1984-02-16

BUSINESS OF THE HOUSE


Mr. Pinard:: Mr. Speaker, 1 rise on a point of order. I thank the Hon. Member for St. John's West (Mr. Crosbie), who knows that 1 will take just one minute to outline the business for the coming days and tell Hon. Members when we will debate the Budget. Today, obviously, will be the first day of debate. The second, third and fourth days of the Budget debate will be Tuesday, Wednesday and Thursday of next week. Tomorrow and Monday we will deal with the following Bills: C-18, C-9 and C-10, in that order.
This is the business for the coming days. I thank the Hon. Member for St. John's West for giving me this opportunity.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Wednesday, February 15, consideration of the motion of Mr. Lalonde that this House approves in general the budgetary policy of the Government.
Hon. John C. Crosbie (St. John's West):: Mr. Speaker, I do not want to be repetitious. I hope that anything I say today with reference to the Budget Speech the Minister delivered yesterday will be new and fresh.
I want to start by adverting to the situation with respect to unemployment. Probably the most serious deficiency in the Budget is that it does not provide for any long-term recovery in Canada. That, of course, is because it does not show any way in which we are going to get out of the Government's existing deficit position in the next five years. It does not show any way in which we are going to achieve lower real interest rates or lower interest rates in the next five years. It does not show how the present economic recovery is going to continue successfully.
It is also noticeable because of the apparent inability of the Government to deal with the question of unemployment, the
1,473,000	Canadians who are now unemployed. The document that gives the figures for the fiscal plan is astonishing. When
you get behind the figures and the phraseology in his Budget, it shows that the Minister is contemplating that this year there will be 1,401,000 Canadians unemployed on average during the year. In 1984-85 he contemplates 1,336,000 Canadians will remain unemployed. In 1985-86 he is contemplating
1,238,000	Canadians remaining unemployed all year. In 198687 there will be 1,184,000 people unemployed, the Minister prophesied. In 1987-88, even then, 1,106,000 Canadians are to remain unemployed if this Government remains in office.
I can only tell you, Mr. Speaker, that we do not intend to contemplate those kinds of unemployment figures for Canada when we assume power whenever this Government calls an election. These figures are not good enough. That is why the Minister's Budget appears on the surface to have something to it; but when one looks underneath, as I said last night, it reminds me of a capelin, a little fish that rolls in on the beaches in Newfoundland having his last jolly spasm on the way. The capelin lies on the beach in Newfoundland in the moonlight for a few days. It looks bright and shiny on the surface but once you give it a poke, you find it is completely rotten inside. That is the trouble with this Budget. It is shiny on the surface but completely deteriorated on the inside. That is the Minister's projection of unemployment for Canadians in the next five years.
We hear the Minister in this House tell us how much better we are doing than the rest of the world, how proud he is of our recovery, and how much better off we are than the United States. The unemployment rate in the United States is now 8 per cent. Do you remember, Mr. Speaker, that in 1968 when the Prime Minister (Mr. Trudeau) formed his administration the unemployed rate was 4.8 per cent? There were 360,000 people unemployed. That is a great record. If the Prime Minister stays in power long enough, there will be no Canadians employed. There was 4.5 per cent unemployment when the Prime Minister assumed office in 1968.
Let us look at what it was in March, 1980 when the "terrible Tories" left power. By the way, that was the only year the deficit had been reduced in a number of years. In the eight months we were in power, what was the situation? In March, 1980 the unemployment rate was 7.5 per cent. There were 967,000 people unemployed in the winter of 1980. Four years later there are 1,473,000 Canadians unemployed and we have a government that contemplates some remaining unemployed for the rest of the 1980s. If it is not time for that Government, that tired, dispirited group of montebanks to leave office, then when will the time come? Will anyone be left employed if this Government continues in office? There were

February 16, 1984
The Budget-Mr. Crosbie
360,000	Canadians unemployed when Mr. Trudeau was elected Prime Minister and today we have 1,473,000 Canadians unemployed.
There is another point I want to make in connection with the Government's figures that have been presented to the House. These are five-year projections. The Government has projected, of course, horrendous deficits, as I mentioned yesterday, totalling $142.1 billion over the next five years. It is a fantastic series of deficits, and there are fantastic increases in spending. Are even those projections accurate?
The Government projects $114 million in interest payments alone and $119 million to be borrowed. Are those figures accurate? As you know, Mr. Speaker, we do not know what interest rate calculations the Government is using. We do know from looking at what the Government says the expenditures will be that the Government is using some peculiar figures. For example, the Government says total outlays this year-expenditures-will be $90,076 billion; the year after they will be $99.3 billion; the following years $108.5 billion; $118.4 billion and $128.3 billion. That is what the Government tells us.
[DOT] (MI5)
These are the increases in percentage terms: 7.6 per cent this year; in 1985, 5.3 per cent; in 1986, 5.6 per cent and in 1987, 6.0 per cent. That is the percentage increase in expenditures each year.
Then they show that the cost of living in those years will go up. In 1984 the figure is 5.2 per cent; 1985, 5.3 per cent; 1986, 4.8 per cent and in 1987, 4.5 per cent. They show that during the same years the Gross National Product will go up. In 1984 it will go up by 10.3 per cent; 1985, 9.3 per cent; 1986, 9.1 per cent; and 1987, 8.3 per cent.
Let us compare the percentage increases in the Government's expenditures or what it tells us they are going to increase by each year. We see, for example, that in 1985 the Government says its expenditures will go up 5.3 per cent and the cost of living will go up by exactly the same. We know that there is practically no chance whatsoever that these are accurate projections of the expenditure increases. We therefore know that under this regime the deficits will be even more horrendous.
When we see that in 1985 the GNP goes up by 9.3 per cent and Government spending only goes up by 5.3 per cent, we know that there is a large measure of fiction in the figures that the Minister is asking us to believe are estimates.
That brings me to another point, Mr. Speaker. What is the Government's record for the accuracy of what it tells the House and the people of Canada is going to be the situation from year to year? I hope this will not bore hon. gentlemen because it will take a few minutes.
By the way, I have some quotations. In 1969-70 the Prime Minister said on August 13 that we would be on the road to financial disaster if nothing was done to bring spending under control. That was what the Prime Minister said in 1969-70,
Mr. Speaker. That year we spent $13.8 billion. That was the total spending of the Government when the poor Prime Minister said we would be on the road to financial disaster if nothing was done to control spending. We had a surplus that year of $493 million and our net debt was $18.1 billion. The Prime Minister was worried about the road to financial disaster then, 14 years ago.
This may be of interest, Mr. Speaker. On May 6, 1972 Mr. John Turner said:
The bare fact of the matter is that we cannot do everything at once. We simply don't have the resources. There are limits to the scope of fiscal policy. There are limits to stimulus and readjustment.
He had spending of $20.8 billion and the net debt was $18.8 billion. That gentleman may have a resurrection this year if the Prime Minister is not resurrected for the second time. If he does not beat the record set several thousand years ago, then it may be that Mr. Turner will have a resurrection. On November 19, 1974 he said:
We must do all we can in these circumstances to restrain the growth of government expenditures .. . We have sought and shall continue to seek to cut out public waste, to place limits on the growth of the public service, and to approve only the most essential new programs.
That was the policy of the Government in 1974-75. The total spending was $30.8 billion, the deficit was $1.7 billion and the net debt was $21.1 billion.
The next year, on June 23, 1975, in his Budget address, Mr. Turner said:
The Government proposes to set an example of restraint in this regard by imposing strict control over its activities and programs.
Have you ever heard such a list of protestations of restraint and control, Mr. Speaker? He spent $36.5 billion, had a deficit of $5.4 billion and a net debt of $22.9 billion. Along came Mr. Donald Macdonald, now the Chairman of a Royal Commission that is pointing out our economic future. On May 25, 1977 he said:
To achieve our expenditure central objectives, the introduction of new programs must be kept within careful limits, and the resources required for the continued operation of existing programs must be minimized ... It is appropriate that these record deficits should recede.
That was the pious hope of Mr. Donald Macdonald, now the guiding genius of the Macdonald Royal Commission. He spent $40.3 billion, his deficit was $6.2 billion and the net debt $28.3 billion. He had a Budget the next year as well. On March 31, 1977 he said:
The restraint of growth in the government's spending has been an integral of our anti-inflation policies. The Government believes that such restraint is as important today as it was at the start of the program.
He had a $45.5 billion expenditure, $10.8 billion deficit and a $34.6 billion net public debt. The Liberals are restraining themselves so much, Mr. Speaker, they are suffering from hernia in the Liberal caucus.
In 1978-79, the new Minister of Finance, the present Minister of Energy, Mines and Resources (Mr. Chretien), now out on the campaign trail, said on November 16: "There can be no
February 16, 1984

weakening in our determination to keep expenditures under tight control". What did he spend? He spent $49.3 billion. What was his deficit? His deficit was $12.2 billion. What was the net debt at the start of the fiscal year? It was $44.8 billion.
In 1979-80, we have the Prime Minister interested in the game now, nine or 10 years later. He has become alarmed about what he said in 1970. I believe he went on TV. He had a dramatic conversion on the road on one of his trips. He has had more trips than Bob Hope and Bing Crosby put together. That is the most travelled family, Mr. Speaker, since the Love Boat. On January 12, 1980, during the election campaign, the Prime Minister said:
We will hold the line on government expenditure growth to under the rate of GNP . . . The deficit will be reduced in a phased and orderly fashion ... Any new expenditure programs to meet the evolving needs and requirements of Canadians will be financed by reallocating existing expenditures or by increases in revenues. We will not add to the deficit by adding new programs.
What did Government spend that year? It spent $54.4 billion. The deficit was $11.4 billion, reduced from the previous year. Why? Because the Conservatives had slipped into office for eight months and then slipped out again, and brought the deficit under control. What was the net debt at the start of the year? It was $57.1 billion.
By the way, Mr. Speaker, had I continued on as Minister of Finance, we would not today be looking at 1,473,000 unemployed Canadians. There would be hundreds of thousands fewer.
We can see, Mr. Speaker, that this is a Government fantastically interested in restraint and control of expenditures, one horrified and shocked by deficits and determined to crush the deficit, because that is their rhetoric every year.
In 1980-81, the Deputy Prime Minister (Mr. MacEachen) said in one of his great Budgets on October 20, 1980:
In order to achieve the essential reduction in the deficit, great restraint over expenditures has, therefore, been required.
But not in Cape Breton. The Celtic sphinx was not restraining things down in Cape Breton. He spent $62.8 billion. He had a deficit of $12.6 billion. The net debt was $68.5 billion. He had a deficit of $12.6 billion. The net debt was $68.5 billion.
He brought in another Budget for 1981-82. The November 12 Budget had three themes; restraint, equity and economic renewal. He said:
For our part, I believe we must reduce our deficit and our borrowing requirements substantially.
What did he do, apart from what he said? He spent $75 billion. He had a deficit of $13.6 billion. The net debt was $81.2 billion. "But he said, "We must reduce our deficit and our borrowing requirements substantially".
Then he brought in another budget on June 28, 1982, in which he said:
Some say it (the Government) should print more money.
They certainly do, and he is one of the biggest ones.
Others say it should let the deficit rip.
The Budget-Mr. Crosbie
Oh, it would never do that.
But that would fail miserably.
Well, if letting the deficit "rip" would fail miserably, why has it let the deficit rip?
Inflation and unemployment would get worse.
The Minister of Finance knew what was going to happen if they let the deficit rip; inflation and unemployment would get worse. But he let it rip. He did not have a seat left in his pants, it ripped so much.


Mr. Nielsen:: "Marc, the ripper".


John Carnell Crosbie: Yes; that is "Allan, the ripper".
Then he went on to say interest rates would rise even more. The former Minister of Finance is prophesying exactly what happened. Then he said Canada would price itself out of world markets and recovery would be postponed. That is what the then Minister of Finance said June 28, 1982. He said if we let the deficit rip, inflation and unemployment will get worse, interest rates will rise even more, we will price ourselves out of world markets and recovery will be postponed. What does he do? He lets the deficit rip. Spending was $89.5 billion, the deficit $25.2 billion. The previous year's deficit was $13 billion.
The Deputy Prime Minister was not going to let the deficit rip; he was going to keep her under tight control and she doubled. Doubled! Everything he said would happen that was wrong if he let that happen, happened. Yet the Liberals are continuing to govern. They have been there for years; they are going to brazen it out and cling on for another few months in light of that record.
What about the next year? Why, the next year we had the present Minister of Finance (Mr. Lalonde) on April 19, 1983 say: "This is a fiscally responsible Budget". Well, this is indeed good news. It is the first fiscally responsible Budget we have seen from this crew. What does he do? He spends $100.2 billion. He has a deficit of $31.3 billion, of which $200 million was caused by his Budget leaking; the only Canadian Minister of Finance ever caught in the act of leaking. The deficit turns out not to be $31.3 billion, it is $31.5 billion. What was the net debt of this country at the start of the year? It was $119.2 billion. What does he now tell us our net debt is going to be at the end of March, 1984? Our net debt is going to be $150.9 billion, some 38.8 per cent of the GNP, the highest it has been as a percentage of the GNP since 1951 or so, which resulted from the war years. The average per capita debt is $6,011, the highest ever in our history. That is where this fiscally responsible Budget, this fiscally responsible Minister-all of those Ministers-are leaving us. Every one of them, every year, has fought the good fight against the deficit.
By the way, Mr. Speaker, the present Minister of Finance is a spritely dancer, as you will see from The Globe and Mail. He is the Jimmy Durante of Canadian Ministers of Finance. Old "Schnozz" himself.

February 16, 1984
The Budget-Mr. Crosbie


Some Hon. Members:: Hear, hear!


The Acting Speaker (Mr. Herbert):: Order, please. I should remind the Hon. Member that displays in the House are not allowed.


Erik Nielsen: The Minister of Finance should go out, then.


John Carnell Crosbie: If there is a request from anyone, Mr. Speaker, 1 would table this document.


Some Hon. Members:: Hear, hear!


Mr. Malone:: Table the Minister.


John Carnell Crosbie: Actually, Mr. Speaker, I feel brutal having to say these things because I do not like to be critical.


Some Hon. Members:: Oh, oh!


John Carnell Crosbie: But this is a Government that can make the most Christian among us feel positively negative. Just let me refer again to the same problem. The previous Minister of Finance is now the Deputy Prime Minister and Secretary of State for External Affairs, and never has a Minister been able to obscure and obfuscate our external policy such as this Minister has. Luckily the Prime Minister has taken a great interest in foreign affairs so the Deputy Prime Minister is not needed to put his nose into affairs that are more foreign to him than anyone else. On October 28, 1980, that former Minister of Finance promised that over the fiscal period of 1983-84 there would be a steady reduction in the Government's deficit and financial requirements.
Now I am coming to the point of how accurate estimates are. He said only a moderate reduction in the deficit was needed in the next year. Of course, it went up. He said he expected the budgetary deficit to decline from $14.2 billion in 1980 to $13.7 billion in 1981-82, and then more sharply to $12.1 billion in 1982-83, and to $11.8 billion in 1983-84. The Minister was bravely projecting what the deficit was going to be for the next three years. Let us see how successful he and all of those people who work for him in the fortress of Finance were. He forecast the deficit for 1982-83 would be $12.1 billion. In fact, it was $24.6 billion. This Minister asks us to believe that his projections for the next five years, which are horrendous, are accurate when his predecessor's forecast of a deficit for 1982-83 of $12.1 billion was doubled. He forecast the deficit of 1983-84 at $11.8 billion. That is the year ending at the end of March. The Deputy Prime Minister said the deficit would be $11.8 billion. It is $31.5 billion. That is three times, Mr. Speaker. Three eights are twenty-four, three ones are three and three ones are three! I, at least, am careful mathematically. It is almost three times that the Minister estimated it would be. If the same mistakes are being made by this Minister, it leads us to deficits of $70 billion and $75 billion as opposed to $25 billion and $26 billion. If this Minister is as accurate as the other Minister, that is what we are let to. There is no reason to believe that this Minister is any more accurate than the other Minister. They are both "bass ackward".
In his Budget of November 12 the Minister said:
I believe we must reduce our deficit and our borrowing requirements substantially-even more than I proposed a year ago. This will take pressures off credit markets, ease interest rates and provide room for needy borrowers.
That is when the Government was borrowing $10 billion or $11 billion a year. He wanted to take the pressure off the credit markets, ease interest rates and provide room for needy borrowers. This Minister says we do not need to worry about borrowing $27 billion from the financial markets. He says we do not need to take pressure off the credit markets. This Minister says we do not need to ease interest rates or provide room for needy borrowers because he has been so successful they do not want to borrow. Our economy is so bustling and hustling that no one wants to borrow but the Government. That is the great record of success that this Minister has had.
The Deputy Prime Minister said; "I have set myself the task of cutting back the deficit in the next two fiscal years". I have shown you how successful he was in that task. In his final Budget of June 28, 1982 the Deputy Prime Minister said: "The Government cannot responsibly add to the deficit". That is what he said; but the Government has tripled the deficit. It used to be thought that a Minister of Finance had to be truthful, honest, scrupulous, careful in his statements, careful not to exaggerate and not to frighten the financial markets, rather than people who would say the Government cannot responsibly add to the deficit and then double and triple the deficit. Is it any wonder there is a lack of confidence in the country? Is it any wonder that people from outside Canada do not want to invest in Canada and that Canadians are moving their money out to the U.S. and elsewhere? Zanzibar, Afghanistan or any other country looks better than investing in Canada. We cannot believe a word our Ministers of Finance say.
There can be no confidence in this kind of chicanery and inaccuracy, Mr. Speaker. The Government does not only have budgets, it has economic statements. When the Government wants to pretend matters are not as serious, it has an economic statement. The Minister said the Budget deficit for 1982-83 would be $23.6 billion. That was when the financial year was half over. It was actually $24.6 billion. He put before us the biggest borrowing Bill the Government ever asked the House to grant it, claiming the deficit for the year would be $27.2 billion. The deficit for the year was not $27.2 billion, it was $24.6 billion. In other words, you cannot believe a word these Ministers say, Mr. Speaker. We know what has happened through the 10 or 12 years I have given you the quotations for. That is why this country can only be described as being in a sad state.
A few weeks ago the Minister called for a social contract with the Canadian people. He wants a social contract. The contract the Canadian people want is the contract they now have out on the Government. That is the only contract they want with the Government.
The political process, Mr. Speaker, has been so prostituted for political purposes by the Liberal Party now in power that
February 16, 1984

when you pay taxes today you should get recognition for a deductible contribution to the Liberal Party because the money is not being used for public purposes. Wherever possible, it is being diverted to partisan political purposes such as we have seen in the Prime Minister's Office in recent days.
What is the fastest growing thing in Canada today, Mr. Speaker? It is not worry and fear in the Liberal caucus and it is not projects in Liberal ridings. It is the debt servicing cost of the Government of Canada. Apart from all other concerns with the debt, the average term to maturity of Government debt today has fallen to five and one-quarter years from six and one-half. In other words, all this indebtedness of the Government now has an average term of only five and one-quarter years. The Government has to repay it all within five and one-quarter years. This includes Canada Savings Bonds of $90 billion. About two-thirds of all this debt matures in three years or less. Two-thirds of this tremendous amount of debt matures and has to be refinanced in the next three years. Let that give you pause.
The Auditor General himself has said that these figures are not accurate and do not show properly what the debt is. The Auditor General pointed out that the debt last year was understated by $5.3 billion. Even the fantastic figure shown last year was understated by $5.3 billion because unemployment insurance transactions of $3.28 billion are not shown. The Government has nothing in the books to show the losses of Canadair of over $1 billion and the losses of de Haviiland and the like.
Last year the Government did an exercise to show how much of the deficit was structural and how much was cyclical to try to help explain why the debt was so large. Unfortunately, its studies last year and this year show that of the present debt over half is structural. Even with a booming economy we would still have a deficit this year of $18 billion. The more you look at what is happening, the worse it appears.
In his Budget the Minister tries to pretend that we are going to have great growth this year. Other independent agencies such as the Conference Board of Canada, which has a much better record than the Government, predicts 3.3 per cent and .3 per cent for next year.


Mr. Lalonde:: Look at the OECD.


John Carnell Crosbie: Every time I look at the OECD I see how badly Canada compares to the rest of the OECD and I get depressed. That is why I do not want to look at the OECD.
In February, 1983 Statistics Canada said the value of goods and services declined .2 per cent. On January 31 Statistics Canada said softness of investment plans in Canada contrast with strong gains in the U.S. What is there is this Budget that will make investment plans stronger rather than softer? There is nothing. There is not anything in this Budget that will attract anyone to invest here in Canada. Our industrial capacity which is utilized at.the present time I believe is 70 per cent. It is Statistics Canada itself that is giving the lie to what the Minister says, that softness of investment plans in Canada contrast with strong gains in the U.S.
The Budget-Mr. Crosbie
How scrupulous is the Government to assist Canadian consumers and taxpayers? I mentioned the Canadian ownership charge yesterday. The Government has taken that, without the consent or authority of the House, and instead of leaving these funds in a special fund, has put it in general revenue to reduce its deficit. Yet the deficit still becomes $31.5 billion.
What was it the Minister of Energy, Mines and Resources said on November 22, 1983? I could not find the quote from the Toronto Star last night but he said: "The tax stays but we are still studying what to do with the money". How is that for arrogance? The Government now taxes the Canadian people before it even knows what it wants to do with the money. If that is not the epitome of arrogance. "The tax stays", says the Minister while beating his chest-because he is like a gorilla running across the country-"because I say the tax stays, and to heck with the Canadian consumer. We are still studying what to do with the money". Now we know what he is doing with the money. He is using it just to try to keep the deficit down to $31.5 billion.
While we are looking at the truthfulness of the Government, what did the Deputy Prime Minister say about the Canadian ownership charge when it was imposed on October 28, 1980? At page 11 of that speech he promised the Canadian people that:
Revenue for the Account will be provided by a Canadian ownership charge imposed on all oil and gas consumption in Canada which will come into operation as the acquisition program progresses and will be set at a level to ensure that the program will be totally self-financing, and in no way affect the government's deficit.
That was the solemn promise made on October 28, 1980, when the Canadian public were taxed one cent per litre on heating oil, gasoline and every product made from a barrel of oil. It is 4.5 cents a gallon; $840 million this year; $960 billion next year and $1 billion that it will take the year after. We were told that the program would be self-financing and in no way affect the Government's deficit. What does the Government do four years later? It reduces the deficit by $800 million or $420 million for this year, I believe, because it has taken $500 million to use for Dome-if Dome ever needs the $500 million, because Dome has taken the Government for far more than $500 million. Now it is used to affect the Government's deficit. Can one believe a word that such a motley crew as this enunciates? Of course one cannot. One hates to have to say it.
Just in passing, as a person who comes from the Atlantic provinces, what a disgraceful belabouring they have been given in the Atlantic provinces in the last three or four years. The Government has dismantled DREE. It did away with DREE in January, 1981 and we will now have what the Government calls ERDAs. It did away with DREE, replaced it with DRIE and we will now have ERDAs, Economic Regional Development Agreements.
The money spent in Newfoundland by DREE has decreased by something like 70 per cent of 80 per cent in the last several years. I understand that the Government will spent $2 billion in ERDAs of which $1.2 billion goes to Quebec and $30

February 16, 1984
The Budget-Mr. Crosbie
million, for example, to Alberta. That is called equity by the Government; $1.2 billion in Quebec and $30 million in Alberta. I do not know if it will spend anything in Newfoundland.
That is what has happened to the great program to overcome regional disparity. Do Members recall the Prime Minister in 1968 when he was on the diving boards of the country? His great theme was that he was going to overcome regional disparity. This is what has happened to his attempt to overcome regional disparity.
The present Minister of Finance said on September 15: "The top economic priority is the creation of jobs to ease our serious unemployment". Where does that appear in this Budget? What happened to that priority of September 15? On January 23, when he spoke to the Canadian Club in Toronto- memories are so short-he said:
Budgetary policies in 1984 must also respect the need for stability in the economic and fiscal environment. That means holding firm to the fiscal policy track-
He has his fiscal policy track suit on.
-on which the deficit will be restrained and then reduced as the recovery strengthens.
That is what he said to the Canadian Club on January 23 of this year. What has happened to that proposal? What is the point of the Minister making speeches if he will not carry out what he says in those speeches?
The Government said in the 1983 Throne Speech:
A comprehensive program will be presented to encourage economic growth so that more Canadians can own a home, learn a trade, expand a business, participate in the ownership of our resources, and gain a fair share of the abundant benefits this country can provide.
Where is the comprehensive program? This is the Government's Budget for 1984 and there is no such program. I mentioned yesterday that the Minister of Finance's dominant concern last April was to help 1.5 million Canadians who want to work but cannot find jobs. He has done nothing for them. In the Budget of last April the Minister said:
I expect strong growth to continue through 1984 at an average rate of 5.2 per cent. It will also become more broadly based as investment gathers strength.
Neither of those expectations has been fulfilled. The recovery is not broadly based.
I mentioned what Statistics Canada has reported. It said:
The narrowing of sources of growth in domestic demand is also reflected in the regional distribution of economic activity... In fact, Central Canada has accounted for all of the increase in employment since June as net declines have since been registered in Western Canada, notably Alberta and British Columbia.
Where is the broad-based growth that the Minister said would occur just 10 months ago? How does the Budget address the fact that the broad-based recovery promised in April has not occurred? Where can we point to in the Budget to show how the broad-based recovery is going to be achieved?
The special recovery tax imposed last April will cost Canadians $805 million this financial year. It will cost $2.4 billion in 1985-86 and $2,975 billion in 1986-87. The Minister calls it the special recovery tax. He should rename it the special recession tax. There is no recovery. This tax is not
going to help it, this special recession tax. Again, Statistics Canada said on January 31:
The economic recovery appeared to lose some of its vitality in the fourth quarter, and it is likely that this slow-down will continue early in 1984. The moderation of growth has been most evident in domestic demand.
Where does the Minister help domestic demand in this Budget? He does not help it at all because he increases taxes and takes four times the revenue he has given back in the various matters he mentioned yesterday. He might help demand if he did away with the Canadian ownership tax. He would help consumer demand if he did away with the 1 per cent increase in the federal sales tax that is coming in October. It is a regressive tax that bears more heavily on lower income people.
The Minister brings in pension changes that favour the wealthy, increasing the RRSP limit as he has. Where in this Budget does he help to increase domestic demand? If anyone on the other side can point to where he does that, then we will pleased to listen.
The increase in sales tax in October will cost Canadians $365 million. That is for this financial year. Of course, it will be a much greater amount next year when it has been in effect for a full year.
What is the main problem or obstacle to continued economic recovery? We can look to the Conference Board or other economic specialists. I would like to quote the Conference Board where it said: "Interest rates, given the rate of inflation, remain high and thus are unable to provide the usual stimulus to economic activity as would be the case in normal cyclical recoveries". What has this Budget done to address that question? Nothing. The Budget papers indicate in two places that the Government expects interest rates to decline, but the Government refuses to tell us what interest rate projections they are using in calculating debt repayment costs for the next five years.
The current Bank of Canada rate is 10 per cent. It is higher than it was last April. Is that a sign that interest rates will go down? The prime rate of the Bank is 11 per cent. Inflation has dropped significantly during that period, but it has not affected interest rates. Why not? It is because no one with money to invest trusts this Government. They know the Government is incapable of operating the economic affairs of the country. They know that if this Government continues in power, we will have renewed inflation and economic disaster. That is why they will not lower their interest rates now. As I said last night, the Budget has done nothing to bring about lower interest rates, to increase consumer demand or business investment, which are the three essentials if we are to have a real economic recovery.
It is a sorry story. By the way, when Liberal Members have a chance to speak in this debate, I hope they will not be tiresome and keep referring to some alleged article in The Globe and Mail of Toronto by "yours truly", unless they are going to look at it more accurately. I was honest enough to say
February 16, 1984

that the Budget of last April contained a proper general approach. That was the right kind of general approach compared with the disasters of his predecessors. The general approach was right, but that general approach has disappeared, and now the Minister has joined his predecessor in the march to inexorable disaster. This Budget guarantees Canadians a dubious and diminishing economic future. He has joined the march. He has arrested nothing, and he no longer moves in a direction that is satisfactory. He now has no chance of bringing economic recovery to Canada.
Of course, we will have other speakers in this debate who will be tackling different phases of the Budget-the question of pension reform, which is important; improvements in the assessment practices of the Department of National Revenue, which we forced the Government to commence and bring about. That is important as well. These things will all be discussed.
In this connection, I want to move the following amendment to the Budget:
That all the words following the word "That" be deleted and the following substituted therefor:
"this House regrets the failure of the Government to present measures designed to reduce Canada's budgetary deficit, lower existing high interest rates, reduce crippling high levels of unemployment or to create meaningful pension reform all of which are needed as a result of years of government economic mismanagement and condemns the Government for its continued misuse of public funds and arrogant maladministration which have led to a crisis in public trust and confidence in government".
To top off this record I have given this morning, this resume of economic mismanagement, wrong estimating, deceit of the public, complete lack of control or fidelity-as though that were not bad enough-there is not anyone in the country with an ounce of impartiality who does not look at Ottawa and see a government which is wallowing in the worst kind of stable politics. I mean "stable" in the sense of a stable in which one keeps animals. They see leading this country a group of people who are prepared to do anything to keep themselves in power. That destroys confidence. The only hope the country has is that before too long there will be an election and we will have an opportunity to give the people of Canada an alternative and to show what we can do with the economic administration of this country. That is the only hope. Even if this group brought into the House a set of perfect policies to fit our economic circumstances, they would be unsuccessful as they cannot work without confidence. And there is no confidence in this Government.


Some Hon. Members:: Hear, hear!


John Carnell Crosbie: If this Minister had the confidence which he pretends he now has, surely with four years expiring on February 18 of this week the Government would be going to the electorate. This has been the practice in every democratic country, that the government goes to the electorate in its fourth year. This Government has completed four years.


Mr. Fisher:: You did it in four months.
The Budget-Mr. Crosbie


John Carnell Crosbie: Yes, and Canadian people suffered terribly because of it. Your term in Parliament will be a short-term one; you will not be back next time. I will miss you.


Douglas Glenn Fisher: Come out to my riding and campaign. We love you.


John Carnell Crosbie: Mississauga will give you an awful mauling, brother, when the election comes.


Douglas Glenn Fisher: Come down and help them out. We love you.


John Carnell Crosbie: Only this Government would go over four years in these circumstances and try to hang on after the four-year term. If the Minister thinks that the Canadian people are supportive of what they have done for the last four years-for the last 14-why does he not advise the Prime Minister to settle down here? Is the Prime Minister prepared to spend six weeks in Canada on an election campaign? He could not bear not to be out of the country somewhere during those six weeks. He should try to persuade him to stay here during those six weeks and have an election campaign. Let us put it to the test.


Marc Lalonde: Where were you in January?


Douglas Glenn Fisher: Yes, where were you?


John Carnell Crosbie: I paid for my own trip.


Marc Lalonde: You are paid to be in the House.


Mr. Harquail:: When did you get home?


John Carnell Crosbie: Mr. Speaker, in January I was in the Yemen and, believe me, the level or intelligence there is far higher than it is in the government ranks.


Some Hon. Members:: Hear, hear!


John Carnell Crosbie: While there I saw someone who reminded me of the Minister of Finance.


Maurice James Harquail: That is the most intelligent remark you could make.


John Carnell Crosbie: We ran into a group of quagga, wild jackasses, such as the one yelling down in the corner.
We ask Government Members who will now pretend to be so proud of this Budget document, indeed, we plead with them, to dissolve the House and go to an election. Let us put this to the test. Let us see what Canadians think. Let us see what the 1.4 million unemployed think. Let us see what they think in Newfoundland which did not have a Cabinet Minister for six months. Its Cabinet Minister was thrown out of Cabinet, humiliated, and then reconstituted and recycled six months later because the person they attempted to appoint in the meantime had a little bother with the tax authorities. Let us see what they think of them down in Newfoundland. Let us see what they think of them in New Brunswick, Nova Scotia and Prince Edward Island. Let us see what they think of them in

February 16, 1984
The Budget-Mr. Riis
Quebec. The unemployment rate in Quebec has gone down while they are hiring people to scout around to see what they can find on the Leader of the Opposition (Mr. Mulroney). The only place where they are making a dent in the unemployment rolls is down there-people being hired by the Prime Minister's Office. Let us see what they think of them in Ontario, Manitoba, Saskatchewan, Alberta and British Columbia. That is what we want. We do not want another year of watching this Government in extremis, crucifying the Canadian people as it attempts to cling to power. I invite Hon. Members opposite, some of them, to allow their pangs of conscience to vote with us so that we can terminate this scurvy lot today or when the vote comes next Tuesday, so we can terminate the Government and put this to the test. Give the Canadian people a break. You have had four years; give them a break. Give them a chance to say whether they regret what they did on February 18, 1980. I am confident what the answer will be.


Some Hon. Members:: Hear, hear!


Maurice James Harquail: Mr. Speaker, I rise on a point of order. Under the democratic process, all Hon. Members have a right to raise a point. Since you were not able to discern the question of some of the terminology, the verbiage and the squalor of the previous speaker, and you did not comment on that, I would point out that Erskine May in the British House talks about lunacy. If that is the attitude, perhaps we should consider in this House what Erskine May has brought through the United Kingdom in the British Parliament. It might be an aspect that we could consider for this House when remarks border on lunacy.


The Acting Speaker (Mr. Herbert):: If the Hon. Member is making a suggestion that there were some remarks that were not in conformity with our normal practices, I would like him to identify them. I did not personally hear them. I will refer to the blues. If he has anything he wants to refer to, he might let me know precisely what it was.


Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, I am very pleased to have the opportunity to rise today to respond on behalf of the New Democratic Party to the Budget introduced by the Minister of Finance (Mr. Lalonde) yesterday and try to find some way to visualize what kind of a Budget it was. Over the last number of hours we have had responses as different groups indicated their reaction to the Budget.
I want you to imagine for a moment the Minister of Finance in a worn, torn, old suit to which he has sewn brightly coloured and brightly covered sequins. When he walked into the House of Commons yesterday to deliver his speech, the floodlights gave a glimmering appearance to this man on stage. Actually he looked kind of good with his glimmering sequins on his suit. A few hours later, taking advantage of the sunshine of the next day, the real worn and torn fabric of that suit comes through.
So be it with this particular Budget. Last night when people heard the Budget, there were feelings that there were some
good aspects to the Budget, that there was something for everyone. When you analyze carefully item by item what was in the Budget, you find that indeed there were some things in that Budget that will make people very happy, particularly a very select and special, elite group in Canadian society.
One document which the Minister of Finance gave out as part of his Budget is entitled: "The Canadian Economy in Recovery". I suspect that most Canadians over the last number of months have not noticed that there has been a recovery in Canada. Most people in my constituency are not aware that there is a recovery under way. They read about it in the newspapers and they hear it from the Minister of Finance. They hear various corporate leaders talking about recovery signs, that things are looking good, that the recovery is under way, perhaps not as much as anticipated by the Government, but very clearly that there is a recovery in place. The average man and woman in this country has not had a recovery in terms of their own lives. 1 think it is fair to ask, a recovery for whom? Has it been a fair recovery for all Canadians? It has not.
Who were the winners in this Budget? One of the best ways to determine that is to listen a few hours later, after people have had a chance to analyze the Budget, after the smoke has been blown away from all of the hoopla surrounding the Budget. You notice who is cheering today. You notice who the people are who perhaps celebrated last night with champagne because they really appreciated what this Government has done for them.
Unquestionably those in the boardrooms today are happy because more loopholes have been opened by that wonderful tax loophole man, the Minister of Finance. Again the corporate sector has a number of tax grants and concessions coming its way. There is another group of Canadians, the wealthy elite of Canada, who have had a number of loopholes opened for them as well. Whereas a few days ago we had 200 identifiable tax loopholes, we now have a few more added to make the tax system more unfair and, consequently, the recovery more unfair.
Do we hear any cheers this morning from the 1.5 million Canadians out of work? You notice absolute silence in the country coming from the unemployed because in this Budget there is not a single item that will assist those 1.5 million Canadians who are unemployed today to find meaningful work in the months ahead. Do we hear cheers and accolades coming from the poor of Canada? Do we hear cheers coming from the women of Canada? Do we hear cheers coming from the single women of this country, those involved in the fishery or the forest workers of Canada?
If you listen carefully, do you hear cheers coming from the small business sector? For a handful, yes, but the majority of small businesses in this country are not cheering this morning. After hearing the rhetoric of the Minister of Finance and having done their analysis of what is in the Budget for them, they Find there is nothing to cheer about.
Aside from the corporate boardrooms today and aside from the cheering upper income earners, the lawyers, doctors, den-
February 16, 1984

tists, veterinarians and chiropractors, who are now able to pay income tax at a lower level than they did the night before, who is cheering? As if there were not already enough loopholes in the tax system to cater to the privileged few in society, the Minister of Finance has opened up a new set of loopholes. Where they paid 33W per cent income tax, they now pay 25 per cent. In other words, the Minister of Finance has put thousands and thousands of dollars into the hands of the upper income people, the doctors and lawyers who are involved in incorporating their businesses and are involved in business ventures.
The question must be asked: Who is going to pay for all of these loopholes that have been provided? Who is going to make up the difference? Somebody has to pay the taxes in this country. Somebody has to pay for all the loopholes for the corporations that have been added and for the additional loopholes for the upper income earners of Canada. Did the Minister of Finance do what people across this country have asked him to do, namely rescind the tax increases that he brought in last April that touched every Canadian family? He did not. Therefore, $200 or $300 will be taken from the pockets of every Canadian family to pay for the additional loopholes provided in the Budget last night.
The Minister of Finance says that we helped young people in this country. The young people should be cheering, but do you hear the young people of this country, particularly those who are out of work, cheering today? When you look carefully at this $150 million that the Minister of Finance has provided for youth unemployment, you see it is the same amount as the little Liberal slush fund that we have been talking about for the last few days. When you analyse that and break it down, how much of the unemployed youth are going to be assisted?
Visualize the unemployed youth of Canada, Mr. Speaker, and apply this particular amount of money. It will provide a 12-month job for only 1.5 per cent of all those unemployed today. It is 1.5 per cent for a single year. What about the hundreds and thousands of young people in the next few weeks and months who will be coming on to the job market seeking employment, those coming out of our universities, colleges, technical, trade and secondary schools? That is the assistance this Government has provided for our unemployed youth. It is a pittance. I do not understand how the Minister of Finance has the courage to stand in his place and say as part of his Budget Speech that he and his Government are going to help the young people with this miserly, this miserable, this minute amount of money.


Marc Lalonde: It is $1.3 billion.


Nelson Andrew Riis: Then the Minister of Finance said: "We are going to help the senior citizens of Canada; we are going to increase the contribution to the guaranteed income supplement". A few months ago the Minister of Finance assembled a task force to talk to people across the country to try to understand the needs of senior citizens and to make recommendations to the Gov-
The Budget-Mr. Riis
ernment. The task force did that. It said the beginning step this Government should take was to increase the GIS immediately by $100 a month. Did the Minister do that? No, he did not do that. He provided half of that.
Let us break it down. The senior citizens of Canada on GIS will receive an increase on July 1 this year of 75 cents a day. My parents are senior citizens. I phoned them and said: "Great news, Mom and Dad; you are going to get 75 cents a day starting July 1 from the Minister of Finance". They were not particularly pleased. This means that still today as a result of this so-called improvement for the senior citizens of Canada, hundreds and thousands of them will still be living below the poverty line, the poverty line as described by the Government of Canada. Hundreds and thousands of our senior citizens will be in this situation. Is there anything in this Budget for the war vets, those who fought in Dieppe? No. there is not a thing. Is there any increase for our war vets, people we know who are struggling to survive? No, there is nothing.


Mr. Evans:: They get the GIS.


Nelson Andrew Riis: There are hundreds and thousands of senior citizens living below the poverty line and the Minister of Finance and the Government says it is going to make a significant contribution to pensions. Then, of course, comes the RRSPs. This will be the real saviour for people's pension systems. When you look closely, Mr. Speaker, many Canadians can take advantage of the RRSPs. They can put in $1,000 or $2,000, and many people do. But the Minister of Finance did not assist so much the average Canadian taxpayer. He said: "We are going to lift the ceiling to $15,500 a year". If you have an extra $10,000 or $15,000 in loose cash at the end of the year, you can invest that in a pension plan. Those who will benefit to the maximum from this allowance are those people whose incomes are nearly $90,000 a year. Those are the ones who will be able to take advantage of the maximum benefit, those with nearly $90,000 a year.
I do not think there is any question of the hypocrisy of this Government. It brings in this Budget and, as my Hon. Leader suggests, it gives those people an $8,000 tax benefit. But the Government said it has changed its mind now and it is going to send out a signal to labour across the country. The Government is now going to ask labour to join in a co-operative venture in terms of getting the economy back on track. The Government said it has just given tax breaks to its friends in the corporate sector and tax breaks to upper income Canadians; but it is now going to ask labour to join in the recovery program. As a first gesture, the Government said it is going to restore free collective bargaining to the public sector. That is like putting a gun to somebody's head and saying: "Now we are going to start free collective bargaining". It is a Russian roulette approach to this whole business.
The Government said it is going to bargain collectively with labour, but it also said: "If you do not agree with us, if you do not do exactly what we say, we are going to legislate a settlement". Is that free collective bargaining? Is that the kind

February 16, 1984
The Budget-Mr. Riis
of gesture that will encourage labour across Canada to be willing to co-operate fully? Is that the kind of signal that the Government wants to send out to labour, putting a gun to their head in so-called free collective bargaining? This budget fails to provide any real hope for middle and low-income Canadians in the months ahead, those Canadians who have not been part of the so-called recovery program to date.
I have to refer for a moment or two to my Progressive Conservative friends. They have gone on at some length about the deficit. They argue whether the deficit should be $27 billion, $29 billion, $31.5 billion and so on. That is their concern. They say they are very concerned about that. But the Leader of the Official Opposition (Mr. Mulroney) stood in his place the other day and said: "We need to increase defence spending by $300 million". Then the fishery critic said in Vancouver: "We have to help the fishing sector and add another $300 million." In agriculture the Tories say the same thing. The Hon. Member who is the critic for employment suggests that we spend more on job creation. The small business critic says we have to spend more on tax concessions to small business. The industry critic stands up daily in this House and says: "We have to provide more and more tax concessions to the corporate sector to encourage it to invest".
You cannot have it both ways, Mr. Speaker. You cannot have individual Members standing up day after day saying spend millions of more dollars here, hundreds of millions of dollars there and billions more in tax concessions, and then say that we have to reduce the deficit. If they were being honest and truthful to the people and were going to assist those sectors as they say they will, and if they are going to reduce the deficit, do you know, Mr. Speaker, who will suffer as a result of that? Do you know who will have their pensions cut? Do you know who will reduce unemployment insurance and reduce assistance to single parents? The Progressive Conservatives.


Mr. Taylor:: Baloney!


Nelson Andrew Riis: You cannot have it both ways. You cannot have a reduced deficit and increased spending in virtually every sector. They have to come clean. That is why the Government is being told these days by Progressive Conservatives that they are not going to tell them what they are going to do.
I have to give credit to the Hon. Member who was the previous Minister of Finance in the Conservative Government, the Hon. Member for St. John's West (Mr. Crosbie). I have to give him credit for being honest with the people of Canada. He stood up and said: "We cannot tell you what we are going to do. We are unable to tell you what our policies are, because if we did, the people of Canada would never vote for us". He is an honest man; he is an honest John.


Some Hon. Members:: Oh, oh!


Nelson Andrew Riis: I am pleased to share a spot on this side of the aisle with such an honest, straightforward Conservative.


John Carnell Crosbie: You were there in 1979. Why did you vote against us?


Nelson Andrew Riis: I want to pause here in my comments to supplement the amendment provided by the Hon. Member for St. John's West. I move, seconded by the Hon. Member for Hamilton Mountain (Mr. Deans):
That the amendment be amended by changing the period at the end of the last sentence to a comma, and by adding immediately thereafter the following words: "and this House condemns the government for continuing the Liberal-Conservative policies that have produced record mumbers of unemployed, widespread poverty among our elderly, and burdensome taxation for middle and low income Canadians; and this House further condemns the government for failing to introduce in this budget a fair recovery programme that would end unproductive tax concessions to corporations, rescind the $1.4 billion in consumer tax increases announced in the last budget, provide for mechanisms to deal fairly with job displacement resulting from technological change, and increase productive investments in those sectors of the economy which will be the backbone of any future economic prosperity".
Having made the comments I did about my friends in the Conservative Party that they are not prepared to be honest with the people of Canada in terms of their policies, and while we in the New Democratic Party have criticized the Government and the Minister of Finance for not taking the action we felt was required at this time to ensure a fair recovery and have criticized the Conservatives for being vague, I feel obligated to put on the record some of the recommendations we would have put in this Budget. We hope that the Government will consider them in its next budget which it will bring in before another election.
The first thing we would do would be to rescind the increased taxes to consumers. On many occasions we have heard that we need to have a consumer-led recovery; that it is important for Canadians to be able to purchase the homes they need, the appliances they need and the vehicles they require in order to provide stimulus to the manufacturing sector that will enable plants to operate at more than the present 60 per cent or 70 per cent capacity. To that end people must have disposable income to afford these kinds of necessities.
The thing that must not be done, as was done by the Conservative Government during the depression, is to increase taxes. Yet the Minister of Finance is quite prepared to say that taxes on every Canadian household will be increased between $200 and $300 this year, as if that will assist in the recovery program. The first thing this Party would do would be to rescind this tax increase.
In an effort to deal with the deficit, we would then reform the personal income tax system so that everyone would pay their fair share. On many occasions we have pointed out that thousands and thousands of Canadians with incomes of $50,000 per year or $100,000 per year or $500,000 per year do not pay any income tax at all. Then who pays? The 16 million average Canadians who file tax returns each year whose tax is deducted at source pay. They pick up the shortfall and pay more than their fair share. The personal income tax system should be changed so that everyone pays a fair share of the tax burden.
February 16, 1984

The corporate tax system must also be revamped. In the past year many corporations have made hundreds of millions of dollars in profits. We have nothing against that; we like to see a healthy economy. But if a company is going to make hundreds of millions of dollars in profit, as the Bank of Montreal did last year, then we expect it to pay its fair share of income tax and not, as some firms have been able to do through tax loopholes, avoid paying a single red cent in income tax.


The Acting Speaker (Mr. Herbert):: Order, please. I have to interrupt the Hon. Member because his time has expired. Of course, he could continue his remarks with the unanimous consent of the House. It is agreed?


Some Hon. Members:: Agreed.


Douglas Glenn Fisher: Mr. Speaker, we would be delighted to agree. I know the Hon. Member is getting into the positive part of his speech and we would like to hear that. I would simply remind him that we have a speaker on this side who would like to talk before lunchtime.


Nelson Andrew Riis: Thank you, Mr. Speaker, and I want to thank my colleagues in the Progressive Conservative Party and the Liberal Party for their positive gesture. I will keep my remarks brief and finish my speech in the next few minutes.
As my Leader has suggested on many occasions, Mr. Speaker, one of the ways to deal with the deficit would be to reconsider some of the $10 billion presently handed out in tax concessions and grants to the corporate sector. I do not think it is unfair to say to the corporate sector that if it expects the taxpayers of Canada to assist it in certain ways through tax concessions or grants, some accountability is required. We are entitled to expect some kind of performance either through research and development initiatives, job creation, job training, or the purchase of new plant and equipment from Canadian suppliers. In other words, tax concessions should be tied to a meaningful contribution to the economy. I cannot imagine that anyone would seriously argue against that. I believe the corporate sector would welcome that initiative.


Mr. Broadbent:: Instead of a free lunch.


Nelson Andrew Riis: We could do away with the free lunches. We are against the concept of simply giving out grants and expecting nothing in return.
Something that has been overlooked in the Budget and has not been commented upon as yet by the Official Opposition is interest rates. In this Party we feel that we cannot have real, sustained economic recovery with interest rates at their present level and with the potential for volatility that we have seen in the last months and years. It is now appropriate for the Minister of Finance, through the Bank of Canada, to take active, positive steps to reduce the interest rates and maintain them at lower levels. The spread between the inflation rate and the interest rate in this country is greater today than ever before in our history. It is time the difference was reduced and interest rates brought down so that people can afford mort-
The Budget-Mr. Deniger
gages and expand their small businesses, their farms, ranches and various economic endeavours. This is the kind of major and bold step that members of the New Democratic Party feel is absolutely necessary for a sustained recovery.
We would also like to expand the job development potential in key sectors of the economy by investing in the infrastructure of those sectors. In simpler terms, the forest industry, for example, is important all across the country. In five out of ten provinces it is a major industry and it is a significant industry in every province, yet it is in dire straits. It is suffering from lack of private and public investment. Is there a better time to invest public sector money in the development of reforestation or the development of salmonid enhancement programs of salmon habitat protection? We do not call this government spending but, rather, serious investment in the economy of Canada.
That is what is required and it must be done next year or within two or three years. We say now is the time to do it because such investment would put hundreds of thousands of Canadians to work immediately in jobs that would bring about a sustained recovery and economic development. In turn, this would generate an increase in tax revenues through corporate and personal income tax for federal coffers. That is the kind of investment we would like to see.
We would like the Government to do some planning. It should sit down with the private sector, with labour and with regional governments to plan what we want to accomplish in the next ten years. It should set out a strategy for the economy and regional strategies that everyone can support and identify with. In that way we could get on with developing the economy. This reeling and wheeling from crisis to crisis, this stumbling about, this ad hockery in terms of economic development, is not good enough. The Budget that was introduced a few hours ago is just one more step in the same direction. There is a lack of vision, a lack of concept or vision about what the country could and should be doing.
This Party feels that the Budget demonstrates that most Canadians have not been heard, Mr. Speaker. Their concerns must be taken into account in these difficult times, their plight must be unveiled and their interest must be represented in the House of Commons.
Today and in subsequent days during this debate the New Democratic Party will represent those voices. The people of Canada have been left out of this document.


Some Hon. Members:: Hear, hear!
[ Translation]


Mr. Pierre Deniger (La Prairie):: Mr. Speaker, it is with great pleasure that I rise on the first day of the debate on the Budget for the 1984-1985 fiscal year. It is a pleasure, Mr. Speaker, because this fiscal year marks the beginning of a period of consolidating what the Government's economic policy has achieved.

February 16, 1984
The Budget-Mr. Deniger
Last year, real growth in this country reached 3 per cent, and 400,000 jobs were created. Inflation, that nightmare of developed economies, has at last been wrested to the floor, something not even my colleagues opposite can deny. These results were certainly not a coincidence, although some people are very reluctant to admit this. In fact, the results I just mentioned clearly illustrate the beneficial effects of last year's Budget on this country's economic state of health.
Mr. Speaker, the present Budget has renewed my faith in this Parliamentary institution, since most Members will have heard from their constituents about problems they were experiencing, due to situations which have now been corrected in yesterday's Budget.
Today, I would like to share with my colleagues a number of those achievements which prove that the Minister of Finance (Mr. Lalonde) has a quality, rare even among ministers, which is to act as well as listen.
I was listening earlier to the former Minister of Finance in the Progressive Conservative Government when he was talking about interest rates. He discussed the matter last night on the news and again this morning on Canada AM, and I would like to remind him of what he said on November 15, 1979, about interest rates, and I quote:
We do not have high interest rates because this government wants high interest rates. That is not our policy. As politicians we do not want high interest rates. The people do not want high interest rates. Nobody wants high interest rates, so it is not a policy of the government to have high interest rates, it is a condition that the government cannot do anything about at the moment. It is not through choice.
Mr. Speaker, imagine the then Minister of Finance admitting that he was powerless to act! We, however, have taken steps to reduce inflation and bring down interest rates, which dropped more than 50 per cent over the last two years, and I think the Minister of Finance has something to be proud of here.
Mr. Speaker, the Budget the House is being asked to consider today is the end-result of a successful undertaking started ten months ago. The results, as I said, are there. The next step is to consolidate those results and to ensure continuity. However, according to our great Liberal tradition, we cannot stop here. We also must consider those who for a time were unable to benefit from this growth and those who had borne the brunt of the recession. That is why this Budget also tries to consider the normal aspirations of the average citizen, of the man and woman on the street. First of all, the Budget is continuing our efforts to restore the economy's momentum. A striking example among many others, Mr. Speaker, is the decision to defer the Incremental Oil Revenue Tax. Though this would be a source of considerable income for the Government, the Minister of Finance (Mr. Lalonde) did not hesitate to relinquish that income, for the benefit of the private sector. The message is clear: The Government will never set its own interests above those of the corporations that generate this country's wealth.
To stimulate the economy, we must also stimulate those who participate in that economy. That is the key to success, as far as productivity is concerned. In 1984, investment must no longer be restricted to equipment. It must also cover human resources. That is why the Government intends to help businesses make their employees aware of the realities of economics, by encouraging them to let their employees share in the profits generated by the activity of their economic unit. The subsequent increased co-operation between labour and management will surely enhance the quality and competitive position of Canadian products abroad.
Mr. Speaker, this is not a new concept. In fact, the Minister of State (Youth) (Mrs. Hervieux-Payette) previously tabled in this House a Private Member's Bill which referred to this positive attitude that would help increase productivity and wealth of both employers and employees. Furthermore, we must be efficient to maintain our position on international markets, and in this connection, the decision to create an international Aid-Trade Fund is more than welcome. In fact, this measure will not only help our companies to meet international commitments that are part of our country's policy, but it will also open new markets to competitive businesses. Mr. Speaker, most of us have spoken to businessmen who want to get a start on the international market. The Aid-Trade Fund will help our companies generate profits and generate employment, and in so doing, it will help boost the economic recovery that is now well underway, Mr. Speaker.
These are all important, necessary and even crucial measures, but it is not so easy to visualize how they could improve the lives of ordinary people.
I feel this Budget is dedicated to those nameless thousands who work hard to make this country what it is, a place where it is good to be. Above all else, the Budget has made job creation one of its top priorities. The previous Budget had already set aside nearly $3 billion for employment assistance. The present Budget has increased funding by more than 15 per cent, a total of over $3.5 billion. Youth will not be forgotten, Mr. Speaker. In addition to the $1 billion in the last Budget, there will be an additional $150 million in new funding that will be immediately available to help young Canadians in their future aspirations.
Another facet of the Government's present concern is its desire to resolve the problems of average Canadians in connection with tax measures affecting small and medium-sized businesses. These businesses are a major source of immediate job creation in this country, and clearly this is the first sector where we should start simplifying the tax system and stimulating the economy. From now on, the so-called cumulative deduction account will be eliminated, which will considerably reduce the number of hours spent by small businessmen on paperwork and recordkeeping. Administrative problems will be reduced even more as a result of eliminating the distinction between active business income and non-qualifying business
February 16, 1984

income. In all, small businessmen will have to cope with only one-third of the tax laws, compared to the previous situation, and they will now be able to spend their time on less frustrating and more productive activities.
Mr. Speaker, this is a direct response to the representations I received from the Societe pour le progres de la Rive-Sud, of the South Shore Chamber of Commerce, which had been complaining about paperwork, administrative red tape and endless tax forms. Once again, we are responding to these very genuine complaints in this Budget.
But when it comes to the average Canadian, Mr. Speaker, the budget contains quite a number of social measures whose common objective is to ensure greater financial security for people with fixed incomes. This assistance is intended primarily for those who have laid the foundations of Canada as we know it today. Naturally, I am talking about our elders, people of the golden age. The financial assistance for senior citizens as advocated in this budget will take various forms. First of all, it was imperative that a very special effort be made to help the most underprivileged among the elderly. In Quebec alone, for instance, more than 230,000 people will benefit from an increase in the guaranteed income supplement-$25 more a month beginning July 1 and another $25 beginning December
1.	In the riding of La Prairie alone-I am talking about my riding-3,300 residents stand to gain immediately from this very popular measure which, I repeat, is the answer to the legitimate claims of the people of my riding.


An Hon. Member:: Hear, hear!


Pierre Deniger: Those are concrete measures which members of golden age associations in my riding will appreciate indeed, for they will give them peace of mind and the opportunity to pamper themselves now and then, something which they could not even think of until now. We also had to consider a major overhaul of every aspect of the Canada Pension Plan to make it more equitable and guarantee a more promising future for people who will retire in coming years.
Let me deal with another aspect of the proposed pension reform. To come to grips with the serious predicament of older women who live alone, the Government intends to split the pension credits in case of marriage breakdown and to maintain survivor benefits should the recipient remarry. In addition, should death strike, the surviving spouse will be entitled to at least 60 per cent of benefits paid to the deceased. I say again, Mr. Speaker, that the budget meets the real needs of people who have made representations to us as Members of Parliament. The Minister listened to them and took action. A number of measures were needed so people would prepare for retirement, including fair and equitable access to some form of tax relief. Under the new RRSP proposal, Canadians who are self-employed or whose employer does not offer that plan will be entitled to the same fiscal assistance as more privileged Canadians. Thanks to this new proposal, tax deductions will be
The Budget-Mr. Deniger
not only more equitable, but also more generous for all concerned. Who among us, Members of Parliament, have not heard these words from people of 45 or 55: "I Find myself with nothing, I have no pension plan, what shall I do?"
Once again, Mr. Speaker, this Budget fulfills a real need among Canadians. What a relief it will be for taxpayers in the future upon filing their income tax returns at the end of April! No more headaches, because the rules of the game will now be simpler. They will also be fairer to those who receive new tax assessments.
All of us in the House are aware of the publicity made about tax audits these last few weeks. Once more, the demands of Opposition Members as well as Government supporters have been met by proposals contained in the Budget brought down by the Minister of Finance (Mr. Lalonde). The period for filing objections to tax assessments is being extended from 90 to 180 days after receipt of the assessment. Instead of having to pay the full amount, taxpayers will be able to provide adequate security, which will greatly simplify the administration of the Income Tax Act and satisfy, as I said, very actual and genuine needs of our constituents.
Again with respect to the proposed changes to the tax system, senior citizens needed a simplification of the system. The provisions concerning quarterly tax payments will prevent senior citizens from being penalized for not having assessed their income to the nearest cent.
Mr. Speaker, how many of us here have yet to receive requests dealing with this provision? We have made regular representations about this both in this House and in the caucus. The Minister has listened to us and he has done something.
To summarize, Mr. Speaker, this is the Budget that the people of the constituency of La Prairie expected, the budget that Canadians expected; in other words it is a Budget which tells every ordinary Canadian that the Government holds their concerns and their interests at heart. It is a Budget which strengthens economic recovery, an audacious Budget which does not hesitate to innovate in the social fields in order to provide Canadians with the material safeguards which they need and of which the Members of the Progressive Conservative Party rhetorically claim to be the defenders, even though they have never defended them in actual practice.
Mr. Speaker, it is not enough to speak about tenderness, to use the favorite expression of the Leader of the Official Opposition (Mr. Mulroney). We need action. The best thing in this Budget is that the increase in social expenditures will in no way prevent a decrease in the deficit. This is a Government whose fiscal responsibility will never be questioned, but it is also a Government which will never cause the Canadian people to get into debt to prevent the state from doing so. As for the deficit, let us talk about it, Mr. Speaker. The size of the deficit

February 16, 1984
The Budget-Mr. Deniger
has been criticized at length. But how can we maintain what has been gained? How can we help those who have been most severely affected by the recession, while injecting funds to create jobs and stimulate the economy, without increasing expenditures? In the worst of the recession, we could not reduce the deficit because that would have aggravated the impact of the recession. And if we cut government expenditures tomorrow, if we increase taxes to a considerable extent, what would that do? It would paralyze our present economy, which is starting to gain momentum and is in the midst of its recovery. And what do our Progressive Conservative friends opposite say? They want to reduce the deficit for a certain group, but they also want a bigger defence budget; they are talking about additional transfer payments to the provinces and they also want more tax relief for business. The Member representing the New Democratic Party pointed out earlier a number of similar contradictions in what the Opposition Members were saying, for instance when they told people in the forest industry that the Budget had to do more for forestry, the people in the fisheries industry that it had to do more for fisheries and people on welfare that benefits had to be increased, and yet they want to reduce the deficit! Mr. Speaker, perhaps this debate on the Budget will at last give Opposition Members a chance to tell the House exactly what they intend to do. The Member for St. John's West (Mr. Crosbie) failed to do so earlier, Mr. Speaker. He put on a show and it was a very good one. He is the best showman we ever had in the House. He is good for a laugh a minute! But that is not what government is about. Mr. Speaker, to govern means to decide to help the poor and the needy, those who come to see us, both Opposition Members and Government Members, to talk about real problems. That is what the Budget is about, Mr. Speaker. It is a recovery Budget, a Budget with momentum, that will reassure the Canadian people.
My constituents in the riding of La Prairie are mostly homeowners. Many of them came to see me, and many other Canadians went to see their Members, to complain about mortgages they were unable to pay off in advance because of the penalty involved. I am referring to mortgages they had to put up with for five years because they had renewed them for five years, at very high rates.
Mr. Speaker, these complaints were brought to the attention of the Minister of Finance. He looked into the matter and he took action. I think the real estate sector which provides employment for many Canadians will respond in a positive way to the Government's generosity, which will make mortgage holders heave a sigh of relief and also enable many young people who are looking for a house to purchase their first home.
Mr. Speaker, there is a great deal to say about this Budget. I realize my time has expired. However, I just want to tell the people in the riding of La Prairie who often bother to complete the surveys I send them, that today, they have authentic proof
that their complaints and requests and desires have not fallen on deaf ears. The Minister of Finance has brought down a Budget that is humane, a Budget for the average person, for the man in the street, for ordinary people, for the people who elect us as Members of Parliament, both Opposition Members and Government Members.
Mr. Speaker, I have the following message for my colleagues in the Opposition who will be voting on the Budget in a few days. Are you going to vote for the future and endorse this Budget or are you finally going to admit that generosity is confined to one Party and that Party is certainly not the Progressive Conservative Party?


The Acting Speaker (Mr. Herbert):: Ten-minute period allowed for questions, answers and comments.


Gordon Edward Taylor: Mr. Speaker, if the Hon. Member wanted a few more minutes we would certainly have no objection. However, if he is finished, I would like to ask a question or two.
Mr. Speaker, I enjoyed the Hon. Member's address and particularly what he said about helping the people who need it the most. I agree with that philosophy. I realize there is a limit to which any Government may go. I am wondering why the Government has left the tremendous void in the present social services program. We have something for the aged, we are doing more for the single pensioners who are below the poverty line, and we have helped some spouses. There are still spouses whose husbands died before the change came who are presently getting nothing and must wait till they are 65. There is a tremendous void, particularly among women between the ages of 50 and 65. That can be broken down as 55 to 65 or 60 to 65. There is a large body of women who are getting absolutely nothing. Some of these women have spent their lives looking after an aged parent, crippled brother or others who needed help. They have saved the Government a tremendous amount of money because they were prepared to stay home. They have no Canada Pension. It is difficult for a woman to compete in the marketplace when she is 50 or 55. Many of them have brought a family into the world. Now their only resource is welfare. Personally I do not think it is any blight on a person to accept welfare, but many people feel that welfare is not really a pension. They feel they are getting something they do not deserve.
Does the Hon. Member feel there is a void here? I am wondering why the Government did not at least start to fill that void so that these women would be able to get something and live somewhat of a dignified life during their last years.


Pierre Deniger: Mr. Speaker, I have fully appreciated the remarks made by my hon. friend opposite. I must say I have enjoyed hearing him speak and ever since I have known him, it
February 16, 1984

was the first time today that I heard him speak like a true Liberal, and not as a Conservative.
Mr. Speaker, 1 suggest that he is right when he says that the government must provide assistance to those who need it the most, and that is precisely what the government has done in this budget. It is all a matter of degree. A choice had to be made and we have made it. Obviously if money was no object, if we had no deficit and a healthy margin of operation, we would certainly have helped everybody. Flowever, I want to remind my hon. friend that we are going to provide assistance to those who need it most; for instance, we are going to increase the Guaranteed Income Supplement for needy senior citizens, and to help older single women who are destitute. As for those between the ages of 55 and 65, they will have to wait until the next budget.


Nelson Andrew Riis: Mr. Speaker, I listened with interest to the Hon. Member's presentation. I quite enjoyed what he had to say and found it to be a very thoughtful speech. He may consider my question to be unrelated. If he does, I would understand why he would not want to respond. He mentioned time and again the need for a strong and sustained recovery and outlined a number of initiatives he felt the Government had taken to encourage and ensure that that take place.
Can the Member explain why, at a time when recovery is so dearly sought by us all, the Government would consider 1984 to be a year when there would be a reasonably serious increase in taxation of consumers? I refer specifically to sales tax, gasoline extra charges and the increase in income tax rates which calculate out to about $200 to $300 on average for each Canadian family. Does the Hon. Member have some observation? Some of us have a difficult time understanding how increasing taxes at this time could do anything but hinder a recovery, generally speaking.


Pierre Deniger: Mr. Speaker, my hon. friend is clearly referring to tax measures which were included in the previous budget and not in this one, because this last budget does not provide for any immediate tax increase.
The Hon. Member is certainly aware that the Government is eager to encourage a strong and sustained recovery such as that we are witnessing now. A period of expansion will provide new revenues, which will make it possible for the Government to invest more in small and medium-size businesses and therefore create more jobs. Consumer spending will in turn increase, which will allow the Government to reduce the deficit, something Hon. Members opposite are anxious to see.


Douglas Glenn Fisher: Mr. Speaker, I am anxious to get the Hon. Member's views on the housing industry in his riding, in Montreal and generally across Quebec. We have had some very good reactions from Ontario spokesmen. Mr. Henry Stolp of HUDAC has said:
These moves will create additional consumer confidence which is definitely needed before we can have a big improvement in sales.
Bill Dixon from the Canadian Real Estate Association has said that it should stimulate the sale of houses. The Hon. Member comes from a riding where there are a lot of new homes and a lot of people interested in home owner issues. Perhaps he would like to reflect generally on the way this mortgage assistance is going to help his riding.


Pierre Deniger: Mr. Speaker, I am particularly pleased with the measures on mortgages and the incentives to the housing industry.
It is obvious, Mr. Speaker, that in a riding like mine, somewhat like yours, there is a large number of houses built every year and there is enough space to build more. Some are built near Montreal where people go to work. Such measures will provide security to young homeowners who will now be assured that they will not lose their home because of a sudden rise in interest rates such as the one experienced at the end of the 1970s. Such measures will allow the construction of thousands of units in the constituency of La Prairie which has already entered a period of rapid growth. Such a budget, Mr. Speaker, will promote in my riding the creation of a large number of jobs and bring wealth and security to people who need it most.


Mr. Kempling:: Mr. Speaker, I wonder if I could have the agreement of Members of the House to call it one o'clock?


Some Hon. Members:: Agreed.


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


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.


Mr. Howard Crosby (Halifax West):: Mr. Speaker, public statements by the Minister of National Health and Welfare (Miss Begin) concerning the new Canada Health Act have caused confusion among Canadians with respect to the health services plan in their respective provinces. At the centre of the controversy is the term "extra billing". Unfortunately, refer-

February 16, 1984
ences to extra billing cast unfair shadows over physicians in some provinces, particularly Nova Scotia.
In the late 1960s, when health care only covered hospital services, the federal Government and the Government of Nova Scotia negotiated the extension of the existing plan to physician services. Quite understandably, the negotiation extended to the physicians who were represented by the Medical Society of Nova Scotia.
With limited resources, Nova Scotia could not afford extension of health care services even with federal assistance. The compromise reached was that physicians agreed to accept 85 per cent of the approved fees for services rendered. Physicians were granted the option of charging the patient for the remainder of the fee.
To characterize this process as extra billing is misleading to the public, and unfair to Nova Scotia physicians. The Medical Society of Nova Scotia must have the opportunity to present their case and their position to the parliamentary committee reviewing the Canada Health Act. The real issue in health services is the quality of patient care. Let us not allow the Minister of National Health and Welfare to confuse this issue with empty rhetoric.



AIR SAFETY


Maurice James Harquail: Mr. Speaker, I rise on a subject of urgent and pressing necessity. It concerns the Canadian travelling public. While 1 commend and congratulate the Minister of Transport (Mr. Axworthy) for setting up the Canadian Aviation Safety Board, with the appointment of Lieutenant-General Thorneycroft to be Inspector General of Transportation Safety for Transport Canada, I do not believe that this goes far enough. When we see recent events, such as the fire in a cockpit of an Air Canada flight when a member of the crew lit his briefcase with a cigarette, they focus once again the urgency of having the Minister take a serious view at least at recommending to airlines that employees such as pilots, co-pilots, and other crew, be prohibited from smoking in the cockpits of aircraft.
I recommended to the House that Members support me in this endeavour to protect the travelling public in Canada by having the Minister of Transport seriously consider banning all smoking on aircraft in this country.



BANKS AND BANKING


Mr. Gus Mitges (Grey-Simcoe):: Mr. Speaker, it has come to my attention that there was a very serious omission when the Canada Deposit Insurance Corporation Act was amended and passed into law on April 27, 1983.
All of us are aware that the amendments, among other things, raised the amount from $20,000 to $60,000 that one could have on deposit in an account that would be insured against the possibility of a bank, or trust company, or other lending institutions in which the funds are deposited, going bankrupt.
However, the guarantee is only for funds on fixed deposit for five years or less. In other words, funds on deposit that are locked in for a period of more than five years are not included and are not protected by the Canada Deposit Insurance Act.
I believe the vast majority of Canadians are unaware of this and think that their funds are perfectly safe and protected if the term of fixed deposit is more than five years. Therefore I call upon the Government either to make this information readily available to Canadians or to change the Canada Deposit Insurance Act so that it applies to all deposits regardless of the number of years such deposits are in place.



THE BUDGET


Mr. Raymond Savard (Verdun-Saint-Paul):: Mr. Speaker, there are in Canada some 750,000 senior citizens, three quarters of whom are women who live at the poverty level. The Minister wanted to help them by providing for a minimum monthly pension of $600, or $7,200 a year. To that end, a Bill will be introduced shortly by the Minister of National Health and Welfare (Miss Begin) to provide persons living alone with an increase of $50 a month, in two stages, $25 a month starting July 1st, 1984, and $25 more a month starting December 1st, 1984. This means the extra help paid by this Government will total $460 million on a yearly basis.
The main reason why I rise in this House, Mr. Speaker, is that the Quebec Government does not seem to be greatly concerned with senior citizens, judging from the remarks of its Premier. It is my hope that this increase, so eagerly awaited by senior citizens, particularly those living in retirement centers, will not be pocketed by the Quebec Government, that it will be passed on to those people who built this country and who deserve a healthy, decent standard of living.



PENSIONS


Mr. Neil Young (Beaches):: Mr. Speaker, the Budget of the Minister of Finance (Mr. Lalonde) leaves current pensioners out in the cold. One quarter of Canadians over 65 live on incomes below the poverty line. But the Government seems to be content. It has again refused to recognize the eradication of
February 16, 1984

poverty as a priority. The Minister refused to meet with anti-poverty organizations during the pre-Budget consultations and his callousness shows.
Eighty-three cents a day on July 1, and 83 cents a day on December 1, will take a single elderly pensioner in Toronto less than one quarter of the way from the current level of benefits up to the poverty line. It is meagre and unjust. Pensioners need substantial increases now, not next July when the Liberals have their leadership convention, or next fall when an election campaign may be in high gear.
Not only has the Government turned its back on current pensioners, but it has also abandoned future pensioners by refusing to expand the universal Canada-Quebec Pension Plans. Hundreds of Canadians participated in good faith in the deliberations in the Task Force on Pension Reform. But it was just a ruse. The gurus in the Department of Finance already decided that tax subsidized savings which benefit the rich disproportionately should be implemented, and universal coverage should be forgotten.
There is no fairness or equity in the Budget. In fact it does a great disservice to the pensioner, and the government should be totally ashamed of itself.



EXTERNAL AFFAIRS


Mr. Jesse P. Flis (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, 66 years ago today, the restoration of the independence of Lithuania was proclaimed. The establishment of Lithuanian independence in 1918 is widely observed by Lithuanians in Canada, the United States, and many European countries.
Lithuania succeeded in re-establishing its independence in 1918, at the end of World War I, but was occupied again in 1940 when Soviet armed forces invaded the independent countries of Lithuania, Latvia, and Estonia. The peaceful, western-oriented Baltic nations were crushed by the force of arms of their hostile neighbour. Under the cynical arrangements of the Ribbentrop-Molotov Agreement, the Soviet Union forcibly and ruthlessly incorporated the three Baltic republics into its empire.
Today, the Baltic peoples continue to struggle to attain the freedoms that we enjoy. The Baltic peoples suffer harsh imprisonment, banishment, and persecution for their political and religious beliefs. Brave Lithuanian men and women still seek to exercise their human right to think, speak, and believe as their conscience directs them.
One of the hopes for Lithuania's future lies in the fact that a new generation now stands in the forefront of resistance against the Soviet drive to destroy the Lithuanian nationality.
1 urge the Government of Canada to continue not to recognize the forced incorporation of the Baltic States into the Soviet Union. I also take this occasion to pay a warm tribute
to the many human rights activists in Lithuania, and the Lithuanian people who are continuing their struggle for freedom and democracy.



OLYMPIC GAMES


Hon. Roch La Salle (Joliette):: First of all, Mr. Speaker, I should like to refer to last week's visit by the Minister of State (Fitness and Amateur Sport) (Mr. Olivier) to Sarajevo where he made certain statements concerning the structure of the Olympic Games and amateur sport. He took that opportunity to chastise the Canadian Olympic Association officials and their International Olympic Committee pals who have remained aloof in their ivory tower, as the Minister said. Given those circumstances, I sincerely hope the Minister will follow up on those statements here in the House. Naturally, he would have liked to see more Quebecers take active part in those Olympic Games. Mr. Speaker, you will be as happy as I am to learn that our hockey team did very well in the Olympic Games.
Moreover, how could anyone refrain from being enthusiastic about the accomplishment of a Quebecer who became one of the greatest Canadians this morning, and I am referring of course to Gaetan Boucher who has won three Olympic medals.
With that in mind, Mr. Speaker, on behalf of all Canadians and all Quebecers who are justifiably proud of that performance, I would like to say quite simply-as you and Hon. Members feel the need to do-Well done, Gaetan!



THE ECONOMY


Mr. Andre Maltais (Manicouagan):: Mr. Speaker, this morning, I met with Mr. Angelo Forte, chairman of the Schefferville Employee Reclassification Committee, whom I can now see in the gallery, and we looked at the situation with respect to the reclassification of Schefferville workers. I wanted to ask if it would be proper at this point to re-evaluate the designated zone of Port-Cartier/Sept-Iles/Schefferville in the light of certain new developments. We have learned that, since this zone has lost its designation more people have been laid-off by the Iron Ore company than during the two years when it was designated.
I therefore believe, Mr. Speaker, that to be fair to all the North Shore people, it is important for the Ministers respon-

February 16, 1984
sible for the designated zones to meet with Mr. Forte and his team and look at what else could be done in addition to the action which has already been taken by the Federal Government and the company, as well as other people.
It is very important, Mr. Speaker, that this meeting be held because the situation is extremely bad on the North Shore. We are having problems in meeting certain departmental officials, which could eliminate the present delays.
I believe, Mr. Speaker, that everything that has been done by the Federal Government was done equitably and extraordinary well. Mr. Forte and his team have worked very well, but much remains to be done. The chairman of another group, Mrs. Paradis, would like all the people who have been laid off to be integrated under the same formula and all those involved to be treated fairly. The cases relating to Schefferville, Labrador City, Wabush and Sept-Iles should be re-examined and the people involved should receive at least the same federal assistance as before.
* *
*



FINANCE


Mr. Henri Tousignant (Parliamentary Secretary to Minister of Regional Industrial Expansion):: Mr. Speaker, based on the principle that health care should be made available to all Canadians everywhere in Canada, I wonder about a situation which exists unfortunately much too often and which apparently is not covered by this principle. I am referring to those people who are suffering from cancer and who must travel very long distances to obtain adequate treatments and who, as in the case of children, must be accompanied.
Mr. Speaker, you surely know that such treatments run into thousands of dollars. I have raised this issue with my colleague the Hon. Minister of National Health and Welfare (Mrs. Begin) who apparently agrees with the principle. I have written to the Quebec health minister and urged him to try and remedy this situation. I suggest that these patients and their close relatives have enough to deal with the severe traumas resulting from their illness without having to depend on the generosity and contributions of charitable individuals or organizations to cover their traveling expenses. 1 urge, therefore, the Quebec government to pay these costs entirely.


Mr. Lee Clark (Brandon-Souris):: Mr. Speaker, it has long been accepted that businesses can write off certain expenses, and generally there is no deduction ceiling on these eligible expenses. That is not the case with daycart costs. Even though the basic minimum daycare deduction has been increased for the 1983 tax year, a ceiling nevertheless remains. Among its many other omissions, yesterday's Budget did not deal with this matter.
There are two fundamental reasons for objecting to the ceiling. First, single parents, who more often than not are single women, are discouraged from entering the work force by prohibitive daycare costs. Even though most provincial Governments provide subsidies for daycare costs, these subsidies are generally small or non-existent for women in the middle-income bracket and, since annual full-time daycare costs far exceed the maximum allowable deduction, many single parents must pay non-deductible daycare costs out of their own pockets. The second argument against the ceiling is based on the more general principle of ensuring equal opportunities for women.
Obviously the burden of paying for children's daycare puts the single working mother at a distinct economic disadvantage. Child care is a necessary expense for single parents entering the work force, so denying them the right to deduct any portion of this legitimate employment expense is highly unfair. Clearly the ceiling on the allowable deduction for daycare expenses should be removed.




Mr. Jim Manly (Cowichan-Malahat-The Islands):: Mr. Speaker, yesterday's Budget, like that of 1983, stacks the deck against low and middle-income Canadians but gives a very sweet deal to those in upper income brackets. We find a particularly blatant example in the profit-sharing proposals.
Participating employees would be able to claim a 6 per cent tax credit on their share of profits. However, the maximum amount of shared profit which can be used as the basis for the tax credit is 25 per cent of yearly income up to a maximum income of $60,000. This means that a person with a $60,000 income could base his or her tax credit on a maximum of $15,000 shared profit. On the other hand, an employee with a $20,000 income would have to claim his or her tax credit on a maximum of $5,000 shared profit. It follows that the $60,000 employee can claim a maximum tax credit of $900, but the $20,000 employee has a maximum tax credit of $300.
Obviously the theme of the Budget is: the rich get rich, and the poor get taxes. The unfairness of this proposal should be so obvious that the Minister should have been ashamed to suggest it. If the profit-sharing proposal cannot be made fair to all employees, it should be dropped.
February 16, 1984



ORAL QUESTION PERIOD


Hon. Flora MacDonald (Kingston and the Islands):: Mr. Speaker, in the absence of the Prime Minister my question is directed to the Acting Prime Minister. It concerns the daily revelations of the investigations by the Prime Minister's Office into the personal affairs of the Leader of the Opposition as a private individual, the latest being into his private home. I have been associated with the offices of two Conservative Prime Ministers and neither of these gentlemen would have engaged, or ever did engage in such disgraceful tactics-


Some Hon. Members:: Hear, hear!


Flora Isabel MacDonald: -and neither would the Prime Minister's predecessors, the late Right Hon. Mr. St. Laurent, and the late Right Hon. Mr. Pearson.
My questions to the Acting Prime Minister are: did the Prime Minister know that his principal secretary and others associated with his office were engaged in this kind of nefarious practice, and did the Prime Minister condone those
activities?


An Hon. Member:: Here he is now.


Mr. Chretien:: Mr. Speaker, I was about to say that the Prime Minister was on his way, but he is already here.


Some Hon. Members:: Hear, hear!


Flora Isabel MacDonald: Mr. Speaker, I think that under the circumstances I should repeat the question.
Mr. Speaker, the Prime Minister having arrived, I will repeat my question. It concerns the daily revelations of the investigation by the Prime Minister's Office into the personal affairs of the Leader of the Opposition as a private citizen, the latest concerning his private home. As I said, I have been associated with the offices of two Conservative Prime Ministers and neither of those gentlemen ever did or ever would have indulged in such disgraceful tactics, and neither would the Prime Minister's predecessors, the late Right Hon. Mr. St. Laurent and the late Right Hon. Mr. Pearson.


An Hon. Member:: That bears repeating.


Flora Isabel MacDonald: Did the Prime Minister know that his principal secretary and people associated with his Office were engaged in these nefarious practices, and did he condone that operation?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, if there had been investigation into personal and private affairs, I think the Hon. Member would be justified in describ-
Oral Questions
ing them as nefarious practices. I know of no such nefarious practices. I know of no investigation into private affairs. I have begun to read the public record in the last hour, and I have seen the exchange which took place yesterday in the House, and have read some of the clippings. It seems to me it has been established quite clearly by the Deputy Prime Minister that there has been no investigation into private affairs. There has been the use of a clipping service. There has been access made to public records. Everything that has been done has been made public.
I understand that my personal secretary has offered access to the media, which have spent quite a bit of time looking at all of our clipping services and other files. There is nothing personal in them. It is all matters culled from newspapers on the public record.
The Hon. Member suggests there were no such practices in the times of previous Prime Ministers. I understand that there is such a practice occurring in the office of the Leader of the Opposition, that he has a couple of boxes on myself that he will not show to the press. Perhaps the hon. lady should dissociate herself from her present Leader since he is so far below the standards established by the other gentlemen that she mentions.


Some Hon. Members:: Hear, hear!


REQUEST THAT PRIME MINISTER SEEK OFFICIALS' RESIGNATIONS
Flora Isabel MacDonald: Mr. Speaker, I am going to tell the Prime Minister that I have files on the Prime Minister.


Some Hon. Members:: Oh, oh!


Mr. Speaker:: Order, please.


Flora Isabel MacDonald: What the Prime Minister fails to realize is that every time an office of a Cabinet Minister sends out any kind of press release, it goes into a file in the Member's office. What he does not seem to understand is that there is a distinction between the Prime Minister of Canada using the power of the state to search a title of a private individual and that which is put into the files of any Member of Parliament in this House. That is the distinction. The problem is that the Prime Minister and his colleagues have been wallowing around in the sewers for so long that they no longer know the difference between right and wrong.


Some Hon. Members:: Hear, hear!


Flora Isabel MacDonald: Since his return, has the Prime Minister questioned the people on his staff about this betrayal of trust in the highest office of the land, and has he asked for their resignations? If not, will he do so immediately?


Some Hon. Members:: Hear, hear!

February 16, 1984
Oral Questions


Pierre Elliott Trudeau: Mr. Speaker, the hon. lady asks about a betrayal of trust, and she alleges use of the power of the state. These are serious allegations. They are not founded on fact. They are pure inventions. I have stated quite clearly, and our office has stated quite clearly, that we have a clipping file. The hon. lady herself says she has a file on me personally. 1 hope she will make that public, except perhaps the personal correspondence that we might have had together.


Some Hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Where is the betrayal of trust? The hon. lady has done this with public moneys. She has done it with people who are paid by the public purse. The files of the Leader of the Opposition, which he will not show to the press, contrary to ours which we have, are accumulated with what money? Some multinational corporations gave him money to do that? No, Sir, Mr. Speaker. The Leader of the Opposition has a research bureau which receives more than half a million dollars a year. As Party Leader, he receives more than $1 million a year just for his staff. Is this using the power of the state because it is taxpayers' money? If it is, then the accusation stands against both of us; we both stand condemned.


Mr. Deans:: Out! Out!


Some Hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Let them applaud when I say the three of us stand condemned. The Leader of the New Democratic Party, as Party Leader, receives over half a million dollars a year, and the NDP research bureau receives more than a quarter of a million dollars a year.


Some Hon. Members:: Oh, oh!


An Hon. Member:: What do you receive?


Pierre Elliott Trudeau: They ask what I receive. The two Opposition parties' research bureaux put together receive more than the Liberal caucus research bureau.
More than ten years ago, in order to improve the quality of questioning in this House-


Some Hon. Members:: Hear, hear!


Pierre Elliott Trudeau: -in order to permit the Opposition to do its job and to counter the advantage the Government has because it has the Public Service of Canada working for the Government of Canada-that is the way the system operates-we took the innovative step of funding the research bureaux for the Opposition Leaders' offices. If they have used these moneys to colligate files on myself which are unshowable they are so base in their content, then that is their responsibility, not ours.


Some Hon. Members:: Hear, hear!


REQUEST FOR NAMES OF PERSONS INVOLVED IN OPERATION
Flora Isabel MacDonald: Mr. Speaker, the Prime Minister will sink to any depths.


Some Hon. Members:: Hear, hear!


Flora Isabel MacDonald: What is at issue here is that the Prime Minister and his staff were out to dredge up material that they hoped would discredit the Leader of the Opposition, and their scheme failed. The Minister of Finance is the living proof that their scheme failed.
We now learn that there were ten people involved in this operation, at public expense. Will the Prime Minister say who they were, who authorized them, and will he, in the name of all that is decent, assure this House and the country that the Office of the Prime Minister will no longer be used in this shameful way? If he won't give that assurance, then he should resign.


Some Hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Mr. Speaker, the Hon. Member wants me to give the assurance that it will not be used again in this way. I cannot give that assurance. It has never been used in this way. We have not looked into private lives. We have a clipping service. That is what we have.


John Carnell Crosbie: Searching titles?


Pierre Elliott Trudeau: The Hon. Member mentioned searching titles. The Deputy Prime Minister yesterday dealt with that.


An Hon. Member:: No, he did not.


Some Hon. Members:: Oh, oh!


John Carnell Crosbie: Who owns your house?


Pierre Elliott Trudeau: The Hon. Member wants to know who owns my house. He just has to read The Gazette and many other papers. They have researched the public records in Canada about my house in Montreal.


Mr. Clark (Yellowhead):: At whose expense?


Pierre Elliott Trudeau: At whose expense? At their own expense, of course. That is what happened in the case of the Leader of the Opposition's house. I understand that somebody in my office read in The Gazette, a Montreal paper, that the Leader of the Opposition had bought his house for $1, and that he had sold it back for $1.


An Hon. Member:: To whom?


Pierre Elliott Trudeau: I do not know.


Some Hon. Members:: Oh, oh!


Pierre Elliott Trudeau: The story was in the Montreal Gazette.


An Hon. Member:: We want to know how it was done.
February 16, 1984


Pierre Elliott Trudeau: Presumably The Gazette obtained it from the public record. I know that somebody in my office, I think impressed by the Leader of the Opposition when he makes these speeches about "and I know what it is to pay a mortgage"-


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!


Pierre Elliott Trudeau: So somebody in my office wanted to know how much he was paying on his mortgage.


Some Hon. Members:: Oh, oh!


Pierre Elliott Trudeau: And they went to the public registry.


Mr. Blackburn:: How would you know what it is like to pay a mortgage?


Pierre Elliott Trudeau: -which the press is doing all the time on my own house in Montreal. So what?


Charles Joseph Clark: Who sent The Gazetted


Pierre Elliott Trudeau: Who sent The Gazette, the Hon. Member for Yellowhead says.


Some Hon. Members:: Oh, oh!


Pierre Elliott Trudeau: We have another question here, Mr. Speaker.


Some Hon. Members:: Hear, hear!


Pierre Elliott Trudeau: The Hon. Member for Kingston says they have suspicions because of a certain letter which the Minister of Finance talked about. What research bureau permitted the Hon. Member for Yukon to refer to a letter that the president of Iron Ore had received from the then Minister of this Government? Who gave him that?


Joseph Jacques Jean Chrétien: Who gave the permission?


Pierre Elliott Trudeau: Was it Mr. Mulroney, or was it his research bureau, who looked into the files and found the correspondence, not with the Leader of the Opposition but with the president of Iron Ore, the great administrator of Iron Ore?


Joseph Jacques Jean Chrétien: Who closed the mine?


Pierre Elliott Trudeau: And who closed the mine?


Some Hon. Members:: Hear, hear!


DISPATCH OF OFFICIAL TO WASHINGTON
Hon. James A. McGrath (St. John's East):: Mr. Speaker, keeping a clipping file is one thing, but using the powerful instruments of the state to pry into the lives of private individuals is quite another.


Some Hon. Members:: Hear, hear!
Oral Questions


James Aloysius McGrath: And the Prime Minister does not distinguish between the role of the research offices of Members of Parliament and his role as the head of the Government and chief adviser to the Crown, and the instruments, the powerful instruments, that he has at his disposal in that capacity.


Charles Joseph Clark: Has and uses.


James Aloysius McGrath: What really is involved here, Mr. Speaker, is an abuse of those powers. I want to ask the Prime Minister, if there is nothing wrong with this operation, can he tell the House why it was necessary to send David Crenna to Washington, as was indicated yesterday by the Acting Prime Minister, to obtain from the U.S. Securities and Exchange Commission the annual report of the Iron Ore Company of Canada and other information in the public domain, all of which, by the way, is readily available from the Library of Parliament? And I got it this morning.


Some Hon. Members:: Oh, oh!


James Aloysius McGrath: And anything else in the public domain in the U.S. Securities and Exchange Commission could have been obtained through the office of our embassy. Why then was it necessary to send Mr. David Crenna to Washington?


Pierre Elliott Trudeau: First, I must return to the preamble of the question where the Hon. Member suggests that we use the powerful instruments of the state to compile secret information. Those facts are not right, Mr. Speaker. The powerful instruments of the state do not exist in this particular case. It is the research bureau of the Liberal caucus. It is the exempt staff of the Prime Minister's Office. Just as the Leader of the Opposition has an exempt staff, which has compiled two drawers full of files on myself, in addition to the files which the Member from Kingston has.


Some Hon. Members:: Oh, oh!


Pierre Elliott Trudeau: Are they using the powerful instruments of the state? No, Mr. Speaker.


Mr. Crombie:: No, you are.


Pierre Elliott Trudeau: Let the Hon. Member substantiate his allegations. If it is the exempt staff of the Prime Minister, is this not a distinction between the state and the exempt staff of the Prime Minister? I had this argument with the Leader of the Opposition the other day who seems to believe-and I thought the Hon. Member was more informed-that there is no distinction between the public service, hired under the Public Service Act, which is different from the Prime Minister's Office. The Prime Minister's Office is political by nature, just as the Leader of the Opposition's office is political by nature. I cannot believe the Hon. Member is ignorant. He must be a hypocrite to believe the two are the same. He knows the distinction. You all know the difference over there. I think you are all indulging in hypocrisy.


Some Hon. Members:: Hear, hear!

February 16, 1984
Oral Questions


James Aloysius McGrath: Mr. Speaker, when it comes to hypocrisy, the Prime Minister takes second place to no one.


Some Hon. Members:: Hear, hear!


James Aloysius McGrath: Obviously, the Prime Minister has not read the code prepared by the late Right Hon. Lester Pearson which set out the responsibilities and the moral responsibilities of the exempt staff of Ministers. There is the distinction-of Ministers, members of the Government.


REQUEST FOR PUBLIC INQUIRY
James Aloysius McGrath: Mr. Speaker, there have been serious allegations made in the press concerning operations of the Office of the Prime Minister. I say to the Prime Minister he has an opportunity to put these allegations to rest by agreeing to a public, independent inquiry.


Some Hon. Members:: Oh, oh!


James Aloysius McGrath: I will say this to you. The Leader of the Opposition is prepared to open every office under his supervision to any such public inquiry.


Pierre Elliott Trudeau: That seems like a pretty gratuitous assumption, Mr. Speaker. The Leader of the Opposition is prepared to open everything. Why did he not open it this morning to the press? Why did he not show these files? What kind of an offer is the Hon. Member making when he makes such a statement? He is making a purely rhetorical statement. We have let the press look at our files. Why does his Leader not let the press look at his files? Because the mentality of those people over there is the mentality they have shown before, hiring gumshoes, hiring private detectives, pretending that their telephones are bugged, when in reality they are doing the bugging, and this happened under the leader-


James Aloysius McGrath: Ask Goyer.


Mr. Epp:: Ask the extra-parliamentary group.


Mr. Hees:: You are running down.


Pierre Elliott Trudeau: I guess you are running down over there because if you can only come up with this kind of invention-


George Harris Hees: That was certainly a killing crack.


Pierre Elliott Trudeau: This Party which is constantly using confidential documents received in brown envelopes, reading from confidential documents, that have been obtained illegally- they use illegal documents, and then they blame us for using the public records and newspaper files. What a bunch of hypocrites!


Some Hon. Members:: Hear, hear!


Some Hon. Members:: Oh, oh!


THE BUDGET
John Edward Broadbent: Mr. Speaker, I have a question for the Minister of Finance. In his Budget last night, as well as in the Budget he brought down before, the Minister talked about fairness and recovery. I have an invitation for the Minister. I should like him to come to Oshawa. Would he agree to meet with two families? The first family is a middle-income family which lives in one part of town. As a result of the Minister's last Budget, in the next two years it will experience an increase in taxes of no less than $500.
The other family lives in another part of town. It is headed by a lawyer who earns $90,000 per year. As a result of last night's Budget, because of the changes the Minister introduced he will save $7,500 in taxes.
Will the Minister agree to meet with both families and explain why he had to increase taxes on middle-income Canadians before, in order to provide subsidies for the rich now?


Marc Lalonde: Mr. Speaker, let me first of all congratulate the Leader of the New Democratic Party for addressing the issue of the Budget, contrary to members of the Official Opposition who seem to ignore the situation of the economy and what should be done about it.
I have to tell the Hon. Member that in my own constituency there is a large number of constituents, some with very low incomes, some with middle incomes, and some with high incomes. I meet with them regularly, as I hope my friend is meeting with his constituents.
I want to draw to the Hon. Member's attention a number of features in the Budget that he seems to ignore. The only increase in expenditure this year, for instance, will go to those most in need. There will be $50 per month going to single people on GIS, the Guaranteed Income Supplement and we will allocate over $1.3 billion to unemployed youth.
The changes that have been made in addition, in terms of profit sharing, will allow low-income workers, middle-income workers and high-income workers to share in the profits of their corporations. The changes that are going to be made to the pension schemes will benefit all workers coming under federal authority and all workers covered by the Canada Pension Plan. They will also ensure that those who are not employees, those who are running or are employed by small businesses who do not have pension plans, those independent operators like farmers, fishermen and professionals, have the same benefits that are available at the present time to those who are working in a plant and who are benefiting under defined benefit plans. The proposal in the Budget is to give equal access to all Canadians to pension benefits in this country. I invite my friend to go back to the Budget.


John Edward Broadbent: Mr. Speaker, just a few minutes ago the Prime Minister referred to hypocrisy. I want to tell the Minister of Finance that when it comes to the sharing of income and
February 16, 1984

Oral Questions
the tax policies of the Government, the people of Canada are	[English]
getting tired of the kind of hypocrisy we just heard from him.	Mr. Broadbent: Oh, you switched to French.


AMOUNT OF BENEFIT INCREASE FOR PENSIONERS
John Edward Broadbent: Mr. Speaker, my supplementary question follows immediately from what the Minister just said. He said he increased the pension benefits for those who are getting the GIS. The Minister knows that there are 750,000 poor pensioners in Canada. He is giving them a SI.66 per day increase. Considering this, and in terms of the private pension change available primarily to the rich, why did he provide a benefit scheme that would give the rich $20 and something per day, compared to $1.66 per day for the poor? Why is it that the poor get so little and the rich so much? Is the rich vote worth 20 times the amount that a poor vote is worth?


Marc Lalonde: Mr. Speaker, I should like to remind my friend that what we are doing in support of the senior citizens is the implementation of recommendations coming from all kinds of groups interested in social services and in welfare, as well as other organizations, that is, ensuring that those who are single recipients of Old Age Security and the Guaranteed Income Supplement will receive 60 per cent of the amount of money available to couples. In effect, as the Hon. Member knows, what we propose is going to bring these people over 60 per cent of what is available to couples. This is going to take effect immediately.
As far as the other measures are concerned, as I have indicated to the Hon. Member, what we are proposing under the Tax Assistance Plan for pension reform is to make access to the pension scheme equivalent, whether you are an independent professional, farmer, businessman, or whether you happen to work for a firm. That access is given equally to all, and that is fair between people in similar situations.


John Edward Broadbent: Mr. Speaker, once again the Minister talked about fairness. He talked about it last night, and he talked about it before. He goes on about recovery and fairness.


TAX LOOPHOLES AVAILABLE TO RICH
John Edward Broadbent: Mr. Speaker, considering that even after this Budget people at the poverty level will continue to pay taxes, and that after this Budget pensioners will continue to pay taxes, why is it that we have a tax system so riddled with more than 200 loopholes that a man or a woman earning $200,000 can get away without paying one penny in tax? When are we going to have a fair kind of recovery in which all Canadians share the benefit?


Marc Lalonde: Mr. Speaker, I want to-


Marc Lalonde: What have you got against French? I thought French was the official language of this country as well as English. What have you got against French?

-I will speak French when I feel like it!


Some Hon. Members:: Hear, hear!


Marc Lalonde: I know the Hon. Member and I am aware of his interest in and dedication for bilingualism. I should like to think that it was just his angry reaction on the spur of the moment. I will answer the question.
Now then, with respect to the question raised by the Hon. Member, I would like to remind him that Canadian pensioners benefit from a plan which compares favourably with that of any other industrialized country-more generous in fact than those of most industrialized countries.
In addition, the tax benefits granted to the elderly are considerably higher than those of people under 65. The Hon. Member is aware of that as well. Of course, some pensioners do pay income tax, but that is because they earn a fairly good income. Similarly, people under 65 who declare good incomes have to pay taxes.
Concerning the specific cases to which the Hon. Member might want to refer, they have been mentioned in previous question periods. He knows the tax regulations, people have to pay taxes on the income they earn, in accordance with well known regulations of the Income Tax Act which has been adopted by Parliament.


PRESENCE IN GALLERY OF FOREIGN AFFAIRS COMMITTEE
Mr. Speaker:: May I call the attention of the House to the presence in the Speaker's Gallery of the Hon. Du-wan Pong, Chairman of the Foreign Affairs Committee, National Assembly of the Republic of Korea.


Some Hon. Members:: Hear, hear!


PRIME MINISTER'S OFFICE
Charles Joseph Clark: Mr. Speaker, my question is addressed to the Prime Minister. He will know that an employee of his Office-the Office which, without ques-
1462

February 16, 1984
Oral Questions
tion, is the most powerful in the land, because a call from the Office is a call from the head of the Government, with all that entails-he knows that an official of his Office, Mr. Crenna, has been quoted as saying that the request was made for a title search of the residence of the now Leader of the Opposition. Is the Prime Minister denying that a request was made? If he is not, will he tell us who made that request?


Pierre Elliott Trudeau: Mr. Speaker, I do not know who in name made that request. I would be prepared to say without any hesitation that, if Mr. Crenna made the search, it was probably requested by someone in my Office who was his superior, if not by one of his colleagues. So there is no denying that the request would have issued from my Office, if Mr. Crenna made-I believe the Hon. Member for Yellowhead is talking of the research at the Security Commission-


An Hon. Member:: No, the mortgage.


Joseph Jacques Jean Chrétien: The mortgage.


Pierre Elliott Trudeau: Then, so far as I know it is not Mr. Crenna who made that research. But someone in my office, I am informed, asked someone involved in real estate in Montreal to look at the public record to see if the story in The Gazette was correct, that Mr. Mulroney had bought his house for $1. And I am told that 1 am incorrect in saying that he had sold it back for the same amount. I am sorry-


Joseph Jacques Jean Chrétien: 


Pierre Elliott Trudeau: -if I misled the House. It was unintentional. So what, Mr. Speaker? There was a verification on the public record as to whether the story in The Gazette was correct.
I wish the Leader of the Opposition, and all his supporters, would also make verification before they make the kind of unfounded allegations which very often they cull from the press. I mean, that is the story of the past two days. They took allegations out of the press which were patently incorrect and false, and they repeated them in this House without verifying whether they were true or not.
Apparently my Office has more conscience than the members of the Opposition. It verifies the public records before repeating nonsense.


CONTENTS OF FILE
Charles Joseph Clark: Well, Mr. Speaker, we are getting somewhere.


Some Hon. Members:: Oh, oh!


Charles Joseph Clark: The Prime Minister has now confirmed that his Office requested verification of that information, that it received verification of that information. Presumably there is a record of that verification. Will the Prime Minister tell us if the record of that verification was in the
Mulroney file which is being kept at public expense in the Prime Minister's Office? If not, why is it not there? And what else was removed from the Mulroney file before it was opened to the press?


Pierre Elliott Trudeau: Mr. Speaker, the second part of the question devours the first. The Hon. Member presumes that something has been removed from the file. I do not even know if it was in the file, Mr. Speaker. We do know there was a story in The Gazette that somebody in my office had verified whether it was true or not. So presumably all that is in the file is a Gazette story, probably with a handwritten note, "This is correct. We verified it." I don't know, Mr. Speaker. I am certainly not interested in these files.


Mr. Coates:: Why do you have them?


Mr. Jarvis:: Somebody thinks you are interested.


An Hon. Member:: Somebody is interested in it.


Pierre Elliott Trudeau: Well, someone over there obviously is very interested in knowing what we know about what is on the public record. It seems to me that the whole Iron Ore question has not been put forward by this Party. It has been part of the public record put forward by the Leader of the Opposition who gives himself great, great credit as to being a very able administrator-and he shows Iron Ore as the proof of that- and a man who knows how it is to carry a heavy mortgage, when he only paid a dollar for his house. These are public matters and it is incorrect, particularly for the former Prime Minister, to allege somehow that, because I am Prime Minister I am not also Leader of the Liberal Party, and that as Leader of the Liberal Party I do not have a political partisan function to perform. Once again, the Leader of the Opposition had exempt staff. I remember answering in front of a parliamentary committee that he had more people-


Some Hon. Members:: Order.


Pierre Elliott Trudeau: -on his exempt staff than I did.


An Hon. Member:: Shame!


John Carnell Crosbie: The ramblings of a wreck. Order, Mr. Speaker.


Pierre Elliott Trudeau: What were they doing, Mr. Speaker? Were they putting things in files and then removing them surrep-tiously so that the press would not see them? Do we go around making this kind of accusation-


John Carnell Crosbie: Order.


William Herbert Jarvis: Check with your Minister of Finance.


Pierre Elliott Trudeau: -about the former Prime Minister? What about his own Files? Did he destroy-why did he destroy files when he became Leader of the Opposition?
February 16, 1984


PROCEDURE FOLLOWED IN APPOINTING FORMER MINISTER TO CABINET
Charles Joseph Clark: Mr. Speaker, I have a supplementary question for the Prime Minister. Having asked him questions about an investigation carried out by a public official of the highest office in the land, at public expense, into a matter that, if carried out at all, should have been carried out by the Party; having asked him a question about a public investigation which we believe was most improper for him to carry out, let me ask the Prime Minister of Canada why there was not similar interest shown in carrying out an investigation into the background of the Member of Parliament for Burin-St. George's before he was named to the Cabinet of Canada for 10 days?


Some Hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Mr. Speaker, I think the Hon. Member for Yellowhead has just spilled the beans. He equates a public record in a registry office in Montreal with private tax information which is held private under the income tax laws of Canada. He is now suggesting that we should have had some of our exempt staff look into the files of the tax office of Canada. This is something I suppose he would have done.


An Hon. Member:: Shame!


Pierre Elliott Trudeau: And maybe he did that with his Ministers before naming them. I did not. I presumed they were honest people. That presumption is not-


Mr. Hnatyshyn:: With your record, that is hard to believe.


Pierre Elliott Trudeau: -that presumption is not destroyed because exempt members of my staff, who are hired as Liberals to perform a partisan function-not a function of the state, but a partisan function-let us not be hypocrites, Mr. Speaker. The Leader of the Opposition is also Leader of the Tory Party. The Leader of the Government is also Leader of the Liberal Party. They perform partisan functions as well; both offices do. But looking into the tax files of any private Member is something we would not do, but something which I guess the Hon. Member for Yellowhead would do, if I can judge his question.


Some Hon. Members:: More.


AMATEUR SPORT
Mr. Dennis Dawson (Louis-Hebert):: Mr. Speaker, I can see that the Hon. Members are rather excited today. My questions will be somewhat more gracious than the previous ones, Mr. Speaker. They are for the Minister of State for Fitness and Amateur Sport (Mr. Olivier). The Minister is probably aware
Oral Questions
that Gaetan Boucher won his third medal this morning, a gold medal in speedskating, in addition to the other two he won this week. Will the Minister consider the request made by the Federation de patinage de vitesse du Quebec, which has seven members on the Canadian speedskating team? Will he consider the request of the Federation to give the City of Sainte-Foy an artificial speedskating ring so that the Canadian speedskating team will not have to go abroad, namely in Europe or Lake Placid, to train?
Mr. Speaker, it is extremely important that we should encourage the recipients of gold medals which were won at an extremely reduced cost. It would be encouraging if, in 1988, we could have not only Gaetan Boucher, but other competitors named Daigle, Grenier, Thibault and Pichette-


Hon. Jacques Olivier (Minister of State (Fitness and Amateur Sport)):: Mr. Speaker, I would like to take this opportunity, on behalf of the Canadian Government and all Canadians, to congragulate Mr. Gaetan Boucher who has become the first Canadian amateur athlete to win three medals at the Winter Olympics. Gaetan Boucher becomes the first Canadian amateur to win two gold medals in the same Winter Olympics.
In reply to the Hon. Member's question, I can say that the Canadian Government and my Department are considering the possibility, first, of building an Olympic speed skating oval in Calgary at a cost of $35 million, and also of building facilities in Eastern Canada so that Eastern Canadians can practice this form of sport.
In closing, 1 should also point out that Mr. Gaetan Boucher will receive the Order of Canada on April 11 for his achievements and the honour his achievements are giving Canada throughout the world.


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


THE ECONOMY
John Carnell Crosbie: Mr. Speaker, my question is for the Minister of Finance of the Schickelgruber government.


Some Hon. Members:: Oh, oh!


An Hon. Member:: Oh, there he is; there is John.


John Carnell Crosbie: That is what happened to the Reichstag in 1933.

February 16, 1984
Oral Questions
In the Budget of April 19, 1983, he said:
-my dominant concern in preparing this Budget has been to help the more than one and a half million Canadians who want to work but cannot find jobs.
Ten months later the number of unemployed is 1,473,000 and the Minister forecasts it will be over 1,400,000 this year and next, and it will be over 1,100,000 in 1988. What has happened to his dominant concern to help Canadians find jobs? When is he going to act to carry out that magnificent statement of April, 1983?


Marc Lalonde: Mr. Speaker, the problem with the Hon. Member and with the Conservative Party is that they have never gone past 1983. We are in 1984, in case the Hon. Member did not realize it. We had a Budget yesterday which came out with a number of measures aimed at helping the economy and Canadians in a lot of areas, whether they are senior citizens, young people, workers, farmers, small businesses, or home owners. I invite my friend to look at it.
As far as the figures he has quoted are concerned, I have to remind him that last year we created 400,000 jobs. The job creation forecasts for 1984 compare very favourably with any other industrial country. As I indicated, we are going to create close to 1.6 million new jobs over the next five years. Obviously we are not going to be able to eliminate unemployment during that period for the very simple reason that we have the fastest growing labour force of any industrial country. My friend knows that, too.
We are going to create jobs as fast as can be done without creating impossible situations in terms of the general performance of the economy. We are very concerned about the situation; we are allocating public funds to a degree and at a level well over what has ever been allocated in this country by any Government to fight unemployment. But we are also counting on the activities of the private sector to come in and be the main engine of growth. This what we expect in the coming year.


John Carnell Crosbie: A short supplementary, Mr. Speaker.


Mr. Speaker:: With all due respect to the Hon. Member, it is past the hour and there is a Budget debate ensuing. This appears to involve matters anticipated in the Budget debate. The Chair would like to call on the Hon. Member for-


John Carnell Crosbie: Mr. Speaker, a supplementary? Is there anything more important than unemployment, Mr. Speaker? This is of some urgency.


Mr. Speaker:: The Chair recognized the Hon. Member when it was already past three o'clock, and the Chair-


John Carnell Crosbie: Mr. Speaker, a short supplementary.


Some Hon. Members:: Sit down!


John Carnell Crosbie: Well, Mr. Speaker, we know it is 1984 when we have Big Brother over there answering. Heil Schickelgrub-er!


Pierre Elliott Trudeau: The Reichstag was burned down by guys like you.


John Carnell Crosbie: What about unemployment? You are a disgrace to your office.


Mr. Speaker:: The Hon. Member for Hamilton Mountain (Mr. Deans) on a matter of privilege.


John Carnell Crosbie: We are not permitted to ask you questions. You are afraid of your unemployment record.


Pierre Elliott Trudeau: Stand up.


Mr. Ouellet:: What a joker.


John Carnell Crosbie: From Russia with love.


Pierre Elliott Trudeau: If you are concerned about unemployment, why did they spend half an hour asking questions about clippings?


John Carnell Crosbie: Supplementary, Mr. Speaker.


Some Hon. Members:: Sit down.


Ian Deans: Mr. Speaker, I-


Mr. Speaker:: The Chair has indicated grave concern about anticipating a Budget debate according to the rules of the House. The Chair at this point has recognized the Hon. Member for Hamilton Mountain on a matter of privilege.


PRIVILEGE
Ian Deans: Mr. Speaker, I do regret the fact that so much time was taken early in Question Period which has denied other Members a chance to raise legitimate questions.
As you know, I was making some comments yesterday with regard to the question of privilege raised by the House Leader for the Official Opposition and responded to by the President of the Privy Council (Mr. Pinard). I can see there is very little interest in the matter given that most of the Members are paying attention to other than what is taking place. I listened with interest to the exchanges between the Hon. Member for Kingston and the Islands (Miss MacDonald), the Hon. Member for St. John's East (Mr. McGrath) and the Prime Minister (Mr. Trudeau) today and I must say the whole thing sickens me. It sickens me to the point that I cannot be bothered talking about it; make your own decision.


Mr. Speaker:: The Chair may have misinterepreted-


Mr. McKinnon:: He is sick.
February 16, 1984


Mr. Speaker:: The Hon. Member was recognized to add to a question of privilege. Is the Hon. Member directing a criticism at the Chair or is it-


Erik Nielsen: He is just informing the Chair he is sick.


Mr. McKenzie:: We knew that.


Mr. Speaker:: Are there any other Hon. Members seeking to intervene at this point?


David Edward Crombie: Mr. Speaker, I wish to intervene with respect to the question of privilege raised by the Opposition House Leader yesterday. I had expected to hear, for a moment at least, some views from the Hon. Member for Hamilton Mountain.


Ian Deans: What is the point?


David Edward Crombie: I do not want to go over the ground covered by my House Leader, but I want to add a dimension which I think is important to the matter you have to deal with. It arises from the debate yesterday in Question Period, and I might add, now that I have heard the Prime Minister (Mr. Trudeau) speak on the matter, that the thoughts l have for you as you make your decision are perhaps more in order than I even thought myself.
It seems to me that the root of our difficulty, not only on the matter specifically before you but those which have arisen in the last number of months, Mr. Speaker, relates to our understanding of what the Prime Minister's Office is, what it does, its relationships with Government and with us. I heard the Deputy Prime Minister the other day, Mr. Speaker, simply say there was no basic difference between public funds in a Member's office or in the office of the Leader of the Opposition (Mr. Mulroney), and public funds being used in the Prime Minister's Office. That suggestion is sustained in an article in The Globe and Mail today where the principal secretary to the Prime Minister again tries to draw an analogy by saying that the Leader of the Opposition has public funds for research, as does every Member, as well as the PMO.
When I heard the Prime Minister himself say that he saw his "exempt staff' as not being governed by the same rules of conduct as members of the Public Service, I say to you that I hope I will have your attention on this matter because I have not heard anything which has quite so disturbed me in a long, long time. The Prime Minister is absolutely wrong. The danger of his assumption is quite stunning. The Prime Minister's Office stands in an entirely different constitutional position from that of a Member's office or the office of the Leader of the Opposition, indeed almost any other office you can think of.
In 1979 an excellent book was written called The Super Bureaucrats. That book is an exposition of the central agencies of Government. Central to that was its discussion of the Prime Minister's Office. This is the shortest definition you will find of what the Prime Minister's Office does. I commend it to you, Mr. Speaker, because it is very important. It states that the
Privilege-Mr. Nielsen
Prime Minister's Office is to serve the Prime Minister in the exercise of his power, in the pursuit of his duties, and in the discharge of his responsibilities as head of Government and as head of the administration.
That is the job of the Prime Minister's Office. It advises the Prime Minister as head of the Government and head of the administration. That is the qualitative, fundamentally important difference, Mr. Speaker, between the Prime Minister's Office and the Leader of the Opposition's office, or indeed any other research office. The fundamental difference is that when the Prime Minister's Office speaks, asks a question, writes a letter, asks people to investigate or telephones, the Prime Minister's Office is speaking with the authority and power of the Government and the state.
Today the Prime Minister said something which I never thought I would hear in the House. He said that when the exempt staff in his office operates they are not part of the Government and controlled by the mode of conduct required for all public servants. If there was any doubt about the power of the Prime Minister's Office, it has surely increased in the past 15 years. We have centralized more and more power in the office of the Prime Minister. That is why there has been grave concern.
When the Prime Minister spoke about research of a political nature, he totally confused the role of his Party with his job as head of the Government. It gives me concern, Mr. Speaker, and should give you concern when you make your decision.
I would like to quote from an article about a topic which was recently debated in a city in this country. It reads as follows:
The growth of central agencies (notably the Prime Minister's office ... ) has had a dramatic effect on the role of the Liberal Party in Government. The development of powerful resources around the leader has meant that many functions that are "political"-and political in a partisan sense-have devolved to publicly-paid officials. Much of what might otherwise have been the party's role has been subsumed ... by the developments.
In light of this, it has become progressively easier for the party to slip into the role of simply an election machine, cranked up every four years, but largely dormant and ineffective in inter-election periods. Even in elections, much of the planning and related activity that one might expect to see reside in the realm of the party has become centered in government or parliamentary institutions, reliant on government or parliamentary resources.
I did not make that up, Mr. Speaker. That is from a discussion paper on the reform of the Liberal Party. That is a report from the Committee for Reform of the Liberal Party in Canada. It is under the auspices of the president of the Liberal Party.
There is danger in confusing the activities of those who work in the Prime Minister's Office with those who work in the Leader of the Official Opposition's office or members' offices. It is a matter which is important to us and also to the Liberal Party; at least, their own people who want to reform them say so. It has occupied the minds of people in other countries. How do you control the power of the Prime Minister's Office in relation to the privileges of the House and the privileges of the Members in it? The question is what power the Government,

February 16, 1984
Privilege-Mr. Nielsen
the Prime Minister and the Prime Minister's Office have to reach into the House and intimidate its Members. That is the issue. That is why the question of privilege is no frivolous one.
The oldest battle in the history of Parliament has always been how to control the power of the Government and the power of the state. It is as old as Parliament itself. Mr. Speaker, the rights and privileges which you administer for us and your own rights and privileges as Speaker come as a result of the need 400 years ago in England for the Parliament of that day to make sure that the Crown, the state and the government of the day could not reach in and intimidate either the House or its members. In response to the questions of privilege raised in the 1540s when the King commanded that the Speaker do such and so, the Speaker said: "Eyes 1 have and ears I have only that Parliament will give me".


John Leslie Evans: The King is a Member of Parliament.


David Edward Crombie: Mr. Speaker, the Member across the aisle-


Mr. Speaker:: Order, please. Order.


Mr. Blenkarn:: Get in your seat.


Mr. Speaker:: Order. The Hon. Member for Rosedale has the floor.


David Edward Crombie: Mr. Speaker, there was an intervention by the Member for Ottawa Centre (Mr. Evans). He indicated that the Prime Minister was acting as a Member of Parliament. We are not talking about the role of the Prime Minister as a Member of Parliament, but about the role of the Prime Minister's Office as a function of government.


Douglas Glenn Fisher: Your office does not do anything, David?


David Edward Crombie: It is the power of the state to intimidate the House and its Members that we are talking about. That kind of executive power-


Douglas Glenn Fisher: You are only using your office for the same thing. You are doing the same thing all the time.


David Edward Crombie: Mr. Speaker, could I have order, please? I would like order, Mr. Speaker.


Mr. Speaker:: It has been a difficult enough day. I appeal to Hon. Members for order. The Hon. Member for Rosedale has the floor.


David Edward Crombie: Thank you very much, Mr. Speaker. I do not need any instructions from Members opposite who do not understand how this House is supposed to function. The Member for Mississauga North (Mr. Fisher) knows no better than to shout at other people. He makes no contribution of his own.
The matter we are talking about has not only been important here but has been important in other countries. The control of executive state power has grown immeasurably in most countries. In democratic countries the way in which we
have done that is to make sure we can contain that power. In the 1970s in the United States that same kind of executive power had internal revenue investigating files of members of Congress and opponents of the government.
A few weeks ago in the House the Minister of Finance (Mr. Lalonde) made allegations that through the Prime Minister's Office, through people who are supposed to be public servants, he obtained information alleging certain actions by the Leader of the Opposition. That, Mr. Speaker, is why we worry. We have to nip it in the bud. Any government which thinks that the Prime Minister's Office is a function of politics rather than of political Party, and is not a function of serving the head of government, is a government that you cannot trust with power. That is why Parliament and its privileges has always been the shore against the water that came from those who wished to abuse power.
The second way we contain it, Mr. Speaker, is through the privileges of individual Members. I have been in public life for almost 15 years. I have held positions of power to make decisions affecting other people. I am well aware of the kinds of blandishments, intimidations, threats and muffled threats that come to people in a decision-making process. It is easy to be intimidated. It takes courage not to be intimidated by those who would distort the exercise of responsibilities. That is why it needs something else. The privileges of the House and of each Member of the House are the one factor that allows Members to withstand the pressures from those who would intimidate them. Privileges and rights of Members are not some esoteric, above the ground or misunderstood reality. They are the essential requirement for carrying out our public responsibility.
If Members are going to be intimidated by the government of the day through the use of files to which only the Prime Minister's Office has access and not other research houses, that becomes the small trickle that grows into a flood and we can no longer depend on Members to carry out their responsibilities.
The day that privileges of the Members of the House and the privileges of the House generally are usurped by the assumption that the Prime Minister's Office is concerned more with politics than with government is the day when your rights, Mr. Speaker, and my rights, and therefore the rights of the people of this country, are in jeopardy.
It is not only through the rights of Parliament and the rights of individual Members that we protect the freedom of this institution and can defend it from the abuse of power by government through the Prime Minister's Office. It is also done through morality. All of the rules of the House, the philosophy that sustains them and all of the freedoms that we enjoy are rooted in a common understanding of how one conducts politics. There is a moral basis to politics. That is why all members of the staff of Ministers and the Prime Minister's Office have the same code of conduct. The Prime Minister indicated otherwise today.
February 16, 1984

1 want to give the following quote because it came from a great Liberal Prime Minister. After the scandals of the 1960s, Prime Minister Pearson was concerned about the conduct of the Prime Minister's Office and the conduct of Minister's offices. He said that it is essential to establish a code of conduct applicable to today and went on to say:
It is by no means sufficient for a person in the office of a Minister-or in any other position of responsibility in the public service-to act within the law. That goes without saying. Much more is required. There is an obligation not simply to observe the law but to act in a manner so scrupulous that it will bear the closest public scrutiny. The conduct of public business must be beyond question in terms of moral standards, objectivity and equality of treatment.
I note that at the beginning he said "all staff members". When we read Hansard tomorrow we will see that the Prime Minister of this day does not understand the fundamental point that his staff in the Prime Minister's Office, exempt or otherwise, must carry out the same degree and level of moral conduct that everyone else is expected to carry out. That was the essence of Watergate. The essence of Watergate was not the break-in; it was the abuse of executive power. That was the point.
This abuse of power can only be contained by a code of moral conduct. That is why Lester Pearson made that statement in the mid-1960s. It is time that the Government read it again.
1 relied heavily on the Liberal discussion paper prepared by those who want to reform the Liberal Party and on a Liberal past that at least understood that there was a moral basis to politics. 1 did so because at the root of the question of privilege for you to consider today, Mr. Speaker, is the question whether the Prime Minister's Office, with the power it has, is required to act within a moral code so that it does not impinge upon the rights and privileges of the House and its Members.
Interestingly enough, there is no dispute about the facts because it is clear from yesterday's Hansard that the Deputy Prime Minister (Mr. MacEachen) indicated there was no question of the facts. What was in question was the interpretation. You may want to check Hansard, Mr. Speaker, but that is what I read.
I am saying that my interpretation is that, on the basis of those facts, the principal secretary to the Prime Minister and those who work in the Prime Minister's Office did not act in a way that would "bear the closest public scrutiny".
Finally, let me say that when we deal with this matter it is my judgment and that of the reform group in the Liberal Party, the judgment of Lester Pearson and the judgment of any honest, thinking person, that the actions of the Prime Minister's Office give us the suspicion-and do not forget that intimidation works best by suspicion-that they are a threat to the rights and privileges of the House, of its Members and have certainly taken us down a long, dark road to any further understanding by the Government of the moral basis of politics.


Douglas Glenn Fisher: Mr. Speaker, I would suggest to you that what we
Privilege-Mr. Nielsen
have just heard is not a question of privilege but a matter of debate. That is my first point.
My second point is that it is rather biased and strangely worded debate from a man who has been practising exactly what he has accused the Liberal Party of doing. Let me point out that the Member for Rosedale (Mr. Crombie) is the political leader in his Party for Metro Toronto. It is an informal post that was given to him in trust by his Party and does not really have any bearing on his formal duties as a Member of Parliament. But you know, Mr. Speaker, and so do I, that in the course of that duty he will at least be tempted, if he does not actually do so, to use the resources and the funds of his office here in Ottawa and in his constituency to carry out these duties. Those are at least the temptations.
He is rising in the House to tell us that the Prime Minister (Mr. Trudeau) should not succumb to such temptations; that the Prime Minister should not act as a politician, as a Member of Parliament. He is arguing that the Prime Minister may be given a political staff but should not use it for that purpose. Yet the Member for Rosedale acts like a politician, as does every other Member in the House.
I must say that the Member for Rosedale should pay less attention to my riding and more attention to his riding. He would then be able to get some of the grants he has been complaining about.
Today the Member for Rosedale raised a red herring as an opportunity to invent stories and present misinterpretations about the activities of the Liberal Party. As the Deputy Prime Minister (Mr. MacEachen) pointed out yesterday, what is wrong with preparing a file of newspaper clippings? It is not a covert action. He invited members of the Press Gallery and Members of the Opposition to look at it. He made it very open. Are we to say that Members on other side have not done the same about us? That is a normal political activity. We want to know where we all stand on various public issues, so we go and do some research. A public issue is any issue which we are ready to bring into this arena ourselves, if others do not force it on us.
As was pointed out today in Question Period, the Hon. Member for Central Nova (Mr. Mulroney) has himself raised many of these issues, so there is no abuse of political power; there is simply research to see whether the things he said hold water. That is normal politics. That is what we do in this arena.
When the Hon. Member for Rosedale (Mr. Crombie) rises and spends long minutes in the House using a question of privilege simply to score those sorts of partisan points, I think that is an abuse. I think that is a waste of Members' time. The people who want to speak on important issues like the Budget are throttled. It is a kind of Tory closure. They do not want to let us get on to the real issues of the day and they are going to waste time in the House.
I say first that the issues raised by the Hon. Member for Rosedale are issues which apply to him and to every other

February 16, 1984
Privilege-Mr. Nielsen
Member in the House. They are partisan. They are the use of our offices as partisan politicians, and that is what the public thinks we should do. The public does not object when we use our own offices and our own role to reinforce what we are, namely partisan politicians. Second, the public knows that there is nothing wrong with politicians investigating the claims which we make ourselves, as the Hon. Member for Central Nova has done. Third, I personally object to the use which the Hon. Member for Rosedale has made of a question of privilege simply to take a matter of debate, drag it out and waste the time of ordinary Members when we have a list of people who want to speak on the Budget.


Mr. Albert Cooper (Peace River):: Mr. Speaker, I would like to enter into the debate on this point of privilege because I think it is fundamental and has a very significant impact upon the democratic principles of our country.
At page 49 of Beauchesne's Fifth Edition, Citation 157 reads:
The Leader of the Opposition and some of his principal colleagues form a group, each member of which is given a particular range of activities on which it is his task to direct criticism of the Government's policy and administration.
Clearly that is the role or the responsibility of the Leader of the Opposition (Mr. Mulroney). It is one which comes to us from a long parliamentary tradition, a tradition that must be respected. Anything which would attempt in any way to undermine that role is an abuse of privilege and an abuse of the House.
At page 143 of Erskine May's Twentieth Edition, it reads:
It may be stated generally that any act or omission which obstructs or impedes either House of Parliament in the performance of its functions, or which obstructs or impedes any Member or officer of such House in the discharge of his duty, or which has a tendency, directly or indirectly, to produce such results may be treated as a contempt even though there is no precedent of the offence-
Clearly this action taken by the office of the Prime Minister (Mr. Trudeau) was designed to impact directly upon the performance of the Leader of the Opposition in this Chamber.
I suggest that type of action is a clear breach of privilege.
I would like to quote from an article which appeared in today's edition of The Globe and Mail. In part it reads:
Mr. Crenna also confirmed yesterday that the Opwatch operation, which he co-ordinated, has involved up to about ten Government officials in and outside the PMO since it began last summer.
Further the article reads:
The PMO also put out requests to have Government officials with special expertise in the area of political research seconded to the PMO to work on the Mulroney file.
The significance of that is that we have public servants attached to performing political functions, which is clearly a breach of their purposes.
The question that is outstanding is just what was to be done with this information. Obviously it was not simply information gathered for no purpose, but it was to be used in the House to affect the performance of the Leader of the Opposition. We just have to look back at the recent actions of the Minister of Finance (Mr. Lalonde) to see the significance of that type of action.
Mr. Cadieux, in yesterday's edition of The Globe and Mail, indicated that this material they were collecting was going to be fired at the Leader of the Opposition in the House of Commons.
Page 158 of Erskine May's Twentieth Edition makes the indirect attempt to influence a Member as much a breach of privilege as the direct attempt when it indicates the following, under the headline "Acts Tending Indirectly to Obstruct Members in the Discharge of Their Duty":
Conduct not amounting to a direct attempt to influence a Member in the discharge of his duties, but having a tendency to impair his independence in the future performance of his duty, will also be treated as a breach of privilege.
This action on the part of the Prime Minister's Office was in fact designed to impede the Leader of the Opposition in his duties in the House. Only the most naive of Canadians would not believe that to be true.
At page 22 of Beauchesne's Fifth Edition, under "Influencing Members", it reads:
It is generally accepted that any threat to a Member, attempting to influence his vote or his actions as a Member, is a breach of privilege.
It is very clear that these actions were designed to be a threat to the Leader of the Opposition, and therefore were clearly a breach of his privileges.
On October 17, 1973, as reported on page 6942 of Hansard, we find that David Lewis, MP, rose on a point of privilege regarding the bugging of an NDP caucus meeting. The Speaker found that to be a prima facie case of privilege. The point here is that it is important that the privacy of the NDP caucus be protected; the same must apply to the privacy of the Leader of the Opposition.
On Tuesday, September 4, 1973, as reported on page 6179 of Hansard, we find that the Hon. Member for Kingston and the Islands (Miss MacDonald) rose on a point of privilege regarding the RCMP making inquiries at her office. She specifically noted in her arguments the need to protect the privacy of Members of Parliament. Again the Speaker ruled that she had a prima facie case of privilege.
What we have here is clearly an attempt by the Government to undermine the performance of the Leader of the Opposition in the House. Second, we have the partisan involvement of Government officials. Mr. Mitchell Sharp, a well-known past Member of the House, had some comments about the use of the Public Service and this type of attitude. He said:
I believe that there is a responsibility upon politicians and those public servants now at the top to ensure that the ideals of disinterested, non-partisan public service are upheld and maintained.
This action was clearly meant to have an influence upon the performance of the duties of the Leader of the Opposition in the House. Clearly, as is evident from quotations from Beau-chesne and Erskine May, those types of actions are nothing more than a breach of privilege. I encourage the Speaker to find here a prima facie case of privilege so that the House can act and go on to investigate the seriousness of these allegations.
February 16, 1984


John Leslie Evans: Mr. Speaker, I would like to intervene for just a short time on this matter. The Hon. Member opposite who just spoke indicated that the role-and I think he quoted from Beauchesne's but 1 did not get the citation-of the Leader of the Opposition (Mr. Mulroney) was to criticize policy put forward by the Government. That, to me, makes imminent sense. That is precisely what the Leader of the Opposition, the shadow cabinet ministers and members of the Opposition are meant to do. What could not be found in that citation of Beauchesne was that that criticism of policy should involve the compiling of records and information on individual Cabinet Ministers for the express purpose of undermining the ability of Cabinet Ministers to conduct their functions or for carrying out a campaign in the House of personal persecution of individual Cabinet Ministers with information which has been gleaned through brown envelopes, secret memoranda and any other sources of information that the Opposition can collect. That seems to be the kind of thing the Opposition is trying to accuse the Office of the Prime Minister (Mr. Trudeau) of doing. It is something which we have witnessed in the House for years by members of the Opposition, and they do not find that to be a matter of immorality. It is clear that that has been done by members of the Opposition.
I would like to quote the Right Hon. Member for Yellow-head (Mr. Clark) when he was Leader of the Government in 1979. He appeared before the Miscellaneous Estimates Committee. This can be found at page 9:22 of the Miscellaneous Estimates Committee for November 15, 1979. It is a discussion between the members of that committee and the right hon. gentleman. The passage I wish to read is one where the Hon. Member for Madawaska-Victoria (Mr. Corbin), now Deputy Speaker, was questioning the Right Hon. Member. I quote:


Mr. Corbin:: -1 could go so far as to say that the Prime Minister's Office has a partisan political perspective, since it is difficult to separate partisan feelings from politics.


Charles Joseph Clark: It is difficult to do so now, it has been difficult to do so in the past and it will continue to be a hard thing to do.


Eymard G. Corbin: You therefore intend to uphold the usual practices which have thus far been followed with respect to your Cabinet and the political role played by a number of people in your office?


Charles Joseph Clark: Yes, since that is an essential part of the political role of a Prime Minister under our system. 1 am both Prime Minister and head of the Party, as was my predecessor and as are all Prime Ministers.


Eymard G. Corbin: Does your Party have separate offices here in Ottawa?


Charles Joseph Clark: Yes.


Eymard G. Corbin: Do you have an office at your Party headquarters?


Charles Joseph Clark: No, I do not.


Eymard G. Corbin: This means that you take care of partisan political matters in the actual office of the Prime Minister, here on the Hill or in the Langevin Building.


Charles Joseph Clark: Yes, just as 1 did when I was Leader of the Opposition. I assume the present Leader of the Opposition does the same thing.
The Prime Minister's Office, according to the words of the former Prime Minister, carries out partisan political activities by members of the exempt staff of the Prime Minister in the
Privilege-Mr. Nielsen
Prime Minister's Office in the Langevin Block and here on Parliament Hill. Those are precisely the words that were uttered today by the current Prime Minister (Mr. Trudeau) with regard to his exempt staff.


David Edward Crombie: Still wrong.


John Leslie Evans: The Hon. Member says "still wrong". He is condemning the Right Hon. Member for Yellowhead who stood today in righteous indignation and condemned the Prime Minister for doing precisely what he says he was doing in 1979.
1 know that offices of Members of Parliament on this Hill, the staff of Members of Parliament on this Hill, watch the newspapers daily, cut articles out of newspapers that have to do with other Members of Parliament, positions they have taken, statements they have made, and keep these on file. They do investigative research, I can say quite frankly and openly, on the past history of other Members of Parliament.
1 have been the subject of such an investigation by Members of the Opposition. That is past history, a period before I was a Member of Parliament. That information was not available from newspaper clippings. It was not available from the public record in the Library of Parliament. It was obtained somewhere else. That has gone on in offices of Opposition Members of Parliament.
The Hon. Member for Peace River (Mr. Cooper) quoted from Erskine May and from Mr. Sharp about the role of public servants. The fundamental confusion that he is making is the same fundamental confusion that was made by the Leader of the Opposition the other day. There is a fundamental difference between people who are under the Public Service Employment Act, who are permanent full-time public servants, and members of the exempt staff of Ministers and members of the staff of Members of Parliament. They are not public servants as defined by the Hon. Member in his citations from Beauchesne's, Erskine May and his quotes from former Ministers of this place. It is absolutely true and absolutely essential that the public service, as defined by the Public Service Employment Act, be impartial, that it serve the Government of the day and that it be apolitical. That is not the same thing. Indeed, that is why the staff we are talking about here today is called the exempt staff. They are partisan. They are hired on a partisan basis.
I know for sure that the Leader of the Opposition would not hire a Liberal or a Member of the NDP in his office. He hires Tories-partisan hiring practices. That is why they are exempt staff. They are supposed to do partisan things. That is why they cannot be public servants. The Public Service Employment Act expressly forbids that kind of behaviour.
We are talking here about the exempt staff. I do not draw a distinction, as the Hon. Member for Rosedale (Mr. Crombie) did, between the Office of the Prime Minister and the Office of the Leader of the Opposition because, under our parliamentary system, the Leader of the Opposition is the Prime Minister in waiting. If the Hon. Member for Rosedale is saying that it is all right for the Office of the Leader of the Opposition to

February 16, 1984
Privilege-Mr. Nielsen
be partisan and collect political and background information on Members of this side when he is Leader of the Opposition, but that that somehow will stop if he ever becomes Prime Minister, then the Hon. Member is dreaming in technicolour.
The Right Hon. Member for Yellowhead, by his own admission in front of the Miscellaneous Estimates Committee, has absolutely confirmed that his practices as Leader of the Opposition were precisely the same as his practice as Prime Minister. The quotes are here in the report of the committee. 1 have put them on record. The words of the Right Hon. Member for Yellowhead speak for themselves.
There is no question of privilege involved here. There was no intimidation involved here. There was a collection of documents from the public record to determine where it was that the Leader of the Opposition stood on issues, just as those kinds of documents and that kind of information is collected by the Opposition on Ministers, and certainly the Prime Minister, as he indicated in Question Period earlier today. It is a specious question of privilege that is being raised here. I agree with my colleague, the Hon. Member for Mississauga North (Mr. Fisher) that this has been done today to waste the time of the House so that we could not get on with other matters such as dealing with budgetary issues.


Flora Isabel MacDonald: Mr. Speaker, I listened with some interest to what the Hon. Member for Ottawa Centre (Mr. Evans) had to say because there is one area here that neither he nor any other Member on that side of the House has dared to deal with. The question comes up as a result of what has taken place and what has been revealed in the last few days. It is a question that perhaps the Hon. Member for Ottawa Centre does not understand. It is a question of morality. That is exactly what is involved here.
I want to say, as a person who worked in the Office of a former Prime Minister, that we knew what the rules and regulations were. We knew what it was that staff were able to do. We knew the code of behaviour and ethics that were expected. That is something which the present Prime Minister (Mr. Trudeau), his staff and the people who sit behind him, have lost sight of. That is the difference.
Yesterday there was an interesting response to a question from a member of the press. An official in the Prime Minister's Office, David Crenna, said:
I don't know what you consider legitimate PMO behaviour.
That, Mr. Speaker, is really at the heart of all of this. Those people do not know and do not understand what is legitimate behaviour in the Prime Minister's Office. The Deputy Prime Minister (Mr. MacEachen) does not understand what legitimate behaviour is any more; the Prime Minister does not understand that there is such a thing as legitimate behaviour- the things that people can straightforwardly question about and information that can be gathered. But that does not include going into the private personal lives of individuals in this country.


John Leslie Evans: You have done it to me.


Flora Isabel MacDonald: As you have done. That is exactly what is at stake here, Mr. Speaker.


Mr. Speaker:: The Chair has done very little indeed, with all due respect to the Hon. Member.


Flora Isabel MacDonald: I am sorry, Mr. Speaker. When I said "you", 1 made a mistake. I meant through you, Mr. Speaker, to the Members on the Liberal benches. I do apologize to you, Sir.
I also want to mention that there is a very real difference between the kinds of materials which 1 as an individual Member of Parliament have in files being sent around by Cabinet Ministers, stacks of material, and the matter we are discussing. I sometimes wish the stacks were a lot less. It is the paper burden, overburden. But it is there in files. People also write to us. You would be surprised how many people write to me about the Prime Minister. What they have to say about him is not very flattering.


Douglas Glenn Fisher: People write to me about you.


Flora Isabel MacDonald: Indeed they may. The Hon. Member for Mississauga North (Mr. Fisher) says they may write about me. I agree. That happens to be what people want to do. I do not argue that. That is a very different thing from having that kind of material in a file and going out and making an underhanded search for material that people in the Prime Minister's Office thought they could find in the files in Washington or files about a house in Montreal so they could discredit the Leader of the Opposition (Mr. Mulroney). That is exactly what they were doing, Mr. Speaker.


John Leslie Evans: Where was the covert action? What is covert about that?


Flora Isabel MacDonald: The question is, why were they out looking for this information? How much more do they have which is hidden somewhere? Not just about the Leader of the Opposition, but about anybody whom they may happen to think they want to get. That is really what this is all about and what the question of privilege is about. There is not a single Member in the House of Commons who has dared to stand and raise a question about the operations of this Government. There is not a single Member now who is outside the thrust of the kinds of operations we have seen emanating from the Prime Minister's Office in the last number of weeks and months, not one. That is what you have to judge, Sir. How far is this kind of operation allowed to go? How far is the abuse of the Prime Minister's Office allowed to extend?


Douglas Glenn Fisher: As far as the Library? Tell us about the libraries, Flora.


Flora Isabel MacDonald: Let me tell you. Why was Mr. Cadieux told by people in the Prime Minister's Office not to go to the Library of Parliament, where he could have found that information? Because they did not want people within this purview
February 16, 1984

to know that that individual was associated with the Prime Minister's Office. Why this underhanded approach to what was going on?


Mr. Nickerson:: It is an underhanded government.


Flora Isabel MacDonald: Where are the explanations? That is at the heart of this question of privilege. As long as that sort of operation is able to continue, there is absolutely no guarantee for any Member of Parliament in this House who opposes the Government, or for any individual citizen across the land who is critical of the operations of this Government, that his or her rights and his other personal lives will not be investigated and will not be exposed for nefarious reasons by this Government. It is so bankrupt, Sir, that it will stoop to anything to try to hold on. Every day it digs its grave deeper.


Mr. Speaker:: The Chair would like to state that it has heard fairly extensive argument at this point. The matter of privilege is a narrow one that has to be decided by the Chair. The Chair would like to proceed to other business of the House.



ROUTINE PROCEEDINGS


[Stage Direction]
Second report of Standing Committee on Agriculture-Mrs. Cote.
[Editor's Note: For text of above report, see today's Votes and Proceedings.]

Gordon Edward Taylor: for leave to introduce Bill C-218, an Act to amend the Prairie Grain Advance Payments Act (spouses).


Some Hon. Members:: Explain.


Gordon Edward Taylor: Mr. Speaker, Section 7(3.2) of this Act discriminates against a productive farm woman who is legally married to a productive farm man. A farm woman who owns land and who has a permit book from the Canadian Wheat Board may, if she is single or living common law, receive prairie grain advance payments provided she has the grain in her bins to cover same. A farm woman in exactly the same category but who is married to a farmer who also has a permit book from the Canadian Wheat Board is denied advance
Order Paper Questions
payments. In all cases the bill is paid when the grain is taken to an elevator. This Bill will remove this discrimination against married women in this group. Our legislation should not encourage common law arrangements by granting benefits to a common law spouse which is denied to a legally married spouse when all other factors are the same.


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

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
John Leslie Evans: Mr. Speaker, the following questions will be answered today: Nos. 191, 330 to 335 inclusive, 361, 402 and 491.


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


Mr. Peter Lang (Parliamentary Secretary to President of the Treasury Board):: In so far as the following are concerned:
Treasury Board of Canada Secretariat:
1. (a) 1981-82
(i)	37
(ii)	$516,587
(b)	1982-83
(i)	44
(ii)	$383,184.04
2. 1981-82 (a)
Eric A. Milligan
Margot Priest
Hay Associates Canada Ltd.
Towers, Perrin, Forster and Crosby
Systemhouse Ltd.
(b)	(c)
$ 62,900 To study and report on matters related to the Government's program on regulatory reform.
$ 55,200 To study and report on matters related to the Government's program on regulatory reform.
$193,105.59 To develop a method of evaluating air traffic controller positions and for the development of appropriate salary levels, premiums and insured benefits.
$ 22,000 To conduct a Preference Audit & Climate Review of Federal Public Service managers allocated or likely to be allocated to the Management Category, etc.
$ 25,000 To conduct an audit of the input aspects of the Official Languages Information System (OLIS).

February 16, 1984
Order Paper Questions
Margot Priest	$ 15,400	To study and report on matters related to the Government's program on regulatory reform.Eric A. Milligan	$ 68,821.41	To study and report on matters related to the Government's program on regulatory reform.Vicor Spassov Editorial Services Ltd.	$ 25,200	To edit, format, indexing of manuscript for Access Register publication.Words Associated	$ 25,200	To edit, format verification and indexing of French manuscript for Access Register publication.McGill University	$ 30,129.73	To carry out on behalf of Treasury Board and the Public Service Alliance an investigation of employee health complaints at Les Terrasses de la Chaudiere.Management Research Consulting	$ 22,976.21	To develop Phase II and IV of training programs for Human Resources.Office of the Comptroller General:	1. (a) 1981-82	(b)	1982-83	(i) 37	(i)	36	(ii) $384,913	(ii)	$246,709	2. 1981-82	(a)	(b)	(c)Abt Associates of Canada	$ 25,000	To undertake an evaluation of the financial officer recruitment development program and to prepare a written report.Coopers and Lybrand	$ 66,484.50	To review and make recommendations regarding internal auditing of computer systems.Peat, Marwick. Mitchell and Company	$ 31,548.55	To assist in the preparation of a discussion paper for review by Cabinet which would identify the need for a comprehensive review of the Financial Administration Act.Price Waterhouse	$ 43,500	To review and report on the present financing of each Crown corporation and to propose action where necessary to adjust their financing to ensure consistency with current policy and also revised scheduling for such Crown corporations.Touche Ross & Co.	$ 29.025.75	To develop a practical set of guidelines on cost determination for use by government departments.Peat, Marwick and Partners	$ 20,000	To prepare a written discussion
paper on program evaluation methodologies and their appropriateness.
Allan Bennett & Associates	$ 32.262.50	To provide editorial services to
20 program expenditure plans as well as to provide advice and assistance to departmental editors in the preparation of their plans.
Peat. Marwick. Mitchell and	$ 24.500	To assist in assessing the need
Company	for a review of the Financial
Administration Act.
Woods Gordon
$ 24,250 Development of professional development program for Management Practices Branch.


Mr. Stevens: During 1983, what was the (a) total number of employees (both locally engaged and Canadian personnel) (b) total cost of operating the Canadian High Commission in London?


Hon. Allan J. MacEachen (Deputy Prime Minister and Secretary of State for External Affairs):: During 1983, the total number of employees in the Canadian High Commission in London was 344 (214 locally engaged employees and 130 who were Canada based). The total cost of operating the High Commission was $15,836,695.


Mr. Stevens: During 1983, what was the (a) total number of employees (both locally engaged and Canadian personnel) at (b) total cost of operating the Canadian Embassy in Paris?


Allan Joseph MacEachen: During 1983, the total number of employees in the Canadian Embassy in Paris was 246 (156 locally engaged employees and 90 who were Canada based). The total cost of operating the Embassy was $15,644,780.


Mr. Stevens: During 1983, what was the (a) total number of employees (both locally engaged and Canadian personnel) at (b) total cost of operating the Canadian Embassy in Washington?


Allan Joseph MacEachen: During 1983, the total number of employees in the Canadian Embassy in Washington was 299 (98 locally engaged and 201 who were Canada based). The total cost of operating the Embassy was $14,169,287.
Ernst & Whinney	$ 23.200 To conduct an evaluation of the
implementation assistance program and to produce a final report on the study on or before September 1, 1982.


Mr. Stevens: During 1983, what was the (a) total number of employees (both locally engaged and Canadian personnel) at (b) total cost of operating the Canadian Embassy in Bonn?
February 16, 1984


Allan Joseph MacEachen: During 1983, the total number of employees in the Canadian Embassy in Bonn was 112 (60 locally engaged employees and 52 who were Canada based). The total cost of operating the Embassy was $5,970,248.


Mr. Stevens: During 1983, what was the (a) total number of employees (both locally engaged and Canadian personnel) at (b) total cost of operating the Canadian Embassy in Tokyo?


Allan Joseph MacEachen: During 1983, the total number of employees in the Canadian Embassy in Tokyo was 154 (94 locally engaged employees and 60 who were Canada based). The total cost of operating the Embassy was $10,573,395.


Mr. Stevens: During 1983, what was the (a) total number of employees (both locally engaged and Canadian personnel) at (b) total cost of operating the Canadian Embassy in Rome?


Allan Joseph MacEachen: During 1983, the total number of employees in the Canadian Embassy in Rome was 84 (52 locally engaged employees and 32 who were Canada based). The total cost of operating the Embassy was $5,023,092.


Mr. St. Germain: Is there a Source Development Fund administered by Supply and Services Canada and, if so, since April 1, 1981, what amount was spent on (a) product innovation (b) increasing Canadian content (c) front-end development costs?


Mr. Paul-Andre Masse (Parliamentary Secretary to Minister of Supply and Services):: The Source Development Fund was established in 1981 to help finance incremental costs on government contracts related to the establishment or maintenance of Canadian sources of supply.
(a), (b) and (c) The SDF can assume certain front-end development, product innovation, and increased Canadian content costs. These cost categories are not mutually exclusive since, for example, assisting a firm with front-end or product development also contributes to a higher level of Canadian content. $18 million has been expended from the SDF to date and these moneys are expected to yield $324 million in increased sales, $180 million in exports and the creation of almost 2,900 person years of employment in Canada over the next 10 years.
The Budget-Mr. Kempling NUCLEAR NON-PROLIFERATION POLICY


Mr. Howie: Does the Government require any country receiving nuclear material from Canada to guarantee that it will not be processed, enriched or otherwise altered in form or content without the prior approval of Canada?


Allan Joseph MacEachen: In our bilateral nuclear co-operation agreements with our nuclear partners, agreements that are required by Canada's 1974 policy, there are provisions that nuclear material transferred from one party to the other shall be enriched beyond 20 per cent U235 or reprocessed only as agreed in writing between the parties. Thus, there is a requirement that any country receiving nuclear material from Canada seek the prior approval of Canada before reprocessing or enriching beyond 20 per cent U235 all Canadian origin nuclear material.


Mr. Howie: Did the Government allocate any amount for Canadian participation in Expo 84 in New Orleans and, if so, what amount?


Allan Joseph MacEachen: Yes, the Government has allocated $5.5 million for Canadian participation at Expo 84 in New Orleans.


Mr. Speaker:: The questions enumerated by the Parliamentary Secretary have been answered.


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


Mr. Speaker:: 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 this House approves in general the budgetary policy of the Government, and the amendment of Mr. Crosbie (page 1445) and the amendment to the amendment of Mr. Riis (page 1448).
William James Kempling: Mr. Speaker, budget speeches and Throne Speeches are opportunities for government to reset the course and the direction in which we are

February 16, 1984
The Budget-Mr. Kempling
travelling. Many of us have felt for some time that we are on the wrong course, travelling in the wrong direction, down a slippery road, and that there is no return.
We have seen the results of philosophical and academic tinkering with our economy. Our national debt has climbed to unacceptable levels. As my colleague, the Hon. Member for St. John's West (Mr. Crosbie), pointed out, the interest burden that the average Canadian will pay will be with us for many years. In fact, the Government will have to go to the same money market that the private sector has to tap and that will make things more difficult for private sector financing.
We have seen inflation and recession, and we have seen crippling interest rates ruin hundreds of thousands of business enterprises and shatter the hopes and dreams of millions of Canadians.
1 always approach the period leading up to budget day with anticipation. It is a chance for change, a chance to redress, a chance to restructure. So it was with this Budget. I saw opportunities for the Government to make some changes that could attempt to solve the difficulties facing the 1.5 million unemployed in the country. All those hopes and anticipations were tempered somewhat with information we received from Statistics Canada on January 31 which showed that the recovery appeared to lose some of its vitality in the fourth quarter and that this slowdown would continue early in 1984. The Conference Board of Canada forecast that there were worrisome signs that the recovery may not be as robust as might be expected. The gross domestic product fell by .2 per cent in November and the final demand actually fell by .2 per cent in the third quarter.
From comments reported in newspapers and speeches made by business leaders and others, we see that consumer confidence seems to have fallen in the last quarter. In fact, the survey of the Department of Regional Industrial Expansion, released in December, shows a further reduction in the levels of capital investment by larger firms for 1984.
I read with great interest of the wide consultation the Minister of Finance (Mr. Lalonde) had with the business community in the past several months. The Canadian Manufacturers' Association, the Canadian Chamber of Commerce, the Canadian Federation of Independent Business, the Canadian Organization of Small Business Inc. and numerous other business and commercial associations presented briefs and had conversations with the Minister of Finance and his officials.
I know it is easy to look at the headlines in the financial papers and see that this corporation and that corporation posted record profits. But that is not common throughout industry in general, Mr. Speaker. The business community faces many difficulties. While interest rates have modified to some extent, bank rates are still 6.5 percentage points above the level of inflation. When you compare that to where they were prior to the recession, you find that at that time the prime rate was 3.4 per cent above the level of inflation. While inflation has subsided, the spread between inflation and the prime rate has increased. In fact, when we look at real interest rates we see they are double what they really should be. Many
of our financial institutions are very liquid. They have lots of money to lend, but that money is not going to commercial operations. In fact, commercial loans are down substantially.
The real competition for that money is in the residential mortgage field. I think we are all thankful for that. Residential mortgage rates dropped dramatically in the past year. There is no evidence of any increase in commercial loans as far as we can see at this time. There is a reason for this condition, Mr. Speaker. Most of our small and medium-sized businesses are debt financed today, rather than equity financed. They are reluctant to take on any additional long-term debt because of the disastrous interest rate experience they had during the recession. Many companies barely survived.
I know that those who are familiar with the balance sheets and financial statements of business will appreciate that when you look at the balance sheets of these companies you find that they are in a very precarious state. Most companies stripped their earned surplus accounts in order to stay alive during the recession. Many have eaten into their capital accounts and are operating today with very reduced working capital. I believe that is an accurate assessment of the large number of small and medium-sized businesses in the country. That is why commercial loans are down, Mr. Speaker. They are in a delicate condition. They are afraid that if there is a slight bump up in the interest rates, a lot of those companies which survived the recession will not survive a second round. They are hanging on by their fingernails hoping that interest rates will continue to subside. That is one of the things they were looking for and I was looking for in the Budget.
If small and medium-sized businesses are to survive and invigorate themselves and put most of the 1.5 million unemployed to work-the Minister of Finance has said again and again that he is looking to the private sector to help reduce unemployment-that cannot be done if companies have weak balance sheets. It cannot be done if they do not have a working capital with which to go forward, and it cannot be done if there is the slightest chance that interest rates will rise and that the very precarious recovery they have survived is any way in doubt. With the depleted capital account and reduced working capital and debt financing, firms just cannot pick up the slack and hire the unemployed people that the Minister expects.
While the initiatives taken for small business in the Budget will be welcome when they are in place, the structural problem will remain and will discourage the expansion we need to take up the unemployment challenge.
I am most discouraged that the Minister did not move in the matter of capital cost allowance. I think that was a major mistake. I know that the Canadian Manufacturers' Association lobbied very hard for this, and I know from comments 1 have had from business people across the country that they were all looking for some redress in this matter. The fact that it was not done is of great concern to many people. Those who do not understand how a capital cost allowance works will not understand how badly it has hurt the cash flow of most of the businesses that utilize it. The decision not to redress the capital
February 16, 1984

cost allowance has damaged the cash flow of thousands of businesses. It is the main deterrent to capital investment and is hobbling the expansion of industry.
In the Budget the Minister recognized the importance of productivity and noted the high cost of new productive machinery. Our industries must modernize and they require new productive machinery in order to be competitive in world markets. It is frustrating that although the problem was recognized, nothing really was done. Indeed, the forecast for unemployment shows that it will stay in the double digits for the foreseeable future.
An examination of the Budget documents reveals that the Government's forecast of productivity is that it will decline in the next few years. Everyone knows that we are almost at the bottom of the list on the productivity scale of the OECD.
The other thing that we noticed in the Budget was that there was no plan to reduce the deficit beyond the pious words of the Minister. Those of us who have been here a few years have all heard the Minister stand in his place and say that the deficit is going to go down and that, indeed, the Estimates will be tabled in another couple of weeks. Those Estimates may in fact show that government spending is off, but those are the Main Estimates. As we go down the road, we receive Supplementary Estimates (A), (B), (C) and (D), and by the end of this fiscal year, I can tell you, Mr. Speaker, that our spending will probably be as high or higher than it is right now. Therefore, I get the feeling from the performance of the Minister that he sort of casts himself in the role of a Minister of Finance holding back the hordes of irresponsible spenders who would spend untold billions in order to buy favour from the electorate.
We have seen in the House recently some rather sleazy tactics used by an arrogant Government which is trying to raise its profile with the voting public. And I made reference to those special projects which were apparently privy to Liberal Members of Parliament but not to all Hon. Members of Parliament.
1 must say, Sir, that I was dismayed and angered by the officials in the Department of Finance who attended the lock-up preceding the Budget address to answer questions which arose as a result of our examination of the Budget document. I will not name the individuals. I would not do that. We agreed not to do that. However, I found, Sir, when they were asked tough, precise questions, they sidestepped them by saying, "Well, that is a policy matter and you will have to discuss that with the Minister". When asked for an explanation of some of the numbers we had just seen in the documents, they waffled on those answers as well. In fact, I asked them how much it would cost to repair and put the capital cost allowance provision back to what it was before it was cut in the previous Finance Minister's Budget. The official just put his hand up in the air and pulled down a figure of $1.2 billion. For months I had asked the former Minister of Finance to supply me with that figure. I did not even receive an acknowl-
The Budget-Mr. Kempling
edgement of my letters. It was always going to come when I spoke to him, but it never did. When I pursued, with the official of the Department of Finance, the question of where he got that $1.2 billion, what was the back-up data for that, could he verify it in some way, he finally admitted it was just a guess on his part and he had no real date to back it up at all.
I find that quite a disgusting performance under the circumstances. I had the feeling that those officials were there just to slough us off and not really to answer questions at all but just to give us whatever answer they thought we would accept. They knew that we had to leave at a specified time, so it was just an exercise of the clock as far as they were concerned.
The Budget announced a variety of new studies, consultations, and promises of action down the road, and we quite agree with some of them, we think the intitiatives as far as pensions are concerned are good. I wish they could come forward faster than has been promised. However, I believe they are quite good. I was not too impressed with the $50 a month extra which is going to come to senior citizens in two stages, although I know those senior citizens will be glad of it. One can look at that amount in different ways. I heard someone say it was the equivalent of $1 a week. Someone said it was the equivalent of two doughnuts and a coffee. It is not very generous, but I believe, when it is added to the other moneys which those senior citizens receive, it will help some people who really need some assistance.
The Budget announced that we were going to have some assistance for home owners. I would like to spend the last moments of my time in this debate to talk on that particular subject because I did press the matter very hard in the House with the Minister of Finance, the Minister of Consumer and Corporate Affairs (Mrs. Erola) and others. 1 must say that I welcome what is being done, but I do not feel that the real problem has really been addressed. The Hon. Member for Sarnia-Lambton (Mr. Cullen) and other Hon. Members in the House have pursued that problem very vigorously. We are thankful for what has been done. I am sure that many home owners will be thankful as well. However, there are approximately 750,000 Canadians who are trapped with high interest rate mortgages. That problem has not been addressed in this Budget. Some of those individuals-I know because I have had correspondence with them-have had the ability to renegotiate those mortgages. Some of the mortgage companies have bent the rules and helped them. However, 1 hope that the Minister, in his negotiations with the mortgage companies, will insist that they address the matter of the individuals who are trapped in those high interest rate mortgages. He should insist, before he gives any concessions whatsoever to them, that this matter be addressed. I believe what was done to many Canadians was disgusting and degrading. I was angered when I saw some of the mortgage documents which were put forth by these companies where, in the mortgage renewal, they wiped aside the actions of the Parliament of Canada and the actions of a provincial legislature, by causing people to waive their rights under the Interest Act of Canada, under the Mortgage Act of Ontario, and under the Mortgage Act of Manitoba. I thought

February 16, 1984
The Budget-Mr. Kempling
that was a disgusting display of corporate and monetary power.
I hope that when the Minister deals with the mortgage companies, he will say, "Never again are you guys going to act like this and hold people to ransom." Never again should corporate power be used to set aside the decisions of the elected Members of this Parliament or the elected members of a legislature. That was a disgusting display of power and they got away with it. I hope the Minister will take these words to heart and will deal with these companies, and deal with them severely, because there is no way we should give them anything until they agree that they will never take that course of action again.
I say this in particular because in discussing the matter with the officials at the briefing yesterday, I asked them in particular what they meant in their comments about amendments to the Interest Act. One of them told me that the proposal is that the Government is going to amend the Interest Act to remove Section 10 which allows an individual who has had a mortgage for five years to renegotiate that mortgage on the payment of three months' interest. The officials claim that this is the reason why we have short-term mortgages, this is the reason why we do not have 10-year mortgages. I do not know what world they are living in. All they have to do is to travel across the border and see what happened in the United States which has had the same provision for years. There are still 25-year and 30-year mortgages there, and that country still has that provision.
I disagree that we should remove this right from the mortgagors. However, if we are going to remove it, then there has to be a quid pro quo as far as the mortgage companies are concerned. I hope, Sir, that never again will we see in this country the raw corporate power displayed by some of the mortgage and trust companies whereby they ravaged and gutted mortgagors in this country and caused them to lose their homes.
I commend the Government for the action it is taking. However, I believe it should be stronger. But this is a first step and perhaps when the legislation is introduced, we will have an opportunity to speak to it and perhaps we can improve it.


Douglas Glenn Fisher: Mr. Speaker, I have a very short comment. The Hon. Member, as usual, has made some strong and careful representations on behalf of people like mortgage holders, and 1 congratulate him for that. I do not want to take away from that. I would just like to add a single point in correction of something the Hon. Member said. He referred to the Opposition and critics' lock-up yesterday afternoon. I would remind the Hon. Member of two things. First, when he went in there and the public officials arrived, they talked to him under the assumption of confidence. They did not talk to him under the assumption that they would be quoted here in the House of Commons. Just the little trick of not mentioning the individual's name does not quite overcome that. Second, he has drawn the inference that the same officials were political creatures. I would like to correct him. We were dealing with impartial public servants, not people from the Liberal Party or from the
Government but impartial public servants who do have to draw a line in their responsibilities between the things they do as public servants and the things he would like to know as an Opposition critic. They have to draw that line and leave it up to the Minister to decide whether to reveal certain information. That is their duty. They have no choice in the matter. The Hon. Member has risen today and left the impression, first, that he was being manipulated for political reasons and, second, that these people are not impartial. I would like to make it clear that both of those points are not correct. Not only that, but I think he damages the general spirit of co-operation by revealing these sorts of things, true or false, from the lock-up, when it is supposed to be confidential.


William James Kempling: Mr. Speaker, if the Hon. Member will read the record he will find that he is quite wrong. 1 did not mention the word "political" or "political decisions" or make reference to that in any way, shape or form. I did not mention the officials' names; that was part of the confidence that we agreed to. I did not specifically quote directly things that they had said. I said, Mr. Speaker, I was disappointed in the quality of the information they supplied to us, and that they did not answer questions directly. They pulled figures out of the air and they generally sloughed off hard questions that were put to them. I think that is a fair comment. This is not the first lock-up I have been in, there have been several over the years, and in the past we have had more direct and hard information from the people of the Department of Finance than we had yesterday. I was most disappointed and I was drawing a comparison between previous years and this particular year. I say again that I was disappointed in the quality of information that they passed on to us. They may as well not have been there as far as I was concerned. I do not think anyone who was there really got very much out of it at all.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: 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 Cowichan-Malahat-The Islands (Mr. Manly)- Housing-Residential Rehabilitation Assistance Program- Request for expansion, (b) Distribution of funding; the Hon. Member for Burlington (Mr. Kempling)-National Revenue-Denial of deduction for leg braces, (b) Request for broader definition of "disability"; the Hon. Member for Burnaby (Mr. Robinson)-National Revenue-Request for inquiry into Vancouver office practices, (b) Job description reference to work quotas.
February 16, 1984



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Lalonde that this House approves in general the budgetary policy of the Government, and the amendment of Mr. Crosbie (page 1445) and the amendment to the amendment of Mr. Riis (page 1448).
Hon. David Smith (Minister of State (Small Businesses and Tourism)):: Mr. Speaker, I would like at the outset to thank the Minister of Finance (Mr. Lalonde) for presenting this House yesterday with what I believe to be a very optimistic Budget. I call it an optimistic Budget because, first of all, of its evaluation of the Canadian spirit. I call it an optimistic Budget because of the open consultative process that took place in its development, and because it reaffirms the role of this Government in helping those who need help the most. 1 would also like to thank the Minister of Finance for asking me to be one of the first speakers in this debate. I think he has done that because, quite frankly, my responsibilities as Minister for Small Business are made easier because of this Budget. This Budget, Mr. Speaker, is a good Budget for small business. It recognizes the vital role played by the small business sector in the economic recovery taking place throughout this country.
Small business, Mr. Speaker, is really the lifeblood of the Canadian economy. There are 750,000 small businesses in Canada. They make up 97 per cent of the business firms in this country. They represent 30 per cent of the business sector of the Gross National Product. They represent 42 per cent of the private sector jobs in this country. The people of Canada who own and run small businesses believe in this country. They believe in the economic future of this country because they have invested in it. They believe in the free enterprise system. They believe in initiative, the work ethic, in taking risk, and they believe in enjoying the rewards of hard work. Those are the people who make up the small business sector of this country, and this Government believes in them. Our confidence in that small business sector is well placed because at the moment they are creating about two thirds of the new jobs being created in this country. One of the major objectives of the Minister of Finance's Budget was to create jobs through partnership with the private sector.
I submit that this Budget represents a balanced Budget, balanced in the sense that it represents sound economic planning on the one hand and is socially responsible on the other hand. That is understandable because that is the philosophy of this Government. This is a Government which believes in the free enterprise system and also believes in social justice within it.
Before going into some of the areas which I think benefit the small business sector, I would like to state that, contrary to what some cynics may think, this is not an election Budget, not a Budget based on opinion polls, not an attempt to score
The Budget-Mr. Smith
political points against an Opposition which is bereft of any ideas of its own. It is a balanced Budget, a reflective Budget, a thoughtful Budget and a responsible Budget. It represents sound economics with a social conscience.
How does that philosophy contrast with the philosophy of the Conservative Party? We look at their critic, the Hon. Member for St. John's West (Mr. Crosbie). What did he say? He said, "You have to be tough, mean, nasty and do all kinds of unpleasant things. That is why I am not going to outline what these things would be now". Do you believe it? He actually said that. We all know that he believes it, but that he would actually say it is a bit unthinkable. He went on to say that a Conservative Budget at this time would scare Canadians. That is what the official critic for the Conservative Party said. Well, Mr. Speaker, this Government is not out to scare Canadians. It is out to build confidence in the economic recovery we have seen taking place in this country. That is the difference between us and the Official Opposition. Listen to the Hon. Member's words: "You have to be tough, mean and nasty". Well, there is no doubt in my mind that if they were ever in office they would be tough, mean and nasty. They were before, and God help Canadians if they are in there again because that is exactly what they can expect.
Before reviewing some of the provisions of this Budget that I think are of particular benefit to the small business sector, I would like to say a word about the process. The basic theme this Budget process represents is consultation with the private sector, consultation with all elements of the small business sector, business organizations and numerous submissions from private individuals. These submissions have been reviewed, considered by officials and the Minister of Finance, and in some cases they have been accepted. One of the issues on which the Government has received many representations in recent years, and in recent months in particular, has to do with the whole question of the complexity of the tax system. A complex tax system can be time consuming and expensive to deal with. The Minister of Finance responded to that concern. There are specific changes to the tax system which simplify it. I will not go into all the proposals, such as the elimination of the accumulative deduction account, but in addition we have a very thorough paper which has been released called Simplifying Taxes for Small Business which will permit the maximum amount of discussion and consultation with all elements of the Canadian business community. I think it is possible that some fine-tuning may occur and some further changes may take place as a result of that consultative process.
The Canadian Tax Foundation and L'Association Quebe-coise de Planification Fiscale et Successorale played important roles in consultations. They organized a couple of symposiums and conducted an ongoing dialogue with officials of the Minister of Finance. On the whole question of the specific changes with regard to tax simplification, over two-thirds of the amount of legislation relating to the tax rules for small business have been eliminated. That is real progress, Mr. Speaker,

February 16, 1984
The Budget-Mr. Smith
which everyone in the House should be pleased with and quite proud of.
The purpose of the further discussions is really twofold. It is, first of all, to solicit non-expert input and to assure a continuity to these changes so that taxpayers themselves can live with them. It is also to allow the Government through this process to discuss these proposals in greater depth before they are implemented. As 1 said, it is possible that some further changes may take place as a result of those consultations.
There are other general Budget changes which dramatically benefit the small business sector. This Budget is great for small business. These changes include the easing of the tax installment payments. There are 50,000 small businesses and family farm corporations in the country which will benefit from that change. There are the auto standby charge, the administrative improvements in the sales tax, the longer appeal period for tax appeals, the provisions which permit the awarding of costs for legal fees in successful tax litigation cases and still more benefits, and the opportunity for many small businesses in the country which want to take advantage of Third World business opportunities to receive assistance from the $1.3 billion aid trade fund. Another aspect of the Budget which benefits the small business sector is the continuation of the fight against inflation, and the 4 per cent price guideline ceiling.
There are other areas of interest in the Budget which relate to my Cabinet duties. I would like to say a word about tourism. This Budget is good for tourism. The Budget reaffirms the Government's commitment to the Special Recovery Capital Projects Program. More than $1 billion is being spent on these projects. A number of them do relate to the tourist industry and improvements to the tourist industry in the country. A large proportion of businesses in the tourist industry are small businesses. What is good for small business is good for tourism. In the recent Throne Speech, the Government clearly recognized this and announced that a tourism strategy was being developed and would be introduced before too long. The Government recently announced some television campaigns, one to encourage Canadians to vacation in this country, and another one, which will be starting in a couple of months, to encourage Americans to visit Canada. The tourism industry will also be enhanced by these various programs. We also have access in the tourism industry to the new Industrial Regional Development Program which is operated by our Department.
An exciting area of the Budget, Mr. Speaker, is the proposal to encourage employees to participate actively in the economic recovery of the country through stock options and profit sharing. The rationale of this proposal is quite sound. First of all, it provides an incentive for greater productivity. In other words, it gives both management and labour an incentive to increase productivity and profits. It will also improve employer and employee relationships and go a long way to encouraging an entrepreneurial attitude among Canadians.
In my opening remarks I mentioned that this Budget represents a balance. It is balanced, on the one hand, by sound
economic planning and, on the other hand, by a commitment to our social responsibilities. The latter is evidenced by the improvements to pensions and the raising of the Guaranteed Income Supplement payments. Both of these policies reaffirm the Government's traditional commitment to living up to our social responsibility.
Another provision which relates to the question of pension security, and is of great interest to the small business sector, has to do with the lifting of the ceilings on the RRSPs. This is very important to many small businessmen who are not part of big pension schemes that are often available to people in large companies or in the public sector. These ceilings have been lifted to $10,000 in 1985 and they will be rising to $15,500 in 1988. This is clearly something from which small business will benefit considerably.
I would like to make a few comments about the improvements to the Government's policies with regard to pensions. Proposed improvements include the splitting of pension benefits upon marriage breakdown, the continuation of survivor benefits on remarriage, and the ensuring of equal pensions for men and women retiring under the same circumstances. I understand that the Minister of National Health and Welfare (Miss Begin) will be introducing the appropriate amendments shortly after consultations with the provinces.
Another topic which I welcome is the discussion of a homemaker's pension. It is a priority of the Government that women receive adequate retirement income. These measures will be one way of ensuring that. The proposed changes to improved RRSPs will also greatly increase the flexibility and access to tax assistance for small business persons saving for retirement.
Complementing this focus on women in the home are studies done by the small business secretariat on women's role in the labour force. While the trend of women entering the business world is a relatively recent one, small businesses owned and operated by women are quite large employers, especially of other women. I recently saw statistics which suggested that about 30 per cent of the small businesses in the country are controlled by women, a lot of them in the retail trade. About two-thirds of the women surveyed by the secretariat felt that female business owners do not face problems which are any different from businesses in general. Women wish to be treated as equal members of the business community, and equality of treatment is something which I can assure you is my goal and the goal of the Government.
I am optimistic, Mr. Speaker, that the Finance Minister's emphasis on small business will have the desired spin-off effect and stimulate the overall economy. When you talk of small business, you are talking about all kinds of different enterprise. You are talking about small manufacturers and processors and the construction sub-trades. Of course, the whole home construction industry will greatly benefit from the Mortgage Rate Protection Program which was introduced. We are also talking about tourism operators. There are lots of small hotel operators and restaurateurs who certainly will find many of these provisions relating to small business of great benefit to them. I
February 16, 1984

am optimistic that the great Canadian resource, which we call small business, is receiving the encouragement appropriate to its role in the economy.
In conclusion, Mr. Speaker, I would like to reiterate what I perceive to be the three major themes of the new Budget of the Minister of Finance. They are, first of all, a Budget process which is based on a consultative process with all the sectors of the community, and in particular the private sector, big business, small business and everyone in the business community. Second, there is a thrust to increase productivity and our ability to compete. Third, there is the recognition of the small business sector as the main source of entrepreneurship, risktaking and job creation. I might also add, Mr. Speaker, that I, other Ministers, and particularly the Minister of State for Finance (Mr. MacLaren), will be continuing an ongoing process of consultation with the business sector, including the small business sector, to further the goals of this Budget.
In closing, Mr. Speaker, I would like to congratulate the Minister of Finance for presenting what I consider to be a sound, responsible, upbeat Budget. It is an optimistic Budget which represents sound economic planning on the one hand with a social conscience on the other hand. It includes programs and initiatives that display in the finest way the role that the Government can play in supporting the economic recovery that we see under way throughout Canada at this time. I might say that I would also like to thank the Minister of Finance for the opportunity to participate in this debate at its outset.


Nelson Andrew Riis: Mr. Speaker, I listened with interest to the speech of the Minister of State for Small Business Mr. Smith in which he pointed out the virtues of small business. I think he indicated accurately that a great deal of the job creation that we hope will occur in this country in the next few years will in fact come from that small business sector. Perhaps it would be even more accurate to say that all of the new jobs created in Canada in the next decade will come through the medium and small business sector.
Mr. John Bullock is President of perhaps the largest small business organization in Canada and the most effective lobbyist on the important issues of the small business community. He is someone who has gained respect from the Minister and the respect of the small business community in general because of his grasp of the reality of that particular sector. How does the Minister interpret a comment Mr. Bullock made last night in his response to the Budget when he indicated that this Budget will not result in any new job creation in the small business sector? He indicated that he was pleased with a number of housekeeping changes that had been made for which the small business community had been lobbying for a number of years. The Minister went to some length to explain what some of these improvements were.
In terms of job creation, the most powerful small business lobby in Canada has stated that the Budget will result in no
The Budget-Mr. Smith
new jobs being created in the small business sector. How does the Minister respond to that comment?


David P. Smith: Mr. Speaker, sometimes I agree with Mr. Bullock and sometimes I do not. Mr. Bullock made a number of comments last night, not all of which were recorded. Some of them were supportive of the measures in the Budget and some were not.
I happen to have a different opinion. I believe the Budget is responsible. By making it easier for the small business community to operate in a number of ways, it will inevitably result in jobs being created.
If one looks at the reaction to the Budget by business leaders as a whole, it is quite positive. As a matter of fact, there are a number of officials in Mr. Bullock's organization, the Federation of Independent Business, who commented on the Budget. If I might use a word that is sometimes used by the other side of the House, if one looks at the totality of their comments, on balance they are quite positive and supportive.


Nelson Andrew Riis: Would the Minister comment on the $1,000 that the Government will now refund to a small business that successfully appeals a tax decision as a way of compensating the cost? He knows that the average cost incurred by a small business in this country when it appeals a tax decision averages between $2,000 and $4,000. Why would the Government not refund the legitimate costs of small businesses when the small businesses in these cases have been proven to be honest and straightforward but it was the Government that had erred? Rather than the $1,000, why not reimburse what we know is a more realistic cost?


David P. Smith: Mr. Speaker, there are many things we would like to do that I suppose would be popular, but we must look at all these matters from the perspective of the Government's ability to afford them. I suggest that changing the rules to permit the courts to award costs of up to $1,000 is a good start. I think it is one that should be applauded and welcomed.


Mr. Skelly:: Mr. Speaker, I have a question for the Minister with respect to small business. In the area that I represent, the Federal Business Development Bank has taken on the name among all the small businesses in that community of the "Federal Business Destruction Bank".
There are some extremely serious problems with respect to small business getting involved in recovery. The bank has refused to refinance loans which would bring them down from interest rates that are as high as 21 per cent. It is only talking about bringing refinancing down to 14 per cent or 16 per cent, and it is only willing to do so by imposing a substantial penalty, even though it is prepared to add it on to the interest rate. TThis is causing some extremely serious problems for small businesses in the area that I represent, and I assume right across the country.
There is a group of small businessmen in that community who are forming a committee to become involved in a fight against the Federal Business Development Bank. Can the

February 16, 1984
The Budget-Mr. Smith
Minister tell me and others what action he will take to make that Federal Business Development Bank more responsive to the needs of small businesses over a period of time in order to help them back on the road to recovery? Is he prepared to fight for the same results that the Minister of Finance talked about in aiding home owners to refinance? What will he do about the Government's bank that is harming business so badly?


David P. Smith: Mr. Speaker, I think the bank is doing exactly that. There are 85 branches of the bank throughout Canada. To a large extent they represent a lender of last resort.
However, the bank is still dealing with public funds and must do so in a responsible manner. It cannot give out loans on the basis of political considerations. It has to give them on the basis of banking considerations.
No one is forced to take a loan from the Federal Business Development Bank. When someone takes a loan from any bank, it is a contract. At the time the bank issues those funds, it must secure those funds and it does so at a certain interest rate. It seems to me to be an unreasonable request to the bank to say that it would then have to suffer the loss for refinancing.
I might say that the FBDB had losses in the last fiscal year of approximately $80 million. I do not think anyone could suggest for one second that the FBDB has not been taking its part of the responsibility in providing financing to a number of firms that are unable to go anywhere else in the country. That does not mean that we just abandon all banking principles and give money away.


Gordon Edward Taylor: Mr. Speaker, first I would like to congratulate the Hon. Member on his elevation to the Cabinet. I have felt for some time that the federal Department of Tourism has not had a sufficiently high profile. Tourism is a tremendous industry in this country and many people do not realize its importance.
Does the Hon. Minister have any funds with which he can help build unique attractions that will bring people to the country? These funds could be given either on a loan or a grant basis. 1 am not talking about ordinary projects but about something that is unique in the country. Is there such a federal fund for that and, if not, what is the primary function of the federal Department of Tourism?


David P. Smith: Mr. Speaker, the primary function of Tourism Canada is to encourage tourism in this country. Of course, we do not try to favour one area of the country over another. We encourage Canadians to vacation in Canada and try to give equal coverage to all areas of the country that represent tourist destinations.
We also do a lot of advertising outside of Canada. In April we will launch a major television campaign in the northern tier of the United States, aimed at encouraging tourists to this country.
I welcome the Hon. Member's interest in tourism. 1 might say that the Industrial Regional Development Program, which is administered by the Minister for Regional Industrial Expansion (Mr. Lumley), does provide some assistance to the establishment of what may be tourist related proposals. If the Hon. Member wants me to provide him with more information or to set up a meeting with interested parties who have some ideas, I would be happy to do that with the appropriate officials.


Arnold John Malone: Mr. Speaker, I would like to ask a question of the new young Cabinet Minister. It concerns small business. It is a question about a group of people whom I consider to be some of the most important small business people we have, those in the business of food production. 1 am aware that the Government has made some provision in the area of capital gains, but I consider its efforts to be rather insignificant.
Bearing in mind that valuation day was established in 1971, how can this Government or any government continue to take the view that in fact it has the legitimate right to calculate gain as gain when in fact it takes inflation from 1971 to whenever the calculation is made and calls it gain? Any child in grade five knows that the Government is really causing double taxation and therefore putting small business persons, be they farmers or otherwise, into a very difficult and unfair situation.


Mr. Deputy Speaker:: Order. The question having been put, the House may agree to allow the Hon. Minister to respond.


Some Hon. Members:: Agreed.


David P. Smith: Thank you, Mr. Speaker. I think the question is essentially rhetorical in nature and more in the form of debate. I take it as a representation. However, the one point with which I would disagree is that I do not happen to think that a provision which allows a farmer to put $120,000 into an RRSP on the sale of his farm is insignificant. I do not think most average Canadians would think it is insignificant. It is a very thoughtful and positive response to what has been a legitimate problem. Certainly it is a move in the right direction and a responsible one.


Raymond John Skelly: Mr. Speaker, I rise on a point of order. Would it be possible to seek unanimous consent of the House to extend the questioning for a period which the Chair might deem appropriate, since there is much interest in the Minister's answers? Is it possible to seek the consent of the House to extend this question period slightly?


Mr. Deputy Speaker:: Of course the Chair abides by the rules. I will put that question to the House. Is it agreed?


Douglas Glenn Fisher: Mr. Speaker, I rise on the same point of order. Regrettably, as the Hon. Member knows, there is no way of turning this off once it gets turned on. We have a list of people who would like to speak. Although I know the Minister would like to answer some more questions, I cannot give that consent.


Mr. Mayer:: Just another ten minutes.
February 16, 1984


Mr. Deputy Speaker:: As there is not unanimous consent, the House will now proceed with debate.


James Douglas Manly: Mr. Speaker, 1 rise on a point of order. I ask the House to seek unanimous consent for ten further minutes in which to ask questions.


Arnold John Malone: Mr. Speaker, I would just like to note that the Government Member is quite correct that once we get them turned on, we cannot get them turned off. 1 want to support the Hon. Member for Cowichan-Malahat-The Islands (Mr. Manly) in his very reasonable request for a further ten minutes. Government Members should not have any fear of that reasonable request.


Douglas Glenn Fisher: Mr. Speaker, on the surface of it, it appears to be a reasonable request. However, 1 would suggest to Hon. Members that if they really are sincere about this sort of thing, they would be well advised to tell their colleagues, the Hon. Member for Rosedale (Mr. Crombie) and the Hon. Member for Kingston and the Islands (Miss MacDonald), not to waste so much time right after Question Period with specious questions of privilege. 1 think we need to get on with the list of speakers. I have several people on my side who would like to speak, if they do not.


Mr. Deputy Speaker:: I gather there is not unanimous consent. Is there unanimous consent?


Some Hon. Members:: Agreed.


Douglas Glenn Fisher: No.


Mr. Deputy Speaker:: There is not unanimous consent.

Debate. The Hon. Member for Joliette.


Roch La Salle: Mr. Speaker, I certainly had no objection to allowing ten minutes more. I realize that a number of Members would have liked to put some pertinent questions to the Minister of State (Small Businesses and Tourism). Well, Standing Orders are Standing Orders!
Mr. Speaker, I have some comments on the Budget. In fact, this morning, in the newspapers, the Budget was hardly as popular as the news that Gaetan Boucher won this major international event. You will understand that Canadians were very interested in this major win and were more excited about a Canadian winning than about the Budget, considering the bill we got yesterday from the Minister of Finance (Mr. Lalonde). Mr. Speaker, I was listening earlier to the Minister of State (Small Businesses and Tourism) and I do not doubt his good faith and his plans to increase co-operation with the private sector. He was expressing his Government's faith in the private sector in this respect. Even the provinces, perhaps! However, Mr. Speaker, I am astounded that the Minister of State (Small Businesses and Tourism) should fail to realize that the Minister of Finance, who produced this pile of infor-
The Budget-Mr. La Salle
mation, measures and proposals in the House yesterday, has been behaving for at least ten years with incredible arrogance. Considering his forecasts for the energy and financial sectors, I would say not only arrogance but also unprecedented incompetence. And now they are talking about restoring a climate of confidence! I wonder they even dare to talk about restoring a climate of confidence, when over the last eighteen months, and I am positive about this and I have the polls to prove it, Mr. Speaker, this Government has lost the confidence of the general public. Just over 30 per cent, on average, over the last 18 months! This proves Canadians no longer have confidence in this Government. Of course this Government will always say it won a majority in 1980, but during the last eighteen months, the Government knows it lost the confidence of the general public, and it is trying to act as though it had the public's support, and the Minister of Finance is talking with a kind of optimism that reeks of hypocrisy, since he knows perfectly well he no longer has the confidence of the general public and will be unable to restore that confidence with the Budget he brought down yesterday afternoon. Mr. Speaker, for your information, just to prove to what extent the Minister of Finance has lost the confidence of the general public, there are certain people in the business world who told me as a joke: Listen here, La Salle, when you form the Government in a few months, remember to give the Minister of Finance the post he would like to have, which is President of the Canada Post Corporation. Then he could read the mail of all Canadians without any problems. Mr. Speaker, you see the kind of joke the credibility of the Minister of Finance has become, a credibility that has hit its lowest level. Mr. Speaker, it is clear that in this Budget, some measures are more significant than others. There is some good news, since the Government finally decided to increase benefits for the elderly and single persons, so they can meet their financial obligations. Well, Mr. Speaker, on this side of the House we have realized for a long time that this need existed. The Government seems to be willing to do something about it. Considering the measures the Government proposed yesterday, and unless I am mistaken there are only one or two that could be put into effect before January 1, 1985. Mr. Speaker, as you and I are aware, the likelihood that there will be a general election before January 1, 1985 is considerable. So, in his hypocrisy, the Prime Minister goes on and gives us a scenario he will probably not be responsible for putting into effect. Mr. Speaker, I suppose there is also reason to rejoice that they finally realized what a problem the Revenue Canada tax forms were for small and medium-sized businesses. It seems the Government has finally decided to change and improve the tax forms for small and medium-sized businesses, but I hope nobody will assume, Mr. Speaker, that this is going to create thousands of jobs. It will help small and medium-sized businesses in that the forms will be easier to understand and much easier to complete. So, of course, we are pleased with this change.

February 16, 1984
The Budget-Mr. La Salle
There is also a reference to assistance to farmers. It is perfectly obvious, Mr. Speaker, that before even considering legislation that would help farmers give up for and benefit from a pension, they would first have to start making money and have some kind of security. Perhaps they should have considered appropriate measures for stimulating recovery in the agricultural sector. The survival of agriculture is a very important issue, and it is one the Minister of Finance (Mr. Lalonde) has failed to address. It is therefore clear that the Budget's proposals with respect to farmers are quite inadequate, and it is also clear that the Minister has decided against considering a single aspect of a major problem today, which is financing. Many farmers are still faced with the exorbitant mortgage rates that prevailed a few years ago, and unemployment is also a problem. I see no specific measures in the Budget aimed at helping those farmers-and every Member of this House is aware of the situation-at saving them from bankruptcy and giving them the security they need to improve their circumstances, and at improving the state of the agricultural sector in this country.
[DOT] (WOO)
Mr. Speaker, the Budget also proposes to provide some kind of insurance for mortgage rates. Details are not available yet, and the Minister indicated that program criteria will be announced within a month. There is indeed a pressing need, Mr. Speaker, for a measure of security and stability, and the Minister of Finance was not saying anything new when he mentioned this in the Budget yesterday. For many years and many months we have been urging the Government to take action in this particular area and to strengthen the construction industry, which is a vital part of our economy.
And then, Mr. Speaker, the Minister of Finance spoke very eloquently about helping unemployed young people. The new Minister of State for Youth did admit recently that young Canadians are driven to despair, that we are in the process of wasting a whole generation, and she said that quite simply as she was assuming her new responsibilities as Minister. Well now, Mr. Speaker, for the past 15 years this Government was supposed to look after youth, it was supposed to create jobs, something which would have given those young people a much brighter outlook on life than the one they have now.
It would seem that the Government has just realized that between 400,000 and 500,000 young Canadians are now seeking employment and going through a desperate crisis, so the Minister, of course, starts throwing millions of dollars at the problem, $150 million more! But, Mr. Speaker, suppose all that money is spent or earmarked for programs such as we had before, programs which at best would mean jobs for 15 to 20 per cent of young people for periods ranging from 20 to 26 weeks. Perhaps the lucky ones will indeed work for 52 weeks. But at the end of the programs those young people will have to draw unemployment insurance benefits, just as they have been doing now for the past four or five years. Fet us be honest, Mr. Speaker, those programs are practically just another name for social welfare. Young people are hired to work on projects which hopefully are worthwhile-but not necessarily so, as you know-and then they go back to unemployment insurance. How can such an attitude on the part of the Government build up the confidence of Canadians? How can the country possibly get back on the road to prosperity with temporary programs offering temporary employment? And the Minister proudly claims that the Canadian Government created 400,000 new jobs last year. Never did he say how many of those jobs were temporary. Thousands of those 400,000 jobs lasted for 20 or 26 weeks, then it was the unemployment line again. A good many people do not even figure in the statistics because they have no jobs and their unemployment benefits are exhausted. The answer to that, of course, is provincial social welfare. How easy it is to fool young people by telling them that we now have a Minister of State for Youth who will look after them. It would seem that there was no need for that over the past 15 years, but now we do have a Department of Youth and we will solve the problem which has been there all along. No way, Mr. Speaker! Young people are not that stupid! They should not be likened to children who have no idea about the responsibilities of Government. This budget fails to meet the aspirations of young Canadians and will do nothing to create jobs.
Mr. Speaker, I wish to underline the fact that the Minister admitted recently that he had been unable to spend the millions of dollars set aside to create jobs in his 1983 budget and that there still remained between $300 million and $400 million to be spent. Naturally, he has to reallocate this money in his new Budget. However, how can he explain the fact that, with respect to the exercise in co-operation or co-ordination with the provinces which he so often mentions, the Government has not yet succeeded in coming to the necessary agreement, not even with my own Province of Quebec? Mr. Speaker, you are aware of the incredible number of jobs lost in Quebec, and I am also aware of the fact that no agreement has been reached yet, and that the necessary efforts have not been made to fulfill the needs of the 1,250 Quebec municipalities which are hoping that an agreement will be signed by the federal and the Quebec Governments. According to my information, and it comes from a good source, this question has now been before the Cabinet for the past few weeks. Yet, the Ministers are themselves from Quebec and there are also well over six dozens of Members of Parliament. All these ministers from Quebec have not seen fit to settle this matter once and for all so that municipal projects which would generate employment may go ahead.
Mr. Speaker, there is one point on which the Minister of Finance is not saying the whole truth, not to say that he is lying to the House. He is not saying the whole truth when he talks about his efforts to create jobs. An agreement could have been signed many months ago; this would have satisfied the municipalities and prevented the Quebec Government from
February 16, 1984

threatening municipalities with penalties because the federal Government wanted to give them grants directly. Co-ordination, co-operation and true respect for federalism imply the respect of provincial jurisdictions. What the Minister of Finance is not saying is that he does not believe in this concept and that the Government does not want to believe in it either, Mr. Speaker! During this Budget debate, I urge the Minister of Finance to realize the importance of signing this agreement on behalf of the 1,250 municipalities which are waiting and hoping that the federal Government will finally set aside its partisan motives and accept to sign an agreement with Quebec, so that these municipalities may receive the federal funds to which they are entitled. The Liberal Members from Quebec, and 1 as a Conservative Member from Quebec, would applaud such an agreement and we would be able to tell the people of Quebec that the taxes that they pay to Ottawa are being redistributed fairly.
On this issue, Mr. Speaker, I must say that the Government has shown a lack of good faith and has not done what was necessary to come to an agreement on a matter as urgent and as important as this one for Quebec. Of course, the Government would rather do what it has been doing these last few months. It would rather use these $250 million allocated to Quebec for something else and launch various projects without providing sufficient information to the Opposition! Mr. Speaker, such a method comes close to corruption. It is unacceptable! The Government would have done better to sign an agreement with Quebec. Of course, the Liberal Members from Quebec were embarrassed when they heard the mayors of certain municipalities and people in Quebec tell them: "Why is it that we cannot benefit from the amounts allocated by the federal Government?" This is why this Government has decided to implement a program which allowed them to allocate certain amounts to Quebec for projects which were most often submitted by party supporters, and at the same time to increase their popularity in Quebec! Indeed, in Quebec like elsewhere in the country, this Government is running short of popular support.
Mr. Speaker, these are some of the comments that we must make in this House.
I pray and urge the Quebec Liberal ministers and caucus members to conclude this agreement without delay; should they refuse next Tuesday-I know they have to deal with this issue at their next Cabinet meeting-there are a number of Quebec Liberal members who are quite unhappy about this absence of agreement, and my information comes from very reliable sources, Mr. Speaker.
Also, the Minister of Finance referred to the coherent stability of his economic policies! How can he expect the business community to take him seriously when he does not seriously raise in his budget the possibility of increasing the amounts allocated to research and development. Mr. Speaker, businessmen and ordinary citizens in Canada are aware that
The Budget-Mr. La Salle
high technology is the key to streamlining our industry, increasing our productivity, reshaping our industry to protect our traditional jobs and create new ones. No increase in the funds allocated to research and development, Mr. Speaker! This is quite revealing! This should be the essential element of any economic policy. How can the Government expect to convince Canadians to devote more money to advanced research, something we need if we want to plan rationally our development on the basis of our needs.
That the Minister of Finance should present this document without First of all using research as the foundation and providing funds for advanced technology is unthinkable. We are well aware that our industries could benefit from export markets if they had the advanced technology they need. In addition, more research could enable union members to understand better the importance of productivity if they want their industry to compete on world markets. Witholding the funds needed for increased research and development is tantamount to ruling out the economic recovery, however urgent it may be.
We talk about better co-operation with the private sector. The Minister of Finance lost all credibility when as Minister of Energy he fought fiercely against the private sector and yet today he is making a desperate appeal to businessmen begging them to take part in that economic recovery. With a rare sense of optimism, he is now referring to economic growth. Mr. Speaker, we are aware of the present conditions. We know that the economic recession was quite painful and I do not agree with the Minister of Finance that we are now on the road to recovery. The Minister cannot obtain the co-operation of the private sector as a result of his recent beahaviour. Mr. Speaker, I heard a while ago and I am now coming to the end of my comments, I heard the Minister of Industry, Trade and Commerce suggest that a Conservative budget would frighten Canadians. I can tell him right now that thousands of Canadians are asking for a general election to condemn, and rightly so, a government which has so badly failed in all areas.


The Acting Speaker (Mr. Guilbault):: A ten-minute period is allowed for questions and comments. The Hon. Member for Comox-Powell River (Mr. Skelly),


Raymond John Skelly: I have a comment on the previous Member's speech. I know how reluctant his Party is to put forward any position on any subject affecting Canadians. On the question of small business, the Budget contained a statement that competition legislation is going to be introduced. Why is the Conservative Party opposed to legislation that would protect small businesses from the predatory activities of large businesses? I will give just one example so he can develop it further. The multinational oil companies, the foreign-owned conglomerates, friends of the Conservative Party, have targeted and conducted some fairly serious activities against small independent oil companies in Canada which are providing

February 16, 1984
The Budget-Mr. La Salle
competition, a choice for Canadians and, holding prices in line-


Arnold John Malone: Have the guts to lay the charge.


Raymond John Skelly: Yet what we have is a Party which has gone on record as opposing the kind of legislation that would protect small businesses. Could the Hon. Member explain why this Party is against small business from the point of view of competition legislation?


The Acting Speaker (Mr. Guilbault):: The Hon. Member for Joliette (Mr. LaSalle). Order, please. Could we hear what the Hon. Member has to say in reply?


Raymond John Skelly: Mr. Speaker, I rise on a point of order. I heard someone make a reference to the horse's ass. Would the Chair accept the comment that the horse's ass in this Parliament is the Conservative Party because it has failed to put forward positions to protect small business?


The Acting Speaker (Mr. Guilbault):: Order, please. I am sure the Hon. Member realizes this is not the type of language that should be used in this House.


Roch La Salle: Mr. Speaker, I suggest the Hon. Member who put the question was absolutely wrong in implying we were not ready to help small and medium businesses. We would give them the same advantages as to all other Canadian businesses. And while small and medium businessmen will appreciate the improved income tax forms, I think this is a good thing but it is not enough. There are tax measures in favour of small and medium businesses we already supported, but what is needed to assist them is finding new markets, conducting better market research abroad, and providing services to increase productivity. For a long time, we have relied on official, theoretical studies done by consultants. I feel the time has come to provide small and medium businesses with in-depth studies to increase their productivity, and competitiveness and lessen their dependence on government grants for survival.
Briefly, we would help the small and medium business sector by showing them how to catch their own fish instead of giving them any.
So much for research. As I said, research subsidies are inadequate. There is no reference to that in the budget, but with additional subsidies, invaluable services could be afforded to the small and medium business sector. We do not want our small and medium businesses run by the State. We want to help them identify markets through the provision of services and even foreign market research. And this is not aimed at multinational corporations only. We are committed to a kind of regional development involving an increasing number of small and medium businesses, Mr. Speaker.


Raymond John Skelly: Mr. Speaker, although the Hon. Member did not deal with the question which involves the protection of small business in the country, I would like to raise another question. On the matter of the multinational friends of the Conservative Party, I would refer the Hon. Member to his Leader's own speeches in which he said that the Conservative Party will facilitate the entry into Canada of foreign companies and foreign investment. Let me use another example to show where his Party is right off track with small business. Into this country have come a number of waste disposal companies, welcomed in with the foreign investment crowd. What they have done is driven the small Canadian companies out of business with their practices.


Arnold John Malone: Name one.


Raymond John Skelly: I will. There is no competition legislation that is effective in Canada to protect Canadian small businesses from the deep pockets and the predatory practices of those foreign companies. Greater Vancouver is riddled with this problem. People are crying for assistance. The Conservative Party is quite willing to see those small Canadian businesses go down the drain as a result of the unfortunate practices of the foreign-owned corporations in the country. What is that Party prepared to do to control foreign investment so that small Canadian businesses are not driven out?


Roch La Salle: Mr. Speaker, let me say in all humility that I have never claimed to be able to answer all questions that are put to me in this House. Contrary, to others, I know my limits, thank God!
However, when the Hon. Member implies that the Progressive Conservative Party is against small and medium size businesses, I regret to tell him, with all due respect, that it is obviously incorrect. We want to protect them. We want to give them every opportunity to survive. Of course, my colleague and myself do not share the same philosophy. I would never want to support businesses which are unprofitable for all practical purposes. However, I want our party and the government, any government, to provide such businesses every possible opportunity to survive and expand, and our party completely agrees with that. That is our position. I would add that if we succeed in providing these opportunities to our small and medium size businesses, to Canadian businesses, we will have greatly reduced the impact of foreign products. Because we must be competitive. And I don't want to hear about locking us up into full-scale protectionism. We must keep some ties with the outside world. On the other hand, I admit and 1 realize that it is important as well to provide a minimum of protection for Canadian trade, but within reasonable limits. The question is to determine what is reasonable and unreasonable.
February 16, 1984


Gordon Edward Taylor: Mr. Speaker, I always find it amusing to hear the socialist from Powell River talk about competition. Nationalism and competition do not go together.
I have a question for the Hon. Member for Joliette (Mr. La Salle). I enjoyed what he said about research and development. It reminded me of an excellent engineer, the Dean of Engineering at the University of Alberta, Dr. Bob Hardy. When I was with the Department of Highways in Alberta, he suggested that if we spent 1 per cent of our budget on research, it would bring back tremendous dividends. We adopted his suggestion and over a ten-year period found that we not only got better value for every dollar but also had better structures and better public works. 1 agree with what the Hon. Member said about research and development.
Are there areas in his particular riding where research and development might bring in more jobs or give better value for every public dollar spent? That is also important.


Roch La Salle: Indeed, Mr. Speaker, each and every region of Canada would stand to gain a lot more than is the case now if we were getting a better value for our dollars by investing more in research and development. In my riding-and this goes for any riding in Canada-it is obvious that we have to spend more money on research and development, because that will eventually enable us to carry out projects which meet the specific needs of the region.


John Leslie Evans: Mr. Speaker, it is always a pleasure for me to join in the debate on the Budget. After a good deal of examination of the documents yesterday when I was privileged to attend the lock-up with Hon. Members from both sides of the House, I became quite enthused about the policies it set out.
We all realize that the federal deficit is very large and is constraining the Government's ability to move. There was no room for the Government to expand expenditures in a major way. Neither was there the option of greatly reducing the deficit at this time because of the fragility of the recovery and the need to move into an expansion phase that would ensure that we do not damage the recovery that is under way and which promises to increase employment and put Canada back on the rails again.
I was very interested to hear the Minister's speech and to hear about these programs. I will deal with them later. I was also interested to know how the Opposition would attack the Budget. It contained measures for small business, for pension reform, a program for mortgage insurance, programs that made sense, tax simplification for small business-all of those made sense and were done with consultation and with the provision for further consultation. It seemed to me that it was going to be difficult for the Opposition to attack these measures.
The Budget-Mr. Evans
When the Opposition finance critic entered the debate last night and again this morning, we did not hear any discussion of the substance of the provisions in the Budget. For 90 minutes the Hon. Member for St. John's West (Mr. Crosbie) talked about one thing-the deficit. He talked about the deficit from every angle that the mind could imagine. It was the subject of a 90-minute discourse by the Hon. Member for St. John's West. There was nothing in his speech about the provisions of the Budget or on the factors which gave rise to the deficit; there was simply a diatribe about all the ills that would befall Canada if the deficit were not dealt with.
There was nothing about what the Conservative Party would do if it were in power or would have done had it been in power during the same period. We should recall-and the Hon. Member for St. John's West raised this in his speech because he knew that we would raise it-that last year when he spoke about the April Budget of the Minister of Finance (Mr. Lalonde), he was asked what he would do in the circumstances that faced the country then. His response at that time, which he admitted this morning, was that the Minister had taken a responsible position, that it was the right Budget for the time and that basically he would do the same thing. That is what he said last April. What dramatic changes have occurred since then? Last night the Minister of Finance brought forward an extremely responsible Budget, given the conditions that face the country.
In the last year and a half we have been in the midst of a major world recession. This recession hit every industrialized country in the world and hit the less developed countries the hardest. It was the worst world-wide recession since the 1930s. That is the reason for the deficit that we face now. That is the logic of it.
The question then arises, if the deficit is far beyond what a Conservative government would have allowed, how would it have achieved that? I expected to hear the Hon. Member for St. John's West deal with that issue. For example, would the Conservatives have cut unemployment insurance benefits? Would they have cut pensions like Old Age Security, the Guaranteed Income Supplement and the Canada Pension Plan? Would they have cut other social expenditures?
I remember that when we brought in the six and five program, the Opposition did not support us. They claimed that it was unfair to make the cuts or impose the restraints, yet now they tell us that they would have reduced the deficit dramatically.
That does not wash, Mr. Speaker. Would they have cut defence expenditures? Would they have cut economic development expenditures during a recession when industry was on its knees and needed the assistance the federal Government could provide? Would that Party have cut job creation? I know it did in 1979 when it came to power. But during the middle of a recession when jobs were being lost by the thousands, would that Party have cut federal assistance for job creation? I do not think so, Mr. Speaker. Faced with the reality of power, of being the managers in a time of serious economic recession, I do not believe that any responsible Party would have made

February 16, 1984
The Budget-Mr. Evans
those kinds of moves, which would have led to a much larger deficit than the one we are seeing right now. I certainly hope no Party in this Canadian federal scene would have done that.
However, the question does come up as to what that Party would have done differently, and what would it do that is different from what we are doing? I believe the people of Canada are starting to ask that question more and more. They are not very happy with the answer which keeps coming back because, Mr. Speaker, of what we are hearing. The Hon. Member for St. John's West (Mr. Crosbie) told us last year that if he were faced with the same situation as the Minister of Finance, he would do basically the same thing. Yet here in the House he says, "We would reduce that deficit." That was all he talked about during his whole criticism-ninety minutes on the deficit.
What about the future? The Hon. Member for St. John's West has told us a great deal. First, a few months ago he was asked what the Conservative Party would do. He said in essence, "If I told you, we would never be elected". In other words, if the Conservatives told the people of Canada what they would do, they would never be elected. And, Mr. Speaker, the Hon. Member for St. John's West did it again last night. I quote the following from the Ottawa Citizen of February 16:
Mulroney said the $31.5-billion deficit indicates the Liberal government is on the verge of bankruptcy and what Canadians really need is a new government.
However, Tory finance critic John Crosbie conceded that the government action needed to slash the deficit would scare most Canadians.
The article goes on to say:
"You have to be mean, nasty and do all sorts of unpleasant things," Crosbie said outside the Commons when asked what a Conservative government would do. "That's why I'm not going to outline what they would be now."
In other words, the Tories have a little plan. I mentioned in this House before that these Tories have a little list. They admit to a list of 3,500 names of individuals in the bureaucracy whom they are going to sack, so to speak, and I suggest to you, Mr. Speaker, that that list is probably a lot longer. Not only do they have a little list, they have a little plan, and that little plan, to quote the Hon. Member for St. John's West, would be, "mean, nasty and do all sorts of unpleasant things". That is the little plan, Mr. Speaker. I believe all we have to do is to go through the expenditures put forward in the Budget, the expenditure envelopes, and we would find out what that little plan entails. We have heard a few things which the Opposition Members said they would do. They would increase defence spending. They would increase transfers to the provinces for medicare. They would reduce taxes, which would reduce revenues, of course.
If one looks through the economic envelopes, Mr. Speaker, what are the Government's expenditures? Next year, $11.2 billion will be expended by this federal Government for economic development; $4 billion for energy development, new energy resources; $2 billion for legal affairs and justice in the country; $4.2 billion for servicing of roads and harbours and all of the things which come under the rubric of service to Government, buildings, national monuments, national parks,
all these things which are the responsibility of the federal Government in the form of infrastructure. There will be $192 million for Parliament. If you eliminated Parliament, it would not get you very much. On defence, $8.7 billion, will be expended. External Affairs and aid, $2.7 billion. Would there be a cut in external affairs and aid? Fiscal arrangements, $5.9 billion, that is equalization. I do not believe a Conservative Government would cut equalization to the provinces, but perhaps it would. Public debt charges, $20.4 billion. All of those areas, Mr. Speaker, could possibly be reduced by a government which was intending to be "mean, nasty and do all sorts of unpleasant things". The big one, however, in here, Mr. Speaker, is Social Affairs, $39.7 billion. I have the little thought in my mind, Mr. Speaker, and other Hon. Members are beginning to come to the same conclusion, that that is where the little plan is to be found, in the social affairs envelope. If the deficit is going to be reduced, social affairs is what that Party would go after. We proved, Mr. Speaker, during the recession, and we are proving in the Budget which came down, that that is not something which this Government will do. This Government will fight against reducing the money for social affairs.
We have heard a great deal about the deficit. I quote from the Montreal Gazette of February 16 where the Leader of the Opposition (Mr. Mulroney) is quoted as saying:
"There's nothing in this budget that deals with the fundamentals, namely an overwhelming deficit that is going to inhibit economic recovery," Mulroney told reports.
The Tory leader said there was "a degree of profligancy in government spending that is without precedent in any western industrialized nation."
Those are direct quotes from the Leader of the Opposition last night. Let us take a good look at this deficit, Mr. Speaker, a good hard look, because the fear is being put into the minds and hearts of Canadians that this deficit is going to destroy the nation, that it is going to bring us down. If we take the deficit in perspective, it seems to me, and I believe to most Canadians, that there used to be a time-and I suppose 1 show my age by remembering that time-when you could buy an automobile for $2,500. In fact, if I go back to my very early years, I can remember the days when you could buy an automobile for about $1,200. Today it costs $12,000. A person who bought a $1,200 car perhaps had to borrow $800. A person who buys a $12,000 car today might have to borrow $10,000 or $11,000. That is a huge increase in the notion of debt. However, at the same time incomes have gone up, Mr. Speaker. People can afford to service a larger debt. It seems to me that the notion of income, how rich we are, should have some bearing on how much debt we can afford to carry.
Let us look at the net public debt-that is the figure of which the Hon. Member for St. John's West was talking-as it relates to total personal income, the income of all Canadians in the country. In the 1983-84 period when we hit the worst of the recession, that ratio was 45.1 per cent. In other words, net public debt was 45 per cent of total personal income. That is the entire debt, not the deficit. The deficit is what you run up in one year. The debt is the cumulative total of all the previous deficits in history. That is a big number, 45 per cent, because
February 16, 1984

in the period from 1971 to 1982, the ratio ranged between 19 per cent and 33 per cent, basically. Now it is up to 45 per cent, and that is because of the big recession and the run-up of the current years' deficit and the effect it has had.
Let us go back historically, Mr. Speaker. This is supposed to be, according to the Leader of the Opposition, the worst situation which has ever existed. In 1946-47, the net public debt as a percentage of personal income was 132 per cent. In other words, the debt was a third larger than the total personal income. We should look through the period of time which we could call the Conservative halcyon days. I am talking about the time of the Diefenbaker Government, the period from 1957 to 1963. Let us look at the net public debt as a percentage of personal income during these halcyon days of conservatism when wealth and jobs were being created. We all agree the country was booming. We all agree the 1960s was a boom period for Canada. What were those figures? Remember, Mr. Speaker, that this year it is 45 per cent. Well, I'll be darned. In 1957-58 the ratio was 48.7 per cent; in 1958-59 it was 49.5 per cent; then 48.6 per cent, 47.2 per cent, 49.1 per cent, 47.3 per cent, and 47.8 per cent. This was all during the Diefenbaker period, the halcyon days of the Conservatives. The ratio of net public debt to personal income was higher during that entire period than it is right now when we are coming out of the worst recession the western world has known in the last 50 years. Those were the halcyon days. We were making great strides in personal income. But what happened to the debt, Mr. Speaker? Amazing, is it not? All during the 1960s the net public debt as a percentage of personal income was higher for every year than it is right now. The Hon. Member for St. John's West rails at the Government: "Oh, my gosh, we are going down the sewer". Well, we did not go down the sewer in the 1960s. The country did quite nicely.
I suggest the reason this net debt position is where it is right now is that this Government took the action necessary to protect Canadians during the worst recession we have seen in 50 years. Can you imagine what would have happened to Canadians, what it would have been like in this country over the last year and a half, or what it would be like right now if we had not taken the action we have? There would be chaos in the streets, Mr. Speaker. This Government supported the social programs it put in place over the years, and we continue to do so in this Budget.
We are now making structural changes to those programs to improve pensions, improve the environment for small business, because we believe that is where the jobs will be created in the future. We are making it easier for people to form and run small businesses and be successful. That will generate the jobs, Mr. Speaker, and this Budget moved very strongly in that direction. It is going to reduce the tax statutes applying to small business by two thirds. If you have three inches of tax statutes now, you are going to wind up, with these measures in place, with one inch.


Charles James Mayer: I will believe it when I see it.
The Budget-Mr. Evans


John Leslie Evans: I think we should probably get down to the point where they are a quarter of an inch. I and some of my colleagues on both sides will continue to work together to see if we cannot get it down to a quarter of an inch from three inches. That would certainly be a boon. The Minister of Finance has moved dramatically in that direction.
Let us look at another set of figures. The Leader of the Opposition has said that there is a degree of profligacy in Government spending without precedent in any western industrialized nation. What would that be, Mr. Speaker? Let us say federal expenditures as a percentage of the GNP are now 9.2 per cent.
May I have unanimous consent to have one more minute to complete my remarks, Mr. Speaker?


The Acting Speaker (Mr. Guilbault):: Is there unanimous consent for the Hon. Member to extend his remarks?


Some Hon. Members:: Agreed.


John Leslie Evans: I would like to thank my colleagues, Mr. Speaker. I was saying that federal expenditures as a percentage of the GNP now are 9.2 per cent. In 1979, the year of the Conservative Government, the ratio was 13.8 per cent, or about 33 per cent higher than it is now. My gosh, if we go back to those halcyon Diefenbaker years, it was 10.1 per cent, 11.7 per cent, 9.3 per cent, 10 per cent. Higher than it is now, Mr. Speaker. It seems to me we had better take a look at facts before we start crying wolf, because there is a lot of information which has not been portrayed correctly by the Hon. Member for St. John's West. I certainly hope that in future speeches on this Budget those facts will have some impact on the kind of commentary we hear relating to this Budget.
I tell you, Mr. Speaker, the Budget is a responsible one given the conditions we face. It makes great strides in terribly important areas. I am proud to stand up on this side of the House and support that Budget to the hilt.


Nelson Andrew Riis: Mr. Speaker, I listened with interest to the Hon. Member's eloquent words and how pleased he is with the Budget. I have two questions. He made many comments regarding the real job creation to occur in Canada. In the next number of years that will obviously come from the small and medium-sized business sector. Governments are not going to be creatings jobs, and I do not think that anyone believes the corporate sector will be creating the jobs. So we are moving from the megaproject approach down to the microproject approach in job creation.
I read some of the quoted remarks of Mr. Bulloch, President of the Canadian Federation of Independent Business, who had some observations on the Budget last night. He agreed there were many positive steps of a housekeeping nature for small business in the Budget. However, he said the Budget itself will not result in any new real job creation in the small business sector. In other words, the Budget is not going to encourage small business to expand and create jobs. There seems to be some opposition to what the Hon. Member was saying. Would

February 16, 1984
The Budget-Mr. Evans
the Hon. Member not consider it to be advantageous for the Minister of Finance (Mr. Lalonde) to have rescinded the personal tax increases Canadians are going to experience this year as a result of the April Budget? These amount to something in the neighbourhood of $1.4 billion for this particular year. In a recovery which will be consumer led, or where consumers will play a major role, would it not have been useful to rescind that tax increase?


John Leslie Evans: No, Mr. Speaker, it would not have been. If you want consumption, the best place to get 100 per cent consumption is exactly where we got it: we increased the GIS. They are the people in greatest need. They do not save any of it, they spend it all. That is hundreds of millions of dollars being put in the hands of people who are going to spend it. That was where it should have been put, and that is where we put it.
As to Mr. Bulloch, I have great respect for him. I do not think there are many people who understand the small business environment better than he does. However, I suggest that by removing the cumulative deduction account, businesses will now be encouraged to expand. They have been afraid to do so because once they go beyond the $1 million limit, they are no longer a small business and the tax implications are horrendous. Therefore, we are removing the CDA and saying, $200,000 a year without limit. Businesses will feel unshackled. They are going to be free to expand, and I think they will.
The other thing this Budget did, and I think commentators across the land have been saying this, is to provide a sense of stability. The Minister of Finance did not make dramatic changes. He put in measures that were structural in nature and made the kind of changes which people are going to appreciate in the area of pensions, mortgages, and small business taxation. It came out as a Budget which maintains the sense of stability and purposefulness which the Government has put forward in the past. That is going to increase business confidence and, with the restraint measure, it will keep Government price increases down to the 4 per cent level. That reinforces the sense that we are going to get inflation under control. Those are the kinds of things we have to do if the confidence is going to be there for the real interest rate to start to squeeze down. When people no longer believe that inflation is going to take off again, interest rates will begin to come down closer to the inflation rate. That is what we need to do. That is built on stability, confidence and sound budgetary management, which is exactly what the Minister brought forward here last night.


Douglas Glenn Fisher: Mr. Speaker, I enjoyed the comments of my colleagues. He pointed out the constructive role that government spending can play in softening the effects of economic slowdowns and recessions, particularly the effects that government spending can have on low income people. He also pointed out the Conservative policy to be "nasty, mean-minded and tough". I would like to quote something from the Toronto Star of February 12 which goes one step further than that. Joseph
Schlesinger, an impartial man who is a foreign correspondent for the CBC, has written the following:
Canada and the United States have both been going through tough times the past three years with high unemployment, increasing poverty and strained budgets.
But there is a major difference in how the two countries have dealt with the victims of the hard times.
Call it the Compassion Difference. But they try-
That is the Government of Canada:
-with job creation and income supplement programs. In the United States, the federal government is led by people who are not only cutting back on such help-they're actually denying the existence of some of the problems.
Edwin Meese, one of the President's closest political advisers, said:
-people go to soup kitchens because the food is free and that's easier than paying for it.
That is the Conservative mentality. In the House we have heard the Tory policy about being mean-minded and tough. That is what they are talking about. The Hon. Member for St. John's West (Mr. Crosbie) said in the House that the Americans have handled the deficit properly. That is what he means. He has this cynical idea about poor people. The difference is the compassion difference. I would like to hear the Hon. Member's theories on that.


John Leslie Evans: Mr. Speaker, I do not want to expound-


William James Kempling: What a bunch of claptrap.


John Leslie Evans: Mr. Speaker, there was a movie called Sargeant Pepper's Lonely Hearts Club Band years ago.


Charles James Mayer: You really asked him a tough question.


John Leslie Evans: In that movie there was a group called the Blue Meanies. There are the Blue Meanies of today sitting right across from us. Let me quote again the Hon. Member for St. John's West (Mr. Crosbie). He said:
You have to be mean, nasty and do all sorts of unpleasant things.
That is the head Blue Meanie from St. John's West speaking. He said:
That's why I am not going to outline what they would do now.
You would never vote for us if we did. Mr. Speaker, the Hon. Member talks about the cuts in the United States and the cuts here. The Leader of the Opposition said he would cut everywhere and under every circumstance. That is another Blue Meanie speaking. He would cut consultants, outside lawyers and accountants, advertising, public service, compensation, waste, unproductive subsidies, travel, indexed pensions, fringe benefits, capital construction programs, capital overruns and so on. The Blue Meanies speak and the people are listening. That will tell the story over the next few months, Mr. Speaker.


Ian Deans: Mr. Speaker, my question is quite simple. It would have to be in order to get an answer from the other side. What am I now supposed to tell the more than 100,000 people who no longer qualify for unemployment insurance benefits
February 16, 1984

and do not qualify for welfare payments because they have a spouse working who earns just enough to keep them from qualifying? What do I tell those people is in this Budget that will be of some assistance to them on Monday next? What can I suggest they should do in order to meet their mortgage commmitments and find a job in an area in Hamilton where 50 per cent of construction workers and 20 per cent of steel workers are out of work? We have had six plants close down in the last 14 months. There is a negative job growth. In other words, there are fewer jobs being created than there are people looking for them. What can I say to them? I have raised this question with the Minister of Finance (Mr. Lalonde) and with the Minister of Employment and Immigration (Mr. Roberts). Although no doubt they both bleed quite honestly for those individuals, there is no one offering them any kind of assistance or help. What do I tell them about this Budget, given that the Government is able to find 190 million tax dollars to give to the oil companies? The Government is willing to forgo hundreds of millions of tax dollars in RRSP investments to those who already have enough. The Government is prepared to reduce the tax burden on lawyers, doctors and accountants. There is not one single item in the Budget that I can find which addresses their immediate needs.


The Acting Speaker (Mr. Guilbault):: Order. The posing of this question happens to come just at the end of the question period.


Ian Deans: I will ask it again tomorrow.


The Acting Speaker (Mr. Guilbault):: It is not the fault of the Hon. Member. If we had unanimous consent, the Parliamentary Secretary could answer.


Some Hon. Members:: Agreed.


John Leslie Evans: Mr. Speaker, the Hon. Member can tell them that over the next year the federal Government is going to spend $3.5 billion on Special Recovery Capital Projects. The Minister of Transport (Mr. Axworthy) has started the most impressive rebuilding of the western transportation system in the history of the country. That is going to increase the demand for steel, rails and equipment that are bought in central Canada and made in Hamilton. In addition to that, the Government has put in an incentive program for profit sharing and job creation in small business. All the job-creation programs which the Government put in place over the last years are in full swing now. The special recovery projects are in full swing now. They will be generating jobs. There is hope for those people with whom we all suffer. There is hope. The Government is putting in place policies which are going to do the absolute maximum that can be done in the situation which we face as a nation.


Charles James Mayer: Mr. Speaker, I have a couple of minutes. I will make a few comments and call it six o'clock, if I may. The Hon. Member talks about the fantastic initiatives of the Minister of Transport. They should take the Minister of Transport, put him in a caboose and send him across the
Adjournment Debate
Prairies on a train. He would learn something about the railroad business. I say that because he was part of the Cabinet committee that allowed the dismantling of VIA Rail. At the time they said they were going to save $100 million. The Hon. Members opposite are making pious Alice in Wonderland comments and statements. I have never heard such a bunch of nonsense in my life. In 1981-82, VIA Rail cost $540 million. The Minister of Transport was going to save $100 million. That meant that the deficit should have gone down with regard to VIA. This year it costs $825 million. He cut off the revenue base and kept the cost structure the same. That is the fantastic initiative that the Minister of Transport is presiding over. They are all mad hatters. I get so excited that I cannot even talk. On February 1, 1983, they talked about 375,000 jobs that this rail initiative would create in western Canada. That was from the former Minister of Transport.


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


Charles James Mayer: May I call it six o'clock, Mr. Speaker, since it is six o'clock?



PROCEEDINGS ON ADJOURNMENT MOTION

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

James Douglas Manly: Mr. Speaker, on February 10 I raised a question with the Minister of Public Works (Mr. LeBlanc) concerning RRAP, the Residential Rehabilitation Assistance Program. At the time I pointed out that this was a good program but limited to designated communities and neighbourhoods, which meant that many Canadian people were unable to take advantage of it.
Let me summarize some of the values of the RRAP program. First, it meets a real need for up-grading homes. It helps people, many of them on fixed incomes, to fix their places of residence. This is also available for rental units.
Second, it has an immediate and direct impact upon employment. The RRAP program is labour intensive.
Third, there are direct spin-offs to local communities. When people fix up their homes they are purchasing building materials and supplies at local stores. The RRAP program gets money to people who need to repair their homes and it creates

February 16, 1984
Adjournment Debate
jobs. However, as I said, the major problem with it is that it has never been adequately funded.
There are hundreds of communities and neighbourhoods across Canada that are left out of this program. There are three communities in my riding that have never been designated. Many of these people live close to rural areas where their neighbours have access to the RRAP program. They can see some of their neighbours across the road who have access to RRAP, only to find out when they apply that they are not eligible. Many of them live in older homes that are badly in need of renovation. Pensioners who live on fixed incomes see their neighbours across the road who are able to take advantage of the program. They make inquiries only to find that they are ineligible because their community has never been designated. The unfairness of this should disturb us all.
In the case of one municipality, I have been writing to the Minister and CMHC since 1980 in an attempt to get some action to have that community designated as being eligible for the RRAP program. In April, 1981, I was assured that the community of North Cowichan was on the priority list but the new funds had to be allocated. However, in December, 1982, during which time the economy of North Cowichan had declined considerably and the need was even greater, the Minister wrote that the communities of North Cowichan, Duncan and Ladysmith were not considered priority areas.
In the correspondence I have received from the Minister about this issue, he continuously refers to the shortage of funds and budgetary restraints as the reason why these areas have not been designated.
One of the many disappointments of yesterday's Budget was that it did not expand this program which is acknowledged on all sides of the House to be a good one. It is a good program that would put money into the hands of home owners who would, in turn, pass it on to trades people and local business. It is the kind of pump primer we on this side of the House have been saying our economy needs. However, the Minister and the Government answer that budgetary restraints make it impossible to expand this program.
In yesterday's Budget, we saw how some of these budgetary restraints are applied to some other sectors of the economy. For example, oil companies received a gift of an extra SI90 million from the suspension of the incremental oil revenue tax until June 1, 1985. We heard the Minister of Finance talk about doubling and tripling the tax exempt ceilings on RRSPs. This is a proposal that will directly benefit the well-to-do. As we all know, low and middle income people are unable to put aside the present $5,500 maximum tax exemption for an RRSP for a year, let alone the $10,000 limit for 1985 or the $15,000 limit for 1988. This increase in RRSP tax exemptions is a tax break for the well-do-do which will amount to $675 million in the next few years.
It is not as though we need to have more money put into savings. We have seen massive bail-outs for large corporations. In the last two weeks we have heard of a $150 million Liberal
slush fund. If the Government forgot about this business of using public money to curry favour with special constituencies and concentrated on getting Canadians the best value for their money, perhaps our economy would not be in such a mess.
Communities across Canada have been waiting for RRAP designation for years. They have been standing at the end of a long line which never seems to move. I call upon the Government to take some action to expand this program and to put money into it so that we can fix up our homes, create employment and get the economy moving again.


Mr. Jean-Claude Malepart (Parliamentary Secretary to Minister of Public Works):: Mr. Speaker, I should like to answer the questions raised by the Hon. Member for Cowi-chan-Malahat-The Islands (Mr. Manly) on February 10, 1984 concerning the Residential Rehabilitation Assistance Program, RRAP for short.
As the Hon. Member pointed out, RRAP has been an outstanding success. Since it was launched in 1974, some 262,000 housing units have been rehabilitated throughout Canada. In the past two years, the Federal Government has allocated $359 million to finance the program, including $309 million subject to repayment. Thanks to that assistance, approximately 89,000 units have been rehabilitated. Twice in 1983, additional funds were set aside for RRAP. For instance, the April budget earmarked $40 million for that program over a two-year period. An additional amount of $40 million was allocated in October so that the program would continue uninterrupted until the end of the year. Those measures are a clear indication of the Federal Government's commitment to maintain the quality of existing housing units. We will continue to support the program in 1984 because it has been widely accepted by Canadians and we want as many people as possible to benefit from it.
Mr. Speaker, I would like to point out that many regions in this country have already been designated as eligible for RRAP. Although the Federal Government acknowledges that the Program is not offered in all regions, except in the case of handicapped persons, one of the Program's objectives is to promote upgrading of communities and consequently, the Program concentrates on areas where housing conditions are poor. Eligibility for the Program has had to be restricted because of high demand and a limited budget.
As the Minister indicated in his answer in the House, it would be unfair to make the Program's application universal without increasing funding, since people who already applied some time ago might be deprived of assistance under the Program.
I appreciate the Hon. Member's interest in RRAP and his support for the Program. Federal housing programs are constantly being reassessed in order to improve them. RRAP is being reviewed, and special consideration is being given to the feasibility of extending eligibility to Canadians in all regions.
February 16, 1984


NATIONAL REVENUE-DENIAL OF DEDUCTION FOR LEG BRACES. (B) REQUEST FOR BROADER DEFINITION OF &quot;DISABILITY&quot;
William James Kempling: Mr. Speaker, on January 16 1 put a question to the Minister of National Revenue (Mr. Bussieres) regarding a constituent of mine, Mr. David Bourne, who, as I said in the question, has felt the sting of the Income Tax Act in that he is being denied a deduction for expenses related to the cost of leg braces and is being told by National Revenue officials that he should use a wheelchair. I have protested to the Minister about this. I have asked him to review the statute and the regulations to see whether or not some adjustment could be made. There was a case before the tax court of a Mr. Michael Overdyk who has a disability similar to that of Mr. Bourne. The Tax Review Board ruled in favour of Mr. Oberdyk. I asked the Minister to look into this to see whether this could be a precedent applied to other people in the same condition.
The difficulty is this. My constituent is a young man. He is able to get around with leg braces and crutches. He is able to take employment. In fact, he was working for BP Petroleum which eventually became PetroCan. With braces and crutches, he was able to walk and get around his office. He is mobile in a car. He can go for a walk, walk his dog and so forth. If he goes into a wheelchair, there is a psychological problem that I will explain in a moment. In a wheelchair, he would have great difficulty in securing employment and carrying out the normal functions of life.
Many small employers have their offices on the second floor of buildings and in many cases there is no elevator. The doorways may not be wide enough and the washrooms may not be able to accommodate a wheelchair. The man is mobile, but the psychological impact of going into a wheelchair would be disastrous.
I personally know this because I was crippled with polio. For four years as a boy I used braces and crutches. I was pulled around on a wagon by my friends. I know how these braces have to be made and adjusted every year, sometimes twice a year. I was growing. I know when I fell down how they would hurt. I was bruised and skinned from the damned things. I was one of the lucky ones who was able to recover.
I know what this man is going through. He desperately wants to maintain the use of these leg braces, which cost more than a wheelchair. Every year he has to have them adjusted and renewed. This man wants to retain the use of them as long as he possibly can. He is part of the whole like everybody else in the office. He can get around, get out in case of fire and drive his car. He is just like everyone else, except he is a little slower. If you put him in a wheelchair, he will feel restricted.
I ask the Minister to look into the matter on humanitarian grounds. I have written to him about it, raised the matter in the House and have spoken to him privately. I cannot understand why the department does not move.
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There is a similar case in Hamilton. Professor Nagler who teaches at Waterloo University has cerebral palsy. He can drive a car, dress himself and do many of the everyday functions, but he cannot hold a pen or pencil in his hand and he cannot operate a typewriter. In order to perform his function as a teacher in a university he has to hire a secretary. The university does not provide that service for him. In order to perform any teaching function he has to hire a secretary to whom he dictates his notes. In that way he carries out his function as a teacher. He is a useful, intelligent individual. I cannot understand why the Income Tax Act cannot be amended to accommodate these people.
In my supplementary question to the Minister I asked why the Government did not accept the recommendation made by the special committee of this House. The committee's resolution No. 46 would cover cases like David Bourne and Professor Nagler. If the Government accepted that recommendation these people would be accommodated and looked after. It is deplorable that the Government cannot move to look after these people, and let them be part of the mainstream of society.


Mr. Garnet M. Bloomfield (Parliamentary Secretary to Minister of National Revenue):: Mr. Speaker, before proceeding to give an answer, I have to remind the Hon. Member that I may not give any information with regard to the affairs of a particular taxpayer, including the taxpayer of which the original question made mention. I can deal with the generalities of the subject only. Also, although the Hon. Member in his original question referred to a denial of a deduction for leg braces, it is evident from his reference to a certain case that he really meant the denial of the disability deduction.
The law here is quite precise. The Hon. Member may not like the law and think it should read differently, but, if that is the case, his quarrel should not be with the department which is required to administer the law as it is. The law says, in the context that concerns us here, that the disability deduction is available to a person who is:
-throughout a 12-month period ending in the year, necessarily confined for a substantial period of time each day ... to a bed or wheel chair-
The law, therefore, defines disability in terms of confinement to a bed or wheel chair, and that is the law to be administered.
In the Overdyk case, which is public knowledge the Tax Review Board, now the Tax Court, dealt with a particular set of facts. I may say that other cases where the facts are the same would be dealt with by the department according to the decision in the Overdyk case.


NATIONAL REVENUE-REQUEST FOR INQUIRY INTO VANCOUVER OFFICE PRACTICES. (B) JOB DESCRIPTION REFERENCE TO WORK QUOTAS
Mr. Svend J. Robinson (Burnaby):: I am pleased to rise this evening to pursue a question I asked in this House earlier this

February 16, 1984
Adjournment Debate
week concerning the imposition of quotas on Revenue Canada taxation offices, particularly in the Vancouver regional office of Revenue Canada Taxation.
Since I first raised this issue of quotas and the deletion of reference to quotas in the Vancouver office early last week, I have been flooded with telephone calls and correspondence from constituents, in Burnaby in particular, but also from people throughout the mainland, expressing their concern about the effects this kind of imposition of quotas has on the manner in which Revenue Canada goes about its business.
I should emphasize that certainly no one objects to performance standards, that is, to standards that reasonably attempt to set out criteria that must be met by employees of Revenue Canada in pursuing their responsibilities. Similarly, no one takes objection to the suggestion that those taxpayers who are able to pay their tax and are deliberately avoiding payment of taxation should, in fact, be vigorously pursued. But in these difficult economic times surely it is not reasonable that Revenue Canada's authorities-the taxation authorities-should be cracking down, if you will, on the victims of this Government's economic policies; at a time when there are far too many people out of work and at a time when small businesses are really under the impact of this Government's economic policies. Surely Revenue Canada should not be operating under a system that forces staff to adhere to what amounts to quotas.
In making these comments I am not seeking to punish those who are the staff members of Revenue Canada. I think it is important the public be aware that these policies are policies which are developed by the Government, by senior staff members in national headquarters, by management, and in many instances the staff are simply administering these policies.
For example, it was not employees of the taxation component Department who made the decision to store all taxpayer files in Canada in seven central locations. It was not decided by employees of the Department that there should be quotas. Similarly, it was not employees who decided that taxpayer phone calls to Revenue Canada offices should be limited to three minutes each.
But for the director of the Vancouver office of Revenue Canada Taxation to deny the existence of quotas flies in the face of all of the evidence. In fact, senior staff in the Vancouver office of Revenue Canada Taxation went to such lengths to deny the evidence of quotas that they literally took a bottle of typewriter white-out fluid and blanked out all references to quotas on documents within the Vancouver office. There were a few documents they were not able to white-out. One was the actual job description for a PM3, Collections Unit Head.
That job description, which is in effect throughout Canada, states that one of the requirements of this particular individual is to:
-observing fluctuations in workload and production and establishing work quotas for each function-
How on earth can the Minister continue to deny the existence of quotas in Revenue Canada taxation offices when the very job description for a unit head in a Revenue Canada taxation
office clearly states that one of the obligations is to ensure that these quotas are met. We are getting some sort of doublethink or doublespeak. When the Minister continues to deny the existence of these quotas. We are not talking about the auditing function, we are talking about collections.
The implications of these quotas for taxpayers are clear. Far too many taxpayers are being unduly harassed. Their wages are being garnisheed in order that a staff member in question might meet a quota. Liens are being slapped on property, and telephone calls are being cut short. In essence, the high standard of service, which I am sure employees would like to be in a position to deliver to taxpayers, is suffering.
I should like to state very clearly that I believe that those of my constituents in Burnaby, who in many instances have been unduly harassed as a result of the policy of imposition of quotas, demand first of all a recognition of the existence of these quotas and, second and more important, an end to quotas.
Surely employees of Revenue Canada can go about their responsibilities in a manner that does not involve meeting a specific number of accounts per given period of time. Surely it is unacceptable that senior staff of the Vancouver office of Taxation Canada should deliberately set out to destroy evidence of quotas. That kind of conduct is unacceptable in the Public Service. The Regional Director of Taxation Canada must accept the responsibility for that totally inappropriate conduct.
There must be a full, independent inquiry into what led to his initial denial and subsequent cover-up of the existence of these quotas.


Garnet McCallum Bloomfield: Mr. Speaker, the Minister of National Revenue (Mr. Bussieres) has answeered again and again in this House the allegations about auditors' quotas. He has done so with what I can only term exemplary patience. I will, therefore, not bother to cover the same ground.
The Hon. Member is talking about forms used in one office of the Department which refer to the expected or actual production of collection officers, not auditors. The Minister has never said that production standards are not set in the Department. In fact, a primary aim of the Department is to make the best, most efficient use of all its resources, material and human. It has a system of allocating these resources between functions and between offices in a way that is intended to optimize productivity. Expected production in each type of operation is highly important in this allocation process.
The Member should be aware that even the Auditor General has approved the approach of setting performance indicators for employees in the Government and that this is just a good management practice.
The Hon. Member has come into possession, by whatever means, of an internal operating document of the district office concerned. Through some local confusion of a junior supervi-
February 16, 1984

sor that document was changed. The Hon. Member seems to find something sinister here that escapes me. Surely anyone wishing to "cover up" something, with any improper intent- the Hon. Member used the words "cover up the evidence" in his original question-would not be so naive and literal as to use one of the patented white liquid correction fluids. To be very simpleminded about it, as the Hon. Member may not know but should, the fluid leaves a white smear that makes the
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correction glaringly obvious. There are many ways to change a record when you have something to hide, but this must be the worst of all ways.


The Acting Speaker (Mr. Guilbault):: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 11 a.m.
At 6.25 p.m. the House adjourned, without question put, pursuant to Standing Order.

Friday, February 17, 1984