1984-05-31

[Stage Direction]
Mir. Speaker: Before calling the order for the day, the Chair notes that there are two orders on the Order Paper and would be prepared to hear argument before making a decision.
Hon. Ray Hnatyshyn (Saskatoon West):: Mr. Speaker, since we seem to go through this situation periodically, and having reviewed some of the precedents, I am prepared to argue this matter and to assure you that it has always been my intention as House Leader of this Party to ensure that the NDP is given adequate opportunity-in fact, we have bent over backwards-to have more than its share of allotted days. It must have something to do with their philosophy, which goes something like this: What is mine is mine and what is yours is mine.
However, the tradition that has been established is that we possibly get some indication of Your Honour's preliminary inclination, rather than have what happened the last time. I have a presentation I would like to make which I believe substantiates very much our entitlement to proceed today on the Opposition motion filed by my colleague, the Hon. Member for Wellington-Dufferin-Simcoe (Mr. Beatty).


Mr. Speaker:: If that is the wish of the House, the Chair is quite prepared to make some observations of a preliminary nature.
It appears that there are three supply periods which provide for 25 allotted days, six of which can end in a vote of non-confidence in the Government. In the current parliamentary calendar, the Progressive Conservative Party has used 18 allotted days, five of which have ended in a vote. The NDP have used five designated days, none of which has ended in a vote.
The preliminary inclination of the Chair would be to choose the motion in the name of the Hon. Member for Churchill (Mr. Murphy), but the Chair is prepared to hear argument.


Ramon John Hnatyshyn: Mr. Speaker, I will address myself to this matter. We have a situation where you will be required, pursuant to Standing Order 62(4)(c), to select the motion to be debated by the House today. The last time the Chair was obliged to make such a decision was on November 22, 1983.
Before you make your final ruling on the motions that are before us today, it might be useful if I review a couple of the issues that were raised at that time.
One point of view that was expressed last November was that the Chair pay some attention to the time in which the motions were filed with the Table in order to determine the order of precedence. The Acting Speaker, at page 29061, ruled that the time of filing was not the major factor in determining which motion should be put to the House. Indeed, the House Leader of the NDP argued that the time of filing should not be considered at all. His remark to that effect will be found at page 29060 of Hansard for that day.
Another interesting point that was made that day was that the NDP felt that the distribution of Opposition Days should be calculated on the basis of the calendar year. While both Her Majesty's Loyal Opposition and the NDP are of the view that equity demands that Opposition Days be distributed on the basis of Party representation in the House, the Official Opposition was and is of the view that this distribution of days should be calculated on the basis of the year of supply.
As you know, Mr. Speaker, the first semester of Supply takes place in the period ending June 30 each year. It is in that semester that the Main Estimates for the fiscal year are considered by Parliament. In the subsequent two semesters, Supplementary Estimates are the Business of Supply that is to be considered by this House. Therefore, it is a specious argument to suggest that Opposition Days should be distributed according to calendar years. Such an argument could only be advanced by people who are ignorant of the meaning of Supply.
Nonetheless, it seems that on November 22, 1984, you will recall that members of the NDP were successful in convincing the occupant of the chair-


Mr. Speaker:: Excuse me. The Hon. Member said November 22, 1984?


Ramon John Hnatyshyn: I am sorry, I intended to say 1983. Of course, on November 22, 1984,1 will be sitting on the opposite side and not over here!


Mr. Deans:: Not if the decision is made wisely.


Ramon John Hnatyshyn: If the Hon. Member for Hamilton Mountain (Mr. Deans) is waiting for an opportunity to demonstrate his intelligence, we may have to wait for a long time.
On November 22, 1983 members of the NDP were successful in convincing the occupant of the chair that the protection

May 31, 1984
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of their minority rights demanded that they be given a day in the second semester of Supply in order to ensure that an equitable distribution of Opposition Days be made in the then current calendar year. Having adopted that view and having thus altered the distribution of days in that period, the Chair must now consider the implications of that decision on the distribution of days for this year.
Both Parties on this side of the House are in agreement as to the ratio that should be used in calculating the distribution of Opposition Days. Roughly one-quarter of the members sitting on this side are members of the NDP. Thus, it follows that they should receive one-quarter of the available Opposition Days.
The Standing Orders provide for 25 days to be given over to the business of Supply in each year. Based upon the one-quarter and three-quarter ratio that I have outlined, the NDP is entitled to 6.25 days out of the total days available in each Supply year. As well, in each of the three periods of Supply two motions may be put to the House under the provisions of Standing Order 62(9). Standing Order 62(9) states that these two motions constitute motions of no confidence and provision is made for a vote to take place at the conclusion of debate on such motions.
Using the same ratio that applies to the general distribution of Opposition Days, it follows that the NDP is entitled to 1.5 of the six voting days that occur each year. Because it is impossible to divide these votes in this manner, the distribution of these motions must be worked out on a two-year basis whereby members of the NDP are entitled to put three votable motions before the House over a two-year period.
In order to be able to discuss in a rational manner the problem which confronts you today, Mr. Speaker, I took the time to review the distribution of Opposition Days over the life of this Parliament. I am in a position to provide you with some statistics which may be of use to you in reaching a decision on this matter.
In 1980, the Supply year was disrupted by the fact that Parliament was called into session after the date on which the first semester of Supply would normally commence. For that reason, the Parties agreed that the second semester would be expanded and that all of the Opposition Days that would ordinarily take place during the first semester would instead be allocated to the fall semester.
Even under the terms of this arrangement, only 18 out of the normal 25 days of Supply were allotted in 1980. Of those 18 days, the NDP was given four days, one of which terminated in a vote. That year, members of the NDP did not complain because they did not receive their normal allocation of days. At that time members of the NDP understood that the distribution of days related not to the calendar year but to the Supply year. Not surprisingly, the records indicate that the NDP received an additional two days in the final Supply period of the 1980-81 fiscal year.
In the next Supply year, the NDP received seven Opposition days, two of which terminated in votes. In the 1982-83 Supply
year, the NDP received six Opposition days, two of which again terminated in votes. In the 1983-84 Supply year, the NDP received seven Opposition Days and two of those motions came to a vote. Thus, over the past four years of Supply, the NDP have received 26 of the 100 Opposition Days and have had seven of those motions come to a vote. In other words, although members of the NDP constitute only 25 per cent of all Opposition Members, they have received 26 per cent of the Opposition Days and over 29 per cent of the motions filed under Standing Order 62(9).
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However, the Chair for some reason determined last November that Her Majesty's Loyal Opposition would not be entitled to receive the day which they asked for at that time on the basis of a calculation of the distribution of Opposition Days. The Chair decided that the NDP argument concerning distribution of Opposition Days by calendar year was valid.
Therefore, we have gone out of our way to ensure that we are meeting our obligations by both standards. Not only did we provide the NDP with more than the number of days which constituted their minimum entitlement in last year of supply, but we have already given five days to the NDP in this calendar year. No matter how they slice it, the NDP has been receiving the days to which they are entitled.
Furthermore, we have been prepared to be even more generous in our distribution of Opposition Days. My predecessor offered the NDP four Opposition Days in a row in the last semester, all of which were refused. Since I have been House Leader I have offered the NDP another Opposition Day in this semester, which was refused. Still they complain that somehow we are being unfair in not allowing them an adequate opportunity with respect to Opposition Days. That is completely contrary to the facts. My Party and I have bent over backwards to offer the NDP ample opportunity to have Opposition Days, more than they are entitled to by the numbers.
Apparently today the NDP will stand before you, Mr. Speaker, and argue that they should be allowed to place their motion before the House. This would be the sixth time in this calendar year that the NDP would have had the opportunity to take over the debate on an Opposition Day. Based upon the NDP calculation with respect to the distribution of Opposition Days, they will have exhausted their full entitlement for the year before June 1. Therefore, if the Chair decides in their favour, it would demonstrate, in my estimation, that a minority of Opposition Members are able to exercise a disproportionate claim to precedence on Opposition Days, in that they want to have all their Opposition Days before June 1 of the calendar year, and on their own argument that they are entitled to only so many in a full calendar year.
The NDP cannot have their cake and eat it too. They should either! calculate their entitlement on'the basis of calendar years or on the basis of fiscal years. Equity demands that not only the rights of the minority be defended, but that the rights of the majority not be subverted by the actions of a few.
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On November 22 of last year, the Acting Speaker ruled that the rights of the minority required protection, and that because the NDP had not been given an Opposition Day in that supply period, he would select their motion for debate. However, today we face an entirely different set of circumstances. As I have pointed out, the NDP won their argument the last time around. The occupant of the Chair agreed to disregard our understanding of the appropriate means of calculating the annual distribution of Opposition Days. Moreover-and this appears to be the critical point in the decision rendered that day-the Acting Speaker was of the opinion that because the NDP had not been given the opportunity to debate a motion of their choosing during a Supply period, he would give them that opportunity.
That is not the case today. The NDP have already received two Opposition Days in the current period. Based on their own calculations, this would exhaust their entitlement for the year if it were given on this day. We would then face the problem of having to decide whether or not the NDP would be entitled to an additional day in order to provide them with some opportunity to hold a debate of their choice in the fall semester. If that request were to be granted by the Speaker, not only would the NDP have been permitted to pre-empt Her Majesty's Loyal Opposition today, but the NDP would be permitted to appropriate an Opposition Day which would legitimately belong to our members.
The NDP may stand in the House and argue that there is some rule of thumb which would lead to their being given three Opposition Days in the spring semester. Presumably this argument is based on the proposition that the Parties are entitled to a proportional distribution of Opposition Days in each Supply period. The flaw in that argument is that based upon the ratio that I have referred to and that we have employed, the NDP would be entitled to precisely 3.25 days in the first semester, 1.25 days in the second semester and 1.75 days in the third semester. It is quite simply impossible to distribute days in that way.
For that reason, the allocation of Opposition Days in any given semester has varied over the life of this Parliament. Thus the average allocation in the first semester has been 2.75 days rather than the 3.25 days dictated by simple mathematics. In the second semester the average has been two days rather than the 1.25 days obtained through the proportional model. In the third semester the New Democratic Party has averaged 2.25 days rather than the 1.75 days which result from proportional distribution. Thus it can be demonstrated that the NDP have always been under-allocated days in the first semester; overallocated days-50 per cent of the time, at least-in the second semester, and always over-allocated days in the final semester.
With regard to the distribution of voting days, Mr. Speaker, I can only ask how a distribution of three votes over a two-year period can be evenly spread across three semesters of Supply which occur in any given year. Furthermore, if the New
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Democratic Party chooses to argue that it has not received its entitlement of voting days for this year, I suggest it refer to the Votes and Proceedings for February 14, where it will find that the House divided on a motion by the Hon. Member for Kamloops-Shuswap (Mr. Riis).
If you were to look back over the past four calendar years, Mr. Speaker, you would find an interesting pattern. In 1980 the New Democratic Party had one motion which terminated in a vote. The next year it had two motions. In 1982 it had one motion and in 1983 it had two motions. By extension one can see that 1984 is a year in which the NDP is entitled to only one motion pursuant to Standing Order 62(9), and it already has had one such motion put before the House in this calendar year.
Hon. Members of the New Democratic Party are certainly adept at complaining that no one takes them seriously and that their rights are continually being denied them. The reason for that is that so often their complaints are not founded in reality. What it comes down to today, Mr. Speaker, is that the New Democratic Party is afraid that the Government may decide to call an election prior to the end of the year and that it will, ostensibly, lose out on some fraction of the Opposition Days to which it would normally be entitled this year.
Our Party has not been restricting Hon. Members of the New Democratic Party from the opportunity to be heard in this place. In fact, the New Democratic Party has taken almost 30 per cent of the Opposition Days which have been held to date this year. The New Democratic Party does not want to debate the issue of the Government's mismanagement of Revenue Canada; that is clear. It does not want to allow our Members of Parliament to have a fair share of the Opposition Days. It does not even want to be consistent in its calculation of the way in which days should be allocated. Instead, Mr. Speaker, members of the New Democratic Party are going to stand here and anticipate the future life of this House, this parliamentary session, by attempting to get their Opposition Days in before some projected election call, and they are not even prepared to wait and see whether the final Opposition Day in the current period would be allocated to them. And as you know, Mr. Speaker, there is another Opposition Day which will be held at some time before the end of next month.
The New Democratic Party is also engaging in a more direct form of anticipation, Mr. Speaker. The motion which it proposes to move today condemns the Government for failing to introduce amendments to the Canada Labour Code. Quite apart from the fact that the motion contains the false accusation that the Conservative Party stands in the way of labour reforms, it also neglects to mention the fact that a Bill with respect to that legislation has been introduced before the House, that is, Bill C-34, which does purport to amend the provisions of the Canada Labour Code. The NDP by its motion proposes to anticipate the debate which will take place on this legislation in the coming days. The motion of the Hon. Member for Wellington-Dufferin-Simcoe does not offend the rule of anticipation.

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Under Standing Order 62(4)(c), you have the responsibility, Mr. Speaker, of selecting which Opposition Members' motion will be put to the House for debate. I would ask you to call the motion standing in the name of my colleague, the Hon. Member for Wellington-Dufferin-Simcoe. I would ask that you do that, if not for the reasons I have just outlined, then because the Hon. Member had a similar motion standing in his name on the Order Paper which was not selected by the Acting Speaker last November. I submit to you, Mr. Speaker, that the New Democratic Party should not be permitted to hijack an Opposition Day out from under the Hon. Member for Well-ington-Dufferin-Simcoe twice in a row.
If equity is to be the determining factor in the selection of today's Opposition Day motion, and if the protection of the rights of individual Members is central to your decision, I believe the motion of my hon. colleague should be the one to be selected for debate today.


Mr. Speaker:: Did the Chair understand the Hon. Member to say there had been one motion voted by the NDP this year?


Ramon John Hnatyshyn: On February 14.


Ian Deans: Mr. Speaker, I want first of all to say I regret very much that you have been put in the position of having to make a choice. I know the Chair does not enjoy having to make decisions such as this and I would have hoped that we could have worked it out in advance by agreement. Unfortunately, that was not the case.
I want to acknowledge at the outset the fine working arrangement that has developed between myself and the House Leader for the Conservative Party. He is, under normal circumstances, a person of impeccable honour and he works diligently at his job. I was therefore surprised to hear his submission. He knows full well, Sir, that in fact, even on the basis of mathematical calculation, what he has submitted is inaccurate. That, I think, is where we begin.
The Conservatives, as the Official Opposition, have consistently operated on the basis of the NDP being one-quarter, 25 per cent, of the Opposition. However, Sir, if you were to make a calculation you would find that there are three Conservatives to every one New Democrat. That would leave any thinking individual with the impression that there should therefore be three Opposition motions assigned to the Official Opposition and one to the NDP. That is all we are asking for. For every three motions that the Official Opposition puts forward, we in this Party, as the minority, should be entitled to one.
Having said that, we also contend that-


Mr. Forrestall:: How can you say that without tongue in cheek?


Ian Deans: I can say it without tongue in cheek because it is factual. We also contend that we are entitled to a votable motion. However the Hon. House Leader for the Official Opposition puts it, there can be no argument over the statistics. If you do it in this trimester, Mr. Speaker, in 1984 there would be 13 days allotted. Of those, two would be votable days. We contend, on the basis of three to one, that if the Conservatives get ten of those days, which is what they would get if we were given this day, we would be satisfied. Out of 13, the Conservatives get ten and we get three. That is all we are asking for; that is all we expect in the interest of fairness.
You will have noted, I am sure, that the Conservatives have put down for today a votable motion. If we are not allocated this day, that means there is no votable motion available after the vote is taken today at six o'clock. Therefore, it would not be possible, even if we were to be allotted the next allotted day, for us to be given a vote during this trimester. I contend that in fairness, which is all we ask for, we are entitled to one voting day.
I will now go back three trimesters. In the last trimester there were seven days, five taken by the Conservatives. They asked us to take two and we did, but we got no vote. In the previous trimester, the third trimester of last year, there were five allotted days. Four were taken by the Conservatives; one was offered to us, which we accepted, without a vote.
Looking at the third trimester of last year, the first trimester of this year, and this trimester which ends at the end of June, there have been 25 allotted days, or will have been. If you were to decide today that we were entitled to the day, then 19 of them would have been allotted to the Conservative Party and six of them to the NDP. That is as close as a three-to-one ratio could ever be. That is in keeping with the numbers within the House of Commons.
In addition to that, if you were to decide, as you have indicated you might in your preliminary judgment, that we were entitled to this day and that it is a voting day, it will be the first voting day that we have been granted in the last three trimesters. Taking that into account, it would seem that we would be entitled to have this particular-


Mr. Speaker:: The Chair must interrupt the Hon. Member because there is a factual argument. Was February 14 a votable motion in the name of the New Democratic Party or not?


Ian Deans: February 14?


Mr. Speaker:: Of this year.


Ian Deans: I will have it checked.


Mr. Speaker:: It appears that it was. If so, the Hon. Member will have to take note of it.


Ian Deans: I will have it checked. I do not have that in front of me. Be that as it may, it does not alter the argument on balance. I will come back to it. I put to you that even if it turned out that the fourteenth was a voting day, that would give us two voting days in three trimesters. Even at that, the balance would still be tipped very heavily in favour of the
May 31, 1984

Official Opposition and we would not be getting more than we are entitled to.
The House Leader of the Official Opposition raises a number of different points. In the early part of his submission he talked about the time of filing. If the actual time of filing were to be a consideration in determining who should be given the allotted day, it would be possible for any one of the Parties to file everything at the beginning of a session and therefore pre-empt anyone else from getting an opportunity to seek an allotted day. The House Leader of the Official Opposition indicates that he offered us an allotted day. That is true; I accept that. However, I asked for an allotted day with a vote. I suggested that we felt we were entitled to an allotted day with a vote. The dispute arose over whether if we took a day without a vote we would therefore lose the opportunity to have a vote on a motion that we felt was important. You know, Sir, that voting is one of the ways in which Members of Parliament are able to put clearly on the record their support for or opposition to any matter before the House.
The House Leader for the Official Opposition tells you that some time ago we were given an additional allotted day. You may recall, however, that the reason we got the additional day was in order to accommodate the Conservatives who wanted to have a day without a vote on the day prior to their convention. They did not want to have the motion in their name. They asked us if we would take the allotted day in order to free their Members from having to be in attendance in the House of Commons. We, of course, in our normal generous way, accepted our responsibility to accommodate their needs. It is clear that we have not been given, nor have we requested, more than we are entitled to.
In the last session, on November 22, 1983 a question similar to the one now before you was before the Acting Speaker Corbin. The decision was made in favour of the motion which was standing in the name of a New Democratic Party member. The Acting Speaker said:
Past practice indicates that Parties in opposition to the Government, other than the Official Opposition, have received their share of allotted days in any Supply period.
That is not in a calendar year or since the beginning of time, but "in any Supply period". He went on to say:
Since this is the fourth day of a five-day period, and taking into account that three of the days have been used by Hon. Members of the Official Opposition, it is my intention to put to the House the motion standing in the name of the Hon. Member for Kamloops-Shuswap.
The situation which pertained then is almost identical to the situation which you are now faced with. The Official Opposition has already had its share of the allotted days in this Supply period. To date there have been 11 allotted days, nine of them taken by the Official Opposition and two of them allocated to the New Democratic Party. If this was the last day, we could reasonably expect to be allocated this day on the basis of their having already used nine of the allotted days in this Supply period. Had the Official Opposition not chosen to put this day down as a votable day, we might have been prepared to attempt to negotiate further for the final Supply day which will presumably come some time before the end of
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June. Unfortunately, that negotiation process does not seem to be arriving at any satisfactory conclusion.
I ask you simply to reaffirm the preliminary judgment that you made and to agree that in this Supply period the ratio of days between the two Parties, given that there are 13 days, would be more fairly reflected if three were allocated to us and 10 to the Conservatives. That is a reasonable reflection of the numbers in the House of Commons. It is 30 per cent rather than 25 per cent. It is three to one. If that were decided we would find that desirable and acceptable.
I would like to clear up a misunderstanding which I had. You are correct, Mr. Speaker. In fact the motion of February 14 was a votable motion. I therefore do not want to continue with that submission before you. However, I do point out that, taking that votable motion and this votable motion and looking at the three trimesters, or even looking at the single trimester, we would not have had more than our share of votable motions during this period in the history of this particular Parliament.


Hon. Yvon Pinard (President of the Privy Council):: Mr. Speaker, I will very briefly put on the record that we consider, as you surely do, that Standing Order 62(4) (c) must receive its application. It reads:
When notice has been given of two or more motions by Members in opposition to the government for consideration on an allotted day, the Speaker shall have power to select which of the proposed motions shall have precedence in that sitting.
You have seen fit to hear the House Leader of each Opposition Party; that is in accordance with recent practice. I consider and hope that this is sufficient for you to make a selection now.


Mr. Speaker:: The Chair thanks the Hon. President of the Privy Council (Mr. Pinard) for reminding the Chair of its obligation.
Having taken note that two notices of motions were filed yesterday evening, the Chair had anticipated the discussion which has taken place. There are two distinct issues to be addressed; the first is the distribution of allotted days between the Opposition Parties in any given period; the second issue is the distribution of allotted days ending in a vote of non-confidence in the Government over the three Supply periods of the parliamentary calendar.
On both of these issues, the Chair cannot make a ruling which would apply in all cases. The Chair's selection must be based on the representations of the Parties in the House and also on what has happened, by agreement of the Parties concerned, in the immediate past Supply periods. These conditions can vary from Parliament to Parliament and Hon. Members will remember that it was not so long ago that there were three Parties sitting in opposition in the House.
On November 22, 1983 the Chair exercised, I believe for the first time, its power of selection pursuant to Standing Order 62(4)(c). Faced with two motions on the Order Paper, the Acting Speaker chose an NDP motion because that Party had

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not yet had an allotted day in the Supply period ending December 10, 1983. There are five days in the said period. The Progressive Conservative Party had already had three of those days and the Chair felt it had a duty to give special attention to the protection of the minority in the Elouse.
Our rules are silent on the second issue, that of non-confidence votes. Although caveats have been entered by Opposition House Leaders in the past claiming that a non-confidence motion is a prerogative of the Official Opposition, the Chair has found no precedent to support this contention and certainly should not, without direction from the House, decide that that is so. The Chair has also ruled that the timing of the filing of the resolution is not really relevant to this decision.
Successive procedure committees, despite the urging of the Chair to clarify the intent of the House, have also been silent on the matter.
Therefore, the Chair will again only exercise its power of selection based on fair play and impartiality.
The three Supply periods provide for 25 allotted days, six of which can end in a vote of non-confidence. In the current parliamentary calendar the Progressive Conservative Party has used 18 allotted days, four of which ended in a vote. The Chair made an error in its preliminary count. The NDP has used five designated days, one of which has ended in a vote. There appears to be agreement on the mathematics.
On that basis, the Chair selects the motion standing in the name of the Hon. Member for Wellington-Dufferin-Simcoe (Mr. Beatty). The Chair wishes to renew its appeal to the procedure committee to consider the principles which should underline the organization of the Supply procedures.


ALLOTTED DAY, S.O. 62-NON-CONFIDENCE MOTION-REVENUE CANADA
Hon. Perrin Beatty (Wellington-Dufferin-Simcoe) moved:: That this House regrets the failure of the Government to satisfactorily protect the civil liberties of Canadian taxpayers in their dealings with the Department of National Revenue and calls upon the Government to implement without delay the recommendations of the Progressive Conservative Task Force on Revenue Canada and, in particular, to curtail the Department's powers of search and seizure under Section 231 of the Income Tax Act, to guarantee taxpayers the right to a fair hearing on disputed reassessments before having to make payments or post security, to create a Taxpayers' Bill of Rights, and to provide an adequate system of appeals of unfair decisions concerning collections.
He said: Mr. Speaker, may I start this morning by expressing my personal thanks to you for the decision which you have just made, which I feel was a very fair and just decision. I am grateful for the discretion you have exercised.
The motion which is being moved today is a motion of non-confidence in the Government because of its handling of the administration of the income tax system. There is probably no issue which has more consumed the interest of Members of Parliament and the public than this issue. Over the course of the past several months since January, my office has received between 800 and 900 letters on this subject. We found ourselves literally incapable of keeping up with the volume of mail
and telephone calls coming into the office, even with having hired other part-time staff.
It is apparent to us that there is deep public interest in and concern about the way the income tax system in Canada is being administered. It is clear that it is important that Parliament act now to begin to assure fairness in the administration of the income tax system in Canada.
You will recall that since September there has been a succession of revelations about improper actions on the part of the Department of National Revenue which have cast serious doubts upon the fairness of the system which we have operated.
The Government's response has taken many forms. The first was simple denial that there was a problem in the first place. Second, there was hedging, with the Government qualifying the initial denials. Third, it looked for scapegoats, ultimately firing the deputy minister and transferring him to another responsibility, leaving the impression that somehow he was solely to blame for the problems within the Department. Then we saw the Government acting to defer decisions. It appointed a private consultant in January whose job it was to take the heat off the Government for the duration of the year and prevent decisions from having to be made.
Additionally, the Minister refused to take decisions with regard, for example, to the odious film on auditing which has caused so much controversy. He had passed that element of his responsibility to a high-priced group of public relations people whose job it was to make recommendations on improving the Department's image. There was an attempt to defer decisions being made and to deny the Minister's responsibility to make these decisions.
Finally, in the past month there have been encouraging words from the Department but very little action to deal with these very fundamental problems. Encouraging words are not good enough. What we need at this point, is, first, a candid assurance from the Minister that he acknowledges that there have been serious problems within the Department and that he recognizes that the vast majority of Canadian taxpayers are honest and want to pay their taxes fully and on time. He should understand that they have rights. They are entitled to have those rights respected by his Department. The candid admission that his Department's procedures have often not been consistent with those principles and that taxpayers' rights have often been taken away is an essential first start to correcting these abuses and protecting the rights of taxpayers in the future. Yet that admission has never been made in that clear and simple way.
Second, we need something more than a simple admission. We need an action program. The Government should genuinely recognize that there are problems within the Department and that the rights of taxpayers have been in jeopardy as a result of actions of its officials. As well, it must recognize that their rights have been in jeopardy as a result of the writing of the Income Tax Act which gives the Department powers that surpass the powers of its counterparts in Great Britain or the
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United States and which often surpass the powers even of the policy, which may in some cases even be unconstitutional.
If the Government genuinely recognizes those facts, surely it is essential that the Government act now to curtail those powers and bring them back into line with basic civil liberties in this country, to ensure that never again will the Department use these excessive powers to take away the basic civil liberties of Canadian taxpayers.
Repeated studies have indicated how serious this problem has been, going back as far as the Rowe report which was commissioned by the Minister's predecessor. It studied the administration of the income tax system, referred to problems within it and talked about the need for the political will to act quickly to address the problems. Yet this report, which was conducted by a former leader of the Liberal Party in Newfoundland, was ignored by the Minister. It was suppressed for over a year. An attempt was made to prevent it from ever seeing the light of day. Instead of acting on the report, the Minister handed it to his officials who prepared a rebuttal in which they dismissed, one after another, each of Mr. Rowe's concerns and recommendations. There probably has never been a neater snow job on a Minister in my time in Parliament than was done in this case. He handed this report to his officials and they convinced him that there was no need for action.
That report was presented to the Minister in December 1982. Nothing was done. Since that time there has been a succession of other reports. Most recently, within the past week, we found a report that was prepared by the Joint Committee of the Canadian Bar Association and the Canadian Institute of Chartered Accountants which makes, in a very telling way, the argument which I was just placing before the House. We saw in that joint brief that was prepared by the CICA and the Bar Association a statement that recognizes how serious the problems have become. It includes this statement:
Revenue Canada must have broad enforcement powers. But a balance must be struck between the necessity for effective tax administration and the protection of taxpayers from undue and unreasonable interference. In our view, the Income Tax Act (the 'Act') provides inadequate restraints on Revenue Canada's enforcement powers. The Act should be amended to impose powers. The Act should be amended to impose reasonable limitations on Revenue Canada's enforcement powers and to provide for independent judicial scrutiny of the exercise of those powers in all circumstances.
They refer as well in their report to their experience in dealing with the Department. They say this: "Most Revenue Canada employees are courteous, honest, competent and reasonable." The report continued by indicating: "Nevertheless our experience was that the attitudinal problem we have described is growing throughout all levels of Revenue Canada." That report was presented just last week by some of the most senior tax practitioners in the country.
On behalf of my Party, I endorse strongly the recommendations which have been made by the Joint Committee of the Canadian Bar Association and Canadian Institute of Char-
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tered Accountants. In virtually every regard they are consistent with recommendations that were made by the Progressive Conservative Task Force on Revenue Canada.
Let us review for a moment the history of Parliament's involvement in this issue. Last fall we raised a series of questions with regard to problems in the administration of the Income Tax Act-the issue of quotas which were initially denied by the Minister but which he subsequently confirmed existed, and the issue of attempts by Revenue Canada to gain direct access to the computerized data banks of the City of Kitchener. This was the second issue which was of major concern and which we referred to the Privacy Commissioner. His report, which was released quite recently, found that Revenue Canada had taken a careless approach in this whole issue and that it had not observed proper regard for the rights of Canadian taxpayers living in the City of Kitchener. He raised serious concerns about the whole issue of privacy.
Hon. Members on this side of the House of Commons, including my Leader and my former Leader, called upon the Minister of National Revenue (Mr. Bussieres) to strike a committee of the House of Commons with a majority of Liberal Members and with a Liberal chairman, whose job it would be, first of all, to give Canadians a chance to be heard or to express their points of view about the administration of the income tax system; and second, to give to the Minister and to the Government a series of recommendations which would improve the administration of that system to make it more efficient, fair, accountable and effective. Yet the Minister refused. Parliament was to be denied the opportunity to have that sort of committee study. He said that it was good enough to parcel out this responsibility, which should be undertaken by elected representatives, to a group of private consultants.
As a result, my Leader announced at the beginning of February the creation of the Progressive Conservative Task Force on Revenue Canada. Five members of our caucus visited 23 communities across the country throughout the month of April. We listened to over 300 oral submissions and received a tremendous volume of written material, both when we were on the tour and after we returned. As a consequence of those hearings, we produced the report of the PC task force on April 8, 1984.
The contrast between the Government's approach to this issue and the approach taken by my Party is striking. First, we felt that it was an issue in which elected representatives should be involved. The Government sought to gag Parliament and to prevent Members of Parliament from hearing about this. The Government felt it was appropriate simply to parcel it out to private consultants. My Party spent its own money to pay for the work of the task force. We brought in a report, which has been virtually universally acclaimed by the press, the public and tax practitioners, on a budget of $100,000, paid for not by taxpayers but by the Progressive Conservative Party. In contrast, the Government's Woods Gordon study, the private consultants' study, was commissioned in January and then will not be making their report until toward the end of this year. The Minister has indicated that the budget for the Woods

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Gordon consultants' study will be some 15 times the size of the budget of the Progressive Conservative Task Force on Revenue Canada. That private consultants' study will cost Canadian taxpayers $1.5 million.


Some Hon. Members:: Shame!


Henry Perrin Beatty: Yet we still do not see action being taken. The Woods Gordon study is being used as an excuse not to take action rather than being used, as the PC task force report can be used, as a blueprint for action to be taken now to redress the situation.
On May 2 the Hon. Member for Cariboo-Chilcotin (Mr. Greenaway) and I met with the Minister of National Revenue in his office. When we left that meeting, we indicated to the press what our honest impressions were. We were pleased with the reception with which our report was met by the Minister. He indicated a genuine concern about the activities of his Department and a genuine interest in making reforms. We were pleased with that. I indicated as well that I had repeated to him an offer which had been made by my Leader publicly, namely, that if the Minister or the Government were prepared to act on the recommendations of the task force, we would pledge in advance our full co-operation in implementing these reforms as quickly as possible, that there would be no delay coming from this side of the House. I stressed at that time the importance that we act, not leave it until after the next election. Time is running out.
At the same time I indicated to the Minister that positive words were not enough, that if the Minister and the Government were not prepared to act, we would take our case to the Canadian people. Indeed, that is precisely what we intend to do. There has not been action taken since that time. What have we seen? We have seen, finally, the report of their Task Force on Public Relations but no action. I might add that the findings of the Task Force on Public Relations tended to substantiate the case which has been made by our Party throughout and the recommendations of our task force. However, public relations improvements are not good enough. We need amendments to the Act. What we need is changes in procedure which will ensure that the rights of Canadian taxpayers are no longer abused.
Some of the key recommendations which we made were for a Taxpayers' Bill of Rights. There need be no delay on that. There is no reason for delay on a Bill of Rights, a plain language statement from the Minister himself outlining the rights of taxpayers in Canada and the sort of treatment they have the right to expect at the hands of departmental employees. The statement could be distributed to every taxpayer in Canada and to every departmental employee. When taxpayers feel that their rights are being abridged, such as their right to privacy, to fair treatment, to be presumed innocent until proven guilty and to full information when requested, these are basic rights which all Canadians should have. There is no reason a Taxpayer's Bill of Rights could not have been sent out before now. Yet no action has been taken. The purpose of the Taxpayers' Bill of Rights is to have in the
hands of taxpayers a statement from the Minister so that when they feel their rights are being taken away by an official, they will be able to say: "The Minister is on my side and he says that you cannot do this to me; I have rights too".


Some Hon. Members:: Hear, hear!


Henry Perrin Beatty: Also we pointed out the serious problems under Section 231 of the Income Tax Act which gives sweeping, draconian powers of search and seizure to the Department. Again we find that the recommendations of the Joint Committee on Taxation of the Canadian Bar Association and the Canadian Institute of Chartered Accountants argue for a redrafting of Section 231. For example, the Committee pointed out that, in its opinion, there were even some doubts as to the constitutionality of some of the provisions in Section 231 and recommended that those provisions be narrowed. Surely, when the constitutionality of those provisions is in doubt, and when a group as distinguished as this one says that it is essential to protect the rights of Canadians and that amendments be put before the House quickly, that should be done.
There is no excuse for not acting. There is no excuse for deferring action to protect the rights of Canadian taxpayers. There is no excuse for not presenting to Parliament now, before an election, legislation which would protect those rights and would limit the powers of the Department to those powers which are essential for enforcement but are consistent with basic civil liberties in the country.
There is something grievously wrong in our system of tax administration when a person accused of a serious crime, such as robbing a bank or committing assault, has greater legal protection than a Canadian taxpayer who is under audit. There is something seriously out of alignment. Also there is something seriously wrong when we have a presumption of innocence until proven guilty in the case of people accused of criminal offences. Yet we say to taxpayers that if they are reassessed by the Department of National Revenue, they are immediately liable for payment of any money for which they are reassessed before they have had the chance of a fair hearing. Surely it is reasonable for all Hon. Members of the House to accept the position taken by Hon. Members on this side and by the joint committee as well-a position which, incidentally, is written into the law in the United States-that taxpayers are entitled to a fair hearing before they can be forced to pay money.
The Minister will likely point to the provisions of the February 15 Budget and say that it is adequate that now all the Department will do, instead of forcing collection, will be to tie up an individual's capital by requiring bank guarantees for the duration, literally possibly tying up thousands of dollars for years while the matter is adjudicated and preventing, for example, a small business person from having access to that working capital. We say that is wrong. We say the onus should be on the Department to prove its case before it can collect a disputed amount of money. There is no excuse for not acting on that.
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Going back to the issue of the Department's powers in gaining access to records, there is something seriously wrong when the Department has the right to come into a business and seize business records which may be essential to the functioning of that business, take them to the departmental office and hold them for 120 days before having to go to court for an extension. It then has a right, which we do not dispute, to go to the court to ask for an extension.
What is extraordinary with the way the Act is written today is that the Department has the right to go in secrecy, without the presence of the taxpayer, to argue that it should be allowed to hold those essential business records. We say, as the Canadian Institute of Chartered Accountants and the Canadian Bar Association said, that these ex parte proceedings must be stopped. We must amend the Act to prevent this sort of abuse taking place in the future.
What conceivable justification can there be for this? Is it a case where the taxpayer could destroy the documents or hide them? Of course not. They are held in the possession of the Department. I ask the Minister, what is the risk to the Department in a taxpayer being able to be in court to argue against the Department having an extension and holding essential business records? Surely under our system of Canadian justice you have a right to be present at proceedings which affect your basic liberties and your right to earn a living. As things stand today in Canada with the present Income Tax Act, you do not have that right.
We argue as well in this motion, as we argued in the task force report, that it is essential that there be a proper appeals procedure on collection. What we have increasingly found over recent years is that the Department says that because a person is liable the money as soon as he is reassessed, it will use its powers as fully as it can. Garnishees are issued to take away people's funds in their bank accounts or their pay cheques before they have had a chance for a fair hearing.
In addition, we found that the Department has often refused to use a discretion open to it to arrange reasonable collection procedures where a taxpayer is reassessed and it is clear there is no fraud, where the Department does not dispute that, where it recognizes that an error may have been made or there is a difference in interpretation of the law, with no intent on the part of the taxpayer to commit fraud. Taxpayers often ask to be given an extended payment term and be allowed to make the payment of every penny that is owed, with interest, over a period of time. We increasingly find that the Department has refused to do that. We have argued for an appellate procedure which would allow taxpayers to appeal unreasonable decisions.
I see that my 20 minutes is expiring. There are many other issues I would have liked to raise today, but in conclusion I want to express this message on behalf of my colleagues and repeat the offer that was made. There is no reason for not acting to guarantee taxpayers' rights now before an election. If the Minister and his colleagues bring forward legislation consistent with the report, we will co-operate fully. However, I serve notice on him publicly today that if the Government
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continues to refuse to act, this issue will be taken to the Canadian people in an election campaign. The recommendations of the task force will be a high priority for a Progressive Conservative Government.


The Acting Speaker (Mr. Laniel):: The speech of the Hon. Member being concluded, there is a ten-minute period for questions. Are there any questions?


Hon. Pierre Bussieres (Minister of National Revenue):: Mr. Speaker, I listened with great interest to the comments made by the Hon. Member for Wellington-Dufferin-Simcoe (Mr. Beatty). Actually, what the Hon. Member said was not particularly new to me, because besides examining the report prepared by the committee chaired by the Hon. Member on behalf of his Party's Caucus, I also had a long meeting with the Hon. Member and members of his task force during which we thoroughly explored a number of subjects he has raised today and which are the subject of recommendations made by his taks force.
I do have some trouble accepting "certain charges", if I may use the expression, which were made by the Hon. Member. However, I hasten to say that I fully agree with the principles underlying the task force's recommendations. They are the same principles that form the basis for my Department's policy in administering the Income Tax Act.
Before speaking to the subject of the motion before the House today, I note, Mr. Speaker, that the Hon. Member remarked that although it was time to act, no measures had been taken. I am sorry but I must object to this remark. A number of measures have been taken, and I am sure that the Hon. Member and many of his colleagues will acknowledge they have heard as much from their constituents, or have seen for themselves the results of such measures. These measures have taken the form of guidelines or basic principles to be adhered to in administering the Department, principles which I put down in writing when my deputy minister took up his duties at the Department of National Revenue. I believe these principles provide a very clear concept of the kind of action that should be taken in administering the Income Tax Act and that they cover much of the ground that was covered by the recommendations of the task force chaired by the Hon. Member.
A third preliminary remark is appropriate, Mr. Speaker. We must make a distinction, and this is particularly relevant considering what the Hon. Member said in his conclusions, between the responsibilities of the Minister of National Revenue and those of other ministers. I think that the Hon. Member, in formulating his motion, wished to indicate that distinction by going beyond the responsibilities of the Minister of National Revenue. For instance, when he refers to the changes to be made in certain provisions of the Income Tax Act and when these provisions are as general as Section 231,

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the Minister of National Revenue is not the only one involved. The proposals must be made in the House by the Minister of Justice. Furthermore, all other provisions of the Income Tax Act are, in the final instance, the responsibility of the Minister of Finance.
The Hon. Member has, and I am very pleased with his spirit of co-operation, clearly indicated, on behalf of his caucus, that if the Government makes proposals regarding changes it acknowledges are entirely justified, he is prepared, with the cooperation of his Party's caucus, to expedite passage of such proposals in the House. I admit I am very pleased with this cooperative attitude, and I have said as much to my colleagues who are responsible for the various departments concerned. I think it is time to complete our review of the various recommendations on changes in legislation and to do so as soon as possible.
Mr. Speaker, the motion speaks generally about protecting the rights of taxpayers.
In his speech, the Hon. Member clearly expressed his conviction that from the way the Income Tax Act is administered, Canadian taxpayers, and he was speaking generally, feel that their basic rights are threatened. I would respond, Mr. Speaker, to this general accusation with an equally general argument. In our country's Constitution, this Government has laid down the basic rights of all Canadians. Anyone may, for any reason, avail himself of these provisions which have been enshrined in our Constitution, in the Constitution of this country, in order to obtain legal remedy if his basic rights have been infringed by any level of government.
Second, Mr. Speaker, I would like to point out to the Hon. Member that the very nature of our tax system recognizes the basic freedom of the individual with the immediate corollary of freedom which is responsibility. What is the nature of our tax system? It is a soft-assessment system. The Canadian taxpayer is responsible for declaring all his income. The law says clearly: "all his income". Second: he must establish the amount of tax due. And finally, he is responsible for paying his taxes as assessed. For the vast majority of taxpayers, this exercise has been simplified because we have a system by which employees have their taxes deducted regularly at source, either weekly, every two weeks or monthly, depending on how they are paid. For these taxpayers, it is relatively easy to comply with the Income Tax Act. I would even say they have practically no choice in the matter, because their employers are given tax deduction tables, the amount of the deduction is calculated, and the annual filing of tax returns is merely an exercise in adjustment, in which the taxpayer reconciles the amount already paid with the various deductions to which he is entitled, or adds any income he may have received in addition to his regular income.
Other taxpayers, and especially those who are self-employed or have a business, pay their taxes according to a different formula and have a much broader range of deductions they can make from their gross income, before establishing the tax payable. Generally, taxes are paid in quarterly instalments. With an adjustment at the end of the year.
Mr. Speaker, our system of self-assessment must be the most tangible sign of recognition of a basic right of the individual, of the freedom of individuals in democratic society. That is how our tax system works. To maintain the integrity and reliability of a self-assessment system, we must ensure it is fair, if we are to maintain public confidence in the system. It is sound, reliable, and reasonable, but the taxpayer must be convinced the system treats all taxpayers equally, that is to say that each taxpayer is responsible for declaring his income and calculating the amount of tax payable and, importantly, for paying his taxes-and that everyone is on the same footing.
Since most taxpayers have their taxes deducted at source, Mr. Speaker, we must have mechanisms to check whether the others do abide by the law, and we must ensure as well that enough of them do so to maintain the system's reputation for fairness, so that all Canadian taxpayers will feel a commitment towards and give their full support to the system.
Mr. Speaker, the system itself fully respects the basic rights of individuals and must be provided with audit mechanisms if we want to maintain its integrity and soundness. Pursuant to specific provisions of the Income Tax Act, the department responsible for the administration of the act is empowered to carry out such audits as may be required to maintain the integrity and the equity of the system.
With respect to the second aspect of my remarks, the Hon. Member has quoted various reports which have been made public and he has indicated that the powers provided under the Income Tax Act are too extensive, and that the very nature of those powers-which is what the Hon. Member is concerned about, I am sure-and the way they are exercised may jeopardize the rights of taxpayers.
Mr. Speaker, I would rather not refer at length to the very complex rulings of various Canadian courts on the way the Department has used its powers under Income Tax Act Section 231. However, Canadian courts did state on several occasions that such powers were necessary, appropriate and justified in a free and democratic society. I might simply quote just one ruling made recently by an Ontario Supreme Court justice in which he concluded as follows:

The Court found that there was no improper conduct in the search of the private residence, that the judges had acted within their jurisdiction in making the orders under attack and that the seizures were authorized by the relevant statutory provisions. The Court further found that the Minister's powers of search and seizure and the related procedures were necessary, appropriate and demonstrably justified in a free and democratic society.
May 31, 1984



Mr. Speaker, that was not written by some National Revenue official, but by a court judge in his decision. Of course, being concerned is quite normal, and we should be concerned about the way any enforcing organization is using its powers. We should keep in mind, however, that these powers are provided for in the legislation and that they are perfectly consistent with our fiscal system.
On the other hand, we should examine under what conditions these powers have been used. Hon. members are aware that the powers of search and seizure can be used either under the Minister's authority or a mandate issued by a court of law. In all, in 1984, some 16 million Canadian taxpayers have filed income tax returns. Out of these 16 million Canadian taxpayers, Mr. Speaker, how many would you say have been subjected to search procedures in 1984? Forty two. Not 42,000 or 420, but only 42 have been subjected to search procedures so far in 1984 out of our many million of taxpayers. There have been 143 ministerial seizures.
By quoting these figures and the judge's decision, Mr. Speaker, I wish to lay to rest the concerns some people may have regarding the use of such overwhelming powers. What I am saying is that the powers provided for in the legislation are now used with moderation and to the extent that special circumstances warrant them. I believe that this reflects a healthy administration of the legislation and a sound use of these powers.
Mr. Speaker, because of the very nature of the income tax system, it is an acknowledged fact that we need an audit mechanism to guarantee the fairness of the system and that we also need structures to enforce the Income Tax Act when people are not complying with it. This is not the only aspect of life in our society which is subject to enforcement procedures. We have in our streets people who are responsible for encorc-ing the law, and I do not think that people are frightened by the presence of policemen in a society. However, it is obvious that if we were to look at everything these policemen could do with the powers they have, we could be frightened. But the important thing is to recognize that, in most cases, their powers are used discerningly and in relation to the problems they must face. We have to view the power given to the Department of National Revenue in exactly the same perspective. Have these powers been used in relation to the circumstances the legislator said would justify them? Mr. Speaker, the Department of Justice is now reviewing all these provisions and is making sure that these powers are in agreement with the provisions of the Charter of Rights and Freedoms contained in our Constitution and is also checking on cases where they have been used in the past to make sure that they were used properly.
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Mr. Speaker, I see that my time is running out; I would like to deal with another aspect of the issue, another specific case mentioned by the Hon. Member. It relates to the request for information made to the City of Kitchener by the Department of National Revenue. Mr. Speaker, I have already given my views when I answered questions in the House on the request itself, and I also have had the chance of discussing the matter with the Hon. Member and others. As concerns the lack of available information which seems to be common with a few groups, whether it is a municipal body or any other group, I believe that, except in this particular case, the examples I have given have convinced the Hon. Member, the House in general and all Canadians that it is quite legitimate for the Department, whenever there is a reasonable doubt about non-compliance with the law, to request this information in order to enforce the Income Tax Act and maintain the credibility, the integrity and the equity of the system.
The Hon. Member has directed three questions to the Privacy Commissioner about the specific case of the City of Kitchener. On this matter, the Commissioner did say that the request made by the Department of National Revenue was legitimate. The Commissioner made a legitimate and legal recommendation.


An Hon. Member:: Legal?


Pierre Bussières: Read it! I hope you have taken the time to read it! Mr. Speaker, the Hon. Member should not try to juggle with words. He should read the paper and say exactly what it contains. He suggested something to the Department and made a criticism about a procedure used in connection with classified information. I am happy to indicate to the House that steps have already been taken, and that very soon I will appear before the Treasury Board with a submission along the lines recommended by the Commissioner. But most importantly, when answering the three questions, he recognized that the Department in no way contravened the Act which the Commissioner is duty bound to enforce.
Mr. Speaker, there are many things I would like to add-


The Acting Speaker (Mr. Laniel):: I am sorry, but the Hon. Minister's time has expired. We should now proceed to a question period. Any questions?


Henry Perrin Beatty: Mr. Speaker, at the end of his remarks the Minister dealt with the issue of the attempt by Revenue Canada to gain access to the computerized data base in the City of Kitchener. That was an attempt which was characterized-and the Minister perhaps overlooked it in his reading of the report-by the Privacy Commissioner as having exhibited carelessness and casualness in terms of the rights of the citizens.
The Minister will also be aware that the Privacy Commissioner made a differentiation between data matching and computer matching. He indicated that he did not believe this

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case involved computer matching. Will the Minister give the House the assurance that his Department has not to date in any instance engaged in computer matching of information, to use the term which was used by the Privacy commissioner?
[ Translation]


Pierre Bussières: Mr. Speaker, admittedly I had difficulty following the Commissioner's recommendation. This is an aspect now under review, and I understand there were further discussions between the Commissioner and my officials on that particular aspect, in order to identify the issue exactly and come to an understanding as to what the Commissioner meant concerning the Department's operations. Clearly, the Hon. Member is focusing on one aspect of the Commissioner's comments, but what is important is to have a good view of the issue. Taking, the first substantive issue, for instance the Commissioner's answer is clear. He stated:

The Privacy Commissioner stated:
The information sought by Revenue Canada from the municipal records of the City of Kitchener is relevant to the Department's operating programs of collecting taxes and determining compliance with the Income Tax Act. The collection of such personal information is authorized by Section 4 of the Privacy Act.
He concluded:
What is relevant is that any information obtained relate directly to an operating program of the Department-
In seeking such information from Kitchener, Revenue Canada did not violate the Privacy Act.

And he answers the three questions. Now, as I indicated at the beginning of my answer, when I last discussed this particular aspect with my deputy minister, he told me there would be further discussions between my Department and the Commissioner, in order to come to a clear understanding of the terms used and the substance of the issue.


Henry Perrin Beatty: Mr. Speaker, you will note that the Minister did not answer the question, which was whether he could give the House the assurance that in the past there has not been computer matching of data as referred to by the Privacy Commissioner. I will not repeat that question, but I would simply draw to the attention of the Minister an article which appeared in the Kitchener- Waterloo Record of last Saturday. In that article an official of his Department indicated that, in fact, such computer matching appears to have taken place in the past. I think the Minister should be aware of that fact.
Second, the Minister should also be aware of the fact that the Privacy Commissioner found that if, in fact, the Department had gained access to the computerized data from the City of Kitchener, the failure to have the information properly catalogued would have been in violation of the Act. I think he overlooked that fact.
I would like to ask the Minister about another matter which is under his jurisdiction. I draw to his attention a bulletin
called the Special Investigations Bulletin, which I believe was published in March, 1984. At the very same time there was a stable of very high-priced flacks revealing the public relations policies of the Government. In the bulletin there is an article headed "Department 'takes in' what Chinese 'took out' ". It refers to the operations of a Chinese restaurant operator.
I want to ask the Minister whether he feels this sort of casual racist reference to Chinese in this way is appropriate in an official publications of his Department. A subsequent article entitled "Precious Metal Attracts Precious Taxes" deals with the file of a Brockville doctor. Why was it not necessary in that article to identify the doctor by his race or nationality when it was deemed necessary by his Department to identify the individual mentioned in the previous article as Chinese? Does he feel that this sort of reference is appropriate in official government documents? And does he not feel that this casual racism is something which should be prohibited?


Pierre Bussières: Mr. Speaker, I would like to get back to this once I have clarified the point in the Privacy Commissioner's report concerning appropriate classification of information obtained. I indicated in my comments, perhaps too quickly, that the Department has already established new lists and new schedules, and that a representation will be made to Treasury Board to satisfy the concerns of the Commissioner with respect to the information obtained, so as to avoid any possible criticism by the Commissioner and to comply as strictly as possible with the various regulations and other provisions concerning information held on individuals.
Mr. Speaker, I am not sure about the document to which the Hon. Member referred but I do understand his question. In any case, and I say this without the slightest hesitation, any departmental document, whether public or internal, which has racist overtones is unacceptable. I cannot really judge the document until I have seen it, but as a general rule, I can assure the Hon. Member that any departmental document that would use expressions with racist overtones or make discriminatory remarks about a particular group is unacceptable, since this Government's principles and policies are clear on the subject, and all departments must, above all, comply with those policies and principles which are not only the policies and principles of this Government but also those of the House, as expressed on many occasions by the House itself.


Mr. Malone:: Mr. Speaker, the Hon. Member for Welling-ton-Dufferin-Simcoe (Mr. Beatty) much earlier talked about the need for a Taxpayers' Bill of Rights. Today he has again brought up the subject of the need for a Taxpayers' Bill of Rights. In responding a few moments ago the Minister wrapped himself in the Charter of Rights and submitted that somehow all of the rights and protections of citizens were wrapped up in that document.
May 31, 1984

How can the Charter of Rights protect a taxpayer in a situation where he has been reassessed and the Government demands that he pay now, before he has had a fair hearing? How can it ensure that he will get a fair hearing before he has to make payment? How does the present Charter of Rights give full protection against that kind of situation? And if full protection is there, why is it that the taxpayer has to make his payment before his hearing under the present tax system?


Pierre Bussières: Mr. Speaker, I do not think it was my intention to turn down outright the proposal contained in the report prepared by the committee of the Progressive Conservative Caucus, regarding a more direct expression of rights and responsibilities. I think the Hon. Member for Wellington-Dufferin-Simcoe (Mr. Beatty) will agree when I add "and taxpayers' responsibilities", considering the tenor of the discussion we had. He agrees that in a self-assessment system, both rights and responsibilities must be made clear. I think this goes without saying, in view of the close correlation between these two concepts.
I would like to make it clear to the Hon. Member that I do not want to hide behind this particular concept of rights and responsibilities vis-a-vis a Department or the administration of an extremely complex Act, especially with respect to this group of taxpayers. I simply would like to draw the attention of the Hon. Member to the letter I wrote to my deputy minister when he commenced his duties. In that letter I stressed the fact that in our communications with the taxpayer, whether these would concern assessment or collection issues, we should indicate to the taxpayer his rights and recourse with respect to the Department's decisions. I should also like to indicate to the Hon. Member that the whole issue of collecting taxes after assessment is now being examined, that a more flexible approach has already been proposed by this Government, either through the Budget or through strict administrative measures, and that the concept must be examined within the context of the whole concept of our tax system-


The Acting Speaker (Mr. Laniel):: I am sorry, but I shall have to interrupt the Hon. Minister because his time has expired.


Hon. J. Robert Howie (York-Sunbury):: Mr. Speaker, I would first of all like to congratulate my colleague, the Hon. Member for Wellington-Dufferin-Simcoe (Mr. Beatty), for an excellent address on his motion, which gives us an opportunity as parliamentarians to discuss a matter of great importance to the people of Canada. I would be remiss in my duties as well if I did not also congratulate the Hon. Member and his task force for the excellent job done in travelling across Canada and gathering such extremely useful information.
In his remarks a moment ago, the Minister of National Revenue (Mr. Bussieres) made the distinction between the role
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of the Minister of National Revenue and the role of the Minister of Finance. He was correct in making this distinction. Both Ministers are members of the same Cabinet, a Cabinet which speaks with unity. As a member of that Cabinet, the Minister of National Revenue has a rare opportunity to propose and fight for tax reform in substance, if he so desires. As Minister of National Revenue, he has the unique opportunity to correct administrative defects within his Department. The Minister is in a unique position no matter which route we take in helping to bring about the reforms which we have spoken of and will speak of in the course of this debate.
I would like to thank the Minister for being present during this debate. I hope that the points we make will be useful in helping us as parliamentarians to chart a new course for the people of Canada and correct some areas which are badly in need of correction. I agree with the Minister that the taxpayer must be convinced that the system is fair to all. The taxpayers are not so convinced, Mr. Speaker. Indeed, as late as Monday of this week, in Prince George, British Columbia, a very distinguished and prominent Canadian, Mr. John Turner, said that he has read the Progressive Conservative task force report and that if he is put into a position of authority, he will see that the administration of the Act is brought back into unquestioned equity and fairness.
I do not want to project myself into the Liberal leadership race; there are enough people already in it. However, I do want to say that I hope during the course of the leadership race other candidates will also make such frank statements. As for the Minister, I want to suggest to him that if the House continues it appears he may have some support for his position; and if the House does not continue, our Party will form the next Government and he will then see some action.
Since last year we have seen and heard growing evidence to the effect that Canada's tax collection system, once one of the most fair and effective in the world, has deteriorated very badly. We have received complaints from a wide spectrum of our population that a new hard line approach to the administration of the Income Tax Act was leaving an angry trail of taxpayers who have become disillusioned with the system and are demanding justice and fair play from their Government.
Last September the Canadian Chamber of Commerce warned there was a clear perception across the country that Revenue Canada was becoming more and more aggressive in its attitude towards the assessing and collecting of income taxes. Notices of objection filed by taxpayers jumped by 36 per cent. Significantly, over 70 per cent of all notices filed were settled in whole or in part in favour of the taxpayer. There was more evidence. In November of 1983 every chartered accountancy firm in the city of Cambridge, Ontario, signed a letter alleging that local auditors were operating under a quota system. We all know of the debate that ensued from that allegation and we all know of the results.
When the Government rejected the idea of a full parliamentary inquiry proposed by our Leader, he set up a task force to

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listen to Canadians and their concerns about how taxes are collected in Canada. The mounting evidence of problems in the system left little doubt in my mind or in the minds of those in the task force that we should provide a forum for taxpayers to present their views and should recommend ways to improve the administration of the Tax Department in Canada.
After holding meetings in 23 centres across Canada through the month of March this year, the task force received more than 300 oral presentations in addition to a large number of written and informal submissions. The meetings were both disturbing and encouraging. The picture that emerged was that of a Department with powers that even the police do not have. Tax professionals, the lawyers and accountants who have dealt with thousands of tax cases over the years, told us of a marked change in the Department in the past two years. They spoke of a new aggressiveness that presumes the taxpayers are guilty until they are proven innocent. Additionally, the collections area of the Department has been much less flexible in agreeing to repayment terms when taxpayers are reassessed.
On the positive side, we were encouraged to hear that the district office in Calgary has a co-operative attitude in dealing with inquiries from taxpayers or their representatives, and I have discovered that the Saint John, New Brunswick district taxation office has been courteous and co-operative in dealing with complaints 1 have put forward from my constituents. The Minister's office has also replied with courtesy to inquiries I have put forward on behalf of my constituents.
On the other hand, I must say that much of what we heard during our task force hearings disturbed me greatly. We were struck by the fear with which ordinary Canadians greet a call from the Tax Department, a fear that is sometimes cultivated by Revenue Canada in its attempts to frighten ordinary taxpayers. We found that the Tax Department often pursued Canadians of modest means who lack the resources to fight back and defend themselves. Accordingly, we have a recommendation that we think will help the Tax Department deal more fairly with people in this category and I will refer to it in just a moment.
We found the sheer complexity of many provisions caused serious problems for taxpayers who can least afford costly professional assistance. The growing complexity in the law, sweeping departmental powers, and a new hard line attitude towards taxpayers appears to have eroded the rights of thousands of Canadians and undermined public confidence in our tax system and our Government. We were shocked to hear testimony of poor internal communications within the Department, particularly between the computer centres, which should be supplying the service for district taxation offices, and the offices themselves. We heard testimony of one citizen's bank account being frozen even after his debts were paid in full.
Throughout Canada the task force heard evidence of problems caused by the "reasonable expectation of profit" rule as it is interpreted and applied by the Department. Under this test, small businessmen, farmers, artists and writers all have no way of knowing clearly and in advance how a loss will be treated.
Worse, disallowing losses after they have occurred creates a kind of double penalty in that having lost the money one is then deemed to be a hobbyist and must, in effect, pay tax on the loss. I suggest that at least the basis of determining whether a business loss will be allowed against other income, if not a determination itself, should be available in advance of making an investment. Equally, should the ground rules for making these determinations later change, retroactivity should not be applied.
A common complaint of farmers and artists was that the Department arbitrarily established time frames within which profitability must be achieved, although it often takes several years of hard work and financial investment before profits are made. Until a consultative group established by the Minister of Finance (Mr. Lalonde) has made its report public and it has been debated, individuals who have claimed bona fide farm losses should not have their ability to deduct those losses restricted simply because they have had to earn other income in order to support their family and business activities.
Again, a decision by Revenue Canada to alter established practice and to give at times the narrowest possible interpretation to the reasonable expectation of profit test is causing a terrible injustice to Canada's artists and scholars. Until the Standing Committee on Communications and Culture has completed its review of matters relating to the taxation of our artists and writers, the treatment of artists' and writers' expenses should revert to the old interpretation; or at the very least a moratorium should be placed on any further reassessments.
Of all the assets of Revenue Canada, its staff is unquestionably the most valuable. Unfortunately, the task force uncovered considerable evidence that a number of the Department's policies and practices have resulted in poor morale, reduced productivity and an unacceptably low standard of service to the public. These problems must be reversed. The quota system, by whatever name, should be scrapped and never be a measure for promotion and advancement. The accent should be on accuracy, not the maximization of tax revenue. The quota system is a stain on the conscience of the Tax Department as indelible as the dark spot with which Shakespeare cursed Macbeth.
It is essential that Revenue Canada move away from an attitude that taxpayers are potential crooks waiting to be caught to a more positive service attitude. Canadians are an honest, decent and law-abiding people and have every right to be treated as such by their government and all its employees. Taxpayers should enjoy the right to be presumed innocent until proven guilty, and no payment should be required on assessments until appeals are resolved.
In addition, and this is the matter I mentioned earlier, we need a small claims tribunal to deal with disputes under $5,000, and taxpayers should get a response to their cases in 30 days. This informal procedure would help cut through red tape and promote efficiency and deal more fairly with Canadians in the lower and middle-income groups. We should make taxpayers' files more accessible by returning them to their
May 31, 1984

regional offices after they have been processed. Our Party would significantly curtail the Department's powers of search and seizure.
Our task force made 76 recommendations, including the creation of a Taxpayers' Bill of Rights. It is a plain language statement of the treatment taxpayers should be able to expect. It supplements the Charter of Rights just as every other piece of legislation we passed in this House supplements it. Among our recommendations is one for a Taxpayers' Bill of Rights. This Bill would include the presumption of innocence until proven guilty; the right to privacy; the right to timely and accurate information; and the right to courteous treatment. These matters are not spelled out in the Charter of Rights; they are refinements of fundamental rights spelled out in that Charter. Surely there could be no objection to this measure.
We also recommend that taxpayers who disagree with the reassessment be given the right to a fair hearing before the Department can take away the pay cheques or their bank accounts. Surely powers given the Tax Department which exceed those in Britain or the United States should be changed to ensure that while the Department has all the authority it needs to enforce the law, taxpayers are guaranteed at least the protection our law gives people accused of serious crimes, a protection they do not now have.
Our report is non-controversial and non-inflammatory. It succinctly and coherently describes ways in which Revenue Canada could function better serving both public and administration alike. I urge the Government to act now, even at this late date before it loses power, to implement the report's recommendations and thus provide an important service for all Canadians. If the Government chooses not to act, the Government which succeeds it will.


The Acting Speaker (Mr. Laniel):: The House will now proceed to questions and comments. Are there any questions? The Hon. Member for Humboldt-Lake Centre (Mr. Althouse) on debate.


Mr. Vic Althouse (Humboldt-Lake Centre):: Mr. Speaker, I see by the clock that my remarks will by interrupted by the dinner bell. One of the problems which mankind has always had with tax systems is finding a system which will seem to be fair and will be administered fairly. With the income tax system we have an attempt to operate a self-assessment system.
That concept was not first developed during World War I when income tax was introduced. The self-assessment feature of taxation has been used by many civilizations in the past. One which comes to mind particularly is a self-assessment system that was used in the Sound between Denmark and Sweden. It was called the Sound tax which the King of Denmark collected. He made himself responsible for patrolling the Baltic Sea. All shipping that went in and out of the Baltic Sea did so under a method of taxation which was a relatively fair self-assessment tax. When the ship captains applied to go
Supply
through the Sound they presented the Tax Department with an assessment of the value of the cargo. They simply paid 10 per cent of that amount. In order to keep it fair and reasonably honest, the King of Denmark had the right to buy the cargo at the rate at which the sea captain had valued it. That is a sample of a self-assessment tax system.
One of the problems which we have run into with our self-assessment tax system as it applies to income tax is that there are too many instances surfacing in which it does not appear to be fair. The self-assessment features are being challenged dramatically by the Government. In too many cases the challenge appears to be unfair and unreasonable. It is to that that this motion addresses itself.
We propose to provide an additional amendment to this motion. If it is permitted, as I understand it is at this point in time, I would like to present my motion prior to continuing with my speech so that I could address the amendment as well as the motion. I will pause for a moment to receive your ruling; my understanding may be incorrect.


The Acting Speaker (Mr. Laniel):: I would invite the Hon. Member to read his amendment and send it to the Chair so I can look at it.


Victor Fredrich (Vic) Althouse: Mr. Speaker, I propose to remove the period at the end of the motion which is before us and add the following words:
-and further, to recognize the inequity of the appeal process by guaranteeing to taxpayers who are successful in an appeal through the courts that their legal costs will be paid for by Revenue Canada.


Henry Perrin Beatty: It is already done.


Mr. Robinson (Etobicoke-Lakeshore):: Point of order.


The Acting Speaker (Mr. Laniel):: The Hon. Member for Etobicoke-Lakeshore (Mr. Robinson) on a point of order.


William Kenneth Robinson: Mr. Speaker, it is my understanding that the matter the Member has raised as an amendment to the motion has already been carried out.


Mr. Mayer:: That is typical of the NDP. They are redundant
anyway.


The Acting Speaker (Mr. Laniel):: It is not the responsibility of the Chair to answer that preoccupation of the Hon. Member for Etobicoke-Lakeshore. All I have to do is ensure that the amendment relates to the main motion in front of us and that it does not go beyond the scope of the intention of that motion. It does not and is well related, so I declare the amendment acceptable. I will put the amendment at this time.
Mr. Althouse, seconded by Mr. Lewycky, moved to amend the motion by removing the period at the end of the motion and adding:
-and further, to recognize the inequity of the appeal process by guaranteeing to taxpayers who are successful in an appeal through the courts that their legal costs will be paid for by Revenue Canada.

May 31, 1984
The Late George R. Pearkes
The question is on the amendment. The Hon. Member for Humboldt-Lake Centre.


Victor Fredrich (Vic) Althouse: Mr. Speaker, we have concerns about the powers that have been used by Revenue Canada personnel and by the Act. I suppose it is not just the powers of the Act that are of concern, but more precisely some of the powers through Orders in Council and by internal operating procedures of Revenue Canada. As part of my presentation here today I would like to review three or four instances which I think highlight some of the abuses that are referred to, both in the motion and now in the amendment. I would like to go through those three or four examples. It would be more convenient if we could do them back to back, Mr. Speaker. Since it is pretty well the hour for adjournment, I propose to call it one o'clock and proceed after the lunch hour.


The Acting Speaker (Mr. Laniel):: Before we adjourn, I would like to clarify one point. I should have put the motion at the end of the speech. I am sure the House will agree that the Hon. Member may continue his speech by unanimous consent after lunch. Is it also agreed to call it one o'clock?


Some Hon. Members:: Agreed.


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


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.

Hon.   J.-J. Blais@Minister of National Defence: Mr. Speaker, it is customary to take a few moments to pay tribute to an illustrious Canadian who is no longer among us. I am of course referring to General George R. Pearkes who died this week at the age of 96. I would like to express to the House and to all Canadians, my admiration and respect for this illustrious Canadian, and recall the many services he rendered to this country.

In his long career General Pearkes touched many Canadians, as a keeper of the peace with the Royal North-West Mounted Police, as a hero among heroes in the First World War, as a staff officer and educator in the Canadian Army, as a politician, as Minister of National Defence, and as a representative of the Queen in British Columbia.

He will undoubtedly go down in history as the soldier who received the largest number of decorations and awards from the Canadian Forces. He will be remembered for his courage. He was wounded five times but was always prepared to serve his country when danger struck.

But for many Canadians who had the privilege of knowing him, General Pearkes will be remembered as a courtly gentleman of enormous integrity, a man who devoted his life to public service, and an example to all the people of Canada for generations to come.


Some Hon. Members:: Hear, hear!


Hon. Erik Nielsen (Yukon):: Mr. Speaker, many Canadians who knew General Pearkes in his later years as an outstanding Defence Minister in the Diefenbaker Government and Lieutenant Governor of British Columbia, were unaware that he was a genuine Canadian hero.
He left the Royal North-West Mounted Police of fabled memory, where he was serving in Whitehorse, Yukon, to go overseas in the First World War, where he won every available medal for bravery and distinguished service, from the Victoria Cross, Great Britain's highest honour, to the Croix de Guerre, and including the Military Cross, Distinguished Service Order, and the United States Order of Merit. He was wounded five times, and was mentioned four times in despatches.
Following the war, he continued his military career as General Staff Officer at Royal Military College, Director of Military Training at National Defence Headquarters, and Officer Commanding, Military District 13.
In World War II he gathered new laurels as Major General in command of the First Canadian Division overseas.
In 1945, at a time when most men are thinking of retirement, he undertook a new career in politics and soon demonstrated the same qualities of courage, devotion to his country, and rugged honesty which he had displayed on the field of battle.
As Minister of National Defence in the Diefenbaker Government he upgraded the weaponry and equipment of our fighting forces, recognized and respected the NATO and NORAD commitments to the full and, in spite of his army associations, regarded the air as the first line of defence.
Both the Arrow and Bomarc controversies erupted while he was head of the defence portfolio, and with wit, honesty and good humour, he bore criticism for decisions which were based on carefully considered recommendations of the Chiefs of Staffs based on their conviction that manned bombers were already obsolete.
When he left the defence portfolio to assume the Lieutenant Governorship of British Columbia in 1960, George Pearkes was undoubtedly grateful for the opportunity to leave the turbulence of politics.
May 31, 1984

Of him it can be said that virtually his entire life was one of service. His contribution to Canada and democracy was always one above and beyond the call of duty. He gave more than was expected, and always with a quiet modesty and good cheer that became a man who never turned his back on the foe, whether military or political.
The thoughts of this House remember him fondly and go out today to his wife, Blytha, his close friends and family who have suffered a loss comparable only to that suffered by the nation.
Of him, John Diefenbaker once said, "He was a great soldier." We can do no better here today than echo those words.


Some Hon. Members:: Hear, hear!


Mr. Ian Waddell (Vancouver-Kingsway):: Mr. Speaker, I am pleased to say a few words on behalf of our Party because I represent a riding in British Columbia which is one of the places that General Pearkes served so well. It has already been said that he was a Mountie. He was a Victoria Cross winner in World War I. He was a staff officer. He was a politician. He was Minister of National Defence. He was a representative of the Queen as Lieutenant-Governor of my Province of British Columbia in 1960.
He was a gentleman, a soldier, and a person of great integrity. If that could be said of any of us in the House, we would consider it to be a wonderful honour.
Most of my generation never served in the Armed Forces. Thank God we did not have to go to war. I believe we must thank people like General Pearkes and other soldiers who did go to war to serve Canada and help make the world a safer place for people of my generation.
It has been said that General Pearkes was a genuine Canadian hero. At the time of its fortieth anniversary, D-Day is much on our minds. Many of Canada's old soldiers are going over to the beaches of Normandy. I trust and hope that they will reflect today on the passing of General Pearkes. He had a full life and I think we should be thankful for that. Old soldiers never die.
On behalf of my Party I want to extend to his family our thoughts and gratitude for the fullness of this man's life.


Some Hon. Members:: Hear, hear!


Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, when I came here as a member in 1957, it was to assume a post as first parliamentary assistant to the Minister of National Defence, the late George Pearkes.
As a veteran of World War II with a lot of friends at National Defence, and working under a man who was Officer Commanding, First Canadian Division, when I went overseas in 1941, not to his division but to another formation, I can assure the House that he had the loyalty of Canada's Forces behind him. As was indicated by the Hon. Member for Yukon
The Late George R. Pearkes
(Mr. Nielsen), there were tough decisions, I remember, on the Arrow and on the Bomarc. However, he always served as Minister of National Defence in the House with the greatest courtesy to all, and with a determination to get the job done.
May I just add a further note that in his role as Grand President of the Royal Canadian Legion, a year or so before he retired from that position he received an honour from the Legion in convention in Edmonton which is rarely accorded- a standing ovation on being introduced.
He had an honourable life since leaving the office of Lieutenant-Governor of British Columbia, where he was one of the most popular Lieutenant-Governors in recent history. We who have known him for many years watched his declining health with continuing concern. May we say that it is unfortunate he did not reach a century. On the other hand, I think his family and friends will be relieved that he has slipped quietly away. To his widow, Blytha, and to his son, John, may we all say we are sorry. George was one of Canada's great men.


Some Hon. Members:: Hear, hear!


Hon. Allan B. McKinnon (Victoria):: Mr. Speaker, General Pearkes was a legend in the Canadian Forces, but his life before he joined and after he left the Forces was equally outstanding. He came to Canada to homestead on a prairie farm in 1906. Then he joined the Royal North-West Mounted Police as a rookie and served as a constable, serving in the Yukon and elsewhere. In January, 1915, he joined the Canadian Mounted Rifles, now the British Columbia Dragoons, which was then a cavalry unit stationed in Victoria. He joined as a private soldier and worked his way up through the ranks, achieving a record in the year 1916 which has not been equalled before or since, of going from the rank of Sergeant through all ranks to the rank of Major in one year. He finished World War I as a Lieutenant-Colonel, with the Military Cross, Distinguished Service Order, and the most highly regarded decoration in the world, the Victoria Cross.
He remained in the permanent Force in that fine regiment, the Princess Patricia's Canadian Light Infantry and, on the outbreak of World War II, he again went overseas in his country's service. He commanded the Second Brigade and then the First Canadian Infantry Division, where I first met him while serving under his command. I served under him again when he was General Officer Commanding, Pacific Command, and of course when he became Minister of National Defence in 1957.
His moves from the military to the House of Commons, to the Privy Council, and to Government House in Victoria, in his mind I believe, were simply a continuation of his public service and his duty.
It is difficult to find words to describe adequately the respect and affection which the people of Victoria, and indeed the Canadian public, felt for this man. To state it simply, they trusted him and they believed him. His service to Canada in war and in peace set an example which may never be equalled.

May 31, 1984
The Late George R. Pearkes
I wish to add the condolences of myself and of the citizens of Victoria to those already expressed by the Leaders of the Parties of this House and others, to his wife and family.


Some Hon. Members:: Hear, hear!


Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, Major General, the Hon. George Randolph Pearkes, Victoria Cross, Member of Her Majesty's Privy Council, Companion of the Order of Canada, Companion of the Order of the Bath, and awarded the Distringuished Service Order and the Military Cross, all titles and honours in the service of his country, died yesterday in Victoria. His honours were many; we are honoured to have known him.
As the Member who represents the same people of Esquimalt-Saanich for whom General Pearkes spoke in this place with such honour, dignity, civility and humanity, I cannot fail to be aware of the responsibility that now is mine. In fact General Pearkes set a model for all of us to follow as Members of Parliament speaking here on behalf of our constituents.
His record in the service of Canada and Canadians is one that is not easy to match. Arriving in this country as a young man in his late teens, settling on a farm in Alberta, which at that time had only recently been created a province of Canada, and spending the first few years homesteading there, gave him a deep appreciation of Canada's richness and its readiness to reward those who were prepared to work with its endless resources.
I suspect it also gave him, unless he brought it along with him, a healthy humility when confronted with God's manifold favours. He was a devout man, respecting his God, living by God's laws, and knowing he lived always in God's sight.
He served several years, much of it in the Yukon, as a constable in the Royal North-West Mounted Police. When war was imminent, he enlisted as a trooper in the Second Canadian Mounted Rifles. He trained in Canada and went overseas.
Late in October, 1917, and as a Major, he displayed the fearless courage that marked his whole life. Although wounded, he led his men with the utmost gallantry and disregard for danger-because he was under ground fire and air attack; he fulfilled his Colonel's orders, reached his objectives and returned with his company, depleted, it is true, but their task was fulfilled. His valour on this occasion at Passchendeale won him the Victoria Cross. Throughout that battle and in all his subsequent commands, as Major, later as Colonel, and eventually as Major-General, he never lost the common touch. Because he had grown up humbly, he never became arrogant. Success never went to his head. It merely gave him an added opportunity to serve his fellow men.
There are many instances of his love for his fellow men, his simple, direct approach to all he met, his kindliness, and his concern for people, all of which endeared the man to those who served him or with him, as Commanding Officer, Member of Parliament, Minister of the Crown, or Lieutenant-Governor.
As Her Majesty's representative in British Columbia he earned the respect of all those he met and thousands more he never met.
Of no one in the country can it be said more justly that he won our respect because he respected each of us. A more fitting tribute for a great Canadian, a more worthy example for all of us, in whatever walk of life, would be difficult to find. His citation for the Victoria Cross begins "for most conspicuous bravery". For his record of service to Canadians for more than 70 years, I would suggest that we add "and for most conspicuous service".
To Blytha, his wife, to whom he was married for almost 59 years; to his son, John, and to his grandchildren, I am sure the House will want to express its sincerest condolences and prayers for their comfort in their loss. Their loss is ours too.


Some Hon. Members:: Hear, hear!


Mr. Speaker:: May I suggest to the House that we rise and observe a minute's silence in memory of the late George Randolph Pearkes.
[Whereupon the House stood in silence for one minute.]


Mr. Speaker:: Order, please. Is there unanimous agreement that Question Period extend until five minutes past three?


Some Hon. Members:: Agreed.



ORAL QUESTION PERIOD


Charles James Mayer: Mr. Speaker, I have a question for the Prime Minister of which I have given him prior notice. It has to do with an article that appeared in yesterday's Globe and Mail concerning statements made by his Minister of Agriculture. I quote one paragraph:
A man should always wear a hat. ... No easier way to catch a cold in winter than to go bareheaded. And in summer, the sun'll roast your brains if you don't wear a hat. That's one reason they have low IQs in Africa. They don't wear hats.
Does the Prime Minister find this acceptable behaviour by one of his Ministers, and what has he done about it or intends to do about it?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, I always hate this kind of a question, although I did get notice of it. I received the clipping. I realize why the Hon. Member is only quoting one paragraph, as he said. If he read the next phrase after the one he stopped reading, it would have gone on to say:
May 31, 1984

Another reason, and a more important problem is malnutrition, something that as President of the World Food Council for the past two years he has been intent on doing something about.
He has done a great deal about it. I know Mr. Whelan. I know that he has constantly been raising the problem of malnutrition in Africa. He has been raising the problem in Cabinet. He has been trying to help refugees.
I would agree that the phrase about IQs and wearing hats does not sound very good when you look at it in black and white, but I would imagine Mr. Whelan did it with tongue in cheek. The Hon. Member for Saskatoon West looks disgusted at my answer. I remind him that his seatmate, the Hon. Member for St. John's West, talked about our former Minister of Finance, the Secretary of State for External Affairs, going to Gabon to be with people who were swinging from trees. Do you remember that? I remember it. I do not think that was a very good remark either, but we did not make a question out of it. I can give other examples.
I know Mr. Whelan. I know that he is very sensitive to the difficult economic situations in Africa. I certainly am not going to make a fuss about this.


REQUEST FOR MINISTER'S RESIGNATION
Charles James Mayer: Mr. Speaker, I suggest that many of the things the Prime Minister said in his response are total non sequiturs. His Minister, a Minister of the Crown, has uttered what most people would say is a totally unacceptable racial slur. If the Prime Minister does not ask for the Minister's resignation and continues to keep him in his Cabinet, he will cast some very serious doubts on his lifelong concern over civil liberties, his Charter of Rights, and his concern for minority rights. I ask him again whether he is prepared to ask for that Minister's resignation. If he does not, he will be launching his retirement on a very sour note that is in contrast to many of the things he stood for as Prime Minister of this country.


Pierre Elliott Trudeau: Mr. Speaker, I am certainly not going to ask for his resignation, but I would ask the Hon. Member if maybe he goes out in the sun without a hat sometimes.


Some Hon. Members:: Hear, hear!


PRIME MINISTER'S POSITION
Charles James Mayer: Mr. Speaker, Members on the other side can laugh all they want, but this is a very serious matter. A Minister of the Crown of this country has insulted a whole continent with which we have good relations. I again suggest that, if the Prime Minister treats the matter in this kind of offhand manner, he will find that his cavalier attitude toward this matter casts a very serious doubt over what he has stood for on behalf of minority rights in this country.
Oral Questions


Pierre Elliott Trudeau: Mr. Speaker, there is one sentence that expresses a thought which, quite often, I like to take as a guideline: "One ought not to take tragically what should properly be taken seriously". I am always astonished to see the Opposition take tragically things which have been said lightheartedly on this side of the House. [English]
Why did they not make a fuss when their Leader, Mr. Mulroney, made fun about our Minister of Finance going to an OECD meeting in Paris in order to be with the Folies Bergeres? Was that a racial slur, or was that just absolute nonsense? This kind of thing crosses this aisle often and I do not take it tragically.


REQUEST FOR APOLOGY
Ramon John Hnatyshyn: Mr. Speaker, I do not think there is any analogy whatever with respect to the examples that have been given. The Minister of Agriculture, representing Canada, who is also President of the World Food Council, has uttered a very unacceptable racial slur. The Prime Minister will know that Mr. Earl Butz uttered similar racial slurs in the United States, and he resigned. He was asked by the President to resign his portfolio. What I find unacceptable is that the Prime Minister condones the statement of the Minister of Agriculture, which is really incredible. Will he not at least ask him to do the decent thing and apologize, particularly to those Canadians of African descent who require an apology from the Prime Minister of Canada?


Pierre Elliott Trudeau: Mr. Speaker, the Hon. Member does his usual thing. He says I condone. I did not condone. I said the contrary. The Hon. Member is distorting what I said. He is doing it in a way which I find unacceptable, in order to prove a point about a statement. Everybody knows the Minister of Agriculture. He is talking in the House all the time. Everyone realizes that he is a good, sound, human being.


Some Hon. Members:: Hear, hear!


ESTIMATES
Miss Pat Carney (Vancouver Centre):: Mr. Speaker, my question is directed to the Prime Minister. His Government's Estimates are deemed to be passed by midnight tonight, yet his Minister of Energy, Mines and Resources has refused to appear before the Standing Committee on National Resources and Public Works to explain and defend his Department's expenditures totalling $3.1 billion. The Minister has already defied the Prime Minister's instructions to be in the House to answer questions. The Minister is introducing the Canada-

May 31, 1984
Oral Questions
Nova Scotia Energy Agreement later today. He is not here now to answer questions about secret side deals. Why does the Prime Minister allow his Ministers to let their leadership aspirations take precedence over their parliamentary duties? Surely the minimum standard of accountability should be appearance in committee to defend the way he, as a Minister, spends public money?


Pierre Elliott Trudeau: Mr. Speaker, the Hon. Member phrases her question in a dangerous way when she talks about letting leadership aspirations get in the way of parliamentary duties. She could look at her own Leader and ask herself why he does not discharge his parliamentary duties once in a while.


PRICE OF GASOLINE
Pat Carney: Mr. Speaker, my supplementary question is addressed to the Prime Minister. We look forward to being before the Parliament of Canada and its committees on important matters such as the Estimates after the election. One of the issues we wanted to raise today deals with the petroleum compensation charge. We have evidence that gasoline prices are being kept artificially low until after the next election. Is the Liberal Government so indifferent to the spending of taxpayer's money that it feels it does not have to come to Parliament and explain this kind of glaring discrepancy?


Pierre Elliott Trudeau: Mr. Speaker, when the minister of Energy, Mines and Resources proved unavailable the particular day the committee was sitting, I asked his Associate Minister to appear before the committee, which I am told he did. Therefore the committee members could ask all the questions they wanted. The Hon. Member is not complaining about a question not having been answered. The Hon. Member is complaining about the Minister not being there when another Minister was there in his stead.


RAILWAYS
Mr. Doug Anguish (The Battlefords-Meadow Lake):: Mr. Speaker, my question is directed to the Minister of Transport. In his absence perhaps his Parliamentary Secretary could answer. I think the Minister is to be commended for the announcement made a couple of days ago concerning the Prairie Branch Line Rehabilitation Program, particularly as it affects Saskatchewan and the allocation in my own particular riding. People are waiting to see if the Government will carry
through with this program. There are, however, some questions that are as yet unanswered.
I am wondering if the Parliamentary Secretary could inform the House if the miscellaneous $51 million incentive fund is meant to assist communities that are left off the five-year rehabilitation program because they were low on some arbitrarily drawn priority list, or if the fund is meant to assist in branch line abandonments by funnelling this money off to something like trucking subsidies to replace the branch lines that are in danger of being put out of the permanent network.
[ Translation]


Mrs. Eva Cote (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, I thank my Opposition colleague for asking me this question. I should like to remind him that we already have a $520 million program for the rehabilitation of railway lines in Western Canada. It is a five-year program. The additional $51 million fund which has just been announced will be spent for special programs which will have to be submitted to the Senior Grain Transport Committee. The particulars and all necessary data related to this new program will be readily available to the Hon. Member for The Battlefords-Meadow Lake.


PURPOSE OF INCENTIVE FUND
Douglas Keith Anguish: Mr. Speaker, at committee the people from Transport Canada were saying that the money for trucking subsidies would in fact come from part of the money that was to go to the Prairie Branch Line Rehabilitation Program. The Parliamentary Secretary has said that some $528 million is going into the rehabilitation program. As well, there is the issue of the $51 million incentive fund. Perhaps the Parliamentary Secretary could tell me if this $51 million is part of the $528 million, or if it is possible that the $51 million is a special allocation above and beyond the $528 million and is really meant for trucking subsidies.


Eva Lachance Côté: To sum up the situation, Mr. Speaker, $520 million have been set aside for a five-year railway lines rehabilitation program, including over $300 million to be spent in Saskatchewan alone. The $51 million we are talking about today is in addition to the amounts already announced and, as I just said, they will be spent for special programs which grain transport system users will have to submit to the Senior Grain Transport Committee.
With respect to trucking, the Minister of Transport is indeed quite interested in that question, and I should think that representations will have to be made to the special committee which is now considering the whole question of grain transport in Western Canada.
May 31, 1984


ALLOCATION OF MONEY
Douglas Keith Anguish: Mr. Speaker, my supplementary question is directed to the President of the Treasury Board. The announcement of the funding for the Prairie Branch Line Rehabilitation Program said it was to be given out during a five-year program, as pointed out by the Parliamentary Secretary. The largest expenditure is to be in the first year. I wonder if the Minister could tell us if the money that is to be spent over a five-year period is tied with an ironclad guarantee, or if it is subject to Treasury Board approval each year and therefore subject to the new priorities of a new Government that may come into power within the coming months?


Hon. Herb Gray (President of the Treasury Board):: Mr. Speaker, I would be happy to check into the situation and report back to the Hon. Member.


THE ADMINISTRATION
Hon. Allan Lawrence (Durham-Northumberland):: Mr. Speaker, my question is directed to the Prime Minister. In view of the continuing allegations in the media, as well as now by personnel in the offices of certain Liberal leadership candidates, regarding the use by all candidates of staff or consultants who are on the public payroll, and the use for partisan purposes of government facilities and aircraft paid for by the taxpayers, contrary to the guidelines laid down in the House and elsewhere by the Prime Minister, I wonder if the Prime Minister could tell us what is being done to enforce these guidelines. For example, what is being done about the specific allegations made in today's press concerning the use by the Minister of Justice of his personal staff to further his leadership aspirations in violation of those very guidelines?


Pierre Elliott Trudeau: Mr. Speaker, the Hon. Member alludes to general problems like those with aircraft. I believe that any problems along those lines have been dealt with, and I have dealt with any discussions or questions asked of me in this House.
The Hon. Member asked about something which was reported in the media today. I asked to be informed about it, and thus far all I can find out is that there has been an ongoing process of a shift in the workload for these people as they have moved from departmental responsibilities to leadership responsibilities. As this has happened, they have taken leaves of absence or have resigned. That is what I have found out thus far, and that seems to be a move in the right direction.
Oral Questions


Allan Frederick Lawrence: Mr. Speaker, If there is constant monitoring of those guidelines, then obviously the Prime Minister's guidelines were pretty empty rhetoric.


STATEMENTS ATTRIBUTED TO MINISTER OF JUSTICE ON HATE LITERATURE LEGISLATION AMENDMENTS
Allan Frederick Lawrence: Mr. Speaker, as a supplementary question may I draw the Prime Minister's attention to a Canadian Press item from Montreal yesterday relating that the Minister of Justice, at a private breakfast, allegedly gave details of some important proposed amendments to the Criminal Code for the control of hate literature? The news report quoted the Minister as saying that he would make details of the amendments public tomorrow, that being Friday, not here in the House of Commons but at a press conference or a campaign meeting in Toronto, presumably because he is too busy campaigning to be here in the House.
Is it now government policy to make such important announcements on the campaign trail rather than in the House of Commons? Is it the Government's honest expectation that any such amendments will be passed before the summer recess, or is this simply another-


Mr. Speaker:: The Chair has some concerns about the nature of the supplementary question arising out of the original question.


Allan Frederick Lawrence: Mr. Speaker, it relates to the campaign activities of one of the Ministers of the Crown. I think it is a very valid supplementary question.
Is this another piece of huffery and puffery by a candidate on the campaign trail?


Pierre Elliott Trudeau: For heaven's sake, Mr. Speaker, I do not know by what double standards the Opposition is trying to play. It is perhaps fair ball to draw attention to the activities of the leadership candidates, but no one seriously expects that during a leadership campaign Ministers will sit in their seats in the House every day to answer questions or make announcements. They are out there trying to be elected as the Leader of the Party.
In so far as their staffs are concerned, Mr. Speaker, I have set down guidelines. As far as I can see, the spirit of those guidelines is being respected. There may be one or two instances of slowness in getting around to following them but one can remember that there was a leadership campaign on the other side of the House-


Allan Frederick Lawrence: They weren't gone-


Pierre Elliott Trudeau: Let me finish. That was last year, and I guess most Members of the House were out campaigning. They were not here. I would bet my bottom dollar that their staffs were also involved in helping them out.


Some Hon. Members:: Oh, oh!
4240

May 31, 1984
Oral Questions


Pierre Elliott Trudeau: Why all this hypocrisy? It may be just rhetoric and I do not take it seriously.


Mr. Wilson:: Mr. Speaker, I would point out to the Prime Minister that all the candidates for the leadership campaign last year resigned from their positions in the shadow Cabinet for the duration of the campaign.


Allan Frederick Lawrence: Including the Leader of the Opposition.


Pierre Elliott Trudeau: But did they use staff?


REGIONAL ECONOMIC EXPANSION
Michael Holcombe Wilson: Mr. Speaker, my question is directed to the Minister of Regional Industrial Expansion and it relates to the support that the Government announced last week for the Devco mine and the closure of No. 26 Colliery, an announcement which we on this side of the House welcome. However, I am sure that the Minister is aware of the concerns that have been expressed regarding the safety of the mine, and of the hope that has been expressed that this type of disaster will not recur.
Since Colliery No. 26 experienced a series of fires over the years, some of which caused fatalities, there have been recommendations for the installation of fire doors in the mines to control fires. Would the Minister say whether he has ascertained why these fire doors were not installed in No. 26 Colliery? And would he tell us whether it will be a requirement that fire doors be installed now in all Devco operations?


Hon. Andre Ouellet (Minister of Labour):: Mr. Speaker, the hon. member should have directed his question to the minister who, through his department, is responsible for security. I can tell him, however, that some of my officials are now carrying out an investigation on the spot and discussing the situation with representatives of both the company and the union.


MAINTENANCE OF EQUIPMENT
Michael Holcombe Wilson: Mr. Speaker, I direct my supplementary question to the same Minister. Mr. Webby Murray, a retired CLC safety inspector, is quoted as saying:
There's no doubt in my mind that if the belt lines (underground conveyors which transport the coal) had been properly cleaned and serviced and stone-dusted, (which reduces the likelihood of sparks igniting), 26 would not have had that fire.
Is the Minister, during the course of his investigations, looking into this allegation, and others like it, as part of the
comprehensive review of corporate operations which was announced by the Minister last week?


André Ouellet: Mr. Speaker, my officials, while carrying out their investigation, will certainly check whether this statement and others are true.


INQUIRY OF THE MINISTRY
Mr. Irenee Pelletier (Sherbrooke):: Mr. Speaker, my question is for the Leader of the Government. I would like to know whether he could tell us when the motion providing for the setting up of a committee to consider the definition of a charitable organization under the terms of the Income Tax Act will be introduced in the House?


Yvon Pinard: Mr. Speaker, this motion is already on the Order Paper. I am now negotiating with the Opposition hoping to get it approved as quickly as possible and I expect an answer to my proposal within the next few days.
I can therefore assure the Hon. Member that, as far as the Government is concerned, we want this motion to be approved as soon as possible. However, there are not many days left before the summer adjournment and we will try to reach an agreement with the Opposition to debate and approve this motion in the very near future unless the conditions laid down by the Opposition are so exaggerated that we cannot reasonably accept them as this would mean going against the other priorities of the Government.


CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS COMMISSION REGULATION OF LONG DISTANCE TELEPHONE SERVICE
Mr. David Orlikow (Winnipeg North):: Mr. Speaker, my question is directed to the Minister of Communications. The Minister knows that Canadians are proud of the high quality and reasonable cost of their telephone service. I am sure he also knows that, as a result of deregulation of the telephone industry in the United States, local rates for U.S. residents and small business people have doubled and tripled. The CRTC is now going to consider an application by CN-CP Telecommunications to be permitted to compete with Bell Telephone for long distance telephone service. If its application is approved it will soon mean substantial increases in the monthly rates paid by consumers.
May 31, 1984

Will the Minister exercise the authority which he has as the Minister of Communications and tell the CRTC that we do not want deregulation of the telephone industry, which will have a disastrous effect on the consumers?


Hon. Francis Fox (Minister of Communications):: Mr. Speaker, the Hon. Member raises an obvious question of very great importance. The Hon. Member knows that the CRTC receives applications from various telephone companies across the country on a number of subjects, and that the Government's power to intervene is usually on appeal. The Government doees not at the moment have power of direction over the CRTC. I would very much encourage the Hon. Member to discuss this matter with the critic for the Official Opposition and to seek quick passage of Bill C-20, which would give Parliament and the Government of the day the opportunity to look at this question and to issue directives to the CRTC on the type of architecture we want to have for our telecommunications and broadcasting system in Canada.
Up to now I do not have the co-operation of the Official Opposition in order to bring this Bill forward and pass it quickly before the House rises. I would very much hope that we could do so in order to allow us to make substantial progress in ensuring that the elected representatives of the people are the ones who decide on the architecture of the system.


BELL CANADA-LOCAL SERVICE RATES
David Orlikow: Mr. Speaker, I am sure the Minister knows that the next step to deregulation in the United States, and one which is being considered by Bell Canada, is local measured service which, again, would mean very sharp increases for the consumers, particularly for the elderly and the sick. Would the Minister indicate to the CRTC, and to the people of Canada, that the Government of Canada opposes that kind of idea which is now receiving support in the United States?


Francis Fox: Mr. Speaker, once again the Hon. Member raises a question of fundamental concern, and one which Canadians will certainly be debating with a great deal of interest in the years to come. I feel that this type of question should be debated in this forum and in parliamentary committees. One way of doing so is the passage of Bill C-20 which-


Mr. Dick:: What is the government view?


Francis Fox: -the Leader of the Official Opposition wants us to split in two parts, basically allowing part of it to go through, but not allowing the part to go through which would allow Parliament, and the Government of the day, to have an influence on this type of question-


Paul Wyatt Dick: What is the Government's view?


Francis Fox: -instead of a quasi-judicial body. I would very much hope that, through the Hon. Member's questions, the
Oral Questions
House Leader of the Official Opposition would be sensitized to this question. It is of fundamental importance to the type of telecommunications industry we will have in this country, a fact which the Official Opposition does not yet realize and fails to accept.
*  *
[ Translation]


CANADA SPORTS POOL CORPORATION-ALLEGED DIFFICULTY IN SECURING PRIZE MONEY
Hon. Roch La Salle (Joliette):: Mr. Speaker, my question is directed to the Minister of State (Fitness and Amateur Sport).
Mr. Speaker, as the House is aware, in the last few days the Minister has been telling us about his new system for Sport Select, the sports pool, and he tried to prove that the system was foolproof. Yesterday, a man from Laval won the incredible sum of $20.65. He had to go to two gas stations, plus four corner stores, to get his money! Considering the fact that ticket vendors were selected on the basis of competence and not party affiliation, could the Minister inform the House today whether he is going to comment on the problems encountered by this lucky winner in collecting his $20.65?


Hon. Jacques Olivier (Minister of State (Fitness and Amateur Sport)):: Mr. Speaker, I want to thank the Hon. Member for Joliette for giving me this opportunity to mention some of the extraordinary things that have been happening across this country. For instance, one participant in Prince Edward Island won $25,000, and after that, because he was also a ticket vendor for the provincial lottery, his licence to sell tickets was taken away. Mr. Speaker, I would like to point out that people from the provincial lotteries across Canada, with the support of our friends opposite, are blackmailing storekeepers. They order them to stop selling sports pool tickets unless they want to lose their ticket vending machine or, if they do not have one, they will be at the top of the list, so they will never get a terminal, and then they can never get a lottery licence! And this is the kind of blackmail being perpetrated by our friends opposite! These are guerrilla tactics!


SYSTEM OF CLAIMING PRIZES-REQUEST FOR GUARANTEE-CORPORATION'S PROFITABILITY
Roch La Salle: Mr. Speaker, I think the Minister's reply is almost obscene. I was just asking him on behalf of people who bought a few tickets for the sports pool... I think the Minister must be responsible for seeing to it that those $20.65 are paid! He certainly cannot accuse us of being responsible for that kind of poor administration!
In the circumstances, Canadians would like to know, Mr. Speaker, and I think the Minister has forgotten to give us his

May 31, 1984
Oral Questions
projections at least for the next year... Could the Minister inform the House what guarantees he has for the system's profitability? Is the Corporation unable to pay the winners at this time? Canadians would like to know whether the system set up by the present Government, which in fact infringes on provincial jurisdiction, is profitable. I think Canadians would like to know whether the Minister can give us the assurance that the system will be profitable over the months to come.


Joseph Mario Jacques Olivier: Mr. Speaker, the Hon. Member opposite is asking me to guarantee how many millions of dollars we are going to make available for amateur sport, medical research and all the other reasons for which the legislation was passed. I cannot give him any figures, but it is a foregone conclusion, provided the provinces leave us alone and stop harassing small retail businessmen who want to sell those tickets, retailers who want to help us develop amateur sport, pay for the Calgary Olympic Games, and pay for medical research ... I am sure that if the Members opposite would speak to the provincial governments, to their political friends, we would then be able to set up an organization that will help us develop a true concept of amateur sport, we would be really independent! We would not depend on their political friends out there!
When they signed an agreement in 1979, they simply transferred $500 million to the provinces, to Progressive Conservatives and separatists, in exchange for the $35 million we had left to develop the Olympic Games, amateur sport and medical research! That is what they did!


CORPORATION'S ISSUANCE OF ADVERTISING CONTRACTS
Mr. John Bosley (Don Valley West):: Mr. Speaker, my question is for the same Minister. I put the question on Friday last, and the President of the Treasury Board took it as notice for the Minister.
The Canada Sports Pool Corporation has awarded two advertising contracts, one of them to Planicom in Montreal, specifically to the publicity manager for John Turner. Were those contracts tendered, Mr. Speaker? If so, was the French language contract awarded to the lowest bidder? Will the Minister table those tenders? If they were not tendered, why not?


Joseph Mario Jacques Olivier: Mr. Speaker, I simply want to say that the two advertising agencies were selected by the Canada Sports Pool Corporation. Now, some Members seem to want politics to be constantly involved in the corporation's decision-making process. That decision was made entirely by the Canada Sports Pool Corporation and not by the Minister.


John William Bosley: Mr. Speaker, the Minister can try to duck the responsibility for as long as he wants. The Government of Canada is responsible for public money in this country, and the Minister is going to learn that fact.


CONTRACT TENDERING PROCEDURES-REQUEST THAT MINISTER TABLE LIST OF EMPLOYEES
John William Bosley: Mr. Speaker, my question is a simple one. Were those contracts tendered? If they were, will the Minister table the tenders? If they were not, why not?
At the same time, will the Minister today give the House the answer to the question as to whether he will table the hiring contracts and the list of those people whom the Liberal Party has chosen for patronage reasons to put on the public payroll?


Joseph Mario Jacques Olivier: Mr. Speaker, there is no patronage involved. I am simply saying that the agencies which were selected had the qualifications and the ability required to do the job.


Roch La Salle: You are unable to-


Joseph Mario Jacques Olivier: I would appreciate it if the Hon. Member for Joliette would listen to my answer!
In addition, Mr. Speaker, since there is a good deal of competition in this industry in any case, according to what the Canada Sports Pool Corporation has said, we could not have the same advertising agency as Loto Quebec because we are in competition with them.
The choice made by the Corporation therefore seems to be the right one to me. It will have an impact, and in this regard, I believe that the people in the Corporation who hired this agency made an excellent choice.


SOCIAL SECURITY
Mr. Louis Duclos (Montmorency-Orleans):: Mr. Speaker, my question is directed to the Minister of National Health and Welfare. The Quebec Minister of Social Affairs has just demanded that federal jurisdiction over old age security pensions be transferred to Quebec, in return for fiscal compensation-


Roch La Salle: They answered that question yesterday!


Louis Duclos: Mr. Speaker, could I be allowed to ask a question? As I was saying ... in return for fiscal compensation



May 31, 1984

for the Government of Quebec. Since the tax point yield . .. That's over your head, Tit-Roch!


Some Hon. Members:: Ha, ha!


Louis Duclos: Since the yield on the tax points which would then be transferred to Quebec would be less than the average yield for tax points for Canada as a whole, could the Minister inform the House what the consequences would be of transferring jurisdiction over old age security pensions paid to senior citizens living in Quebec?
Not as easy as yesterday's question, Tit-Roch!


Hon. Monique Begin (Minister of National Health and Welfare):: Mr. Speaker, I wish the Hon. Member for Joliette would repeat out loud for the media, his constituents and all Quebecers, an opinion that shows, surprisingly, that today he is clearly a federalist and that he realizes Ottawa's old age pensions are steady pensions . . . Well, that is because you were not clear. Only the ambiguous are misunderstood.
To answer the Hon. Member's question, and without wishing to alarm senior citizens, because I think this is only a red herring thrown out by Dr. Laurin ... So, without wishing to cause our senior citizens undue concern, I think it is obvious that the value of the tax points represented by our old age security payments to Quebec pensioners would be much lower, because a tax point from Quebec is worth less, and has been for many years, unfortunately, so that Quebec pensioners would receive less money if they had provincial pensions.


INDIAN AFFAIRS
Mr. Jim Fulton (Skeena):: Mr. Speaker, my question is for the Minister of Indian Affairs who is just behind the curtain looking for delegates. Would he come back to his seat?
Now that the Minister is back in the House, I am sure he is aware that the Department of Fisheries and Oceans has completed meetings throughout British Columbia regarding Alcan's $3 billion Kemano completion project. Fishermen, native people, farmers, and water users generally have pretty much unanimously called for a full public inquiry. The Minister is aware that Treasury Board has put forward funding for some of the affected bands in the area. Two weeks ago he told the Haizla people that he was going to call a full public inquiry. Will he tell this House, the native people in that area generally, fishermen, and British Columbians whether or not that public inquiry will be called before the end of this session in June?


Hon. John C. Munro (Minister of Indian Affairs and Northern Development):: Mr. Speaker, it is not my role, nor do
Oral Questions
I have the authority, to insist on a public inquiry. If he is asking my view on a matter of this significance, I think there should be a very full airing indeed of all the implications. Yes,
I indicated that I would be prepared to consider the application of the band for the money necessary to undertake some real research into what the implications of such a development would be.


MINISTER'S POWERS
James Ross Fulton: Mr. Speaker, at least the people in British Columbia understand the effect of this project is to lower the Fraser River by three feet at Hell's Gate and join the two major river systems of British Columbia, the Skeena and the Fraser. I recommend that the Minister talk to the parliamentary legal counsel. Under the federal Inquiries Act he has the power to call a full public inquiry, and I do not think it is legitimate for him to go around peddling leadership bull to people across the country that he is going to call a full public inquiry, and then stand up in the House and say he does not have the power to do it. Is the Government going to do it or not? It has had five years to call it, and it has done nothing.


Mr. Benjamin:: Come on, John. Put up or shut up.


Mr. Speaker:: The Hon. Member for St. John's West.


INDUSTRY
Hon. John C. Crosbie (St. John's West):: Mr. Speaker, my question is directed to the Minister of Industry, Trade and Commerce, responsible for DRIE. It has to do with the situation at Corner Brook where, as the Minister knows, Bowater is closing its pulp and paper mill this fall. A number of proposals have been made to the Newfoundland Government and Bowater with respect to other concerns purchasing the mill and carrying on, but they are all dependent on financing from the Government of Newfoundland and the Government of Canada for improvements to the mill. Could the Minister tell us whether he has received any proposals, whether the Government of Canada has a task force reviewing this situation, and just what the situation is now?


Hon. Ed Lumley (Minister of Regional Industrial Expansion):: Mr. Speaker, I am sure the Hon. Member knows that the Premier has asked us not to discuss the details of any of these commercial negotiations in public, obviously because of potential problems they would have in Newfoundland in handling the discussions with the various companies themselves. I can say, however, that we have indicated to the Province of Newfoundland that the pulp and paper modernization agreement funds, the balance of which I believe is almost $26 million, are available for any new purchaser of Bowater. We

May 31, 1984
Oral Questions
have had a request from Newfoundland for additional funds and are looking at the possibility of providing them.


REVIEW OF PROPOSALS
John Carnell Crosbie: Mr. Speaker, could the Minister advise the House whether his Department, or he himself, is reviewing the best of the proposals that are made, and when a decision might be made with respect to what assistance government is prepared to grant to help modernize that mill? When will a decision be made on that? Is the Government prepared to put further money into the agreement entered into between Newfoundland and Canada, to save thousands of jobs and the city of Corner Brook by keeping that mill operating?


Edward C. Lumley: Mr. Speaker, as I indicated in my previous answer, we have had a request from the Province of Newfoundland for additional funds over and above the millions that are in the pulp and paper modernization agreement. We have said that we will look very seriously at their request. We are not personally evaluating the proposals. That is being done by the Province of Newfoundland. We have offered our expertise with respect to any particular aspects put forward by the individual companies which have made proposals for the mill.


NATIONAL CAPITAL COMMISSION
Mr. Bill Domm (Peterborough):: Mr. Speaker, my question is for the Minister of Public Works who is responsible for the National Capital Commission. I have learned this week that there are 1,241 properties which are owned by the National Capital Commission. Many of these properties in the Ottawa area are rented to people on the preferred list of many of the directors of the National Capital Commission, at rents which are somewhat less than market value. Why is the Minister reticent to release the list to the media or anyone else who is trying to find out where the properties are, who the tenants are, and how much rent is being paid for these properties?


Hon. Romeo LeBlanc (Minister of Public Works):: Mr. Speaker, going back to my days as Minister of Fisheries, I have always been reticent to release names and addresses of individuals due to the normal privacy to which we are all entitled. Outside of that restriction, I am certainly open to inquiring whether more information can be made available.


REQUEST FOR DISCLOSURE
William Henry (Bill) Domm: Mr. Speaker, I would remind the Minister responsible for Public Works that under the Access to Information Act there is no confidentiality involved with regard to a fringe benefit of rent subsidy offered to possible employees of the federal Government.
Why is the Minister not disclosing the lists of these properties? It is not even possible to obtain the addresses of these 1,241 properties which the National Capital Commission is administering, other than a rural route number which means absolutely nothing when one tries to check out who is the tenant. Would the Minister again look into the Access to Information regulations and legislation, and agree that it is possible to disclose those lists?


Roméo LeBlanc: Mr. Speaker, the Hon. Member has made a fairly long parliamentary career of making all kinds of accusations and not listening to the answers. I said very simply that there is legislation which imposes on Ministers some limitations under the right to privacy. I have to see whether I am allowed to release names and addresses in that situation. We are all entitled to the privacy of our personal addresses if we so choose. I will look into it, and I will release what information I can under the Access to Information Act.


PETITIONS
Mr. Speaker:: I have the honour to inform the House that the petitions, with the exception of one, presented by Hon. Members on Wednesday, May 30, 1984, meet the requirements of the Standing Orders as to form.


Mr. Speaker:: The petition presented by the Hon. Member for Cariboo-Chilcotin (Mr. Greenaway) does not meet the requirements of the Standing Orders as to form.


BUSINESS OF THE HOUSE
Ramon John Hnatyshyn: Mr. Speaker, would the Government House Leader outline for the House the proposed business for tomorrow and into next week?


Yvon Pinard: Mr. Speaker, tomorrow we will dispose of three Bills in the following order. The three Bills will be introduced later today. They are the Yukon Quartz Mining Act, the Skagit River Treaty and the Asia-Pacific Foundation.
On Monday we will start debating the second reading stage of Bill C-40, an Act to amend the Old Age Security Act. The back-up legislation on Monday will be Bill C-39. Next Tuesday will be the last allotted day of the current period of Supply. Next Wednesday and Thursday we will resume debate on the National Housing Act, Bill C-37, with Bill C-36 as the back-up Bill.
May 31, 1984


Ian Deans: Mr. Speaker, I would like to reinforce what I have raised on two previous occasions. It would be the desire of this Party to see the Canada Labour Code amendments dealt with expeditiously. I would like to urge the Government House Leader to attempt to find out from the Conservatives why they are stalling.


Yvon Pinard: Mr. Speaker, I can assure the Hon. Member that serious consideration is given to all Bills on the Order Paper, including the one just referred to. As he knows very well, a few minutes ago the three House Leaders were negotiating a package. The Bill he referred to was included in the package. We must wait until next week before we know the results of our negotiations. I certainly do not intend to continue negotiating on the floor of the House.


Ramon John Hnatyshyn: Mr. Speaker, I am sure there must be something wrong with my hearing device. I would have sworn that I heard the Member for Hamilton Mountain make the accusation that somehow we in this Party are holding up a certain piece of legislation with respect to the Canada Labour Code. I can only say that that statement is the opposite to the truth.


Ian Deans: Mr. Speaker, taking into account the comments made by the Hon. House Leader for the Official Opposition, perhaps the Government House Leader would check with the Minister of Labour to see whether he has received a reply from the Leader of the Official Opposition with regard to speedy and expeditious passage of the Canada Labour Code amendments which are now before us, given that up until now I have not been able to decide where they stand on it.


Yvon Pinard: Mr. Speaker, I can assure the House that if it is true that the Official Opposition is disposed to allow the Canada Labour Code to go to committee, and if it is also true that the NDP is serious in wanting that Bill to go to committee, that would have been done at this time if the NDP had not used two days to debate Bill C-37, the National Housing Act.


Some Hon. Members:: Hear, hear!


Ian Deans: Mr. Speaker, bearing in mind what the Government House Leader has said, I would ask you to seek unanimous consent for leave to introduce the following motion pertaining to the treatment of Bill C-34. If unanimous consent were forthcoming, I would be prepared to move and to support that the Standing Orders be amended by adding immediately following Standing Order 79(1) the following:
79.(1 a) The purpose of this Standing Order is to provide for the orderly and timely consideration of Bill C-34, An Act to amend the Canadian Labour Code, and to be finally disposed of no later than June 30th, 1984;
(b)	When the House is considering the said legislation for second reading, at the end of one day's debate, all questions necessary to dispose shall be put;
(c)	That the said legislation shall be deemed to be returned to the House for report stage and third reading no later than June 28, 1984.
If there were unanimous consent for that motion, Mr. Speaker, I would be prepared to support it.
Business of the House


Mr. Speaker:: Is there unanimous consent for the Hon. Member for Hamilton Mountain to introduce his motion?


Some Hon. Members:: No.


Some Hon. Members:: Agreed.


Yvon Pinard: Mr. Speaker, I understand the interest of the Hon. Member. However, I am very much surprised at his request at this time. We just had a House Leaders' meeting. It was made very clear that since this Bill was included in our negotiations we would not raise this matter on the floor of the House of Commons today.


Ian Deans: That's not true.


Yvon Pinard: It was made very clear that the content of our meeting would not be made public. We want this Bill to be passed. We want other legislation to be passed. We hope that our negotiations will be fruitful and that Bill C-34 will be passed before the end of June, as will Bill C-37, the amendments to the National Housing Act.
The Hon. Member knows very well that the two are very much tied together, and all the time used so far by the NDP on Bill C-37 is preventing us from dealing with Bill C-34. If the Hon. Member wants to give a positive answer to my offer to allow Bill C-34 to go to committee very quickly, on the same day we will send the National Housing Act. That I can do any time next week.


Ian Deans: Mr. Speaker, I hate to say it but what the Government House Leader said is not true. I made no such commitment with regard to raising this question at the House Leaders' meeting. There was none and he knows it. I am surprised that he would even indicate that that is the case. He sought the commitment and I refused to give it. If he thinks back on the meeting and searches his mind, I think he would feel an obligation to rise and apologize for having suggested that.
However, with regard to linking the two, the National Housing Act Bill and the Labour Code Bill, I am prepared to pass the Labour Code Bill with one speaker per Party. I cannot get agreement from the Conservatives.


An Hon. Member:: Who are you? Are you the Government?


Yvon Pinard: Mr. Speaker, I do not doubt the good faith of the Hon. Member. I certainly do not intend to apologize because I believe what I said. All I can say is that the Hon. Member has developed the art or the cult of ambiguity. It was very clear to me that we made an agreement not to raise this matter today because we are negotiating it.
You are supposed to go to your caucus next Wednesday, as is the Official Opposition. I do not mind talking about it publicly, but since we have agreed not to raise it-I repeat we had agreed not to raise it-


Ian Deans: That's not true.

May 31, 1984
Business of the House


Yvon Pinard: -I just want to live by what I understood. If I misunderstood, that is fine. I do not doubt the good faith of the Hon. Member and I am not upset about what he is saying, but certainly he should not expect me to apologize because I do not feel that I am wrong.
I am saying that we are negotiating as usual as House Leaders. The Bill to which he refers is included in our negotiations and the fact that he has raised it now will not facilitate the passage of the Bill. If anything, it will make it more difficult for me to pass it. However, I will still try to do my best to allow the Bill to be passed before the end of June, provided the Hon. Member and his Party are reasonable and also allow other legislation to be dealt with.
The very simple request is to allow the Canada Labour Code Bill to go to committee in less than a day, provided that at the same time, after two days of debate, we allow Bill C-37 respecting the National Housing Act to be sent to committee on the same day. That is a very simple proposition. If the Hon. Member is sincere and acts in good faith, as I believe he is, he will agree to that. That is the answer that I was waiting for. I am still waiting.


Ramon John Hnatyshyn: Mr. Speaker, the Government House Leader says that he does not doubt the good faith of the Hon. Member for Hamilton Mountain. I must say that I am sorry to report to the House that I do.
I have not been in this job very long. My understanding of the responsibility of House Leaders is that when we have meetings our negotiations are to be carried on in good faith and in confidence. There is a process of negotiation that takes place. I can assure you, Mr. Speaker, on behalf of my Party, that my mandate involves ensuring that Parliament is productive and passes the legislation that should be passed.
Our position is well known to the Government House Leader. When someone stands in the House and attributes a position taken in the course of negotiations that is wrong and misleading with respect to our position on the Canada Labour Code, I can only say that it brings shame on that member.
I want to tell you, Mr. Speaker, that I am not going to be away all next week like the Hon. Member for Hamilton Mountain. He makes a big show before he goes away. He will not be in the House of Commons or Canada. I will not stand here and be a hypocrite. If he wants to carry on the negotiations in public and if he wants us to participate with him in the same room, he better rethink whether he is going to discuss what goes on in House Leaders' meetings.


Ian Deans: Mr. Speaker, I would ask that you look carefully at the record of what I said. I made no reference whatsoever to anything that happened at House Leaders' meetings. Absolutely none. I made absolutely no reference to today's House Leaders' meeting. I did not make any reference to what was discussed at the House Leaders' meeting. The references were made by the Government House Leader and the House Leader for the Official Opposition.
I simply asked that we come to some understanding with regard to a piece of legislation that I have been asking about since it was introduced. We have been asking that there be some clear understanding on the record of how that Bill is to be dealt with. I am prepared to enter into agreements on legislation at any time, as I frequently do, in order to try to expedite the business of the House of Commons.
As far as my absence next week is concerned, perhaps the Hon. House Leader for the Official Opposition would like to suggest that perhaps I ought not to be there representing Canada at the D-Day Remembrance, as I have been asked to be. Maybe he thinks that is not important in the over-all scheme of public business. Maybe he feels that we ought to ignore the request of the veterans who have asked that I take part. Perhaps that is his attitude.


Mr. Speaker:: It is the interpretation of the Chair that the request for unanimous consent has been refused.



ROUTINE PROCEEDINGS


Mr. Maurice A. Dionne (Northumberland-Miramichi):: Mr. Speaker, I have the honour of tabling the second report of the Standing Committee on Transport.


FINANCE, TRADE AND ECONOMIC AFFAIRS-PRESENTATION OF SECOND, THIRD, FOURTH AND FIFTH REPORTS OF STANDING COMMITTEE
Mr. Jim Peterson (Wiilowdale):: Mr. Speaker, I have the honour of tabling the second, third, fourth and fifth reports of the Standing Committee on Finance, Trade and Economic Affairs. These deal with Bill C-8 on trade practices, draft amendments to the Income Tax Act, Customs Tariff and insolvency.
[Editor's Note: For above reports, see today's Votes and Proceedings.]


PETITIONS
Ms. Lynn McDonald (Broadview-Greenwood):: Mr. Speaker, I wish to present a petition supporting my Private Member's Motion concerning injustices to Japanese Canadians. This is a petition signed by a large number of people, including some in my riding of Broadview-Greenwood, many others throughout Toronto and the surrounding area as well as
May 31, 1984

Ottawa. They ask that the many injustices committed against Canadians of Japanese origin and after World War II be responded to with an acknowledgement of these injustices.
Wherefore the undersigned, your petitioners, humbly pray and call upon Parliament to acknowledge the loss of dignity and human suffering, to enter into negotiations with representatives of the Japanese Canadian community for compensation for the wrongs committed and to re-examine the War Measures Act in the spirit of the Charter of Rights and Freedoms to the end that such injustices never recur.


Mr. Fred King (Okanagan-Similkameen):: Mr. Speaker, I have the honour to lay before the House a petition which attests to the stated concerns of 89 residents of the riding of Okanagan-Similkameen who have affixed their signatures to an objection which states that they object to any form of pornography depicting women or children in degrading and sadistic sexual roles. They also object to the purchasing of films of children being abused sexually for therapeutic use on sexual offenders in Canadian prisons. They further state that enforced regulatory measures must be taken to prohibit the entrance and use of this material in Canada.
As a result of these convictions, these constituents pray and beseech the House to consider this vital issue and to introduce a satisfactory Bill into Parliament to fight the war against obscenity and all flagrant forms of indecency.



SKAGIT RIVER VALLEY TREATY IMPLEMENTATION


Yvon Pinard: for leave to introduce Bill C-41, an Act to implement a treaty between Canada and the United States relating to the Skagit River and Ross Lake, and the Seven Mile Reservoir on the Pend d'Oreille River.


Mr. Speaker:: Is it the pleasure of the House that the Hon. Minister shall leave to introduce the Bill?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, Bill read the first time and ordered to be printed.
Mr. Speaker:: When shall the Bill be read a second time? At the next sitting of the House?


Some Hon. Members:: Agreed.
Introduction of Bills



ASIA-PACIFIC FOUNDATION OF CANADA ACT MEASURE TO ESTABLISH

Yvon Pinard: for leave to introduce Bill C-42, and Act to establish the Asia-Pacific Foundation of Canada.


Mr. Speaker:: Is it the pleasure of the House that the Hon. Minister shall have leave to introduce the Bill?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, Bill read the first time and ordered to be printed.
Mr. Speaker:: When shall the Bill be read a second time? At the next sitting of the House?


Some Hon. Members:: Agreed.



CANADA-NOVA SCOTIA OIL AND GAS AGREEMENT ACT MEASURE TO ESTABLISH

Mr. Speaker:: Before putting the question to the House, I draw its attention to a discrepancy between the English and French versions of the title of the Bill and the wording of the royal recommendation as they appeared in yesterday's Order Paper. The English version in both cases was correct. In today's Order Paper, the French version in both cases has been corrected and the title of the Bill and the wording of the royal recommendation are in conformity in both official languages. I draw this to the attention of the House, but I see no difficulty in putting the question on the motion for leave to introduce the Bill at this time.


Yvon Pinard: for leave to introduce Bill C-43, an Act respecting the Canada-Nova Scotia Agreement on Offshore Oil and Gas Resource Management and Revenue Sharing and to make other related and consequential amendments.


Mr. Speaker:: Is it the pleasure of the House that the Hon. Minister shall have leave to introduce the Bill?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, Bill read the first time and ordered to be printed.
Mr. Speaker:: When shall the Bill be read a second time? At the next sitting of the House?


Some Hon. Members:: Agreed.

May 31, 1984
Order Paper Questions YUKON QUARTZ MINING ACT



AMENDMENT RESPECTING STAKING OF CLAIMS

['Agreed.']
Yvon Pinard: for leave to introduce Bill C-44, an Act to amend the Yukon Quartz Mining Act.


Mr. Speaker:: Is it the pleasure of the House that the Hon. Minister shall have leave to introduce the Bill?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, Bill read the first time and ordered to be printed.
['Agreed.']
Mr. Speaker:: When shall the Bill be read a second time? At the next sitting of the House?


Some Hon. Members:: Agreed.
Sutherland Asbill and Brennan	49,952	Special Advice on Foreign LegislationWellford, Wegmen, Krulwich & Gold	71,982	Special Advice on Foreign Legislation1982-83	Arthur Erickson	25,000	Preparation of a report for a construction projectR.A.D. Ford	50,093	Special advice on East/West relationsHayes/Hill Incorporated	32,500	Market StudyHickling-Johnston	20,246	Technical expertiseHickling-Partners Inc.	54,253	Feasibility Studies (2)Peter Louch and Associates	52,742	Market StudyL. Mohr and Associates	32,000	Market StudyWellford, Wegmen, Krulwich & Gold	91,467	Special Advice on Foreign Legislation



[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. John Evans (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, the following questions will be answered today: Nos. 190, 719 and 784.


OUTSIDE CONSULTANTS EMPLOYED BY EXTERNAL AFFAIRS
Mr. Hnatyshyn: 1.	Are any exempt staff employed by the Ministry of State (Youth) and, if so, what are their (a) titles (b) positions (c) names?
2.	Do any of the staff mentioned in part I receive income, financial assistance or other benefits related to their employment from sources other than the ministerial budget and, if so (a) which members (b) what are the details of the income, financial assistance or other benefits?


Hon. Celine Hervieux-Payette (Minister of State (Youth)):: 1. The Minister of State (Youth) employs exempt staff as follows:


Mr. Blenkarn: 1.	In the fiscal year (a) 1981-82 (b) 1982-83 were outside consultants employed by the Department of External Affairs and, if so (i) how many (ii) what was the total amount paid?
2.	Were any consultants paid more than $20,000 and, if so, in each case what (a) was his/her name (b) was the amount (c) services were provided?


Hon. Allan J. MacEachen (Deputy Prime Minister and Secretary of State for External Affairs):: 1. (a) Yes. (b) Yes.
(i)	(ii)
(a) & (b)
Executive Assistant Policy Advisor Special Assistant Secretary Press Attache Special Assistant
2. No.
(c)
Decary, Michel Bouchard, Charles Graham, David Turmel, Mireille Breton, Francine Laurin, Diane
1981-82	33	$ 591,1261982-83	48	943,281Total	81	$1,534,4071. Yes,	see list below.	1981-82	(a)	(b)	(c)BuiltEnvironment Coordinators Ltd.	$ 42,650	Preparation of brief for a construction projectR.A.D. Ford	47,980	Special advice on East/West relationsA.E. Lepage	23,197	Property Management StudyPeter Louch and Associates	23,000	Market Study


DIAND-COST OF MEDIA MONITORING
Mr. St. Germain: Since April 1, 1983, did the Department of Indian Affairs and Northern Development spend any amount for (a) electronic media monitoring services performed by private firms or individual contractors (b) print media clipping services performed by private firms or individual contractors and, if so, in each case, what amount?


John Carr Munro: During the period April 1, 1983 to March 31, 1984, the Department of Indian Affairs and Northern Development spent the following amounts on electronic and print media monitoring by private firms or individual contractors:
May 31, 1984

(a)	electronic media-$22,187.00
(b)	print media-$6,565.75 [Translation]


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


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


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Beatty:
That this House regrets the failure of the Government to satisfactorily protect the civil liberties of Canadian taxpayers in their dealings with the Department of National Revenue and calls upon the Government to implement without delay the recommendations of the Progressive Conservative Task Force on Revenue Canada and, in particular, to curtail the Department's powers of search and seizure under Section 231 of the Income Tax Act, to guarantee taxpayers the right to a fair hearing on disputed reassessments before having to make payments or post security, to create a Taxpayers' Bill of Rights, and to provide an adequate system of appeals of unfair decisions concerning collections.
And of the amendment of Mr. Althouse to remove the period at the end of the motion and add the following words:
-and further, to recognize the inequity of the appeal process by guaranteeing to taxpayers who are succesful in an appeal through the courts that their legal costs will be paid for by Revenue Canada.
Victor Fredrich (Vic) Althouse: Mr. Speaker, just before the luncheon adjournment I introduced an amendment to the motion before us today. I noticed when I received the "blues" over the lunch hour that when I introduced the amendment, some Hon. Members seemed to think that indeed there were now guarantees which recognized the problems of taxpayers appealing their cases before the courts. They shouted that the Government would now permit Revenue Canada to pay legal costs when taxpayers are proven to be in the right. I have a slightly different understanding of what is a guarantee.
I recognize that the Minister of National Revenue (Mr. Bussieres) has directed his Department to pay the cost of such appeals when the Department is clearly in the wrong. However, I do not think that is a guarantee which will be of any good to my constituents who run into difficulty next year, the year after or 10 years from now. Indeed, constituents have experienced problems with the Minister and with the Department interpreting somewhat differently that same law of Parliament. When I talk about guarantees, I mean guarantees in
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the form of a law or Bill passed in the House of Commons which makes it clearly understood where the responsibility lies. This is what we will be voting upon later this afternoon.
I should like to deal with some of the cases to which I referred just prior to the luncheon adjournment. For example, a small farmer who is in his late fifties or early sixties, has farmed all his life on a small acreage, raised his family and has run into a succession of crop failures due to hail and frost for four years in a row, has no choice but to go out and work. The very fact that he did this in his late fifties or early sixties got him into trouble under Section 31 of the Income Tax Act. An assessor in the Department decided that because crop failure forced him to go out and work, according to the rules he was suddenly a hobby farmer, even though he had lived and worked on that farm all his life.
On the Fifth year, as luck would have it-and it was purely luck-he showed a profit from his crop. He had that argument to make when the Department decided to press its case and take him to court. The poor man had no recourse but to obtain legal assistance from a lawyer and pay the legal costs. The case reached the point where the prosecuting attorney looked at it and decided that there was really no case to win in court. Therefore he telephoned my constituent's lawyer and said: "Why do we not get the Department to change the allocation and, instead of putting him under no losses, allow him to operate under the restricted farm loss section?" This meant he could have losses of up to $2,500 per year. Since the difference was somewhere between $3,000, the amount of the original assessment, and $600 to $700 under the new assessment, the lawyer convinced his client that it was the way to go. Instead of being assessed at something in the neighbourhood of $3,000, my constituent paid between $600 and $700 to the Department of National Revenue and a legal bill of something over $1,000. Had he and thousands of other small taxpayers been guaranteed in law that the Department would be responsible for paying the legal costs if the case were pursued, he would have pursued it, showed that he was indeed a farmer and liable to no taxation. The legal costs would have rested on the shoulders of the Department rather than his own. As it turned out, he paid out nearly as much in combined legal and tax fees as he would have paid had he paid the original assessment.
Thousands of small taxpayers are in this position. They have the choice of fighting the case and paying more in legal fees than what the assessment is, or simply caving in, paying the assessment and writing it off to experience. It is necessary to have guarantees written into the law of Canada, not into the operating procedures of the Department or leaving it to ministerial discretion. There should be guarantees from this House of Commons that taxpayers' rights are clear and guaranteed to them.
I have a number of other cases I want to point out to the House to show where I believe the responsibility of tax collectors and tax assessors has been overrun. I cite the case of a younger farmer who ran into some financial difficulties. His

May 31, 1984
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best choice was to sell the farm and leave farming. He sold the farm. Because of the requirement in our tax law that allows the principal residence to be free from capital gains tax, he worked out an agreement with the buyer of the property, which included the farmhouse, as to the valuation to be put on that house. They agreed that it should be done at about $30,000. Taxes were filed and paid accordingly.
The subsequent buyer of the property decided to move the farmhouse into town and put it on a lot and foundation, which cost him $5,000. He moved the house on to it and sold the property for $35,000, which is a clear indication that the house was worth $30,000. An assessor came to reassess his claim. The assessor only looked at the broken basement on the farm and never looked at the house. He never interviewed the buyer of the house or the subsequent seller after the original buyer resold it. He did no ground work. On the basis of the broken foundation, which naturally was broken because the movers broke down the sides to get the house off it, he decided that the house could not have been worth $30,000 and reassessed him. The case has been in the appeal process for two and a half years.
These types of things should not happen. On some occasions, 1 dare say, we have incompetent assessors, people who are perhaps trying to rush through too many cases. I do not know what the excuses are, but they do not do a complete and proper job. Because of that and because there is not adequate protection in the Act for individuals who are attempting to play the game fairly, live by the rules, be fair in their self-assessment, and are subsequently proven to have been fair-minded people in their assessment of what they owe in taxes, they have been harassed by the Department. There have been demonstrations of incompetence. It is only fair that the laws of the country be tightened up and changed in Parliament to guarantee that those taxpayers so harassed will have their costs paid when proven to be innocent of the charges laid by the Department.
It is extremely important to discuss and to have in this motion a guarantee from the House of Commons that taxpayers' interests will be looked after when they are taken to court by the Department of National Revenue. When the taxpayer is proven to be correct in his self-assessment, it is the Department and not the taxpayer who should pay the cost of that defence.
I see my time is up, Mr. Speaker.


The Acting Speaker (Mr. Herbert):: There follows a ten-minute period for questions and comments.


John William Bosley: Mr. Speaker, I have just a simple question. Can the Hon. Member tell me whether his Party was aware of the change in policy earlier today when it moved the amendment?


Victor Fredrich (Vic) Althouse: Yes, Mr. Speaker, we were.


The Acting Speaker (Mr. Herbert):: Are there other questions or comments? If not, continuing debate, the Hon. Member for Cariboo-Chilcotin.


Mr. Lome Greenaway (Cariboo-Chilcotin):: Mr. Speaker, how interesting it is that the NDP has put forward this amendment to our motion. For the last two or three years we have been battling Revenue Canada. Where has the NDP been? We have heard very little from these people. Now they bring forth an amendment to a motion that is clearly past history. This situation was addressed in the Budget. On April 25, the Minister released a further amendment to his Budget, lifting the ceiling on the costs that are paid by taxpayers who have won their case. They are trying to play catch-up, and it is reprehensible.
When I was elected as a Member of Parliament, little did I know that I was destined to spend a good portion of my political life corresponding, questioning, arguing and fighting with a huge federal bureaucracy called Revenue Canada. If I had been forewarned, I would have surely returned to university and taken a double-barrelled degree in accounting and law. As a matter of fact, I would have enrolled in law school in Philadelphia, because I am convinced that only a Philadelphia lawyer could ever hope to do battle with Revenue Canada and come out on top.
What I have learned over the last few years has at time dismayed, discouraged and even disgusted me. I must quickly admit, however, that there have been occasions in dealing with the Department when I and my staff have received prompt, courteous and fair treatment on behalf of my constituents. There are many good and dedicated personnel in the 20,000 people who work for the Department. Unfortunately, there are the other type as well, and they should be, and will have to be, dealt with as they deserve.
Naturally, one must keep in mind that in many situations Revenue Canada employees are simply following the guidelines and interpretations of legislation passed by Parliament. Tax legislation endorsed by Parliament is obviously the root cause of most problems that we run into, all of which can be exacerbated by the attitudes of personnel whose job it is to collect taxes; not a pleasant task at the best of times, as has been recorded down through the ages.
I feel certain that there are very few Members of Parliament who, if they really understood the income tax legislation they were asked to pass, would ever vote for it. For years, Ministers of Finance have continued to table tax legislation written by bureaucratic drafters that is continually more complicated and incomprehensible. Much of it reads like fine print in an insurance policy. Those drafters probably never really intended to bring forth rules and regulations which, when interpreted to the letter, could literally bankrupt taxpayers and give powers expected only in a police state. However, that is what they have done and that is what we have done. The Act now is so large, complicated and convoluted that I do not think there is anyone in this country who really understands it. Members of Parliament henceforth should be certain, in fact they must ensure, that tax legislation is clearly understood, its ramifications clearly explained, before ever voting in favour of it. If only it were possible to scrap the entire Act and put in its place something clear and simple, it would be much better, because



May 31, 1984

that is what Canadians want. I do not think that any administration will ever have the fortitude to do what the majority of the people wish. One becomes rather cynical in this place. So often, people never receive the commonsense things that they want.
It was actually four years ago that I received my baptism respecting Revenue Canada. I recall that my office had been contacted by two ranchers in Williams Lake, British Columbia, a part of my constituency, who claimed to be having tax problems. I met with them on my next regular trip to my riding and was presented with two similar tales of woe, both of which I could not believe. Without going into great detail, let me say that both had been reassessed under Section 31 of the Income Tax Act, a particularly stupid, ambiguous, poorly drafted and odious rule, and both feared huge tax bills.
Both of these men, because of hard times, had taken jobs off the ranch to augment their farm incomes. Both had large families and were struggling to stay in business. Both were working along with their wives day and night to keep from going under. Both were good, honest Canadian folk who were trying to do what their forefathers had done and succeeding, until they were descended upon by the collectors of tax. While everyone agreed that the situation facing my constituents was most unfair, we lost both appeals, and as the men involved had no money to hire expensive professional help, they had to give up and they had to pay up. One survived and one did not.
About one year later, it suddenly became evident that there was an audit blitz going on in certain parts of my constituency and that the target was the small farmers and ranchers. Hundreds were audited and reassessed. People were left stunned and in a state of shock. We learned that this was going on in other provinces as well. Farmers were being targeted as had been fishermen a year or two before for what the Department refers to as a project "L" audit.
This concern was raised time and again in the House and we then progressed to the situation concerning quotas. Several of my colleagues did a superb job of drawing attention to this disgusting process. Finally, as Members know, after the Minister refused to appoint an all-Party task force to investigate the operations of his Department, our leader appointed a Tory task force on Revenue Canada. It was my good luck- although sometimes I wondered about that-to be appointed as a member of that task force.
Because I had received so many complaints from farmers respecting Section 31 of the Act, I took special interest in such cases as they came before us. I continued to watch for what I felt was a typical case and I selected one to present today. This particular case concerns the plight of a couple, both of whom are medical practitioners, who are raising horses in the Fraser Valley of British Columbia. In 1969, because of a lifetime interest in horses, this couple decided to develop a racing stable. In 1970, they organized this venture as a bona fide business. Books were set up by a chartered accountant. A trainer and grooms were hired and salaries, feed costs, bills for
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tack, vets, farriers and other bills were all paid. At the end of this first year, a reasonable profit was recorded, which in itself is praiseworthy, and the couple paid income tax.
At this point Revenue Canada entered the picture and informed these people that because they were both professionals, they were not allowed to have more than one source of income. Consequently, all capital costs incurred in setting up the business were disallowed, resulting in a large reassessment. This reassessment was paid. At that time, Revenue Canada indicated that under Section 31 of the Income Tax Act, Revenue Canada would in future only permit costs of up to $5,000 to be deducted annually. In spite of this initial setback, this couple went ahead. The enterprise expanded and enjoyed a fair measure of success.
In 1975-76, their business was re-audited and everything was found to be in order. In 1977, because of the success of this business, they decided to expand into horse breeding and consequently purchased a small farm for this purpose. The farm was run down and they spent a considerable amount of money in its upgrading. The wife took charge of raising the horses and the husband took out a licence as a trainer.
In the spring of 1983, Revenue Canada commenced a further audit. All records and receipts plus a 13-page letter of information covering the period from 1979 to 1982 were submitted to Revenue Canada. The auditor in charge was asked repeatedly to visit the farm but refused to do so. To this day, no Revenue Canada employee has done so. In the guidelines to auditors who are doing a Section 31 audit, it is recommended that the auditor visit the farm. At no time was this done in this particular case.
On May 31, 1983, a letter from Revenue Canada was received by these people stating that the provision for the deducting of $5,000 per year in expenses was rescinded for the years in question because the auditor claimed that there was no expectation of profit. A reassessment was made, which the couple immediately appealed. As soon as the notice of appeal was lodged, the taxpayers began to receive threatening phone calls from Revenue Canada collectors stating that if they did not pay the assessed amount, they were liable to be sent to jail. Ironically, after being disallowed costs because of no reasonable expectation of profit, a profit was actually made in 1982 and 1983.
These taxpayers have been fighting this case ever since. They have spent a small fortune on professional assistance and have had a good portion of their bank credit tied up in a letter of credit payable to Revenue Canada. I personally investigated this case as did my colleague in whose constituency these people reside. Their story is irrefutable and has been presented publicly in great detail. These people are good, hardworking, honest individuals who believe in Canada and are trying to survive in business in spite of the bungling and harassment of Revenue Canada. What is even worse is that, as I said at the outset, this is a typical case.
To say that the situation is ridiculous is a gross understatement. It is nothing short of disastrous and is a travesty of justice. Hundreds of farmers across the country are in similar

May 31, 1984
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circumstances all because of a section of the Income Tax Act that is clearly accomplishing nothing but is in reality destroying incentive and causing bitterness and ruin.
As I see it, the essential problem is that in many cases the taxpayers know that they are right. They understand the legislation and their current position with regard to that legislation. In addition, they know that if they appeal, a tax court will eventually rule on their case. However, that ruling comes after they have paid and after they have put up the hard earned money which they did not think they should have remitted in the first place. In addition, after shelling out for these unexpected taxes, many of them cannot afford to defend themselves against a Government that already has their money. This is clearly an injustice.
Because these citizens are at an overwhelming disadvantage, they are prepared, out of absolute fear, to accept payment plans and halfway deals from the Department. The taxpayer knows that he is right, but he is willing to pay the tax anyway because he risks losing his business, his house, his pay cheque and his savings before obtaining the right to an impartial review of the situation. All too often, it appears to be less expensive to pay than to fight. Is the Government protecting the civil liberties of Canadians in these cases? I simply do not see how it is doing so.
It is interesting to note that on a recent trip to British Columbia, Mr. John Turner, one of the Liberal leadership candidates, was asked about reforms to the tax law of Canada. In response, he said:
I will look very carefully into the Administration of that system. I will read the report that Mr. Beatty, the Conservative Member of Parliament, has put together-as a matter of fact I've read it. And, if I'm in a position of authority I'll see that the Administration of the Act is brought back into unquestioned equity and fairness.
That is a fine statement. It is interesting that the present Minister of National Revenue (Mr. Bussieres) is a supporter of Mr. Turner. I certainly do not think that Mr. Turner is a very strong supporter of the present Minister of National Revenue.
The power of the Department is so insurmountable that the taxpayer is completely at the mercy of the collector. The taxpayer will have the right to a hearing sometime in the future, but in the meantime his whole livelihood could be taken away. The situation is pitiful. Re-assessed taxpayers feel that they are taking on the whole world and no one can offer them the guarantee of a fair and impartial review before payment of disputed tax. Taxpayers receive conflicting advice and guidance from the Tax Department, tax accountants, lawyers and politicians. They are left alone to evaluate the conflicting advice with no indication of their personal rights. Tax officials offer them deals and remind them of the enormous powers of enforcement which the Department has. Tax accountants maintain that the returns they file on behalf of taxpayers, which are under dispute, are still correct. In Section 31 cases, lawyers-if they can be afforded-say that the law is in a state of flux. National Revenue has the advantage at the moment,
but important cases are currently before the courts, and that could be changed. Politicians argue that the law should be changed. Consultative groups and committees have been set up, but the process is slow and taxpayers cannot rely on them. If a taxpayers' bill of rights such as the one proposed by the task force existed, these people would at least be guaranteed the right to a review of their tax situation before having to pay disputed taxes.
It seems that Canada now subscribes to the Napoleonic form of jurisprudence, at least where Revenue Canada is concerned. Thus, the accused stands guilty as charged and the onus is on him to prove his innocence at great personal cost and inconvenience. This is diametrically opposed to the basic tenet of our common law whereby the accused is presumed innocent until the courts prove him guilty. It must be changed. In my mind every Canadian should be guaranteed these rights. In order to provide these rights, we should adopt a bill of rights as proposed by the PC task force on Revenue Canada.
In closing I would like to read a short portion from a submission which was made to the task force. It states very clearly the feelings of many taxpayers of the country. In part it reads:
In summary, then, we have presented in detail just one case, which we believe shows an overbearing bureaucracy at its worst. Countless other examples exist- you have heard many of them already during your deliberations.
Are all these people, as Revenue Canada would have us believe, all deliberate tax evaders? Are all these Canadians dishonest entrepreneurs, trying to beat the system? We don't think so. We are a generally peace-loving people, and tolerant probably to a fault. But we have reached the end of our tether, and we demand that something be done to right the inequities in this system, and restore to us the dignity and consideration which is our right.
If this Task Force accomplishes nothing else, it must seek to make Parliament curb these unwarranted and unjustified powers of the bureaucrat over his employers, namely the besieged taxpayers of Canada, and allow the taxpayer the right to redress through the courts.
That is the reason for the debate today. We have done enough talking. We have done enough consulting. We have scores of proposals for change to act upon. The only logical thing to do now is to act. We must move quickly and decisively to institute the important changes that have been proposed so that Canadians once again can rely on an efficient, fair and voluntary tax system.


The Acting Speaker (Mr. Herbert):: There follows a ten-minute period for questions and comments. Are there any questions? The Hon. Parliamentary Secretary to the Minister of National Revenue (Mr. Robinson).


William Kenneth Robinson: Mr. Speaker, the Hon. Member has mentioned a number of what might be called horror stories with regard to the implementation of the Income Tax Act. I wonder if he could tell the House if all of the cases are very recent and if they are presently being acted upon efficiently and effectively by people in the Income Tax Department.


Lorne Everett Greenaway: Mr. Speaker, there were some 300 oral submissions and 100 written submissions brought before the task force in its hearings. Some of the cases go back 10 years
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or 15 years. Many of the cases are current, but the Section 31 cases basically go back to 1978-79. Some of those cases are being acted upon, but I am not sure with what diligence or speed. It seems to me that many of them are hung up in the appeal process and the Department is waiting for court decisions. There is a tremendous amount of apprehension and unease among taxpayers. They do not know whether or not they owe money. In many cases, the taxpayers have had to sell out because they have had to pay before their appeals were heard. If they could not raise the money, they had to sell some of their equipment, stock and, in some cases, their real estate. The whole situation must be addressed and addressed very quickly.


William Kenneth Robinson: Mr. Speaker, I agree that these matters must be addressed and that they must be addressed quickly. However, I would ask the Hon. Member if he knows of recent cases in which taxpayers are not receiving compassion and consideration in accordance with the dialogue which has been going on in the House for the past six months.


Lorne Everett Greenaway: Mr. Speaker, it is my experience, since we have started to raise this issue and since the task force began its work, that we are getting a much better service from the Department, at least in my constituency. There are hundreds of cases. Very few of them have come to an end. The majority of cases are still in progress.


William Kenneth Robinson: Mr. Speaker, I agree with the Hon. Member because I have problems in my constituency with regard to income tax cases. I am sure every Member has. But I would like to ask one further question. He referred to a Napoleonic Code approach in the Income Tax Act. I would point out to him that, of course, it is a negative piece of legislation in that people are guilty and must prove themselves innocent as opposed to the normal trial situation in which a person is innocent until proven guilty. I appreciate that point. Maybe it is something which does have to be addressed. However, I wonder if the Hon. Member realizes that amendments to the Income Tax Act would have to be made through the Department of Finance and the Minister of Finance and not through the Department of National Revenue and the Minister of National Revenue.


Lorne Everett Greenaway: I certainly do realize that. It must be taken into account by the Minister of Finance. I know that he has made one move toward correcting the Section 31 situation and has appointed a group to look into it. However, it took the Minister three and a half months just to appoint the group. Lord knows how long it will take for that group to report and how long it will be before action is taken.
I would also remind the Hon. Member that in the United States the situation is the other way around. Taxpayers do not have to pay money until they are found guilty. If a taxpayer is deemed to have been using the system to try to delay his payment of taxes, he can be assessed and fined for a spurious attempt to delay the payment of his tax.
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The Acting Speaker (Mr. Herbert):: If there are no further questions or comments, for continuing debate, the Hon. Parliamentary Secretary to the Minister of National Revenue.


William Kenneth Robinson: Mr. Speaker, at the outset I would like to point out that, in my view, the Hon. Member for Wellington-Dufferin-Simcoe (Mr. Beatty) has brought before the House a very interesting and timely motion. It follows the filing of income tax returns for the year 1983 and it also follows the concerns which have been expressed in the House for many, many months. I am sure every Member of the House of Commons share the same concerns as the Hon. Member. I share those concerns and I think that it is most timely that we are considering it further in the House today.
The Hon. Member, I am sure, is concerned about the fairness of the tax system, the rights of the individual, the Public Service versus the taxpayer relationship and, of course, service to the public. I would like to make a few comments on the latter point. It must be evident by now, Mr. Speaker, even to Members of the Opposition, that Revenue Canada, Taxation is currently engaged in a process which is substantially increasing service to taxpayers in Canada. Furthermore, proposed changes to the legislation are designed to support and enhance this upgrading in service. There is no question, Mr. Speaker, but that additional improvements will also result from the study being conducted by Woods-Gordon, the group commissioned by the Department to study the entire operations of Revenue Canada, Taxation. This study, which is headed by Mr. W. A. Farlinger, will identify areas for improvement for the longer term. In the meantime, there are a number of steps which have already been taken by the Minister. Operational changes to improve service include additional staff, increased tax advisory service by the Department, and greater access to the Department.
I would like to outline briefly some of the improvements which are already made, and then provide an indication of just how taxpayers will benefit from the proposed changes contained in the last Budget.
The Department has added more than 1,000 person years to provide the public with a faster and more complete tax information service. This is clearly a commitment on the part of the Department, and also an indication of the priority this Government places on service by Revenue Canada Taxation. The increase in almost 40 per cent of the total number of additional person years authorized by the federal Government for the current fiscal year. Revenue Canada has also established feedback procedures which will make the Department more accessible as well as provide a means to measure taxpayers' satisfaction in their dealings with the Tax Department. I am glad to see this happen because, in my view, this is indeed very important.
I think it is significant that the Minister has issued a number of directives which were subsequently supported by recommendations contained in briefs presented to the Woods-

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Gordon group. I assume this also includes the brief presented by the Hon. Member for Wellington-Dufferin-Simcoe. This is a clear indication that modifications to a government service are in line with the wishes of the public which is being served.
Included in these directives are instructions to put in place a means of monitoring and reporting on taxpayer satisfaction. These reports will be provided to the Minister on a quarterly basis beginning in September of this year. The Department will also be introducing surveys, questionnaires and interviews to identify the level of taxpayer satisfaction in the areas of audit, assessment and appeal activities. All three of these areas are, in my view, tremendously important and I am happy they are being attended to in this way.
Another area of increased service to the public is a recent pilot project which saw the creation of nine seasonal tax assistance centres for the peak filing season. These centres were established for the sole purpose of making the Department more accessible and making information more readily available to the tax paying public. The effectiveness of this service, which was available to approximately 300,000 taxpayers across the country, is now being evaluated. Depending on the outcome of that evaluation, this additional face to face assistance may well become a permanent feature in coming years. I would also point out, Mr. Speaker, that this service is in addition to the existing network of some 30 district offices and the several sub-offices which were introduced in the last few years.
I believe the spirit in which the taxpayer service is being upgraded is embodied in a recent letter from the Minister of Revenue Canada, Taxation to his Deputy Minister, Mr. Harry Rogers. I believe most Hon. Members already have a copy of that letter. It is a letter dated April 2, 1984. I will not read all of the letter but there are certain parts which are quite relevant at this time. That letter, in part, covered the following points:
Letters and messages to taxpayers should be reviewed and, if necessary, revised to make them more understandable, personalized and courteous.
This, of course, is in respect of the attitude of the Department of National Revenue about which so many people have complained. Another point in the letter was:
Where appropriate, correspondence should include an outline of taxpayers' rights and responsibilities.
This, in my view, is absolutely essential as a step in the right direction. Other points in the letter were:
Officials of the Department should consider the introduction of more storefront services and additional sub-offices to make tax help more accessible to more Canadians.
The Department should ensure the establishment of liaison committees with tax practitioners in each of the district offices and examine ways to more effectively distribute interpretive material to taxpayers.
There is now under way, Mr. Speaker, a process which will generally ensure greater personal contact with taxpayers, provide additional checks and balances to protect the rights of taxpayers, and provide training of department staff to better ensure the fair and equitable application of the legislation. In fact, all training will reflect a commitment to taxpayer service
and the communication of taxpayer rights. I feel that is absolutely essential.
These measures have been put in place, Mr. Speaker, to provide better service to taxpayers and, at the same time, to maintain public confidence in our self-assessment system of taxation because, without that public confidence, the system will not work. I believe we have some confidence, and I hope and trust we will have more in the future, because the vast majority of Canadian taxpayers have little or no problem with Revenue Canada, Taxation. Notwithstanding the media attention, less than half of 1 per cent of taxpayers filed notices of objection last year. Of these, the majority were settled at the local level to the taxpayers' satisfaction. That leaves the balance of about 16 million taxpayers with routinely filed and processed returns. I doubt very much if many private sector enterprises enjoy such a low rate of unsatisfied customers. Nevertheless, the numbers of unsatisfied taxpayers should be further reduced. It is hoped that many of these proposals will be helpful in this regard.
I believe it is also important to note, Mr. Speaker, that the steps I have outlined represent only the beginning of the general upgrading of service to taxpayers. More long-term improvements will follow the study by the Woods-Gordon group and, certainly, changes in the Budget will have a lasting effect when they are passed into law. That brings me to the other vital player in this process of change and improvement to taxpayer service, namely the Department of Finance. As Hon. Members know, the Department of Finance is the source of budget change, and the last Budget provided for a number of changes in the Income Tax Act which will directly affect taxpayers. Proposed simplification of the legislation will not only provide tax savings for a number of groups, but will also substantially reduce paper work for almost 300,000 small companies. In fact, Mr. Speaker, approximately two-thirds of the legislation relating to small business will actually be removed from the books. That is really a step in the right direction. Small business is going to be very happy about that.
Proposed changes in the Budget will also exempt in the order of 350,000 senior citizens from having to pay quarterly tax instalment payments, and the same holds true for about
50,000	small businesses. Other measures will make it easier for taxpayers to file an objection to an assessment, and there is now no restriction on the amount a taxpayer may be awarded in costs upon completion of a successful appeal. I believe this satisfactorily takes care of the amendment to the motion which was put forth by the Hon. Member of the New Democratic Party.
All these measures are in addition to existing services such as the more than 600 different forms and guides produced to assist a wide variety of taxpayers in filing returns. To further improve communications and help develop stronger ties with the business and financial communities, the Department established the taxation advisory committee in 1970. Composed of tax experts from these sectors, the committee meets regularly with departmental officials to offer constructive criticism of the Department's policies and procedures. Departmental offi-

cials also meet annually with representatives of the joint committee of the Canadian Institute of Chartered Accountants and the Canadian Bar Association. I understand that the Hon. Member for Wellington-Dufferin-Simcoe has a copy of the latest publication of both the Canadian Institute of Chartered Accountants and the Canadian Bar Association. Unfortunately, I have not received a copy as yet. He seemed to be able to get it much more readily than myself.
To help taxpayers plan or make decisions involving complex business transactions, the Department also offers an advanced rulings service.
These initiatives, Mr. Speaker, demonstrate the good faith of a government which sincerely wants to encourage open dialogue with all sectors of the tax-paying public. The wide variety of tax information material made available free of charge illustrates an awareness of the special needs of the many different groups and individuals who participate in the self-assessment system. Take for example the information circulars and interpretation bulletin series, to which I am sure many Hon. Members subscribe. Intended primarily for lawyers, accountants and other tax consultants, these publications explain the Department's administrative interpretation of tax law as the Department's own auditors and assessors apply it. I think it is fair to say that there are few Departments in the federal Government which have greater direct contact with the general public. It is equally fair to say that there are few Departments with a greater information flow to and from the general public. The process now under way will not only increase that contact but also increase that two-way flow of information.


The Acting Speaker (Mr. Herbert):: There now follows a period of up to ten minutes for questions and comments.


Henry Perrin Beatty: I have a question, Mr. Speaker, but I might start by associating myself with my friend's remarks regarding the NDP amendment. One would be hard pressed to think of a more irrelevant amendment that could be moved. Nothing to date could better characterize the NDP contribution to the Revenue Canada debate than the fact that the task force made its report which recommended lifting that ceiling on the awarding of costs at the Tax Court of Canada on April 8, and on April 25 the Minister of Finance (Mr. Lalonde) tabled his amendments which did precisely that. A month later the NDP comes along and puts itself squarely in favour of a policy which has already been announced. Certainly one wonders where it has been throughout this debate, if it has been serious about this.
I want to ask my friend about another matter. I was somewhat confused about one part of his speech where he seemed to be implying that the fact that a high percentage of the notices of objections filed by taxpayers are resolved in favour of the taxpayers was proof that the system is working well. Would it not be more correct to argue that in fact it was proof that the Department was wrong, in whole or in part, in
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70 per cent of the cases where a notice of objection was filed? Is that not proof of how badly the system is working instead of how well?


William Kenneth Robinson: Mr. Speaker, it depends on whose glasses you are looking through and whether you are a pessimist or an optimist. I like to look at things optimistically, and I am looking at it from the right end of the telescope at this time. We are looking for all kinds of improvements, and I think we are going to get them. Probably a great deal of the impetus is a result as well of what the Hon. Member and his colleagues have been trying to do.


Henry Perrin Beatty: If my friend has his optimists glasses on at the present time, does he find it encouraging that there was an increase of something like 36 per cent, year over year, in notices of objections being filed by taxpayers? If he finds it encouraging that 70 per cent of those people are in the right and the Department is in the wrong, would he be doubly optimistic if twice as many notices of objections were filed of which 70 per cent of taxpayers were right and the Department was wrong?


William Kenneth Robinson: I think the approach I would like to take is that if the assessors and auditors are doing their job as efficiently and effectively as I hope they are and will be, if not now at least in the future, we will not have as many objections. People will find that they owe the tax and will pay it or make arrangements to pay. I think it is most unfortunate when people have to go through a court process in order to determine if they owe money. I think this is really what the Hon. Member is bringing to the attention of the House.


Henry Perrin Beatty: Mr. Speaker, my hon. friend has a strong interest in civil liberties and the rule of law. Could he take off his Parliamentary Secretary's cap for a moment and put on his MP's cap, and deal with the issue of the Department of Finance and the Department of Justice? He pointed out quite properly that some of the recommendations made in the task force report would require the consent of and initiative on the part of those two Departments. In particular he will be aware of the fact that both the task force and the joint committee of the bar and the CICA recommended that Section 231, the search and seizure powers, be amended to bring them back into line with civil liberties. Is he prepared as a Member of Parliament to recommend to his colleague, the Minister of Justice (Mr. MacGuigan), that in fact such amendments be put in place before this House recesses for the summer or is dissolved for an election?


William Kenneth Robinson: Mr. Speaker, the Hon. Member brings up a very important point. There is plenty of power there, but it is a question of carrying out the power and responsibility with discretion and feeling to help the individual taxpayer. This is really what we are looking at. It is in part attitudinal. We want to be sure that we are being fair with the taxpayer. I am not afraid of the power; I am only concerned about how it is actually carried out.

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Henry Perrin Beatty: Mr. Speaker, do I understand my colleague correctly? If he is not concerned about the power that is given in the first place but only about the administration, would he not be concerned if the Government were to say that the Department may seize any documents it sees fit irrespective of their relevance or the effect upon civil liberties, and then amend the Act in that way and just hope the officials in the Department will act wisely? Or does he feel the responsibility of Members of Parliament is to ensure that, on the one hand, the Department has all the powers it needs to enforce the law, but that, on the other hand, those powers do not go beyond the basic need and do not offend against basic civil liberties? Does he not feel that Parliament has a direct and very real responsibility to write the law in such a way as to prevent abuses from taking place? Should we not be writing the law for the worst case, not the best case?


William Kenneth Robinson: Mr. Speaker, maybe what we have been doing is writing the law for the worst case and that is why there has been so much power put into it. That is why I think it is a question of how you use the power that is important. There may be extreme cases where you need to have a lot of power, but there are a lot of other cases which do not fall within that ambit. That is where I think discretion has to be shown. Having said that, yes, I agree with the civil libertarians, I agree with freedom of information and the Charter of Rights and so on.


Henry Perrin Beatty: Save the whales.


William Kenneth Robinson: I agree that taxpayers have the same rights as any other citizen and they should be properly respected. I understand what the Hon. Member is saying, but all I am saying is that it is the way the Act is perceived and the way the power is used that is of the utmost importance to me.


The Acting Speaker (Mr. Herbert):: If there are no more questions or comments, the Hon. Member for Don Valley West in debate.


John William Bosley: For instance, earlier the Minister made the statement that every freedom carries responsibility. Of course it does. Every right carries obligations. Of course it does. He went on to talk about the freedom that is guaranteed in the self-assessment system as though the self-assessment system were created to create freedoms. The self-assessment system exists because it is the single best way to collect taxes at the least cost. That is its reason for existence. It is not to guarantee freedoms.
He used the following argument, and it is specious. The vast majority of Canadians have their taxes deducted at source. I do not know of any taxpayer who has his tax collected at source or any employer who employs employees who has any freedom to do anything but collect taxes at source. He then went on to say that those who do not have their taxes deducted at source have to be checked by the Department in order for the system to be just so that those who do not have their taxes deducted at source are found and encouraged to pay the taxes they owe. The whole case put by the Minister is that those who have their taxes collected at source are clearly honest and can be trusted-the translation is that they have no choice-and everyone else should be checked. If you start from the premise that everyone who is self-employed or files an independent tax return in the country needs to be checked, you have built into that premise an assumption that they are guilty and are trying to do something other than pay the taxes they owe.
That is precisely the attitudinal problem that members of the task force found throughout the country in terms of the way the Department approaches a taxpayer. We could never get this clear to Members on the opposite side. We thought perhaps that we would never find an occasion on which to demonstrate the problem to Liberal Members. Recently, when studying the Estimates of the Minister we persuaded the Government to bring to the committee some of the training films which were used and may still be used. Although there is some lack of clarity about whether they are going to be abandoned, I believe they should be. At this point it appears that they are going to be used.
We saw a film in which an interviewer was interviewing actors portraying senior members of the Department on the question of the powers of the Department. They were discussing whether they were broader than the British and American powers. Senior members of the Department were proud to say that there is no guarantee of one's right not to incriminate oneself as there is in the United States. We do not have that in Canada. Departmental officials sat before the committee and said that this is only for the big companies, those people with gross sales of more than $12 million a year. I remember that Liberal Members opposite looked at us and asked what we were talking about. They said that those powers are only applied against big companies and that big companies should have big treatment.
We asked whether there was not a preamble to that film recorded by the then Deputy Minister. The departmental officials admitted that there was in fact a preamble. Having seen the film in the morning, the Department was able to find that introduction to the film that afternoon. They ran the
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introductory piece for members of the committee, including Liberals who had been present in the morning. Lo and behold, the Deputy Minister introduced the film with the following statement, which I paraphrase; "You are going to see a film now about techniques that we use primarily with companies with over $12 million a year in annual sales. However, these are the same techniques we use for all taxpayers and companies in Canada".
For the first time we saw the beginning of shock and awareness on the faces of Liberals on that committee. In the morning they had been assured by senior departmental people that those practices were not used with ordinary taxpayers. Those are practices of fishing expeditions which were touted in the film, the practice of trying to go around tax advisers to Canadians and of assuming that there was probably something to find in any audit that was out. In the afternoon the Deputy Minister made perfectly clear to members of the Liberal bench what we already knew from having been on the road. We knew that those were indeed the practices which are used against all taxpayers.
The importance of that is to remember a human thing, that is, that the biggest people in the country have the biggest resources with which to defend themselves. Consequently, across the land it is not particularly the biggest taxpayers who are being abused. Equally, if you are a good assessor or good auditor you tend to get promoted up the system. That means that the best tend to deal with the biggest. Those who have the least capacity to defend themselves get the people who are either new or perhaps, in one sense, not the best or the most aware of the proper interpretations of the Tax Act. The combination is self-evident.
Add to that the situation which occurs when supervisors pass files on to auditors for review and tell those auditors they would not be giving them those files if there was not something to be found in them. The assumption is created at the lowest level of the system that a junior auditor must find something when he is given a file. If a junior auditor has ambition, he or she had better find something in that file in order to have a career.
Although we did not hear from enough members or ex-members of the Department, we did hear from several of them. I will never forget the story told to me by one ex-departmental auditor who appeared before our task force. She told us that we should understand that when she is given a file and returns to say to her supervisor, after conducting an audit, that she found nothing in the audit, she is told by the supervisor that she was wrong because she would not have been given the file if there was not something there. She was told to find it. She said that she re-audited the taxpayer, but still could not find anything. She went back to her supervisor, who told her again that she was wrong because she would not have been given the file if there was not something there. That auditor did what anyone else would do in the same circumstances, she reassessed the taxpayer. That is how she met the goals, the

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model and role set for her by her boss. The consequence of that is, to put it mildly, difficulty for the taxpayer. It is that type of situation that illustrates excessive use of the Department's powers.
The Parliamentary Secretary asked one of my colleagues if it is true that the Department is treating taxpayers better than previously. The answer is yes, they are being treated better. The local office treatment of my constituents is better at this point than it was a year ago.
However, that is not a defence for keeping the law as it is. It only means that four or five years from now if the Government does not change, God help us if it does not, another group of parliamentarians will have to go on the road again to make the same report and attempt to restore the proper treatment for taxpayers. That misses the whole point.
No taxpayer in this land who believes that he or she does not owe the money that the Government tells them they owe should have to put up one cent or a day in court. If we as the Parliament of Canada do not accept that principle, we are saying that we do not trust the taxpayers, the people who pay us. That is a phenomenal statement for us to even contemplate.
I find it incredible that it is even necessary for the Parties to debate this question or that there should be any delay in changing the basic structure of the system. Our report and the report of the lawyers and chartered accountants make it clear that when the Government believes there is fraud or has reason to move expeditiously it should have that right. But it should go to court first. We also believe that anyone who tries to cheat the rest of us should be subject to severe penalties and the potential awarding of costs by the court.
However, the premise of our report and the report of the chartered accountants and lawyers is that we cannot base our system on the assumption that everyone is a cheat and will be forced to prove his or her innocence. The consequence of that is that the self-assessment system will be destroyed. We will run the risk of people not trusting the Government. They will not report their income and will make the Government go to them. We found in our hearings across the land that that view is beginning to be felt by too many Canadians.
What would you say, Mr. Speaker, to a couple who owned a trailer park and came home from vacation to discover that their house was ransacked? This appeared to have been done by burglars but in fact it was Revenue Canada, that had done it. The Department conducted a net worth audit on that couple, which is a means by which the Department decides what one actually earns and then taxes one on it. You must then prove your innocence. The Department decided that these people had an unreported income of $1.6 million. When the case was finally settle in court and the dust had settled, a reassessment was issued. The Department determined that their taxable income for the year was $20,000. In the meantime their property, their car, their clothes and their radios were seized and sold at a sheriffs auction at a loss. Not once has the Department admitted that it treated those people unfairly. In fact, it was not very long after that that the Department was still after penalties and interests.
I want to close by replying to the comment by the Parliamentary Secretary that one-half of one per cent of cases turn into objections. It is not those cases where there are no disputes that should concern us in this debate. There is no problem with the 15 million taxpayers who file their returns and there is no re-assessment, no objection and no appeal.
It is when there is a dispute that the question of civil liberties and treatment arises. Surely when the taxpayers are winning 70 per cent of the appeals that are launched and when there are well-known cases of excessive use of power, it should take no more than that for the Department to understand that an increasing number of innocent people have been hurt. They are not people who have tried to cheat the system.
It is important to improve the communications practices and to improve the taxpayers' knowledge of the system. The fundamentally important principle, for which we will press until it is accepted, is that we should not have a situation in this land where a taxpayer must prove his innocence against the resources of the Department. There should be a recognition on the part of the Department of Justice, the Department of Revenue and the Government that a fundamental principle of our way of life and justice is that taxpayers should have every opportunity for a day in court. If taxpayers succeed in their day in court they should get their costs and damages if it is deemed appropriate. If we do not accept that principle, then shame on us.


The Acting Speaker (Mr. Herbert):: There follows a ten-minute period for questions and comments.


William Kenneth Robinson: Mr. Speaker, I believe that we all agree with the last points made by the Hon. Member. There is no reason to think otherwise.
Surely he realizes that the people who work in the Department of National Revenue are public servants who are also taxpayers. They are only doing the job that they are required to do under the Income Tax Act. While we may differ about how they are doing that job, we agree that they must carry out their functions in accordance with the present law. Does the Hon. Member not agree that the law should be changed but not by the Department of National Revenue but by the Government through the Department of Finance?


John William Bosley: Mr. Speaker, the people who have been abused do not care which Department changes what law. They are only concerned that the law be changed.
Of course we agree that the law should be changed. That is the whole purpose of the motion. However, it is no defence for maintaining the law as it is for one branch of the Government to say that it is not its fault. Of course the employees in the Department of Revenue are doing what they have been taught, trained and told to do by their superiors. Of course they are implementing law and the practices they have been taught. The question is, when will the Government change the law?
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The point of this motion is to say that the Government has had adequate time and knowledge to change the law. All it has to do is to table the change in the House of Commons. We have indicated repeatedly that it will receive quick passage. Instead of asking us whether we know that the Department of Justice has to introduce the law, the Parliamentary Secretary ought to be going to the Minister of Justice and to his superiors and saying that he wants the law changed before the summer, before the election, because it is only right and fair.


The Acting Speaker (Mr. Herbert):: If there are no further questions or comments, for continuing debate, the Hon. Member for Welland.


Mr. Gilbert Parent (Welland):: Mr. Speaker, I should like paraphrase the question asked by the Hon. Member for Don Valley West (Mr. Bosley). He asked what was the humane thing to do. When we are attacking institutions, we must remember that these so-called institutions are run by humans. Yes, we agree with his statement that the people in the Department of National Revenue are simply carrying out their responsibilities as they have been trained to do. However, what we are doing is destroying in many ways the people who are carrying out their responsibilities. I hear an Hon. Member opposite laughing. He thinks it is funny when we put extra hardships on these people.
Today we have heard many hardship stories. Perhaps I could put the other side of the story on the record. Approximately 10 days ago I was flying home and I happened to sit beside a gentleman with whom I eventually conversed. I asked him what he did, and he said that he worked for the Government. I asked him three or four questions before he told me that he was a tax assessor. I said: "You fellows have been under a great deal of pressure within the last few months, in the last year". He said: "Yes, and most off it unjustifiably so". I want to put that part of the argument forward on behalf of those people who are carrying out the responsibilities placed on them by the Government of Canada. Tax assessors have never stood in very high repute with their fellow citizens. If taxes were not assessed or collected, how could society have existed as it has?
I should like to deal with two points that were raised by the Hon. Member for Wellington-Dufferin-Simcoe (Mr. Beatty). One was the payment of tax under dispute, and the other concerned tax appeals. The Hon. Member suggested that the Government has failed to protect satisfactorily the civil liberties of Canadian taxpayers in their dealings with the Department of National Revenue. That is the crux of his argument and of his motion. He heralded a cry for a guarantee to taxpayers of the right to a fair hearing on disputed reassessments before having to make payments or post security. Is there anyone in the House of Commons who would not agree with that position? It is a reasonable position to take. My friend across the floor is certainly good with slogans. He captured the attention of taxpayers with his battle cry that they must be considered innocent until proven guilty. I agree
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with this, and this is what is being done in the overwhelming majority of cases. Despite the Hon. Member's ability with slogans, his foundation in fact is somewhat shaky.
I should like to bring forward a few matters which perhaps have not been considered to this point in time. Few tax systems in the world depend upon and operate upon a voluntary reporting of income as does the Canadian system. The Canadian taxpayer is awarded the highest level of trust, of innocence and of basic rights by the very structure of our tax system. It cannot be a system without checks. It cannot be a system operating under naive principles. It is voluntary, but the system is not naive. Does the House not think that after so many years in the tax collection business, the Tax Department and its employees have not seen their fair share of schemes, devices, plans and dodges for evading or avoiding altogether the payment of taxes? Is it not a human trait of some of us perhaps to try to beat the system? Does the House not think that one of the reasons for the complexity of today's tax law stems from the very fact that the wording of every section of the Act has been examined for the smallest, most imperceptible loophole, and that in closing these loopholes the Act has grown in length and in complexity? Does the House not think that without audits, some investigations, cross-references and matching programs, some of us in our human frailty might be tempted to forget to include some of our income or overestimate the expenses or deductions we claim?
While there is in Canada an extremely high standard of compliance with the law, 99.9 per cent, I believe the selfassessment system can be maintained only through a vigilant inspection of tax returns. This does not mean that we check everyone's tax down to the final comma. I am not saying that, but the examination of a taxpayer's books and records to determine accurately the legitimate taxes, interest and penalties payable under the law, is a method used to monitor and maintain the self-assessment system which I believe to be one of the best in the world.
The argument has been put forward that when Revenue Canada reassesses a taxpayer following one of those audits or other types of checks, the taxpayer should not be required to pay the tax assessed if the amount is challenged by an objection or an appeal. In theory, this idea has great merit and in fact I understand that serious consideration is being given to it. However, I must point out the obvious difficulty in taking the position that tax would not be due until all objections or appeals have been settled. It seems obvious that the number of objections and appeals would rise drastically, some based upon very legitimate arguments with an assessment and others, in fairness and in honesty, would be used as a delaying tactic to avoid the immediate payment of the tax. If someone owed $1 million in back taxes-and I know that amount is very high- and if the interest on that money was 10 per cent, that is $100,000 per year that that taxpayer would have over other taxpayers who did not owe that amount of money, if indeed he owed the $1 million of assessment. We must strive for an assessment system which is fair to all taxpayers in Canada.

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John William Bosley: If you destroy someone for the sake of fairness, that is okay?


Gilbert Parent: I cannot hear the Hon. Member. Perhaps he could rise on a point of order.


John William Bosley: I will.


The Acting Speaker (Mr. Guilbault):: The Hon. Member for Welland has the floor.


Gilbert Parent: Clause 43 of the notice of Ways and Means motion to amend the Income Tax Act tabled in the House of Commons by the Minister of Finance (Mr. Lalonde) on February 15, 1984 indicated that for taxes in dispute which are payable at any time after that date, taxpayers should be permitted to provide security for payment satisfactory to the Minister of National Revenue (Mr. Bussieres).
I am pleased to inform Hon. Members that Revenue Canada has modified its policy regarding accounts under notice of objection or appeal, so that the Department now accepts any negotiable security in lieu of payment for the duration of the appeal process. This means that the Department does not limit itself to bank letters of guarantee. Of course, where the security may be of fluctuating value such as in bonds or not immediately realizable, a satisfactory payment arrangement may be required as part of the agreement to protect the Department's interests. While the Opposition calls for an end even to the provision of security in cases where the tax is in dispute-and I believe that is what the Hon. Member for Don Valley West was alluding to-I am sure you can appreciate, Mr. Speaker, the dangers inherent in such a move. However, with the possible guarantees that I spoke of, guarantees against frivolous disputes intended only to delay the payment of tax, the question can be taken up for consideration and no doubt will be examined seriously.
My concern continues to rest with that vast majority of taxpayers, really the silent majority from whom we hear few if any complaints, whose taxes are deducted at source and who have little or no cause to dispute their tax assessments. I personally feel that the rights of these taxpayers must be protected at all costs.
We have heard figures in this House in answers from the Minister of National Revenue and the Minister of Finance that as much as $3 billion a year go uncollected. If that is the case, who is paying for that $3 billion if not the other taxpayers who have their taxes deducted at source? It is we who pay our taxes who are being penalized by those who do not. I have not heard anyone here dispute the fact that $3 billion more in taxes should be collected. I have not heard that addressed. If it has, by whom and when?
I now turn my attention to tax appeals. This matter was raised by the Hon. Member for Don Valley West in his request that we make the whole system more humane. The rights of taxpayers have become the watchword of the day, and rightly so. Every citizen in Canada-I should not say every one
because some are too young to pay and some do not earn enough to pay taxes, but the watchword is that the rights of these taxpayers have to be first and foremost. No doubt the wrongs of taxpayers are of somewhat less interest to my colleagues on the other side.
I would like to discuss briefly some of the rights that taxpayers enjoy under the current system, the changes which the Minister of National Revenue has already made in his Department and some of the measures that the Minister of Finance recently introduced that will further ensure the protection of rights of Canada's taxpayers. I will begin by talking about the tax appeals. The Canadian taxpayer has available a system of appeal that reaches right to the Supreme Court of Canada. I must point out that for the vast majority of people who object to a tax assessment, a resolution is found at a much lower level than the Supreme Court, and rightly so.
Let us look at the figures for last year. Of the 45,000 notices of objection filed last year, fully 35,000, as mentioned by the Parliamentary Secretary, were resolved at the local level to the satisfaction of the taxpayer. That is the overwhelming majority. Before examining this figure further, let me also point out that those notices of objection represent one-quarter of 1 per cent of the 16 million taxpayers in Canada. With all respect, that is not a high degree of dissatisfaction.
When the task force set up by the Opposition was going across the country-and perhaps the Hon. Member for Well-ington-Dufferin-Simcoe will ask some questions later-were there any people who appeared before the committee who thought the taxation system was fair, or did they only hear from those who, for want of a better term, had a beef to bring forward? Perhaps that could be addressed a little later.
With regard to the degree of dissatisfaction, not only does this performance seem inconsistent with the criticism levelled at Revenue Canada, the premise on which I started my remarks, but I would suggest that it represents a Department more than willing to listen to and accept the objections of taxpayers. Notices of objection are the means of redress for taxpayers written into the Income Tax Act, and the Department publicizes them.
There has been a great deal of talk concerning the cost to the taxpayer in taking this particular route. This too was alluded to by the Hon. Member for Don Valley West. Let me make the point that the initial review at the district office level does not involve cost to the taxpayer. If the taxpayer wishes to engage a representative such as a lawyer or an accountant, this cost is deductible for income tax purposes.
There are no charges in appealing to the Tax Court of Canada and if subpoenas are required, they are provided without charge. Again, if the taxpayer engages an agent, these costs are tax deductible. If taxpayers lose an appeal, they are not required to pay court costs. The Hon. Member must have had this information when he brought up this argument. I hope he does question me. Perhaps he could then let us know whether this information was available to him.
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We have recently taken steps to protect the taxpayer even further. Legislation proposed in the Budget presented in this House on February 15 which allowed a judge to award up to $1,000 in costs to the taxpayer has now been modified, removing the $1,000 limit and leaving the award of costs at the discretion of the Tax Court. This proposed legislation also specifically prohibits any such award to the Department of National Revenue.
There has also been a change in one other area. When the Minister appeals a decision of the Tax Court of Canada involving disputed tax not exceeding $2,500 or a disputed loss not exceeding $5,000, the Federal Court will order the Minister to pay all reasonable and proper costs of the taxpayer. The February Budget provides that these amounts be increased to $10,000 and $20,000 respectively, thus increasing the number of appeals eligible for costs. Surely Members opposite will agree that this is going in the right direction. I guess that wanting us to stand here and object to everything they said is not reasonable. I see my time is running out, so I will terminate my remarks.
In addition to the measures recently undertaken by the Minister of Finance, the Minister of National Revenue has also taken steps to ensure that the taxpayers are fully protected in their dealings with Revenue Canada. The Minister has recently advised his Deputy Minister that a complete evaluation of the appeals function be undertaken to determine its independence of the assessing or audit functions. I hope I will receive some questions. I will be very happy to answer them.


Henry Perrin Beatty: Mr. Speaker, I would not want the Hon. Member to be disappointed. I want to take him up on his invitation. He put a question to me that I can respond to at this point. He asked whether the only people we heard before the task force in the over 300 submissions we received were those who had a gripe with the Tax Department. I suppose the implication of his question was that somehow the only people we would hear were chronic complainers who wanted to destroy the system.
If he put people like the Canadian Institute of Chartered Accountants in that category as well as the Canadian Federation of Independent Business, the Canadian Organization of Small Business, the various arts groups which came before us, federations of agriculture and others, that would be a judgment which he would have to make. As a matter of fact, we went out of our way to solicit balanced views, to hear from experts, and indeed we went so far as to indicate that we wanted to receive representations from officials within the tax Department itself. We had hoped to hear from the Deputy Minister and from other senior officials within the Department.
When attempting to get this information, we found that the Minister took the trouble to send a memorandum to every single employee of the Tax Department indicating that they could not come near us and that in no way would they be allowed to speak before us. He put a gag on every single
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employee within the Department. Now the Hon. Member has the temerity to suggest that we were not seeking to hear other points of view. Of course we were, but the Minister put every possible impediment in our way.
Notwithstanding that, we were able, through groups like the Canadian Institute of Chartered Accountants, to hear good, balanced and very fair opinions. I would be interested to know whether or not the Hon. Member agrees or disagrees with the submission that was made jointly by the Canadian Bar Association and the Canadian Institute of Chartered Accountants, a submission which was referred to earlier today.
I would like to ask a question of the Hon. Member. He can correct me if I do not quote him correctly, but my understanding is that he said that our system of taxation has the highest degree of trust and protection of the rights of taxpayers of any system in the world. I am interested in how the Hon. Member does his research. Exactly which authority did he refer to when making that statement?


Gilbert Parent: Mr. Speaker, I have two things to say. The first is that the Hon. Member for Wellington-Dufferin-Simcoe makes the assumption that I am judging the people who appeared before him. To the contrary. He has said that he tried to get a balanced view. My question remains: did he indeed get a balanced view, or did everyone who came before him have a problem? I do not judge these people and these different groups to which he referred. If they came before him, I would hope that they put a balanced view before him.
As far as the appearance before the task force of employees of the Department of National Revenue is concerned, surely they are not the only Canadians in the country who are satisfied with the way the taxation Department is being run. What the Hon. Member would have us believe is that all Canadians are dissatisfied with the taxation system.


Henry Perrin Beatty: False again.


Gilbert Parent: I beg your pardon.


Henry Perrin Beatty: Wrong again.


Gilbert Parent: There you are. Whatever deductions we make are wrong and whatever deductions he makes and whatever groups he refers to are correct. That does not require argument. I will just let that pass and take it at face value.
The Hon. Member asked me what the source was for my remarks. There are tax systems in the western world, and if he wants a specific quote from a specific publication, I will be happy to table that for him in the very near future, if I can get the information for him. The Hon. Member for Crowfoot (Mr. Malone) laughs again.


Arnold John Malone: Indeed I do.


Gilbert Parent: Indeed he does. You can see, Mr. Speaker, that whenever we do not have information that is documented to the nth degree right at our fingertips but say that we will get that information, it is always a cause for rejoicing on the other

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side. That is because their research is so slipshod that whether they had a day or a week, they would not be able to get the information to us.


Henry Perrin Beatty: Mr. Speaker, I would like to pursue the question of the Elon. Member's research. Is he saying that he simply does not know where he got the information he used to make the assertion that there was the highest degree of trust and protection of the rights of taxpayers in Canada of any system in the world? How could he make a bald assertion like that if he does not have the foggiest idea where he found the information? Second, in what form will he be conveying this information to us? Will he be tabling it in the House or will he send us a letter? Can we release any letter that he sends?


Gilbert Parent: Mr. Speaker, any information that I put forward can be released at the discretion of the Hon. Member. I said to him that I did not have the specific quotation. I also gave him my opinion after having looked over some of the tax assessment systems in the western world. I will get him direct quotations if that is what he wants.


John William Bosley: Mr. Speaker, could I ask the Hon. Member through you why he believes that if he were to receive an assessment that was improper, that he knew to be improper and that he could not get resolved at the lowest levels and were thus forced to go to the courts, it would be fairer for him or for any taxpayer to pay the taxes that are claimed to be owing prior to having his day in court? This can be compared with the system that we have recommended and that the chartered accountants and lawyers have recommended whereby the Hon. Member would not have to pay anything until he had had his day in court but interest on the moneys that the courts indicated were owing would run from the day the assessment was issued. In other words, if someone were to make an appeal and lose, they would wind up owing the taxes plus the interest. That is normal. Could the Hon. Member tell me why it is fair for any Canadian, including himself, to be forced to put up what could amount to a very large sum of money which may even bankrupt that person or his business before having his day in court?


Gilbert Parent: Mr. Speaker, in my remarks I stated specifically that I do not agree that a taxpayer should have to put up money, so let us start from there. However, today, this very day that we are debating this issue and asking each other questions, it is possible to put up collateral which is not money. Is the Hon. Member saying that this is not the way it should be? Is he saying that he does not agree with this? Perhaps he could give me his views on that.


John William Bosley: Sure I can. Mr. Speaker. May I ask the Hon. Member whether he knows that that power to accept security did not begin with the Budget but has always been with the Department? If the Hon. Member were a small businessman who was reassessed and the Department claimed that he owed $50,000, and he had a working capital credit line of $20,000, $30,000 or $40,000, why would it be fair to require him to tie up his working capital in some form of security which, as the
Hon. Member knows, would be a liability on the books of his corporation? Why would that be fair when that liability might in fact shut his business down and put it into bankruptcy? That is exactly what has happened in several cases. Why would that be fair when it turns out in the end that his business does not owe a penny in taxes?
Let me ask the Hon. Member a supplementary question because it is part of the same issue. When a business is deemed by the courts to owe tax, why is it left entirely to the discretion of the Minister what security will be taken? Would it not be fairer, when there is a dispute about the payment process, to allow an appeal to the courts in order to find out whether the Department has been unreasonable in refusing the form of security that is available to that taxpayer? That is also a part of our recommendations.


The Acting Speaker (Mr. Guilbault):: The Hon. Member for Welland (Mr. Parent) has one minute to answer the question.


Gilbert Parent: Mr. Speaker, the Hon. Member asked two questions. I agree with the proposition put forward in his second question, so we can put that one out of the way. With regard to the first question, it is my understanding that one can put up collateral which is not money or currency. For example, one can put up a collateral part of one's business or a structure. One could pay money for that later on. That does not tie up the cash flow to which the Hon. Member refers.


John William Bosley: Of course it does. That is the point.


Gilbert Parent: In my view, if a man has assets in his business which are put up for collateral, that would be fair. As long as one has collateral, it should not be necessary to put up the money. I agree that that has happened and I agree that it should not happen.


The Acting Speaker (Mr. Guilbault):: This puts an end to the question period. We are resuming debate.


Arnold John Malone: Mr. Speaker, throughout the course of this debate, not only today but also over the course of this past year, the Hon. Member for Wellington-Dufferin-Simcoe (Mr. Beatty) has been asking for a taxpayers' bill of rights. The speech made by the Hon. Member for Welland (Mr. Parent) has now underscored the need for precisely such a bill of rights.
Using some false form of logic, the Hon. Member suggested that if collateral is put up, it somehow justifies everything. He suggested that if one has been charged but not yet heard, it makes everything okay when one puts one's collateral forward. If the Member had had some business experience, he would have known that as soon as collateral is put forward, that limits collateral for any other business enterprise. He would also have known that in many cases tax reassessments are made many years before the hearing process. In effect, he is asking that we simply freeze the capacity of an entrepreneur who has developed some collateral to raise capital against the
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collateral he has. Why? Because Revenue Canada has made an assessment that the taxpayer believes is wrong.
In the normal legal process an individual pays, or receives punishment for a charge, after the hearing has been held. However, the Hon. Member for Welland would like to see the full payment made and only then hearing held. Had he applied that method to capital punishment, we would be executing people and then, on some occasions, finding that the person was innocent. In effect, he is proposing the same kind of punishment. It will prevent capital flow by causing people to pay the price. Often it is an extensive price for an extended period of time. The damage is done.
Throughout the past year, the Government denied that there was a problem. Then it admitted that there might be a problem with Revenue Canada. Then it admitted in the House of Commons that there was a problem. However, it admitted only that the problems were isolated examples which existed in Kitchener. Then, when it found out that these problems existed in other places, it was basically a day by day and pick by pick method by the Opposition which exposed the Department's incompetence.
Frequently, many issues are raised by all Parties in the House of Commons. However, one of the interesting things about this issue was that shortly after it was raised there was immediate public reaction. People said to our Party, "You are on the right track on this one". The people immediately understood and believed that there was something wrong with Revenue Canada. As all of us will quickly concede, there is no great love affair between Revenue Canada and taxpayers. There are not many Canadians who love to pay income tax. In spite of that fact, most of us believe that in many cases our taxes do some good. I know the old Will Rogers' saying of, "Thank goodness we don't get all the government we are paying for", but nevertheless, we concede that we need a public Treasury.
However, the public is saying that there is something fundamentally wrong with Revenue Canada. We have heard today Hon. Members from the Government side praising the system. They have said that it is a great self-assessment system. When I was elected to Parliament in 1974, about 80 per cent of the farmers in my constituency filled out their own income tax forms. That is my own estimate, and I will have to swallow those words if I am wrong. Today, I doubt if 10 per cent of those farmers fill out their own income tax forms. Whether those are the precise figures or not, certainly that is the trend. Fewer and fewer small business persons today fill out their own income tax forms. I doubt if I could go to any community in my constituency and get two accountants, working separately and apart, to fill out a business person's income tax form and arrive at the same number on the bottom line. The specialists in the field look at this boondoggle of a mess called Revenue Canada regulations and guidelines. The truth is, the specialists will come up with a different set of numbers every time. If that is what the professionals are faced with, then we
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cannot claim to have a self-assessment system. When I heard the Hon. Member for Welland telling us in his speech that we have the most trustworthy system in the world-ignoring Australia, New Zealand, England and the United States-and claiming that ours is the best, I believe that all that I am hearing is one more Liberal speaker trying to defend the undefendable.
There has not been any action. Interestingly enough, one of the leadership candidates for the Liberal Party, the Hon. Member for Bay Street, Mr. Turner, proclaimed that the report of the Hon. Member for Wellington-Dufferin-Simcoe was one of the finest reports he had ever seen. If that man should by some chance happen to win the Liberal leadership race, I do not know how we could possibly be effective in instrumenting such a program because of the nature of persons such as the Minister and those who stood up today to defend the status quo. I submit that if that is the defence, it is not a question of the leadership of the Party, it is a question of the Party. Truly, there needs to be a whole rethinking of the question of how taxes are collected.
I would like to turn to some specifics. First, I would like to deal with Section 31. It indicates that farmers who work beyond their farms must classify those farms as hobby farms because they have other income. The truth of the matter is that we are in a situation today in which interest rates are very high. Not only are those interest rates high at the banks, but they are high at the Farm Credit Corporation. Farmers are also faced with fuel taxes imposed by the federal Government and the provinces, royalties and the like. For example, today when a person buys $15 worth of gasoline, he pays $5 for the gasoline and $10 goes to tax. Actually, the gasoline is not expensive. The tax is expensive. The result of that, added to the fact that there is the PGRT-the front-end taxing on fertilizers and natural gas which makes nitrogen fertilizers-is that we are experiencing record farm bankruptcies.
In the last decade, farm input costs have increased 150 per cent. Statistics Canada has projected that by the year 1988 the farm input costs will have increased another 110 per cent. The prices today for farm commodities on the average are the same as they were in 1973. So we are comparing 1973 receipts with a 150 per cent increase in farm input costs. Obviously, because of that situation, the economy of our nation has driven many farmers to seek second jobs to supplement their farms. High interest rates have meant that many young persons who want to start farming for the first time cannot do it unless they work as well in the oil fields, drive a truck, or earn income in some other way. Often it is the farmer and his spouse who are both out earning income to contribute to the farm. Yet the Government has the harshness to say that that farm is just a hobby. They do not allow that farmer to write off any normal deduction which would be presumed for a full-fledged farmer. What the Government is doing by that policy is saying that the only people who can continue to farm are the ones who are already farming and have their debts paid. One of these days those people will die and we will end up with no food in the country. The truth of the matter is that we have frightened

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away an enormous potential number of young people who could be coming into the farm enterprise sector. Section 31 obviously needs to be amended, because the only way for people to establish themselves in farming today is by either winning a lottery or taking an extra job.
I would like to focus also on a subject which is of considerable concern to me. That is the question of third party demand. I agree that a third party demand on a person's account is probably a tool which the Government should have, but it should be exercised with very strict control under the authority of someone at the highest level of Revenue Canada. That is not what is happening today, however. If you talk to the manager at any bank in the country you will find that he has had third party demands put on his bank. And who is it who is doing this? Someone new to the Department, often young in age, arrives with a briefcase with forms which have a rubber stamp of a person's signature on them. He can say to the bank manager, after showing his identification, "Do you have the account for a certain person"-and name him or her-and then with that rubberstamped signature he can close that person's account.
It is shoddy, Mr. Speaker, to destroy a person's credit in this country in that way. It is too easy to do this. In my constituency it was happening with some regularity. It was brought to my attention by a banker who was concerned. I was very interested to find out, Sir, that with the exception of two, every one of those third party demands was reversed within 24 hours. Someone might say, "In that case, what are you crying about? What are you giving a speech on that for?" I come from a small community, Mr. Speaker, and news travels fast in a small community. City people think they have some advantage with their telephone service, but I can tell you that news travels much faster in a small community without the benefit of a telephone. I can tell you, Sir, that a lot of financial reputations were severely damaged when people found out that the Department of National Revenue had come in and, not with a stroke of the pen but with a rubber stamp, closed out a person's account.
I found out something else, Mr. Speaker. When people wrote letters, made phone calls and had personal conversations with Revenue Canada personnel trying to set up arrangements for a pay-back because they did not have the amount of money owing at that time but were expecting some money very soon and wanted to pay what they owed in some regulated way that they could afford, Revenue Canada preferred to bring down the guillotine and just throw them right out of business. I will not give you the name of any particular business, but I can tell you that one of the firms employed four people, and when it was closed down, not only was its capacity to pay taxes ruined from then on, but the four people who worked for it became unemployed. And that has repeated itself throughout the country. Surely, the danger of third party demands ought to have been recognized.
I would also like to raise the matter of the insensitivity of those persons who put into effect those third party demands on behalf of the Department. They did not do it in the private back office of some bank. Right out in the public rotunda of a bank, they filled out third party demand forms, side by side with the people who were making a withdrawal or deposit or in other ways doing business with the bank. There is a notion, Mr. Speaker, that the subject of income tax is absolutely private and personal to the person involved. But here was an employee of the Department of National Revenue, standing where one could look over his shoulder and see him, closing out accounts. One official stood in one bank that I know and did that for ten different accounts. He closed them out right there in that public area. I tell you, Mr. Speaker, that that kind of behaviour is shoddy. No wonder the Hon. Member for Well-ington-Dufferin-Simcoe brought forward a motion calling for a taxpayers' bill of rights.
It is not a question of whether or not we live by the rule of law. That has never been the question. The question is whether or not we have a recognition of where power comes from in this country. The presumption has been since the Magna Carta that power belongs to the people. All this place is is an institution where we work on behalf of the people. That is why it is called the House of Commons. It is where we work for the common people. The common people said that the king will not have the control, that we, the people, will. But Revenue Canada is all-powerful. As a matter of fact, it is so all-powerful that people have more protection under the Criminal Code of Canada. A criminal who commits such atrocious sins against society as Clifford Olson, even though he mass murdered young girls in the Vancouver area, has more rights than the taxpayer of Canada. At least under the Criminal Code you are presumed to be innocent until you are proven guilty.
I believe very strongly, Mr. Speaker, that there should be no third party demand unless it is signed in pen and ink and unless someone at a high level in Revenue Canada accepts the responsibility. No one today accepts the responsibility. No one admits that he or she did this. Someone just shows up with a briefcase and closes out accounts, and you cannot find out who ordered it. We cannot trace this action back to anyone who will accept the responsibility.
I see you are indicating, Mr. Speaker, that my time is up. I am sure my colleague will take over where I left off in debating this motion.


The Acting Speaker (Mr. Guilbault):: Are there any questions or comments?


Mr. Baker:: Mr. Speaker, before I direct my question to the Hon. Member, I would like just to comment that it is quite unfortunate that a massive tax audit was started in the fall of 1979 when the Progressive Conservative Party was in power, and we saw for four years fishermen harrassed throughout Canada. Some of the statements made by previous speakers on the unfairness of the collection system certainly ring true. It is unfortunate that the tax audit was ordered in 1979. I am sure
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that if the Liberal Government had been in power at that time it would not have been ordered.


Henry Perrin Beatty: It was and it did.


J. Michael Forrestall: You would not want to mislead the House, would you?


Walter David Baker: The Hon. Member who introduced this motion was, I believe, a Cabinet Minister at the time. It is unfortunate that some of the good things he is suggesting now were not initiated by his own Government.


Henry Perrin Beatty: In those two months!


Walter David Baker: My question deals with the third party demand. Does the Hon. Member have the same difficulty I do with a disgusting aspect of that third party demand on low-income people, the primary producers? The third party demand is made on the gross amount, not on the net. If a fisherman owes money to the dealer to whom he is selling fish and he has other expenses, the 25 per cent, sometimes 50 per cent, is taken right off the top. You take the Revenue Canada portion of the attachment, then you take out his expenses and he is left with zero, or sometimes less than zero. Does the Hon. Member find the same thing in dealing with primary producers in his part of the country?


Arnold John Malone: Mr. Speaker, with respect to the Hon. Member's first comment, I can only tell him that after not being in power for the better part of this last half of the century, obviously when you come to power you cannot stop everything and start all over again. We inherited quite a hornet's nest when we came into Government. If the Hon. Member is saying that some things continued which ought not to have, then we concede that. We only wish that they had given us enough of an opportunity in power so that he would not have to lament his own actions today.
As to his question concerning the third party demand, I can only say that I believe from the tone of the Hon. Member that he and I would be in full agreement. Certainly the demand ought not to be on the gross, it ought to be on the net. As a person who represents farmers and ranchers, I have a great affinity with the people he represents in his area such as fishermen. In the primary resource sector, whether on land or on water, the economics are very similar, and I am sure we would share a similar view.


Mr. Scott (Victoria-Haliburton):: Mr. Speaker, the Hon. Member has a farm background, and my question has to do with a fellow in the farm implement business who was assessed an amount of $750. He appealed the assessment and it cost him $10,000 in legal fees and procedural costs thus far. He has not yet come to the end of the case. It seems to me that an appeal like that is not worthwhile. This is why so many people will pay these smaller amounts rather than go through the cost of appealing the assessment. It does not make sense to appeal,
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given the costs, even if you are right. I would like to get the views of the Hon. Member on that.


Arnold John Malone: Mr. Speaker, the answer is obvious. Surely when the cost of an appeal is greatly in excess of the assessment, only those persons who are fighting for a principle will proceed with the battle. I know of cases, as do other Members, where a person has been reassessed and the cost of defending their case might be half as much as the reassessment. That does not sound so bad; you are reassessed $8,000 and it is going to cost you $4,000 to defend. But then comes the word from a Revenue Canada staff person who says, "We will continue to reassess you until you do pay". Then the person starts to think that there is no sense in winning because they are going to reassess and reassess. When that is the process, people just give up in fatigue. What my hon. friend is saying comes down to the need for a taxpayers' bill of rights. The Government has the right to make a reassessment, but when it loses the reassessment, it has the obligation to bear the burden of costs. If it does not, it can virtually destroy the private citizen economically through the process, which is absolutely wrong and must be done away with.


William C. Scott: Mr. Speaker, I am sure the Hon. Member will recall the meeting of the task force in Calgary where John Bullock, representing over 60,000 small businesses, appeared. He said that not only did he fully support the measures of the task force, but that the Conservative task force was the taxpayers' finest hour. I think you will recall that he was applauded and then he went on to elaborate.


The Acting Speaker (Mr. Guilbault):: Order, please. The Chair regrets to interrupt the Hon. Member but the question period is up. For debate, the Hon. Member for The Batt-lefords-Meadow Lake.


Douglas Keith Anguish: Mr. Speaker, I see I have only about seven minutes left, but I want to put some comments on the record in the debate today. I agree with much of what the Official Opposition has said regarding the taxation system. I disagree with other aspects which they have touched on from time to time. The most important point I want to bring out is that both the Liberals and the Conservatives have overlooked a large part of the problems in the system, and I would like to touch on that briefly.
Since I have been a Member of Parliament I have had many farmers and small business people come to me about their feelings of being dealt with unfairly by the system, by auditors and collectors from Revenue Canada. In some cases they have had very just complaints. The most common complaint seems to be about the aggressiveness with which Revenue Canada sometimes pursues audits and collections. At the same time, I think people feel a great deal of unfairness, especially those involved in small business and farming operations. An auditor from Revenue Canada can tell an individual that his business or farm is not a viable operation and therefore he cannot deduct the year's losses or the legitimate expenses which he

May 31, 1984
Supply
feels he is eligible to deduct. The Department is going to have to consider that case very seriously. I have some confidence that the pressure of the Opposition will cause the Government to recognize that there is a problem and that it will be rectified in the future. It had certainly better be or we will not have many farmers left in many areas of western Canada other than long-time established farmers or those who have very large and wealthy farming operations, which is not the norm.
The other problem is that in pressing economic times many people, especially young farmers, find themselves leaving the farm to earn income, when they are not involved in the farming operation itself, to put bread on the table and enable themselves to live at a standard of decency that is above the poverty line. The issue of off-farm incomes and the arbitrary assessments by Revenue Canada people that a business or farming venture is not viable must be reckoned with.
In the literally dozens of cases which have come to me in the past four and a half years I have found most of the public employees within Revenue Canada to be quite helpful. There are some who are not, just as in any other organization or government Department. The taxation office in Saskatoon has been helpful, as has the regional office in Winnipeg. I usually deal at these levels with problems which constituents have brought to my attention.
I will turn to what I think both the Liberals and the Conservatives have overlooked. Our taxation system has become a nightmare of complexity and unfairness. As the Hon. Member for Crowfoot (Mr. Malone) pointed out, very few people anymore fill out their own income tax forms. That is just one example of the complexity of the system. The unfairness is what many of the politicians and parliamentarians are overlooking. The Canadian tax system is based on a simple premise that one pays taxes on income earned. The more money you make, the more taxes you should pay. In 1981, 8,000 people earned more than $60,000 and paid no taxes. That is what the Hon. Member for Kamloops-Shuswap (Mr. Riis) refers to as the golden loophole award for the people in those brackets. In 1981, 239 Canadians earned an average of $635,000 and paid no income tax. There were another 1,200 Canadians who earned $100,000 and paid no income tax.
Some of the largest and most profitable corporations in Canada have been able to defer taxes. In 1980, $25 billion, which was more than the deficit, was deferred in taxes. They say they do not owe this money. During the committee meetings on Bill C-155 when the Crow rate was abolished, CP said that it did not owe those taxes. It said those were deferred taxes. I think that is a good indication that it never intends to pay them.
I only have about one minute left. Since the mid 1970s the tax breaks to corporations have more than quadrupled. They now total more than $25 billion and are equal to roughly $1,000 in lost revenue for every adult Canadian. These tax breaks mean lower tax rates and higher profits for corporations. The result has been higher rather than lower unemployment. I see your clock is about one minute different from the clock on the wall.


The Acting Speaker (Mr. Guilbault):: It being 5.45 p.m., it is my duty to interrupt the proceedings and put forthwith every question necessary to dispose of the business of supply in accordance with Section 9 of Standing Order 62.
Mr. Althouse, seconded by Mr. Lewycky, moved that the motion be amended by striking out the period at the end thereof and adding the following immediately thereafter:
-and further, to recognize the inequity of the appeal process by guaranteeing to taxpayers who are successful in an appeal through the courts that their legal costs will be paid for by Revenue Canada.
The question is on the amendment. Is it the pleasure of the House to adopt the amendment?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


The Acting Speaker (Mr. Guilbault):: I declare the amendment lost.


Ian Deans: Agreed. What are you talking about? Point of order.


The Acting Speaker (Mr. Guilbault):: The Hon. Member for Hamilton Mountain (Mr. Deans) rises on a point of order.


Ian Deans: I am sorry, Mr. Speaker, but there is a procedure one must go through in order to determine whether a vote has been carried or lost. You asked, "All those in favour?" We said, "Agreed", and they said "No". You do not declare the amendment lost. Surely you must ask for the yeas and nays.


The Acting Speaker (Mr. Guilbault):: The Chair has been following the procedure, except that when the Chair asked, "Is it the pleasure of the House to adopt the motion?", the Chair listened. The Chair heard "noes" but did not hear any "yeses". I may ask again. Those in favour of the amendment, will please say yea.


Some Hon. Members:: Yea.


The Acting Speaker (Mr. Guilbault):: Those opposed to the amendment, 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:: (Division No. 45)
++YEAS
Hamilton	McMillan
(Qu'Appelle-Moose	Miller
Mountain)	Munro
Hawkes	(Esquimalt-Saanich)
Heap	Nickerson
Hnatyshyn	Nielsen
Howie	Nowlan
Jarvis	Nystrom
Jewett (Ms.)	Oberle
Keeper	Parker
Kempling	Patterson
Kilgour	Reid
King	(St. Catharines)
Lambert	Robinson
La Salle	(Burnaby)
Lawrence	Roche
Lewis	Schellenberger
Lewycky	Scott
MacDonald (Miss)	(Hamilton-Wentworth)
(Kingston and the Islands)	Scott
Manly	(Victoria-Haliburton)
Mayer	Siddon
McCain	Stevens
McCuish	Taylor
McDermid	Thacker
McGrath	Towers
McKenzie	Vankoughnet
McKinnon	Waddell
McLean
 NAYS	Wenman Wise-79.
Messrs.	
Dubois	LeBlanc
Duclos	Leduc
Dupont	Lefebvre
Duquet	Lumley
Ethier	MacBain
Evans	MacEachen
Ferguson	Mackasey
Fisher	MacLaren
Fleming	MacLellan
Flis	Malepart
Fox	Maltais
Garant	Marceau
Gauthier	Masse
Gendron	Masters
Gimai'el	McRae
Gingras	Nicholson (Miss)
Gourde	Olivier
(Levis)	Ouellet
Gray	Parent
Guilbault	Pelletier
Harquail	Penner
Henderson	Pepin
Herbert	Peterson
Hervieux-Payette	Pinard
(Mrs.)	Portelance
Hopkins	Prud'homme
Hudecki	Regan
Isabelle	Roberts
Ittinuar	Robinson
Joyal	(Etobicoke-Lakeshore)
Kaplan	Rompkey
Kelly	Rossi
Kiilens (Mrs.)	Roy
Lachance	Savard
Lajoie	Schroder
Lalonde	Simmons
Landers	Tardif
Lang	Tessier
Laniel	Tousignant
Lapierre	Trudeau
Lapointe	Turner
(Charlevoix)	Veillette
Lapointe	Watson
(Beauce)	Weatherhead Yanakis-123.
Supply


Ramon John Hnatyshyn: Mr. Speaker, I wonder whether there would be a disposition to apply the same vote to the main motion as was recorded on the amendment?


Ian Deans: Mr. Speaker, I would be quite prepared to have that vote apply.


Yvon Pinard: We agree, Mr. Speaker.

I declare the amendment lost.


Mr. Speaker:: Are there any Hon. Members who wish to be	
recorded as voting who did not vote the first time? If not, then		
the vote as recorded for the amendment will be the same vote recorded for the main motion.


Mr. Speaker:: I declare the motion lost.		
It being 6.18 p.m., this House stands adjourned until 11.00 a.m. tomorrow, pursuant to Standing Order 2(1).
At 6.18 p.m., the House adjourned, without question put, pursuant to Standing Order.



Friday, June 1, 1984