1984-02-07

GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Thursday, February 2, consideration of the motion of Mr. Lalonde that Bill C-12, an Act to amend the Federal-Provincial Fiscal Arrangements and Established Programs Financing Act, 1977, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
Mr. Robert Wenman (Fraser Valley West):: Mr. Speaker, sometimes in the House of Commons we speak about Bills of great importance. Perhaps even more often, Bills like this finance Bill can slip through without there being a recognition of the major and serious impact they will have on our education systems, not only today but for future generations.
With this Bill we are setting an attitude that education is not as important as it used to be.
Mr. Speaker, education not only is as important as it used to be; in fact, it is considerably more important. We remember that in about 1948, after World War II, the reigning opinion was that we should pump money into education and make a great effort in that direction, believing that it would prove to be the answer to all our problems. Those great hopes and the great expenditures for the tremendous development of education across the country, have perhaps not been fully realized. That may be because we have just directed money and have not provided incentives.
After 1948 we moved into a time of professionalism. We felt that perhaps parents and other institutions did not have the answers but that the professionals educated in our universities had. We elevated the status of professionals in society, in our hopes and expectations, only to Find out that they did not have all of the answers either.
We made a minor thrust into vocational education. The federal Government took a bold and profitable initiative by establishing vocational wings on our high schools, our colleges, technical schools and vocational schools. It was the correct thrust and it could stand further impetus today.
Beyond those thrusts, Mr. Speaker, in the last few years we have seen a decline in the evaluation of education. Starting in the 1970s we found that enrolments were declining as people had less confidence in university education as an answer. We had declining enrolments. In fact, as those enrolments declined, we thought perhaps there was a type of peaking in education.
[DOT] (mo)
However, in the last few years we have seen a reversal of this. Again our universities are filled. Our young people are demanding to get back into the educational stream as an answer to job security and a meaningful fulfilment of their lives. Education is a tool not just for students but to be used to bring our society forward. But we are falling behind just at a time when we need a completely new look at education as a continuing process, not in terms of self-fulfilment but in terms of a continuing process as it relates to the growth of our nation. Instead of cutting back, holding the line, calling for restraint, we need a general overhaul of our education system in Canada. We need leadership for our education system from the federal Government.
Just as we got that thrust which gave us vocational and technical schools, we now need another thrust relating to technology. The secretaries which we hire in our offices today are becoming irrelevant because of another machine or computer. We need more training not only on how to use computers but to service those computers, to build them. We need innovative technology not just in computers but in the whole way in which we do business. Canada must be made more productive in order that it can compete in international markets.
We are losing out to systems of education in Japan, for example, which combine educators with business people and with companies, and project the needs of education on into the next decade and the decade beyond that. We do not have that kind of educational planning and vision in Canada today. We are losing our productive capacity because our educational system is not providing people who in fact can carry us on, whether it be in research and development or any kind of innovation. That means that Canada will die as a major world power in an industrial sense. That reality is being read in every statistic which is Canadian, and this decline is going to be further increased by government restraint in this field at this time.
The first concern of this House of Commons should be for the impact this will have on the future of our nation. We have heard other Hon. Members speak and we will continue to speak about the impact this restraint is having. Certainly, it is

February 7, 1984
Established Programs Financing
important to other Governments, to individual Canadians, our young Canadians and future young Canadians, that our university system is at a very high level. The most immediate impact, of course, is the reality of U.B.C. expecting a 33 per cent increase in tuition fees. Where is that 33 per cent increase going to come from? Ultimately it is going to have to come out of the pocket of the provinces, and if not the provinces then it must come out of the pocket of the individual student.
What kind of dilemma will the individual student be in when he has a 33 per cent increase in fees passed on to him not by the provincial government but by this Government? The Liberal federal Government of Canada has passed that increase on to the province, who in turn has called for restraint and passed it on to the student. That student is already looking at this 33 per cent increase in the fall. He is asking how he can accommodate that increase when he cannot pay what is already required. He cannot pay his tuition fees because he cannot get a summer job. If he cannot get a summer job to earn the money, how is he in fact going to pay the fees to enable him to go to university?
The problem is compounded by the interaction of government programs. That 33 per cent increase is only symbolic of increases across the country. If you look at the cost of education, British Columbia spends very well on a per student basis compared to other provinces across the country. It is reflected proportionately in every institution of higher learning in Canada. Every time we take these potentially productive students, Mr. Speaker, on whom we have spent a great deal of money just to get them to first, second or third year university, or even to graduation, and then prevent them from developing the potential brain power and turn them back into the service industry or the unemployment line, we damage not only those human beings but the entire structure and future of our nation. That kind of short-sightedness is not the vision Canadians are looking for from this House of Commons. The lack of confidence pervading this nation now is part of the depression. We are sending the wrong signals.
I have great concern, Mr. Speaker, about this particular cycle being set up and the impact it has on our students, our provinces, and on the fabric of Canadian society. I suppose it is again too late. In spite of the fact that Member after Member stands up in our House of Commons, our democracy, and speaks the will of Canadian students, of the Canadian people, we, too, are feeling the sense of frustration and concern that we are not being heard. Canadians are being frustrated in trying to reach out to the Government with a message but the message is not getting through. I look up and see young people sitting around us here today. I see their parents. I am concerned for them and their children.


Ms. Mitchell:: What about Social Credit cutbacks for education in B.C.?


Robert Lloyd Wenman: Now you see, Mr. Speaker, one of the best points is made right here by the NDP. She is absolutely right;
what about the cutbacks at the provincial level? Why are the provincial governments-not just British Columbia but Ontario, Alberta, Saskatchewan, Manitoba-cutting back? You can go all the way across the country to the Maritimes and you will find there is a restraint program, cutbacks in education in all those provinces. Why is it common to all provinces? Because it comes from a common source-the federal Government. Those provincial governments have no option but to cut back and then they become the villains. I am ashamed, Mr. Speaker, that the NDP Member is sitting here condemning provincial governments when in fact it is the federal Government which must be taken to task and condemned. This is where her responsibility lies. Let her stand up here and condemn this Government and its program instead of trying to play a political partisan game back in British Columbia or any other province.


Ms. Jewett:: They did not pass on a nickel of the increase.


Mr. Miller:: Come clean. Bob.


Robert Lloyd Wenman: The problem, Mr. Speaker, is that the NDP recognize they have no hope in the House of Commons of Canada. They are still fighting the election back in British Columbia. If they would get off that and speak to the subject here, they would be way ahead. But that is why they are always going to be sitting over there in that little rump, and that is why so many of them have to return to the Province of British Columbia to try and run politically, because there is no future here. Well, there is no future for the NDP there either, Mr. Speaker.


Mr. Fulton:: You were going to run as a Socred; tell us about that, "Socred Bob".


Pauline Jewett: "Cutback Wenman".


Mr. Crosbie:: The three witches from Macbeth.


Robert Lloyd Wenman: Boil and bubble, toil and trouble; that is what they are, yes!


James Ross Fulton: At least we are not Socred. At least we are not stupid.


Robert Lloyd Wenman: The reality, Mr. Speaker, is that we have a House of Commons which is too much divided by partisanship. It should be keeping its eyes above that horizon and on individual students in every province of Canada. Mr. Speaker, as I stand here today I am speaking on behalf of the Government of Manitoba which is equally concerned with this Bill and with the cutbacks and what this will mean to this NDP Government. I would like to see more money for the-


Some Hon. Members:: Hear, hear!


Robert Lloyd Wenman: -and the NDP Government of Manitoba. I want to see more money for the Conservative Government of Saskatchewan that has to build an educational recovery from
February 7, 1984

the many years of abuse in Saskatchewan. I know about the abuse in Saskatchewan and the lack of educational capacity there. I want to see this Bill for every province and every type of government to get those increases that are necessary so that they are passed down and our students across the country are not cut off.


The Acting Speaker (Mr. Guilbault):: Order. The time allowed the Hon. Member has expired.


Edward Allan Miller: Mr. Speaker, I am pleased to have the opportunity to register my strong opposition to the restrictions placed on post-secondary education through Bill C-12, the retroactive extension of the six and five program to post-secondary education. I find it extremely disconcerting to see the federal Government compounding the problems young Canadians are finding in their attempts to turn the uncertain job situation around by returning to college, university or trade school to prepare themselves for an improvement in the job market. The demand for post-secondary education is at record highs in many of our schools because of our inability to employ Canadians as a result of our insatiable thirst to export raw material and import foreign capital for our industries. Inadequate resource planning and little Canadian decision-making in secondary manufacturing and employment have left our country with little more than Liberal rhetoric about recovery and job creation, with unemployment at 11.1 per cent nationally and 13.6 per cent in British Columbia.
The Government should be aware of the impediments to educational opportunity in British Columbia and how the reduction in funds will be an excuse for further reductions of assistance to education from an already stingy provincial government seeking any means at its disposal to cover up its incompetent financial affairs and resource mismanagement.
During the 1960s and 1970s students on Vancouver Island could look forward to employment opportunities in the forest industry as holiday relief at reasonable rates of pay through the companies and unions such as the IWA, the Canadian Paperworkers Union and the Pulp and Paper Workers of Canada. Money earned permitted return to college and university and paid for most of their tuition, lodging and other living expenses. Work with the provincial government, municipalities and local businesses also offered an opportunity to offset educational costs to a large degree.
These opportunities no longer exist. Workers with years of experience and seniority are on unemployment insurance or welfare as companies, the provincial government and municipalities practise restraint or rationalize the work force. Poor economic performance and low consumer demand also reduce work in local service industries and compound an already serious unemployment picture. Job creation programs sponsored by the federal Government offer no long-term, adequate provision to prepare for another year of education and job training, except for those young people with parents assisting in the payment of their educational fees.
Established Programs Financing
The response of the Province of British Columbia to the heavy demand for educational training before and after high school is to reduce budgets, lay off staff members and reduce options formerly available. The reponse from post-secondary education to budget cuts is to limit enrolment at the University of British Columbia, increase tuition fees by 33 per cent over last year, and offer a financial barrier to education which the New Democratic Party vehemently opposes. Educational opportunities should be determined by academic and vocational ability, not ability to pay, as the Province of British Columbia and the federal Liberals seem to imply.
Can Canadian political Parties be serious about the importance of our country meeting the challenge of the new technology, about increasing our competitiveness through increased productivity and providing our industries with well educated, skilled, productive workers, when they then turn around and deny young people the space and financial ability to obtain the education required to be competitive with our industrial rivals? Without the same commitment to education and job training, we will continue to hear Tory governments complain about unproductive workers and the difficulty they have in attracting business. This nonsense has been used too long and is jeopardizing an entire generation of young people who believe in education as a way to job security, productive work and a standard of living promised by North American society.
Canadians need to expose this fraud. Cutbacks in EPF federally compound an already serious problem in British Columbia. A provincial government capable of mammoth expenditures of funds to megaprojects cannot maintain its public school and post-secondary education system.
We should be insisting on the corporate sector paying fair tax to permit government to educate young people for the Public Service, the business community, for labour leadership, research and engineering and for social service jobs to make our country what we think it is-a progressive, caring, capable society which is able to provide employment and take a leadership role in international affairs. Instead, over $2 billion of profit was invested outside of Canada in 1982. Governments falling short on resource exploitation now wish to exploit youth unemployment by penalizing them for wanting to receive the education that they may well need in an increasingly complex industrial world.
We need a commitment to excellence in fields of endeavour we have established for ourselves in the past. Research and development continue to elude Canadian industry as our branch plant economy resists work in Canada for parent companies elsewhere.
Still, the Liberals in Ottawa and the Social Credit in British Columbia encourage more foreign ownership and resource export at the expense of highly skilled, well paid jobs. Once again our young people wonder when they will find their first job or one that is at least suitable to their training. The six and five program is reflective of the short-sightedness of the feder-

February 7, 1984
Established Programs Financing
al Government and its own political commitment to power through polling advice.
I am particularly incensed because I have seen the real contribution Malaspina College in Nanaimo and North Island College in Port Alberni have made to their cities and to Vancouver Island residents, both young and old. They have given an entire new meaning to many young people unable to proceed immediately to vocational schools or universities but with a desire and ability to excel in their chosen field. Cutbacks threaten to jeopardize the programs and the spirit benefiting our residents. Rather than meeting the challenge for increased education and employment training, federal and provincial governments remain complacent with long waiting lists and longer unemployment periods.
The best investment for our future is in our young people, to show them we care for their chances for a life many of us have enjoyed because we lived through good times in the 1960s and 1970s. Youth unemployment is our most critical social issue today and could be the legacy we leave as the most serious evidence of a failing economy and a society's unwillingness to meet the failure.
Malaspina College and educators in China have recently agreed to an exchange of teachers. Eventually we will be seeing students going to mainland China for the continuation of their education. The benefits to our community will be important. By exchanges between our two nations we will broaden our understanding of each other and develop an appreciation for the arts, business and cultures and closer ties with the world's most populous nation.
The agreement was reached as a result of China's concern for a lost generation of Chinese youth whose education and social advancement were stifled. Canada, while offering assistance, is itself failing to recognize the beginning of our own lost generation through high unemployment and the unwillingness of governments, both Conservative and Liberal, to make the connection between lack of economic planning and control and high unemployment and the growing disparity in the incomes and educational opportunities of Canadian families. We do not need an elitist educational system to go with arrogant, uncaring governments. We need a commitment to young people, to their education and to full employment.
Instead, the federal Government presents us with Bill C-12 which is part of the six and five program that was supported by the Conservatives in 1982 and implemented because of the Liberals' reading of the polls showing the fear of the public toward deficits and anger at the job security incomes of the public sector. Both federal and provincial governments were prepared to fight inflation through higher unemployment, as is seen by the 1.5 million Canadians who are unemployed, including over 250,000 in the former "have" Province of British Columbia. Now British Columbia faces growing unemployment, growing deficits and tighter controls on education from the province's refusal to pass on the federal contribution to post-secondary education. In fact, in 1983-84, British Columbia did not increase operating grants to the postsecondary educational system, not even the increase in the
fiscal transfers for post-secondary education provided by the federal Government. In 1984-85 it will demand a 6 per cent reduction or $18 million less for the three universities in British Columbia. The only provincial government in Canada that passed on the entire contribution was the NDP Government of Manitoba, which supplemented it by another 3.4 per cent of its own funding.


Mr. John A. MacDougall (Timiskaming):: Mr. Speaker, it gives me great pleasure to take part in the debate today in order to give the House of Commons my comments and observations on this very important Bill, Bill C-12. The riding of Timiskaming is located in northeastern Ontario. Many young people have to leave Timiskaming in order to further their education. We are fortunate to have in our community, in Kirkland Lake and Haileybury, two campuses of the Northern College which offer a very high quality of education and have a very high quality of staff. I must say that our concerns are grave. They are the concerns of young, educated secondary school graduates who have to travel out of my riding to other points in Ontario or other provinces of Canada. They are faced with the costs of accommodation and travel. Now, with Bill C-12, they will be faced with increased costs for registration. It is a mess.
Perhaps the most serious flaw in the Bill is the clause which puts financial transfers to the provinces under the smoke and mirrors plan of the federal Government, the six and five program. For over two years our country has witnessed one of the worst recessions in its history. Today 1.6 million Canadians are out of work, and the most discouraging news remains the fact that our nation's young people are suffering in these hard times.
Further, young people without a post-secondary education are hit even harder. Upwards of 24 per cent unemployment hits this group of people. These facts and figures point to one thing. In tough economic times, the last move the federal Government should be making is toward reducing funding to post-secondary institutions.
During the debate on the Bill, we have heard Hon. Members quote statistics informing the House that students are turned away from universities and colleges every year because of underfunding, lack of space, shortstaffing and lack of research funds and resources.
Limiting funding to the six and five program is a serious blow to our post-secondary institutions which are already crumbling as a result of underfunding. Several months ago during Question Period, in a question to the Minister of Employment and Immigration (Mr. Roberts) on the program of mineral production, I indicated that there were several factors governing why the program was not as successful as it could be. One reason was because the original organizers at Laurentian University in Sudbury could not find qualified and trained people to do the preliminary geological work on the
February 7, 1984

project. I find it terribly frustrating to discover advertisements in foreign newspapers asking for qualified workers in specialized fields to come to Canada to work. This proves that limiting post-secondary funding to the six and five program will do more harm than good.
We have just finished celebrating National Universities Week in Canada. We were told that certain institutions were considering lowering their standards in order to make universities more accessible to Canadians. As a Member of Parliament who comes from a riding where mining and mining technology play an important role in local economies, I can honestly say that cutbacks in funding to universities and colleges will hurt the industry. In order to be a world competitor on the international stage, Canadians must become world leaders in new and more efficient technologies. For years our Party has called for increased funding for research and development in Canada. For years the Government has not listened to that call and subsequently we find ourselves playing catch-up in an industry where we were once world leaders.
In the troubled iron ore industry, Canada was once a world-class, first-class exporter. We now find ourselves competing with countries such as Brazil which can ship one tonne of iron ore to the Great Lakes region of Ontario for $10 per tonne cheaper than is the case with a firm in northern Ontario. If we are to regain and retain our lead on the world stage in mining and other sectors, we will have to increase the nation's manpower. 1 urge government Members to heed the words of the Hon. Member for Brandon-Souris (Mr. Clark) on January 27 in this debate. As a professor at a respected university, he called upon the Government to wake up and witness the fact that underfunding is seriously affecting the type and quality of work which now takes place in the post-secondary system. Shortages of space and books in libraries across Canada are stunting the educational growth possibilities of young Canadians.
In the midst of the crisis within our educational system, what does the Government do? Instead of responding to the challenge and increasing funding to the provinces, it cuts back funding to the six and five level. On top of that, it introduces Bill C-12 with a retroactive clause to April 1, 1983. It is somewhat fitting that such a foolish move would take place on April Fools' Day. Over 700,000 Canadians of all ages are enrolled in either full or part-time studies at Canadian universities. When these men and women graduate, they will be the nation's greatest asset. They will be the ones who will need full-time positions in the high technology industries which are sprouting up across Canada. Instead of stunting their growth potential through limited and unrealistic levels of funding, the Government should be expanding the resources of post-secondary institutions.
In my riding in Ontario Bill C-12 will result in a drop in funding of $41.7 million in 1983-84. The following year the drop will be even more significant-it will be a loss of $92 million, the largest of any province. Surely the Minister of State for Finance (Mr. MacLaren) and his boss, the Minister
Established Programs Financing of Finance (Mr. Lalonde), realize the serious consequences of allowing the Bill to pass.
Now is the time for the Government to look at the long-term implications of severely hurting the growth potential of the nation's young minds. As a member from northern Ontario and as a Member of this side of the House, I urge the Minister of Finance to take a second look at Bill C-12.


Margaret Anne Mitchell: Mr. Speaker, Bill C-12 will escalate the crisis in post-secondary education by imposing the six and five restraints retroactively on educational funding. At a time when there are unemployed in great numbers and technological change demands higher education, young people are being deprived of access to universities and colleges across the country. Women, who are increasingly raising children on their own, are condemned to remain in low-paying job ghettos because they cannot afford university tuition fees, and support services such as daycare are usually non-existent. Our country is squandering our most valuable human resources while an unwanted generation remains at home watching television or wandering the streets hopelessly.
The federal block system of funding education has failed. Provinces also are guilty of cutbacks. B.C. refused to pass on federal increases last year and have cut back post-secondary funding generally, and drastically. As a result, universities and colleges are cutting programs, increasing class sizes, raising tuition fees and denying many students access to education. Student aid has decreased 40 per cent this year.
Bill C-12 is encouraging an educational system which increasingly caters to a wealthy elite. We need well-educated, skilled young people to be competitive in our high technological world. Underfunding of education is forcing us backward.
I want to illustrate this with several human examples from my riding of Vancouver East. Last week I talked with a group of Italian constituents who, like many immigrants, have worked very hard and sacrificed so that their children can have an education and get ahead in life. They had two very strong concerns. Unemployment has hit most families. Even skilled trades people are having to go on unemployment insurance or work in very low paid jobs. Many need retraining as their skills become obsolete, but training programs are not available for middle-aged workers. These people are more worried about their children who cannot afford university tuition fees and must remain unemployed.
This puts great stress on families. One father wondered what would happen to his son who wants to be a mechanic. There is a two-year waiting list. Even then, he is not sure of getting on it. Meanwhile, where can he get practical experience? Another had a son who graduated in urban planning, but he cannot get a job because he has not had work experience. The need for expansion of co-operative work and training experiences in our post-secondary education system is very evident as is the need for increasing adult training.

February 7, 1984
Established Programs Financing
In Vancouver public schools, 52,000 students have English as a second language. Federal and provincial cuts to ESL programs mean many of these students will be handicapped in their future education. The federal Government has neglected its responsibility to immigrant families. I want to mention in particular its responsibility to mothers who often remain in the home and are handicapped because of the language barrier.
There is a massive outcry against the provincial cuts as well as federal cuts to universities and colleges in British Columbia. George Petersen, President of the University of British Columbia, says: "If you are poor you may have a hard time getting a university education from now on". The university is raising tuition fees by 33 per cent. Only the brightest students will be accepted for enrolment, and student aid is restricted. Other universities and colleges are forced to follow this trend because the Social Credit Government has refused to distribute federal funds fairly or to share costs. Funding will be curtailed even further by Bill C-12.
I wish to quote Christina Taulu, a parent advisory representative in Vancouver East. She has called university restraints racist and discriminatory. English programs for new Canadians, higher university fees and stricter university requirements are making it very difficult for children from the east end of Vancouver to have access to an education. She said: "Unless you're rich, you're not going to get very much education". She further stated:
You're going to have a greater disparity between the east and west side of Vancouver .. . the rich can get into universities. But the poor? Forget it... I call it discrimination. It's a form of racism ... children from Vancouver's east side often start out at a disadvantage ... Many children have parents for whom English is a second language.
Another parent said:
"Higher fees are making it more difficult for children from low and middle-class families ... rumours are that the provincial government will drop the grant portion of its student aid program. Meanwhile, the minimum grades required to enter universities are expected to rise."
Fligher education will be harder to get for children of non-English speaking families. This year, the Vancouver School Board plans to cut $800,000 out of its ESL programs as a direct result of provincial government cutbacks. Another parent said:
I feel that a lot of very qualified young people are going to be lost. They won't be able to afford the university fees ... It's the long range forecast that worries me ... No jobs. No schools. No hope.
A grade 12 student at Britannia High School also spoke of the unfairness of imposed exams that do not take into account cultural and geographic differences. She said:
I don't know, but it seems to me that over on the west side of town, kids there get in a lot easier to university. When you go to the west side, it is mostly Caucasian. There's more money. Whereas here, a lot of the kids have English as a second language . .. Our chances of getting into university aren't as good . .. Life is unfair.
Finally, 1 want to point out the difficulties for women students. Enrolment of women in universities and colleges in the seventies increased by 95 per cent. In the eighties, many women are being excluded from universities by high fees. Also, vocational training options are limited. The National Training
Act is designed for men, without adequate support services such as day care. How can a woman with a child survive on a weekly training allowance of $150? How can a secretary compete with automation if retraining is not available to her?
This country must not allow our educational system to be eroded. Our citizens, regardless of income or ethnic origin, have equal rights to education, training and retraining. To survive as a nation, we must have a highly skilled work force. Federal and provincial governments must invest in education now to achieve future goals of increased human and economic productivity.


Mr. Les Benjamin (Regina West):: Mr. Speaker, any government that puts a higher priority on corporate giveaways, corporate income tax deferrals, tax loopholes for the wealthy, fighter planes that we neither need nor can use, while cutting back funding for post-secondary education, hospitalization and medicare surely has its priorities backwards. Expenditures of the nature of those in this legislation are always looked upon as some kind of expense. It is not an expense. Funds for post-secondary education, hospitalization and medicare are an investment in the nation. As a result, governments get a return on that investment far in excess of what it pays out.
Better and higher education means a better and higher income, which means higher taxes being paid. During the earning years of a person with a post-secondary education, taxes paid of all kinds are many times more than what it costs governments or the parents. Similarly, curing illnesses and keeping people healthy keeps them earning an income and paying taxes. This kind of investment should receive first priority in the budgets and legislation of any government. About the only good thing with this Bill is that we will be able to find out specifically how much goes to post-secondary education, hospitalization and to medicare. Beyond that, it is more publicity than accountability. No doubt the federal Government will put up billboards outside hospitals and universities indicating how much money it gave. It will be careful not to say how much it cut funding back. It will copy the Bill Davis tactic and put a sign in every bus and street car and on every park bench saying how much it gave.
The parliamentary task force on fiscal arrangements rejected federal cutbacks in the order of $500 million for 1982-83 and $1 billion annually thereafter. The cutbacks proposed now are far more severe than those already rejected by that task force. They amount to $1.6 billion in 1982-83 compared to the $500 million rejected by the task force. They will amount to $11.1 billion over the five year period of the new arrangements compared to the $4.5 billion rejected by the task force.
The impact of the cutbacks on the provinces is uneven and affects the so-called "have-not" provinces disproportionately to the "have" provinces. The "have-not" provinces bear 71.6 per cent of the cutbacks, have 43.5 per cent of the population and nearly 37 per cent of national output. In contrast, the "have" provinces, British Columbia, Alberta and Ontario, bear 28.4 per cent of the cutbacks with 56 per cent of the population and
February 7, 1984

over 63 per cent of the national output. It is the "have-not" provinces that are hurt the worst. The cutbacks impose an average net cost of $2,440 per family in the "have-not" provinces, over triple the $744 cost in "have" provinces. Surely that is unfair, Mr. Speaker.
The "have" provinces are equally guilty in how they fund the programs. The provinces with the least excuse are the ones that levy health care premiums. In British Columbia that amounts to $315.5 million, in Ontario $1.2 billion and in Alberta almost $216 million. Ontario provides really good grants for raising pure-bred horses and for horse racing. But it also raised Mrs. Jones' health care premium. Surely that is an unconscionable activity for a government of any political stripe.
The proposed cutbacks are much more severe than was set out in the federal Budget, which included double accounting and did not take into account the effect of federal cutbacks on equalization; the Budget suggested a federal saving of $915 million for 1982-83 but the actual saving was $1,639 billion; a net impact on provinces and territories of $169 million in 1982-83 including provincial tax increases; the latest available information puts the net impact at something near $1 billion; a saving of $5.7 billion was projected over the next five years but the latest information confirms a federal saving of $11.1 billion. This cannot do anything but harm post-secondary education and health care programs.
The federal Government and Parliament must change priorities, Mr. Speaker, and not provide corporate giveaways, corporate tax deferrals and loopholes. I know they need more money so why do they not charge a modest 6, 7 or 8 per cent interest on the $25 billion or $30 billion which has accumulated in deferred corporation income tax? At present not a nickel of interest is charged, but a modest 7 or 8 per cent would bring in an extra $2 billion or $3 billion which could be applied to post-secondary education, hospitalization, medicare and chronic care homes.
Thousands of people in this country pay as much as $10,000 per year for special nurses and $1,500 or $2,000 per month for senior citizen care. That should not be allowed. Parliament should change the priorities and see that programs like this come at the top of the list.
We must reform our tax system so that it is fair for everyone, no matter what their status in life and no matter what their income. Reform is 50 years overdue. 1 have mentioned three areas which badly need reform and which would provide additional revenue for government to distribute to the provinces for programs like this. We could then expand our health care programs and university education in a much better way.


John Carnell Crosbie: Mr. Speaker, this is a deplorable piece of legislation because the principle of it is one of betrayal. The Bill betrays the provinces of Canada, the provincial governments of Canada and betrays the universities of Canada. It betrays post-secondary institutions of Canada, it
Established Programs Financing betrays the young people of Canada and it illustrates rank hypocrisy in the actions of the Government.
There is an article in today's Ottawa Citizen about the new Minister of State for Youth (Mrs. Hervieux-Payette). That is a useless appointment but it makes the Government sound like it is doing something for youth. However, in this article the Minister herself pointed out that one in five young Canadians is without a job and future prospects look dim. Yet the House is discussing a Bill to reduce federal contributions to postsecondary education by $ 118 million for the fiscal year ending next March and to reduce the federal contribution to postsecondary education by $260 million in the next fiscal year starting April 1, 1984. Is that not rank hypocrisy? Is it not an illustration of the rottenness and internal self-contradiction of the people now administering the affairs of Canada? They pretend to be concerned about the prospects for youth by appointing a Minister of State for Youth, yet on the other hand, a year ago, they announced a scheme to impose a ceiling so-called of 6 per cent and 5 per cent on the contributions to the provinces for post-secondary education. That is the rankest hypocrisy.
As a person who comes from an area that now has an official unemployment rate of 19.2 per cent, but where in reality I would say one-third of the population is at present unemployed when people not working and who have no prospects of finding jobs, and are therefore not listed by Canada Manpower, are included, I tremendously resent the Bill.
I was a provincial Cabinet Minister from 1966 to 1976, except for three or four years when I was in Opposition to another vicious and decaying Liberal administration, which we destroyed in 1971 just as in 1984-85 we are going to destroy the vicious, insensitive Liberal administration on the federal scene. During that time I was involved, Mr. Speaker, in federal-provincial negotiation after federal-provincial negotiation, first as a Cabinet Minister with the Liberal Party in Newfoundland. Then after I saw the light, got on the right track, from 1971 to 1976 I was with the provincial Conservative Government. Never in all that time, Mr. Speaker, did federal-provincial relations reach such a low state as they have today. I can remember when provincial Ministers used to deal with half decent and reasonable federal Ministers. I remember dealing with John Turner, for example. He was a Minister of Finance of Canada one could deal with, who would listen to a rational and reasonable presentation, and who would change federal policy when that became necessary. He changed the tax equalization formula when I brought to his attention the inequities that this was causing to the hydro-electricity situation in Newfoundland and Labrador. He changed the formula to resolve that inequity. But that kind of person is long gone.


Pauline Jewett: Turner for leader!


John Carnell Crosbie: Those Hon. Members will certainly be better with John Turner as leader than with the rotten tribe they have leading them now. Yes, there is no question of that.


Mr. Fisher:: Will you come over if we do that, John?

February 7, 1984
Established Programs Financing


John Carnell Crosbie: If Mr. Turner has any sense he will join us. He will not attempt to run for the festering Party which now represents the Liberals in Canada.
In the last four or five years, Mr. Speaker, there has been no federal-provincial relations hip. There is a state of war between the federal Government and the ten provinces of Canada. We have a Prime Minister (Mr. Trudeau) who is all muscle within Canada when it comes to his own fellow Canadians. When it comes to the other ten Canadian governments the Prime Minister is all muscle; he is warlike, he is belligerent, he declares war, he does a judo chop on them. There is no insult he will not give to them. It is only when it comes to our enemies outside Canada that he is an emasculated eunuch, a peace lover of the highest degree. That is when he goes outside Canada. Inside Canada he is belligerent and has declared war on the provinces, and this Bill is a reflection of that.
I have another piece of hypocrisy here, Mr. Speaker. There is another article in the paper today where the distillers are pointing out what has happened to their industry as a result of vicious taxation by the Government. The indexing of excise taxes two years ago, in September of 1981, has increased the retail price of liquor by 45 per cent. The Government which is now applying six and five to post-secondary education, and to the universities of Canada, last fall increased taxes on wine and spirits by 13 per cent to 15 per cent. There is no six and five policy when it comes to collecting its revenue and its impositions from the Canadian people. As a result of the indexing of excise taxes, thousands have lost their jobs in the distilling industry.
We are told that this great and famous six and five program has to be applied to post-secondary education. Whom does it affect the most? Whom is this the most crippling blow to? It is the most crippling blow to the Atlantic provinces and, in particular, to the Province of Newfoundland. It is a blow to those provinces which are financially strapped, and the four Atlantic provinces are among the most financially strapped of any of the provinces of Canada. This is a vicious blow to those provinces just when they need federal financial assistance, and more of it, to help their post-secondary education system. Just when they have fantastic highs of youth unemployment and unemployment generally, this Government reduces what they are to receive, using the fiction that it has to apply a six and five program to contracts which it entered into with the provinces in 1977. The Government has turned its back on its commitment and asks us to pass this legislation.
What is the effect on Newfoundland? In the year which is ending now, Newfoundland will receive $2.7 million less than it would have received for post-secondary education. I believe in the year 1984-85, next year, when Newfoundland will be more in need of educational and training services for youth than ever, there will be a reduction, I believe of $6.1 million. The Province of Newfoundland, already strapped, already with a current account deficit, already with the highest per capita debt in Canada, is not going to be assisted by this Government.
This Government is going to grind Newfoundland further down, if it can do it.
If one looks at the changes for this year, one will see that Ontario loses $41 million. There could be some argument that Ontario can afford to pay more itself, although I do not accept that, but certainly Ontario is in a better position than Newfoundland to absorb these kinds of body blows. The total for this year is $118 million. That is despite the Minister of Finance (Mr. Lalonde), who was then Minister of Health, having devised the new formula for the provinces five years ago, and having had them enter into agreements with the federal Government. It was the Government of Canada which agreed to the formula and put forward the formula in 1976-77 which was accepted eventually and passed into law, and which this law now breaches. I, of course, intend to vote against this Bill and I only wish I had more than one vote to cast against this pernicious betrayal of the provinces and the people of Canada.
The Speaker indicates I only have a minute or so left. I just want to point out that the Economic Council of Canada, an impartial federal agency, reported last year, with respect to the claim of the Government of Canada that the provinces had reduced their spending on health care and education, that:
-there has been no decline in provincial spending on health care and postsecondary education relative to GNP.
That is a complete repudiation of the position of the federal Government and the devious statements of the Minister of Health over the last several years. The same report of the Economic Council of Canada stated that contrary to the claims of the federal Government-and I quote again:
-there was no meaningful evidence that the increase in the federal deficit could be linked specifically to federal-provincial transfers.
That was another canard. That was another piece of deception which the Minister of Finance and the Minister of Health were attempting to put across. Their own federal economic research agency-independent-repudiated the Government's position after doing a careful study of the health care and educational situation. What more can be said?


The Acting Speaker (Mr. Guilbault):: Order, please. The Hon. Member's time has expired.


John Carnell Crosbie: Well, no more can be said because my time has expired. I hope that many of the hon. gentlemen opposite will join me in voting against this betrayal of the Canadian people.


James Ross Fulton: Mr. Speaker, I am pleased to have a chance to participate in this debate and to make clear to Hon. Members on the government side, and to those people who might be listening today, my opposition and the opposition of my Party to the proposed Bill, Bill C-12. At the end of my comments, Mr. Speaker, I will be referring the subject matter of the Bill. I just want to give you notice of that and perhaps you will remind me when I have a few seconds left so I can move it for the record.
February 7, 1984

I want to make it clear to all Hon. Members of this House why it is so important that such a referral of the subject matter be made to the Standing Committee on Finance, Trade and Economic Affairs, so that witnesses can come forward and the material can be scrutinized. As Hon. Members in this House know, the formula ran out in 1982 and for years now the federal Government has had an opportunity to get together with its provincial counterparts to work out some new and innovative kind of funding arrangement. But because of the nature of the Government which sits across from us, that opportunity has never been pursued. Unfortunately, it is our young people generally in this country who are the ones who are suffering.
Most Hon. Members of this House, Mr. Speaker, are aware that Bill C-12 caps the funding effective in April, 1983 at 6 per cent and at 5 per cent for this coming year. In both of these years we would have effectively seen an increase in excess of 11 per cent in funding under the Established Programs Financing program. Once again, Mr. Speaker, we have ssen a unilateral move by the federal Government. It is a very serious problem in this country right now that the Liberal Government is incapable, for a veriety of reasons, of having good relations, sound relations, not only with the provincial governments but with various groups who really are the future of the country.
An example of what occurred even last year under the six and five regime was touched on earlier this morning by a Tory Member from the Fraser Valley. He was trying to stand up for his good friends, the Socreds, I suppose because he was intending to run for them. In my own Province of British Columbia we have had the slash at the federal level of 5 per cent.
Then we have the heartless Government, led by the halfmad Bill Bennett, who does not pass on any of the increase to community colleges and universities. The effect is particularly devastating not only in rural British Columbia, such as the area I represent, but in urban areas all across Canada.
There is in effect a class and income-related bias as to who can get further education. Not only are eligible students being turned down for university, but it has become an economic phenomenon. The increase in tuition fees, rental accommodation costs, books, everything, has reached the point where once again it is the "haves" in society who are going to get an education and the "have-nots" will not. Here I am speaking about visible minorities such as native people, women, ethnic minorities, and people who for a variety of reasons have language problems, are disabled or whatever. It is those very individuals who should be gaining greater access to higher education and job marketable skills, but they are being excluded first by a very heartless move by the federal Government.
My colleague from Regina made a very good point that I think all of us have to reflect on. There is capital available without raising taxes or going through any real serious changes to the existing and extremely unfair tax measures
Established Programs Financing before the House of Commons. I do not hear the Tories raising this issue. They are after the Minister of National Revenue (Mr. Bussieres) for a variety of things, which I think is good, but you do not hear them talking about the fact that the big corporations in this country owe $30 billion-not million but billion-in unpaid taxes to Revenue Canada. We do not see the Minister of National Revenue sending his hotshots out to collect that money or the $12 billion owed by the oil companies who ripped off consumers in this country. That money is not going into the EPF programs.
Not only are the wrong students being excluded from education, Mr. Speaker. I know that myself, having travelled from northern British Columbia, the Queen Charlotte Islands, to go to Simon Fraser University where my colleague, the Hon. Member for New Westminster-Coquitlam (Ms. Jewett) was the President. That fine institution, like all of them in British Columbia and across Canada, is now having to cut library and laboratory supplies. Particularly useful things not only to graduate students but everyone in university, college or vocational training centres are periodicals, whether on plumbing, electricity, new breakthroughs in medicine or even English literature. Those are the kinds of things being slashed in the educational arena. These are the kinds of things that make education interesting and useful for the people who are there.
In moving referral of the subject matter, Mr. Speaker, I think all Members of this House should take an interest and vote for it. I am sure the Tories will vote for it because they do not want to vote with the Government. The benches of the national press gallery are bare; their occupants show no interest in this because it is one of those issues where students are isolated all across the country. Those who cannot go to university for economic or other reasons are not getting together to bring to beat co-ordinated political pressure. It is only those of us who really honestly believe in the future of this country, whether we are talking high-tech, vocational skills or about increasing the viability of the skills of minorities for whatever reason, whether native people or women-who are in fact not a minority but a majority. But they are one of the groups hardest hit by this six and five capping. Disabled people are another example.
I urge government Members not to vote just like rank and file sheep and seals, as they always do, but to think seriously about the effect of six and five being applied in this area. The Government is not applying it in areas such as the corporate sector, bank profits and all kinds of other areas. In moving this motion, Mr. Speaker, I urge Members in this House to show some common sense and sincerity about the job and the people they represent and the future of this country.
I therefore move:
That the motion be amended by deleting all the words after the word "that" and substituting the following therefore:
"Bill C-12, An Act to amend the Federal-Provincial Fiscal Arrangements and Established Programs Financing Act, 1977, be not now read a second time but that the order for second reading be discharged, the Bill withdrawn and the subject matter thereof referred to the Standing Committee on Finance, Trade and Economic Affairs.

February 7, 1984
Established Programs Financing


The Acting Speaker (Mr. Guilbault):: The Chair has heard the amendment, which is in order. Mr. Fulton, seconded by Ms. Jewett-no, Ms. Jewett has spoken in the debate and will not be able to second the motion.


Douglas Glenn Fisher: No one there to second it.


The Acting Speaker (Mr. Guilbault):: Do we have a seconder for the amendment?


An Hon. Member:: No seconder.


The Acting Speaker (Mr. Guilbault):: So we are back on the main motion. The question is as follows: Mr. Lalonde, seconded by Mr. Ouellet, moves:
That Bill C-12, an Act to amend the Federal-Provincial Fiscal Arrangements and Established Programs Financing Act, 1977, be now read the second time and referred to the Standing Committee-


Mr. Shields:: Mr. Speaker, I was rising to speak on the motion.


The Acting Speaker (Mr. Guilbault):: On which motion? On the main motion? The Hon. Member for Athabasca (Mr. Shields).


Mr. Evans:: 1 rise on a point of order, Mr. Speaker. If I am not mistaken, Mr. Speaker, you were in the process of putting the main motion. At that time no one can interrupt the Chair. I would suggest the motion has to be put, Mr. Speaker. You started to put the motion and 1 suggest you have to continue.


Jack Wendele Shields: On a point of order, Mr. Speaker, I have been taught in this House that when the Speaker is rising a Member remains seated in his chair. If the Parliamentary Secretary will have observed, a Member of the NDP rose to put his motion; you then stood in your place as you would, Mr. Speaker, and called for a seconder. From that moment on you did not sit; I had no opportunity to rise. In fact, I had to break the decorum of the House to rise and catch your attention to indicate that I did want to speak on the main motion.


The Acting Speaker (Mr. Guilbault):: The Hon. Member for Athabasca would have the floor.


Jack Wendele Shields: Mr. Speaker, I thank you for the opportunity to speak on Bill C-12 presently before the House.


Douglas Glenn Fisher: On a point of order, Mr. Speaker, it was my understanding, and I clearly saw it, that you were putting the motion to the House. I heard the point of order raised by the Hon. Member for Athabasca (Mr. Shields) and I sympathize with him, but there are regular procedures in this House. The Speaker has precedence and the Speaker was in fact putting the motion.


The Acting Speaker (Mr. Guilbault):: The Parliamentary Secretary in fact is now reflecting on the ruling just made. The Hon. Member for Athabasca is perfectly in his right.


Douglas Glenn Fisher: No, Sir.


The Acting Speaker (Mr. Guilbault):: I did not sit between disallowing the amendment and reading the main motion. Once an amendment is not accepted by the Chair or cannot be put for lack of a seconder, as was the situation here, we are back on the main motion. Any Member of this House who has not yet spoken on the main motion is allowed to do so. This is the reason I recognized the Hon. Member for Athabasca who has the floor now.


Mr. Duquet:: Mr. Speaker, on the same point of order, I am sorry-


The Acting Speaker (Mr. Guilbault):: Order, please. Decisions of the Chair may not be commented upon. Would the Hon. Member please sit down?


Jack Wendele Shields: Mr. Speaker, as I was saying, I am particularly pleased to stand today and speak on Bill C-12, an Act to Amend the Federal-Provincial Fiscal Arrangements and Established Programs Financing Act, 1977. We have watched the present Government continue in a confrontational style of government over the past 10 to 15 years. It has become very obvious that the Government, with the centralist attitude that it has, practises politics that are totally opposite to the type of government which was established in this country to deal with the regions and the hinterland provinces. We have continually seen the Liberal Government unilaterally introduce legislation without prior consultation that has profound effect on every part of the country.
I am getting sick and tired of going back to my riding week after week and hearing people say that the Government is not listening to the people in the regions. We saw this in the national energy policy which was brought forward without consultation with the people of Canada. With the Indian Act we see that the consultative processes are not taking place. In this case the Government is introducing Bill C-12 which changes the formula and reduces the amount of money that the federal Government will transfer to the provinces for post-secondary education, health and medicare.
This has created a problem right across the country, Mr. Speaker. At a time of high unemployment universities are really scratching to get the kind of funds they require to move Canada into the technological age. Up until now we in Canada have had the highest standard of education per capita of any country in the world. There are some provinces which cannot afford to hit the local tax base and ingest the required funds into post-secondary education. I am talking about all kinds of post-secondary institutions. This cash-starved Government, which was supported by the New Democratic Party year after year, went on a reckless spending spree and set up a bureaucracy and system of government that is now, along with the other governments, taking close to 45 or 50 per cent of the Gross National Product. This bureaucracy has gone wild to
February 7, 1984

the point that Ministers do not even know what is going on in their Departments.
Because of this squeeze on government funds, and because of the disastrous effect of the national energy policy and the resulting drying up of funds that were sustaining this massive bureaucracy in power, the Government is seeking every way it knows to wring out the last dollars from the local taxpayer. It affects the local taxpayer. If education and health care systems cannot be supported as per the original agreement, local Governments will have to go to the local tax base to sustain the present levels.
Some of the programs that exist within the Government now should be cut back. There is no businessman or single individual who operates from a budget in this country who does not understand the massive overspending by the federal Government. There is massive unemployment across the country, Mr. Speaker. It is criminal to see these people coming into the constituency offices in my riding, as I am sure is happening in all the ridings in Canada, asking how they can get training so they can get a job. At a time when there is an unprecedented number of young, middle-aged and older people requesting entrance to post-secondary education in order to retrain, we are cutting back on funding to these very institutions. This is totally ridiculous. This is the time when we should be taking some of the money which we are paying people to stay at home because there are not any jobs, either through welfare or unemployment insurance, and putting it into the post-secondary education system which gives individuals another chance at getting out into the job market when the economy does turn around.
It was not four years ago, Mr. Speaker, that in my riding we actually had recruiting teams from various companies and school boards going to Europe and Asia seeking qualfied people to come to Canada to fill jobs Canadians could not fill. Now that unemployment has gone so high our people could fill those jobs if they were properly trained four or five years from now, if and when this Government is thrown out of office and the country gets moving again. We will need those trained personnel.
Instead the Government brings in an Act, Mr. Speaker, to reduce the funding from the federal Government to the provinces. As I said before, it is unilateral action. The provinces have not had the opportunity to sit down with the Minister to point out the problems which exist in the hinterland provinces that this legislation is going to affect. It is not only going to affect the hinterland provinces; it is going to reduce the funding to Quebec by 30.9 per cent and it is going to reduce the funding to Ontario by 41.7 per cent.
Members opposite are going to support this Bill because they act like sheep. They jump when the whistle is blown. They are here in their seats and they stand row upon row supporting a Bill which they know is not correct. If they think for a moment they will realize that people do not want to be unemployed. People who are unemployed today are seeking ways of getting out of this situation. Those same people are lining up at the post-secondary institutions begging to get in.
Established Programs Financing They are told there is not enough money because Manpower did not buy enough places in the institutions for them to receive further training or retraining.
Technology is advancing so rapidly in our country and in the world that we have to keep on top of it by putting more money in. Technology is advancing the kind of health care we can give to our senior citizens. We have to put more money into that. We have to care for the people who built this country and who are now in senior citizen homes and chronic care homes. They sit and reflect on the good things they have done and sacrificed to provide us a better living. This is not a time for the federal Government to move unilaterally against the provinces, to become like Scrooge and not allow the post-secondary institutions to be funded as they properly should.


The Acting Speaker (Mr. Guilbault):: Order. The Hon. Member's time has expired.


Mr. Tom McMillan (Hillsborough):: Mr. Speaker, I welcome the opportunity to speak, even this briefly, on Bill C-12, and Act to amend the Federal-Provincial Fiscal Arrangements and Established Programs Financing Act, 1977.
Among other things, the Bill provides in the fiscal years 1983-84 and 1984-85 that the increase in the federal Government's per capita contribution to the cost of post-secondary education will not exceed 6 per cent the first year and more than 5 per cent the second year. In other words, the Government is clamping an enormous, heavy lid on expenditures for universities and community colleges in Canada.
This so-called restraint will have a devastating impact on higher education across the entire country. The federal Government's contributions will be limited to well below the level of funding required by the institutions affected, given the real escalating costs they are facing.
We in the Progressive Conservative Party are greatly in favour of restraint in the federal Government. Indeed we have been urging restraint on the Government for many years, ever since it began to stack up multibillion dollar deficits one year after another. But in this case it is a national scandal and disgrace that the Government is paying lip service to the principle of restraint on the backs of the young men and women in Canada who are trying to get the education and training they will require in the work force of tomorrow. The Government can find hundreds of millions of dollars for bail-outs of its corporate friends at Dome Petroleum, Massey-Ferguson and Maislin Trucking. But the same Government refuses to allow our badly underfunded education system the money it needs to produce the highly trained manpower for the country. Those are strange priorities-bizarre in the extreme.
For the small provinces and universities in Canada, the implications are especially disastrous. The fact is that in the Atlantic provinces about 80 per cent of university operating income is provided by government each year in the form of operating grants. The remainder comes from tuition fees and other sources, such as endowments and gifts. When govern-

February 7, 1984
Established Programs Financing ments slash their expenditures, especially the federal Government, one can be sure that the entire educational system suffers. Nor can the slack be picked up elsewhere. There is only so much room for cost cutting. As a result of seven consecutive years in which governments' operating grants per full-time student have declined in constant dollar terms, universities have not only cut their expenditures to the bone, they have also had to cut the bone itself,
In my own region, the maritime provinces, governments are expecting the universities to manage this year with grants of which the actual value after allowing for inflation is 30 per cent less on a per student basis than it was in 1976-77. Approximately 60 per cent of the incomes for the governments of the maritime provinces is derived from the federal Government, so clearly the source of the problem rests at the federal level. Nowhere is the problem more evident than in the area of Established Programs Financing for post-secondary education, the very subject we are debating today.
Let us not make any mistake about it, the debate is not merely over a matter of numbers and statistics. At the heart of the problem is the future of a whole generation of Canadians. The federal Government, by imposing narrow-minded restraint in this area of public policy, is compromising the quality of education and training available to our young people. For example, in my Province of Prince Edward Island where I am most familiar with the problem, government funding at the University of Prince Edward Island in 1980-81 amounted to $5,638 per full-time student. That is reduced to only $4,386 in 1983-84 which is a very substantial drop. It is true that those figures have been adjusted to the national Consumer Price Index, but the fact is that university expenditures have been rising at a much faster rate than the CPI in general, especially in such cost-intensive areas as scientific laboratories, supplies and staff salaries, with the aging professoriate.
At a time when per full-time student grants are being slashed by approximately $1,100 in real terms, student enrolment is actually increasing throughout the Maritimes by about 25 per cent. Therefore, universities are being required to do more with less. Enrolment in the maritime provinces skyrocketed from 30,473 in the 1979-80 academic year to 38,170 in the 1983-84 academic year.
The result of this underfunding is that the quality of education is fast deteriorating. The University of Prince Edward Island is no longer hiring new staff though there is a serious need for staff in several areas. In fact, the overall staff has been reduced in recent years. In the face of such staff shortages, classes must be made bigger and students have been given less access to the personal counselling that is so important to a quality education.
The same applies not only to teaching staff but to resource and support staff as well. A case in point is the library staff which has been slashed from 32 to 23 full-time personnel since 1974-75. The library is forced to reduce substantially its purchases of volumes. Given the fact that the library is the heart of any university, the resource and information centre of the university, one can see the profound effect this is having on
the quality of education. But in Prince Edward Island, the University of Prince Edward Island library is not only the heart of the university, it is the major knowledge, information and resource centre for the entire province.
A parallel funding crunch is being faced by other sectors of the University of Prince Edward Island and other maritime universities. The crunch of reduced funding in biology and other fields is having a profound and lasting effect on the quality of education available to each student.
The universities in the Maritimes have calculated that from 1976-1977 to 1981-1982, they needed an increase in government funding in the range of 71 per cent merely to maintain services and the level of education that they were offering. Instead, during that same period they received only approximately 50 per cent more. This year they will require about a 12 per cent increase just to stay where they are, much less to improve the quality of education in light of the knowledge explosion and manpower requirements. The legislation under debate now will restrict increases in federal contributions to 6 per cent.
To their credit, the maritime provincial governments are coughing up an increase of approximately 7.3 per cent to help pick up the slack. But those governments are badly strapped; they are not in a position to make up the total difference in the face of the restraint which is being imposed on higher education spending under this Bill.
In conclusion, 1 denounce the Government for paying lip service to restraint. To the extent that it is exercising restraint, it is doing it on the backs of young people who require a quality education in this increasingly competitive world.


Margaret Anne Mitchell: Did you vote for the six and five?


Thomas Michael McMillan: No, I did not.


Mr. Blaine A. Thacker (Lethbridge-Foothills):: Mr. Speaker, I would like to make a few comments with respect to Bill C-12. It is another Bill which amends the Federal-Provincial Fiscal Arrangements and Established Programs Financing Act, 1977. However, it must be viewed in the context of federal fiscal transfers of moneys which have continued from Confederation. In itself it is a topic of incredible interest and great fascination for people who take the time to review the history of these transfers.
Canada is a federation with a split jurisdiction. It is also split in terms of population density and in terms of resources. The fiscal strength of each province is substantially different because of resources which might be hot at one point in history but cool at another. If we look at the history of cash flows, we see in the early days that an enormous amount of money flowed in from the Atlantic region; then a tremendous amount flowed in from Ontario; and, more recently, an enormous amount has been flowing in from the west. While regions might be net contributors to the nation at one time, often at some point they have to receive funds. Surely that is the
February 7, 1984

strength of having a strong Federal-Provincial Fiscal Arrangements and Established Programs Financing Act.
I certainly agree with the splitting by this Parliament of the post-secondary education contributions and the health care contributions. We are really transferring some $5 billion per year to health care and some $1.8 billion to post-secondary education on a cash basis. It is our responsibility as parliamentarians to be visible to our constituents so that they can see that the money we collect from the entire nation is being applied to specific programs and we can face the accountability. Then I can go to my constituents and say: "We are taking this amount of money from you in terms of taxes but here is how we are splitting it up: this amount goes back to the Province of Alberta in cash for post-secondary education and this amount for health care".
The bottom line question concerns the conditions we can impose on this cash contribution. The Canada Health Act will continue the conditions of universality and portability established back in 1957. It imposes two new conditions, one being a visibility factor and the other being that the money has to be spent for health care. We have to be accountable for how that money is applied. We must face that as well in post-secondary education.
This raises an enormous problem because jurisdiction under the Constitution lies entirely with the provinces. However, because of the enormous fiscal capacity of Parliament in terms of taxing by all means and methods across the whole nation, the question is what those reasonable standards would be. That is the issue about which we should be thinking now so that a Bill can be brought forward in the future setting forth those reasonable standards within the context of the Constitution.
There is no doubt that the federal Parliament will be paying some $6.7 billion less to the provinces by 1985-86 for health care and post-secondary education. This was accomplished in the statute passed in 1982 wherein the federal Government cancelled the revenue guarantee. Once again I want to put on the record that I believe it was an improper action based upon what was perhaps a fraudulent excuse which did not bear up under the historical development of the revenue guarantee.
Prior to 1977 there was a transfer for health care and post-secondary education based upon the actual expenditures of the provinces. In effect, at the end of the year they would send a bill to the federal Government for 50 per cent. Under that system the costs were rising enormously because in the sixties the children of the baby boom were reaching university age. Also as a society we wanted mass education of our young people. This is why the university population rose so enormously. Clearly the costs to the federal Government were going up, so in 1977 it sat down and negotiated, with the give and take of a negotiation, the 1977 statute we are amending today. That simply imposed a base year and the federal contribution was based upon that base year figure plus an escalator calculated from the Gross National Product. There was a three-year delay in that escalation. However, again the federal Government felt it needed to cut back. Therefore it made changes to the statute, most notably in 1982.
Established Programs Financing
The revenue guarantee came into existence because in 1971, with the imposition of a new tax system, the provinces were concerned that they would not have the same tax revenue. Therefore the federal Government negotiated a revenue guarantee. It said to the provinces that if they accepted the 1971 tax statute, they would be given a revenue guarantee that they would not take less than before. The provinces accepted it and it continued in effect until 1977.
When the statute was passed in 1977, the federal Government negotiated away the revenue guarantee because it would have had to terminate the original agreement which could not be done until 1980. It simply said to the provinces that if they would accept an immediate termination in 1977, it would kick in an extra tax point. The provinces accepted the deal and it became the 1977 statute and the revenue guarantee disappeared.
I want it said again and again that in 1982, when the federal Liberal Party imposed a cutback of some $6.7 billion, it did so on a basis which I believe was improper. Indeed, it might even have been fraudulent because the revenue guarantee had in effect disappeared.
Once again because different regions of the country have different fiscal capacities, a cutback at the federal level could be argued as being improper. The truth of the matter is that all provinces east of Saskatchewan have quite enormous provincial deficits and annual operating budgets which are tough. Therefore, how can they be expected to make up the shortfall? For example, the people of Prince Edward Island do not have the fiscal strength and base upon which to pick up their part of the $6.7 billion. Thus I argue that we in Parliament should be more generous rather than cutting back. We can tax everyone across the country. Canadians accept the concept that they might be net contributors today but that in 25 years or 30 years the resources with the greatest fiscal strength might change or even disappear. It is part of the equalization concept. As well it applies to these programs.
I regret that the Liberal Party has decided to punish the young people of the nation because of its claim of restraint. There are various ways in which the federal Government could have saved the $6.7 billion, such as air travel or excessive salaries in the Public Service for ourselves or our senior managers. There are all sorts of waste. We should look more carefully at the programs to which we apply tax dollars. In a time of enormous deficits, the Government gives $7 billion or $8 billion to a national oil company which is more inefficient than private enterprise and, in effect, destroys thousands of Canadian-owned oil and gas companies and firms in the service industries. That was an improper application of public moneys.
We are now paying the debt for that decision. I do not want to let the Liberal Party or the New Democratic Party off that hook because Canadians are worse off today for those public policy decisions that have put them into debt.

February 7, 1984
Established Programs Financing
[ Translation]


Mr. Ian Waddell (Vancouver-Kingsway):: Mr. Speaker, I would like to say a few words about this Bill and subsequently move a motion.

As economic development critic for my Party, I would like to say a few words about the post-secondary education cutbacks. As I said, I will have a motion to move at the end of my remarks.
As 1 understand the matter, the federal transfer payments to the provinces are going to be cut back S5.36 billion by 1987 because of the 1981 Liberal Budget, and further cuts are likely. Last year the federal Government eliminated the revenue guarantee under Established Programs Financing with the result that $1.9 billion has gone from post-secondary education. With this Bill, the six and five procedure will cost $118 million for an already strapped post-secondary education system. In fact, the Canadian Association of University Teachers estimates that the system is underfunded by $250 million to $400 million just for essential services like libraries, student aid and student services.
At the same time as there is made available $500,000 per Liberal riding-and I see the Hon. Member who revealed that to Maclean's is here-for unworkable, short-term, job-creation projects, money is being cut to universities, colleges and technical institutions, wherein lies the true economic recovery in Canada. I want to say something about that.
What we are seeing is a cutting back of funding in the very area we should not be cutting back, namely education. Thousands of students are being turned away from our universities, colleges and technical schools. In my Province of British Columbia, 20 per cent of the applicants have been turned away. The situation is worsened by inadequate student aid. Therefore, people will be able to attend school based on their ability to pay rather than their ability to absorb the education and profit from it.
Grants in British Columbia have been cut back by 40 per cent this year. Tuition fees are going up; 25 per cent at Simon Fraser University and 33 per cent at the University of British Columbia. Even those in the middle class are being threatened. We are in a situation now where even those who can afford to go to university will not be able to because the number of applicants for university is being cut back. This is the first time this has happened in Canadian history. This was expressed eloquently by our critic, the Hon. Member for New Westminster-Coquitlam (Ms. Jewett), the former President of Simon Fraser University. She is really an authority on education in Canada. She has spoken on this matter in the House.
I want to return to what I said a minute ago. Today's youth, who are tomorrow's workers, are not going to get the education or knowledge that they need to participate in the new high-tech society. This is the key to economic recovery. We in Canada are going through a revolution. We are entering a new type of society. We will produce a generation of functional illiterates, a lost generation in this kind of society. This is what
the new Minister of State for Youth (Mrs. Hervieux-Payette) was saying. She recognized the problem. She said this:
If we don't tackle the problem globally-by all the partners in society-a generation will be sacrificed or a generation will revolt. If I was in the youth group myself, 1 would not tolerate being excluded from participating in society.
This Government, of which she is a member, is prepared to tolerate, by Bills like this, the possibility of these young people being excluded from participating in the kind of education that we need to provide the required literacy for the society we will face tomorrow.
We in the New Democratic Party have some solutions, some positive proposals. We believe that full employment should be the overriding economic goal of this country. The federal Government must stop cutting back on its share of postsecondary funding. In addition to the federal Government doing this, my province, which has a very reactionary Social Credit-Conservative Government, cuts back further. It does not even pass on the limited funds sent by the federal Government. This has caused a crisis. We have a crisis in post-secondary education in my Province of British Columbia. From what I hear from other Members, we have a crisis in the other provinces as well, but we certainly have it in our province and that will stop our recovery.
We propose also that a joint federal-provincial emergency fund be set up. It could use the $102 million saved on post-secondary education through six and five as a start. Also, the $75 million to be used by DND to hire young people could be spent more productively on post-secondary education. The money for the Ministry of State for Youth would be better spent directly on post-secondary education. We need a parliamentary task force to address this crisis facing young people, jobs and education. We need a new funding formula to make governments more accountable for their post-secondary spending.
In conclusion, Bill C-12 seeks to cut back even further by limiting federal spending on post-secondary transfers to 6 per cent and 5 per cent. This will cost the system about $118 million. If our young people are to take advantage of this new high-tech society we are moving into, this is the very last thing we should do.
I have an amendment, Mr. Speaker. I move, seconded by the Hon. Member for Humboldt-Lake Centre (Mr. Althouse):
That the motion be amended be deleting all the words after the word "that" and substituting the following therefor:
"Bill C-12, an Act to amend the Federal-Provincial Fiscal Arrangements and Established Programs Financing Act, 1977, be not now read a second time but that the Order for a second reading be discharged, the Bill withdrawn and the subject matter thereof referred to the Standing Committee on Finance, Trade and Economic Affairs".
That is my motion. I have signed it and I will pass it to the Chair. The purpose is to allow the Committee to take the subject matter and deal with the whole problem in a broader way. I am sure Liberal and Conservative Members can support this amendment because we are in a crisis in post-secondary education today. That is why I am proposing this motion.
February 7, 1984


The Acting Speaker (Mr. Guilbault):: The Chair is of the opinion that the motion is acceptable. Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


The Acting Speaker (Mr. Guilbault):: All those in favour will please say yea.


Some Hon. Members:: Yea.


The Acting Speaker (Mr. Guilbault):: All those opposed will
please say nay.


Some Hon. Members:: Nay.


The Acting Speaker (Mr. Guilbault):: In my opinion the
nays have it.
And more than five members having risen:


The Acting Speaker (Mr. Guilbault):: Call in the Members.


Mr. Speaker:: I declare the motion lost. At this point the Chair is in the hands of the House. Shall we proceed to Question Period?


Some Hon. Members:: Agreed.


Mr. Speaker:: Unless there is unanimous consent not to do so, we will proceed to Question Period. The Chair proposes 45 minutes of questions, which would be to 3.15 p.m.


Mr. Pinard:: First of all, Mr. Speaker, you were seeking unanimous consent to put the main motion. We certainly do not object on this side. If there is no objection then we would obviously agree, but I suggest consent is required that Question Period last 45 minutes because under the rules it should stop at three o'clock. I received this request from the House Leader of the Official Opposition earlier and I told him that certainly we would agree to a 45-minute Question Period provided he understands that if some Ministers had previous commitments they would be free to leave.


Mr. Nielsen:: That is accurate, Mr. Speaker. We would have no objection to dealing with the main motion now on the condition, as I interpret the remarks of the Government House Leader, that we could have 45 minutes. We clearly understand there may be commitments which have to be made.


Mr. Deans:: Mr. Speaker, I want to be clear on exactly what we are agreeing to. If the main motion is put now, there will be a further division. Does that mean that we will then, at the end of the division, have 45 minutes for Question Period?

February 7, 1984
Established Programs Financing Mr. Speaker: Is it agreed?


Some Hon. Members:: Agreed.


Mr. Speaker:: Shall 1 dispense with the ringing of the bells?


Some Hon. Members:: Agreed.


Mr. Speaker:: Is the House ready for the question?


Some Hon. Members:: Question.


Mr. Speaker:: The question is on the motion of Mr. Lalonde, seconded by Mr. Ouellet:
That Bill C-12, an Act to amend the Federal-Provincial Fiscal Arrangements and Established Programs Financing Act, 1977, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
All those in favour of the motion will please say yea.


Some Hon. Members:: Yea.


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


Some Hon. Members:: Nay.


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


Erik Nielsen: We would like a recorded division without the bells, please.


Mr. Speaker:: Dispense with the bells.


Mr. Speaker:: I declare the motion carried.		
Bill read the	second time and referred to the Standing	
Committee on Finance, Trade and Economic Affairs.



ORAL QUESTION PERIOD


Hon. David Crombie (Rosedale):: Mr. Speaker, my question is directed to the Minister of Finance. The Minister may be aware-and I hope he is-that there is an allegation in the current edition of Maclean's magazine that government funds were used for large scale patronage projects, and that, only Liberal MPs were asked for suggestions and were guaranteed
February 7, 1984

a set amount of funding. Clearly, Mr. Speaker, the Minister should be aware that the essence of that allegation is that the Government is using funds allocated for unemployed people for its own political purposes. That is a very grave allegation. Can the Minister assure the House today that all Hon. Members of this House, and their unemployed constituents, were treated openly, fairly, and equally in the administration of the Special Employment Initiatives Program?


Hon. Marc Lalonde (Minister of Finance):: Mr. Speaker, in the Budget of June, 1982, a Special Employment Initiatives Program was proposed as part of various other job-creation programs. Additional funds were provided for that Program in April, 1983. The amounts were spelled out at the time, and the administration of the Program was under the Minister of Employment and Immigration. All the funds expended were spent under existing government programs and under the rules governing those particular programs. 1 am advised that the funds have been allocated on the basis of requests and needs that were expressed for expenditures under those various programs in various Departments under the authority of the Minister of Employment and Immigration, in order to reduce unemployment. I am also advised that funds were expended in all Provinces and all Territories, and in constituencies represented by Conservative Members or NDP Members as well as constituencies represented by Liberal Members.


ACCESS OF MEMBERS OF PARLIAMENT TO PROGRAM FUNDS
David Edward Crombie: Mr. Speaker, it is exactly those rules that are under scrutiny both by Maclean's and Members of this House and the public. With great respect, the Minister did not answer the question. He well knows it is a matter of public record that $138 million of the $150 million in that program was already allocated by November, and it was not until February that the Government sent the circular to all Members of the House.
Why is it, Mr. Speaker, that Members on the government side, Liberal Members, had access to that fund long before Members on this side? Indeed, they had three months in which to get money from that program, long before we did. Why did the Minister and his Government keep Members on this side in the dark about a program which was supposed to be for unemployed people, not unemployed Liberals?


Marc Lalonde: Mr. Speaker, the more the Hon. Member speaks, the more he shows that he is indeed in the dark. This program was announced in June of 1982. Additional funds were provided in April of 1983. The amounts were quite clearly spelled out, and Members of Parliament from all Parties were obviously quite free to make representations to the Minister of Employment and Immigration, or other Ministers, if they had projects they wanted to propose. As a matter of fact, I am sure there are Members on the opposite side of the House who have made representations on various programs to the Minister of Employment and
Oral Questions
Immigration or other Ministers. As I said, funds have been expended in all Provinces and in ridings held by Conservative or NDP Members, as well as by Liberal Members. The only thing I can say is that if the Hon. Member was in the dark until February 1, he is not watching after his constituents very well.


REQUEST THAT MINISTER PUBLISH LIST OF APPROVED PROJECTS
David Edward Crombie: Mr. Speaker, it is pretty clear that the Minister is continuing his record of the past few weeks. I have in my hand here a letter from the Minister of Employment and Immigration sent on February 1, advising Members on this side about this. Members of the Minister's own caucus received that months before. The Minister can clear the matter up if he is willing to make a clean breast of it now by making public and tabling in this House a list of all the projects allocated funds under that program. That is all he has to do, and he can quit making politics out of people who are unemployed.


Marc Lalonde: Mr. Speaker, I am impressed by the Hon. Member's appeal to quit making politics. 1 remind my hon. friend that what he has in his hand is a document which says quite specifically: "Attached is the information on the Special Employment Initiatives criteria that was sent to the Standing Committee on Labour, Manpower and Immigration following a November 29 meeting." My friend should have been aware of the criteria a long while ago.


David Edward Crombie: Make it public.


Marc Lalonde: As far as the Hon. Member's request is concerned, I remind him, if he bothers to check the records of this House, he will find there is a request by his colleague from St. John's East for such a list-


David Edward Crombie: Four months ago.


Marc Lalonde: -and that the Minister of Employment and Immigration, who is absent from the House today for an important meeting, is preparing the documentation and will make it public is due time in answer to the request put forward.


David Edward Crombie: Four months ago.


REQUEST THAT LIST BE TABLED
Hon. Flora MacDonald (Kingston and the Islands):: Mr. Speaker, I made that request in committee on November 24. I asked for the criteria and for the list of projects. I received the criteria, as a member of the committee, on January 26. The officials who were there at that time told us that they would make the criteria and the list of projects available within a few days. The criteria were not available to Members on this side until January 26, and we still do not have the list of projects which were approved last November.

February 7, 1984
Oral Questions
We were told then that there were 844 projects that had already been approved. What are they? To what constituencies were they awarded? If the Minister is not trying to cover up something, will he table that list today?


Marc Lalonde: Mr. Speaker, I will certainly draw the Hon. Member's request to the attention of the Minister of Employment and Immigration when he returns to the House. But I would like to draw to her attention that, to my knowledge, she is one of those who got one of the very first projects approved under that particular program.


Some Hon. Members:: Shame!


Marc Lalonde: I am told that the project had been recommended by the City of Kingston.


Some Hon. Members:: Table the list.


Marc Lalonde: I have said the Minister would table the list as soon as he is in a position to do so.


TREATMENT OF UNEMPLOYED
Flora Isabel MacDonald: Mr. Speaker, the Minister obviously does not know one program from another or he would not have made the statement he did. I want to tell him that last Saturday a man who had been out of work for one and a half years came into my constituency office. He is in desperate straits. He cannot keep up with his rent payments and he has to withdraw one of his children from college. That man, and thousands like him, should have the same access to employment programs as any other job hunter in this country. In what possible way can the Minister justify that unemployed people in one part of the country are treated differently from unemployed people in another part just so the Government can play cheap politics with their lives?


Marc Lalonde: Mr. Speaker, if that were the rule I would be surprised at how the Hon. Member could have had so many projects approved in her own riding-


Flora Isabel MacDonald: Tell me what they are.


Marc Lalonde: -to deal with the unemployment situation under various program of the federal Government. As far as the unemployed are concerned, she knows there are many programs under the Minister of Employment and Immigration dealing with the unemployment issue, and that those programs have criteria which have been made public, and that the Government has, over the years, allocated those funds to deal with the unemployed across this land.
The Hon. Member refers to a particular individual in her own riding.


Flora Isabel MacDonald: There are many others like him.


Marc Lalonde: Yes, and I can refer the similar individuals in my own riding who are facing difficult situations. The Hon.
Member knows there is a high unemployment situation and in every riding there are cases similar to the one she mentions. She is not the only one in that situation. It is a very sad situation and we are trying to deal with it fairly and effectively across the land.


SASKATCHEWAN IMMEDIATE EMPLOYMENT STIMULATION PROGRAM
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, my question is also for the Minister of Finance. I have recently found out that in Saskatchewan a program called the Immediate Employment Stimulation Program has been in existence since January 1, 1983. It is a $4 million project, and the only access to that fund is through Senator Hazen Argue. Apparently groups approach him directly, and his office then either approves or does not approve a project, and it is rubber stamped by the Minister of Employment and Immigration. Why are officials from the Department of Manpower and Immigration not involved in processing the applications? Why have Members of Parliament from Saskatchewan not been informed of this $4 million slush fund in Senator Hazen Argue's office?


Marc Lalonde: Mr. Speaker, I would like to challenge the statement made by the Hon. Member that the officials of Manpower and Immigration are not involved. On the contrary, they are the ones who are examining the programs. They are examining the project proposals that have been put forward. They are examining whether they are meeting the criteria of the various programs of Manpower and Immigration or of other Departments. If my friend has proposals or suggested projects to put forward, why does he not put them forward to the Minister of Manpower and Immigration or to the Minister who represents Saskatchewan in Cabinet? This is the normal procedure. Or he could put them directly to the Department and they will be examined.


INFORMATION PROVIDED TO SASKATCHEWAN MEMBERS OF PARLIAMENT
Lorne Edmund Nystrom: Mr. Speaker, I and others in our Party from Saskatchewan have approached the Department of Manpower and Immigration for capital funds. I did that for the Endeavour school gymnasium and for the Doukhobor Heritage Home in Verigin, and I was told by the officials in Regina that no such programs exist for capital funding. I found out that I was misled; indeed one can go to Senator Argue's office and get funding for those kinds of projects. Why were Members of Parliament misled by officials of his Department, and why has the public of Saskatchewan been led to believe that no such program exists? Is this just a slush fund, or what is it?


Marc Lalonde: Mr. Speaker, I again refer my hon. friend to the fact that the program itself has been mentioned in two Budgets and that the Minister of
February 7, 1984

Employment and Immigration has appeared before the parliamentary Committee and has answered all the questions that were asked about the program. If my hon. friend has not been following what the Minister of Employment and Immigration has been saying, I cannot help him in that regard. He should follow what the Minister has said before the Committee.


PROGRAM ELIGIBILITY CRITERIA
Mr. Jim Hawkes (Calgary West):: Mr. Speaker, my question is for the Prime Minister and it is in regard to the same issue. Yesterday the Prime Minister indicated these funds were allocated on the basis of unemployment rates. There is not a word in the criteria about employment rates. However they do say: "These projects were not the subject of formal consultation with Members of Parliament".
Was there or was there not a meeting of the caucus of the Liberal Party in April and May where the criteria were explained? Was there or was there not consultation held with at least some Liberal backbenchers, when promises of $500,000 were made? Was there or was there not notification given to Liberal riding associations regarding how to participate in this particular fund?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, the Minister of Finance has just once again repeated that two Budgets, one in June, 1982 and another in April, 1983, put these programs forward. They involved some 15 Departments and many hundreds of millions of dollars. They are directed toward giving jobs to the unemployed. They are spent in all parts of Canada, in every province.


An Hon. Member:: Yes, to get votes.


Pierre Elliott Trudeau: The Hon. Member says "to get votes". Mr. Speaker, if we are giving money to people who are unemployed we are not giving it to them on the basis of whom they will vote for. We are giving it to them because they are unemployed. I do not imagine the Member, even in his wildest errancies, would suggest that we would ask unemployed people who they are going to vote for before giving them money. I am told there are some Provinces, such as Prince Edward Island, where more money has been spent in the Conservative ridings than in the Liberal ridings. The money is directed towards the unemployed.
The Hon. Member asks if there has been any consultation with Liberal Members. Yes, Mr. Speaker, there has been consultation. When the Minister introduces his Budget, he does in caucus what he does in the House; he explains his programs. Liberal Members are diligent enough to follow up on the those programs. The funds are allocated. They are there. The programs are public and contained in the Public Accounts. Liberal Members may be doing their jobs better than Conservatives. That is all I can say.
Oral Questions


REQUEST THAT LIST OF APPROVED PROJECTS BE TABLED
Frederick James (Jim) Hawkes: Mr. Speaker, we on this side of the House have a job to do. One of the aspects of that job is to fight on behalf of the unemployed in our ridings in those parts of the country that are not represented by Liberal Members. On November 24 we were told that 844 projects had been funded, to the extent of $138 million out of the $150 million. If the Prime Minister has nothing to hide, if that money is distributed fairly to all the unemployed in the country, and if there are not first class unemployed Canadians in Liberal ridings and second class unemployed Canadians in Conservative ridings, then all he has to do is table the list. The list has been available since November. If it is simply tabled today the country will be able to see whether we have first class unemployed in Liberal ridings and second class unemployed in the rest of the ridings. Will he table the list?


Pierre Elliott Trudeau: Mr. Speaker, I can repeat the answer given by the Minister of Finance. According to my information the question was asked by the Hon. Member for St. John's East on January 24, only a few weeks ago. The Minister is presently attending an OECD conference in Paris. I am sure he has asked his officials to follow up on the question and provide the answer. We do not have it. The Minister does not have it. I do not have it. The question was asked, Mr. Speaker, less than three weeks ago. It asked for hundreds and hundreds of compilations. I imagine they are in process. I cannot table it now.
When the Hon. Member talks about second class unemployed, he should talk about second class Members of Parliament. The unemployed in this country remember what the Tories did in 1979. They cut off the job-creation programs and that is why they have the mentality of people not following up on the programs of the Minister of Finance when he put money forward.


NATURE OF LIST
Mr. John Bosley (Don Valley West):: Mr. Speaker, my question is for either the Prime Minister or the Minister of Finance. They have indicated to the House today that they know of the funding at least with regard to Prince Edward Island and for the riding of the Member for Kingston and The Islands. What lists are you referring to? If there is a list, will you table it? Or is the Minister of Finance again referring to coversations with senior staff?


Pierre Elliott Trudeau: Mr. Speaker, if the Hon. Member had followed the Order Paper he would see that his own colleague from St. John's East is asking for a list. We are not imagining this. He is asking for a list. It is on the Order Paper, dated January 24, which is less than three weeks ago. Moneys are being spent all the time. I believe moneys were even spent in Schefferville to create jobs. Even though Schefferville happens to be a Liberal riding we are still going to spend money there when unemployment is created.

February 7, 1984
Oral Questions


PROJECTS REFERRED TO BY MINISTER OF FINANCE
John William Bosley: Mr. Speaker, my supplementary question is for the Minister of Finance. Flas the Minister seen a list of the dates, the projects, and the funds to which he has already referred today? If he has seen such a list will he table the list that he has referred to and from, or is he just misleading the Flouse again?


Marc Lalonde: Mr. Speaker, no, I have not seen the list, but it is a well known fact, recognized by the Hon. Member for Kingston and the Islands, that indeed there have been grants given in her riding to help the unemployed.


Flora Isabel MacDonald: Not under that fund.


PRESENCE IN GALLERY OF MINISTER OF EXTERNAL AFFAIRS OF ROMANIA
Mr. Speaker:: I have the honour of drawing the attention of the House to the distinguished presence in our gallery of His Excellency, Stefan Andrei, Minister of External Affairs, from Romania.


Some Hon. Members:: Hear, hear!


FISHERIES
James Ross Fulton: Mr. Speaker, my question is directed to the Minister of Fisheries and Oceans who, I am sure, is aware that this morning the Tories promised West Coast fishermen everything except specifics.
I have a very specific question to ask the Minister of Fisheries and Oceans. It results from a document sponsored by him and his Department. The Minister's document concludes that the farming of fish is preferable to the conventional means, such as troll, seine, and gillnet, and makes three specific conclusions: one, fish can be raised and harvested as opposed to hunted; two, genetics can be manipulated to improve the yield; and three, exclusive rights to given resources can be better defined.
Would the Minister rise in his place and tell the fishermen from the West Coast just exactly how far he has gone with this fish farming proposal and how much of it he will bring forward in March with his Cabinet document in support of the Government?


Hon. Pierre De Bane (Minister of Fisheries and Oceans):: Mr. Speaker, I certainly agree with the Hon. Member that the Official Opposition not only has been totally bankrupt in any
policies they could present about the Pacific fishery but it is so sad that the fishermen of the Pacific Coast have to come to Ottawa to meet with their Conservative Members of Parliament.


Some Hon. Members:: Oh, oh!


John Carnell Crosbie: When did you see them?


Mr. McDermid:: Have you met with them yet?


Mr. Epp:: Where can they meet with B.C. Liberals?


Pierre De Bané: It hurts them so much when we speak the truth. For the last year I have been waiting in vain for one idea from the Official Opposition about the Pacific fishery.


Mr. Nowlan:: Resign.


Mr. Stevens:: Quit.


John Patrick (Pat) Nowlan: Go to your fish farm, you sucker.


Pierre De Bané: The relationship that I have with the different organizations on the Pacific Coast has been to work very closely with them for the last year at their own pace. We have been working with them very, very closely. During the past weekend I have put before them all of the different issues that I believe are very important to deal with, and the different options that we will have to consider.
I am happy to report to Parliament that the fishermen and the different organizations found that the Department has identified the different issues and the different options. I will be having a final meeting with them this weekend, and afterwards I will be making a report to Cabinet.


James Ross Fulton: I think it is pretty clear to all West Coast fishermen that the Minister of Fisheries and Oceans did not answer a very simple question about fish farming which is: how far will he go with it?


COMMON PROPERTY FISHING RESOURCE
James Ross Fulton: Mr. Speaker, the most devastating thing that has ever been put in writing by that Minister and his Department is in this document which I now have. I will quote from page 2 where it says: "The days of common property fishing are over". What that means to Canadians, whether they are sports fishermen, native Fishermen, or commercial fishermen, is that the Minister and his Government have decided that the fish on the West Coast, including salmon, herring, and everything else, belong to private corporations and to individuals, but it is no longer a common resource. I want him to rise in his place and tell the fishermen from the West Coast his position on this being a common property resource? Where does he stand? Get up and tell us.


Pierre De Bané: Mr. Speaker, it is a pity to see such demagogy being put forward by the Hon. Member for Skeena.
February 7, 1984


James Ross Fulton: Tell them.


Pierre De Bané: I think the facts before us show that what has been going on on the Pacific Coast cannot continue.


Mr. Fraser:: That's the mismanagement.


Pierre De Bané: Unless we stop this speculation, this race, this lottery, it will not change the competitive situation of our fishermen.
The Hon. Member should have been honest enough to say that the document points out very clearly that all the issues and options being put in that paper do not reflect the point of view of the Minister, the Department, or the Government. It is just to make sure that we have all of the issues and the options before the fishermen. I can tell the Hon. Member that they were much more intelligent than he seems to show.


James Ross Fulton: A final supplementary.


Mr. Speaker:: The Right Hon. Member for Yellowhead.


James Ross Fulton: A final supplementary.


Mr. Speaker:: The Hon. Member has had a supplementary question. The Chair will attempt to deal with it in due course, as it has done, with all due respect. The Right Hon. Member for Yellowhead.


James Ross Fulton: A final supplementary.


Mr. Skelly:: A final supplementary.


Mr. Speaker:: The Chair has indicated to the Hon. Member that the Chair will come back to him in due course, but at this stage the Chair recognizes the Right Hon. Member for Yellowhead.


James Ross Fulton: This is Question Period. A Final supplementary.


FINANCE
Right Hon. Joe Clark (Yellowhead):: Mr. Speaker, my question is directed to the Prime Minister. In referring to expenditures in Prince Edward Island he indicated that he has quoted from a list which the Minister of Finance claims he has not seen. In November in committee, Mr. Lussier, the Deputy Minister of the relevant Department, told the Member for Kingston and the Islands that there were 844 projects involved. He talked about a specific number of projects. He talked about specific expenditures. That was in November. There must have been a list in November. Where is the list today, and does the Prime Minister intend to continue to hide this list until after the election has been called?


Pierre Elliott Trudeau: Mr. Speaker, I do not know of any list. The only knowledge of a list that I
Oral Questions
have is that one has been asked for by the Opposition. I assume that it is being compiled.
The Right Hon. Member for Yellowhead is quite incorrect. Although only some few minutes separated my answer from his quotation of my answer, I never referred to a list when I said that my information was that more money was spent in Conservative ridings in Prince Edward Island than in Liberal ridings. I did not refer to a list. I said that I had been informed; that is all I said.
I do not know of any list. That is why I answered that if there was such a list, as the Hon. Member argues, and if he knows of a list which existed in November, why is his colleague from St. John's East asking for a list in January?


Charles Joseph Clark: For the first time in this Question Period there will be a straight answer to a question. The straight answer to that question is that we are asking for that list because it has been denied to Members of Parliament. We suspect it has been denied to Members of Parliament because it shows the worst kind of Liberal patronage and playing with the lives of the unemployed.


NOTIFICATION OF PROGRAM CRITERIA-APPLICATION OF PROGRAM IN ALL CONSTITUENCIES
Charles Joseph Clark: Mr. Speaker, permit me to come back to two other questions. First, will the Prime Minister tell the House of Commons whether criteria for this program were made known to members of the Liberal caucus before they were made known to other Members of the House of Commons? Second, will the Prime Minister of Canada give us an undertaking, a personal guarantee now, that this program has been applied equally to Canadians in all constituencies in the country who would be eligible?


Pierre Elliott Trudeau: Mr. Speaker, the only criteria that I know of for certain are those put forward in the two Budgets of June, 1982, and April, 1983. There were programs spread over some 15 Departments, I believe. There was some $2.4 billion set aside for work on infrastructures.
In his speech the Minister was encouraging all Members of the House to put forward infrastructure projects which might have been held up on the shelf but which we wanted to move forward on a fast track in order that jobs be created at a rapid rate. Our Members on this side seized the program and proceeded with it. I understand that Members on the other side have also done so. They have co-operated with the Minister of Finance's projects to create jobs.
I believe several Members on the other side are so negative as to the proposals of the Minister of Finance, they have spent so much time being destructive about them, that perhaps they have not been as diligent, I say, as Liberal members in following up on the $2.4 billion that was put forward.

February 7, 1984
Oral Questions


PROJECTED DATE FOR TABLING OF PROJECT LIST
Charles Joseph Clark: Mr. Speaker, we are prepared to let the facts speak for themselves if the Government will publish those facts. Will the Prime Minister of Canada tell us when the list will be made available to Parliament as to the allocations under the Special Employment Initiatives Program? Will it be tomorrow? Will it be June? Will it be 1992? When will the Prime Minister of Canada come clean with the people of Canada and make known to this Parliament a list that has been requested for at least three months?


Some Hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Mr. Speaker, the Hon. Member for Yellowhead always talks about coming clean when he has asked the same question many times and when he refuses to hear the answer. The Minister of Finance gave the answer. I gave the answer. A couple of weeks ago a question was put on the Order Paper-


Mr. Kempling:: Three months ago.


Pierre Elliott Trudeau: January 24, Mr. Speaker. The Order Paper speaks for itself. The only coming clean would be the Hon. Member's ears if he wanted to listen to the answer.


Some Hon. Members:: Oh, oh!


FISHERIES
Miss Coline Campbell (South West Nova):: Mr. Speaker, my question is for the Minister of Fisheries and Oceans. Now that the federal Government has guaranteed to pay the Bank of Nova Scotia $70 million over the next five years-and I agree we have to go along and we have to believe in the gamble on the future of the fishery-will the Minister use the remaining funds allocated under Bill C-170 for the Nova Scotia restructuring to give guarantees to the many private independent companies, which are also having difficulties and which would like to survive, for the future of the fishery?


Pierre De Bané: Mr. Speaker, I will certainly take note of the representations of the Hon. Member.


THE ECONOMY
John Carnell Crosbie: Mr. Speaker, my question is for the Minister of Finance who will be aware that there is a great deal of concern about the economic situation, as shown by what happened in the Stock Exchange yesterday.
It was the worst drop in more than four months. Mr. Volcker, the U.S. Federal Reserve Board Chairman, has reported to Congress and he has said "high deficits are restraining economic recovery. The federal deficits have kept interest rates high and restrained expansion in areas of the economy that are more sensitive to interest rates, such as housing, autos and long-term business spending." In view of the fact that the Canadian deficit is much higher proportionately than the U.S. deficit, $31.3 billion this year compared to $138 billion with the U.S. economy being ten times the size of ours, will the Minister of Finance tell the House whether he agrees with Mr. Volcker's opinions on the effects of these high deficits?


Marc Lalonde: Mr. Speaker, I have quite often said substantially the same thing. If the Hon. Member had bothered to read my speeches, he would have seen some of the statements. I have indicated that we had to address the deficit situation in a very gradual and responsible way, that we had to bear in mind the general situation of the economy, particularly the fate of the unemployed, and that my strategy was to bring the deficit down gradually in a responsible way.


John Carnell Crosbie: The Minister suffers from galloping hypocrisy as well as malignant McCarthyism. His actions belie his words. His debt this year is $31 billion. In terms of the U.S. economy it will $310 billion.


REQUEST THAT MINISTER ACT TO REDUCE DEFICIT
John Carnell Crosbie: Mr. Speaker, what action does the Minister of Finance plan to take? The fundamental problem of our recovery is high interest rates. The Minister of Finance has just said he agrees that the deficit is producing high interest rates. When will he start reducing the deficit so that we can have lower interest rates, have an economic recovery in Canada, get people back to work, and have investments start again? When is the Minister going to start that process, instead of just talking about it and pretending he is doing it?


Marc Lalonde: Mr. Speaker, the Hon. Member will have to wait for the Budget in order to reach his own conclusions in that regard. I would like to remind him that interest rates have come down substantially in the last two years. As a matter of fact they have been cut by half-


Mr. Huntington:: And what did they go up to?


Marc Lalonde: -while the deficit was increasing substantially. There is no automatic and immediate relationship between the size of the deficit and the level of interest rates.


John Carnell Crosbie: You just said you agreed with Mr. Volcker.


Marc Lalonde: But we have seen in the last two years a rapid and significant decline in interest rates in spite of an increase in the deficit. However, what is important to note is that over
February 7, 1984

the medium and long-term you cannot continuously have higher and higher deficits because that will obviously have an impact on interest rates. In the short term it is quite obvious, as has been demonstrated over the last two years, that you can have a decline in interest rates and still have high deficits. As a matter of fact, the Hon. Member knows that we have brought interest levels in Canada-


John Carnell Crosbie: You doubled them first.


Marc Lalonde: -particularly the prime rate of the banks down to the same level as in the United States, in spite of the fact that for a few years we had a spread. Canada interest rates were higher. For the last several months we have achieved a record-


John Carnell Crosbie: You wrecked the economy.


Marc Lalonde: -where our interest rate in Canada is at the same level as that in the United States.


John Carnell Crosbie: Practise what you preach.


BANKS AND BANKING
Mr. David Orlikow (Winnipeg North):: Mr. Speaker, my question is for the Minister of Finance. Last week the Leader of the New Democratic Party asked the Minister how the purchase by the Bank of Montreal of the Harris Bank in Chicago for $650 million could help the people of Canada. He was told the bank made the purchase with U.S. funds. I would like to pursue that question.
In view of the fact that in the last two years the Bank of Montreal has closed more than 100 branches, has reduced its number of employees by more than 1,300, has increased its service charges to customers by 46 per cent-the highest of any bank-has paid no tax at all in 1982, and it has been able to do these things because of the tax policies of the Government, will the Minister explain to the people of Canada how these actions by the Bank of Montreal helped one single Canadian, particularly those laid off by the Bank of Montreal?


Marc Lalonde: Mr. Speaker, I would like to repeat to the Hon. Member what I said last week. After I raised the matter with the authorities of the Bank of Montreal, I was assured that the takeover of the Harris Bank in the U.S. was done with non-Canadian funds and therefore had no impact on the Bank's operations in Canada but was the result of activities abroad.
As far as the Bank's internal operations are concerned, I obviously cannot comment on the internal operations of any business in Canada. The Hon. Member mentioned a certain number of facts. He will find that most financial institutions
Oral Questions
and even a great many other institutions have, over the past years, increased the efficiency of their operations in an attempt to cut costs and remain competitive, and unfortunately, in some cases this has meant the loss of a certain number of jobs. The Government has tried to create all kinds of incentives to help the private sector create new jobs, and, as the Hon. Member is aware, last year we created over 400,000 new jobs.


David Orlikow: Mr. Speaker, obviously the Minister of Finance does not go to the bank to do his business himself or he would know there are thousands of Canadians who spend anywhere from 15 minutes to an hour waiting because there is so little service.


An Hon. Member:: Right on.


TAKEOVERS OF FINANCIAL INSTITUTIONS
David Orlikow: Mr. Speaker, the people of Canada are being told every day by Government and by business that to cut down on unemployment we have to increase productivity. Yet what we have seen in the last couple of years-


Mr. Speaker:: Would the Hon. Member ask his supplementary question, please?


David Orlikow: Mr. Speaker, how can the Minister say that the takeovers we have seen of financial institutions, and the wheeling and dealing we have seen, have added anything to productivity, except added profits to the owners of those corporations?


Marc Lalonde: First, the Hon. Member should realize that some of the takeovers that occurred did not lead to increased profits for the companies who initiated the takeovers. On the contrary, many businesses found themselves in serious difficulty as a result. 1 am saying there is no direct relation between takeovers and expanded profits.
As far as the principle of takeovers and mergers in the private sector is concerned, the Hon. Member knows perfectly well that if we as Canadians are to be able to compete internationally, we will have to have businesses in Canada that are strong enough to compete with the big multinationals on the world market. It does not take much brains to figure that out.

February 7, 1984
Oral Questions


CRIMINAL CODE
Mr. W. Kenneth Robinson (Etobicoke-Lakeshore):: Mr. Speaker, my question is directed to the Minister of Justice. In view of the fact that Brampton, Ontario, the home of Premier William Davis, has a tarnished image as a family community due to. the proliferation of so-called "adult entertainment parlours" where even G-strings are not required by the "lewd nude dancers", will the Minister introduce provisions in the Criminal Code amendments allowing municipalities to pass G-string by-laws and close down these anti-family establishments now in existence which serve only the strip club mentality?


John Horton McDermid: Tell him they passed the by-law last week, Mark.


Hon. Mark MacGuigan (Minister of Justice):: Mr. Speaker, with the co-operation of the House, 1 hope to give first reading to a Bill this afternoon which will deal with a more effective definition of pornography in our law, enabling us to get especially at the new kind of pornography. The kind of problem to which my friend refers sounds like a rather older problem, and I suspect that it is more adequately handled by the Government of Ontario if it is disposed to do so.


NATIONAL REVENUE
Hon. Perrin Beatty (Wellington-Dufferin-Simcoe):: Mr. Speaker, at the outset I want to thank the Minister of National Revenue for staying. I understand he had another appointment, but he was good enough to stay for my question.
The Minister has conceded that auditors within the taxation side of his Department have had quotas put upon them. Since he has been Minister, have auditors on the other side of his Department, in customs and excise, been forced to work under quotas?


Hon. Pierre Bussieres (Minister of National Revenue):: Mr. Speaker, I shall, if I may, correct the preamble to the Hon. Member's question. I have made it quite clear that there was no policy on the Taxation side of my Department to have quotas put on the auditors, to use the Hon. Member's expression. As I said before, there may have been a few unfortunate occurrences in certain sections, but the Department's policy had been restated, and that policy is that no quotas are set for audit operations. On the Excise Tax side of the Department, the procedure is the same: there are no such quotas.


Mr. Speaker:: A short supplementary, the Hon. Member for Skeena.


FISHERIES
James Ross Fulton: Mr. Speaker, my final supplementary question is directed to the Minister of Fisheries and Oceans. There is a sneaking suspicion among fishermen on the West Coast that the sum total of Liberal government policy on fish is the "Salmon Arm salute". However, my final supplementary question relates to the quote 1 gave to the Minister, and I will read it to him again:
The days of common property fishing are over.


Mr. Speaker:: Will the Hon. Member please state his supplementary question? Reading of documents in supplementaries is not strictly according to the rules.


James Ross Fulton: I hope the Minister will answer my final supplementary question.


Some Hon. Members:: Order.


James Ross Fulton: Is the common property statement in this document correct? Is it his view? If it is not his view, will he assure the House that whoever wrote it and had it distributed will be fired?


Pierre De Bané: Mr. Speaker, I will be announcing shortly initiatives by the Government regarding the Pacific fishery. On the other hand, I find the Hon. Member ignorant about what is common property and the consequences of common property. That topic has been studied to death, for instance, on the Atlantic coast, by people on the union side and on the fishermen's side-by all the participants.
Common property is certainly an element which fuels speculation, which fuels over-investment, and which fuels irrational lottery and races among fishermen. It has a lot of downside aspects to it, so please do not make a big fuss about something which has been studied to death by many experts a lot more knowledgeable that the Hon. Member for Skeena.


Some Hon. Members:: Oh, oh!


PETITION
Mr. Speaker:: I have the honour to inform the House that the petition presented by the Hon. Member for Fraser Valley West (Mr. Wenman) meets the requirements of the Standing Orders as to form.
February 7, 1984


OLYMPIC HOCKEY-CANADA VERSUS U.S.A.
Mr. Maurice Harquail (Restigouche):: Mr. Speaker, since the Minister of State for Fitness and Amateur Sport (Mr. Olivier) is in another country, I would just like to mention that Canada won 4-2 against the United States.


Some Hon. Members:: Hear, hear!


POINTS OF ORDER
Thomas Michael McMillan: Mr. Speaker, 1 rise on a point of order. During the Oral Question Period, the Prime Minister (Mr. Trudeau) put on the record an erroneous statistic which 1 know he would be the first to want to have corrected. He said that in-


Mr. Speaker:: With all due respect to the Hon. Member, differences as to statistics or facts are debate, not points of order. 1 can appreciate that the Hon. Member wants to make an intervention, but there are other devices available to him, including the adjournment debate, to correct a matter of this nature or to set the record straight.


Thomas Michael McMillan: Mr. Speaker, this would be the only way for the official record to be set straight.


Some Hon. Members:: Order, order.


Mr. Speaker:: Regretfully I have to rule that it is not a point of order.


James Ross Fulton: Mr. Speaker, I would simply ask that you review the common practices of this House that the lead-off speaker for the third Party, for the NDP in the House, generally gets two supplementaries together. Pursuing the practice that was followed today was most disruptive-


Mr. Speaker:: Order. Supplementaries are at the discretion of the Chair. That is a well-established parliamentary practice.


Raymond John Skelly: Mr. Speaker, you will recognize that yesterday the same thing occurred to me but it did not occur to members of the Official Opposition. If there is equality of opportunity for Hon. Members-


Mr. Speaker:: Order, order. Will the Hon. Member resume his seat. The Hon. Member for Nanaimo-Alberni (Mr. Miller) asked a further supplementary. He indicated to the Chair his concern, and it was granted to him. There are procedures which respect the dignity of this place available to Hon. Members.


Raymond John Skelly: A point of privilege, Mr. Speaker.


Mr. Speaker:: A point of privilege arising immediately out of these proceedings?
Points of Order


Raymond John Skelly: Immediately out of these proceedings, Mr. Speaker. I feel, as a Member of the House, and with a request to be treated in as equitable manner as other Hon. Members, that some-


Mr. Speaker:: Will the Hon. Member please resume his seat. The Hon. Member for Rosemont (Mr. Lachance).


Raymond John Skelly: A point of privilege, Mr. Speaker.


Mr. Speaker:: The Hon. Member cannot be continuously recognized on a point of privilege.


Raymond John Skelly: One further point, Mr. Speaker.


Mr. Speaker:: The Chair has ruled on the matter. [Translation]
Order, please. The Hon. Member for Rosemont (Mr. Lachance), on a point of order.


Mr. Claude-Andre Lachance (Rosemont):: Mr. Speaker, with reference to Standing Order 15, which gives you the privilege to preserve decorum in the House, I wish to draw your attention to an incident that occurred a few moments ago when you recognized the Member for Skeena (Mr. Fulton) for the third time and several Members of the New Democratic Party intimated, Mr. Speaker, that you should sit down.
I find this practice altogether deplorable and I hope there will be no recurrences in the future.


Mr. Doug Anguish (The Battlefords-Meadow Lake):: Mr. Speaker, I rise on a question of privilege. With regard to the long-established practice about which you have spoken to us concerning supplementaries being at the discretion of the Chair, the only time we have seen that start to take a different tone is since-


Mr. Speaker:: Order, order. Would the Hon. Member resume his seat. Presenting reports from Standing and Special Committees.


Raymond John Skelly: A point of privilege, Mr. Speaker.


Mr. Speaker:: The Hon. Member has already been recognized on a point of privilege. The subject matter which he raised is clearly not the kind of matter that he can raise on a point of privilege. If he wants to put a motion in place respecting the conduct of the Chair, that option is open to him and the group he represents; but the Hon. Member cannot continue in the vein he was adopting a few minutes ago.


Raymond John Skelly: Mr. Speaker, I wonder if we may find a way of accommodating what is perceived to be a problem. The mechanism would be for some consultation with the House Leader to deal with what might be perceived as a grievance. It may be within your discretion and ability to remove that grievance, and we would proceed with the dignity which the House requires.

February 7, 1984
Introduction of Bills


Mr. Speaker:: The Chair thanks the Hon. Member for his
suggestion.


Erik Nielsen: Mr. Speaker, I can say now that it would be most improper, in my belief, for me to be discussing with House Leaders, or anywhere else, the conduct of the Chair.


Some Hon. Members:: Oh, oh!


Erik Nielsen: That expression that 1 heard from the Hon. Member who is not even worthy of being identified is, incidentally, unparliamentary. I have adopted a consistent practice of never reflecting or remarking on the conduct of any occupant of the Chair except in this Chamber and I do not intend to alter that practice now, notwithstanding the good faith in which I am sure the suggestion was made.


Ian Deans: Mr. Speaker, 1 am always pleased when my friend and colleague, the Hon. House Leader for the Official Opposition, intervenes. However, 1 think what my colleague suggested was that you perhaps meet with the House Leader of this Party to discuss a way of resolving the difficulty that we seem to be facing at the moment.



ROUTINE PROCEEDINGS


Mark R. MacGuigan: for leave to introduce Bill C-18, An Act to provide for the Settlement of Claims by Indian bands in British Columbia relating to certain lands cut off from their reserves.


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

Mr. Paul E. McRae (Thunder Bay-Atikokan) moved: for leave to introduce Bill C-215, An Act to amend the Public Service Employment Act (Staff of Members of the House of Commons).


Some Hon. Members:: Explain.


Paul Edmund McRae: Mr. Speaker, the purpose of this Bill is to provide reasonable security to staff of all Members of Parliament. Members will know that particularly at election time approximately one-third of the Members cease to be Members. As a result, something in the order of 300 staff members are without employment after years of faithful service.
The Bill would place the staff of all Hon. Members in the same situation as those in the Prime Minister's Office, the offices of the Leader of the Opposition and Cabinet Ministers. Where a staff member has three years of service, such staff member would have a priority right of access to the Public Service.
The Bill is seconded by the Hon. Member for Lachine (Mr. Blaker), the Parliamentary Secretary to the Minister of International Trade. I can assure you that every effort will be made to secure the consent of all three Parties for what is a worthy attempt to achieve speedy passage of the Bill.


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

Mark R. MacGuigan: for leave to introduce Bill C-19, An Act to amend the Criminal Code, to amend An Act to amend the Criminal Code and to amend the Combines Investigation Act, the Criminal Law Amendment Act, 1977, the Customs Act, the Customs Tariff, the Excise Act, the Food and Drugs Act, the Narcotic Control Act, the Parole Act and the Weights and Measures Act, to repeal certain other Acts and to make other consequential amendments.


[Stage Direction]
Motion agreed to, Bill read the first time and ordered to be printed,
Mr. Speaker:: I have had notice from the Hon. Member for Comox-Powell River (Mr. Skelly) concerning a matter that he wishes to raise under Standing Order 30.


MOTION TO ADJOURN UNDER S.O. 30   FISHERIES SEIZURE OF FISHING VESSELS BY CHARTERED BANKS
Raymond John Skelly: Mr. Speaker, I wish to bring to your attention a matter that I believe warrants the adjournment of the House for a special debate, that is, the activity of some of the chartered banks with regard to seizing the vessels of West Coast fishermen. The banks have told fishermen that, in order to retain their vessels without any
February 7, 1984

guarantee, they must put up their homes or seek a guarantor to those loans. Once that happens, they seize the vessels. In the past, Members of Parliament have intervened successfully in some cases to stop that activity and the bank, in response, has sent letters to its clients suggesting that if they involve anyone else or make the matter public they will cancel any attempts to carry the loans and not foreclose.
This has become an emergency situation in which they are refusing to allow any publicity without divulging the confidential nature of it. There is a mechanism by which this House could act to prevent that. I firmly believe that people's civil rights are being violated. The Minister of Justice (Mr. Mac-Guigan) should be examining this. The Minister of Finance (Mr. Lalonde) should be charging the Inspector General of Banks to use whatever power he has to stop this practice of the chartered banks seizing vessels and homes and attaching guarantor's assets under conditions in which civil rights are violated and under which the client must act in absolute silence or lose everything. This is just not acceptable. I hope, Mr. Speaker, you will find that this matter is urgent and there is enough of an emergency in the situation to warrant a debate in Parliament.


Mr. Speaker:: The Hon. Member for Comox-Powell River (Mr. Skelly) gave the Chair the required notice of his intention to seek leave to move the adjournment of the House for the purpose of discussing this matter.
Prior to the Hon. Member's submission, the Chair did not have a great deal of information concerning the seizure of fishing vessels on the West Coast by Canadian chartered banks. The nature of the matter which the Hon. Member wishes the House to debate on an emergency basis is now much clearer to the Chair in light of the Hon. Member's explanation.
The Chair recognizes that this is an urgent and important matter, but is nevertheless bound to apply the conditions envisaged in the Standing Order. Standing Order 30(5) requires that the Speaker shall have regard to the extent to which the matter concerns the administrative responsibilities of the Government or could come within the scope of ministerial action. The Chair must also have regard to the probability of the matter being brought before the House within reasonable time by other means.
On the basis of the Hon. Member's submission, the Chair has some doubt as to whether the Government is in any position to intervene in a matter of this nature. The seizure of the fishing vessels by the Canadian chartered banks, regrettable though it may be, was presumably a legal action contemplated in the loan contracts between the banks and the fishermen.
I would also point out that this has been an ongoing problem and can hardly be classified as a sudden emergency. The Hon. Member referred to letters, I believe, he has been receiving over a period of time, and it is clear that the problems of the West Coast fishermen are not going to be resolved by an immediate debate in the House. Furthermore, an opportunity
Order Paper Questions
to debate this matter arose last Friday, an allotted day, when the Pacific coast fishery was the subject of debate. It would also be possible to raise this matter on a future allotted day. There are many such days remaining between now and March 1.
I would also underline two of the criteria relating to emergency debates set out in Citations 286 and 287 of Beauchesne's Fifth Edition. The former provides that the matter proposed to be discussed "must be so pressing that public interest will suffer if it is not given immediate attention".
The latter citation distinguishes between urgency of debate and the urgency of the matter itself. In order to meet the requirements of the Standing Order "the public interest must demand that discussion take place immediately".
I would point out to the Hon. Member that there are various methods of bringing this matter to the attention of the Government. Three allotted days remain in the current period, and one of them could be used for the discussion of this matter. The Estimates of expenditure will shortly be presented to Parliament and further opportunity will be provided both in the House and in committee to debate this matter. The issue could be raised during the Question Period and, failing a satisfactory reply, on the adjournment motion at the end of the day. There are thus various opportunities without resorting to an emergency debate.
Therefore, while recognizing the gravity of the matter for those involved, I have to rule that this request for leave to move a motion under Standing Order 30 does not conform to the requirements for debate at this stage on an urgent and priority basis.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
John Leslie Evans: Mr. Speaker, the following questions will be answered today: Nos. 55, 84, 162 and 252.


Mr. Howie: 1.	How many persons were employed by Treasury Board in the temporary assignment pool on December 1, 1983?
2.	What (a) was the salary level (b) were the duties of each position?


Mr. Peter Lang (Parliamentary Secretary to President of the Treasury Board):: 1. Thirty-eight.
2. The Temporary Assignment Program is a group of senior executives and officers who can undertake priority assignments

February 7, 1984
Order Paper Questions
of a temporary nature within departments at the request of the deputy minister.
As of December 1, 1983, the distribution of TAP positions, the salary level and duties were as follows:
Position:	Senior Policy Advisor
Classification and Salary:	EX-4 /$66,540 to $78,230
Total number:	5
Summary of duties: Under terms of reference established at the deputy ministerial level, the Senior Policy Advisor assumes responsibility for planning, program evaluation and policy analysis of major programs in the department.
Examples of the responsibilities associated with such assignments would include the following: review and analysis of legislative and constitutional basis of departmental programs, and the development and presentation of proposals for amendments to enabling legislation for Cabinet consideration; Evaluation of existing departmental programs and responsibilities in light of changing economic, social or political requirements, and development of associated advice and recommendations to deputy minister and minister.
Position:	Policy Advisor
Classification and Salary:	EX-3 /$60,870	to $71,550
Total number:	14
Summary of duties: Plans, directs and co-ordinates projects associated with the analysis, evaluation, organization and/or development of departmental capabilities in respect of new or revised programs of major consequence to departmental operations.
Examples of the responsibilities associated with such assignments would include the following: development and presentation of proposals for revisions to legislation for consideration by the deputy minister and/or minister; analysis of departmental programs, objectives and requirements in light of changing economic, social or political requirements, and development of associated advice and recommendations to the deputy minister and minister.
Position:	Advisor
Classification and Salary:	EX-2 /$56,090 to $65,980
Total number:	6
Summary of duties: plans, directs and carries out complex assignments relating to the appraisal, analysis and development of policies and programs, to organizational assistance, to new program implementation.
Review legislation, policies and precedents relating to assigned areas of responsibility, and developing and presenting proposals and recommendations on new or revised programs, changes to legislation and/or amendments to policies to senior management of the department; filling key positions in organizations at the Director General level; by developing a new organization while managing all or part of it during the development phases; by rebuilding an organization that has encountered difficulties.
Position:	Senior Officer
Classification and Salary:	EX-1 /$51,410 to $60,420
Total number:	7
Summary of duties: plans, directs and carries out assignments relating to the appraisal, analysis and development of policies and programs, to organizational assistance, to new program implementation.
Assist department management in the development of recommendations for amendments to legislation and the planning, development and implementation of new programs and policies in response to Cabinet requirements.
Evaluates the effectiveness and efficiency of existing programs in terms of departmental objectives and legislative responsibilities.
Position:	Officer
Classification and Salary:	SM /$47,960 to $56,400
Total number:	6
Summary of duties: conducts a program of study and evaluation of the Department and more specifically of the areas of assigned responsibilities; evaluates the effectiveness and efficiency of existing programs in terms of departmental objectives and legislative responsibilities and analyses departmental requirements to meet these responsibilities; develops and presents recommendations for changes in policies and programs; provides consultative and advisory services for the implementation of changes in policies and programs; directs assigned staff resources.


Mr. Howie: How many persons engaged in public relations, media relations or publicity are employed by the Department of Public Works?


Hon. Romeo LeBlanc (Minister of Public Works):: There are 30 persons engaged in public relations, media relations or publicity employed in Public Works Canada.


Mr. Mazankowski: 1.	Is the Department of Regional Industrial Expansion's econometric model capable of estimating the impact on short-term and long-term interest rates in Canada for varying levels of the government deficit and (a) if not, for what reason (b) if so, what change in short-term and long-term interest rates from current levels does it predict if the deficit were (i) 0 (ii) $10 billion (iii) $20 billion?
2.	What impact would the changes in interest rates have on the cost of servicing the national debt?


Hon. Ed Lumley (Minister of Regional Industrial Expansion):: 1. Yes. (a) Not applicable, (b) (i), (ii) and (iii) Precise changes in short-term and long-term interest rates from current levels cannot be predicted unless the way in which the deficit is to be reduced to the specified levels is also indicated by the questioner. In general, however, lower deficits would influence interest rates downward.
February 7, 1984

2. The direct effect is clearly positive; that is, changes in interest rates lead to changes in debt servicing costs, in the same direction, given no change in the government debt portfolio.
Indirect effects of interest rate changes on national debt servicing costs can also occur. For example, rising interest rates may lead to decreased economic growth which, in the absence of policy change, would reduce government revenues and increase government expenditures thereby raising the level of the stock of government debt or changing the composition of the government debt portfolio toward higher yield debt instruments. This would also increase the cost of servicing the debt.
A full response to the question would require consideration of the causes of changes in interest rates, over-all economic responses to these changes, and government policy and program reaction to both the direct and indirect effects of interest rate changes.


Mr. McKinnon: Did the Department of National Defence award a contract, valued at $489,000, to Garrett Manufacturing Ltd. of Rexdale, Ontario for the repair and overhaul of the CF-18 aircraft air conditioning systems and, if so (a) was this repair and overhaul necessary because of some defect in the air conditioning system (b) did the Department pay for the repairs and, if so, for what reason (c) does this contract apply to (i) the 20 planes received from McDonnell Douglas (ii) aircraft not yet received?


Hon. Charles Lapointe (Minister of Supply and Services):: The Department of Supply and Services awarded a contract valued at $498,000 to Garrett Manufacturing Ltd., on behalf of DND to supply long lead time accountable advance CF-18 air conditioning system spares as part of the normal repair and overhaul support program for DND aircraft. Actual repair and overhaul work on an as-required basis is not due to start until October, 1984.


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


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


Some Hon. Members:: Agreed.


Mr. Speaker:: Orders of the Day. The Hon. Member for Comox-Powell River (Mr. Skelly) rises on a point of order.


Raymond John Skelly: Mr. Speaker, were petitions called?


Mr. Speaker:: Yes, I did call them. I regret but there will be an opportunity for the Hon. Member to present his petition tomorrow. We are at Orders of the Day.
Excise Tax Act



GOVERNMENT ORDERS


Hon. Roy MacLaren (Minister of State (Finance)) moved: that Bill C-14, an Act to amend an Act to amend the Excise Tax Act and the Excise Act and to provide for a revenue tax in respect of petroleum and gas be read the second time and referred to a Committee of the Whole.


Mr. Speaker:: Is it the pleasure of the House to adopt the motion? The Hon. Member for Comox-Powell River.


Raymond John Skelly: Mr. Speaker, I am under the impression that we are commencing debate on Bill C-14.


Mr. Speaker:: That is so. The usual practice at this point would be to recognize the Minister introducing the Bill and then the Hon. Member. The Hon. Minister of State for Finance.


Roy MacLaren: Mr. Speaker, the Bill before us amends the petroleum and gas revenue tax to reflect measures announced almost two years ago as part of the National Energy Program update and in the Budget of last April. The specific changes set out in the Bill include the following: a one-year reduction in the basic rate of petroleum gas revenue tax from 16 per cent to 14.67 per cent; an annual credit for small producers of $250,000 against their PGRT liabilities of a corporation on Division I production and processing revenues; a provision allowing the reduction of eligible capital expenditures in an enhanced oil recovery project from production revenue of eligible projects, and technical amendments, designed among other things to reduce the paper burden on taxpayers.
As the House will recall, fiscal and pricing measures were announced in the National Energy Program update in 1982 in response to a number of economic forces affecting the petroleum industry. The economic slowdown in the United States reduced natural gas export markets; falling demand for oil and natural gas in Canada lowered industry returns; and the high interest rates of 1981 and 1982 created difficulties for many firms. In addition, there has been continuing uncertainty about world oil prices over the next decade.
Accordingly, the National Energy Program update provided a package of measures valued at some $2 billion in improved cash flow for the petroleum sector. Moreover, the April Budget and recent amendments to the energy agreements with producing provinces are expected to add an additional $700 million to industry cash flow.
The tax measures in this Bill account for about $1.3 billion in relief to the petroleum industry. The temporary reduction in the petroleum and gas revenue tax on production and royalty income is estimated to have increased industry cash flow by $200 million over the relieving period from June 1, 1982, to May 31, 1983.

February 7, 1984
Excise Tax Act
The annual tax credit for small producers of $250,000 against PGRT liability is expected to provide $900 million in relief over the 1982 to 1986 period.
In addition, Mr. Speaker, the PGRT reduction for enhanced oil recovery projects will mean that investors pay no PGRT until eligible capital investments have been recovered. The response has been encouraging. For example, BP Explorations Limited has announced that it will proceed with the Wolf Lake project and Esso Resources Limited has begun work at Cold Lake. Additional projects appear to be under consideration by other corporations. This measure is estimated to reduce PGRT liabilities of project sponsors by a total of $45 million in the two years ending March 31, 1985.
Today, I wish to talk a little about the Government's energy program and progress toward its objectives. Naturally, since I am speaking to a tax Bill, I shall look in some detail at the fiscal dimension of the policy.
Let me first comment on the policy background and the nature of the taxation system for oil and gas as it was, and as it is now.
In 1980, after returning to government, this Party began to look closely at the way in which the revenues from oil and gas were shared among provincial and federal Governments and industry. This question had taken on much greater importance in view of the enormous increase in the world price for oil and the increasing agitation from many quarters, including some in the private sector, in favour of raising Canadian oil prices closer to world prices. We were determined to ensure that if we were to increase incentives for oil and gas production, at the expense of energy consuming industries in Canada, the rate of inflation and the rate of national economic expansion, these gains should be fairly shared.
By 1980, it had become apparent that the revenue sharing system in oil and gas was fundamentally unfair to the national Government. A few numbers illustrate the point.
In 1978, of total net petroleum revenues of $8.4 billion, the federal Government received $751 million. In 1979, total revenues rose to $10.6 billion; the federal share was $797 million. In 1980, total revenues reached $13.2 billion. The federal share was $795 million. Overall revenue from oil and gas had risen over the period by $4.8 billion. The producing provinces and the petroleum industry received all of that increase. The federal Government actually lost ground between 1979 and 1980.
This was neither equitable, Mr. Speaker, nor did it reflect the fact that the federal Government had onerous responsibilities. I recognize that there were good energy policy arguments for letting the price rise even further. However, a higher price had to involve fairer revenue sharing. On the evidence, that was not and is not a partisan issue. Therefore, Mr. Speaker, we took decisive action designed to make the system more equitable for all concerned, the producers, producing provinces, consumers and the federal Government. In October 1980, and subsequently, through negotiations with the producing provinces, we came up with a package which balanced higher wellhead prices for oil and gas producers with fair prices for consumers and a greater share for the national Government. As a result of the federal-provincial agreements, federal revenues from production, minus incentives, increased from $795 million in 1980 to $1.3 billion in 1981 and $2 billion in 1982. We now estimate net federal revenues from production at $2.5 billion in 1983.
It is our view, Mr. Speaker, that the new system represents a more equitable sharing of revenue. Resolving this issue was the key to resolving the oil and gas pricing issue in a balanced way. It enabled a less confrontational discussion between the two levels of government about the Canadian pricing response to changes in the world oil price.
Some have argued, Mr. Speaker, that other parties in the revenue-sharing game have been hard done by, and by implication that any hesitation or problem in the petroleum industry is due to new taxes. Not unnaturally, this has led to some demands for a reduction in the burden of federal tax. Some basic facts might be helpful here. First, the former Conservative Government advocated that the federal share should increase as prices rose. Consider the evidence. On Page 53 of the December 1979 Budget papers, it is stated:
It is the intention of the federal Government to impose a new energy tax that would capture roughly one-half of the returns accruing from annual price increases in excess of $2 per barrel per year on oil and 30 cents per Mcf per year on gas.
According to our calculations, Mr. Speaker, such a tax would have taken some $7.5 billion, less the incentives they might have put in place, from oil and gas production revenues over the period of 1980-83. You will recall that this view was taken even before the revolution in Iran caused world oil prices to double, indeed to more than double.
Second, Mr. Speaker, let us examine for a moment the facts on revenue sharing. While it is true that the federal share has increased, as it should, the regime has been eminently fair to the producers and to the producing provinces. Between 1979 and 1982, the federal Government's net take from upstream revenues has increased by about $1.25 billion. During the same period, the producing provinces' take has risen by about $1.65 billion. Industry's share has increased by $2.87 billion. Thus, the federal Government received a smaller share of the 197982 increase in production revenues than either of the other two participants despite the major changes made to the system in 1980 and 1981. Industry now has approximately the same share as in 1979. However, the size of the pie is considerably greater by some 54 per cent.
Third, Mr. Speaker, those who support the view that the federal energy taxes are excessive tend to ignore some basic realities, both world-wide and here in Canada. It is claimed, for example, that the fall in the number of active drilling rigs in Canada is a result of the National Energy Program. But the number of active rigs in the United States has fallen also, by some 60 per cent at one point during 1983. That is greater than the drop here in Canada. The reasons are quite simple.
February 7, 1984

The industry's market reduced expectations of natural gas sales, the outlook for world oil prices, and increased conservation by consumers have dampened the exploration rush. In Canada, the price for new oil has increased dramatically since 1979. The netback has doubled. Indeed, oil well completions are up substantially as a result of our policies, including an increase in our frontier lands and offshore, in the wake of more demanding work obligations and an attractive fiscal regime.
We have heard it said, Mr. Speaker, that the economics for the industry are better outside Canada. I shall let the industry's investment actions speak for themselves on this point. In 1982, a year in which the Canadian oil industry's capital expenditures rose slightly in Canada, its capital expenditures outside the country fell by one-third. In the case of Canadian controlled larger companies, the drop was even greater, a 59 per cent drop in their capital investment in the United States alone. If figures for 1983 confirm the evidence that this pattern has continued at a similar rate, the total level of investment by Canadian oil firms, both junior and senior, outside Canada will have fallen by 68 per cent between 1981 and 1983.
By contrast, despite the sag in natural gas markets, increased interest costs and disappointment over world oil price developments, the same companies reduced their capital expenditures in Canada by only 7.6 per cent. Forced to conserve cash, they cut back their outside investments nine times as much as they did their domestic expenditures. In short, Mr. Speaker, the industry's allocation of its dollars proves the attractiveness of the opportunities here at home.
Also relevant in considering taxes on the oil industry is its reinvestment behaviour. In 1981, the petroleum industry's reinvestment of production cash flow was well over 100 per cent. In the first half of 1983, the ratio had fallen to 82 per cent, with some groups in the industry-notably the foreign senior companies-reinvesting as little as one-half of their cash flow. This is not in fact a picture of an industry with too little cash, at least in the aggregate. Rather, it is a picture of an industry hesitant to invest for a variety of reasons, including uncertainty about world oil prices. We recognize this. For this reason we have, in concert with producing provinces, offered fiscal concessions designed to improve the investor's return and reduce the risk of major oil projects.
Those efforts are now beginning to pay off: Cold Lake, Wolf Lake, Syncrude, Norman Wells and so on. These projects and others will support our quest for energy security and economic development, under a fiscal regime which is designed not to provide industry-wide windfalls but, rather, to reward successful oil projects. Confronted by these facts, Mr. Speaker, and presumably concerned about the federal budget deficit, would anyone seriously suggest that the federal Government should greatly reduce its share of petroleum revenues?
Before leaving the subject of the fiscal regime for the petroleum industry, Mr. Speaker, let me make a few comments about the Petroleum Incentives Program, one of the many new energy programs funded with the help of the
Excise Tax Act
additional revenues gained in 1981. As Minister of State for Finance, I am naturally concerned about all Government expenditure, and major programs warrant special attention. However, I believe the critics have lost their perspective on this matter. The following points certainly appear relevant to me.
First, both the private sector and the national Government believe that there should be exploration in the frontier. No one would argue with the statement that such activity is both risky and expensive, but the pay-off could be enormous if there are more flibernias and Venture fields yet to be found. Second, we believe that Canadian companies should play a major role in the frontier. This has not been the case in the past. Most of the prospective lands are under licence by foreign-owned firms. About the only way for Canadian companies to play a larger role in the frontier in this decade is in partnership with foreign firms. Third, in contrast with countries like the United States, which charge substantial sums for the right to explore frontier lands, we believe that special financial incentives are required to encourage exploration in the frontier. We believe, too, that we have to help accelerate this process of partnership between relatively small Canadian companies and foreign companies with greater financial resources. Fourth, we do not believe that drilling 65 wells in the frontier, which is less than 4 per cent of the national total of 1,900 exploration wells drilled in 1983, is excessive considering that the frontier may account for nearly 20 per cent of Canada's ultimate resources of conventional oil and about 60 per cent of our ultimate resources of natural gas. Fifth, while we recognize that the current incentive rates for Canadian companies are generous, they are not out of line with those which the former Conservative Government would have made available to the industry in 1979. The form of incentive is different. The Conservative Government would have continued with a tax-based incentive, of no immediate use to many Canadian companies, while we have a grant system directed preferentially toward Canadian companies.
Incentives in the form of grants are more visible, but the fact remains that the former Government's proposed incentives were very rich too. Our grants pay up to 80 per cent of approved expenditures. A fully taxable Canadian controlled company with a high Canadian ownership rate can have its net cost cut to seven cents on the dollar. An individual taxpayer can face even lower net costs. The Conservative Budget of 1979, on page 69, indicated a willingness to see individual taxpayers pay as little as two cents on the dollar. The point is, however, that only taxable firms or individuals would have received any real benefit from such an approach. In the oil business, taxable firms have generally meant the foreign companies. In the circumstances, Mr. Speaker, it is surely incumbent on those who say we should end discrimination in the Canada Lands to say what they mean. Do they mean a return to the old incentives scheme, biased against Canadian firms? Canadianization goals without supportive measures are simply unfeasible. John Stoik, President of Gulf Canada, has some pertinent observations on the impact of PIP on Canadian companies. Here is what he said on January 8:

February 7, 1984
Excise Tax Act
Now, if the PIP grants are done away with, certainly the companies that are going to be hurt most are the Canadian companies who have exposed their companies to this activity. And if those grants are done away with, they are going to feel the pain the most.
Mr. Speaker, Canadian ownership of the oil and gas industry is up from 28 per cent to 38 per cent in three years, a good beginning toward our objective of 50 per cent Canadian ownership by 1990. Substantial progress has been made in the frontier element of our Canadianization thrust. While in 1980 the frontier landscape was dominated by relatively few multinational firms, we now have an impressive array of private Canadian companies involved, as well as a strengthened Petro-Canada. Canadian companies held only 38 per cent of frontier land in 1980. Under the new arrangements, they can earn up to 60 per cent under conditions that are fair to all companies, foreign-based or domestic.
However, the shift goes beyond ownership, Mr. Speaker. Several of the new farm-in arrangements envisage the Canadian companies being or becoming over time the operators of the exploration venture. Home, Husky and Bow Valley are among the Canadian frontier newcomers who have taken their place in the ranks of operators, building up a substantial group of Canadian companies able to operate for the first time in and compete for lands in both the offshore and in the north. The Canadianization effort is at the same time supporting our energy security and economic development objectives. For example, developments offshore Nova Scotia, heavily supported by PIP grants, have opened up new economic opportunities for that province as service and supply industries migrate to the area and planning proceeds toward Sable Island gas production during this decade. The number of wells drilled in the East Coast offshore quadrupled in 1983. All of them involved Canadian companies.
Oil demand, Mr. Speaker, a key to achieving energy security, has fallen dramatically. Starting from a level of 1.5 million barrels per day in 1972, oil demand peaked in 1979 at 1.9 million barrels per day. In 1983, some four years later, domestic demand has fallen to 1.4 million barrels per day, despite a slight increase over the period in gross domestic product. Thousands of Canadians, many of them aided by federal off-oil grants, have contributed to this dramatic shift, one which few outside our Government believed could be achieved. Now few will believe that oil demand will rise significantly over the rest of the decade. Net oil imports have fallen from over 300,000 barrels a day in 1979 to zero in 1983. Our overall energy trade surplus, some $3.9 billion in 1979, reached $6.3 billion in 1982. Drilling for oil increased by more than one half in 1983 to a new record level. It will continue to increase if the host provinces play a supportive role. New federal and provincial incentives have spurred enhanced oil projects, expansion at Syncrude and Suncor, and in situ tar sands development. In 1983, oil production increased for the first time since 1979.
Finally, while some critics continue to talk of a "federally-imposed fiscal regime", more knowledgeable observers are aware that the current regime was the result of federal-provincial agreements. The negotiations required compromise on
both sides. The objectives of the National Energy Program, however, were preserved and federal-provincial jurisdictions respected. There is a new balance in the relationship between the Governments of the producing provinces and the federal Government.
In the old days, Mr. Speaker, the producing provinces largely left to the federal Government the burden of providing incentives to the petroleum industry while they took the lion's share of the revenues. As is only fair, the producing provinces continue to receive a substantial portion of the total revenues, but there is a new attitude of partnership when it comes to providing fiscal incentives such as those offered to the Cold Lake and Wolf Lake projects. This is an approach which bodes well for the federal-provincial relations and the future of the oil and gas industry. I hope that our provincial colleagues share this view, recognizing that there must be no reversion to the old unbalanced system.
The past few years have seen a major change in the Canadian petroleum sector and the world-wide environment affecting it. Our policies are designed to facilitate that change while ensuring success in our efforts by recognizing and accommodating changes, both domestic and international. The Bill before the House today is a good illustration of how we have responded to altered circumstances by helping and encouraging the industry and its activities.


Miss Pat Carney (Vancouver Centre):: Mr. Speaker, Bill C-14 basically provides much needed royalty relief for Canada's energy sector. I listened with a great deal of interest to the Minister's comments on this legislation. While I have respect for the Minister, who is new in his job, I can only say that he clearly does not know much about the energy field. He clearly does not understand the nature of the legislation with which he has been dealing. Otherwise, he could not have given this House such a pathetic defence of a destructive piece of legislation. For instance, he lists all the reasons why oil prices have decreased and all the reasons why this royalty relief is necessary. He talks about the decrease in oil prices and the recession. He fails to mention that the major reason this royalty relief is needed is that the NEP was so badly based on a forecast of rising revenues and so out of tune with the realities of the world that this kind of band-aid approach has had to be implemented.
The Minister talks about the fact that investment in Canada has dropped less than investment abroad. He fails to understand the drilling exploration arrangements that are made between the Government and the contractors which force companies to maintain their exploration programs in order to hold their land. I could go on and later in my speech and I will return to these points.
I am always amused at how the Government, in discussing the national energy policy, continually tries to imply that it has produced major developments, such as Hibernia and Sable Island, which of course preceded the introduction of this Bill. In fact, the Government's only contribution to those major
February 7, 1984

finds has been to expropriate and confiscate some of the action through the back-in. What amuses me the most is the Government's implication that somehow or other it was responsible for the discovery of oil at Norman Wells. In fact, the person who discovered oil at Norman Wells was Sir Alexander MacKenzie nearly 200 years ago.
The Minister has referred to three major initiatives. They are the $250,000 PGRT tax credit, a reduction in royalties, and the Enhanced Oil Recovery Program. The first allows a corporation an annual credit of up to $250,000 that may be deducted from the PGRT liability. This was announced in the Government's national energy policy update in 1982. It has been in effect since then. I am pleased to see that it will continue. Another tax measure was a royalty reduction from 16 per cent to 14.67 per cent, effective June 1, 1982 to May 31, 1983. This is a gross rate because the actual rate has dropped from 12 per cent to 11 per cent. This was also announced when the NEP update was tabled well over a year and a half ago. We are today talking about a Bill which puts into place some measures which are no longer even in effect. The last measure I mentioned is the Enhanced Oil Recovery Program announced in the April 19, 1983 Budget, which basically provides for a reduction from income of capital costs in enhanced oil recovery projects.
The Minister has made much of the miniprojects which he says flow from this kind of approach. He failed to comment on the loss of the megaprojects which we were anticipating as engines of growth for the economy before the introduction of the NEP.
1 am not here today to argue against the intent of this bill because it does provide royalty relief for corporations. Some of these measures are good measures which my Party has long argued for. What concerns me is that the measures which this Bill touches on deal on the surface only with the problems caused by the Government's National Energy Program. He talks of fiscal dimensions. We talk about the human dimensions of the terrible blows that were suffered in the western sedimentary basin, the collapse of communities, the loss of jobs, the bankruptcies, and the human tragedy which followed the introduction of this policy which I will discuss later.
I would like to give you an overall picture of the state of the industry at the present, just three years after the national energy policy was first introduced. The first goal of the NEP was security of supply or self-sufficiency by 1990. An internal federal study released recently shows that Canada will have a tough time achieving that goal and could remain dependent on imports through to the end of the century. It shows that unless world oil prices climb more quickly than now expected, and offshore production and oil sands projects come onstream sooner than anticipated, Canada might never be self-sufficient in this century except for two brief two-year periods in the mid 1990s. Even that seems unlikely. Another report prepared by the Geological Survey of Canada says that it is unlikely that there will be any significant offshore production in this decade. So much for self-sufficiency.
Excise Tax Act
The second goal referred to is Canadianization. More than 20 years ago the late Prime Minister John Diefenbaker described the rationale for Canadianization. I think it is well worth repeating his words. He said, "Investment in Canada must fully regard Canadian industry, Canadian interests and Canadians' economic destiny." The cost of a Liberal Canadianization program has been the outflow of about $11.1 billion in the first two years alone after this policy was introduced. A year ago Pitfield Mackay Ross said that the outflow of Canadian capital had reached tidal wave proportions. When the Bank of Canada was defending our dollar with painfully high interest rates the Government was destroying the dollar through so-called Canadianization. This hardly takes into account Canadian industry, Canadian interests or Canada's economic destiny.
The final objective of the national energy policy was fairness. Only 150 days after it was introduced 35,000 jobs had been lost, companies had 25 per cent of their offshore holdings expropriated by the Government, the cost of heating oil more than doubled and Government taxation on gasoline tripled. I wonder how the Liberal Government would define fairness. The Minister says in his speech that fairness is not a partisan issue. We wish to make it a partisan issue because the Government has been unfair.
While we are on the subject of fairness, I would like to discuss the matter of the Canadian ownership charge which is costing each and every energy consumer in this country an average of $60 a year. This charge was imposed by the Government to subsidize Petro-Canada's purchase of Petrofina. That exorbitant $1.7 billion price tag has been covered. The Government now says it will not cancel the tax because it has an obligation to bail out Dome Petroleum should Dome want or need that assistance. Dome does not want to touch that program with a 10 foot pole. Still the Government will not drop the charge because it means an additional $1 billion a year in revenues to feed the ever-growing national debt.
It is obvious that what it really needed is a major overhaul of the punitive aspects of the national energy policy. Before we can get on with the job of taking corrective measures which go well beyond the ones introduced in this Bill, the Government must first admit that it made a mistake. The first step to resolving in issue is to admit openly that there is a problem and to face it realistically. That is something the Government needs to do after 15 years in power.
I did take heart when the Minister responsible for this disastrous legislation stood in the House on January 30 and apologized to the Leader of my Party for unjustly accusing him of advocating tax changes that were advantageous only to the rich, a charge which later proved false. Possibly the Minister should also apologize to the people of Canada for this equally serious energy problem he has created. I expect that the Government knows the extent of its mistake and hopes to hide it from the people of Canada by introducing a flurry of

February 7, 1984
Excise Tax Act
amendments, such as the one we have before us today. In am only disheartened that this legislation does not contain anything new.
You can understand my surprise when 1 read in the Toronto Star recently that the present Minister of Energy Mines and Resources (Mr. Chretien) is proud of his Government's record. He is quoted as saying that the reason my Party is not talking energy policy is that we know that he is a good Minister and that his Government is doing a good job in the energy sector. In a recent speech Mr. Chretien talked about that record with pride and compared, point by point, his views with those of Mr. Mulroney who reviewed portions of our Party's energy policies in Calgary last October. 1 believe many of his points deserve clarification.
Mr. Chretien starts off his speech by saying that Mr. Mulroney treated Parliament with contempt in his Calgary speech when he likened the NEP to a hold-up at a corner gas station. I would remind Members of the House of how contemptuous of Parliament the Government was when it introduced this legislation in the form of an omnibus Bill that precipitated the historic ringing of the bells. That action eventually shut down all business in the House.
The Minister went on to say that the oil and gas industry gets approximately 52 per cent of energy revenues compared to the historic share of 46 per cent in 1978 or 41 per cent in 1979 when the Conservatives were in power. In real terms, however, the industries' net income after operational costs, interest, royalties, taxes, etc. are taken into consideration, was 12.5 per cent of gross revenue in the first six months of 1983, which has led to severe cash flow problems in the industry.
The Government also fails to point out that the government share has jumped from 7 per cent to over 24 per cent, which is an increase of 343 per cent since 1979, at a time when the industry needs the cash flow to finance badly needed investment in the industry. The truth of the matter is that the Government sees the energy sector as a cash cow, something to be milked for all it is worth to feed the evergrowing national debt.
Mr. Chretien also took exception to Mr. Mulroney's comment that the federal Government had instructed Petro-Canada to spend billions of dollars to buy up companies. Mr. Chretien said that he does not apologize for this and in fact says that Canadians are proud of Petro-Canada because "it's ours". I wonder if taxpayers are proud of the fact that we spent $1.7 billion to buy Petrofina's assets, $200 million more than its estimated worth. I wonder if they would be proud if they knew that the Auditor General's office was unable to obtain pre-acquisition and post-acquisition evaluations prepared or being prepared by Petro-Canada on that transaction. Even the Auditor General has publicly stated, and I quote from his report:
There is a serious weakness in the management of public funds when departmental and central agency officials have had no responsibility to ensure due regard to economy is demonstrated and value for money achieved.
I wonder if the Government is proud of a policy which maliciously and with intent discriminated against one region of the country, that is, western Canada.
Another point the Minister of Mines, Energy and Resources dwelt on is Mr. Mulroney's comment that since 1980 nearly half of the drilling rigs in western Canada have been idle. The Minister then pointed out that during the same period of time the number of rigs working in the United States dropped by more than half between 1981 and 1983 to 1,807-a 60 per cent drop. Again, that subject has been raised this afternoon.
What the Government fails to point out is that the picture has vastly improved in the United States. The number of rigs there has now climbed to 2,556. That represents a 56 per cent increase. In Canada, the number of rigs dropped from 385 to 280 from November, 1982, to November 1983. That is a decline of 27 per cent. No wonder the various statements made in the House by the Government on the matter of energy are so confusing.
Just to confuse us even further, the Energy Minister has commented that Mr. Mulroney does not know that there will be 51 per cent more oil wells-


The Acting Speaker (Mr. Guilbault):: Order, please. I have been listening very carefully to the Hon. Member. On numerous occasions she has been using the names of Members of the House. They should be called by their ridings or their portfolio. Beauchesne is very clear on this, that if a text being quoted from is not parliamentary, it does not make the reference in the House any more parliamentary.


Pat Carney: I apologize, Mr. Speaker. It is an elementary mistake on which you will have to watch me.
Just to confuse us further, the Minister of Energy, Mines and Resources said that the Leader of the Opposition (Mr. Mulroney) does not know that there will be 51 per cent more oil wells completed in Canada in 1983 than in 1980. This looks fine on the surface until one examines the figures closely. In 1980, there were 1,017 oil wells drilled; in 1981, 740 and in 1982, 760. There was a 25 per cent drop from 1980 to 1982, and 1983 is not expected to be any better.
If the figures do climb at all it will most likely be through the efforts of provincial governments like Saskatchewan's which initiated a royalty tax holiday that allows for quick pay-backs on investments. Saskatchewan, in a program started by the NDP, awarded grants of up to 75 per cent of the total drilling costs of all oil and gas wells. It paid out $40 million to $60 million annually for companies to drill holes, 30 percent of which were dry.
In July, 1982, the Progressive Conservative Government introduced a new program in which wells are exempt from provincial royalties during the first to fifth years of production. It has caused a boom in the province. Province-wide, 51 rigs were operating during the first week of September, compared to 15 the year before. I do not really believe that the federal Government can take credit for this, as the Minister of State for Finance (Mr. MacLaren) has attempted to do today. One
February 7, 1984

would also think that the Government would do well to learn from Saskatchewan's experience that it makes more sense to reward success, not merely effort, which is the basic problem with the PIP program. In that program, companies are encouraged to spend taxpayers' dollars drilling dry holes.
The Minister of Energy, Mines and Resources also took offence when the Leader of the Opposition said that few people realized that our oil production is declining at a rate of 30,000 barrels a day. The Energy Minister commented that our crude oil production climbed 3.4 per cent in 1983 and conventional crude by 2.4 per cent in the same year. Unfortunately, the Minister of Energy, Mines and Resources, like his colleague in the Elouse today, uses selected statistics to hide the real truth.
The real facts are that since the NEP was introduced, production of conventional crude is down some 16 per cent. Our capacity to produce conventional oil has been declining since 1969, and we are now in our fourteenth consecutive year of decline. According to a Geological Survey of Canada forecast, total Canadian oil production, now around 1.46 million barrels a day, would decline to 1.35 million barrels a day by 1990, peak at 1.73 million barrels in 1996 when frontier production reaches its maximum, and then trail off again to 1.6 million barrels per day by the year 2000.
Currently, Canada is self-sufficient but this is a temporary situation resulting from the sharp 30 per cent drop in demand caused by the recession. That is hardly something to be proud of.
The Minister of Energy, Mines and Resources said that he applauded the statement by the Leader of the Opposition that the Progressive Conservative Party is in favour of Canadiani-zation. But it is worth noting who first started the move toward increased Canadian presence in the oil and gas industry. It was not the Liberal Government of the former Prime Minister Louis St. Laurent, for between 1945 and 1951, Canadian ownership of the industry had slipped from almost 60 per cent to under 50 per cent and American ownership had actually increased by 10 per cent. Through the 1950s that position continued to erode until action was taken by the Diefenbaker Government.
It was a Progressive Conservative Government which established the National Energy Board in order to control the quantities of oil and gas that could be shipped back to the United States by American controlled Canadian subsidiary companies.
It was also a Conservative Government, under the then Prime Minister Diefenbaker, which introduced regulations for northern development that required majority Canadian beneficial ownership of any oil and gas producing properties. It must also be worth at least a footnote in history to point out that the then Opposition Leader, Mr. Pearson, was concerned that those Canadianization regulations would discourage foreign investment in Canada.
Excise Tax Act
So, of course, my Party supports Canadianization. We started it. We, however, believe in Canadianization that allows Canadian companies to flourish in an expanding oil and gas industry, not the approach of the Liberals which is to increase Canadian ownership by reducing the growth of the industry.
Nearing the end of his attack on the Leader of the Opposition the Minister of Energy, Mines and Resources said that the federal Government should actually continue its intrusion into exploration management. That is something on which we basically disagree. Energy policy is the role of a reasonable Government, but exploration, development and how capital should be reinvested should be controlled from the boardrooms of this country, not from the Government offices in Ottawa or Calgary. Perhaps the Prime Minister (Mr. Trudeau) should consider instructing his Government to get out of the boardrooms as well as the bedrooms of the nation.
The Minister of Energy ended his attack on the Leader of the Opposition by saying that he did not need to make promises about the need for co-operation between the federal Government, the provinces and the industry. He said he had already delivered. We beg to differ.
The current federal-provincial dispute over search and rescue off Newfoundland, which is endangering the lives of the men working on those offshore rigs, is a shining example of the kind of co-operation that Ottawa extends to the provinces.
The Industry's view of the Government's stand was recently summed up by the same Chairman of Gulf Canada Limited to whom the Minister of State for Finance referred earlier this afternoon and who is quoted as saying, in reference to the winter drilling fiasco:
-the greatest threat to development of the massive oil reserves is legal and political wrangling.
The Chairman of Gulf added that oil companies are afraid to invest heavily in offshore exploration because they do not know if the federal or the Newfoundland Government is calling the shot, or which rules should be followed.
I question the Minister's definition of co-operation. Since I was appointed energy critic last September, I have been crossing the country speaking with literally hundreds of representatives from the energy industry, provincial Premiers and the people who have suffered because of this policy. I have seen what this Government dares not talk about. The small towns which have been so badly hit, the shopping centres with empty stores, the for rent signs plastered on their windows, hotels boarded and shuttered and in receivership; all because an energy boom was snuffed out largely by this Liberal Government at a time when there were other adverse forces still to be taken into account. I have mentioned before in the House the problems faced by towns such as Grande Prairie, Alberta, which is one of the communities hardest hit by the NEP since it is heavily geared to servicing the needs of the exploration arm of the industry. The resulting shift of exploration to the Canada Lands which are under Ottawa's thumb, the crippling increase in taxation, which virtually dried up the industry's cash flow, and the weakening demand for gas in the United

Adjournment Motion
States dealt the community and the industry a devastating blow.
I was in Grande Prairie to officially open a new gas plant last October, which meant 100 man-years of employment in Alberta during the construction stage and 20 full time jobs in the community. The sad part is that when I cracked the valve after saying a few words of congratulations, not a single cubic foot of gas was released. A few metres downstream from the automatically controlled valve that I cracked open an enormous gate valve was closed. Why? Because under this Government's natural gas policy. There is no place to sell the gas. What 1 saw was a S35 million facility up to its stack in moth balls before it was even officially opened, because of this Government's national energy policy, which promised fairness, self-sufficiency and Canadianization. That may be what it promised and what the Energy Minister said he delivered, but to Grande Prairie what it really means is house prices that crashed an awesome 25 per cent, and a three-year supply of office and warehouse space idling on the market.
I have attempted today to outline some of my Party's objections to the national energy policy, and we will be doing so throughout this debate. I thought it was time to put on record some of the misinterpretations of the Energy Minister in his snide attack on the Leader of the Opposition's Calgary speech. All statistics aside, the Government and the people of Canada cannot ignore this policy that has caused ugly damage to the country. In the words of the Leader of our Party, it is time that an energy policy be established around a table of consensus, instead of across a gulf of confrontation.



PROCEEDINGS ON ADJOURNMENT MOTION

The Acting Speaker (Mr. Guilbault):: Order, please. 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 Saskatoon West (Mr. Hnatyshyn)-Finance-Employment initiatives program- Allocation of funds, (b) Consultation with Members; the Hon. Member for Halifax West (Mr. Crosby)-Labour Relations- Eastern Provincial Airways dispute-Implementation of Labour Relations Board decision, (b) Request that Minister intervene; and the Hon. Member for York-Sunbury (Mr. Howie)-Finance-Financial deficits of Atlantic Provinces, (b) Request that Minister initiate new grants program.
February 7, 1984



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of Bill C-14, an Act to amend an Act to amend the Excise Tax Act and the Excise Act and to provide for a revenue tax in respect of petroleum and gas.
The Acting Speaker (Mr. Guilbault);: The Hon. Member for Comox-Powell River (Mr. Skelly).


Some Hon. Members:: Hear, hear!


Raymond John Skelly: Mr. Speaker, in spite of the congratulations and heartfelt applause from the Members opposite, I would like to begin by making some initial comments on the legislation before us this afternoon. I think this particular piece of legislation is one of many admissions that the national energy policy put forward by the Liberal Government in 1980 has collapsed. We are faced with an amazing situation in which the Government will now bring forward and has been bringing forward a number of policy changes and a number of pieces of legislation to effect those policy changes of which this Bill is one of a number.
Unfortunately, in the legislation before us today and the policy initiatives the Government, instead of admitting that the National Energy Program overall is a failure, prefers now to tamper with its various aspects and tries to change things without giving some kind of thought to developing a coherent policy which is relevant to the present situation and down the road for some time to come. It would appear that the assumptions upon which the National Energy Program was based have collapsed, and those assumptions are proving to be incorrect and the policies developed out of them are certainly inappropriate.
The advice we would like to give the Government is this. It is time we sat down together. The speaker from the Official Opposition, in a spirit of consensus, began to look at some of these serious problems which do affect us all. We should begin to look at new and more appropriate policies to face the situation ahead. The PGRT is, of course, one aspect of this policy. Certainly the expectations of high prices and improved market opportunities for Canadian energy did not materialize in a way that would yield revenue. I would be prepared to admit that many smaller Canadian companies have been seriously harmed by the initiatives of the Canadian Government in this area. It is unfortunate we were unable to develop effective mechanisms by which those smaller companies could survive government policies which were so harmful. It was not only the National Energy Program or high energy costs or the taxation burden placed upon many outfits. Beyond those matters and many others was the high interest rate policy, which killed not only companies in the energy industry but in the whole economy in general.
February 7, 1984

It is this one aspect of the failure, that is trying to provide some tax relief on the PGRT, that we find offensive. We find it offensive not in the sense that it provides relief but in that it fails to provide relief on a general basis. The Government is proposing to give some tax relief to oil companies in an indiscriminate way. Except for one small provision in the legislation, it will generally give tax relief to oil companies. It will improve the lot or cash flow positions of the oil companies. Some oil companies will definitely benefit and be able to carry on activities, but there are some which have benefited over the course of Canadian history to a tremendous degree. Their parent companies in other countries have also benefited, at the expense of Canadians, to a tremendous degree. They will be allowed to take a much larger share of this unconditional windfall tax benefit.
We find that extremely offensive. It violates a fundamental principle of the National Energy Program in that it is absolutely unfair. It discriminates against Canadians. Obviously, when I and others see multinational oil companies obtaining unconditional windfall tax breaks, we find the Bill offensive and we believe it should not be approved.
It is about time the Government began to husband tax dollars which are gleaned in such a difficult manner from Canadians. Those tax dollars should be spent in such a way that Canadian people obtain a definite benefit from them. I would like to refer to a small example in the legislation which does not go far enough toward tying unconditional tax breaks or opportunities to improve cash flow to investing and defining products which will ultimately provide Canadians with the economic expansion and employment opportunities they require. Tax breaks can no longer be unconditional. They must be tied to economic benefits. When we see unconditional tax benefits being given to multinational oil companies, people begin to wonder why disabled persons and pensioners are not receiving the attention or benefits they need. We need look no further than the legislation in which the Government proposes unconditional tax breaks to companies, some of which are not doing all that well when compared with other groups and other businesses in society.
Another interesting but offensive aspect of this particular piece of legislation is the fact that the unconditional windfall tax break to major multinational oil companies, Canadian oil companies and smaller oil companies, will not be passed through to consumers. When we take a look at the price at the gas pump, we realize that the people who have been hammered beyond belief by the Government are average Canadians who live in Courtenay or Powell River, British Columbia, or the small-businessman or fisherman who is being driven into the earth by increasing costs-high fixed costs, high interest rates and high energy costs. The Government has no way of ensuring that the tax break at the upstream end of the system, this unconditional windfall tax break which will occur to oil companies, will pass through to consumers.
The other day when there was an appeal in the House for the Minister of Finance (Mr. Lalonde) to look at a mechanism
Excise Tax Act
in his Budget for providing some relief to fishermen from high energy costs, high murage costs or for refinancing to obtain lower interest rates, he just laughed and said, "We gave them the six and five; that is all the relief they need". That is absolute nonsense. When will the Government start looking at a downstream energy policy? When will it start looking at the possibility that when a tax concession is made, it be allowed to move down the stream to consumers? Frankly, government Members do not care about consumers, fishermen, small businesses or small transportation outfits. They do not care about the way in which inflation is affected by high energy costs, even when they are giving the tax dollars of those same consumers back to oil companies in the form of a windfall or even when they are failing to provide an adequate distribution in the country on the basis of some equitable measure of taxation. It is offensive in a very serious way.
Another offensive aspect of the Bill is that it represents a tampering with some of the smaller components of a national energy policy which has failed. I think the reason we have had so many problems is that the former Minister of Energy, who is now the Minister of Finance, was a tremendously strong individual who had decided on an approach for a national energy policy and rammed it through without any consideration whatsoever. What must have happened inside the planning area in the upper echelons of the Liberal Government is that there was a realization that the assumptions were wrong and that the national energy policy would undoubtedly fail. Then there was a switch-the Minister of Energy became the Minister of Finance and the Minister of Justice became the Minister of Energy. We are concerned that the Minister of Energy, Mines and Resources (Mr. Chretien) is not giving the attention to this portfolio which he gave when he was in his previous portfolio and working on the Constitution. The energy he put into the Constitution is certainly not the energy which he is putting into his present portfolio. One could suggest, by the answers he has given in the House and his failure to understand some basic concepts which are developing from his Department, that he is spending more time seeking the leadership of his Party than paying attention to his household duties in the Department of Energy and to pursuing for Canadians an alternate policy which may fit the reality. That has to be considered. Certainly that Minister is capable of providing higher quality based answers in the House and actions to protect Canadian interests in this area.
Another aspect of the Bill before us today that is offensive is once again the tampering concept. The Minister of State for Finance (Mr. MacLaren) will not admit that the energy policy has collapsed. He wants to tamper with the symptoms of failure. He wants to give oil companies a $250,000 break because their cash flow has collapsed and he wants to assist them. Unfortunately, he will pass it on to others who we do not believe deserve it. It is not tied to conditions or to improvements which will generally benefit Canadians. It is not specific enough. He wants to back off on the PGRT. Again it is not specific enough, again it is tampering. However, we believe that he is failing to provide Canadians with a beginning of a

February 7, 1984
Excise Tax Act
more effective energy policy, a fair energy policy and one that stresses Canadian interests.
The Minister of Energy has also refused to admit that the energy policy of the Government has failed. As he moves through, he is simply tampering with bits and pieces, without developing an umbrella policy to let Canadians know where they are going or to let Canadian businesses know what to expect down the road. He is fooling with the buttons and pulling the levers, but not in a coherent, consistent way.
There are serious problems with the Petroleum Incentive Program, but the Minister of Energy refuses to acknowledge that. He refuses to allow an open investigation. The Auditor General, Members of Parliament and energy companies have all expressed concern, as have the provinces, but not the Minister of Energy. He thinks he may change a little of the format and require anybody drilling more than a $50 million hole to put his signature on it before allowing the hole to go ahead. Unfortunately, this is tampering. It is a situation in which the Minister is failing to discharge his responsibility and protect the taxpayers' dollar. He should admit when the policy is wrong. It will be much better to admit when the policy is wrong than to begin to develop more appropriate mechanisms.
I will give another example of this Government's failures. I could go on all day with this. I am merely reflecting on the ironclad guarantees that an Alaska gas pipeline would be built. We were not to pour large amounts of natural gas into the United States through the pre-build. All kinds of benefits were to come to Canadians through the building of the Alaska gas pipeline. We received ironclad guarantees in this House, solid as the rock of Gibraltar. Unfortunately, we have all been hit by the rock of Gibraltar. I will not say: "I told you so". Everyone in this House knows that the pipeline will not be built. Everyone knows that the Canadian Government was sucked in in spite of advice to the contrary. They built the pre-build. I do not know why the Minister will not admit that in this House and give us an indication of the kind of natural gas policy to be followed and what will be done with the great relic it has built.
There is another interesting problem with natural gas. The Minister has admitted there are problems, that it does not conform to the expectations that were developed in the National Energy Program. In the face of collapsing contracts in the United States and a collapsing price regime the Minister, along with other individuals responsible for this, is providing giveaway prices for our natural gas in the United States. This seems to be in conjunction with a short-term surplus in the United States. Over the long term, a couple of years down the road, it is projected that the demand for Canadian natural gas will increase. We will be locked into a regime in which the giveaway prices of Canadian gas continue in the face of rapidly rising American demand.
The Conservative Party cannot move fast enough to get involved with this kind of policy. It cannot give it away fast enough or at a low enough price. The suggestion is that the
Minister of Energy, Mines and Resources cannot continue to tamper with the various symptons of failure. The Government must admit the assumptions were wrong, the policy is not right and that it is prepared to take a new look at the situation. Without that, the resources of the Canadian people are in extreme jeopardy.
The Government, through its National Energy Program, made a commitment to build gas pipelines. It was a commitment to build pipelines all across Canada in a fair way. They said it was fair to expect the building of a gas pipeline to the Maritimes, to build lateral lines through the Province of Quebec and to commit funds to build a pipeline to Vancouver Island. So much for the fairness. Those Government funds have evaporated.
Additional funds have been added for Vancouver Island and an enormous amount of money into building the Quebec lateral. Undoubtedly a line will be built into the Maritimes. Unfortunately, the people on Vancouver Island feel like second-class citizens. They know that the money to build the pipeline to Vancouver Island does not exist. If it does exist, it will probably go for job-creation projects in Liberal ridings. I do not know. However, whatever happens, it is not fair. The money was committed to a gas pipeline on Vancouver Island. If the gas pipeline is not built, there should be options for that money to work with an off-oil program and an alternate energy program. The benefit should be provided to the people who live on Vancouver Island so that high energy costs are not discriminatory there. There should be some fairness and equitability.
Frankly, it is a failure. The Minister is again tampering with the symptoms of failure but not developing a policy. He is very close-mouthed. We are very close to the next federal election. If the Government dallies much longer without bringing forward a policy, this certainly will not be done in the dying session of this Parliament. Unfortunately, this Government refuses to admit that the policy collapsed, the assumptions are a failure and that it cannot move in an effective way to protect Canadians.
I have a great fear that the failure of the Liberal Party to fulfil its responsibility to the Canadian people will mean that if the Conservative Party becomes the Government, we will roll the clock back 100 years in energy policy. The Leader of the Opposition (Mr. Mulroney) and his no-policy Party will turn around and will actually encourage greater foreign investment. They have said that they will encourage greater control of our foreign resources. Ultimately Canadianization, fairer prices and a more effective energy policy with regard to energy security for the future will be placed back in the hands of the multinationals and no one will benefit. If the energy policy of the Conservative Party-and there is a very limited amount that we can see-comes to pass, Canadians will be in very bad shape. It is unfortunate they have their heads buried in the sand on this.
When I look at the energy policy, I tune myself to a statement by the former Minister of Finance in the Clark Government. He was interviewed following a Liberal Budget
February 7, 1984

speech. When asked what he thought about the Liberal Budget, he said: "I think it is terrible". When asked what he would do if he were in Government, he said: "If I told you what we would do if we were in Government, they wouldn't elect us." That caution has to be given to the Canadian people. It was published in Maclean's Magazine. That is the policy of that Party.
Unfortunately, the Liberals have brought this to pass by failing to deal with the real issues, the collapse of the National Energy Program, and failing to give us some indication of a new policy direction which would be more relevant and effective for Canadians. They have created a situation in this country where the anachronistic policies of the present Official Opposition are going to be on us. That is not just in energy policy, it is across the board in a whole host of social issues. I say to my friends in the Liberal Party that that curse lies in their hands.
That is not the only flaw in this legislation, not the only offensive aspect of it. 1 wish the Minister of Energy, Mines and Resources would pay more attention in this House to those issues in an honest and forthright way. Things do not fail because of Government but because of world circumstances that we did not anticipate. An argument can be made in some aspects for this. The Minister could honestly begin to deal with those questions where the policy was not appropriate and failed and begin to propose new policy directions.
There is tremendous concern about the nuclear fuel cycle. My colleague, the Hon. Member for The Battlefords-Meadow Lake (Mr. Anguish), has been an outstanding spokesperson on this issue, as have the Hon. Member for Skeena (Mr. Fulton) and the Hon. Member for Regina. They have expressed serious concerns along with the United Church and numerous other groups. They have asked for an inquiry into the nuclear fuel cycle. Who is going to be hurt by developing information upon which we can make more effective decisions? Absolutely no one. In fact, a large number of Canadians would be satisfied.
I see that time is running on. I wonder if I might continue at the next sitting of the House.


The Acting Speaker (Mr. Herbert):: Order, please. I regret to interrupt the Hon. Member but it being five o'clock, the House will now proceed to the consideration of Private Members' business as listed on today's Order Paper.



PRIVATE MEMBERS' BUSINESS-MOTIONS

['I could make it very easy for the Hon. Member. Since it is after six o\'clock, the "Late Show\'\' would lapse automatically. At this point I will adjourn the House until tomorrow at two o\'clock p.m.\nAt 6.03 p.m. the House adjourned, without question put, pursuant to Standing Order.']
The Acting Speaker (Mr. Herbert):: Shall all orders and items listed under Private Members' Business preceding Order No. 35, be allowed to stand by unanimous consent?
Agri-bond Program


Some Hon. Members:: Agreed.



Mr. G. M. Gurbin (Bruce-Grey) moved:: That the Standing Committee on Agriculture be empowered to examine the establishment of an Agri-bond Program to provide the present Canadian agriculture industry and young Canadians, who are the nation's future farmers, with adequate funding at reasonable rates, and recommend methods of implementing such a program;
That such examination include the hearing and consideration of the views of interested parties and organizations;
That it be an instruction to the said Committee that it meet forthwith; and
That the Committee submit its report not later than March 31, 1984.
He said: Mr. Speaker, this motion is exactly the same as a motion presented by myself and 10 other Members of Parliament on November 24, 1983. The 10 were, the Hon. Member for Moose Jaw (Mr. Neil), the Hon. Member for Cariboo-Chilcotin (Mr. Greenway), the Hon. Member for Assiniboia (Mr. Gustafson), the Hon. Member for Wetaskawin (Mr. Schellenberger), the Hon. Member for Elgin (Mr. Wise), the Hon. Member for Portage-Marquette (Mr. Mayer), the Hon. Member for Leeds-Grenville (Mrs. Cossitt), the Hon. Member for Oxford (Mr. Halliday), the Hon. Member for Okanagan-Similkameen (Mr. King), and the Hon. Member for Red Deer (Mr. Towers).
It was first introduced prior to the Throne Speech of December 7, 1983, and is introduced again now in an effort to do three things: first, to have the Standing Committee on Agriculture meet because until then it had not met for a long time. Even now, except for some organizational meetings there has not been a full meeting of the Agriculture Committee for several months. It was also an effort to get the Government to produce specific legislation to deal with the serious farm financial crisis. Second, the purpose of the motion is to encourage the Government in the Throne Speech to recognize the importance of a healthy farm economy to economic recovery in Canada through balance of trade payments and industries including co-ops, equipment dealers and manufacturers, food processors and small grocery stores. They all contribute significantly to our food security and the direct and indirect employment of literally one-fifth of our working population or nearly 2 million people. Finally, Mr. Speaker, we hoped that this motion would provide a specific solution that the Government could use as a blueprint and focus to deal with high

February 7, 1984
Agri-bond Program
interest rates because those responsible do not seem to be able to produce any specific solutions.
For the record, 1 want to ensure that this motion and the agri-bond proposal itself are taken in the proper context.
There is a popular reference nowadays to farming as a business. The comparisons, from a strictly financial point of view, are reasonable-credit and financing are required and records are important both for production and for economic planning. There must be a market and there must be transportation of produce. Efficiency is generally rewarded by increased returns.
The differences must also be recognized. We sometimes lost sight of the struggle, pride and effort of Canadian farmers and the contribution that agriculture makes, not only in strict economic terms, but to our national fibre and basic human survival through the family farm unit.
The following figures tell us what has happened and illustrate the threat that this unit of production faces. In 1941, there were 733,000 farms; in 1971, 366,000; in 1981, just 318,000. Overall, this represents a 57 per cent decline in only 40 years; and 80,000 or one-quarter of the 1981 census farms accounted for three-quarters of total production; in 1940, the average farm produced enough food to feed 11 people, today an average farm feeds 55 people; in 1960, an average farm was worth less than $27,000, and today it is worth $409,000; 67 per cent of farmers are 40 or older and 30 per cent have off-farm income.
These figures can be used to describe a number of phenomena, but the key points I would like to focus on are these. Productivity has been remarkable; it has increased constantly every 10 years. Capital requirements have increased by a factor of 16 times in 40 years, and our farm population is aging significantly.
In its report to the Macdonald Royal Commission, the Canadian Federation of Small Business identified, based on current economic information, a revolution in Canada. Its very well documented case illustrates the fact that this recession represents a period of innovation where small business, of cottage industry stature, has sprouted in very great numbers to replace industries whose size, labour costs and overall function leave them uncompetitive.
By its nature, the family farm unit has represented an industry that attracts technology in the form of new seed varieties, disease control, irrigation options, equipment and management practices. It represents a management team, often both husband and wife, that has direct responsibility and that usually provides the majority of the labour component. These factors have resulted in continuous and impressive improvement in productivity.
The massive capital costs of agriculture, today over $400,000 on average, are of particular interest to the young people who might start farming. This reflects a combination of land prices, equipment and building costs and does not even directly consider the operating capital required. In turn, this speaks to the less than one-third of farmers who today are under 40 and the many who must seek off-farm income in order to make ends meet.
The farm population is even now in the stage where the majority of producers are aging. Younger farmers are ill-advised to enter agriculture in spite of their ability. The only viable means of entry is through an inheritance. The future of this stable and productive primary industry within Canada is threatened regardless of aid offered through a number of political attempts, and perhaps in some cases because of them.
Whether it is through supply management or uncontrolled commodities and whatever the pros and cons of size, techniques or commodity, the most important acute and long-term issue in agriculture today is financing. Other issues can and must, because they are not unrelated, be addressed on another day. Today there is a motion before the House that addresses a critical aspect of financing-interest rates for agriculture.
The agri-bond could take a variety of forms whose net result could be long-term lending to agriculture at interest rates of up to one-half the prime bank rate plus administration charges. If that were transposed today to the Farm Credit Corporation, it would mean an interest rate of 6.5 per cent.
Agri-bonds could also represent a vehicle for retiring farmers to invest, in a secure fashion, directly in the future of Canada's agriculture and be relieved of the capital gains taxes that continue to threaten their financial security in retirement and which even now influence the productive use of farm lands. There is a range of implementation options. It is clear, while this is a concept that was born of a western farm group and first brought to this House by the Hon. Member for Swift Current-Maple Creek (Mr. Hamilton), that there could possibly be unanimous support for the concept throughout Canadian agriculture. It has both provincial support and widespread support in the Conservative Party.
It should also be made clear that the Minister of Agriculture (Mr. Whelan) and Liberal Members of Parliament who have been in power for four years and who are at the end of their mandate, have spoken favourably of agri-bonds but have done nothing. At the same time they have voted in support of Liberal policy that doubled gasoline and fertilizer costs and has produced Farm Credit Corporation policy that has interest rates for farmers now at 13 per cent with many locked in with rates of up to 16.75 per cent. Agriculture cannot and should not be asked to withstand interest costs of this magnitude and maintain the value of its contribution to the Canadian economy while at the same time producing food at prices that on average represent to Canadian consumers the best food to income ratio to be found anywhere.
If this motion passes, there would at least be an indication of the Minister's support for fair interest rate levels for agriculture.
I expect that if any Liberal Member joins in this debate he will point with optimism and satisfaction to the Government's record in the last four years and perhaps even to the proposals, suggested but not yet available to Members, to deal with farm bankruptcies. The records show, Mr. Speaker, that the number
February 7, 1984

of farm bankruptcies in Canada has increased by 20 per cent from 1982 to the end of 1983. That is only the most obvious sign of serious trouble in agriculture. There is little question that many victims of Liberal policy need some recourse, as do victims of many other disasters, but patching up the wounds will not address the fundamental issues nor correct the negligence and abuse, nor will it smooth political speeches. Agribonds, Mr. Speaker, would be a positive step. Why will the Government not take that step?
On that basis, Mr. Speaker, at the conclusion of my remarks I would like to ask that the following motion be considered by the Flouse pursuant to Standing Order 8(4)(a):
That this House continue to sit beyond the ordinary hour of adjournment for the purpose of continuing consideration of Private Member's Notice of Motion No. 35.
That is the motion now before the House.


The Acting Speaker (Mr. Herbert):: I will read Standing Order 8 as follows:
When the Speaker is in the Chair, a Member may propose a motion, without notice, to continue a sitting through a lunch or dinner hour or beyond the ordinary hour of daily adjournment for the purpose of considering a specified item of business or a stage or stages thereof subject to the following conditions:
(i) The motion must relate to the business then being considered provided that proceedings in any Committee of the Whole may be temporarily interrupted for the purpose of proposing a motion under the provisions of this Standing Order.
(b) In putting the question on such motion, the Speaker shall ask those Members who object to rise in their places. If twenty-five or more Members then rise, the motion shall be deemed to have been withdrawn, otherwise, the motion shall have been adopted.
Those Members who object to the motion as proposed by the Hon. Member for Bruce-Grey (Mr. Gurbin) will please stand. And fewer than 25 Members having risen:


The Acting Speaker (Mr. Herbert):: There being fewer than 25 Hon. Members standing, the motion is adopted.


Jack Wendele Shields: Mr. Speaker, it gives me a great deal of pleasure to make a few comments on the motion before the House. This motion makes one wonder, Mr. Speaker, where the priorities are of Hon. Members of this House of Commons when they fail to recognize the severe plight which is facing the agriculture industry in Canada today. At farm meetings in my riding there is a constant complaint made by farmers, whether they be grain farmers, hog producers, or cattle producers, that is, they feel they are receiving very little support from the law makers of this country, particularly as it relates to farm financing.
I know, Mr. Speaker, that the input costs for farming today have risen astronomically. We all know, or at least we should know, that the farmer is one of the last primary producers in our country who believes in the free enterprise system and who gambles absolutely everything he owns on producing the food which we eat three times a day, if we are not unemployed. We cannot eat oil, Mr. Speaker. We cannot eat machinery which is produced in the great manufacturing centres. The primary
Agri-bond Program
producer of food keeps us moving and we must rely on him. He produces wealth from the ground by his own initiative. When he starts out he has absolutely nothing but hope for the commodity he is going to produce either by seed or through a cow-calf operation. We are not-1 repeat, we are not-supporting this vast group of producers across the country.
My colleague who spoke before me indicated some of the hardships which are faced in financing a farm operation. He pointed out that there is only one way that young people today have post-secondary education and go to agricultural colleges can practise what they learned, that is, by farming. And there is only one way they can get into farming today, and that is, if they inherit the land base or farm to work from.
We give assistance, Mr. Speaker, to small business and to large corporations in central Canada. We give assistance by way of tax breaks and incentives to the oil industry. All of these things may be necessary. Why, then, are we not giving assistance to the farming communities across the country? If we in this House of Commons are not prepared to face this problem, and face it squarely, we will rue the day, because the day will come when the farmers will say, "It is no use. I am going to leave the farm". They will then let the land go back to being unproductive.
In northeastern Alberta and northwestern Alberta the provincial government is attempting now to open up new farm lands because it realizes with the expansion of cities and with the expansion of industry, and with airports being built on prime agricultural land, it is only marginal land which is available, the grey wooded soil, and that requires much more input cost in the form of fertilizer, machinery and equipment. There is a great need in the form of knowledge about agriculture which young people and agriculturalists are passing on to the industry. I point that out because over the past two or three years the input cost to the producers has gone up drastically-in some cases it has gone up 50 per cent and 60 per cent-but their incomes have dropped significantly, to the point where in many cases they cannot meet the obligations they have with the banking institutions, the trust companies and even with the Farm Credit Corporation. Some of those producers, Mr. Speaker, are locked into loans at interest rates far in excess of what is available in the open market today. Really, the Farm Credit Corporation has not become a corporation which assists farmers. In many cases it has become just the opposite. The Farm Credit Corporation has become the weight around the neck of the farmer and it is dragging him down into the manure.
We must face the problem which is outlined, and I can see one solution proposed by western producers as being the agri-bond. The agri-bond would make it possible for farmers to pass on to their children, or to other young people who want to take up farming as a profession, the holdings they have and still realize their moneys from the sale. They will then not be faced with a massive grab through the capital gains tax. The agri-bond would encourage the farming community, the seasoned farmer who broke the land in many cases and who has operated well under trying conditions, to invest in the future

February 7, 1984
Agri-bond Program
farmers of Canada. These are the men who understand only too well the amount of sweat and hard work that goes into sustaining the agricultural industry.
Let us look for a moment, Mr. Speaker, at what might happen if we allowed our agriculture industry to go down the tube, as most assuredly we are doing today by not giving it proper support. We depend on the commodity export market, on the shipment of grain, livestock and dairy products, that great variety of items produced by our agriculture industry, to maintain Canada's balance of payments. We have seen the disastrous effect this Government's policies have had on our balance of payments. Interest rates have gone up because we are trying to attract foreign capital back into the country. At the same time, when we came to Parliament and asked for assistance for the farmers, the ones who are actually producing goods which contribute to a positive balance of payments, the Government said no. Interests rates could have remained level across the country. People could have bought homes and cars and financed them at a reasonable rate. But we did nothing to help the one segment of the economy-which contributes more than any other to the well-being of all Canadians. Think for a moment what would happen if we did not export agricultural commodities to foreign markets where they are needed. Think of what would happen to interest rates given the policies of the Minister of Energy, Mines and Resources (Mr. Chretien) which gave money to a Crown corporation to buy a foreign oil company and ship billions of dollars out of the country. We would not have seen interest rates at 19 per cent or 20 per cent; we would have seen them closer to 25 per cent and 30 per cent. That is what the agriculture industry does for every one of us apart from giving us the high standard of living and high standard of health we have in this country. Do you realize, Mr. Speaker, that when countries do not have the kind of productive agricultural base that Canada has everything starts to fall apart?
We do not have to look very far to see what can happen, Mr. Speaker. We have only to look to the Soviet Union. It has as much arable land as Canada but, because of the approach it takes, because of the lack of reward to the producer, it produces very little. It cannot produce enough for its own use. Our objective for the next ten or 20 years should be to support the agriculture industry to a point where we double exports so that we in Canada can continue with the standard of living we all enjoy today.
I am pleased to speak on this motion, Mr. Speaker. I wanted my remarks to be recorded because it is important that all Members of this blouse, whether they be Liberal, Conservative or NDP, recognize the serious situation which exists in our farm communities. It is absolutely impossible for Members, particularly from rural areas, to go home and interview farmers and not realize what is happening in the industry today. I have seen farmers and livestock producers in my area who have had to sell virtually everything they own and move off the land. The land is being taken out of production and the only thing that is going to save it is a system which would allow
investment by retiring farmers in an agri-bond to allow the young farmer to raise a family and produce on the farm the necessary commodities for export and domestic consumption. Therefore, Mr. Speaker, I urge this House to consider very carefully the motion presented by my colleague and allow it to pass.


Mr. Vic Althouse (Humboidt-Lake Centre):: Mr. Speaker, it gives me a great deal of pleasure to participate in this debate on a motion moved by my friend from Bruce-Grey. It says:
That the Standing Committee on Agriculture be empowered to examine the establishment of an Agri-bond Program to provide the present Canadian agriculture industry and young Canadians, who are the nation's future farmers, with adequate funding at reasonable rates, and recommend methods of implementing such a program;
That such examination include the hearing and consideration of the views of interested parties and organizations;
That it be an instruction to the said Committee that it meet forthwith; and
That the Committee submit its report not later than March 31, 1984.
At the end of his opening remarks the Hon. Member moved another motion that debate on this item continue past adjournment hour. Because there were not 25 Members to oppose the motion, we will perhaps be discussing this very important issue for the next several days unless we can get some agreement to send it to committee to be dealt with in depth.
I have just been going through my records, Mr. Speaker, and I find that this matter has been raised before. I made speeches on it in 1980 and 1981. We issued news releases, and we included it in a presentation to the OFA task force on agriculture, which you will perhaps remember made a tour of the Province of Ontario to investigate the reasons behind the rapid increase in bankruptcies taking place, particularly among young beginning farmers in that province at that time. I can only say that in the intervening years the symptoms of the disease, lack of income which is followed by lack of credit in the farm community, have spread beyond Ontario and Quebec where the first indications showed up with an increased sudden spate of bankruptcies. Now virtually every province in Canada is faced with a great number of farmers going bankrupt each year. We note that farm debt is rising across the country largely because farm markets have not been adequate.
This is not the place to spend a great deal of time talking about the shortcomings of some of the marketing systems that we have in place. Suffice it to note that the red meat sector in particular has been having difficulty in part because it does not have, as some of the other farm products do, a national form of marketing its products and a national single-desk agency to establish prices and establish the amount that should be allowed on the market at any one time. Consequently, purchasers in the market place are taking advantage of the producers of these products and using their marketing power to reduce the price at the farm gate, because there are very few buyers in such markets.
The agri-bond was one of the possible solutions to assist the next generation to come into agriculture under such difficult
February 7, 1984

conditions. The basis of the agri-bond would be to have the Minister of Finance (Mr. Lalonde) provide a financial instrument whereby a retiring farmer could roll over part of the funds from the purchase into an agri-bond, which would then be used to relend money to beginning farmers. This would be done in order to assist new farmers and to avoid some capital gains tax at the present time. Because the beginning farmer was avoiding the payment of capital gains tax he would be in a position of accepting less than the market value for those funds which he had invested in agri-bonds. Consequently, the managers of the agri-bond could relend the money to young farmers at a rate which would be much below the standard commercial rate, provided those funds were used for reinvestment in farmland.
It is a very sensible, straightforward, proposition. It is one of the methods which could be used to provide funds for a new generation of farmers. This would not cost the Treasury very much money and would go a long way to providing increased capital for new farmers.
There are other things which could be looked at as well. There have been proposals that the Farm Credit Corporation's mandate be extended to include the ability to be a guarantor of mortgages where the existing farmer provides a mortgage to the next generation. In the event that the second generation farmer had difficulty paying off the mortgage, the Farm Credit Corporation would stand in and act as a guarantor so that the retiring farmer would not lose everything or have to take the land back.
There has been the concept of land banks which have been applied in some of the provinces, particularly in my home Province of Saskatchewan. The land banking system was a method which permitted small and medium-sized farms to remain within the same family in some cases. It provided some cash for retirement for the older generation and provided a mechanism whereby the next generation could take over the land. The procedure was that the father or grandfather sold their land to the land bank, which then leased it back at very reasonable terms to a son or grandson, daughter or granddaughter, if that was the choice of the original seller. The new tenant had full rights to that land until age 65, after which time he could designate his direct descendant to be the next lessee. It was possible to maintain the land within the family for future generations without having to go to the financial community, regenerate a loan and carry a heavy interest burden every time the land changed hands from one generation to the next. It was a sensible proposition for a good many farmers who were attempting to get some money to retire with and for their sons or daughters to take over the home farm.
Another method of financing, which has been tried with fairly good success, was something like a small business development bond which was applied for some farm credit for a short period of time. The theory there was very much like the agri-bond concept. The borrower got a reduced rate on his interest provided that he did not show the interest paid as a farm expense. The lending institution was then able to use that interest as a deduction for determining the amount of tax that
Agri-bond Program
would have to be paid. The bank got almost the equivalent of an investment tax credit for having lent the money at a reduced rate, which some farmers and small businessmen will understand. It helped the beginning farmer and was also of assistance to the bank. This is the kind of relationship we think would exist between the lender and borrower through the agri-bond concept.
The Government of the day has proposed changes to the capital gains tax. It proposed improvements to the Farm Credit Corporation and in fact a few changes have occurred in this last session of Parliament which would increase the amount of funds which Farm Credit was able to obtain to relend to farmers. However, at the moment, the Farm Credit Corporation can only obtain those funds from the market at competitive terms and then must relend the funds at a rate high enough to be able to pay itself for the administration and any risk which might occur in the farm financing business. As a result, the interest rates that are available to the farmers borrowing under those programs are not particularly low and in fact at the moment are a couple of percentage points higher than the rate at which most of the banks or credit unions will lend money on land. The advantage of going to the Farm Credit Corporation exists only for those people who expect interest rates to climb again. I do not know that there are very many of those. The advantage also exists for those people who desire to have the money for 25 to 29 years.
I have been handed a note, Mr. Speaker, saying that there has been a proposal for some sort of agreement to be worked out between the two sides of the House and that the Government side and the Official Opposition are proposing to consider allowing this very good motion to take its course. According to the note, the Government seems disposed to allow the Agriculture Committee to make an investigation into the merits of the agri-bond concept and report back to the House by June 30. Thanks to the leverage which the Hon. Member for Bruce-Grey (Mr. Gurbin) was able to apply through his proposed motion to talk all night and all day, if necessary, 1 am pleased that we have been able to discuss this motion in the House during the last 40 minutes and obtain an agreement from the Government to send it to committee.
I hope this agri-bond concept gets a thorough hearing in committee because we know that most of the major farm organizations have been proposing a form of agri-bond during the last three or four years. Most Members of the House who represent rural areas have been advocating the utilization of agri-bonds as a means of increasing the options available for new and expanding farmers. I hope the initiative taken here today will result in the committee being able to pursue this excellent proposition and develop a proposal that will be acceptable to the House after June 30.


Douglas Glenn Fisher: Mr. Speaker, I appreciate the opportunity to talk on this very important topic. May I begin by extending my congratulations to the Hon. Member for Bruce-Grey (Mr. COMMONS DEBATES
February 7, 1984
Agri-bond Program
Gurbin), who was very eloquent in making his personal views known and who 1 believe has, in some interesting ways, applied pressure on Members on this side to have us co-operate. He has been imaginative and should be congratulated.
While we are spreading credits around, I would like to make note of the contributions made by the Member for Lambton-Middlesex (Mr. Ferguson) on this issue. He has been an eloquent spokesman on this topic, not only on behalf of his constituents but on behalf of people across Canada. In effect, the interest in this issue which we have demonstrated on the Government side has primarily been provoked by the good work of my colleague from Lambton-Middlesex. He should be recognized and given some credit for that.
I also point out that the Parliamentary Secretary to the Minister of Agriculture (Mr. Dionne) is here today and has some notes and thoughts on this issue. I know that he is delighted that this subject will proceed to committee to be given a thorough examination. I know that he will have some strong views and will provide leadership in the committee when it is struck. We look forward to his contributions which will undoubtedly be of his usual high calibre.
In a few minutes 1 will move two amendments to this motion. I will suggest that it go to the Finance Committee instead of the Agriculture Committee. I would also like to suggest that the reporting deadline on this issue be moved from March 31 to June 30. Let me explain why I am suggesting those two changes.
First, I wish to tell the House that the Finance Committee should be the group to look at tax matters. As we know from the descriptions we have heard here today, the agri-bond revolves around tax issues. It is to relieve tax on some of the interest portions of the bond that make it possible for interest rates on the bond to be lower. Of course, whenever we are dealing with relief of taxes we are dealing with a matter that quite properly should go to the Finance Committee and on which recommendations can be made by that committee to the Minister of Finance (Mr. Lalonde). This will eventually be a successful matter if the Minister of Finance rises on a future budget night to say that this is what we will do.
Since it is a tax measure and not an agriculture measure, we should be dealing with it in the Finance Committee. That is not to say that the current Members of the Finance Committee would be the ones working on it. I suggest it would be understood that the Parties could look for a subcommittee so that experts like the Member for Lambton-Middlesex-who of course normally works on the Finance Committee-could provide his expertise in the subcommittee, as could the Member for Portage-Marquette (Mr. Mayer) and the mover of the motion, the Member for Bruce-Grey. They would have access to the committee, and I personally suggest that the motion be referred to the Finance Committee itself, and then down to a subcommittee where others could come freely and enjoy the informality there.
I also believe that we should move the date from March 31 to June 30 in order to give witnesses time to organize themselves and make proper presentations. As well, Members of
Parliament would be able to conduct some research. I remind the House that we face a very busy schedule. We are just finishing one debate on federal-provincial fiscal arrangements that will go to the Finance Committee. Also, there is the Budget and other issues that will spin from that Budget. Since we will be busy and would not want to appear as if we had collectively ignored an important issue at the end of March, we would want to give ourselves some extra time and demonstrate to the farming community that we are serious about this issue and want to do a good job with it. If we delay until June 30 we can do a good job and schedule it properly in that form.
In 1982, I visited the riding of the Member for Bruce-Grey and discussed some of these issues. I was invited there by a group of farm wives and, in all likelihood, I think that I was a disappointing visitor. I think I came with my city attitude and city perspectives. I am sure that those folks felt that I really did not understand the spirit, if not the economics, of farming. I know that that feeling often exists within the farming community, that people from the city do not understand their problems as thoroughly as we should. I visited the riding and talked to the people there. I would like to say now that I am personally grateful for the insights they gave me. If I was not an adequate spokesman, at least I was personally educated quite thoroughly and hospitably by this group and given some real understanding of how they are being crunched by current economic conditions.
I was struck by their observations about lower incomes from their commodities, by the higher costs created by high interest rates and how, in this case, these wives or their husbands had to leave the farms to get some outside income to supplement their cash and help hold up their heads during tough times. I came away from that meeting with a sense of seeing determined people who were faced with problems that they would overcome. They were not going to bow to these economic pressures from the outside.
I felt that the answers to their problems were in longer-term events and in longer-term economic phenomena. I did not think, and still do not believe, that there is a quick solution to these kinds of long-term problems.
Perhaps I can give a couple of examples. I noted that many people said that they had borrowed too heavily in the 1970s because they were confident and optimistic about their economic future. Therefore, they tied themselves into costs for such things as silos, new equipment or new buildings which could not be removed from the premises. They could not just wish the problems away. These things had to be paid for, despite rising interest rates. The higher interest rates were really causing them severe problems. In that respect they shared problems with small businessmen and big businessmen in my area. In the 1970s there was an optimism about borrowing that was based on an inflation psychology. People believed that if they borrowed and borrowed and borrowed then, as inflation went up past the cost of borrowing, the price of repaying would be lower. In effect, the lender's position would be eroded and the borrower's position would be strengthened. That, indeed, did happen through the 1970s. We saw people
February 7, 1984

who would borrow, say, $1,000 at 10 per cent, and as inflation hit 10 per cent they were getting their money free. People knew that. There was a false optimism that that cycle could continue.
Canadian farmers and businessmen were not alone in that optimism, I must say right away. I remember reading an investment article in Esquire magazine in the late 1970s urging people to get into the stock market or to get into real estate based on that inflation psychology. Of course, that kind of cycle ends some day. There comes a time when the crunch hits when interest rates will not stay below inflation but will skyrocket upward. That happened and people with fixed investments, like farmers, were caught when the ultimate cure arrived. When high interest rates arrived on the scene, they arrived because the western world had been on an inflation binge, and finally the lenders were not going to watch their positions erode any longer. Lenders were not going to give money cheap any more. They were not going to see their savings disappear. Therefore, interest rates went up over 20 per cent. That caught farmers, small-businessmen and home owners. I believed, and I said to those folks in Bruce-Grey, that the real answer to their problems in farm financing and high interest rates was to cure inflation. That was an honest answer. I think as we look at the economic performance over the past year, we can agree that that happened. Interest rates came down from their peak above 20 percent. They are now down to 10 per cent to 12 per cent on home mortgages. Interest rates are more manageable for folks today because inflation is a more manageable phenomenon. That is a tough thing to tell somebody in the middle of a crunch when his family has to make tough economic decisions to survive the next week, let alone the next year until a long-term cure arrives.
As we look at this issue of agri-bonds, let us not be confused. We will do our people no good at all if we tell them that there are quickie answers to those kinds of emergencies. We must try in real distress situations to help the distressed and give them a bridge across these difficulties. Nevertheless, we cannot go to a whole community, like the farming community, and say that their problems will be solved by one quickie answer. That quickie answer will lead us all into a blind alley.
As we study this question of agri-bonds, we had better ask ourselves: Are we going to use agri-bonds for people in distressed situations or are we going to try to use them for the whole community? Are we going to use them for fixed periods of time or are we going to put them in place permanently? We know, because we can see in France today, the ravages caused by quickie cures to long-term problems. The French economy has been slower than some in its recovery because the French Government tried some quickie cures to some very deep problems, like inflation. As a result, the French brought in even more inflation causing longer-term problems. We must avoid that, and I do not think we want to tell Canadian farmers that we are really going to resolve their problems with this one approach. First, we had better resolve in our committee to
Agri-bond Program
whom we are going to make the agri-bonds available. Are we going to make them available for everyone or are we going to make them available for people in trouble? If we do this, how are we going to do it so we do not create a blind alley and an economic trap that will eventually lead people into worse trouble? I can think of lots of other examples besides this one where governments have tried short-term, very attractive cures or palliatives that have led people into ultimate distress. I would think the AHOP-the housing program-and the "home ownership made easy" programs in the 1970s were examples of where that kind of optimism-ultimately created huge, huge problems for individual families.


Mr. Nickerson:: Good Liberal programs.


Douglas Glenn Fisher: Second, I would like to ask the committee to take a look at the way an investment program like this could distort the market. There is a feeling that if we lower interest rates we give our customers or our community room on land prices. That is not always true. If land is a highly desired commodity and we lower interest rates, then all we are going to do is to give people room to increase the capital. That is definitely what happened in some parts of the United States where this kind of cure was brought in, where interest rates were taken out and lowered in some way. Capital costs then simply went up to absorb the vacuum. You do not see prices coming down. You see other costs going up, Mr. Speaker. We had better take a good look at that.
Third, we should look at the way this kind of special treatment will affect all other Canadians. What will happen to home owners? What will happen to small business? What will happen to people who own Canada Savings Bonds? What will happen to people who own commercial loans? The interest on their investments will continue to be taxable. How do we justify to them that they must pay tax on their bank accounts while someone else invests in a farm and gets that investment at a lower tax rate or tax free? That is not impossible to do. We do that all the time. We do it with people who invest in small businesses instead of big business. We do it with people who invest in other high priority economic activities. But it will be incumbent upon the committee to address that question.
I would caution the committee, as it works on this, that the Lortie Commission looked at this question for mortgages. They were unable to find proper solutions. When the Lortie Commission looked at the mortgage proposals, it recommended that they should be abandoned because the proposals were too complex.
Those are just three issues. I think we have a variety of others. I would first of all suggest that we have to look at whether this is a genuine cure, a palliative, or a dead end. Second, we have to decide what we are going to say to people in other market. Third, we have to decide what effect this will have on land prices in the farm community.
For the reasons I have already explained, I move, seconded by the Hon. Member for Lambton-Middlesex (Mr. Ferguson), who is an outstanding expert and who is ready to second any motion that I offer and therefore is very high in my esteem:

February 7, 1984
Agri-bond Program
That the motion be amended by deleting references to the Agriculture Committee and substituting a reference to the Standing Committee on Finance, Trade and Economic Affairs, and by deleting the date of March 31, 1984, and substituting the date of June 25, 1984.
Those are my two amendments. Let me correct that. This is my one amendment. The Parliamentary Secretary to the President of the Privy Council (Mr. Evans) is keeping me in order. If the House is in agreement, perhaps we can pass unanimously the motion that this matter be sent to the Finance Committee, and everybody can get to work on it.


Mr. Forrestall:: Mr. Speaker, the amendment of the Parliamentary Secretary is quite acceptable to us. Because June 30 is the automatic adjournment date, would he consider moving it to the preceding Monday, June 25, in terms of the report? If so, that is quite acceptable.


Douglas Glenn Fisher: Mr. Speaker, June 25 is a fine date as far as I am concerned. If you could just change it with your pen and avoid a lot of rigmarole, I am sure it would be acceptable to
us.


The Acting Speaker (Mr. Herbert):: The House has heard the terms of the amendment. Is it the pleasure of the House to adopt the said motion?


Some Hon. Members:: Agreed.
Motion (Mr. Gurbin) agreed to.


The Acting Speaker (Mr. Herbert):: The question is now on the motion as amended. Is it the pleasure of the House to adopt the motion as amended?


Some Hon. Members:: Agreed.
Motion (Mr. Gurbin), as amended, agreed to.


John Leslie Evans: Mr. Speaker, I should like to rise at this moment to inform the House that we have just been informed from Stockholm that the Right Hon. Prime Minister of Canada (Mr. Trudeau) has been nominated for the Nobel Peace Prize.


Some Hon. Members:: Hear, hear!


J. Michael Forrestall: Mr. Speaker, I rise on a point of order. I think you will find that there is agreement on this side of the House to take your counsel and advice and perhaps, by seeking unanimous consent, to relieve ourselves of the motion put earlier in the hour with respect to the extension of hours, so that we might now call it six o'clock and the adjournment motion could then be properly put.


The Acting Speaker (Mr. Herbert):: I could make it very easy for the Hon. Member. Since it is after six o'clock, the "Late Show'' would lapse automatically. At this point I will adjourn the House until tomorrow at two o'clock p.m.
At 6.03 p.m. the House adjourned, without question put, pursuant to Standing Order.


END OF VOLUME I