1985-05-29

Mr. Alain Tardif (Richmond-Wolfe):: Mr. Speaker, the Minister of Energy, Mines and Resources (Miss Carney) announced recently that the Sherbrooke-Asbestos gas pipeline project was shelved. This unilateral decision is an insult to the Quebec Government which was not party to this decision-making process. The decision will have a dramatic impact: first, although it is planning to invest $1.2 billion, Domtar will not be supplied with natural gas and, second, J.M. Asbestos Company has just announced 225 lay-offs.
In either case, Mr. Speaker, the Government is not doing anything at all. It is not doing anything with respect to the gas pipeline which would make Domtar's project more viable and pave the way for real economic diversification in the two single-industry towns of my riding.
As to asbestos, the Government's performance is pitiful and will have a dramatic impact on the major city of my riding, Asbestos. The people of Asbestos quite properly expect the Government to implement a dynamic abestos policy to boost sales and on-site processing.
Shameful though it may be, the Government processes only 5 per cent of the production and simply exports the other 95 per cent. Processing would be just the way to create jobs.
*
* *


GASOLINE PRICES-BUDGET IMPACT
Mr. Rod Murphy (Churchill):: Mr. Speaker, there is much in the Budget of the Minister of Finance (Mr. Wilson) which concerns Canadians. The betrayal of the Conservative promise of full indexation for the old age pension was the cruellest cut of all. However, I would like to talk about another broken promise.
On page 97 of the Conservative campaign handbook, the Conservatives promised:
The tax system must be adjusted to help lower the price of consumer oil and gas products.
Was that promise kept? No, it was not. Instead, ordinary Canadians will see yet another hike in the cost of gasoline, not to reduce the deficit as some may claim, but to give more to the oil companies of the land.
Canadians in rural and northern areas are doubly hit. First, they already have to pay higher prices. Second, they have longer distances to travel. That is not all. In addition, because the cost of gasoline is going up, it will mean that each and every product which is transported into rural and northern areas will go up as well.
It is upsetting to many Canadians that the Government does not keep its promises. But it is doubly upsetting to realize that it has absolutely no concern for those people who live in the hinterland of the country.
* *
*


THE BUDGET
Mr. Jean-Claude Malepart (Montreal-Sainte-Marie):: Mr. Speaker, I should like to stir the conscience of Hon. Members by reminding them of what the Prime Minister (Mr. Mul-roney) and the Minister of Finance (Mr. Wilson) expect them to do about the elderly.
The Minister of Finance and the Prime Minister have been urging us to tell the elderly that they ought to tighten their belts to reduce the deficit. When we talk about the elderly, we are referring to my father and mother, your father and mother who were brought up in difficult times. My parents were married during the Depression, they lived through hard times yet paid to send me to school because education was not free in those days, they made a lot of sacrifices to pay for medical care because there was no such thing as health insurance then. Today's generation of Wilsons and Mulroneys benefit from the self-sacrificing achievements of elderly Canadians who are once again expected to do more than their share so that the Wilson and Mulroney children will not have to pay the debt later on.
Mr. Speaker, I should think that all members of the House share my feelings: under no circumstances will I ever ask my parents for more sacrifices. I would rather sacrifice the Wilson

May 29, 1985
and Mulroney generation and well-to-do people to reduce the deficit and save our children as well as our parents.


INTERNATIONAL YOUTH YEAR
Mr. Howard McCurdy (Windsor-Walkerville):: Mr. Speaker, the United Nations has designated 1985 as International Youth Year, in which the three themes of participation, development, and peace are to be given emphasis.
The United Nations' document elaborating on these themes states that "participation implies that a person is aware of his or her opportunity, has access to the means necessary for taking advantage of it, and feels satisfied that his or her contribution has been recognized". That condition will not be met in Canada if a person is a disabled youth, an Acadian, an East Indian, or a black. Those persons will not be represented on the Youth Advisory Committee for International Youth Year which was appointed by the Minister of State for Youth (Mrs. Champagne).
The Acadian community, in particular, has already expressed its concern to the Government. Participation is also compromised by exploitation for political purposes, such as has been alleged by some to have occurred in Jamaica when there was an attempt to co-opt Canadian support for highly partisan, right wing resolutions which were promoted by the United States, or when background material and agendas were not provided in a timely fashion in preparation for meetings.
New Democrats believe that participation is of fundamental importance to all components of our youthful society. What the membership of the advisory committee might be is of tremendous and symbolic significance-


Mr. Speaker:: I regret to advise the Hon. Member that his time has expired.


AGRICULTURE
Mr. Felix Holtmann (Selkirk-Interlake):: Mr. Speaker, I would like to draw to the attention of the House an important delegation which is in Ottawa this week. Hog producers are here from all provinces in Canada to call on their elected representatives and to inform them of the serious dilemma which faces the hog industry today. If the current United States countervailing duty on hogs continues, Canadian hog production could drop by 25 per cent to 30 per cent. That would mean a loss in production of from three million to five million head, and some $300 million to $500 million to Canadian hog producers. With the five-to-one spinoff recognized in hog production today, Canada's economy could lose $2.5 billion.
We have 50,000 hog producers in the country. About 30,000 live hogs and seven million pounds of pork are exported to the United States each week. The countervailing duty is 3.8 cents per pound on live hogs, and 5.3 cents on pork. It is disastrous. Canadian hog prices have dropped over 15 per cent since the tariff was imposed.
We must act now so that this vital sector of our agricultural economy is not devastated beyond repair. All the provinces and all the hog boards must work collectively with the Government before the full effects of the tariff are felt.
The hog producers are not looking for handouts. They have not come begging. All they want is a fair deal. All they want is access to fair trade.


Some Hon. Members:: Hear, hear!


EMPLOYMENT
[Stage Direction]
| THE BUDGET-SOLIDARITY FUND FOR QUEBEC WORKERS
Mr. Charles-Eugene Marin (Gaspe):: Mr. Speaker, as the Member for Gaspe, I would like to draw the attention of the House and the people of Canada to a particularly interesting proposal in the Budget brought down on May 23 of this year by the Hon. Minister of Finance (Mr. Wilson).
The proposal concerns the Solidarity Fund set up by the Quebec Federation of Labour in 1984, to maintain existing jobs and create new employment in Quebec. It is a venture capital fund and invests in small and medium-sized businesses in Quebec. The Government of the Province of Quebec provides tax credits to individuals who invest in this fund.
The Progressive Conservative Government, unlike the previous Government, believes that this kind of initiative deserves support, not only in Quebec but across Canada.
Consequently, the Government of Canada will provide a tax credit for individual investors in the Solidarity Fund in Quebec or in similar funds in other provinces that are based on the Quebec model.
Mr. Speaker, this measure shows once again the conviction of our Government that investment is necessary to create jobs.


SOCIAL SECURITY
Mr. Reg Stackhouse (Scarborough West):: Mr. Speaker, since the Government took office Canada's Old Age Security Program has been one of the best in the world. In spite of a
May 29, 1985

projected deficit of $32.8 billion in the forthcoming year, senior citizens will still be better off in Canada than anywhere else. Full universality of old age security pensions will be guaranteed. No current pension income will be reduced to fight inflation or to cut the deficit. Full indexation of guaranteed income supplements for the most needy will be maintained.
Cost of living supplements will be paid to all pensioners when the Consumer Price Index rises above 3 per cent. Indexation of spousal and veterans pensions will continue. Larger contributions to RRSPs will be permitted tax free. Plan holders will be allowed to purchase shares in Canadian-owned corporations. Best of all, inflation will be checked by responsible fiscal policies. Canada will still have a better Old Age Security Program than anywhere else in the world.


THE BUDGET
Mr. Gilles Bernier (Beauce):: Mr. Speaker, I would like to take this opportunity to recall the new approach taken by the Government with respect to Crown corporations, as set forth in the Budget brought down last Thursday by the Minister of Finance (Mr. Wilson).
I was glad to hear that Crown corporations with a commercial value but no ongoing public policy purpose will be sold. In this connection, the Government intends to divest itself very shortly of Teleglobe Canada and Canadian Arsenals Limited, as well as its interest in the Canada Development Corporation. Crown corporations with no commercial value and no effective public policy purpose will be dissolved or absorbed within existing departments. Thirteen corporations have already been identified.
Mr. Speaker, Government operations must be leaner. It is not enough to be well-intentioned. A vigorous effort is needed to streamline and enhance the efficiency of our public administration. For 20 years, Crown corporations have been allowed to proliferate. Twenty years of white elephants!
Spending public money to make their dreams of centralization come true, that was the goal of the Liberal Government. We were elected to clean up the mess, and that is what we are going to do.



Mr. Fernand Robichaud (Westmorland-Kent):: Mr. Speaker, the people of New Brunswick were appalled to hear that the
Progressive Conservative Government has decided to ignore their needs in its Budget.
It is indeed discouraging when we realize that the Government has decided to stop encouraging our regional small- and medium-size businesses by cutting federal grants by $100 million this year and $150 million next year.
It is discouraging when we hear that the transportation sector will lose $75 million this year, and we all know how vital this sector is to the Atlantic Provinces. It is also discouraging to realize that the price of gas has gone up again, especially since in the Maritimes, the price of gas is already very high. It is very discouraging to hear that transfer payments to the provinces will be limited from now on.
It is discouraging to be hit with a host of tax increases that will reduce the disposal income of consumers and result in more employment. It is discouraging to hear that Old Age Security pensions and family allowances will no longer be indexed to the consumer price index.
Finally, it is really discouraging when we realize that middle- and low-income Canadians in remote areas stand to suffer most as a result of the draconian policies the Progressive Conservative Government has decided to inflict on Canadians.


EXTERNAL AFFAIRS
Mr. Bob Corbett (Fundy-Royal):: Mr. Speaker, the three Palestinian refugee camps of Sabra, Shatila, and Bourj al-Barajneh have come under armed assault by the Shiite Amal militia and the Lebanese Army Brigades. Another Palestinian refugee camp has been encircled by the Amal militia.
During the attack the Gaza Hospital was partially destroyed, and 95 wounded Palestinians were murdered in their hospital beds. Some 450 Palestinians refugees were killed, and over 2,000 were wounded in the fighting. Another 2,000 Palestinians have been kidnapped. No distinction is being made between men, women, and children.
The Palestinian refugee camps have come under continuous and merciless shelling. No supplies have been allowed in, nor have the wounded been evacuated. The Red Cross has been denied permission to administer humanitarian assistance. Victims are being allowed to die when they could have lived.
I urge the Government of Canada, as a conscientious and humanitarian body, to call upon the Governments involved to halt the horror. I also call upon the Government of Canada to make immediate representations urging provision be made to allow the admittance of medical and food supplies into the camps, to permit the evacuation of the wounded and burial for the dead, to provide safety for those in medical centres who are

May 29, 1985
Tribute to Steve Fonyo
presently injured, and to arrange the safe return of the abducted Palestinians. We cannot turn away from this cruelty.

*


BUSINESS OF THE HOUSE
Hon. Ray Hnatyshyn (President of the Privy Council):: Mr. Speaker, there have been discussions among the Parties and, today being a unique and special Canadian day when Steve Fonyo reaches the end of his important journey across Canada, we have agreed that the Prime Minister (Mr. Mulroney), the Right Hon. Leader of the Opposition (Mr. Turner), and the Leader of the NDP will each have an opportunity to address this important occasion. Therefore, Question Period will be extended for the period of time used up on this occasion.


Mr. Speaker:: Is that understood and agreed?


Some Hon. Members:: Agreed.


STEVE FONYO
Right Hon. Brian Mulroney (Prime Minister):: Mr. Speaker and Members of the House of all Parties, today, together with all Canadians, I take pride in saluting Steve Fonyo, our courageous young countryman, who has completed his epic run across this vast land. After many months and countless miles he has reached his destination, he has realized his dream.
Steve Fonyo, despite his crippling disability, has accomplished this remarkable feat because he is a man of genuine courage, driven by a desire to help others who are or might become victims of the disease that he faces with such fortitude. His first step on his journey for lives was a giant step for all of us. Through his valiant efforts he has made a significant contribution to the cause of cancer research and the eventual conquest of a grievous malady. On behalf of all Members of the House of Commons and all Canadians, I salute him warmly today.


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: Alone and vulnerable, overcoming his handicap with each step, Steve Fonyo has blazed a trail of courage across the breadth of this continent.
In so doing, he has made each of us part of an event which, in addition to its unique individual achievement, has acquired meaning for us all.
His unspoken but eloquent message is that there are other answers to human vicissitudes besides despair; other ways to combat evil besides violence; and other solutions to injustice.
Steve Fonyo is among those who believe that individuals Find their ultimate dignity in throwing off the chains imposed by day-to-day existence.

Steve Fonyo has made his painful progress from St. John's to Victoria. He has given us a shining example of the true strength of the human spirit. He demonstrated anew the power of courage, the capacity of a man of inflexible resolve and indomitable will to struggle, to endure, and so to achieve his cherished goal. Steve Fonyo's personal triumph is a matter of national pride.


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: We stand in admiration of his extraordinary achievement. We are all the richer because of the legacy of hope and inspiration that he has given all of us. Where there is a generous heart and gallant spirit great things can be achieved. This, I think, is the lesson we have learned from Steve Fonyo, the long-distance runner.

On behalf of all Canadians, I want to offer my congratulations and best wishes, not only to Steve Fonyo but also to his family, to his truly remarkable parents, and on behalf of all Members of the House of Commons, I again wish to extend our sincere congratulations today.

Let me assure you, Steve, that all Canadians rejoice with you and with your family today. Yours is a unique achievement, a splendid accomplishment. You are a Canadian of historic stature, worthy of our utmost esteem. On behalf of the Government and the people of Canada and on behalf of my colleagues of all Parties of the House of Commons I offer heartfelt sentiments of gratitude and pride, and I express our most fervent hopes for your personal health and happiness.


Some Hon. Members:: Hear, hear!


Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, I would like to join the Prime Minister (Mr. Mulroney) and second what he has so ably said. On behalf of fellow Members in the House, I pay tribute to one of Canada's outstanding young men. Steve Fonyo said to his fellow citizens in B.C. Place, "I am not a hero. I am just a 19 year old guy who got cancer". Steve, there are not very many 19 year old guys who run across Canada on one good leg to raise money for cancer.


Some Hon. Members:: Hear, hear!


John Napier Turner: On Monday we watched as he ran into Vancouver's B.C. Place. We watched as he was greeted by his fellow British Columbians. We have watched as
May 29, 1985

he ran through Rogers Pass in the Rocky Mountains. We have watched him run across the cold Prairies during a very tough winter. We watched as Mary Beth Dolan greeted him in Winnipeg. We watched as he ran through ice and rain in Atlantic Canada and Quebec. Canadians have been watching Steve Fonyo, praying for him, and thanking him ever since he dipped his leg into the cold Atlantic Ocean more than a year ago.

Mr. Speaker, I have twice had the honour of thanking Steve Fonyo personally: the first time when he visited the National Capital last August, and the second time in Kelowna, British Columbia, not long ago.
Today, Canadians want to express, to him and his family, their admiration for his determination, courage and perseverance.
Canada is a big country, and its climate can be cold and rigorous. But it also has a wealth of beauty and warmth. Steve Fonyo, by doing what he did, has demonstrated all the generosity, sincerity and courage of which Canadian men and women are capable.

Today, as Steve Fonyo stands at kilometre zero of the Trans-Canada Highway and pours that vial of water from the Atlantic Ocean into the Pacific Ocean, we would all like to share with him and his family the enormous pride that he must feel having completed such an epic journey.
In his "Journey for Lives" he has created a hope for thousands across Canada who suffer with cancer, hoping that some day there will be a cure. Steve Fonyo said:
I have run in the cold and I have run on ice. I have run in the rain. I have run in the sunshine. But mostly, I have run on hope.
Steve, on behalf of my own proud constituents in Vancouver Quadra, on behalf of all our colleagues in the House of Commons, and on behalf of all your fellow Canadians, I say that you have given people hope, hope for a cure for cancer, hope in themselves, hope for the young and old who suffer, hope for a country. Thank you once again, Steve. Congratulations.


Some Hon. Members:: Hear, hear!


Hon. Edward Broadbent (Oshawa):: Mr. Speaker, I am pleased to join with the Prime Minister (Mr. Mulroney), the Leader of the Opposition (Mr. Turner), and all other Members of the House to mark a courageous young man's completion of a monumental 8,000 kilometre voyage, Steve Fonyo's "Journey for Lives". We are paying tribute this afternoon to a very special young man. Although Steven himself may say, as he did, "So big deal", we know differently. We know that Steve's determination to fight cancer has affected Canadians profoundly. He has won a place in our hearts and in the collective imagination of all Canadians.
Tribute to Steve Fonyo

The brave struggle, five years ago, of another young man, Terry Fox, to help find a cure for cancer, inspired Steve Fonyo to do something that would bring hope to other young men and women afflicted with this terrible disease. Steve Fonyo decided that he could and would take up the challenge.

In Steve's own words, "I just want to say that I hope because of this run there is going to be a cure for cancer. I don't want any kid-I don't want anybody-to go through what I did."
Steve's dedication to this cause was tested over the last 14 months as Canadians all across our land have seen. Like the classic hero of antiquity, he set out on a journey, was confronted by nature and the foibles of personality, but he did not falter or fail. He overcame. Indeed, he triumphed.
Steve's arrival at his destination today, mile zero on the Trans-Canada Highway, while a personal triumph for Steve is an inspiration for all Canadians. His journey has revealed what the indomitable human spirit can actually achieve.
Steve refused to quit. He refused to quit because he did not want to let down the children struggling with cancer, to put it as bluntly and frankly as that. He wanted to show them that fighting can make a difference.
Despite almost constant pain and a gruelling 25 kilometre a day schedule, Steve persevered. With stubborn determination he became our coast-to-coast hero, weaving a common thread of optimism across our country.

His run across the country will remain a symbol of endurance for all Canadian men and women. His initiative has fired the dedication of thousands of volunteers of the Canadian Cancer Society who yearly go from door to door to canvass for donations. During his trip, donations to the Canadian Cancer Society increased 25 per cent. The money is to be given to the Lung Research Association in Kelowna and will also be spent on research, education and various services for cancer patients across the country.

Steve Fonyo can indeed go his own way today in the full knowledge that he has made an outstanding contribution. We all wish him well in realizing his wish at this point for plenty of sleep and a chance to learn to fly a helicopter.
I would like to say to Steve, having shown us all what it means for the human spirit to fly, he should be able to master a helicopter on one clear day.


Some Hon. Members:: Hear, hear!
Oral Questions HOUSE OF COMMONS

May 29, 1985


PRESENCE IN GALLERY OF THE MINISTER OF STATE, FOREIGN AND COMMONWEALTH OFFICE OF THE UNITED KINGDOM
Mr. Speaker:: Before proceeding to Oral Question Period may I indicate to the House the presence in our gallery today of the Right Hon. Baroness Young, Minister of State, Foreign and Commonwealth Office of the United Kingdom.


Some Hon. Members:: Hear, hear!



ORAL QUESTION PERIOD


Hon. Donald J. Johnston (Saint-Henri-Westmount):: 
Martin Brian Mulroney: Mr. Speaker, on June 30, 1982, there was a statement made in the House that I think responds to the Hon. Member's question. It reads:
The essential attack on the federal deficit and on provincial deficits can only come when people contribute more out of their incomes to reducing them. We have built in this country one of the best welfare systems in the world, one of which we can all be proud. But we must also pay the bill for that system. That is what I meant when I said that the real incomes of the employed in this country must be reduced so that the capital, which would otherwise go into consumption-
-would go into paying for those resources. That was the statement by the Member for St. Henri-Westmount.


Ms. Copps:: They are on pensions.


Martin Brian Mulroney: In point of fact we were extremely conscious of the impact of the Budget on all Canadians according to different income levels, which is why it is most demanding and most tough on those in high income levels and it has the smallest possible impact on those down the income scale. I think that is consistent with the principle of fairness with which all Canadians agree.


Sheila Maureen Copps: Tell the truth.


Donald James Johnston: Mr. Speaker, I do not think the Prime Minister really answered the question. I am trying to get at
some facts that may have escaped the attention of the Government, the Minister of Finance, or the Prime Minister, when the Budget was tabled.


GOVERNMENT POLICY
Donald James Johnston: Mr. Speaker, I have a supplementary question. We have done the calculations. The issue really is this. Was it the intention of the Budget to have the people at the poverty line, the elderly poor, contribute $58.08 a month out of their incomes to reduce the deficit? That is the question. Perhaps the Minister of Finance could respond to that.


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, I think we have responded to this question on a number of occasions in the past in the House.


Mr. Foster:: He has talked, but he does not answer.


Michael Holcombe Wilson: We have said it is important to maintain the viability of the finances of the federal Government in order that we can maintain the wide range of social programs that we have and that we all feel are very important to the fibre of our society. We have taken these considerations very much into account when we designed the Budget. That is why we kept in place this very, very potent form of insurance against the effects of inflation for those people who are on old age security so they will continue to be-


Mr. Speaker:: Order, please. The question was short. The answer can be short, too.


Donald James Johnston: All my questions are short, Mr. Speaker.


Some Hon. Members:: Oh, oh!


REQUEST FOR INTRODUCTION OF LEGISLATION
Donald James Johnston: Mr. Speaker, I have another question for the Minister of finance. Seriously. If we are able to satisfy the Minister of Finance and the Government that this is the impact, $58.08 out of the pockets of the elderly who are at the poverty line, and if we can satisfy everyone in this House on that score, will the minister of Finance bring in remedial legislation or proposals before the end of June to correct what is obviously an inequitable and unjust situation?


Michael Holcombe Wilson: Mr. Speaker, I think the Budget is generally regarded as being fair to all Canadians.


Some Hon. Members:: Hear, hear!


Some Hon. Members:: Oh, oh!


John Napier Turner: Where has he been?


Some Hon. Members:: Hear, hear!
May 29, 1985


Michael Holcombe Wilson: We have maintained the full indexation of the guaranteed income supplement in place, and the payments to veterans and the child tax credit will be increasing in excess of inflation over the next three years. We have committed to put in place a minimum tax for the next taxation year. There is a wide range of matters here which direct themselves to the question of fairness, and I believe Canadians support that.


SOCIAL WELFARE
Jean-Claude Malépart: Mr. Speaker, my question is directed to the Prime Minister. Yesterday we proved that you did not honour your solemn commitment towards elderly Canadians.
Here is what the Parliamentary Secretary to the Minister of National Health and Welfare said, as reported today in the newspaper La Presse:
-the Mulroney Government does not have to keep last summers's election campaign promise to index old age security pensions.
Here is my question to the Prime Minister. Does the statement made by the Parliamentary Secretary to the Minister of National Health and Welfare represent the position of the Prime Minister and the Government?


Martin Brian Mulroney: Mr. Speaker, I think that the position . . . The Hon. Member is not in the House today.


Mr. Rossi:: They hid her!


Martin Brian Mulroney: On the contrary! The Hon. Member for Bourassa said that we hid her. She is one of Quebec's most distinguished women, one of our outstanding Quebecers and we want her to be constantly in the limelight. The name Bertrand commands pride. She did not say she was speaking on behalf of the Government. The Minister of Finance and the Minister of National Health and Welfare have been the Government's spokesmen, and I should think that was obvious enough.


FULL INDEXATION OF OLD AGE PENSIONS-GOVERNMENT POSITION
Jean-Claude Malépart: Mr. Speaker, just to make sure that the Right Hon. the Prime Minister is as good as his word, would he now agree to ask the Minister of Finance to reinstate full old age security pension indexation, as promised in Sherbrooke on July 26, particularly
Oral Questions
in the case of elderly people living under the threshold of poverty who will lose $54 a month as a result of the Budget?

Hon. Michael Wilson '(Minister of Finance): Mr. Speaker.il think that the record of this Government since we have been in office has been a good one.


Mr. Chretien:: It is a broken record with broken promises.


Mr. Rodriguez:: Soak the poor.


Michael Holcombe Wilson: We have broadened the spousal allowance to 85,000 other new low-income Canadians who previously had not been receiving the benefits that they now receive, and I believe that is a good step forward.


Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: If the Hon. Member wishes to look carefully at the budget documents he will see that, if in the future the circumstances and the resources permit, we will review the situation.


PENSIONS
John Edward Broadbent: Mr. Speaker, we have been continuing to get what can only euphemistically be described as baloney type answers from the Minister of Finance in justification for the Government's removal of indexation from pensions.
I want to ask the Prime Minister a question on the same subject. He promised Canadians on July 26 last that if a Conservative Government were elected there would be full indexation restored to all pensions on January 1, 1985. Yesterday the Parliamentary Secretary to the Minister of Health and Welfare, of all people, said that the Conservatives were not obligated to keep their promises. Is that the real explanation why the Prime Minister has broken his promise to Canada's pensioners?


Martin Brian Mulroney: Mr. Speaker, we have-


Mr. Nunziata:: No integrity at all, Mulroney.


Martin Brian Mulroney: There is somebody who knows a little bit about integrity.


Some Hon. Members:: Oh, oh!


Joseph Jacques Jean Chrétien: Yes, he does.


Martin Brian Mulroney: It is written all over his forehead.


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!

May 29, 1985
Oral Questions


Martin Brian Mulroney: Since we have come into office, notwithstanding the fact that the budget deficit was greatly in excess of the deficit projected in the February papers, we have taken a number of measures designed to benefit those in need both in November, and again in December, with regard to veterans, the elderly, and others. We will continue to do so.
I will acknowledge that unfortunately, given the incredible mess that we were left, we cannot do it all over night, but we are working on a program which will allow us at all times to provide more to those in our society who need help.


REQUEST FOR RECONSIDERATION
John Edward Broadbent: Mr. Speaker, the reality remains that the Prime Minister has categorically broken a very specific promise he made to the pensioners of Canada, who are among the most vulnerable people in our society.


Some Hon. Members:: Hear, hear!


John Edward Broadbent: When his Party was in opposition it took out full-page ads across the country and spent some $30,000 to criticize what was then alleged to be the Liberal Government's intention to remove indexation of pensions, correctly pointing out how harmful that would be to Canada's elderly citizens, and urging Canadians to send a message to the Government to stop it from doing so. Since Canadians were urged to send a message to the Government of the day to get it to reconsider, will the Prime Minister now make a commitment to Canadian pensioners that, if they get a message to him that they want indexation restored to their pensions, his Government will reconsider?


Michael Holcombe Wilson: Mr. Speaker, I think the Hon. Member does a disservice to the House when he compares the 1981 period with the position of the economy today. It is quite clear, and this is my recollection, that at that time the inflation rate was 11 per cent or 12 per cent. That was entirely different from today, when we are looking at an inflation rate of 4 per cent. At that time there would have been a major impact on Canadians had there been a removal of indexation, as was speculated at that time. However, at this point there is a very potent form of insurance for Canadians receiving any form of indexation program, because they will be protected from any inflation rate over 3 per cent.


REQUEST THAT PENSIONERS BE CONSULTED
John Edward Broadbent: Mr. Speaker, the only guarantee in the Budget for pensioners is that within five years they will lose $600 from their pensions, and that within 15 years they will lose $1,500 from their pensions. That is the guarantee they are getting from the Conservatives.
Considering that the Minister's Government has made so much about consultation, even though it left out anything it heard from pensioners, will he now consult pensioners about
the effects of the Budget and, if they tell him that they want their full pensions restored, will he have the honesty, in terms of previous commitments, to live up to that request?


Michael Holcombe Wilson: Mr. Speaker, we can see in the House today that there are many Conservatives Members who have been consulting over the past few days. The response to the Budget has been a positive one. Our senior citizens are saying: "Yes, we know there will be some"-


Mr. Fulton:: Name one senior citizen who supports it.


Michael Holcombe Wilson: If the Hon. Member would allow me to finish the question, I would do so.


An Hon. Member:: George Hees.


Michael Holcombe Wilson: Senior citizens are saying: "Yes, there will be a small sacrifice which we, as all Canadians, are being asked to accept, but we want to do so because we are worried about our grandchildren, because we are worried about that fast accumulating debt which is such a burden on the country". Those are the reasons why senior citizens are saying: "You are on the right track".


THE ADMINISTRATION
Hon. Bob Kaplan (York Centre):: Mr. Speaker, my question is directed to the Prime Minister. When the Prime Minister smeared me yesterday with a patently false accusation, which he has subsequently withdrawn, he was trying to protect a Solicitor General with a perverse sense of how he should use his powers. I want to return to that and to ask the Prime Minister how he can keep in Cabinet a Solicitor General who gratuitously intervened, taking sides in a proceeding before a federal commission, to protect a friend. Does the Prime Minister not realize that that sends an intimidating signal to complainants before the federal tribunals and commissions? Is it not a ground for replacing the Solicitor General with someone who has respect for the office?


Martin Brian Mulroney: Mr. Speaker, I have learned that in the heat of debate in the House from time to time statements are made which inadvertently reflect unfairly on other Members. That was the case with part of my statement yesterday vis-a-vis the Hon. Member. I wrote to him earlier today to withdraw that statement, and I do so with good grace, and with an apology to him.


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: I read the transcript of the statement made by the Solicitor General. It is my reading of it, and my understanding, that he expressed to the media at that particular moment regret that his remarks had been so construed. He
May 29, 1985

indicated that, if that were the case, that that part of his remarks he wished he had not so conveyed. In light of that, and given the outstanding record of probity of the Solicitor General for so many years, I am satisfied that he will continue to conduct himself with great honour.


ROYAL CANADIAN MOUNTED POLICE
Robert Phillip Kaplan: Mr. Speaker, I will seek to raise a question of privilege in connection with the letter, which is not an apology and which is not satisfactory as far as I am concerned. However, I want to ask the Prime Minister a supplementary question. With The Gazette of Montreal now added to the list of dailies demanding the resignation of the Solicitor General, will the Prime Minister look at the latest gaffe the Solicitor General made in the Justice Committee yesterday, where the Solicitor General refused to do anything to assist the Commissioner of the RCMP to defend the reputation of the force in the Province of New Brunswick, where the Government of that Province, even after Commissioner Sim-monds' investigation and report, still indicates that it harbours suspicions against the force? Will the Prime Minister at least read that transcript and what the Solicitor General had to say about his responsibilities?


Martin Brian Mulroney: I am sorry to learn, Mr. Speaker, that my hon. friend is disinclined to accept an apology offered on the floor of the House of Commons. Having said that, may I tell him that, while I will read the transcript to which he referred, I had an occasion in Regina at the First Ministers' Conference when this matter arose to set out the view of the Government of Canada, which is that we view the Royal Canadian Mounted Police as an outstanding national police force that we hold in the highest respect, and will defend at all times, in all circumstances.


PENSIONS
Mr. Neil Young (Beaches):: Mr. Speaker, my question is directed to the Prime Minister. There is absolutely no question that, under the Government's proposal to deindex pensions, pensioners will be getting a double whammy-lower pensions and higher taxes-from the Budget.
When the Conservatives were in opposition they ran an ad across the country opposing what the Liberals intended to do on deindexation. Does the Prime Minister agree with the following statements which they made then-"the less your income, the harder you get hit", "deindexing would mean a massive tax increase for all Canadians", and "the one group which would get hit hardest are pensioners"? Does the Gov-
Ora/ Questions
ernment still agree with those statements which were made across the country in 1980?


Michael Holcombe Wilson: Mr. Speaker, I remind the Hon. Member that at that time-and he was in the House, as I was-there was considerable speculation that indexation would be fully removed. Instead of having a minor impact on indexation, as is the case with our proposal, there was to be a drop in the indexation rate from around 11 per cent or 12 per cent to zero. We opposed that, and we still oppose that. This is why we have put in a modified form of indexation which provides for full indexation of the impact of inflation over the level of 3 per cent.


GOVERNMENT POSITION
Neil Young: Mr. Speaker, my supplementary question is directed to the Minister of Finance. Since Conservatives raised Canadians' expectations by promising to index pensions fully, as well as all those other promises which they made, why does the Government now feel quite justified and quite clean in saying to Canadians that it cannot keep the promises to seniors but it can keep the promises to the oil companies, and make seniors pay for them?


Michael Holcombe Wilson: Mr. Speaker, 1 am going to repeat myself. I have talked to many of my colleagues here, and I have talked to many senior citizens. The one thing that seniors tell me very, very clearly, is that they are very worried when they see the debt of the country growing three times faster than the rate of the increase in the economy of the country. They are also concerned, about the huge debt, which at today's level is $6,000, and will go to $12,000 per person that will be left for their children and grandchildren to pay. That is something we are trying to turn around, and I would expect that there would be some degree of support for-


Mr. Speaker:: Order. That is becoming a speech.


CLOSURE OF CAPE BRETON HEAVY WATER PLANTS-CREATION OF EMPLOYMENT
Mr. David Dingwall (Cape Breton-East Richmond):: Mr. Speaker, my question is directed to the Right Hon. Prime Minister. The Prime Minister will know that a member of his caucus is on record as saying that the closure of two heavy water plants in Nova Scotia will be devastating to the local economies. That Member has also gone on to say that it is now the complete responsibility of the Government of Canada to resolve the high unemployment rate in that area. 1 would ask the Prime Minister respectfully if he agrees with those statements. If so, when can we expect some real, concrete, positive
5186

May 29, 1985
Oral Questions
statements and actions to be taken to put people back to work in those communities?


Martin Brian Mulroney: Indeed, Mr. Speaker, there is an onus on the Government to make sure, to begin with the employees affected, that if there is an error made that we err always on the side of fairness and generosity to the employees. I accept, as well, that there is an obligation on the Government of Canada to ensure that the tax measures proposed result in the attraction of durable jobs for the people of Cape Breton.
Cape Bretoners have had a difficult time, and eastern Nova Scotia has not had an easy time for as long as I can remember. It has never been easy. There is a special kind of problem there that has been recognized by Members on all sides of the House. I accept that we have a special obligation to do everything humanly possible to bring durable jobs to Cape Breton.


REQUEST FOR GOVERNMENT ACTION
David Charles Dingwall: Mr. Speaker, my supplementary question is directed to the Right Hon. Prime Minister. I wish to inform him of what the Minister of Energy, Mines and Resources informed the union when she said on March 4:
No action will be taken on the future of AECL's heavy water operations in Cape Breton without a full and thorough review of the impact of a proposed decision.
There has been no consultation with the unions affected. I would ask the Prime Minister to order the Minister of Energy, Mines and Resources and the Minister of Regional Industrial Expansion to live up to their commitments to the people of Nova Scotia, and to the workers, by creating jobs now, not in 50 years' time. Will the Prime Minister live up to that commitment?


Hon. Sinclair Stevens (Minister of Regional Industrial Expansion):: Mr. Speaker, in reply to the Hon. Member I would like to assure him that there will be jobs for those in Cape Breton. As far as I am concerned, the number of jobs to which the Hon. Member referred is certainly attainable before there are any reductions with respect to the heavy water plants, as far as employment in those plants is concerned.


THE BUDGET
Mr. Ian Waddell (Vancouver-Kingsway):: Mr. Speaker, my question is directed to the Prime Minister. In 1980 the Conservative Party promised tax breaks to the oil companies and, sure enough, in the Budget paper that was not published, it is indicated that in 1990 $2.4 billion will be forgone to the oil companies, in one tax alone, the PGRT. In 1980 the Conservative Party proposed that it would not do anything with deindexation for pensioners, but in the Budget it eliminated that


Mr. Speaker:: Order, please. The preamble is becoming longer than the question.


Ian Gardiner Waddell: Mr. Speaker, why is there a double standard? Why is it fair to give the oil companies $2.4 billion while taking the money away from the pensioners?


Michael Holcombe Wilson: Mr. Speaker, I think what the Hon. Member misses is the range of measures that are taken in this Budget to do two things. One is to create jobs by identifying three particular areas in the economy which have the greatest impact on economic activity. The first is small business, the second is research and development, and the third is energy development. Those jobs will be created right across Canada. As I said before, jobs will be created in Vancouver-Kingsway as well as in Halifax. Those are the things we are trying to do. We are trying to get the unemployment rate down so that the children and grandchildren of those senior citizens will have jobs.


Ian Gardiner Waddell: Mr. Speaker, the Minister knows that he is taking money from the pensioners and giving it to the oil companies. Will he take this cheque from the pensioners of Canada to give to his friends-


Mr. Speaker:: Orders.


Some Hon. Members:: Order. Order.


Ian Gardiner Waddell: Will he give them $530 million? Will he take that right out of the pockets of the pensioners of Canada?


Some Hon. Members:: Order. Throw him out.


Mr. Speaker:: Order. The Hon. Member for Grand Falls-White Bay-Labrador.


STATEMENT ATTRIBUTED TO MINISTER OF JUSTICE
Hon. William Rompkey (Grand Falls-White Bay-Labrador):: Mr. Speaker, last week the Minister of Justice was sent to Newfoundland and Altantic Canada to sell the Budget, the most crippling economic blow ever dealt to the Altantic area. The Minister of Justice knew that because he said, as reported in the Evening Telegram of May 25, 1985:
If it turns out that in any of the approaches taken in this budget there is any possibility of any damage to regionally deprived areas, then there will be changes made-
Does the Minister of Finance agree with that? Will he show some compassion? Will he live up to the commitment made by the Minister of Justice? If we can show him, as we can, that this will cripple the Atlantic area, will he make some changes?


Michael Holcombe Wilson: Mr. Speaker, I have always indicated in the past that I am a very flexible individual. We have had a Budget which I think has been well received across the country. I am listening to people. We are
May 29, 1985

going to continue the consultative process. Consultations did not stop on May 23. We will continue with them for future Budgets that the Government will be bringing down. Yes, we will be flexible, but we do believe that the new approach that we set out in a clear break from the past is the right approach, and we are going to give it a good chance to work.


REQUEST FOR CHANGES TO BUDGET
Bill Rompkey: Mr. Speaker, we cannot wait for future Budgets. This Budget will cripple the Atlantic area for the next four years. The Evening Telegram also reported the following about the Minister of Justice:
He admitted the private sector in the Atlantic area is weaker than other parts of the country and said there will have to be more government support-
The Minister of Finance has cut that government support. Will he change the Budget? Will he stop the cruel and devastating effect this is having on the Atlantic area?


Hon. John C. Crosbie (Minister of Justice and Attorney General of Canada):: Mr. Speaker-


Mr. Ouellet:: Order. The question is to the Minister of Finance. He cannot answer.


John Carnell Crosbie: They are afraid.


Some Hon. Members:: Oh, oh!


Mr. Speaker:: The Hon. Minister of Justice has the capacity to answer as the Hon. Minister of Justice on a justice matter.


André Ouellet: It's not a justice matter.


Mr. Speaker:: Order.


André Ouellet: This is a budget matter.


Some Hon. Members:: Oh, oh!


Mr. Speaker:: For some reason I cannot hear. The microphones must be off.


Bill Rompkey: Mr. Speaker, the question was directed to the Minister of Finance.


Mr. Speaker:: Order, please.


Sheila Maureen Copps: It's a budget matter, not a justice matter.


Mr. Speaker:: Order. I take it that the Hon. Minister of Justice is now trying to answer a question in his capacity as Acting Minister of Fisheries?


John Carnell Crosbie: Yes.


John Edward Broadbent: No, it's a budget question.


Mr. Speaker:: Order.


John Carnell Crosbie: 1 am versatile, Mr. Speaker.
Oral Questions


Mr. Speaker:: 1 now recognize the Hon. Member for Laurier.


CONSUMER AND CORPORATE AFFAIRS
Mr. David Berger (Laurier):: Mr. Speaker, 1 have a question for the Minister of Consumer and Corporate Affairs.
Since yesterday I have had several conversations with the President of the Canadian Patent Insitute who stated that closing the Patent Office would deprive Canada of a tool essential for Canadian industry as a whole as well as for innovation, economic growth and employment opportunities. As he told me, we will soon rank among the banana republics.
Can the Minister confirm that closing the Patent Office is indeed Government policy? Can he tell us whether a cost-profit analysis was made, and would he be prepared to table that study?


Hon. Michel Cote (Minister of Consumer and Corporate Affairs):: Mr. Speaker, indeed we are aware of the recommendations of the task force chaired by my colleague, Mr. Nielsen. We are interested in examining the conditions of Canada's ratification of the Patent Co-operation Treaty with a view to avoiding duplication of efforts by various countries when examining patents.
The task force considered and analyzed the advisability of Canada proceeding this way, and we endorse this measure.


PATENTS
Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, my supplementary is directed to the same Minister.
Dismantling the Patent Office will mean a loss of 200 jobs in the Public Service. Can the Minister inform the House whether he has consulted with the unions and whether these employees will be dealt with on the basis of relocation? Will they benefit under the measures provided by the Public Service Commission ... Can the Minister inform the House today exactly when the Office is to be closed and why?


Michel Côté: Mr. Speaker, I repeat once again that the Government is anxious to provide the best possible service at the lowest possible cost. As far as the Hon. Member's questions

May 29, 1985
Oral Questions
are concerned, I can inform him that I have had consultations with the President of the Treasury Board, and I can assure him that there are quite a few patent applications that must be examined before any employees can be laid off, and we must proceed with these applications before any final steps are taken.


TEXTILES AND CLOTHING
Mr. Jean-Guy Guilbault (Drummond):: Mr. Speaker, my question is directed to the Minister of Finance.
After carefully reading through the Budget, I was unable to find any measures dealing with the textile and garment industry. Could the Minister inform the House what kind of policies he intends to introduce in this respect or could he give some indication of the progress that has been made in deciding on policies for this particular sector?


Michael Holcombe Wilson: Mr. Speaker, the Budget gives a good deal of encouragement to the small business community, which involves many companies in the textile industry. The involvement there will give the industry access to more capital and a good deal of encouragement in expanding its activities.
In consultation with the Minister of Regional Industrial Expansion as well as with the Minister for International Trade, we have been discussing at length the directions in which we feel the textile industry should proceed. Announcements will be made with respect to those directions in due course.


NORTH AMERICAN AIR DEFENCE COMMAND
Ms. Pauline Jewett (New Westminster-Coquitlam):: Mr. Speaker, I should like to ask a question of the Minister of National Defence in the absence of the Secretary of State for External Affairs. Will the Minister confirm the reports we have received from the usual sources-those being the Pentagon and The New York Times-which state that the United States has finalized its plans to establish an integrated command centre at Colorado Springs which will include ballistic missile defences, that is, the SDI, as well as offensive nuclear forces? Can the Minister confirm this decision? Will be not agree that, unless we oppose it, Canada will be inexorably drawn into star wars through NORAD?


Hon. Erik Nielsen (Deputy Prime Minister and Minister of National Defence):: Mr. Speaker, I will confirm no such thing.
I read the article to which the Hon. Member refers in The
Globe and Mail this morning. That article purports to reproduce an article from The New York Times. Mr. Hallo-ran, who, I believe, is the reporter who wrote the article, garbled totally fictitious events with some actual developments, which creates the very false impression of relevance to star wars, SDI, or whatever. However, in the process it is very misleading and gravely misquotes the facts, which I do not find unusual.


STATEMENT ATTRIBUTED TO EXTERNAL AFFAIRS MINISTER
Pauline Jewett: Mr. Speaker, it is clear the Minister has, once again, not been speaking to his colleague, the Secretary of State for External Affairs who, on March 12, 1985, in answer to a question from my colleague, the Hon. Member for Brant, said that arrangements have been in place for some long time for the development of the merging of missile air and space systems under NORAD. That is what the Secretary of State for External Affairs has stated. That is what the United States stated when the Minister-


Mr. Speaker:: Order, please. Does the Hon. Member have a supplementary question?


Pauline Jewett: When will the Minister state what his colleague has already stated, namely, that there is to be a combined, integrated centre at Colorado Springs which will include ballistic missile defences?


Some Hon. Members:: Hear, hear!


Erik Nielsen: Mr. Speaker, my colleague has said no such thing.


Pauline Jewett: Read Joe.


Erik Nielsen: If there is any influence among the bedfellows over there, then I would urge the Leader of the New Democratic Party to intervene personally with the Leader of the Liberal Party-


John Edward Broadbent: That is what he is doing!


Erik Nielsen: 
THE BUDGET
Mr. Raymond Garneau (Laval-des-Rapides):: Mr. Speaker, last Monday, I was able to point out that in absolute dollars.
May 29, 1985

the middle class was going to be taxed 26 times as much as wealthy Canadians. A closer analysis of last Thursday's Budget indicates that as a result of tax increases and de-indexing of Old Age Security pensions, domestic demand will drop $3 billion in 1986-87, $5 billion in 1987-88, $7.3 billion in 1988-89, $9.5 billion in 1989-90 and $12 billion in 1990-91.
My question to the Minister of Finance is very simple. How does the Minister intend to create the jobs he promised Canadians by cutting the purchasing power of the middle class?


Michael Holcombe Wilson: Mr. Speaker, on many occasions the Hon. Member opposite has commented on the danger of running up deficits and debts which are too high. I believe he has pointed out why we did not go farther in the deficit cutting exercise. We have maintained a balance. We have tried to have regard for the impact on Canadians and for the impact on the economy. For that reason we chose the direction which we have taken in the Budget.
However, if the Hon. Member suggests we should be cutting somewhere else, and not in the ways he has suggested, then I would appreciate him advising me. I do not think he would wish to have a higher deficit than that which I brought in last Thursday.


Raymond Garneau: 
FINANCE
Raymond Garneau: Mr. Speaker, I have a supplementary. I would also like to point out to the Minister of Finance that although he is very found of using the United States and the Prime Minister's buddy, Mr. Reagan, as a model, the U.S. economic recovery was the result of reducing taxes and increasing the deficit. My supplementary is as follows: Could the Minister inform the House how, if the purchasing power of Canadian families is cut by $1,000 a year, starting in 1988, there will be enough demand to help small-and medium-sized businesses create jobs and produce more, also considering that our industrial capacity is under-utilized?


Michael Holcombe Wilson: Mr. Speaker, I am left to draw two conclusions from the Hon. Member's question. First, he would wish that I increase the deficit to something in the order of $38 billion or $40 billion. That is the direct conclusion which I draw.
Oral Questions
The second conclusion is that, in an imaginative way, without drawing on the resources of the Government, we have opened access to vast amounts of capital for the small business community. As the Hon. Member and I are well aware, the small business community is the major generator of economic activity. It is the creator of jobs. That is the direction in which we have gone, and I think the people are supporting it.


CROWN CORPORATIONS
Mr. Aurele Gervais (Timmins-Chapleau):: Mr. Speaker, my question is for the Minister of Regional Industrial Expansion. In the budget speech it was stated 13 Crown corporations will be sold, one of which is the Canada Development Corporation. The CDC owns 49 per cent of Kidd Creek Mines Ltd., the largest employer in my riding of Timmins-Chapleau. Will the Minister tell me what ramifications, if any, the sale of the CDC will have on Kidd Creek Mines, its employees, and the community of Timmins?


Sinclair McKnight Stevens: Mr. Speaker, the possible sale of some 23 million government shares which was announced today will have no direct effect on the Kidd Creek Mines operation. I would remind the Hon. Member that there is no suggestion that the board will be changed, or that the management of CDC will be changed. As he probably knows, that mine had a much better experience in the current quarter than in earlier quarters. It actually was on a profit level and had a cashflow level of $18.3 million.


AGRICULTURE
Mr. Stan J. Hovdebo (Prince Albert):: Mr. Speaker, my question is directed to the Minister of Finance. The Budget indicates that an annual reduction of $50 million will begin in 1985-86 and will continue to 1990-91. Can the Minister clarify the effect of the reduction? Will it be a one-shot affair which will end up as being a $300 million reduction in the money which will go to farmers over six years, or will it be a $1.05 billion reduction in the money which will go to farmers on a cumulative basis?


Michael Holcombe Wilson: Mr. Speaker, I presume the question related to the $50 million reduction in agriculture subsidies.


Stanley J. Hovdebo: Yes.

May 29, 1985
Oral Questions


Michael Holcombe Wilson: In the Budget I said that those reductions would occur as $50 million a year in 1985-86 and in 1986-87. The Minister of Agriculture will be announcing the effects of the reductions in due course.


SIZE OF REDUCTION
Stanley J. Hovdebo: Mr. Speaker, the $50 million reduction in the Budget is only a small part of the reduction which will affect farmers. Could the Minister indicate what the total extraction of money from farmers will be, with the $33 million recovery program, the reduction in insurance premiums, less funds for the farm credit program, higher freight rates, and the grain commission recovery? What will be the total extraction from the farming community through the Budget?


Michael Holcombe Wilson: Mr. Speaker, I think the Member has got his decimal points or his signs wrong. Since we have come into power the impact of the measures which have been taken by the Government have all been positive and have benefited the farming community.


Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: There is a $150 million fuel tax rebate. There is a drop in the Farm Credit Corporation long-term interest rate, from 16.25 per cent to 13.5 per cent. There is a change in metric. There is a change in the capital gains exemption, which the farmers will be able to take advantage of right away. In addition to that interest rates have dropped about three percentage points since we have taken office, and that has also helped the farming community. I do not understand what the Hon. member is getting at. We have been very generous toward the farming community.


Some Hon. Members:: Hear, hear!


PENSIONS
Hon. Herb Gray (Windsor West):: Mr. Speaker, my question is directed to the Minister of Finance. A few minutes ago he told the House that he had spoken to senior citizens and that they support what he has done in the Budget, in reducing old age pensions by amounts up to $690 a year by 1990. Can he explain the statement of Jean Woodsworth, head of the Ontario division of Canadian Pensioners Concerned, representing about 10,000 seniors in Ontario, when she said:
It's a shocking thing for the Government to do,... It takes money away from the very poor.
Further she said:
-senior groups across Ontario petitioned the federal Government to maintain full indexing.
To which seniors did the Minister talk? Surely not the spokespersons for the tens of thousands of elderly people across
the country. Will he come clean and tell the House why he has not listened to the spokespersons of the senior citizens, and why he is cutting their pensions?


Michael Holcombe Wilson: Mr. Speaker, I would expect, as would the Hon. Member, that the spokespersons for the senior citizens would take the position which they took. I can assure him that senior citizens are very encouraged because we have maintained full indexation on the G1S. They acknowledge that some change has been made in the modified indexation of the OAS, but, as I have said before, they recognize the importance of getting the deficit down because they know that deficit leads to inflation. If there is one thing which senior citizens understand, it is inflation, and the levels of inflation which the previous Government brought in.


Some Hon. Members:: Hear, hear!


CLERK OF PETITIONS' REPORTS
Mr. Speaker:: I have the honour to inform the House that two petitions were presented by the Hon. Member for Van-couver-Kingsway (Mr. Waddell) on Tuesday, May 28, 1985. The first petition, concerning jobs for youth at gas stations, meets the requirements of the Standing Orders as to form.
The second petition which was presented by the Hon. Member for Vancouver-Kingsway (Mr. Waddell), concerning assistance to the Tigreans in Ethiopia, does not meet the requirements of the Standing Orders as to form.


PRIVILEGE
Robert Phillip Kaplan: Mr. Speaker, I have a question of privilege, of which I gave you notice, that relates to a letter which the Prime Minister (Mr. Mulroney) sent to me this morning, to which he referred in Question Period as a letter of apology. The letter refers to false accusations which he made yesterday that I had engaged in an authorization of a police procedure which the Prime Minister considered reprehensible.
To come directly to the question of privilege, the Prime Minister did not satisfactorily and completely retract today the remarks which he made yesterday in the House, which results in damaging my reputation and in creating the impression that I have engaged in some form of reprehensible conduct.
Yesterday, the Prime Minister alleged that I had directly authorized a payment of $100,000 to be made to Clifford Olson. That is an authorization which the Prime Minister considered reprehensible. Today, he withdrew in his letter the remark that 1 had authorized it, but be continued to assert that 1 was responsible for it.


Ramon John Hnatyshyn: Order.
May 29, 1985


Robert Phillip Kaplan: As I have the floor, 1 hope I will have the opportunity of being heard.
In his letter today, the Prime Minister continued to assert that I was responsible for the authorization of that payment because it was made by a senior officer of the RCMP for whom I was responsible to Parliament.
In reply to the statement which was made by the Prime Minister, I would like to remind him that, in fact, RCMP officers who investigated the case were acting on a matter which was of provincial responsibility. They were paid by a provincial contract. They were reporting to the Attorney General, and it was not the Attorney General-


Mr. Speaker:: I have given the Hon. Member some time to tell the House what it his question of privilege. I would now invite him to do so. I appreciate the seriousness and importance of the matter to everyone who is concerned, but would the Member please bring it into the context of privilege.


Robert Phillip Kaplan: Mr. Speaker, I submit that the Prime Minister should withdraw the remarks which damage my reputation.


Ramon John Hnatyshyn: Mr. Speaker, that is clearly not a question of privilege. I do not understand what the Hon. Member hopes to accomplish by raising the matter under the guise of a question of privilege.
The Prime Minister (Mr. Mulroney) had the grace and decency to stand in his place and withdraw categorically any implication with respect to the statement which was made yesterday. I have the letter here. If the Hon. Member who is new in this House, and probably does not know the rules, would look at Beauchesne's Citation 19(1), he will understand-


André Ouellet: You are the House Leader and you should know better.


Ramon John Hnatyshyn: -that a difference in facts is certainly not a basis for a question of privilege. There is no question of privilege here. Moreover, the Prime Minister stood in his place on the floor of the House-and, Mr. Speaker, you heard him today in Question Period-and said that he withdrew absolutely the reference made on the floor of the House yesterday with respect to this matter. And, Mr. Speaker, he apologized.
If the Hon. Member had any sense of decency in this House, he would leave things alone; he would leave it at that.


Robert Phillip Kaplan: I would accept an apology from the Prime Minister (Mr. Mulroney), but this is no apology.


John Napier Turner: Mr. Speaker, I rise on the Hon. Member's question of privilege. I am sure that if the Prime Minister (Mr. Mulroney) would add to what he said in the House earlier today, a withdrawal of this letter, which is not an apology, the Hon. Member would accept that.


Some Hon. Members:: Hear, hear!
Privilege-Mr. Kaplan


Mr. Andre:: What kind of garbage is this? You're despicable.


Jean-Robert Gauthier: He is despicable.


Mr. Speaker:: Order, please.


Carlo Rossi: Who do you think you are?


Mr. Speaker:: It does not seem to matter how many times I say to the House that there is language which is proper for this place and language which is not. It just does not seem to matter on both sides.


Carlo Rossi: He is the one who said it.


Mr. Speaker:: Order, please. This is not some place where people yell at each other. This is supposed to be a house of civilized, principled debate.


Mr.   de Jong@: The press are laughing.


Mr. Speaker:: Order, please. I didn't say it was. I said it was supposed to be. I hope, for the last time, to read Citation 19(1) from Beauchesne to Hon. Members. Beauchesne reads:
A dispute arising between two Members, as to allegations of facts, does not fulfil the conditions of parliamentary privilege.
The question of privilege of the Hon. Member for York Centre (Mr. Kaplan) arises out of yesterday's Question Period. It arises, I take it, out of a concern he has with a statement which was made and which, apparently, in his view is unfactual, and later admitted to be that by the Prime Minister (Mr. Mulroney). Whether withdrawn or not, the factual dispute is not a question of privilege, ever. I suggest to Hon. Members that, under the circumstances, I have been given nothing to reserve on except the question of a putative letter of apology, and I am faced at the same time with a verbal apology issued during Question Period.


John Napier Turner: With a letter on record.


Mr. Speaker:: There is no letter on record.


John Napier Turner: It is.


Mr. Speaker:: The Hon. Member had the opportunity, in presenting his question of privilege, to submit to me the letter. He neither submitted it to me in writing nor did he indicate during his question of privilege that he intended to submit it to the House. I have no evidence. Even if I did have the letter, it would still come back to a question of fact, and I believe the right hon. gentleman knows that. It is a matter of procedure.
I appreciate that it is a difficult moment between Hon. Members in the House. But I ask Hon. Members to accept the position which the Speaker is in on this question, and who apparently is entering into what the Hon. Member for Hamilton Mountain (Mr. Deans) quite properly referred to yesterday as "editorializing", and I think I will leave it at this point.


Martin Brian Mulroney: May I just say that I had the opportunity earlier in the House of conveying my apology to my hon.

May 29, 1985
Petitions
friend. I had hoped that that would be appropriate and adequate. If it is not, I am happy to repeat it again for him and to withdraw the statement.
I take your observations very seriously, Mr. Speaker, and particularly your injunction in regard to civilized conduct. As Prime Minister, 1 must be the first to follow those rules. So I apologize to my hon. friend.


Some Hon. Members:: Hear, hear!


Robert Phillip Kaplan: Mr. Speaker, I can accept a gracious apology, but the letter on the record, the letter which has been sent to me, makes it clear that the Prime Minister still regards me as responsible for the payment, and that is no apology.


John V. Nunziata: Withdraw the letter.


Martin Brian Mulroney: Mr. Speaker, if it is the letter, which was dispatched in good faith, the letter of apology that is causing some difficulty, I will withdraw the letter of apology.



ROUTINE PROCEEDINGS


Mr. Stan Schellenberger (Wetaskiwin):: Mr. Speaker, I have the honour to present the second report of the Standing Committee on Indian Affairs and Northern Development in both official languages.


OFFICIAL LANGUAGES AND PROGRAMS-FIRST REPORT OF STANDING JOINT COMMITTEE
Mr. Gabriel Desjardins (Temiscamingue):: Mr. Speaker, 1 have the honour to present the first report of the Standing Joint Committee of the Senate and the House of Commons on Official Languages Policy and Programs.
[Editor's Note: For above report, see today's Votes and Proceedings.]


PETITION
Mr. Marcel R. Tremblay (Quebec East):: 
QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Paul Dick (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, questions Nos. 342 and 369 will be answered today.


Mr. Althouse: Was any agreement reached between the Department of National Revenue and Amway Canada Limited after the Department sought $105 million for unpaid import duties, sales taxes and penalties for the years 1977 to 1980 and, if so, what were the terms of the agreement?


Hon. Perrin Beatty (Minister of National Revenue):: No
agreement has been reached between the Department of National Revenue and Amway of Canada Limited. The Department is still seeking the amount of $105 million. The matter has been referred to the Department of Justice with a request to proceed with the case in the Federal Court (Trial Division) for recovery.


Mr. Young: 1.	For each of the past five years, how many applications did the Department of Insurance receive from pension plan sponsors to recover surpluses from plans registered under the Pension Benefits Standards Act and (a) how many were approved (b) what was the total amount of surplus recovery?
2.	What amount did plan sponsors propose recovering from pension plans registered under the PBSA?


Hon. Barbara McDougall (Minister of State (Finance)):: Department of Insurance
1 and 2.	No. of	No. of Requests	Amount of Surplus Refund	Amount of Surplus RefundYear	Requests	Approved	Requested S	Approved S1980	I	1	93.806	93,8061981	1	1	1,365.700	1.365,7001982	4	4	3,919.825	3,919,8251983	6	5	5.928.105	5.586.0801984	11	II	47,269.849	27.328.8561985 (to date)	0	0	0	0Totals	23	22	58,577,285	38.294.267
May 29, 1985


Paul Wyatt Dick: Mr. Speaker, I ask that the remaining questions be allowed to stand.


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


Some Hon. Members:: Agreed.


Paul Wyatt Dick: Mr. Speaker, I ask that all notices of motions for the production of papers be allowed to stand.


Mr. Speaker:: Shall all notices of motions for the production of papers be allowed to stand?


Some Hon. Members:: Agreed.


Mr. Speaker:: I have the honour to inform the House that a message has been received from the Senate informing this House that the Senate has passed Bill C-52, an Act to amend the Unemployment Insurance Act, 1971, without amendments.
[DOT] * *



THE ROYAL ASSENT

Mr. Speaker:: Order. I have the honour to inform the House that a communication has been received as follows:
Government House,
Ottawa,
May 29, 1985 Sir:
1 have the honour to inform you that the Honourable Gerard V. J. La Forest, Puisne Judge of the Supreme Court of Canada, in his capacity as Deputy Governor General, will proceed to the Senate Chamber today, the 29th day of May, 1985, at 4.45 p.m., for the purpose of giving Royal Assent to a certain Bill.
1 have the honour to be.
Sir,
Your obedient servant,
A. P. Smyth,
Deputy Secretary to the Governor General
The Budget-Mr. Nielsen



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Monday, May 27, consideration of the motion of Mr. Wilson (Etobicoke Centre) that this House approves in general the budgetary policy of the Government; and the amendment of Mr. Johnston (p. 5043).
Erik Nielsen: Mr. Speaker-


John Napier Turner: Where did everyone go?


Erik Nielsen: I can't see anyone. Oh, yes, there are two Hon. Members behind my hon. friend over there.


John Napier Turner: Where did everyone go?


Erik Nielsen: I can't see anyone.
1 rise to intervene in this debate, Mr. Speaker, in connection with a process in which my ministerial colleagues and 1 have been involved since last autumn. I speak, of course, of the program review, so I am participating in that regard wearing the hat of chairman of that task force.
The time and the thoughtful consideration given to the program review by the Minister of Finance (Mr. Wilson), the President of the Treasury Board (Mr. de Cotret) and the Minister of Justice (Mr. Crosbie), who sit with me on that committee, is a measure of the commitment of this Government, the depth of that commitment, and the priority being given to improving both the management of government programs and service to the public, as well as to improving the sense of order generally throughout the Government. This mission is one that we accepted readily and that has been at the forefront of our thoughts for several months with a very high degree of determination and insistence upon those objectives.
The assignment with which the Prime Minister (Mr. Mul-roney) mandated us last September is a measure as well, Sir, of the commitment to ensuring the effectiveness and efficiency of the Public Service for many years to come. The people of this country, it is our belief, have a right to expect a Public Service the equal of any. People from Port Alberni to Chicoutimi and Placentia Bay are entitled to expect their Public Service to function without fear of favour, liberated entirely from any concessions whatsoever to the past. A contemporary Public Service should be free from the yoke of compromises fashioned to fit expediencies that no longer apply.
A revamped approach to management of the Government was long, long overdue. We in government knew that as private citizens, as businessmen, as farmers, and as members of communities which struggled to meet the challenges raised

May 29, 1985
The Budget-Mr. Nielsen
by post-war global enterprise. We knew this as members of her Majesty's Official Opposition as we watched and then tried to check the responses of the Government of the day to the energy crisis; as we tried to check the environmental threats that were being posed and, in our view, overlooked, and the failure of the Government of the day to rise to the challenges being brought about by the technological revolution. We watched them as their response stacked program on top of program, inflated Budgets beyond accountability, and multiplied staff resources in many areas until they grew entirely out of proportion with any reality whatsoever. We reflected, too, on the judgments of others such as that of the Auditor General of Canada when he declared that the management of Government in this country was entirely out of control. We waited, Sir, until obviously Canadians came to the conclusion that enough was enough was enough.
We have now been a few months into this process of program review, a process which can be accurately described as an examination, on a government-wide basis, of management practices being applied with respect to those programs. The impressions we formed while in opposition, the observations we made, have been confirmed and with a great deal of emphasis.
Members, 1 am sure, are aware of the findings of study teams on services and subsidies to business, the study teams on job creation, training and employment and on agriculture which were reported in the Budget in a separate document entitled "New Management Initiatives". Members will also be aware that there has been created by the Prime Minister a special subcommittee of Cabinet to deal with the whole broad range of native policy matters. The Budget presented an early opportunity to describe the work of the ministerial task force in the context of the Government's fiscal plan, and in the context of the Government's over-all strategy for economic renewal. Certain observations at this stage are central to the work of the task force on program review as it has occurred to date.
First of all, where we looked we found what we expected. There was stacking of subsidies and programs to spur investment. That stacking process had been obscured in a scheme of grants, tax incentives, loan guarantees and other forms of industrial aid which take more than 30,000 public servants to keep track of. The Budget addresses one dimension of this issue: The amendment to the investment tax credit will reduce the stacking of this tax incentive on top of other forms of support. The Government will be consulting with provinces and industry about other ways to deal with this stacking phenomenon.
Training programs should not be an end in themselves; assuming people enter these programs with an interest or aptitude for certain kinds of work, it is reasonable for them to expect the authorities to ensure that there are jobs to go with their new certificates. People pin their hopes and the wellbeing of their families on the expectation of employment which is implied in the offer of training itself. Yet the review of federal training programs revealed that the kinds of training
that are provided are too often not synchronized with the job opportunities in the labour market. The material released with the Budget asserted that the link between training and job opportunities should be strengthened during the renegotiation of the federal-provincial training agreement.
Another observation: Canadian agriculture needs a new impetus and emphasis on the market realities of the 1980s. The agri-food sector must also equip itself to adjust to opportunities that will emerge in the last decade of this century. Effective programs for the development of the industry must be based on a sound appraisal of the market opportunities and the competitive position of each commodity in each region of this country. This orientation is central to the review of agricultural programs and was consolidated in the Government's plans for new market-oriented commodity development strategies by the decisions of Cabinet relating to that particular review. In short, many of the assumptions on which current agricultural programs are based are anchored in the past. This realization no longer reflects merely the views of outsiders looking in on the management of federal Government as it relates to agriculture; it has now been acknowledged and embodied as a new direction in the development of federal policy and programs for the future.
Second, the Government of Canada is under new direction and we are moving decisively to remove the ties that bind federal decision-making to the past. I have just mentioned the new orientation of agricultural programs. Another example deals with the antiquated legislation governing the operations of Revenue Canada, Customs and Excise. The legislation prohibits the importation of goods between sunset and sunrise. The same law empowers the Government to impound a horse and cart, while making no reference at all to a truck. The Minister of National Revenue (Mr. Beatty) will be bringing forward proposals for a new Customs Act and will review the operations of Revenue Canada, Customs and Excise, to deal with these anachronisms and other issues illuminated by the exercise on program review.
Still another example is raised in the business framework legislation administered by the Department of Consumer and Corporate Affairs. In addition to a Bankruptcy Act which has only been tinkered with since 1949, the Department is burdened with a 1924 Copyright Act which could not possibly anticipate the advent of photocopiers, cassette tape-decks, video recorders or personal computers. As the budget documents say, legislative proposals applying to bankruptcy, patents, copyright, the Canada Business Corporations Act, the Trade Marks Act and the Industrial Design Act, have just been moved up on the Government's agenda.
A third observation has to do with the nature of the process of reviewing over 1,000 federal programs and services on a government-wide, department by department basis. None of these programs exist in isolation, although in some cases they are distinctly unrelated to the real world of the 1980s.
May 29, 1985

Neither 1 nor my ministerial colleagues on the task force were surprised when we opened the lid of this Pandora's box that we inherited from the previous Government. As I have already said, our expectations were very quickly confirmed. The study team on business services and subsidies alone had to sift through well over 150 distinct federal or federal-provincial programs costing more than $12.2 billion in fiscal 1984-85. Many of these programs not only have roots in the past, they are like some mutated creature, half plant and half fish, with tentacles that reach deep into the support system of legitimate enterprise-strangling initiative, incentive, and natural growth.
Another perspective of the work that we are trying to accomplish might best be achieved if I were to inform Members that the over-all program review entails the support of some 170,000 person-years annually. It addresses the expenditure of something in the order of $92 billion. Study teams confronted with matchless complexity of that magnitude had about three months each to come to grips with the subject matter and to bring forward reasonable suggestions or recommendations for solutions. When these recommendations reached Ministers of the task force, care was taken not to cripple good and effective programs in our enthusiasm to eradicate those that good management compelled us to recommend be eradicated.
The simplest and most isolated examples of overlap and duplication were, of course, dealt with most expeditiously. However, these were not always the most insidious or most far-reaching. In a number of cases the solutions to the most vexatious issues lie at the end of a long and sometimes tedious implementation process. The choice of the task force in some instances was to ask for additional study along the lines developed by the study teams, with a subsequent report and decision to come before the fall. In other instances, as in the illustration I used a few moments ago, the solution lies in legislation and will be determined by the priorities of the House. In any case, the decisions of the task force fall somewhere between an evolutionary reform of the management of Government and a more revolutionary one.
There are few overnight remedies to a number of problems that have taken two decades to develop. The choice of the task force has been to bite off a manageable portion this far and to report our initial results as part of the budget package.
Incidentally, I am delighted that the advent of this Budget has provided the vehicle for squelching certain myths about the work of the task force. I have heard it suggested, for instance, that the task force is devising some sort of hidden agenda. Others have said it is operating under a mantle of excessive secrecy like some nocturnal raider intent on slashing this and chopping that. Such talk is nonsense and those who propel it are nonsensical. Such nonsense reflects no appreciation for the uniqueness and magnitude of the task we are about.
Never in the history of Canadian public administration has the political will been summoned to launch a review of such scope. Nowhere in the annals of federal public administration has such a representative cross-section of people from outside
The Budget-Mr. Nielsen
Government been invited into the process in the way that the private sector is represented, both as advisers and analysts, on the study teams. How can it be credibly asserted, as some have tried, that this is a closed process? Its very make-up has assured, in the creation of a private sector advisory committee and in the private sector membership on study teams, an open and healthy exchange of ideas. I am totally mystified how a process can be declared secretive when at the first opportunity an account is tabled of its composition, its terms of reference, and its initial results, running to more than 270 pages in both official languages.
It is ironic that the very nature of the process has caused some mutterings about its impact and implications. Members of the House should understand, if some instant analysts do not, that it was not designed to yield headlines, but to produce results.


John Napier Turner: Author.


Erik Nielsen: I am the author of these words. Sir.


Some Hon. Members:: Hear, hear!


Erik Nielsen: I have often attempted to give a 20 minute speech in 20 minutes, but sometimes it has to be put on paper in order for that to be done. Now he has diverted me and 1 have lost a minute.


John Napier Turner: We are grateful.


Erik Nielsen: You should be grateful. I am glad to see you sitting here listening.
As I say, it was designed to produce results. A measured, methodical analysis of more than 1,000 programs may not satisfy some newsmen's lust for drama and immediacy, and may not produce the kind of political grist that others in the House may seek. I do not identify anyone who may have this motivation as being guilty. In no way can this can be described as an overnight smash and grab. All that the initial report of the task force represents is a snapshot of a systematic process, with headlines to follow if and when they are warranted. Rash judgment may be the bread and butter of some-including a few journalists and others who may moonlight at that craft- but there is no place for it in the management of the Government of Canada.
In the Budget itself we have seen the first step of the implementation of the stacking principle to prevent the "giving with both hands". We have seen the introduction of the refundable tax credit for research and development as an initial step to streamline the administration of R and D programs. We have seen the termination of a number of sales tax exemptions to restore part of our tax base.
All of these measures are directly attributable to the work of the task force and the individual study teams. In terms of dollars, the famous bottom line, you may have noticed that our initial discussions have been translated by the Department of

May 29, 1985
The Budget-Mr. J. N. Turner Finance for fiscal year 1986-87 into some $500 million in savings and some $275 million in increased revenue. I suggest that is a good start.


The Acting Speaker (Mr. Paproski):: Questions or comments on the Hon. Minister's speech? If not, debate.


John Napier Turner: Mr. Speaker, it is always a happy coincidence to have you in the chair. It gives me that sense of equilibrium one needs when addressing the highest court in our land on a very serious subject.
After waiting the longest period in Canadian history for a new Government to present its economic plan to the nation, eight and a half months, Canadians are finding out that it was not worth the wait. The Budget does not have an economic plan. There is no agenda for growth, no agenda for jobs.
We have heard the Minister of Finance (Mr. Wilson) say in the House that last fall Canadians, voted for a change. However, they did not get the change they wanted. They did not get what they were promised. Instead of sticking to its massive list of glowing promises, that avalanche of promises, the Government has made a complete about-face.
The people of Canada were misled. Not only did the Government have no intention of keeping those promises, the new Conservative Government has finally revealed through its Budget that the true hidden agenda is nothing short of an all-out attack on lower and middle-income families of this country.
The Prime Minister (Mr. Mulroney) and his Ministers are travelling throughout the country in expensive government jets to promote the Budget. I understand that the Prime Minister is on his way to Toronto. The Budget received tremendous hype. The Prime Minister was in western Canada for the first time since the election, except for a brief love-in at Regina on St. Valentine's Day. He showed up in Edmonton, Calgary and Winnipeg saying that this was going to be a tough but fair Budget.
Conservative back-benchers, who are usually silent, anonymous and invisible, have been given a kit and told to sell the Budget in their ridings. Selling the Budget will be a challenge. No matter what the qualifications that the Members of the Conservative caucus may have as salesmen, no one can sell a bad product. The Budget is a bad product.
The Prime Minsiter said that the Budget would be tough but fair. The Prime Minister has spent much time promoting this Budget and I believe that he co-authored it, beginning in Miami. Therefore, this is not only the Budget of the Minister of Finance but, probably for the first time in Canadian history, a Prime Minister is intimately connected with the writing of the Budget, and he will be held jointly accountable with the Minister of Finance.
The Prime Minister's slogan of "tough but fair" promises to go down in history with many other famous sayings, such as, "Let them eat cake", "A chicken in every pot", "Tough but fair". The words "fair" and "fairness" are sprinkled liberally
throughout the Budget. On the first page of the budget speech, the Minister says, "The actions 1 am proposing are realistic, effective and fair". On page 21, he says that costs and benefits will be fairly shared.
I believe that before the Minister of Finance assumed his portfolio, he was rather straightforward, direct and unambiguous. It seems that the Prime Minister, followed by the Minister of Finance and other members of the Government, feels that people will tend to believe something if it is said and repeated often and enough. Let me suggest that despite the repetition and the hype from all the salesmanship, the burdens, the costs and the benefits of the Budget are not evenly shared by the people of Canada.
The Government's Budget is not fair. It hits average Canadians hard. The tax increase for the average Canadian is approximately $400 to $500 a year when one considers all that the tax increases, including the clandestine, sneaky and direct increases. That $400 to $500 tax increase to the average Canadian family begins now.
What use will be made of this money that was taken from the average Canadian? Does it go to the poorer regions of the country? Does it go to the less advantaged? Does it go to the single parents? Does it go to the elderly widow? Does it go to our native people? The answer is no, no, no. It goes to the rich and wealthy with the scope to invest.
The $500,000 capital gains tax exemption is a cash bonanza of $125,000 when converted into cash. The average family faces a $500 a year tax, while the wealthy have a cash lifetime bonanza of $125,000. Is that fair? Is that just? I do not believe that is the type of equitable Budget that you expected, Mr. Speaker.
I said in the House on Thursday night, and again last Friday morning, that this Budget is not only unfair, it is sneaky. It is based on a hidden tax increase. The Minister had a secret document entitled Direct Impacts of Budget Measures by National Accounts Component. It was prepared by his Department and confirmed as valid by his own officials. As was pointed out on Monday by my colleague, the Hon. Member for Laval-des-Rapides (Mr. Garneau), this secret document of the Minister of Finance reveals that de-indexing will net the Treasury $11.5 billion more. In other words, the cost of this move to the average Canadian by 1990 will be $11.5 billion. It is not a $200 million tax increase, but a $11.5 billion increase. At the same time, the give-away to the multi-nationals by that date will be some $8.5 billion. The middle class will be affected now, while the minimum tax on the rich is postponed for a study. Those who can least afford it must pay now, while those who can afford it pay very little. That is what the Government calls fair.
Let us deal with the minimum tax. On August 17, during the election campaign last year, the Minister said:
I think it is unfair that an individual not pay a minimum tax.
We proposed a minimum tax on the rich of 13 per cent for those over $50,000. Taken with the provincial component of an additional 7 per cent, that would have been a 20 per cent
May 29, 1985

minimum tax on every Canadian earning over $50,000 a year. The Government also promised a minimum tax during the election campaign, but it has given only some options in this Budget. It has provided for some further study but not any realistic commitment.
The Budget hits the poor, the weak, the elderly and the disadvantaged. It does so in a sneaky, underhanded, ruthless and gutless manner because the tax increases are not up front. The Prime Minister and the Minister of Finance said categorically that there would be no tax increases. Yet the Government has handed Canadians the most massive tax bill in recent Canadian history.
The Minister of Finance agrees with me that hidden taxes are wrong. Here is what he said as quoted by the Canadian Press on August 8, 1984. These are the Minister's words. He was then the critic for another portfolio. He said:
I think taxation which is automatic, taxation which sneaks in without a politician having to say, "this is what we're doing, this is why we're doing it, and be prepared to take the flak that comes from it is wrong.
He went on to say:
Responsible government means that when you want to increase the taxes, you say you're going to increase the tax and you make it quite clear why you're going to increase the tax.
The Minister has not done it. He has repudiated his own words and brought in the most massive, secret, hidden tax increase in the history of this country.


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Shame!


John Napier Turner: He begins with de-indexation of old age pensions. I want to tell the old age pensioners of this country what is happening in this Budget. By taking away de-indexation from those pensions up to 3 per cent every year pensions will be reduced by 3 per cent, year after year after year cumulatively.


Mr. Siddon:: No.


John Napier Turner: That is exactly what the Budget says.


Some Hon. Members:: No.


John Napier Turner: Yes, read the documents. We have a lot of squirming Conservatives on the other side of the House who have not read the documents, Mr. Speaker. There are approximately, 1,740,000 senior citizens in Canada at or below the poverty line. De-indexation plus tax increases means that old age pensioners will lose roughly $1.25 billion in income by the year 1990. Those are figures derived from the Minister's own documents produced by my colleague, the Hon. Member for Laval-des-Rapides. Those are the documents upon which the Minister of Finance is relying himself.


Thomas Edward Siddon: Pensions will not be reduced.
The Budget-Mr. J. N. Turner


John Napier Turner: Those documents have not been denied by the Minister. They were not denied by his officials in the lock-up.
The 80-year old widow trying to make ends meet will see a reduction in her income by 1989 of $30 a month in real terms. She will have to pay more under this Budget for health care products. She will even have to pay more for her cat food, more for her soap and her shampoo.


Some Hon. Members:: Oh, oh!


John Napier Turner: They laugh. Members on the other side do not know what it is like to count every penny to know if you have enough to pay for soap, shampoo, let alone to feed a pet. The Minister did not tell the 80-year old widow that in this Budget that is what she will have to do. He did not tell her that $360 a year is going to help provide the owner of her apartment building with a $125,000 cash bonus in a capital gains tax exemption. She will have little money for soap, shampoo and basic health care, but the owner of that apartment building will be able to invest in Miami real estate.
You know, Mr. Speaker-

-he is eliminating the first 3 per cent of indexing from senior citizens' pensions, and as if this further violation of an election promise was not enough, the Hon. Member for Brome-Missis-quoi (Mrs. Bertrand) told the newspaper La Presse today that it was up to the people to judge whether this promise was so vital to the survival of our senior citizens. You know- [English]
In his book Where I Stand, the Prime Minister said the following about indexation of pensions. On page 19 we find:
It should become a priority to reduce and eventually eliminate and outlaw indexed contracts and benefits, including indexed pensions, in line with a decline in inflation-Clear and justified exception should be made for mothers' allowances and all other social programs designed to protect the ordinary or disadvantaged Canadian from the ravages of inflation for which they are not responsible.
That is where the Prime Minister stood. Where does he stand now after all that talk about sacred trust and longstanding commitment? Canadians can be forgiven for asking the Prime Minister, "We knew where you stood when you wrote the book. Where do you stand now?" It is certainly not where he stood during the last election campaign.
Let us turn to family allowances and the child tax credit. The net result, based again on these documents of the Department of Finance, is that some $300 million less is available for families by 1990. This reduction hits hardest at the people who need help the most, young families, single parents, and every year that family allowance, now de-indexed up to 3 per cent, goes down 3 per cent, after 3 per cent, and all cumulative.
Let me come to the matter of de-indexing the income tax system. By de-indexing the tax bracket 3 per cent after 3 per cent year by year, which accumulates, again by the Minister's own documents, by 1990 families with incomes of $15,000 a year will see their taxes increase by 36 per cent while families with $30,000 a year will see their taxes increase by 11 per

May 29, 1985
The Budget-Mr. J. N. Turner
cent. But if you make $100,000 a year, the increase will be only 4 per cent. If you make $200,000 what will the increase be? Only 2 per cent, Sir. That is the fair, equitable Budget of this Government and of the Minister of Finance?
I want to tell the Minister why I brought in indexation of the tax system into the Income Tax Act in the first place in my Budget of February, 1973, a Budget I recommend the Minister read and study. Our income tax is based on a progressive system. It is based on a progressive rate schedule. As a Canadian's income increases, the percentage of tax he or she pays increases. It is basically sound, basically fair. But the increase should be in real terms, it should not be in inflationary terms. The increase should be a real increase, and not just a numerical or nominal increase as a result of inflation. If a Canadian gets a 5 per cent pay increase, and inflation for that year is 5 per cent, the increase is really illusory, it does not exist. He has the same purchasing power. There is nothing more. But under the tax system we had then and under the tax system the Minister proposes for us now, that person will be worse off, because for every 3 per cent in inflation his real purchasing power will diminish and he will get caught by the new system proposed by the Minister.
In my Budget I moved to eliminate that unfair and unintended result from our tax system by indexing deductions and tax brackets as the consumer price index increased each year. That move was supported by the Conservative Party when the Conservatives sat in opposition under the former Leader of that party, the Hon. Mr. Stanfield. The only people who opposed that move at that time, as I recall, were the other Parties.


Jean-Robert Gauthier: The NDP.


John Napier Turner: The tax system would no longer erode a person's purchasing power and individuals would no longer pay tax at a higher marginal rate simply because inflation boosted him or her into a higher tax bracket.
For a person on fixed income, the result of indexing was to reduce taxes each year of prices went up and leave him or her with the same real tax to pay but not the same nominal tax, which was inflation. That change put Canada on the vanguard of nations with progressive, humane tax systems. No longer were the neediest hit. No longer was the tax system claiming higher and higher shares of an individual's hard earned money simply because of inflation. That system, I believe, Sir, has served us well since it came into effect in 1974.
Last Thursday, the Minister of Finance turned back the clock and virtually wiped out one of the most progressive and humane changes in tax legislation in our history.

We Liberals know what our principles are. And since last Thursday, when this Budget was brought down, we also know what the real principles of the Conservatives are. The Conservative Government has finally shown its true face. Last Thursday's Budget has made a mockery of the Prime Minister's solemn commitments made during the election campaign.
This Budget is a betrayal of the trust of Canadians. The Minister has deceived the Canadian people.
This Budget is a direct attack against Canadian men and women on low incomes who are being hit by a whole series of tax increases. A real downpour, as the Hon. Member for Laval-des-Rapides (Mr. Garneau) said. "Taxes, taxes, taxes!" to use the words of the Hon. Member for Saint-Maurice (Mr. Chretien). The tax on gas: 2 cents more per litre. The Government is going to use the money to pay the oil multinationals the $2 billion it agreed to pay them under the Western Oil Accord.
The Minister of Energy, Mines and Resources (Miss Carney) promised the House that this measure would not result in any tax increases for Canadians. We have been deceived. This Budget contains a whole list, a series, an avalanche, a veritable downpour of taxes: federal sales tax exemptions on certain products have been withdrawn; a 1 per cent increase in federal sales tax; a 25-cent increase in excise tax on a large package of cigarettes; a 2 per cent increase in the excise tax on alcohol. Even candy is being taxed! This is a cruel Budget, a cowardly Budget!
It is also a regressive Budget. It hits those least able to pay. It hits the consumer. There is a 1 per cent hike in the federal sales tax to 11 per cent. New items not previously taxed have been added-everything from children's candies and soft drinks to pet foods and alternative energy equipment. The 11 per cent tax now applies to health care products as well, such as bandages. Scrapes and bruises are suddenly taxable items, as well as soap and shampoo. It will cost more to stay clean. It really is a dirty Budget.
In 1982, the average family of four in the under $20,000 income range spent $372.60 per year on health care products. The Minister has just raised that bill by $41, 11 per cent, to $413.60. Again it is a tax which will hurt those who can afford it least. They will be the hardest hit. Most important is that the 11 per cent sales tax now applies to surgical supplies in doctors' offices, dental instruments, X-ray apparatus and X-ray film. A trip to the dentist will be more expensive, especially if one has children. These increases are expected to cost the health field alone some $75 million per year in additional costs to average Canadians going to a dictor or going to a dentist.


Mr. Nystrom:: That is painful.


John Napier Turner: The Hon. Member to my left says: "That is painful". I want to tell him that trying to get any information from the Minister of Finance is like pulling teeth.
What does the Budget do for women? First, there is no mention of the promise of a home-maker's pension, which was in their platform during the election campaign. The Prime Minister was committed to it in the Leaders' debate on
May 29, 1985

women's issues. There is no mention of compulsory credit splitting on marriage breakdown. There is no mention of continuation of benefits on remarriage. There is no mention of improvement of survivors' benefits. There is no mention of improvement if disability benefits. All of these were commitments of the Prime Minister and of the Conservative Party during the election campaign, commitments made by the Prime Minister on television when he debated the other two Leaders. There is no promise to improve child care as undertaken by the Conservative Party during the election campaign. More than 70 per cent of single women live below the poverty line. Why is there no shelter allowance, as we promised? There is no protection against inflation for senior citizens. Most senior citizens living in poverty are women, and their pensions will be eroded 3 per cent per year, and there is no additional protection. The Minister says the Guaranteed Income Supplement is not touched. However, the base is touched, so the total of the pension and the G1S come down 3 per cent a year or whatever the lower percentage will be after calculating the GIS.
Let us look at health care. The health care system in Canada is under attack. User fees and extra billing are undermining the equality of that system. The health of Canadians is too important to be played around with. We all have a commitment to preserve that system. However, in the Budget the Government intends to cut by the year 1990-91 over $4 billion in cash transfers to the provinces under EPF. Another $1.6 billion will be cut from post-secondary education transfers. Two key areas where we share responsibility as parliamentarians with provincial Governments are health care and education. Can you tell me, Mr. Speaker, two more important vital priorities for the country than a decent, universally accessible health care system and improvement to education, particularly at the technical and post-secondary levels? I do not know of any stronger priorities for Canadians, yet these are proposed to be cut under the Budget.
The Minister is also imposing a two-cent per litre tax on gasoline, indeed on all other transportation fuels. When the Minister of Energy, Mines and Resources (Miss Carney) signed the deal with the western provinces, we called it a giveaway to the multi-nationals which would cost consumers. She said to us in the House that the consumer would not pay. She accused us of pitting region against region. She told me that we were causing hatred and division. She promised that there was nothing in that agreement "that hurts consumers", as reported in Hansard of March 29. We were undermining the future of the nation by even suggesting that the consumer in Atlantic Canada or in Ontario would have to pay. 1 hope that Minister will at least have the decency to apologize today for misleading the people of the country in the Parliament of our country.
That tax is also being applied in a very sneaky way. It does not come into effect until September. The Government hopes the consumers of the country, motorists and those who drive trucks for a living, will have forgotten by then. It hopes the people who drive and who depend on transportation for a living
The Budget-Mr. J. N. Turner
will not remember why they are being hit at the pump. The simple reason is that it is to pay for a giveaway to multinational oil companies. The tax also applies to aviation and other transportation fuel. It means that everything that moves gets more expensive, including air fares. Less than a year ago, the now Minister of Justice (Mr. Crosbie), then finance critic and lusting after the portfolio, as quoted in The Citizen of Ottawa on July 26, 1984, said:
We are not planning any gasoline sales tax increases on the Canadian public.
Oh, those broken promises; oh, how they must hurt.


John V. Nunziata: Who said that?


John Napier Turner: Laymen would call him "John Crosbie"; we call him the Hon. Member for St. John's West. At the same time, the Government is increasing user fees and putting a larger tax burden on farmers.
Let us look at the agricultural picture. The Government increased fees in November on inspection services and grading up to $32 million per year. The Minister says that the capital gains exemption will solve the problem. That is the one commitment they lived up to, that a capital gains exemption would be applied immediately on the transfer of farm land. Mr. Speaker, you were sitting in a less exalted place when I eliminated the capital gains tax on the transfer of a family farm from one generation to another. That being said, all the other promises were reneged on.
The Minister says that the capital gains exemption will solve the problem. It will only help more people get out of farming. What about the 39,000 young farmers caught in the debt crisis? The Government did not keep its promise of an agribond program with long-term lower interest rates. Farmers are hit with the increased fuel tax, two cents per litre. The average farmer uses 14,000 litres of fuel per year. His increased cost as of September will be $280 per year.
There is $50 million chopped from the departmental budget on top of the cuts in November, endangering dairy programs, freight assistance, crop insurance and other programs. Sales tax increases mean higher input costs for farmers. We in this Party are committed to the family farm. This Budget is great for the farmer, but only if he wants to get out of farming. For his family who wants to stay in agriculture, this Budget is a disaster.
How has the agricultural community responded to the Budget? Henry Pelissero of the Ontario Federation of Agriculture says that he is disillusioned, disappointed, upset and angry and that the Budget mocks the consultative process. That is what the Ontario Federation of Agriculture thinks about the Budget.

Michel Lord of the Union des producteurs agricoles had this to say about the Budget:
-it was a great disappointment there were no measures to help farmers in financial difficulty, no proposals for overhauling farm financing.

May 29, 1985
The Budget-Mr. J. N. Turner

How about fishermen? In November, fishermen were subjected to a cut of $40 million. Their fees for weather reports, dockage and berthing were raised. This Budget imposes an additional $25 million cut on fishermen. The average fisherman in British Columbia, Nova Scotia, New Brunswick, Quebec or Newfoundland uses thousands of litres of fuel per year. I have not been able to obtain that statistic as I was able to do for farmers, but the two-cent increase in fuel taxes means that fuel will cost fishermen hundreds of dollars more.
I now turn to the subject of mining, which is a major industry in British Columbia, the province which I have the honour to represent. Mining is not even mentioned in the Budget. There is not even one single line with respect to it in the budget speech or in any of the supporting documents. Where are the promised changes to the tax system to encourage exploration, processing and development? There is not one single line with respect to those changes.
I would now like to deal with another major industry in British Columbia, that is, forestry. Where is the aid for B.C.'s declining forest product companies? Why is there not assistance to allow for recapitalization of these companies through transfer of tax bases, capital cost allowances and investment tax credits to investors? When one reads the letters investment bankers send out with respect to the Budget one sees that they state, "Stay away from western forest product companies". That is exactly what has been said. Where is the promised increased funding for the Canadian forestry service and the regional forestry agreements? Where is the national forestry internship program which the Government promised during the election campaign?
With respect to the areas of forestry, fisheries, mining-and I will mention tourism in a minute-there is nothing in the Budget. The Province of British Columbia is a monumental loser with respect to this Budget.
Let us now consider VIA Rail. The Government is cutting service with respect to this corporation by some $200 million per year. This hits the outlying regions of the country. The new philosophy seems to be, "Use it or lose it". This from a Party which vowed to reinstate VIA Rail routes. It is the end of a commitment to the disadvantaged regions of the country.
The Government is cutting regional industrial incentives by $100 million this year and by $100 million next year. Business will concentrate through the private sector in central Canada. The weakest regions of the country are being hit. Cape Breton has been devastated by this Government. The Minister of Employment and Immigration (Miss MacDonald) promised, and I am quoting her words:
My plan (in Cape Breton) to close the two heavy water plants will not proceed before alternate employment opportunities can be found for displaced workers.
What do they do? There is no plan for employment in Cape Breton. There is no economic plan for less disadvantaged areas. All we have for Cape Breton is a so-called tax free zone.
That is a joke. Without the infrastructure in place, where can we get the private sector to invest in Cape Breton?
I would now like to speak about another region which has been absolutely devastated right here in the Ottawa Valley. I am speaking of Deep River, Chalk River, Arnprior, Pembroke and Renfrew. Funds to Atomic Energy of Canada have been cut by some $100 million. In addition, $70 million of its earned surplus has been diverted into government revenues. That is a devastating comment with respect to what we are doing through the Government to Canadian research.
In my hand, Mr. Speaker, I have an advertisement which appeared in The North Renfrew Times on August 22, 1984, which is entitled "The P.C. Commitment to Chalk River Nuclear Laboratories. Elect Don Whillans. Time for Change". The advertisement states:
Chalk River has been the heart and soul of this nuclear program. A P.C. government will not only maintain this facility, it will consider providing additional funds to allow greater Canadian involvement in the massive fusion energy projects underway in other countries, building on the Laboratory's experience with tritium-based fusion cycles.
The future of Chalk River is closely linked to our Party's commitment to research and development. We will develop a co-ordinated approach to government-sponsored research, strengthening the linkages between public sector and private sector research activities, and setting priorities in close consultation with provincial government engaged in similar research.
This is the Progressive Conservative commitment: Job security for you-and jobs for your children.
How about that?


Some Hon. Members:: Shame!


John Napier Turner: I wish to show you, Mr. Speaker, a copy of the The North Renfrew Times for Wednesday, May 29-today. The headline is "Budget Gores AECL". On the front page of the newspaper is reprinted the advertisement to which I have just referred. It has been surrounded in black crepe. I understand the rules with respect to this matter, Mr. Speaker, and I will desist. However, I wish to show visibly how hypocritical the Government has been.


Some Hon. Members:: Hear, hear!


John Napier Turner: The Minister of Finance has said, "The approach we are following in Cape Breton reflects the basic philosophy of this Government". I tell you, if I lived in the Atlantic provinces, Gaspe, northern Ontario, up in the Ottawa Valley, or even in parts of western Canada, I would not take the Minister's commitment too seriously. The Minister has also said, "We must ensure that adjustment takes place in a humane way". That is like saying to a condemned man on death row, "Do you want the noose, the electric chair or would you like it intravenously?" That is what this Government is saying.
What about tourism, which is so important to British Columbia, Ontario, Quebec and Atlantic Canada? The largest potential customer for our tourist industry is the United States. What have we done in this regard? We have raised gasoline prices and liquor prices. Frank Miller, on his last leg, breathing his last priministerial air, claims he kept the price of
May 29, 1985

gas from going up by 22 cents per gallon. The following is what Frank Miller had to say with respect to his claim:
I'm delighted to see the discussions I had with the Prime Minister ... about the potential 22-cent-a-gallon gas tax had some impact on his final decision.
Frank, you did a great job. You cut it down to about 10 cents.
This is what the Prime Minister said last summer during the election campaign as reported in The Globe and Mail:
We will examine gasoline, alcohol, food and lodging taxes which are reducing the competitiveness of Canada's tourism industry.
What has the Prime Minister done? He has examined them all right. He took one look and jacked them all up. He jacked up the price of gasoline, liquor and food.
The Minister of Finance has said that the reason for the tax hikes is to lower the deficit and to stimulate confidence. However, all this ballyhoo and noise about confidence does not even accomplish what he set out to do.
If we look at the Minister's objectives with respect to dealing with the deficit, he does not measure up. During the election campaign I was the only one who spoke frankly about the deficit. I analysed it into a structural and cyclical component. I made a commitment to reduce the structural part of the deficit in a period of five to seven years. However, not at the expense of the weak, the unemployed, the aged, the handicapped or the weaker regions of the country.


Some Hon. Members:: Hear, hear!


John Napier Turner: If the Minister is looking for applause from the investment community, he will not receive it since the deficit has not really been reduced. He took the deficit at $29.6 billion from Mr. Lalonde's February 1984 Budget to somewhere between $30 billion and $32 billion. Through the actions of his Government, he took that deficit up to $38.2 billion. He took it up as a result of the Western Accord, transfers to the provinces and other actions. At best, the figure of $38.2 billion is his figure and not something which he inherited. In fact, he inherited something between $30 billion and $32 billion. He now says he is bringing that deficit down to $33.8 billion. Mr. Speaker, he is not even back to where he started. He has not broken even.
In November, the Minister predicted a deficit of $1.5 billion lower than that which he now has. In his financial statement just six months ago that is what he said. Six months ago he was wrong by $1.5 billion. The minister now responds by saying that he is not going to bother making projections any more. I do not blame him. At least, his projections will not be published. He states at page 20 of the budget speech:
It is more misleading than helpful to present a precise view of the deficit five years from now ... It would be foolhardy to finetune policy to precise estimates that we know are uncertain and will inevitably be proven wrong.
At least the Minister of Justice, when he was the Minister of Finance-during that short, abortive period in Canada's history-had the guts to come up with projections.
Three sentences down in the same paragraph of the budget speech the Minister states:
The Budget-Mr. J. N. Turner
The measures I announced in November and today will ensure that the annual deficit is $20 billion lower than it would otherwise have been by the end of the decade.
Three sentences prior to that he said there would be no more projections. He stated it would be too tough to predict employment figures, interest rates and inflation rates. He has said he will make no more projections. Yet, just three lines later we are given a $2 billion deficit reduction. Those are selective projections. He draws what he wants. He publishes what he likes. I say to the Minister that that is intellectual dishonesty.
The Minister claims to have cut $4.4 billion from the deficit this year and over $8.6 billion in 1986-87, the next fiscal year. In fact, the Minister's own figures show that the deficit reduction will be only $2 bilion lower than forecast this year and only $1 billion next year. Which is it to be? Are there going to be projections or not?
The Minister has already acknowledged that in six months they were out by $1.5 billion. In five years, that works out to a margin of between $10 billion and $15 billion. This is an important fact. It is at the core of the Budget and is the Minister's own argument. It is the way he wanted to do things.
The Government is putting all its hopes for growth on building what he calls confidence in he private sector. However, in one paragraph, the Minister undermines that whole approach. How can the business community have confidence when the Minsiter will not tell us on what he bases his figures? He simply says, "Trust me". I simply say that that is not good enough. Confidence is fragile enough without adding to the confusion.
The Minister of Justice (Mr. Crosbie) went to St. John's, Newfoundland recently. He goes back there every once in awhile to refresh himself. The Hon. Member for Grand Falls-White Bay-Labrador (Mr. Rompkey) mentioned earlier today the article in the Evening Telegram of May 25, 1985, which quoted the Minister of Justice. The Minister is even more loquacious when he is in St. John's. I suppose it is contagious. The article quotes the Minister as saying:
"If it turns out that in any of the approaches taken in this budget there is any possibility of any damage to regionally deprived areas, then there will be changes made to deal with that," he said.
I think we ought to invite the Minister to Cape Breton. Perhaps we ought to invite him to Deep River. How about Chalk River?


Joseph Jacques Jean Chrétien: In B.C., what about the forestry, the mining? He should be there.


John Napier Turner: You've got it, Jean. The article indicates that the Minister went on to say the following about his brother Ministers:
"If they can't do it, if they can't produce the jobs and the economic growth, then we won't hesitate to go in a different direction. Although I don't know what other direction you can go in because the other direction has proved to be a failure for the last 20 years."

May 29, 1985
The Budget-Mr. J. N. Turner
The article indicates that he went on to say:
"If they don't perform, then big brother will have to be given the job back again," he warned.
I wonder if the business communities of Toronto, Montreal and Vancouver have read about that particular remark.
These boys will change their minds pretty quickly. They do not really believe in what they are doing. I ask them to show us the calculations. I would ask the Minister to show us how he came up with such optimistic projections. I would like to remind the Minister of Finance of what his leader, the Prime Minister, told us during the election campaign about public finances. He said that they were going to tell the people the facts, that they were going to share them with Canadians and that they were going to set out a true and honest accounting. Well, give us that accounting.
We know that over one-half of the deficit reductions, $2 billion this year and $1 billion next year, are put down to what the Minister calls better program management. When we were in the lockup, my colleagues from Saint-Henri-Westmount (Mr. Johnston), Winnipeg-Fort Garry (Mr. Axworthy) and Laval-des-Rapides asked the officials who wrote the Budget what that meant. We asked them from where that money would come. They did not know. They had no answers. Neither does the Minister of Finance. As Jeff Rose, the President of CUPE, has said about this Budget, this Budget is about leaps of faith and starry-eyed assumptions that the private sector will provide jobs while consumers spend less.
I say that it is lousy economics to take $4 billion out of the economy next year and to take $4 billion away from consumers. My colleague, the Hon. Member for Laval-des-Rapides, made this argument earlier this afternoon. The Budget takes $4 billion out of demands. From where does the cash come to buy the goods being produced by the private sector? How does taking away spending power from the Canadian consumer create jobs? How does it help small business?
The Government is relying on the United States market to keep our exports going. It is relying on the United States market to keep our big business going. However, when small business is the core around which this Budget is being directed, it takes $4 billion out of the demand of this country, money which can ony be directed to small business and the products of small business. The answer is that this will not help small business. It will hurt the average businessman and woman in this country. We predict that on the basis of that withdrawal of $4 billion worth of demand in the Budget, 125,000 to 150,000 jobs will be lost.
Data Resources, a well-known forecasting firm, has just come up with its calculations. Its report indicates:
The Government's bitter medicine will reduce growth of real output by 0.3 per cent this year and by 0.2 per cent in 1986.
It goes on to indicate:
The restraints may raise the unemployment rate in the next year by as much as 0.3 per cent.
That is not a job-creating Budget. That is not an agenda for growth. That is not an agenda for jobs.
The Minister is relying on opening up the rules for the application of funds from RSPs and pension plans in order to invest in small business. I do not know how realistic that is. I have been a trustee for pension funds for a large number of workers. I know that I and the other trustees of such funds have a fiduciary duty to protect and increase the capital of those funds. I want to know how many pension funds or RSPs will really invest in high-risk ventures when the duty of the trustees who manage those funds is to protect and enhance their capital. I think there is a lot of smoke and mirrors and a lot of wishful thinking here.
We suggested that the best way to help small business in this country and to persuade Canadians to invest in small business would be to allow a complete deduction of a capital loss against income for investment in small business. I believe that that would have done far more for small business than any measure that is in this particular Budget. What about our young entrepreneurs program for which we suggested $100,000 worth of start up moneys? What about one-stop shopping for all government services at the Small Business Development Bank?
Where are the promises the Government made to reduce the tax burden on small business, to simplify the tax system, to review government purchasing policies so small business can get their fair share and to create more accessible methods of financing? The Minister claims that the half million dollar exemption for capital gains will go to small business, but again that exemption is not targeted. There is no assurance whatsoever that any of that money invested and claimed by way of exemptions by wealthier citizens will go to small business.
By the way, only 4 per cent of Canadians make capital gains. There are only 150,000 Canadians who invest in ways that will allow them to get capital gains exemptions, and there are no strings attached to those exemptions.
As you know, Mr. Speaker, we in this Party are committed to the private sector. The Budgets I brought down were committed to the private sector. We believe that the small business sector is the engine of growth in this country. We believe that the small business community can and will give us job creation. That is why during the election campaign we presented the programs I have just described. We believe in rewarding success. We believe in rewarding risk. Those are basic principles of our Party.
As reported in Hansard of May 24, the Minister has said:
One of the things that has characterized the response of a broad range of people to this Budget is that it has been fair.
However, $350 to $500 will be taken from the average family and there will be a $125,000 cash bonanza for the wealthy who can afford to invest and be eligible for capital gains. However, there is no relation between that exemption and small business. There is no guarantee that that money will be invested in a business in Montreal, Saint-Maurice, Vancouver Quadra or Ottawa-Vanier. That money could go to a condominium in Florida, a hotel in California or Palm Springs, European art or a number of objects that have nothing to do with jobs in this country.
May 29, 1985


Some Hon. Members:: Hear, hear!


John Napier Turner: The Minister says that he has been consulting and listening. It has taken eight and a half months for him to bring down this Budget, the longest time it has taken in modern Canadian history. Today the Prime Minister said that he thought that the Budget was generally regarded as a helpful document for the economy.
To whom has the Prime Minister been listening? To whom has the Minister been listening? It sure wasn't Lesley Silver of the Social Planning Council of Ottawa-Carleton who said:
This Budget is a strong step in the direction of entrenching inequality ... In fact, a de-indexing of Old Age Security will mean the poorest of the elderly- those living on incomes comprised solely of OAS and GIS-will suffer a 1 per cent reduction in real income.
He didn't listen to Sally Hall, President of the Consumers' Association of Canada, who said that middle-income earners are going to be hit hardest and that the consumer is going to have less money. Nor did he listen to representatives of labour. Dennis McDermott has said that the Budget:
-studiously ignores labour... there is a violation of their election promise to get the country working again-
He went on to say:
This is a Budget of continuing recession. There is no hope out there.
James McCambly, President of the Canadian Federation of Labour, said that the $125,000 capital gains tax bonanza for the rich means:
-high income people will get off scot-free but middle income and average wage earners are going to get hit.
He didn't listen to Cliff Pilkey, President of the Ontario Federation of Labour, who said:
-the unemployed people of Canada have been betrayed.
Nor did he listen to the President of the Canadian Ship Building and Ship Repairing Association who said of the Budget:
Our worst fears have happened and all the promises (made by P.C. politicians during the 1984 election campaign) have been abandoned.
Nor did he listen to the Executive Director of the Ontario Federation of Agriculture, who said:
It was a pretty depressing message ... It will help farmers sell and get out of farming, but there was little to help them stay in business ... There was nothing that dealt with the issues that we raised with them and nothing that had been promised in the federal election proposals.
Nor did he listen to the Secretary-Treasurer of the B.C. and Yukon Building Trades Council, who said:
Once again we have a federal Budget designed to make ordinary wage earners and the unemployed pay to meet the never-ending demand for increased profits from speculators and major corporations.
Did he listen to the 13 member Canadian Council of Churches and Citizens for Public Justice? They said:
In fact, the Budget will deepen poverty in Canada. Changes in the federal sales tax, for example, are regressive and mean additional tax costs for poor families.
The Budget-Mr. J. N. Turner
We do not know to whom the Minister has been talking and where he got the idea that people think it is fair to attack middle and lower income groups. I am outraged that the Minister would dare to say that I agreed with his over-all approach to capital gains exemptions for the rich. Not only is the measure unfair, but put together with the tax increase for the average Canadian it will not work for the purposes which he says it will work. It will not be invested in Canadian small business.


Some Hon. Members:: Hear, hear!


John Napier Turner: It is great for real estate in Florida, buying a race horse in Kentucky, or a hotel in Hong Kong, but it will not put a cent into Canadian business. When I asked the Minister why the exemption was not limited to Canadian businesses, he said:
-if we put those rules into the tax system it would result in a tremendously complex tax system ... people would be able to find ways around it.
What a pathetic excuse. What a sad and sorry abdication of ministerial responsibility. The Minister of Finance said that the Budget was about jobs. That is pretty rhetorical, but the truth is that there is nothing in the Budget which will create jobs. It will not even create training, as it has cut $100 million from training programs.
On CTV's Question Period, May 25, the Minister said that it was:
-a very slight amount less money spent on job training-
I have said that budgets are not just graphs, jobs or projections. Budgets are about human beings. An economy only works if people are at work. A budget is only successful if people can find meaningful employment, educate their children and provide for their retirement.

A Budget is not just the sum of a column of figures or a series of graphs. A Budget is people. It deals with men and women and families across the country. A Budget concerns our way of life, the careers of your young people, the future of our children. This Budget, however, is not a Budget of hope, it is not a Budget of jobs, it does not have the confidence of Canadian men and women.

The sad thing is that the people of Canada honestly believed that the Prime Minister meant it when he said the priority would be jobs, jobs, jobs. They believed him when he said that social programs were a sacred trust. They believed him when he said that the economy could be made to grow, that prosperity was just around the corner and that the unemployed would be put to work. They believed him when he said that the poor would not suffer. They believed him when he said that the elderly would live in dignity. He said the Government would be fair, but the first Budget, the first opportunity the Government had to demonstrate what it really means for Canadians, where its heart really is, and the first chance it had to demonstrate that fairness is something which counts, is an

May 29, 1985
The Budget-Mr. Crofton
astonishing betrayal of the trust which was placed in the Government by Canadians last fall.
It is a gutless Budget. It is ruthless. It is a heartless assault on the weak, the poor, the unemployed, the elderly, the disadvantaged, middle-income earners and average Canadian families across the entire country. The average Canadian is being hit to put money into the hands of the rich and powerful.
There is no agenda for growth. In fact, the Budget is anti-growth, anti-family, anti-youth, anti-women, anti-senior citizens, against the regions of the country and anti-research. There are no jobs available in the steel and automobile industries. There is not a single word about mining. There is nothing for forestry or housing. There is nothing for tourism, and there is virtually nothing for agriculture or fishing. There is only the vague expectation of the Minister of Finance that somehow, out of the goodness of their hearts, the corporate sector will invest a bit more and create a few more jobs, but the Minister will not say how. He will not say it because he does not know. His incentives are not targeted to achieve that result.
That is why we in the Liberal Party have no confidence in the Budget. It presents a vision of Canada which we do not share. It is a vision of Canada which denies the contribution of the elderly. It is a vision of Canada which denies equality to every individual in every region. It is a vision of Canada which says that the poor are not worthy of our compassion. It is a vision of Canada which denies the social contract. It is not a Budget of hope. It is a Budget of despair. It is a Budget which we cannot support. We will continue to condemn the Budget from one end of the country to the other.


Some Hon. Members:: Hear, hear!


Mr. Patrick Crofton (Esquimalt-Saanich):: Mr. Speaker, it is with great pleasure that I rise today to participate in the budget debate. Although, Mr. Speaker, you have been kind enough to recognize me on various occasions to permit me to comment and make observations on matters before the House, my remarks today constitute my maiden speech.
It will thus come as no surprise if I digress briefly from the important budget debate to make several comments about my riding of Esquimalt-Saanich, which I have the great honour and privilege to represent in the House. Some Members who are present, having been here awhile, will remember several of my predecessors-the Hon. George Pearkes, P.C., and holder of the Victoria Cross; George Chatterton and Donald Munro.
I know my distinguished predecessor, Don Munro, would want me to extend his felicitations to his many friends and former colleagues on both sides of the House.
Where, one might ask, is Esquimalt-Saanich? It is on southern Vancouver Island, adjacent to the riding of Victoria. It has a population of 115,000. Its make-up is diverse. Esquimalt includes our western naval base and Work Point Barracks, the home of the 2nd Battalion Princess Patricia Canadian Light Infantry. The Saanich Peninsula includes rich farmland and a growing scientific community. We share a major university and community college with the riding of Victoria. Thanks to our temperate climate, we have a large
number of retired residents. Given the immense natural beauty of Vancouver Island, the mild climate and the ocean as a doorstep, it is not surprising that tourism is a major industry.
Greater Victoria, which includes my riding, is the sports capital of Canada. We have produced a long procession of national championship teams in basketball, soccer, lacrosse, softball and field hockey. The heart of our Gold Medal Olympic Rowing Team lives and trains in my riding. Many Canadians will be surprised to learn that we even won the Stanley Cup a few years ago. Sports flourish across the full range of age groups and areas of endeavour. It is truly a favoured land. Some have called it a Garden of Eden.
Thus far, I have been describing the physical aspects of my constituency. The economic situation is not so happy a story. Unemployment is at 15 per cent in the greater Victoria area. Energy prices are high. Small business has been depressed. Tourism has been down and mills have been closed. Young and old alike have suffered.
The first tentative signs of economic recovery are showing. As a province heavily dependent on resource industries, we in British Columbia require stable markets, affordable wage scales and responsible federal Government fiscal management for business to flourish. Until recently, these necessary ingredients have been missing.
Initiatives taken by the new Progressive Conservative Government beginning last September have helped to start the turnaround, not just in British Columbia but right across our nation. The Budget introduced by the Minsiter of Finance (Mr. Wilson) is an important milestone in this process of economic renewal. Hon. Members opposite are attempting to portray this Budget as some isolated incident which is unrelated to the legislative program which began last autumn and which will continue over the months and years ahead. They could not be more mistaken, Mr. Speaker.
We began with the economic statement in early November, followed by the First Ministers' conference in Regina, the conference in Quebec and the economic conference here in Ottawa. Overlaying and connecting all of these events has been the extensive and unprecedented consultation between the new federal Government and all of the provincial administrations. Many other important legislative initiatives have been taken since November which have inspired Canadians from coast to coast. This is an ongoing process and there is much more important legislation to come.
This budget, very significant though it is, is not the end of the battle to make sense out of the nonsense we inherited. Indeed, this is barely the "end of the beginning", to paraphrase the words of that great Englishman, Sir Winstor Churchill.
What do British Columbians in general, and my constituents in particular, think of this Budget and the approach of this Government? They like it very much, indeed, Mr. Speaker. It begins with that very basic of requirements, attitude. We are the first federal administration in a long while which has
May 29, 1985

genuinely listened to western Canada. In a federal state such as Canada, there is a partnership between the federal authority and the various provinces. Practically all of our national programs are funded and administered jointly. To presume to govern nationally, to presume to be acting on behalf of all Canadians, without consulting promptly, thoroughly and reasonably with each and every provincial jurisdiction, is to perpetrate a fraud, a hoax on the people of Canada. That is exactly what our Liberal predecessors did. They perpetrated a fraud and a hoax. They did not consult, did not account and they did not care. It was a splendid example of "fooling enough of the people most of the time". In 1984, Canadians said, "Enough".
The people of Esquimalt-Saanich are very much in favour of the consultative process. They are fed up with the bickering between jurisdictions. They want effective, efficient administration from Ottawa. I don't know how Ottawa is viewed from Cape Breton or Saskatoon, but I can tell you, Mr. Speaker, Ottawa has been known in British Columbia these recent years as "fat city". Fat city, Mr. Speaker, is that shameless place which is untouched by the recession and populated by legions of faceless bureaucrats and eastern politicians. It is inured from the vicissitudes of inflation and high unemployment, with fat salaries, fully indexed pensions and other assorted perks and benefits.
No one in the former Government cared what westerners thought. Let us take the Liberal national energy policy. That alone tells the story of the Liberal attitude toward western Canada; repressive, vindictive, disinterested and disdainful. Western Canadians have long wanted to be consulted, to be treated fairly and honestly. They have been consulted these recent months. They agree with the policy thrusts of this Budget.
This past weekend 1 met with hundreds of my constituents in a public forum. They agree that the deficit must be controlled and reduced. They acknowledge that the private sector, most especially small business, is the vehicle for economic growth and job creation. The tax incentives and the changes to the capital gains legislation are important ingredients in the policy to help small business.
The pioneer spirit is alive and well in British Columbia. It is a frontier land of rugged beauty and rugged individualism. The entrepreneurs, the risk takers, are more than willing to take up the challenge of business development, business growth and to be the engine of economic renewal. They have been waiting for a Government which is prepared to reward the successful and the risk taker, a Government which does not dictate everything from the bowels of "fat city" but consults and puts faith in the individual Canadian. That states plainly that the Government wants to unleash the little bit of genius which lurks in every Canadian, whether it be a labourer, union member, farmer, scientist or artist. We have said in the Budget, "You, the average Canadian, choose which artist deserves support, which business has a saleable and worthy product and which initiative deserves public support". That is what my constituents tell me, that is what this Budget tells my
The Budget-Mr. Crofton
constituents and all Canadians, and that is how we intend to proceed.
We intend to manage our nation's affairs prudently and efficiently. We intend to be accountable and to consult. The farmers in my riding are very pleased with the capital gains legislation. The entrepreneur and the small businessman are very pleased with the tax breaks offered in this Budget. Those involved in research and development are delighted with the revised rules. The many retired people who have worked long and hard to build this country, the men and women from right across Canada who suffered through war and depression and who have retired on temperate Vancouver Island, viewed with particular alarm and concern the profligate and irresponsible financial management of this country over the past two decades. They applaud this Budget because that for which they had worked so long and so hard, and for which they had risked so much, was being eroded, thrown away, before their eyes.
None of us is happy with the need to touch modestly the old age pension indexing, but senior Canadians recognize, as do all other thinking Canadians, that full indexing itself is inflationary. Our retired citizens are prepared to make any modest and reasonable sacrifice, providing all Canada joins in the battle to straighten out our financial affairs. The senior citizens in my riding are well aware that our social programs, in order to be sustained, and to be improved and strengthened, require a vibrant economy in which Canadians have jobs and our finances are properly managed. We have extended benefits to widows and widowers between the ages of 60 years and 64 years. We have increased veterans pensions. We have broadened the scope of eligibility for disability pensions, which will benefit an estimated 120,000 additional Canadians. We do indeed take our social responsibilities seriously.
The Western Accord on energy is a great boon to British Columbia, indeed to all of Canada. In the fishing treaty with the United States, we have at long last started on the road to re-establishing our valuable salmon resource in British Columbia. I had the privilege of attending in Vancouver on Saturday the signing ceremony for the IRDA sub-agreement on forestry involving $300 million. There has never been a larger forestry agreement signed in Canada. This means thousands of jobs in B.C. in the immediate future. This agreement is six times larger than any previous federal forestry agreement with British Columbia.
In this debate on Monday, the Hon. Member for Vancouver East (Ms. Mitchell) stood up and said we had done absolutely nothing for forestry. I suggest that shows she and her Party are completely out of touch with what is going on in B.C. The right hon. gentleman who spoke ahead of me, representing the Liberal Party, said we were doing nothing for forestry. This agreement was signed in a city in a riding which he purports to represent. I suggest he does not know what is going on in B.C. either.

May 29, 1985
The Budget-Mr. Crofton
The rest of the IRDA agreement involving joint expenditures of an additional $275 million to be devoted to tourism, research and development, agriculture, and the economic development funds provided for in this Budget are all positive steps toward economic renewal and new jobs in British Columbia and in my riding. These are all positive steps, all part of the new and enlightened administration of this country. This Budget is an important milestone in this process of renewal and regeneration.
In summary, my constituents in Esquimalt-Saanich support the initiatives taken in this Budget. They consider it to be fair and even handed. They are fully aware that our financial affairs will not be put straight overnight. They expect us to develop a lean, efficient and accountable administration, one that is frugal with their tax dollars, and one that returns control and decision making to the people of this country. They are fully aware that the initiatives in this Budget, although significant and important, are but one milepost in the long and difficult road back to prosperity in our country. My constituents support this Budget, I support this Budget, and I am very pleased to have this opportunity today to say so.


Mr. Skelly:: Mr. Speaker, first let me congratulate the Hon. Member on his maiden speech. He indicated that people like this Budget. 1 would like to raise some concerns expressed by an important group of people who do not like the Budget; that
is,	members of the Canadian Armed Forces who are penalized by the Budget and the Conservative Government.
New provisions of the Unemployment Insurance Act have placed retiring members of the Armed Forces at a serious disadvantage when they retire. Many former members of the Armed Forces have retired after long years of service to Canada with low pensions because in former times incomes were very low. They have now lost the benefit of full indexation. Servicemen who live in permanent married quarters on Canadian Forces bases, particularly CFB Comox, are facing dramatic increases in rent, some in the order of $100 to $150 a month. I would like to point out to the Conservative Government and the Hon. Member who just spoke that this Budget is unfair and unacceptable to members of the Canadian Armed Forces. It imposes harsh treatment on them, and I think these matters should be raised and responded to by the Government.


Patrick Dermott Crofton: Mr. Speaker, I appreciate the observations of the Hon. Member for Comox-Powell River (Mr. Skelly). I am not entirely sure exactly which members of the Armed Forces he is speaking about because the ones I have spoken to support this Budget. There is indeed a problem with housing for servicemen living on base. The Hon. Member might not know
it,	but this is one of the questions I raised just recently in the Standing Committee on External Affairs and National Defence. I did so because clearly action is required in this regard.
As to the matter of de-indexation, I think it best to repeat the comments made by the Minister of Finance earlier today. Finances which are out of control, rising costs, interest rates and inflation, affect all Canadians. Any thinking Canadian
will appreciate that any government which does not take action to get our finances under control does a gross disservice to the people of this country. That is precisely what we are attempting to do, to get our finances under control, and that is what we were elected to do.


Raymond John Skelly: Mr. Speaker, there is of course another group of people who live in the Hon. Member's riding who are concerned about this Budget. If you include the cuts announced in the November Economic Statement along with those announced in this Budget from the Department of Fisheries and Oceans, that Department is not going to be able to enforce habitat protection and fisheries management. They are not going to be able to provide a $200 million salmon enhancement program or the $100 million buy-back program. Many people are dissatisfied with this Budget, and 1 think it would pay the Hon. Member to take a very close look at people in his riding who are not satisfied.



THE ROYAL ASSENT

[Stage Direction]
A message was delivered by the Gentleman Usher of the Black Rod as follows:
Mr. Speaker, the Honourable Deputy to the Governor General desires the immediate attendance of this honourable House in the chamber of the honourable the Senate.
Accordingly, Mr. Speaker with the House went up to the Senate Chamber.
And being returned:
The Acting Speaker (Mr. Paproski):: 1 have the honour to inform the House that when the House went up to the Senate Chamber the Deputy Governor General was pleased to give, in Her Majesty's name, the Royal Assent to the following Bill:
Bill C-52, an Act to amend the Unemployment Insurance Act, 1971-Chapter No. 18.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Wilson (Etobicoke Centre) that this House approves in general the budgetary policy of the Government; and the amendment of Mr. Johnston (p. 5043).
[Stage Direction]

May 29, 1985
The Acting Speaker (Mr. Paproski):: Questions and comments? The Hon. Member for Essex-Kent (Mr. Caldwell).


Mr. Caldwell:: Mr. Speaker, under the rules of the House we are unable to ask any questions of the Right Hon. Leader of the Opposition (Mr. Turner). Since they both come from the same province, I will ask my question of the Hon. Member for Esquimalt-Saanich (Mr. Crofton). The Right Hon. Leader of the Opposition indicated that he did not see any area in the Budget where a minimum tax was mentioned. Can the Hon. Member tell us whether he saw mention of a minimum tax in the Budget and whether he read the same Budget as did the Right Hon. Leader of the Opposition?


Patrick Dermott Crofton: Mr. Speaker, I thank the hon. gentleman for his question. The Budget presented by the Minister of Finance which I read did indeed make reference to a minimum tax. The Right Hon. Leader of the Opposition (Mr. Turner) said all sorts of things in his presentation that were, as far as I could determine, a combination of flights of fancy, misrepresentation, and a whole flock of other things. He drew attention to forestry and tourism. As I endeavoured to point out in my presentation, the Budget happens to be one of a series of documents. Unless one is going to have a budget speech that goes on for two days, it is impossible to touch on everything.


The Acting Speaker (Mr. Paproski):: Questions and comments are now terminated. The Hon. Member for Winnipeg North Centre (Mr. Keeper) on debate.


Mr. Cyril Keeper (Winnipeg North Centre):: Mr. Speaker, the one thing that we can say with some confidence about this Budget is that it is clearly unfair to ordinary Canadians. It is a kick in the teeth of the ordinary taxpayers. The real question that must be asked about the Budget is who pays the bill that the Minister of Finance (Mr. Wilson) presented with his Budget in the House. It is obviously the ordinary taxpayer of the country who will pay. Every ordinary family across the country will be paying an increase in taxes of approximately $500 a year. That is one heck of a wallop in terms of increased taxes. That increase in taxes comes on top of the $500 increase in taxes of ordinary Canadians by the Minister of Finance last November 8. That is unfair, Mr. Speaker, because at the same time as he is asking ordinary Canadians to pay increased taxes, he is telling other Canadians that they can rest in the sunshine of paying no taxes.
As a result of the Budget, the Government will have collected $4.1 billion in personal income taxes by 1990-91. As a result of the Budget, the Government will be collecting $2.6 billion more in sales tax by the year 1990. At the same time, corporate taxes are going down and by 1990-91, they will be $2.2 billion less. This obviously makes the Budget very unfair and unbalanced. Ordinary families will pay $500 more in taxes while corporations will benefit next year by some $540 million less taxes. They will pay even less in corporate taxes as years progress.
The Budget-Mr. Keeper
When the Minister of Energy, Mines and Resources (Miss Carney) announced the Western Accord in the House, she was very proud to say that consumers would not have to carry the burden as a result of that energy accord. Of course, the day she announced that accord there was no mention of a tax for consumers, only the fact that the oil companies were getting a $2 billion tax holiday.
We waited some time for the other shoe to drop. When the Minister of Finance delivered his Budget, we discovered that the gift to the oil companies as a result of the Western Accord will come out of the pockets of consumers. The Minister of Finance raised the excise tax on gasoline by two cents a litre.
From a political perspective, the Budget was well crafted because the impact of tax increases on individuals are delayed and spread out among several groups. For instance, the gasoline tax increase will not take effect for a few months so that consumers will not feel its immediate impact. However, the truth remains that the Government has raised taxes on gasoline in order to pay for that tax holiday to the oil companies.
The measure which received the greatest applause from the Conservative caucus during the Budget presentation was the capital gains tax exemption of $500,000 over a lifetime. While I support a capital gains tax exemption for such things as the sale of family farms and individual homes, allowing $500,000 in capital gains tax exemption while increasing the taxes for ordinary Canadians is completely unacceptable. At a time when the Government is preaching restraint, it is unfair to allow capital gains tax exemptions to a select few. The Government is raising sales taxes and limiting indexation on personal income tax while allowing a capital gains tax exemption to those who have money. The most outstanding feature of the Budget is its unfairness. It favours corporations and the rich. [Translation]
In my opinion, Mr. Speaker, this Budget is unfair, for it has raised taxes paid by ordinary people while at the same time reducing those paid by rich people and large corporations. [English]
I hear comments about the coalition. I presume it is envy that this Party has been able to bring progress and a breath of fresh air to politics in Ontario.
Let me comment on the capital gains tax from the perspective of its use as an economic instrument. It perhaps would be possible to understand the Government's decision to tax middle income earners while favouring the rich if the capital gains exemption were to achieve a worth-while public purpose.
In the opinion of the Minister of Finance, the capital gains tax exemption would create employment and result in economic growth. I suggest that opinion deserves further study. First, the Minister has set no conditions for the capital gains tax exemption. For instance, he did not make this exemption conditional on creating employment in our country where there are 1.5 million people unemployed. He did not say that if you invest in Canada you can have this exemption on capital gains, which would be a worth-while public purpose. He just

May 29, 1985
The Budget-Mr. Keeper
said, "You can have a tax holiday on capital gains whatever you do."
It is important for us to take note that even before this Budget, capital gains was treated much more favourably than ordinary income. Up until the Budget, half of one's capital gains would be tax free anyway. What the Minister has done is sweeten the pot, and the pot was already pretty sweet as it was.
What was the result of the previous easy treatment of capital gains by the tax system? Did it result in a great deal of new employment? Had the Minister examined the results of those capital gains, studied them and come up with documentation to demonstrate to us that this kind of use of the taxation system resulted in x number of jobs or that it directed employment into regionally underdeveloped areas? No, Mr. Speaker. The Government simply moved on the basis of blind faith, on the basis of philosophy and its ideological commitment to laissez-faire, to hands off, when it comes to the private sector.
Let us consider some other possibilities that capital gains might be used for. If you had a summer cottage and it was worth a tidy bit, you might want to sell it and realize a capital gain and a tax benefit therefrom. Would that create employment? Not necessarily. If you owned a duplex or a triplex, a building in which you did not live yourself, and you wanted to realize an exemption under capital gains so you sold the dwelling, would that result in more employment? No, not that I can see, Mr. Speaker. If you invested outside of the country, even if it created employment wherever you invested, would that make jobs for Canadians? It is pretty hard for me to see that it would. It is possible for somebody to sell a condo in Florida and realize a capital gain that will not be taxed, to get a gift from the Government, but it would not create any employment in Canada.
Another way capital gains will have an impact is that they are treated better under the taxation system than dividends or interest. It will favour trading in shares. Does that necessarily result in employment? Not necessarily, Mr. Speaker. What proportion of the economic activity that will take place under this exemption of capital gains will favour employment? I do not know. I am sure the Government does not know either. It did not provide us with any figures. If the Government did know, it would have provided us with solid figures to say that this tax holiday will provide 1,000 or 10,000 new jobs. The Government provided no figures because the Government does not know how many jobs will be created as a result. The Government does not know how much of this money from the Government going to those who have large capital holdings will be a waste because there will be no employment creation whatsoever.
When we are looking at this capital gains tax holiday, we are talking about a fair amount of money. It is not a minor item. This year we are talking about some $550 million. That is a lot of money which the Government is giving up, particularly at a time when it says that it is concerned about balancing the books and reducing the deficit.
Next year we will lose from public revenues some $700 million. In five years, when this capital gains exemption reaches its full proportions, you will be looking at billions of dollars, Mr. Speaker. It is a serious question. You have to ask yourself, why did the Government introduce this capital gains holiday? It could not have been because the Government was concerned about reducing the deficit. If the Government were, it would have sought to collect this revenue and to use it to bring down the deficit.
[ Translation]
Mr. Speaker, I have another comment to make on the question of capital gains. It is important to me that the public be the real winner every time tax exemptions are granted, and the first and foremost consideration today is unemployment and jobs. Does the Government know how many new jobs will flow from this measure? I would suggest that no one not even the Government, can come up with exact figures.
Mr. Speaker, I want to know why they gave that tax exemption to rich people without any guarantee that it will create jobs in Canada.


Some Hon. Members:: Hear, hear!


Cyril Keeper: Thank you, I just keep trying.

I see, Sir, that I have only two minutes remaining. I want to be sure to mention one other item from the Budget because it is crucial. The most shocking element of this Budget is the meat axe which the Government took to the pension system. It decided to limit indexation of the old age pension. The Government is taking away from the people who built this country their sense of security. The Government has decided that the first 3 per cent of inflation will not be covered in pensions. This year I think pensioners will lose $100, and next year the amount will be more. The social policy reform group has estimated the cumulative loss to a single pensioner by the year 1987, two years from now, will be $1,577.
This Government has decided to pick the pockets of pensioners in order to give money to its friends in business to whom the Government is giving a tax holiday. That is the most cruel, insensitive aspect of this Budget. The Government has broken promises. It said universality was a sacred trust and that it would govern with compassion. Who did the government hit over the head?


Jean-Robert Gauthier: The elderly.


Cyril Keeper: Yes, the elderly. The Government is taking money out of the pockets of elderly Canadians to give a capital gains holiday to its friends, a move which is of questionable benefit in terms of employment or of any economic impact.
It is shocking that the Government would tamper with the pensions of people who have built this country when the
May 29, 1985

Government promised during the election that universality and pensions were sacred.


Mr. Gerry Weiner (Parliamentary Secretary to Secretary of State for External Affairs):: Mr. Speaker, I rise today to salute a new day for Canada. My colleague, the Minister of Finance (Mr. Wilson), has shown us the way to economic renewal. He has opened the door of success to Canadians. He has given us the chance to rebuild Canada. The future is ours.
For over a decade the door to success was kept closed, barred by a massive debt and the economic policies of the previous administration, policies which never recognized the great potential within every individual Canadian. Instead, we saw policies which shattered the morale of Canadians, that lead to stagnation in the economy and destroyed the dreams of millions of Canadians. A shattered dream is hard to repair; a shattered notion, even harder.
We have begun the process of repair and renewal, a process which will give new hopes to Canadians, a process which offers all Canadians a chance to grow, a chance to succeed. The Right Hon. Leader of the Opposition (Mr. Turner), when he was Minister of Finance, showed us the way to go into debt. Canadians accepted it then; after all, it was not that much and they were told that it was necessary and unavoidable. However, it set a dangerous trend, a trend of always taking the easy way out, a trend which led to more and more debt, and a trend which has led to a deficit of some $35 billion this year alone.
Tough measures were needed a long time ago, but the previous administration was afraid to act. In 1975, one in eight tax dollars was used to pay the interest on our debt. The previous administration had set sail on a course which lead the country further and further into debt, with more and more misery for thousands of Canadians. It lead us to a point where 30 per cent of our tax dollars go to pay only the interest on the debt. When Members of the previous administration spoke to Canadians, they never told them that 80 per cent of the income tax they paid would one day go to paying the interest on the debt.
We have taken tough measures. They are fair and they are progressive. They are positive steps toward a new future for Canadians. I can understand the Opposition's mock rage, its posturing in the House, because the Budget shows Canadians that we are willing and able to make changes, fair changes which will provide more jobs and offer them new hope, something the previous administration was unable to do. Instead, it took us into debt and shattered our dreams. On September 4, Canadians voted for a change. They voted for a chance at a new beginning.
This Government has chosen a path which brings about positive, fair change. The Minister of Finance has adopted a fair approach which will solve the problem over time without threatening our economic recovery. This is not an easy task. We cannot ask Canadians to do it by themselves. Government must be a leader in cutting costs and eliminating waste. Eighty
The Budget-Mr. Weiner
per cent of our actions to reduce the deficit will result from our efforts to cut government expenditures.

Very important though they were, these measures would not have been enough and some taxes had to be increased. As a whole, however, these increases will amount to only $250 million in 1985-86 and $1.7 billion in 1986-87. In other words, close to 80 per cent of the deficit reduction stems from lower expenditures. It is a fair and realistic strategy under the present circumstances with the result that, within a relatively short time, the Government will have more leeway to take yet more encouraging measures for Canadians.

Our goal is growth and new jobs. During the election we spoke of jobs, jobs, jobs. That is still our goal. Unlike the opposition Parties that are still wandering around in the dark, the Minister of Finance has lit a beacon of hope, a beacon which will guide Canada through the shoals of Liberal mismanagement to a new economic future.
This Budget will generate new economic activity and with that activity will come new jobs. The small business sector has long been proven to be the major source of new jobs in this country. In my own riding of Dollard, small business was stagnating, its spirit crushed by the ineptitude of the previous administration. It has been awaiting some sign that the Government cares, that the Government recognizes its ability to create jobs, permanent jobs. I was a small-businessman, and I beleive that small business is the single most dynamic force in the Canadian economy. More jobs, permanent jobs, have been created by this sector than by any other. The last Liberal Government with its spending on mammoth projects, work schemes, et cetera, which quickly became modern day dinosaurs, was not the answer. Past policies made it easier to keep wealth than to create it. These savings vehicles did not create jobs, they left investment decisions in the hands of bankers and their best customer has been the Canadian Government. I hope I need not remind too many people of issues like Dome and Maislin. I am not an economist, but I know that what the Prime Minister (Mr. Mulroney), the Minister of Finance and we in the Government have done in the Budget has broken with the past and has taken a gamble, a gamble on the Canadian people. A number of elements in the Budget will make it easier for the average Canadian on the street to say: "I would be better off investiong in a small business than just putting my money to sleep in a savings account."
In my riding, 61 per cent of Challenge '85 applications came from small-businessmen whose morale was on the way up, who say this Government take the first progressive steps in November and who wanted to show Canadians that our faith in them as the vehicle of economic renewal was not unfounded. We want to encourage Canadians to invest in Canada's growth. By giving Canadians a lifetime capital gains exemption of $500,000, the Government is giving individual Canadians a chance to invest in Canada's future. Unlike the NDP, we know that most investors are ordinary Canadians, not multi-millionaires.

May 29, 1985
The Budget-Mr. Weiner
We are rewarding success and challenging Canadians to invest in Canadian enterprise. We believe they will accept the challenge.
We have also for the first time changed the regulations governing RRSP and pension fund investment. RRSP funds can be used for investment in smaller Canadian businesses. Does the Opposition actually think this opportunity will be ignored? No, it will not. There will be a new influx of badly needed capital for business. This is but one important step which will create jobs. We have made other changes to pensions that will benefit all Canadians. Portability of pensions is now a reality. No longer will it be necessary for a Canadian to turn down a job offer or refuse a new opportunity because his pension is frozen.
Men and women are equal. They deserve equal pay for equal work, and they deserve equal pensions. The Government has recognized that equality and has acted.
As I mentioned before, we must be fair. The Budget recognized the fact that our social programs must help those in need. That is where the money must be channelled. We have kept universality but for the first time the Government is insisting that the moneys go to those who need it. We have increased the child tax credit, a credit delivered to low income families, to a level of $584 per child by 1989, an increase of $140. At the same time we have guaranteed that Old Age Security payments or family allowances will not be reduced as a result of the modification to indexation. They will be fully compensated whenever inflation goes over 3 per cent. The Guaranteed Income Supplement, as well as benefits paid to veterans, will continue to be fully indexed.
When one considers fairness, we cannot forget taxing the rich. All Canadians should be making a reasonable contribution to the tax revenues required to finance public sector operations which benefit all. This Budget recognizes that principle. Beginning in 1986 there will be a minimum tax. High income Canadians will pay their share. Unlike the infamous MacEachen Budget, which introduced 35 retroactive taxes, we believe in being fair and honest with the Canadian people. We have no retroactive taxes, and we are giving advance notice of when we intend to make changes. That is the fair way, the progressive way.
We recognize the role labour has to play in creating jobs. We have seen in Quebec the successful application of labour-sponsored venture capital funds. With the progressive use of tax credits to individuals investing in these funds, we will increase investment in small and medium sized businesses. This will create jobs.
Research and development in Canada has long been ignored. We recognize the vital contribution it can make to Canada's economic growth. We have made changes that will help these smaller companies, especially start-up firms. This Government will make 100 per cent of the tax credit they now earn for R and D refundable to them. This is a major,
significant improvement over the 40 per cent of the credit that was previously refundable.
This sector was ignored by the previous administration. Its full job creating potential was never recognized, and its need for capital never realized. The Government has recognized the potential this sector holds for Canada. We have recognized its needs. If Canadian industry is to be successful in the 21st century, it must rely on research and development today. We recognize that and we have acted. Not only will we create jobs today, we have guaranteed them in the years ahead. We face a great challenge. Our challenge is to recreate a dynamic Canada, one of growth and prosperity.
Last Friday, in Paris, Yves Duhaime, Quebec's new finance minister, was asked what he thought of the P.C. Budget. Does anyone remember what he said? He stood up and declared loud and clear that it is about time somebody in Ottawa took a stand and said, "Enough is enough." What he meant, and what we mean, is that the federal Government cannot continue to support the country as if it were receiving welfare. It is about time the people of Canada did this for themselves. That is what my Party believes in. This is what the Minister of Finance's Budget is designed to achieve. It is intended to arouse the people of Canada so that they can improve the deplorable economic situation in this country through hard work, investment in Canadian business and intelligent risk taking. No Government in the world can tolerate an annual deficit as large as ours in relation to our country's size. The Liberals tried it and look where they are now. They deserve it.
When the Liberals came to power-there was no deficit. There was a surplus. Through their financial incompetence, the term "deficit" has become, unfortunately, a household word in Canada.
[ Translation]
In 1974-75 the federal Government's net debt was 16.6 per cent of the Gross National Product. In 1984-85 it has reached 45.2 per cent-a totally unacceptable level.
The measures proposed in this Budget will directly reduce the deficit. That is precisely what Canadians expected us to do, and we will manage to reduce our deficit so that our children may look to the future with confidence.

During the election campaign we promised to act responsibly. Our Budget is the first step in that direction. I will tell Hon. Members something-it is about time! Through our Budget, every small and medium sized businessman in Canada is being invited and encouraged to invest with confidence in the economic future of Canada. This is what will provide jobs for Canadians. We have provided a way for the Canadian people to help themselves.
[ Translation]
The budgetary proposals manage to reduce the deficit while introducing measures to help create durable jobs. To create those jobs, Canada needs a private sector that is dynamic and vigorous, flexible and innovative. Small- and medium-sized
May 29, 1985

businesses in particular are the engine of our economy. By encouraging the private initiative of Canadians with measures such as the lifetime capital gains exemption of half a million dollars and allowing pension funds and registered retirement savings plans to invest in small businesses, we will create employment and provide for sustained economic growth.
Many jobs will also be created as a result of measures to promote investment in research and development.

Before our sweep of September 4, media commentators and other political observers were deploring the fact that there was little difference between the Liberal and Conservative platforms. The Hon. Member for Oshawa (Mr. Broadbent) compared the Prime Minister (Mr. Mulroney) and the Leader of the Opposition to Visa and Mastercard respectively. He implied the voters had no choice. However, the massive shift of allegiance has shown that the voters themselves saw the significant differences between our two Parties.
Our gains were most spectacular in Quebec. However, right across the country, French-speaking people and members of many ethnic communities joined their English-speaking brethren in deserting the Liberal Party. They rejected bureaucracy. They rejected federal paternalism and the period of confrontation. We must eliminate waste and inefficiency in Government. We want a Government which is efficient, effective and economical. Stop betting on the Government, and bet on the little guy.
Where was the Government in February of 1984 when the petrochemical industry of Montreal called? At that time, there was no response. What did the Government do with respect to the losses in Montreal's pharmaceutical industry? We waited some 15 years for a review of a patent law which was totally unfair. It was a law which cost us jobs and proved disastrous to the development of products.
This Budget is a call to arms to our constituency-the small businessman, the professionals and the farmers-all 700,000 of us. We form a veritable army in the war on unemployment. It is this army which will create jobs. This Budget is a break from the past. We want to use the creative energy of Canadians to build a better future for themselves.
What did September 4 signify? It signified a change of Government, yes. However, it also signified the beginning of a new political area. In November, we promised to put our House in order. This means a leaner Government, one which is more efficient-one which will create a healthier investment climate. We have said that Canada is open for business.
The Budget embodies three main principles of the P.C. Government: the encouragement of private initiative and job creation; the improvement of the management and effectiveness of government; and concrete action to control the debts.
Measures to encourage private initiative represent a break with the past. Personal capital gains exemptions are designed
The Budget-Mr. Weiner
to let the people of Canada-not politicians and bureaucrats- choose where to invest and how to create jobs. What the Budget says to individuals and communities is, "For too long Government has made your decisions for you." Now is the time to translate ideas and energies into the type of Canada we want for ourselves and our children.
Canadians are not quitters, Mr. Speaker. We are tough and resilient. Together, we can work toward a greater future-a future with a job, success and where the security of one's family is guaranteed.
Some Hon. Members; Hear, hear!


The Acting Speaker (Mr. Paproski):: Questions or comments?


Bill Rompkey: Mr. Speaker, I would like to take part in the debate. I would also like to call it six o'clock at this point.


The Acting Speaker (Mr. Paproski):: There are still a few minutes left which could be used for questions and comments.


Bill Rompkey: I would very much like to take part in the debate, Mr. Speaker, if that is possible.


The Acting Speaker (Mr. Paproski):: In light of there being a minute or so for questions and comments, perhaps we could have one question from the Hon. Member for Comox-Powell River (Mr. Skelly).


Raymond John Skelly: Mr. Speaker, 1 have a comment to make.
This Budget is not a beacon of light, as outlined by the previous speaker. It is a revisiting of the Dark Ages. The Conservative philosophy is nothing more than economic Nean-derthalism, which is no more apparent than in this Budget.
For one group in the economy, that is, people in communities dependent upon the fishing industry, the Budget is a complete disaster. For this group, the Conservative Party has broken all its promises. Instead of assisting these people with measures such as salmon enhancement programs, fishing vessel buy-back programs, more work on habitat protection, and the development of an effective fishing industry plan, the Conservative Government has cut the Department of Fisheries and Oceans' Budget by $65 million. It has increased user fees. It has increased mortgage rates and cut services to the industry. This Budget is not fair. It is not effective for the fishing industry and in fact it is irrational.


The Acting Speaker (Mr. Paproski):: A short answer from the Hon. Member for Dollar (Mr. Weiner).


Gérard (Gerry) Weiner: Mr. Speaker, 1 thank the Hon. Member for his comment. Of course he comes to it with a totally different perspective, and one that 1 cannot understand. We have apparently read two different documents. From my study of it, my impression is that what our Party is attempting to do is fair

May 29, 1985
The Budget-Mr. Weiner
and honourable. I have been consulting in my community constantly and 1 have had overwhelmingly good-


The Acting Speaker (Mr. Paproski):: On that basis, I must interrupt. 1 am afraid that I cannot recognize the Hon. Member.
[Translation
It being six o'clock, this House stands adjourned until tomorrow at eleven o'clock a.m., pursuant to Standing Order 2(1).


[Stage Direction]
The House adjourned at 6 p.m.
[Stage Direction]
Thursday, May 30, 1985