1984-02-15

STATEMENTS PURSUANT TO S.O. 21


Mr. Doug Lewis (Simcoe North):: Mr. Speaker, it is a sad day for Canada when taxpayers' funds are used by the Office of the Prime Minister (Mr. Trudeau) for a personal witch hunt.
The Liberal Party and its hired hacks have shown the country that there is no limit to the private correspondence they are prepared to reveal, no limit to the dirty tricks they are prepared to use, no limit to the cover-up, no limit to their personal attacks, no limit to their slush-fund approach to politics, no limit to the conspiracy, and no limit to the depths to which they are prepared to sink.
Desperate men and women adopt desperate tactics. The corruption in the Liberal Party reached the point where even its own party members rebelled at the last convention, and that was before the infamous "sidepocket" affair. The Prime Minister's Office makes the Watergate group look like angels, with its sleazy tricks. What is more, every Liberal MP stands condemned because they condone these tactics and are powerless to do anything about them. They will leave a sad legacy. They are a blot on democracy.


EMPLOYMENT
Mrs. Ursula Appolloni (York South-Weston):: Mr. Speaker, according to yesterday's Hansard, the Hon. Member for Saskatoon West (Mr. Hnatyshyn) spoke of matters of morality. We on this side of the House believe that the grossest immorality occurs if Members, once alerted to serious problems, do nothing to find solutions.
1 was alerted to the serious problem of street kids in an article entitled "Social Time Bomb Ticks on Yonge Street Strip" in the Sunday Star, dated October 16, 1983, and I
sought a solution. But for that I now stand accused by Tory Members.
Therefore, for having helped, either directly or indirectly, to provide accommodation and sustenance for derelict young people from all across Canada-mea culpa; for having thereby dared to tread on the slumbering fiefdom of Rosedale-mea culpa; for having, either directly or indirectly, created jobs sponsored by the entire Roman Catholic Archdiocese of Toronto-mea maxima culpa.


PRIME MINISTER'S OFFICE
Mr. Jim Hawkes (Calgary West):: Mr. Speaker, it is now clear that the backroom manipulators in the Office of the Prime Minister (Mr. Trudeau) reach into our pockets, take our wallets, and use their slush funds to create secret service jobs in the Prime Minister's Office. That is not democracy. That is not representative government. That is not the Canada I know and love.
The backroom spenders in the Prime Minister's Office have been inventing ways to attack Members of Parliament. Last week the Prime Minister himself tried to slur me in the eyes of my family, friends and voters, by suggesting that I was a second-class Member of Parliament and that I made up quotations. If I am on the Prime Minister's hit list, then let those backroom spenders and secret service agents in the Prime Minister's Office try. It is our duty in this Chamber to defend democracy. Let the people judge. Canada's people need an election. They need it now. The four years are up.


EXTERNAL AFFAIRS
Miss Aideen Nicholson (Trinity):: Mr. Speaker, 1 rise to ask Hon. Members of the House to join me in requesting the Life-President of Malawi to commute the death sentences imposed on Orton Chirwa, former Minister of Justice and Attorney General of Malawi, and his wife, Vera.
The Chirwas were convicted in July, 1982, of treason by the Regional Traditional Court. They insisted that they were innocent. They appealed to the National Traditional Court, which upheld the sentence of the lower court. Amnesty International has stated that procedures of these courts did not

February 15, 1984
conform to internationally-recognized legal norms. The matter is being raised at the current session of the United Nations Human Rights Commission. However, the only remaining means of appeal in Malawi at the present time is to its Life-President, Dr. Banda. Therefore I urge Members to request that Dr. Banda exercise his presidential powers of clemency to spare the lives of Mr. and Mrs. Chirwa on humanitarian and compassionate grounds.


PRIME MINISTER'S OFFICE
Hon. Roch La Salle (Joliette):: Mr. Speaker, I must say that I also heard the news this morning that the Prime Minister's Office allegedly turned its employees into secret agents to try and justify the slurs on the reputation of a man who has made it clear that he intends to direct all his energies towards pursuing the interests of his country. In the circumstances, I appeal to the sense of honour of all the Members of this House, to severely censure these absolutely odious attempts, stemming from attitudes that are entirely unacceptable to this Parliament, to examine someone's past for the purpose of preventing him from serving his country properly. In the circumstances, Mr. Speaker, I severely censure and I demand and urge the Prime Minister, as soon as he is back, to explain the reasons for an investigation into matters that are totally irrelevant as far as we are concerned.


ENVIRONMENTAL AFFAIRS
Mr. Denis Ethier (Parliamentary Secretary to Minister of the Environment):: Mr. Speaker, now that one of North America's most advanced computers has been put into service at the Canadian Meteorological Centre in Dorval, Canada is entering a new era of more reliable long-term weather forecasting. This computer will also play a major role in agriculture and the environment. It will produce seasonal forecasts and better assessments of climatic changes. It will facilitate national and international research on transboundary air pollution. The computer will also make it possible to develop better strategies against acid rain and for intervening faster and more effectively in the case of environmental emergencies.
Mr. Speaker, the Liberal Government does not hesitate to intervene in these high technology sectors, since providing meteorological information puts more than $1 billion each year into the economy.


EMPLOYMENT
Mr. Ian Waddell (Vancouver-Kingsway):: Mr. Speaker, I was in Edmonton last weekend. I talked to a lot of unemployed people, especially young people. These people need hope. They need job-creation programs. They are very important programs. That is why I raised in the House this week the grant of $583,000 to the Community Alliance Group in Toronto.
Considering that there are existing agencies there already doing the job, considering that there is opposition from the Italian community, considering that even the Member of Parliament for York West (Mr. Fleming) is quoted in today's Toronto Star as saying there were outsiders involved in this grant and the social agency is raiding his own riding, and considering that it is becoming increasingly obvious that this grant was a result of political influence, I ask the Minister of Manpower and Immigration (Mr. Roberts), as a political Minister and as a Minister of the Government, to rise above this and to reconsider the grant, to do what he said he would do when he met with the groups, that he would reallocate moneys, because to do otherwise is very unfair to the Italian community in Toronto, and very unfair to the unemployed in Canada.


OFFICIAL LANGUAGES ACT
Mr. Pierre  Gimai@: Thank you, Mr. Speaker.
Politics certainly make strange bedfellows, Mr. Speaker. I heard the Member for Joliette speak earlier in defense of the man he called "the golden calf' during his Party's leadership campaign more than a year ago. At the time he spoke with considerable eloquence about that gentleman's past. Mr. Speaker, I would now like to say a few words about the future of the Member for Central Nova (Mr. Mulroney).
The Hon. Member for Central Nova (Mr. Mulroney) would have Quebecers today believe that his Party has wiped out the blot made on its record by that same Party in the Riel affair. I would like to point out to the Hon. Member that there are still Members in his own Party who are against the Official Languages Act have said so in no uncertain terms. I am referring, for instance, to the Member for Simcoe-South (Mr. Stewart) and the Member for Winnipeg-Assiniboine (Mr. McKenzie), to name only two.
Mr. Speaker, I remember during the debate on the Constitution that I asked the Hon. Member's predecessor, the
February 15, 1984

Oral Questions
Member for Yellowhead (Mr. Clark), to call the Member for Simcoe-South to order, following a speech he had made, and I challenged him to do what the former Progressive Conservative Leader, Robert Stanfield, did with the Member for Moncton at the time.
I may point out to the Member for Central Nova (Mr. Mulroney) what happened to the Member for Yellowhead afterwards. He failed to do what he should have done to clarify his Party's position, and it was his own Party that removed him from his position as Leader of the Opposition at the time.
I therefore urge the Member for Central Nova to do his duty to Canada and to all French-speaking Canadians and keep a tight rein on Members of his Party who are not in agreement with that Party's philosophy, if indeed it has one, Mr. Speaker.


PRIME MINISTER'S OFFICE
Mr. Gordon Taylor (Bow River):: Mr. Speaker, the committee set up by the President of the Liberal party concluded that the Liberal Party was in a "state of disarray", that it was "tired, arrogant, self-serving, self-satisfied and irrelevant", and its aim was to build a better Liberal Party. Well, any improvement would make the Party better. In fact it could not sink any lower, or become any more corrupt.
In today's Globe and Mail there is a story of the Prime Minister's Office using taxpayers' money to snoop into the private life, before he was elected, of the Leader of the Progressive Conservative Party. They have no policies of their own to combat the debt-ridden unemployed society they have created, and they fear the honest approach of our Leader, so they try to find dirt to throw at him. They used the taxpayers' money to finance their misdemeanor. They could not find anything but good, and so the Minister of Finance (Mr. Lalonde) made up a story that, when he was in private life, our Leader was begging for the rich and for himself, when in fact his letters were pleading for a fair deal for the workers. The Minister's apology was hollow.
How many other Canadians are being snooped and investigated? Is any Canadian safe? No wonder the Liberal committee says this Government is self-serving. Canadians want their Government to show honesty and have integrity. The Liberals have betrayed Canadians. They should resign and let a man of the stature of our PC Leader take over and restore honesty and integrity to the Government of this country.


ENVIRONMENTAL AFFAIRS
Mr. Jim Manly (Cowichan-Malahat-The Islands):: Mr. Speaker, last week a bargeload of toxic waste was shipped from Alaska to Seattle through Canadian waters. The 261 metric tonnes of waste from American military bases was contaminated with cancer causing polychlorinated biphenyls, or PCBs. Although this barge travelled through the inland passage of British Columbia, our provincial Government was not notified. According to the B.C. Environment Minister, our federal Government does not require pre-notification for such shipments in spite of the hazard they pose to our coastline.
The threat to marine life, and ultimately to human life, is taken seriously by the people of British Columbia even if the Ottawa Liberals choose to ignore it. This careless attitude on the part of the federal Government is the same that was shown to the uranium mine at Key Lake before the massive spill of radioactive material there a few weeks ago. It is a situation similar to the unwanted seepage of toxic waste coming from the United States across the Niagara River into Canada.
I call on the Minister of the Environment, (Mr. Caccia), the Minister of Fisheries and Oceans (Mr. De Bane), the Minister of Transport (Mr. Axworthy), and the Secretary of State for External Affairs (Mr. MacEachen) to get together and draft regulations forbidding the transportation of toxic waste through Canadian waters.



ORAL QUESTION PERIOD


Right Hon. Joe Clark (Yellowhead):: Mr. Speaker, my question is directed to the Acting Prime Minister who will know of the admission by officials of the Prime Minister's Office that that office was using public funds, and publicly funded employees, to conduct a vain witch hunt into the background of the Leader of the Opposition before he was in public life, and may well have been involved in activities which will prove to be illegal.
I am sure that the Acting Prime Minister is as alarmed as I am by this evidence of the spread of a Watergate mentality into the Prime Minister's Office.


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!

February 15, 1984
Oral Questions


Charles Joseph Clark: We know that there was a covert operation mounted by officials of the Prime Minister's Office. 1 ask the Acting Prime Minister who authorized it?


Hon. Allan J. MacEachen (Deputy Prime Minister and Secretary of State for External Affairs):: Mr. Speaker, if one were to take at face value the description given by the Right Hon. Member for Yellowhead, or indeed presumably the newspaper article upon which his descriptions have been based, then there might be cause for concern because the newspaper story alleges a covert intelligence operation. That is quite untrue, and quite false. There was no such covert intelligence operation conducted by the Prime Minister's Office into the conduct of the Leader of the Opposition and into his background before he entered public life. There was no such covert operation, and 1 deny it completely.
1 would ask the Right Hon. Member for Yellowhead to take a rather more responsible attitude to a very important matter.


Charles Joseph Clark: The Acting Prime Minister's denial, and his disinterest in the fundamental principles of decency and morality and the practice of the House of Commons are denied by the words of the officials in the Prime Minister's Office.


RESPONSIBILITY FOR AUTHORIZING INVESTIGATION
Charles Joseph Clark: Mr. Speaker, I notice that the Acting Prime Minister has admitted that there was an operation. 1 notice that he has declined to answer my question as to who authorized it. 1 repeat that question. Who authorized that operation which we believe broke the law, and which we know broke the traditions of this Parliament? To whom did Mr. Crenna report when he came back from his vain witch hunt in Washington?


Allan Joseph MacEachen: Mr. Speaker, let us take the case of Mr. Crenna and explain exactly what happened.
Mr. Crenna is a full-time employee of the Prime Minister's Office. He was in Washington on a variety of questions as a member of that office. They were important public questions which he was examining in Washington, in the course of which he went to the Securities and Exchange Commission to seek the annual report of the Iron Ore Company, and to seek some other information that is part of the public record. He went into a public office, signed a paper, secured authority to receive those documents which are available to any citizen in the United States and in Canada. It took a very short time, and this is the basis upon which the former Leader of the Opposition uses the words "a witch hunt", and the basis upon which the writer in The Globe and Mail says that two employees, two people from the Prime Minister's Office, were engaged in covert intelligence gathering.
What Mr. Crenna did in Washington is something that was done publicly, that was done openly, and that is on the public record. There is nothing covert about it. It can be done by any citizen, by paying the required fee to the public authority.


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!


REASON FOR OBTAINING INFORMATION FROM U S. SECURITIES AND EXCHANGE COMMISSION
Charles Joseph Clark: Mr. Speaker, again the Acting Prime Minister refuses to answer the question. He has admitted the operation.
Let me ask him why Mr. Crenna was down there getting information from the Securities and Exchange Commission? Who authorized his venture? To whom did he report when he came back? Will the Acting Prime Minister tell us whether the Prime Minister of Canada knew about this venture directly, or whether he knew about the operation only indirectly through his principal secretary who was part of the group that laid the plan?
Hon. Allan J. MacEachen (Deputy Prime Minister and
Secretary of State for External Affairs): Mr. Speaker, I think we have to bear in mind that what Mr. Crenna sought was public information on the operation of a wholly owned multinational corporation. It is a matter of public record that when the Leader of the Opposition sought the leadership of his Party, he built a very important part of his appeal to the Canadian public on his superior management abilities in the Iron Ore Company of Canada and how he handled labour adjustment problems. It seemed to me to be-


Charles Joseph Clark: To you?


Allan Joseph MacEachen: -a very important part of the research activities of any professional organization to find out all about this masterful operation, in the words of the now Leader of the Opposition.
Mr. Crenna was examining an issue that had been brought into the public domain by the Leader of the Opposition as he sought the leadership of the Conservative Party, and which he incorporated into his party manifesto. What is wrong with that? I do not see anything wrong with it-


Mr. Andre:: That is what Alfred Apps has been saying.


Allan Joseph MacEachen: -to find out about the public operations of a multinational corporation with operations in Canada.
The former Leader of the Opposition asks who authorized this. The project was under the direction of the principal secretary who employs all the staff. I do not know whether the Prime Minister knew about it or not. I certainly did not know anything about it. I find it quite a normal operation to keep informed about what is going on.
February 15, 1984


Mr. McGrath:: Mr. Speaker, the Acting Prime Minister is now admitting that public funds were used to examine SEC files in Washington with the sole purpose of destroying the reputation of the Leader of the Opposition.


Some Hon. Members:: Hear, hear!


An Hon. Member:: Nonsense.


James Aloysius McGrath: 1 submit to you, Mr. Speaker, that if hon. gentlemen on the treasury benches were to stand up to the same scrutiny, they would fail.


REQUEST FOR INDEPENDENT INQUIRY
James Aloysius McGrath: Mr. Speaker, I want to ask the Acting Prime Minister, who stands in this House and puts his credibility on the line by denying there is anything improper about this, if he is prepared to have an independent inquiry into this-


Some Hon. Members:: Oh, oh!


Charles Joseph Clark: That is how they reacted to the Erwin inquiry.


James Aloysius McGrath: The people of Canada do not think this is any laughing matter. Is the Acting Prime Minister prepared- since he stretched his credibility here by denying there was anything wrong with this-to authorize an independent investigation into this sleazy, covert operation which had one objective, and that was, by the improper use of public funds, to destroy the reputation of the Leader of the Opposition, the Hon. Member for Central Nova?


Some Hon. Members:: Hear, hear!


Allan Joseph MacEachen: Mr. Speaker, the Hon. Member really should try to fasten his attention on the facts which I have put before the House. In the case of Mr. Crenna, he sought information which is publicly available, having to do with a corporation which operates, or used to operate, in Canada. That is all he did. There was no investigation into the personal conduct, nor would I condone if it were ever brought to my attention any such investigation into the conduct of the Leader of the Opposition.


An Hon. Member:: What are you afraid of?


Allan Joseph MacEachen: I wonder why we should have an independent inquiry about dropping into a public office to get public records in Washington. Does the Hon. Member want an inquiry on that?


ROLE OF RESEARCH ASSISTANT
James Aloysius McGrath: Perhaps, Mr. Speaker, the Acting Prime Minister might want to tell the
Oral Questions
House what the role was of Mr. Pierre Cadieux who, apparently, was operating as "a secret agent" in this covert operation?


Some Hon. Members:: Oh, oh!


James Aloysius McGrath: Why was he operating clandestinely if there was nothing to hide, if this was an operation which was legitimate, proper, and above board?


Allan Joseph MacEachen: Mr. Speaker, we have dealt with Mr. Crenna who is accused of being a secret agent. Let us turn to the other person. Who is this secret agent to whom the Hon. Member refers?


James Aloysius McGrath: 1 did not call him a secret agent.


Allan Joseph MacEachen: Who is this covert operator as mentioned in The Globe and Mail, and what was his scene of operations? Well, the person in question is currently enrolled as a student at the University of Ottawa. He was taking a summer job and doing this research work for a couple of months prior to going to university. So that is the covert agent. What was the scene of his covert operations? The library, Mr. Speaker, at the University of Ottawa.


Some Hon. Members:: Oh, oh!


Some Hon. Members:: More.


CONTENTS OF DOSSIER
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, my question is directed to the Acting Prime Minister on the same subject. The Acting Prime Minister has said, and I listened with care to his answers, that what was obtained here was public information which was publicly available. However, 1 want to say to him that the ordinary citizen of Canada does not work in the Prime Minister's Office, and does not have access to the funds and to the power of the state. That is an important difference.


Some Hon. Members:: Hear, hear!


John Edward Broadbent: Mr. Cadieux said, with reference to the Minister of Finance's complete abuse of privacy recently in terms of revealing correspondence of a then private citizen who happens to be now the Leader of the Opposition, that the use of those letters was "a complete ignorance of the dossier". My question to the Acting Prime Minister is this: if that was a complete ignorance of the dossier, what else, what other material is in the dossier?


Allan Joseph MacEachen: Mr. Speaker, the Hon. Member talks about the use of funds. The Prime Minister has an office budget, and so does the Leader of the New Democratic Party. He has $500,000 in his office budget. Those are public funds to run his office, and if he wants to do

February 15, 1984
Oral Questions
research with it, he is entitled to do so. He has a research operation which is publicly funded. So let us not talk about public funds, because they are available to him to conduct research as he wishes and at his own discretion.
The Hon. Member has asked about what is in the file. Well, the file is in the Prime Minister's Office, the press are invited to go and look at it and see what is there. If the Leader of the NDP wants to go, he will find a chronology of events and a lot of press clippings, and I think it will be a very boring afternoon for him.


TAX FILES AND PRIVATE LIVES OF MEMBERS OF PARLIAMENT
John Edward Broadbent: Mr. Speaker, it is one thing for a political Party, whether on that side or on this side of the House, to conduct a public inquiry into the public activities of any political opponent. It is quite another to conduct an investigation into the private lives and matters that ought to remain private, of political opponents. There is a crucial distinction.


Some Hon. Members:: Hear, hear!


John Edward Broadbent: We already have on record the abuse of that principle by the Minister of Finance just a few weeks ago. The Government and the whole country know about that, hence my question about what is in the dossier.
Will the Deputy Prime Minister assure the House unequivocally that no official in the PMO has authorized an investigation into the tax files of Members of Parliament, for example, or has in any way been responsible for conducting an investigation into the private lives of Members of Parliament? Surely this is an important and basic democratic question, and if the Government was at all sensitive to propriety, it would be able to give us a categorical no to those questions.


Allan Joseph MacEachen: Mr. Speaker, on the first point I want to assure the Leader of the NDP that this particular research exercise had nothing to do with the private life of the Leader of the Opposition. If he will recall, when the Leader of the Opposition became a candidate for the Conservative leadership he issued a very large glossy promotion in which was included, as part of his claim to the leadership, how he handled the Schefferville case. In fact he included with his announcement a very large series of comments on Schefferville.


John Edward Broadbent: I did not ask about that.


Mr. Axworthy:: That is the issue.


Allan Joseph MacEachen: In his book Where I Stand, in case the Leader of the NDP-


John Edward Broadbent: Answer the question!


Allan Joseph MacEachen: -has not read it, he will find a very important segment dedicated to Schefferville and how the
Leader of the Opposition operated there. We were interested in following up this issue which he brought into the public domain. That is all; nothing to do with his private life. In answer to the Hon. Member's other questions, I give a categorical no.


John Edward Broadbent: Mr. Speaker, it is interesting that the Deputy Prime Minister, who said he has not discussed the matter with the Prime Minister, is in a position to give such a categorical no. I hope what he says is the case and that the Prime Minister, when he returns, will confirm it.


REQUEST FOR ASSURANCE OF NON INVESTIGATION
John Edward Broadbent: Mr. Speaker, to be perfectly clear, is the Deputy Prime Minister assuring the House that none of the political offices of the Government with access to funds which can be used for public inquiry into publicly available information, no question about that, whether it is Schefferville or any other publicly available item-but is he telling us for sure that tax matters or the private lives of Members of Parliament, or of candidates for the Conservative Party, the New Democratic Party, indeed the Liberal Party, under no circumstances are being investigated by this Government?


Allan Joseph MacEachen: Mr. Speaker, the Hon. Leader of the NDP asked me whether the Prime Minister's Office was investigating the private lives of Members of the Opposition, including tax files. I think in a sense the question is very offensive.


John Edward Broadbent: That is what the Minister of Finance did.


Allan Joseph MacEachen: I deny any allegation that arises from it. I said no to his question, and I say no to his second question which he has now applied to the whole Government. Are we investigating the personal lives or personal tax files of Members of Parliament? That is also an insulting question, and the answer is no.


Some Hon. Members:: Hear, hear!


INVOLVEMENT OF OFFICIALS AND MINISTERS
Hon. David Crombie (Rosedale):: Mr. Speaker, my question is also for the Acting Prime Minister. What was alleged in The Globe and Mail this morning is a very, very grave matter. It is alleged there has been abuse of public office in the Prime Minister's Office. So far the Acting Prime Minister has indicated there are two people, to his knowledge, involved in that matter, Mr. Crenna and Mr. Cadieux. It has also been alleged that Mr. Gillan and Mr. Tom Axworthy, the Prime Minister's principal secretary, have been involved. My question to the Acting Prime Minister is: how wide does that go? It is clear from his remarks that he does not know, and he does not know whether the Prime Minister knows.


February 15, 1984

It is also clear from other people's remarks that the Minister of Finance, some weeks ago, knew of it and had access to it. Who else is involved in this matter of abuse in the Prime Minister's office? How many more? Are the political Ministers involved? Has the Prime Minister knowledge of it?


Mr. Dionne (Northumberland-Miramichi):: Have you
stopped beating your wife yet, David?


Allan Joseph MacEachen: Mr. Speaker, we are talking about two persons who were accused in The Globe and Mail this morning of conducting a covert intelligence operation. We know what those words mean. I have explained the circumstances in each case as truthfully as I could find out in the limited time available this morning. I know of no other facts that I should give to the Hon. Member. If another fact comes to my attention, I will bring it to his attention and that of the House. But I am giving the facts as I know them, both in the case of Mr. Crenna and in the case of Mr. Cadieux.
It seems to me that when we have said "look at the file" put together by Mr. Cadieux, we have told the press to look at it, that is a pretty clear indication there is not very much covert about it, that one wanted to conceal, and nothing about the personal life of the Leader of the Opposition. I tell you, Mr. Speaker, that I would condemn as being totally without justification any such investigation by the Government into the private life of any Member of Parliament. That is for the police if they want to do it, but not for us.


David Edward Crombie: Mr. Speaker, I think the Acting Prime Minister, indeed all Canadians, would understand that when we read the paper this morning we clearly had in mind the abuse demonstrated in this House by the Minister of Finance. That is why we attach far more importance to it than the Acting Prime Minister.


REQUEST THAT PRIME MINISTER CONDUCT INQUIRY
David Edward Crombie: Mr. Speaker, I ask the Minister to consider this. We understand there was a limited time to investigate, and we understand that the Acting Prime Minister can confirm for us only two of the four persons named in the paper. However, Tom Axworthy, the principal secretary to the Prime Minister, is alleged to have been involved, as well as others. What we want to know, I think what everyone wants to know, is who else is involved, how long will it go on, and who else is going to be touched?
Will the Acting Prime Minister undertake to this House today to meet with the Prime Minister on his return and ask him to carry out a full-scale inquiry, so that the matter can be dealt with openly and cleanly? At stake are not only the Acting Prime Minister and this Government, but the sanctity and importance of this House.


Allan Joseph MacEachen: Mr. Speaker, if the
Oral Questions
conduct in itself were reprehensible, it would be important to find out whether there were other persons involved. I do not find anything reprehensible about seeking information on public issues and about the stand of public figures on public questions. That is all that has happened here. It has arisen from a very important industrial relations case, a very important shutdown in which the Leader of the Opposition was involved and to which he drew attention himself. It seems to me it was our responsibility to be fully informed on that event. That is all. Why ask who else is involved? If there were three or six others, would it add anything to an act which in itself is innocent and fully justified?


POSITION OF DEPUTY PRIME MINISTER
Hon. Jake Epp (Provencher):: Mr. Speaker, my supplementary question is for the Deputy Prime Minister. The Deputy Prime Minister would like to dispose of this issue by saying it is not reprehensible. A few days ago, after the Minister of Finance could not produce a specific letter, he tried to back it up by saying he had heard of a conversation with the Deputy Minister of Finance. We have had a plethora of examples in the House whereby the Government is using various means to hang on to power and to bring others in the House down to its level.
Does the Deputy Prime Minister not feel that this action, in connection with the other actions that have been exposed in the House, in fact degrades the Government, the House, and the very institutions we are to uphold in the eyes of Canadians?


Allan Joseph MacEachen: Mr. Speaker, we are speaking about a particular case which has been brought up in the press this morning and has now been raised quite legitimately by members of the Opposition. I have explained what has happened in each case, to the best of my knowledge. 1 do not find anything degrading about going into a public office to seek information, nor do I find anything degrading about doing research, principally in the library of the University of Ottawa, to get information on a public event. I do not see anything degrading about that. Maybe the Hon. Member does, but I do not.


Arthur Jacob (Jake) Epp: Mr. Speaker, since the Deputy Prime Minister feels that it is so minor, it is interesting to note that it was the principal secretary in the Prime Minister's Office who thought it was important enough to develop this kind of activity.


INSTRUCTIONS GIVEN TO RESEARCH ASSISTANT
Arthur Jacob (Jake) Epp: Mr. Speaker, if this was so minor, inconsequential, and of such little importance, why was Mr. Cadieux told to operate in private, not to be associated with the Prime Minister, not to have any linkages with the phones, not to have any office space in the Prime Minister's office, but to get the information?

February 15, 1984
Oral Questions


Allan Joseph MacEachen: Mr. Speaker, 1 have not used the word "minor" at all. The Hon. Member has built his case around the use of the word "minor", as if I had used it. I have not said this event which was being researched, and to which the Leader of the Opposition paid so much attention, was a minor event. It was an important event in the public and industrial life of Canada. However, it was not degrading to look into it, as I have explained. I have no way to answer the question which the Hon. Member bases upon a premise which I have never employed.


EMPLOYMENT
Mr. Doug Anguish (The Battlefords-Meadow Lake):: Mr. Speaker, my question is for the Minister of Employment and Immigration. The question arises from some of the accusations of porkbarreling and Liberal patronage made against that Minister in the past week or so. My question is in regard to Canada Works projects in my riding. Programs similar to last year's were cut back. We now have about one-tenth of what we had the previous year. There were special allocations set up for non status, Metis people, and treaty Indians. Not one non status or Metis project was funded in my constituency. Many of the treaty Indian projects which have been around for some six months are not approved.
From the research I have done I understand there is an argument between the Minister of Indian Affairs and Northern Development and the Minister of Employment and Immigration. Some of the reserves in the northern areas have in excess of 90 per cent unemployment, as opposed to the rate of 8 per cent which was assigned to my constituency. When will those funds finally be approved for the reserves in The Battlefords-Meadow Lake constituency and other constituencies across Canada which have to wait while this Minister and the Minister of Indian Affairs and Northern Development squabble over how the money should be disbursed.


Hon. John Roberts (Minister of Employment and Immigration):: Mr. Speaker, the hon. gentleman refers to some dispute, squabble, or disagreement between myself and my colleague, the Minister of Indian Affairs and Northern Development. I can tell the House quite honestly that I cannot think of any dispute or divergence of view between us on anything at the moment. We have had some in the past but they have all been resolved, as far as I know. If the Hon. Member is alleging that there has been some delay in the Canada Works grants in his constituency because of a difference of view between my colleague and myself, that is simply not true.
In regard to the situation in his constituency in terms of Canada Works, I do not know offhand what the details are of the projects which have been applied for there, or what recommendations he has made. I will be happy to look into the situation and look at his representations.


FORMULA FOR ALLOCATING GRANTS
Douglas Keith Anguish: Mr. Speaker, there is a six month delay in terms of having the funds approved. Considering there is in excess of 90 per cent unemployment, I think there is some kind of a problem there. The Minister should be answerable for it.
Instead of diverting these funds into patronage programs over which the Liberals have control, will the Minister look at the formula which determines the rate of unemployment? I know that within my constituency the rate of unemployment is not the 8 per cent upon which grants are based. The rate of unemployment is much higher than that. The Canada Employment Centres can substantiate that. Will the Minister look at the formula for allocating those grants rather than the formula of political patronage for their own people. Will he change it so it is more realistic and allows unemployed people to take jobs under this program albeit short term?


John (Moody) Roberts: Mr. Speaker, I am very impressed by the fervour with which the Hon. Member deals with his question. I would have been far more impressed if he had expressed that fervour earlier rather than waiting until members of his constituency were in the gallery to watch him. At any time over the past several months he could have made representations to me personally or in the House on this matter. I regret that he has not done so until now.


CHARTER OF RIGHTS
Mr. Louis Duclos (Montmorency-Orleans):: Mr. Speaker, my question is for the Minister of Justice.
Throughout the debate which led to the adoption of the Canadian Charter of Rights and Freedoms, senior Government Members kept repeating that the main purpose of section 23 of the Charter was to ensure that French-speaking minorities in Canada would have the same education rights as those of the English-speaking minority in Quebec.
In view of that, could the Minister tell the House if, from a legal standpoint, Franco-Ontarians can indeed seek for themselves the status given to Quebec's English-speaking minority when they claim the right to manage their own school system, and could he say whether, in the opinion of the Government, section 23 of the Canadian Charter of Rights and Freedoms does grant such a right to the Franco-Ontarian minority, "where numbers warrant"?


Hon. Mark MacGuigan (Minister of Justice):: Mr. Speaker, the Government advocates a very broad-minded interpretation of section 23 of the Constitution. The operative words are "minority language educational facilities" and our position in
February 15, 1984

that respect is that all means to establish facilities for the linguistic minority must be taken in keeping with the interpretation of that section of our Constitution.


PRIME MINISTER'S OFFICE
Mr. Chris Speyer (Cambridge):: Mr. Speaker, my question is for the Deputy Prime Minister. The Deputy Prime Minister will know as a result of the furore concerning criticisms of the Tax Department that the Prime Minister's Office has established a small group of individuals designed to advise the Minister of National Revenue with respect to the criticism that has been levied at his Department.
Mr. Tom Axworthy, the principal secretary, says that the Prime Minister's Office is designed for partisan purposes. In light of the tactics of investigation, and in light of the attempted smear and the muck raking with respect to the Leader of the Opposition, how can any Members of this House repose confidence in the fact that we will be immune from criticism with respect to criticism of the Revenue Department when the Prime Minister's Office is constantly investigating the Leader of the Opposition and other Members of this House?
Hon. Allan J. MacEachen (Deputy Prime Minister and
Secretary of State for External Affairs): Mr. Speaker, the question is purely rhetorical. The Hon. Member does not ask anything. He makes a number of charges with which 1 have dealt already. There is no investigation whatsoever into the personal lives of Members of Parliament. The Hon. Member repeats the claim again. Why? There is no such effort. Is the Hon. Member surprised that the Prime Minister's Office is interested in the politics of Canada?


Some Hon. Members:: Oh, oh!


Allan Joseph MacEachen: It is, and will continue to be. I am sure if that never-never land happens and we have a Tory Government again, the Prime Minister of that Government would be interested in the politics of Canada and would be very interested in what the Leader of the Opposition would be doing in that very, very distant time.


Some Hon. Members:: Hear, hear!


Chris Speyer: Mr. Speaker, the Deputy Prime Minister represents the Party of St. Laurent and Laurier. I am sure they would be disgusted at the tactics that are being utilized.


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


REQUEST FOR ASSURANCE DEPARTMENT NOT MONITORING TAX RETURNS OF MEMBERS OF PARLIAMENT
Chris Speyer: Mr. Speaker, my question is for the Minister of National Revenue. Will he confirm the accuracy of my statement that he is being advised by a group of individuals with respect to the Revenue Canada crisis, the Revenue Canada furore, from the Prime Minister's Office? In addition to that, can he give assurances to every Member of this House that the Leader of the Opposition's tax returns have not been monitored, or any other Members' tax returns? Will he give us that ironclad assurance?


Allan Joseph MacEachen: That has been asked and answered already.


Hon. Pierre Bussieres (Minister of National Revenue):: In
answer to the first part of the question of the Hon. Member, Mr. Speaker, I would like to indicate that, with the assistance of the Privy Council, where can be found the most senior officials who assume responsibility for the Public Service within the Government, we have appointed a working group to look after and improve Revenue Canada communications with the public. I hope the Hon. Member will understand that they belong to the Privy Council and are all senior Government officials. I should like to assure him as well that, whatever the political partisanship criteria may be, they are never a determining factor as to whether a taxpayer return will be audited or not.


JOB DESCRIPTION OF RESEARCH ASSISTANT
Hon. Allan Lawrence (Durham-Northumberland):: Mr. Speaker, bearing in mind the statutory responsibility of the Minister of Justice is to ensure that the laws of Canada are enforced, has the Minister assured himself, or will he, that no offence has been committed by Mr. Tom Axworthy, the principal secretary to the Prime Minister, or anyone else connected with the Prime Minister's Office, in dishonestly or fraudulently committing a deception in the falsification of documents under Section 355 of the Criminal Code, or for that matter under Section 356 relating to the falsification of employment records, in that Mr. Pierre Cadieux was allegedly employed by the Prime Minister's Office and apparently Mr. Axworthy by utilizing a false job description and classification?


Mark R. MacGuigan: Mr. Speaker, the Hon. Member's question is full of allegations and insinuations. It seems to me that if he wants to make that kind of allegation, he should do so plainly and directly.


Some Hon. Members:: Hear, hear!

February 15, 1984
Oral Questions CONSPIRACY INQUIRY


Allan Frederick Lawrence: Mr. Speaker, I have a supplementary question for the Minister of Justice. Would the Minister in this regard when he is giving the consideration, which under his statutory responsibility he must do, look at the matter of criminal conspiracy under Section 423 of the Criminal Code as it relates to the involvement of the employment of people in the Prime Minister's Office in connection with the falsification of employment record in the public service of this country?


Mark R. MacGuigan: Mr. Speaker, I will give the Hon. Member's questions the attention they merit.


Some Hon. Members:: Oh, oh!


An Hon. Member:: You had better look at them.


NATIONAL DEFENCE
Mr. Bill Blaikie (Winnipeg-Birds Hill):: Mr. Speaker, my question is for the Minister of National Defence. On Monday 1 had the opportunity to present a petition to this House, a copy of which I supplied to the Minister, requesting him to release the transcript of the military inquest into the accident which took the lives of two young men of the Canadian Militia on August 21, 1983. The Minister previously indicated to me that he thought this information should be sought through the Access to Information Act. He has been asked to use his ministerial powers to make that transcript available to the families so they can find out what actually happened that day. I know the Minister has had the opportunity to consider the matter. Will he tell us now whether he is prepared to release that transcript?


Hon.   J.-J. Blais@Minister of National Defence: Mr. Speaker, I thank the Hon. Member for his question and for his continuing interest in this matter. As I indicated to him initially, the matter should be pursued through the Access to Information Act. As I understand it, an application has already been made and I have directed my officials to give that application their undivided attention in order to expedite the release of the information.


William Alexander (Bill) Blaikie: Mr. Speaker, I feel the Minister could have used his powers in this case. The families have already waited since August of last year, trying to find out. I regret that he has not decided to make the transcript available now.


DRIVER'S LICENCE
William Alexander (Bill) Blaikie: Mr. Speaker, I have a supplementary question for the Minister of National
Defence. May I ask him whether he would be prepared, because this is a matter separate from the inquest, to instruct the Militia to make available to the parents a copy, or the original, of the driver's licence of Private Krosney, so the parents can know whether or not their son was trained by the military to drive the vehicle he was driving that day when he was killed?


Hon.   J.-J. Blais@Minister of National Defence: Mr. Speaker, I will take those comments as a representation, and I will see to it that every effort is made to accede on a positive note.

[ Translation]


ENVIRONMENTAL AFFAIRS
Mrs. Eva Cote (Rimouski-Temiscouata):: Mr. Speaker, my question is for the Minister of Environment.
Some time ago, he announced a most interesting program known as Environment 2000. However, the time limit for submitting projects under this program is very short and representations have been made to the Minister in this regard. I would like the Minister to tell us today if possible whether the final date for submitting projects under the Environment 2000 Program has been put off so that a greater number of interesting projects may be submitted?


Hon.   Chas. L. Caccia@Minister of the Environment: Mr. Speaker, as mentioned by the Hon. Member, several Members have shown their interest in the Environment 2000 Program and have raised the question of the date limit. I have examined this issue, and to give more time to all Canadians who live in the faraway areas of the country and who are interested in this program, 1 have decided to push the final date back five days.


PRIME MINISTER'S OFFICE
Hon. Ray Hnatyshyn (Saskatoon West):: Mr. Speaker, my question is for the Deputy Prime Minister with respect to the covert operations carried on by the Prime Minister's Office-


Mr. Ouellet:: That is not true.


Ramon John Hnatyshyn: -with respect to the background of the Leader of the Opposition. The Prime Minister and the Deputy Prime Minister obviously confuse the public funds and the use of public facilities with their own money for political purposes. At least the Watergate plumbers got their money from the Republican Party.

February 15, 1984

Privilege-Mr. Nielsen PRIVILEGE


Some Hon. Members:: Hear, hear!


Ramon John Hnatyshyn: 1 want to ask the Deputy Prime Minister a couple of specific questions. Were the Minister of Finance's recent accusations on the floor of the House with respect to the Leader of the Opposition as a result of a strategic distribution of material obtained by the crew that is working out of the Prime Minister's Office?
I also want to ask him-and he should know it-whether or not any official in the embassy in Washington facilitated or assisted in the obtaining of this information by Mr. Crenna?


Allan Joseph MacEachen: Mr. Speaker, to my knowledge it would not be necessary to secure the help of an embassy official to drop into a public office, make out an application and pay a fee to obtain documents which are generally available. It would be quite unnecessary to call upon the services of the embassy to conduct a purely information gathering activity, not a covert activity as the Hon. Member wants to continue to say against all the facts.


SECURITY SERVICE INQUIRY
Ramon John Hnatyshyn: Mr. Speaker, the Deputy Prime Minister did not answer the question with respect to the recent reprehensible actions of the Minister of Finance when he had scoured the files on the Leader of the Opposition in various government Departments, including his own. I want the Deputy Prime Minister to answer the question as to whether this was connected in any way with this particular endeavour. Also I want to ask him whether or not he can give an iron clad assurance, in terms of the law enforcement powers of the Government, through the Solicitor General or otherwise, or through any security service, that there is no use of these facilities with respect to obtaining information about the Leader of the Opposition or any other Member of Parliament.


Some Hon. Members:: Hear, hear!


Allan Joseph MacEachen: Mr. Speaker, I have already answered similar questions by the Leader of the New Democratic Party. It is obvious that the Opposition will not stop at anything in order to make unfounded allegations. Now he is suggesting that the Government is using the Security Service. That is a pretty baseless, unjustified, and cheap allegation.


MR. NIELSEN-REPORTED INVESTIGATION OF LEADER OF OPPOSITION
Hon. Erik Nielsen (Yukon):: Mr. Speaker, I raise a question of privilege arising out of the exchanges in today's Question Period. It is a very grave and probably the most serious matter to have come before the House, certainly in my experience.


Some Hon. Members:: Oh, oh!


Erik Nielsen: I know the Government-


An Hon. Member:: In 30 years?


Erik Nielsen: I know government Members do not take it seriously, but I take very seriously any attempt by the Government to intimidate Members of the House of Commons in the execution of their duties through the threat of the release of confidential or private information about Members of the House, because that is what we are dealing with here.
We are dealing with public servants and hired agents used to dredge up material against the Leader of Her Majesty's Loyal Opposition (Mr. Mulroney), a despicable action, unworthy of a Prime Minister's Office.


Some Hon. Members:: Hear, hear!


Erik Nielsen: We have been given a glimpse, Sir, into the inner workings of the office of the Prime Minister (Mr. Trudeau), and what has come out is not such as to encourage or reassure Canadians who continue to believe that a Prime Minister represents all the people, that the Public Service, paid out of the public Treasury, is outside of politics, and that Canadians can rely on impartiality in the organs of government. The Prime Minister's Office, particularly that part of it within the parameters of the Public Service, is just such a government organism. It should be prepared to treat all Canadians with that measure of even-handed justice to which the Prime Minister is so fond of referring. Instead, we have evidence of a perversion of the organs of government in a way which has never been experienced in this country.


Some Hon. Members:: Hear, hear!


Erik Nielsen: The action of taking out files on one's political opponents, of setting out to investigate the private, not the public, activities of an Opposition is common in secondary military governments, petty dictatorships and totalitarian societies. It has no place in a parliamentary democracy, and this is not the first time that this kind of conduct has occurred under a Liberal government.
There was an occasion when a Liberal Prime Minister used the RCMP to go through the files for a decade to find material discreditable to the Opposition. An inquiry was set up which a former Prime Minister of the country, then Leader of the Opposition, the late Right Hon. John Diefenbaker, refused to attend. Since then the politicization of our institutions has advanced by leaps and bounds. We have a Prime Minister who

February 1 5, 1984
Privilege-Mr. Nielsen
likes to take shortcuts. The Prime Minister is so busy settling the world's problems, he has no time for what is going on in his own Office.
Within weeks of the new Leader of the Conservative Party being chosen, emissaries were on their way to Washington to dig up information. They were not looking for biographical information. We could have supplied that; we would have been pleased to do so. They were looking for material which would cast the Leader of this Party in a derogatory light, and they were doing it with public officials at public expense. The fact that they found nothing does not detract one iota from the underhanded, unparliamentary nature of their desperate action, for that is the only way that it can be described.


Some Hon. Members:: Hear, hear!


Erik Nielsen: We have had Members of Parliament threatened in the performance of their duties. Members who engaged in the House in criticism of tax collection methods of the Department of National Revenue were faced with a scarcely-veiled hint about publication of their tax positions. We had a threat in the House by a Minister, the Minister of Finance (Mr. Lalonde), who suggested that he would pull out letters which would cast a derogatory light on the Leader of the Opposition. This House, Sir, has been most jealous of its privileges, as has the British House before it. Threatening a Member in the performance of his or her duty is so serious that if forms the subject of a statutory prohibition. Now we have hanging over us on this side of the aisle the threat that the vast resources of government, as was pointed out by the Leader of the New Democratic Party (Mr. Broadbent), are being used to dredge up material against the Opposition including its Leader.
It is not a large step from dredging to fabricating. Those who are capable of hiring investigators to look into the activities of the Leader of the Opposition are equally capable of creating material. Would it not have been more appropriate for the Prime Minister to investigate the background of his own proposed Cabinet Ministers before their appointment, rather than to conduct the resources of government in this direction?


Some Hon. Members:: Hear, hear!


Erik Nielsen: We have already had a case where correspondence contradicting specifically the impression which the Minister of Finance sought to leave was not produced. That, Sir, is known as suppression, and I speak specifically of the letter he failed to produce dated November 30. This latest infringement on the privileges of a Member is one of the most serious which has ever been brought before the House.
The Leader of the Opposition is an officer of the House. He fulfils a function recognized constitutionally in Canadian and British parliamentary law and precedent in the same way as the position of the Prime Minister is recognized. It is his constitutional duty to attack and to criticize government. The present Leader of the Opposition has carried out that function in a reasonable, honest and fair-minded way.


Some Hon. Members:: Hear, hear!


Erik Nielsen: No one can accuse him for being overly partisan or carrying partisanship to the extremes. In my personal viewpoint, he has been moderate to a fault.
What is the reward for this restraint that he has practised? Threats, production of documents, secret and clandestine investigations. Surely this is one of the most serious revelations ever to come before a House of Commons in any parliamentary democracy.
The investigators have been hired with public funds, public servants suborned, secret trips authorized in order to dredge up anything, inside the country or out, which might reflect upon the conduct of the Leader of the Opposition while he was the head of a company in private industry. Coming on top of the publication by the Minister of Finance of private communications, the message is clear to Canadians in business and industry or to those of us who attempt to serve our constituents in Parliament. We are all subject to being looked into, we are all subject to being harassed, we are all subject to being investigated or spied upon by a Government which feels free to use the apparatus of the Public Service for partisan purposes.
We know what happened to the Special Recovery Fund: $300, million of public moneys turned over to Grit members as a patronage dispensary controlled by the Prime Minister's Office. How far has that politicization gone? Now the subversion of the Prime Minister's Office, the highest office in the land, which ought to be at the service of all Canadians without distinction as to the political conviction, is being used as a kind of command post for espionage against members of the Opposition. Is it any wonder that Canadians throughout this country have serious qualms about entrusting a new security apparatus to the kind of people capable of carrying out the kind of operations Mr. Axworthy has been masterminding in the Prime Minister's Office?


Some Hon. Members:: Hear, hear!


Erik Nielsen: It was from the Prime Minister's Office that the slush goodies were being dispensed. It was under Mr. Axworthy's direction that the funds were made available for a project here and a project there. Curiously, all of these projects which came fluttering out of Mr. Axworthy's office- and there was some doubt whether it was his or the Prime Minister's-all came fluttering down like manna from heaven, to land where? In Gritland. Mr. Axworthy makes no bones of the politicization of the Prime Minister's Office. It has become an anteroom for the National Liberal Federation. The only criterion of qualification is the degree of Gritism inherent in the person seeking favours. We have seen this politicization-


Some Hon. Members:: Oh, oh!


Erik Nielsen: They laugh over there. That displays the head space that they are in.
February 15, 1984

The Globe and Mail article today, written by Lawrence Martin, confirms that Government employees have been used to investigate details about at least one Member of Parliament with the objective of using that information in the House of Commons to deter Opposition questions about the Government's handling of its administrative responsibilities.
You have recently been asked, Mr. Speaker, to consider a parallel instance where a civil servant threatened to withhold the services of a Government agency if a given Member of this House did not pre-screen questions to be raised in Question Period. That matter is now under your advisement. I submit there can be no doubt that if such a threat occurred, it was a contempt of Parliament. Similarly, if the threat is made, implicitly or explicitly, that private information about a Member will be released if that Member rises in the House to ask a question of a Minister for the purpose of obtaining information about the Minister's Department of his responsibilities or policies in respect of that Department, the threat is made for the purpose of restricting the Member's freedom of speech in the House, and that, fundamentally, is a contempt of Parliament. Such a threat has been made. Citation 55 of Beauchesne's Fifth Edition says this:
The privilege of freedom of speech is both the least questioned and the most fundamental right of the Member of Parliament on the floor of the House and in committee.
This fundamental privilege is under attack in the House. Members of the House can no longer rise in the House to ask questions of the Ministry without fear of reprisal for their action. Members sitting on this side of the House can no longer ask questions about matters pertaining to the official duties of Ministers-their public duties-without expecting that the Minister will respond by releasing information about the Member of Parliament in his or her capacity as a citizen of Canada either before or after that individual was elected to public office. That is what is at the core here.
Furthermore, the Government has engaged in this practice with the full knowledge of the fact that any such allegations as to facts made by Ministers must be accepted by the House and are privileged, and thus not subject to legal action outside of the House.
This concerted attack on Opposition Members seems to have been orchestrated through the Prime Minister's Office and therefore falls under his direct responsibility as a Minister of the Crown. If public employees working for the Prime Minister are engaged in activities designed to intimidate Members, obstruct them in their duties or malign them or impute motives to their conduct in the House of Commons, it is the Prime Minister and no one else who must take responsibility for that kind of sordid conduct.


Some Hon. Members:: Hear, hear!


Erik Nielsen: The Globe and Mail article established the fact that at least two employees in the Prime Minister's Office-indeed it was admitted today by the Deputy Prime Minister (Mr. MacEachen)-were engaged in researching, as he calls it, details about the conduct and behaviour of the
Privilege-Mr. Nielsen
Leader of the Opposition in his capacity as a private citizen prior to his election to the House. Furthermore, the article states that one of those individuals was hired specifically for the purpose of conducting this investigation, and that the job description under which he was hired was written by the principal secretary to the Prime Minister. In the interview conducted by The Globe and Mail reporter, it is clear that the principal secretary to the Prime Minister was entirely aware of the activities in which the PMO employees were engaged and that he sanctioned those activities.
Clearly there can be no doubt that this investigation into the activities of the Leader of the Opposition was conducted at high level within the Prime Minister's Office and that the Prime Minister was aware, or should have been aware, of the fact that this investigation was under way.
Admittedly, an investigation into the private life of a Member of Parliament by the political appointees of the Prime Minister, while distasteful and unconscionable, is not by itself sufficient to amount to a question of privilege. What must be demonstrated is that this resulted from actions undertaken or statements made by the Leader of the Opposition in the conduct of his duties in this place and that the objective of the Prime Minister's actions was to obstruct or intimidate the Leader of the Opposition in the carrying out of his duties. Such a connection, I submit, is established in that Globe and Mail article, which also appeared on the front page of The Citizen. The Prime Minister's principal secretary is described in The Globe and Mail article as having said that "the more intense research on Mr. Mulroney was in response to the Opposition Leader's use of the Iron Ore lay-offs as an issue".
Although the PMO employee who led the investigation into the actions of the Leader of the Opposition in the Iron Ore case had been hired before the Leader of the Opposition had taken his seat in the House of Commons, the article notes that it was only last fall that the operation moved into high gear. According to The Globe and Mail, that same official said that "gathering information on Mr. Mulroney has become a cottage industry in the Liberal hierarchy, with several groups involved". Should there be any question that this information was being gathered for use during the Question Period, that doubt is surely resolved by the closing paragraph of that article, which reads as follows:
Mr. Axworthy said that the public should not confuse the Prime Minister's Office with the Privy Council Office, which it often does. He called the PMO "a partisan office." Information gathering is "to prepare for Question Period .. . We have to know what the stands of the various players are."
What information on file with the Security Exchange Commission in the United States may have to do with the stands on issues of Members of Parliament during Question Period is a moot point. However, it is clear that the Prime Minister's hit squad was engaged in this investigation for the purpose of using the information during Question Period. Thus, two elements of the case for a question of privilege have been established. First, the investigation resulted from or related to issues raised by the Leader of the Opposition. Second, the

February 15, 1984
Privilege-Mr. Nielsen
investigation was undertaken so that some form of retaliation could be exercised in the House during Question Period.
For a breach of privilege to be established, it must be established that the Government attempted to intimidate or obstruct the Leader of the Opposition by threatening to release information about his conduct in his role as a private citizen.
Ample demonstration of just such an attempt at intimidation was provided by the Minister of Finance on Tuesday, January 24 last. As you will recall, Mr. Speaker, when the Leader of the Opposition rose and asked the Minister of Finance a question on the effect of the Minister's policies on the unemployed, the Minister did not reply to the question but stated, as reported at page 693 of Hansard, that the Leader of the Opposition's question:
-would have a little more validity and credibility if, when we prepared the last Budget, the Hon. Member had made representations other than the one I obtained from him when he was in private business at the time, to deal with an advantage for the rich and a deal which would have benefited him rather than the unemployed.
As we now know, those allegations were unfounded and the Minister was forced to swallow his words. The important aspect of this attack upon the integrity of the Leader of the Opposition and the attempt thereby to undermine his credibility when asking questions in the House is that there appears to be a connection between the investigation undertaken by the Prime Minister's Office and the Minister of Finance's charge that was made in the House.
The official in the PMO who was in charge of the investigation is quoted in The Globe and Mail as saying:
Mr. Lalonde is a prime example of this.
I don't know who would have briefed him on the fact that a letter might have contained demands for the rich. It's a complete ignorance of the dossier.
This comment suggests, at first glance, that there was no direct link between the Minister of Finance and the information collection which was undertaken by the PMO. However, the fact that the PMO official quoted notes that the dossier contained detailed and accurate information about the letter in question indicates that the letter must have been obtained by the PMO from the Department of Finance or that officials in the Department of Finance made the PMO aware of the details of the correspondence between the Leader of the Opposition and the Minister and his officials.
The Minister of Finance cannot disclaim responsibility for the actions of his officials, nor can he deny his intent to use the information in Question Period to intimidate and obstruct the Leader of the Opposition. Can he then justify the communication of private correspondence with the Department of Finance to the political arm of the Prime Minister's Office? I think not.
The ominous overtone of this whole issue is clearly underlined in the following remarks attributed in The Globe and Mail to the PMO official in charge of the investigation:
The steps that were taken to obtain the information were well done. But it's in the interpretation of the final information. That's what's hot.
Clearly the Prime Minister's Office undertook an exhaustive search for information, causing officials of the Office to go as far afield as Washington to peer into files, and presumably scouring the files of Government Departments, as implied in the case of the Department of Finance, in order to develop a dossier of detailed information which could then be "interpreted" by Cabinet Ministers and the Prime Minister to, as the Prime Minister's principal secretary put it, "prepare for Question Period".
Intimidation was the Government's intention. The Government proposed to "interpret" information contained in the dossier whenever the Leader of the Opposition raised a question in the House that the Government found too hard to handle or too politically embarrassing. This is Newspeak. Whenever the Government says that it is interpreting information, we can now assume that it means bending it out of shape for the purpose of causing damage to the reputations of those who oppose the Government. Interpretation in reality means intimidation and obstruction. Much as it must upset the Government to have come up dry in its quest for compromising information about the Leader of the Opposition, the fundamental question of privilege remains. The Government used its access to information to construct a dossier about the Leader of the Opposition, and was prepared to hide behind the privileges of the House while putting its interpretation of that information on the public record in the House of Commons.
This action raises two fundamental issues of privilege. First, is the Government committing a contempt by attempting to intimidate a Member of the House into silence? Second, can the Government be permitted to place allegations on the record of the House without being prepared to attest to the accuracy of those allegations and to be held responsible for them?
On the first issue, there can be no doubt that intimidation offends the rules of the House. At page 157 of Erskine May the following words which speak to the issue of intimidation are found under the heading "Attempted Intimidation of Members":
To attempt to influence Members in their conduct by threats is also a breach of privilege.
There follow several examples as authority for that.
The observations made in Erskine May are further underlined in Beauchesne's Fifth Edition, Citation 67, where it states:
It is generally accepted that any threat to a Member, attempting to influence his vote or his actions as a Member, is a breach of privilege.
The threat, implied or stated, to release private information about a Member of Parliament should he or she ask questions in the House that are embarrassing to the Government falls squarely into the definition of intimidation. Because such intimidation limits the Member's freedom of speech, it is a contempt of Parliament of the highest order.
The further difficulty posed by Ministers standing in the House and tabling documents, or referring to private information about a Member of the House in deflecting a question
February 15, 1984

about ministerial responsibilities is that under the rules of this place, those Ministers are protected from similar actions undertaken by private Members. A Member cannot, for example, stand in the House and pose a question to a Minister about matters not falling within his administrative responsibilities in a portfolio currently held by that Minister. All other questions are out of order and they would be ruled out of order by you, Sir.
Ministers of the Crown cannot be allowed to use their privileged access to information, the resources of the Government paid for at the taxpayers' expense, and the immunities that they enjoy in this place in an unfair or unjust manner. It is fundamental to the rules of Parliament that the rules exist to protect the minority from the tyranny of the majority. Individual Members of the House should not be subject to attacks on their personal integrity and invasion of privacy simply because the Government finds it expedient to engage in such practices.


Some Hon. Members:: Hear, hear!


Erik Nielsen: Furthermore, politicized Government
employees operating out of the PMO should not be given the authority to scour Government files and create dossiers for the purpose of arming Ministers to enter into character assassination in the House. The very fact that such an action was contemplated by Government officials is a breach of the privileges of the House and of Members of this place. That Ministers have the intention of proceeding to use this information is a far graver offence against Parliament.
To support my contention that the threat against Members could be made either explicitly or implicitly, 1 would like to draw your attention to the following observation drawn from page 162 of the Twentieth Edition of Erskine May:
Both Houses will treat as breaches of their privileges, not only acts directly tending to obstruct their officers in the execution of their duty, but also any conduct which may tend to deter them from doing their duty in the future.
There can be no doubt that the intended effect of the campaign against the Leader of the Opposition was to counter the questions that he was raising in Question Period. By revealing private information when the Leader of the Opposition asked them a question to which they did not wish to reply it was the hope of the Ministers of the Government that the Leader of the Opposition would be deterred from asking further questions. Unfortunately for the Government, it was unable to find the damaging information that it had hoped for, and the Leader of the Opposition is not easily deterred from doing his duty in the House and holding Ministers to account for the actions of their Departments. Nonetheless, the very attempt to restrict the Leader of the Opposition's freedom of speech in this place is a contempt of the House.
My contention as to the seriousness of this contempt is further supported by the following observations found at pages 158 and 159 of Erskine May's Twentieth Edition and which speak to this issue of reprisal against Members' actions in the
Privilege-Mr. Nielsen
House and acts which reflect upon or obstruct Members in the conduct of their duties in the House. The heading and text read as follows:
Acts tending indirectly to obstruct Members in the discharge of their duty.
Conduct not amounting to a direct attempt to influence a Member in the discharge of his duties, but having a tendency to impair his independence in the future performance of his duty, will also be treated as a breach of privilege.
On the same page appears the following:
Molestation of Members on account of their conduct in Parliament. It is a breach of privilege to molest any Member of either House on account of his conduct in Parliament.
In the middle of page 158 is the heading "Reflections upon Members", which is also regarded by that authority as a breach of privilege. The actions undertaken by the Prime Minister's Office and thus on his behalf, are a gross breach of parliamentary privilege, Mr. Speaker.
This question of privilege relates not solely to the rights of the Leader of the Opposition. If the Government is allowed to get away with this practice in the case of the Leader of the Oppposition, then no Member of Parliament is safe from this form of public trial with no charge laid against him. Every Member rises in the House to ask a question knowing that a Minister may leak information about the Member in retaliation for his or her question. Mr. Speaker, we cannot, under the rules, require Ministers to answer questions, but it seems that by asking questions we open ourselves to a personal attack upon our freedom of speech by the Government. If ever there were a question of privilege, this is it.
The heart of the issue rests in the age old principle that the publishing of statements impugning Members and threatening them with further exposure if they take part in the debate of the House, is a breach of privilege. This principle was set out in the famous Plimsoll's case in 1873, found in May's Twentieth Edition, at page 157, and continues to be valid today.
What is of great concern is the fact that this has become, as The Globe and Mail reports, a cottage industry. It would seem that the assault on Members' freedom is widespread among government Departments and the responsibility is thus shared by the Prime Minister with other of his Cabinet colleagues.
In closing, Mr. Speaker, if you find that I have a prima facie question of privilege - that I have raised a matter of sufficient substance that the House should be permitted to examine and decide the issue - I would be prepared to move the appropriate motion that the subject matter of the article and the circumstances surrounding it be referred to the Standing Committee on Privileges and Elections.
I know that you regard this matter as serious, Mr. Speaker. I know that brief as your tenure in the Chair has been, you have been a Member of Parliament long enough to realize -
The President of the Privy Council (Mr. Pinard) treats the matter with such frivolity that he plays an imaginary violin.


Mr. Pinard:: You are wasting the time of the House.


Erik Nielsen: We take it as serious, Mr. Speaker. The Minister accuses me of wasting the time of the House. It was

February 15, 1984
Privilege-Mr. Nielsen
his own House order we are living with, that if we come to Orders of the Day before four o'clock, we would rise and re-convene. I am not wasting any time in a technical way and I am certainly not raising any passing matter of frivolity. We have the makings of a threat against all Opposition Members of Parliament that cannot be glossed over lightly.
1 know, Sir, that you will look upon this seriously enough to take the matter under advisement and consider very carefully what the decision will be. I submit to you in all sincerity that the matter is a valid question. There is a serious question of privilege that should be referred to the House for a decision.


Yvon Pinard: Mr. Speaker, lacking the prophetic talents of the Member for Yukon (Mr. Nielsen), I do not have before me a pile of some thirty-odd pages prepared in advance, all nicely ordered so that I can make a speech on a matter that, according to the Member for Yukon, arose from an article published this morning. I was looking at the elaborate document he prepared. 1 wonder whether he drafted it this morning or whether it has been in his files for some time. In any case, I merely intend to look at the facts that could possibly form the basis for a question of privilege.
Judging from the facts before the House, which are the only facts that should be considered by the Chair in deciding whether there is a question of privilege, there is not much there. We have here a mass of high-sounding principles, sometimes a bit exaggerated and a bit drawn-out, that have been enumerated or mentioned by the Member for Yukon, but as a general rule, he was quoting principles, in some cases with, and other cases without, their context but in any case, principles that should be considered and applied only when the facts so justify.
What is lacking in his arguments is that there are no facts or elements that could lead us to believe that there had been an investigation into the private life of one or several Members. There is nothing before the House that justifies the conclusion or even the suspicion that the private life of a Member had been the subject of a "secret investigation", to use the Opposition's words.
Mr. Speaker, I suppose you heard the brief, concise and brilliant answers given by the Deputy Prime Minister (Mr. MacEachen) during Oral Question Period. One by one, he disarmed the Members on the front bench of the Progressive Conservative Party, who visibly wanted to build up a momentum that would justify their indulging in a form of obstruction, as a footnote to a happy anniversary. Unfortunately for the Members opposite, however, because the Deputy Prime Minister had the facts and the truth on his side, he was able, simply and literally to disarm them, and as a result, the cut-and-dried document prepared in advance by the Member for Yukon became totally insignificant. It has absolutely no basis in fact.
Mr. Speaker, the facts are quite simple. During the Progressive Conservative Party's leadership campaign, one of the candidates, now the Member for Central Nova (Mr. Mul-roney), said that he wanted to lead the country more or less as though it were a large corporation, because he had experience in managing a multinational, the Iron Ore Company, and had shown that he was very good at it. Upon starting his career in public life, the Hon. Member used that experience in becoming a candidate and running for the leadership. Subsequently, he used the same arguments during his election campaign in Central Nova, and later, here in the House, he also referred to his experience in managing the Iron Ore Company, especially in Schefferville.
That is the basic issue of the debate today. Following those allegations made public and used publicly by the Leader of the Opposition to win his election, we now have one of two individuals who is accused of being a secret spy by the Opposition. I am referring to Mr. Crenna of the political office of the Prime Minister, which is not the same thing as the Privy Council. The Leader of the Opposition also has an office and public funds in excess of $1 million to hire people whose sole occupation is nothing other than political activities. Even the Leader of the New Democratic Party has a budget of $570,000 to hire similar staff, as the Deputy Prime Minister has indicated. The Prime Minister is entitled to a slightly larger budget for his political office. Mr. Crenna is from the political office of the Prime Minister and, after the Member for Central Nova talked about his experience in the management of major companies, we want to know exactly what happened at the Iron Ore and at Schefferville. What is so remarkable about the management of a company which has to close its doors and practically ruin the economy of the north shore? What is so remarkable? That is why we want to set the record straight, since the Leader of the Opposition himself raised the issue.
As it happened, Mr. Crenna-the so-called secret spy-was performing his duty in Washington to seek information about various other sectors. As the Hon. Member and the Deputy Prime Minister pointed out, he went to a public commission, the American Securities and Exchange Commission. It is open to the public for those who seek public documents concerning a public report on a public company. Those are the facts concerning the secret spy, Mr. Crenna. He went to ask a public document about a public company in a public place, nothing else. There is no other evidence which would lead us to believe that he has inquired into the private life of anyone. These are the facts as far as the first person involved is concerned, and 1 do not think that I am exaggerating. In all the answers which were given to the questions asked and in all the facts that you have before you, I ask you to indicate what element could lead us to believe that the private life of an individual has been subjected to an investigation.
February 15, 1984

The second person involved, a second secret agent, to use the words of the Opposition, is a certain Mr. Cadieux. Mr. Speaker, Mr. Cadieux is not a secret agent! He is a student, and he obtained a certain amount of money to do some public research as a summer job. He did not operate from a secret place and in an underhanded manner to make a covert inquiry as a secret agent into the private life of the Leader of the Opposition. He is merely a student who, as summer employment, did some research work on a public company, Iron Ore, and on the situation in Schefferville, since this had been used by the Leader of the Opposition. He conducted this research from the University of Ottawa library.
Those are the only facts before us. It is quite ridiculous, Mr. Speaker, for the Hon. Member for Yukon to get all excited and give the same pat retorts to the clear, specific and simple answers which were given by the Deputy Prime Minister and which correspond with the facts.
I do not think that either Mr. Crenna or Mr. Cadieux are secret agents. They are two individuals who were acting quite legitimately in carrying out their legitimate and normal duties and who operated in public, seeking public information on a public company, period. Nothing in the facts before us, Mr. Speaker, would lead us to suspect that someone could have investigated the private life of a Member of Parliament.
Mr. Speaker, the one and only thing to do to settle the complaint made in this House on behalf of the Hon. Member for Central Nova is to refer to a precedent. Curiously enough, this precedent concerns a complaint made by the predecessor of the Leader of the Opposition, the former Member for Central Nova, Mr. MacKay.

It is a coincidence, perhaps, that twice in a row we are facing the same Tory tactic, a frivolous attempt to waste the time of the House. In 1977, the former Hon. Member for Central Nova raised a question of privilege. He seemed to be obfuscated and it was found he was totally wrong and that the facts were contrary to his allegation.
You will recall, Mr. Speaker, that in 1977 the Tory tactic was to allege that Members of Parliament were being subjected to surveillance by mail tampering, wiretapping and bugging of offices. They brought forward only two so-called "solid" cases. In the mail tampering case, the matter referred to a weird "postcard" which turned out to be an unstamped, incorrectly addressed, plasticized computer card which the postmaster, having read the message, referred to the RCMP. In the bugging case, Mr. MacKay, the former Member of Parliament for Central Nova, the predecessor of the Leader of the Opposition and now his senior adviser, hired a Toronto detective to check his office. The detective claimed to have discovered a listening device in the office and, as a result of Mr. MacKay's complaint, the Speaker called in the police. The police found that the device was phony and that it had been planted by the detective. The detective was prosecuted, convicted and fined, as well as being deprived of his licence.
Privilege-Mr. Nielsen
That is the previous case which was brought to the attention of the House by the adviser to the Leader of the Opposition, the former Hon. Member for Central Nova.
Today we have the complaint regarding the new Hon. Member for Central Nova, which is, in my view, almost as frivolous. What we have witnessed today is a tactic to try to build up a crisis in the House. I do not know why. Perhaps the Tories do not like the anniversary of their defeat four years ago. Certainly, however, their attempt was totally destroyed by the very clear, simple and brilliant answers given by the Deputy Prime Minister (Mr. MacEachen) today to each of their questions.
There are absolutely no facts in this case which would allow us to believe that there might have been an inquiry into the private life of any Hon. Member. On the contrary, the facts are very clear and very simple. One employee in a political office was doing his job, seeking public documents from a public bureau, from a public commission, dealing with a public company, the Iron Ore Company of Canada. The student was working during the summer from the library of the University of Ottawa to find out what had happened in Schefferville and dealing with facts with respect to the Iron Ore Company.
All this is public, the gathering of press clippings, the gathering of facts in relation to a public company. There is nothing which should allow you, Mr. Speaker, to suspect that there might have been a private inquiry into the private life of any Hon. Member of the House. I suggest that this attempt today has been undermined very seriously by the Deputy Prime Minister in his very straight answers which were based on the very simple facts. This attempt should not be encouraged. I believe you should set aside this frivolous so-called question of privilege.
I should like to refer you, Mr. Speaker, in conclusion, to Beauchesne's Fifth Edition, the usual reference, Citation 19, which is very clear. It indicates to a Speaker that when Members disagree on facts, this cannot be the basis of a question of privilege. What we are witnessing here is the Opposition Members pretending that there are facts indicating to you, Mr. Speaker, that there has been an inquiry by secret agents into the private life of the Leader of the Opposition or of any other Hon. Member. That is not the case. This was firmly denied by the Deputy Prime Minister.
Moreover, to the intelligent question posed by the Leader of the New Democratic Party (Mr. Broadbent), the Deputy Prime Minister was very straightforward and gave a very clear, unequivocal answer. The Deputy Prime Minister was asked if there was an inquiry going on with respect to any private Hon. Member of the House, and he replied, no. I believe his word should be taken and this should close the matter.
It is a shame that the Opposition is insisting at this time on trying to ride a dead horse and waste the time of the House, when in fact there was nothing wrong in this whole dossier. It was merely two individuals doing their jobs, doing them well, in a very open way, and dealing merely with public facts, public documents, public commissions and a public company.

February 15, 1984
Privilege-Mr. Nielsen


Mr. Speaker:: The Hon. Member for Hamilton Mountain (Mr. Deans).


Mr. Deans:: Mr. Speaker, I listened-


Mr. Speaker:: Order. The Chair would like to call the attention of the House to the House order which will mean that at four o'clock we will be dealing with budget matters.


Erik Nielsen: On that point of order, Mr. Speaker-


Mr. Speaker:: The Chair has recognized the Hon. Member for Hamilton Mountain on a point of order.


Erik Nielsen: It was on the remarks of the Chair, Mr. Speaker, just very briefly.


Mr. Speaker:: The Hon. Member for Hamilton Mountain (Mr. Deans) is deferring on the matter of the four o'clock House order.


Erik Nielsen: That is right. I just want to say that there would be a question as to whether or not it is a House order. We have no intention of carrying this question on beyond four o'clock because we want to hear the Budget. But the matter is far too important not to carry on tomorrow at three o'clock.


Mr. Speaker:: The Chair in no way wishes to interfere with the rights of Hon. Members to make further representations. There is ample precedent, the case of the Hon. Member for Peace River (Mr. Cooper) being the most recent one.


Ian Deans: Mr. Speaker, I listened with great interest to the exchanges that took place in Question Period, as well as to the presentation by the House Leader for the Official Opposition and the response of the President of the Privy Council (Mr. Pinard). I, too, read this morning's paper. I read the story a number of times, quite carefully, and there is no doubt in my mind that the story raised more questions than it answered, which was perhaps unfortunate. You may have noted that the Leader of the New Democratic Party (Mr. Broadbent) raised some questions which that story failed to answer. I listened to the House Leader for the Official Opposition with great care and 1 must say his presentation was long and, honestly, quite difficult to follow in some instances. It was very involved and it raised a number of questions which may well have been related to the ultimate question of privilege claimed, but they were questions which, I think it is fair to say, we dealt with during the course of the last two or three weeks.
For example, Mr. Speaker, there was the incident of the letter referred to by the Minister of Finance (Mr. Lalonde) which ultimately turned out not to exist. We supported the Official Opposition's contention that that letter ought to have been tabled, and we were appalled to find the letter and the Minister's comments concerning what was alleged to have been said by the present Leader of the Official Opposition (Mr. Mulroney) were unsupported.
The House Leader of the Official Opposition raised another matter of great concern. He indicated that there were incidents where Members of Parliament were being threatened over statements they may have made regarding matters which are clearly a public concern. They were being threatened with exposure of information of a personal nature in an effort to intimidate them into stopping their legitimate public criticism. I should like to go into that matter in a little more detail later. He then went on to speak of the matter of the Special Recovery Fund, which has been the topic of some considerable debate in the House over the course of the last few days, and the whole question of the Liberal Government's use of public funds for what, at least on the surface, has been indicated to have been patronage purposes.
Other than the fact that they are of interest and tend to cast the Government in a bad light, quite justifiably so, I am not too sure how those matters relate to the question now before us, which is as follows. There are two related matters, but they are separate. Did the Government improperly use public funds to research and obtain information of a private nature about Members of Parliament? That question has to be addressed in some detail in order to determine facts. Did the Government, using funds available to it for the exercise of its public responsibility, allocate those funds so as to seek information, private or public, which could be used to discredit or undermine the effectiveness of a Member of Parliament or, as raised by my Leader, of Members of Parliament. I think that is a separate question to be dealt with in a moment.
The second question is: If they used those public funds to get that information, was that information to be used or intended to be used to intimidate a Member of Parliament? I think the House Leader for the Opposition used those exact words. In addition to that, was it to be used to deny the Member, or attempt to deny the Member, the undoubted right of freedom of speech?
I think those are difficult questions to answer, Mr. Speaker. The story as it appears in the paper today, although it carries considerable innuendo, produces very little evidence to show that that is the case. However, having said that, it is not unreasonable to draw the conclusion that that may well have been the case. I think it would have been easier for us to come to a conclusion about that had the House Leader for the Official Opposition dealt specifically with that matter rather than with the other matters.
As I see it, the question you have to deal with is twofold, Mr. Speaker. The first question is the one I raised: Can the Government, using all the powers of the Treasury-


Erik Nielsen: State.


Ian Deans: -using all the powers of the state, as my colleague says, but using all the financial powers of the Treasury, can the Government go out and investigate at whatever cost, in whatever way it desires, the private involvement of Members of Parliament, whether it be in business or otherwise? Is that a breach of privilege? It is quite clear on the face of it that the Office of the Prime Minister (Mr. Trudeau)
February 15, 1984

certainly did go out and did attempt to seek information. The question now before you is whether that was a simple research operation, or was it in fact intended to intimidate and deny the Leader of the Official Opposition the opportunity to exercise his responsibilities as the law requires?
It being four o'clock, Mr. Speaker, 1 would prefer to continue with this matter tomorrow.



GOVERNMENT ORDERS


Hon. Marc Lalonde (Minister of Finance) moved:: That this House approves in general the budgetary policy of the Government.
He said: My budget today is dedicated to building a strong and growing economy-an economy that will generate lasting, meaningful jobs for all Canadians who want to work, an economy that will provide the economic opportunity and security all Canadians seek.
My budget puts into action the program for growth, opportunity, security and partnership outlined in the Speech form the Throne.
We find ourselves in a markedly improved international and domestic environment. World economic recovery is taking hold. The threats to the financial system have been contained through the close co-operation of governments, the international institutions and the world banking community. Protectionist pressures worldwide remain a potential threat. In this area, as on the financial front, my colleagues and I are working actively with other governments to promote a more stable and more predictable international environment.
On the domestic front the record is impressive by any standard. In the June 1982 budget, my predecessor established the 6 and 5 Program to reduce significantly the inflation that was destroying our economy. That goal has been met. In my April budget, my goal was to secure the recovery. That goal has also been met. Growth has been stronger, inflation lower, and our employment higher than forecast last April. When we compare our economic recovery to that of other countries, Canada is faring better than most. Our economy, growing steadily and surely, is expected to be mong the leaders in the industrial nations this year.
These are solid achievements. Yet none of us can be satisfied when more than 1.4 million Canadians-our children, our relatives, our friends and neighbours-want to find jobs and cannot.

The Budget-Mr. Lalonde BUDGET STRATEGY
My budget is aimed at creating jobs through partnership. The private sector must be the main creator of jobs. But the government can help-by providing assistance where desirable, by lightening the burden of administration where feasible and by leading directly where necessary. Ultimately, the confidence of Canadians-consumers, savers and investors-and the creative energy and entrepreneurship that flow from this confidence, will shape our future.
In my consultations with Canadians in all walks of life and in all regions, I have been encouraged by the sense of realism they bring to our economic and human challenges. There has been a renewal of confidence throughout the country-confidence in our economic potential and confidence in our ability to achieve that potential. At the same time, we increasingly recognize that our future prospects depend, fundamentally, on a strong, co-operative and responsible partnership among Canadians and between Canadians and their governments. [English]
Today I shall propose new initiatives to strengthen this partnership. Although I shall refer to these initiatives in detail later on, let me indicate the general thrust of some of them.
The accomplishments of the 6 & 5 Program are a remarkable example of what Canadians can do when we all work together. Thanks to the success achieved, we shall, in 1984, be able to maintain our commitment to wage and price restraint but with a more flexible approach.
To secure the jobs we need, we must become more efficient, more productive, and more aggressive in world markets. I shall announce significant measures to improve our productivity and competitiveness, and our ability to export.
The principal generators of jobs in this country are the hundreds of thousands of small and medium-sized businesses.


Some Hon. Members:: Oh, oh!


Marc Lalonde: I am glad the Conservatives are at long last recognizing this. I shall take steps to ease their administrative burdens by simplifying the tax system. Increasing the economic security of Canadians will strengthen confidence and help boost growth and job creation. I shall propose innovative measures to increase the security of homeowners and I shall announce comprehensive measures to reform the Canadian pension system, including assistance to those in greatest need.
This budget is fiscally responsible. It is designed to provide leadership in moving beyond economic recovery to economic expansion. It will lead us toward growth in incomes and jobs. Most important, it does so by public support to private initiative.
Private initiative depends on confidence. Confidence in turn is fostered by consistency and continuity in government policy.

February 15, 1984
The Budget-Mr. Lalonde
My objective as Minister of Finance has been and remains straightforward: to keep the economy growing, so that Canadians who want to work can find productive and meaningful jobs. My policies have been consistently directed towards this end.
Securing growth and jobs depends on our success in four basic areas: reducing and controlling inflation; increases investment; reducing the government's deficit and improving our competitiveness and productivity. I want now to report the progress we have made on inflation, investment and the deficit, and our prospects for the coming years. I shall return later to competitiveness and productivity in more detail.
[ Translation]


CONTAINING INFLATION
[Stage Direction]
Canadians can be proud of our collective achievement in bringing inflation down from almost 12 per cent in June 1982 to 4.5 per cent at the end of last year.
The government's 6 and 5 Program has contributed substantially to this this achievement. Restraint in federal wages and prices has helped to lead inflation down. Canadians were challenged to support the federal government's leadership in their own wage and price decisions. They have responded positively and enthusiastically. Inflation, after three years in doubledigits, averaged 5.8 per cent in 1983, the lowest annual rate in a decade.
The 6 and 5 Program has been supported by responsible fiscal and monetary policies. These policies will continue to be directed at facilitating real growth, while resisting inflationary pressures.
The 6 and 5 Program, however, will begin to phase out at the end of June.
Over the course of the last few months, I have benefited from consultations with labour and business groups, with other associations, with Members of Parliament, and with my provincial counterparts. Canadians recognize that the program has been instrumental in moving from a 12-per-cent world of recession to a 5-per-cent world of recovery. They have urged the federal government to maintain strong leadership in the continuing battle to contain inflation. Most cautioned, however, that simply extending the program could create distortions that might do more harm then good.
[Stage Direction]
I am confident that wage and price decisions in the private sector this year will not contribute to renewed inflationary pressure, and I am therefore not proposing a new guideline for the private sector. As well, effective January 1, 1985, Family Allowance payments, Old Age Security payments, public service pensions, and income tax brackets and deductions will again be adjusted on the basis of actual increases in the cost of living.
I recognize, however, that all levels of government have a fundamental responsibility to continue to exercise discipline in their own wage and price decisions.
The federal government will continue its leadership role. I am today affirming our commitment to continue wage and price restraint.
The existing policy of limiting price increases for goods and services sold by the federal government, Crown corporations and federally regulated industries will be extended for a third year. The price guideline will be reduced from 5 per cent to 4 per cent for this period.
Mandatory wage controls in the public sector will not be extended.
As urged upon us by the public sector unions and many others, the government is prepared to resume collective bargaining when the legislation expires. I want to say clearly that we shall bargain hard. We shall bargain responsibly. We shall bargain fairly. No catch-up payments will be allowed. And we shall observe four major principles in our negotiations.
Federal compensation settlements will contribute to reducing inflation and be fiscally responsible.
They will be based on total compensation comparisons with the private sector, that is, factors such as job security, pensions, hours of work and other benefits will all be considered.
They should not exceed the private sector in compensation for comparable jobs.
They will be designed to ensure that settlements encourage increased productivity and improved performance, and recognize relative job responsibilities.
Should it become apparent in specific cases that arbitration awards in the public sector or wage settlements in our Crown corporations are excessive, when measured against these principles, or that reasonable wage settlements cannot be obtained without lengthy and disruptive strikes damaging to the public interest, then the government will ask Parliament to legislate a wage settlement.
As well, my colleague, the President of the Treasury Board (Mr. Gray), will undertake consultations with labour and other interested groups on proposals to amend the Public Service Staff Relations Act. This Act establishes the framework for collective bargaining in the federal public service. It has not been updated since its introduction in 1967. Both the government and public sector unions will wish to consider changes to modernize it.
[Stage Direction]
For 1984 as a whole, I expect inflation to average about 5 per cent, compared with 5.8 per cent in 1983. The economic projections I shall table with this budget suggest that further reductions in inflation will be made through the mid-1980s. The policies I have just announced will ensure that federal wage and price decisions contribute to this outcome. I expect other levels of government and the private sector to continue to do their part.
February 15, 1984

[Stage Direction]
New jobs will come from the expansion of business and industry throughout Canada, to meet the needs of Canadians and customers abroad. This expansion will require new investment.
Public investment, particularly by the federal government, will give a strong boost to the recovery over the coming year. Led by the Special Recovery Projects, our capital expenditures will increase by more than 25 per cent over the course of 1984.
Business investment declined by about 9 per cent in 1983, which is a smaller decline than I had forecast last April. Over the past year, however, significant progress has been made in restoring the financial health of the business sector. The strength of the recovery, lower inflation and interest rates, and higher productivity all helped to bring about a strong rebound in business profits. It must be stressed however that profits are still below historical levels, but they are on their way back. This growth in profits, together with much stronger stock markets and the tax incentives to assist private investment that I introduced in my April budget, have helped businesses to make considerable progress in restoring the strength of their balance sheets. These positive developments are beginning to pay off in stronger investment programs.
Equipment investment picked up in the second half of last year, and 1 expect it to grow strongly this year, increasing by about 7 per cent over its 1983 level. Stable interest rates and rising consumer demand should encourage business to replace and expand its stock of machinery and equipment. Plant construction should begin to grow again in the second half of this year. In 1984, I expect total business investment to grow by 2'A per cent. Beginning in 1985, and continuing through the medium term, business investment is projected to be a major source of economic growth in Canada.

[Stage Direction]
As business investment increases, the government's financial requirements must be reduced.
In April, I estimated that the government's deficit for the 1983-84 fiscal year would be $31.3 billion. My current estimates for revenues and expenditures show only slight changes from those I presented to Parliament last April.
The changes to projected revenues and expenditures will result in a deficit for the current fiscal year of about $31.5 billion. Government financial requirements will total about $27 billion.
The deficit has provided considerable support to the welfare of individual Canadians and to the promotion of economic activity through the difficult period of the recession and the first year of recovery. Current financial requirements have been financed without pushing up interest rates as a result of strong savings and weak business investment. But government
The Budget-Mr. Lalonde
deficits must be reduced as investment recovers and the economy expands.
I remain committed to bringing the federal deficit down in a way that does not damage our economic prospects. The fiscal strategy I set out last April has proved itself to be the right course of action.
In the coming fiscal year, taking into account the impact of the measures proposed in this budget, the deficit will fall by almost $2 billion to $29.6 billion. The government's financial requirements will be $25.6 billion.
In the medium term, the deficit will continue to fall, consistent with the strategy set out last April, from over 8 per cent of gross national product this year to about 4.7 per cent by 1987-88. Financial requirements will fall even faster. They will drop from 6.9 per cent of gross national product this year to 3.4 per cent by 1987-88.

[Stage Direction]
Creating employment for Canadians wanting to work is a prime national objective. The progress we are making in reducing inflation, increasing competitiveness, restoring investment and reducing the deficit is showing up in growth and jobs.
The first year of economic recovery has been stronger than I forecast last April. We have achieved about 3 per cent real growth in 1983, rather than the 2.3 per cent I predicted. Employment also grew more rapidly than expected. About 400,000 jobs were created during 1983.
The government is making a major contribution to ease the pain and hardship of unemployment, and to speed up the creation of new jobs.
In my April budget, I announced a $4.8 billion Special Recovery Program to create jobs by accelerating productive investment. Half of this money is available to the private sector, to support private investment. The remaining $2.4 billion is being spent to upgrade public facilities in key sectors of our economy and in all regions. Under the Special Recovery Capital Projects Program, work is now under way on more than 200 projects to improve our basic research capability, our harbours and wharves, our transport system, our agricultural facilities and our tourist attractions. More than $1 billion will be spent on these projects in 1984-85. These facilities will contribute to growth across our country, provide support to private investment and create jobs for many thousands of Canadians.
In addition to the Special Recovery Program, the government has already committed over $2.3 billion in the coming year to provide direct employment and training opportunities to almost 550,000 Canadians. This includes the additional $400 million announced in the Speech from the Throne last December.
[Stage Direction]
February 15, 1984
The Budget-Mr. Lalonde
[Stage Direction]
Creating jobs for Canada's youth is a priority. The strength and vitality of our nation's future depend on our young people. It would be nothing less than a national tragedy if they do not have the opportunity to realize their potential. The Speech from the Throne established a Youth Opportunity Fund of over $1 billion to help young Canadians acquire new skills and find meaningful jobs in the private, voluntary and public sectors. The Prime Minister has also announced the appointment of a Minister of State for Youth to oversee the co-ordination of programs assisting young Canadians. I am announcing today that the Youth Opportunity Fund will be increased by a further $150 million, thus bringing the Youth Opportunity Fund to about $1.3 billion this year.
In the coming fiscal year, the government's commitment to Special Recovery Capital Projects and to direct employment support will exceed $3.5 billion. This is about $525 million more than in the current fiscal year.
[Stage Direction]
But we must all recognize that there are limits to what government alone can do. The jobs Canadians seek-good jobs and permanent jobs-must come from a healthy and growing economy, led by a strong and vigorous private sector.
I expect real growth in 1984 to be about 5 per cent compared with 3 per cent in 1983. Continued strong employment growth, of about 3.5 per cent, will increase the total personal income of Canadians. I am forecasting that total personal income, after inflation and taxes, will increase in 1984, after declining for the past two years. Consumer expenditure is expected to grow steadily in 1984, supported by this increase in personal income and a modest decline in the personal savings rate.
The improvement in the housing market last year will be maintained with an average annual level of new housing starts of about 170,000 units. Government capital expenditures, including the Special Recovery Capital Projects, will provide an important source of growth. Most importantly, I expect business investment to provide increasing support throughout the year, thereby providing the key building block to a sustained medium-term recovery.
Over the medium term, 1 expect real growth to continue, averaging almost 4 per cent a year from 1985 to 1988. Employment increases will continue to be strong. I am projecting that almost 1.6 million new jobs will be created over the five-year period from 1984 to 1988. At the same time, however, the labour force will also grow significantly, particularly in 1984 as increasing employment opportunities lead many Canadians to return to the job market. For this reason, we may not see a dramatic reduction in the unemployment rate this year. However, the unemployment rate should steadily decline and fall to about 7.5 per cent by 1988.
These forecasts are not goals. Our experience last year showed that by working together we could do better than the forecasts. Our objective should be to do so once again, the measures I am about to announce will help to achieve this outcome.

[Stage Direction]
1 now turn to the competitiveness and productivity of the Canadian economy.
Becoming more competitive is a critical challenge for us all. It is a challenge we must meet if we are to create new economic opportunities and new jobs.
We are making progress. In the past year, moderating costs and strong productivity growth have helped us maintain our competitive position in world markets. Our exports grew by more than 5 per cent last year, increasing our share of the world market.
In order to keep Canada growing we must better equip ourselves to compete with our trading partners, both at home and abroad. That means we must cut our costs and be more productive. We must be world class. Laterly the government is committed to strengthening the world trading system. We can grow and prosper only by raising our own standards, not by self-defeating attempts to cut ourselves off from the rest of the world.
Three weeks ago the Government announced that business and labour representatives had agreed on the mandate and structure for the Canadian Labour Market and Productivity Centre. The federal government has committed about $27 million towards its operation over the next four years. The establishment of this Centre is a welcome result of what I regard as one of the most important of the many initiatives in the budget of April 1983: the effort to develop a new national partnership of labour, management, and governments to meet the tough competitive challenges of the 80s and provide the jobs Canadians need. Such a partnership cannot be legislated; it must be based on a strong sense of shared economic interests.
I wish to thank the labour and business representatives who worked together to make the Centre a reality. I am confident that it will soon make a valuable contribution to increasing productivity and employment.
In order to help ensure that our economy remains efficient and productive, my colleague, the Minister of Consumer and Corporate Affairs, will soon introduce amendments to the Combines Investigation Act. By modernizing competition policy, the government will assist in the promotion of efficiency and growth. An effective competition policy allows for efficient producers to be successful and for the fair treatment of large firms, small firms and consumers alike. The proposed amendments will help Canadian companies meet foreign com-
February 15, 1984
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petition domestically and challenge foreign companies for markets abroad.
Today I am announcing new measures to assist Canadian workers and managers to build a more productive and competitive economy.
[Translation)

[Stage Direction]
The key to our success is productivity. Investment in modern equipment is critical. So is education, training, and research into new techniques of operation. But equally important is "putting it all together", and putting it all together comes down to individual Canadians co-operating in the workplace to make a better product at a lower cost.
Innovative managers are recognizing this. Traditional management techniques are adapting to changing attitudes and rising expectations of workers. Workers today want to be informed about their company's goals and performance. They want to understand why, as well as how, things should be done. They want to participate in the decisions that affect their work environment and the security of their jobs. And they want their own contribution to the success of their company to be recognized and rewarded. Responding to these legitimate ambitions can provide substantial benefits for management and workers alike.
[Stage Direction]
The government believes improved labour-management cooperation in the work place is fundamental to economic growth.
I am therefore proposing today to encourage this process with tax assistance for a new Employee Profit-Participation Plan.
The government will provide a tax credit of 10 per cent of the profits shared under the Plan. Sixty per cent of the tax credit will go to individual workers; forty per cent will go to the employer.
The Employee Profit-Participation Plan is designed to complement the collective bargaining process, not replace it. Experience has shown that to succeed, profit-sharing cannot be a substitute for competitive wages.
Any company wishing to establish a plan must form a labour-management committee. The details of the Plan will have to be agreed upon by both workers and management.
I shall table a paper with this budget providing details of how the Plan will work. I want to proceed with legislation that will allow such plans to begin in the 1985 taxation year. 1 therefore intend to consult without delay provincial governments and representatives of the business and labour communities to seek their views and co-operation.
I also intend to broaden the tax assistance available to employee stock option plans. Employee stock options are important in compensating dynamic and entrepreneurial employees. They provide such employees with incentives
The Budget-Mr. Lalonde
directly related to their ability to increase the productivity, competitiveness, and growth of their company.

[Stage Direction]
Public support can do much to enhance the role which our private sector can play in international development.
In my April budget, I stressed the importance of exports to promote recovery and expansion. I established a Special Recovery Export Financing Fund of $180 million to enable the Export Development Corporation to provide greater assistance to exporters.
The developing countries offer many export opportunities for our private sector. However, many of these countries are experiencing unusually serious balance of payments problems which are impeding their development efforts and thus their capacity to import. Their decisions to undertake investments and capital projects often hinge on the availability of external financing on concessional terms. To respond to these needs, for our own benefit as well as theirs, we shall require closer co-ordination of our development assistance and our export financing policies.
In the Speech from the Throne, the government reaffirmed its commitment to devote 0.5 per cent of GNP to official development assistance by the mid-1980s and 0.7 per cent by the end of the decade. This commitment will require an expansion of Canada's traditional development assistance programs; it will also require new policies and new delivery channels.
In this regard, I am announcing that the government will allocate up to one-half of the increase in Canadian official development assistance, as we move towards the target of 0.7 per cent of GNP, to create a special fund in support of an expanded role for Canadian firms in developing countries. By 1990, as much as $1.3 billion could be allocated to the fund to provide financing for projects which have high priority in recipient countries' development plans, for which Canadian firms are competitive and for which development assistance financing is required.
The government will develop guidelines for the use of this fund in consultation with the business community. The object will be to help Canadian firms to provide additional goods and services in support of Third World development and to increase the Canadian share of procurement in multilateral development projects. It will also be the government's intention to enhance industrial co-operation between Canada and developing countries.
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The Budget-Mr. Lalonde

[Stage Direction]
1 now want to deal with the issue of simplifying the tax treatment of small business. An important part of the government's responsibility to the private sector is to keep the rules of the game simple and clear. Far too much talent, money, and productive effort is being misspent on keeping complicated records, filling out difficult forms, and trying to understand increasingly complex legislation. The Minister of State for Small Business and I have received numerous representations about the complexity of small business taxation. With the advice of small business organizations and tax practitioners, I have devoted considerable effort to simplifying the tax system.
Tax simplification can free valuable resources for the critical tasks of running a business and making it grow. I recognize that the tax system must inevitably be complex to some degree in order to deal fairly with the wide variety of circumstances that characterize a complex economy. But I am determined to simplify it where possible. I propose to take a significant step tonight, but I recognize that more remains to be done. I intend to continue my efforts in this regard.
[Stage Direction]
Canadian small businesses are the main source of entrepreneurship, risk-taking, and job creation. It is, therefore, an appropriate area to begin tax simplification. Streamlining their tax regime can be as important as the considerable financial support that the government already provides.
I shall table a paper with this budget containing proposals for a major simplification of the income tax regime for small businesses. The original purpose of the cumulative deduction account was to limit the low tax rate for small business to companies having less than $1 million of cumulative business income. However, it meant that all small business corporations had to keep track of this account regardless of their size. The cumulative deduction account is a prime source of legislative and administrative headaches. I propose to eliminate it. This will reduce paperwork and record-keeping for almost 300,000 small Canadian companies.
The administrative burden on small businesses will be eased further by eliminating the distinction between active business income and non-qualifying business income, and by simplifying the legislation dealing with specified investment businesses, personal service businesses, and corporate partnerships.
These proposals will cut the small business tax legislation by two-thirds, shorten and simplify the tax form, and lighten the burden of record-keeping. The measures will also provide more tax savings for growing small and medium-sized businesses. In the first full year of operation, federal taxes for Canadian controlled private corporations will be reduced by $150 million.
In my consultations on tax simplification, I heard many Canadians say that the rapid pace of change in the tax system in recent years was itself a cause of complexity. Accordingly, I want to allow time for interested parties to comment on these
measures. The paper I shall table contains detailed proposals and draft legislation. I hope to receive comments by April 15 and to introduce legislation shortly thereafter. The measures will take effect following enactment by Parliament.

[Stage Direction]
Canada's tax system is based on the principles of self-assessment and voluntary compliance. Because of the complexity of our tax laws, however, taxpayers often experience difficulties in completing their returns. It is becoming increasingly difficult for them to be sure they are complying with the law, and also to be sure they are claiming all the tax relief to which they are entitled.
Demands have increased for Revenue Canada to provide information, assistance in the preparation of returns, advance rulings, and other similar services to taxpayers.
The Minister of National Revenue has appointed an independent expert to undertake a thorough review of the administration of the Income Tax Act. The purpose is to find out what steps need to be taken to make Revenue Canada's service more responsive to the public without detracting from fulfillment of its responsibilities. But some legislative action can be taken immediately.
In response to representations by my colleague, the Minister of National Revenue, I propose a number of immediate changes in the law that, taken together, should contribute significantly in relieving the administrative burden on taxpayers and improving the fairness of tax administration.
The quarterly tax payments are a serious burden to many senior citizens. Therefore, I am increasing the existing $400 annual tax threshold below which individuals are exempted from having to pay quarterly tax instalments. The new threshold will be $1,000 and will be extended to corporations. In addition, where interest on late or deficient tax instalments is less than $25, it will not be assessed. These new thresholds will mean that tax instalment obligations, and the associated burden of paperwork, are eliminated for about 350,000 senior citizens and over 50,000 corporations, most of them small business and family farm corporations.
I propose a package of legislative initiatives to improve tax administration. A number are designed to facilitate the resolution of taxpayer disputes and appeals.
The period for filing formal objections to tax assessments is being extended from 90 to 180 days. In addition, rather than being required to pay taxes in dispute, taxpayers will be entitled instead to provide adequate security.
More generous provisions will be introduced relating to the awarding of costs on successful appeals to the courts. In particular, the Tax Court of Canada will be allowed to order Revenue Canada to pay up to $1,000 of the costs of a taxpayer's successful appeal.
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Further, taxpayers will have a right to a refund of any overpayment of taxes when a court decides in their favour, even if Revenue Canada further appeals the decision. There are additional relieving changes relating to taxpayer elections and waivers.
[Stage Direction]
A number of major administrative initiatives are also proposed for the sales and excise tax. The government will for the first time pay interest on delayed refunds of overpayments of sales and excise tax. Manufacturers will also be permitted to claim a refund of any such taxes paid on bad debts. In addition, a formal assessment and appeal system will be introduced into the Excise Tax Act. The appeal rights of taxpayers will be protected and entrenched in the law.
These and other proposals detailed in the supplementary information address a number of serious concerns relating to tax administration and represent major improvements in the protection of taxpayers' rights and I wish to thank the Minister of National Revenue (Mr. Bussieres) for his co-operation in this matter.

[Stage Direction]
I am also announcing today a further change to the sales tax.
The question of whether the manufacturer's sales tax should be shifted to the wholesale level has been discussed for several years. One of the government's original objectives was to eliminate the unwarranted advantage this tax gave foreign producers competing with Canadian manufacturers in our own markets. This was particularly serious in the auto industry.
Last year 1 appointed a private sector committee to study alternatives. The committee has recommended that the proposed overall shift in tax to the wholesale level not be implemented. Rather, it has suggested that the government introduce modifications to the existing system to deal with specific defects. The government accepts this recommendation.
I propose, however, that the manufacturer's sales tax on highway motor vehicles be shifted to the wholesale level, effective March 1, 1984. At present, the tax on a Japanese or European car can be $100 to $200 lower than on a comparable car made in Canada or the United States. The change I propose will result in a small revenue decrease for the federal government. But it will ensure a uniform application of tax to all makes of vehicle and end the unfair advantage for imported overseas automobiles.
This measure among others will support growth and employment in the Canadian auto industry.

[Stage Direction]
1 am also proposing a number of additional amendments to the Income Tax Act and to the Customs Tariff and Excise Act that will affect Canadians in specific situations. These are
The Budget-Mr. Lalonde
described in detail in the supplementary information I shall table with this budget.
One in particular I want to mention relates to the energy sector. While circumstances in the petroleum industry are improving, there is a need for further temporary assistance, particularly for Canadian companies that are typically among the most aggressive in searching for new supplies of oil and gas. Last April, I provided support to these companies by deferring the reintroduction of the incremental oil revenu tax for one year, from June 1, 1983. to June 1, 1984. I will be proposing to defer reintroduction for another year, to June 1, 1985.
I also propose to introduce changes to facilitate the transfer of family farms from one generation to another. These changes are in keeping with the government's commitment to the preservation of the family farm.
There has been some controversy surrounding the possible application of Section 31 of the Income Tax Act to farmers. The court decisions have clearly emphasized that farm losses are not in any way restricted for those farmers whose principal occupation is farming and I want to affirm that this is our policy intention. Those farmers whose principal occupation is farming should have no concern that their losses may be restricted. This includes farmers who have taken jobs to provide an extra source of income, as many farmers do in order to support their farm operation.
There is some question of the application of these rules to part-time or so-called hobby farmers. Many such persons have full-time or other occupations in the city but nevertheless carry on farming activities. Concern has been expressed that changing the loss rules to benefit those persons could have an adverse impact on farm prices and provide an inappropriate incentive for speculation in farm land. Before considering any specific changes to Section 31,1 intend to establish a consultative group to assess the impact that changes might have on the agricultural sector.

[Stage Direction]
In preparing this budget, one of my overriding concerns has been to improve the economic security of individual Canadians.
Through the recession and into the recovery, this government has maintained its commitment to a wide range of programs and policies that provide an essential level of economic support for Canadians: income support programs, health care programs, economic opportunity programs. These programs help build an environment in which economic growth can be better achieved and maintained.
I am proposing today important measures to enhance the economic security and confidence of Canadians.
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February 15, 1984
The Budget-Mr. Lalonde IMPROVING PENSIONS FOR CANADIANS
First, I will deal with pensions. Pensions are the principal lifeline Canadians have to economic security in their retirement years. There are ways we can strenghthen that lifeline.
We have had a constructive debate in this country for many years about the best way to build better pensions for Canadians. The government issued a Green Paper in December 1982. This paper was the subject of extensive review by the Parliamentary Task Force on Pension Reform, which reported at the end of last year.
Today, 1 want to propose actions in five important areas of pension reform.
First, too many retired Canadians are now receiving pensions that are insufficient to allow them to live in comfort and dignity. I refer to those single senior citizens who are now receiving the Guaranteed Income Supplement.
This government will never turn its back on those who spent their working lives helping to build this country, and who now need help themselves. In the Throne Speech, the government made a commitment to introduce legislation to increase the GIS for single pensioners. My colleague, the Minister of National Health and Welfare, will soon be introducing legislation to increase the maximum payment to this group of pensioners by $50 a month. The payment will increase by $25 a month on July 1 of this year and another $25 a month on December 1. This raises the guaranteed income for elderly single individuals to more than 60 per cent of the amount paid to couples, as recommended by many business, labour and women's groups.
When the GIS is combined with the universal old age pension, single pensioners will be assured of a monthly minimum income of $600, or $7,200 a year. About 750,000 single senior citizens, three-quarters of whom are women, will benefit from the increase. The additional government support will amount to $460 million in a full year. This $50 increase is in addition to the $35 which this government introduced on July 1, 1980. As a result of these increases introduced by this Government during the last four years, those elderly Canadians in greatest need will receive next year additional assistance of more than $1 billion over and above what they would have received had we not made the changes we have in the last four years. Provision will also be made to see that persons receiving partial old age pension, most of whom are Canadian immigrants, have Guaranteed Income Supplement benefits sufficient to give them the same minimum income as other pensioners. About 3,000 pensioners will benefit in the coming year. The number will rise to about 25,000 by the end of the 1980s.
We have honoured our commitment to help those in greatest need.
I expect that provincial governments will not take advantage of this significant increase in benefits to senior citizens by reducing their own payments or increasing their charges on them.
Second, I intend to introduce legislation at an early date which will significantly improve minimum standards for all private pension plans under federal jurisdiction. This represents about one million Canadian workers. I shall table a paper providing details of these proposals.
The changes I am proposing will provide protection against inflation for future pensions.
They will assist mobility by ensuring that employees acquire rights to their pension benefits after two years' service instead of ten, and are allowed to take their benefits with them if they move to another job.
The changes will also broaden pension coverage for full-time and part-time workers, many of whom are women.
Indeed, they will also assist women in a number of other ways: first, by requiring pension plans to provide survivor benefits and ensuring that these benefits will not end if an individual remarries; second, by requiring the pension earned to be split between spouses in the case of marriage breakdown; and third, by ensuring that women and men retiring under identical circumstances receive equal pensions.
There will also be new provisions to assure the disclosure of information and to provide for worker representation on pension advisory committees.
Time will be needed for private plans to adjust to this new regime. I am proposing that these measures take effect no later than January 1, 1987. I will seek an earlier implementation date if that is possible. I expect provincial governments to adopt similar measures in their jurisdictions.
third, with respect to the Canada Pension Plan, my colleague, the Minister of National Health and Welfare, will soon be bringing forward several specific amendments to strengthen the CPP and improve the benefits to women that the CPP provides.
These include automatic splitting of pension benefits upon marriage breakdown or when the younger spouse reaches 65, the continuation of survivor benefits on remarriage, and the raising of pensionable earnings to the average industrial wage by January 1987. Agreement of provincial governments to implement these measures will be sought as soon as possible.
A number of more extensive changes in the CPP will be discussed with the provinces beginning this summer. Among them are the introduction of a homemaker's pension in the CPP, improved survivor and disability benefits, the qualifying age for entitlements and the financing of CPP benefits.
Fourth, I propose to introduce a major reform of the income tax system in order to improve tax assistance for retirement saving. I shall table a discussion paper with this budget that sets out details.
It has become clear over time that a number of aspects of the tax treatment of pension savings are unfair and inflexible.
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For example, the tax system now provides significantly greater support and flexibility to Canadians building pensions through defined-benefit plans than it does to Canadians building pensions through money-purchase plans such as RRSPs. This inequity penalizes in particular employees of small businesses, farmers, fishermen, professionals and others who are self-employed.
I am proposing changes to put all pension plans on an equal footing for tax purposes, and to allow contribution entitlements to be carried forward from year to year on the basis of total career earnings. As a result, all Canadians will have comparable access to tax assistance. They will be able to save for retirement as their means permit without losing any entitlement to tax assistance. This will recognize that many Canadians, in their early working years, Find it difficult to build pensions because they are saving for a home, bearing a heavy burden of family expenses, or investing to build up a business.
The new tax-assistance system will also be indexed by the average industrial wage, to ensure that Canadians are able to build tax-supported pensions that keep up with inflation and with real increases in living standards.
I am also proposing an innovative Registered Pension Account. This will create a tax-assisted individual savings vehicle to which employers and employees can both contribute funds that cannot be withdrawn until retirement. The Registered Pension Account will relieve many small business employers of complex pension administration burdens, as well as allowing employees improved pension portability.
The new system will provide tax assistance for an adequate pension based on total career earnings. To meet this target, Canadians will be allowed to deduct their own contributions, or contributions made for them by their employer, to any registered pension plan, up to a limit of 18 per cent of total career earnings.
In the first stage of the new system, beginning in 1985, the annual dollar limit for money-purchase plans, including RRSPs, will be increased from $5,500 to $10,000. The annual dollar limit will rise to $12,000 in 1986 and $14,000 in 1987. Limits on employee contributions to registered defined-benefit plans will be removed in 1985.
With the second stage in 1988, the new system will become fully operational. In that year the annual dollar limit for contributions to all pension plans taken together will rise to $15,500. The ceiling will thereafter be adjusted annually by changes in the average industrial wage. The fully operational system will allow individuals to carry forward their unused annual deduction entitlements to future years.
Fifth, 1 am also taking immediate action to assist farmers to build better pensions for retirement. Effective this year, a special provision will be introduced to allow farmers to contribute up to $120,000 of taxable capital gains from the sale of a farm to an RRSP. The amount eligible will be $10,000 for every year they have farmed the land from 1972 to 1983. This
The Budget-Mr. Lalonde
provision recognizes the special difficulty farmers have had in providing for their retirement during the years they are building up their farm.
[Stage Direction]
The new system of tax assistance for retirement saving, together with the changes 1 propose to the Pension Benefits Standards Act, will increase the capacity of Canadians now working to build stronger pensions for their retirement. By so doing they will help to build a strong foundation for personal economic security, while increasing savings that will support investment and growth over the medium term. This shows once again how public support for private initiative can help Canadians to help themselves, and in the process build a stronger future for all of us.
Finally, the government reaffirms its commitment to ensuring that all Canadians have adequate retirement income. It undertakes to monitor closely the reaction of provinces and the private sector to the proposals for pension reform presented in this budget. The government will be ready to discuss with them whatever additional steps may be required, and their nature and timing.

[Stage Direction]
Another area which requires attention is the security of homeowners and of prospective homebuyers. I will have three measures to announce.
Mortgage rates have fallen dramatically and have been stable for many months. Lower and stable interest rates, together with growing incomes and government incentive programs, have restored some of the confidence of Canadian homebuyers. In the past few years, however, thousands of homeowners were dealt a serious blow by mortgage interest rates that rose to unprecedented levels. The Canada Mortgage Renewal Program supported more than 20,000 Canadians in financial difficulty when they had to renew their mortgages at very high interest rates. The Canadian Home Ownership Program provided $3,000 grants to more than 260,000 firsttime homebuyers. Over the past two years, the government has provided about $800 million to help Canadians own a home.
With the return of lower interest rates, and in response to the assistance provided in my April budget, new housing starts rebounded strongly in 1983. But many Canadians who were forced to renew their nortgages at very high rates in 1981 and 1982 continued to experience financial difficulties even after mortgage rates came down.
I am concerned about those Canadians who are trapped in such difficulties. The government has encouraged the co-operation of major lending institutions in assisting them. I have also considered, with my colleages, the Minister of Public Works and the Minister of Consumer and Corporate Affairs, what additional steps can be taken to increase flexibility in the mortgage market, provide borrowers with better information
[Stage Direction]
February 15, 1984
The Budget-Mr. Lalonde
and firmer rights, and protect homeowners against extraordinary increases in mortgage rates.
The government is prepared to act in three areas to strenghten borrowers' rights and to increase the fairness and flexibility of the mortgage market in order to improve the security of Canadian homeowners. These proposals are outlined in detail in a document I am tabling with this budget.
[Stage Direction]
First, the government proposes a Mortgage Rate Protection Program that will provide income security to homeowners facing mortgage renewals at much higher interest rates. All Canadians will be eligible to join the plan. An individual will pay a modest fee when renewing an existing mortgage or taking out a new one. This will protect the homeowner against extraordinary interest rate increases for a further period of years equal to the original term of the mortgage. As a consequence, someone taking out a five-year mortgage and buying coverage under the program will be guaranteed that monthly payments will remain relatively stable for a 10-year period, that is, twice the duration of the first mortgage.
Mortgage Rate Protection will provide an important element of personal security to home owners and those wishing to purchase homes. My colleague, the Minister of Public Works, and I wish to consult with the financial community and housing industry on a number of administrative and technical details related to the operation of this program. These consultations should be concluded over the next month or so. Enabling legislation will be introduced as soon as details are settled. All homeowners entering new mortgage contracts after March 1, 1984 will be eligible to participate in the program.
Second, together with my colleague, the Minister of Consumer and Corporate Affairs (Mrs Erola), I will be proposing amendments to the Interest Act. These amendments will require disclosure of interest rate information, and prepayment rights and penalties, so that all borrowers will be able to know, precisely and simply, the terms of their contract. The amendments will also guarantee a right of prepayment for all mortgages and will limit maximum prepayment penalties in a way that is fair to both borrowers and lenders. The government intends to proceed as quickly as possible. I am also asking financial institutions to voluntarily apply the proposed prepayment measures immediately to existing mortgages.
Finally, in order to facilitate the introduction by the private sector of mortgages that run longer than five years, and as Members know, mortgages for longer than five years have practically disappeared from the market, I shall take steps to
encourage the development of mortgage-backed securities. Longer-term mortgages can provide substantial security to homeowners by guaranteeing their mortgage costs for a considerable period of time. I am prepared to propose amendments to remove any legislative barriers to the development of mortgage-backed securities, and I intend to consult with mortgage lenders to determine whether additional measures are required to support the development of such instruments by the private sector.
[Stage Direction]
The measures I am proposing to improve the security of homeownership will enable and encourage more Canadians to buy their own homes. This will increase their personal economic security and contribute as well to residential construction, business investment, and growth.
This budget was preceded by an extensive round of consultations with Canadians from all economic sectors and all regions of the country. These consultations are an important step in carrying out the government's commitment in the Speech from the Throne to introduce more permanent mechanisms of economic consultation.
I have found these consultations extremely valuable, and I wish to thank all those who took the time and effort to present their views to me and to my colleagues.
If there was one underlying message that came through time and again, it was the need for a period of stable and consistent economic policies. Now is not the time for a radical change in direction. People also stressed that the budget process should allow major initiatives to be presented in a way that provides for informed public comment and discussion before they are put into effect.
In line with the Green Paper on the Budget Process, issued in April 1982, the government has been steadily opening up the budget making process.
[Stage Direction]
Extensive consultations have now become a permanent feature of budget making. I welcome this development. Major proposals in my last budget, such as the Indexed Securities Investment Plan and improved tax incentives for research and development, have benefited considerably from the expertise and knowledge that was brought to bear on them in postbudget consultation and comment.
My budget today continues this evolution to a more open process. The government recognizes that consultation cannot and must not be a substitute for action. But proposals, such as those I have put forward today, can be improved and refined to
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the benefit of all when Canadians are offered a reasonable opportunity to comment on them.

[Stage Direction]
I am tabling with this budget Ways and Means motions relating to all the tax and tariff changes I have proposed. I am also tabling all of the budget papers to which I have referred.
These papers on profit sharing, on tax simplification, on the mortgage market, and on pension reform, contain far-reaching proposals for action. These proposals will strengthen the partnership between government and the private sector while they expand economic opportunities and improve personal economic security for Canadians. The Government is eager to proceed with these proposals as quickly as possible. In the coming weeks, my colleagues and I will meet with our partners in labour, business and the provinces to hear their views.
[ Translation]
Mr. Speaker, I have brought down a Budget which, I am sure, will help us make the transition from recovery to expansion, by ensuring that more industries, regions and Canadians receive the benefits of economic growth. I am thinking particularly of our young people who need jobs and of those Canadians who are retired or close to retirement and deserve proper recognition for the contributions they have made.
As Canadians, we must share the burden when times are hard, but we must also share the profits when better times come along. Above all, we must do our share to make our economy grow, by working together as true partners. My Budget opens new avenues towards an economic future that will be better and more profitable for all of us.
As businesses regain their profitability, their employees will share more directly and completely in the benefits of their work. Following the substantial simplification of their taxation system, small and medium-sized businesses will be able to use more of their time, more of their talents and more of their money to promote productive growth.
With the proposals contained in this budget, Canadian homeowners and builders will benefit from an improved confidence and a greater stability as well as from a more secure future.
Our young people will benefit from better opportunities to gain secure and satisfying employment through a substantial increase in the material resources which the government will set aside for this purpose this year.
As I have already noted, the Youth Opportunity Fund will receive about $1.3 billion this year.
Finally, senior citizens today and in the future will be able to enjoy a larger part of the property they have acquired through their work thanks to a reform of the pension system. Farmers particularly will benefit from new and innovative measures which will help them to better provide for their retirement years.
The Budget-Mr. Crosbie
[Stage Direction]
If Canadians are to meet the challenges of the future, we cannot be satisfied with past performance and past habits. These will not sustain us in a fiercely competitive international marketplace. We must become better than the competition- better at producing and marketing goods and services; better at working together for the shared economic interests of all Canadians.
If we measure up to that challenge, then we shall create new opportunities for Canadians to find good, satisfying, permanent jobs. We shall create opportunities for more Canadians to buy a home, to start or expand a small business, and to invest with confidence in our future. In short, we shall create the opportunities for Canadians to build better, more fulfilling lives on a foundation of economic strength.
That is the goal of the program of action I have presented today to lead Canada from recovery to expansion.
Hon. John C. Crosbie (St. John's West):: Mr. Speaker, unfortunately I have to be truthful with the Canadian people. I can be no other way. I do not rise here tonight to deceive them by saying that this is indeed a wonderful Budget. There is a little froth on the surface of it to which the Government has been forced. There is some help for those who have suffered from the injustices of the Department of National Revenue, which of course has been caused by the people on this side of the House who pursue that issue. There are some improvements in pensions, largely because of the agitation of a Member on this side, the Hon. Member for Kingston and The Islands (Miss MacDonald) and others.
When you look at the fine print in this Budget, Mr. Speaker, you will discover that all these improvements are going to cost the Government today a net decline in revenue of only $215 million. It is only froth on the surface of this Budget. At the same time last April this Government increased taxes to the Canadian people in the amount of $805 million. It will cost the Canadian people $2.4 billion in the next financial year, and the year after that it will cost $2.9 billion. All of this that sounds so fine today will cost the Government $215 million net while it will bleed the Canadian taxpayers four times that amount. This Government has taken the Canadian ownership charge of $840 million without the authorization of the House. It has been put into general revenues. Otherwise, the debt for this year, which is now $31.5 billion, would have been $840 million more. That is the kind of deception we are used to with this Government.


Some Hon. Members:: Hear, hear!


John Carnell Crosbie: Mr. Speaker, in order to show that I am bilingual, I want to say a few words to the Minister. I am quoting from the great French author Rabelais. His last words are these: "Tirez le rideau, la farce est jouee".


Some Hon. Members:: Oh, oh!

February 15, 1984
The Budget-Mr, Crosbie


John Carnell Crosbie: It means, bring down the curtain, the farce is over.


Some Hon. Members:: Hear, hear!


Some Hon. Members:: Oh, oh!


John Carnell Crosbie: The Canadian people will have endured four years of Liberal Government on February 18. The Government's moral authority to rule any longer has gone. I say, let us go to the people on this Budget.


Some Hon. Members:: Hear, hear!


John Carnell Crosbie: What did the Minister say in his Budget of last April ten months ago? Let me quote:
My dominant concern in preparing this budget has been to help the more than 1.5 million Canadians who want to work but cannot find jobs.
That is what the Minister said ten months ago. How many Canadians are there today out of work who cannot find jobs? There are 1,500,000. That is exactly the same number he was going to help ten months ago.


Some Hon. Members:: Hear, hear!


John Carnell Crosbie: We have the greatest deficits in Canada's history and not one more person is working. We have $31.5 billion deficit and there is not one more person working. That is how wonderful deficits work, Mr. Speaker, Do you know that in the next five years, including the financial year that starts at the end of March, the Government will have, it says, $173 billion in deficits. The Government says its financing requirements will be $114.1 billion. Do you know, Mr. Speaker, that the Government will have to borrow all of that because it will have to pay, it says, $109.1 billion in interest on the deficits and the debt it has racked up in the last eight or ten years?


Some Hon. Members:: Shame!


John Carnell Crosbie: There is no future for Canada in this Budget. There is no thrust for economic recovery. There is no thrust for economic growth. It is a down the chute budget. It is a red ink budget.


Some Hon. Members:: Hear, hear!


John Carnell Crosbie: The public debt charges this year, what we are paying on the debt the Government has already incurred, are $18.1 million. One of every $3 the Canadian people will pay in taxes this year goes in interest on the debt. Next year the public debt will go to $20.3 billion, the following year, $22.4 billion, the following year, $23.6 billion, and the following year after that, $24.7 billion. That is money just wasted in interest payments. For what, Mr. Speaker? For permanent improvement? No. It is to pay interest on the debt of these spendthrifts, these wastrels opposite us.
Next year the deficit will be $26.9 billion. Do you know, Mr. Speaker, that personal income tax returns will be up 16 per cent this year; corporate tax will be up 25 per cent and the
revenue is shown as going up 14 per cent? Everything in this Government goes up except what should go up. The Minister just brought the Budget up. We have had five budgets brought up by this Government.
The public net debt of this country at the end of March will be $150 billion. When the Prime Minister (Mr. Trudeau), who is now off on a trip to Russia, started his regime in Canada we had a net public debt in Canada of $17 billion. It is now $150 billion. No wonder he is ashamed to be here for this Budget.


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!


John Carnell Crosbie: Any excuse is all right for the Prime Minister to be away when the domestic problems of this country are under consideration. He does not want to hear the shameful record of this country.


Some Hon. Members:: Oh, oh!


Mr. McDermid:: That gets them going.


John Carnell Crosbie: Now most of them hope he never returns.


Some Hon. Members:: Hear, hear!


John Carnell Crosbie: There is only one way this nation can have economic recovery, and that is, to have lower interest rates. There is only one way we will get lower interest rates, and that it, if we have a Government that will show it will control its spending and its deficits. That is the only way. We are doomed to a thwarted and aborted recovery with this Budget. It does not show the Government will control its spending or the deficit. The Minister of Finance knows that. He has given that exact advice to Mr. Volcker. Remember when I put the question to him last week, Mr. Speaker? I quoted Mr. Volcker, the U.S. Federal Reserve Board Chairman, who said this:
High deficits are restraining economic recovery. The federal deficits have kept interest rates high. Pressures from the deficits work to restrain expansion in areas of the economy that are more sensitive to interest rates, such as housing, autos, and long-term business spending.
I asked the Minister whether he agreed with those statements. He got up and he said, "Sure, I was the one who originated them. I said that long before Volcker did". If the Minister believes these statements of Volcker's are true, how can he continue to have budgets that bring in a deficit far greater than the U.S. deficit? The U.S. economy is ten times our size. The U.S. deficit this year, I think is $183 billion. Our is $31.5 billion. In terms of the U.S. economy, that would be a deficit of $310 billion. That is far worse than the U.S. deficit. If these economic principles are true for the United States of America, they are true for Canada. The Government is leading us down the chute because it does not have the guts, the gumption or the courage to tackle the real problems of this country.


Some Hon. Members:: Hear, hear!
February 15, 1984


John Carnell Crosbie: I will not give myself as an authority, Mr. Speaker; 1 will quote somebody else. 1 quote him now:
Real interest rates are high and this seems in part a reflection of worries about a possible resurgence of inflation and large fiscal deficits.
"Real interest rates are high". What is it? A reflection of worries about a resurgence of inflation and large deficits. Who said it? The Minister of State for Economic and Regional Development (Mr. Johnston) making a submission to the MacDonald Royal Commission last September 21. How can he stay in a Government that ignores these economic truths and these views?


Marc Lalonde: I said it, too.


John Carnell Crosbie: You are the cause of the real interest rates. You and your Government and your spending over the last four years. You do not want to do anything to overcome it.
Mr. Speaker, let me give another quotation that I have here somewhere in my voluminous notes.


Some Hon. Members:: Oh, oh!


Mr. Tousignant:: What about the Budget, John?


John Carnell Crosbie: If you want me to bring in a budget, go to the electorate tomorrow and they will see that I am put back to bring in the budget.


Some Hon. Members:: Hear, hear!


John Carnell Crosbie: The Minister of Finance said this:
Budgets are not instant solutions, but building blocks to success.


Mr. Evans:: What do you think?


John Carnell Crosbie: This is not a building block to any economic recovery in Canada. We have had six of these documents from this Government since it got back in power four years ago. The first was on April 21, 1980, which was an economic statement. The next was on October 28, 1980. That was when the poor old Deputy Prime Minister (Mr. MacEachen) brought in a Budget on energy and he crushed the energy industry with the help of the then Minister of Energy. The two of them should be taken up for attempted murder.


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!


John Carnell Crosbie: On November 12, 1981, the Deputy Prime Minister reversed himself, swallowed himself and became the Gypsy Rose Lee of Finance Ministers. He threw off all these tax reforms and was left naked as a newt in front of the Canadian people. On January 28, 1982, there was another Budget from the hon. gentleman, and he finished stripping- the G-string went on that one.
On October 27, 1982, there was an economic statement from the present Minister of Finance (Mr. Lalonde), and on April 17, 1983, a Budget. This is now No. 7; seven come
The Budget

Mr. Crosbie
eleven, they hope, and every one of them different from the last one, every one of them reversing the last. There is no confidence left in the country at all. There is no confidence among those who have money to invest, foreign or domestic. Then comes down the Budget of today, which reveals a situation far worse than anyone could have imagined in their most drunken moments, with a deficit that was not several billions of dollars better, as the rumour had been, but a deficit that was several million worse.
The Minister had a Budget leak last year at a cost to Canadian taxpayers of $200 million. But even adding that on, he has outdone that. His Budget deficit is now going to be $31.5 billion. By the way, in the lock-up we asked about several places in these documents where they are calculating that interest rates will decline. Remember, this is very important, because the biggest spending done by the Government now is on interest payments on our debt. In estimating what they will be, one has to estimate what interest rates will be in the next five years. This group says that they are estimating that they will decline. So we asked them what interest rate they were using. Oh, they could not tell us. We asked, "Why can't you tell us? Don't you have to use some estimate of interest rates?" They said, "Well, we have to ask the Minister about that". I said, "If you are going to ask the Minister to give you permission to tell us what interest rates are used- and probably it was 3 per cent-then we are never going to find out what interest rate assumptions were used". In other words, these figures are entirely fictitious.


Some Hon. Members:: Hear, hear!


John Carnell Crosbie: They are what the ordinary person describes as a crock. I hope the Canadian people watching tonight will tune in tomorrow morning; I am back again at eleven o'clock in the morning.


Some Hon. Members:: Hear, hear!


John Carnell Crosbie: Tomorrow I will show how accurate the Government has been in its projections and estimates over the last four years. It would turn your hair white, Mr. Speaker.


Some Hon. Members:: Hear, hear!


John Carnell Crosbie: The Hon. Member for York West (Mr. Fleming) on the Government side of the House on November 29 said this about the Government: "If we stay the way we are, surely we are dead". We are looking at the living dead here today. They have stayed just the way they were. As he said, the Government operates on cynicism, ballyhoo and manipulation, but cynicism, ballyhoo and manipulation will not feed the unemployed.
Do you know, Mr. Speaker, what goes on in this Budget speech? I will show one little piece of deception that is in this Budget speech just to show how it is done. They cannot feed people on deception. I would like to refer to page 7 of the speech. By the way, the Budget speech and the documents were not delivered around. I do not think they have been delivered to our Members yet.

February 15, 1984
The Budget-Mr. Crosbie


Some Hon. Members:: No.


John Carnell Crosbie: When our Members leave the House, they will be asked by their constituents, the radio and other media, questions about the Budget and the Budget papers. They have not even been allowed to see them yet; they are not even distributed yet. That is a disgraceful piece of news management.


Some Hon. Members:: Hear, hear!


John Carnell Crosbie: On page 7 of his speech, the Minister discussed securing growth and securing jobs. He said:
For this reason, we may not see a dramatic reduction in the unemployment rate this year.
Well, that is a safe prediction. We are going to see a lot of unemployed Liberals if they get their act together and call an election. Then he went on to say:
However, the unemployment rate should steadily decline and fall to about 7.5 per cent by 1988.
Now the person listening in hears only the words "decline and fall to about 7.5 per cent". He does not notice the "1988". But if he gets, which he will not, the fiscal plan and all the other Budget documents and looks them up, he will find what the Minister really predicts in 1988, five years away unless my mathematics are incorrect.
Here is what is in the document-the unemployment rate for 1983 was 11.9 per cent and for 1984 will be 10.9 per cent on average. That is the year in which we are living now. They also estimate the number of those who will be unemployed-
1,401,000	is the Minister's estimate of those who will be unemployed in Canada all during 1984; not 1988, they cannot survive on nothing until 1988. They estimate that 10.1 per cent will be unemployed in 1985; 1,336,000 will be unemployed that year. Then the Minister estimates that 1,238,000 will be unemployed in 1986 and 1,184,000 in 1987, and we are right down to 1,106,000 in 1987-88; not 7.5 per cent which the unsuspecting listener who hears him rush through his speech thinks he is forecasting. He is not forecasting that. He is forecasting leaving them in the dark. The Minister is forecasting leaving all those unemployed in the dark for the next five years. Mr. Speaker, 1,401,000 will remain unemployed this year, not what the Budget speech tries to pretend will happen. 1 have unlimited time, by the way. That is good news for the other side.
The Minister said, "In my April Budget, my goal was to secure the recovery. That goal has also been met". Do the 1.5 million unemployed out there think that his goals have been met? They do not. They will put him through the goal posts soon.


Some Hon. Members:: Hear, hear!


John Carnell Crosbie: Do you know, Mr. Speaker, that only 70 per cent of all our industrial capacity is now being utilized? Is that economic recovery? "My goal was to secure the recovery. That goal has also been met". Was 70 per cent utilization of our industrial capacity the Minister's goal? Is that his goal? If so,
he should get out. That is not our goal. Our goal is 100 per cent, not 70 per cent.


Some Hon. Members:: Hear, hear!


John Carnell Crosbie: On page 2 the Minister said, "This Budget is fiscally responsible." It is the most fiscally irresponsible, pernicious Budget ever brought into the House. How can they criticize President Reagan? President Reagan's deficits are far better than theirs. How can they come into the House and show that over the next five years we will have the kind of deficits they show, with no indication of how they are going to change? The improvements in pensions which we are discussing here today and which we support and the improvements in the GIC will do Canadians no good if in 10 years or 15 years the economy of this country cannot grow, if we are on the downward path, if we are finished as an industrial power, if we do not have the capacity to work hard, if we cannot be more productive and improve our productivity, if we cannot be competitive, if we cannot control the deficit, if we cannot control our sloth, if we cannot control our Government's carelessness, and if we cannot control their insatiable lust to be in power and stay there forever. If we cannot do that, none of those people have any security; it is all going to go.


Some Hon. Members:: Hear, hear!


John Carnell Crosbie: That is why we have to get in office. The people and the press ask us outside, "What are you going to do?", "How are you going to control the deficit?" and "What spending are you going to cut?" That is the responsibility of those who wheedled their way in four years ago with deceit, lies and trickery. They have the responsibility of governing. If we get the responsibility of governing, then we will take the responsibility. We are going to do all the hard things that have to be done.


An Hon. Member:: Tell us about them.


John Carnell Crosbie: You had your 20 years. You brought us to this pass. You have not got the guts of a giblet between the whole lot of you.


Some Hon. Members:: Hear, hear!


John Carnell Crosbie: The Minister says on page 3 that he is going to put back indexing, which our former Leader, Mr. Stanfield, suggested in the first place, which they stole and adopted, and which they betrayed several years ago, unnecessarily. They are going to put back the indexing of income tax brackets, deductions and so on, which they should never have removed in the first place because they were not causing inflation. If those things had caused inflation, why are they putting them back again when we still have inflation of 5 per cent and there is a threat of further inflation? Obviously they did not cause inflation in the first place.
The man who slit the throat of the principle of indexation is the Deputy Prime Minister. He is swallowing himself again
February 15, 1984

today as the principle of indexation gets put back in the Budget.


John Leslie Evans: Thirty-five minutes and you've said nothing yet.


John Carnell Crosbie: We happen to know what you would do. The unknown is far preferable, so don't worry about it. Give the Canadian people a choice between the Government and anyone, a group of phantoms, zombies from outer space, and they will choose.


Some Hon. Members:: Hear, hear!


John Carnell Crosbie: What 1 want Government Members to do is to ask these questions. What has this budget done to address the problem of high interest rates in Canada and to be sure that they will decline in the coming months? What has it done to achieve that? That is the secret to any economic recovery.
What has this Budget done about bringing about lower interest rates and increasing consumer demand? The Canadian ownership charge is still gouging the Canadian consumer four and one-half cents a gallon. The Minister of Energy, Mines and Resources (Mr. Chretien) had the audacity, the gall and the skullduggery to announce on November 21 that the Government was going to impose the Canadian ownership charge, although it did not know what it would do with the proceeds. It did not care what it would do with the proceeds, but it would keep collecting them from Canadians. The Deputy Prime Minister said: "Vote Liberal and the price will come down." Prices have gone up a thousandfold since.
What has the Budget done to lower interest rates? What has the Government done to help consumer demand? What has it done to increase business investment? This will not increase business investment. Anyone who has money to invest will stay away from Canada until Canada has a government that is prepared to tackle these problems. I will be elaborating tomorrow. If Members want to know what I would do, I advise them to come along and I will tell them what to do.
The need in this country is for confidence, confidence of ordinary Canadians in their government. How can they have confidence in a government that acts as though it were completely composed of sleaze-bags that spend public funds? Part of the $31.5 billion deficit is to hire investigators to look into the record and the activities of the Leader of the Opposition (Mr. Mulroney) before he became our Leader. Can anyone have confidence in a regime that will stoop that low? Of course not. Can an investor have confidence in a government that sees itself out of control and does not care about spending, but apparently is never going to control its spending, that will impose increased taxes? No. There cannot be confidence in a government like that.
Do you know that the structural deficit is over 50 per cent? We are not in boom times. The Government's own analysis shows that over half of the $31 billion deficit is structural. It will not disappear with an economic recovery, but is anything being done? Can anyone have confidence in a government that will not seize that fact? Of course they cannot and do not.
The Budget-Mr. Crosbie
Can they have confidence in a government that changes its fiscal and economic policies every six months, changes its Finance Ministers, brings in as a last gasp the only man in the Cabinet that has the necessary backbone to be able to slip under the door, a refurbished McCarthyite who attempted to besmirch the escutcheon of our honoured Leader and who met with editorial scorn in every paper of the Dominion, French, English and Ukrainian?


Some Hon. Members:: Hear, hear!


John Carnell Crosbie: The need is confidence. The need is for a convincing program, a deficit reduction that will deal with the structural deficit over four or five years. The need is for solicitude for the helpless and the needy who need to have a better future, and that depends on a healthy growing economy. The need is for honesty of purpose and expression. The public is fed up with the whole shebang, because they see a government ripe with dishonesty and they think all politicians are the same.


Some Hon. Members:: Hear, hear!


John Carnell Crosbie: We need a restoration of integrity for the governmental process. We need the removal of those whose sense of right and wrong is atrophied by 20 years in power. We need a restoration of the sense of smell to Cabinet Ministers. The mighty must fall and be humbled and the humble must be given their chance. That environment will lead to lower interest rates. It will lead to a resurgence of belief and investment. It will lead to a return of confidence to the consumer and to the investor, more employment and growth. It will lead to a better climate for federal-provincial co-operation. That is what we intend to bring when we take office.
In ending, temporarily, let me say this. Canadians are shocked by the stench of Party favouritism, patronage and corruption that is wafing out across the country from Ottawa. It is worse than the worst excesses of Mr. Duplessis or Mr. Smallwood. They are not in the class of what has been happening here in the last few months.


Some Hon. Members:: Hear, hear!


John Carnell Crosbie: Malevolent McCarthyism, misuse of public funds, smear tactics, the attempt to find something discreditable about those who are wholly creditable is wholly despicable. No budget nor any set of policies can overcome this atmosphere. There can be no economic recovery for Canada with this atmosphere. Only an election and a new government can set the stage. If you care about the Canadian people, give them a chance and call an election. That is how we will have real economic growth.
In concluding, let me say this: Come my friends, the Canadian people, 'tis not too late to seek a newer world. Push off and sitting well in order smite that Liberal Government and all will be on the way to becoming better.
Mr. Speaker, I move:
That the debate be now adjourned.

February 15, 1984
The Budget-Mr. Crosbie
I hope, to be here at eleven in the morning. Tune in tomorrow morning.


Some Hon. Members:: Hear, hear!


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


Some Hon. Members:: Agreed.


Mr. Speaker:: It being six o'clock, this House stands adjourned until tomorrow at eleven o'clock pursuant to Standing Order 2(1).
At 6 p.m. the House adjourned, without question put, pursuant to Standing Order.

Thursday, February 16, 1984