production standard to meet specified hours. Does the Minister condone this? When did he become aware of it? Is he going to cause an investigation to be made, not only in the Kitchener office but in all of Revenue Canada, of the standards being imposed on the taxpayers of Canada?


Pierre Bussières: Madam Speaker, 1 made it clear in my previous answer to the Hon. Member that as soon as our senior officials here in Ottawa became aware of the existence of specific quotas, they asked to have these withdrawn. However, I can assure the Hon. Member again-and I wish he would also abide by the same standards he would impose on others and take the time to listen to the answers-that it is a fundamental and essential
December 19, 1983

part of our responsibility as Ministers of this Government to ensure that the work of each employee meets certain standards of quality and efficiency, so that the Auditor General of Canada will not have to point out that our employees are not doing good and efficient work. Consequently, we have standards for measuring the quality and efficiency of the work done by our employees.


PERFORMANCE EVALUATION CRITERIA-PROMOTION OF PERSONNEL
Hon. Ray Hnatyshyn (Saskatoon West):: Madam Speaker, my question is supplementary to the question asked by my colleague, the Hon. Member for Cambridge, and is directed to the same Minister. The Minister will know that it is a well-known fact within the Department itself that the people from regional offices who can expect promotions are those who collect the most money. It is a very simple criterion. The whole question of assessing the performance of officials has nothing to do with that, but has to do with the unrealistic expectations which are reflected in the way those employees deal with the taxpayers of Canada. In view of the fact that there is still in existence criteria for assessing the performance of employees which take into account the upward income per hour realized by employees, is the Minister saying that he will remove that criterion with respect to the assessment of employees within the Department?
[ Translation]


Pierre Bussières: Madam Speaker, first of all, the Hon. Member should know that promotions within the Department of National Revenue, as he seems to believe or would have us believe, and I am not sure he is entirely convinced himself, are not based on the amount of money collected or the number of audits carried out. We have certain weighting factors, so that when an auditor has to audit so many files requiring certain qualifications and corresponding to certain levels of difficulty, a certain time frame is allowed and judged on the basis of those factors.
The qualifications of an auditor are not determined by the amounts of money assessed or the issuing of a notice of assessment or collection or the amount of money recovered but by the professional rigor with which these duties are performed.


REQUEST THAT COMMITTEE VIEW TRAINING FILM
Ramon John Hnatyshyn: Madam Speaker, the attitudinal approach to tax collection taken by the Minister's Department even filters down to the training films which are produced for the auditors. I wonder if the Minister, in the spirit of freedom of information to which the Government is apparently committed, would be prepared to allow the film entitled The Investigative Approach to Auditing, which has
Oral Questions
been described by people within his own Department as being heavy handed, and which has shocked a number of senior business auditors, to be viewed by the Standing Committee which deals with his Department so that it may find out what heavy handed approaches are being recommended for employees within his Department.


Pierre Bussières: Madam Speaker, the Estimates provide us with regular opportunities for appealing before the Standing Committees of the House. 1 did so very recently, and never received a request to that effect. I know one of the Hon. Member's colleagues made a number of enquiries to the Department, and we are preparing replies to those questions, and I do not see why we should make a secret of our working methods.


DISARMAMENT
Hon. Edward Broadbent (Oshawa):: Madam Speaker, my question is directed to the Prime Minister and concerns his recent visit to the United States. Following his meeting with President Reagan, the Prime Minister is alleged to have said that the President demonstrated a change in the trend line of his thinking. I wonder if the Prime Minister would be more precise about what he meant by that. As well, would he please inform the House as to President Reagan's response to his specific proposals?


Right Hon. P. E. Trudeau (Prime Minister):: Madam Speaker, I believe I had occasion to illustrate what 1 meant when I said that the President is now saying things that he had not at least been perceived as saying before. One of the examples I gave was that in the Diet in Tokyo, just a month ago, he came out with a clear statement indicating that he believed that nuclear war could not be won. He believed that we should try to get rid of all nuclear weapons. He also said that he believed that the United States would be flexible in negotiating and that it was looking for an agreement for a lower level of nuclear weapons. These, to my knowledge at least, were statements which I had not seen broadly reported in Canada, and I thought it would be worth while for me to make it clear that we had talked about them during my meeting with the President.
The second evidence of change in the trend line of thinking, Madam Speaker, came from the NATO meeting in Brussels just two weeks ago, which was attended by the Secretary of State for External Affairs. It was a meeting at the ministerial level. If the Hon. Member would refer to the declaration which came out of that meeting, and to the communique which came out after it, I would think that he would see some very encouraging signs. The first was that the NATO Ministers agreed that the meeting in Stockholm should be at the

December 19, 1983
Oral Questions
ministerial level. They agreed that we should review our positions on the MBFR in Vienna and consider whether it would be worth while escalating that to the ministerial level.
The statement was also replete with references to the need for dialogue between East and West and the need not for superiority of the West over East but for a balance in armaments. As well, there were other indices. One which I think is significant is that we indicated that we realized that the other side had legitimate security interests which it was justified in protecting, just as NATO countries had legitimate security interests which we were justified in protecting.
These are all ideas that the Government has been putting forward, some of then recently in the peace initiatives which the Secretary of State and myself have been pursuing, and some of them less recently, such as in a speech which I gave at Notre Dame a couple of years ago, and the speech I gave to the Second United Nations Special Session on Disarmament. These are all ideas that we were hoping would be recognized by all sides. They have been recognized now by the NATO powers.


FIVE-POWER NUCLEAR CONFERENCE PROPOSAL-PRIME MINISTER'S FORTHCOMING VISIT TO MOSCOW
John Edward Broadbent: Madam Speaker, the Prime Minister did not deal in detail with his own specific proposals and with the President's response to those proposals.
I would like to pursue the question of the Prime Minister's activity in this field with regard to his proposed visit to Moscow. Is the Prime Minister in a position to tell the House if the date has been set for that visit? Having regard to the fact that four of the five states that would be involved in the five-power nuclear conference proposed by the Prime Minister have turned it down, does the Prime Minister intend to pursue that option in Moscow, or does he intend to take other new proposals to Moscow and, if so, would he tell us what they might be?


Pierre Elliott Trudeau: Madam Speaker, the Hon. Member says that I did not speak about my specific proposals. My first answer was quite long. 1 did not want to go into great detail, but of course I mentioned two of the four proposals directly. One was for a meeting at the ministerial level in Stockholm and that proposal was successfully accepted by the NATO countries at the NATO meeting two weeks ago, as I have already indicated. 1 do not know yet if the Warsaw Pact countries will agree.
In so far as the MBFR meetings in Vienna are concerned, I also dealt with that, and it seems to me that the decision in Brussels was very encouraging in that sense. The third proposal had to do with the ASAT, and I always indicated that that would be something we would be moving toward, particularly at the United Nations, with regard to matters dealing with high altitude anti-satellite weapons.
Dealing with the five-power meeting, Madam Speaker, I am afraid that the Hon. Member has misread the answers of the
leaders to whom I talked. None of them have rejected it, and several of them, three at least, have said specifically that they would be prepared to attend the five-power meeting. This is the case with France, this is the case with Great Britain, and this is the case with China. They have all indicated that they did not want to attend it now, they wanted certain things to happen first, but they have indicated that they want to attend.
President Reagan has also indicated to me, in a letter that he wrote me some time ago, that he thought that at some point it was a good idea but he was not prepared to envisage it now. There is much more to say on each of those points, Madam Speaker.
The only leader I have not seen is Mr. Andropov. I have no date set, although the invitation has been extended to me repeatedly. Obviously the Soviet leader is not in a position to meet with foreigners now, and they are asking me to be patient. I would point out to the Hon. Member that the Soviet Union has also told me that it is interested in the five-power meeting, under certain conditions, once again. This seems to have escaped not only the Hon. Leader of the New Democratic Party but most of the commentators in the media. They seem to say that the idea has not taken off the ground. It is an idea that they have all accepted in one form or another.
Once again. Madam Speaker, it is not the specific purposes which were the more important in our proposal, it was the changing of the trend line; it was an injection of political will to deal with the problem at the political level rather than at the bureaucratic-


Madam Speaker:: Order, please. Order, please. I am really sorry, but 1 do have to interrupt the Right Hon. Member.


John Edward Broadbent: Madam Speaker, the Prime Minister has observed, and I think correctly, that in his visit to other states, most states, whether in the Warsaw Pact or in NATO, or among the non-aligned countries, are reluctant to depart from past traditions. He has suggested that new ground ought to be broken. He has also talked about creating a new atmosphere. I should like to suggest to the Prime Minister that surely these things are connected, that new ground should be broken to create the proper atmosphere.


NUCLEAR FREEZE POLICY
John Edward Broadbent: Madam Speaker, 1 have a last, supplementary question. I wonder if the Prime Minister, on behalf of the people of Canada, would be willing to commit the Government of Canada to the kind of position taken by many European leaders and many American politicians, as well as other people around the world, and break some new ground, create some new atmosphere, by committing Canada to a nuclear freeze policy?


Pierre Elliott Trudeau: Madam Speaker, in so far as the disarming of Canadian forces in a nuclear sense is concerned, we, of course, began that in 1969,
December 19, 1983

and pursued it successfully in every area. There were four areas where we had atomic weapons; there was the Bomarc, there was the Honest John, there were the 101s and the 104s. In every case except the 101s we are not a nuclear power. In the case of the 101s we will cease to be on July 1, when the last of the 101s will be replaced by the F-18s. It seems to me that, as far as we are concerned, we are truly a non-nuclear power. We have no nuclear weapons; we do not handle them or use them, and we do not intend to.


John Edward Broadbent: What about the two tier plot?


Pierre Elliott Trudeau: Madam Speaker, it seems to me we have made some progress along those lines.

[ Translation]


PRESENCE IN GALLERY OF SPEAKER OF NATIONAL ASSEMBLY OF SENEGAL AND OF INTERNATIONAL ASSOCIATION OF FRENCH-SPEAKING PARLIAMENTARIANS
Madam Speaker:: 1 have the honour of drawing the attention of the House to the distinguished presence in our gallery of Mr. Habib Thiam, Speaker of the National Assembly of Senegal and the Association internationale des parlementaires de langue franqaise.


Some Hon. Members:: Hear, Hear!


CRIMINAL CODE
Hon. Bud Cullen (Sarnia-Lambton):: Madam Speaker, 1 have a question for the Minister of Justice. Given the carnage on our highways caused by drunk drivers, and given the fact that recently research group results indicate that 40 per cent of sentencing in the courts is related to drunk drivers, does the Minister contemplate bringing in amendments? If so, when does he contemplate introducing those amendments?


John Horton McDermid: Come on with a straight face.


Mr. Crosbie:: You are going to be taken up for impaired back-benching.


Hon. Mark MacGuigan (Minister of Justice):: Madam Speaker, I thank the Hon. Member for his question. Because of the number and severity of accidents on our highways involving impaired driving, 1 am able to tell the House at this time that the Government will be introducing new legislation which will create four new offences. There will be two offences concerning impaired driving-impaired driving causing death, and impaired driving causing injury; and two offences concerning dangerous driving-causing death, and causing injury. We
Oral Questions
will be adding certain new sanctions, such as mandatory prohibitions from driving for any offence of impaired driving. We will be making it possible to immobilize vehicles, and to provide for compulsory treatment. We will also be providing for the compulsory taking of blood samples under judicial order.


TIMING OF INTRODUCTION OF LEGISLATION
Hon. Allan Lawrence (Durham-Northumberland):: Madam Speaker, the Minister of Justice has been preaching and promising on this and on many other subjects for some time, but no draft legislation has been forthcoming. 1 understand the media manipulation and hype are being continued by the Minister today, but still no draft legislation has been presented to the House. In view of the details the Minister has just given to the House, would he confirm that first reading will be given to the Bill today?


Mark R. MacGuigan: Madam Speaker, this legislation will be part of the larger series of amendments to the Criminal Code which will be introduced in January. 1 believe that it may help us in depressing the accident rate through this festive season if Canadians are aware at this point of the serious view the Government takes of impaired driving.


GOVERNMENT'S POSITION
Allan Frederick Lawrence: Madam Speaker, my supplementary question to the Minister is this: why have we not got a Bill before us today? Why do we not have a Bill?


Mark R. MacGuigan: Madam Speaker, I had hoped that my hon. friend might be interested in the details that we propose to bring forward. I know that he is generally supportive of such legislation, as I believe Canadians are generally, and the Government is prepared to give a strong lead at this time with respect to this very serious social problem.


Mr. Epp:: You have a great future behind you.


NATIONAL REVENUE
Mr. S. J. Korchinski (Mackenzie):: Madam Speaker, I have a question for the Minister of National Revenue. It has come to my attention that many employees who buy Canada Savings Bonds through the payroll deduction system are not provided with a T-4 slip showing this deduction, as is done with deductions for the Canada Pension Plan, unemployment insurance, union dues, et cetera. Would it be possible for the Minister to include a box on the T-4 slip which would include

December 19, 1983
Oral Questions
the amount of interest paid, since this is a deductible item, and not have the amount paid provided only on demand. People who purchase bonds in that fashion should be able to include this interest on their income tax returns and not have it overlooked.


Pierre Bussières: Madam Speaker, I shall give the Hon. Member's suggestion careful consideration.


REQUEST THAT EMPLOYEES BE PROVIDED WITH DATA
Stanley James Korchinski: Madam Speaker, if the Minister cannot include that item this year, would he provide a directive to all employers who have made the deduction for the purchase of Canada Saving Bonds, to add a slip in addition to the T-4 form, so that people may take advantage of the deduction? Not everyone employs an accountant to complete his income tax return. May I also ask the Minister if this item has been overlooked, for what period of time could people have their files re-opened? Would it be four years, or, as in the case of farmers, six years after they have been reclassified as hobby farmers?


Pierre Bussières: Madam Speaker, as I pointed out with respect to the first part of the Hon. Member's question, I shall look into his proposal. However, I would like to point out that this should not add an even heavier paper burden to the already existing form.


ADMINISTRATION OF JUSTICE
Mr. Robert Wenman (Fraser Valley West):: Madam Speaker, my question is directed to the Minister of Justice. The Government has now had over two fully months to digest the
6,000	pages of testimony regarding Sidney Jaffe which were filed in the Florida court records. These records contain, in particular, a letter dated December 22, 1981, from Mr. Jaffe's lawyer to the Assistant Attorney General of Florida, stating that "Jaffe (would) use his influence to stop the Canadian criminal prosecution of Putnam County public officials resulting from the kidnapping." Mr. Jaffe claimed that his influence at this time, 1981, was with the Canadian Ministry of External Affairs.
Given the fact that the Canadian Government has filed a writ of habeas corpus to drop all State of Florida charges, and has now also filed a stay of proceedings on the charge of organized fraud, could the Minister tell us the nature and
extent of Mr. Jaffe's influence, with whom does he exercise this influence, and why and to what extent have officials of the Canadian Government been protecting Mr. Jaffe from due process of United States laws?


Mark R. MacGuigan: Madam Speaker, my hon. friend puts his question, I believe, quite unfairly. He is quite right in saying that the Canadian Government has been taking certain steps in the U.S. courts on behalf of Mr. Jaffe. We would be taking those steps whether Mr. Jaffe had Canadian citizenship or not. We would take those steps on behalf of anyone who was peacefully in this country and who was seized and carried away to another country. It seems to me, Madam Speaker, that the ordinary process of law in the United States to which my hon. friend would wish us to be subjected, should certainly not, by international law, include the right to seize people from other countries and to try them on that basis.


Some Hon. Members:: Hear, hear!


LEGAL RESIDENCE OF SIDNEY JAFFE
Robert Lloyd Wenman: Madam Speaker, my supplementary question is addressed to the Secretary of State. Mr. Jaffe's residency requirements for the acquisition of a 1981 Canadian citizenship have been under investigation by the Ministry of Justice. These records include several letters dated 1977, where Mr. Jaffe wrote to various business acquaintances indicating that he had "relocated" to San Francisco and that he would be supervising his business from San Francisco rather than Toronto. We now know that Mr. Jaffe and his wife filed income tax returns in the United States for four years preceding his application for citizenship, and that he also applied for admission to the California State Bar. Does the Minister still feel that this man adequately and absolutely met the residency requirements with respect to his intent to become a Canadian citizen?


Hon. Serge Joyal (Secretary of State):: Madam Speaker, the Hon. Member has provided the Justice Department, with copies to the Secretary of State, with various documents pertaining to Sidney Jaffe's requests in compliance with the Citizenship Act of Canada. As the Hon. Member has indicated, there are numerous facts which have been alleged. As soon as the review has been completed, within the framework of the Act, we will inform the House accordingly.


INDUSTRY
Mr. Ian Deans (Hamilton Mountain):: Madam Speaker, my question is directed to the Minister of Regional Industrial Expansion. The Minister may well know that the Bridge and Tank Company, a subsidiary of Russell Steel Incorporated,
December 19, 1983

has announced its intention to close its Hamilton plant in the middle of February. That will cost Hamilton yet another 100 jobs. This company builds railroad bridges, among other things. Would the Minister sit down with the company and determine whether or not there is going to be a need for such a product, given the expansion of the railroad system, and try to work out some way in which to keep this company operational until such time as the need begins to develop?


Hon. Ed Lumley (Minister of Regional Industrial Expansion):: Madam Speaker, I am not aware of the specific closing of the plant which is raised by the Hon. Member. However, I will ask my officials to look into it this afternoon. Obviously, the Minister of Transport and Cabinet have great expectations for a substantial number of Canadian jobs and Canadian content as a result of the changes in the Crow and the investment in transportation needs of western Canada, as well as of the East. 1 will be happy to look into that for the Hon. Member.


RAILROAD EXPANSION-NEED FOR COMPANY'S PRODUCTS
Ian Deans: Madam Speaker, I do not have great expectations of that. However, if there is to be a railroad expansion, obviously this kind of equipment is going to be needed. I wonder if the Minister would consider, in addition to simply discussing the financial situation of the company involved, taking a look, together with CN and CP, at their needs, and consider the possibility of the federal Government perhaps funding the continuation of this company until such time as the cash flow improves and the jobs can be safeguarded.


Edward C. Lumley: Madam Speaker, my colleague, the Minister of Transport, and myself, as well as our officials, have already had a substantial number of meetings with both CN and CP to ensure we maximize the Canadian content in this massive megaproject which the Government of Canada is undertaking. As 1 said in my initial response, I will be happy to look into the matter for the Hon. Member as soon as possible.

[ Translation]


FINANCE
Mr. Gaston Isabelle (Hull):: Madam Speaker, my question is directed to the friendly Minister of Public Works and concerns federal grants in lieu of taxes paid by the Government to the City of Hull. In a letter sent by the Minister of Finance to all Quebec municipalities in October 1983, one reads that: "The property assessment by the federal Government coincides with that made by the municipal authorities and the amount of the grant is equal to 100 per cent of
Oral Questions
property taxes". Last Friday, however, the Mayor of the City of Hull stated before the Macdonald Commission that the federal Government ought to behave like any other citizen and pay its municipal taxes like anybody else, thereby insinuating that there was a very wide gap between grants in lieu of taxes and property taxes paid by rate payers.
I should therefore like to know whether the Member for Hull misinterpreted the letter sent on October 19, 1983 by the Minister of Finance to the Quebec mayors or is the Mayor of the City of Hull deceiving the Macdonald Commission?


Hon. Romeo LeBlanc (Minister of Public Works):: Madam Speaker, I can inform the friendly Member for Hull that he interpreted the letter from the Minister of Finance correctly and that the federal Government fully intends, and in fact already has done so, to fulfil its obligations to the municipalities. In fact, I must say sometimes the latter besiege our office with requests to locate a given building within their limits instead of somewhere else where we could find adequate accommodation. That being said, when I published the Pollack Report on the subject, I made it clear that we were prepared to set up some kind of appeal tribunal, and with this in mind, I designated a number of people, some of whom have no ties with the Government, to hear the representations of municipalities that are dissatisfied.


ADMINISTRATION OF JUSTICE
Mr. Alex Patterson (Fraser Valley East):: Madam Speaker, I address my question to the Minister of Justice. In view of the CTV W-5 Program on Sunday night, December 11, and its documentation of the tragic events surrounding the death of 15-year-old Corina Carlson, and in view of the information which revealed that her murderer had been convicted several times previously of sexual crimes, could the Minister tell the House what deficiency he sees in our criminal justice system which would permit an habitual sex offender to be turned loose in an unsuspecting community to continue his long career of sexual attacks?


Mark R. MacGuigan: Madam Speaker, the problem to which my hon. friend refers is indeed a serious one. I had the rather sad opportunity within the last ten days of discussing this with the parents of the deceased, Mr. and Mrs. Carlson, and with members of their community in Thunder Bay. The amendments which the Government has the intention of bringing forward, Madam Speaker, with respect to sentencing and, in particular, with respect to the dangerous offender provisions of the Criminal Code will, I believe, have sufficient teeth and advancement in scope so that this problem will not be one for so much concern in the future.

December 19, 1983
Oral Questions


REQUEST FOR SUFFER PROVISIONS IN LEGISLATION
Alexander Bell Patterson: Madam Speaker, the Minister has stated, and has reiterated today, that he intends to bring in legislation. Has he gone into this matter in depth to the point that he is convinced that the amendments which he is proposing are not only going to have the effect of solving this problem, but will also have the effect of dealing with these individuals in such a way that they will not be able to perpetrate their acts again?


Mark R. MacGuigan: Madam Speaker, the answer is yes, in general terms. In this particular case my hon. friend will realize that the initial offences committed by the convicted person were committed under the juvenile system. Under the new Young Offenders Act as passed by Parliament, as under the present legislation, there has to be a decision made by a court that an offender should be taken out of the juvenile stream and brought into the adult stream. Assuming that the offender is in the adult stream, I have no hesitation at all in answering my hon. friend that I believe our amendments will take care of such situations.


NATIONAL REVENUE
Hon. Perrin Beatty (Wellington-Dufferin-Simcoe):: Madam Speaker, my question is for the Minister of National Revenue who, earlier today, conceded that he did not know what he was talking about when he told the House on November 29 that there was not a quota system in place. In light of the fact that he has now turned up the fact there was a written quota system in place for Kitchener, has he made personal inquiries of all other district offices, and can he assure the House there is no such quota system in existence in any other district offices, either written or oral?
[ Translation]


Pierre Bussières: Madam Speaker, as I said before, after the Hon. Member's colleague asked this question for the first time, I was informed that certain directives had been given, and that as soon as the immediate supervisors of those who issued the directives were informed of the situation, they asked for their withdrawal because they did not comply with departmental policy. At that time I asked the same officials whether there were other locations where similar measures had been implemented, and 1 was informed that there were none.


Henry Perrin Beatty: Madam Speaker, 1 trust the Minister will be doing further research, because we will.


INCREASE IN NUMBER OF TAXPAYERS' COMPLAINTS
Henry Perrin Beatty: Madam Speaker, to ask the Minister about something he should know about, can he confirm to the House that the number of notices of objection, that is, taxpayer originated complaints about assessments, have increased by 36 per cent in one year? How can the Minister explain a 36 per cent increase in taxpayer complaints about assessments in one year?


Pierre Bussières: Madam Speaker, there has been an increase in the rate of notices of objection and notices of appeal. I think there are a number of reasons for this. One, for instance, is the fact that there were delays in processing income tax returns, and since the Act provides for very specific time frames, many taxpayers or their tax advisers decided it would be better to object as soon as possible before trying to reach a settlement with the district office, for instance, in view of the very limited time frame and the delays that had occurred this year, so that all this might have led to an increase in notices of objection and appeal cases.


CANADA LABOUR CODE
Margaret Anne Mitchell: Madam Speaker, my question is directed to the Minister of Labour, and concerns part-time workers. The Throne Speech referred only to consultation regarding benefits for part-time workers, who are among the most exploited of any group. Since consultation has already taken place through a year long commission, when will the Minister actually amend the Labour Code, as recommended, to provide pro-rated fringe benefits and pension rights for part-time workers, 72 per cent of whom are women?


Hon. Andre Ouellet (Minister of Labour):: Madam Speaker, amendments to the Canada Labour Code will be tabled early next year, and I would invite the Hon. Member to wait until the Bill is tabled, when she will be able to see the amendments that are of interest to her.


UNEMPLOYMENT INSURANCE
Margaret Anne Mitchell: Madam Speaker, part-time workers are tired of Liberal excuses on the matter of coverage for part-time workers. When will the Minister of
December 19, 1983

Employment amend the Unemployment Insurance Act to provide benefits to part-time workers who are working more than eight hours a week, as recommended by the commission on part-time work?


Hon. John Roberts (Minister of Employment and Immigration):: Madam Speaker, as you know, we have been assessing the recommendations of the commission. In some of the basic recommendations there is clearly a misunderstanding of what some of the facts are, although many of the recommendations are extremely useful. I am not at the present time proposing to present to the House any substantial revisions to the Unemployment Insurance Act.


EMPLOYMENT
Frederick James (Jim) Hawkes: Madam Speaker, my question is for the Minister of Employment and Immigration, who will remember he has told the House several times that employment creation funds are allocated to ridings on the basis of an objective formula. Can the Minister tell the House how he can claim to have an objective formula when neither Statistics Canada nor his own Department collect labour force data by riding? How can he have an objective formula if no one in the country collects data on the size of the labour force by riding?


John (Moody) Roberts: Madam Speaker, as the Hon. Member suggested, the basis of the allocation formula is objective and based on labour surplus rates. The way that is calculated has been communicated to the Hon. Member at least once, and probably several times, so I am not sure how I can further respond to his question. As I have said to him very often, it is based on labour surplus rates and that is why there are instances of Members receiving various supplements to their original allocations. But in every case that increase is based upon the labour surplus rate.


DATA COLLECTED BY STATISTICS CANADA
Frederick James (Jim) Hawkes: Madam Speaker, the Minister could do so much for the credibility of his Party if he simply stood in the House and told us that labour force surplus rates are based on guesses. There is no data base which exists in Canada.
Can the Minister tell the House why he does not use the data collected by Stats Can on the labour force to allocate the money in a fair manner to all unemployed in the country, instead of depending on departmental guesses which benefit Liberal ridings and put the unemployed in Conservative ridings at a big disadvantage? Why can he not use objective data?
Oral Questions


John (Moody) Roberts: Mr. Speaker, the fact of the matter is that the data is objective and the credibility of the Hon. Member's questions would be considerably increased if he will try to understand that fact, rather than pretending he does not, and stop trying to pretend there is a partisan distortion in this allocation process when there is not.


Some Hon. Members:: Oh, oh!


NATIONAL REVENUE
Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, my question is directed to the Minister of National Revenue, and 1 do not know whether the matter that concerns me today is related to the quota collection procedures to which reference has already been made in Question Period today. 1 am wondering if the Minister is aware that two-income families who have employees in his Department have been singled out as a class for special reassessment for the last three or four years?


Pierre Bussières: Mr. Speaker, 1 am sorry, but I am not sure 1 understood the Hon. Member's question. 1 wonder whether he is referring to groups and if so which, or if he is referring specifically to individuals.


TREATMENT OF SPOUSES OF DEPARTMENTAL EMPLOYEES
Donald W. Munro: Mr. Speaker, the individuals in question are employees of his Department who happen to be members of two-income families. It is the spouse of the non-departmental employee who is being subjected, presumably as a class, to the reassessment procedure. It the Minister aware of that?


Pierre Bussières: No,
Mr. Speaker.


INFORMATION PROVIDED TO DEPARTMENTAL EMPLOYEES
Donald W. Munro: Mr. Speaker, he is now aware of the fact that the spouses of some of his employees are being subjected to these reassessments. I was wondering whether he also knows that the employee is being informed, in defiance of the regulation of confidentiality, that his or her spouse's tax return is being reassessed.


Pierre Bussières: Mr. Speaker, if the Hon. Member could give me the facts and

December 19, 1983
Oral Questions
specific names, I could make enquiries and give him a more satisfactory answer.

ment in Taiwan. 1 have no objections whatsoever to the Chamber of Commerce making such arrangements. Such arrangements cannot and will not be made by the Government. In relation to the issuing of visas, I believe that the present arrangement is adequate.


COMMERCE BETWEEN CANADA AND TAIWAN
Mr. Peter Elzinga (Pembina):: Mr. Speaker, my question is for the Minister of International Trade, who is just behind the curtain. My question is a follow-up to questions put to him in the Standing Committee on External Affairs. Can the Minister indicate what specific measures he or his Department is taking relating to trade with Taiwan, and what steps he is taking to promote the processing of visas both here in Canada and in Taiwan?


Hon. Gerald Regan (Minister for International Trade):: Mr. Speaker, the Hon. Member discusses the question of commercial relations with Taiwan. Canada does not have diplomatic relations with Taiwan, but that in no way interferes with commercial trade between our two countries. As the Minister responsible for International Trade, I encourage Canadian businessmen to sell goods and services to Taiwan. Our contacts with that country must be on a non-governmental, unofficial basis. There is a very considerable amount of trade, and I believe that the Government takes every reasonable step to facilitate the exchange of visits between businessmen on the non-official level.


SUGGESTED ESTABLISHMENT OF TRADE MISSION
Peter Elzinga: Mr. Speaker, in view of the fact that the Minister indicated to the Standing Committee that he was giving consideration to establishing some non-official status for trade, and in view of the fact that every non-communist nation in the industrialized world has some form of permanent non-official status as it relates to a trade mission in Taiwan for the purpose of promoting trade, will the Minister give us some type of commitment that he will pursue immediately some form of permanent non-official status so that we can have the issuing of visas in order to increase our trade capacity with Taiwan?


Gerald Augustine Regan: Mr. Speaker, 1 certainly cannot give the Member any assurance that I will pursue any non-official course of action because, obviously, if a Government Minister pursues a course of action it then becomes official. Most of the countries of which the Hon. Member speaks have private organizations which are non-governmental and have representation in that country. It is my understanding that the Canadian Chamber of Commerce is examining the possibility of having such an establish-


INCOME TAX ACT
[Stage Direction]
The House resumed consideration of the motion of Mr. Lalonde that Bill C-2, an Act to amend the statute law relating to income tax and to make related amendments to the Canada Pension Plan and the Unemployment Insurance Act, 1971, be read the second time and referred to a Committee of the Whole.
Mr. Deputy Speaker:: Order. It being three o'clock, pursuant to order made Thursday, December 15, 1983, it is my duty to put every question necessary to dispose of the second reading stage of Bill C-2.

Consequently, the question is as follows: Mr. Lalonde, seconded by Mr. Bussieres, moved that Bill C-2, an Act to amend the statute law relating to income tax and to make related amendments to the Canada Pension Plan and the Unemployment Insurance Act, 1971, be now read the second time and referred to a Committee of the Whole.
Is it the pleasure of the House to adopt the motion?

All those in favour of the motion please say yea.


Some Hon. Members:: Yea.


Mr. Deputy Speaker:: All those opposed to the motion 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.


Mr. Deputy Speaker:: I declare the motion carried.
Bill read the second time and referred to a Committee of the Whole.
* *
*


PRIVILEGE
Henry Perrin Beatty: Mr. Speaker, the rules of our House require that a question of privilege be raised at the earliest opportunity. 1 would like to serve notice of my intention to reserve my right to raise a question of privilege tomorrow arising out of the statements made by the Minister of National Revenue (Mr. Bussieres) in Question Period today.
The House of Commons has the right to expect that any statement made by a Minister will be honest and accurate to the best of the Minister's ability. The Minister indicated to the House on November 29, in response to the Hon. Member for Simcoe North (Mr. Lewis) and in response to the Right Hon. Member for Yellowhead (Mr. Clark), that no quota system existed. He indicated today, if memory serves me correctly, that he discovered some time ago, following those questions, that in fact the quota system existed in at least part of the system. We would like to reserve our right to read the Hansard "blues" and raise a question of privilege tomorrow if it appears that the Minister did not take the earliest opportunity to correct a misleading statement which he had given to the House of Commons.


STANDING ORDERS
Hon. Yvon Pinard (President of the Privy Council):: Mr. Speaker, 1 rise on a point of order to ask for the unanimous consent of the House following consultations with the House Leaders. I refer you to the motion on page 9 of today's Order Paper dealing with parliamentary reform. There is an agreement to that motion from the three Parties under three conditions.
The first condition is the inclusion of a new paragraph after the first paragraph of the motion which would read as follows:
Provided that the Standing Orders shall be further provisionally amended by adding at the end of Standing Order 19:

December 19, 1983
Standing Orders
No Private Members' Business shall be taken up on days appointed for the consideration of business pursuant to Standing Orders 62(5) or 64(4).
This provisional amendment shall cease to have effect as provided for the other provisional Standing Orders in the first paragraph of this Order.
That is the first condition agreed to by the Parties, that the new paragraph 1 just read be added to the motion and included after the first paragraph of the motion standing in my name on page 9 of the Order Paper.
The second condition is that in the report of the Special Committee on Standing Orders, a report that has been printed in Votes and Proceedings for Thursday, December 15, there is printed the new Standing Order 18(5). The condition is that in this new Standing Order 18(5), the brackets that include Private Members' business on Monday, Tuesday, Thursday and Friday be deleted and that the wording be reversed. To be more specific, in the new Standing Order 18(5), when we reach, under Monday, Tuesday and Thursday, what is suggested in the report as "(From five to six o'clock p.m.-Private Members' Business)"-there would be no brackets, and it would read, "Private Members' Business-from five to six o'clock p.m." A bit further in the same Standing Order 18(5), under Friday, it would become, no brackets, "From four to five o'clock p.m.-Private Members' Business". That is the second condition.
The third condition that we have agreed to is to clarify the situation in so far as the third and seventh paragraphs of the first report of the Special Committee are concerned, printed in Votes and Proceedings for Thursday, December 15, 1983. Paragraphs 3 and 7 are not covered by the motion that will be moved today, and which meets with unanimous consent, provided it is amended as 1 have just indicated. Further, I consider that paragraphs 3 and 7 were not covered by the terms of reference of the Committee and are not relevant. Therefore, they will not apply when the motion in my name on the Order Paper today, as amended, is agreed to.
Under those three conditions-and I hope I have been specific enough, and this may be clarified by other House Leaders-it seems there would be unanimous consent to adopt without debate the motion on the Order Paper as it appears at page 9, amended as I have indicated after the first paragraph and in the new Standing Order 18(5), without brackets as I have explained, and paragraphs 3 and 7 of the report not being covered by the motion and not being relevant.


Mr. Deputy Speaker:: If the Chair understands correctly, the President of the Privy Council (Mr. Pinard) has sought unanimous consent to amend a motion standing in his name, to a consequential amendment in 18(5) of the report, and to further amendments relating to paragraphs 3 and 7 of the report. Is that a fair summary?


Yvon Pinard: Mr. Speaker, with respect, your last sentence was not accurate. I merely made a clarification for the record by indicating that paragraphs 3 and 7 of the report were not covered by the terms of reference and therefore are not
relevant and not covered by the motion which we will adopt in a few seconds.


Hon. Erik Nielsen (Yukon):: Mr. Speaker, we consent to the motion being put on the precise terms spelled out by the Government House Leader without having any regard to the comments from the Chair a moment ago. There is one explanation that I should make, and that is, that while we agree with the Government House Leader that paragraphs 3 and 7 exceeded the terms of reference of the Special Committee, we would have liked to have seen both of those recommendations accepted. If they were, the problem that arises under Standing Order 8(4), to which reference is made in paragraph 3 and the seven outstanding reports of the Special Committee that were tabled during the last Parliament, would have the breath of life breathed into them again by reference as recommended in paragraph 7 of the first report of the Special Committee which was referred to the Standing Committee on Procedure and Organization. We regret that the Government did not follow the recommendations of the Special Committee contained in those two paragraphs, but nonetheless, in order to further the spirit of reform, we agree entirely with the acceptance of the other amendment proposed by the Government House Leader in the precise terms that he has spelled out.


Ian Deans: Mr. Speaker, we also agree with both the Standing Order and the amendments that have been proposed. I hope that by the time these provisional Standing Orders have expired, the House of Commons will have had the opportunity to deal with the recommendations in the other reports of the Special Committee and that by the time that we adopt, as a permanent feature of the House of Commons, the Standing Orders under which we are now working and under which we will continue to work for the next year, we will also be in a position to adopt many of the other recommendations in order that we can see some actual reform, not only in the operations of the House itself but also in the operations of other features of the day to day lives of politicians here in Ottawa.


Yvon Pinard: Mr. Speaker, following the comments made by my two Hon. colleagues, I would like to assure them that the adoption of this motion today is the result of serious negotiations on parliamentary reform. In so far as we are concerned, I want there to be no doubt that there have been negotiations, there are negotiations and there will be further negotiations, because reform is an ongoing process. Parliamentary reform will not stop with the adoption of this motion. It is an ongoing process of consultation and negotiations and we certainly hope that before the end of this experiment, we will be able to bring on other changes like those suggested in paragraph 3, for example, to which my colleague, the Hon. Member for Yukon, referred.


Mr. Deputy Speaker:: Mr. Pinard moves:
That, subject to a future Order of the House, the temporary changes to the Standing Orders set forth in Appendix C of the Third Report of the Special Committee on Standing Orders and Procedure, presented to the House on Friday, November 5, 1982 and adopted on Monday, November 29, 1982, be
December 19, 1983

amended, effective at 5.59 o'clock p.m. on Wednesday, December 21, 1983 or at one minute before the adjournment of that day's sitting, as the case may be, as recommended by the First Report of the Special Committee on Standing Orders, presented to the House on Thursday, December 15, 1983 and, as so amended, be in effect until the House adjourns on the 120th sitting day of the first session of the thirty-third Parliament;
That, in the event of prorogation or dissolution of Parliament before the aforementioned expiry day, the said temporary changes to the Standing Orders shall cease to have effect when the House adjourns, on the 120th sitting day next after the dissolution of the 32nd Parliament;
That the proposed changes in the Standing Orders shall continue to be applied in the spirit expressed in Part II (entitled "Recommended Experimental Changes") of the Third Report of the Special Committee on Standing Orders and Procedure;
That, notwithstanding temporary Standing Order 12(3), if a division is demanded on the last sitting day on which the temporary Standing Orders are in effect, and if the said day is a Friday, the said division shall not be deferred;
That the membership of standing committees shall cease to have effect on the last sitting day on which the temporary Standing Orders are in effect; and
That the first sitting day following the expiry of the temporary Standing Orders shall be deemed to be "the commencement of the first session" for the purpose of permanent Standing Order 65(1).
In amendment thereto, Mr. Pinard moves:
That the motion be amended by adding immediately after Paragraph 1 the following new paragraph:
Provided that the Standing Orders shall be further provisionally amended
by adding at the end of Standing Order 19:
No Private Members' Business shall be taken up on days appointed for the consideration of business pursuant to Standing Orders 62(5) or 64(4).
This provisional amendment shall cease to have effect as provided for the other provisional Standing Orders in the first paragraph of this Order.
Hon. Members have heard the terms of the amendment. Is it the pleasure of the House to adopt the amendment?


Some Hon. Members:: Agreed.


[Stage Direction]
Amendment agreed to.
Mr. Deputy Speaker:: Is it the pleasure of the House to adopt the motion as amended?


Some Hon. Members:: Agreed.
Motion, as amended, agreed to.


POINT OF ORDER
Erik Nielsen: Mr. Speaker, I rise on a brief point of order flowing from the events of last Friday's Question Period. This point is timely because we are just commencing a new session of Parliament. I raise this point of order not to reflect upon any past decisions of the Chair but to ask you, Mr. Speaker, to consider the direction in which the Chair seems to be going during Question Period. A trend that is rather alarming to me appears to be emerging whereby the Chair exercises editorial decisions as to the nature of the questions that are put to the Minister during the Question Period.
Point of Order-Mr. Nielsen
From this vantage point, Mr. Speaker, it would appear that the Chair has of late been extending the authority afforded to it by this House. In particular, I refer to the fact that one of the occupants of the Chair has begun to exercise the authority of the Chair not only to determine who should be seen by the Chair during the Question Period, not merely to protect and interpret the rules and practices of the House, but to determine the merit of the subject matter addressed in the Question Period. I would refer you to Hansard for Friday, December 16, at page 260, Mr. Speaker. There, following an exchange between the Hon. Member for Saskatoon West (Mr. Hnaty-shyn) and the Minister of Justice (Mr. MacGuigan), the following words attributed to Mr. Deputy Speaker are found:
A short supplementary. The question seems to have been asked on more than one occasion.
I have no difficulty with the fact that Citation 371 of Beauchesne's Fifth Edition points out the following:
The extent to which supplementary questions may be asked is in the discretion of the Speaker.
Indeed, Mr. Speaker, that discretion is exercised almost every day. However, Citation 371 refers to the authority of the Chair to determine the number of supplementary questions to an individual question that may be permitted on any given day.
Citation 371 draws its substance from Erskine May's Nineteenth Edition where British practice with respect to oral questions is outlined. As you are aware, Mr. Speaker, the British practice with respect to oral questions is quite different from our own. At Westminster, a Member gives notice of a given question and supplementary questions are then permitted in order to clarify the Minister's answer or to ensure that all aspects of the original question are addressed. Beauchesne's, at page 134, puts it this way:
Although there may be no debate on an answer, further questions, as may be necessary for the elucidation of the answers that have been given, within due limits, may be addressed to a Minister. The extent to which supplementary questions may be asked is in the discretion of the Speaker. Sir Erskine May, Treatise on the Law, Privileges, Proceedings and Usage of Parliament (19th ed., 1976), pp. 334-5.
The Speaker exercises judgment as to the number of supplementary questions that are necessary in order to ensure a comprehensive response to the Member's original question. There is no suggestion in Erskine May that this judgment should take into account questions which have been asked by a Member on previous occasions or, for that matter, by other Members on previous occasions.
The Chair's comments on Friday with respect to allowing a short supplementary because a question appears to have been asked on more than one occasion seems unusual in the context of the rules governing the Question Period. The Chair appeared to have no concern that the question asked by the Hon. Member for Saskatoon West was out of order; merely, that it may have been soliciting information that had been requested during some other Question Period on some other day.
318

December 19, 1983
Point of Order-Mr. Nielsen
The difficulty with prohibiting questions on the basis that the information may already be available to the Elouse is that it causes the Chair to place a value judgment on the questions of Hon. Members. Moreover, it is difficult to see how the Chair can determine whether or not new information is being sought before the question has been asked.
In determining whether the Right Hon. Member for Yel-lowhead (Mr. Clark) would be permitted a second supplementary question, Mr. Deputy Speaker again appeared to anticipate the content of a question. Again at page 260, Mr. Deputy Speaker is reported as saying the following:
The Hon. Minister has indicated his difficulty in answering the question. If the Hon. Member-
There were then two interjections. Mr. Deputy Speaker went on to say:
There have been a series of questions, and if the Right Hon. Member for Yellowhead wishes to go one further supplementary-
There was then a further interjection.
I would ask you therefore, Mr. Speaker, to consider, not whether the comments of the Chair as recorded in last Friday's Hansard were appropriate at the time but whether this indicates a shift in the thinking of the Chair with respect to the procedures to be followed in future by the Chair and whether or not this is appropriate in the context of the established procedures, both here in Canada and in Great Britain.
While you are considering that point, Mr. Speaker, i would ask you to take the time to reflect on the practices of this House with respect to the order in which Members of this House are recognized during the Question Period. Also, last Friday, the occupant of the chair recognized a member for Her Majesty's Loyal Opposition, the Hon. Member for Well-ington-Dufferin-Simcoe (Mr. Beatty), to ask the first question and two supplementaries. Following those exchanges a member of the New Democratic Party was recognized for three questions. Although it is at the discretion of the Chair to recognize any Member, a practice has evolved, familian to every Member of the House, whereby the first two questioners recognized during a Question Period are representatives of Her Majesty's Loyal Opposition for five questions, in total, and the third questioner is a member of the New Democratic Party for a total a three questions, and sometimes that is split two and one or one and two or some other way; that is their business. The first five are here and the next three are to my left. On Friday last, the Opposition determined that the Hon. Member for Wellington-Dufferin-Simcoe (Mr. Beatty) should be given both of those opening rounds of questions, and the Speaker was informed of our desire in this regard. Instead of following his own opening round of a question and two supplementaries, the Hon. Member for Wellington-Dufferin-Simcoe was required to follow the first question put by a member of the New Democratic Party.
Whether or not the pattern in which Members were recognized for questions last Friday reflects more of Mr. Deputy Speaker's view that it is up to the Chair to determine the
importance of Members' questions, or whether it reflects some other line of thought, 1 would ask you, Mr. Speaker, to consider the implications that this has for the well established practice concerning the order in which Members are recognized in this House during the Question Period.
As 1 stated at the beginning of this point of order, Mr. Speaker, these two matters indicate, in my view, a disturbing trend in the exercise of the authority of the Chair and I would ask you to consider the matter and take whatever action you deem to be necessary.
I suggest, Mr. Speaker, that you might want to consider this matter over tomorrow and perhaps come back to the House on Wednesday-indeed, I would not be in the least bit disturbed or put out if you wanted to take the whole of the Christmas recess to consider the matter.


Mr. Deputy Speaker:: The Hon. Member is not raising a point of order, he is asking for clarification of a policy and what might be future policy. Let us deal with the question of the Right Hon. Member for Yellowhead (Mr. Clark). I once called him "the honourable", and the Hon. Member for Yukon was offended. It was a slip; he is the Right Hon. Member as I am well aware.
The point is that the Right Hon. Member for Yellowhead intervened on a supplementary question. There had already been a question and a supplementary; this was a further supplementary. The Chair exercised its discretion as to how many supplementaries it could exercise. The Right Hon. Member for Yellowhead was allowed a second supplementary, so there can hardly be an allegation that there had been a denial of justice in the matter.
In regard to the question which was raised on Friday, it is true that a communication was sent to the Chair that it was the desire of the Official Opposition that one opening question-ner be allowed five questions, an original and four supplementaries. This raised a very serious problem for the Chair. If such a precedent stood, what would happen in the future? How could a similar treatment be denied to the minority group in the House? What would be the reaction of government Members to see one Member recognized, not for one supplementary, not for two supplementaries but for four supplementaries? To demand this as a matter of right, to argue that there is an established procedure in the House which establishes this as a matter of right, is a doctrine that the present incumbent of the Chair cannot accept.
If the Hon. Member will recall, what happened was that the Chair did interrupt and then went back, and the Hon. Member for Wellington-Dufferin-Simcoe was given every opportunity to pursue the series of supplementaries because other members of this Party extended to him the courtesy of not rising at that point.
If the Hon. Member for Yukon (Mr. Nielsen) has a matter of order or of privilege, he is aware of the channels that are open to him.
December 19, 1983


Erik Nielsen: Mr. Speaker, I tried to keep my submission to the Chair on an unemotional and calm basis and 1 intend to continue to do so.
1 suggest that it is inaccurate for the statement to be made that the Right Hon. Member asked two supplementaries on Friday, he asked a question and one supplementary.


Mr. Deputy Speaker:: He was recognized on a supplementary and asked a further supplementary. The Hansard record will disclose that.


Erik Nielsen: That is fine. What we are describing as his first question then is a supplementary question. The denial of justice that the Chair referred to - I made no such accusation. I made no such submission whatsoever. 1 was inquiring - which I still believe to be a legitimate point of order - into whether the Chair is adopting the practice now of recognizing Members on supplementary questions on the basis of an anticipated editorializing. That is what the comments in Hansard show. If, Mr. Speaker, you will examine the submission 1 am making today and the citations from Hansard that 1 read into the record as well as the authorities, I am sure you will recognize that there is a substantive point of order which deserves consideration by the Chair.
If what the Chair is now saying is that the practice that has grown up in this House through Mr. Speaker Lamoureux and through Mr. Speaker Jerome, that Her Majesty's Loyal Opposition got the first five questions, and that certainly has been the established practice, regardless-


An Hon. Member:: No, no!


Erik Nielsen: Well, that is true and that is the practice that has grown up. Sometimes there have been four. 1 can recall occasions when the Leader of the Opposition has asked four and the second member of the Official Opposition has only been granted one supplementary as a result thereof. Indeed, 1 can remember when the Leader of the Opposition has asked five and no second questionner has been allowed, properly so, and the questioning has gone to the NDP.
I am speaking of numbers, Mr. Speaker-numbers where a practice has grown up that the first five questions have been allotted to members of the Official Opposition and the next three questions allotted to the New Democratic Party. Often it is the practice of the New Democratic Party to have one speaker on its lead ask two questions, followed by the second member of that Party with a single question. But they get their three questions, and properly so. What we adopted on Friday was the reverse of that practice; it did not disturb the numbers. There were still only five questions planned, and indeed, the Speaker could have exercised his discretion at the end of the fifth question and cut the questioner off, even if there was an intention to ask a sixth question.
It seems to me, and I suggest that the Chair consider this at least overnight, that we should consider whether the numbers argument is valid and is the practice, or whether it is the practice for two Members to be recognized on five questions,
Point of Order-Mr. Nielsen
no matter how. 1 suggest that the more reasonable practice should be followed, if for no other reason than the proportionate representation in the Opposition, that the first five questions in terms of Members, should be ours; if we choose to use five members to ask them, that discretion should be ours; if we choose to use two Members to ask them, that discretion should be ours, and if we choose to use one Member to ask those five questions, that discretion, too, should be ours.


Ian Deans: Mr. Speaker, I wonder if 1 might ask your indulgence to withhold a judgment on the matter raised by the Hon. House Leader for the Official Opposition inasmuch as he has raised questions which touch upon the rights of all Members and has raised them in such a way that it is important that we should study the submissions he has made.
I note with interest, for example, that on Friday our first questionner asked only one question and one supplementary.


Erik Nielsen: One question and two supplementaries.


Ian Deans: One question and one supplementary.


Erik Nielsen: No.


Ian Deans: My hon. colleague would argue with me on the floor of the House. Let me just correct him. 1 do not want to take much time.


Mr. Deputy Speaker:: The Hon. Member for Hamilton Mountain (Mr. Deans) is right.


Ian Deans: Thank you, Mr. Speaker, 1 appreciate your coming to my defence. I want to say that 1 believe there is another practice that has been useful over the two and a half years that I have been charged with this responsibility, and that is, from time to time for the House Leaders to meet informally with the Speaker. 1 believe it might be helpful if at some point, on questions such as this, rather than take the time of the House, perhaps to have an informal meeting with the Speaker to discuss these kinds of things.


Mr. Deputy Speaker:: The Chair appreciates the suggestion of the Hon. Member for Hamilton Mountain, which seems to be reasonable in the circumstances. The Chair would welcome an opportunity for some informal discussions with the House Leaders themselves and would be prepared to meet with them, if necessary.


Erik Nielsen: Mr. Speaker, 1 do not feel the record should be allowed to remain without comment. The Hon. Member for Hamilton Mountain is half right, 1 believe I am half right, and I believe the Chair is half right. At pages 256 and 257 of Hansard for last Friday, December 16, it appears quite clear that the Hon. Member for Skeena asked two full supplementary questions. At page 257 he is on the record as follows:


James Ross Fulton: Mr. Speaker, I have a supplementary.


Mr. Deputy Speaker:: The Hon. Member has had one supplementary question.

December 19, 1983
Petitions
The Hon. Member for Wellington-Dufferin-Simcoe was then recognized. The Chair exercised its discretion in cutting off the Hon. Member for Skeena. 1 can well understand the concern expressed by the Hon. Member for Hamilton Mountain in that the practice would have seen the Hon. Member for Skeena recognized for the full number of three supplementary questions. 1 agree with the suggestion of the Hon. Member that it might prove useful if we did have a meeting.


Mr. Benjamin:: Why didn't you raise that in the first place?


STATEMENTS BY MINISTERS
Mr. Paproski:: Mr. Speaker, 1 rise on a point of order. A week or so ago the Minister of State for Fitness and Amateur Sport (Mrs. Hervieux-Payette) made a statement outside of this House. She never made it inside the House but went out and held a news conference on anabolic steroids. There is now supposed to be an announcement made of the first down payment of $40 million on the Olympics in Calgary. I hope that in the future she will make her statements in the House instead of holding news conferences. The people of Calgary are waiting for the first down payment on the Olympics, which will create a lot of jobs. I hope that in the future she will come into the Chamber to make her announcements instead of making it to the Press Gallery.



ROUTINE PROCEEDINGS


Mr. Geoff Scott (Hamilton-Wentworth):: Mr. Speaker, I wish to table a petition on behalf of approximately 100 citizens who are concerned about the continuing presence of the peace camp on the front lawn of Parliament Hill. These petitioners feel the protesters have made their case and since the issue on the Cruise missile testing issue has been decided, the unnecessarily long stay of those peace campers amounts to an abuse of the right of people to demonstrate on Parliament Hill.


Mr. Bruce Halliday (Oxford):: Mr. Speaker, it is my privilege and duty to present a petition signed by residents of the Township of East Zorra-Tavistock in Oxford County who wish to protest against the proposals of the federal Electoral Boundaries Commission for Ontario. These proposals, if implemented, would alter the riding of Oxford in a manner disrespectful of the longstanding cultural and economic ties and associations within the present federal constituency of Oxford.
The petitioners humbly call upon the House of Commons to urge the federal Electoral Boundaries Commission for Ontario to reconsider its proposals so that East Zorra-Tavistock Township may continue to be represented in the Parliament of Canada by the elected Member for Oxford.



GOVERNMENT AFFAIRS CONTROL ACT


[Stage Direction]
Mr. Howard Crosby (Halifax West), moved for leave to introduce Bill C-208, an Act to provide for the control of conflicts of interest in Government affairs.
He said: Mr. Speaker, let me indicate the purpose and major features of the Bill which has just been introduced in the House, and which is called the Government Affairs Control Act. Every Member of Parliament is well aware that the rules governing conflict of interest are quite unclear under the existing laws with respect to the personal activity permitted for members of the Cabinet and Government officers. First, the Bill defines what personal activity will constitute a conflict of interest for a Cabinet Minister or Government officer; second, the Bill directs the Deputy Registrar General to investigate conflict of interest cases and report to the Federal Court of Canada the result; third, the Federal Court of Canada-
Mr. Deputy Speaker:: There are limits to the length of the explanation which is generally permitted. However, I will let the Hon. Member finish.


Mr. Crosby:: Mr. Speaker, such an intervention is just adding to the length.


Douglas Glenn Fisher: Order!


Howard Edward Crosby: Third, the Federal Court of Canada is authorized to direct whatever action may be required to protect the public interest when a conflict of interest case is established.


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


Mr. Ralph Ferguson (Lambton-Middlesex) moved: for leave to introduce Bill C-209, an Act to facilitate family farm financing.
He said: Mr. Speaker, the purpose of this Bill is to empower the Minister of Agriculture (Mr. Whelan) with the authority to provide guarantees through the Farm Credit Corporation to an individual who takes a mortgage on a farm property or
December 19, 1983

properties at the time of sale of said property, in order to protect and ensure the future stability and growth of the family farm unit.


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

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. John Evans (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, the following question will be answered today: No. 34.


Mr. Beatty: 1.	What regulations, if any, that regulate television cabling are applicable in cases where new housing developments are created within a licensed area?
2.	(a) What is the policy of CRTC regarding the financing of television cabling in new developments (b) what percentage of the costs is to be borne by the (i) developers (ii) licensee (iii) subscribers?
3.	Where is the policy referred to in Part 2 stated?
4.	On what dates, if any, were public hearings conducted by the CRTC with respect to the policy?
5.	Arc any other hearings on this question planned and, if so, on what dates and at what locations will they be held?


Hon. Francis Fox (Minister of Communications):: I am
informed by the Canadian Radio-television and Telecommunications Commission as follows:
1.	The cable television regulations do not directly address the provision of service in new housing developments created within a licensed service area.
Sections 16 and 17 state as follows:
16.	(1) Every licensee shall, on receipt of the amount of the installation fee authorized by the Commission or, where applicable, the amount referred to in subsection (2), and in accordance with any applicable provincial laws, install equipment for the provision of service by the licensee in any premises situated in any residential area within its licensed area that are provided with water or sewer service.
(2) Where an installation of equipment requires a cable connection from the property line of the premises to be served to the point at which the cable enters those premises that
(a)	is in excess of a distance of 150 feet,
(b)	cannot be made directly and unimpeded overhead, or
(c)	where underground services are provided in the area in which the premises are located, necessitates an underground connection the cost of which is not comparable to the connection for such other underground services,
the licensee may, in lieu of charging the installation fee authorized by the Commission, charge an amount equal to the expenses incurred by it in making the installation.
17.	No licensee shall charge any fee or other sum of money for
(a)	any service provided by its undertaking, or
(b)	the use of its undertaking.
in excess of the amount authorized by the Commission.
Order Paper Questions
Any new housing developments meeting those requirements would automatically be covered.
2.	(a) and (b) The above stated regulations with respect to the provision of service are very specific. The licensee is obligated to bear the entire cost of providing cable television facilities with the possible exception of the drop as indicated in section 16(2) of the cable regulations.
3.	Sections 16 and 17 are contained in the regulations respecting broadcasting receiving undertakings more commonly known as the cable television regulations.
4.	The Commission published proposed regulations in Canada Gazette, Part 1 on March 4, 1975, which were subsequently considered at a public hearing held on April 8 and 9, 1975.
5.	There are no hearings currently planned with respect to the cable regulations that would have any effect on the provisions as stated.


John Leslie Evans: I would ask, Mr. Speaker, that the other questions be allowed to stand.


Erik Nielsen: Mr. Speaker, when 1 asked for the co-operation yesterday of the Parliamentary Secretary in commencing to answer questions on the Order Paper, because sooner or later this consent would have to cease unless he started, I never thought for a moment that the commencement of the process would be the answering of the magnificent number of one question. Naturally, since he has gone that far, we will certainly give our consent. But I would urge him not to expect us to continue our co-operation if he does not exceed that kind of track record in the future.


John Leslie Evans: Mr. Speaker, as I have indicated, I intended to answer as many questions as I possibly could. This question was available today. The other answers are not yet available. However, I would just ask the Hon. Member if he realizes that if he were to withhold consent to the remaining questions being allowed to stand, the only effect would be that questions of his Members and questions of other Members would be eliminated from the Order Paper. That would be the only effect, Mr. Speaker. It would have absolutely no effect on the Government, but would cause great inconvenience to his own Members.
It is a courtesy that we ask these questions be allowed to stand, Mr. Speaker. 1 certainly would hope that he would concur.


Mr. Blenkarn:: Are you threatening, John?


Erik Nielsen: Mr. Speaker, 1 cannot allow that kind of distortion to stay on the record because I have an argument which, Sir, 1 think would commend itself to you and be very compelling for you to take the opposite point of view.


An Hon. Member:: That is debate.

December 19, 1983
Income Tax Act


Erik Nielsen: Yes, it is, but it is answering the debate opened up by the Parliamentary Secretary. It might prove to be even more discomforting to the Government if my argument were to be accepted rather than his. I urge him to co-operate by answering the questions because it could well be-and 1 do not want to disclose the substance of an argument I may raise in the future-that there is another side to that coin which would be very discomforting to the Government.


Mr. Deputy Speaker:: The Chair notes that at this point there is consent for the remaining questions to stand, and would like to proceed to the next item of business.


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House in Committee of the Whole on Bill C-2, an Act to amend the statute law relating to income tax and to make related amendments to the Canada Pension Plan and the Unemployment Insurance Act, 1971-Mr. Lalonde-Mr. Francis in the chair.
On Clause 1-Taxable income defined
Donald Alex Blenkarn: Mr. Chairman, we would be prepared to carry Clause 1 but we would like to speak to you with respect to the way this Bill might be handled this afternoon. There are a number of clauses which relate very closely to one another. Commencing with Clause 2, there is a series of clauses that relate to the indexed security investment plan, and I am prepared to agree that those clauses might be handled together. The Minister has suggested that there are a number of clauses relating to Bill C-139 in the last session of Parliament which are really a method of cleaning up the mess left by the Government when that Bill was pushed through this House by closure. We have not had an opportunity to go over those clauses, but there are a number we would be prepared to let go. I am wondering if, when we get to Clause 2, we can move to a series of clauses we feel are related, and I suspect the NDP might also have the same concern.


Cyril Lloyd Francis: The Chair understands the Hon. Member's suggestion. He is suggesting that a group of clauses be treated within that group seriatim, and that we then go back to other clauses.


Donald Alex Blenkarn: That is correct.


Cyril Lloyd Francis: The Chair recognizes the Minister of State for Finance.


Mr. MacLaren:: Mr. Chairman, my friend opposite and I have had an opportunity to have a word on this matter. I have no difference of opinion with him on it. The groupings he has touched upon we have discussed and they are certainly acceptable to us. I would only add that in the case of the technical amendments flowing from Bill C-139, it would be my submission that we deal with all those now because the first is in fact Clause 1, and there follows a series of related clauses, which I would be glad to submit to the Chair and which are of a fairly technical nature, which I think could be adopted, if my hon. friend would agree, without much discussion.


Raymond John Skelly: Mr. Chairman, possibly you could give me some direction. My understanding is that discussion on Clause 1 is an occasion when Members can raise with the Minister some general questions and then we get into specifics. Is that the case?


Cyril Lloyd Francis: I believe that is the normal practice. The Chair would be prepared to entertain some general comments at this point.


Raymond John Skelly: If there is an arrangement pending, it might be more convenient for the Chair and the Parties to resolve that issue, and then maybe I could make my general comments and questions when Clause 1 is called.


Donald Alex Blenkarn: Mr. Chairman, that was not my understanding. Our feeling is that we have had a very extensive second reading debate. Indeed, we did not see the necessity for a second reading debate as long as the one we had, but unfortunately an arrangement to terminate that debate on Thursday was not made. We think we should get down to the nuts and bolts of this Bill on a clause by clause basis and not wander all over the place for further second reading debate. We do not think that is necessary.
1 know the Minister has some amendments, as we do, and perhaps others have amendments. In our view this Bill should be discussed on the basis that people speaking on clauses stay within the clause, otherwise it would be out of order.


Douglas Glenn Fisher: Mr. Chairman, I have a suggested set of groupings of technical amendments similar in nature to the technical amendment for Clause 1. If you decide you would like to know what the grouping is and you agree it should occur on Clause 1 regardless of how we settle the question raised by the Hon. Member for Comox-Powell River, 1 am prepared to give you the groupings and ask you how you want to handle this. Would you like the list read off and then submitted to the Chair, or do you simply want the list submitted to the Chair? I believe we are dealing with a common list among the three Parties and it will be up to you, Sir, how you would like to proceed.


Cyril Lloyd Francis: Is this agreeable to the Hon. Member for Comox-Powell River?


Raymond John Skelly: Mr. Chairman, 1 would like to retain my right to make some general comments and ask questions. This may
December 19, 1983

prevent an additional amendment down the road when we hit third reading. By allowing the opportunity for the Minister to clarify some things now we will be in better shape later on.


Cyril Lloyd Francis: The Chair would like to recognize for, say, a few minutes the Hon. Member for Comox-Powell River, if he wants to make some general remarks. Perhaps the Parliamentary Secretary could be so kind as to pass the list of the suggested groupings to the Chair. I think it would be convenient if they could be inserted in Hansard at the appropriate time.


Donald Alex Blenkarn: Mr. Chairman, we have not agreed to the groupings the Government has presented with respect to Clause 1. We are presently going over them. I suggest we pass Clause 1, go on to Clause 2, with respect to which we agree with the groupings. If you wanted to do that, that would be fine. Otherwise we think we should proceed on the basis that the debate must be in order, and not a general debate.


Cyril Lloyd Francis: The Chair recognizes the point made by the Hon. Member for Mississauga South but the practice has been to allow some general comments at the beginning. If that is agreeable, the Chair would like to recognize for a few minutes the Hon. Member for Comox-Powell River. Perhaps the Parliamentary Secretary and the Hon. Member for Mississauga South might be able to confer during this period and come to a further agreement on the groupings we will discuss later.


Raymond John Skelly: The question that I would like to raise relates to the matter of granting charitable status to charitable organizations under this legislation, and particularly the need to place in the statute a definition to handle the problem of defining charitable organizations. I would like to take a few minutes to present a situation to the Government and ask the Minister for his interpretation of the problem and to tell us what action the Government intends to take to resolve the problem.
To illustrate the problem 1 would like to compare two charitable organizations in the country. The first organization is the B.C. section of the Canadian Mental Health Association. This was raised in the House by the Hon. Member for Waterloo on November 2, 1983. He pointed out that the Department of National Revenue had been involved in encouraging the B.C. section of the Canadian Mental Health Association to change its constitution, to remove an objectionable section in the statement of purpose which is to advocate and lobby for improvement and integration of treatment rehabilitation services for persons who become handicapped or disabled by emotional disorders. The key point is that the function of the group was to represent the interests of handicapped persons in this country by educating and providing information, especially in some of the technical areas, to legislators. That is an extremely important function if in fact the legislature is going to assist in it. There does seem to be a need for some change. The best change may come through a definition placed in the legislation that would accommodate
Income Tax Act
that kind of activity for an organization which, beyond any shadow of a doubt, is truly charitable in nature.
The other organization which I think it would pay for the Minister to peruse in his comparison when he is looking for an appropriate definition is the Fraser Institute. The Fraser Institute is licensed as an organization with charitable status under the Income Tax Act. It represents a vey small, privileged right wing group in our society. Its unstated purpose in 1974 was to focus on efforts to get rid of the NDP Government in British Columbia. Its activities involved providing advice and active policy direction to the Social Credit Government in B.C. It is probably one of the most right wing and reactionary groups in North America. The executive director of the Fraser Institute publicly bragged of that fact.
I would like to read into the record a small analysis of Richard Gwynn. In speaking of Michael Walker he states: "He founded the Fraser Institute in 1974 after a bunch of B.C. businessmen came up with the money, not so much because they cared about his ideas, but they cared deeply about getting rid of New Democrat Premier, Dave Barrett, and getting him out of office." That is Richard Gwynn's analysis of the charitable nature of that organization. When you compare it to organization like the Mental Health Association, things start to get a little bit fuzzy regarding how the Department is handling the question of defining charitable organizations.
1 would like to point out that one of the policy decisions which the Fraser Institute has come up with is to abolish minimum wage. Its idea is that you can hire four handicapped people at $1 an hour instead of one person at S3.65, which would presumably give some benefit to the economy. It advocates the abolition of rent controls. It is opposed to equal pay for equal work for men and women. In one of its publications it states that to discriminate in a democratic society is a right. This organization has had charitable status in this country since 1974 through a failure by the Government to provide an adequate definition in its legislation of what in fact a charitable organization is. It is extremely ironic when an organization such as the B.C. branch of the Canadian Mental Health Association has to be hauled up and chastised when an organization as blatant as this can continue to function. The board of directors of the Fraser Institute represents such stalwart and well represented groups as B.C. Packers, The Royal Bank of Canada, The Bank of Commerce, IBM of Canada and Gen-star. I would say that that group certainly is not one of the key demanders of charity in this country.
In short, Mr. Chairman, the Fraser Institute is not a charitable organization. It is an active political organization giving policy advice and direction to one of the most right wing governments and right wing politicians in Canada. It is not illegal in Canada to play the role of social and economic dinosaur, but it is illegal for the Fraser Institute to have charitable status, and it is immoral for the Government to permit this type of antisocial and anti-people propaganda to be developed and disseminated with the support of public funds.
I would like to use one more example, Mr. Chairman, to show that the Fraser Institute is a political organization

December 19, 1983
Income Tax Act
involved in activities which are almost exclusively political in nature.


Cyril Lloyd Francis: The Chair has a problem at this point.


Donald Alex Blenkarn: It is not political at all. It has nothing to do with the Bill.


Cyril Lloyd Francis: The second reading debate is a general debate. Debate in Committee of the Whole should be more specifically related to the Bill before us. I can understand the Hon. Member's reasons for wanting to put certain material on the record, but this is Committee of the Whole and debate should be specific to the Bill at this time.


Raymond John Skelly: I have only another minute or two of this. These are very specific items in which-


Donald Alex Blenkarn: Mr. Speaker, I rise on a point of order. The clause in the Bill is an amendment to Clause 2 (2) of the Income Tax Act. It defines taxable income. What the Fraser Institute and the machinations of what goes on in politics in British Columbia have to do with Clause 2 of the Income Tax Act is anybody's guess on any rule of order. Even on a second reading debate this Member is totally out of order and ought to be ruled out of order.


Cyril Lloyd Francis: I am attempting to call to the Hon. Member's attention the restrictions that generally apply at Committee of the Whole regarding specific comments on the Bill before us. With all due regard to the Hon. Member for Mississauga South, the Chair was making a point of order with the Hon. Member and he appeared to be responding to it.


Raymond John Skelly: To continue the point of order, Mr. Chairman, there is the question of taxable income. It is an extremely important and difficult question that not only this Party but also the other Party has been dealing with over a period of time. It is extremely important and 1 would really like to set out these two very highly contrasting situations so the Minister could give us an indication of what in fact is taxable income. Is taxable income money that goes to the Fraser Institute or the B.C. Chapter of the Mental Health Association? With your indulgence for a minute, I will finish this argument.
I would like to use one final example to show that the Fraser Institute is a political organization involved in activities which are almost exclusively political in nature. There is a Conservative candidate in the next federal election. He is a member of the Conservative Party and a supporter of the Social Credit Party. On November 3, he wrote a letter to Conservative members in the riding and said that he has arranged for full-time tutoring from the Fraser Institute on economic policies. I would suggest, Mr. Chairman, that this indicates that in fact, as I have stated before, as Gwynn states and as the executive director of that organization brags on providing advice to that government, this is a political organization. I would like to suggest to the Minister that it is time we had some changes in the legislation and that there were a definition to indicate what in fact a charitable organization is so that
organizations like this do not slip through the boards while legitimate organizations are yanked up short. In addition to that, would the Minister undertake to do an examination of that particular organization whose purposes are certainly not charitable? They are certainly not beneficial to the public in any generally accepted way. I think the Minister has an obligation to give this House a commitment that he will examine the activities of the Fraser Institute and make a determination of whether or not that organization is charitable.


Frederick James (Jim) Hawkes: Mr. Chairman, I would like to ask the Minister a quick follow-up question. One of the traditions in this country is that universities have been eligible for charitable deductions. If you follow the train of logic of the NDP, it is urging a Minister of the Crown to use the Income Tax Act to cut into the very basic principle of freedom of speech, which is very important to the lifeblood of universities. I am hoping that the Minister can reassure the House that he is not being trapped into using provisions in the Income Tax Act to deny Canadians the principle of freedom of speech. Can I have that assurance from the Minister?


Roy MacLaren: Mr. Chairman, I have listened to the discussion with some interest. The Hon. Member opposite is right in identifying the Income Tax Act as the legislation which provides the Government with the opportunity to designate certain charitable entities as exempt from the normal tax which would otherwise be levied.
However, the implementation of that legislation, the regulations under which the exemption is provided to any specific institution or organization, is entirely within the purview of the Department of National Revenue. The Department of National Revenue, in assessing the qualifications and merits of an organization for the exemption which it seeks, is based on case law, based on precedent, based on traditions that are well established in our country. It would be quite inappropriate for me to comment on the specific instance that the Hon. Member opposite has raised. I would suggest to him that if he has some specific misgiving about any particular organization or entity which has received, does now receive or may in the future receive some exemption, he would do well to address himself to the Minister of National Revenue and make his views known to him.


Raymond John Skelly: Mr. Chairman, I do not want this to slip by because the case law the Minister refers to is absolutely right. The courts have grappled with the question of what is a charitable organization and what is a political organization. One of the definitions is that a political organization involved with political activity is, by definition, excluded from being a charity.
I have asked the Minister to review these two cases, one raised by a member of the Conservative Party and the other raised by myself, because one way out of this particular dilemma is for the federal Government to place an appropriate
December 19, 1983

clause within the Income Tax Act that defines what a charity is so we are not in a situation in which we find ourselves now.
With respect to the points raised by the previous speaker, this is not an attempt to curtail free speech. As a matter of fact, I mentioned before that if an organization wanted to perform the role of a social and economic dinosaur and disseminate propaganda of that nature, it is absolutely not illegal to do that in Canada. However, it is really immoral to do it through any method of public financing. Otherwise, we should finance every group, and I am sure the Hon. Member does not accept that proposition.
1 recognize the split responsibilities with the Minister of National Revenue who was left with the dilemma of evaluating the organization, but certainly the Minister responsible for the Income Tax Act must familiarize himself with it, come to some kind of conclusion with regard to these problems, and then provide us with an amendment which would remove this type of anomaly in the income tax legislation.


Roy MacLaren: Mr. Chairman, again I have listened with interest to the comments of the Hon. Member opposite. There is a body of case law available to the Hon. Member to guide him in his thinking about the ways in which the Department of National Revenue adjudicates these often difficult questions of deciding what entity should qualify for the tax exemption which the Hon. Member has raised. The subject is one which the Hon. Member opposite will know is under consideration at all times by the Government. It is an evolving and dynamic question as is implied by the fact that case law and precedent are largely relied upon to provide guidance in applications of this sort.
To move toward some precise definition and to attempt to draft some very precise definition of what an institution must be to qualify for tax exemption status would be to impose a straitjacket, which I think all Members would find quite unsatisfactory in a very short period. The nature of our society changes and evolves and new institutions come forward to address new issues which emerge in our society. I would have thought that it is simply beyond the wit of any of us to devise a definition of such precision that it would be durable over a prolonged period. It is for that reason, basically, that the Department of National Revenue has relied upon precedents and case law as the guiding lights in this issue.
I would only add to what I said to the Hon. Member opposite that, without reference to the specific entities that he raised, we on the government side are keeping this issue under review and the question of definition of charitable organizations is never far from our minds.


Flora Isabel MacDonald: Mr. Chairman, I had not intended to question the Minister on this issue until he made his statements in the last few moments. However, 1 do so because some of us have been very concerned for a long time about the imprecision in the definition regarding charitable organizations under the Act and also about the attempts that have been made in the past by the Department of National Revenue to
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superimpose itself on the various organizations throughout the country.
The Hon. Minister may remember that the Honourable Joseph Guay, now a Senator in the other place, when he was Minister of National Revenue indeed began to apply a very precise definition to what a charitable organization was, using, as he said, the definition that exists at the present time. What ensued was a complete uproar among charitable organizations, certainly with members of the Opposition Party which I represent and with the House as a whole. It got to the point where the Government and the Department of National Revenue were forced to change the straitjacket that they were trying to impose on charitable organizations, including churches. For instance, at that point it began to look as though a minister or a priest of a church who preached on any subject that could be termed political in any way would stand in jeopardy of losing his charitable number.
I raise this question because the Minister has now indicated that there is an ongoing review. My understanding at that time was that the Department would withdraw any kind of imposition or restriction of the definition that was then being applied and that at some time it would come back with a definition which we in the House could debate. We have heard nothing more since that time. Is there anything going on behind the scenes that would again arouse the concerns of the 47,000 charitable institutions across this country?


Roy MacLaren: Mr. Chairman, we have no intention of attempting to provide, as it were, a straitjacket definition which would in some way constrain the activities of voluntary organizations and charitable activities across the country. Indeed, I listened with interest to the Hon. Member and find myself in agreement with very much of what she said. If she inferred from what I said earlier that I had in mind that we were, as a government, going to come forward shortly with some specific definition of a very precise order, then I was unclear in what I intended to say. To the contrary, I very much have in mind the general considerations which she has brought forward in the sense that society changes and issues emerge that were not foreseen in earlier decades. I suppose one could take any example, but the environment might be an example to illustrate the point. I am old enough to remember three decades ago when environmental issues were not of prime concern. Indeed, it lacked any organization aside from one or two honourable exceptions. These acted as advocates for the concern of those who wanted to see our environment afforded better protection. Gradually such organizations have emerged. They have acquired the tax exempt status which enables them to pursue their laudable activities. I think we are talking about a dynamic area which is kept under constant review by the Department of National Revenue. I would agree with the Hon. Member opposite that this is a question which we would do well to keep under constant examination as our society evolves.

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Flora Isabel MacDonald: 1 have one short supplementary, Mr. Chairman. The reason there was such concern at the time this issue was raised by the former Minister of National Revenue was that charitable organizations felt there was no protection within the present definition from any government of the day moving against them. What they have been asking ever since is that government, the charitable organizations and the vast body of volunteers across the country come together to discuss what could be a more reasonable definition, a more precise definition, which at the same time does not make them vulnerable to any kind of move that an incumbant government may try to make against them.
Is this being considered? Certainly it has been advocated by the national voluntary coalition at the present time, not that the Government impose itself unilaterally, but that something be done by means of a reference to a parliamentary committee where there could be representations made and where all Parties in Parliament would be able to provide some input to the Government so that there would be no danger to the voluntary organizations in the country of suddenly finding they were being cut off from the charitable status that they now enjoy.


Roy MacLaren: Mr. Chairman, again I find myself in broad agreement with the purposes behind the Hon. Member's intervention. It is certainly not our wish to jeopardize in some way the activities of bona fide charitable organizations. On the contrary, the Hon. Member opposite may recall that in the recent Speech from the Throne the Government stated its determined support for the activities of voluntary organizations, an element in our society which has perhaps not always received the recognition that it deserves. I have myself a real conviction that we will see in the time ahead voluntary organizations play a greater role in our society. It is not our intention to engage in any restriction on the legal, as it were, or the justifiable activities of those institutions receiving exemption from taxation. We have the matter under consideration. I have noted what the Hon. Member said. I am sure she will afford us further opportunity to have the benefit of her contributions in the future.


Raymond John Skelly: Mr. Chairman, there have been organizations that have been, and I would use the term, harassed as to whether or not they have been involved in political activity, and those groups have been threatened by the Department of losing their status. There are other organizations, and 1 would use the example of environmental groups which have been denied status. Ultimately, the concern and worry at each step of the game is whether or not the organizations have political objectives. Do they, in fact, wish to change laws in the country or influence legislators or politicians? Do they dessiminate and produce propaganda? These are the kinds of definitions on which the courts have been falling back. When they have a very hard question, such as whether an organization is charitable, they have used a blanket interpretation that if an organization has political objectives, then it is not a charitable
organization. I would say that probably one of the most difficult situations with which the Minister has to come to grips is with an organization, about which there is no doubt in the minds of anyone in the House that it is a charitable organization providing very worthy support for people across the country, yet there is another organization which, in the minds of tens if not hundreds of thousands of Canadians, is totally political in nature but which qualifies for charitable status. The Department has again, using the court-based rulings, denied access to quite a number of groups that have applied for charitable status under the same terms and conditions as the Fraser Institute. You cannot have it both ways. We have to have at least the assurance of the Minister, either that we may find something in the statute that would allow for an appeal to an independent group from the Department that it can do without some horrendous expense and difficulty, or else that we will move to allow some kind of definition in the legislation that would broaden the situation for people and maybe not put them under such close interpretation of legal statements by the bureaucracy.
I would like the Minister to give us an indication what is involved in this review that he has going on right now. Is he reviewing what the Fraser Institute and other charitable organizations are doing? Is he reviewing the situation with a possibility of creating a statutory definition of a charitable organization or possibly putting in an appeal process for those who have been denied and harassed? It is a very difficult situation when you get a call from National Revenue suggesting that your organization is becoming involved politically and may lose its tax number or that the organization has been denied the right to a tax number. Essentially, what happens is that there is a withdrawal from a very important area, such as education of legislators and making presentations on an organization's objectives and points to governments. I suggest that this is a very important function for advocacy groups. The Minister should be looking at some method of allowing that to go forward.


Roy MacLaren: Mr. Chairman, I believe the Hon. Member opposite has raised two broad areas of concern. One relates to the definition or qualification of specific entities. It is not my purpose today to comment on the institutions he has named, but rather merely to say, as I mentioned earlier, that we believe for our part that, generally speaking, the public is best served in this instance by a procedure that is flexible, which does take account of the changing character of the Canadian society and which, through precedent, case law, enables the qualifications of applicants to be tested and examined.
I have taken note of the intervention of the Hon. Member and indeed the intervention of the Hon. Member for Kingston and the Islands on the question. We will bear their points very much in mind.
With regard to the second point, the question of an appeal procedure of some sort, that is one which requires some examination. In the time ahead I hope we will have the opportunity to look more closely at the possibility of the
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provision of some appeal procedure. I thank the Hon. Member for his contribution.


Douglas Glenn Fisher: Mr. Chairman, for your information, following the instructions of the Chair, we have discussed among ourselves how we would group the votes relating to Clause 1 so that when you call for approval of Clause 1 you will be calling for approval for quite a variety of clauses.
I understand the Chair would like me to read this list. 1 will read out the clauses involved. 1 have a copy for you, Mr. Chairman, and for others. Clauses 1, 5, 9(1), 9(3), 21(8), 21(12), 23, 24, 28(9), 28(14), 30(3), 30(6), 37, 39(2), 39(7), 41, 42, 43, 46(4) (5) (7) (8) (11) and (14), 48, 49(1), 49(5), 50(1) 50(3), 50(4), 50(5), 50(6), 50(8), 51, 52, 53-


Donald Alex Blenkarn: Mr. Chairman, I rise on a point of order.


The Deputy Chairman:: Order. The Parliamentary Secretary has arrived at a reference to Clause 53 at this point.


Donald Alex Blenkarn: You have not arrived at 55?


Douglas Glenn Fisher: No. It occurred to me when 1 was reading that I could have been misleading people. Perhaps I will read the ones that could be confusing. Clauses 50(1), (3), (4), (5), (6) and (8), Clauses 51. 52, 53, 54, 55(5), 55(13), 56, 58, 60, 70, 80, 83, 92, 93, 95, 99, 105(5), 105(8), 106, 108, 110, 111, 112, 113, 117, 118, 119, 121, 122, 123 and 125.
I understand that, when we vote on Clause 1, we will be approving the whole package or voting against the whole package. I understand there are additional clauses which are on this topic, but not included in this group because the great sense of brotherhood and camaraderie in front of us breaks down at certain limits. Some of these clauses will be disputed, so they are not included in this group. I think that if you ask the representatives of the other Parties, they will agree with this list.


Donald Alex Blenkarn: Yes, Mr. Chairman. We are quite prepared to put the question on Clause 1, it being the clause outlined by the Parliamentary Secretary. If you would like to put that, Mr. Chairman, the time to do it would be now.


Nelson Andrew Riis: Mr. Chairman, we concur.


Roderick Blaker: As 1 understand it, the list read by the Parliamentary Secretary-and 1 do not think Hon. Members want me to repeat the entire list-would be those clauses and subclauses which will be voted upon in connection with Clause 1. Is that agreed?


Some Hon. Members:: Agreed.


Roderick Blaker: Shall I now put Clause 1 ?


Some Hon. Members:: Question.


Roderick Blaker: Shall Clause 1 carry?


Some Hon. Members:: Agreed.
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Some Hon. Members:: No.


Roderick Blaker: All those in favour will please rise. All those opposed will please rise-
Clause 1 agreed to: Yeas, 26; Nays, 16.


Roderick Blaker: Hon. Members will realize that this implies that Clause 1 carries together with all of the other clauses and subclauses to which the Parliamentary Secretary referred.
On Clause 2-


Douglas Glenn Fisher: Mr. Chairman, I think that if you ask among the Members, you will find agreement for a grouping of these clauses. In this particular case, we are looking at the IS IP topic which is found in Clauses 2, 4, 9(2), 9(4), 13, 14(1), (2), (3), (4), (5), 15, 17, 18, 19, 20, 22, 33(1), 33(2), 34, 35, 38, 46(2), 46(3), 46(4), 46(10), 47, 48, 57, 58, 75, 78, 81(1), 81(3), 102, 105(1), (3), (4), (6) and (7).
I believe, Mr. Chairman, that all of those clauses deal with the ISIP provisions and so again, one debate and one vote would cover all of the clauses. I understand that the Parties opposite are in agreement with the grouping and they should be in agreement with this great idea as well.


Roderick Blaker: On the matter of the grouping but not the idea, I recognize the Hon. Member for Mississauga South.


Donald Alex Blenkarn: Mr. Chairman, you are quite right about that. It is a disastrous series of provisions but we are most delighted with this grouping. We suggested that a vote on Clause 2 would be a vote on all of these clauses in the grouping and that the debate would then be a wide-ranging debate which would allow for speeches or questions with respect to the provisions of any of the clauses.


Nelson Andrew Riis: Mr. Chairman, we are certainly in agreement with this breakdown which would allow ample opportunity for Members to speak either for or against the ISIP program. We concur with this breakdown.


Roderick Blaker: Then I understand that it is agreed that the list of clauses and subclauses enumerated by the Hon. Parliamentary Secretary to the Minister of Finance are agreed to by unanimous consent for the purposes of debate. Is it so agreed?


Some Hon. Members:: Agreed.


Donald Alex Blenkarn: Mr. Chairman, this particular series of revisions is a new concept in the Income Tax Act that gives those persons who invest in the securities of some 1,100 or 1,150 listed companies in Canada the right to have their securities registered in what is called an indexed security fund or plan. These securities are then treated on the basis that the income or dividends from the securities are paid out to the holder in

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the ordinary course and receive the dividend tax credits and the like, but from then on, the gain is indexed and the annual gain on the portfolio is treated as an indexed gain, and taxes therefore are only paid on the real gain as opposed to the inflationary gain. Indeed, only 25 per cent of the real gain is brought into tax each year.
The same applies, of course, for losses. If there is a loss on the security, the loss can be written off. Through the provision of this particular fund or plan, the loss can be written off in full and not only as against security income but as against any income.
The plan enables those who invest in the stock market to have their capital gains indexed and their capital losses totally deductible, on a 50 per cent basis, of course, from their other income. It treats those who are in the preferred position of having purchased Canadian securities through a Canadian stock exchange in a listed Canadian company the right to pay only capital gains tax on real gains and it gives them the right to deduct all of their losses. In our view, it is pretty unfair to allow one group of investors to have a benefit of this nature whereas other investors receive no such benefit.
This does not mean that we are opposed to indexing of capital gains tax, because we are not. Indeed, we would go so far as to say that the capital gains tax should be completely abolished. However, to allow those who buy the securities of large corporations the right to have their gains indexed and to say to those who invest in small or private business that is not listed on the stock exchange or those who buy farms or small businesses that they should pay full capital gains tax on all of the gain including the inflationary gain and that they should only be able to deduct their capital losses from other income at the rate of $2,000 a year is discrimination of the worst order. Indeed, it is counterproductive and is harmful to Canada. If we are going to do what is contemplated in these particular sections, then we should do it for all.
I would ask the Minister how he can justify to his constituents who have small businesses that they should not be able to have indexation on the value of their small businesses and that they should not be able to write their entire loss off against their other income if they suffer a loss.


Roderick Blaker: I wonder if I might ask the indulgence of the Minister and of the House to permit me to do what 1 must do in accordance with Standing Order 45, which is to take the Chair and tell the House what the issues for the adjournment motion this evening are. Following that, I will recognize the Hon. Minister.
Progress reported.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Blaker):: 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 Halifax West (Mr. Crosby)-Supply and Services-Purchase of American coal for use at Canadian Forces Base Gagetown, N.B. (b) Request for amendment of policy; the Hon. Member for Algoma (Mr.Foster)-Tourism-Tax on Canadian advertising literature-Proposed United States legislation; the Hon. Member for Vancouver East (Ms. Mitchell)-Labour Relations-Introduction of new technology-Request for workers' bargaining rights.
I thank the Hon. Minister and the House for allowing me to intervene in that way, and I shall return now to Committee of the Whole.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration in committee of Bill C-2, an Act to amend the statute law relating to Income Tax and to where related amendments to the Canada Pension Plan and the Unemployment Insurance Act, 1971-Mr. Lalonde-Mr. Blaker in the Chair.
Roy MacLaren: Mr. Chairman, I have listened with attention to the Hon. Member's observations. I have noted with interest his support for the measure we are now discussing, which is the ISIP program. I take it that his principal thesis is that in offering support for ISIP, he would want to see the same thing being extended to the valuation of other assets and to the impact of capital gains and how those capital gains are taxed on other assets.
I am sure that the Hon. Member opposite appreciates that at the present time the Government is reviewing other areas of investment which are affected by inflation. We have under review many of the points that he has offered us today. The challenge in those areas, however, is rather more difficult than it has proven to be in the case of Canadian equity traded on our stock markets. On commonly traded shares, of course, there is a ready method of valuation. That method is available on a daily, monthly or annual basis. It provides a ready measurement of capital gains and therefore a ready way for those capital gains to be taxed.
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Our initiative in this area is really only the first of what I hope will be other initiatives to provide Canadians some protection against the inflationary impact on the valuation of their assets and on assets other than Canadian common shares. However, in this instance, we moved because we could move quickly. We moved first by consulting with those in the industry and with the financial institutions about the ways in which such a program could be implemented. We sought the advice of the Investment Dealers Association, we sought the advice of stock exchanges across Canada and we sought the advice of financial institutions generally. We invited a private sector committee to examine the proposition and report back after consultations throughout the business community with recommendations on how we might move to immunize the capital gains on common shares from normal inflation.
In reviewing the possible extension of that thinking on other forms of assets and referring to the possible extension of this approach to inflationary increases in the value of assets to the sale of shares of private companies, the Lortie Commission pointed out that this suggestion had been examined. It concluded that such adjustments could not feasibly be carried out within the RSIP-which is to say, the 1SIP-or any similar plan, but any gain arising on the disposition of a share of a private company should be subject to tax only when actually realized. The report said that it is inappropriate to include in RSIPs assets such as the shares of private companies which cannot be readily valued and which have limited liquidity. In any event, the report pointed out, there are complications in any system of indexing the cost of shares of private companies, such complications relating to the deductibility of interest on loans taken out to acquire such shares.
There is a dual difficulty in the valuation of assets including the sale of shares of private companies and also, of course, including such assets as a farm or other forms of private property. That difficulty has not deterred us from examining ways in which that same protection from inflation might be extended to other areas.
Nevertheless, while that intention is there to examine other ways in which such protection could be offered, the Government has sought parallel ways in which small business could benefit from tax changes. We have a lower corporate tax rate for small business, small business bonds are available, there is an exemption on sales tax and there is a full offset of capital losses on private company shares and obligations, which can only be of assistance to small business.
I could draw the attention of the committee to other forms of assistance available to small business but I only want to add that the broad question which the Hon. Member opposite has raised is one of common concern. We share his interest in an extension of that sheltering or protection or immunization from the impacts of inflation on the value of capital assets in the way he has described. However, it is not an area where it is easy to take quick measures to bring forward the benefits that he and I both seek.
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Frederick James (Jim) Hawkes: Mr. Speaker, 1 have a series of questions for the Minister. Is the 1S1P initiative in this tax Bill the major initiative in the whole Bill?


Roy MacLaren: No, Mr. Chairman, the IS IP is one of the major measures in the Bill, but there are a number of measures which arose from the commitment of the Government to promote economic recovery in Canada.
The Hon. Member will recall that in the budget two ranges of measures were offered: a short term and an immediate public investment to promote jobs and to help create the infrastructure necessary for further economic expansion but, in parallel, measures to promote the creation of employment and extension in the private sector. The ISIP measure should be seen as part of that second emphasis in the April Budget and in the tax measures now before us.
It would be misleading for me to say that ISIP represents the major element in the tax measures; on the contrary. For example, among the recovery incentives the investment tax credit proposals play a major part. Hon. Members will be aware of the incentives available for additional R and D activity, an area that is of concern to Canadians generally. We have also offered better treatment for tax losses by extending tax carryforwards and tax carrybacks to address, in part, the concern that the Hon. Member opposite and 1 share about liquidity problems that face some Canadian corporations and measures to increase the cash flow of those corporations.
On a personal level with regard to individual Canadians, we have increased the rate of the employment expense deduction and we have increased the child tax credit as measures which we hope respond to the concerns of lower income Canadians, especially in a time of economic recession.


Roderick Blaker: The Hon. Member for Bow River.


Gordon Edward Taylor: Mr. Chairman, I think the capital gains tax-


Frederick James (Jim) Hawkes: I rise on a point of order, Mr. Chairman.


Roderick Blaker: The Hon. Member for Calgary West on a point of order.


Frederick James (Jim) Hawkes: Mr. Chairman, I believe that the past pattern in Committee of the Whole is that once a Member is recognized he has a period of 20 minutes to make a statement or to ask questions. I felt a little filibustered by asking a yes-no question and getting three or four minutes of response. I did not expect to be cut off in something short of 20 minutes.


Roderick Blaker: 1 must tell the Hon. Member that 1 may owe him an apology. My intention had been to recognize Members seriatim in order that they may enter debate, and that would include the Hon. Member for Calgary West again. 1 would ask the Hon. Member if he would give me a moment to check if there is a standing order procedure involving a 20 minute right of questions and answers. 1 do not think so but 1 will check it out. Because the Hon. Member has made that point, if the Hon. Member for Bow River were agreeable, I would change the Chair's recognition and recognize the Hon.

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Member for Calgary West until such time as I look at the subject on a procedural basis. Is that agreed?


Gordon Edward Taylor: Yes, Mr. Chairman.


Frederick James (Jim) Hawkes: Thank you, Mr. Chairman, and I thank the Hon. Member for Bow River. If we could avoid filibusters it would be helpful because we might have to respond in kind.
The Minister has told us that this is not the major measure, but it is major. He has told us that it is designed to help the economic recovery. Could the Minister share with the House an estimate of how many dollars the Government expects to be invested in ISIPs within a year or five years or perhaps a longer period? How much money does he think will go into ISIPs? What is the Government's projection?


Roy MacLaren: Mr. Chairman, 1 cannot offer the Hon. Member the number that he seeks off the top of my head. I would point out that the amount of net capital gains on shares in 1980 was about $2.9 billion but that, of course, fluctuates from year to year and is dependent in part on the inflation rate. In five years we expect all individuals to hold most, if not all, of their common shares through ISIP so as to obtain that protection from the inflationary impact on that capital gains which otherwise common shares would attract.


Frederick James (Jim) Hawkes: Mr. Chairman, could I ask the Minister if the tax system intends to treat differently a dollar which is invested in a new stock issue, an offering on behalf of a company to raise capital, or if I choose to buy some existing stock from someone who already holds it? If 1 put those two situations into the ISIP, would 1 be treated any differently within the tax system?


Roy MacLaren: No, Mr. Chairman, there would be no difference accorded to either newly issued shares or to shares currently traded on the exchanges.


Frederick James (Jim) Hawkes: Does the Minister see a difference for the economy in a rollover situation or in the purchase of new shares? Does one or the other help the economy more or less? And could he explain to us which one he thinks helps the economy the most?


Roy MacLaren: We consulted, as I noted earlier, with the private sector and with the Investment Dealers Association and the stock exchanges, amongst others, across Canada, on this and related questions. It is our view, and the view of those who are active in the industry, that there will be no difference.
1 sense the Hon. Member opposite-without wishing to put words in his mouth-feels there may be some tendency on the part of the market to place an emphasis either on newly issued shares or on shares currently traded. That is not our impression and it is not our expectation. We would assume that the investor will seek his capital gains protection on both existing shares and on new shares.


Frederick James (Jim) Hawkes: Mr. Chairman, that answer is a bit confusing. The question was: if someone sitting over here on my left has a million dollars to invest, and very Canadian, does it help the economy more if he invests in a new share offering or if he simply invests in a rollover? We can make the assumption that a new share offering is being offered by a company because it needs capital to modernize, to bring in new technology, to expand its sales force, to do something with new capital. That is what a new share offering is all about. I am wondering whether or not the Minister is trying to tell me there is really no difference between buying a rollover in a rollover situation, and putting money into a new share offering, in its impact on jobs.


Roy MacLaren: No, Mr. Chairman. I was attempting to tell the Hon. Member opposite that the ISIP treats new share issues and existing shares in the same way.


Frederick James (Jim) Hawkes: What we are intending here, in this legislation, is to give some kind of tax break to people who roll things over. Can the Minister tell me whether there is any necessity-let us say a billion dollars comes into it-that one single job be created in the economy in return for the tax treatment?


Roy MacLaren: Mr. Chairman, the point I wanted to make, and I evidently have not made it clearly, is that we are blind, as it were, to the question of whether new shares or existing shares are being traded. The exemption from the inflationary part of capital gains tax is treated exactly the same in the case of both shares. It is our view that any other distinction-if we attempted to make any distinction-between old and new issues, would lead to complexities not only in the legislation but in the administration of the program.
We also, in equity, feel that current holders of shares need an inflation offset as much as new share investors. I do not know whether the Hon. Member opposite is advocating a system whereby only new shares would be exempted from capital gains-the inflationary element of capital gains-for a certain period. If that is what he is advocating, I do not think I could agree with him. 1 would not want to support such an approach. Obviously, the one immediate impact of any such move would be to attract money away from existing investments into new share issues, and I cannot see that that would be of any benefit to our economy generally.


Frederick James (Jim) Hawkes: One of the fears we have on this side is that indeed money may be pulled out of small business. An equity venture capital fund is not protected against inflation necessarily, either by putting it into existing stock on a rollover basis or not doing so. It seems to me that the Canadian economy needs more venture capital. Everything one reads suggest we need venture capital. Why is the Government at this particular period in our history encouraging traders, rollovers, instead of money being put into venture capital? Why is the Government making this public policy choice?


Roy MacLaren: Mr. Chairman, the Hon. Member opposite may be making rather more difficulty over the listing of shares than I think perhaps is justified. However, bearing in mind his
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admonition to be brief and not to engage in what he rather unkindly described as "filibustering", I will only say to him that there is a whole range, as I think he knows so well, of other measures, not only in the tax Bill now before us but in existing Government legislation, which is intended to promote the growth of small business. I do not believe he and I would have any disagreement on the role played by small business and the role played by the entrepreneur in our economy. I mentioned earlier the lower tax rate available for small business. I mentioned the programs of small business loans and assistance available to small businesses to promote their activities. I think what we see here is a program which takes into account the nature of the Canadian equity markets, parallel to taking into account the particular needs of small business.


Frederick James (Jim) Hawkes: One of the common things on the stock market is that people sell short. That is one of the ways they take a risk. What happens within an IS1P? Can people sell short?


Roy MacLaren: I am sorry, Mr. Chairman. I wonder whether the Hon. Member would mind repeating his question.
I did not hear all of it.


Frederick James (Jim) Hawkes: One of the things which happens in the stock market is that traders sell short. They make a gain sometimes and they have a loss at other times. Are those kinds of gains and losses included within ISIP?


Roy MacLaren: Yes, Mr. Chairman, those gains or losses are included under ISIP. There are special rules for call and put options. Perhaps the Hon. Member wants to be more specific about his concerns. I am not sure I follow exactly what it is he is concerned about.


Frederick James (Jim) Hawkes: It seems to me we are setting up a situation here, Mr. Chairman, where a taxpayer in this country can sell something he does not own. If he loses money on it, the taxpayers will pick up part of it. If he gains money on it, they will only pick up the portion of the share they would ordinarily be entitled to. Is that part of the purpose of the ISIP legislation?


Roy MacLaren: I am not sure of the purport of the Hon. Member's reasoning, Mr. Chairman. It may be that he is advocating a fundamental change in the nature of marginal trading or in our equity system in Canada. If he is not advocating that, I do not see how he can single out certain activities or benefits under the ISIP program to the exclusion of others. I feel one would want to take the market as it operates today, accept it as it operates today, apply the ISIP program to the total activities of the market, and not single out within that total activity certain practices which would be exempted from the benefits of the ISIP program.


Roderick Blaker: May I interrupt the Hon. Member for Calgary West for a moment. While he had the floor I checked the Standing Orders and I find there is somewhat of a
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contradiction between Standing Order 59(1) and Standing Order 59(3). For the moment, the view of the Table officers and myself is that the Hon. Member is quite correct, he has a period of 20 minutes. He began at 5.15, that means he should end at 5.35.


Frederick James (Jim) Hawkes: Mr. Chairman, I appreciate the sensitivity of your comment. I never really got an answer to my question and maybe I could rephrase it. Let us say that any amount of money, $1 billion, $3 billion, $5 billion, comes into ISIP. Is there any guarantee that a single job will be created in Canada with that kind of investment?


Douglas Glenn Fisher: Mr. Chairman, I would like to go back just a bit because the Member has stepped back in his question to an earlier comment he made and I would like to do the same. He raised the question of whether ISIP could potentially draw money out of the small business sector, for example, into common shares which would perhaps, by definition, favour larger companies, certainly the more established ones.
The question is a good one but it comes at the problem from a slightly wrong angle. I suggest to the Hon. Member that the over-all problem we are facing in the business community today is an overload of debt, with a great deal of non-productive interest payments going out as opposed to dividend payments or rewards for risk. The Government would like to shift capital not from small business to big business, not from unlisted companies to listed companies, and not from one activity to another, but within one area. We would like to help those companies with listed common shares through this plan to get off the debt route a little bit and get more reliance on equity.
In the budget announced last April there were other measures which will help small business, farmers and unlisted companies to go through the same exercise. For example, we are allowing people to write off their debts further into the past and into the future. That will erase the impact of high interest rates as we have just experienced them, give them a bit of money through the tax system and, hopefully, allow them to diminish their debt in that fashion. Equally we have incentives in the share purchase plan.
The Hon. Member asked a reasonable question, whether we would be distorting the market, but I ask him to consider the other instruments here as well and not just this one. 1 also point out that the general creation of this kind of strength in the business community has gone to the jobs he is referring to. Clearly, if a business has money to spend for expansion, it will create new jobs. If a business has profits, it can make a decision about whether it will plow those profits back into its operation or distribute them to its shareholders. It does not have that kind of decision when it is faced with debt. Automatically it must pay the debt and the interest.
I believe the creation of a stronger equity base for our businesses through this measure, but also through the others, is going to help them expand. Quite frankly, I thought the statement made in the April Budget along this line was quite a good one. It was quite a clear analysis of the problem that our

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Income Tax Act
business community faces. 1 must say, with all respect, that I differ with my friends in the NDP who have tended to call this a measure for the rich and comfortable.


Mr. Orlikow:: That is exactly what it is.


Douglas Glenn Fisher: Quite frankly, if a business has money to expand, it is going to expand and not sit still. It is going to create jobs and new activity for itself and its suppliers through its equity and profits. Again I repeat to the Hon. Member that businesses do not have that option when they are dealing with debt. They must pay their lenders. The Hon. Member asked this question quite sincerely, and 1 think he has asked the right question and 1 congratulate him for it.


Frederick James (Jim) Hawkes: If the Minister accepts the statement made by his Parliamentary Secretary that the purpose is to reduce company debt, would the Government accept the proposition that any new share offering put out in the public domain for the reduction of debt be put in ISIP and all other things excluded? In that way you target specifically on what the Parliamentary Secretary tells us is the problem. You can do it but you cannot have that necessary new money competing with rollovers because rollovers are nine times out of ten more attractive. They are less risk. If you really want to help the Canadian economy and reduce debt, as you said, then target it.
Will the Government conform with an amendment of that kind, which would target the money on the problem, that is the reduction of debt?


Douglas Glenn Fisher: Mr. Chairman, again it is a key question and I congratulate the Hon. Member for zeroing in on this topic. The problem is, how would he deal with a businessman like me, for example?


Donald Alex Blenkarn: God only knows.


Douglas Glenn Fisher: Now my friend from Mississauga South has a few editorial comments. He is probably accurate. But how would he deal with a businessman like me? I have an unlisted company, Ma and Pa, and Pa is up here waxing eloquent and Ma is earning the profits. We have a livelihood from our company but it would be very hard to get an annual valuation on it because so much of it is sweat equity and so much of it is goodwill. It would be very hard for me to put a value on that annually-


Donald Alex Blenkarn: But you think you should pay capital gains taxes on inflation, do you not?


Douglas Glenn Fisher: -which I could use to determine whether we had a loss or gain, it would be almost impossible to measure the goodwill factor in my business, even though I might claim it is there. So I ask the Hon. Member to consider that difficulty and remember that when pursuing this search for equity he could make life much, much worse for my company.
I would much rather have other ways besides ISIP to overcome my equity problem. I would like to have some of the flexibility in the tax system that the carry-back and carry-forward provisions provide. I would like to have access to the
small business loan and small business rate. Those things are much more valuable to me than an ISIP, which will automatically involve complicated calculations, and they are not going to give the real value the Hon. Member I am sure is sincerely asking to have. I think that there are entirely different problems in small unlisted businesses which we can address in other ways to get the same result, namely more equity and less debt. Certainly using the flexibility of the tax system has done that, especially on the question of writing off losses.


Gordon Edward Taylor: Mr. Chairman, I want to deal with this topic from an agricultural point of view. 1 was interested when the Minister said that one of the objectives of this legislation is to tax only when the profits are actually realized. I suggest that the Government's priority in this particular phase is incorrect. One of the greatest producers of wealth in this land is the farmer. Yet the farmer is the one who is taking one of the worst beatings on capital gains taxes of anyone in the country. For example, land is sold for many reasons. It might be sold for a subdivision, which will realize very large sums of money. If you are close to a city, that is a possibility. I am going to speak now about land that is 30 or 50 miles away from a major city to show how unfair the present system is to those farmers who are producing. I am talking about land that was settled by a man, his wife and family about 50 years ago. The children of that family have now passed away or gone to other places, except for one son. That son still farms the home land. He is not married and has no children. He wants to sell that land now to a nephew. Under the Act an uncle is not included in the family rollover. 1 think that is unfair, but that is the way the Act is. The value of that land becomes the question. The nephew is anxious to take the land, but not at an inflated value which the land will never pay back. He had the manager of a Canadian Imperial Bank of Commerce check the land to ascertain how long it would take the production of that land to pay back the purchase price. The bank manager said that that land would pay back its capital value in seven or ten years at $200 an acre. The Department of National Revenue people say that the going price of that land is in the area of $500 an acre. That is inflated not only by inflation by also by land that is going to be used for other purposes than agriculture. It is most unfair to say to this man, "You are going to have to pay $500 an acre" when that land will never produce enough to pay that back to the farmer.
That is the point which 1 am trying to make today. Unless the land is able to produce enough to pay back the price, then a reasonable purchaser is not going to buy it. You buy a business with the understanding that the production from that business will eventually pay off that purchase price. That is impossible under these conditions. If the nephew buys the land at $500 an acre, he is buying land that will never pay for itself. If he buys it at $200 an acre, which is the value put on it by the bank manager, then it will pay for itself over a reasonable length of time. I would like to ask the Minister whether it is fair to say to our producers, "You are going to be stuck with
December 19, 1983

this inflated value but the bond holders are not going to be stuck with the inflated value"? Surely the Government realizes that unless that land is going to produce enough to pay back the purchase price there is something wrong with the tax.
Is the Minister prepared to look at this particular thing in regard to the Department of National Revenue? 1 see that the Minister of National Revenue is here even though he is not listening. He should be listening. The Department of National Revenue is putting an unfair burden on those who want to buy land when they give it an inflated value of $500 when that land will never produce enough to pay back that purchase price. Are the Minister and the Government prepared to look at this particular problem? After all, the production from our farm lands is probably the most important thing in our country today.


Roy MacLaren: Mr. Chairman, I listened with interest, as always, to the Member opposite, especially when he discusses the agricultural sector with which he is so familiar. The broad question he raises is one of interest to us. We have been reviewing some of the elements he has discussed, however briefly, today. We will continue to bear his concerns in mind.
However, in relating the IS1P proposal to the situation of farmers I would like to offer him a few comments. He began his statement by saying that gains under the ISIP program would only be taxed on the sale of the assets. That is not in fact the case. The tax is levied on an annual basis. I would like to give the Hon. Member opposite an illustration of what I have in mind in the case of ISIP. If there were a capital gain of $60 in the course of a year, in the current year the investor would have to report one-quarter of that, or $15. The taxable portion of that is one-half, that is, $7.50. The tax rate on that taxable portion is 50 per cent. Therefore, the tax payable would be $3.75. I offer the Member that illustration merely to point out to him that in fact under the ISIP program the tax is levied annually, unlike in the case of the sale of farm land where capital gain on the land is not taxed until the sale itself. It is not taxed on an annual basis but rather when the land is sold.
The difficulty with assets other than common stock arises from the difficulty of evaluating the asset.


Donald Alex Blenkarn: Nonsense, absolute nonsense.


Roy MacLaren: Perhaps the Hon. Member has some suggestions about-


Donald Alex Blenkarn: You do not have to value the assets.


Roy MacLaren: -how it is feasible to value annually other forms of assets, including, in his instance, farm land. The second area which gives some difficulty is that under the ISIP program interest paid on money borrowed for investment in common shares is non-deductible. The same would apply if we were to try to extend this program to other forms of assets, including farm land. If money had been borrowed to purchase the farm land the interest would not be deductible. 1 think the Member-
Income Tax Act


Donald Alex Blenkarn: Why is interest not deductible?


Roy MacLaren: -opposite might have some problem with that. The Member opposite will also be aware that in the case of farm land sold to children no tax is attracted.
The final point that the Member made was something about benefiting bond holders under ISIP. Perhaps I did not quite understand his point. The ISIP program does not extend to bonds but rather to equity investment in common shares.


Gordon Edward Taylor: I would like to continue briefly. 1 want to make sure the Government is going to give this problem consideration. It is one of the major problems facing the farmers of Canada today, not only in the west, but all over Canada. I would compare it with the pensions of Members of the House.
1 do not think I will ever get mine, but when those Members who have served a number of years in this House start getting their pension, they will pay income tax on the pension as they receive it year by year. They will not have to pay on the whole pension. That is the part which a farmer finds very unfair. He works 40 years to build up his farm. That is the only pension he has. Then he sells his farm, as this uncle is now wanting to do. He wants to retire. All the wealth he has in the world is in that farm. When he sells that he has nothing left. If he sells that farm, he is going to be taxed on the whole thing the same year he sells it. He will have half of whatever amount of money he receives calculated in his income tax. That will bring it down to a point where he is not able to sell the land because he cannot live on that amount. He still has a number of years to live. It is unfair when one sees others who are building up a pension the way Members of the House of Commons do and compares them with the way farmers or some businesses do it.
1 want to suggest that if we are going to have capital gains-which I do not believe is necessary-it could be more equitable if we allowed the farmer to spread the payment over a number of years. This would be comparable to what other Canadians do, because the present system certainly is not fair.
My second point concerns the rollover from father to son. There are also cases of a rollover from uncle to nephew. Since the farmer may not have any children, the rollover would go to a nephew, who also has some right to the land since his father was part of the family which originally settled that land. Perhaps consideration should be given to including the relatives such as uncles and aunts in these rollover provisions.
My other point concerns valuation. I hope that the Government will accept the fact that the valuation of the land should be based upon what that land can produce, particularly when it is being sold and used as agricultural land. I realize that complications can arise with respect to subdivisions on land that is close to cities, but in cases of strictly agricultural land with no thought of using it for anything but agricultural, the value should be based on what that land would produce in wheat, oats, barley or cattle.
If this were done, the inflated value would be eliminated. If the Government would do as the Hon. Minister of Agriculture

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suggested, and indeed as the Right Hon. Prime Minister suggested in the last election, that is, raised that valuation day by two or three years, it would make a world of difference to how Canadian farmers would look upon this valuation. Certainly it is completely unfair to put a value on land which it never will be able to repay. 1 want to emphasize that point over and over because of the unfairness to farmers who must buy land at an inflated value knowing that they will never be able to pay back that value plus the interest from the production of that land. 1 wish the Hon. Minister, who I know is sincere, would consider some of these points, because they are vitally important to the producers of this country.


Douglas Glenn Fisher: Mr. Chairman, I have indicated to the Minister that I would like to make a couple of comments on this because my friend and I have had many discussions about this issue. 1 would also refer him to the very fruitful discussions that took place in the Finance Committee a year ago on this topic precisely. I think it is only fair that I should mention that four of our Members from southwestern Ontario have been very determined on this issue. They are the Member for Kent, the Member for Lambton-Middlesex, the Member for Essex-Kent, and the Member for London-Middlesex. Those four Members have been very concerned about this issue precisely.
1 am not quite clear about how we can deal with this issue without abolishing capital gains on farm land altogether. I do not think that that would be a particularly fair treatment of farm land. I must confess that to the Hon. Member. I know that in his area there would not be too much difficulty in definining what is a farm and what is not a farm, but in the area that my friend from Mississauga South and I come from, there would be tremendous difficulty defining what is and what is not farmland. It would be difficult to determine if people were legitimately involved in farming on any given piece of land or whether it was being held simply for its real estate value or future industrial use or residential development. We really get into some difficulty in the tax system in these growth areas around cities. With respect to these categories, I believe we would begin to distort the real estate market because we would be pulling people into real estate speculation because of the absence of the capital gains tax. That would be a real problem. I saw the Hon. Member nod his head in agreement and 1 think he understands that.
I would ask him to consider a couple of other points. Farmers are working over-all on a cash basis in the tax system. That is a tremendous asset for a farmer. In small or big business, an entrepreneur must use the accrual system, but a farmer has the benefit of the cash basis. That really helps a farmer over-all inside the system.
Of course, he can take advantage of an RRSP if he chooses to do so. He also has some intergenerational rollover provisions which are very helpful within a family, which again is unique to the farming community. In the April Budget we noticed some special new loss provisions for farmers, the ones who have just come through really tough times. We also added the 40 per cent refundable tax credit.
The Hon. Member should keep these other benefits in mind when zeroing in on the capital gains problem. Having said all that, I understand the difficulty that we are facing here. If a man works all of his life and is not particularly conversant with the tax system, he is not too aware of all of his liabilities. People who are workers, farmers and businessmen are not tax experts. For example, if a farmer works all his life, it hurts when he sells his farm and discovers that his retirement fund is diminished by 25 per cent. There is no denying that it hurts.
On the other hand, I would ask the Hon. Member to realize that others are also faced with that problem. We are in this difficult position where we have to try to consider how we can keep the tax system in a fair balance. While we do not want to distort it, neither do we want to create this kind of burden for a man out of a surprise. I suppose the only answer 1 can give is to counsel some degree of tax awareness and financial planning so that people are prepared for the capital gains tax when it happens.
It is an emotional issue. I understand the emotion behind it. 1 cannot agree with all of it because I think some of the alternatives, as I have tried to demonstrate here, would make things potentially worse for our economy. Therefore, I hope the Hon. Member will take that into consideration. We appreciate the input he has given us but 1 hope that he will look at some of the alternatives which might be much worse.


Gordon Edward Taylor: Mr. Chairman, I want to make one point which I think the Hon. Parliamentary Secretary misses entirely. It is wrong to charge capital gains tax on the value of land which it cannot repay. That is distortion of the worst kind, and that is the point I am trying to make. An average taken of all the land value does not represent the productive value at all. Surely the Government could accept the statement from a qualified evaluator saying that certain land will produce so much and should be valued at that amount. It should not be done by taking a figure out of a hat, as many of the officials in the Department of National Revenue are doing today, and not accepting the evaluated value. The officials should not simply say the value is $800 an acre or $500 an acre, as it is in the case I mentioned. The evaluator says that it will never repay any more than $200 per acre. That is what I want to emphasize, and when the Hon. Member considers this he will see that it is a distortion of the worst kind.


Some Hon. Members:: Question.


Roderick Blaker: 1 had intended to recognize the Hon. Member for Winnipeg North.


David Orlikow: Mr. Chairman, it is almost six o'clock. Can we call it six o'clock?


Roderick Blaker: The Hon. Member suggests we call it six o'clock.


Douglas Glenn Fisher: Let us go on until six o'clock.


David Orlikow: Mr. Chairman, I would ask the Minister to explain why we give this kind of special concession which is,
December 19, 1983

according to his illustration, a very big concession to this group of people. He used the illustration of a person under the system with an income of $60. After the inflation factor was taken into account and the capital gains tax, which is half of the regular tax, the tax on the $60 income would be $3.50. This is a tax rate of under 6 per cent. I cannot think of a salary earner who would not like to have his tax at less than 6 per cent. Perhaps the Minister can explain tomorrow morning the justification for this.
Progress reported.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Howard Edward Crosby: Mr. Speaker, my presentation today relates to a question 1 directed to the Minister of Supply and Services (Mr. Lapointe) on December 15, 1983 concerning the purchase of coal by his Department for the Department of National Defence for use at Canadian Forces Base Gagetown.
To put the question in context, let me explain the historical background. Canadian Forces Base Gagetown for many years utilized coal to produce its requirements for heat and other energy purposes. During that period of time the coal has normally been purchased from the Cape Breton Development Corporation which operates coal mines in Cape Breton, Nova Scotia and in some cases from the New Brunswick Coal Corporation which operates mines in Minto, New Brunswick, and in other places. I understand that over the years this coal supply contract was the subject of tenders and normally either the Cape Breton Development Corporation or the Minto mine would have the most acceptable tender.
1 understand that more recently in 1983 the coal contract was again put out to tender for the supply of approximately 17,500 tonnes of coal with no particular specifications and bids were accepted on that amount of coal. As it happened the successful bidder was not Cape Breton Coal Development Corporation or the Minto Corporation but another company which stipulated and eventually supplied coal mined in the State of Kentucky.
I became aware of this situation when I watched the news report that described the shipment of this amount of coal to the Port of Saint John. Not only do we have a Canadian
Adjournment Debate
Forces Base supplied with coal mined in the State of Kentucky, it was brought to this country on foreign marine carriers with all the expenses attendant upon that kind of transportation. Had the coal been purchased from Devco it would have been shipped from Cape Breton by Canadian National Railway or another local Canadian transporter. We are not only losing for the Canadian economy, and particularly the economy of Nova Scotia, the amount of the coal sale but we have lost the opportunity to transport that coal and all the other things connected with the supply of that amount of coal.
1 suppose the Minister of Supply and Services or the Minister of National Defence (Mr. Blais) who answered the question in the House on September 15, 1983 will respond that the Government made the best deal available at the time in response to the tender. Of course, that requires us to deal with the price of coal as supplied by the Cape Breton Development Corporation.
1 want to make the point very clearly, and I will be very interested in the Minister's reply, that there is more than price involved. Here we have the ludicrous situation of the Government of Canada, through the Department of Supply and Services, buying coal from a competitor of its own agency, the Cape Breton Development Corporation, adding in the result to the astounding deficit of that Crown agency.
Let me speak very briefly about the situation at the Cape Breton Development Corporation. Recently the President of the Corporation announced that the deficit of the Corporation for the current financial year would approximate $62 million. According to newspaper reports, this shocked the Minister of Industry, Trade and Commerce (Mr. Lumley), who is the Minister responsible for regional economic expansion, the Minister in charge of the Cape Breton Development Corporation.
Time and time again over the years the Auditor General has reported about transactions between the Cape Breton Development Corporation and the Government of Canada, complaining about the loose financial arrangements between the two emanations which in fact are principal and agent, the Cape Breton Development Corporation being a Crown agency. Any failings of the Cape Breton Development Corporation have to reflect back on the Government which is the sole owner of this organization. It has the sole and complete responsibility through its board of directors, which it appoints, for the operations of that organization.
It is no answer to say that the Government put the contract out for tender and awarded it to the lowest bidder in terms of price. That is not the issue. The issue is the relationship of the Government of Canada through its Crown agency, the Cape Breton Development Corporation, to all of those persons who are affected by their activities. The persons affected by this activity are the miners of Cape Breton who for years have worked diligently to preserve the operation of the Cape Breton coal mine as a viable enterprise.

December 19, 1983
Adjournment Debate
As a result of this decision on the part of the federal Government, those miners are deprived of the $1.3 million proceeds of the sale. That could have been used to decrease the deficit of the Cape Breton Development Corporation and pay the salaries to those miners. When you divide that $1.3 million by a wage in the area of $25,000 to $26,000 annually, that would employ 50 Cape Breton coal miners. 1 use that only to put the matter in perspective and to indicate how important this transaction is to people in Nova Scotia, particularly people in Cape Breton employed in the Cape Breton coal mines.


Mr. Dave Dingwall (Parliamentary Secretary to Minister of Energy, Mines and Resources):: Mr. Speaker, I congratulate the Hon. Member for Halifax West (Mr. Crosby) who has suddenly found a great interest in and concern for the coal miners of Cape Breton. As a member on the Government side, I thank him for his interest and for verbalizing his real concerns in this matter as they relate to the development of the economy in Cape Breton.
Let me take the opportunity to inform the House and the general public that the Hon. Member is talking out of both sides of his mouth. He supports the Leader of the Conservative Party who says they want to reduce the deficit. However, when a Crown corporation comes to the forefront and he can make a bit of cheap political hay, he takes a different course. I say to the Hon. Member for Halifax West that there will be many opportunities of debate when he can outline his stand on a lot of issues.
The Hon. Member talked about a deficit of a Crown corporation administered by the Government of Canada. That Crown corporation is selling coal to a provincial Conservative Government in Nova Scotia and it is not receiving a fair price for the coal. If it were, the Hon. Member would not have the opportunity, the nerve or the audacity to stand in the House and condemn the Government of Canada. It is John Buchanan, the supporter of the Leader of the Opposition (Mr. Mul-roney) and the Hon. Member for Halifax West, who will not under any circumstances give a fair and just price for Cape Breton coal.
Those are some of the facts, Mr. Speaker. The Hon. Member for Halifax West hides behind mirrors, just as does the Leader of the Opposition. In Calgary, the Leader of the Opposition gave one speech; in Nova Scotia, he gave another. The Hon. Member for Halifax West has the same attitude. In Cape Breton, he is all for the miners and wants to support them. When he is in the big Halifax Club in Halifax, what does he say? He says: "Damn the Cape Bretoners, we give them too much". That, Mr. Speaker, is where that Member stands when it comes to the price of coal.
I would like to add something else to the record, Mr. Speaker. This particular individual and his Party have advocated relationships with the United States time and time again. May I remind him of a GATT Agreement with the United States to which Canada is privy. Are we to break that agreement because the Leader of the Tory Party and what I
would call his "finker" from Halifax West say that we should now breach that particular agreement to suit a particular contract? The comments made by the Hon. Member are absolutely shameful. He is hypocritical. In addition, Mr. Speaker, he does not have the audacity to go to Cape Breton and share his so-called biased views with those people.


TOURISM-TAX ON CANADIAN ADVERTISING LITERATURE-PROPOSED UNITED STATES LEGISLATION
Mr. Maurice Foster (Algoma):: Mr. Speaker, on December 15, I put a question to the Minister of State for Small Businesses and Tourism (Mr. Smith). I asked him whether he was conscious of the fact that there was a Bill before the United States House of Representatives which would impose a tax or a duty on Canadian tourist literature entering the United States. This Bill is sponsored by Congressman William J. Hughes from the Second District of New Jersey. If this Bill were to be passed, it would impose a tax on toursit literature entering the United States.
This Bill before the House of Representatives is very important to many areas of the country which depend upon tourists from the United States. Particularly in my own constituency which includes Sault-Ste-Marie, Algoma and Manitoulin, literally thousands of tourists come across the border each year for vacations in the various communities in the district.
A great deal of advertising done in the United States is by sportmen's groups, tourist associations and travel associations which attend the sportsmen's shows and the like in the American States of Ohio, Michigan and Missouri. Of course, the members of these associations take with them travel brochures and so on. In fact, last year, the Government of Canada, through the employment-related initiatives program, sponsored a program of tourist promotion for our area throughout the northern mid-western states to the tune of $119,000. The people involved with this program took with them some 60,000 brochures related to this one single promotion for the Manitoulin Tourist Association.
If this Bill before the United States Congress were to pass, it seems that a duty would be imposed on these brochures. The people from these associations go to the mid-western states for these annual travel and tourist shows. If United States House of Representatives Bill No. 4074 were to impose a 9 per cent or 10 per cent travel sales tax or duty similar to the kind of sales tax we have on American literature entering Canada, this would, of course, represent a serious expenditure for these associations from Canada which go to the United States to promote their industry. This industry has been suffering in the last year or two with the downturn in the North American economy.
I put my question to the Minister of State for Small Businesses and Tourism, and suggested that when the Minister of Finance (Mr. Lalonde) brings in his next budget, which I anticipate within two or three months, he consider dropping the 9 per cent sales tax on tourist promotional literature which
December 19, 1983

comes across the border from the United States. If that were done 1 am sure the proposed Bill, which is apparently designed to retaliate against our present tax, would likewise be dropped. The International Association of Travel Exhibitors has written to many tourist operators in my constituency pointing out that the Bill is likely to be passed in the House of Representatives unless some action is taken on the 9 per cent sales tax proposed by Canada on its travel information.
I suggest to the Parliamentary Secretary that with all his power and the perogatives of his position he should be able to say to the Minister of Finance-and perhaps he could make a commitment to do so this afternoon-that in the next budget he should drop this sales tax and thus avoid retaliatory action by the House of Representatives in Washington.


Douglas Glenn Fisher: Mr. Speaker, my good friend, the Hon. Member for Algoma (Mr. Foster), has once again represented the interests of his constituency in an outstanding fashion. I am sure the people there in the tourist industry are proud of the representations he has made in the House on their behalf. 1 can assure them that he does this consistently in his role as chairman of the Ontario caucus and in his activities as a private Member in the chamber.
Our concern is that the issue has been somewhat misunderstood by the Americans and is being blown out of all proportion. We are quite anxious to see that it is well understood by people on all sides. The 9 per cent federal sales tax is generally applied to most goods that are either manufactured in Canada or imported. It is quite important to understand that fact. Until two years ago, Revenue Canada informally allowed some importation of tourist brochures, partly on the basis that it was such a small activity and partly because much of the material had no commercial value. It then become clear that there is a degree of unintended discrimination taking place. A Canadian businessman could have his material prepared and printed in the United States. It could then be imported to Canada, thereby escaping the 9 per cent tax which everyone else has to pay.
It is important to note that problem of discrimination. We were merely trying to even out the application of the tax so that it was fair to everyone. The tourist operator who imported material would be given the same privileges and would pay the same taxes as the tourist operator who had the material printed in Canada. We have been quite careful to inform the Americans of this. I am told that the American ambassador, His Excellency Paul Robinson, has been in touch with the Minister of Finance about the matter. The Minister apparently has taken the opportunity to explain that this is not intended as an attack on American material but is intended to even out our own domestic taxation.
There has been some question about non-profit materials and about the type of activity that is taxed. Sometimes government materials are being taxed. We have pointed out to the Americans that non-profit groups in Canada pay the tax. This is not a case where we are singling out a worthy group for some form of punishment.
Adjournment Debate
So, within that context, I would make it clear to the Hon. Member that the tax is not intended as a punishment to his constituent. It is certainly not intended as a deterrent to the American printer, American exhibitor or the American tourist operator. We are simply trying to ensure fair application of the tax inside Canada. I will certainly take the representations the Hon. Member has made about the Budget. However, I am not the Minister of Finance so my commitments would not be too meaningful in that regard.


LABOUR RELATIONS-INTRODUCTION OF NEW TECHNOLOGY-REQUEST FOR WORKERS' BARGAINING RIGHTS
Margaret Anne Mitchell: Mr. Speaker, one year ago the Catholic Bishops said that unemployment was the most urgent problem facing Canada. Canadians agreed. More than 1.5 million Canadians remain unemployed, many of them young people and women. Unemployment continues to hurt men and women in this country who suffer increasingly from mental illness, family breakdown, the high cost of living, while they lose confidence and skills. Needless to say, any man or woman who is unemployed and looking for a job received nothing from the Throne Speech on December 7. The overwhelming failure of this Liberal Government is in its lack of commitment to jobs, its lack of a comprehensive strategy to get Canadians back to work and its refusal to accept full employment as a national goal.
On December 9 I had hoped to question the Prime Minister (Mr. Trudeau) on his lack of commitment to full employment for Canadians. However, neither he nor most of the senior Cabinet Ministers were in the House at the time to be accountable to the people of Canada. I therefore asked the Minister of State for Economic Development (Mr. Johnston) to establish full employment as a national priority goal for Canada. He alleged that every program, every project, has been directed to that very need and that 350,000 new jobs have been created in the past year. He conveniently neglected to mention that unemployment continues at more than 11 per cent in Canada and that 1.3 million fulltime jobs have disappeared since August, 1981.
I urged the Government and the Minister to follow the example of European countries such as Sweden and Austria which have successfully established full employment as a national goal and as a result have reduced unemployment below 3 per cent. The Minister of State for Economic Development tried to deflect the issue by referring to the Soviet Union. I would suggest, Mr. Speaker, that it is far more relevant to make comparisons to social democratic countries with similar parliamentary traditions to our own, as I did. The Minister, with typical Liberal blindness, also ignored in his answer the social costs of unemployment which have been documented recently by the Canadian Mental Health Association. Their report is a stark indictment of the Government's lack of action to create jobs and the impact it is having on people and their families.

December 19, 1983
Adjournment Debate
The Minister of Employment and Immigration (Mr. Roberts) said that the Throne Speech promises it will assist
125,000	adults and youth. This means only one job for every ten people, however, who are looking for work. For the 780,000 jobless adults the measures announced in the Throne Speech, plus those already in existence, will provide help to only 35,000, or one out of every 22 unemployed adults. Many of these adults are trying to feed families. The $1 billion program for youth is, in fact, little more than the amount which was allocated for youth earlier this year.
I also tried to question the Minister on the impact of technological change which is adding to unemployment. This Government intends to aid in the development of high tech industries, and we do not object to this, but it provides no protection or alternative areas of work for workers who are going to be displaced by new technology. Women in traditional office jobs are the first victims to go. We in the NDP believe that workers must be involved in the planning and timing of technological change which will affect them. They must have options for retraining or other alternate kinds of work.
I have urged the Government to assist in expanding a range of community service jobs and co-operatives as one alternate type of job sector. 1 have also asked for benefits and protections for part-time workers, more flexible and earlier pensions, and increased family benefits to ease the stress of unemployment.
The NDP will never accept 10 per cent or 11 per cent unemployment as a given in a country which has an unlimited potential to employ its human resources more productively. Other countries are planning for human needs in a time of massive change and so must we. Canada must invest in people and permanent jobs rather than paying the high cost of unemployment insurance, welfare and social disintegration.
Technology must serve the needs of the people, rather than making them subservient to technology. We are particularly concerned by the projections that women will bear the brunt of the negative employment effects of new technology and of course this is already happening.
In Women and the Chip, Heather Menzies predicts that the unemployment rate among female clerical workers could escalate as high as 33 per cent by 1990. These women are among the most vulnerable of all workers.
The NDP has specific proposals to deal with technological change, including amendments to the Canada Labour Code to provide a model for provincial legislation with respect to technological change, and to provide a framework for the introduction of technology where workers are unorganized. This should include involvement of workers in decisions on the introduction of new technology, making the introduction of technological change a negotiable item in contracts, and providing a minimum of six months to one year notice when technological change is contemplated. Where workers are unorganized, joint technology committees should be set up in
any workplace with 50 or more employees to consult and bargain over the introduction of new technology.
We also propose that progress be made towards shortening the hours of work by shortening the work week, paid educational leave, providing longer annual holidays and optional early retirement.
We would vastly expand opportunities for retraining of workers affected by technological change, with assistance from both Government and employers. The levy grant system is one method to ensure that employers pay their share of the country's training needs.
Finally, it is essential that the Government plan with provinces and with people for alternate areas of work. We have unlimited needs and potential jobs in the arts, literature, research, community services, food production and environmental projects, to name only a few. If the Government implemented these recommendations it would go a long way toward counteracting unemployment.


The Acting Speaker (Mr. Blaker):: Order, please. I am sorry to interrupt the Hon. Member but, as I think she realizes, her time has expired.


Mr. Normand Lapointe (Parliamentary Secretary to Minister of Labour):: Mr. Speaker, regarding the concerns expressed by the Hon. Member, I would like to take this opportunity to point out that the Canada Labour Code is in the forefront of Canadian labour legislation on the matter of establishing the right to negotiate technological change. If the collective agreement contains no specific provisions to help employees affected by technological change and no alternative method to resolve disputes arising from technological change exists, the Canada Labour Code provides for sending a notice to negotiate and for negotiations as soon as an employer makes known his intention to introduce significant technological change. With the approval of the Canada Labour Relations Board, it is then even possible to reopen negotiations on a current collective agreement, and the employer cannot introduce any changes until agreement has been reached or the conciliation process has been completed.
When these provisions were adopted by Parliament in 1972, they were considered to be radical by many corporate leaders and businessmen. Up to now, only three provinces have adopted provisions on technological change. The purpose of the provincial legislation is the same as in the case of the federal legislation: to give both parties specific responsibility for negotiating conditions of implementation that will keep the impact of technological change on the employees affected to a minimum.
Mr. Speaker, our experience in applying the federal provisions has shown that the parties act responsibly and approach the issue of technological change through the collective bargaining process. We are convinced that the method adopted by
December 19, 1983

Parliament in 1972 is the right one and that we have achieved our objective which consisted in facilitating the introduction of technological advances while protecting employees against any infringement on their rights.
Adjournment Debate


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

Tuesday, December 20, 1983