1984-03-30

STATEMENTS PURSUANT TO S.O. 21


Mr. Stan Darling (Parry Sound-Muskoka):: Mr. Speaker, I want to stress the importance of the domino effect of tourist dollars, and 1 wish to appeal to the House for support in bolstering the ailing tourist industry.
The dismal economic forecast is likely to have a detrimental effect on tourism this year. A large percentage of the population in my riding depends on tourism to keep bread on their tables. I believe it is crucial to recirculate tax dollars back into the tourism industry to fight unemployment through job creation.
rence and Gaspe regions. With this contribution, which will be in the form of professional and technical, as well as financial assistance, the Canadian Government has shown its awareness of the fact that forests are a major natural resource and a necessary source of income for our region's producers and workers in the forestry sector. Under this program, farmers who also own private woodlots will be able to go to the Environment Canada office in Rimouski and receive any services they need for woodlot improvement.
On my own behalf and on behalf of owners of private woodlots in the Lower St. Lawrence and Gaspe regions, I want to thank the Government for doing its share to develop the forestry industry in our region, an industry that has suffered severe damage in recent years as a result of the spruce budworm epidemic.
* *
*


AIR SAFETY
[Stage Direction]
The injection of funds into tourism invariably results in a highly desirable domino effect whereby all sectors of society may benefit. A strong tourist area is usually accompanied by healthy cottage and tertiary industries which may be unrelated to tourism.
We must regard tourism as an investment in the future of this country. It is an underdeveloped resource at this point and, so long as this is the case, Canadians will continue to miss the boat.
Obviously, escalation of the tourist industry will create widespread employment and revenue. We already have the natural resources. What we need most is a Government capable of capitalizing on what God has given to all of us.

Mrs. Eva Cote (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, I may remind the House that last Friday, in Rimouski and New Richmond, the federal Minister of the Environment (Mr. Caccia) announced a $19 million forestry program. The purpose of this program is reforestation and improvement of private woodlots in the Lower St. Law-


Mr. Geoff Scott (Hamilton-Wentworth):: Mr. Speaker, I rise to express a purely personal opinion on a matter which has concerned me for some time, namely, smoking on commercial aircraft. During several recent flights I have discussed at length, with air crews of both Air Canada and CP Air, the hazards they face from smoking.
The staggered smoking and non smoking sections on the average commercial airliner are a joke. Most aircraft ventilation systems blow sidestream smoke all over the place and make life miserable for those in border line rows near the smoking sections.
Of far greater concern to flight attendants are the people who have a few drinks, fall asleep, and drop lighted cigarettes on scattered newspapers or on the upholstery. Such incidents have the potential of turning the most sophisticated airliner into a flying inferno, 35,000 feet up. Ground fires on aircraft, as we have seen, can be just as devastating.
Smoking is a luxury. On commercial airliners it is a very dangerous luxury.
While we can do nothing about long haul international flights, we can protect passengers and flight attendants from the annoyance and dangers of smoking on domestic airlines.
Even as a pipe smoker, my own personal desire would be to ban all smoking on domestic commercial airliners in Canada. Since that proposition raises all kinds of questions, such as the effectiveness of smoke detectors in washrooms, I want to see

March 30, 1984
this issue ventilated through a full public hearing by the Canadian Transport Commission.
Surely lives are more important than the luxury of lighting up on Canadian airlines.


LABOUR RELATIONS
Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, the Davis-Bacon Act in the United States of America establishes a federal fair wage guideline for all federal Government construction projects. In Canada we also have a federal fair wage guideline that accompanies most federal Government contracts. There is some question whether these federal fair wage guidelines are being followed by certain contractors and their sub-contractors on major federal construction projects. For example, with the federal Government's armoury construction contract in Kamloops there have been suggestions that perhaps the federal fair wage guidelines are not being followed.
Since many of these federal contracts have been awarded to non-union contractors, it is very important that Labour Canada ensures that these guidelines are being adhered to. These guidelines are the only real protection that workers on these sites have to ensure that they receive a fair and equitable wage. Therefore I urge the Government to take whatever action is necessary to monitor federal projects in an effort to ensure contract compliance with federal fair wage guidelines.


NATIONAL REVENUE
Mr. John McDermid (Brampton-Georgetown):: Mr. Speaker, the Progressive Conservative Task Force on Revenue Canada has completed its cross-Canada hearings. People from all walks of life made representation to the members of the Task Force, most capably chaired by my colleague, the Hon. Member for Wellington-Dufferin-Simcoe (Mr. Beatty), and all Canadians owe this Task Force a debt of gratitude.
Constituents of mine, Lou and Doris Kannon, bravely appeared before the Task Force and told their story of the tax Department presently threatening them with seizure of their property if they missed another payment of S700 a month. In 1980, Lou Kannon was in a coma after a serious fall, and the tax Department demanded $4,300 in taxes. The family contacted me early in 1981 and arrangements were made to pay $400 a month, plus a cash payment of $1,000 to Revenue Canada.
Because of health problems, a payment was missed. Then Revenue Canada demanded $700 a month payments. While Mr. Kannon is just now back at work, it was impossible to
meet last month's payment on time. Then there was the threat of seizing their property, the last thing they have besides each other. Lo and behold, after their appearance before the Task Force, officials of Revenue Canada are now willing to sit down and negotiate a realistic repayment schedule.
The Progressive Conservative Task Force on Revenue Canada made the point loud and clear that this harassing must stop, and humane and fair treatment must be the watchword of Revenue Canada. Could this action mean they are starting to listen? For the sake of all Canadians, I hope so.


INDIAN AFFAIRS
Mr. Andre Maltais (Manicouagan):: On several occasions, Mr. Speaker, I have risen in the House to censure the Province of Newfoundland for denying native people in the Labrador region of Quebec the right to go fishing, trapping and hunting in the Labrador region of Newfoundland. Time and again the Minister of Indian Affairs and Northern Development has made representations to the Newfoundland Government to make sure that the rights of native people would be respected in Newfoundland's Labrador region.
Bearing in mind that negotiations have repeatedly ended in a stalemate, very soon I will join the Quebec Montagnais and Naskapis of the Labrador region and march on Newfoundland territory to uphold their right to trap and fish in that province's Labrador territory.
Mr. Speaker, I would suggest that a show of solidarity is needed so that at long last the Indians will be free to live according to their traditions in those northern reaches of Quebec and Newfoundland. Since Newfoundland has so far turned a deaf ear, as Member for Manicouagan representing those people, I will march right along with them on Newfoundland territory to show peacefully that Indians do have rights which must be respected throughout Canada and that the Government of Newfoundland is ill advised to prevent them from living in accordance with Amerindian customs.


MEDICAL CARE
Mr. Dave Nickerson (Western Arctic):: Mr. Speaker, over wide areas of Canada's North, medical services in the settlements are provided by nurses in the employ of the Department of National Health and Welfare. The dedication and hard work of these nurses are to be applauded as they have been responsible for upgrading community health standards for many years. Since these nurses work alone without direct
March 30, 1984

supervision from doctors, the nearest of whom may be located hundreds of miles distant, it is imperative that they be highly trained, not only in southern nursing practices techniques but also in fields such as diagnosis, drug prescription, X-ray interpretation, midwifery, and how to cope with emergencies of many kinds.
The nurse-practitioner program at the University of Alberta provided training in these needed skills, and nurses from remote areas learned much of great value to them and, as a result, saved many lives and reduced considerable suffering. It therefore comes as complete shock to find that Health and Welfare is discontinuing its support of the nurse-practitioner program. While the Liberal Government has millions of dollars to spend on imposing official bilingualism in the North, how, Sir, can it be so callous as to cut out the training programs for nurses who serve in an area where the infant mortality rate, for instance, is nearly double the national average?


Mr. Speaker:: 1 must interrupt the Hon. Member. His time has expired.



ORAL QUESTION PERIOD


Hon. Perrin Beatty (Wellington-Dufferin-Simcoe):: Mr. Speaker, yesterday we saw the disgraceful and cowardly spectacle of the Government sacking the Deputy Minister of National Revenue in the hope of distracting attention from the complete abdication of responsibility of the Minister. In view of the fact that the Minister of National Revenue refused pointedly on seven separate occasions in one day during Question Period in the House of Commons to back his Deputy Minister, will he deal honestly with Members of the House of Commons now and tell us in a straightforward way what was his recommendation to the Prime Minister? Did he recommend the transfer of his Deputy Minister?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker-


Some Hon. Members:: Oh, oh!


Pierre Elliott Trudeau: Ho, ho, ho, ho! Ho, ho, ho, ho! Where are they this morning?


Some Hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Mr. Speaker, if the Hon. Member were sincere in his desire to stand up for the Deputy Minister and to show his respect for him, he would not have said that we have
Oral Questions
sacked him. He knows that this is a way of showing his contempt for that man, and that is not our position.


Henry Perrin Beatty: Mr. Speaker, on the strength of the Minister's performance to date, I can understand why the Prime Minister does not want to allow him to answer questions.


MINISTERIAL RESPONSIBILITY
Henry Perrin Beatty: Mr. Speaker, I would like to put my supplementary question to the Minister. We will see whether or not the Minister of National Revenue will attempt to hide and refuse to give answers to this question. In view of the repeated revelations over the course of the past several months that ordinary Canadians have suffered because of the Minister's gross neglect of his responsibilities, I would like to ask him what personal responsibility he feels that he carries as Minister for the conduct and activities of the officials of his Department. What personal responsibility does he have as Minister for the people whose rights have been taken away?


Hon. Pierre Bussieres (Minister of National Revenue):: Mr. Speaker, I wish the Hon. Member would revise his notion of ministerial responsibility. I can say that I take every responsibility with respect to my Department that is in line with those ministerial responsibilities.


Henry Perrin Beatty: Mr. Speaker, the Minister would have us believe that he has been held hostage by his officials for the past year and a half as if he were a ministerial Patty Hearst. If the Minister had integrity, he would have resigned if he could not run his Department.


REQUEST FOR MINISTER'S RESIGNATION
Henry Perrin Beatty: Mr. Speaker, why is the Minister not prepared to do the honourable thing? Instead of trying to place the blame for his abdication of responsibility on his Deputy Minister, why does he not tender his resignation now?


Some Hon. Members:: Hear, hear!


Pierre Bussières: Mr. Speaker, I am aware that yesterday, the Hon. Member was busy elsewhere. I suggest that he read the answers given by the Prime Minister, and I wish to repeat what I have said to him previously, that I intend to continue to perform my duties to the best of my ability, bearing in mind the need for fair and just administration of our Income Tax Act and our tax system in general.

March 30, 1984
Oral Questions


Mr. Bosley:: Mr. Speaker, if the Minister spent half as much time looking after his Department as he does looking after patronage in Quebec City, we would be better off.


Some Hon. Members:: Hear, hear!


Some Hon. Members:: Oh, oh!


DEPARTMENT'S ADVERTISING CAMPAIGN
John William Bosley: Mr. Speaker, my question is directed to the Minister of National Revenue. Members opposite want to laugh about the hundreds of Canadians across the country who are in desperate straits because of the activities of that Department. The Minister knows that hundreds of Canadians are stuck in an assessment appeal process whereby they are having their appeals heard by the same people who assessed them. Yet this Minister has $300,000 per week to spend on advertising to puff his image. If the Minister has the money, why does he not fix the system before he runs ads?


Pierre Bussières: Mr. Speaker, here is another glaring example of the way Opposition Members tend to ignore the Canadian taxpayer.
The advertisements we put in the newspapers during the past few days are a response to the taxpayers' need for simple, straightforward information on the tax returns they must file. At this time of the year, when people have to file their tax returns, we want to make every effort to inform them quickly, simply and effectively, to help them comply with the various provisions of the Income Tax Act. That is our objective, and not the twisted attitude the Hon. Member is reading into these advertisements.


John William Bosley: Mr. Speaker, what the ads mean is that the guide is incomprehensible.


INCOME TAX GUIDES
John William Bosley: Mr. Speaker, the Minister is running a bunch of ads but he is not bothering to run an ad to tell Canadians that what the guide says about Canada Savings Bond interest is wrong. He is not bothering to tell Canadians that they have the right to treat some of that interest as capital gains because of a court case he lost.
Let me ask the Minister this question in general about the guide, about the ads and about what has happened. Either the Minister knows, as we have discovered, that the system and the way the Department is treating taxpayers is in a shambles, in which case he ought to resign, or he is going to have to
explain to the House how it is that after two years he does not know it, in which case he ought to resign.
[ Translation]


Pierre Bussières: Mr. Speaker, the Hon. Member is showing his ignorance on two accounts. First of all, he is showing his abysmal ignorance with regard to the Department of National Revenue, because it is a Department that functions well. Second, the Hon. Member shows his level of comprehension is lower than that of the average Canadian taxpayer, because according to tests of our ads, the vast majority of Canadians think they are straightforward, easy to understand and useful.
Since the Hon. Member failed to understand the ads, this means he scores well below the intellect of the average Canadian taxpayer.


INCOME TAX ACT
Nelson Andrew Riis: Mr. Speaker, I should like to pursue this line of questioning but to move away from the collection of taxes to the tax system itself. To a growing number of Canadians it seems to be becoming increasingly inequitable. In 1983 major corporations in Canada had deferred taxes of more than $22 billion, which was roughly equal to the 1983 deficit. What do these taxes mean? An executive of Consolidated Bathurst is quoted as saying: "If you ask me when I expect to pay, I'll tell you, never." This company currently owes the Government $218 million in deferred taxes and it received a $3.6 million tax credit for 1982.
What benefit do the people of Canada receive from allowing corporations to accumulate deferred taxes, particularly when they are of the opinion that they will never repay them?


Hon. Marc Lalonde (Minister of Finance):: people are entitled to claim depreciation and expenditures against profits.
If the company is, indeed, spending at least as much in terms of expansion and depreciation which it can claim, as it makes profits, obviously it will not be paying taxes. However, eventually, unless it keeps on expanding and adding constantly to its plant, it will be called upon to pay taxes. It is the same for any individual who can claim losses in a particular year. If he keeps on making money he will pay taxes later on. This is the situation which applies both in the personal income tax area and in the corporate income tax area.
What my friend has to remember is that these tax incentives are built in so as to expand plants in Canada, expand investment and create jobs for Canadians, which I am sure my friend would also want to see happening more and more.


Nelson Andrew Riis: Mr. Speaker, the question which was posed to that executive was not if he planned to pay taxes in terms of the corporation, regarding deferred taxes, but when. His response was, I believe, very typical of many senior executives today, Mr. Speaker. "Never" does he plan to pay those particular taxes. It is a real shell game, which goes on and on.


TAXES PAID BY SMALL BUSINESSES
Nelson Andrew Riis: My second question directed to the Minister of Finance is this. According to the Canadian Federation of Independent Business most of the job-creation, as we all know, occurs in the small business sector which pays an average tax rate of 24 per cent. However, the Minister of Finance will know that a few years back Shell Canada paid no income tax, Trans Canada Pipe Lines paid a tax rate of 7 per cent, Husky Oil paid a tax rate of 5 per cent, and the Royal Bank of Canada and the Bank of Montreal paid no taxes in 1982.
How long does the Minister of Finance plan to stand idly by, continually asking the small business sector to maintain its particular share of taxes when, because of his Government's tax incentives or, as some people like to call them, tax loopholes, major corporations are making considerable profits and paying no income tax? How long is the Minister prepared to stand back and let this system continue as it is?


Marc Lalonde: First of all, Mr. Speaker, I believe my friend needs help in terms of logic. You cannot compare an average when you look at the small-business sector and say the average is such a percentage of taxes, then take individual large corporations and say this one and that one has not paid taxes. I could make, I suppose, a list of hundreds, probably thousands, of small businesses which also pay no taxes.
What my friend has to look at is the effective tax rate which is being paid by large and small businesses. If my friend looks at the figures he will find that, indeed, when one looks at the effective tax rate being paid by small and large businesses in
Oral Questions
this country, as far as the tax rate itself provided by the law is concerned, small businesses pay proportionately less in terms of the effective tax rate than the larger firms.
I have announced a number of measures in the Budgets of last year and this year which are aimed specifically at giving greater incentives and support to small businesses. I have made it a priority of my responsibility as Minister of Finance to come to the support of the small and medium-size business sectors because, indeed, I believe they are the main creators of jobs in this country.
Again, I want to refer only to the last Budget in which I announced a measure which would cut by three-quarters the income tax legislation dealing with small business, and would generate about $150 million of tax savings to growing small and medium-sized businesses.


Nelson Andrew Riis: Mr. Speaker, the Minister of Finance will know that if you take the average of all the corporate taxes paid, the effective tax rate last year came in at 23 per cent. That is the average corporate tax rate in this country. I suspect that amply demonstrates that the corporate sector is not paying its fair share of taxes.


SHARE OF TAXES PAID BY CORPORATIONS AND INDIVIDUALS
Nelson Andrew Riis: Mr. Speaker, my third question refers directly to this point. Back in 1950 the corporate sector and the personal sector paid on a 50-50 basis. All income tax collected by the federal Government was on a 50-50 basis. Since 1950, Mr. Speaker, 75 per cent of the tax burden imposed by the federal Government falls directly on the individual taxpayers of Canada, on the personal income tax side of the ledger. I ask the Minister how much longer can we expect the Government to have in place a tax system which moves more and more of the tax burden onto the backs of individual taxpayers in order to allow more and more corporate bribes?


Marc Lalonde: Mr. Speaker, my friend will have to reflect a little bit on the nature of corporations when he says they are paying less taxes. Corporations are legal entities, but in the end they do not have an individual physical existence. Behind corporations you have shareholders and employees, et cetera. My friend refers to the percentage of taxes in the 1950s. I would like to know what his Party's objective would be for an ideal division of the tax load between the corporate sector and the personal sector.
I invite him to reflect on how many corporations would establish and carry on businesses in this country if you ended up with a tax situation where they would be paying, let us say, twice as much as they would be paying in the U.S. or Europe. You have to watch constantly the evolution of the situation in industrialized countries and make sure your tax burden on corporations does not get seriously out of line with what is happening amongst your competitors. This is for the very obvious reason that the corporations and the jobs will move to

March 30, 1984
Oral Questions
those countries; they will not come here. It seems to me that it is quite obvious that this would be the reasonable and normal conclusion that any sensible Canadian would reach.


NATIONAL REVENUE
Mr. Tom McMillan (Hillsborough):: Mr. Speaker, my question is directed to the Minister of National Revenue. The P.E.I. Minister of Fisheries told the PC task force on Revenue Canada in Charlottetown that Revenue Canada officials, aided by the RCMP, descended upon fishing families there and used "criminal-interrogation techniques" in their audits of law-abiding citizens. That Minister said that "Revenue Canada has terrorized communities, demoralizing our people and creating fear and mistrust among them."
Knowing as he must that he, the Minister of Revenue, is ultimately responsible for such wrongdoing against decent, law-abiding people, how can he in good conscience refuse to tender his resignation so that confidence can be restored in the tax system and in Revenue Canada, not only in Prince Edward Island, but right across Canada?
[Translation)


Pierre Bussières: Mr. Speaker, I wish the Hon. Member would show more common sense. I am convinced that that statement is a gross exaggeration of the facts. That is a far cry from Revenue Canada's internal policy with respect to Canadian taxpayers.


Thomas Michael McMillan: The Minister has just called the Minister of Fisheries of Prince Edward Island a liar.


FUNCTIONING OF DEPARTMENT-MINISTER'S POSITION
Thomas Michael McMillan: Mr. Speaker, for months the Minister of Revenue has proven himself administratively incompetent. He has misled Parliament and, through Parliament, the people of Canada, with respect to auditors' quotas in his Department. By all accounts his Department is completely out of control. Every taxpayer in the country has lost confidence in his ability to be fair. What would it take-a major tax revolt-for the Minister to tender his resignation?


Pierre Bussières: Mr. Speaker, the Hon. Member claims that the Department is completely out of control. I must point out to him that we are now processing over 17 million tax returns and that, up until a few days ago, we already had refunded in excess of $500 million to Canadian taxpayers. We are now more than a month ahead of last year's pace, Mr. Speaker, and if that is not a sure sign of the Department's efficiency and sound management, I really do not know what it is.


TAX STATUS OF NATIONAL CAPITAL REGION CIVIL LIBERTIES ASSOCIATION
Mr. Walter McLean (Waterloo):: Mr. Speaker, my question is to the same Minister regarding his control of his Department. In testimony yesterday before the PC task force on Revenue Canada, officers of the National Capital Region Civil Liberties Association reported that early in 1982 the Association received almost $10,000 in donations to assist a Canadian citizen, based on the compelling nature of his case.
In the fall of 1982, President Don Whiteside made a routine inquiry with the Minister's officials about filing on behalf of the Association and was told, to his amazement, that their charitable tax status had been cancelled a couple of years previously. Will the Minister explain why he permitted this attack on this Association's important work? Why were they not given notice that their status was being revoked, and why did they not have time to appeal?


Pierre Bussières: First of all, Mr. Speaker, I should like to remind the Hon. Member that it is very difficult for me to comment on a particular case, for the simple reason that I am prevented from doing so under the provisions of the act. Secondly, had he had the courtesy of bringing that case to my attention, I would have examined the facts.
However, perhaps I should tell him that when an organization fails to abide by its contract with society-charitable organizations must indeed operate within strict parameters if we want the system to be administered in all fairness-it receives a warning to that effect.
Supposing that a mistake might have been made in this case, I would urge the Hon. Member not to draw a general conclusion. Surely he knows enough about the administration of that division to refrain from jumping to such a conclusion.


Walter Franklin McLean: Mr. Speaker, it is difficult for Canadian voluntary agencies to have confidence in the sense of fair play of the Minister and his officials when there is not even an element of courtesy when a decision is being made. In answer to the Minister, I have raised in recent weeks the case of the B.C. Human Rights Association, and that of ['Association des services de rehabilitation sociale du Quebec, which have also been treated in an arbitrary manner.


ADVOCACY ACTIVITIES OF CHARITABLE ORGANIZATIONS
Walter Franklin McLean: Mr. Speaker, will the minister confirm the report that the Department has authorized the engagement of five additional lawyers to investigate advocacy activities of Canadian charities?
March 30, 1984


Pierre Bussières: Mr. Speaker, the Hon. Member is making completely unfounded and quite unacceptable allegations. It is contrary to Department practice, and he knows it, to make arbitrary decisions about the tax situation of any taxpayer. The same thing goes for charitable organizations. I would ask him to act more responsibly and, before making judgments, to wonder if in some instances there might not be some facts which justify the Department taking action against charitable organizations which run afoul of the law.
If the questions put by the Hon. Member are meant as an open invitation to charitable organizations to break the law, Mr. Speaker, he is being irresponsible.


WESTERN GRAIN TRANSPORTATION ACT
Mr. Stan J. Hovdebo (Prince Albert):: Mr. Speaker, my question is directed to the Minister of Transport. During the Crow debate the Government made various promises, one of which was that the processing industry in western Canada would be greatly supported by the change in the Crow rate. Right now the crushing industry in western Canada is in trouble, part of which is due to the minimum compensatory freight rates to eastern Canada. Can the Minister tell us his position on these compensatory rates? If it is a position of protection for the farmers and industry in western Canada, will he take that position to the Cabinet and get a favourable decision for western farmers?


Hon. Lloyd Axworthy (Minister of Transport):: Mr. Speaker, in the Hon. Member's question he indicated that the compensatory rates were a problem. I am not sure I understand that, because in fact the rates are still in existence. They still provide a subsidized rate for the movement of canola products into eastern Canada. If he is saying that removal of those rates might present a problem, I tend to agree with him. We are presently working to find a solution for that.
I would like to remind the Hon. Member that, during the examination of the grain transportation Bill in committee, it was indicated and written into the Bill that those products would now be eligible for the new Crow rate. They are able to provide for a new rate which will allow export, particularly through the port of Vancouver, and therefore will open up markets. My colleague, the Minister of Agriculture, and 1 are presently working on a proposal to ensure that there still is assistance. We have a very strong commitment to the maintenance of the canola industry. The Hon. Member should rethink his proposition that the present MCRs are a problem. They are not a problem, and in fact are a great assistance.
Oral Questions


Stanley J. Hovdebo: Mr. Speaker, I recognize the error I made in the present expenditure.


POSITION OF MINISTER OF AGRICULTURE
Stanley J. Hovdebo: Mr. Speaker, my supplementary question is for the Minister of Agriculture. In a speech he made last week in Toronto the Minister of Agriculture was less than direct about his position on MCRs in the future.


John Horton McDermid: "Less than direct". That was kind.


Stanley J. Hovdebo: In the past the Minister has waffled on this matter. Again I point out that the passing of Bill C-155 was based in part on protection and increase of processing in western Canada. Would the Minister of Agriculture give us an indication of where he stands on this matter and whether he is going to take it to the Cabinet in support of western farmers and western processors?


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker, the Hon. Member knows fully well that the one concern which both the Minister of Transport and I have, is to make sure that the industry stays healthy, whether east or west, and to work out a program for that. The Minister of Transport told the Hon. Member pretty straightforwardly what we are doing. We are working together on a program at the present time.


VETERANS AFFAIRS
Hon. Bud Cullen (Sarnia-Lambton):: Mr. Speaker, my question is for the Minister of Veterans Affairs. This past week Mr. Cliff Chadderton, who, I think has some 30 years experience representing veterans, made his 30th appearance before the Veterans Affairs Committee. Among the areas that he expressed concern about was the Pension Review Board. Appeals are now building up. We had backlogs with the Entitlement Board, and it now looks as though we have backlogs with the Pension Review Board. What action is the Minister taking to head this off? Is he expanding the size of the Board or training people? Would he also comment upon whether counsel has been found for this particular Board?


Hon. W. Bennett Campbell (Minister of Veterans Affairs):: Mr. Speaker, we looked at the issue of the backlog before the Pension Commission some two and one-half years ago and took administrative measures to speed up the processing of claims to clear up the backlog.
It was obvious to me and to the members of the Commission that, as the backlog was cleared up at the first level, there would be implications for the Entitlement Board and the Pension Review Board area. We have now reached the point where the increased number of entitlement boards and increased number of cases before the Pension Review Board

March 30, 1984
Oral Questions
are benefiting from the clearing up of the backlog at the first level. We are examining ways and means by which we can accelerate that process to ensure that the backlog and increased number of cases at that level are dealt with expeditiously.
In terms of the Member's second question on legal counsel to the Pension Review Board, that is presently under consideration by the Board and we anticipate we will have a replacement very shortly.


NATIONAL REVENUE
Hon. Sinclair Stevens (York-Peel):: Mr. Speaker, my question is for the Minister of National Revenue. He has surprisingly taken credit this morning for returning to taxpayers the amounts they have been over-assessed. He says that is to the credit of his Department.


John Horton McDermid: He is giving them back their own money.


Sinclair McKnight Stevens: Would the Minister tell the House whether he has any twinge of conscience for what he has been doing to my constituent, Tom Murphy, who was unfairly assessed $200,000, and appealed to the Tax Review Board? Mr. Frost of the Tax Review Board held that this was a case showing that on occasions taxpayers are victimized. He went on to say that this taxpayer has lost his business, his money, and his credit, because of most improper conduct on the part of the Special Investigative Branch of National Revenue in Ottawa. Why have the Department and the Minister persisted for eight years in refusing to give this constituent of mine proper compensation?


Pierre Bussières: Mr. Speaker, considering his many years of experience in the House, the Hon. Member should know that I could not comment on individual tax returns.
Because he behaves often as a newcomer, I am not at all surprised by his question. All I can say is that my Department is trying to run a system which is both fair and equitable towards all Canadian taxpayers.


Mr. Speaker:: The Hon. Member for York-Peel may have a supplementary question, bearing in mind the problem on individual tax returns.


John Horton McDermid: This is a little different from a tax return.


Sinclair McKnight Stevens: Mr. Speaker, as you have undoubtedly noted, the Minister acknowledges he knows this case.


John Horton McDermid: He knows this case full well.


MINISTER'S POSITION
Sinclair McKnight Stevens: Mr. Speaker, my supplementary question is also for the Minister of National Revenue. Can you explain to the House why you have refused to tell your solicitors-


Marc Lalonde: Order. Order.


Sinclair McKnight Stevens: -to accommodate this man's sad plight and give him fair compensation?


Marc Lalonde: You cannot ask questions like that. [Translation]


Pierre Bussières: Mr. Speaker, I can only repeat what I have just said. In spite of his pestering, I refuse to comment on individual tax returns.


DETENTION OF TAXPAYER
Mr. Arnold Malone (Crowfoot):: Mr. Speaker, in response to the Member for Wellington-Dufferin-Simcoe just a few moments ago the Minister of National Revenue said that he tries to run a fair and equitable system. I would like to ask the Minister about Christopher Collins who got a speeding ticket near Perth, Ontario, while en route to Chicago on March 2. An allegation showed up on the police computer that he had not paid tax in 1978. He was detained and jailed. He was threatened with 30 days in jail by the RCMP from Ottawa. He paid the RCMP $345 in cash in order to continue his trip. Upon his return he found a T4-62 slip dated June 25, 1981, indicating no tax payable and no tax refundable. Will the Minister tell us-


Marc Lalonde: You cannot ask questions like this in the House. Order. Order.


Mr. Speaker:: Order. I must bring to the attention of the Hon. Member that a very specific question such as he has posed should be on the Order Paper. If he wants to ask a general question regarding relationships between one tax authority and other collection agencies in the country, that is permissible. However, if he is asking about an individual case in the level of detail he has posed, it should be on the Order Paper.


Arnold John Malone: A supplementary question, Mr. Speaker.


Marc Lalonde: You cannot have a supplementary question on an illegal question.


Arnold John Malone: It is not illegal. The question is about fairness, equity-whether the Minister can run that kind of Department, and whether the RCMP are the collection agency.
Would this incompetent Minister try to tell us whether he accepts that as fair and equitable, whether that is the kind of system he runs, and whether he thinks that is in concurrence
March 30, 1984

with the honourable nature of Parliament that the people of this country expect?


Pierre Bussières: Mr. Speaker, the Hon. Member has chosen to ignore your admonition and to make wild allegations.
He should know that it is not the RCMP but the Department of National Revenu which is responsible for collecting back taxes.


Mr. Speaker:: The Hon. Member for Winnipeg-Birds Hill.


Arnold John Malone: Mr. Speaker, I have a supplementary question.


Mr. Speaker:: The Hon. Member has been permitted to ask a question. The Minister has replied. The Hon. Member for Winnipeg-Birds Hill.


Arnold John Malone: A supplementary question, Mr. Speaker.


Mr. Speaker:: The Hon. Member for Winnipeg-Birds Hill.


CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS COMMISSION LOSS OF QUEBEC CITY RADIO STATION'S LICENCE
Mr. Bill Blaikie (Winnipeg-Birds Hill):: Mr. Speaker, I have a question for the Minister of Communications who is responsible for the CRTC.


Arnold John Malone: The Minister of Revenue has no honour at all. He should resign.


Some Hon. Members:: Oh, oh!


William Alexander (Bill) Blaikie: I am just waiting for the Hon. Member for Crowfoot to calm down, Mr. Speaker.
The Minister will be aware of the FM station in Quebec City, CJMF that will lose its licence to broadcast at midnight tonight, due to the CRTC ruling that CJMF has contravened its promise of performance. CJMF in Quebec City has an audience of over 300,000 people. They have collected names on a petition, to the tune of 142,000.

Does the Minister intend to take action to allow that station to broadcast until the case is heard in the Supreme Court?


Hon. Francis Fox (Minister of Communications):: Mr. Speaker, I know exactly what kind of suggestion the Hon. Member would like to make. If he referred to the Broadcasting Act he would see what are the cabinet's powers as far as the decisions of the CRTC are concerned. He would see for
Oral Questions
example that the cabinet cannot interfere in the delivery or renewal of a permit or its amendment.
Parliament has not given the cabinet the power to intervene when the renewal of a permit is denied. Therefore, the government cannot take any action at the moment considering the quasi-judicial nature of an organization such as the CRTC.


COMMISSION'S DECISIONS
William Alexander (Bill) Blaikie: Mr. Speaker, may I ask the Minister why it is that the CRTC gets tough on a music station, when it does not get tough on pornography, or Canadian content regulations on TV? There are plenty of things on which we would like to see the CRTC get tough but it does not do anything. Here we have this one instance where we have 142,000 people indicating that they would like-


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


Mr.   de Jong@: What is wrong with rock and roll?


Some Hon. Members:: Oh, oh!


William Alexander (Bill) Blaikie: Could the Minister tell the House why it is that the CRTC is under instructions to be firm in this case and not firm in so many other cases when firmness is warranted much more?


Francis Fox: Mr. Speaker, I am delighted to see the Hon. Member's new found interest in communications matters. I think it is the first time he has risen in his seat in the House to raise such a question. The CRTC, to answer his question, has nothing against rock radio stations. There are a number of rock radio stations in the country at the moment. The CRTC feels, however, that when someone applies for a licence, in fairness to the other people who apply for licences, the licensee must live up to his promise of performance. In this case, according to the CRTC, the individual licensee did not live up to his promise of performance, thereby being unfair to all other applicants who made applications for that licence.
There are a number of rock licences that are available in the country at the moment. There is nothing to prevent the present licensee from reapplying for a licence, and this time indicating the type of radio station he is going to operate.
I am sure that if the CRTC modified licences in the way the Hon. Member is justifying, then he himself would be on his feet saying that the CRTC was being unfair to other applicants across the country.

March 30, 1984
Oral Questions NATIONAL REVENUE


DEPARTMENT'S TREATMENT OF ARTISTS
Geoffrey Douglas Scott: Mr. Speaker, my question is for the Minister of National Revenue. It is very general, but the situation is certainly disturbing. Why is Revenue Canada continuing to harass and reassess Canada's artistic community in spite of repeated calls for a moratorium? How can the Minister justify actions against artists even while a special sub-committee of this Parliament is meeting to discuss Revenue Canada's procedures? This is a disgraceful contempt of Parliament, Mr. Speaker.


Pierre Bussières: Mr. Speaker, the Hon. Member does not seem to be aware of the most basic rules of this House. What is even worse, he does not even show the least respect for legislation passed by Parliament. What he is asking me to do, in view of the fact that a certain matter is being considered by a committee, is to suspend the application of some of the Income Tax Act provisions for the benefit of a specific group of taxpayers. The Hon. Member should try and learn a little bit more, first about the practices of this House, and second about how our laws are applied.
As long as the Minister of Finance has not decided to change our fiscal policy and has not proposed amendments to the Act in this House, the Minister of National Revenue must apply the statute as it is written.
I must also point out that we are not chasing after artists specifically. I can even tell him that two out of three artists who have written to me, after my invitation to these artists to call on their District Office, have told me: "We went as you suggested and we are very satisfied with the way we were able to come to terms with your officials." I can also add that I announced last week that we had accepted the first of the three recommendations made by the Canada Council with respect to the way artists are treated by the Department of Revenue. We have accepted the first recommendation. We are considering the other two which concern the Council grants, and I can tell the Hon. Member that our way of treating this group of taxpayers is as equitable as possible.


Geoffrey Douglas Scott: Mr. Speaker, I am glad to see the Minister reads his own press release, and that we did not have to get this through the freedom of information provisions.


Some Hon. Members:: Hear, hear!


REQUEST FOR POSTPONEMENT OF PROCEEDINGS AGAINST ARTISTS
Geoffrey Douglas Scott: Mr. Speaker, I have another question for the Minister of National Revenue.
Why has the Minister not gone one step further in the interest of fairness and ordered all proceedings against artists to cease at once-


Mr. Lapointe:: It is impossible.


Geoffrey Douglas Scott: -at least until the special subcommittee of this Parliament has completed its work?


Pierre Bussières: Mr. Speaker, I find it difficult to understand the Hon. Member's way of looking at equity and fairness. He is telling me this: "Do not apply the law; go against it; go against Parliament; go against the court rulings because some issue is being considered."
Mr. Speaker, if this is the Hon. Member's idea of fairness and equity, I have serious doubts about his approach.


DEPARTMENT'S AUDITING PRACTICES-TRAINING FILM STATEMENT
Miss Pat Carney (Vancouver Centre):: Mr. Speaker, my question is also for the Minister of National Revenue. Last night on CBC television a Revenue Canada training film was shown in which it was stated that Revenue Canada auditors treat audits as fishing expeditions. Is that the policy of the Minister's Department, that audits are fishing expeditions? If it is not, why is the Minister using the film?


Pierre Bussières: Mr. Speaker, the Hon. Member is referring to a film used to train a very specific group of auditors, and I am referring to those who audit large corporations. The Hon. Member is quoting part of a sentence spoken in the film which, if I am not mistaken, lasts about forty-five minutes and is meant to stimulate discussion at seminars held by our auditors.
After the film is shown, the auditors are asked to share their experiences, to see how they can improve the performance of their duties when auditing the files of large corporations.
Therefore, I think it is ridiculous of the Hon. Member to take a sentence and quote it out of the general context in which a training film is used.


Pat Carney: Mr. Speaker, the Minister's answer is a red herring. Considering the fact that we have repeatedly asked to have that training film made available to us and he has refused to do so, he can hardly complain that we are taking things out of context.


TRAINING OF OFFICIALS TO ANSWER TELEPHONE INQUIRIES
Pat Carney: Mr. Speaker, my supplementary question is addressed to the Minister of Na-
March 30, 1984

tional Revenue. If he feels there is a need to inform Canadians about Revenue Canada, and he is spending $300,000 on an advertising program-


Henry Perrin Beatty: A week.


Pat Carney: -why is the Minister not spending that money up-grading the people who answer the telehones in Revenue Canada, considering that a Toronto newspaper found 40 per cent of them this week could not even answer the questions? Why is the Minister not using that money for training instead of advertising?


Pierre Bussières: Mr. Speaker, I am happy to inform the Hon. Member that we spend a lot more than that on training people who answer the phone, not only money but time, and a staff of experts is available to the employees who answer calls from the public.
I can inform the Hon. Member that this training is not given two minutes before they start their duties. Training is on a daily and weekly basis, with meetings with supervisors, when they review the type of questions they have been asked and look at more satisfactory ways of answering taxpayers.


PROCEDURE AND ORGANIZATION
Mr. Speaker:: I am now ready to share with the House my reflections arising out of the events of Monday and Tuesday, March 19 and March 20, reflections, I may say, which have been reinforced by the events of Wednesday and Thursday, March 28 and March 29.
Ever since the occasion in March, 1982, when the division bells were allowed to ring indefinitely, the House has been confronted with a problem which it has yet to resolve. The situation which occurred when the bells continued to ring for 15 days was unprecedented in our practice and the Chair was faced with a dilemma. Had the Speaker ordered the bells to stop, she would have been accused of partisanship on behalf of the Government. By not stopping the bells she was exposed to criticism for failing in her duty to ensure that the House was able to function. It was a classic "no win" situation.
When the deadlock was finally resolved by the Parties, Madam Speaker Sauve made a statement in which she underlined the agonizing conflict of duty with which the Chair was confronted. She quoted the well known parliamentary authority, Redlich, who wrote:
Protection of a majority against obstruction and protection of a minority against oppression are both alike functions of the Chair. It is hardly too much to say that they exhaust the duties of the high office held by the impartial guardian of parliamentary law.
Division Bells Procedure

She spoke of the impossibility of reconciling these two functions in the face of the situation in which she found herself. She pointed out that the House had a responsibility to give guidance to the Chair and I should like to quote some of her words:
The Speaker is the guardian of the rules of the House. He does not invent them. It is up to the House to decide what changes are necessary. I merely point out that there is a problem. In the meantime, the Chair will continue to be vulnerable until the House provides it with guidelines which would lead to settled practices regarding those very difficult and highly controversial questions, where the rules and practices appear to be less than satisfactory.

She concluded her statement by stating:
It is my hope that such a situation will never again occur in this House. However, should it occur again, the Chair, unless it is provided with firm guidelines, would need to consider its course of action with very great care under the new circumstances. I trust that in the overriding interests of this honourable institution, the House will take steps to make known its will as to how the Chair should act before any such situation occurs again.
Shortly after the bells crisis, a special committee was appointed to consider the reform of the procedure of the House. A number of changes recommended by the committee were adopted on a provisional basis. It is within the framework of these changes that the House is currently operating. Many of us hope that the committee would address the problem of the bells and bring in a recommandation which the House might have found acceptable. However, it did not do so.
In the absence of any guidelines, certain initiatives have been taken by the Chair. Dilatory motions have been declared to have lapsed if not voted on by the hour of automatic adjournment.
On three occasions, when the question before the House has been a substantive one, the bells have been suspended overnight and have continued the following day. This practice in no way interferes with the indefinite ringing of the bells when substantive questions are before the House. It came about as a result of the humane considerations referred to by the Hon. President of the Privy Council (Mr. Pinard) when speaking to the point of order raised by the Hon. Member for Yukon (Mr. Nielsen) on March 20.
The Chair was also influenced by the need to maintain the dignity of the House. The spectacle of a lone occupant of the chair and a gowned clerk, during the fullness of the night in an otherwise empty House, the prisoners of a theoretical assumption that the House might be ready to vote at any time appeared to the Chair to be absurd.
I should now like to deal with the arguments raised by the three House Leaders when they spoke on this matter on March 20. The Hon. Member for Yukon asserted that the Chair exceeded its authority in suspending the sitting and the bells. He said:
The suspending of a sitting overnight in the midst of a division is almost without precedent.
There was, of course, only one such precedent, on May 9, 1983. We now have another resulting from the bell which

March 30, 1984
Division Bells Procedure
commenced on March 28. He went on to say that he could find no text or precedent which supported the authority of the Chair to suspend a sitting "at whim". I agree with him. I assure him that the action I took on March 19 was not taken lightly. I looked at precedents. 1 engaged in consultations. I waited until almost the very last minute in the hope that the representatives of the Parties would notify me of their intentions.
The Hon. Member for Yukon referred to the power of the British Speaker to adjourn or suspend a sitting in circumstances of grave disorder. Let me assure him that the thought of justifying my action in terms of this procedure never entered my head. There was no grave disorder. This practice has no bearing on the situation which faced us. There is nothing in the British practice and precedents which could assist us in resolving any problem related to the bells. This problem is uniquely Canadian. I know of no parliamentary jurisdiction outside Canada where the bells can ring for an unlimited period prior to a recorded vote.
The position taken by the Hon. Member for Yukon was that the timing of a vote rests entirely with the Whips because a division is an expression of the will of the House, not of the Chair. Thus, in his view, even the suspension of the bells overnight is beyond the authority of the Chair, without the consent of the Whips, even though such action cannot affect the length of time the bells may ring nor the outcome of the vote. That is his view and I respect it.

The Hon. President of the Privy Council, while supporting the action of the Chair in suspending the bells, agreed with the Hon. Member for the Yukon that the decision as to the timing of a vote was a matter for the Whips. He pointed out that there are no standing orders to provide any direction as to the Speaker's role where the bells are concerned. Neither is there any jurisprudence except in relation to the lapsing of dilatory motions and the suspension of the bells overnight when a substantive motion is before the House.
The question which arises, therefore, is: how is the Speaker to assist the House without a standing order or a resolution of the House to guide him? How is he to fulfil his duties when he finds himself trapped in a situation whereby, whatever he does, his action will appear to be partisan? With nothing but common sense to guide him, he can only do what appears to be sensible in the circumstances.

The Hon. Member for Hamilton Mountain (Mr. Deans) made a number of significant comments. He said that at some point the House has to come to grips with the problem that threatens to be a potential disaster for the parliamentary system. He pointed out that the rules of the House are intended to protect each and every Member. And he underlined the embarrassment for the Chair when it finds itself in a situation such as occurred on March 19.
He has my full sympathy in the expression of these views. Let me assure him that the Chair is ever mindful of its duty to protect minorities. However, where voting is concerned, there is little the Chair can do as long as the timing of a recorded vote remains exclusively in the joint control of the Whips of the Government and the Official Opposition. In practice, total control can be exercised by only one of the two, acting on his own, because under our present practice the vote cannot take place unless both Whips approach the Table together. Perhaps, in taking account of the problem, the House or the House Leaders might give some thought to the position and rights of a third party.
Let us consider the implications of allowing the bells to ring indefinitely. When taken to an extreme, the practice can paralyse Parliament completely. We have seen in Manitoba how the Government was forced into proroguing the legislature because an indefinite bell was used by the opposition to prevent a vote on an important government measure. We can imagine a government in a minority situation using the indefinite bell to avoid facing defeat on an issue of confidence. We have also seen how the bells can disrupt the arrangements for signifying the Royal Assent to bills. While the House is fully within its rights in ordering its affairs as it sees fit, I suggest that the other place and the representative of His Excellency the Governor General were subjected to a grave discourtesy as a result of what happened on March 28. Do we in this House of Commons really want to enshrine this device permanently in our practice?
It seems to me that the House has three options. The bells can be controlled by the Whips, by the Speaker or by Standing Order. I think the House should consider the pros and cons of all three options. If the Whips have unrestricted control over the bells, we all know what the possibilities are. It means that either the Government Whip or the Official Opposition Whip can exercise an absolute veto over the taking of a vote. Perhaps this suits the purposes of the Government and of the Official Opposition. Is it satisfactory to the House as a whole? Is it acceptable to back-benchers? Is it fair to a third party?
If the Speaker were to control the bells, it could place a very grave responsibility upon him. The advantage to the House would be that the control of the bells would be in the hands of an impartial arbiter. He would, to repeat the words of Mr. Redlich, have regard to the "protection of the majority against obstruction and protection of a minority against oppression". Thus he could be expected to intervene if the bells were used to obstruct a government measure indefinitely. He could also be expected to intervene if the Government were trying to prevent a vote it expected to lose.
The third solution would be to adopt a Standing Order which would place a limit on the length of time the bells may ring and possibly also provide for the scheduling of votes at pre-determined times during the week. In this way, all Hon. Members would know in advance the amount of time available to them to reach the House in order to vote. I believe this
March 30, 1984

would be the ideal solution. Only the adoption of a Standing Order could settle this issue once and for all, and I suggest to the House such a Standing Order is sorely needed.
I shall, as has been suggested, be consulting with the three House Leaders with a view to regulating this very important procedural question. For the time being, pending an agreement to change the practice or until I receive other instructions from the House, I shall continue to follow recent precedents. Dilatory motions will be deemed to have lapsed at the ordinary hour of adjournment if not disposed for earlier. In the case of substantive questions, if not disposed of before the ordinary hour of adjournment, the sitting and the bells will be suspended until 9 a.m. on the following sitting day, unless the Chair is notified of a specific intervening hour at which the Whips intend that the vote should take place.
I am not suggesting that either of these practices provides a satisfactory answer to the problem. Without a limit on the bells, we shall continuously be facing a potential procedural dilemma.
[ Translation]
The House is master of its own procedure. The authority of the Chair comes from the House. In areas of uncertainty, the Chair can only do its best to interpret the will of the House and protect the rights of its Members. Without the support of the House, the Chair is powerless. I think we should learn from recent experience. The problems we face have been exposed. I would like to thank Hon. Members for their contribution to this discussion. It has been instructive for the Chair and I hope for all Hon. Members.
Above all, I believe it has been instructive for this great institution which we all cherish. The Chair stands ready to co-operate with the House in any attempt to regulate this difficult and pressing problem. The House should, however, be aware of the Speaker's position. He should not be placed in a situation where he is confronted with conflicting duties. [English]
Until the House comes to grips with this problem, it will remain a constant threat to the efficiency of the House and the security of the Chair. I suggest the credibility of the parliamentary institution is at stake. I believe we have the duty to protect it.


Hon. Yvon Pinard (President of the Privy Council):: Mr. Speaker, I have no intention of arguing the issue again since in your comments today, you already referred to the views expressed previously by the Parliamentary House Leaders. However, considering recent events and the comments of the Chair in this respect, I feel it is my duty, as Leader of the Government in the House, to say very briefly what my reactions were. My first reaction was extremely positive, with respect to the Chair intervening, because you have shown a very real concern for seeing this institution operate in a normal
Division Bells Procedure
way, and I believe that in the circumstances, the House can hardly have any reservations about the intentions of the Chair, which were to make a contribution while respecting the will of the House towards making it possible for Parliament to be respected and operate in a normal way.
The Chair also referred, very appropriately, to recent, sometimes appalling, events which I would nevertheless like to touch on very briefly to justify your action as well as the suggestion I would like to make to the Chair. The latest incident ... and there have been three during the last two weeks, Mr. Speaker, in which the public, which was unfortunately unable to intervene, witnessed a constant ringing of the division bells. The latest incident was yesterday. I think it is shocking, because the division bells were used to achieve two negative and entirely unacceptable objectives. The first was to prevent Parliament from sitting, which is intolerable when we consider the number of people to serve and the volume of legislation before the House, and the second, to prevent one of the parties to a contract from meeting its obligations. In my view, the latter is just as shocking and intolerable.
The House will recall that last June, we had a Bill in which the Government asked for authority to borrow a certain sum of money. The Government negotiated with the Official Opposition and made a deal. An agreement was reached. The deal was: "We are going to cut the amount but you will let us ask Parliament for the difference, with a three-day debate, subject to certain conditions". We met these conditions, Mr. Speaker. The conditions were very straightforward. They were laid down in a special Standing Order of the House, so this was being taken very seriously, and the purpose of the Standing Order was to prevent the Government from losing its part of the deal in a new session, and under the Standing Order we were only obliged to introduce a Bill by the end of March. Therefore, entirely legitimately, we gave notice as required under the Standing Order. We advised the Official Opposition of our intention to act on this agreement, and we made it abundantly clear that we wanted to request, on short notice, a borrowing authority of $4 billion, according to the Bill appearing on the Order Paper. We even informed the Official Opposition that we were ready. I made a solemn commitment on behalf of the Government-it is on the record-yesterday, that we were prepared to subtract the $4 billion from another Bill that is before the House, so that the Opposition would not lose anything, and the Government was not trying to get more out of the deal made with the Official Opposition than it had obtained when the Opposition gave its word that the Government, if it did so within a certain period, could have a three-day debate; $4 billion in order to meet its obligations, pay income tax refunds to Canadians, and so forth. So where do the division bells come in? The Conservative Party used the bells to prevent the Government from acting on the rights it had under this agreement with the Opposition, although the Government held up its side of the agreement. It is absolutely

March 30, 1984
Division Bells Procedure
shameful to use the bells to break your word and prevent an agreement, consecrated by a special Standing Order of the House, from being executed. The second appalling aspect of the attitude of the Progressive Conservative Party yesterday, when it let the division bells ring until 6 p.m., was that, in a democratic country, they were preventing the Government from introducing a Bill. What is more fundamental to our freedom? We have a Charter of Rights and a Constitution, we have established the importance of Parliament and the freedom of citizens to be elected members thereof and to pass laws, and one of the simplest ways of passing legislation in this country is to allow a democratically elected Government, to introduce a Bill, during the normal sitting hours. Granted, the Opposition may not agree with the substance, it may debate the Bill and there are rules governing debate. But by preventing Parliament from sitting simply to make it impossible for a democratically elected Government to introduce, not to adopt but to introduce a Bill, are they not running roughshod over democratic principles and insulting the Canadian people? I am saying that it is shameful and totally unacceptable, and I suggest that you, Mr. Speaker, are quite right to intervene at this time and urge all parties to seek ways of enabling the Chair to put a stop to the efforts of a political party bent on bringing Parliament to a standstill, ignoring democracy, flouting its contractual commitments and thus giving the people a pitiful example which ought not to be followed anywhere. That, Mr. Speaker, is the first instance of the Progressive Conservative Party resorting to bell-ringing tactics in recent days.
The second instance has to do with the incident which occurred at 5.40 p.m. the day before, or two days before, when Hon. Members had just voted on a time allocation motion to put an end to filibustering. A few minutes later, the question was put on an amendment. Hon. Members were still on Parliament Hill since they had just voted a few minutes earlier. The Progressive Conservatives knew that the Governor General or his representative was standing by in the Senate, waiting for Members before giving Royal Assent to a supply Bill. They knew that the messenger was at the door and that, in a show of respect for Her Majesty, we had to go to the other place for Royal Assent at six o'clock or shortly after. Despite all that, rather than let the vote be taken rapidly since Members were present, they decided to let the bells ring throughout the night until morning, after the beginning of the day, that is after the regular sitting hour. They openly admitted that they wanted to wrench compromises from the Government through blackmail, saying: If you do not make the concessions we want, Parliament will not sit today, Royal Assent notwithstanding. That was an unspeakable insult to the Senate and particularly to the Governor General or his representative.
Here again, it seems to me to be the kind of abuse we have been witnessing and which is so reprehensible that you are
seeking a remedy by appealing to Hon. Members. Here again, in a totally unacceptable and unwarranted tactical expedient, the Progressive Conservative Party completely ignored the Members who were quite prepared to vote and said: No, we are walking out, we will be back tomorrow. The bells will ring, forget about Royal Assent and we will even prevent the House from considering a Bill tomorrow unless you make certain concessions. That is quite unacceptable. That is blackmail, an act of sabotage against this institution, hijacking Parliament!
If we consider what has been happening in Manitoba, again it looks as though the provincial Conservatives took their cue from the federal Progressive Conservative Party which had let the bells ring for 16 days, an incident to which you referred in your remarks. The Conservative bells have been used to impinge on the rights of the Franco-Manitobans. Such an occurrence in Canada is completely unacceptable and shameful. The blue bells, the Conservative bells, the bells used to strike against Canadian freedoms are the bells which were used for the first time by the Progressive Conservative Party in this House two and a half or three years ago, when, for 16 days, before the whole world, news flashed that in the world's foremost freedom-loving country a parliamentary institution was paralyzed because some people on the Opposition side had decided that, to boost their own political interests, it was more relevant to prevent Parliament from operating than to allow democracy to prevail and a government to rule normally and let the people pass judgment on its accomplishments every four or five years as provided for in the Constitution.
Mr. Speaker, those are the abuses which you wanted to help eradicate in presenting your comments this morning, and I congratulate you for it. You have been sitting for 25 years in this House as a parliamentarian and as a politician. 1 have only been here ten years. However, I am lucid enough to understand that you cannot build anything in our society by knocking down our democratic institutions, the first and most important being the Canadian Parliament.
As a parliamentarian and a Member of this House, I am convinced, Mr. Speaker, that my role is not that of a helpless witness to such irresponsible and destructive acts, that my duty as a parliamentarian does not allow me to remain passive and silent. I have been House Leader of this Government for 4Vi years and, for a number of years, I have witnessed actions which are absolutely repugnant to a parliamentarian. The comments you made this morning, Mr. Speaker, have given me an opportunity to say so publicly and to mention some rather recent examples of a behaviour which should certainly not be repeated if we want not just to protect this institution, but also to enhance the credibility of politicians in the eyes of the public.
I suggest that those who use such tactics not only should refrain from doing so, but should also apologize publicly and determine not to do so again. We are still in March; there is an Order of Business for today. We shall request the unanimous
March 30, 1984

consent of the House to introduce a Bill and we shall ask the Opposition strictly to agree to respect the rights devolved to us by way of honest negotiations and provided by Standing Orders which were agreed upon by all the Members of this House. Following the discussions I had with the Hon. Member for Yukon (Mr. Nielsen) yesterday, I expect that the Members opposite will not agree to that unless I have been able to convince them to show some common sense. If they fail to agree, we shall not insist. I would not want to lower myself and prevent this House from sitting today on the grounds that this is an Opposition day. I shall not let my behaviour be influenced by the bell ringing tactics of the Opposition the way the Manitoba Conservatives let theirs be influenced by the Federal Progressive Conservatives. We shall simply refrain from introducing the Bill if there is not unanimous consent, but the people at large will know that this type of obstruction on the part of the Official Opposition is unworthy of a nation which takes pride in the fact that its people are free and that it sets a democratic example for the rest of the world. Whoever will have prevented us from having unanimous consent and who will continue to threaten to use these extreme measures will bear the responsibility for it. We shall see how the public will pass judgment on these facts; we shall see how the public will distinguish between the Progressive Conservative Party before and after Mulroney. Is the civility to which he refers less noisy than it was at the time of the bell ringing for the energy Bill three years ago? Do the bells we have heard these last three days show a change of spirit or attitude on the part of the Progressive Conservative Party in the House? It is unfortunate that the Leader of the Official Opposition is not here at this moment. He is never here and even when he is, he very seldom has any question to ask. He is the new Quiet Man, the "Mr. Muffler" of Canadian politics.
Mr. Speaker, I do not want to go on much longer, but Canadians have a right to our respect. They have the right to see their Parliament and their Members of Parliament debate issues in the House. As Members of Parliament, we have no right to prevent debate from proceeding by letting the division bells ring. The Progressive Conservative Party started this new fad of paralyzing debate, infringing on our freedom of speech, and preventing Members of Parliament from passing legislation. One would have hoped that, with the new Leader of the Progressive Conservative Party, there would have been a change in attitude, so that Canadians would no longer have to put up with these unfortunate incidents. However, that is not the case, and the public can judge for itself that in the final instance, the Members opposite are the same ones who let the bells ring for sixteen days during the energy debate. They are the ones who undermined Parliament's credibility, who took this institution hostage, and who now, under the leadership of the new Member for Central Nova (Mr. Mulroney), have not changed one bit. It is the same clique, the same old gang of obstructionists that is preventing Parliament from functioning, and, Mr. Speaker I say this is very unfortunate, and I am certainly not convinced that the change in leadership on the Progressive Conservative side was a change for the better. On
Division Bells Procedure
the contrary, it has become a leadership that is silent on policy and very vocal through its use of the division bells. It is both regrettable and intolerable.
Mr. Speaker, you said that, pending adoption of a Standing Order, the Chair would let itself be guided by common sense. About two weeks ago, and this is my third example, when the bells rang somewhat longer than expected because of the weather, the Chair consulted with Party representatives and found out, at least as far as we were concerned, that it was true the weather was bad in eastern Quebec, that there was fog in the Maritimes and that weather conditions would have prevented Hon. Members from exercising their sacred right to vote in the House. I think it is a matter of common sense. When the division bells ring for such reasons, the Chair having consulted with Members on both sides of the House, it seems to me, Mr. Speaker, that it is only common sense and only logical, and that the public is prepared to accept this.
However, with respect to the two most recent examples, the Manitoba issue and the energy legislation bell-ringing incident three and a half years ago, you have every right to try to convince the Parties to reach an agreement so that you will have guidelines to follow and avoid finding yourself too often in situations where you might appear to favour one side over the other.
In the meantime, Mr. Speaker, I hope that parliamentarians will continue to seek a solution and work together to find a way out. I am prepared to sit down with you and discuss the question, as you have suggested, along with the Opposition spokesmen if they are interested-or without them-with a view to improving the situation. However, until such time as we do settle the issue, surely we ought to rely on common sense. We agree with you and, as far as we are concerned, we want to impress upon you that we have never considered nor do we consider now resorting to bell-ringing tactics. Still, we are not going to let the Opposition continue to breach freedom in Canada by playing bell games as it has been doing so shamefully both here and in the Manitoba Legislature.


Hon. Erik Nielsen (Yukon):: Mr. Speaker, we, of course, will want to study your very thoughtful reflections that were obviously given a great degree of care in preparation. Certainly, I for one would be very happy to meet with you, if I took it from your remarks that there is a suggestion that we do so. In the meantime, because the Chair raised the precedents, allow me to say that the manner in which the Government House Leader has referred to the precedents is very saddening to me. What he has done is that not once, not twice, but three times today he has attempted to use this occasion to use French-English rights in this country as an instrument of division rather than one of unity.


Some Hon. Members:: Hear, hear!

March 30, 1984
Division Bells Procedure


Erik Nielsen: I deplore that kind of conduct when we on this side have displayed in this House of Commons our adherence to using that issue as an issue for unity rather than disunity.
The roots of this problem go far deeper than most Members here can recall. One or two of us sat here in 1957, 1958, 1959, 1962 and 1963. That was an occasion when the Liberal Opposition of the day had some 45 Members against the overwhelming majority of the then Prime Minister Diefen-baker. As Mr. Pearson himself called it, "that happy band of warriors" held up in the House the Estimates of the day for 49 days, refusing supply, deliberately obstructing the House and, indeed, forcing the Government of the day to go to Governor General's warrants in order to pay the salaries of the Public Service. Yet in this day and age, when we as a responsible Opposition attempt to use the tools remaining, we are called obstructive. When the Government does it, it whines about the weather, or about uncontrollable events; but when we do it, it is called obstruction.
I have no quarrel with what was done by the "four horsemen of the apocalypse", as they were called in those days-Mr. Chevrier, Mr. Pearson, Mr. Pickersgill and Mr. Martin. They were magnificent parliamentarians all, doing what they thought was a responsible job in opposition-and it was, Mr. Speaker.
Therein lies the root of the problem. After the 1963 election we of course changed sides; Mr. Pearson and his Liberal Party took office and we moved to this side of the House. One of the first things that the Government did was look at the Standing Orders and say: "By George, we cannot ever be caught in a situation where we can be prevented from getting our program through, as we did to the Conservatives when they were in office".
The method used to avoid being subjected to the same terms as we had been subjected to when they were in opposition, was to change the Standing Orders. In the process the effectiveness of the Opposition was weakened. The tools it had hitherto possessed in order to discharge its responsible function as an Opposition were taken away. In doing that, the Opposition was left with precious few tools with which to oppose when it believes that opposition is warranted. All it is left with are the tactics that we have used that focus on ringing the bells or moving dilatory motions such as the one moved yesterday. That is all the Government has left any opposition as tools with which to perform its functions.
In effect, we have reached the stage where the Prime Minister's oft-quoted remark is closer to the truth than many people believe-that Members of Parliament, when they are 50 feet off the Hill, are nobodies-because the place is becoming irrelevant in terms of the institutional structure itself-a parliamentary government and a parliamentary opposition.
I agree with the Government House Leader that the Government is there to govern; that is its mandate. But the Government has to admit that the Opposition has a function to perform as well, and that function is to oppose where Opposition-in its view, not the Government's-is essential. It has to be provided with the tools to present that opposition.
We are left with a psychology where we are compelled to the conclusion that unless we do things the way the Government thinks we should do them, we are guilty of obstruction. That is not a good approach to the maintenance of this institution and what it is supposed to be in the parliamentary sense.
Now I want to say a word about yesterday. The Government, through the Minister of Finance (Mr. Lalonde), tells us that the borrowing Bill before us for $29.5 billion will be sufficient to cover its needs right through to March 31, 1985. That is what he said; that is all the money the Government needs. We believe that is an overstatement, but nonetheless we are debating the Bill now. Then the Government came along the day before yesterday with a notice-


Mr. Evans:: Don't mislead the House.


Erik Nielsen: I will not even bother-


John Leslie Evans: You had better not.


Erik Nielsen: -replying to that inferential charge from an Hon. Member who has not been here long enough to appreciate the implications of what he is saying.
After telling the House that all it needs to cover its entire requirements for the fiscal year is $29.5 billion, two days later the Government puts a notice on the Order Paper asking for authority to borrow a further $4 billion, which makes the total $33.5 billion.


John Leslie Evans: What did our House Leader say yesterday?


Erik Nielsen: If the Hon. Member would just keep quiet for a moment, as I did when his House Leader spoke, and allow me to complete my remarks, I will get to his question. I think he should at least extend the same kind of courtesy that we extended to the Government House Leader and bless us with his silence.
The Government says that if we give it that further $4 billion worth of borrowing power, whatever portion it uses it will deduct from the $29.5 billion-I see the Minister of State for Finance (Mr. MacLaren) nodding in agreement with that-by way of an amendment to be introduced at the committee stage. We do not question that. We do not question the validity of the Government's word in that regard. What we do question is that it needs it.
Why is it bringing forward a Bill for a supplementary $4 billion when it has cash deposits of $8.1 billion? April, we know, is a heavy expenditure month. All the bills come in and all the refunds must be made, and the like. However, there are enough cash reserves to cover the demands up to the end of April by more than two times now on deposit with the Government. I see the Minister of State for Finance disagreeing with me there, but that is our advice.
In committee, we asked the Governor of the Bank of Canada and the Minister of Finance (Mr. Lalonde) to explain
March 30, 1984

why the cash deposits now available to the Government are so far beyond those which were available last year, more than double. They will not answer. They will make no disclosures and give no explanations. In the absence of explanations and in the absence of answers, and in the presence of the fact that it has that $8.1 billion there, what are we to do to act responsibly? We must oppose by any means available to us on the basis of the information which we have or have not received despite repeated attempts to get it. The only manner in which we can oppose, Sir, is to prevent the introduction of that Bill.
I am convinced, Sir, that it is false to say that not giving government this supplementary borrowing Bill of $4 billion will hold up the payment of income tax refunds. That is a political statement and it is a sad one, to my way of thinking. In any event, it is false.
One last thing, Sir. It will take the Government, by the application of Standing Order 8(3), five days to get its $29.5 billion. It would have taken three days-not much of a shortcut-if we had permitted it to go the supplementary borrowing route. It was not necessary and it would have had a hangover in that $4 billion for which we were being asked to provide authority. That is what we are objecting to. If the Government House Leader was really serious about parliamentary reform which would permit governments to govern and permit oppositions to discharge their responsibilities, he would bring forward for quick passage all of the outstanding reports of the parliamentary committee on reform. These reports were dropped from the Order Paper at the prorogation of the last session, but are still there, as the Government House Leader told me before. They are in the public domain, but they are sitting on the shelf, no longer on our Order Paper. If the Government was really serious, it would bring all of them forward and let us pass them before the end of June. Let us give them quick debate and bring about meaningful reform in this place.
I, for my part, and on behalf of Her Majesty's Loyal Opposition, with whatever tools have been left to it, will be very pleased to sit down and have a very serious discussion with the House Leader and with you, Sir, and with the House Leader of the New Democratic Party, to see if we can design some method of bringing those reports before the House, agreeing on a time limit for their debate-a short time limit- and for their very quick and expedient passage.


William Alexander (Bill) Blaikie: Mr. Speaker, in the absence of our House Leader today, I would just like to make a few comments concerning your reflections, the remarks of the Government House Leader and those of the House Leader of the Official Opposition.
First of all, I would like to join with others in commending you for deciding to deal with this very difficult issue within the limitations, as you yourself pointed out, of what the Speaker is able to do about this issue in the absence of any clear instruction from the House, and in the absence, I might say, of any clear political will to do something about it. I believe you are to be commended for taking your responsibilities as Speaker seriously in trying to do what you can within the very real
Division Bells Procedure
limitations which you yourself pointed out. I will have more to say about those limitations in a moment, Mr. Speaker.
I hope that co-operation between the House Leaders will be possible in the near future and that some kind of agreement could be reached with respect to a Standing Order which would give the Chair more instruction, more clear guidance, with respect to the taking of votes, but perhaps leave some discretion with the Chair for special circumstances or whatever. But that is just a personal view of mine. I do hope that there could be that kind of co-operation.
However, my concern is that the remarks of the Government House Leader were not, in my view, designed to create that kind of co-operative atmosphere. He did not go anywhere toward creating that possibility. If anything, he damaged that likelihood by bringing in things which have nothing to do with what is going on here in the House of Commons, in the federal Parliament. The Government House Leader would have been well advised not to have commented on the things he did comment on and to have stuck to what our responsibilities are here in the House of Commons in ensuring that we conduct our business in a way which commands the respect of the Canadian people.
I feel we do have to do something about the bell ringing episodes. I am sympathetic with the comment of the Hon. Member for Yukon (Mr. Nielsen) that very few tools are left to oppositions to indicate to government: "Hey, we are really serious about this". I do not always agree with the Official Opposition as to what it decides to get its back up about and go to the wall for. In fact, I very seldom agree with it. However, I do agree that very few tools are left to oppositions which, for one reason or another, make that decision. Fewer tools, I might say, are left to an opposition Party which is not the Official Opposition. So there is a problem.
I ask my Progressive Conservative colleagues to consider, especially since they regard themselves as defenders of the parliamentary traditions despite the damage which has been done to that tradition by the Liberals over the years, whether, in spite of the legitimacy of the argument that this is one of the few tools left to the Official Opposition, we are not, by having these bell ringing episodes, doing damage to the very institution which I believe the Progressive Conservative Party genuinely cherishes. The public really does not understand, and I believe no one can really understand, just what is going on with the empty Chamber and the ringing of the bells. It is always an embarrassment to me, Mr. Speaker.
For instance, yesterday afternoon there must have been people here who had only one day in Ottawa. They come here to watch the debates of the House of Commons and all of a sudden the Speaker says "Call in the Members", a bell starts to ring, and everyone takes off. Surely people who watch us all the time on TV must be getting used to it by now so they know what is going on. But people who come here out of the blue to see their Parliament in action must really wonder what the devil is going on when the bells start to ring. I do not know if they are told, or if they could be told: "Don't bother sitting around because there is not going to be a vote today". "Well, I

March 30, 1984
Division Bells Procedure
have four hours". "Sorry, there will not be a vote". "Well, they were all just in here". "I know, but they have all taken off".
I think what you were pointing to, Mr. Speaker, is that this does not lend itself, to understate the case, to enhancing or even preserving the dignity of the House of Commons, or the perception of democracy as something conducted by adults in a reasonable manner within which context there are rules for disagreement. 1 certainly agree with everyone who has said we have to do something about this. If doing something has to be part and parcel of giving more genuine power and input not just to opposition Parties per se, but to back-benchers and Parliament itself, then so be it.
I have a special interest in this, as you know, Mr. Speaker, as Vice-Chairman of the Special Committee on Standing Orders and Procedure. I regret that we did not come up with a solution to the bells problem, but in order to do that we would have had to come up with a solution to the over-all problem that Members of Parliament in general, and opposition Parties, official or otherwise, do not have enough genuine input into the process around here. That is the problem and delay becomes the only mechanism by which people can indicate they are dead serious about their opposition to something. They want the opportunity through delay to allow public opinion perhaps to mobilize or whatever.
Delay does have its benefits. Delay is not always the bad thing that the Government House Leader would have us believe. The word "efficiency" is thrown around too loosely. I would like this place to be as efficient as possible, but what the Government House Leader means by that word is not what I have in mind. Quite often he means the Government getting its legislation through as quickly as possible regardless of the contrary views here in the House of Commons.
What I wanted to point out, Mr. Speaker, is that there should not be too much self-righteousness on either side of the House in this issue. Some of the tactics employed by the Opposition have been embarrassing. Although I have not been here very long, I paid attention to the role of Parliament for a long time before I got here, and no one has done more damage to Parliament over the years as the central political institution in this country than the Liberal Party of Canada. They have done this by making major policy announcements outside of the House, by Ministers refusing to make statements in this House so that people can respond to them. They have done this through some of the rule changes they forced through unilaterally in 1968. The list goes on, Mr. Speaker, of the way in which the Party now in power has taken away from Parliament as an institution. So let us not have the Government House Leader get up and wax eloquently and self-righteously about his appreciation for Parliament. If he has that appreciation as an individual, then he ought to do something about his Party and he ought to be more honest about the role they have played in downgrading this institution. Then maybe we can take him seriously.
You have laid out the options with respect to the bells, Mr. Speaker. Either we can continue as we have, with the decision on when a vote is taken resting completely with the Whips, which I hope everyone regards as unacceptable; or you could have more authority as the Speaker to decide; or we could have a Standing Order. What I want to say goes back to the recommendations made by the special committee, which were mentioned by the Hon. Member for Yukon. Right now the Speaker does not have that kind of authority. This is no reflection on your personal competence or ability to do the job; it is a reflection on the structure here. That is why we recommended that the Speaker be genuinely elected by the House of Commons; that there be a process for electing the Speaker which would give the Speaker of the House of Commons more genuine moral authority in the House. Then option number two would, I think, be much more acceptable.
However, going beyond the question of the bells, I think this is an opportunity for us to reflect on why it is that the Chair in its present circumstances feels the limitations it does. This is because of the way in which the Speakership has grown up over the years in Canada. This again is a peculiarly Canadian problem. The Speaker of the House of Commons in Westminster has much more moral authority than the Speaker of the House of Commons in Canada has ever had because the appointment is much more removed from the perception that it is the will of the Government only and not that of the House of Commons. This is an opportunity for us to reflect on that.
Having said that, I would just like to say one more thing before I sit down with respect to the comment the Prime Minister (Mr. Trudeau) is reported to have made some time before I got here, in 1979 I believe, that when Members of Parliament get 50 feet off the Hill they are nobodies. Mr. Speaker, my contention, having listened to many witnesses in the special committee and from my own experience as a Member of Parliament, is that it is just the other way around. When we get off the Hill and we are in our constituency, or speaking at a conference, or anywhere but in the House of Commons, we are somebody because our people expect that Members of Parliament have a larger role to play in how this country is run than we actually do.


Some Hon. Members:: Hear, hear!


William Alexander (Bill) Blaikie: It is when we get into the House of Commons that we are nobodies. For the most part we have absolutely no effect on what goes on around here. There are exceptions, but one of the things we have to do to revitalize this institution is change our political culture and the way we now regard Parliament. A big change in that respect will have to come from that side of the House because they are the Government, they are one of the Parties which is a contender for government in the next election, and because they in all likelihood- God forbid, but this is the way Canadian history works out- might be the Government again.


Sinclair McKnight Stevens: Hear, hear!
March 30, 1984


William Alexander (Bill) Blaikie: Sine Stevens is clapping at the fact that the Liberals might be the Government again.


Sinclair McKnight Stevens: Oh, no!


William Alexander (Bill) Blaikie: I think he must have misunderstood me. In any event, there are great changes to be made and I think the Government ought to show a little leadership. Instead of being so self-righteous about it, why do they not do what the Hon. Member for Yukon suggested, and what I and other Members have suggested many times, and get on with implementing the recommendations of the Special Committee on Standing Orders and Procedure? Then we could take the Government seriously.


Mr. Speaker:: The Chair would like to thank all Hon. Members who participated for their comments. They have obviously been well motivated and thoughtful.
I wonder if we might now, since it is one o'clock, take up the rest of Routine Proceedings at two o'clock today?


Some Hon. Members:: Agreed.


Mr. Speaker:: It being one o'clock, I do now leave the chair until two o'clock later this day.
At 1 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
Yvon Pinard: Mr. Speaker, I have had consultations with the Hon. Member for Yukon (Mr. Nielsen). I cannot see anyone from the NDP present at this stage but I suppose they will not object. We propose to suspend Routine Proceedings until after the third speaker on the motion to be debated on this Opposition Day. That will give us time to continue with the debate we began before the lunch hour. If you seek unanimous consent to postpone Routine Proceedings until after the third speaker has spoken on the Orders of the Day today, I think it would be agreeable to us and to the other Party.


Erik Nielsen: Mr. Speaker, that is quite agreeable. I hope that each of the three speakers will take their full 20 minutes.



GOVERNMENT ORDERS


Erik Nielsen: Mr. Speaker, in the absence of the Hon. Member for St. John's West (Mr. Crosbie) we will have to
Supply
seek consent for the motion to be moved by the Hon. Member for York-Peel (Mr. Stevens).


Mr. Speaker:: Is there unanimous consent that the Hon. Member for York-Peel will move for the Hon. Member for St. John's West?


Some Hon. Members:: Agreed.


Sinclair McKnight Stevens: That whereas the depreciating dollar and increasing unemployment, inflation and interest rates endanger economic recovery and undermine job creation through their damaging effects upon agriculture, small business and business investment, this House regrets the government's failure to include in its February 15th Budget, or to adopt at any subsequent date, policies to provide the necessary conditions for a reduction in interest rates and the strengthening of the Canadian dollar and calls for the immediate resignation of the government.
He said: Mr. Speaker, the Hon. Member for St. John's West (Mr. Crosbie) hopes to join this debate as it proceeds. Unfortunately, he is detained at a luncheon meeting and has been unable to finish his speech to get here in time to join in the debate.
I would hope in discussing the motion now before us that we can do so in a comparatively non-partisan way. We are actually dealing with something that is a terrible tragedy not only for hundreds of thousands but for about two million Canadians. I am, of course, referring to our unemployed, our jobless. It is fine to talk about those big figures, but let us look at what has happened since 1980. I think we sometimes forget the human aspect when we talk about raw unemployment figures. If we go from town to town across Canada we find that Saint John, for example, had an unemployed population in 1980 of 4,000. There are now 7,000 people unemployed;
3.000	more are now out of work in Saint John.
In Montreal we find 74,000 more out of work today than in 1980, that figure having risen from 124,000 to 198,000 currently. To express that in percentage terms, it means 13.7 per cent of the work force in Montreal have no jobs. They are out of work.
However, if you look at the Ottawa-Hull area, you find a startlingly different picture, Mr. Speaker. While unemployment has gone up, it has gone up only 3,000, from 29,000 to 32,000. I suggest that is one of the problems we live with at the federal Government level. People, certainly the bureaucracy in an area such as Ottawa, get isolated. They do not, as people in other towns do, sense the magnitude of the unemployment that is occurring in Canada.
Sudbury has had a 100 per cent jump in unemployment, from 5,000 persons to 10,000, since 1980. Toronto, usually looked upon as a comparatively full employment area, has seen
75.000	people added to its unemployed list since 1980. In Toronto there are now 156,000 unemployed. Hamilton has seen its unemployment almost double from 17,000 persons to
33.000	currently. I emphasize to all Members, even to the socialistic Members because they seem to care so little for these things, that this jobless situation has occurred in just

March 30, 1984
Supply
three years. In the case of Hamilton, in percentage terms unemployment has jumped from 6.4 per cent to 11.9 per cent. Winnipeg has seen a jump in its jobless total from 18,000 to
32.000	people.
Then we come to the tragic situation in Calgary and Edmonton. Isn't it strange, Mr. Speaker, that I am in the House of Commons on March 30, 1984, talking about declining economies in what only four years ago were two of the most prosperous cities not only in Canada but in North America? While our economy was doing poorly, certainly in the late 1970s, we at least had the Province of Alberta where the economy was comparatively buoyant. Then came the National Energy Program. An industry that was relatively successful in Alberta may have hit some decline, but the National Energy Program accelerated that decline beyond belief. As a result in Edmonton, where there were 14,000 out of work in 1980, there are now 46,000 out of work, a jump of
32.000	persons. A total of 32,000 people is roughly the population of the largest town, Newmarket, in my riding. It means, in effect, that every man, woman and child is out of work in Newmarket. Or you could say that the entire population of Newmarket, 32,000, is out of work in Edmonton alone. In percentage terms, unemployment has tripled, from 4.1 per cent to 12.1 per cent in Edmonton.
Then we have Calgary. Twelve thousand was the number of people looking for work in 1980. I do not have to remind Hon. Members that was when, unfortunately, we got turfed out of power. There are now 45,000 people unemployed in Calgary, up 33,000. In percentage terms the figure has almost tripled, from 3.6 per cent to 12.2 per cent.
In Vancouver we find 48,000 more people out of work today than in 1980, the figure having jumped from 36,000 to 84,000 persons, meaning that 12.3 per cent of the population of Vancouver are out of work.
I wanted to mention those figures because when we look at some of the points in our motion before the House, we gloss over what we are talking about in human terms. I want to refer to the depreciating dollar, inflation, the interest rate increases that we are experiencing and the general lack of growth in our economy. All of this need not have happened, yet when you look back over the years, in my case since 1972 when I first became a Member of this House, you can see how predictable it was, how the Government of the day was taking step after step that would lead to the present malaise as sure as the sun will rise tomorrow.
What brought me into this House was the way the Government went about the income tax revision, blatantly ignoring the public initially and putting tremendous consternation on Canada's whole economy. There was an indication even back in the late 1960s and early 1970s that the Prime Minister (Mr. Trudeau) was bad news for the nation. His priorities were wrong. He was fascinated, as history has demonstrated, with things that disunited Canada, that essentially focused the nation and certainly this House on things other than getting our economy first and foremost operating satisfactorily, and
secondly giving Canadians the prosperity to which they were entitled.
That is the chronic problem with which we have been living. I suggest it started to show up most vividly during those hung years when we had a minority Liberal government aided and abetted by the socialists between 1972 and 1974. It was during that period that we found that, in the Liberals, desperate anxiety to retain power, the then Trudeau Government accepted virtually any ultimatum thrown its way by the socialists to our left. The net result was, with the weak Minister of Finance then in place, spending soared.
I thought we had lost that Minister at the federal level but now I understand that he believes he should not come back as a new Minister of Finance-heaven forbid-but as the Leader of the Liberal Party and presumably Prime Minister. Of course, I am referring to John Turner. When he was Minister of Finance I was able to watch him, for some time as a critic, double government spending before he left after 40 months. He doubled federal spending and introduced the nation to peacetime deficit financing for the first time. By the time he left office, the deficit had soared from one which was well below a billion dollars. If we go back a number of years in which there were some years in surplus and some years in deficit, he left us with a deficit of $5.6 billion. Some now say that this is the man who was responsible, a man of fiscal restraint. I would invite anyone who wants to say that to look at the record first. Inflation and unemployment went up while the rate of growth in the economy went down, along with our dollar. That was the beginning of the colossal catastrophe which faces the country now.
After he established these spending programs to which I referred, which doubled federal spending during that 40 months, he then brought in indexing. The Government became involved in that very awkward fiscal position in which there was virtually no control over the spending side, which was not indexed except in reverse, where inflation would make expenditures soar, while revenue was indexed so that it plateaued. Having set in place the fiscal stance that saw a levelling of revenue but an ever-growing expenditure line, he then not only quit as Minister of Finance but went back to the private sector and made hundreds of thousands of dollars a year presumably advising people about what was wrong in Ottawa, if one believes his private letters of the time.
That is what we have inherited. We have inherited a regime that has left a gap between revenue and expenditures of over $30 billion. As has been pointed out, on a per capita basis that is 50 per cent more than the deficit which the Americans are so worried about in their country. The deficit not only sops up the savings money of the country, it drives up interest rates and is putting us into the position where 30 per cent of every tax dollar that comes into the federal treasury must be earmarked to pay interest alone. That is what is happening.
The Government will admit that 20 per cent of their expenditures goes out in interest to service the debt, but it is not so
March 30, 1984

quick to admit when speaking about the $100 billion of expenditures that it only has approximately $66 billion in revenue. This means that for every $1.50 that it spends, it only has $1 to cover it. That is why I say that 30 cents out of every dollar it has in revenue must go to pay someone, and it is more frequently the foreigner who picks up that 30 cents, or part of it.
This is the scenario in which we find ourselves. The Government likes to say that other countries are presumably as bad off as our country. I know from your years of attentive study in this field, Mr. Speaker, that you know that is untrue. Let me confirm what you know to be untrue. For example, the best comparison we have for our economy is easily the American economy. We plunged into the recession, which we now refer to as past history but which may or may not be true, sooner than the Americans. We went deeper into the recession than the Americans and our recovery from that recession has been much slower. If our economy had performed under the emperor as well as the American economy has performed under their President, there would be 448,000 more Canadians working in Canada today. The truth is that the Government, rather than the Yankee battering which it loves to do, should perhaps admit its failure to the Canadian public, because if our economy was running at least as well as the American economy, almost a third of our unemployed would not be out of work at all.
Let me give some other facts. Each Canadian employee today would have $967 more per year in after-tax income if we were doing as well as the Americans. Our industrial production would be $4 billion higher than it currently is. It would also mean that our Gross National Product would be $13.2 billion higher. I could give other comparisons. For example, while our unemployment level on a national basis is 11.3 per cent, the American unemployment level is 7.8 per cent. During the past three months U.S. prices went up 4.4 per cent on a seasonally adjusted annual rate basis while Canadian prices went up 7.4 per cent.
I am putting this on the record because I think if we are honest with our constituents it is not just enough to acknowledge what a mess we are in but we should also acknowledge that it did not have to be that way. Certainly the situation in the United States demonstrates that our situation did not have to be so bad.
1 also said that we should not be overly partisan about this subject because I believe that there are solutions. If I may, I would like to recommend, in attempting to decide on solutions, that all members, certainly Liberal members, and even the socialists if they care to read, as well as ourselves, should read a book that has just come into our offices. It is a book written by the late Maurice Lamontagne entitled Business Cycles in Canada: The Post-War Experience in Policy Directions. I invite Hon. Members to read this book because I believe that the senator repeatedly asked us to consider some of the options, such as the research and development potentials, the technology potentials and the trade opportunities. In short, he tried to have us think about the future that could be as
Supply
opposed to dwelling on that philosophical, academic cross-purpose that the Prime Minister led us into.
This book allows us to learn some of the senator's thoughts even after his death. I would invite many in the House to read what the late senator had to say because I can assure Hon. Members that if we would accept some of the suggestions that are being made, the future in Canada can be one where indeed we will have 500,000 more working than are projected to be working under the present Minister of Finance's projections through to 1987. Inflation will be lower. Interest rates will be lower. The deficit will be less. However, before we can reach that goal, we must do what the motion calls for-demand the resignation of the Government and let somebody who knows how to run things in a business-like manner get into office.


Mr. MacLaren:: Mr. Speaker, I am surprised that the Hon. Member who has moved the motion of, in effect, censure on the Government is not able to be here today to give substance to his allegations. On the other hand, while stating in his motion a number of dreadful things that he sees this Government doing, the same man not many months ago said he would do exactly the same thing. Here we have the Hon. Member for St. John's West (Mr. Crosbie) saying that the Government has failed in a number of respects, yet a few months ago he said that if he were in government he would continue with the general approach taken by the Finance Minister. I don't doubt in those circumstances that the Hon. Member finds it difficult to be in the House-


Mr. Deputy Speaker:: Order. The Standing Orders provide for a ten-minute question and comment period after each speaker. May I inquire from the Minister if he rose to make a speech, make a comment or put a question?


Roy MacLaren: Mr. Speaker, as I informed the Chair earlier it was my intention to ask for the floor following the-


Mr. Deputy Speaker:: I appreciate the Hon. Minister's comment. Nevertheless, the Chair is bound by the Standing Orders to inquire if any Members wish to pose questions or make comments following the previous Member's speech.


Mr. Fennell:: Mr. Speaker, the previous speaker referred to the years 1972-74. It was a great insight for me to find out where we really got into trouble. I was aware it was during the day of the support of the red rump that the Liberals brought in these extra policies that caused us trouble. Could the Hon. Member expand? Did the total deficit in those two years amount to $5 billion, or was it each of those years? Can he expand on what he was telling us about that two-year period and what happened subsequently?


Sinclair McKnight Stevens: Mr. Speaker, the period that the Hon. Member is referring to is, of course, that period between 1972 and 1974. We find that in the very early 1970s there was a comparatively balanced budget position. One year there was even a fair surplus. Then the deficits start to mount. By 1975 the deficit was $5.4 billion in that year alone. It was caused by

March 30, 1984
Supply
high spending prgrams being put in place without the corresponding funding. Unfortunately, that was not the end of the story. With the indexing that I referred to that the then Minister of Finance, Mr. Turner, brought in, the revenue in subsequent years tended to plateau, yet his big spending programs-and incidentally we found this out in Treasury Board-never costed out.


Mr. Pepin:: As recommended by your Leader.


Sinclair McKnight Stevens: As a result you have that yawn, that gap between revenue and expenditures, that is now producing a $30 billion deficit. The Minister of State for External Relations (Mr. Pepin) says "as recommended by your Leader", who was the then Leader of the Opposition, Mr. Stanfield. That is typical of how the Liberals only listen to part of what we say. What Mr. Stanfield said at the time was that the only way we could once again get control of expenditures in this country was to cut off from government what they call their tax dividends.
With our personal income tax structure the way it was, if there was a 10 per cent increase in the economy-let us say it was pure inflation-taxes went up 17 per cent. He said you have to index that because as long as you hand that kind of a melon to a government, it will start spending it. The other side, and this is obviously what the Government and the Minister of State for External Relations have forgotten, was that you have to bring in government restraint hand-in-hand with indexing your revenue. That is something this Government and certainly Mr. Turner never did. We are now rueing the day.


Dave Nickerson: Mr. Speaker, I must apologize for disrupting the train of thought, if any, of the Minister of State for Finance (Mr. MacLaren). I have a question for the Hon. Member for York-Peel (Mr. Stevens) knowing that he has some knowledge of the banking industry. Will the fact that Canadian banks have extended great amounts of money by way of loans to countries such as Argentina, Brazil and Mexico, which are having a great deal of difficulty repaying these loans, affect interest rates in Canada in the near future and the level of economic activity? What are the relationships between moneys that have been loaned abroad and moneys that have been loaned to Canadian businesses or the Canadian Government? Could this state of affairs have been prevented by some form of government policy? Is that a reasonable suggestion?


Sinclair McKnight Stevens: Mr. Speaker, I thank the Hon. Member for the question. I believe it is important that we remember just what did happen with respect to this sizeable exposure of Canadian banks to what are generally regarded, as the Minister of State for International Trade (Mr. Regan) said the other day, as not good credit risks. Our banks have an exposure of approximately $14 billion in loans to various Latin American countries, mainly Mexico, Brazil, the Argentine and certain others. This has become a tremendously worrisome asset on their balance sheet. While some rescheduling has been taking place, there is that deep down feeling that they are just
fudging things. Unless the loans are rescheduled, they are just not current. This weekend we may find that the Argentine will say: "We are not going to play the game any more. We are not going to pay the interest. We are not going to reschedule. We just think the terms are too severe".


Jean-Luc Pepin: They said they would.


Sinclair McKnight Stevens: If they said they would, that is good. What I am saying is that it is a very anxious thing for any banking group to have to live with. It is worth remembering that what that causes the banking community to do is widen its spread between the cost of its money and what it charges its customers. We have a very wide spread at the present time. The banks need that spread to provide for future losses that they feel may occur. Second, it makes them come down exceedingly hard on commercial borrowers in this country. Commercial loans in this country have been reduced by about $12 billion over the last couple of years. They are calling in that money. Guess where they are putting it? They are bailing out the Government, buying Government debt. That puts pressure on the Canadian businessman. That is why the farmer who, in the aggregate, has access to only $7.5 billion from Canadian banks is being forced as hard as he is to pay up or be foreclosed.
In short, the system can only take so much expansion. If one part of the system, such as foreign credits, becomes questionable as far as security is concerned, it means that the better part, the domestic part, takes severe pressure both in interest rate rises and in the collection and recall of those loans.


Mr. Munro (Esquimalt-Saanich):: I wonder if the Hon. Member for York-Peel (Mr. Stevens) could deal again with this matter of foreign loans through the banks. Perhaps he could deal with the degree to which the federal Government is involved in the operation, either indirectly through the EDC or as a guarantor of some of the loans that have been made for the purchase in Argentina, for example, of the Candu reactor.


Sinclair McKnight Stevens: Mr. Speaker, again I thank the Hon. Member for his question. As he undoubtedly recalls, the Export Development Corporation, a corporation which carries the full faith and credit of Canada behind it, has loaned the Argentine something over $300 million. Not only did the corporation loan that money on the strength of its directors' decision but it also went through another section of the Act and got a direct loan from the Government of Canada approved by the Cabinet Ministers as opposed to the directors of the corporation.
In short, not only did the EDC extend what it felt was wise in the case of lending to Argentina but, when it ran out of money, it then had the Government indicate that that was still not enough and add another one hundred million some odd dollars to be authorized directly by the Cabinet. I hope that that money will be repaid in due course. Again, it puts the Government in a position of being exposed on a loan that is shown as an asset today but may never be recovered in full.
March 30, 1984


Roy MacLaren: Mr. Speaker, we are faced today with a motion presented by an Hon. Member who, as I noted earlier, is not present in the House. In any event, the motion is at variance with the Member's own stated view that, if he were Finance Minister, he would do exactly what the Government has been doing. It is also, of course, at variance with the facts. If the Hon. Member opposite had taken the trouble to search out the facts, he would have seen that the allegations made in his motion cannot in fact be substantiated. The motion is, however, at one with the gloomy view of the economy which he always tends to bring forward. He has become sort of an apostle of doom and gloom and I am not surprised that he takes advantage of this occasion, against the evidence, to present an exceedingly gloomy picture of Canadian economic prospects.
The heart of the resolution is an interesting one. It attempts to suggest that somehow the Canadian Government can avoid dropping the value of the Canadian dollar vis-a-vis the U.S. dollar and at the same time hold down interest rates if at the same time U.S. interest rates are rising. That is the situation we are facing today. As a result of principally two factors, U.S. interest rates have increased over the past few months. There is an expectation that those interest rates will grow again in the time ahead. Why is that? Principally because the United States is running a very substantial structural deficit.
Let us pause for a moment to describe a structural deficit. I dare say that there are one or two Members opposite who may want, as they often do, to point out that in per capita terms the Canadian deficit is somewhat higher than the U.S. deficit. The fact is that the Canadian deficit reduces automatically as tax revenues increase and as the costs of social programs diminish during the period of recovery. The United States deficit, by contrast, is one which is fixed until such time as the United States Government does decide explicitly to reduce its deficit spending.
At the same time as it is engaged in high levels of deficit spending, the United States has experienced a period of substantial economic recovery. There is an anticipation in the U.S. capital markets that a crowding out shall occur unless the United States Government reduces its deficit spending. In anticipation of that type of crowding out of private investors in the money markets of the United States, U.S. interest rates have been rising.
Attracted by those rising United States interest rates, foreign money, including Canadian speculative short-term money, flows into the United States. A Canadian speculating on the U.S. dollar may buy U.S. dollars and pay for them with Canadian dollars, thus drawing down the value of the Canadian dollar. In those circumstances, what will happen in Canada? We can either respond by adjusting our interest rates or we can let the Canadian dollar reduce its value.
The Chicken Littles across the way say: "My goodness, the sky is falling. Look what is happening. Interest rates in the United States are going up, Canada will have to respond and interest rates will go through the roof'. They cry out in horror that the sky is falling and wonder what we are going to do. I
Supply
shall tell them what we are going to do, Mr. Speaker. We shall go on doing what we have been doing. We shall moderate any sharp reductions in the exchange rate of the Canadian dollar with the U.S. dollar and we shall equally move to ensure that there are no sharp or rapid increases in interest rates in Canada.
I see no evidence, Members opposite cite no evidence and indeed economists who write in the newspapers and elsewhere cite no evidence, that we need fear very rapid increases in interest rates in Canada or indeed that we need fear rapid devaluation of the Canadian dollar. Members opposite know that the reason this is so is that fundamentally the Canadian economy is exceedingly strong. There is ample evidence of that at hand, some of which I shall cite in a moment.
If the Member opposite is suspicious of any evidence that I may cite, I would draw his attention to the Conference Board of Canada, an institution much favoured by Members opposite because it often presents, as they do, a very gloomy view of the prospects for the Canadian economy. The most recent quarterly statement of the Conference Board of Canada forecasts that the inflation rate is to decline for the remainder of this year, easing from about 5.8 per cent in 1984 to about 4.6 per cent this year.


Sinclair McKnight Stevens: How about real growth?


Roy MacLaren: The Conference Board goes on to note that unemployment is expected to decline during the coming year. The fact is, Mr. Speaker, that there shall be real growth of a substantial nature in the Canadian economy during the calendar year of 1984. The Member opposite alleges that there shall be no real growth in the economy. That, of course, is nonsense.


Sinclair McKnight Stevens: No.


Roy MacLaren: There shall be very substantial growth in the economy.


Sinclair McKnight Stevens: Tell us how much.


Roy MacLaren: If he thinks for one moment that the rapid rate of increase experienced during the initial period of a recovery is to continue indefinitely, then of course he is at variance with all economic forecasts. The initial spurt of economic recovery in any such cycle is typically followed by a period of sustainable and stable growth, and indeed of slower growth. We have said that from the beginning. We knew it would happen. The Hon. Member opposite must have known that it would happen, yet the Chicken Littles are saying: "My goodness, the sky is falling". We are saying, we have said and are continuing to say that there shall be sustainable and real growth in the Canadian economy in 1984.
Let me deal for a few moments with the economic forecasts for the future. However, I also wisn to spend a moment dealing first with the question of the impact of the United States interest rates and the United States fiscal policy generally on the Canadian situation. As I have suggested, the United States has had rapid economic growth in the last few months

March 30, 1984
Supply
matched with a substantial federal deficit. The Chairman of the Federal Reserve Board in the United States has noted that those two factors combine to pose a "clear and present danger to the sustainability of growth and the stability of markets both domestically and internationally". He calls on the United States Government to take action to reduce its deficit spending in order to permit greater private sector borrowing in the economy as the expansion goes forward. If the United States Government does not make that move, then there is a danger that interest rates there will continue to climb.
As I have said, Mr. Speaker, I do not anticipate a sharp increase in interest rates in the United States during the course of this year. I suggest to the Hon. Member opposite that there is no way in which the Canadian people can immunize themselves from the effect of interest rate increases in the United States if that should occur. The fact is that the Canadian economy is part of a total North American economy. We operate open borders for the flow of capital, goods and services, and unless the Hon. Member somehow thinks that we can revert to wartime circumstances and successfully impose on an infinitely more complicated economy sustained by electronic transfers of payments a system of exchange controls, then I think he is talking through his hat.
What we have to do in Canada over the longer run is to ensure that we are more productive and more internationally competitive. That is what the Government has been promoting over the past year and a half during our period of economic recovery, the first milestone being the April, 1983 Budget and the more recent Budget of February.
Our competitive position in Canada, since the recovery began, has improved substantially because we have succeeded in bringing down the rate of inflation in Canada. Wage settlements and inflation in Canada have declined dramatically and, accordingly, productivity has increased dramatically.
Our friends opposite often want to compare Canada with the United States so let us make some comparisons. In the final quarter of 1983 the level of wage settlements in Canada was lower than that of the United States. Our unit labour costs have moderated considerably compared to those of the United States. Our surplus on merchandise trade has grown and has reached record levels, unlike the situation in the United States where that country is running a major, unprecedented trade deficit. Canada is reaching record levels of export trade and the United States is experiencing the very opposite trend.
These and other developments are positive elements that have made for confidence in the Canadian dollar in the first year of our recovery, and there is every reason to believe that full confidence will continue. Obviously we want to sustain that recovery by a stable dollar and stable if not lower interest rates. The downward pressures on the exchange rate of the Canadian dollar with the U.S. dollar pose some difficult economic choices for Canadians. On the one hand we know perfectly well that downward pressure on the exchange rate can introduce inflation into Canada, but equally we know that
large increases in interest rates can also cause problems for our economic growth. As I mentioned earlier, we have been working to ensure that any such changes are moderate and that there is no substantial devaluation in the Canadian dollar or sharp increases in interest rates.
I said that the real assurance that neither of these deleterious circumstances will occur rests on the fundamental strength of the Canadian economic recovery. I want to cite for the Hon. Member opposite, who seems to choose his statistics in a most curious fashion-


Sinclair McKnight Stevens: But they are accurate.


Roy MacLaren: -that, for example, in January we had a record merchandise trade surplus of $25 billion at an annual rate. The Hon. Member opposite may wish to belittle that achievement but it is one of which all Canadians can be proud. For my part, I would see Canada experiencing very real growth in export trade during the remainder of 1984.


Sinclair McKnight Stevens: That is what we are saying, the economy is moving.


Roy MacLaren: Partly as a result of that factor and other factors, real domestic product increased by 1.3 per cent in January. That means an increase of 16 per cent at annual rates. No one expects the economic recovery to bound forward at such a pace indefinitely but I say again to the Hon. Member opposite that he can be certain, if he will take the trouble to look at the forecasts, that we will achieve very real growth during the remainder of this year. Retail sales increased some 3.1 per cent in January alone. That is more than a one-third increase over the similar period last year at annual rates.
Regarding manufacturers' shipments, Hon. Members opposite may wish to consider, in terms of what inventory replacement means and what manufacturing expansion means, that manufactured shipments rose by almost 7 per cent in January and new orders by some 9 per cent. That would be in both cases of manufactured shipments and new orders almost a doubling of those of last year. Unemployment was up some
54,000	jobs in February and housing starts rose for the fourth consecutive month.
All those factors are at least on a par with the situation in the United States and in several respects exceed the economic pace in the United States. I do not know what purpose Hon. Members opposite have in seeking to undermine confidence in the economic recovery in Canada and the growth we are now entering upon, but I would suggest to them that in their ever present comparisons with the United States they should recognize that in Canada we are experiencing a period of very real, sustainable growth.
In earlier discussions a number of Members, indeed the Hon. Member who introduced the motion today, have drawn attention to the fact that in Canada we have had a high level of unemployment that can only cause concern to us all; but they neglected to point out that some three million more Canadians are at work now than there were in 1968. After
March 30, 1984

warnings from economists that 1983 would produce more job losses, in fact the economy responded in 1983 by creating some
403,000	new jobs. A year or more ago most forecasters called for continuing declines in unemployment. For example, the Conference Board of Canada forecast 163,000 fewer jobs, but business fooled the forecasters and by December the economy had restored three-quarters of the jobs lost during the recession. Last week Statistics Canada reported that our recovery from the recession is now complete and that we are entering a period of real growth.
How does our employment performance look as compared to that of our major trading partners? I have said that there are now three million more Canadians who work today than there were in 1968. That means that some 40 per cent more Canadians are at work today. The comparable figure for the six major summit countries is less than 13 per cent. In other words, job creation in Canada has proceeded at more than three times the average rate of the summit countries.
I believe it is time, Mr. Speaker, that we all recognized the remarkable performance of the Canadian economy in absorbing the increase in new workers. All of us welcome the fact that women today are working far more than before, that the young people of the baby boom years are now entering the work force, and the Canadian economy has met the challenge of absorbing many more new entries into the work force than are the European countries or, indeed, than has been experienced in the United States.
With our labour force growing faster than in virtually every other country in the industrialized world, we have nevertheless provided jobs for a very substantial number of Canadians. I, for one, Mr. Speaker, am confident that during the coming year we will see a further reduction in the levels of unemployment in Canada as our dynamic economy creates more jobs for Canadians.


Sinclair McKnight Stevens: Mr. Speaker, the Hon. Parliamentary Secretary in his remarks passed off what he referred to as the Canadian deficit as being less worrisome than the American deficit.


Nelson Andrew Riis: Minister of State for Finance.


Sinclair McKnight Stevens: I am sorry. Yes, I am referring to the Minister of State for Finance (Mr. MacLaren), which makes what I have to say that much worse. He passed off our deficit as something which we should not be too worried about because, after all, it is not a structural deficit as in the United States. Our revenue, he said, will be popping up very shortly and will knock it off. Would the Minister of State for Finance explain to the House why, if that is so, his Minister of Finance (Mr. Lalonde) said on February 15 that our projected deficit for this year would be $31 billion; for next year, $29.6 billion; for the next year, $27.9 billion; for the next year $27.1 billion, and for 1987-1988, $26.1 billion. That is a total of $142 billion in deficits shown in the projections by the Minister of Finance. Is
Supply
that not, surely, a structural deficit which the Minister said was something we did not have in this country?


Roy MacLaren: No, Mr. Speaker, the fact is that if the Hon. Member will look at the numbers again, he will see that those forecast reductions represent a magnitude of 10 per cent plus or minus for each of the next five years. Those are substantial reductions. We have set out in the Budget papers and, indeed, in the paper on the deficit which accompanied the April, 1983 Budget, our thinking on how, during the time ahead, we are going to have a gradual reduction in the level of deficit spending in Canada. But make no mistake about it, Mr, Speaker, this side of the House, this Party, is not going to cut back drastically on government spending in the way which our friends opposite seem to think is not only desirable but, apparently, in their view, is quite possible.
Who is it who is telling us that we should cut back on government spending? It is the Member who, when he was in office, would have reduced very substantially, as he said, the Public Service. Perhaps that still remains his view. However, is he not also saying that in reducing the number of those public servants, he is going to reduce substantially, if he were in office, a vast array of government programs? What is he talking about? If we are spending approximately $90 billion a year, are we going to cut out the social programs of which Canadians are rightly proud and which, during the period of recession through which we have passed, provided a safety net for those who could not provide for themselves?
His desk mate told us that his Party would eliminate universality. Then his Leader said, no, they would not eliminate universality. Then his desk mate said, yes, they would, and the Leader said, no, they would not. So I am not quite sure where that Party is on the question of social spending in Canada. However, unless the Hon. Member opposite; if he were in office-which is most unlikely-were committed to a policy of cutting out major social program spending on universities, medicare or old age, there is no way, Mr. Speaker, that deficits in Canada can be reduced overnight by 50 per cent or something of that magnitude. They can be reduced in the way I have described at 10 per cent or so a year, which is substantially different from what is done in the United States, which has, as I have said, a structural deficit of a character and nature fundamentally different from that in Canada.


Mr. Crosbie:: Mr. Speaker, it is quite humorous to note the reply of the Minister of State for Finance (Mr. MacLaren). The whole economic program of the gentleman he is supporting for the Liberal leadership, Mr. John Turner, is that the deficit must be reduced. The only economic policy he has announced to date is that the deficit must be reduced and that under his stewardship and leadership it will be reduced, contrary to what has happened for the last ten years. As a matter of fact, an Hon. Member for the same Cabinet, the Minister of State for Economic and Regional Development (Mr. Johnston), said, "The deficit is a very pragmatic restraint which people do not see. I mean, people have to understand that government simply can't borrow and borrow". However,

March 30, 1984
Supply
apparently the Minister of State for Finance, who should be one Minister in that Government who would observe that, is absolutely uncaring. My question, therefore, to the Minister is this: How can the Minister support the candidate for the leadership who is going to make his main economic plank a reduction of the deficit? And how can the Minister at the same time stay in the Cabinet with his colleague, the Minister of Finance (Mr. Lalonde) who suggested on November 4, 1982 that the baby bonus, known as the family allowance payments, might be eliminated for wealthier people who do not need it and who also said that he disagrees with his colleagues who say that the basic principle of Liberal philosophy is universality? How can the Minister of State for Finance stay in the Cabinet with such a Minister? How can he stay in the Cabinet with the Minister of Indian Affairs and Northern Development (Mr. Munro) who said on November 7, 1982 that the Government is, " ... wasting millions of dollars by sending monthly pension cheques to wealthy senior citizens and baby bonuses to families who don't need the money. Such funds should be directed to help the most needy"?
How can the Minister support a man who says his objective will be to reduce the deficit, and also stay in the Cabinet with two others who are opposed to universality and who have made savage attacks on the whole principle of universality? What bunk and hypocrisy the Minister has spouted!


Roy MacLaren: Mr. Speaker, the Hon. Member opposite is ill advised, I would have thought, to speak of hypocrisy when he brings forth the resolution today, not many months after he told us he would do exactly what this Government is doing and what the Minister of Finance is doing. He cannot have it both ways. If he is going to endorse the policies of this Government-


John Carnell Crosbie: Answer the question.


Roy MacLaren: It seems incongruous that the same time he says he disagrees with the policies of the Government, he says he agrees with them.
On the question of deficit reduction, I do not know that we want to carry on a discussion on the floor of this House about what leadership candidates in the Liberal race have to say.


John Carnell Crosbie: Why not? Is it embarrassing?


Roy MacLaren: However, I am quite happy to pursue the subject by drawing attention to the fact that the Hon. Member quoted only part of what Mr. Turner, the candidate to whom he referred, said. He quoted only part of what Mr. Turner
said.


John Carnell Crosbie: Give us the rest of the weasel words.


Roy MacLaren: The Hon. Member opposite is a past master of selective quotations and he chose to read only the first part of what Mr. Turner said. Mr. Turner, when he announced his candidacy, said that the deficit should be reduced over a period of time. That is what this Government says. But Mr. Turner has also said, as all of us on this side have said, that the deficit
reduction will not be carried out on the backs of the poor, the aged or the sick in our society. We will do it in a gradual and reasoned way, reducing programs where possible and increasing government revenue as necessary. In that way the deficit will be reduced as set forth in the paper accompanying the 1983 Budget and confirmed again in last February's Budget. There is no discrepancy; we are on track and we are going to achieve a substantial reduction in the deficit by the end of the next fiscal period.


Nelson Andrew Riis: Mr. Speaker, when listening to the Hon. Member for York-Peel (Mr. Stevens) and the Minister of State for Finance (Mr. MacLaren) I was reminded of a book by Kathleen Hough called How To Lie With Statistics. I suspect that these Members have developed a fine art of selecting statistics to suit their purposes. The Minister of State for Finance says we on this side are presumably of the Chicken Little variety, concerned that the sky is falling. He went on to say that Canada is experiencing very real, sustainable growth, the Canadian economy is strong, and therefore the Government of Canada is going to go on doing what it has been doing.


Sinclair McKnight Stevens: A point of order, Mr. Speaker. I think that in all fairness a Member should not be allowed to throw out an insinuation that a former speaker has lied with statistics without specifying what statistics he disagrees with. Does he say that what I said about the number of unemployed in Edmonton and Calgary is not accurate? What specifically does he feel was inaccurate?


Mr. Deputy Speaker:: I am afraid that that exchange is in the nature of debate. Unless the Hon. Member for York-Peel makes a specific accusation, I must take the Hon. Member's comments as being simply a contribution to the debate. It is not a point of order.


Nelson Andrew Riis: Mr. Speaker, perhaps I can assist the Hon. Member by referring to the one comment, out of, I suppose, a whole number, which first caught my ear at the very outset of his presentation. He was condemning the Government for its national energy policy and commenting upon the level of unemployment in Edmonton and Calgary as a direct result of that policy. He was thereby implying that if he had the opportunity as a Member of the Government he would change that. Yet I remember very distinctly that when the Leader of the Progressive Conservative Party was in Edmonton not too many weeks ago, he said he would make no substantial changes to that policy.


Sinclair McKnight Stevens: That is not true.


Nelson Andrew Riis: He was in a sense quite prepared to accept that. That was his exact phrase. It stood out on the front pages of The Edmonton Journal and The Calgary Herald.


Mr. Dick:: Read the speech.
March 30, 1984


Nelson Andrew Riis: I did not have the opportunity to read the speech in full-


Some Hon. Members:: Oh, oh!


Nelson Andrew Riis: -but I read the reports. I did not hear a single denial of the Leader when he said that. It is so easy for Members to stand up and hurl these insults and criticisms and imply that they would not do that. Yet I remember that when the Hon. Member for St. John's West was asked how he would change the course which the present Minister of Finance (Mr. Lalonde) was taking-I believe it was in an interview in the city of Montreal-he said, that no, he would not change the present thrust of policy presented by the Minister of Finance. One assumes that because they are criticizing the Government for what it is doing, they would not want to repeat the same error. Yet we now have ample evidence to suggest that that is simply not the case. I say again that the national energy policy is something that the Leader of the Progressive Conservative Party said he would not change in any substantive way.


Paul Wyatt Dick: Mr. Speaker, I am just wondering if the Hon. Member is aware that the Canadian Press issued an apology to the Leader of my Party for those comments, which they made erroneously.


Mr. Deputy Speaker:: Order. There should be no undue interruption of the Hon. Member's speech. An opportunity will be provided later on-


Sinclair McKnight Stevens: But these are untruths.


Mr. Deputy Speaker:: -for questions and comments. I suggest that if Members disagree with the Hon. Member's comments, they will have the opportunity to rise in the 10-minute question period.


Paul Wyatt Dick: Point of order, Mr. Speaker.


Mr. Deputy Speaker:: On a point of order, I hope.


Paul Wyatt Dick: Yes, Mr. Speaker. This Chamber is meant, hopefully, for saying the truth. I can prove that what he is saying is untrue, and he knows it.


Mr. Deputy Speaker:: Order. That may or may not be the case. The Hon. Member will have an opportunity later on to rise and make his comments.


John Carnell Crosbie: The hon. gentleman just misquoted what I was alleged to have said. I certainly said nothing in Montreal. He is talking about an interview in a Toronto newspaper and conducted in Ottawa last November, when I said that the general thrust of the last Budget had been the correct one. That is a long time ago and has no relevance to the present situation in which the thrusts are entirely misplaced; in fact, there has been no thrust in the Budget of February 15.


Mr. Deputy Speaker:: Order. The point raised by the Hon. Member for St. John's West (Mr. Crosbie), under Standing Order 41(1), is well taken.
Supply


Nelson Andrew Riis: Mr. Speaker, I suppose I must say that 1 feel badly that I had misplaced the place of the interview and the source-


John Carnell Crosbie: That is how accurate you are.


Nelson Andrew Riis: -but the former Minister of Finance in the Conservative Government said that, by and large, he agreed with that Budget put forward by the present Minister of Finance. When you consider what was in that Budget, that is quite a statement. I suspect that what he said in the House today will come back to haunt him in future weeks.
I want to go back to the point being made by the motion we are debating today. By and large it is a condemnation of the Government's economic and fiscal policies. Consider that the Minister of State for Finance has indicated that we have very real, sustainable growth taking place today. Our economy is quite strong. I wonder how on earth he can say those things when he knows perfectly well that interest rates are once again going up in what is now, I believe, the fifth week in succession. Unemployment is again increasing substantially. Inflation is increasing month by month. The Canadian dollar is falling, and would probably fall more if the Bank of Canada were not intervening on an almost daily basis to purchase Canadian dollars in order to keep it at an artificial level. Corporate investment in Canada is falling in spite of what the Minister has indicated. The misery index is on the increase.
By and large one has to ask the question: How could anyone, with those general trends before them and listening to any serious economist or financial adviser, say that the economy of Canada is healthy? You have to wonder whether the Minister has travelled throughout the country and looked carefully at the forest industry of Canada. After looking carefully at the forest industry of Canada, could you really say we have a healthy economy? After examining the West Coast, East Coast or inland fishery and talking to the people involved in the fishing industry, could you say our economy is strong and growing substantially? After looking carefully at the mining industry which stretches from one end of the country to the other, how could the Minister say that that particular sector is strong? After visiting the farming communities of Canada from Nova Scotia to British Columbia and really talking to the people involved in the production of food in this country, how can the Minister of State for Finance stand in his place and say that that sector is strong?
I am reminded of a quote by Mr. Michael Walker of the Fraser Institute. Not long ago he was quoted in Vancouver as saying that the Canadian economy is going full tilt. Presumably he did not say in what direction it was going full tilt, Mr. Speaker. A senior adviser to the right of center of today's society is suggesting to us that the economy of Canada is going full tilt. On what evidence is he saying this? How can people say that? That was said in the Province of British Columbia where the Fraser Institute is located. In that province there is
2586

March 30, 1984
Supply
a Conservative Government which has literally devastated that part of Canada.


Donald W. Munro: A Social Credit Government.


Nelson Andrew Riis: The Hon. Member for Esquimalt-Saanich (Mr. Munro) corrects me. I stand corrected. It might be called a Social Credit Government but it is being advised by the Fraser Institute. It is employing ultra-conservative policies and is made up primarily of card carrying Conservatives. Call it what you like, I call it a Conservative Government in the Province of British Columbia which has literally brought that economy to its knees.


John Carnell Crosbie: Don't be so silly.


Nelson Andrew Riis: I challenge Hon. Members in the House to oppose the position that I take when they have an opportunity to rise. The economy of British Columbia is literally on its knees. Under that particular regime and with those particular policies in place the economy cannot by definition become healthy in the months and years ahead. It is a devastating situation, Mr. Speaker. I listen day after day as my friends in the Conservative Party complain about the deficit. I share that complaint. By implication there is the suggestion that if a Conservative Government were in power in this country the deficit would automatically be reduced.
I use two examples. I look to the Conservative Government which is in place in the United States and see what it has done with its deficit. Has it done what it promised the people of the United States it would do? When President Reagan campaigned in the last presidential election he literally promised the people of the United States that he would reduce the deficit in that country. Has he? Of course not. The deficit is significantly increased today. All implications and indicators show that it will continue to increase for many years.
We do not have to look at the United States, Mr. Speaker. We can look at our own country, and in particular at the Province of Saskatchewan. Today the Province of Saskatchewan has a debt that is increasing. It has not always had that debt. It has not always been in a deficit situation. For decades under the New Democratic Party led by individuals such as Tommy Douglas, there was no debt. There was absolutely no deficit or debt year after year, decade after decade. However, as soon as the Conservative Government took over in the Province of Saskatchewan, they had deficits and debts.


An Hon. Member:: That happened before.


Nelson Andrew Riis: Yes, that happened before under Liberal Governments. When the New Democratic Party took over power in the Province of Saskatchewan, there was a debt. It was committed to reducing that debt. Not only did it reduce it, it eliminated it. For decades there was no deficit or debt. However, as soon as the Conservative Government took over in that Province, there was a deficit.
Myths can be perpetuated in this House by people presenting so-called facts which are unsubstantiated, very selective and highly edited. No wonder the people of this country are somewhat confused. No wonder the people of this country wonder what on earth the Federal Government and some of the provincial Governments of the country are doing. For example, Mr. Speaker, the Budget that the Hon. Member for St. John's West (Mr. Crosbie) referred to, a Budget which he supported, was a Budget which brought a substantial number of tax concessions to the corporate sector of Canada. The Minister of Finance indicated clearly at that time that with a number of tax concessions-


John Carnell Crosbie: Mr. Speaker, I rise on a point of order. I should not be misquoted here. I never said I supported the Budget of April 1983. I said it had some general thrusts that I agreed with. I have not said I supported the Budget. In fact, I voted against the Budget. The hon. gentleman should not say I supported the Budget of last April.


Nelson Andrew Riis: Mr. Speaker, I thank the Hon. Member very much for that intervention. I appreciate the Hon. Member for St. John's West clarifying the point that he supported the general thrust and a number of the-


John Carnell Crosbie: Some of the general thrusts.


Nelson Andrew Riis: -some of the general thrusts of that Budget, Mr. Speaker, but perhaps not in its entirety.
To continue with what I was saying before I was interrupted, Mr. Speaker, the Minister of Finance told the people of Canada that we must have patience, must be prepared to sacrifice, and must be prepared to share the burden of this recovery. He promised us that giving huge concessions to the corporate sector of the country, and in some cases to the upper income earners, was in our best interest because those individuals who had tax concessions provided to them would take the extra money and invest it in the economy in new plants, new equipment and new economic activity. As a result, jobs would be created for the unemployed in Canada, and this would go on year after year. Only part of that proposal worked, Mr. Speaker. Indeed the corporations received a considerable number of tax concessions. As a matter of fact, the President of the Bank of Montreal, Mr. Mulholland, was quoted as suggesting in a speech, made I believe in the City of Toronto, that the corporate sector of Canada was awash in tax concessions. He was really saying that the money saved through tax concessions could not be wisely invested in new plants and new equipment because of the under-utilization which was taking place in manufacturing in industrial Canada.
The Minister of Finance told only half the story when he said that by giving these huge tax concessions eventually economic development would occur, jobs would be created and unemployment would decrease substantially. With unused capacity in the 60 per cent to 70 per cent range, that reinvestment was simply impossible. One is not criticizing the corporate sector for not investing in new plants when present plants are operating at only 50 per cent, 60 per cent or 70 per cent of
March 30, 1984

their capacity. One is not saying that one would necessarily do anything differently. The point is that that did not work.
The Minister of State for Finance is saying that they are going to continue to do what they have been doing because they feel it is the right thing. It is obvious that the present policies of the Government will not get the economy of Canada going as we would like to see it and as the people of Canada ought to see it. In comparison with countries around the world, many of them our economic competitors, Canada unquestionably has the greatest growth potential. Unquestionably we have more natural resources, energy resources and capital resources at our disposal. We have more expertise and more high-tech at our disposal. We have a population that is relatively well trained and well educated, although that is being threatened by the Government today. The only thing we lack, Mr. Speaker, is the political will to do the job.
Many people say it is difficult these days to have political will to do the job. I want to remind Hon. Members that we have seen Governments have political will and we have seen programs implemented relatively quickly. I will use the national energy policy as a case in point. The decision of the Government was to introduce a national energy policy, and within a matter of a very few months we had a national energy policy in place. I also recall the Prime Minister (Mr. Trudeau) deciding that the country needed a bilingual policy. By the stroke of a pen, a policy was created and put into place overnight which has created a different Canada in relation to bilingual issues. Also with the stroke of a pen the Government of Canada decided that we should have a metric program in place. Indeed, within a very short period of time that program was launched and it has literally changed the measurement system of Canada. We have seen identifiable examples of where the political will is in place and there is no question action follows. There is a need now as never before for the Government of Canada to work co-operatively with provincial and regional governments, to work carefully with the industrial business and labour sectors in order to draft a co-operative economic international strategy.
What about our successful competitors? I think of some western European countries and countries such as Japan which have had an approach in place for some years and as a result are, by and large, much more competitive and productive than we are. People have some sense of where they are going. People have some sense of their country's destiny. People see where they fit in, whether they are corporate leaders, labour leaders, individuals or governments. People see where they fit into the overall strategy. But what if we do not have a strategy? Then we find many of our important corporate areas, and in some cases very strategically corporate areas, in trouble. In this case I refer to such corporations as Dome, Chrysler, Maislin, Massey-Ferguson, Canadair, de Havilland, Cooperative Implements, Consolidated Computers, White Farm Equipment, Pioneer Chain Saw, St. Anthony's Fisheries and Electrohome Limited. The list could go on and on. When major corporations get into financial difficulties, the best we
Supply
have been able to do is to come in with some rather simplistic bailouts. Some have worked, some have not. In a sense, by definition, lacking any over all comprehensive economic and financial strategy, these bailouts cannot work because these corporations are not being bailed out in any particular context. If we had a national strategy in which all of the players were agreeing and participating, then perhaps we could view these so-called bailout requirements in some context. We could say in some cases, yes, it makes sense for the federal Government to use taxpayers' money to keep companies afloat and to encourage them into a more productive areas. In others we may decide that, no, because of the obvious direction in which this country is moving all the participants agree that this particular bailout does not fit into the overall strategy.
In summary, I suppose I support the general thrust of this motion put forward by the Hon. Member for St. John's West. I believe the Government has misrepresented the people of Canada in introducing appropriate economic and financial policies. I believe that one of the major items required in order to develop a sustainable economic growth and recovery in Canada is an economic strategy in the development of which all of the participants play a role.


Dave Nickerson: Mr. Speaker, I listened intently to the Hon. Member for Kamloops-Shuswap (Mr. Riis). I found his speech very enjoyable but somewhat lacking in concrete recommendations as to what he or his Party might do to save us from the economic ills that have been visited upon us by the Liberal Government. He came in at the very end and made the pitch that his Party has made on several past occasions, that there should be some kind of a national strategy, some kind of centralized economic plan for the whole country. I do not really want to ask the Hon. Member a question, but I want to comment on that view even though he did not outline what might be contained in that plan.
I think there are great dangers with that type of approach to life. Is that not how they organize things in the Soviet Union?


Nelson Andrew Riis: Try Japan.


Dave Nickerson: What about the people who want to dissent? What if somebody does not want to fit into that plan? What if they do not want to take up their assignment in the salt mine, or the potash mine in Saskatchewan or wherever they are told to go by a socialist government? This is a great danger that I behold in this idea where there is someone at the pinnacle somewhere in Ottawa who assigns every manufacturer, every farmer, or every worker in Canada into his little slot according to this plan, Sir. I stand up to dissent. I think the people who want to go fishing should be able to fish in whatever lake or sea they want. I think that if we were to have that freedom of choice in Canada, which is rapidly disappearing, then a lot of our economic ills from which we now suffer would be solved. We should not be going farther down the road to centralized planning.


Nelson Andrew Riis: Mr. Speaker, I can say that that is probably the most ridiculous statement I have ever heard raised in the

March 30, 1984
Supply
House of Commons. I have heard what I consider ridiculous statements made in the House, but that one takes the prize by leaps and bounds. What I was suggesting was planning with all of the players involved. One sees this in countries such as Japan, Austria, Switzerland, West Germany-


Dave Nickerson: In China.


John Carnell Crosbie: In Czechoslovakia and Poland.


Nelson Andrew Riis: -in Belgium, Norway, and Denmark. When you hear arguments put forward such as that of the Hon. Member for Western Arctic (Mr. Nickerson), it is no wonder that people have questioned the validity of this House. After an attempt to deliver what I thought was a suggestion for consideration to hear Members stand up and purposely and consciously ridicule that suggestion, knowing that that suggestion is in place in the most progressive economics in the world today, is to misrepresent, misinform, slant, and present a biased picture. It does a disservice to this House and to the institution of Parliament. As he made his statement, I will let that go for my own.


John Carnell Crosbie: Mr. Speaker, one does not want to disturb the serenity and the capacity of thought of Members of the New Democratic Party. They have not had a new view or a new idea in at least twenty years. I want to test the Hon. Member now.
The Conference Board of Canada has just given its quarterly Canadian forecast. Mr. Maxwell, the chief economist, said when he released the forecast that the Keynesian theory that you can spend your way out of recession "simply is not working". We have surely seen the proof of that in the last couple of years. We have just ended a year with, I believe, a deficit of $31.6 billion. We have $29.5 billion deficit forecast for this year. We have had deficits in the last few years totalling in excess of $90 billion. We are spending, spending, spending. But we still have a bad recession, terrible unemployment, and all the other ill effects. I want to ask the Hon. Member a two-part question. First, does he agree with Mr. Maxwell? Has the New Democratic Party come to its sense? Is the New Democratic Party now ahead of the Liberal Party in realizing that this approach does not work? The whole system today is shagged up. Our whole economic system is wrecked with these government deficits and borrowings. That is why we do not have any real recovery. Would the Hon. Member agree with that?
Second, would he agree that one of the differences between the piteous state of the Canadian economy today, and the American economy which is booming ahead with real growth, with much better employment prospects, is its lower deficit? The American economy is ten times the size of ours, and its deficit is about 50 per cent lower than Canada's. We have had tax increases in Canada. This is in sharp contrast to the expansionary fiscal stance of the United States. We have increased taxes; the Americans have reduced taxes. The only reason the Americans have a deficit that is so large is that they have also increased defence spending. Would the Hon.
Member for Kamloops-Shuswap not agree that this accounts for the difference between the two economies?
However, would the Hon. Member first agree with Mr. Maxwell that you cannot simply spend your way out of recession anymore? Are not the last four or five years living proof of the bankrupt policies of the establishment opposite, which is now tottering on its last legs toward a final cataclysmic event when the election comes?


Nelson Andrew Riis: Mr. Speaker, 1 think it is much more complicated than the question put by the Hon. Member for St. John's West. I think he wants a glib response that no, one cannot spend one's way out of a recession.
I believe that the more sensible way to approach it is to suggest that one can invest one's way out of a recession. I believe that now is the time when we have to find ways and means for encouraging average Canadians to invest in our economy once again, to encourage the corporate sector to invest in the Canadian economy once again and also to invest in the public sector in terms of developing the necessary infrastructure that an economy such as ours requires. To do that does not always result in increased government spending.
For example, I know that the Hon. Member feels strongly about the bribes that the Government presently gives to some of the major oil companies for exploration purposes. They amount to many billions of dollars for the last number of years and into the future. I do not think any serious economist would suggest that those bribes are necessary to encourage our oil companies to explore off of our coasts and in our frontier areas. If we were to take some of that bribe money that is given to the oil companies and perhaps if we were to collect some of the taxes that are presently called deferred corporate taxes, we would have a substantial amount of money to invest in the infrastructure that a country like Canada must develop in order to get on with developing our economy. Just so there is no mistake in the Hon. Member's mind, by infrastructure I mean better port facilities, better transportation facilities and perhaps some assistance to small business and the farming sector of our country. That is how we will get our economy going again.


Paul Wyatt Dick: Mr. Speaker, there are a number of inaccuracies that I know the Hon. Member for Kamloops-Shuswap (Mr. Riis) would not want to leave on the record. There was the inaccuracy about the speech made by our Leader in Calgary and Edmonton to which he referred and about which I am sure he knows the Canadian Press issued a retraction saying that the reports were in error. There was also an editorial in the Ottawa Citizen at that time stating that the press had not served our Leader very well because it had distorted the facts. Does he think it is fair and honest, in making his speech, to compare the Government of Mr. Douglas, which did not have deficits, the Government of the 1940s and early 1950s when indeed there were surpluses at the federal level and when Douglas Abbott, the Minister of Finance, was referred to as Sunny Abbott because he always had such glowing surpluses,
March 30, 1984

with a situation 35 years later when we are in the midst of the deepest recession since the Great Depression?
Does he not recognize that Mr. Blakeney, the immediate predecessor of Grant Devine of Saskatchewan, also ran with deficits through the late 1970s and early 1980s? That might be a more fair comparison, instead of referring to a sunny period in our times when we were in a reconstruction 35 years ago?


Nelson Andrew Riis: Mr. Speaker, I believe the record will show that the point I was trying to make was that at that time in Canadian history-in fact, Hon. Members can pick whatever date they desire, the late thirties, forties, fifties and sixties- while Conservative governments in all other provinces in this country were chalking up deficits that were placing their people in debt, including Atlantic Canada, parts of prairie Canada and central Canada, there was a single government in this country that was not. That was the New Democratic Party Government in the Province of Saskatchewan. That was the point I was trying to make.


Yvon Pinard: Mr. Speaker, I understand that we are reverting to Routine Proceedings. I am rising on a point of order at this time under Routine Proceedings.


Mr. Deputy Speaker:: As agreed to earlier, the House will now proceed to Routine Proceedings, and I recognize the Hon. President of the Privy Council (Mr. Pinard) on a point of order.



ROUTINE PROCEEDINGS


Yvon Pinard: Mr. Speaker, I want to confirm that we had consultations and that negotiations took place with the other Parties. I am happy to report that we have come to some agreement which will make it unnecessary for us to introduce today any Bill dealing with borrowing authority. The agreement is on Bill C-21. 1 believe, Mr. Speaker, you would find the unanimous consent required for the following motion:
That, notwithstanding any Standing or Special Order, at 4.45 p.m. on April 2, 1984, any proceedings before the House shall be interrupted and every question necessary for the disposal of Bill C-21, an Act respecting borrowing authority, shall be put forthwith and successively, without further debate or amendment, except as herein provided;
Provided that the said Bill shall be referred to a committee of the whole, rather than a standing committee, after being read a second time; and
Provided that a Minister of the Crown shall propose in committee of the whole the necessary amendment or amendments to reduce the borrowing authority requested in the said Bill to $24,550,000,000.
Business of the House


Mr. Deputy Speaker:: The House has heard the proposal put forth by the Hon. President of the Privy Council. Is there unanimous consent to the proposal?


Erik Nielsen: Yes indeed, Mr. Speaker. That reflects the arrangements that have been concluded between the Parties on the clear understanding that the notice with respect to the supplementary borrowing authority for $4 billion will not be proceeded with.


Mr. Deputy Speaker:: Is there unanimous agreement to adopt the proposal put forth by the Hon. President of the Privy Council?


Nelson Andrew Riis: Yes, Mr. Speaker. On behalf of my Party I say that the same understanding has been entered into, and we concur.


Mr. Deputy Speaker:: Is it agreed?


Some Hon. Members:: Agreed.


Mr. Deputy Speaker:: Agreed and so ordered.


[Stage Direction]
Motion agreed to.

Yvon Pinard: Mr. Speaker, I would like to seize this opportunity to outline the business for next week. On Monday we will resume debate on the third reading stage of Bill C-3. Tuesday will be an allotted Opposition Day. On Wednesday and Thursday of next week we will debate the report stage and, hopefully, give third reading to Bill C-12. The back-up legislation will be Bill C-10.


Mr. Gauthier:: On this same subject of House business, Mr. Speaker, I would like to ask the President of the Privy Council some information concerning the Joint Standing Committee of the House and the Senate on Official Languages established last week, on March 22, 1984, when the House agreed to the motion introduced by the Government.
We were unable to call the meeting to set up the Committee for the simple reason that we lack some information. Could the President of the Privy Council tell us, first, whether he plans to decide on the number of representatives from the House and from the Senate on this Committee, and second, what will be the ratio of members from the Senate and the House of Commons? Can he also tell us exactly what terms of reference will be provided so that the Report of the Commissioner of Official Languages may be referred to the new Committee since it has already been forwarded to the Special Joint Committee and not to the Standing Committee? There will have to be negotiations and adjustments made if this Committee is to have any work to do.


Yvon Pinard: Mr. Speaker, the Hon. Member's interest in the Committee on Official Languages is a well known fact and I

March 30, 1984
Order Paper Questions
can assure him that, since the Committee established a few days ago is a Standing and not a Special Committee, we intend to allow this Committee to work efficiently. There is no doubt that, if we need a special indication from the House to send the Report tabled by the Commissioner of Official Languages to the new Committee, this will be done.
Concerning the other issues mentioned by the Hon. Member, I shall be happy to discuss them with him and suggest to the House that the appropriate arrangements be approved so that the Committee may operate normally. I can assure the Hon. Member that his concerns will be taken into serious consideration and that we are not interested in delaying this unduly. I hope that this whole situation will be clarified by next week and that the necessary changes will be made.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
John Leslie Evans: Mr. Speaker, the following questions will be answered today: Nos. 94, 192, 341, 585 and 593.


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


Hon. Bob Kaplan (Solicitor General of Canada):: Ministry Secretariat	4
National Parole Board	3
Royal Canadian Mounted Police	33
Correctional Service of Canada	12
Total	52


[Stage Direction]
Question No. 192-Mr. Blenkarn:	-OUTSIDE
1.	In the fiscal year (a) 1981-82 (b) 1982-83 were outside consultants employed by the Ministry of State for Social Development and, if so (i) how many (ii) what was the total amount paid?
2.	Were any consultants paid more than $20,000 and, if so, in each case what (a) was his/her name (b) was the amount (c) services were provided?
Hon. Mark MacGuigan (Minister of Justice):: (1) How Many	1. (ii) Total	(a) Who	2. (b) Amount	(c)	What services
	Amount				
8	$97,081	Russell Banta	$32,922	Development management system proposal.Magnus Gun-	$24,962	Analysis of the effectivenessther	of federal programs in support of post-secondary education.1982-83	(i) How Many	1. (ii) Total	(a) Who	2 (b) Amount	(c)	What servicesAmount	8	$85,258	Nepean	$23,137	Presentation, format andDevelopment Consult.	graphics of A. Base.M. Hendrick-	$20,855	Analysis of the social andson	economic characteristics of Metis and non-status Indians (MNSI) and of provincial program expenditure patterns for MNSI.


Mr. Orlikow: 1.	What is the composition of the Board of Directors of the Freshwater Fish Marketing Corporation and what is the address and occupation of each individual?
2.	What is the compensation and what are all the benefits paid to the chairperson, directors, president and vice-presidents of the Corporation?


Hon. Pierre De Bane (Minister of Fisheries and Oceans):: 1.	The Board of Directors of the Freshwater Fish Marketing Corporation consists of a Chairman, a President, and one director from each of the participating provinces and four other directors each of whom is appointed by the Governor in Council.
March 30, 1984

Name	Address	OccupationD. D. Tansley	Freshwater Fish Marketing Corporation-240 Sparks St. Ottawa, Ontario	ChairmanT. J. Dunn	Freshwater Fish Marketing Corporation-1199 Plessis Rd. Winnipeg, Man.	PresidentR. M. England	54 Arthur Street Winnipeg, Man.	Regional Planner/Social Economic ConsultantJesse D. Klassen	Box 235 Big River, Sask.	Commercial FishermanDr. D. M. Cauvin	Freshwater Institute 501 University Cresc. Winnipeg, Man.	Associate Director of Fishing Services
There are currently six vacancies on the Board.
2.	The President is paid at the GI-6 level (61,070-71,890) by the Corporation. His salary is fixed by the Governor in Council and he is entitled to those benefits available to any public servant. The Chairman and those directors not employees of the Public Service receive $100 per day plus travel expenses when attending Corporation meetings. Directors who are members of the Public Service receive no compensation from the Corporation.


Mr. McLean: 1.	Does the Government have a specific policy with respect to Canadian commercial relations with Chile and, if so, what is it?
2.	Does the Government enforce any restrictions on sales of military and security technology to that country and, if so, what is a list of all such restrictions?
3.	To the knowledge of the Government, were there any sales, by Canadian firms, of either prison detection or offshore surveillance systems to the Chilean Government?


Hon. Allan J. MacEachen (Deputy Prime Minister and Secretary of State for External Affairs):: 1. Canada maintains normal diplomatic relations with Chile and we also pursue normal commercial relations that will benefit Canadian producers and exporters.
2.	The sale of defence related equipment to foreign countries, including Chile, is governed by the Export and Import Permits Act. As a matter of policy, the Canadian Government does not permit the sale of defence related equipment to countries engaged in hostilities or where there is an imminent threat of hostilities, or to countries for which the export of arms is forbidden by United Nations embargo. Applications for permits to export defence equipment that might possibly be used against civilians are carefully scrutinized and would be rejected if it appeared that such a use were probable.
There is no list of restrictions. However, a complete list of all products for which export permits are required is published as the "Export Control List" in accordance with requirements of the Export and Import Permits Act.
3.	To our knowledge, since export permits are in general not required for detection equipment of the type normally used by prisons, only Sparton of Canada Ltd. has been involved in the
Order Paper Questions
sale of a detection system evidently intended for use in prisons in Chile. This sale was made to a private sector firm, not to the Chilean Government. Government officials have been informed by the company that most of the content of the system was supplied by its U.S. parent company, although parts of this system were assembled in Canada and the marketing was done by the Canadian subsidiary. The installation of the system was done by the Chilean prime contractor. No permits were required for export of this equipment and, therefore, the Government had no opportunity to comment on the appropriateness of the sale.
With reference to offshore surveillance systems to Chile, we understand that only at one point a Canadian company had identified an opportunity for such a system but the project has since been deferred. No application was made for an export permit.


Mr. Howie: What are the (a) names (b) positions of the persons who occupy positions on the Executive and Board of Directors of the Science Council of Canada and, in each case, what amount was he/she paid in respect of that position in the fiscal year ended March 31, 1983?


Mr. Rolland Dion (Parliamentary Secretary to Minister of State for Economic and Regional Development and Minister of State for Science and Technology):: In so far as the Science Council of Canada is concerned:
(a)
Blais, Dr. Martin
Blais, Dr. Roger A.
Borger, Dr. John P.
Boulet, Dr. J. Lionel
Branigan, Dr. Donald W.
Chisholm, Dr. Donald A.
Drake, Dr. E. Lawson
(b)
Member for a term ending February 28,
Nil
Member for a term ending July 31,
Nil
Member for a term ending September 30, 1983
Member for a term ending June 30,
Nil
Member for a term ending July 31,
Nil
Member for a term ending June 30,
Nil
Member for a term ending July 31,
Paid $ 1,000 honorarium for duties carried out as Chairman of the Science and Education Study Committee.

March 30, 1984
Order Paper Questions
Florian, Mary-Loy E.	Member for a term ending December 1, 1983
	Nil
Gourdeau, Jean-Paul	Member for a term ending July 31, 1984
	Nil
Kenney-Wallace, Dr. Geraldine	Member for a term ending June 30, 1985
	Nil
Kydon, Dr. Donald W.	Member for a term ending July 31, 1984
	Nil
MacDonald, Dr. John J.	Member for a term ending June 30, 1983
	Paid $2,000 honorarium for duties carried out as Chairman of the Transportation Study Committee and as Chairman of the Steering Committee for the National Conference on Aquaculture.
MacDonald, Dr. John S.	Member for a term ending October 31, 1983
	Nil
Maine, Dr. Frank W.	Member for a term ending October 31, 1985
	Paid $ 1,000 honorarium for duties carried out as Chairman of the Biotechnology Study Committee.
O'Connor, Arthur J.	Member for a term ending June 30, 1983
	Nil
Robertson, Dr. B. E.	Member for a term ending July 31, 1984
	Nil
Simek, Stefan	Member for a term ending December 1, 1983
	Nil
Snyder, Harold L.	Member for a term ending July 31, 1984
	Nil
Suzuki, Dr. David	Member for a term ending June 30, 1985
	Nil
Vikis-Freibergs, Dr. Vaira	Member for a term ending December 1, 1983
	Nil
Webster, Dr. J. Malcolm	Member for a term ending June 30, 1985
	Nil
Wilson, J. Tuzo	Member for a term ending June 30, 1983
	Nil
Winters, Henry C.	Member for a term ending October 31, 1985
	Nil
Wolan, Dr. C. T.
Zimmerman, A. H.
Member for a term ending October 31, 1982
Nil
Member for a term ending June 30, 1985
Nil
Executive
Chairman	Smith, Dr. Stuart L.
Vice-Chairman	Vacant
Compensation. See report on Governor in Council appointees tabled in the House of Commons on November 17, 1983.


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


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


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Stevens (for Mr. Crosbie):
That whereas the depreciating dollar and increasing unemployment, inflation and interest rates endanger economic recovery and undermine job creation through their damaging effects upon agriculture, small business and business investment, this House regrets the government's failure to include in its February 15th Budget, or to adopt at any subsequent date, policies to provide the necessary conditions for a reduction in interest rates and the strengthening of the Canadian dollar and calls for the immediate resignation of the government.
John Carnell Crosbie: Mr. Speaker, the Minister of State for Finance (Mr. MacLaren) apparently had something to say about the fact that I was not here to speak at two o'clock. I do not know where he is now. I guess he spoke and ran. If he is still around, he might come in and I will tell him where I was. I was to be at the Canadian Police College at twelve o'clock for graduation ceremonies. They had the eminent good sense to ask me to be the guest speaker. I was to introduce this motion, but I was not able to introduce it between twelve o'clock and 1 p.m. because of the bells, for whom the bell tolls, because the ding-dong Government over there has not solved the bell problem. I could not leave the ceremonies before I spoke there in order to rush back here for
March 30, 1984

two. Therefore, my good friend, the Hon. Member for York-Peel (Mr. Stevens), substituted for me as our first speaker and, of course, did his usual fantastic job.
If that settles the mind of the Minister of State for Finance, let me deal with his speech. His speech illustrated the smugness with which this Government is adorned. He is full right to the mug with smug. How could he treat the economic situation of this country as cavalierly as he did today and as his Minister of Finance (Mr. Lalonde) has been doing is beyond me. That smugness was illustrated in the Budget of February 15, when the Minister of Finance said:
In my April Budget, my goal was to secure the recovery. That goal has also been met.
What goal has been met? What recovery? Where is it? It is not present for the 1,476,000 Canadians who are unemployed. Since that Budget was brought down, every economic commentator has remarked on the fact that the Budget was based on unrealistic assumptions and forecasts, particularly the assumption that we are going to have an unprecedented six consecutive years of sustained economic growth. This is what the Minister's Budget said. We will be lucky if we even have any sustained economic growth today.
What has happened since the Budget came down, the Budget he is so pleased with, the one he says has met his goal of recovery? What has happened since then? The Bank of Canada rate has gone up for each of the six weeks since that Budget, from 10 per cent to the current 10.78 per cent. Interest rates have gone up, the prime bank rate from 11 to 11.5 per cent. Mortgage rates have risen by another half per cent or more, depending on the term.
Interest rates have been rising and are likely to continue to rise because the Canadian dollar has been depreciating just about every day since the Budget was brought down, particularly as a response to the stupidity of the Minister in saying, as he said and as I remarked in the House before on March 6, that he was not spending his nights up worrying that the dollar is not at 81 cents. What an incredible statement. If the Minister of Finance of this country is not worrying about the state of the currency in this country, the state of its economy and the state of its interest rates, how can we expect anything but that the currency of this country will devalue and be treated with the contempt it has been treated with since he made that statement?
Not only that, for two consecutive months the inflation rate has been back up again. It was down to a year-over-year rate of 4.2 per cent last November. It was up in December, up again in January. It has been up for the last two consecutive months, January and February. The latest figure is 5.5 per cent. The underlying trend rate of inflation is back up again. Surely that has to worry everyone. Even at a time of low inflation, our interest rates stayed at a prime rate of 11 per cent and higher. The real interest rate that people are now looking for on their money has exceeded 6 per cent and 7 per cent.
If the inflation rate is going to go up again, where are interest rates going to go? What is the reason interest rates
Supply
have been staying up as they have despite the lower inflation rate? It is the fear of renewed inflation. In the last two months we have seen the reason for people to fear renewed inflation. Interest rates have gone up, the dollar is tending down and there have been other economic consequences. We have seen the lack of business investment and the like.
The Minister of Finance continues to pretend that all of those trends do not represent a danger to our economic growth. He continues to pretend that there is not need for a change in government economic policies despite all these facts. The Minister has been pretending all along that things are out of his control, that the Government control what is happening, that we are prisoners of the United States, lock-step with them, that no matter what we do in Canada, we have to follow what happens in the United States. That is his usual theme. Last Monday the Minister gave lie to that theme in this House when he said, as reported at page 2422 of Hansard:
We are monitoring the situation carefully. If need be, we will make the necessary adjustments.
What more need will we want to see?
In the meatime I see no reason to change the basic policy that we have been following.
If that statement meant anything, it meant the Government could take steps. The Minister said they are monitoring the situation, but they are satisfied that this is the right course, there is no reason to change the basic policy and no need to make these necessary adjustments. This Minister is satisfied that 1,476,000 Canadians should remain unemployed. That is what he said.
When the Minister is asked in this House about the unemployment figures, he tries to pretend that we are doing as well or better than the United States. He croaks of how we have had a large number of new entrants into the labour force. What malarkey! These are people who have been unemployed donkey's months, if not years, and they are coming back out to see if possibly there is a job. This is supposed to indicate a better situation in Canada.
The facts are entirely different. What are the facts? In August, 1983 there was an unemployment rate in the United States of 9.5 per cent. In Canada it was 11.6 per cent in August of last year. In February of this year, the unemployment rate in the United States was 7.8 per cent, a decline of 1.7 per cent. What is the situation in Canada? We have an unemployment rate of 11.3 per cent. The decline in our unemployment rate has been 0.3 per cent as compared to a decline in the United States of 1.7 per cent.
Do you know how many new entrants to the labour force there have been in the United States in those months, Mr. Speaker? There have been 576,000 new entrants to the labour force in the United States. How many have we had in Canada? Only 61,000. What do new entrants to the labour force have to do with this pitiful performance in Canada as compared to the performance in the United States? Nothing, Mr. Speaker, and less than nothing.

March 30, 1984
Supply
The number of unemployed in the country is up for the fourth month in a row. The rate of unemployment is up for the second month in a row. The number of people working full time is now 352,000 fewer than the pre-recession peak and 68,000 fewer than the number working when the Government came into office four years ago. The number of young people with jobs is now 346,000 fewer than the number who had jobs before the recession and 288,000 fewer than when the Government took office in March, 1980, four years ago. The effect on jobs of this Government entering office is that 68,000 fewer adults have jobs now than four years ago and 288,000 fewer young people have jobs now than four years ago.
We hear and see the Liberal leadership candidates, five of whom are Ministers of the Government, going around the country pretending that they have some new economic approaches. The Minister of Justice (Mr. MacGuigan) has a new economic program, but we have not heard what it is. He wants the Government to clear out of the board rooms of the nation. He does not want to have government intervention any longer, yet he remains a member of the most interventionist Government in Canada's history. The leadership candidate who is not a member of the Government is attacking the deficit. The Minister of Economic Development (Mr. Johnston) is attacking the deficit, and every Liberal Minister of Finance in the last 12 years has attacked the deficit, yet not one of them lifted a finger to do anything about the deficit which they are now attacking. It is a disgrace, Mr. Speaker.
I have here a study called Hidden Unemployment which was done by the Social Planning Council of Metropolitan Toronto. It indicates that 2,019,000 Canadians were unemployed last year and not the the 1,448,000 that Statistics Canada showed. Why is this? It is because Statistics Canada does not take into account discouraged workers who have given up looking for work because they believe there are no jobs available in the current market in Canada. This is the situation which the Minister said did not need adjustment.
Do you not think, Mr. Speaker, that the situation calls for some adjustment when there is an unemployment rate of 11.3 per cent, 1.5 million Canadians who cannot find work are looking for work and another half a million Canadians are no longer looking for work because they know there are no jobs for them? If the Minister has the ability to make adjustments to his policy, has the need not been proven for him to do so? The Minister is not even present today to give us his reasons for not doing so.
The Minister usually says that he is helpless because of the United States. When he gets up in the morning and changes his underwear, he should put on the stars and stripes. He should wrap himself in the American flag because, according to him, only the United States can do anything to help the world. As reported on page 2467 of Hansard of March 27, 1984, the Minister said:
We are part of the world economy-
-that is something new that we did not realize, I am sure. He went on:
-and we are also very much affected by events in the United States.
There is the old United States again. Every time the Minister hears the word "United States", he salutes. This is the same Minister who two years ago insulted the Americans. He went to the United States and told them that we are going to take over the energy field, we do not want foreign investment, we do not want United States investment. He went down there like a raging lion, Marc the lionhearted in New York. He was telling them what they could do with their foreign investments. He told them they could shove it, and not to Canada but elsewhere. Now he says every day that we are very much affected by events in the United States. This Marc is a different Marc Antony.
Again on page 2467 of Hansard of March 27, 1984, the Minister is reported as saying:
If there is a rise in interest rates in the United States, clearly we would not be able to keep our rates at levels lower than those in the United States over a prolonger period of time.
This is the helpless Marc, the hapless Marc. He is certainly hapless and helpless. Anyone who reads the record will see that the comments he made in the House this week and last are confused, contradictory and shifty. He is shifting all over the place and does not know where to turn. This is not the certain, sure, strong Marc the lionhearted we have heard about who is going to save the Government. He is evasive, elusive, lacking certainty, looking around for pity, piteous looking. Of course, he is always arrogant and imperious. When shown wrong, he always proclaims his rightness. One need simply read his replies as reported in Hansard for the last two weeks to see that the economic fate of the country is in the hands of a man who does not know what to do, who has given up, who has no solutions and who will muddle through. His policy is one of muddleheadedness and addle-patedness.
The Minister is almost as bas as the Hon. Member for Kamloops-Shuswap (Mr. Riis). Never have I heard such shus-wap as I heard from the Hon. Member for Kamloops-Shuswap today. He spoke gibberish with not one solid economic thought. Members on that side of the House have not grown beyond Cambridge University in the 1920s. They have seen where the Keynesian policies taken to their extreme have brought the Liberal Government of Canada, but they cannot even come up with anything new. All they want is the same old thing, only more of it.
Statistics Canada reports that "Consumer demand will continue to be restrained in the short term by the steady slowing of wages and weak labour market conditions". Does the Minister do anything about that? No, apparently that does not indicate any need for action. The Conference Board of Canada says that there is a slowing in the pace of economic growth this year and there is a possibility of a recession in 1985. Does that cause the Minister to take any steps? No, there is still no need to take steps. The Conference Board indicates that it cannot see any improvement in the unemployment rate and predicts a steady rise in unemployment to as much as 12 per cent in 1985. Does that cause the Minister to change his basic policy? No, apparently he does not recognize that that is needed.
March 30, 1984

As I mentioned earlier, the Conference Board has indicated that this dismal economic outlook results largely from "the continued high level of interest rates, particularly when viewed in relation to the rate of inflation". Does that bother this Minister? No, the Minister is not bothered by interest rate increases. Why, we heard him say this week that he pooh-poohed the damage done by interest rate increases. I know you do not believe me, Mr. Speaker, so I will read from the portion of Hansard in which he pooh-poohed. He said, as reported on page 2550 of Hansard:
-I explained that in spite of the increase in interest rates in Canada and the United States during the last few weeks, we should not necessarily conclude this will have a negative impact on employment and the growth rate of the Canadian economy any more than it does on the U.S. economy.
He says that we should not necessarily conclude this or we should not necessarily conclude that. Is that somebody who is speaking for a Government? If interest rates will continue to rise, the only conclusion we can come to is that there will be no economic recovery. We have seen that interest rates of 11 per cent have stopped the recovery in its tracks. Will interest rates of 11.5 per cent be any better?
We should not necessarily conclude this, that and the other. I can necessarily conclude that the Minister does not have a grip on what is happening in the country. He has served us too long. He and the Government are tired and have no new vigour or ideas which will change economic policy. They should do what this resolution asks them to do. They should resign and go to the people of the country and let them make the judgment as to who should lead the country out of the economic morass into which they have led us.
Again on page 2550 of Hansard, the Minister is reported as saying:
The Government does not favour an increase in interest rates.
That is a fantastic statement, Mr. Speaker. When is it going to do something to stop the increase in interest rates? No one favours an increase in interest rates. What kind of malarkey is that for the Minister to give to the House of Commons when he is asked a question? He goes on to say, "We are living in the real world, we are on the North American continent-" He did not even know three years ago that we were in the real world or on the North American continent. He was going to throw the Yankees out. Today we know what he is doing with the Yankees and we know what he is kissing down in the United States of America.
He also said, "-the Canadian and U.S. economies are extremely interdependent". We are in the hands of economic mountebanks, Mr. Speaker. If we do not change them, God only knows what is going to happen to the people of this country and to our economic future.
Unfortunately, I do not have time to cover all the points I would like to as I have only 20 minutes. In his remarks in the House this week the Minister did not say that his February Budget was based on the assumption of lower interest rates. I do not have the time to quote him now, but those interested in
Supply
what he said about the Canadian economy in recovery should turn to page 15 of the Budget where he said:
Further progress in reducing interest rates and the growth of cost is essential if the business sector is to restore its Financial strength and become a sustaining force in the recovery.
That is what he said in the Budget, but this week in the House he told us not to worry about interest rates going up, that we cannot necessarily assume anything. Why then did he make that statement in his Budget on February 15 if it did not matter and if we cannot assume anything? In his Budget he went on to say:
Without a gradual return of real interest rates to more historic relationships, there is a risk that the medium-term real growth outlook for Canada and elsewhere will be weaker than projected.
You had better believe there is a risk, Mr. Speaker. There will be no medium growth in Canada if interest rates continue to go up.
The Minister does not have any powers of prediction either, Mr. Speaker. On October 19, 1983, he predicted that interest rates would drop by another two to three percentage points in the next six months. But they have gone up by a half percentage point, Mr. Speaker, not down two or three percentage points. Imagine the Minister of Finance making a prediction like that which turned out to be so wrong. On May 11 he said that interest rates were to stay stable. What does stable mean if it does not mean that they do not move at all? He said that interest rates would remain stable for most of 1984 and drop toward the end of the year. So much for anyone who believes any of the predictions made by the Minister of Finance.
Finally, Mr. Speaker, I want to move on to one other egregious error, if it was not deliberate, of the Minister in this House this week. On Tuesday, March 27, as reported at page 2467 at Hansard, he said:
We need a lot of borrowing from abroad because we do not have enough resources in this country to ensure the full potential that this country has.
Then he went on to say-


Mr. Deputy Speaker:: I regret to interrupt the Hon. Member, but his time has expired. He may continue with the unanimous consent of the House.


Some Hon. Members:: Agreed.


Jean-Luc Pepin: One minute.


John Carnell Crosbie: Thank you, Mr. Speaker, and I want to thank Hon. Members for giving me an extra minute.
Last Tuesday the Minister also said that we had a net capital inflow of $5.5 billion last year. The Minister continued, as reported at page 2468 of Hansard:
We had a net inflow into this country of $5.5 billion in foreign investment in 1983. My friend should look at both sides of the picture and realize that Canada has been a net beneficiary of foreign investment in 1983.
That is completely wrong, Mr. Speaker. I do not suppose it is deliberately wrong; the Minister is just confused, uncertain, shaken up. In 1983 in Canada the actual position with respect to what the Minister calls net capital inflow was that there was

March 30, 1984
Supply
$200 million of direct investment in Canada and Canadians invested $2,525 million abroad in the same year. There was no net capital inflow into Canada of $5.5 billion; there was a net flow out of direct investment of $2,525 million. Canadians are sending their money out of the country because they have no confidence in the Government. To that should be added $6.6 billion in unidentified outflows. We had an investment outflow of $8.9 billion, not a net foreign inflow into Canada of $5.5 billion. There was $2.3 billion in direct investment and $6.6 billion was unidentified. That is one of the things that is putting pressure on the Canadian dollar.


Jean-Luc Pepin: In conclusion-


John Carnell Crosbie: Mr. Speaker, I have unanimous consent so 1 have to finish making my point.
Imagine the Minister of Finance making such a gigantic error when answering questions in the House. He should tender his resignation on Monday, Mr. Speaker. The only time we have had a greater investment outflow than we had in 1983 was in 1981 with the National Energy Program of the same Minister, when he was Mr. Hyde, the big bully-boy of the international investment scene-Mr. Hyde, but today he is Dr. Jekyll. He has his other face on today as Minister of Finance. As a result of the NEP and FIRA, in 1981 we had investment outflows of $20.3 billion, including $11.3 billion in direct investment lost to this country. In 1981 we still lost money. Canadians and foreigners who had money invested here are moving it out of the country. If that were not the case, Mr. Speaker, why would there be pressure on the Canadian dollar when there is a positive trade balance and a positive balance on the current account?
I was given unanimous consent in order to conclude my remarks, Mr. Speaker, so I will conclude by saying that all these points illustrate that the time has come for the Minister to admit that his policy is not succeeding. Since he has admitted that he can make adjustments, since he changed his tune last Monday, the time has come for these adjustments to be made. There are 1,476,000 reasons for adjustment to be made-they are the officially unemployed Canadians. There are another 600,000 reasons for adjustments to be made, and they are the unemployed Canadians who are not included in the statistics.
If the Government will not take this action, Mr. Speaker, then this resolution calls for it to resign. It has been in office for four years, and that has been four years of economic misery for the people of the country. It is time to put in another group that will take a different approach and will have the guts to do what they say must be done, and that is, to reverse the economic policies that are now under way, the sloth, the whole succession of deficits of the last 12 to 14 years, the inability to get up the gumption to attempt to tackle it.
It is time for the electorate to be given the chance to show if it wants a continuation of the last four years with the same group in government, perhaps with a different leader. We all know that the question is, "Would you buy a used government from that new leader, Mr. Turner, or not?" That is the
question that Canadians are going to be asked-"Would you buy a used Government from this man or would you want to try a Party that has been opposing these ruinous, wasteful economic policies of the last four or five years?" That is the Party that I represent, Mr. Speaker.
Thank you for giving me the time to conclude, Mr. Speaker.


Nelson Andrew Riis: Mr. Speaker, I always enjoy the comments of the Hon. Member for St. John's West (Mr. Crosbie). I have a two-part question for him. It seems to me that when he was Minister of Finance he reappointed Governor Bouey to the Bank of Canada. Knowing Governor Bouey's record, it was perfectly clear where he stood in terms of monetary policy and how he viewed the high interest rate policy of the Government. Why did the Hon. Member reappoint Governor Bouey, knowing where he was coming from, to put it in popular parlance?
The Hon. Member criticized the Minister of Finance for having said that adjustments would be made if necessary. He made the case very well that adjustments are required today. Could he give us two or three ideas of what his adjustments would be if he were given the opportunity to make them?


John Carnell Crosbie: Mr. Speaker, I thank the hon. gentleman for giving me the chance to address those questions. The Hon. Member should not make the silly mistake of blaming Governor Bouey for our present economic situation. It is only Governor Bouey who is standing between us and complete and utter economic disaster. Governor Bouey did not cause this situation. This situation is caused by the policies of this administration over the last ten years or 12 years. It so weakened our economy with its ever increasing deficit, with which we are all familiar, and its economic policies, that the only thing standing between Canada becoming a banana republic and economic chaos is Governor Bouey, who is trying to defend our currency. He is trying to operate in such a way that we will have a country which can still compete internationally and will not go through ruinous inflation again.
What would interest rates come to if we allowed the dollar to go down 10 cents or 15 cents, or whatever, and then went into another round of fantastic inflation? The whole cycle would start again. Where will the Canadian dollar end up? The Canadian dollar has been devalued, Mr. Speaker, in the last four years something like 22 per cent or 23 per cent. That has not been the solution. It has not brought economic miracles to Canada. Suppose the Canadian dollar devalues another 25 per cent? What can that do except to bring us quickly down the slope to economic chaos together with ruinous inflation. Do we want to be another Brazil with 250 per cent inflation, another Israel, or any of those countries which cannot keep up?
It is not Governor Bouey, it is the policies of the Government which got the Canadian economy, particularly on the fiscal side, in the shape it is in. It is not Mr. Bouey's fault. If Mr. Bouey was not there, we would have to invite another "Bouey". So do not worry about Mr. Bouey. It is the Govern-
March 30, 1984

ment which is responsible for this wreckage, not Governor Bouey. He is a consequence of the policies of the Government.
With regard to the second point, what would I do? First, I will say that nothing can save the economy while this Government is in power. No one has any confidence in it. Capital is going to flee this country because of its record of intervention and incompetence. If we are there, confidence will be restored; the flight of capital out of Canada will stop; the pressure on the Canadian dollar will stop. One thing I would not have done is to bring in the tax increases which the Minister of Finance brought in in April and which he confirmed again in February. How could this be the right time to have tax increases when there is not any kind of vigorous recovery going on in the economy? I would not impose another 1 per cent increase in the sales tax on the Canadian people in October, and I would not have made the changes in the child tax credit and the other changes which were introduced in the Budget of last April. So we would not be going on this course.
Why is the United States doing better? Because despite its budget deficit, which is considerably less than ours, it has reduced taxes. It has not gone, like the Minister of Finance and the Government of this House, in the other direction. The record of Mr. Reagan is fantastically successful compared to the Trudeau-Lalonde record. Reagan streaks ahead of them economically. The U.S. has 7.8 per cent unemployment. Here we have everybody unemployed. Mr. Trudeau started with 360,000 Canadians unemployed. Today he has 1,476,000.


Mr. Deputy Speaker:: Order, please.


John Carnell Crosbie: Can I have another question, please. Mr. Speaker?


Mr. Deputy Speaker:: Order. Questions and comments must both be brief and to the point.


Mr. Baker:: Mr. Speaker, I have a certain amount of respect for the hon. gentleman who just spoke. I believe his feet are on the ground. He is certainly not like his Leader, who probably gets up every morning and looks in the mirror and takes a bow. I would like to ask the hon. gentleman, if he is advocating an increase in the value of the dollar, whether he would like to make that policy statement on a wharfhead of a fish plant in the City of St. John's? I would like to ask him if he believes he would survive being hove off that wharf into the water? And if there are any ice pans there, he would be tabby-panning across to the south side hills.
Would the Hon. Member state clearly now whether it is the policy of the Progressive Conservative Party to bring up the value of the Canadian dollar, and how far, and would he admit it to the fish processors in Newfoundland and the fishermen, who do not receive enough in unemployment insurance benefits?


John Carnell Crosbie: Well, Mr. Speaker, the Hon. Member is getting all exercised about this Government's policy. That is exactly the policy of the present administration. Does he not realize that the Government permitted interest rates to go up
Supply
just so that the value of the dollar would be increased? When the hon. gentleman goes back to see his fishermen, would he advise those fishermen that his Government has just prevented the dollar from sinking down to 75 cents, 70 cents, 60 cents or whatever he thinks they want it to sink down to? Because when the fishermen realize that, they will throw the Hon. Member over the head of the wharf on his keester. When they realize that this Government has kept interest rates high and allowed them to go up to 22 per cent a year and a half ago just to protect the dollar, the hon. gentleman will not even get to the wharf. They will have him cooped up in a barrel and capsized before he even gets to the head of the wharf.
Yes, we do not stand for a deliberate devaluation of the Canadian dollar. No country can prosper which deliberately allows its currency to devalue. I will say that to the fishermen on the wharf in St. John's West, or anywhere else in Newfoundland. I will defend my economic policies. In fact, their love for me is shown by the fact that my vote increased fantastically down in St. John's West after my last Budget. When they give me a chance to bring in another one, it will be 100 per cent down there.


Mr. Deputy Speaker:: Order. Question, comments? Debate.


Mr. Herb Breau (Gloucester):: Mr. Speaker, I always enjoy the spectacle of a speech by the Hon. Member for St. John's West (Mr. Crosbie), because that is what it is, really, a spectacle. No wonder he receives a lot of invitations to speak across the country. He is a big drawing card. He makes people laugh and is good on his feet. When people are in an atmosphere where they want buffoonery, the best guest they can get is the Hon. Member for St. John's West. As a matter of fact, sometimes I think I would invite him to come to my constituency, because he would draw a lot of people.
This man, who ran in the leadership convention last year, did very well. I was proud as a Canadian to see that he did so well. Some people say that had it not been for having to speak French or understand French, perhaps he would have become leader of the Conservative Party and perhaps he would have become Prime Minister of the country. As a Canadian who is a francophone and happens to be from Atlantic Canada, I felt some sympathy for the Hon. Member because, really, a person should not be deprived of gaining power because he does not speak one or the other language. However, what the Hon. Member should realize is that the fact he could not speak French did not really hurt him that much in the convention, because I feel that unilingual francophones who cannot understand English would have probably voted for him if they had not understood what he said.


Mr. Deputy Speaker:: Order. Could I invite the Hon. Member for Gloucester (Mr. Breau) to speak to today's motion, please?


John Carnell Crosbie: Good idea.


Herb Breau: Yes, Mr. Speaker. As I was saying, unilingual francophones, listening to the Hon. Member speaking on his

March 30, 1984
Supply
motion today, would be more likely to agree with him if they did not understand what he said. If they had understood what he said last June, then he would have lost some delegates in the convention. No question about it.
What the Hon. Member is talking about is supply side economics. I applauded a while ago when the Hon. Member said that President Reagan had a great policy. I was happy to hear the Hon. Member for St. John's West tell the House of Commons and the public that that is what he wants, supply side economics.
That is the kind of policy which President Reagan has brought to the United States of America. The Hon. Member for St. John's West is really an honest man. He has been saying it in public since he has been finance critic of his Party, only to be repudiated by his Leader, who has a hidden agenda. He says the truth. He says it and he means it. He says he admires the economic policies of the U.S. and their job-creation record. He admires the way they have brought down inflation and unemployment. Yes, Mr. Speaker, there are ways to create jobs and bring down inflation other than the way this Party and this Government has done over the past 16 years or so. You can stop the economy flat. You can do what President Reagan and the Hon. Member for St. John's West say is great. You can cut off welfare payments to people, you can cut off food stamps for people at the low end of the economic scale as they did in the U.S., and increase military expenditures.
President Reagan is not running a tight fiscal ship. He has increased military expenditures to an incredible level and reduced the expenditures affecting low-income people, the poor. That is what he has done. That is not running a tight fiscal ship. The Hon. Member says he loves this because he is talking supply side economics. He says that if you look after the wealthy, the powerful, the big institutions and large corporations, the benefits will trickle down to the people. But they do not, Mr. Speaker.
The Liberal approach is to reject supply side economics because it increases the economic and social gaps in society. We have another way to go about it.
The Hon. Member also spoke about the National Energy Program and this Government's foreign investment policy. I wonder if he realizes where he is from. He is from Newfoundland. The Hon. Member for Gander-Twillingate (Mr. Baker) asked him about the strength of the Canadian dollar. The motion of the Hon. Member for St. John's West says:
That whereas the depreciating dollar ... undermine job creation through their damaging effects upon agriculture, small business and business investment-
Well, the Hon. Member, in his answer to the Hon. Member for Gander-Twillingate, said that yes, he wants to strengthen and increase the value of the Canadian dollar. But the Hon. Member for Gander-Twillingate rightly pointed out that the fishermen in St. John's West or in his riding, or in northeastern New Brunswick, cannot sell their fish, or the company to which they sell fish cannot resell it, unless they undercut the European countries which are dumping fish in the U.S.
because they have devalued their currency. How can a Member from Atlantic Canada, in this economic context, be sincere to the people he represents if he advocates an increased value in the Canadian dollar? That will ruin the Atlantic fishery. The pulp and paper industry in Atlantic Canada, in fact all over Canada, is having a hard time because we have to compete with European economies which have devalued their currencies. When the value of the Canadian dollar, Mr. Speaker, is reduced by market forces, not by deliberate Government policy, what happens? The regions of this country which export products which were protected by the national economic infrastructure and trade policies this Government has built up, in other words Ontario and parts of Quebec, are the ones that benefit.
If the country accepted the economic and monetary policy of the Hon. Member for St. John's West, we would not let the market determine the value of the dollar. He would want to increase it. The result is that the Atlantic fishery could not compete, the pulp and paper industry and construction industry could not compete.
The Hon. Member criticized the NEP and said it was a bad policy because some American interests did not like it. Does he not realize that it is because of the NEP that billions of dollars are being invested now in the Newfoundland offshore? The NEP rationale was to say that now that we have obtained just about the limits of new discovery of oil from conventional sources, there are still secondary discoveries and tertiary recovery methods. Over the last 30 odd years a tax and price regime was put in place to permit Alberta and Saskatchewan in particular to develop a petroleum industry. The rationale of the NEP is that now we have to look elsewhere, we have to look at the so-called Canada Lands because they are under federal control. The offshore is federally controlled, as the Supreme Court of Canada confirmed two weeks ago. We said we now need a new regime. Who but the Parliament of Canada can provide that regime?
The NEP, Mr. Speaker, is there to make sure that in the Canadian north, in the Atlantic offshore, we will have a regime which will encourage exploration for oil and gas. Therefore, I just do not understand how a Member from Atlantic Canada can suggest that the NEP has been bad for the country.
A lot has been said about the deficit and how it is supposed to be so bad. But, Mr. Speaker, why do we have a deficit in Canada, and how can we deal with it? We have a deficit because, first of all, in the mid-1970s the Government started to change the tax system so as to leave more money in the hands of Canadians in order to stimulate the economy. In order to make the tax system more equitable, we adopted a proposal that the-the former Whip of the official Opposition laughs at that. It was advanced by one of his former Leaders to make sure that the federal Government would not benefit from inflation. Indexed personal exemptions meant that less revenue came into the federal Treasury.


Mr. Kempling:: You did not cut expenditures.
March 30, 1984


Herb Breau: That is right, because we also indexed the social payments to the cost of living. The result is that more money goes out and less money comes in. So you have a deficit. Then, later in the 1970s, we had the oil crisis. The federal Government determined through a series of policies that we would have a tax regime and the National Energy Program to give incentives to develop the petroleum and gas industry. We had policies to help people insulate their homes and reduce the consumption of oil for the good of the whole country. We wanted security of supply. That means you use the fiscal policies of the Government of Canada. You increase expenditures, but you do not necessarily increase revenue when you do that. The revenue has not come in because world petroleum prices have not continued upwards. Therefore, we cannot sell our natural gas in the U.S. as we thought we could because we have to be competitive.
Another reason for the deficit is that in the last two years we have had a recession. Now you need to be mischievous or not understand anything about the economy to suggest that the recession we just came out of had its roots in Canada. How can anyone, unless he is being overly partisan, suggest that Canada was the only country that had a recession? The causes of the recession were partly in Canada, but they were in greater part from outside of Canada. The economy was stopped dead in the United States through monetary policy because President Reagan agreed with the Chairman of the Federal Reserves Board in the United States to recoup a great part of the American dollars which were financing the rest of the world for so long. They did that by increasing interest rates. What should countries which border on the United States do? Should they close their eyes and ignore what happens in the United States? That is done at a great cost. We determined we could not do that. That had the effect of slowing down the Canadian economy because people were worried about high interest rates. They were not building homes, buying cars or buying appliances. Therefore, unemployment was created.
To suggest that the economic recession which we just went through had its causes only in Canada is not to understand the workings of the economy of Canada, let alone of the rest of the world. During that recession we did not cut down on social programs as they did in other economies such as Great Britain and the United States. We continued to increase them. This is the basic difference between supply side economics and Liberal economics, between the Tories and the Liberals. We did not reduce social expenditures for people who cannot defend themselves, the real victims of an economic recession. We did not cut back on UIC payments. We increased them. We did not cut back on our payments to provinces for medicare, postsecondary education and equalization. The poorer provinces of the country continued to get increases from the federal Treasury. When the recession was at its worst and the federal deficit was going up, we were still increasing payments to Newfoundland, P.E.I., New Brunswick, Nova Scotia and Manitoba by over 12 per cent a year. Even when we had a restraint program to limit discretionary expenditures of the
Supply
federal Government to 6 and 5 per cent, we continued to increase health transfers to provinces by 13 per cent. We transferred post-secondary education to 6 per cent but we did not touch the equalization program. In my Province of New Brunswick it went up by 11 per cent from 1982-83 to 1983-84.
Liberal Governments do not adopt policies that only protect the economy for the wealthy, the powerful and those who can look after themselves. We do it more gradually because the economy will correct itself gradually. In the meantime, with a series of safety mets, we protect those in society who cannot protect themselves from the ravages of inflation, unemployment and economic recession. That is why we have a high deficit.
Is the deficit too high? That is a question of judgement. I would point out, Mr. Speaker, that in the mid-term the deficit will come down. It is now about 8 per cent of the GNP. It will go down to about 4.7 per cent in the fiscal year 1987-88. The financial requirements of the Government will go down from 6.9 per cent of the GNP to 3.4 per cent of the GNP in three years.
When Canada participated in World War II, our deficit went up to over 20 per cent of the GNP. Did the economy stop flat? After the war we had an incredible period of growth. Saying that the deficit automatically means we are not going to have economic recovery, that the economy is going to be stifled because of the deficit, is all hogwash. Some of our partners in the OECD have higher deficits. Japan has a higher deficit than that year after year. In Japan they have such a high trade surplus that they have a surplus of yen. They absorb it with high fiscal deficits. With the savings rate at over 14 per cent of personal disposable income in Canada today, if we did not absorb a good part of that savings rate at the federal and provincial levels, chances are we would have to export finance and invest money elsewhere. The Japanese had to invest yen outside of their country. That is not necessarily bad because it builds relationships with partners.
The federal Government has a high deficit not only because it refuses to balance its books. It is because the federal Government has a fiscal responsibility in the overall economy. It has a responsibility to make sure that the ups and downs are as smooth as possible. In private industry, private budgets and even in provincial governments it is possible to balance the books. However, over and above the expenditures and revenues we must look at the overall economic interest of the country in the mid-term and in the long term. We must use the credit of the whole country to the advantage of the overall economy. With government expenditures we must make sure that an economic recession will not hit only those who cannot defend themselves.


Dave Nickerson: Mr. Speaker, I know the Hon. Member for Burlington has a lot of useful information to give us so I will try to be as brief as possible. The Hon. Member for Gander-Twillingate (Mr. Baker) and the Hon. Member for Gloucester (Mr. Breau), who just spoke, seem to be supporting the NDP policy of allowing the Canadian dollar to sink lower and lower.

March 30, 1984
Supply
They say that will encourage trade. That might be so. However, it does that because in real terms the value of wages and salaries in Canada will decline. On this side we want to encourage additional trade, but we would do it by encouraging productivity, making each unit of effort produce more.
Why does the Government advocate a decrease in wages and salaries for Canadians in the country?


Herb Breau: Mr. Speaker, neither I nor the Member for Gander-Twillingate said that we encouraged a policy to decrease the value of the Canadian dollar, or sink the Canadian dollar, as the Member just said. No one ever said that here this afternoon. The Opposition says that is what we say. However, that is not what we say. We say that the dollar should reflect the market forces, that it should be at the value the market forces dictate. It is true that a lower dollar improves your export opportunities, but it can damage you importwise. Over a period of time this has the effect of putting some pressure on wage rates and on all cost pressures. This is true in the manufacturing sector in particular, in the areas that are already strong. However, in the resource areas of the country; the west, the north and Atlantic Canada, that will not happen. If the Canadian dollar is too strong, we cannot sell our resources. Of course, there is a cost and an opportunity to everything. I agree that some sectors in the Canadian economy will feel the competitive forces of their wages at one point. I say it will be the stronger sector of the Canadian economy that will suffer. It will be those workers who already do very well who will suffer the competition. I do not mind that happening for the benefit of creating jobs in those regions of the country which benefit from exports where unemployment is always chronically higher.


Mr. Deputy Speaker:: There being no further questions or comments, we will proceed to debate. The Hon. Member for Burlington (Mr. Kempling).


William James Kempling: Mr. Speaker, I could not bring myself to ask any questions of the Hon. Member for Gloucester (Mr. Breau). I looked up in the gallery and I noticed some people holding their mouths. I thought they were going to throw up. Perhaps it might be an idea to have sick sacks in the gallery to take care of people who cannot abide speeches such as the one the Hon. Member made on economics. I have never in my life in all the time I have been here listened to such economic gibberish as I heard from him. I do not think he could run a hot dog stand and lose money. He is just a disaster.
There is not much time left this afternoon, Mr. Speaker. I might say that much has been said about the Budget introduced by the Minister of Finance (Mr. Lalonde) on February 15. Some say it should have this measure or that measure of relief, or some favoured provision that has been promoted by a lobby. But the reality is that it is not just the February 15 Budget that is at the root of our problems. It is really the last four Budgets. The damage done by the three previous Budgets could not be reversed in the last Budget because governments
do not advertise their mistakes or admit to errors in judgement. This is evident from the twisted and tangled rhetoric of the Member who just spoke. Clearly what we need is a period of stability to allow many of our businesses to restructure their finances. They simply cannot expand and employ more people, raise the GNP and help reduce the deficit if they are debt-financed. That is the problem being faced.
Many businesses are operating with a sizeable loss carried forward. This was recognized to some extent in the Budget and the carryforward term was extended to seven years. But if you think about it for a few moments, Mr. Speaker, a profit applied against a loss carried forward means that that business will pay no taxes to the federal Treasury, or at least it will pay very much reduced taxes. It means that government expenditures must be cut to accommodate the shortfall in revenue, or taxes must be raised in other areas to pick up the revenue shortfall, or additional borrowing must be made. We can see what has happened here. The Government is using a combination of the last two: borrowing more money and in some areas raising taxes.
Clearly some measures to increase and encourage equity investment beyond that which is presently in place must form part of the strategy for any budget.
Many of us thought we would have seen such a provision in the last Budget. Some even speculated that there would be a flow-through feature of losses carried forward to other income. That feature could have repaired the capital accounts of many businesses if, say, 50 per cent of the flow-through benefit were required to be reinvested in businesses. Some people may have difficulty in following that thought but, in simple terms, many businesses have been stung by high interest rates and are reluctant to finance an expansion program on borrowed funds, especially in a volatile money market.
Somehow we must break out of the mould into which the last four disastrous Budgets have cast us. Let us say you operate a small to medium sized business, Mr. Speaker, and you want to expand to capture a larger market outside of Canada. Say you need new productive machinery to enhance your gross profit but you are reluctant to place the order because you must borrow the money on a term loan with a floating rate. You look at your cash flow for a period ahead and you are aware that the capital cost allowance for the first year on that new piece of machinery will be 50 per cent of what it was two years ago. You find yourself having to seek a larger line of credit at the bank with a floating rate in a volatile money market. There, in simplified terms, lies the dilemma facing many business people in Canada who are being urged by the Government to venture and increase markets, and to expand employment, to add more people to the payroll and reduce unemployment.
It is obvious to anyone who thinks seriously about business that the only way you can undertake new markets, purchase new productive machinery and hire new people is by finding new sources of equity. An equally important problem is that so many governments and business gurus worship at the high technology altar, and the Government's actions to encourage equity investments are directed almost exclusively at high-
March 30, 1984

tech. What it does not realize is that even at the turn of the century the bulk of the people employed in this country will be employed in low technology industries. We have to have a window on the world, and high technology certainly has a place in our economy. Anyone would be foolish not to acknowledge that. But it is not the end-all to everything, and that we have to recognize. Some investors will not look at you if you do not say magic words such as robot, transistor, third, fourth or generation mode. One businessman told me he is so tired of hearing about word-processors that he is developing a bias against them.
We have to move above and beyond this level of thinking and begin to look at markets, market size, and market accessibility and ask how we are going to capture those markets. The Hon. gentleman for Gander-Twillingate (Mr. Baker) talked about the fish problem in Newfoundland. It is a serious problem. But there is an answer and a solution to it. I just wish we could take some of the marketing brains that I see in central Canada at whom he takes a kick once in a while and put them in Newfoundland. I want to tell the Hon. Member that there are ways to move that fish, but the way they are going about it, it will not be done. We have to determine how we are going to capture that market. Our products must be the best in the world, and we must look at that. The quality of the product one produces has to be second to none. If it is, you will sell it. I suggest to the Hon. Member that what is being produced now may not be the best there is. Excellence has to be our goal in production. Good value for our money must be our philosophy in trade. That is the area in which we have to move. If you adopted those principles in the marketing of fish
Supply
and you had the best possible product available packaged in an attractive way, and you aimed toward excellence and gave value for money, not the lowest price, not beating foreign competition, which devalues currency, I say to the Hon. Member he would have competition beating a path to his door to buy fish. I can assure the Hon. Member of that, because that philosophy works in all business, not just the fish industry.
I get tired of the bureaucratic games that are played with fiscal and tax policy. The bureaucrat seizes on a policy and his main concern is that a sum of money is moved equal to that set forward in the Budget document. Some of them, I think, would rather have half a dozen megaprojects going consuming several billion dollars than 400 projects that consume several hundred million dollars. A judgment error on megaprojects can spell disaster to an industry sector. We only need to look at the National Energy Program as an example.
Perhaps, Mr. Speaker, I may conclude because it is almost five o'clock. If I do not, I will get into another area which will seem irrelevant to Hansard. May I call it five o'clock, Mr. Speaker?


Mr. Deputy Speaker:: Order. It being 5 p.m., it is my duty to inform the House that in accordance with Standing Order 62(11), the proceedings on the motion have expired.
Therefore, this House stands adjourned until Monday at 11 a.m., pursuant to Standing Order 2(1).
At 5 p.m., the House adjourned, without question put, pursuant to Standing Order.

Monday, April 2, 1984