1984-01-31

BUSINESS OF THE HOUSE

Mr. Pinard:: Mr. Speaker, I rise on a matter of House business. I just want to designate Friday of this week as an Opposition day.



GOVERNMENT ORDERS


[Stage Direction]
Hon. Andre Ouellet, for the Minister of Finance, moved that a Ways and Means motion to amend the Petroleum and Gas Revenue Tax Act, laid upon the Table on Wednesday, December 2, 1983, be concurred in.
Motion agreed to.
Hon. Roy MacLaren (Minister of State (Finance)) moved: that Bill C-14, an Act to amend an Act to amend the Excise Tax Act and the Excise Act, and to provide for a revenue tax in respect of petroleum and gas, be now read the first time and be printed.


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

[Stage Direction]
Hon. Roy MacLaren, for the Minister of Finance, moved that a Ways and Means motion to amend the Excise Tax Act
(1), laid upon the Table on Wednesday, December 7, 1983, be concurred in.
Motion agreed to.

[Stage Direction]
Hon. Roy MacLaren, for the Minister of Finance, moved that a Ways and Means motion to amend the Excise Tax Act
(2), laid upon the Table Wednesday, December 7, 1983, be concurred in.
Motion agreed to.

[Stage Direction]
Hon. Roy MacLaren, for the Minister of Finance, moved that a Ways and Means motion to amend the Excise Act, laid upon the Table on December 7, 1983, be concurred in.
Motion agreed to.

[Stage Direction]
Mr. MacLaren, for Mr. Lalonde, moved that Bill C-15, an Act to amend the Excise Tax Act and the Excise Act, be now read a first time and printed.
Motion agreed to, Bill read the first time and ordered to be printed.

[Stage Direction]
Hon. Roy MacLaren, for the Minister of Finance, moved that a Ways and Means motion to apply the customs and excise jurisdiction of Canada to the continental shelf of Canada and to amend certain Acts in relation thereto or in consequence thereof, laid upon the Table Wednesday, December 7, 1983, be concurred in.
Motion agreed to.
Roy MacLaren: that Bill C-16, an Act to amend the Act to apply the Customs and Excise jurisdiction of Canada to the continental shelf of Canada and to amend certain Acts in relation thereto or in consequence thereof, be now read the first time and printed.


Mr. Speaker:: Is it the pleasure of the House to adopt this motion?


Some Hon. Members:: Agreed.


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


Some Hon. Members:: Agreed.

January 31, 1984
Established Programs Financing


FEDERAL-PROVINCIAL FISCAL ARRANGEMENTS AND ESTABLISHMENT PROGRAMS FINANCING ACT, MEASURE TO AMEND
[Stage Direction]
The House resumed from Friday, January 27 consideration of the motion of Mr. Lalonde that Bill C-12, an Act to amend the Federal-Provincial Fiscal Arrangements and Established Programs Financing Act, 1977, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
Mr. Pat Nowlan (Annapolis Valley-Hants):: Mr. Speaker, 1 am pleased to participate in the debate on Bill C-12. As the Minister who introduced the Bill on Friday indicated, it is, in effect, imposing the six and five program of the Government on post-secondary education Financing.
As my colleague, the member for Mississauga South (Mr. Blenkarn), stated on Friday in response to the Minister, it is paradoxical to say the least that the Government is moving at this time to impose six and five on post-secondary education. The Minister in his opening remarks on Friday got a certain amount of satisfaction from pointing out that the rate of inflation, which is the whole reason we talked about six and five, a program which the Government brought in, had been reduced from 11.2 per cent to 4.5 per cent.
I could talk about the formula in this Bill C-12, Mr. Speaker. It is almost incomprehensible to the layman. You talk about squaring the cube root of escalators, numerators and denominators. You need to be an accountant with a computer even to start to make any intelligent sense of the escalator clause, devised by some wizards in some ivory tower to impose, in effect, the six and five program for the next two years on university financing.
I say categorically this is the wrong Bill at the wrong time for the wrong reasons. The Minister himself says that the reasons have really disappeared because the inflation rate is down 4.5 per cent. Let us say the six and five might have helped a little, but there is certainly a lot of smoke and mirrors about it. According to statistics though, the inflation rate is down to 4.5 per cent. The bottom line is that with this new escalator to impose six and five a year and a half after the Government brought in the program, when the inflation rate is down below both 6 per cent and 5 per cent, it will mean that post-secondary institutions will get fewer dollars.
The Minister is an intelligent person from an interesting riding in a part of Canada that is known sometimes for its intelligence. He knows himself that to decrease the dollar amounts, as you interpret this escalator clause in Clause 7 of the Bill, Mr. Speaker, you are giving less dollars to postsecondary institutions which are facing increased costs-we all know that-and also facing increasing enrolments. Increasing
enrolments are vicariously related to increased costs. A lot of students now are going back to university because they cannot find jobs in the job market. Once you get that type of equation of increased costs, increased enrolments and declining funding-no matter how you call it, it is a rose which still has the pricks of the thorn-you are adversely affecting funding to these institutions. You are starting to limit the access of students and thus, starting on the other side of the coin, perpetuating an elitism in universities that is not healthy for the country. If you do not have the dollars for the institutions, especially institutions in Atlantic Canada from where I am privileged to come, you start to have an adverse effect on the standards of the education that is so vital to the growth of this country.
I have only to read from the Massey report of 1951. In effect, the Massey Royal Commission was the last real royal commission on higher education and culture which resulted in many progressive steps, including the Canada Council. There was recognition that the federal Government had to get involved in higher education, especially in view of post-war activity, when veterans who fought and defended the country came back to enrol in colleges. Let me read from a part of the report which, even though it was produced in 1951, is so prophetic today and crystallizes the situation. The report argued that the universities "serve the national cause in so many ways, direct and indirect, that theirs must be regarded as the finest of contributions to national strength and unity". When more have we needed institutions to help increase the national strength and unity of this land?
The commissioners also found that the institutions had been starved for resources and were "facing a financial crisis so grave as to threaten their future usefulness". They were victims of "the twin spectres of falling revenues and rising costs". Hence, one of the most urgent recommendations in the Massey report of 1951 was that the federal Government, because of the national interest, had to become involved in direct grants to universities based upon the student population of the institution. In effect, it asked for a national Government scholarship fund, for the establishment of a council and for encouragement of the arts, letters, humanities and social sciences. They were also to be supported by the Government. Of course, it became the Canada Council. If those reasons were valid enough for Mr. Massey, that eminent Canadian, and his eminent commissioners to become directly involved in financing, they apply even more today. The Government, under the smoke and mirrors of six and five, should not cut back on post-secondary funding.
In the brief time I have I want to direct my remarks to the fact that while this hits all universities across the country, it hits the maritime or Atlantic universities especially hard. There are very responsible and respected post-secondary educational institutions in Atlantic Canada. Basically I will talk
January 31, 1984

more about the Maritimes. In my own home town in Nova Scotia is located one of the more eminent universities in Canada, Acadia University. It has a relatively small enrolment of 3,000 students, but the quality of student, be it man or woman, surpasses some of those in the larger institutions of the land.


Mr. Dingwall:: Hear, hear!


John Patrick (Pat) Nowlan: They win national football and basketball titles. That university produced perhaps one of the few Nobel Prize winners of maritime universities in the person of Dr. Charles Huggins. He received the Nobel Prize for medicine out of the University of Chicago. He is still a very active and constructive Canadian even though he works offshore.
I do not have to go very far to find another university, St. Francis Xavier. The eminent Deputy Prime Minister (Mr. MacEachen), who is still on some mountain trying to commune with someone, is a respected alumn of St. Francis Xavier University. It is known world-wide for the Cody movement, the Antigonish movement and the whole genesis of the co-op movement. It has contributed people across the country and in fact across the world. There is also Dalhousie University.


Mr. Pepin:: Don't forget your own Leader.


John Patrick (Pat) Nowlan: I thank the Hon. Minister. I did not want to be too parochial. Obvious my Leader has been a very active alumna and graduate of St. Francis Xavier. It is interesting that he and the Deputy Prime Minister worked hand in hand many times when it came to the university.
I really wonder where the Deputy Prime Minister is on Bill C-12 and/or where the Minister for International Trade (Mr. Regan), a former Premier of Nova Scotia, is on Bill C-12. With respect-and I am not becoming too political here-they are not discharging their responsibilities the way other Ministers from Nova Scotia discharge theirs. One of my predecessors, the Hon. Lorimer Ilsley, a former Member for Digby-Annapolis-Kings, was Minister of Finance many years ago in the St. Laurent Government and in the Mackenzie King Government which was instrumental in first getting federal involvement on a per capita basis of 50 cents and going up to a grand total of $1.50 per student, and first acknowledged the interest of the federal Government in post-secondary education.
In the Atlantic provinces we have Acadia, Dalhousie-a great degree-conferring institution in law which has produced many Prime Ministers-St. Francis Xavier, UNB and P.E.I. They are universities of eminent quality far out of proportion to the relatively small population size of the Maritimes. This is why a reduction in funding in a general way with an arbitrary, unilateral six and five formula will hit hardest the maritime universities. I have excluded Memorial because there are some different considerations to be made, one of which is the fact that it has just gone to grade 12, so its figures this year in
Established Programs Financing terms of grade 12 enrolments are out of proportion to the norm.
I will come to the millions of dollars which in effect will be saved; it is a very foolish form of savings by the federal Government as far as I am concerned. This decrease hits especially hard disadvantaged areas like the Maritimes. One of the reasons for this is that enrolment rates for many reasons in maritime universities are much higher than the national average. On Friday, Statistics Canada released the statistics for university enrolment. They surprised many educators. Because many people have not been able to find jobs, they have returned to university. The national average for increased enrolment is 5 per cent. Nova Scotia had the highest increase in the country, 9.5 per cent. In New Brunswick it was 7.5 per cent and 6 per cent in Prince Edward Island. Those are the percentage increases in enrolment.
When you come to the second part of this whipsaw, you have increased enrolment in the maritime universities much higher than the national norm, yet the formula, which is described in incomprehensible terms in Clause 7 of the Bill, for the year 1983-84 is based on a 6 per cent increase per capita, multiplied by the population of the province. If a provincial population increases, the number of dollars under this formula will increase. If the population relative to other populations across the country decreases, there will be a decrease for that province. If it remains the same, it will receive at least the 6 per cent.
According to the Government's own figures, the inequity of this formula will hit an area that is already disadvantaged, the Maritimes. Let us use British Columbia as an example because of its growth. I am not against growth in other parts of the country, but I am certainly against penalizing those parts of the country that have had a history of serving students from all parts of the country. Because of the economic difficulties and the realities of the region, they are not able to pick up the slack. There is the unfortunate anomaly in that British Columbia under this formula, which is supposed to be fair, will receive a 9.1 per cent increase, the same as Alberta, whereas Newfoundland will receive 6.6 per cent, Nova Scotia and New Brunswick 6.5 per cent-just a little over the 6 per cent-and Prince Edward Island 6.3 per cent. That is not acceptable.
Let us get off the formula and see what happens in terms of dollars. I will deal with 1983-84. Under Bill C-12, Nova Scotia will receive $136.5 million. Without the Bill it would have received $140.6 million. Without the Bill it would have received $140.6 million. Therefore, it will receive $4.1 million less. Under Bill C-12, New Brunswick will receive $112.4 million. Without the Bill it would have received $115.7 million. The amount is down $3.3 million. The same is true of Prince Edward Island which will receive $19.7 million rather than $20.5 million, down $800,000. Newfoundland will receive

January 31, 1984
Established Programs Financing
$91.8 million under the Bill. Without the Bill it would have received $94.5 million, a decrease of $2.7 million.
We are talking millions of dollars. Nova Scotia will receive $4.1 million less, which will be off budgets that have already been pared to the bone. We know that in that area, the salary level of teachers is not the highest in the land. On the other side of the coin, because of the unfortunate circumstances they cannot take up the slack of these millions of dollars by increasing fees. Unfortunately, the fees in the Maritimes are already the highest in the land. Therefore, the maritime universities get a double whammy.
There is another facet to this equation. We all know that the magic phrase "research and development" is essential to a technological nation in the 20th century. Unless there are dollars going for research and development, we will be faced with atrophy and begin to starve. Even before the advent of Bill C-12, because of the size of many institutions of higher learning, too much was concentrated in too few universities outside of Atlantic Canada. If you cut back on the base in the Maritimes, you also cut back on the potential for increasing the minimal research and development already taking place. To have this happen, with no logical reason for applying six and five arbitrarily across the country, leaves much to be desired.
For a brief time the Pearson Government recognized the historical position of the Maritime universities which educated so many out-of-province students. Given the net inflow and outflow of students, the Maritimes ends up on the wrong side. I am not against students from Ontario, Quebec and the west coming to maritime universities. It was recognized in many briefs to previous Cabinets that there should have been a factor built into the formula to make sure that the maritime universities got a little higher percentage because they educated so many students from outside of the region.
There is also the historic reality that unfortunately so many students who graduated from the maritime region had to leave to find employment and help develop other parts of the country which did not have to pay the cost of their education. There was a very brief moment of sunshine in Mr. Pearson's Government when 1 and some of my colleagues sold the message, that of the $5 per capita grant. Some 70 cents was to go to the maritime institutions in recognition of the fact that those institutions welcomed students from other parts of the country with open arms.
I could make a speech on regional development alone, Mr. Speaker. Every government has tried to develop industrial programs and an industrial strategy. Well, you do not do these things in a vacuum. The reality in Atlantic Canada, because of our restricted resource base and until we develop the sea and its resources, which has been historically slow to come, is that we have had the service industry take up some of the slack
because of a lack of great industrial growth. In this way post-secondary institutions have been a real industry in the Maritimes. In my home town Acadia University is the biggest employer. The ripple effect from these institutions is out of all proportion to the dollars involved. That is why it is so important that millions here and millions there are not chopped off.
I only have a couple of minutes left, Mr. Speaker, and it is almost impossible to make that point in that time. This situation is not the fault of Bill C-12, I guess. It is the fact that we ever brought in the Established Programs Financing Act back in 1977. It goes back even further than that, to the day when there was a change from the per capita grant per student administered by universities to, in effect, an unconditional transfer of tax points to the provinces.
My time is too short really to develop this point in my remarks, but I guess we should not be surprised that we had this Act in 1977, or even that Mr. Pearson in October, 1966 made this conversion from per capita grants to unconditional transfers. In the government of that day, I think the Prime Minister's Parliamentary Secretary was the Hon. Member for Mount Royal. I would recommend that everyone read his treatise on federal financing to universities written in 1957. In his dialectical musings he found himself in the same bed with his arch-enemy, Duplessis, tearing strips off the then Prime Minister, Mr. St. Laurent. I cannot read the article to you, Mr. Speaker, but you will find it at page 82 and in 14 more interesting, musing pages of Federalism and the French Canadians. The author was totally against post-secondary education at that time and I can only conclude that if that is the case we would never have had medicare.
I want to ask the House why we cannot go back to the fundamentals in Bill C-12 since it is a stop-gap operation for two years. Unless the government of the day-and, we hope, a new government-accepts the challenge of post-secondary education now in the technological age, as the then Liberal Government did after World War II, to move into the vacuum, to give leadership in a field that needs it, then our young people are going to be poorly served by this House.


Mr. Deputy Speaker:: Questions or comments? Debate. The Hon. Member for Dauphin-Swan River (Mr. Lewycky).


Mr. Laverne Lewycky (Dauphin-Swan River):: Mr. Speaker, it gives me great pleasure to speak on Bill C-12, an Act to amend the Federal-Provincial Fiscal Arrangements and Established Programs Financing Act, 1977 or, as it is renamed, a Bill that deals with federal post-secondary education and health contributions.
I should like to bring a Manitoba perspective to this debate regarding the negative impact that introducing the Bill will have there at this time. I know the situation has been observed by previous speakers but I would reiterate that it seems rather
January 31, 1984

ironic to introduce this Bill at this time when almost daily in Question Period the Government suggests there has been a real recovery or that recovery is on the way. Now we find, however, that a cutback or restraint mentality is being demonstrated in the provisions of the Act.
In Manitoba and elsewhere it has been observed that in this time of recession and unemployment more and more students have been turning to post-secondary institutions in order to further their education and equip themselves to earn their fair share of the economic recovery that is being touted. There has been a dramatic increase in enrolment at the university and college level. I have obtained figures which indicate that between 1980 and 1984, overall university enrolment in Manitoba increased by almost 30 per cent; in 1980-81 there was a university enrolment of 19,254; in 1981-82 an enrolment of 21,214; in 1982-83 it was 23,586 and in 1983-84 it was 25,066.
Manitoba is a small province with a population of over one million people but it has had a dramatic rise in university enrolment. There is the University of Manitoba, the University of Winnipeg and Brandon University. Just yesterday the Hon. Member for Brandon-Souris (Mr. Clark) delivered a good speech about Brandon University and told us what great strides it is making. For the edification of the former professor of that university, I want to indicate that perhaps the main reason why the university has been such a great university in Canadian history is that people like Tommy Douglas graduated from it and the House Leader of this Party, the Hon. Member for Winnipeg North Centre (Mr. Knowles), is its chancellor. It is therefore no surprise to me that such great things are happening at Brandon University.
In my own experience I have followed the BUNTEP and other programs rather closely. These have provided teachers' aids on the reserves and in the northern part of Manitoba. I believe that steps like this have been very helpful and I should like to see more emphasis being put on such programs.
The universities are located in the two most populated centres of Manitoba. The University of Manitoba and the University of Winnipeg are both in Winnipeg and, of course, Brandon University is in Brandon. It is true that some 60 per cent of Manitoba's population resides in Winnipeg while Brandon has about 34,000 people and also serves a larger surrounding area. This means that along Highway No. 1 in the southern part of Manitoba, within 100 miles of the United States border, there are these university structures and facilities but rural parts of Manitoba do not have the same privilege. Rather than have cutbacks in the universities at the present time, I should like to see them increase their extension programs. I raise these arguments, Mr. Speaker, in an effort to point out that the timing of this six and five program for post-secondary education is not very helpful.
In addition to the universities there are community colleges and technical colleges. In Manitoba there is the Red River
Established Programs Financing Community College, the Assiniboine Community College, one at The Pas, Manitoba, and these provide more technical training. The increase in enrolment in these colleges has also been rather dramatic. I believe there has been a 12 per cent increase in enrolment in some in both day and evening classes. The statistics that I have show that in 1980-81, 32,302 students were enrolled at colleges in Manitoba; in 1981-82, 35,245 students were enrolled and in 1982-83, 36,000 were enrolled. This shows a great increase in this aspect of postsecondary education.
There are also some denominational colleges which provide religious training and equip students for the Christian ministry, colleges such as the Winnipeg Bible College and Theological Seminary, the Canadian Nazarene College; the Mennonite brethren have a bible college in Winnipeg as well as the Canadian Mennonite brethren. These colleges could be affiliated with universities by way of teaching stations or through cross-credit transfer programs. They might even be members of certain associations which are related as degree granting institutions or diploma granting institutions. The colleges have also been experiencing a great increase in enrolment. Winnipeg Bible College often transfers credits to Brandon University in some of its programs. Last year the enrolment was up by 15 per cent.
These institutions represent the tax paying public but quite often they do not receive the recognition they should. In our multicultural and pluralistic society some of the programs they offer should receive some sort of funding to make sure that type of education is available to people who want it.
The Parliamentary Secretary who spoke earlier in the debate referred to the benefits the Canada student loan program had offered. I know, however, that with the increase in costs a large number of students, from rural areas especially, have not been able to avail themselves of some of these very important programs. Timing is a problem, Mr. Speaker, and I will deal with it.
We must put more emphasis on the challenges and opportunities of post-secondary education and realize that in order to develop more money is needed. There has been reference to mature students returning to training institutions in order to further their education. When I taught sociology at the University of Manitoba, at evening classes at Portage la Prairie, for instance, many people who would call themselves housewives-I would say there is no such thing as a housewife, but rather a domestic executive and household engineer-people who have raised a family and who have been working in the home, have often gone back to take one or two courses as a stepping stone to returning to full-time education. Many older people in my constituency have gone back to university to get a degree, something they would have liked to do a long time ago.

January 31, 1984
Established Programs Financing
As we consider the phenomenon which is occurring now of people going back to university later on in life, I feel it is important that we have some sort of comprehensive program wherein we address ourselves to this whole question of lifelong learning. With the development of high technology, it is necessary for people to become familiar with the way computers, word processors, all of these machines of the 20th century operate. It is important that we place emphasis along these lines.
My colleague, the Hon. Member for New Westminster-Coquitlam (Ms. Jewett), has addressed herself to the whole question of co-ordinating some of the aspects of post-secondary education. She has emphasized the necessity of having a Minister designated who will pursue and follow the whole area of post-secondary education. I would underline that particular suggestion because 1 believe it is one worthy of consideration and should not only be taken seriously but should be implemented.
As has been mentioned, there are too many different Departments involved with different aspects of post-secondary education, whether it be research and development or the Secretary of State. There are too many people with their fingers in the post-secondary education pie, yet there is no hand which co-ordinates the way these different fingers are delving in and out of the pie. I believe it is important for us to see that some of these things are reviewed, even the way the various associations, such as the Association of Universities and Colleges of Canada, AUCC, operate. I believe there should be reviews conducted of just exactly the way this whole system of post-secondary education is functioning.
From my own experience on the special parliamentary committee dealing with the participation of visible minorities in Canadian society, I know when matters are raised such as AUCC, many people are unfamiliar with the role it has in terms of informing people regarding the recognition of degrees from foreign universities and so on. I believe that organizations such as this have been remarkably weak in their ability to really keep our Canadian society informed in the way it should be informed regarding a lot of these issues.
In Manitoba we have found that a lot of the federal slack in this area of funding for post-secondary education has to be absorbed by the provincial Government. This has been done, in a way, because the provincial Government has made it a priority to see that there is accessibility to post-secondary education and, to my knowledge, there has been no increase in tuition fees since Premier Pawley's Government came into office. So there has been a recognition on the part of the provincial Government of this need. I wish there were a similar sort of recognition at the federal level.
I know that all aspects of education in Manitoba have been endorsed by various organizations. In fact, in a letter from the
Manitoba Association of School Trustees it was stated that that association was generally pleased with the provincial funding levels in 1983, and it emphasized the concern that the Minister of Education, Maureen Hemphill, has demonstrated in her commitment, along with the Government, to education in Manitoba. I believe it is important in this particular day and age when we have this increase in enrolment, keeping in mind the whole area of lifelong learning, that more money rather than less be assigned to this area of post-secondary education.
I would also like to mention that in addition to post-secondary education, and the items which I have underlined here, Mr. Speaker, this particular Bill also affects the area of health. I would like to raise one or two issues in this regard which are of concern to the people in Manitoba and to the elected Members of our provincial Government. Our own provincial Minister of Health, the Hon. Larry Desjardins, has expressed concern over the present inadequacies of federal-provincial proposals. In fact, at this time the federal Government is assuming only about 39 per cent of the costs which relate to health. In discussions which have been held, the federal Government has been willing in certain areas to go on a fifty-fifty basis. This has been in such areas as hospitals. However, the federal Government has been vacillating in certain other aspects of health care which we can consider to be part of the overall package of health care for the citizens of Manitoba. I refer to such things as the personal care homes and dental coverage where there are insurance programs. But the federal Government has not been willing to go on a fifty-fifty basis. The New Democratic Party Government of Manitoba has wanted these aspects of personal care homes and dental coverage to be included in any agreement.
There would appear to be a great difference of opinion, then, between the federal Government and the provincial Government as to what really constitutes health care; what is the nature and scope of health care. I urge the federal Government to broaden its definition somewhat in terms of some things it is considering with regard to health care.
It is with this in mind that I wanted to raise some of the concerns I have, as a Member of Parliament, with regard to Bill C-12. I feel that rather than cutting back, we should be making great strides in some of these areas. I refer to some of the issues which I have raised in the House with regard to some types of multicultural programs which we should be funding at the university level. I have specifically referred to regional research and resource centres in multiculturalism so that the people of Canada would become more aware of the richness of the resources which Canada has. Of course, one of the richest resources we have is our whole multicultural heritage. I have mentioned on other occasions the model I found at Washington State University, in its funding of programs with regard to comparative American cultures. I believe it is important for us to see that there is a greater dissemination, awareness and exposure to the multicultural history of

Canada. Questions have been raised in the Elouse with regard to Canada Post recognizing the Chinese New Year. If we had an educational thrust which made people in general more aware of the multicultural heritage in Canada, we would not have these problems.
[DOT] (U50)
I see, Mr. Speaker, that my time has expired. In closing, I would like to indicate that we in the New Democratic Party feel that people are our greatest resource and this is not the time to be introducing a Bill such as this. We wanted to share these concerns at this time.


Mr. Scott Fennell (Ontario):: Mr. Speaker, I am delighted to speak on this Bill. I have only to look through the postsecondary entitlements and the comparison with and without this Bill to see that in 1983-84 the provinces will be losing $163.88 million for education. In 1984-85 they will be losing $177.37 million. Mr. Speaker, every newspaper that you open today refers to the lack of education of our youth in high-tech skills. This is the wrong time to be reducing the entitlement to the provinces.
I heard the Hon. Member for Annapolis Valley-Hants (Mr. Nowlan) talking about the difficult times they are having in the Maritimes and the fact that their entitlement will be cut more than that of the provinces of British Columbia and Alberta. Mr. Speaker, if there is any part of this country to which we should be addressing the importance of education it is to the Maritimes. The Maritimes have had basic, built-in problems for many years. The one way that they could come into their own is with brain power. Through education in high technology they could be self-sufficient. The Maritimes are not satisfied to be in the position they are in today. Deep down they do not want handouts. They would like to be a self-sufficient part of the Canadian society, contributing on an equal basis. Cutting back in the Maritimes is the most severe mistake that this Government could make.
I have a record here, Mr. Speaker, of some of the universities in the Maritimes. Of the general operating expenditure of the University of New Brunswick, 17 per cent is spent on research. That is very commendable. How can they keep that up if the basis of funding that has been agreed to going back to Confederation is cut back? This is wrong, Mr. Speaker. Any Member on the Liberal side who comes from the Maritimes should vote against this Bill because it is doing a disservice to that part of the country. They are fine people and would like to have their own industries. They would like to be able to adapt themselves to new technology. Through new technology, Mr. Speaker, this world becomes much smaller. Where you live becomes less important if you have those facilities. If the Government wanted to cut back on Ontario I would argue that point. However, I am much more strongly opposed to cutting back in the maritime provinces. Look at the youth unemployment in Newfoundland, Mr. Speaker. That is a province that
Established Programs Financing could be totally self-sufficient. With their oil potential from the sea they should have a larger proportion of funds for secondary education.
I would particularly like to speak about Memorial University. The general operating costs of Memorial University are $79 million. Their research costs are $11,783 million. Mr. Speaker, the Government is going to take that away from a critical part of the country and from the youth that are now unemployed in Newfoundland. I think that is a serious error. To try to apply the formula of six and five to post-secondary education is insane. The rest of the world has increased their expenditures on research and development and education. For example, in Japan there are 400 engineers for every one million people. Our record is around 40 engineers.
The one thing this country has to do, Mr. Speaker, is to increase its Gross National Product so that we can afford to provide these social programs. If we are going to increase the Gross National Product we cannot afford to cut back on post-secondary education. The Government is doing the wrong thing again. If the public thinks carefully, this should put us back up to 62 per cent in the polls. Our Government, Mr. Speaker, would increase the funding for research and development through the universities and increase the funding for post-secondary education. We know that the only countries that are doing well today have done that.
I am in the middle of a report from the American Congress, Mr. Speaker, dealing with how they have gotten so far behind. Their unemployment is not acceptable yet their unemployment is far less than ours. Their inflation is not acceptable yet their inflation is far less than ours. They are addressing the critical problem of research and development to allow people to get jobs.
My riding encompasses all of the area east of Toronto to Oshawa. Durham College has been an important facility to the City of Oshawa. The young people in my riding and over as far as Bowmanwille have been raised with the idea that if their grandfather worked in the "Motors", their father worked inthe "Motors" and they will work in the "Motors". Mr. Speaker, they will not work in the "Motors" because the company is changing. General Motors is going to be as modernized as any Japanese automobile factory within the next five years. At the present time they have one production line which has not gone onstream. I believe it has 117 robots. Mr. Speaker, those robots can work three shifts. During the night they can probably work with one man supervising them. The point I am trying to make, Mr. Speaker, is that we cannot afford to cut back on post-secondary education.
There is going to be a conference of the Association of Colleges of Applied Arts and Technology of Ontario. On February 15 and 16 they will be reviewing their role. What kind of role will they have if there is a cutback? Let us take it one step further. We have heard a great deal about primary education in this country and the illiteracy of students who

January 31, 1984
Established Programs Financing graduate from secondary schools. Those students have difficult problems managing their first year of university.
A cutback in post-secondary education will cause a ripple effect through the system. It is the Government's responsibility to educate people and it is shirking that responsibility. Instead, it is trying to cut its commitment on the basis of six and five.
I cannot explain intensively enough the importance of high technology and particularly its development in those parts of Canada which have a high unemployment rate. 1 cannot emphasize enough its importance to the Maritimes. Above all, education for those people should not be cut back because it is their one chance to be self-sufficient and to take pride in themselves. They are intelligent people who are capable of developing industries in that part of Canada.
1 cannot understand the logic of the Government's action in another area. It has a $1 billion youth opportunity program, the purpose of which is nothing but partisan politics. That $1 billion should have been put into the re-education of Canadians in their mid-forties and mid-fifties who will be structurally unemployed as new technology takes over. Instead, a billion dollars is being thrown into make-work projects which will not add ten cents to our GNP.
In order to increase our GNP, productivity must be increased. In order to increase productivity, youth and those presently in industry must be educated. This Bill is an absolute insult to Canadians. Since these cutbacks will discourage our doctors currently practising here, how will we be able to educate and encourage a sufficient number of doctors to remain in this country? A cutback in this area means that research is cut back and that is something we cannot afford to do. 1 repeat that this will have a ripple effect through the whole economy.
I cannot accept this Bill because it is unfair and does not apply equitably across the country. I suspect the Government believes that since it gives the Maritimes so much it does not need to give them any more. But the Maritimes must receive more in the right areas in order to help them become self-sufficient. I believe that is very important.
As I indicated at the outset, the only way we can afford the wonderful programs in this country is to increase our GNP through increased productivity. It is only our youth and our presently employed who can increase productivity, and any action which adversely affects them will affect the future of this country. We will not be dealing with a $31 billion deficit; it will be much higher. Our programs must grow with the economy.
The other part of this Bill concerns medical cost-sharing. The Government, in an attempt to rectify its mistake, is now saying that it will go fifty-fifty with the provinces. However, it is still trying to stick to six and five. As new technology in
medicine is developed, costs rise. For instance, a nuclear scan is far more expensive than an x-ray machine, yet new technology is continually improving to the point where the nuclear scan is almost out of date.
The Government is not contributing its fair share toward medicare. The Government has indicated in Bill C-3 that the provinces cannot get their money if they implement user fees or the like. In Bill C-12 the Government is indicating to the provinces that it will keep them limited as to how much money they can spend. This is literally talking out of both sides of one's mouth. The Government should be consistent. If the Government wishes to implement the proposals of Bill C-3, which we have supported, then it should put the funding in place that will enable us to have medical attention that is as good as anywhere in the world. While our country has been blessed with resources, we have also been blessed with knowledgeable people. If the Government cuts back on its share of medical costs it will do so to the detriment of every citizen in Canada.
I am afraid that the Government has its priorities totally clouded. It is not addressing the important issues because it is terrified that it is on its last legs. This would be called a lame duck congress in the United States. This is a lame duck Bill which does nothing.
The Government should at least live up to the commitment that was made when medicare was originally introduced and to the original commitment with respect to post-secondary education. It should not impose cutbacks in these two areas. The way we can afford medicare is to increase our GNP through increased productivity. That productivity will be increased when the skills of the people in this country are improved.
Our Party will not vote for this Bill because it is inequitable, unfair to institutions and to those who have dedicated their lives to research and the education of Canada's youth. This Bill is not fair to our country. Canada must be built on technology because resources are no longer the solution. We must refuse to accept this Bill because funding to educational institutions should be increased in order to ensure the protection of primary education in Canada.


Mr. Blenkarn:: Mr. Speaker, the Hon. Member spoke about a $1 billion youth fund. It seems to me that this Bill cuts back on the money available for education of young people. Last year funding was cut by $118 million and beginning in March of this fiscal year it will be cut by another $260 million, for a total of $378 million. Why do we have a $1 billion youth fund on one hand and a cutback of the services available for educating young people of $378 million on the other?


Thomas Scott Fennell: That is a very good question. The priorities of the Government are out of whack. The Government is frightened and therefore operates in fear of doing the wrong thing. It knows that it will lose the next election so it is trying to buy votes through part-time work.


David Charles Dingwall: Oh, come on!


Thomas Scott Fennell: On the other hand, it is not supporting education by increasing funding through the universities and colleges of this country. It is a disgrace to take $370 million from education and put it into make-work projects. There is an Elon. Member from Newfoundland who will support this Bill. Excuse me, he is not from Newfoundland but from Cape Breton. It is one of the most beautiful parts of this country. But we need to assist those people in developing their brain power so they can create industries in that region. This is very important. I think if he and I were outside the House we would agree on this. The people of Cape Breton are so capable of learning they should be given the facilities to learn. They should not be suffering from cutbacks by the federal Government.


Mr. Fisher:: Mr. Speaker, I just want to observe after that answer that I have never heard such an eloquent reason for continuing support of geography lessons. It seems to me the Hon. Member would be well advised never to visit Cape Breton Island or he might learn the difference between Cape Breton Island and Newfoundland.


Thomas Scott Fennell: Mr. Speaker, I do know the difference between Cape Breton Island and Newfoundland. They are both fine parts of this country. Admirable people live in both regions. They should be encouraged to take post-secondary education and thus create industries and jobs.


Mr. Taylor:: Mr. Speaker, it is refreshing to hear the Hon. Member for Ontario (Mr. Fennell) spend a good deal of his time on productivity. In Canada today and in this House we spend a lot of time talking about almost everything except productivity. Productivity, as the Hon. Member said, is what will give Canadians better pensions and give our aged, crippled and retarded a better standard of living.
In my view, productivity depends on brawn and brains. Many people in Canada do not have an opportunity to get an education, but they add a tremendous amount to productivity through hard work, the strength of their backs and through the trade or the industry in which they work. We have tremendous resources in this land that will require development by the best of brains. We have vast supplies of coal in Cape Breton, in Alberta and in Saskatchewan. That coal should be used in Canada today to do away with the acid rain problem. Our coal is practically sulphur free. We need the technology developed by the brains of Canada in order to find ways and means to make that coal attractive to the industry in central Canada. That is just one simple illustration. We could thus save millions of dollars of destruction caused by acid rain and provide thousands of jobs. We require the improved technology that will come through primary, secondary high school and univer-
Established Programs Financing sity education. I want to commend the Hon. Member for spending so much time on productivity.
In considering productivity, the Hon. Member mentioned the necessity for education. I am sure the Hon. Member did not mean in any way to leave out the other side, those who have not had the privilege of an education but who add to productivity. I agreed with the Hon. Member that we need to spend more money on education, not less. But we need to encourage those who have the brawn as well as the brains to increase our productivity.


Thomas Scott Fennell: Mr. Speaker, I mentioned briefly in my speech my deep concern for what I referred to as the structurally unemployed. Those are the people with brawn who built this country. We will still require a large number of those people to man our industries. But by cutting back our education allowance, we cut back the opportunity for those people to upgrade their skills, perhaps on the plant floor.
Let me give an example. Instead of men slapping wheel discs on cars in General Motors, this work will be done by a robot. Men can be trained to operate the robot. Similarly, in the coal industry, much of the coal will be electronically mined as opposed to the old days when people used picks and shovels. Cutting back on education grants directly affects those people who are the most severely hurt in this new era which we are entering. I support the Hon. Member for Bow River wholeheartedly. We must look after those people during this process.


Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, one would have thought in reading the remarks made by the Minister on Friday, remarks which frankly I do not attribute to him personally because they are so fatuous and so ill-conceived that they have to be authored by someone else. They were authored in a vain attempt by this Government, as we have seen over the past year, to try to draw attention to itself, to milk every program of government as though it were its own. Possibly this is motivated by a certain philosophy in the Cabinet that says, in so far as Quebec is concerned, the Government has to get its credit because it will not get the credit from the Levesque Government. That is right. But that is not so with regard to Canada.
I am not interested this morning in the quality of the established programs, medicare, hospital care and post-secondary education, as some of my colleagues have been. I want to point out to the Minister the first fatuous remark that was made in his statement, and here I refer to Hansard for January 27, 1984, at page 814, which reads:
Federal support for post-secondary education has brought significant benefit since this program began in 1967.
Who is the Minister trying to fool? When I came into this House in 1957 the program already existed. It did not exist with regard to the Province of Quebec because the then Premier of the province felt that contributions or assistance to

January 31, 1984
Established Programs Financing post-secondary education was an unwarranted intrusion by the Government of Canada in a strictly provincial jurisdiction.
I recall that my former colleague, the then Minister of Finance, the Hon. Donald Fleming, negotiated an arrangement with the Province of Quebec whereby the province would be transferred a number of tax points without any conditions but well knowing the revenue would be used for post-secondary education. This was done by Quebec governments in their own indeterminable fashion in the years that followed.
We have had a succession of Fiscal Arrangements Acts. I think during the time I was finance critic and even when I was on the Government side prior to that there were negotiations for amendments. There were changes. 1 remember that revenue from resources was a very, very useful portion for the equalization of fiscal resources for the provincial governments.
if anyone is interested in why we have fiscal arrangements, let that person go to the report of the Rowell-Sirois Commission in the mid-1930s which was the source or inspiration for fiscal sharing. There is one thing 1 must protest, and that is the suggestion that the Government of Canada contributes all the money under these arrangements. Balderdash! The federal Government does not contribute; the federal Government collects moneys which the provinces would be entitled to collect on their own and then by agreement-and as far as this Government is concerned, an agreement is something which is to be broken on any given Monday morning-they are allocated or redistributed to the provinces under a formula. I do not need to go into the formula involving per capita, the history of resource production and so on.
Why is it that under the earlier Act the Province of Alberta with its petroleum industry contributed far more before the National Energy Program and the raids by this administration on that industry? I admit that in the early days the Province of Alberta was a have-not province. I saw the difficulties in resource revenues when there was included the sale value of leases; it was an alienation of resources. What was a disposal of capital asset was treated as revenue; but such was agreed by the federal Government and some of the provinces, and Alberta suffered under this unfortunate interpretation. There was only one voice against the others. Everyone had their noses into the through of this new-found wealth in Canada.
That history is a long and very interesting one, but it is totally ignored by the present administration which wants to break the agreement of 1977 as it broke it in 1982 by the block funding principle. Now it wants to impose unilaterally the six and five as though the money going to the provinces under Established Programs Financing was the federal Government's money. Whether it is by the calculation of the revenues arising out of the transfer of tax points or whether it is a cash distribution, the Government of Canada says to the provinces: "That is our money. In the spirit of the agreement, we will
limit you to six and five for 1983-84 and 1984-85". Nonsense! That is a total breach of faith.
For what are agreements made between the strata of government in this country representing the same people? One would almost think that the Government of Canada represented one people, that the provincial governments represented another people, and that there had to be something gained, one over the other. That is the mentality of the centralizers and the centralizing philosophy of this administration and of the man-derinate which support it.
We see how much interest there is in this arrangement. We must remember that it is retroactive because in so far as post-secondary education is concerned, it will go back to April 1, 1983. There are some additional changes which will be made when the other piece of centralizing or power-grabbing legislation called the "Canada Health Act" comes up for discussion and implementation. That date will be April 1, 1984.
On Friday the Hon. Member for Mississauga South (Mr. Blenkarn) put many figures on the record. I commend them to Hon. Members. His view of the Act coincides with mine even though I have not discussed it with him. But such is my assessment of this Act and what it drives at that I find myself-or shall I say that we find ourselves-on a common path. I refer to what the Hon. Member said, as reported at page 817 of Hansard:
The original agreement made in 1977 between the federal Government and the provinces looked after and put all the various shared cost programs dealing with post-secondary education, medicare and hospitalization into a block of funds called the established programs fund. The amount of money to be transferred by the federal Government to the provinces was made up of what was deemed to be certain transfers of tax points and certain equalization of that amount in a cash transfer. It was a block funding arrangement
The 1977 agreement could not be put more succinctly. Even though that was a derogation in principle from the original agreements because the block funding was established upon a moving formula with a three-year averaging of the growth in the GNP, in an inflation period the provinces saw their share of funds coming down because the national GNP went down. There was not any proportionate growth to costs in the moneys returned to the provinces which were properly theirs, and we have had difficulties in the provinces with health care, medicare and post-secondary education. It is only those provinces in a have position which have been able to take funds from other sources to meet the legitimate but highly escalating costs for health care, medicare and post-secondary education. I say to my friend from Ontario (Mr. Fennell) that I am not too sure that more money has to be spent on education. The big problem in this country is getting productivity out of education. We have been living in a fool's paradise where a lot of the so-called education being foisted upon our youth from primary school on has been totally and irrevocably opposed to any progress we should have been making with regard to productivity and to meet the competitive edge of the world about us.
January 31, 1984

We have been living in a cloud cuckoo-land. This Government wants to accentuate that.
This Bill will result in a reduction of payments to the provinces. I will not read the table I have before me which shows how the post-secondary entitlements are divided on the basis of Bill C-12. However, there will be a reduction of roughly $120 million in 1983-84 and $260 million in 1984-85.
The federal Government is going to cut back on its cash allotment. For a measly $118 million, the Government of Canada unilaterally proposes to amend an agreement entered into bona fide by all the provinces. This is supposed to be the spirit of Confederation. Any agreement may be torpedoed if the administration of the Government of Canada deems that it is to its advantage to do so.
I find this Bill totally repugnant and not in the spirit of our Confederation. Along with our Prime Minister (Mr. Trudeau) and any number of other Ministers, the lackeys and hacks are writing here, speaking there, praising this administration for having brought to Canada a Constitution which outlines the rights and responsibilities of the Government of Canada and the governments of the provinces. They are established as a right. They enter into agreements on behalf of the people of Canada, who are the same people whether they are administered under federal laws in certain fields or provincial laws in other fields.
Any agreement entered into by the Government of Canada with the provinces, and we have seen any number of them, may be unilaterally amended by a supine majority in this House. It simply has to suit the centralizers, whether it be the Minister of National Health and Welfare (Miss Begin), who is right up there in the front, the Prime Minister, the Minister of Finance (Mr. Lalonde) and any others, as well as their support mandarinate. It is they who shall have the say. We find the acolytes on the Government side merely applauding and saying "Amen, amen". That is the Government of Canada? No, Mr. Speaker. I hope this House will rise and unite in voting against this Bill.


Donald Alex Blenkarn: Mr. Speaker, the Hon. Member comes from the Province of Alberta. We have not had the opportunity of hearing from Government speakers. 1 was wondering if the Hon. Member has the opportunity to discuss with provincial treasurers from time to time whether the provinces ever agreed to this division of the block fund with 67.9 per cent for health and 32.1 per cent for education. It is difficult to find out what the Government knows about the provinces agreeing to this breaking up of the block fund. Has the Hon. Member for Edmonton West (Mr. Lambert) had the opportunity to discuss with provincial treasurers whether they agreed to have the block fund set out in the Fiscal Arrangements Act split into the health fund and post-secondary fund?
Established Programs Financing


Marcel Joseph Aimé Lambert: Mr. Speaker, I have had limited discussions with the provincial treasurer of the Province of Alberta and some of his colleagues. Since Hansard is a document which enters into the home, I would not put the language that was used on the record. It is the same position, the same as in 1977. The federal Government uses its leverage on the have-not provinces which dare not object for fear that there will be further penalties imposed. The Provinces of Ontario, Alberta and British Columbia object to this single-handed amendment of agreements entered into bona fide over the years. My colleague from Bow River (Mr. Taylor) was a member of the Alberta Government for many years. He will recall the spirit that motivated the previous Federal-Provincial Fiscal Arrangements Act. We did not have any of this one-sided truck that we have today.
I recall when medicare was brought in by the administration of Lester B. Pearson. It was the boast of the then Minister of National Health and Welfare, I think the late Judy LaMarsh, and also of the Prime Minister, that the Government of Canada would assume 50 per cent of the costs. Alberta, which had an efficiently functioning system of medical services insurance, MSI, was finally jaw-boned and pressured to join the system despite the fact it felt that it had a more efficient system.
I wish the clock could be turned back because the present day system of health care is now controlled by the cost accountants. This is true not only at the federal Government level, which says it is going to control the administration of health care, but also in the provinces. Hospital administrators and doctors who occupied positions of responsibility in the hospitals will tell you some of the horror stories inflicted upon either the medical profession or the hospitals, all under the heading of controlling costs. The Government of Canada, through the block funding program and the changes which have occurred, has reduced its contributions to medicare. In Alberta, Mr. Speaker, two or three years ago it was down to 38 per cent. One can understand why there is resentment, but none of those people across the way, certainly not the Minister, will have to explain why the Government of Canada has reduced its contributions. The net result is control by the cost accountants and the poor Canadian who requires health care is at the end of the line. If there are going to be any further cuts, Mr. Speaker, you and I know who is going to pay for them.


Gordon Edward Taylor: Mr. Speaker, the Hon. Member for Edmonton West (Mr. Lambert) is an outstanding and highly respected lawyer as well as a parliamentarian. When medicare was first enacted in this country, the responsibility for health care under our Constitution was and still is that of the provinces. As the Hon. Member just said, the federal Government entered into an agreement with the provinces where it would pay 50 per cent of the costs of medicare and hospitalization. Now, instead

Established Programs Financing of paying 50 per cent, it is bringing in unilaterally this Bill which will actually give Alberta 24 per cent of its costs, unless you include the tax transfer agreements which have nothing to do with medicare and which would bring it up to 34 per cent of the cost.
I ask the Eton. Member: In his view does he think the federal Government has the right now under the BNA Act to force this type of thing upon the provinces without an agreement?


Marcel Joseph Aimé Lambert: Mr. Speaker, with all due deference to my colleague, who has I think much overstated my capacity as a constitutional lawyer, it is my view that the Minister of National Health and Welfare has no business whatsoever in dealing with the administration of health care services in this country. She is using the spending leverage of the Government of Canada to get this agreement. We cannot in any way divorce this Bill from the extension of the six and five program to funds over which the Government of Canada should have absolutely no control, because the funds do not belong to it. In many instances it is merely acting as a collection and distribution agent. This is part and parcel of what was finally agreed to in order to put an end to the jungle of tax levies and collections.


Mr. Deputy Speaker:: Order. ( regret to interrupt the Hon. Member but the period allotted for questions and comments is terminated. The Hon. Member may continue briefly with unanimous consent of the House. Is there unanimous consent?


Some Hon. Members:: Agreed.


Marcel Joseph Aimé Lambert: Thank you, Mr. Speaker, and I wish to thank Hon. Members as well. I will be brief.
We have thus seen an intrusion and a self-assumed right to amend agreements between sovereign governments. It was, as I said, also the extension of the six and five program. It is also related to the Minister's dogmatic, in fact one might say dialectically dogmatic, insistence that she and her officials will run the health care system in Canada. To this extent they have used demagoguery, and they have inculcated in the people of Canada some sort of spirit of acquired right to medical Services; that their right to medical services is the equivalent to the right to free speech, the right to worship, the right to freedom and the right to freedom from imprisonment without a fair trial. We now have this sort of floated right to medical services. I do not think that would stand up at all, Mr. Speaker for the reasons that this is an undue extension of six and five into a field where the Government of Canada has no right of ownership of the funds, and that there is a centralization right in the Minister of National Health and Welfare to control medical services in Canada.


Mr. Cosgrove:: Mr. Speaker, I rise on a point of order. After consultations with the House Leaders of all Parties and discussions this morning, I have their consent and now seek the unanimous consent of Members to table the report of the Special Joint Committee on Senate Reform.


Mr. Deputy Speaker:: Order, please. That request would still have to be consented to by the House and it should be worded in terms of moving to presentation of reports from standing and Special Committees at this stage, after which we would revert to Government Orders.
Hon. Members have heard the proposal. Is it agreed?


Some Hon. Members:: Agreed.



ROUTINE PROCEEDINGS


Paul James Cosgrove: Mr. Speaker, I have the honour to present the first report of the Special Joint Committee on Senate Reform in both official languages on which, pursuant to Standing Order 69(13), the Committee requests a comprehensive response.
[Editor's Note: For above report, see today's Votes and Proceedings.]



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Lalonde that Bill C-12, an Act to amend the Federal-Provincial Fiscal Arrangements and Established Programs Financing Act, 1977, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
Mr. David Orlikow (Winnipeg-North):: Mr. Speaker, we are dealing with a Bill under the provisions of which the Government proposes to limit the increase in the financial support it provides for post-secondary education to 6 per cent for the year 1983-84 and to 5 per cent for the year 1984-85.
January 31, 1984

Members of Parliament will recall that until 1977 the federal Government encouraged and supported, through costsharing arrangements, a number of activities in fields which had very important and beneficial effects on most Canadians. It cost-shared post-secondary education programs, it cost-shared the provisions of our universal medical insurance and hospital insurance plans. Essentially, the federal Government paid 50 per cent of the cost of those programs. Because the federal Government offered to pay 50 per cent or more of those programs, the provinces were encouraged and induced to become much more involved in post-secondary education, to establish universal medical insurance plans and universal hospital insurance plans.
Great progress was made until 1977, when the Liberal federal Government unilaterally moved from the cost-sharing programs, under which it paid 50 per cent or more of the cost of post-secondary education, hospital and medical insurance, to block funding. Members of the New Democratic Party were the only Members of Parliament who opposed the Government's plan to move from the former costsharing arrangements to block funding. We did that because we felt that if the provinces were not required, as they had been under the old programs, to match the funds provided for post-secondary education, hospital insurance or medical insurance on a dollar for dollar basis, many of the provinces would use the money available to them under the block funding system for other purposes.
The other thing we knew and tried to point out to Members on the Government side and in the Official Opposition was that if the block funding provided less funds in the future than it had in the past, if the cost of post-secondary education increased by more than the federal Government proposed to give, the provinces would be put in a very difficult situation. They would either have to find extra money to maintain the level of services being provided, or they would have to cut back on the services. The other alternative for the provinces would be to increase the fees which students paid. We pointed out that these things would happen, and on the basis of what has happened since we are sorry that our predictions of the dire consequences were proven well founded.
What we are debating in this Bill today is the intention of the Government to limit its increase in financing for postsecondary education to 5 per cent in the coming year. If we were still operating under the policy that existed before 1977, the increase this year from the federal Government would have been 11 per cent rather than the 5 per cent the Government proposes. The effect on post-secondary education and on the provinces is, has been and will be disastrous.
Most if not all provinces are already faced with very substantial deficits. The first two years that the present NDP Government of Manitoba was in office it tried to maintain the standards for post-secondary education which had previously been established. Increases for post-secondary education in the first two years it was in office were substantially more than 10 per cent. If my memory serves me correctly, it was 16 per cent in the first year and 11 per cent last year. The Province of
Manitoba is faced with a very large deficit because of the recession and the resulting drop in revenue which all provinces have experienced. This year the province is saying that the increase to universities and community colleges will have to be limited to 3 per cent. Everyone knows that this will have a very adverse effect on post-secondary education. The province has no alternative. To a large extent it has been put in that position as the result of the policies of the federal Government, unilaterally decided upon, which led to a situation where the provinces simply cannot find the money to maintain the standard and quality of service they have enjoyed up to now.
We are told that this limit on the amount of funding that the federal Government would contribute to post-secondary education at this time was necessary because inflation had to be brought under control. For the time being inflation is under control but one of the serious consequences of the policies of restraint is unemployment at an all-time high-higher than it has ever been since before World War II. There are 1.5 million people or over 11 per cent of the Canadian work force unemployed. Almost 20 per cent of young people in the work force cannot find jobs.
May I call it one o'clock, Mr. Speaker?


Mr. Deputy Speaker:: Order, please. It being one o'clock, this House stands adjourned until two o'clock p.m.
At 1 p.m. the House took recess.


[Stage Direction]
AFTER RECESS The House resumed at 2 p.m.


Mr. John McDermid (Brampton-Georgetown):: Mr. Speaker, there is a sad case in my riding where Revenue Canada not only has shown no compassion or understanding, but has cruelly and without warning closed out a senior citizen's bank account. When my constituent retired in 1982 he received a lump sum payment from which income tax was deducted. This money was used to put a new roof on his home. Unfortunately, the lump sum payment put him in a higher income tax bracket, and he was informed that he owed Revenue Canada an amount just over $1,000.
As an honest tax-paying citizen, he approached Revenue Canada to make arrangements for the payment of this debt. Revenue Canada agreed that this debt could be met by payments of $50 per month. Just prior to Christmas, and after two monthly payments of $50, this gentleman went to his bank

January 31, 1984
to make a small withdrawal, and was humiliated on being informed that he had no money because his bank account had been closed by Revenue Canada. Not only did Revenue Canada not comply with the $50 per month agreement, but it closed this man's bank account with absolutely no warning whatsoever.
Now, I ask, in all that is decent and honourable, that Revenue Canada and our Government take a long hard look at its methods of extracting payments from citizens who acknowledge their debt and are doing everything in their power to meet their obligations.



AGRICULTURE


Mr. Rolland Dion (Parliamentary Secretary to Minister of State for Economic Development and Minister of State for Science and Technology):: Mr. Speaker, UPA leaders from the Quebec City region, representing farmers in the riding of Portneuf, have asked to meet the Minister of Agriculture of Canada (Mr. Whelan) as soon as possible.
As a result of weather conditions in the spring and summer of 1983, forage crops-mainly hay-and potato crops suffered serious losses, in some cases as much as 50 to 60 per cent. I therefore ask the Minister of Agriculture to meet as soon as possible with representatives of the Union des producteurs agricoles du Quebec in order to examine forthwith ways of helping these farmers who are in a very precarious position at the beginning of the new year. I also ask Cabinet, and especially the Minister of Finance (Mr. Lalonde) to pay particular attention to any requests he may receive from the Minister of Agriculture in this respect. Mr. Speaker, in Portneuf, farming represents 50 per cent of our economic activity. Thank you.



EMPLOYMENT


Mr. Gerry St. Germain (Mission-Port Moody):: Mr. Speaker, the Government opposite has designed patchwork, shortterm job-creation programs which are leading to the creation of a major recycling scheme-not the recycling of metal or paper, but the recycling of people. The Liberal Government is creating a master plan to recycle the unemployed.
Unemployment insurance recipients are put on Section 38 programs; then those programs are extended. When a Section 38 program runs out, the unemployed person becomes an exhaustee and is hired on a Canada Works program. When the Canada Works project is completed the person is then eligible
to requalify for unemployment insurance benefits again. It is one big vicious circle, a treadmill for the unemployed, operated by the Liberal mismanagers, and powered by deficit money which you and I owe.
There are no long-term solutions offered by the Liberal wrecking crew, Mr. Speaker, just government controlled, public financed, recycling programs. Canada Works, NEED, LEAP, and the other Liberal programs are garbage. They are components of an over-all master plan which is designed to have the Big Brother Liberal Government pull all the strings.



HUMAN RIGHTS


Mr. Roland de Corneille (Parliamentary Secretary to Minister of Veterans Affairs):: Mr. Speaker, recent events in Argentina are tremendously encouraging to all of us who are concerned to see an end to the use of torture and oppression of political opponents in Latin America. In Uruguay, however, one of the most notorious cases of cruel oppression is that of the distinguished mathematician and parliamentarian, Professor Jose Luis Massera. He was tortured eight years ago, and has been held in harsh prison conditions since that time.
A world-wide campaign on behalf of Professor Massera was begun two years ago by a Canadian group, The Canadian Committee of Scientists and Scholars. As part of that campaign, our Canadian Nobel Laureate, Dr. Gerhard Herzberg, and 50 other Nobel Laureates throughout the world have asked for action by the Government of Canada and the other Governments which are members of the Human Rights Commission of the United Nations, which will be in session in Geneva beginning February 6, 1984. These Nobel Laureates ask their Governments to instruct their delegation to this session of the Human Rights Commission to press strongly, ardently, and unrelentingly for the release of Massera. I hope that our Government will give such instruction to our delegation and that Members of Parliament will support that initiative.



NUCLEAR ENERGY


Mr. Doug Anguish (The Battlefords-Meadow Lake):: Mr. Speaker, since this House reconvened on January 12 there have been numerous interventions about the uranium industry and, in particular, Key Lake. I personally have risen 15 times in the House since 100 million litres of radium 226 contaminated water spilled at Key Lake. I believe we have successfully found out why and how the spill occurred. Still many questions remain in people's minds about this particular

incident, as well as concerns about other phases of the nuclear fuel cycle.
The Hon. Member for Regina East (Mr. de Jong), the Hon. Member for Saskatoon East (Mr. Ogle), the Hon. Member for Prince Albert (Mr. Hovdebo), and myself visited Key Lake and Rabbit Lake mine and mill sites on Thursday, January 26, to see first hand the operations and to discuss mutual concerns. Following our visit we feel strongly that there are valid and pressing concerns about the environment, regulatory enforcement, safeguards, and contingency planning, as well as worker occupational health and safety. It should be noted that these concerns are also prevalent throughout the nuclear fuel cycle whether it be mining, milling, refining, or nuclear reactors.
While we note that the Atomic Energy Control Board has ordered cleanup and remedial action in regard to the Key Lake spill, will AECB assure us that a lesson has been learned and regulations will be put in place to ensure similar spills do not occur elsewhere?
Today I call upon the Government to launch a royal commission to examine the entire nuclear fuel cycle in regard to occupational health and safety, environmental protection, contingency plans to handle emergency situations, and the economic viability of the over-all industry. As a result of such an inquiry-


Mr. Speaker:: The Hon. Member's time has expired.



CANADIAN BROADCASTING CORPORATION


Mr. George Baker (Gander-Twillingate):: Mr. Speaker, the time is long overdue for the CBC to allocate more resources to the Newfoundland region and to expand television coverage in Gander and central Newfoundland with studio and production facilities. The CBC in Newfoundland, Mr. Speaker, has, I believe, some of the best news and broadcasting personnel in the country. However, because of the lack of t.v. studios and production facilities, the coverage of central Newfoundland on television is just not up to scratch.
This anomaly of CBC presence and coverage in Newfoundland can be overcome if the Corporation would allocate more resources to the Newfoundland region and then decide to establish a television station in the central portion of the province. It is interesting to note, Mr. Speaker, that CBC Radio, obviously manned by professionals, in the central portion of the province, has the highest morning ratings of the three competing radio networks in the province today.
I join the Gander Town Council and the Gander Chamber of Commerce, and all the other interested parties in the central portion of the province, in calling upon the Corporation to carry out this expansion as soon as possible and to allocate the required resources to the Newfoundland region.



VIA RAIL


Mr. David Kilgour (Edmonton-Strathcona):: Mr. Speaker, during 1981 the Government cut one-fifth of VIA Rail's passenger service across Canada, in the 1974 election campaign Liberal candidates called for a revitalization and re-equipping of our passenger rail service, but when re-elected they simply went on cutting the service across Canada. Between 1972 and 1984 our tourist industry, which has the potential to be our largest industry and employer by the year 2000, lost almost 50 per cent of our 1972 share of the world tourist industry.
The task force of the Progressive Conservative Party concluded in 1981, first, VIA's losses were grossly overstated; second, VIA needs a clear mandate in a VIA Rail Act; third, VIA must be modernized and expanded. Today, Mr. Speaker,
I believe that these conclusions are more valid than ever, with one and one half million of our fellow citizens out of work. Canadians need passenger trains with proper funding and equipment, whether in western, central, or Atlantic Canada. The rail mode will then compete effectively with air and highway modes, and tourism will improve right across the nation.



SEARCH AND RESCUE


Mr. Brian Tobin (Parliamentary Secretary to Minister of Fisheries and Oceans):: Mr. Speaker, last Friday in Corner Brook, Newfoundland, I urged both the Government of Canada and the Government of Newfoundland to refer the question of safety in winter drilling for offshore oil and gas to the royal commission on the Ocean Ranger for an interim report to determine what constitutes a reasonable helicopter and fixed wing aircraft facility for Search and Rescue Canada.
Mr. Speaker, you may know very well of the controversy in recent weeks over the question of safety during the winter drilling season. You may know as well about the conflicting statements and claims being made in this regard. It is my firm belief that politics has no business whatsoever entering into the question of safety. Safety parameters can only be established by independent, non partisan experts and consultants. To this end I have telexed both the Minister of Energy of Canada, (Mr. Chretien), and the Minister responsible for the offshore in Newfoundland, Bill Marshall, requesting that the royal commission on the Ocean Ranger tragedy be approached to give an opinion on the adequacy and displacement of current search and rescue facilities in the province.
I am distressed to hear that a representative of that commission commented that the commission was not interested in getting involved in controversial matters and did not expect to

January 31, 1984
be asked to do so by either Government. Mr. Speaker, I remind commission members that their mandate was born out of controversy and human tragedy. It is precisely their job to advise government on how to avoid future loss of life. There is nothing so tragic, Mr. Speaker-


Mr. Speaker:: Order. The Hon. Member's time has expired.



LABOUR CONDITIONS


Mr. Bob Corbett (Fundy-Royal):: Mr. Speaker, thousands of New Brunswickers are suffering the chilling realities of unemployment this winter. Throughout shipbuilding, manufacturing, construction, fishing, and forestry, high unemployment continues. The unemployment rate in New Brunswick is over 15 per cent, ranging from 11 per cent in western New Brunswick to 17 per cent in northeastern New Brunswick.
The Government prides itself on the fact that national unemployment is down. I have news for it. In December New Brunswick's unemployment rate increased. Translated into human terms this means that thousands of New Brunswickers are looking for jobs, in many cases an effort which will reap no reward as the Government continues to promote policies which eliminate meaningful jobs before they can be created, and which snuff out existing jobs.
There are many steps the Government can take which could ease the unemployment crisis in New Brunswick. It could speed up implementation of the frigate program so our shipbuilders can work. It could reverse its decision to phase out CFB Chatham, not only to eliminate the unemployment that will be substantially increased by the devastating decision to close the Base, but to restore economic stability and confidence in that region. It could implement policies that will encourage and enhance New Brunswick's fishery, forestry, and construction sector.
New Brunswick has suffered at the hands of a federal Government more interested in announcing sexy patchwork programs than in dealing with the unglamorous underpinnings of employment and economic recovery. We should know, as we have suffered the results.



EXTERNAL AFFAIRS


Mr. Bob Ogle (Saskatoon East):: Mr. Speaker, over the past number of years in Canada there has been a program sponsored by the Anglican, Lutheran, Presbyterian, Catholic, and United Churches, which is called Ten Days for World Development. During the period between February 3 and 13 of this year the program will be carried out once more. Last year
the focus was on Central America. Because of the great importance of that area to our lives in this country, the focus this year will again be on Honduras, Guatemala, El Salvador, Nicaragua and Costa Rica.
It has been announced that Secretary of State Schultz of the United States is about to visit El Salvador, Venezuela, Brazil, Grenada, and Barbados. The Kissinger Report, which was filed just a few weeks ago, has not given a clear understanding of that region. A delegation of women from all sectors of society in the United States has returned with a very different understanding of the region. It did not get public support, but nevertheless it is a very different understanding.
Once again I would call upon our own Government to come out with a persistent, public, and explicit condemnation of the military build-up in Honduras. At the same time I would like the Government to instruct its Minister of External Affairs (Mr. MacEachen) to visit that region so that Canada can be seen to be backing the Contadora group, specifically, and clearly, and openly going against-


Mr. Speaker:: Order. The Hon. Member's time has expired.



ORAL QUESTION PERIOD


Mr. Thomas Siddon (Richmond-South Delta):: Mr. Speaker, my question is directed to the Minister of State for Science and Technology. Last Wednesday evening the President of the United States, in his State of the Union Address, announced that the United States would place an orbiting space platform, costing some $8 billion, into space by 1991. Canadian scientists and engineers have played a strong central role in the U.S. space program since its inception. Recognizing that there is a possibility to create over 20,000 new, high-tech jobs for Canadians, has the Minister or his Government conveyed to the United States and its President Canada's enthusiasm for the proposed space station project, and our desire to participate?


Hon. Donald J. Johnston (Minister of State for Economic and Regional Development and Minister of State for Science and Technology):: Mr. Speaker, the concept of a space station has been under consideration for some time. A number of years ago when this was initially announced, Canada, Japan, and several European countries undertook their own studies.
We have a study ongoing in order to determine specifically what the economic and industrial advantages of a space station are, what our participation could be, and to what purposes it would be put. We have always been interested in pursuing that concept, and will continue to do so. In fact, the President has
January 31, 1984

named Mr. James Beggs as his personal emissary on the subject. I will be meeting with Mr. Beggs this week to follow up on the announcement made by the President. Our meeting will take place on Thursday and I would be delighted to report to Hon. Members what our position is, subsequent to that meeting. I suspect that a good deal of further work must be done before we decide whether we should make a very substantial investment in the project. It is interesting, and we are pursuing it.


REQUEST THAT GOVERNMENT SUPPORT PROJECT
Thomas Edward Siddon: Mr. Speaker, the Minister points out that studies have been done. Mr. Carl Doetsch, his official in charge of the Canadian space program, has indicated that studies of the specific space station proposal in question have been ongoing for many months. Yet the Minister refused to indicate whether he has or will convey to the U.S. President and administration Canada's support for this project. Why is the Minister, on behalf of the Government of Canada and the thousands of people who might realize new and gainful employment from this project, hesitant to make a commitment on Canada's behalf now, which is what the Canadian space industry requires?


Donald James Johnston: Mr. Speaker, these matters are not quite as simple as the Hon. Member suggests. I would take from his statement that the Tory Party endorses the concept of Canadian participation in a space station project. It is roughly a $8 billion project. I think we would be wise to ascertain what, in fact, the benefits will be to Canadian industry, how many jobs will be created, and what industrial and scientific application it would have from our point of view. These are legitimate questions for us to take a very close look at before confirming that we are on board and going to participate. I do not think the Hon. Member would expect us to write a blank cheque on a project, the feasibility of which we are still studying.


SUGGESTED ESTABLISHMENT OF CANADIAN SPACE AGENCY
Thomas Edward Siddon: Mr. Speaker, the fact of the matter is that Canada has been studying this question for years, and Canadian scientists have been involved in all the major success in the U.S. space program. Bearing this in mind, it would appear that the Government is constrained by other factors-perhaps political or strategic. Will the Minister indicate the Government's undertaking to centralize Canada's support for this program by creating a Canadian space agency which would administer the contracting to over 88 Canadian companies that have already submitted firm proposals in support of this initiative? Will he ensure that the Canadian Government makes a co-ordinated effort, at no significant additional cost, to Canada, to ensure that those jobs, opportunities, and participation come to Canada?
Oral Questions


Donald James Johnston: Mr. Speaker, I am pleased that the Hon. Member for Richmond-South Delta has underlined the success of the space program to date. He has pointed out that Canadian scientists have indeed made a very significant contribution to the success of many space applications in the past; the Canadarm is one of the most celebrated of those. I think he can count on the good management and good judgment of the Government, its Departments and agencies, to ensure that that record will be repeated.
The issue of a centralization of a space agency is again one which has been reviewed. There are pros and cons. There is currently an interdepartmental committee on space which has been operating quite effectively in terms of multi-year planning. As he also must know, industry is very divided as to whether or not there should be a central agency in the federal Government with respect to space activities. We could go into the pros and cons of that, but I think that would be best done during a debate on this subject in the House rather than taking the time of Members today. I take the Hon. Member's representations seriously and, as I say, he can count on us to manage the space program effectively in the future as he acknowledges we have done in the past.


JAPANESE PROPOSAL TO LICENSE COMPUTER SOFTWARE
Mr. Lome Greenaway (Cariboo-Chilcotin):: Mr. Speaker, my question is also directed to the Minister of State for Science and Technology. I am sure that he must be aware that initiatives are presently under way in Japan to impose mandatory licensing on computer software and intellectual property. This action could be devastating to the Canadian high tech industry and surely would be a very critical development as far as Canadian jobs are concerned, since it could cost thousands of Canadian jobs. Is the Minister concerned, and has he made representations to the Japanese?


Donald James Johnston: Mr. Speaker, I have not made representations of the kind to which the Hon. Member refers, but I assure him that any action that will cost Canadians jobs will be of considerable concern to us. I will take note of the Hon. Member's question and get back to him.


GOVERNMENT POLICY INQUIRY
Lorne Everett Greenaway: Mr. Speaker, the Minister's colleague, the Minister of Regional Industrial Expansion, was recently in Japan. Surely he must have brought up this very important subject when he was over there. Recognizing that the United States Government has made very strong representations on this subject to the Japanese, is the Minister telling us that we have actually taken no action whatsoever and have not talked to the Japanese about this very

January 31, 1984
Oral Questions
urgent matter? What is the present Canadian Government policy on the principle of mandatory licensing?


Donald James Johnston: Mr. Speaker, I am not sure in what context the Hon. Member is raising the issue of mandatory licensing. This is something which is of concern in a number of scientific areas, as he knows.
With respect to discussions which may have taken place with my colleague during his recent trip to Japan, 1 will be happy to consult with him, or the Hon. Member can put a question to the Minister directly.


INDUSTRY
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, my question is directed to the Minister of Regional Industrial Expansion. Yesterday 1 asked him questions about the Government's policy with respect to workers being affected by technological change. As the Minister knows, the government's own paper, "The Rocky Road to 1990" urged the Government to involve workers themselves in the decision-making process, both to increase productivity on the one hand, and to have some say in terms of the consequences of job losses on the other.
Specifically the report said, "This is most crucial at the level of the firm where labour should be directly involved in corporate planning, especially with regard to new technology." As the Minister responsible, does he agree with this and, if so, what specific new powers is the Government prepared to give to ordinary working Canadians who are affected by technological change?


Hon. Ed Lumley (Minister of Regional Industrial Expansion):: Mr. Speaker, with respect to asking the Minister responsible for that particular report, I think the question should be directed to the Minister of State for Economic and Regional Development. With respect to the premise that labour should have a greater say about the impact of technological changes, we would endorse what the Leader of the NDP had advocated. As a matter of fact that is why we initiated the task forces, as 1 indicated yesterday, which we announced last year. Within the terms of reference that we set up for the independent task forces, one of the major ones was to make sure labour does have a substantial say with respect to retraining of workers, any possible displacement of workers, opportunities etcetera. 1 think we have already responded to that in a very positive way.


John Edward Broadbent: Task forces are one thing. We have seen a lot of them from the Government. But specific action is quite another. We have not seen a lot of that.


ROLE OF WORKERS IN INTRODUCTION OF TECHNOLOGICAL CHANGE
John Edward Broadbent: Mr. Speaker, since the Minister has just agreed in principle with the idea, and since he is a Minister who dispenses literally millions of dollars of government grants to corporations, is he now prepared to put into action what he has just been preaching? Is he prepared to say that, as a condition of receiving a federal grant, a corporation at the firm level must give the right to a union, where a union exists, to negotiate the terms of the introduction of technological change, or to insist where there is a non union plant that a committee be formed, involving the local workers, so that they can have a say on technological change which affects them and their families profoundly?


Edward C. Lumley: Mr. Speaker, that is a very interesting idea. As I indicated to the Hon. Leader of the NDP yesterday after Question Period, I would be more than happy to consider it.


John Edward Broadbent: The Government cannot have it both ways. Surely it cannot go on talking about the need for co-operation from workers but completely deny the workers any right to a say in the matter that affects them most, namely, their jobs.


REQUEST FOR LEGISLATION GUARANTEEING WORKERS' RIGHTS
John Edward Broadbent: Is the Minister really saying to the ordinary workers of Canada that they must watch the introduction of technological change, be prepared to accept it, and in fact watch it roll right over them and their jobs or, to come to the point, is he prepared to say that he will bring in legislation giving those workers the kind of democratic rights they ought to have?


Edward C. Lumley: Mr. Speaker, now the Leader of the New Democratic Party has extended it from participating in discussions about the impact of technological change to having it legislated.


John Edward Broadbent: No. The right.


Edward C. Lumley: That is quite a strong change from what the Hon. Member advocated yesterday afternoon.


John Edward Broadbent: Legislate the right to negotiate.


Edward C. Lumley: First, with respect to the legislated right to negotiate, I think that may be a little strong. I think that any employer who wants to be successful would obviously want to discuss technological changes and their impact on employees, before undertaking them.
I will go back to the first point I raised with the Hon. Leader of the NDP yesterday, which is the fact that the key is to make companies competitive. That is the number one concern of this Government. If we want to preserve jobs in Canadian industry, particularly in the manufacturing sector, that is our main responsibility, and that is what we are going to do.
January 31, 1984


FINANCE
Miss Pat Carney (Vancouver Centre):: Mr. Speaker, my question is directed to the Minister of Finance. The Government continues to collect about $800 million a year from consumers of gasoline oil, and natural gas, from the imposition of the Canadian ownership charge which was initially imposed on consumers to finance Ottawa's takeover of Petrofina, which has long since been paid for.
The Minister reportedly told the Canadian Automobile Association that these tax revenues may no longer be dedicated to the purposes for which they were levied, which was the expansion of Canadian ownership of the oil and gas industry. Since the legislation specifically limits the manner in which these tax dollars can be spent, why is the Minister prepared to ignore our tax laws? How can he justify continuing to collect these illegal and immoral taxes?


Hon. Marc Lalonde (Minister of Finance):: Mr. Speaker, the Hon. Member will remember that in my Budget last April 19 I announced the intention to change the purpose of this particular tax, broadening it to cover the area of energy generally, and self sufficiency in particular. Currently the money is still being collected on the basis of the existing legislation, but I hope that we will be able to introduce in the House very shortly the legislation necessary to amend the existing legislation in order to meet the purpose stated in the Budget of last April.


Pat Carney: It is the custom of our country to run our country on the basis of legislation, not intentions.


Some Hon. Members:: Hear, hear!


REQUEST THAT MINISTER REDUCE TAX ON GASOLINE
Pat Carney: Mr. Speaker, the CAA also asked the Minister to reduce the federal tax load on gasoline since higher gasoline prices are cited as a major reason for the decline in tourism in this country. Since the decline of automobile travel from the United States has cost Canada about $2 billion in tourism revenues, and an estimated loss of 154,000 jobs, is the Minister prepared to consider the CAA's request to reduce federal excise and sales tax on gasoline?


Marc Lalonde: Mr. Speaker, I would like to stress to the Hon. Member that the Canadian ownership charge is being collected on the basis of the existing legislation, not on the basis of intentions announced in the last Budget. The law of the land is perfectly respected in that regard. As far as the other point raised by the Hon. Member is concerned, I will consider it a representation for the Budget.
Oral Questions


PRICE SPREAD BETWEEN LEADED AND UNLEADED GASOLINE
Mr. Bill Domm (Peterborough):: Mr. Speaker, I am sure Canadian consumers will be somewhat gleeful to learn that the Minister of Finance intends to broaden the base for further taxation at the gas pumps. When the Minister of Finance brings down the Budget, will he have a serious look at the discrepancy in price between leaded and unleaded gasoline? At ten o'clock this morning in Orlando, Florida, it cost consumers 8 cents a Canadian gallon more for unleaded gasoline than for leaded gasoline. Here in Canada we are being ripped off at the pumps with the difference being over 10 cents, and in some cases 12 cents, a gallon extra for unleaded gasoline. Will the Minister incorporate in his Budget some sort of relief for the consumers in this rip-off at the gas pumps in Canada?


Mr. Nielsen:: How about a $200 million change?


Marc Lalonde: Mr. Speaker, I would like to say first that the Bill to be introduced will not increase the tax. It is reallocating the purpose of the tax and using it for the purpose of energy self-sufficiency generally, rather than purely for the acquisition of foreign owned firms in the oil and gas business. It is not the intention of the Government to increase the tax; it is to change the purpose that is, at the present time, very restrictive.
As far as the question of the Hon. Member is concerned, obviously this is a matter that is more for examination by the Minister of Consumer and Corporate Affairs than a Finance Department responsibility or even a budgetary element. It is a matter of practice in terms of pricing in the market. As you know, a lot of this is also under provincial responsibility.


William Henry (Bill) Domm: Mr. Speaker, there will be little satisfaction at learning of the reallocation of what was to be a temporary Canadian ownership tax.


CONSUMER AND CORPORATE AFFAIRS
William Henry (Bill) Domm: Mr. Speaker, I have a question for the Minister of Consumer and Corporate Affairs. It is her Ministry that has been reviewing the difference in price between leaded and unleaded gasoline, going back to the time of her predecessor, the former Minister. In 1982 the Government said at that time that there was a control that could be brought into place to prohibit the role of the major oil companies in this excessive rip-off of 35 to 40 per cent more than is being charged in the United States. Given these facts, will the Minister in all honesty look into this 40 per cent added increase in profits? Not one cent of that increase goes to the retailer of gasoline. All of it goes, in the case of a consigned product, to the oil companies which deliver that product to the service station.
Will the Minister see if the Government can pass on some of these excessive profits to the consumer, who is already being

January 31, 1984
Oral Questions
gouged by the Minister of Finance, in the transfer of the Canadian ownership charge to another area where he might or might not need more finances?
Hon. Judy Erola (Minister of Consumer and Corporate
Affairs): Mr. Speaker, I welcome this opportunity to respond to the Hon. Member. Methinks he protests too much. I suspect that having been burned by his lessons in the gas station, he is now trying to find a scapegoat for the closure of his operations. I would like to add that the Hon. Member must be aware by this time that the Restrictive Trade Practices Commission has been conducting an investigation for well over a year now, and is reaching some conclusions. We expect a report from the Commission within a couple of months. It is a very, very complex issue which the Commission is studying, and I am sure the Member appreciates the fact that all of these issues must be studied very carefully. However, I expect a very thorough report, with some very firm recommendations when it is completed.


INCOME TAX
Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, much has been said recently about the over zealous collectors in the tax department coming down particularly heavily on the backs of small businesses and on average Canadians. Again, last night on television we found a Revenue Canada film which presented a very biased view, identifying average working Canadians as being major culprits when it comes to paying tax.
My question is not aimed at the Department of National Revenue but more at the Minister of Finance whose Department it is that sets the laws and regulations which these tax collection individuals pursue. In terms of fairness, and in terms of a just system, how does the Minister of Finance expect Canadians to be very enthusiastic about participating in a voluntary tax system when they know full well that in 1981 thousands and thousands of Canadians in the $50,000 a year plus bracket did not pay a single penny in income tax? What is the Minister of Finance doing about a system that is so obviously unfair and so obviously unjust?


Marc Lalonde: Mr. Speaker, indeed the fundamental element to the operation of our taxation system is that it be fair and that it also be perceived to be fair. This is what the Minister of National Revenue is pursuing and has been pursuing consistently in his function as Minister of National Revenue, and this is what the laws put before Parliament are attempting to do. However, as the Hon. Member knows, for persons who are in business, a small-businessman, for instance, may very well have a $50,000 income in a particular year but he may have accumulated losses the years before and he is entitled to claim those losses against his income.
On the average over a period of time everyone ends up paying taxes if one has income. But the Hon. Member knows very well that there are situations in which people have fluctuating income because, for example, they are in business and they are entitled to claim previous losses or they are entitled to some credits for investments they make against their incomes. One would have to examine each instance and see whether the law is fair or not fair, and see what amendments can be made. This is a matter that every Minister of Finance addresses when he prepares a budget and tries to see whether there are areas that need correction in that regard. At the same time one cannot expect to have a regime where you would not be able to claim losses, for instance if you are in business, are a farmer, a fisherman, or a small-businessman.


Nelson Andrew Riis: Mr. Speaker, we have seen consistently, and we saw it again just before Christmas, that this Government continues to bring in legislation aimed at assisting a very exclusive few in society, again, the very highest of upper income earners. Setting aside upper income earners on an individual basis, I want to turn now to corporations. The Minister suggests that the system is fair. He knows full well that the small-business sector pay at a higher tax rate in real terms than the large business sector. He knows-


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


NON-PAYMENT OF TAXES BY MAJOR CORPORATIONS
Nelson Andrew Riis: Mr. Speaker, how does the Minister of Finance explain to the people of Canada that firms which made millions of dollars in profits last year, such as Hudson's Bay Company, Steinbergs, Simpson-Sears, Domtar, et cetera, did not pay any income tax in 1982? How does the Minister explain that, particularly to the small business sector of Canada?


Marc Lalonde: Mr. Speaker, first, in a previous answer I talked about a Bill that would be introduced soon. I am informed it was introduced this morning at eleven o'clock, namely, an Act to amend the Excise Tax Act.
To come back to the point raised by the Hon. Member, I have to tell him that the answer with regard to those larger corporations is exactly the same as would apply to small corporations. In effect, there are corporations that have accumulated losses over the year and against which they are entitled to deduct the profits of a particular year. The situation is that they are entitled to claim against their income a number of investments in research and development, in expansion of the firms, and job creation generally. That is all provided under the law.
My hon. friend will have to examine the law as it applies generally, and he will realize that there are good justifications
January 31, 1984

why, even though a company may make money one year and if it had losses the year before, it is entitled to claim those losses.


Mr. Deans:: Why?


Marc Lalonde: My friend says, "Why"? It is very simple. If we want to keep the companies going in the country and to keep jobs rather than having them go bankrupt, we have to provide for a regime that will allow them to take account of the bad years as well as the good years. That is how we will create jobs and not destroy jobs.


NATIONAL REVENUE
Donald Alex Blenkarn: Mr. Speaker, my question is directed to the Minister of National Revenue who gave us a showing of his Orwellian 1984 film, "Excuse me, but there's a computer asking for you", on the CBC program The Journal last evening. As the Minister knows, that film showed ordinary people-secretaries, and a chap called Harry, delivering wood-as people trying to rip off the Government.
Did the Minister direct his Deputy Minister, Bruce MacDonald, to appear on the program and confirm the film's message that the only way the Government feels it can collect taxes from Canadians is to threaten them, to harass them, to treat them as crooks, and to make sure that Big Brother is watching?
[ Translation]


Hon. Pierre Bussieres (Minister of National Revenue):: Mr. Speaker, to answer the Hon. Member's question on whether I instructed my Deputy Minister to comment on the film, the answer is no. I would also like to give my own reaction since I was able to see the film and the comments that followed the screening, and remind the Hon. Member that the film is aimed at a very small group of taxpayers, and urges them to comply with the various provisions of the Income Tax Act, and I think my concerns are as follows: First of all, does the film meet its objectives? Second, I am also concerned about the educational value of the film. I do not think that by frightening people, we are going to make them more compliant with the law. My third concern with respect to the film is the impression it may give, namely that the Government believes that all or most Canadians try to fiddle with the tax system.
That is not the case. The vast majority of Canadians are very conscientious in the way they follow the self-assessment system for income tax, and I feel that what we must do is to keep on trying by informing people that they have failed to comply with the Act and by urging them to comply and to join the ranks of millions of taxpayers who comply with our tax legislation.
Oral Questions


Donald Alex Blenkarn: I am surprised that the Minister would tell the House that he did not know his Deputy Minister was going to be on that program, and would indicate to the House that the program and film were produced without his knowledge. That is the impression he has left here this afternoon.


DEPARTMENT'S TREATMENT OF TAXPAYERS
Donald Alex Blenkarn: Mr. Speaker, will the Minister confirm that he does not know as much about his Department as we do, and that somewhere along the line-


Erik Nielsen: Or the CBC.


Donald Alex Blenkarn: -his Department, directed by his staff, and without his knowledge, because he does not know what he is doing, is treating ordinary Canadians as if they were crooks, no-goods, and defaulters, and will only pay their taxes if they are harassed?


Pierre Bussières: Mr. Speaker, I must admit that I would feel very insecure if, judging from the questions put by the Hon. Member, I did not know more about my Department than he does. I must admit I would feel very insecure. That is my first point.
The second point is that I pointed out to the Hon. Member-and 1 wish he would listen to my answer-that I did not instruct my Deputy Minister to take part in this program. 1 have no instructions to give him in this respect. He advised me that he would offer some comments on the film and I think it was his responsibility to do so.
1 can also inform the Hon. Member that the film was commissioned from the National Film Board by the Department of National Revenue a little over two years ago, if I am not mistaken.


Erik Nielsen: There is a computer listening to you.


SMALL BUSINESS
Hon. Bud Cullen (Sarnia-Lambton):: Mr. Speaker, my question is directed to the Minister of State for Small Businesses and Tourism. It concerns a problem which plagues or irritates the small-businessman, that is, the constant requirement that corporate seals be used on documents that are filed both with his Department and with other Government Departments. Is the Minister looking at the possibility of not requiring the corporate seal to be used as is provided for even in some of our federal legislation?


Hon. David Smith (Minister of State (Small Businesses and Tourism)):: Mr. Speaker, in fact corporate seals are not required by law. However, I have received a letter on this

January 31, 1984
Oral Questions
which originated from a constituent of the Hon. Member, and I think he has a very valid point. I will draw this to the attention of the Minister of Justice because perhaps there have been instances where it has been requested, whereas in fact it legally is not really required.


SALE OF PAPER PRODUCTS TO MALAYSIA-FINANCING AGREEMENT
Hon. Ray Hnatyshyn (Saskatoon West):: Mr. Speaker, my question is directed to the Minister of Trade. His colleague, the Minister for International Trade, announced this past month that a $144 million U.S. financing agreement has been entered into to support a sale to Malaysia of paper products, with respect to a consortium led by Klockner-Stadler Hurter Ltd. and Klockner Industrie Anlagen GMBH of Germany. Is he, as Minister of Trade, and the Government, satisfied with respect to the reliability of these firms, having regard to the fact that the predecessor firm of these companies was subject to charges having been laid by the RCMP in 1980 with respect to dealings with the federal Government?


Edward C. Lumley: Mr. Speaker, for the Hon. Member's information, I am not the Minister of Trade. I know that the Minister for International Trade, who made the recommendation, obviously would not have made it if EDC were not confident the firm could carry out its work.


RELIABILITY OF COMPANIES INVOLVED
Ramon John Hnatyshyn: Mr. Speaker, my supplementary question is directed to the Solicitor General who is responsible for the RCMP. Could he inform the House whether he has been consulted with respect to this transaction so as to give assurances to the Minister for International Trade and to the Government that charges with respect to the predecessor company, Stadler Hurter Ltd., have in fact been resolved or satisfactorily cleared up, and that the companies in question are reliable in terms of that amount of money being expended on the part of the Government of Canada?


Hon. Bob Kaplan (Solicitor General of Canada):: Mr. Speaker, I have not been consulted by the RCMP or by any of my colleagues about this, so I cannot give the assurance the Hon. Member is seeking.


ROYAL CANADIAN MOUNTED POLICE
Mr. Svend J. Robinson (Burnaby):: Mr. Speaker, my question is directed to the Solicitor General. The just released third
report of the McDonald Commission sets out an appalling series of breaches of criminal legislation and breaches of federal statutes by members of the RCMP Security Service during the 1970s, targeted against law-abiding Canadian citizens. In view of the fact that the McDonald Commission concluded that senior members of the Security Service were at best indifferent to the legality of these operations, how can the Minister justify the decision to take no disciplinary action whatsoever against those officers who broke the law and remain within the RCMP?


Robert Phillip Kaplan: Mr. Speaker, perhaps the Hon. Member opposite does not know it, but I have no authority to impose discipline upon members of the RCMP or upon anyone else.


Svend Johannes Robinson: Obviously the Minister is being led around by the nose by the Commissioner of the RCMP, if he makes a statement like that.


John Horton McDermid: Shame!


REQUEST FOR WITHDRAWAL OF SECURITY SERVICE LEGISLATION
Svend Johannes Robinson: Mr. Speaker, as the Minister knows, the Official Opposition has finally ended its nine-month silence on the Government's proposed security legislation and has joined the NDP in opposing the Minister's latest Bill which continues to ignore key recommendations of the McDonald Commission. Given the combined opposition of both Parties to this legislation, and considering the Minister's earlier statement that he would only proceed with the Bill if the Conservative Party supports it, will he now clearly indicate the House whether he intends to proceed with this legislation, or whether he will accept political reality and withdraw this Bill which still constitutes an assault on the civil liberties of all Canadians?


Robert Phillip Kaplan: Mr. Speaker, the Hon. Member knows very well the need for the recommendation of two royal commissions and the Senate committee being implemented as quickly as possible. That is the establishment of the RCMP security service as a separate agency under the type of framework of control that is proposed in the legislation which is now before this House.
I invite the Hon. Member to get serious about this subject and to abandon the shrill rhetoric and unreasoned criticism that he has made, and to join with me in trying to develop legislation which will provide a proper framework for the operations of national security within this country. In fact I have asked my colleague, the House Leader, to consult with Hon. Members opposite for a time for second reading of this legislation because the Government is committed to it. I believe we should move forward and present Hon. Members of this House with an opportunity to consider the legislation and turn a chapter in the history of national security in this
January 31, 1984

country with the development of a security service which will be fully accountable for the privacy and civil liberties of Canadians in ways in which legislation has not covered this in the past and in ways which the Hon. Member knows, as well as anyone in this House, are seriously required in the interests of our national security.


SOCIAL SECURITY
Mr. Bruce Halliday (Oxford):: Mr. Speaker, my question is for the Minister of National Health and Welfare. She is not in her seat. I have seen her flitting around behind the curtain. The Minister will be aware that last Friday her colleague from London West made a presentation under Standing Order 21 regarding the effect of Bill C-139, which was passed by this House last March. The interpretation of it is such that those who are recipients of workmen's compensation benefits because of injury, when reaching the age of 65 will in many cases be deprived of their GIS payments and will suffer a net loss of income. Has the Minister made representations to her colleague, the Minister of Finance, about this despicable situation?


Hon. Monique Begin (Minister of National Health and Welfare):: No, Mr. Speaker. I am aware of the clarification I brought to the House concerning payments under OAS or GIS and the measure introduced by the Conservative Government whereby those who owe taxes might see deductions directly from their pension. The other case has not yet been looked into.


THE DISABLED AND THE HANDICAPPED
Bruce Halliday: Mr. Speaker, bearing in mind that these pensioners have received this workmen's compensation because of an injury and an inability to earn money, I will direct my supplementary to the Secretary of State who is responsible for the disabled and the handicapped. Is he aware of what has happened to the disabled and handicapped who are on workmen's compensation benefits, and is he concerned enough about these people to make representations to his colleague, the Minister of Finance, so they do not suffer further loss of income?


Hon. Serge Joyal (Secretary of State):: Mr. Speaker, the Hon. Member has already expressed his concern very extensively before the Special Committee which sat during the previous session. As was announced in the Throne Speech, a mechanism will be provided to enable Parliament to hear
Oral Questions
Government representatives, and I am referring to Ministers or representatives of the agencies concerned, in order to prepare for the follow-up on recommendations in the Obstacles report. The concerns expressed just now by the Hon. Member will certainly be given a full hearing before this Parliamentary forum.


CANADA MORTGAGE AND HOUSING CORPORATION
Mr. Dan McKenzie (Winnipeg-Assiniboine):: Mr. Speaker, my question is for the Minister responsible for Canada Mortgage and Housing Corporation. It concerns a provincial-federal housing repair project in Wabowden, Manitoba. In December, 1983, it was revealed that this project had a cost overrun of more than $987,000, and because of it the province's NDP Minister quickly fired two officials of the Manitoba Housing and Renewal Corporation without warning. Due to the mass confusion surrounding fund transfers between the project's two budgets, and misunderstandings regarding authorization, can the Minister inform the House whether an investigation ever took place to determine where the problem really lies and who is actually responsible for the cost overrun?


Hon. Romeo LeBlanc (Minister of Public Works):: Mr. Speaker, surely on such a detailed question the Hon. Member could have phoned my office so that I could have looked at the file and refreshed my memory. I will look into the matter and try to report to him, either by letter or in the House as soon as possible.


Mr. Speaker:: A supplementary, but bearing in mind the comment of the Minister about detail.


SINKING OF HOUSES INTO GROUND
A. Daniel McKenzie: Mr. Speaker, I understand the Minister's comment that his officials are not keeping him informed about what is going on in his Department. Obviously there has been poor on-site management. Many houses have literally sunk into the ground. Has the sinking of the houses been stopped? Does the Minister know, or does he need a few minutes to look through his file?


Roméo LeBlanc: Mr. Speaker, I resent the Hon. Member's comment that my officials do not keep me informed. I am familiar with the situation to some extent, but I do not have the information in front of me. Because I take his question a bit more seriously than he does, I want to give him reliable information.

January 31, 1984
Oral Questions SOCIAL AFFAIRS


PLIGHT OF MIDDLE AGED UNEMPLOYED
Mr. Bill Blaikie (Winnipeg-Birds Hill):: Mr. Speaker, my question is for the Minister of Finance. A couple of days ago one of m'y constituents telephoned my office. He is in a similar situation to many other people. This man is in his mid-fifties. The company he worked for went belly-up. He did not belong to a union, he had no pension plan, and he has no job. He is not old enough for the Old Age Pension. He is not disabled enough to receive the Canada Pension Plan. What does the Minister intend to do about people in this kind of situation, particularly those in their mid-fifties, too old to get the kind of job to which they are accustomed? They are being passed up for younger people.
They are not old enough to receive the Old Age Pension and not disabled enough to receive the Canada Pension. What does the Minister plan to do about those in this situation? It is a human situation, not a statistical illusion, not a bunch of figures about jobs. What is he going to do for these people?


Marc Lalonde: Mr. Speaker, there are a number of programs at the provincial and federal level to give aid and support to those in need. My hon. friend knows that. As far as people in situations like this are concerned, my role and concern are to try to ensure that the economy grows at the fastest possible rate and that we are going to create the largest possible number of jobs. This requires the co-operation of all economic agencies and Governments. This is what I have been spending my time trying to get from labour, management, and the provincial Governments since my appointment.
I am happy to see that the economy in Canada improved last year. I hope there will be further improvements this year. I cannot guarantee that for every single Canadian who finds himself unemployed and in a situation like the Hon. Member mentioned there will be a job for him tomorrow. I am sure my friend knows that.


NATIONAL DEFENCE
Hon. Allan B. McKinnon (Victoria):: Mr. Speaker, my question is for the Minister of National Defence. It is over three months since he started his inquiry into the Pacific Petrel fiasco on the West Coast. It is a simple case of money appropriated for one purpose and used for another. One of the results is that the air cadets are unable to go on with their glider training. The Minister has had this report in his hands for several weeks. What has he done about it, or what does he intend to do about it?


Hon.   J.-J. Blais@Minister of National Defence: Mr. Speaker, I again thank the Hon. Member for asking that question. The matter has been addressed by members of all
caucuses. It is a question that I am addressing very seriously. Like the Hon. Member, I paid very constructive attention to the Pacific Petrel project. I am still not in a position to come forward with the report. I would hope the hon. gentleman, with his usual constructive attitude toward these matters, would bear with me until such time as I am in a position to deal fully with the circumstances surrounding that project.


REQUEST THAT SHIP'S CONSTRUCTION BE COMPLETED
Allan Bruce McKinnon: Mr. Speaker, the Minister knows full well that he has done practically nothing since he received that report. He is just mulling it over, wondering how he can get out of the box in which he finds himself. The only action he has taken to date is to move one major to other employment. There is $1 million worth of skilled labour and material, indirectly paid for by the taxpayer, rotting on the beach at Comox. Would the Minister consider turning that over to a non-government organization for a nominal sum, with a view to a lease-back arrangement, so that the ship could be completed and the taxpayers would get some use out of their $1 million?


Hon.   J.-J. Blais@Minister of National Defence: Mr. Speaker, I can assure the hon. gentleman I am not in a box on this project. Quite the contrary. I have looked at this and I am constructively advancing, through this study, my efforts to find a solution to the difficulties the program is facing. There have been a number of representations made. The Hon. Member for Comox-Powell River has made a suggestion similar to that which the hon. gentleman has advanced. I am ready to look at any reasonable solution for a program which has indeed received a wide amount of public support. I am still not in a position to proceed any further at this stage because of the complexities involved in the project.


PETITIONS
Mr. Speaker:: I have the honour to inform the House that the petition presented by the Hon. Member for Peterborough (Mr. Domm) on Monday, January 30, 1984, meets the requirements of the Standing Orders as to form.
January 31, 1984



ROUTINE PROCEEDINGS

[Stage Direction]
Order Paper Questions INSOLVENCY ACT

Hon. Jacques Olivier (Minister of State (Fitness and Amateur Sport)):: Mr. Speaker, pursuant to Standing Order 46(2), I have the honour of tabling, in both official languages, the by-laws of the Canadian Sports Pool Corporation.


MEASURE TO ESTABLISH
Hon. Judy Erola (Minister of Consumer and Corporate Affairs) moved: for leave to introduce Bill C-17, an Act respecting bankruptcy and insolvency.


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


Mr. Terry Sargeant (Selkirk-Interlake):: Mr. Speaker, I am presenting a petition on behalf of 157 constituents, most of whom are distillery workers and their families or friends. They are concerned about the unfair taxation of their product and call upon Parliament to replace the system of automatically indexing excise taxes with a system which will permit a knowledgeable and realistic application of these duties.


Mr. Ian Waddell (Vancouver-Kingsway):: Mr. Speaker, I have a short petition which I would like to read. In the prosecution of Paul Watson of the Sea Shepherd Society under the Seal Protection Act, a noted Maine journalist, Lynn Franklin, was also convicted. Mr. Franklin died in a tragic airplane accident last fall and some of his personal effects, including photographs, are still being held by the prosecution in spite of attempts-


Mr. Speaker:: With all due respect to the Hon. Member, would he please state the purpose of the petition?


Ian Gardiner Waddell: Mr. Speaker, the purpose of the petition is that there be a prosecution, not a persecution, of environmentalists involved in the anti-sealing demonstration. I would just conclude by saying that the petitioners ask that the Minister of Justice (Mr. MacGuigan) intervene with the Quebec prosecut-er to see that justice is done in this case, including the return of all personal possessions to the family of the late Mr. Franklin. Apparently they are keeping half of his personal possessions-


Mr. Speaker:: The Hon. Member has made his point.
(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. 81, 85, 121, 132 and 197.


Mr. Howie: How many persons engaged in public relations, media relations or publicity are employed by the Ministry of State for (a) Economic Development (b) Science and Technology?


Rolland Dion: In so far as the Ministry of State for Economic and Regional Development is concerned:
There are six officers employed at headquarters office whose duties include public relations, media relations or publicity, along with ten regional communications officers, one in each of the ministry's regional offices.
In so far as the Ministry of State for Science and Technology is concerned: Two.


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


Pierre Bussières: There are 37 persons engaged in public relations, media relations or publicity employed by the Department of National Revenue.


Mr. Stewart: Is there a Cost-Recoverable Technical Assistance Program and, if so, since its inception, what amount of Financial assistance was given by the Government to (a) foreign governments (b) Canadian Firms that have contracted for its assistance and, in each case, what percentage of the total cost incurred was recovered?

January 31, 1984
Order Paper Questions


Hon. Allan J. MacEachen (Deputy Prime Minister and Secretary of State for External Affairs):: 1. Yes, there is a Cost Recoverable Technical Assistance (CRTA) Program. The CRTA Program was approved by Treasury Board on February 7, 1979 subsequent to cabinet approval on April 27, 1978.
2. No financial assitance was given by the Canadian Government to: (a) foreign governments or to (b) Canadian (contracting) firms.
Note: The CRTA Program is designed to increase Canada's international trade activity by negotiating, with developing countries, agreements to transfer Canadian technology at no cost to Canada. The program sells to foreign countries Canadian public sector expertise not always available in the private sector. The transfer of technology can occur by bringing non-Canadians to Canada for training or sending Canadian experts abroad. External Affairs administers a pool of 65 non-reportable person years (exempted from Treasury Board's person-year controls) to enable participating departments and agencies (Action Agencies) to staff replacements for personnel assigned to CRTA projects. In return, the recipient country deposits in a Central Advance Deposit Fund (an interest bearing fund) the moneys required to pay the expenses and salaries of the individuals seconded to the project. The moneys for the total cost of the project are deposited in advance thereby ensuring the cost recovery of the program. Consequently, participation in the CRTA Program involves no financial outlay nor even temporary loss of person years.
3.	Services rendered by Action Agencies are provided on a full cost-recovery basis through the operation of the Central Advance Deposit Fund (see above).
1983 GREY CUP GAME


Mr. Stewart: 1.	Did the Government pay for the installation of signs bearing the word "Canada" on or before November 27, 1983 at the stadium at B.C. Place and, if so, at what total cost to the taxpayer?
2.	Did the Government contribute any money for facilities or events related to the Grey Cup game in Vancouver and, if so (a) what were the events or facilities (b) at what cost?
(a)	(b)
1981-82	
Contemporary Research Centre Ltd.	$25,000
Questions and Answers Inc.	$21,000
Public Affairs Int'l Ltd.	$24,000
Intermart Inc.	$25,000
SIA-Societal Issues Analysts Inc.	$32,000
Contrefort Inc.	$25,000
Goldfarb Consultants Inc.	$21,700
1982-83	
Ekos Research Associates Inc.	$20,215
Goldfarb Inc.	$148,500
Goldfarb Inc.	$30,000


Hon. Mark MacGuigan (Minister of Justice):: 1. Yes; the total cost was $2,000.
2. Yes.
(a)	(b)
Co-sponsorship of the pre-game and half-time	shows.	$73,500
Information booths-four were installed at key locations in Vancouver to provide information on Grey Cup activities and programs, as well as services offered by the Government of Canada in British Columbia. $ 3,360
Promotional materials-distribution along the Grey Cup Parade route
and at B.C. Place stadium prior to the Grey Cup Game.	$ 15,450
Promotional Plan:	$60,000
-100,000 copies of the pamphlet entitled "Canada Celebrates" were distributed.
-Advertising space in several bus shelters.
-On a co-operative basis with Tourism Canada and Fitness and Amateur Sport, five 30-second messages were shown on the B.C. Place electronic board.
-Four television advertisements appeared on a co-operative basis with Tourism Canada and Fitness and Amateur Sport.
-Grey Cup float-designed to promote the Year of Tourism in Canada, 1984.


Mr. Blenkarn: 1.	In the fiscal year (a) 1981-82 (b) 1982-83 were outside consultants employed by the Canadian Unity Information Office 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?


Mark R. MacGuigan: 1. (a) (i) 15,
(ii) $502,241. (b) (i) 14, (ii) $669,522.
(c)
Evaluation of CUIO youth calendar through focus groups held in Vancouver, Calgary, Winnipeg, Toronto, Montreal, and Halifax.
Research and development of communication program for federal initiatives in offshore oil and gas development.
Development of public relations campaign for patriation of Constitution.
Development of corporate marketing programs relating to specific social and economic situations involving federal visibility.
Develop communication strategy for public relations campaign on patriation of the Constitution.
Monitor issues and media and provide reports on items having impact on Canadian unity.
Program research for strategic development of environmental communication efforts and consideration as they pertain to the offshore oil and gas explorations in B.C.
Carry out a field study of the impact of the Festival du Voyageur on Canadian unity and provide reliable and valid measurement of concepts related to national unity.
Quarterly and attitudinal surveys on economy and social issues.
Study and report on public's perception of the role of government in Canadian society.
January 31, 1984

Goldfarb Inc.	$50,000
D.J. Sullivan Inc.	$52,569
Hebb, Peter G.	$31,285
ISL-International Surveys Ltd.	$68,913
Decima Research Ltd.	$38,000
Infras Inc.	$28,894
Optima Inc.	$43,550
Can-West Survey Research	$34,000
Contrefort Inc.	$36,721
Intermart Inc.	$36,000


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


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


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Lalonde that Bill C-12, an Act to amend the Federal-Provincial Fiscal Arrangements and Established Programs Financing Act, 1977, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
David Orlikow: Mr. Speaker, before we adjourned at one o'clock I was pointing out to Members of the House that one of the detrimental effects of the Government's restraint program was that we now have over 1.5 million unemployed, or more than 11 per cent of the labour force. Almost 20 per cent of young Canadians are unemployed. The result is that university enrolments, which most people had expected to decline in the 1980s, have suddenly risen. Our universities are filled to capacity by young and older Canadians who have turned to further education because they have been unable to find jobs. They have been told again and again by so-called experts in government and industry that in this era of high technology to which we are moving, having a job will require more and better education.
Established Programs Financing
Study of impact of six and five restraints on Canadian population.
Study and develop appropriate corporate communication program for CUIO.
Data analysis and preparation of reports on factors which are primary cause of alienation in Atlantic region.
To evaluate the Government of Canada exhibits at five major fairs.
Pilot study on nationalism in Peterborough and Newfoundland.
Research development and analysis of bench-marks which will assist research on topics which impact on Canadian youth.
Preparation of an evaluative guide on Canadian Survey Research organizations and academic specialists; creation and presentation of 10 seminars in survey research to staff members.
Study and research on issues affecting Canadian unity in western Canada.
Study and research on federal-provincial issues affecting Canadian unity.
Development of communication strategies for mobile exhibit program.
Thousands of Canadians are now being turned away from our universities because they are full, Mr. Speaker. For example, in Manitoba the Dean of Science at the University of Manitoba explains that capacity in his department has been reached and students will have to be turned away. At Algonquin College in Ottawa there are 18,000 applicants for 4,700 spaces. Humber College has 24,000 applicants for 5,000 spaces. Ryerson Institute in Toronto turned away 7,000 students this year. Again in Ottawa the President of Carleton University states that it will lower education standards rather than continue turning away students.
This is the sad situation for most Canadians, Mr. Speaker, but the situation for certain groups of have-not Canadians is much worse. The education of our native people is a disgrace and the results can only be compared with the sad record of the poorest Third World countries. The number of young native people finishing high school, therefore qualified to attend university or community college, is a disgracefully small percentage compared to the non-native people finishing high school. This proposed further limiting of financial assistance by the federal Government will make it even more difficult for young native people to get a university or community college education. It will also make it more difficult, in those provinces which have established or which propose to establish special programs, for native young people to attend those institutions.
The Hon. Member for Brandon-Souris (Mr. Clark) spoke with pride yesterday, and deservedly so, about the programs at Brandon University. Those programs were established by the NDP Government headed by Mr. Schreyer in the period from 1969 to 1977 and were funded jointly by the federal and provincial Governments. Under them, more than 500 young native people in Manitoba have qualified as teachers. This is a record which cannot be duplicated in any other province. That is the type of program that is being extended in Manitoba to train native people to be social workers and it should be extended in all the provinces and territories in Canada. When the federal Government cuts the funding given to the provinces for post-secondary education, they cannot be expected to do the job they should.
926

Established Programs Financing
It is not just the native people who suffer. According to a report prepared by the Canadian Commission for UNESCO, there are in this country four million people, or 28 per cent of the population, who are functionally illiterate. They do not have the basic skills necessary to handle the tasks of everyday life. Instead of the federal and provincial Governments co-operating to meet this problem and help solve it, the federal Government has all but abandoned adult programs to provide these functionally illiterate people with the education they need. They come mainly from the native community, from among the new immigrants who come here not speaking English or French or from among people who lived for many years in isolated areas of the country. We have cut back on programs which would have given them the needed basic reading and writing skills. In fact, we have excluded from our training programs those who have not learned to read, write or do simple arithmetic-and that is four million people. Many of the underdeveloped Third World countries are doing a better job than we in meeting these problems. Our lack of concern has doomed these people to a life of unemployment, welfare or low-paying, infrequent work.
The federal Government has also cut back very substantially on assistance to the Social Sciences and Humanities Research Council. In the past five years it has drastically reduced the funding going to the social sciences for post-graduate research and has favoured heavily the funding for the Natural Sciences and Engineering Research Council. While this makes sense in view of the Government's promotion of high technology development as a way out of the recession, it does not respond to the need to understand the impact and implication of technological change on society. These changes are taking place so quickly we can only respond with concepts and theories developed in another decade by another generation.
All this is illustrative of the Government's failure to meet and deal with the problems facing the country. We need an approach to education based not on short-term, financial considerations, which is the only explanation for what the federal Government is proposing in this Bill, namely to limit the increase in funding for post-secondary education to 5 per cent for the next year. We need an approach which would be based, rather, on the needs of Canadians to meet the problems of the world in the next 25 years. This will not be achieved by unilateral decisions made by the federal Government, as for example this Bill; it can be met only by consultation and co-operation between federal and provincial Governments and in consultation with labour, management, farmers and educators. Until then the situation will become worse rather than better.
It is for that reason that we intend to vote against the Bill, and it is for that reason that we urge the Government to reconsider the position it has taken. It should not just increase the funding it provides for post-secondary education but also should give some serious thought, in consultation and co-operation with other groups who are just as interested, to meeting the needs of Canadians in the next 25 years so that we can do the things that need to be done and produce the goods that
need to be produced. We must meet the physical, emotional and mental requirements of Canadians in the years to come.


The Acting Speaker (Mr. Guilbault):: Questions, comments.


Mr.   de Jong@: Mr. Speaker, I have not heard all the remarks of the Hon. Member so I wonder if he could tell the House to what degree he feels the changes in the EPF arrangement in 1977 was the cause of the present crisis that not only faces medicare but also higher education.


David Orlikow: Mr. Speaker, there are several reasons why the change made in 1977 has had a very deleterious effect. First of all, until 1977 the shared cost programs for postsecondary education, for the payment of universal hospital insurance plans and for payment for the universal medical insurance plan, was based essentially on fifty-fifty cost sharing by the federal Government and the provinces. Except for those provinces which did not have the resources and got more than 50 per cent, the provinces were required to match the funds put up by the federal Government for these three programs and certain others.
Once that system was changed and the system of block funding was established, the federal Government, even if it were as much as it had been before or more, did not require provincial governments to match funds it provided. Between 1977 and 1981 a province could take money which it had previously put into funding post-secondary education, hospital insurance or medical insurance and spend it on building roads, for example. That was one bad effect. This year the federal Government is going to increase post-secondary education funding by 5 per cent, but under the old system the increase for this year would have been 11 per cent. The provinces got hit two ways by the change.


Hon. Jake Epp (Provencher):: Mr. Speaker, I should like to put a few words on the record regarding Bill C-12, an Act to amend the Federal-Provincial Fiscal Arrangements and Established Programs Financing Act, 1977. There are a number of points I should like to make regarding the negotiations concerning the Established Programs Financing Act and the position this Party took on those negotiations, although this was done most eloquently last Friday by my colleague, the Hon. Member for Mississauga South (Mr. Blenkarn).
In looking at the Bill, it is important to realize that we are dealing with retroactive legislation. It is retroactive for approximately 18 months, during which time the so-called six and five formula which was applied to most federal Government activities also applied to the Established Programs Financing formula, not in legislative form but in practice. That needs some explanation.
What has happened, Mr. Speaker, over the last 18 months is that, in terms of post-secondary transfer payments, the six and five program was applied as though it had legislative life. What Bill C-12 does is legalize in legislative form that which is already being done. Therefore, the Bill is retroactive.
January 31, 1984

All Hon. Members know the Bill will limit increases in 1983-84 to 6 per cent and in 1984-85 to 5 per cent, but I say to you and to Hon. Members of the House that the Established Programs Financing Agreement between the federal Government and the provinces has within it a formula whereby certain transfers of money from the feddral Government are transferred to the provinces, primarily for two functions: one, post-secondary education and, two, so-called medicare, which really is doctors' bills and acute care hospital bills. What Bill C-12 deals with is post-secondary education only. What we are doing today, Mr. Speaker, is addressing the post-secondary education aspects only of EPF and specifically giving legal form to that which has already been done in a partical sense, as I stated earlier.
It is interesting to note that most observers, those who understand revenue guarantees, tax point transfers and cash transfers, argue that this is a capping. I know the Hon. Member for Gloucester (Mr. Breau) would say that this is not a capping, but it is limiting the amount to a certain formula, namely, 6 per cent one year and 5 per cent the other year. To an extent, that is true. However, what I want to deal with is the philosophical question which goes well beyond that.
As a person who has spent some years in education I have experienced, and I believe all of us who were in education in the 1960s have experienced during that period of time, a literal explosion of public consciousness of the need for expending large sums of money for the education of young Canadians. That was triggered by no single event more dramatically than the 1957 so-called "Sputnik" experience. From that period on the western world came to the very fast realization that in order to compete in the world, and even for the survival of the western world, much more attention would have to be given to education. And not only attention-which is the euphemism so often used-but that moneys would have to be expended.
I am sure my colleagues realize that what happened in their own constituencies was a literal explosion of new post-secondary education facilities and post-secondary education expansion, for instance, of universities, of the CEGEPs in the Province of Quebec, of training facilities, so-called technical colleges, and also of regional schools, whereby in a high school setting the traditional academic subjects and technical instruction were often combined in one facility.
Through the 1960s, Mr. Speaker, right across the country there was the realization that greater amounts of money had to be expended for the training of Canadians. That continued into the 1970s. However, as one takes a look at the every-increasing cost of government, tied in with the recession, one finds there has been a contracting of the moneys which are available not only for education but for legitimate government services. However, I will restrict myself specifically today to post-secondary education.
There is no easy solution, I would suggest to the House, to this question. However, the first point which must be made when one looks at a solution is the burden which Canadians are now living under because of this Government's economic mismanagement. If one takes a look at the percentages of EPF
Established Programs Financing relative to the Gross National Product, there is no doubt that, as a percentage of the Gross National Product, post-secondary education, medicare, services which Canadians believe are legitimate, are costing us more and more.
There are perhaps three solutions. The easy solution is to increase the deficit financing, but obviously there are concomitant problems down the road to which we are already subjected. A second solution is to cut back on expenditures for post-secondary education and limit those expenditures to the financial capacity which Canadians have. A third solution- and I suggest this is the solution all of us should look at-is to increase productivity, increase the economy of the country, in order that we can maintain and improve these systems, and yet the percentage of GNP does not grow to the point where the public simply has to say: "We cannot afford services at the level we once provided in previous years".
The reason the third solution, I suggest, Mr. Speaker, is the only solution is that the first two do not address the reality of Canada's youth. The reality of Canada's youth is that between the ages of 15 and 24-just as an aside, Mr. Speaker, I cannot be sure why Statistics Canada starts its figures at the age of 15-Canadian students coming out of our high schools and wanting post-secondary education, be it at the university, college or technical training level, fall into the following categories: first, they must have a job in order to earn money before they can go to school; second, once having entered the first year of university, CEGEP, or whatever, they must have a job over the summer so that they can continue their training.
If one takes a look at the unemployment rates of Canada's youth, one finds very quickly that one out of five is unemployed. That does not even take into consideration the number of students coming into the labour force, generally in April or May, who must find a job for three, four or five months in order that they can go back to school in the fall. Therefore, simply to cut back on the financing of education is not the answer.
We all recognize that our youth today must be even better trained than the training some of us were fortunate to receive in university. We very glibly in this House today, and almost everywhere else, talk about high technology or high-tech. Obviously, our youth requires training in order to fit into the high-tech industries. It might not, in many cases, be of the university or academic type training which a lot of us received, but it is expensive training and I believe we all recognize that it will be ongoing training, almost through the lifetime of a person in those industries. One thing which is very clear about the high-tech industry is it is constantly changing and that education is a constant requirement. Today we face a number of realities. We face the ability, or lack of it, of the Canadian taxpayers' operating through the Canadian Government actually to fund even more money for education. We face the matter of the need for training of students. Before they can be trained they need a job in order to have the financial resources to afford training.

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Established Programs Financing
Through this Bill and in our educational facilities we have seen an unrealistic and untrue assessment of the situation. I would like to explain that. It was interesting to note that the Member for Winnipeg North (Mr. Orlikow) mentioned the Manitoba experience. 1 would like to expand on that experience. Most people in Manitoba feel that their provincial Government is not as concerned about deficits, expenditures and increasing expenditures as governments of other provinces might be. In the 1981 election in that province the NDP promised it would freeze tuition increases for one year. That was very popular among the students and I can understand why. Following on that experience, the provincial Government capped the amount of money it would transfer to the postsecondary institutions. The bottom line to a popular policy which helped it get elected is that in our post-secondary institutions there is not enough money to maintain student-teacher ratios, maintain equipment or in fact get new technology which is needed if students are going to be trained in high-tech fields. The problem very quickly becomes one of good intentions without the resources to carry out the resposibilities to Canada's youth. In universities in Manitoba today students are facing very rapid increases in tuition fees. All of us would agree with the fact that if post-secondary education became too elitist, Canada as a country would suffer.
The only solution I see to the problem, Mr. Speaker, is to increase the productivity by Canadians in the economy and to increase the growth of the economy. There are many factors which apply when one looks at how to improve the growth within the economy. We would all agree that we first of all have to deal with one factor which is nebulous and real at the same time, which is the question of confidence.
One thing in particular has struck me as I have spoken with Canadians. I believe they want to have an election because they want to be able again to place confidence in the political leadership of the country. One cannot deny that as people collectively place confidence in their political leadership the economy is strengthened. That is what is lacking. Mr. Speaker, we can talk in the House as long as we wish about programs which are valid, need funding and should be supported. The bottom line is that the economy must first grow. The tragedy is that as valid as these programs are, many of them are jeopardized, at least in terms of proper funding, because of the economic mismanagement that Canadians have had to endure over the years.
As a Member of the federal Parliament I know that education is a dangerous ground to get on to because the provinces will justifiably defend their right to determine the policies relating to education. We are all aware of Section 93, a special separate section in the division of power as it relates to education. I would put forward to you, Mr. Speaker, for consideration in the House, the proposition that we have to examine seriously whether in all cases the benefits are accruing to young Canadians which we would wish from the funding
that is spent on post-secondary education by the federal Government.
I have no doubt in my mind that people in the education field are interested in changing education. In fact, education has very often been in the vanguard of change. When I look at other economies such as that of Japan and when I look at the democracy that exists between management and labour in West Germany I see that there are lessons to be learned. When I look at all the programs that come into the House which we often call make-work projects, I seriously wonder whether at least a portion of that money should not be used, in co-operation between the federal and provincial Governments, directly for training. Some people immediately argue that it is being put into training. I am refering to training which is targeted specifically at certain areas in which I believe Canada can be a leader in the world. Maybe it is due to the federal nature of the country, but it seems to me that, while these programs are in place, often our targeting lacks precision.
For example, Mr. Speaker, I have spoken to a number of students who have gone to university in the last few years and asked them why they are in university. We have seen the increase in university enrolments in the last few years. One answer they give is, "I was unemployed, I didn't know what to do so I thought I would go into an arts program". 1 am sure some of my colleagues in the House have received the same answer. I am not deprecating that kind of education, especially in view of the fact that I happen to be a graduate of the same program. However, is that the best means for addressing the training requirements of Canada's youth? I realize, Mr. Speaker, it is a much larger problem than just EPF or just the training programs that the federal Government now has in place. My real concern is that in order to get the economy growing and turned around, the co-operative base between the provinces and the federal Government, because of provincial responsibility in education, has to be given much more attention. Some people say to me that it would be easily solved by increasing the amount of expenditures for universities. That would help. However, I would suggest to you, Mr. Speaker, that that would not address the major problem. I challenge my colleagues today to catch again the vision of the Sputnik into which we were jolted after 1957. We have to priorize much more highly the federal and provincial expenditures for the very specific purpose of giving our young citizens training in order to help the economy grow because of the potential that 1 know is within this country. It is important that we catch that vision and I would suggest that Bill C-12 is looking back rather than addressing what I believe are the real issues facing Canada's post-secondary education climate.


Jack Sydney George (Bud) Cullen: Mr. Speaker, I always listen with attention to the Hon. Member because I know that he does much research into his work. When talking to young people, has he ever put to them the idea that the single most important person involved in their future career and where they will work is the student himself or herself? Quite often we do not go the second mile in questioning them. The Hon. Member may have asked a
January 31, 1984

student why he is at school and received the reply, "I do not have a job and it seemed to be a good place to get into the arts course and maybe delay the fact".
Has he gone to the schools to make those kinds of recommendations? We know that to the credit of the provinces there is much assistance given to young people to channel their goals. Fortunately, guidance councillors are no longer teachers who have little to do; we now have well trained guidance councillors. I suggest that one of the best ways to help young people, rather than asking the Government to make more money available for colleges, is to put some responsibility on the young people, to show them that the biggest responsibility lies with them. While there is a lot of help for them, their success requires their own application not only when they are seeking employment but when they are pursuing a degree. It depends on the extent to which they apply themselves.
Has the Hon. Member found some lethargy in that area, because that was my experience from talking to some people? They had not really applied themselves even with the assistance that was available to them from both levels of government.


Arthur Jacob (Jake) Epp: Mr. Speaker, that is a difficult question to answer but I want to be fair to the Hon. Member who asked the question. I do not have a lot of experience with students not wanting to apply themselves. I am talking about university students. I do not have the figure at hand with respect to what is the percentage of student fees covering universities, but the historical rule of thumb is approximately one-third. The other two-thirds come from general taxation or general revenues. 1 do not know what that percentage would be right now.
There is no question that the student has a responsibility. I believe that in my comments this afternoon I did not stress that more money was the simple answer. I did not want to make that point in that way. Obviously more money is always a help, but my real concern is to get a growing economy which would enable us to afford some of these programs.
When we look at training for Canada's youth I think the greater problem is not necessarily with students in university or those coming out of university who are highly motivated and looking for meaningful employment-although some of them become underemployed relative to their training-but rather the type of young person who feels that there is no opportunity for him or her. I know it is difficult to generalize, as the question forces me to do, but we are facing a greater challenge with that type of young person who does not want to go to university or feels that he or she cannot. To them, the training institutions or education generally is just not the answer to their immediate problem. 1 think that is an area on which we will have to spend a lot of time. How do we deal with those people who do not see traditional post-secondary education as a partial answer for their future training but want to get into the job market while having limited skills or experience, if either?
As I said, it is not enough to address ourselves to universities and post-secondary educational institutions with which we are
Established Programs Financing generally familiar but rather we should address ourselves to this group of young Canadians to whom I referred. If they do not get into the job market and find meaningful work, at what stage do they get turned off on the economic system and simply say there is no place or room for them? That is as much my concern as are the others identified by the Hon. Member.


Mr. John Bosley (Don Valley West):: Mr. Speaker, I welcome the opportunity to participate in this debate. I must begin by saying that I am surprised that the debate is being carried only by Members on this side. I have been waiting for more explanation from the Government of the rationale behind this Bill.
I want to join my colleagues in saying that I was somewhat surprised when I read the rationale introduced by the Minister in his speech. Since it seemed so slim, I read it again but found that it did not get any thicker.


An Hon. Member:: Sit down and vote on it.


John William Bosley: Members opposite tell me to sit down and just vote on it. I suspect that is exactly the reason why Liberal Members opposite refuse to debate the Bill. They want this Bill to get out of the House of Commons as fast as possible because I think they are ashamed of it. Frankly, when one reads the Bill one realises that they ought to be ashamed of it.
When we were growing up we were taught the simple lesson that a deal is a deal. If an honourable gentleman or lady made an agreement with you and shook your hand, you presumed that the deal was made and that that person could be trusted. We were also taught to make a deal in writing. The provinces and others had the right to believe that the educational institutions had a deal in writing with the federal Government for the five-year period from 1977 to 1982. The federal Government then came along and said that for its purposes it will put a cap on its side of the deal for 1983-84. What does that say about co-operative federalism as practised by the federal Government in Canada? It tells us that it is not federalist and not very co-operative.
Let me reiterate a couple of points that need to be made about this Bill. In fairness to the Minister, he did state with some reality that the federal Government proposes to put more money into post-secondary education in these two fiscal years. That is true. It proposes to give 6 per cent and 5 per cent more than it was giving. Let me refer specifically to the Minister's comments as reported at page 814 of Hansard on January 27. He said:
The purpose of this Bill is to bring certain fiscal transfers to the provinces into conformity with the anti-inflation program-
He continued:
-federal assistance to each province for post-secondary education will be increased by 6 per cent in 1983-84 and by an additional 5 per cent in 1984-85.
What he does not say thereafter is what other programs are proposed to be constrained. The fact of the matter is that one could have some comprehension of the purposes behind this Bill if federal programs in totality were constrained to six and five. Everyone who reads the blue books knows that that is not

January 31, 1984
Established Programs Financing
true. The federal Government is increasing its spending in each of the constraint years by enormous amounts above 6 per cent and 5 per cent. As well, in this Bill which splits health funding from post-secondary education funding, does the Government plan to apply its six and five program to health care funding? It does not, nor should it. It has an agreement with the provinces in which it undertook to apply the traditional formula of the GNP escalator to all of these programs.
I looked at the Minister's words in search of any rationale whatsoever for the application of the six and five program specifically to post-secondary education since it is not being applied to health or other programs, but is was in vain. I found no explanation at all in the Minister's speech. To my knowledge, no Liberal has yet stood in the House to explain why it is Government policy to constrain federal spending on higher education. That is a travesty. It is a travesty of the parliamentary system. Members opposite have an obligation to tell students and those who wish to become students in the educational institutions across this country why it is public policy to reduce the transfer payments in support of those institutions.
What is going to happen? In Ontario, the federal Government is reducing its cash transfers this year alone by some $41 million. I hope that when the Minister of Education for the Province of Ontario is discussing these matters with Ontario students she will remind students in our institutions, as I am sure she will, that one of the reasons the Province of Ontario does not have as much money as it would like to have to spend on higher education is this Bill. In totality, the Bill proposes to cut $380 million in terms of transfers. Why? Because the Government of Canada chooses to say that the chief purpose of public moneys to be spent on educational programs is for the Government to give credit for those expenditures. It cannot get credit directly, so it prefers to transfer those programs to the youth employment fund, spend the transfers that way and take them out of the educational system. That is the simple bald fact. I knew the Minister who introduced the Bill before his incarnation as a Minister. I have great respect for him personally. I do not know what happens when one joins the Liberal Cabinet, but something drastic does. However, in the words of this Minister, having reread them, I sense the Minister knows that words will not cover what is being done. When the Minister introduced the Bill, he said that the first change being made in the Bill is a change in the name. Let me quote the Minister:
The purpose of this change is to clarify the fact that the federal Government contributes huge amounts to the provinces.
If the purpose of changing the name is to get political credit, then let him say so. The Minister covered that up in somewhat more flowery language. I think that is what he was trying to say. He ought to have had the honesty to admit that that is what he was saying. In the end I think we will find on analysis that that is the entire purpose of this Bill.
What does the Minister say when he attempts to deal with the purpose of the Bill. The Minister said some revealing things. On page 815 of Hansard we find these words:
-the federal Government considers from time to time how best to allocate the huge sums which it allocates to the training and education of our young people.
That is an excellent idea, Mr. Speaker. All programs deserve to be reviewed from time to time to see if they can be better used for those for whom they are intended. 1 continue to quote:
For some lime now, the Government has felt that some of the funds which now move through provinces in a totally unconditional fashion might be more effective if they were channelled through more direct programs.
If that is the rationale for the cut, where in this Bill does the Government move more of its funds to more directly controlled programs? Does the Government do that? No, it does not. It simply reduces the funds without dealing with the principle, which the Minister I take it was espousing, behind the Bill.
The Minister went on to say that as a result of that concern, Ministers of the Crown met with provincial Ministers in order to try to resolve some of these problems. The Minister said:
The Minister of Finance accordingly met with the provincial Ministers of Finance in December, 1982 to exchange views on the economic prospects. He indicated that he had been informed by the Secretary of State that some progress was being made in discussions of support for post-secondary education. The Minister of Finance was therefore able to inform provincial Ministers that it might be unnecessary to introduce measures suggested by his predecessor in 1981. He indicated that he would be prepared-
And these words are self-condemning:
-to see the federal support for post-secondary education increased by 6 per cent in 1983 and by a further 5 per cent in 1984. This would bring such transfers into conformity with the anti-inflation six and five program-
I think the Minister will know that I read the whole paragraph. I do not think he can accuse me in any way of trying to excise quotes or take matters out of context. The implication of those words are clear. In 1982 the Government of Canada changed the understanding with regard to the general financing of health and of education. It abolished the revenue guarantee. The revenue guarantee is a technical phrase meaning that the understandings in 1977 under which provinces had tax points transferred to them, with some risk that revenues might not be equal, provided a guarantee that if revenues from those tax points were to fall below those expectations, the revenues would be topped up. That was the revenue guarantee. The Government abolished that in 1982.
Interestingly enough, the Minister goes on to argue, and this is in parenthesis and I will want to return to it, the validity of calculating the cash payments that are paid to provinces for post-secondary education on the basis that the provinces continue in effect to receive revenues equivalent to the tax points in 1975, 1976 and 1977. The Minister knows that is not true. Precisely because it is not true, the revenue guarantee was abolished in order to save the federal Government money to which it had committed itself years ago. The words are damning. What this Government is saying to the provinces, which have the constitutional responsibility for post-secondary education, is that "No matter what deal we said we would agree to for five years, you have no assurance that we will
January 31, 1984

honour our side of that arrangement during that five-year period." It was one thing in 1982 for the Government to abandon its position with regard to the revenue guarantee. It could at that time at least argue that the original five-year period was up, that a new five-year period was beginning, and therefore the Government had some rights to change the agreement. Whether the Government in fact has the moral right to do so unilaterally is a moot point and a point we debated at length at that time. But there can surely be no question that the Government of Canada has no right to make an arrangement with the provinces of Canada, to say it will live with that arrangement for five years and then change it unilaterally. Surely that is a simple matter of federalism, in other words, the ability to trust an undertaking received from the federal Government that has been put through the House of Commons in a piece of legislation.
I repeat that there might be some justification if, in fact, six and five were being applied to every program of Government, but it is not. It is, as a rule, only being applied to those programs that transfer money to those who need it, whether they are pensioners, educational institutions, or others. The federal Government's main spending programs go on. I ask you, Mr. Speaker, whether you think in fact, that a large budget is being created right now to sell the Government's upcoming budget proposals? I ask you whether or not the Government has cut back its advertising programs in line with six and five? I ask you whether the Government has cut back on the programs of selling itself to live within the six and five guidelines? The blue books are clear on that one. No way, not the Liberal Government. What will be the effect? One of the ironies is that the Government is not saying that in its view too much money is going into post-secondary education. That is not even its rationale. If you look at the proposal, Mr. Speaker, its rationale is to restrain spending on post-secondary education for two years to six and five. Then it is to return to the agreed formula, recognizing that the application of the six and five will reduce the base upon which the real formula then works. The Government is not arguing that the formula is too generous. It is not arguing that the old base is too generous. It is simply saying that it will stick the six and five on it for political reasons.
The effect is that it will make it more and more difficult for provincial governments to meet the demand of young people who know what a big, tough world they are facing and who want training of whatever kind today to help prepare them. That is the tragedy.
Actually the tragedy is twofold. Other Members of the House have dealt at length with what it will do to our student population. By concentrating on the federal-provincial issue, I do not want to suggest that I feel anything but immense sympathy for the students who will be affected. The Minister should have the courage to take his words and boil them down to what they actually say. At the end of his speech introducing the Bill, he talked about how much the federal Government was doing for young people. He referred to the student loans
Established Programs Financing program, a good program, and to research grants. Others talked about what the Government has done to the Social Sciences Research Council. It has cut them off, in effect. His chief example was: "The Speech from the Throne announced the establishment of the $1 billion youth opportunity fund". Well, here it is, here it is!
If one is young and concerned for his future in the country and knows that he needs to be trained for what is coming, he should not look to the Government to deal co-operatively with the provinces or to use national resources at both levels to achieve purposes which will be of benefit to the next generation of Canadians upon whom all of us rely. The evidence in this Bill and others is that the Government's purpose and intention is to strip the funding from higher education, from the co-operative programs which are federal and provincial, for one simple purpose-to create programs directly administered by Ottawa in contravention of the spirit of the Constitution which, it claims, will have long-term job benefits and the cheques for which can be handed out by Liberal back-benchers in an attempt to be re-elected. That is precisely the purpose and ambition of this Bill. I am astounded that Liberal Members opposite expect anyone to swallow this claptrap.


The Acting Speaker (Mr. Guilbault):: Questions, comments? On a question, the Hon. Member for Carleton-Charlotte (Mr. McCain).


Mr. McCain:: Mr. Speaker, one thing that impresses me about this debate more than any other aspect of it is the absence of comment by my Atlantic colleagues on your right. They are the ones who will by all odds suffer the major consequences of this and other legislation which the House has received since it resumed its sitting. I picked up a few facts from some of my New Brunswick friends which I would like to read. In Throne Speech reference was-


The Acting Speaker (Mr. Guilbault):: Order, please. Is the Hon. Member on a question or a comment?


Fred Alward McCain: Debate.


The Acting Speaker (Mr. Guilbault):: No, we are on questions and comments. I will recognize someone then from the New Democratic Party. The Hon. Member for Winnipeg-Birds Hill (Mr. Blaikie).


Arthur Jacob (Jake) Epp: Mr. Speaker, I rise on a point of order to direct a question to the Chair. I believe that the formula generally has been one from the Government side and one from the Opposition and that the split then works basically on a three to one basis. In view of the fact that the Hon. Member for Winnipeg North spoke and that two Conservatives followed, I am just wondering whether there should not be another Conservative recognized in that sequence.


The Acting Speaker (Mr. Guilbault):: First of all, there is no such thing as a firm formula and, second, whatever normal or usual formula is used unofficially, obviously it does not work this afternoon because one Party is not putting up speakers.

January 31, 1984
Established Programs Financing The reason 1 misrecognized the Tory member is that I clearly asked for questions and comments. The Hon. Member from the NDP rose and when he heard that I asked for questions and comments, he sat down.
The Chair has to recognize the first Member who rises. That is the one fundamental rule which is in our books. Arrangements work, providing they happen in the House. I may have a list before me, but if the Member who is the first one on my list does not rise, I have to recognize someone else.


Arthur Jacob (Jake) Epp: A further point of order, Mr. Speaker.


The Acting Speaker (Mr. Guilbault):: A further point of order, 1 will listen to it.


Arthur Jacob (Jake) Epp: Mr. Speaker, do the proportions in the House have no bearing on who is being recognized? I would suggest with all respect, Your Honour, that the Hon. Member for Carleton-Charlotte rose for debate. I think the Chair itself mentioned that there was time for questions first and that there was some confusion as to which Members were rising to ask questions, make comments or for debate. With all respect, I think from my observations that the Hon. Member for Carleton-Charlotte was rising at that time and wanted to participate in the debate.


Mr. Lapointe (Charlevoix):: You did not see that.


Arthur Jacob (Jake) Epp: Have you ever thought of turning around, Charles?


The Acting Speaker (Mr. Guilbault):: I do not think the Chair can entertain a point of order as to who rose first and whom the Chair saw first. It is a privilege of the Chair. There is no point of order. It is a matter for the Chair to determine who is to speak. Therefore, on debate I recognize the Hon. Member for Winnipeg-Birds Hill.


Gordon Edward Taylor: Mr. Speaker, I rise on a point of order. Ever since I have been here there has been a standard practice of three to one. The fact that the Liberals are not putting one up should not change the practice whatsoever. To change the practice suddenly is not fair to anyone, as it is the basis upon which we have been working, established by the Chair for many, many months. Why should it suddenly be changed? Our member had already started to speak, and he was the third member on our side. It would have made no difference if a Liberal had risen every time; it would have come back here and then gone back to the Liberals. Consequently, I suggest that the proper thing to do is for the Hon. Member for Carleton-Charlotte to have the floor.


The Acting Speaker (Mr. Guilbault):: The Hon. Member for Winnipeg-Birds Hill on debate.


Gordon Edward Taylor: Mr. Speaker, on a point of order, are we not to get an answer? Is the Chair to become so arrogant that we are not even going to get an answer?


Douglas Glenn Fisher: Careful, Gordon.


Gordon Edward Taylor: I am asking the Chair for an answer.


The Acting Speaker (Mr. Guilbault):: I mentioned before that a discussion of that nature is not a point of order. I listened out of courtesy to the Hon. Member for Bow River (Mr. Taylor). I do not believe he has a point of order. I am just returning to debate and recognizing the Hon. Member for Winnipeg-Birds Hill.


Gordon Edward Taylor: I suggest that you check with the Table officers and find out.


The Acting Speaker (Mr. Guilbault):: Order.


Ramon John Hnatyshyn: The Hon. Member for Winnipeg-Birds Hill deserves to be recognized as it is the first time he has been in the House this week. He is never here; let's be reasonable.


William Alexander (Bill) Blaikie: Mr. Speaker, the Hon. Member for Saskatoon West (Mr. Hnatyshyn) knows that he is not telling the truth on this occasion.


Some Hon. Members:: Oh, oh!


William Alexander (Bill) Blaikie: Indeed, a cursory look through Hansard of yesterday would help him to realize that what he has just said is not a fact.


Ramon John Hnatyshyn: It is just that you have a suit on.


Arthur Jacob (Jake) Epp: You are not wearing your jeans today.


William Alexander (Bill) Blaikie: In speaking to Bill C-12, which puts the six and five limits on the contributions of the federal Government to post-secondary education, I would like to respond to some of the remarks which were made yesterday by the Hon. Member for Mississauge South (Mr. Blenkarn). I had hoped at that time that I might have an opportunity to respond to the Hon. Member for Mississauga South (Mr. Blenkarn). Time ran out and I did not have that opportunity. Today I want to point out that I was, to say the least, bemused by the concern that the Hon. Member for Mississauga South showed about the sanctity of contract. He talked about the contract between the provincial and federal Governments as it pertained to fiscal arrangements. He was very eloquent in his defence of a principle that you do not interrupt contracts, that if you make a deal you stick with it. He went on at great length about how horrible the federal Government was for breaking a contract.
I just wish that the Hon. Member for Mississauga South and all of his Progressive Conservative colleagues had shown the same respect for contracts when the original six and five Bill was brought before the House. That Bill broke contracts with railroad workers and public servants. It broke contracts galore. We did not hear anything then about the sanctity of contract then from the Hon. Member for Mississauga South.
As far as the Progressive Conservatives are concerned, there are contracts and there are contracts. The same is true of the Liberal Government. This morning in committee we heard that one reason there is a three-year waiting period for doing anything about extra billing is that Ontario has a three-year
January 31, 1984

contract with the doctors. You must not touch a contract with doctors or with the provinces, but if you want to intervene in a contract to reduce benefits for workers, railroaders and public servants, that is different. They do not count when it comes to the reckoning of the Progressive Conservatives and the Liberals. I just wanted to put that offensive irony on the record.
I am against the Bill to apply six and five to post-secondary education. I have been against all the six and five Bills. I am against them on principle. My colleagues and I do not pick and choose according to what we think will be to our political advantage, like the Tories don't mind when contracts with workers are broken, but when it comes to pensioners and the provinces, it is a different story. We do not talk out of both sides of our mouths on this issue as do our colleagues to the right.
With regard to the six and five program, it is particularly irritating-and I have had constituents call me about this- that the Liberal Government has stuck six and five stickers on everything. People working for Canada Post receive a cheque with six and five in the corner. No matter where you go, you find a six and five sticker.
I realize that this is not a terribly substantive point, but the Government, realizing the amount of opposition that there was to this program, should not be so nervy. It should not stick six and five stickers all over the place, rubbing the noses of workers into the fact that it managed to pass the six and five program over the opposition of the NDP and with the co-operation of the Progressive Conservatives.
I wish to deal with some of the other matters in connection with Bill C-12. The separation of federal health care funding and post-secondary education is something I agree with. It was recommended by the all-Party task force on federal-provincial arrangements. It will make for easier accountability as to what the federal Government is providing for health care on the one hand and post-secondary education on the other. Being able to distinguish what goes to health care and what goes to postsecondary education is long overdue.
I agree with the Hon. Member for Mississauga South that the two-thirds one-third is an arbitrary figure. It was arrived at by the federal Government during or after the 1977 negotiations. It is partly because it is an arbitrary figure that it is so difficult to determine on a province by province basis which provincial governments are living up to their previous commitments to post-secondary education, which provincial Governments use the federal Government contribution to permit their traditional amount of the burden with regard to post-secondary education decrease, and which provincial Goverments are increasing their commitment to post-secondary education.
I do not think there is any doubt that regardless of one's opinion about the wisdom and the rightness of the six and five program, in this case as it pertains to post-secondary education, there are provinces which have not passed on federal funding in the full amount to the post-secondary education sector. These provinces have allowed their contribution to this sector to atrophy as a result of federal contributions. But six and five funding for post-secondary education is not the
Established Programs Financing answer. As much as that happens to be a problem and as much as I sympathize with the federal Government in its desire for greater accountability and more visibility of federal spending on post-secondary education, the answer is not to put a six and five limit on federal funding. It does not increase accountability. It does not increase visibility. It does not benefit postsecondary education sector or federal-provincial relations. What does it do?
I can see some of the problems which the federal Government has with respect to post-secondary education. However, I do not think that six and five is the answer. It is indiscriminate. I already explained why I think it is difficult to make overall judgments about what the provinces are doing province by province in the post-secondary education sector. Six and five is a totally indiscriminate solution, if it is a solution at all, which it is not. It treats every province the same regardless of its commitment to post-secondary education, regardless of its needs, regardless of whether it is a have not or a more affluent province. On the basis that it is completely indiscriminate, this Bill deserves our opposition.
Any diminishing of commitment to post-secondary education on the part of any level of government comes at a particularly tough time for those who benefit from postsecondary education, that is mainly young people in the short-run but society as a whole in the long-run.
There is very high enrolment in our universities. The professional faculties cannot admit all of those who would like to attend. The arts and science faculties are busting at the seams. There are increases in tuition fees and incidental fees, that is, the many ways which universities get money out of students. They are really user fees for services which the universities provide. In addition, there are cutbacks at the federal level and at the provincial level in support of post-secondary education.
All of this is at a time when we have the highest youth unemployment in decades. Students are in double jeopardy. They cannot get into universities like they used to and even if they do get in, they can hardly afford to stay there. In the summer they cannot get a job. What are they supposed to do? Six and five in post-secondary education does not address that problem. Neither does all the hoopla around the Ministry of Youth. It is just a way of providing a public relations response to the problems of young people in this country rather than real solutions.
There is a trend in the country toward universities once again becoming a place that only people of means can afford to attend. Only the rich need apply, as the Hon. Member for Dauphin-Swan River (Mr. Lewycky) said. That was a trend we conquered in many respects from the mid to late 1960s and into the 1970s. I know there were many people in Transcona, where I come from, who were the first of their families to go to university. They were able to do so sometimes because of the determination of parents who saved and made it possible. There was also an abundance of summer work in those days and good summer jobs were not that hard to come by. People could work in the summer and save. But there were also in the late 1960s and early 1970s, thanks to the provincial govern-

January 31, 1984
Established Programs Financing
ment in co-operation with the federal Government, more student loans available, more bursaries. We saw at that time, as I experienced it anyway, more and more people going to university who might not otherwise have been able to go. There was a kind of egalitarian bubble so far as enrolment at universities was concerned. I am not saying that that has disappeared altogether, but I am saying that we are going in the direction where that kind of equal access and opportunity, in which we took so much pride, is in danger. Action has to be taken, and applying six and five to post-secondary education is hardly a reasonable response to that situation.
This Bill also gives us an opportunity to reflect on federal-provincial fiscal arrangements as a whole, Mr. Speaker, which is what Bill C-12 is a part of. This Bill changes the title, and I think that is a good idea. I think it is much more useful to call it federal transfers for health care and post-secondary education than to call it federal-provincial fiscal arrangements. People might now have a ghost of a chance of knowing what we are talking about. I would like to see more language changes in this direction as far as Bills are concerned, indeed as far as laws are concerned, so that what we are talking about here can become more comprehensible to people in general.
The application of six and five to the federal contributions to post-secondary education we see another example of unilateral action on the part of the federal Government. In April, 1982, the federal Government reduced transfer payments to the provinces by the amount which had been put in there in 1977 as compensation for the termination of the revenue guarantee. There was no renegotiation, just unilateral reduction and withdrawal of funds. This was on top of a unilateral imposition of a new equalization formula, which hurt the Province of Manitoba and Quebec in particular. There we have two unilateral actions, and then we had the application of six and five to post-secondary education. Really all the Government is doing now is legalizing what it did almost 18 months ago when it moved to the six and five program.
We have a history of unilateral actions, all of which have had the effect of taking money away from the provinces. We have the cutback in April, 1982, the imposition of a new equalization formula, and the application of six and five to post-secondary education. Therefore, the federal Government has a lot of explaining to do when it gets self-righteous with the provinces about what is going on in various sectors, whether health care or post-secondary education. This does not make right what the provinces do, it does not mean their response to federal cutbacks is always right. Indeed, it is more often than not wrong because they tend to use those cutbacks as a political cover for making decisions they would make in any case, but now they make them and blame the federal Government. This is particularly true in health care but also has ramifications in post-secondary education. On the one hand the federal Government has to be stern in requiring provinces to meet conditions like accountability and visibility. On the other hand, I think it has to demonstrate a willingness to re-open questions of funding and not act continually in this
unilateral fashion as far as health care and post-secondary education are concerned.
That is another thing I wanted to raise this afternoon, Mr. Speaker regarding this completely inadequate response to the crisis in post-secondary education. Educators across the country have been calling for a royal commission on post-secondary education. All the time I was on the parliamentary task force on federal-provincial fiscal arrangements educators came before us, such as the Canadian Association of University Teachers and the Association of Universities and Colleges, who all felt long before we got to this point that much more attention needed to be paid to the role of post-secondary education and to the various expectations being placed on the post-secondary education sector of this country. The Government did not respond to those requests. It has not initiated any major re-evaluation of post-secondary education. All we have seen is the limiting of federal funding. That hardly constitutes an adequate response, Mr. Speaker, and is one of the reasons why we will be opposing this Bill consistent with our opposition to all the six and five Bills this Government has brought in.


Donald Alex Blenkarn: Mr. Speaker, could the Hon. Member advise the House of his view concerning the revenue guarantee being removed from the transfer payments in 1982? At that time it was estimated to be about $500 million, but there has been indexing since then. Has the Hon. Member done any study of how that has hurt post-secondary education, medicare and hospitalization? Also, to what extent has this particular Bill hurt the transfers made to the provinces for these needed programs?


William Alexander (Bill) Blaikie: Mr. Speaker, what applying six and five to post-secondary education transfers does is to make matters worse because it applies to a transfer which is already calculated on a diminished base thanks to the removal of the money attributable to the revenue guarantee in 1982. My view of that money at that time, and still today, is that it ought to have been regarded as money for health care and post-secondary education. In my view that is the position the parliamentary task force took. We pointed out, though, that there was an irony in that the federal Government, by deciding in 1982 not to regard that money as being for health care and post-secondary education, was in effect abandoning a position it had taken for five years. It had argued with the provinces that this was money for health care and post-secondary education. Then the provinces, which always said it was not for health care and post-secondary education, when the federal Government cut it back, said that it was for health care and post-secondary education. I guess this is the way it works, Mr. Speaker. Let me just say, oh what a tangled web we weave! Here we have the provincial Government arguing the federal position and the federal Government arguing the provincial position.
There is no question that the removal of the revenue guarantee has certainly been complicated by the six and five program which applies to a transfer which is already calculated on a diminished base. That is something that the Minister of National Health and Welfare (Miss Begin) and other Ministers
January 31, 1984

in this Government will never admit. After 1982 they kept talking about a 13 per cent increase. It was only a 13 per cent increase if you did not take into account the fact that the base had been diminished in the first place. If you took that into account, it turned out to be only a 4 per cent increase.


Donald Alex Blenkarn: I wonder if the Hon. Member would confirm that the effect of the 1982 Act was to take all the reductions in cash so that the tax situation would gradually get larger and larger on a transfer basis while the cash situation would get smaller. The effect of removing the revenue guarantee was to remove at least $500 million from the cash index. In 1983-84, the effect of this Bill, together with the 1982 Bill, was to reduce the cash received by the provinces by something in the neighbourhood of $330 million, and for the 1984-85 year the effect would be further to reduce the cash by $260 million. The reduction to the provinces in educational spending alone as a result of the cumulative effect of the 1982 Bill and this Bill would be close to or in excess of $500 million in the next fiscal year.


William Alexander (Bill) Blaikie: Mr. Speaker, I cannot confirm the figures but there is no question that this is the direction in which the federal Government is going. On this issue at least I have a tendency to trust the calculations of the Hon. Member for Mississauga South. If he says the figure is $330 million, perhaps that is what it is. The general trend is that the federal Government wants to reduce the cash portion it is giving to the provinces. That disturbs me because it is on the cash portion that the federal Government gets the most visibility and can demand the most accountability.
A couple of days ago the Hon. Member for Mississauga South made the argument that the money the provinces collect as a result of tax point transfers is not allocated money and that because they collect those taxes, the money is theirs. He forgets that the reason they are able to collect those moneys in the first place is that the federal Government transferred the points to them for a specific purpose.
In my view, anything which diminishes the cash transfer from the federal Government to the provinces increases the likelihood that such interpretations of federal-provincial fiscal arrangements as the one which the Hon. Member for Mississauga South tries to put forward might be believed. I think that would be unfortunate. I agree with the majority on the task force that all the money that is transferred to the provinces, whether it be in the form of cash or in the form of tax point transfers, has to be calculated in relation to what the federal Government is spending on health care and postsecondary education.


Douglas Glenn Fisher: Mr. Speaker, I thought the Hon. Member's comments about tax transfers and tax points were accurate and I thank him for his description.
Last week the Hon. Member for Mississauga South was a little confusing on the issue. He knew that this type of tax transfer is a very effective way of transferring money to the
Adjournment Motion
provinces without its having a total impact on the economy. In effect, the federal Government shrinks its participation in the tax game and the province expands its participation. In that way we are able to transfer the funds without its having any impact on the taxpayer.
I wonder if the Hon. Member would care to comment on some of the provincial impact, and I would ask him to use Manitoba as an example. I understand that in Manitoba the NDP Government has made a commitment to increase spending on the universities in line with cost of living increases, the GNP and so on, but the previous Tory Government was pretty ruthless about getting a free ride on federal revenues. It let the federal contribution become a larger and larger percentage of total university spending in Manitoba, and I understand that the NDP Government is now trying to reverse that trend.
I think that is a serious issue, Mr. Speaker. Many provincial Governments have tried to get a free ride on federal revenues and have used their portion of the spending for highways or, as in Ontario, for government jets and so on. I wonder if the Hon. Member would like to give his ideas on why the NDP Government in Manitoba has come back into the game more aggressively and what the impact of diminished Tory spending was on Manitoba universities.


The Acting Speaker (Mr. Guilbault):: The Hon. Member for Winnipeg-Birds Hill has one minute left in the question period.


William Alexander (Bill) Blaikie: Mr. Speaker, there is no question that many problems were created from 1977 to 1981 when the Progressive Conservative Government of Sterling Lyon was in power in Manitoba. One of the first things that the present NDP Government had to do when it took power in 1981 was to increase significantly the provincial support for health care and post-secondary education in that province. It was basically playing a game of catch up, trying to overcome some of the damage that had been done by four years of acute, protracted restraint.
As I understand the position of the provincial Government now, it feels that it has caught up and, through guidelines, is suggesting to institutions like the universities that they try to meet certain fiscal objectives.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Guilbault):: Order. It is my duty, pursuant to Standing Order 45, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the Hon. Member for Esquimalt-Saanich (Mr. Munro)-National Revenue-Tax reassessment of two-

January 31, 1984
Established Programs Financing income families, (b) Treatment of spouses of departmental employees, (c) Information provided to departmental employees; The Hon. Member for York North (Mr. Gamble)-National Revenue-Income Tax Act provisions- Minister's position, (b) Delays in adjudicating tax assessment appeals; The Hon. Member for Surrey-White Rock-North Delta (Mr. Friesen)-Fisheries-Management costs of West Coast salmon fishery, (b) Number of vessels engaged in commercial salmon fishery.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Lalonde that Bill C-12, an Act to amend the Federal-Provincial Fiscal Arrangements and Established Programs Financing Act, 1977, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
Fred Alward McCain: Mr. Speaker, 1 listened to the remarks of many speakers in this debate, including the Hon. Member for Ontario (Mr. Fennell), the Hon. Member for Dauphin-Swan River (Mr. Lewycky), the Hon. Member for Edmonton West (Mr. Lambert), the Hon. Member for Winnipeg North (Mr. Orlikow) and the Hon. Member for Don Valley West (Mr. Bosley). Each Member addressed the subject matter of the debate in a very relevant and important fashion. As I interpreted their remarks, none was picking quarrels with the provinces or with federal government standards. Instead they were trying to plead the case of the student, who at this time needs money as it has probably not been needed in the last 25 years in this country.
I rather bemoan the fact that the province which perhaps has the most to fear from this in its tax structure and budget balancing process at the moment is Manitoba where the Hon. Member for Winnipeg-Birds Hill has his constituency. I think he will regret taking the stand he has taken here inasmuch as he feels that all the evils are on his right and that he is not facing them. I think he should reconsider that stand because it is unwise.
I should like to put some figures on the record which will outline the position I want to take. I should like you to understand Mr. Speaker, that the changes are very significant in terms of dollars. If we look at the 1983-84 loss to the various provinces, we find that Newfoundland is losing $2.7 million; Prince Edward Island, $.6 million; Nova Scotia, $4.1 million; and New Brunswick, $3.3 million. If Bill C-12 is passed, in 1984-85 Newfoundland will lose $6.1 million; Prince Edward, $1.3 million; Nova Scotia, $10 million; and New
Brunswick, $4 million. This is happening at a time when the finances of those provinces are very seriously strained. They are having great difficulty in balancing their budgets or even approaching a responsible deficit at this moment in time. One finds, if one takes a look at some other statistics, that the programs under the established financing structure, without federal meddling, reached a point when they were bearing roughly 27 per cent of the total cost of provincial health and post-secondary education spending. However, from 1979-80 through to the 1982-83 Budget, that has dropped from 27 per cent to roughly 21.5 per cent. That is a very significant change in both the post-secondary education and in the cost of health care. The federal contributions to those services have declined from 1978-79 by over 5 per cent. If one looks at the percentage of health and PSE spending in another source, one comes up with exactly the same figure. I regret very much, Mr. Speaker, that this is one of the areas which has been attacked as an opportunity for federal savings.
Again one finds that in 1979-80, by a federal estimate, the federal Government was assuming 31.3 per cent of the budgets of the provinces. It is now, in 1983-84, estimating it will assume 24.5 per cent of those same expenditures. That is down 7 per cent of the total expenditures of the province as the grants have been reduced, and it refers to Manitoba as well as it refers to the other provinces of Canada. This will give the provinces some rather serious difficulties in financing their requirements.
I checked some of the things that were said when I was in New Brunswick, and I first want to blow a hole in the idea that the announcement of the Minister of Finance (Mr. Lalonde) that we were going to receive an additional $769 million in 1983-84 was made in a very inaccurate way. These are the comments which have been made to me by a gentleman in New Brunswick who knows what he is talking about: the Throne Speech reference was made to an increase in federal funding for EPF. This was followed by a press release issued by the Minister of Finance which indicated that the provinces would receive an additional $769 million in 1983-84, New Brunswick's share being $21 million. I have discussed this matter with federal officials and have been able to confirm the following facts: one, this is not new federal money in the sense of a policy change as far as EPF is concerned. In other words, the federal Government is not in any way changing the EPF formula to result in increased payments to the provinces for health care and post-secondary education. The so-called "windfalls" are adjustments to the federal spending estimates. In other words, the $21 million referred to for New Brunswick is a re-estimate of the federal EPF spending in New Brunswick over and above the federal Budget estimate of last April. It is a measure of the inaccuracy of the federal Budget estimate for EPF made last April which we in fact knew was low at the time, and we had incorporated those adjustments in our budgeting process. It was not new money for the provinces in any way.
January 31, 1984

The so-called increase will do nothing, as far as the revenues of New Brunswick are concerned, that has not already been budgeted for. For some time now we have been anticipating an increase in EPF funding because of revised GNP figures. As a point of fact, the moneys referred to as a "windfall" for New Brunswick have been built into our current revenue forecast, and we are not in fact receiving largesse from the bounty of the federal Government in an additional way. 1 believe all of Canada assumed that the federal Government had given $769 million more than it ever had intended to, when in fact the formula which governed the grant dictated that that $769 million be made as an adjustment to federal estimates in its budget process. It is quite an error, $769 million.
Let me refer to what EPF is all about. And we are dabbling, meddling with EPF in this Bill. It was to provide long-term financing certainty to both levels of Government. It indexed federal contributions to the average growth of the national economy during the prior three years. The federal Budget of November 1981 proposed removing over $5 million from EPF over a five-year period to 1987. This was legislated within seven days of the expiry of the five-year guarantee. The unilateral decision of the federal Government to eliminate the revenue guaranteeing component of EPF reduced Ottawa's transfers by almost $1 billion in 1982-83 and an ever rising amount in subsequent years. This, of course, applies to postsecondary education.
The federal Government has recently announced its intention to split the EPF block fund into two components and to cap the growth of the per capita federal contributions for higher education at 6 per cent in 1983-84 and 5 per cent in
1984-85, with no indication of federal plans for the future. The implications of this are, first, that it leads to long-term financial uncertainty for the provinces; second, the split between health and post-secondary education is being done on the basis of the outdated and arbitrary 1975-76 ratio; and, third, by 1987, the provinces would lose $5,304 million through elimination of the revenue guarantee component and $911 million through the proposed cutting of money to post-secondary education, for a total of $6,215 million by 1987. Even if you come from Birds Hill that is not peanuts, Mr. Speaker. That is the situation.
I want to say to you, Mr. Speaker, that 1 was always one who favoured block funding, and it eventually became the policy of the Government of Canada, accepted amicably by the provinces of Canada, with the understanding that the federal Government was through meddling in those areas of responsibility which were provincial, such as post-secondary education, health care services and so on. It was through meddling. The formula had been written, it had been agreed to, and the provinces anticipated that it would be respected. However, in 1982, the provinces were advised very arbitrarily that in fact they could not expect to receive the same contributions which they had received and that there would be changes.
The consequence of this to New Brunswick has been very serious. We find that the provincial expenditures of the Province of New Brunswick have gone to $712 million since this
Established Programs Financing agreement was made. That is an increase, Mr. Speaker, of $294 million, as the services have been rendered by the Province of New Brunswick as best the federal Government could in accordance with its standards. That is the increase in the province's costs. The federal contribution, on the other hand, since 1979-80, has gone up by only $35 million. Therefore, the Province of New Brunswick is spending an additional $294 million for 1982-83, and the federal share of that has only gone up by $35 million. This certainly refuted all the good intentions of the Established Programs Financing policy which have been worked out in the block funding structure. In 1979-80 the share of the provincial expenditures as a total was 41.1 per cent. In 1982-83 it dropped to 29.1 per cent, a 12 per cent decline in total revenues for the provinces of Canada in that period of time. This is something which I submit to you the provinces cannot accept. The first major provincial shared cost program was hospital services. This program, introduced in 1958, provided for the federal Government to cover about one-half of the cost of approved hospital services, with the provinces covering the other half. In the late sixties the medicare program was introduced. Here again the federal Government agreed to cover, on average, half the cost of the provincial medicare program. According to the figures that I have already given you, they have not approached that figure in recent years.
The third major shared cost program involved federal grants for post-secondary education. In 1967 the federal Government offered to pay the provinces 50 per cent of the operating costs of post-secondary education institutions. The original agreements worked fairly well through the 1960s, but problems began to emerge in the 1970s. The provinces were having difficulty coping with the rigid program and spending guidelines laid down by the federal Government, which in many cases directed provincial spending to high cost rather than to less expensive program areas. The federal Government was concerned about the open-ended nature of its financial involvement in which it had to match provincial spending. Beginning in 1972 the federal Government began to take steps to reduce its financial commitments when it placed a cap on its contributions for post-secondary education. The introduction of caps and ceilings was totally contrary to the contract and spirit of the block funding structure which had been adopted. It was not within the intent of either the federal Government or the provinces that caps should be imposed, but rather that the indices of Canada would outline and define the responsibilities of the federal Govermment.
The 1977 arrangements replaced federal conditional grants to the provinces in support of medicare, hospital services and post-secondary education with a new program, namely the EPF. That has not worked either. With EPF, federal contributions were no longer determined by provincial program expenditures as they were before, but were tied to the rate of growth in Canada's economy. This gave the federal Government greater certainty about its financial commitments. Of equal importance, it placed an upper limit on its financial obliga-

January 31, 1984
Established Programs Financing
tions. This less attractive financial arrangement was made acceptable to the province because the federal Government assured them that EPF would give provincial Governments more flexibility in program decisions. Having put themselves in this position, Mr. Speaker, the provinces were asked to seek ways to make more effective use of the provinces money as it related to health care and post-secondary education. This meant the provinces were free to manage their health care and post-secondary education programs in their own way.
For the most part the provinces favoured the move although it was recognized that there would be some small reduction in the total moneys paid by the federal Government to the provinces. One of the key features of the arrangements was that it was designed to produce long-term certainty-please note that-for both the federal and provincial Governments. The federal Government obtained certainty that no matter how much the province spent on these programs its contributions would not exceed the growth of the national economy. The provinces obtained certainty that the federal Government would refrain from applying arbitrary caps and limits to its contribution and therefore could plan accordingly.
EPF worked fairly well over the five year period from 1977 to 1982. However, over that period, and within the lasts year, the federal Government has done much to destroy the principles on which EPF was based. It has launched a counter-productive quarrel with the provinces and caused serious distrust between the provinces and the national Government. Less than two years after it convinced the provinces to accept the EPF agreement, the federal Government wanted to change its terms and thereby reduce the EPF payments to the provinces. On this occasion the provinces successfully resisted cuts to EPF, but the federal Government responded by cutting other transfer payments and terminating discussions for new block funding arrangements for social services. Mr. Speaker, this does not look to me like a Government that wants to get along with the people, the voters and the governments of Canada.
In the 1981 federal Budget the Government of Canada announced its plan to cut over $5 billion from EPF funding over the period of 1982 to 1987. This cut was implemented in the spring of 1982 contrary to the recommendations of all the provinces, the Economic Council of Canada and an all-Party parliamentary task force chaired by the Hon. Member for Gloucester (Mr. Breau) in New Brunswick. Contrary to all of these recommendations the cut was implemented. The federal Minister of Finance announced that federal EPF contributions would be arbitrarily capped in so far as post-secondary education was concerned in 1983. We have that cap at a point in time when young people who cannot find jobs are seeking to improve their standards of earning opportunity by attending post-secondary institutions. Mr. Speaker, the time when potential students most need the money which would have ordinarily flowed from this program is a strange time indeed to put a cap on education. I bemoan the fact that this has happened at this particular point in time.
There have been some increments in those payments, but the fact of the matter is that although federal payments have been
increasing, they are not keeping pace with New Brunswick's spending needs, particularly in the health care field, which have been increasing, according to demands of the federal Government, federal standards and the Minister of Health of Canada (Miss Begin), at a rate which far outpaces the inflationary rate of this country today. The result is that the federal contributions as a percentage of provincial spending are falling, and if present trends continue, will fall for some time to come. As an example, the federal support of provincial spending on health care and post-secondary education peaked at 41 per cent and fell to less than 30 per cent by 1982-83.
I would like to give those who do not care about the provinces and the provincial taxpayers a little bit of information on what the tax rates are in the Atlantic provinces. Mr. Speaker, you are going to wonder why the Minister for New Brunswick, the former Premier of Nova Scotia and the former Leader of the Liberal Party in Prince Edward Island, sat idly by on your right while these things happened to the tax structure of Atlantic Canada. The gasoline tax is 9.8 cents per litre in Newfoundland and P.E.I. In Nova Scotia it is 8.8 and in New Brunswick 8.1. Excepting only Quebec, these are the highest taxes on gasoline of any part of Canada. In Newfoundland the sales tax is a burdensome 12 per cent. In New Brunswick, P.E.I. and Nova Scotia it is 10 per cent. The next highest is Quebec with a 9 per cent sales tax. These are the burdens which our provincial taxpayers are carrying. Mr. Speaker, might I have unanimous consent to continue for a couple more minutes please?


The Acting Speaker (Mr. Herbert):: Is there unanimous consent?


Some Hon. Members:: Agreed.


The Acting Speaker (Mr. Herbert):: The Member may continue.


Fred Alward McCain: In Newfoundland the income tax rate is 60 per cent of the federal tax, in P.E.I., 52.5 per cent, in Nova Scotia, 56.5 per cent; and in New Brunswick, 58 per cent. These are, without any doubt, the highest provincial income tax rates in Canada. The cutbacks in these grants for the established programs Financing are going to transfer additional payments on provinces which are already the highest taxed provinces in Canada. They are transfering these costs to those provinces at the rate of tens of millions of dollars which they do not have. Mr. Speaker, does the Government have any concern whatsoever for the financial future of those provinces with that tax burden as it changes this financing program as it relates to both health and post-secondary education?
I submit to you that as the various Ministers have been badgering the provinces, including the Minister of National Health and Welfare (Miss Begin), the Minister of State for Finance (Mr. MacLaren) and the Minister of Finance when he falsely announced his $769 million, this is transparent deceit in trying to transfer the burden of performance to the
January 31, 1984

provinces and accusing them of everything but good government while depriving them of the historic means which has provided them with the financial capability to serve.


The Acting Speaker (Mr. Herbert):: It being five o'clock, the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.


PRIVATE MEMBERS' BUSINESS-MOTIONS   INCOME TAX ACT EXEMPTION FOR SMALL FARM HOLDINGS
Mr. Robert Wenman (Fraser Valley West) moved:: That, in the opinion of this House, the retention of productive and potentially productive small holdings in agricultural production is of value and, that the government should consider the advisability of repealing Section 31 of the Income Tax Act which threatens the retention of such productivity, lifestyle and land use.
He said: Mr. Speaker, the issue of small farm holdings, production on them and the issue of taxation of that production is what my motion refers to today. There is a smaller issue which has been in focus in the House and throughout the country that relates to aggressive, repressive tax assessors acting with unconscionable and unfair pressure, brought on to excesses by a bankrupt government with a big stick and a desperate need to fill an empty coffer as a result of its own wastes and its own excesses. In fact, as a result of the kind of application of the Income Tax Act in this and many other cases, the Government is cutting off its nose to spite its face. These small farm holdings have a capacity to produce food and provide a lifestyle. The land on these small farm holdings is becoming unproductive because the incentive to make them produce is being withdrawn.
The smaller issue is the tax issue itself. I do not pretend that the motion which I bring forward will in fact answer or solve the problem in itself. This particular motion brings the subject matter forward which will have to be discussed. It may not only be Section 31 but several different parts of the income Tax Act which will have to be amended in order to get back to the basic principle that was intended by this particular tax incentive, or disincentive as it has become.
Hopefully, by bringing this motion forward today we will bring the matter to the attention of the Government once again. 1 want to commend highly my colleague, the Hon. Member for Cariboo-Chilcotin (Mr. Greenaway), and other colleagues from across the country who have been pursuing this matter persistently in the House with respect to the problem of producing on small farm holdings and the tax which in fact destroys that production. It is a difficult equation and the answer is not easy. It is not easy to find a balance between production, taxation and land use that is fair. We
Income Tax Act
know now that it is not working today. The small farmers and businessmen who are trying to struggle to create agricultural products and this lifestyle from a little extra production are experiencing in fact just symptoms of something that is gravely wrong with a system that is in need of a major overhaul, redefiniton and readjustment.
It does come back to a question of land use. It would seem that in this, the second largest country in the world with one of the lowest density populations in the world, the taxation on production and on land would not have a negative effect on production since we have so much of that land. But when one begins to look at our arable agricultural land which can produce, one sees that this particular resource is extremely limited. It is a resource which we must protect as an element of production in our society. While some may say that we can export our water and buy the subsidized crops from Mexico and California and forget about the highly productive farmland in Canada that produces on the basis of natural environmental factors, I do not think we can or should allow in the longer run this small farm holding to disappear as a way of life and a means of production in Canada.
Others will speak on other aspects of the motion today but I would like to place an emphasis on land use, particularly as it relates to urban densities. The lower mainland of British Columbia, The Fraser Valley, is a perfect example. The land in the delta of the Fraser River from Hope, Chilliwack and spreading through the valley to Langley, Surrey, Richmond Delta is going through a great struggle as it is in the funnel and under the pressure of a growing population. More of it is disappearing on a daily basis to industry and housing. Now, as a result of this taxation measure, it is disappearing from production and just sitting idle. This may involve only Five acres here or ten and twenty acres there in small holdings throughout the lower mainland.
Some may have had the pleasure of enjoying new raspberry juice products from the lower mainland of B.C. If people have bought raspberries off the shelf, there is a 90 per cent chance it came from the valley.


Douglas Glenn Fisher: I have had a lot of raspberries from the Fraser Valley.


Robert Lloyd Wenman: That is good. This is a type of double raspberry. It is a raspberry to the Government that is trying to destroy these real raspberries with real value to them.
It is not just the berrygrowers, some of whom are on very small holdings, who are affected. There is an agricultural potential there that is even greater than the agricultural potential of our great breadbasket of the Prairies. In this Fraser Valley area we can grow two and even three crops a year if this land is not eliminated from production. There are studies from Britain and elsewhere in the world which show that the productivity of these small holdings is very high. It can be very intense due to the single family manning a small amount of land and maximizing the production from it. I want to see this production continue in the name of production

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alone, not just with respect to the other elements which make it valuable.
I want to say that it is not only the production aspect that makes it important for these areas to be preserved. In an area like the lower mainland of British Columbia, the population is expected to double and triple in the very near future. As this pressure develops, the price of land goes up and the cost of production goes up. There is greater threat to this land. When I was a member of the British Columbia legislature 1 fought for many years for the preservation of farmland. In fact, everyone groaned each time I stood up to speak in the House knowing I would talk about this issue. It was not just preserving farmland that I fought for but preserving it for the sake of open space. The Open Space Act that I, with the assistance of the Federation of Agriculture, introduced in the British Columbia legislature became the first greenbelt legislation that was passed in any province in Canada. In fact it was passed by a Social Credit Government, I am happy to say. The Greenbelt Act that was created has preserved some of this land, and so the provincial Government and the municipal Government in turn have acted in co-operation to ensure the preservation of this land. But as well as the municipal Government's action and the provincial Government's action there is a third action relevant to the preservation of this farmland, that is, that of the federal Government. The federal Government does that through an incentive in the Income Tax Act to keep the land productive. That incentive is being taken away on a daily basis with a vengeance that we have not seen in the valley for ten years. Each time we change Ministers, I talk to the current Minister about it, send him some letters, we have a little lobby and we have a little petition. Finally, the message gets through and he pulls the tax assessors off usually. But not this Minister, Mr. Speaker. The Government has been waiting for a Minister like this who can say, "Here is another measure of tax we can grab", forgetting why that tax incentive was placed there at the beginning. The tax incentive was put there to increase production.
In my opinion, a secondary factor, which has been more important since land use and environment became more important, particularly in urban density areas, is to keep and preserve the metropolitan area as an open space area where people can live and live in a lifestyle to let the land on the lower mainland breathe.
For us in that suburban area, this is a very important taxation measure. The application of the taxation measure by tax assessors is, hopefully, misunderstood and, hopefully, misinterpreted. If the Liberal Government of Canada is saying "No, that is the way we want it", that is another matter. Then we will have to deal with the Government.
I am pleased to see the agricultural policy of the Conservative Party is to withdraw Section 31 of the Income Tax Act. I am very pleased with that policy. It may well be that we will have to get rid of this Government to begin the correction and to allow this lifestyle and land use to continue. There is in
Canada a sense of fairness, and those who produce know that we have a system of taxation, a Robin Hood system. If you produce, fine. Not only do you produce, but you pay a tax and maybe you pay too much tax. But taxpayers will keep paying that tax as long as it seems to be fair. That inherent line of fairness in the Fraser Valley in British Columbia at least, and across the country as I hear from my colleagues, has that narrow line. It has not been stepped across. It has been strided across and it has been broken. That is causing symptoms, namely the anger of the small farmer and the small land holder who has worked and struggled to maintain his production and who sees his capacity destroyed. He says, "It is not worth it. I cannot be bothered. I will not produce these few extra head of cattle. I will not produce this extra produce. It is not worth it". To me, Mr. Speaker, that is absolutely the opposite to what was intended for the use of that land and for production.
This Bill is of great concern in my riding of Fraser Valley West. As I have said, the nature of my riding is that of a suburban area. It is one of the fastest growing communities in British Columbia, in fact, in Canada. I see the pressure every day. The oceans and mountains which give Vancouver its unique beauty also forces expansion of the community from the ocean up the valley into the lush Fraser Valley. Every day more houses are being built on prime farmland. Every day more acres of valuable agricultural land are taken out of food production and out of that lifestyle. Ultimately, the society I want to create for Canada and I think the people I represent want to create is the kind of society that gives a lifestyle of maximum opportunity. This lifestyle is high density for many, low density for many and a lifestyle which ensures that if you just want to live in an apartment or a condominium, you have that choice. But what if you want to live on a small farm and maybe do another job at the same time as you add a little production, in fact, do a second job while others in the community go to movies, to various shows, nightclubs and so forth? What if you, on the other hand, milk a few cows and raise a few beef, put a little extra feed in seven days a week, produce a little bit and earn a little bit extra in side income, why should there not be some incentive to earn extra income from that second job? Why is there not a category for a person working at one job while at the same time he tries to build some side income from farming? Perhaps he might want to make farming into a full time occupation.
There was some hope for the individual in our society that he could still do that. But that has been taken away. To go into a big farm process is almost out of the question for most Canadians now. There is an opportunity for small farm holders and for some part time farmers. I want to make sure the Income Tax Act takes that into account and provides definition and incentive for them. If it does not happen, this unchecked growth will see the lower mainland become a megalopolis from Vancouver to Chilliwack. It will be like Los Angeles. Los Angeles might be an interesting city but it is an absolute tragedy from a planter's point of view as it has spread its pavement, freeways and houses for miles and miles up the
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valley. What happened as housing spread out and as pollution grew? One can see pollution hanging over the city. I do not want Vancouver, Toronto or Ottawa to be like that. It is hard for a civil servant, a Deputy Minister and others to interpret that because in Ottawa the National Capital Commission preserves open spaces and preserves a particular lifestyle. It lets us feel comfortable and lets our city breathe. I want to see the city in which I live be allowed to breathe as well. Part of that process is right here.
We can avoid the problem of urban sprawl with careful planning. For example, small agricultural holdings of five acres or less, particularly those in proximity to those in urban areas, provide an important function as they relate to the production of food and the preservation of open space internally and externally near areas of high density. Small agricultural holdings also provide an alternative lifestyle that we seek. This means we will have to allow these small farmers to have a full write-off. It is a business principle. When is an expense of a production an expense of production? If I am raising high quality race horses or if I am raising high quality cattle or breeding stock I might invest thousands and thousands of dollars. I have one constituent who hires 10 or 15 people. He would hire another five or ten. But why do it? He cannot write the expense off as an income tax deduction because he is classified as a hobby farmer. He has only ten acres. But he has a million-dollar business going. That, however, cannot be claimed as an expense. He cannot claim against his other income. It is, indeed unfortunate.
I could go on, Mr. Speaker, and express the concerns of individual after individual. I could speak of the associations that have expressed concern. I will present petitions in the House of Commons from the small farm agricultural holding throughout my riding. Who will hear them? Who will receive them? Is our democracy dead here that these people cannot be heard, that there cannot be action carried forward? I hope they will be heard, and I hope we take the subject matter of today's motion as an example of a Private Member's expressing the concerns of many Private Members and many Canadians across the country who want to build a stronger, more productive Canada and a better lifestyle for themselves and other Canadians.


Mr. Jim Peterson (Willowdale):: Mr. Speaker, I rise in support of the principles enunciated in this Private Member's Bill. It is an issue about which I feel very strongly.
I would like to look at the impact of Section 31 of the Income Tax Act. It is a provision designed to limit the losses which persons can claim against other income when those losses result from farming operations. There are very few other provisions in the Income Tax Act which restrict losses in a business from being deducted against other types of income. In essence, it is a unique provision aimed particularly against certain types of farmers.
What was the purpose of the provision? When it was included in 1952, it was assumed that we would prevent
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so-called rich people or people with a lot of money from investing in farms and writing off their losses against executive incomes of, say $200,000 a year-the so-called hobby farmers. In effect, this is saying that farming is not a legitimate business. If those rich people had purchased hardware stores, invested in the textile industry, started a shoe shop, a grocery store or whatever and lost money, they would have been able to deduct their losses. We are putting farmers into a very unique category.
Who are the farmers right now who are facing economic problems and are suffering in the country? To a large measure they are red meat farmers on smaller marginal holdings, smaller lands which are not amenable to rich cash crop operations. What happens? Either the farmers go out of business or they show some initiative by obtaining jobs as well as carrying on farming operations. They take jobs in town and supplement their farm incomes. The impact of Section 31 is to discourage that type of hard work and initiative, because the moment farmers are earning more income from other jobs to make the farms pay, from working in town eight hours a day, 40 hours a week and then spending another 40 hours working on the farm, they lose their farming losses and are restricted under the provisions of Section 31.
Are we attempting to encourage initiative and hard work, or are we more concerned about what was once a perceived loophole? I would like to refer to a Saskatchewan couple of whom I am aware. The wife is an assistant veterinarian and the husband works in an electronics plant. They want to invest in a small-acreage horse farm. They want to raise horses and sell them as yearlings. If they cannot deduct their losses because they already have other jobs, they will be unable to become involved in the business. We are not only hurting people who are in farming and take jobs to supplement their incomes during these tough times for farmers, we are stopping additional people who have an interest in farming from becoming involved.
As far as rich persons are concerned, we are not concerned about persons making $100,000 a year and wanting to become involved in farming as a hobby. We already have built-in safeguards in the system to protect such individuals. Under the present law they cannot operate farms without an expectation of profits and still deduct losses, nor can one in any other business. One has to have a reasonable expectation of profits. That is the safeguard.
A further safeguard, if we wanted to include one, would be the "safe haven" type of rules such as they have in the United States where one has to earn a profit so many years out of so many years. If we wanted a little more certainty in our tax laws, that would be the way to explore plugging up any loophole or curing any problems which might arise.
Let us look at the impact of such farmers becoming involved in smaller acreage marginal lands which support horses or beef but not heavy cash crops. What will be the impact on employment? These types of operations require labour. They are labour-intensive. They need people to build fences, to do the feeding, to do the mucking, to do the sowing, to look after

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cattle when they are giving birth, to look after the young horses and to do the selling. Who are the types of people they employ? By and large the people employed on these types of farms are unskilled labour but people who have a commitment to the outdoors, to animals and to the land. These are the people who need jobs in this time when technology is taking over and they almost require Ph.D.s to obtain jobs in certain areas.
Who will benefit if we were to adopt the principles mentioned in the Bill and to reform what I think is an antiquated provision in Section 31 of the Income Tax Act? In summary, farmers facing problems today who want to supplement their incomes by working in town or elsewhere would benefit. These are the type of people who need our help. Second, we would bring into better use much of the marginal farmland which we find in Ontario and in other parts of Canada. Third, we would be increasing employment as these are labour-intensive operations. Fourth, by abolishing this one restriction in the Income Tax Act, we would be generating on the whole more tax revenue. More money would be going into these marginal farms instead of going into condominiums in Florida. More people would be buying small farms, which creates expenditures in rural communities at the feed or supply store. More people would be hired who would be paying more income tax. Fewer tax assessors would be running around worrying about these types of accounts.
Let us recognize that farming is a business like any other business but, more than that, it is also a way of life which we should want to encourage and preserve. We should stop penalizing farmers who have to take jobs to keep their farms going. This is one instance when all farm groups are united and unanimous in their recommendations for changes to Section 31.
In conclusion, we should either abolish Section 31 outright or, failing that, a reasonable alternative is one that was presented by many farming groups, that is, to increase the restricted farm loss from $5,000 per year to an amount which reflects the realities of today. That $5,000 per year amount was put into effect in 1952 and has remained unchanged. Surely it is time, if we do not abolish it, that we at least bring it up to inflationary standards.


Robert Lloyd Wenman: How much?


James Scott (Jim) Peterson: It would be somewhere in the neighbourhood of $20,000 to $30,000 per year. This is an idea which I believe all Hon. Members of the House should enthusiastically support for the reasons I have mentioned.


Mr. Vic Althouse (Humboldt-Lake Centre):: Mr. Speaker, it is a great pleasure to rise in support of the Private Member's motion before us which reads as follows:
That, in the opinion of this House, the retention of productive and potentially productive small holdings in agricultural production is of value and, that the Government should consider the advisability of repealing Section 31 of the Income Tax Act which threatens the retention of such productivity, lifestyle and land use.
The section has come up for a great deal of criticism and discussion. The recent court case of Paul Graham of Lanark County gives us some hope that the section will be opened up for interpretation. The judgment was given by Mr. Justice Cattanach. His judgment was very fair and objective with regard to how he viewed Section 31. He reviewed the various steps of the case before it got to the Supreme Court of Canada.
Mr. Justice Cattanach said that the previous court said that the section is meaningless and incomprehensible and therefore should not be applied to the detriment of the taxpayer. Mr. Justice Dickson, who made the first ruling which had been appealed by the Department of National Revenue, did not accede to that submission for to do so would be in effect to write the section out of the statute. Accordingly, he made the valiant effort to make sense out of language where no sense existed, such as: "According to the ruling Section 13, which is now Section 31, but the material language thereof is unchanged." In construing the section, he said what the three clauses were. I would like to read them into the record so that people can make sense out of them. This is the section the Department is interpreting. I quote:
(1)	a taxpayer, for whom farming may reasonably be expected to provide the bulk of income or the centre of work routine. Such a taxpayer, who looks to farming for his livelihood, is free of the limitation of s. 13(1) in those years in which he sustains a farming loss.
(2)	the taxpayer who does not look to farming, or to farming and some subordinate source of income, for his livelihood but carries on farming as a sideline business. Such a taxpayer is entitled to the deductions spelled out in s. 13(1) in respect of farming losses.
(3)	the taxpayer who does not look to farming, or to farming and some subordinate source of income, for his livelihood and who carries on some farming activities as a hobby. The losses sustained by such a taxpayer on his non-business farming are not deductible in any amount.
Putting it into a little plainer English, it means that parttime farmers are generally restricted in the application of their farm losses subject to the interpretation by the Department and its auditor. The part-time farmer's loss is calculated as the lesser of the actual loss and $2,500 plus half of the loss in excess of $2,500 to a maximum of $5,000 in any one taxation year. Any remaining portion of the loss may only be applied against farm profits in the carry over period. Hobby farmers are not permitted to claim losses since they are not considered to be operating a business.
Because the question of the hobby farmer comes up often in the debate on Section 31, in my opinion hobby farmers should be treated the way they have been under that section. The Department's problem is deciding when a hobby farmer is no longer a hobby farmer. Those who have been running into difficulty with the Department are those like Paul Graham of Lanark County. He had a job, and I presume he continues to have a job, which employs him for 36 or 37 hours a week. He spends 40, 50 or 60 hours a week working the farm that he has built up. He has added to it over the years and is now generating gross income somewhere in the $60,000 to $80,000 range. He earns less than $30,000 at his other job.
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It was fairly easy and clear-cut for the judge to make the decision he did, that Paul Graham was attempting to become a full-time farmer. He had the volume of business and at the moment of the assessment he was showing a loss. There was a downturn in the meat market. Hogs, his main enterprise, did not bring in enough money to cover his cost of production. There are other cases. I will read only one to show that Paul Graham was not an isolated case. This individual, who lives in Manitoba, said in part in his letter to Revenue Canada, and I quote:
I work a 37 Vi hour work week for Manitoba Hydro and approximately 40 to 50 hours a week on the farm. I travel home after hours and still manage to put in anywhere from six to eight hours on the farm during seeding, summer fallow and harvest time. I spend my four-week holiday plus about 30 to 40 hours on weekends Saturday and Sundays plus statutory holidays.
Since I took full operation of my dad's farm I replaced all the old machinery, cleared off most of the stones, cleared and opened up more land, thus increasing the value of the farm. I installed sewage and water, completely renovated my house and put up a workshop.
I was born and raised on the farm and because farm expenses have outstripped the farm income, as is well known, I set out to seek employment to supplement my family income.
1 am an hourly employee and could be laid off at any time. As I write this letter, 1 am presently laid off for a short period.
I feel the money I spend on upgrading and maintaining my farm is money spent on the local economy and is regenerated through the system for the good of the small businesses that are engaged in the farm machinery and supply sector.
1 don't accept the fact that you have judged my farm operation as a business that has no hope of ever becoming a profitable one. 1 feel since my small operation is financed by my hard work and determination of keeping it in the family and is not dependent on government grants, forgiveable loans, government bail-out, et cetera, 1 also feel that your decision is forbidding me to be an equal of having the right to deduct my expense from my income regardless of whether I make a profit or not.
And I also feel that 1 am not a sinner by not making a profit and if 1 am a sinner then I should be given the same recognition as many other sinners, just to name a few, Government of Canada, CNR, Air Canada and the list could go on.
That probably outlines the argument made by farmers who are attempting to operate small farms and make them into a manageable size in order that they can give up their job or look forward to the day when their off-farm job will no longer be available.
There is the problem of hobby farmers. As the motion suggests, it is time to reconsider the advisability of Section 31. We should open up the whole process and look at what we are doing to farmers, both the beginning category and the so-called viable category and some of our accelerated depreciation schedules which allow machinery to be written off the books much faster than it wears out. We should review our tax policy as it applies to investment tax credits which are an accelerated accelerated depreciation. As well, we should look at the whole policy of capital gains as it applies to agriculture. These items have been discussed many times in the House.
We look forward to the February 15 Budget which we hope will deal with some of these issues. In the unlikely event of that Budget speech tackling head-on these tax problems that affect farmers, we should pursue the motion before us today presented by the Hon. Member for Fraser Valley West (Mr. Wenman). We should refer its contents to the appropriate committee for discussion not only of Section 31, but of the
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whole question of hobby farming, investment tax credits, capital gains and accelerated depreciation.
There are many farm groups with reservations about allowing too much of an increase in the amount of write-offs which a hobby farmer can have. They are somewhat fearful of large investors who come into agriculture looking for the fun of being farmers with a rural setting to go to on weekends combined with the advantage of writing off some of the profits of their other profession or business. In short, it makes for a very uneven competition in rural areas where legitimate farmers are attempting to make a living from the soil and contribute to their communities. They do not look kindly upon hobby farmers who come in from the city on weekends to do this, and we in this corner of the House do not think that increasing write-offs for genuine hobby farmers does anything for the rural community or for the investment potential of the whole country. We would restrict them to the part-time farmer and the farmer who is attempting to work his way into agriculture. The clear-cut hobby farmer who is out there because he decided to walk around the farm instead of walking around the golf course, well, we are not particularly anxious to see that in the part of the country I come from.


Lorne Everett Greenaway: Mr. Speaker, I would like to commend the Hon. Member for Fraser Valley West (Mr. Wenman) for bringing this very important matter to the floor. Also I would like to commend the Hon. Member for Willowdale (Mr. Peterson) for making a very interesting and worthwhile speech. I agree with almost every word he said. What I do not agree with is one of his methods of remedying the situation by increasing the $5,000 limit, in other words, to index it. The danger is that five or ten years down the road people who are reasssessed for three or four years of back taxes, which now would be $20,000 or so, would be reassessed for a lot more. It would also give the auditors a lot more incentive to go out and audit. That is a stopgap remedy.
The motion of the Hon. Member for Fraser Valley West asks that this section in the Act be repealed. That is also the position of the Institute of Chartered Accountants and the Canadian Bar Association. As the Hon. Member for Willow-dale pointed out, there are safeguards in the Income Tax Act to prevent hobby farmers from using farming as a tax writeoff. However, most agricultural associations would rather see this section amended. I have been working on a Private Member's Bill for some time and it is now in the final stages. I am hoping to present some amendments.


Douglas Glenn Fisher: Promises.


Lorne Everett Greenaway: No, it is not promises. It is there. But it has been difficult because we polled as many agricultural organizations as possible to try to get a feel for what they really want in this section.
The trouble we are presently having is not so much the fault of the legislation as it is the attitude of the Department of

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Revenue officials. A good example was typified by the National Film Board movie we saw on the Journal last night which certainly makes Orwell's prophesies virtually come true. The aggressiveness of the Department is not only seen in the farming community, it is seen right through the system. We on this side have brought up example after example over the last few weeks. Interestingly enough, back in the early 1970s when Section 31 caused a problem, the then Minister of National Revenue allowed a reassessment of the current year only. In other words, he did not allow the auditors to go back and reassess any more than one year. If the present Minister would do this, we would not have this tremendous retroactive slap that people are getting at the present time. If you reassess for a four-year period it is absolutely impossible for some people to pay the resulting bill. I think the highest reassessment that I have seen was pretty close to $100,000, and most of them are $10,000 to $20,000.
Interestingly enough, Mr. Speaker, because I have done a fair bit of work concerning this section of the Income Tax Act, I get phone calls from people about tax problems. One of the most interesting I have had so far was over the last weekend. The person who contacted me had been a supervisor in one of the large regional offices of the Department. He told me that in British Columbia the quota system always was and still is in use. The only thing is that they have changed the name now to "Standards of Production". He gave me a good example of the pressures the quota system puts on auditors. When it looks as if an auditor is going to be short on his quota, he has a file of defunct or bankrupt companies he can dip into. He will pick a company that has been out of business for three or four years and do an audit. In the case this gentleman told me about it had been a company that had been out of business for three years. There was absolutely no chance that the Department would get any revenue from this account. They did the audit, the auditor reassessed the company for $90,000. This he added to his quota and pushed it on to the collection department. They in turn fiddled with it for a few days before finding out that the company was out of business. Then they used it for their quota. What I am saying is that the quota system still exists and there are all kinds of ways the system is being abused.
Section 31 is causing a good deal of grief in the agricultural community, Mr. Speaker. It has caused an awful lot of problems in my riding as well as in the riding of Fraser Valley West. I hope that in this upcoming Budget we will see a good positive change that will once and for all address this problem.
At this point I would like to move that the House refer the subject matter of this motion to the Standing Committee on Agriculture for further study.


Mr. Ralph Ferguson (Lambton-Middlesex):: Mr. Speaker, I want to commend the Hon. Member for Cariboo-Chilcotin (Mr. Greenaway) for his approach to this subject in that he has a Private Member's Bill of his own in the works on this very topic. I believe that should be looked at in great detail.
I think I should correct the statement made by the Hon. Member for Humboldt-Lake Centre (Mr. Althouse) who indicated that Paul Graham comes from Lanark County. Actually he comes from Lambton County in my constituency. He is a constituent of mine so I have followed this case with him through the courts and I know what has been happening. He had been farming with his father when he was 19 years old, intending to become the operator of the farm. That was in 1962, when times were tough-there is the old saying that Tory times are tough times. Anyway, they lost the farm and Paul moved to the city where he went to work for Ontario Hydro. In 1963 he bought the farm in Lambton County. In time, he became an engineer for Ontario Hydro and put his money back into the farming operation. It was a very successful operation until last spring when the land was expropriated by the Ontario Government for the new Darcy McKeogh flood plain dam. Paul had to start again.
In order to put this in perspective, however, we must look at what has been happening in the farming sector. In about 1977, in the Province of Ontario 27 per cent of farmers had off-farm income. Today the figure is 45.8 per cent. The average income from off-farm jobs is $15,263 per year, but the average net income for all farmers from farms in Ontario is $2,095 per year. This shows that there is an urgent need for a system whereby farmers can supplement their incomes in the years when they are starting out.
I believe that there are other areas that should be examined as well, Mr. Speaker. We should consider the establishment of a registered savings plan whereby farmers could set money aside, tax free, to be applied as a downpayment on a farm or a small business. I have the same fears as the Hon. Member for Willowdale (Mr. Peterson) and the Hon. Member for Cariboo-Chilcotin regarding hobby farmers taking over land and writing it off as an expense and simply having tenants on the farms. Consequently, I heartily endorse the suggestion by the Hon. Member for Willowdale and the proposal supported by many people in the Ontario Federation of Agriculture, that the limit be raised to reflect the inflationary spiral since 1950. There should be a counterbalance to ensure that the small farmer who wants to devote a lifetime to developing a farm has every opportunity to do so. The Act was put in place, however, because of the fears of farm organizations that very wealthy people would buy up the land in order to use it as a write-off for tax purposes.
I should like to support very strongly the proposal made by the Hon. Member for Willowdale that, rather than abolish that section of the Act, we update it to reflect the current values the inflation of the last 30 years has brought about. I hope that when the Hon. Member for Cariboo-Chilcotin brings his Bill in, it will be drafted in such a way that we can support it and have it referred to a committee.


Douglas Glenn Fisher: Mr. Speaker, in the five minutes remaining I hope I can pass along a few useful ideas. I should like to congratu-
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late the Hon. Member for Willowdale (Mr. Peterson), the Hon. Member for Lambton-Middlesex (Mr. Ferguson) and the Hon. Member for Humboldt-Lake Centre (Mr. Althouse) who have addressed the problem of part-time farmers. Each Member indicated his concern for those farmers who have to work off the farm for short periods of time in order to supplement their income but who clearly want to remain as farmers in the long run.
1 should like to caution the Hon. Member who brought this Bill forward that the repeal of Section 31 would not accomplish what he wants. If Section 31 alone were replaced, then all those small lots in the Fraser Valley surrounding Vancouver would immediately become targets for speculation and for land developers, the people we have described as hobby farmers.
In the background notes provided to me about the Bill, American studies of similar situations were quoted. It was found that if the discipline of something like Section 31 were removed, a huge tax incentive would be created for people in surrounding cities to become hobby farmers. What would happen then?


Robert Lloyd Wenman: Oh, oh!


Douglas Glenn Fisher: Mr. Speaker, the Hon. Member for Fraser Valley West (Mr. Wenman) is interrupting. I hope he pays attention, because he claims to be serious about this issue and I thought he would like to have this background data.
In the United States it was found that the removal of discipline and the creation of a huge tax incentive, results in land prices going up. It also leads to lower product prices and it lowers the rates of return that farmers enjoy because of the influx of speculative capital looking for a tax write-off. We should be careful about the removal of Section 31 or any similar section. As the Hon. Member for Lambton-Middlesex pointed out, the Ontario Federation of Agriculture has confirmed that. 1 have heard the same thing from the Canadian Cattlemens Association. Anyone who wants to farm full time and have some degree of flexibility has to be careful that such flexibility is not abused.
The Hon. Member for Willowdale and the Hon. Member for Lambton-Middlesex outlined the history of Section 31 and some of the difficulty created by a $5,000 limit. I would point out to the House that the Minister of Finance (Mr. Lalonde) made that $5,000 limit more flexible last spring. Today farmers can write their losses off against profits three years into the past, thereby expanding the $5,000 limit. They can also reserve the losses and carry them forward for ten years. The $5,000 limit is therefore much more attractive and flexible, and the person who is forced to leave the farm for a short time can nevertheless write off farm losses against other income going back three years and going ahead ten years. That is good flexibility.


The Acting Speaker (Mr. Herbert):: Order, please. The Chair regrets to interrupt the Hon. Member's remark, but the
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hour provided for consideration of Private Members' business has now expired.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, on December 19, Hansard records, at page 313, that I rose in my place to ask the Minister of National Revenue (Mr. Bussieres) a question about the reassessment of members of the families of employees of his Department. I would like at this stage to correct Hansard on my second question. It should read, "It is the spouse of the departmental employee ...", not as the record shows," . .. the spouse of the non-departmental employee . .." It was the spouse of a departmental employee who was at issue at that particular time.
The immediate issue, one of a series of issues which were being put to the Minister at that time, and which are still very much in the forefront, related to the way he was running his Department. I asked whether the Minister was aware, first of all, that assessments, checks or reviews were being carried out on the tax returns submitted by members of his employees' families, and if he was aware of this, why were such checks being carried out? The Minister indicated he was not aware that the families of his employees were being reassessed.
The second issue on that occasion, and it was raised separately, centered on the unusual, indeed, quite unacceptable practice and procedure which is presumably in force in the Victoria office, in any event, of informing the employee that his or her spouse's tax return is being examined or reassessed. As a preliminary question why should the rule of confidentiality, I must ask myself, be breached in the case of departmental employees when it is respected, or ought to be respected, with respect to all other citizens?
However, let me go back to the first issue, the class of persons whose tax returns are being re-examined such as members of the families of employees of the tax collection offices. It may be even broader than that, but why that particular class? I asked the supervisor, a regional director, who had come to call on me about this particular question, even before I took it up with the Minister. He said he considered it important that employees' records of tax collections should be "squeaky clean" on the grounds that the departmental officers can hardly go around pointing to others

January 31, 1984
Adjournment Debate
who are delinquent or actual offenders of the law unless those officials are themsleves wholly blameless before the law. That is one explanation, and I accept it. However, I do not accept the explanation in this particular case because it is not the employee of the Department who is being examined, Mr. Speaker, it is the spouse of an employee of the Department. They are two distinct individuals, or ought to be. I was seeking an answer as to whether there was a class of people who were being examined. Employees are one thing. The spouses of employees are quite another.
There is perhaps a more sinister explanation than the one given to me about the "squeaky cleanness" of the Department. That is, that the Department may not trust its employees and fears they may be passing on to their spouses some tax dodges, if you like, of one kind or another about which only a well qualified tax collector would be aware-not illegal dodges, but avoidances rather than evasions about which you and I, Mr. Speaker, might not be aware. Is that what the assessors were after? Is that why the spouses of the employees were being reassessed or re-examined? Were these signs of "extra smarts" that the taxpayer being reassessed might have displayed about which someone, without a tax collector as a spouse, would have been unaware? Is that what was behind the decision to single out the spouses of employees as a class ripe for reassessment and review?
I would like to come back to the issue of the breach of confidentiality. That is an important one. That aspect of the case is beyond dispute because the spouse who was being re-examined told me that the other spouse, who was the employee, had imparted this information in the course of a family conversation. I thought it was one of the absolutely unassailable guarantees that what is contained in a tax form is a matter between the tax department and the person who files the return. I think this guarantee rests on a statutory authority and that therefore, in this case, the Department could be accused, possibly even before a court, of breaking a trust guaranteed by law.
What if there had been some slight uncertainty as to the future of the marriage in this particular case? If the employee spouse was told that the non-employee spouse was being investigated could this not have been construed as an aggravation, a further threat to the marriage? Can a government Department condone such unwarranted interference in family affairs? If one spouse decides to tell the other, that is another matter. To parody something that was said in this House sometime before I came into it; the income tax Department has no place in the bedrooms of the nation. The offended party should have a chance to obtain redress for any damage that may have occurred by this unjustified intrusion into the affairs of the families of the employee.
Therefore, Mr. Speaker, there were two issues involved. The first is the decision about examining the affairs of the families of employees. That may be a legitimate one. The other issue is the breach of confidentiality. 1 think Mr. Speaker, that that
was absolutely inexcusable, and I feel that the Minister owes an apology to this particular person.


Mr. Garnet M. Bloomfield (Parliamentary Secretary to Minister of National Revenue):: Mr. Speaker, the tax Department naturally expects a very high standard of compliance from its own employees on the principle that anyone who has a responsibility for the enforcement of a law should be most scrupulous in the personal observation of that law. In some cases-and here we are talking about taxpayers in general, not just employees of the Department-the return of a taxpayer's spouse has to be taken into account when assessing the taxpayer's return itself.
The simplest example occurs when a child tax credit is claimed since the combined incomes of the claimant and the spouse determine the amount of any child tax credit. Or, as another example, certain provincial tax credits are payable only to the higher income earner in a marriage. A more complex example would arise where the taxpayer and the spouse are involved in a business partnership.
The Hon. Member has expressed concern about a possible violation of the confidentiality provision of the Act when a taxpayer has to be told something about the tax affairs of the spouse, or vice-versa. The Act contemplates certain kinds of circumstances when common sense dictates there has to be some such communication if the taxpayers involved are not to be left in the dark about the tax assessments that directly affect them.
I would like to quote the relevant words from paragraph 241 (4)(c) which allows the communication of information obtained under the Act concerning the income of a spouse:
-that is necessary for the purposes of determining any tax, interest, penalty or other amount payable by the taxpayer or any refund to which he is entitled.
I hope this information will set at rest any concerns about the violation of confidentiality restrictions that the Hon. Member may have felt.


NATIONAL REVENUE-INCOME TAX ACT PROVISIONS- MINISTER'S POSITION. (B) DELAYS IN ADJUDICATING TAX ASSESSMENT APPEALS
Mr. John Gamble (York North):: Mr. Speaker, I had occasion on Friday, January 27 to ask the Minister of National Revenue (Mr. Bussieres) a question which had its foundation in my desire to expedite the process wherein objections filed by taxpayers as a consequence of assessments that had been issued against them might be dealt with in a fashion somewhat speedier than presently exists. The Minister's response to me at that time was that the Minister of Finance (Mr. Lalonde) was in the House and had heard my remarks and accordingly would be governed by them.
It is important, with respect to this issue, that we understand the proceedings that are followed under the current provisions of the Income Tax Act wherein an assessment may be issued by the Minister for a variety of reasons, either as a conse-
January 31, 1984

quence of the supplying of information by the taxpayer to the Minister or otherwise. Upon the issuing of that assessment a collection process begins which the Minister has said in the House repeatedly has been somewhat expedited as a consequence of the fact that there are some $3.5 billion outstanding and unpaid to the Receiver General of Canada.
Of course, my question is how much of that is legitimately due and payable, not how much of that is owing legally, because I accept the Minister's figure. In determining how much is legitimately and legally ultimately due and owing it is important to have some regard to the current provisions of the Act as it relates to the issuing of assessments. In connection with this matter I would refer to the provisions of subsection 152(7) and 152(8) of the Income Tax Act. They provide as follows:
(7)	The Minister is not bound by a return or information supplied by or on behalf of a taxpayer and, in making an assessment may, notwithstanding a return or information so supplied or if no return has been filed, assess the tax payable under this Part.
Subsection 8 provides very significantly:
(8)	An assessment shall, subject to being varied or vacated on an objection or appeal under this Part and subject to a reassessment, be deemed to be valid and binding notwithstanding any error, defect or omission therein or in any proceeding under this Act relating thereto.
The very Act contemplates that assessments may have built therein errors or omissions which could easily give rise very clearly to tax being due and payable in law, whereas in fact and in substance ultimately, as decided by the objection proceedings or proceedings before the courts, they may be determined to be incorrect.
Accordingly, my submission to the Minister was to expedite the process at least at the objection stage so that the taxpayer might sooner learn how much of the tax that was originally owing as a consequence of the assessment should indeed be paid. As I have indicated, we know that once the assessment is issued and the collection process begins it takes a variety of forms, such as a garnishee which may be issued against the taxpayer, assets of the taxpayer which may be seized and sold, or a simple execution against the taxpayer may occur. This is all during the period when a valid objection may be outstanding.
The current process is that the taxpayer is entitled, within a period of 90 days from the date appearing on the Notice of Assessment, to issue and serve a notice of objection. That 90-day period clearly is within the control of the taxpayer in the event he wishes to expedite the process. He need only issue and serve his Notice of Objection at as early a date as possible. However, the objection process thereafter is out of his control.
The astounding thing is that the Minister of National Revenue has a full 180 days within which-internally within the Department of National Revenue-to consider the objection which has been filed. I point out that it is within that period of time that the collection process can begin and be concluded so that the assets of the taxpayers may indeed be stripped away from him. Accordingly, I urged the Minister to have some regard, simply from an administrative standpoint,
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to the plight of the taxpayer, and to see that his officials deal with the issues raised in the Notice of Objection at as early a date as possible.
Why are we concerned with these matters particularly today? It is, quite frankly, because this House has heard a variety, indeed a volume of cases dealing with actions by the Department of National Revenue arising as a consequence of quota systems that have been established, systems which are detrimental to the true collection of the ultimate amount of tax that should be paid by the taxpayers of Canada.
I resent the fact that the Minister stands in his place and tries to set one group of taxpayers against the other. He says there are some taxpayers who are obliged to pay their tax on a weekly, a biweekly or a monthly basis because they are employees and their tax is deducted at source, and there is another group of taxpayers who owe a total of $3.5 billion who are borrowing money from the Receiver-General or otherwise cheating their fellow taxpayers. This is simply not true. I question how much of the $3.5 billion ultimately will be due and payable.
On behalf of the taxpayers of Canada, I urge the Minister to speed up the process which would entitle those taxpayers so assessed to know at as early a date as possible what the true extent of their liability might be, hoping in that interim we will have an opportunity to defer the collection process which in many cases has become most offensive.
There have been systems established which could assist the Minister. One in particular was the Comscreen system developed by a gentleman by the name of Gerry Foxall of the Belleville district office of the Department, which would have seen a much more reasonable way of both evaluating the actions, from the standpoint of promotion, of assessors and at the same time zeroing in on those areas where tax might legitimately be collected. The Minister has failed to deal with that kind of a system and is using something that is antiquated and ineffective, a selection by lot and an allocation of files to a variety of assessors in fixing the quota with respect to the work they are to do. That, of course, is unsatisfactory.


Garnet McCallum Bloomfield: Mr. Speaker, as the Minister said when the Hon. Member raised this question in the House, the Minister of Finance (Mr. Lalonde) has consultations on tax policy with his Cabinet colleagues. As you would expect, the Minister of National Revenue (Mr. Bussieres) would have a particular interest in such consultations, particulary as they affect administration.
I should mention as well that the senior officials of the Department maintain a liaison with their counterparts in finance so as to permit the latter to advise the Minister of Finance of difficulties of a technical nature in particular sections of the Income Tax Act. The difficulties may arise because of unintended consequences. For example, an unintended loophole may be created or an unintended restriction

January 31, 1984
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may be imposed. Therefore, as the Hon. Member would expect, there is consultation and liaison between the policy and the administrative sides of the tax system.
At the same time, as he was told the other day, he cannot expect the Minister to violate Cabinet confidences by making public the detail of any recommendations that are made in this connection.


FISHERIES-MANAGEMENT COSTS OF WEST COAST SALMON FISHERY. (B) NUMBER OF VESSELS ENGAGED IN COMMERCIAL SALMON FISHERY
Mr. Benno Friesen (Surrey-White Rock-North Delta):: Mr. Speaker, last week, on January 24, I rose to confront the Minister of Fisheries and Oceans (Mr. De Bane) with the stark reality of an existence in the fishing industry on the West Coast that is intolerable. The value of a landed catch of salmon there is $240 million and it costs $84 million to run the Pacific Region Office, not including what it costs to run the Ottawa bureaucracy. That runs to a 35 per cent to 50 per cent cost for management. There is not another industry in the world that could tolerate that kind of industry management cost.
I pointed out to the Minister that when we had a free entry system of licensing in the industry we had about 20 new licences issued in a year. Once the Liberal Government instituted a buy-back program and restricted licences, that number ballooned to 45 licences a year. It boggles my mind to think that in a free entry system we could be getting 20 new licences but in a restricted entry the figure goes to 45.
I think there are serious questions we have to ask of the Minister about the conduct of his department. To my astonishment the Minister replied, and I shall quote from Hansard. He said:
The Hon. Member is right to say that already two buy-back programs have been implemented in the past and that has not prevented the participants in the fishery from over-investing and over-fishing to the point where today's stock has been the object of substantial pressure.
What he is saying is that it is not the Department's fault, it is not the Minister's fault, it is the fishermen's fault; they are to blame. This is the only manager in an industry that would ever blame the workers for being too productive. Almost every other industry would welcome that kind of productivity. However, this Minister blames the fishermen for being too productive, overlooking the fact that the officials of his Department are the ones who granted the licence which tolerated or brought about the over-fishing.
I want to bring to your attention, Mr. Speaker, some very stark realities. I am glad to see that the Parliamentary Secretary is here. I hope he will be here next week when there will be 100 fishermen representing a cross-section of the industry from British Columbia arriving in Ottawa. They will come here on Sunday and start lobbying next week. Last year some fishermen took over the offices of the Department of Fisheries in Campbell River and Alert Bay. Now they are spending
about $50,000 to come to Ottawa to plead their case. It seems that this is the only way they can get the ear of the Minister of Fisheries and Oceans and his officials.
There are some obvious reasons the industry is dying. The habitat is a mess. Enhancement at best is minimal. There are 19 nations off our coast harvesting our salmon. In 1979, the U.S.A. harvested 99 million fish; Japon, 62 million; and B.C., 23 million. Japan alone had four mother ships which harvested 37 million salmon off our coast. That is 50 per cent more with those four mother ships than the entire Canadian catch. Much of this is taking place outside the 200-mile limit in international waters.
If the Minister says that his Department is doing such a good job, why are they not policing that? Why are they not checking the tags, and why are they not raising a ruckus out there? The total emphasis of the Department is placed upon reducing, restructuring and essentially depreciating the role of commercial fishermen. They have built hatcheries for sports fishermen; that is fine, but what about enhancement for commercial fishermen?
I ask the Minister and his Parliamentary Secretary whether the Department is going to focus all its attention on a buyback program to reduce the capacity of the fleet and give almost no attention at all to habitat enhancement? The Solicitor General (Mr. Kaplan) is willing to assign workers from prison camps to work on enhancement. The Minister of Fisheries apparently will not accept. We need to clean up the habitat. We need to implement full scale, immediate small stream enhancement.
I want to ask the Parliamentary Secretary if we are going to be serious about addressing the problems of offshore fisheries? Are we going to get serious about negotiating with the United States on the salmon agreement on the Fraser River catch? Are we serious about making the Minister's advisory committee a functional group to provide input; to provide not only advice, but to listen to the advice of the industry and make it a full participant in the action which is going on out there?
It is clear from the statistics I have given that the Department is not doing its job. If up to 50 per cent of the value of the landed catch is used for administration, what is left of the value of the industry? It is no wonder that the Department focuses entirely on restricting entry when we really need to restore the fish. Why not raise production? Why not raise the stock? Why not make sure that there are more salmon out there, instead of making sure that fewer and fewer people will be able to work, and more and more people who have seen the fishing industry as a way of life losing it?


Brian Vincent Tobin: Mr. Speaker, I am pleased to be here to respond to the Hon. Member for Surrey-White Rock-North Delta (Mr. Friesen). I know him to be a most interested and sincere member of the Fisheries Committee and a fine gentleman. But his powers of exaggeration in making a point often
January 31, 1984

leave one slightly confused, and a little bit at a loss to understand what the essential point is.
As the Minister of Fisheries and Oceans (Mr. De Bane) has already explained, the operating budget of the Department of the Pacific Coast covers a great deal more than just fisheries management, as implied by the Hon. Member. Moreover, the value of the resource should be based not only on the commercial fishery but also the native and sport fisheries.
The analysis put forward by the Hon. Member overstates the costs dramatically and understates the value of our programs. For example, some costly items are short or medium-term. 1 think in particular about the Salmonid Enhancement Program. I might add that I find rather amazing the statement that we are spending too much on management when part of that management cost is the Salmonid Enhancement Program. We heard that in the second minute of the seven-minute dissertation. After seven and one-half minutes, Mr. Speaker was saying, "wrap it up". Then we hear the Hon. Member saying that we really ought to be spending more on enhancement. I think the Department of Fisheries in the Pacific region has done a great job on the enchancement program. It has done a great job involving the public and working with the public in every way possible.
I want to assure the Hon. Member, as I am sure he already knows, being the gentleman that he is, that the Minister of
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Fisheries does not for one second believe that the problems of the fisheries-East Coast, West Coast, fresh water-originate with the fishermen, or that the solutions can only be found by fishermen paying the cost of those solutions. I know the Hon. Member does not believe that. I want to assure him that the fishermen from his riding, from all of that great beautiful area of the Pacific Coast and western Canada, who come to Ottawa will get a hearing. I hope they are as compassionate and as interested, but not as articulate as the Hon. Member opposite who, because his great powers of exaggeration, often leave me and many other people who are greatly interested in his concerns somewhat confused about what it is he really wants. I know that if this Hon. Member puts his mind to it, if he is interested in real progress, if he is interested in real solutions, not just in scoring political points, as important an activity as that is for a politician, he can be part of the solution, not just part of stirring up the problem. I look forward to working with him.


The Acting Speaker (Mr. Herbert):: The motion to adjourn the House being deemed to have been adopted, this House stands adjourned until tomorrow at 2 p.m.
At 6.30 p.m. the House adjourned, without question put, pursuant to Standing Order.

Wednesday, February 1, 1984