1985-05-31

Hon. Donald J. Johnston (Saint-Henri-Westmount):: Mr. Speaker, yesterday the Minister of Finance (Mr. Wilson) told us that "Canada has an acute shortage of rich people". [Translation]
Now that is a very shrewd observation on the part of our Minister and you know, Mr. Speaker, my constituents in Saint-Henri have been fully aware of that problem for many years. There is a lack of wealth and they would like to lend a hand to the Minister in his quest for rich people.

I have had calls from numerous Canadians this morning anxious to respond to this crisis and fill this shortage. The first one asked: Where do we line up? Another asked me whether rich people could not be imported. A third said perhaps they can be cloned from Bay Street. Another inquired whether they are really an endangered species which needs protection. Another caller suggested the creation of SPERP, a Society for the Protection of Endangered Rich People. Another one asked, and it is a legitimate question, whether the Prime Minister's patronage appointments would not go some way to offsetting this problem. Still another said-


Mr. Deputy Speaker:: I regret to interrupt the Hon. Member, but his allotted time has expired.


FINANCE
Mr. Ian Deans (Hamilton Mountain):: Mr. Speaker, as the Hon. Member for Saint-Henri-Westmount (Mr. Johnston) said, we now know that we do not have enough rich people. Because of this we certainly would not want to tax the few we have. We want to make sure, through the budgetary process,
that those among that elite few will be given the opportunity to enrich their position further. Heaven forbid that we should ask them to contribute their share. Heaven forbid that we should even ask them to pay tax at all in some cases. After all, a country without a large number of rich people is hardly worth living in, is it?
I have to say to you, Mr. Speaker, that we seem able to tax the poor. We can tax the elderly, as you may have noticed. We can tax consumers until it hurts. We can tax families who work every day for a living, struggling to make ends meet. We can tax the middle income and low income earners, but we cannot tax the rich because we do not have enough of them. Therefore it is a good idea just to leave them alone and let them accumulate their wealth. In fact, encourage them by a series of tax measures not only to accumulate wealth but to accumulate upon the accumulation. If we do not have enough rich people, that surely must be a terrible thing.


Mr. Deputy Speaker:: I regret to interrupt the Hon. Member.

[ Translation]


THE ECONOMY
Mrs. Suzanne Duplessis (Louis-Hebert):: In my riding yesterday, Mr. Speaker, I attended a press conference given by the Chamber of Commerce of Sainte-Foy. Management personnel made public the Delta project concerning the development of local high technology industries, and I saw further evidence of the fact that the private sector wants to get in on the economic recovery. From now on, the private sector will be the driving force to stimulate the economy and create jobs.
The project unveiled yesterday has to do with the establishment of an industrial incubator. As we know, the incubator takes an entrepreneurship approach to economic development, and its main objective is to promote the creation of new and sound businesses and the creation of permanent employment. It also makes it easier for researchers and entrepreneurs to operate in surroundings conducive to good business and co-operation.
By putting emphasis on the development of local high technology companies, a centre of incubation for new businesses will also confirm and stress the vocation of the recently established Sainte-Foy-Quebec City technological park. Its role is to support the tremendous efforts made by the cities of

May 31, 1985
Sainte-Foy and Quebec, the private sector, both levels of Government and various organizations.
By advocating such a wide-scale project in our region, the Chamber of Commerce of Sainte-Foy shows that it is anxious to contribute to the development of a challenging community project.


INTERNATIONAL CHILDREN'S YEAR
Mrs. Therese Killens (Saint-Michel-Ahuntsic):: Mr. Speaker, this year we are celebrating the fifth anniversary of the International Year of the Child.
On February 11 of this year, the Minister of National Health and Welfare (Mr. Epp) answered a question on the Order Paper about the status of the work of the Secretariat responsible for examining the progress made following the recommendations resulting from the International Year of the Child.
We were informed that the Secretariat had received responses from the 47 federal departments and agencies affected by the recommendations of the Canadian Commission for the International Year of the Child.
We are still waiting for a report on these activities. Incidentally, our Ambassador to the United Nations, the Hon. Stephen Lewis, will be the guest speaker this afternoon at the Canadian Council for Children and Youth.
The House will recall, Mr. Speaker, that there is still much to be done in the way of protecting our children's rights. According to one report published in this country, one child out of five in Canada is now living in poverty. The Government must take a position on this very serious problem and it has a duty to take any steps that are necessary to assist and protect our children.

MO)


THE ECONOMY
Mr. Steven W. Langdon (Essex-Windsor):: Mr. Speaker, yesterday I released a balance sheet on the Canadianization record of the Government. Decima Research showed in September that 85 per cent of Canadians want more Canadianization of our economy. However, this balance sheet shows an abysmal record since September. It includes a warm welcome of the foreign takeover of Mitel, plans to change the CDC that will end its Canadianization function, lack of action on Canadian content laws in the auto industry, and a series of
decisions in which FIRA failed to act to protect Canadian workers.
There are now five cases on which the Government can improve its record, and I challenge it to do so. It can help White Farm Equipment in Brantford, block two foreign publishing takeovers to allow Canadians to buy them, let workers buy out Canadian Porcelain in Hamilton, and block the rumoured sale of de Havilland to Boeing.
The Government says Canada is open for business, but its actions make Canada open for surrender. I call on the Government to reverse its sorry record.


INDUSTRY
Mr. Bill Tupper (Nepean-Carleton):: Mr. Speaker, Northern Telecom Limited, located in Nepean-Carleton, is the second largest designer and manufacturer of telecommunications equipment in North America and is a significant supplier of integrated office systems. The Canadian-based corporation sells and services equipment in more than 90 countries, through an organization of 47,000 employees. Bell Northern Research, also in Nepean-Carleton, is 70 per cent owned by Northern Telecom and 30 per cent owned by Bell Canada. It is Canada's largest private industrial research and development company.
Northern Telecom was the first company to offer a complete line of fully digital telecommunication products with the DMS-100 family. It was the first to produce a fully digital private branch exchange and the largest selling PBX in the world. More recently, it was the first to produce the Meridian line of fully integrated voice and data office systems.
Yesterday in Nepean-Carleton the Minister of State for Science and Technology (Mr. Siddon) officially opened Bell Northern's $37 million Lab 3, designed to house more than 1,900 engineers, technologists, managers, and support staff. At the official opening the Chairman of the Board of Northern Telecom indicated that the company spent $1.3 billion on research and development in the past five years. More important, he announced that Northern Telecom would be spending $4 billion on research and development over the next five years. Mr. Speaker, think of what that will mean for innovation, for jobs, for exports, and for new wealth.
Northern Telecom is confidence-
[ Translation]


Mr. Deputy Speaker:: I am sorry to interrupt the Hon. Member. The Hon. Member for Montreal-Sainte-Marie (Mr. Malepart).
May 31, 1985


SOCIAL SECURITY
Mr. Jean-Claude Malepart (Montreal-Sainte-Marie):: Mr. Speaker, the elderly in my riding and across Canada have asked me to ask the Prime Minister (Mr. Mulroney) why he decided to cut $50 a month from their incomes in 1990 and waste $56 million on changing the colour of our soldiers' uniforms. They also wanted me to ask the Prime Minister why he is making those cuts and sending 1,000 soldiers more to spend $ 100 million per year in Lahr, Germany. They asked me why the elderly have to put up with cuts in their Old Age Security pension while the Prime Minister spends half a million on parties like the one held in Quebec City.
The elderly have asked me why the Prime Minister did not worry about the deficit when he gave away $95 million to a bank in Western Canada. The elderly asked me why the Prime Minister did not worry about the deficit when he signed an agreement that will give the oil multinationals a present of $2.5 billion. They want to know why the Prime Minister is asking the elderly to make sacrifices so the rich can get richer.
Finally, Mr. Speaker, the elderly have asked me why the Prime Minister and the Minister of Finance (Mr. Wilson) are asking senior citizens to give up $50 a month to send a present of $ 125,000 to well-off Canadians.



ORAL QUESTION PERIOD


Donald James Johnston: Mr. Speaker, there seems to be an acute shortage of Tories in the House today, certainly of Ministers. The Budget is a travesty. It is worse than a crime; everyone now knows it is a blunder. Certainly all Members of the House know it. Yet the Ministers and backbenchers are out trying to sell this can of worms to the Canadian public, and they will not buy it.
I appeal to the good sense of the Deputy Prime Minister when I suggest to him that we get Members back in the House and back to the drawing board to correct the obvious injustices in the Budget before we rise at the end of June.


Hon. Erik Nielsen (Deputy Prime Minister and Minister of National Defence):: Mr. Speaker, I did not hear a question in that statement but, if you will permit me, 1 will reply with a statement.
The Hon. Member knows from sitting on this side, and now sitting on that side, that Members of Parliament have many other responsibilities that they must fulfil, both throughout the
Oral Questions
country and in committees. I simply ask you, Mr. Speaker, to compare the ranks over there which are quite thin. I do not see his Leader, his House leader, or a few others.


Donald James Johnston: He knows that his Members are out on the road trying to sell this can of worms.


APPEAL FOR ATTENDANCE OF MEMBERS IN CHAMBER
Donald James Johnston: Mr. Speaker, the Minister of State for Finance has been spouting the Party line. We want Members of the Conservative Party to think about the Budget and the fact that a senior citizen living in Montreal will be more than $4,000 below the poverty line by the year 1990 under the Budget. 1 appeal to the good judgment and sense of the Deputy Prime Minister to bring Members back to the House and to the drawing board, at least to correct that injustice before Parliament rises at the end of June.


Erik Nielsen: Mr. Speaker, Members on the government side are doing precisely the same thing as Members on the Liberal side.
However, let us look at it in a positive light for a moment. Real output in the Canadian economy, as measured by constant dollar gross national expenditure, grew by 0.9 per cent during the first quarter of 1985. Members opposite have been told, and know, that interest rates have dropped by three percentage points since we took office. They know that 150,000 jobs were created immediately following the November 8 statement, and that the number of jobs since the time that the Government has changed has increased some 350,000. That would not have happened if he were still sitting on this side and that honourable bunch over there were still in office.


SOCIAL SECURITY
Donald James Johnston: Mr. Speaker, we seem to have trouble having a meeting of minds during the Question Period. I will direct my supplementary question to the Minister of State for Finance. The Gazette referred to the Budget's provisions on deindexation as an inhuman course. Will she at least recommend to the Minister that the guaranteed income supplement be double indexed as it was when our Government introduced the six and five restraint program, in order to protect those people living at and below the poverty line who will lose up to $4,000 of purchasing power by the year 1990 as a result of the Budget?


Hon. Barbara McDougall (Minister of State (Finance)):: Mr. Speaker, I would remind the Hon. Member that it was our Party that increased the GIS in 1979. The reason for all the smoke and mirrors and talk about deindexing while the opposi-

May 31, 1985
Oral Questions
tion Party was in Government was that it allowed inflation to get so far out of control that senior citizens could not live with it.


THE BUDGET
Mr. Raymond Garneau (Laval-des-Rapides):: Mr. Speaker, after the Budget was brought down, that same evening the Leader of the Official Opposition expressed his doubts about the impact the capital gains tax exemption would have on investment in small- and medium-sized businesses and job creation. Yesterday, three different groups of experts confirmed his apprehensions and maintained that this bonanza for the wealthy would encourage speculation in real estate, discourage small investors who create jobs and reduce the Government's revenue.
I shall, if I may, direct my question to the President of the Treasury Board, in the absence of the Minister of Finance and the Prime Minister. Considering this unanimity among experts from the private sector and the academic world, does the Government intend to reverse its decision and immediately close the door on this tax break for the wealthy and restrict it to capital gains as a result of investing in small- and mediumsized businesses that would create new jobs, but only in Canada?


Hon. Robert de Cotret (President of the Treasury Board):: Mr. Speaker, I think the Hon. Member for Laval-des-Rapides is well acquainted with the Government's position. In fact, it is a position that he himself has held for quite a long time. De-indexing-


Some Hon. Members:: Oh, oh!


Robert René de Cotret: Mr. Speaker, I am not getting a chance to reply. Give me a break for two minutes. You might learn something. You have not even read the Budget.
Mr. Speaker, the measures in this Budget... this is a job-creation Budget, a Budget that has confidence in Canadians. It is a Budget that restores confidence, that is finally telling Canadians: Listen, our Government does not intend to intervene in the daily decision-making of every Canadian. We will give you the room to manoeuver, which is only fair, since according to the statistics it is clear that the vast majority of jobs have been created by small- and medium-sized businesses. And the measures in the Budget are going to encourage small-and medium-sized businesses to create more jobs.


TAX INCREASES-IMPACT ON SMALL AND MEDIUM SIZED BUSINESSES
Raymond Garneau: Mr. Speaker, the attitude of the President of the Treasury Board is very disappointing. I am not referring only to the concern expressed by the Official Opposition, but also to the advice made public by academic and private sector experts.
Still concerning small- and medium-sized companies-and again, Mr. Speaker, I am not referring to my own observations-the President of the Treasury Board must have read newspaper reports about a panel of tax experts, lawyers and accountants who stated that the capital gains tax exemption was not going to do anything at all for small businesses.
Here is my question. Does the Government not agree that such a huge tax increase will deprive Canadians of the purchasing power they need to buy goods and services offered by small companies, and that by reducing the purchasing power of Canadians, small- and medium-sized businesses in turn find themselves short of investment funds because they no longer have a market for their products?


Robert René de Cotret: That, Mr. Speaker, is the same argument we heard throughout the debate after my colleague made his economic statement last November 8. They kept saying: It is terrible! We cannot believe what is happening! It will throw hundreds of thousands of people out of work! But let us have a look at the figures: since this Government came into office, more than 200,000 new jobs were created. This Government has done more for economic recovery since it assured power than the previous administration did in a number of years.
That is just an argument. I know all about economic models!


Some Hon. Members:: Order!


Robert René de Cotret: Listen, I know all about economic models. The facts are there. If you want to question the figures released by Statistics Canada, go ahead. In my opinion, it does an outstanding job. We have created more than 200,000 jobs, and there will be more new jobs as a result of the measures we have just announced.


PENSIONS
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, the Government has been conveying to the House the reaction on the pension proposals that it has obtained, either when the Minister of Finance goes to the Albany Club in Toronto or the Prime Minister attends a black tie dinner at the Toronto Club.
I have a copy of a telegram that was sent to the Minister of Finance yesterday about which I would like to question the
May 31, 1985

Deputy Prime Minister. The telegram comes from the President of the National Pensioners and Senior Citizens Association of Canada. It reads as follows:
The National Pensioners and Senior Citizens Federation representing more than 400,000 Canadians strongly protest recent budget proposals to reduce the income of our elderly by restricting indexing protection of federal pensions and income tax exemptions. This violates the often repeated promises of Prime Minister Mulroney and constitutes a transfer of funds from the elderly to fulfil budget promises to the business community.
My question to the Minister arising from this concerns a particular pensioner. Does the Government realize that the pensioner particularly hurt is the man or woman who grew up during the Depression, lived through, or fought in, the Second World War, was expecting to obtain a full and adequate pension in five years, and instead will have his or her pension reduced by $600? Is that the Government's concept of justice?


Barbara Jean McDougall: Mr. Speaker, I always like the assumption of the Leader of the NDP that he has some kind of monopoly on morality.


John Edward Broadbent: No monopoly.


Barbara Jean McDougall: It was this Government which increased the GIS in 1979. It was this Government which extended the spouse's allowance last fall. It is this Government that is attempting to keep inflation under control, which is the best thing we can do for senior citizens. By keeping inflation under control, the costs of everything they buy will be lower than they would be otherwise.


Mr. Axworthy:: Then why did you raise the sales tax?


Barbara Jean McDougall: We have kept senior citizens at the forefront of our minds in planning this. We have looked after the ones at the lowest income level. We will continue to do that. We have made that commitment and we have done it, and we will carry on doing it.


CAPITAL GAINS TAX EXEMPTION
John Edward Broadbent: Mr. Speaker, all Canadians know that the Government is hacking away at pensions like no other Government in the past history of the country; that is what Canadians know.
My supplementary question concerns the extraordinarily insensitive statement of the Minister of Finance yesterday when he said: "There aren't enough rich in Canada". Is this why the Government, in its own budget forecasting document which it tried to keep secret, revealed that within five years Canadian pensioners would be losing $1.6 billion, and at the same time the rich in Canada would be gaining because of the scandalous introduction of the new capital gains tax provision, $1.3 billion? We do not have enough rich, according to the Minister of Finance. Is this why the Government plans to take money from the pensioners to give to the rich?
Oral Questions


Barbara Jean McDougall: Mr. Speaker, Hon. Members of the NDP have been calling, for a long time, for a minimum tax. We have committed ourselves to doing that in the Budget. They may have missed that.


Some Hon. Members:: Oh, oh!


Barbara Jean McDougall: 1 know that boys will be boys, but they might actually want to hear the answer.
NDP Members, in their rather bemuddled economics, think that a minimum tax will solve the deficit problem. A minimum tax will not solve the deficit problem because of the debt which had been built up over the last 10 years by the Official Opposition Party. We could go into that further, if they would like to, but senior citizens know about debt. They know that it is a bad thing. They know that young people need jobs, and that the measures which we have brought in will produce those jobs. They also know that we cannot go on building up debt forever. Even the economics professor who sits on the other side of the House has said that we cannot go on with deficit financing forever.


REQUEST FOR CHANGES TO BUDGET
John Edward Broadbent: Mr. Speaker, I will tell the Minister and the Government, which make much about consultation, that 400,000 Canadian pensioners think the Government is wrong. Do you get that clearly? They are saying that you are wrong. I say to the Minister that if they had brought in a minimum tax this year, the way they are imposing a burden on pensioners and a tax increase on ordinary Canadians this year, they would have received an additional $400 million which they could be using to help pensioners, instead of taking away more money from them.
Since the Conservatives are going out all across the country this weekend, they will hear some interesting things if they talk to ordinary Canadians, not those in the Albany Club, but those in senior citizens' homes and in little communities. Will they be prepared to change their Budget and restore indexation to Canadian pensioners?


Barbara Jean McDougall: Mr. Speaker, we made our stand very clear in the Budget on modifying indexation. It is in the Budget. It is a policy to which we are committed. Our conversations with Canadians have included discussions with respect to fairness, equity, balance, and the need for the Government to reduce its debt. We have conversations with people; we do not shout at them.


John Edward Broadbent: Girls will be girls.


REQUEST FOR COMMITTEE REFERRAL
Hon. Douglas C. Frith (Sudbury):: Mr. Speaker, my question is for the Deputy Prime Minister. If the Minister really

May 31, 1985
Oral Questions
believes that Canada's senior citizens who live below the poverty line should share in the burden of deficit reduction, will he not test his Government's convictions by referring the deindexation proposal to the Standing Committee on Health, Welfare and Social Affairs in order that Canadians 65 years of age and over can tell the Government firsthand that they want the decision to deindex reversed?


Robert René de Cotret: Mr. Speaker, if you read carefully the Budget papers tabled by my colleague the Minister of Finance last week, it is quite clear that no senior citizens in Canada and no beneficiary of any social program in this country will receive less than formerly. On the contrary, some increases are still provided for in the budget. Any attempt to interpret our Budget as an attack against older and poorer citizens is an absolute misrepresentation of papers introduced-


An Hon. Member:: Oh, oh!


Robert René de Cotret: Wait a minute! It is a misrepresentation of papers tabled by my colleague.


REQUEST THAT STUDY BE COMMISSIONED
Douglas Cockburn Frith: Mr. Speaker, the definition of the poverty line supplied by Statistics Canada is fully tied to the CPI. As a result of deindexation, thousands of Canadian seniors who find themselves above the poverty line today will find themselves below the poverty line by the year 1990-91. Will the Government do the honourable thing, and commission and table in the House a study to show how many thousands of Canadians will be affected and pushed below the poverty line as a result of the Government's decision to deindex?


Robert René de Cotret: Mr. Speaker, first, the G1S remains fully indexed. Second, there were no measures with respect to deindexation introduced in the Budget. We placed a cap on the level of indexation in a way which would-


Mr. Guilbault (Saint-Jacques):: Is this a new Budget?


Robert René de Cotret: No. You have not read the actual Budget; that is your problem.
Through the Budget presented last week we have said we will protect Canadians at any rate of inflation above 3 per cent-and we will protect them fully. The GIS is totally protected.
There is no question of trying to solve the fiscal mess which we inherited from the Hon. Member's Government, on the backs of poor Canadians.


POSITION OF PENSIONERS
Mr. Neil Young (Beaches):: Mr. Speaker, my question is for the Deputy Prime Minister. The Prime Minister was reported to have said yesterday in Toronto that he wanted to reward those Canadians who get up half an hour earlier. Is the Government saying to retired Canadians, who worked hard all their lives to provide the benefits we now enjoy, that they did not work hard enough while they were working, and if they got up half an hour earlier today then the Government would restore the financial security it is proposing to take away from them?


Erik Nielsen: Mr. Speaker, it is not usual for the Hon. Member opposite to distort either numbers or facts, from my observation of him in the House of Commons over the years.


Ian Deans: That is unfair.


Erik Nielsen: I do not see how such a compliment can be unfair, Mr. Speaker. What is unfair is that the Hon. Member's colleagues do not follow his shining example in getting their facts straight.
What the Budget is all about is putting people back to work. Since when has the NDP been against the creation of jobs?


EXISTENCE OF POLL QUERIED
Neil Young: Mr. Speaker, if the statement is inaccurate, then the Minister can blame The Toronto Star, since that is where it was printed.


Some Hon. Members:: Oh, oh!


Neil Young: Will the Deputy Prime Minister confirm to the Members of the House that the Government has in its possession the results of a poll which clearly indicate that the overwhelming majority of Canadians do not support the Government's move to deindex old age pensions?


Erik Nielsen: Mr. Speaker, I can assure the Hon. Member that, to my knowledge, no such poll exists.


THE BUDGET
Jean-Claude Malépart: Mr. Speaker, my question is directed to the President of the Treasury Board. Yesterday, I had a chance to talk to the President of the Association quebecoise des retraites et des preretraites au Quebec, and I can assure the Members of this House that they are not very happy, and that at the first senior
May 31, 1985

citizens' "Salon" to be held in Montreal, a petition will be circulated, condemning the Government for having failed to meet its commitments.
Mr. Speaker, could the President of the Treasury Board explain to the House why the Prime Minister admitted that he failed to meet the commitments made to senior citizens during the election campaign? In its January consultation paper, the Government made a formal and solemn commitment, through the Minister of National Health and Welfare, who is the official spokesman, according to the Prime Minister, not to apply any savings to a reduction of the deficit, and the purpose of the consultation exercise was to improve the situation of those most in need.
I have here the paper released by the Standing Committee on Health, Welfare and Social Affairs, on which Conservative Members... 92 groups appeared before the Committee. Could the Minister identify those groups which recommended that the Government cut indexing by 3 per cent for the elderly who are most in need in Canada?


Robert René de Cotret: Mr. Speaker, first of all I want to thank the Hon. Member for Montreal-Sainte-Marie. He has been promising me a question and 1 want to thank him for his good intentions. I simply want to repeat that if the Hon. Member had taken the trouble to read the Budget in detail, he would have realized that one of our major considerations throughout has been to avoid making the neediest in our society bear the brunt of the enormous deficit we inherited from the previous Government. And that is why we have exempted certain groups, especially among the elderly, from any measures that might reduce their purchasing power. I also would like to point out, once again, that no one in Canada, either among our elderly or among those Canadians receiving family allowance benefits, will receive a monthly cheque that is lower than the one he or she is receiving at the present time.


REQUEST FOR DETAILS CONCERNING PENALIZED ELDERLY
Jean-Claude Malépart: Mr. Speaker, I would like to tell the President of the Treasury Board that I did read the Budget. Unlike him, however, I went to see elderly people who feel the impact of the Budget every day. Perhaps I ought to warn him that next time he goes back to his riding people will remind him about the $50 monthly income increase they will not get and point out to him that the child tax credit is no longer fully indexed as it was when the Liberals were in office.
I would like to ask the President of the Treasury Board if he can explain to elderly Canadians and families that will be penalized by the Budget why he chose to deprive them when he wasted $56 million only to change the colour of military uniforms? Why do you ask the elderly to pay for that?
Oral Questions


Robert René de Cotret: Obviously, Mr. Speaker, my colleague is confused and has got his files mixed up.
But still there is a question to which I would like to give a direct answer. Nobody is going to be penalized to the tune of $50. After reading the Budget, it is absolutely misleading to claim that somebody is going to be penalized. On the contrary,
I repeat that the Budget makes it clear that not a single elderly Canadian will suffer from loss of income. Making such a statement in public is an attempt to mislead Canadians and elderly people in this country. 1 can say that my constituents are fully aware of the Budget provisions and they know their monthly cheques will not be reduced.


SASKATCHEWAN SENIOR CITIZENS' ORGANIZATION
Mr. Lorne Nystrom (Yorkton-Melville):: Mr. Speaker, my question is for the Minister of State (Finance). It is a question with respect to consultation prior to the Budget. In the week of May 13-17, six representatives from the official Saskatchewan seniors organization called "Action Now" spent a week lobbying in Ottawa. They tried to see the Minister of Finance, but his door was closed. They tried to see Saskatchewan Cabinet Ministers, but they could not get by their doors. They even tried to see Saskatchewan P.C. MPs, but they could not get by their doors.
Why were Conservative Members of Parliament scared to meet with the Saskatchewan senior citizens' organization? Why would the Minister of Finance, the Minister of State for Finance, or anyone, including the Minister of Transport, not meet with that group which represents the official organization of Saskatchewan senior citizens? What does consultation mean, if they would not meet with that group?


Barbara Jean McDougall: Mr. Speaker, I have been involved in a volunteer capacity with senior citizens all my life and I have never once refused to meet with a senior citizens' group from anywhere. Perhaps that was the week I was in Saskatchewan.
I would like to tell the Hon. Member that in the consultations which I undertook throughout the winter months with many groups, including senior citizens, people who were interested in children and youth, and cultural groups, I always closed with one question: If there was one thing which we could do for the people of Canada what would it be? Every one of those people said the same thing. They told us to look after those who need it most. That is what we have done with the G1S. We have looked after the people who need help the most.


ORGANIZATION'S ANNUAL CONVENTION
Lorne Edmund Nystrom: Mr. Speaker, as
the Minister of Finance is not here this morning I want an
answer from the Minister who is responsible saying why the

May 31, 1985
Oral Questions
official organization of Saskatchewan senior citizens was not able to meet with a Saskatchewan Minister, Saskatchewan MPs, or the Minister herself. Why did that happen?
Because they wandered the hallways for five days to no avail, will the Minister now make a commitment with respect to the annual convention of the organization, which takes place next Monday and Tuesday in Moose Jaw, to send a member of the Cabinet to Moose Jaw to consult with the senior citizens of Saskatchewan? Will she make that commitment here and now? I want to know this morning.


Barbara Jean McDougall: Mr. Speaker, I am sure I know who will be at the convention. I am sure it will be the Hon. Member, who will spread fear and scare tactics, as his Party has been shouting and doing since this discussion began.
When he is talking to them, will he talk to them about the other things which are important in the Budget, such as the need to keep inflation down and the jobs which will be created? We do not want another Depression such as that through which many of those people lived. The seniors will understand that. He should go and talk to them and explain what the whole Budget is about, not just one part of it. He should not use any more scare tactics.


EXTERNAL AID
[Stage Direction]
FAMINE RELIEF-EXTENSION OF MANDATE OF HON. DAVID Macdonald
Mr. William C. Winegard (Guelph):: Mr. Speaker, during the last several months Canadians have responded with great generosity to the famine in Ethiopia and in other parts of Africa. The response has come from Canadians, young and old.
In its response to the MacDonald Report, the Standing Committee on External Affairs and National Defence recommended that the mandate of Mr. MacDonald be renewed so that the aid program could continue at maximum efficiency. I would like to ask the Minister for External Relations whether anything has happened with respect to that particular recommendation?


Hon. Monique Vezina (Minister for External Relations):: Mr. Speaker, the question put by the chairman of the Standing Committee gives me the opportunity to thank him and the members of his committee for their excellent work and his quick reply to the report of our co-ordinator, Mr. MacDonald.
1 am pleased to advise the House this morning that I have decided to extend the terms of reference of the co-ordinator, David MacDonald, until the end of December 1985 with three additional months to submit his recommendations and reports.
I have also made available to him a $18 million fund for rehabilitation projects developed by non-governmental organizations.
If I may, Mr. Speaker, I would also like to thank Canadians for their generosity and invite them to continue to support us.


THE BUDGET
Hon. William Rompkey (Grand Falls-White Bay-Labrador):: Mr. Speaker, my question is directed to the Minister of Regional Industrial Expansion. In reply to a question yesterday the Minister spoke of the Chairman of the Atlantic Provinces Economic Council. The Minister said:
He is most supportive of the budgetary measures-
That is absolutely and completely untrue. We met with the Atlantic Provinces Economic Council, and its representatives agreed, as they stated publicly in their press releases, that because of the economy of the Atlantic provinces-the Gross Provincial Product is only 20 per cent in the private sector- the Budget will have an absolutely disastrous effect on the Atlantic area.
As our champion in Cabinet-there is no one on that side who will speak for the Atlantic; he is all that we have-will he now withdraw what he said? Will he come clean with the House and with the people in Atlantic Canada and admit that the Budget will have disastrous consequences for Atlantic Canada? Will he propose special measures to promote growth in that area?


Hon. Sinclair Stevens (Minister of Regional Industrial Expansion):: Mr. Speaker, I certainly would not want to withdraw something which is true. I would go further to say that, if the Hon. Member would present the Budget fairly to his area, he would be able to translate to his constituents and others the fact that it is an approach which, hopefully, will reduce the unemployment level which has plagued that area so unfortunately. It is an unemployment level which, under the previous Government, in the 15 years it was in power, jumped from slightly below 5 per cent to, in some cases, over 20 per cent. What an indictment of the Party which he now represents!


ATLANTIC PROVINCES ECONOMIC COUNCIL-MINISTER'S STATEMENT
Bill Rompkey: Mr. Speaker, we have heard that Tory times are hard times, but I never believed it until now. Not only are they hard times, but we are seeing a callous and uncaring attitude, and insensitivity, and dishonesty is patent. I will give the Minister one more chance to withdraw what he said yesterday and to admit that the Atlantic Provinces Economic Council, and every major spokesman-the Premier of Newfoundland on
May 31, 1985

through-have said that the Budget will have disastrous consequences for that economy because the private sector is weaker than in other parts of the country. Will the Minister withdraw what he said yesterday? Will he say that he was wrong? Will he bring in special budgetary measures to improve the economy in Atlantic Canada?


Sinclair McKnight Stevens: Mr. Speaker, unfortunately the Hon. Member was not at the meeting of the Standing Committee on Regional Development last night. If he had been, many of the doubts which he seems to have, would undoubtedly have been settled.


INDIAN AFFAIRS
Mr. Jim Manly (Cowichan-Malahat-The Islands):: Mr. Speaker, my question is directed to the Minister of State for Finance. On May 10 the Prime Minister said that his Government would never do anything which would be a hindrance to native and aboriginal peoples. But the Minister should know that Indian people already suffer from the highest poverty rates in Canada. They depend twice as much on government programs, such as Old Age Security. Why has the Government gone back on the word of the Prime Minister and reduced the purchasing power of senior Indian people by $100 next year, $200 the following year, and so on in a cumulative manner, so that Indian people will be trapped in a cycle of poverty forever?


Barbara Jean McDougall: Mr. Speaker, native people will benefit from the positive measures in the Budget, the same as will other people. They will benefit from the job-training programs.


John Edward Broadbent: Capital gains is great! Boys will be boys!


Mr. Deputy Speaker:: Order, please.


Barbara Jean McDougall: There are positive measures in the Budget for native people, as there are for others. One of the problems in the native population, as the Hon. Member knows- and I appreciate his question-is lack of jobs. The types of job-training programs which the Government has come up with, and the kind of job creation which will come out of the Budget, as it did from the economic statement, will benefit native people as well as other Canadians. We are very sensitive to those issues, as the Hon. Member well knows.


REQUEST THAT PENSIONS BE FULLY INDEXED
James Douglas Manly: Mr. Speaker, I would like to direct my supplementary question to the same Minister. The jobs have not yet materialized. We will wait a long time before we see jobs materialize in Indian communities. In the meantime, the seniors are suffering.
Oral Questions
Considering the poverty of Indian people, will the Government reverse its policy of deindexing and cutting the purchasing power of Indian seniors, and commit itself to full indexation so that in 1990 an Indian senior on Old Age Security will be able to buy the same basket of groceries that he can buy in 1985?


Barbara Jean McDougall: Mr. Speaker, with the long-term programs we have started to put in place, and the improvement already-already, Mr. Speaker-in the number of jobs which have been created, and the amount of investment which is going on in western Canada, which does have something to do with job opportunities for natives, we will see Indian people and native people much better off by the year 1990, as we will see all Canadians better off by then.


VIA RAIL
Hon. Andre Ouellet (Papineau):: Mr. Speaker, I have a question for the Minister of State (Transport).
Yesterday, in committee, VIA Rail officials confirmed that a fare increase would be needed to make up for the cuts in the Wilson Budget. They referred to increases ranging from 30 to 65 per cent. Will the Minister of State now assure this House that the elderly at least, who travel by train to a very large extent, will not be imposed a fare increase on top of what has already been inflicted on them by the Wilson Budget?


Hon. Benoit Bouchard (Minister of State (Transport)):: Mr. Speaker, I would like to reply to the Hon. Member for Papineau. Concerning the assessment of cost increases, allow me to be somewhat skeptical. It is not possible in my view at such short notice and in such a fuzzy way to claim there will be a 30, 40 or 50 per cent increase. Although it is quite possible that fares may be increased, this could also have occurred independently of the Budget as tabled, in the sense that we are subsidizing that corporation to the tune of $400 million, and I am referring to former statements made by the Hon. Minister of Transport or myself in which we indicated that VIA Rail should strive for a better performance, if not for operating self-sufficiency.
As to the suggestion made by the Hon. Member concerning senior citizens, I am taking note of it. We cannot tell VIA Rail how to go about increasing its fares. But it would be relevant, wise and logical in my view to have some consideration for our senior citizens, the handicapped and other groups of people.

May 31, 1985
Oral Questions TRANSPORT


HORNER REPORT-GOVERNMENT POSITION
André Ouellet: Mr. Speaker, I have a supplementary.
The Minister of Transport has received the report from the task force headed by Mr. Horner. Will the Minister of State assure Hon. Members that the report will be tabled in this House within the shortest time frame possible, as hoped for by train users who want the report to be made public as soon as possible?
Also, will the Minister take note of the representations that have been made for a freeze on any fare increase until VIA Rail has received the passenger cars that have not yet been delivered but should soon be? In other words, no fare increase until VIA Rail can offer its passengers clean and modern trains?


Benoît Bouchard: Mr. Speaker, I would not dare say that we are going to insist on the company's refraining from increasing its fares, since there are technical factors involved. And I would hate to see the Hon. Member in a year from now having to blame me for having compelled the company to increase its deficit. Definitely, in that context, we are going to make sure that is done within the most reasonable period of time. For the information of the Hon. Member for Papineau, the same answer would apply to the question of tabling the Horner report. As soon as it is available and its contents are accessible, I believe it will be submitted to this House.


MULTICULTURALISM
Mr. Allan Pietz (Welland):: Mr. Speaker, my question is directed to the Minister of State for Multiculturalism. This weekend marks the end of this year's Folk Art Festival in the City of St. Catharines. The festival, which is in its seventeenth year, brought together 35 different ethnic groups from the Niagara region, and is the largest folk art festival in southern Ontario. In view of this successful folk art festival, and in view of the Minister's recent successful multicultural convention in western Canada, could the Minister tell the House what further programs he intends to initiate to promote the cause of multiculturalism?


Hon. Jack Murta (Minister of State (Multiculturalism)):: Mr. Speaker, I would like to thank the Hon. Member for the question, and congratulate him and the associations involved in the very successful festival which has been held. It is the kind of festival we can all be proud of as Canadians.
The first ever federal-provincial conference on multiculturalism was successful because it brought the two levels of
government, federal and provincial, together for the first time ever to discuss this very important issue. That in itself is a major step. What we will be doing now, and our thrust over the next few months, is to take a very hard look at multiculturalism in the business sector and how the two could be combined. We will be making a major effort in terms of race relations, working with governmental and non-governmental organizations-


Lloyd Axworthy: Order.


Jack Burnett Murta: -to make sure that there is more sensitivity in this country and, goodness knows, we need it.


PENSIONS
Mr. Cyril Keeper (Winnipeg North Centre):: Mr. Speaker, the Oral Question Period could perhaps be extended, since there are no Ministers in the House.
My question is for the Acting Prime Minister. This partial deindexation of pensions is unfair. It goes against the promise made to pensioners and has been strongly criticized. When will the Government be willing to admit its mistake in introducing this measure and when will it reverse its position on the deindexation of pensions?


Robert René de Cotret: Mr. Speaker, my hon. friend refers to deindexation. There is no such thing. There is a limit, an established rate so that all Canadians who now receive payments from the Federal Government will have their cheques fully indexed if the consumer price index rises over 3 per cent. There is no deindexation at ail.
I would also like to tell my hon. friend that there is absolutely no danger that any recipient of benefits under our social programs will get less than at present.


Cyril Keeper: The Progressive Conservatives give the same reply to this question as the Liberals when they were in power.


An Hon. Member:: It is the same!


INQUIRY WHEN PENSIONERS WILL BE TREATED IN FAIR MANNER
Cyril Keeper: I have a supplementary, Mr. Speaker.
When will the Government realize that it cannot treat unfairly the pensioners of this country and when will it truly break with the past and treat our pensioners fairly?
May 31, 1985


Robert René de Cotret: Mr. Speaker, the Budget treats all groups in our society fairly, honestly and honourably. I can assure you that, as for me, I am not ashamed to trust the Canadian people. You, on the other side, may be ashamed to say that you trust the Canadian people. We inherited a problem from a financially irresponsible Government which accumulated an incredible debt of over $38 billion a year. This could no longer be tolerated. We took fair measures for all Canadians and they are responding very well to our appeal. Mr. Speaker, what we have done has been done fairly.


SPACE WEAPONRY
Lloyd Axworthy: Mr. Speaker, my question is directed to the Deputy Prime Minister. Reported in the Winnipeg newspaper this morning was a confirmed statement by the Secretary of State for External Affairs that the U.S. Defence Department is now free to offer contracts to Canadian companies under the SDI research program. This makes a total sham and mockery of statements made in this House that there would be no such involvement until a direct policy decision has been made by the Government and reviewed by this Parliament and by the Canadian people.
Is the Deputy Prime Minister prepared to repudiate that stand and clearly indicate to the U.S. Department of Defence that no contract should be offered to Canadian companies until there has been a very clear policy decision on the part of the Government on whether Canadian companies should be involved in any way, shape, or form?


Erik Nielsen: Mr. Speaker, the Hon. Member for Winnipeg-Fort Garry certainly takes a quantum leap with that question. What he is asking the Government to do, if 1 understand him correctly, is to put a total ban on any trading relationships, particularly in the research and high tech area, between Canadian companies and the United States in connection with its SDI program. He should, I would think, have been cognizant of the fact that when he was sitting on this side in government, some of those very contracts were entered into between Canadian and U.S. companies to do the precise kind of work he is talking about now.
There never has been any impediment or barrier to Canadian companies entering into contractual relationships with firms in the U.S., the U.K., Japan, or anywhere else for that matter. If I have interpreted his question wrongly, then my answer will have to be amended. But if that is what he intended, I would think it would be a terrible impediment to
Oral Questions
place in the way of the free enterprise system in this country and on Canadian companies.


Mr. Deputy Speaker:: A very short supplementary.


GOVERNMENT POSITION
Lloyd Axworthy: Mr. Speaker, that is an incredibly convoluted answer. We in this House have debated, time and again, whether Canadians should be involved in star wars research, and the Minister has now openly admitted that Canadian companies can be involved.
Is the Government clearly going to indicate there should be no research involvement in SDI related subjects until the Government has made a clear decision to have it debated in Parliament? For goodness sake, will you make up your minds and be clear for the Canadian people on what you are all about on this very vital issue?


Sinclair McKnight Stevens: You are the only one that is confused.


Erik Nielsen: It is the Hon. Member who should make up his mind, Sir, because it was him who was a member of a Government sitting here-


An Hon. Member:: "He".


Erik Nielsen: He, sorry; you are quite right. It was he who was sitting as a member of a Government on this side when contracts were entered into by at least two and, I think, three universities with U.S. firms in the laser and optics fields. Now he is saying that that was some kind of wrong decision.


Some Hon. Members:: You're right.


Mr. Fulton:: Lloyd signed the contract.


Erik Nielsen: We know that the Government has in place-I hear the NDP saying that is wrong, that Canadian businesses-


Some Hon. Members:: No.


John Edward Broadbent: We are saying that you are right.


Erik Nielsen: -should not be in the area of high tech or any of these futuristic businesses.


Mr. Blackburn (Brant):: We said you are right.


Erik Nielsen: I think that is a shameful attitude to be taking.
With respect to the process, the Hon. Member knows we have set up a process whereby we expect to obtain the hard facts upon which to base a value judgment on whether or not the Canadian Government is going to become involved in any way with the United States SDI program. We expect a report in due course, a decision will be made, and he will be aware of it in the normal course of events.

May 31, 1985
Order Paper Questions



ROUTINE PROCEEDINGS


Mr. Barry Moore (Pontiac-Gatineau-Labelle):: Mr. Speaker, I have the honour to present the second report of the Standing Committee on Veterans Affairs in both official languages.


PETITIONS
Cyril Keeper: Mr. Speaker, I have a petition from a number of people in my riding who are concerned about the possible reinstatement of capital punishment. They petition Parliament for the continued abolition of capital punishment and ask that there be no free vote on that issue.


Bill Rompkey: Mr. Speaker, 1 have the honour to present a petition from the people of Cartwright in my constituency. They protest the movement of the Coast Guard station from Cartwright to be located elsewhere. This facility has served that community well. It is not only a source of protection but also a source of employment, and they request that the station be retained in the community of Cartwright.

[ Translation]


[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Paul Dick (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, the following question will be answered today: No. 328.


Mr. Gagliano: Did the Minister of State (Small Businesses) go on a consultation tour with respect to Bill C-23, an Act to amend the Small Businesses Loans Act and, if so (a) who accompanied him (b) who participated in the different cities (c) what was the total cost of the tour?


Hon. Andre Bissonnette (Minister of State (Small Businesses)):: There was no consultation tour specifically with respect to Bill C-23, an Act to amend the Small Businesses Loans Act. However, discussions were held prior to its introduction in Parliament, and during the consultation process on small business.


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


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


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Thursday, May 30, consideration of the motion of Mr. Wilson (Etobicoke Centre) that this House approves in general the budgetary policy of the Government.
Mr. Lawrence I. O'Neil (Cape Breton Highlands-Canso):: Mr. Speaker, on May 23 my colleague, the Minister of Finance (Mr. Wilson) presented his Budget to the House of Commons. This is the most comprehensive statement of the Progressive Conservative Government's principles and policies to date. It has taken the mandate for change which we received from the voters last September and translated into an agenda of action. This has been accomplished through a commitment to consultation and through listening to the concerns of Canadians. The message has come to us loud and clear: Canadians want jobs and economic renewal. They want a rejuvenated private sector where success is rewarded instead of effort subsidized. Canadians want a Government that is more efficient and less wasteful of taxpayer's money. They want the spectre of our huge and growing national debt to be dealt with effectively. This Budget has centred around those themes and taken decisive action on the difficult issues of the day, issues which the previous Government chose to ignore. It has done this with measures which are realistic, effective and fair. The Budget is a document that is truly national in scope.
Today I would like to tell you of its importance from an Atlantic Provinces perspective. We all know what our pro-belms have been for the last 50 years. We need real, productive, satisfying jobs rather than government make-work projects. We have seen the wealth of our reserves tapped, but the profits ended up somewhere else. We have seen our youth move west and south looking for opportunities. We have had to fight with a Government in Ottawa which thought it knew more about what we needed than we did. The new Progressive Conservative Government's change in attitude came almost
May 31, 1985

immediately. The Atlantic Energy Accord signalled a new day for Newfoundland and for all the Atlantic Provinces. The benefits from our resources will stay at home where they belong. The Budget recognizes this need for self-reliance and private initiative.
For budding entrepreneurs, assisting small business starving for capital, there is the personal lifetime capital gains tax exemption of $500,000. This will be phased in over five years beginning with a $20,000 exemption in 1985. This change will allow small businessmen to reap the rewards of their achievement when they sell their business. In recognition of the special circumstances of the agricultural community, farmers will be allowed the full $500,000 personal lifetime exemption immediately.
Capital will also be made more available by changes to the investment rules for pension funds. Large funds will be encouraged to invest in Canadian enterprise through special small business investment corporations and small business investment limited partnerships. RRSP funds will be eligible to invest in private Canadian corporations with which they deal at arm's length. These measures will allow Canadians and not the Government to decide where to put their money and how to create wealth, economic activity, and, most important, jobs.
The small business bond program has been extended for two years. This will allow farmers and business people to obtain lower cost capital through financial institutions. Special venture capital funds administered by labour groups will be enlarged to invest in small businesses as well. These measures and many others will aid the private sector in Atlantic Canada to grow and flourish. Regional development funding will continue, of course, but we have clearly placed the emphasis on private initiative and local decision-making.
We have also taken some fundamental steps to put the Government's own house in order. In this Budget the Government has set itself the goal of eliminating the obstacles to economic renewal posed by waste and inefficiency in Government itself. During the past few months many Canadians told us that they are willing to share the burden of deficit reduction if the Government would first put its own house in order; if it pulls out of wasteful and ineffective programs and allows the private sector to get on with the job of economic renewal. The actions that we are taking with this Budget prove our commitment to do just that. The Budget contains measures that will result in more efficient, effective, and responsive Government.
Last November, only six weeks after taking office, the Government took action to cut its expenditures by $4.2 billion. Since then the Government has been looking at other ways to increase efficiency by cutting out unproductive programs, reducing overlap, and introducing cost recovery measures. A number of internal management initiatives to recover costs, streamline Government, and reduce expenditures have been taken in the Budget.
The Budget-Mr. O'Neil
In addition, the Government has identified the programs and policies where further significant savings can be realized. The task force chaired by the Deputy Prime Minister (Mr. Nielsen) has carried out a comprehensive examination of government programs, the results of which are reflected in the measures we have announced in the Budget. The work of these joint private and public sector committees will continue to improve the management of government programs and services.
The Budget also sets out a number of additional internal measures that the Government is taking to tighten its own belt and increase the effectiveness with which taxpayers' money is spent. For example, the Public Service pension plan will be put on a fully funded basis with no taxpayer subsidy. The guarantee of full indexation of MPs' and Senators' pensions will be ended by January 1, 1986. An aggressive program is being put into place to improve the Government's management of its cash and to dispose of property that it no longer needs. The size of the federal Public Service will be reduced by 15,000 positions over the next six years and there will be no compensation for inflation in the Government's operating and capital budgets. As a result of these measures, and those taken in November, the Government will save more than $2 billion this year and that figure will grow to over $3 billion by 1990.
Some of these measures will have an impact on Atlantic Canada, but there is a hard reality which we must face. Unless the Government takes action to reduce the deficit and control the debt spiral, its ability to provide essential programs and services will be threatened. Care must be taken to balance these expenditure reductions with tax increases for people and corporations that can afford to pay them. The Budget has struck a careful balance which is realistic and fair while taking effective action on many fronts.
The special nature of the economy of Atlantic Canada is recognized in the budget package. The variable entrance requirement for unemployment insurance has been extended. This will allow many Maritimers to continue to qualify for benefits that they need because of the seasonal nature of their industries. The Budget also announced a major review of the unemployment insurance program. The objective is to improve and simplify the system to make it fairer and more responsive to the labour market. Let me emphasize that we are not undertaking this review with the objective of reducing federal contributions to the unemployed in the country.
At the Regina First Ministers' Conference, the Minister of Employment and Immigration (Miss MacDonald) announced a new and innovative approach to training and job creation based on greater private sector and local participation. This approach was unanimously endorsed by provincial Governments and has received broad support from private sector and community groups across the country. We have allocated $900 million to these programs this year. Agreements are now being negotiated so that they can be implemented as quickly as possible. For 1986-87 the Government will allocate $900 million to these programs. This commitment now will be of great help to those designing and implementing those programs. It

May 31, 1985
The Budget-Mr. O'Neil
should help get them off the ground and operating more quickly. This means better and more effective job-creation and training programs in the future.
Federal funds will go to projects developed in local communities that have a purpose and a future. This symbolizes our approach to government management and debt control. We realize that we must begin by putting our own house in order. We also made sure that all parts of Canadian society pay their fair share. The Budget includes a number of actions that will be taken now to ensure greater fairness in the tax system.
For example, a minimum tax will be imposed on upper income Canadians in time for the 1986 taxation year. There will be a temporary deficit reduction surtax on high income Canadians and large corporations and a tax on the capital of large banks and trust companies. There are amendments which prevent taxpayers from avoiding tax by splitting income through the use of loans to spouses and children. There will be further amendments to the Income Tax Act which better meet the needs of disabled Canadians. There has been an elimination of tax shelters involving property such as yachts, recreational vehicles, hotels, and nursing homes.
Equally important, Mr. Speaker, is how the Government collects taxes. The Budget also includes a number of measures to achieve fair tax administration consistent with the Canadian Charter of Rights and Freedoms. For example, we have extension of the "innocent until proven guilty" concept to cases involving sales and excise taxes under the Excise Tax Act. There are clear limits to Revenue Canada's powers of search and seizure, and limits on the Government's authority to make retroactive income tax regulations. These changes will make the tax system fair and responsive to the needs of all Canadians.
The Budget further recognizes that reducing the deficit and controlling the national debt is in everyone's interest. As the Prime Minister (Mr. Mulroney) said, cutting the deficit and reducing unemployment are not mutually exclusive. They are two aspects of the same challenge-building economic renewal and Canadian competitiveness. These problems are a vicious circle, Mr. Speaker. High deficits constrain our ability to create jobs. High unemployment, in turn, causes even higher deficits. The Budget proposes realistic, fair, and effective actions to break this vicious circle. It is centered on the three fundamental strategies that I outlined earlier.
The First is that the Government wants to encourage private initiative. We want Canadians, not politicians and bureaucrats, to control their own destiny and the future of the country. We want Canadians to invest in their own future. Second, the Government has become too big. It has become part of the problem instead of part of the solution. That is why we have been combing Government for waste and inefficiency since September. Our efforts are starting to pay off. The third key idea in the Budget is simply that future Governments will not be able to support growth and jobs and to provide all the services we want if we do not take control of our financial affairs.
The public debt is simply the sum of all past deficits. It took 100 years to accumulate a debt of $18 billion. Now, less than two decades later, the debt is approaching $200 billion and is doubling every five years. Our debt is spiralling out of sight. If we do not show the resolve to deal with this problem, the inevitable result will be paralysis of the Government of Canada. In such a situation Atlantic Canadians would pay the highest price. If this paralysis were allowed to set in, we could not do the things we must do to promote growth and jobs in the Maritimes. That is why the Budget takes action to reduce the deficit over the medium term, not so fast that the recovery is threatened, but not too slow to stop the build-up of debt.
As all Members of the House know, Mr. Speaker, the Government of Canada announced in its Budget that funding of the heavy water plants in Port Hawkesbury and Glace Bay would be discontinued. This decision had been recommended to the Government of Canada for several years. In 1985, the Government of Canada found itself in such adverse financial circumstances that funding of these operations could not be continued.
There will be consequential hardships for the employees of these plants. It is for this reason that the Government of Canada has directed AECL to present a fair and generous settlement package to the employees of these plants. The Prime Minister repeated that commitment this week in this Chamber. Although the exact terms of this package are not yet clear to the workers, I am confident that the workers at these plants will be satisfied when a fair and equitable settlement is agreed upon.
We must now move on with the job of creating new employment in northeastern Nova Scotia, not only for workers laid off from these plants, but also for the hundreds of others who have been unemployed for some time. We recognize that it is time for the Government of Canada to address the unemployment problem with a view to solving it. No previous administration has shown the present Government's commitment to creating employment.
The Cape Breton tax credit makes northeastern Nova Scotia the most attractive place in Canada to invest from a federal tax point of view. The visit of the Minister of Regional Industrial Expansion (Mr. Stevens) to Cape Breton on Friday, the day after the Budget, highlights the Government's commitment to northeastern Nova Scotia.
This Budget has looked realistically at the problems of Atlantic Canadians and of all Canada and has taken effective action to solve them. It is a Budget built on our strong belief in the ability of Canadians and on the strength of this country. The Budget builds on this strength.


Mr. Nicholson:: Mr. Speaker, I want to congratulate the Hon. Member for Cape Breton Highlands-Canso (Mr. O'Neil) on the content and delivery of his speech to the House of Commons.
May 31, 1985

I was particularly interested in his comments concerning the deficit and unemployment. He made the point that those two subjects, although not mutually exclusive, in fact seemed to be very interdependent. Would he comment on the response that he has received from his constituents with respect to the Budget and its thrust? Is there a growing awareness in his part of the country, as I believe there is in mine, that we cannot solve one problem without the other? In other words, we cannot continue to let the national deficit rise and at the same time hope to create employment.
Inasmuch as the Budget contains tax incentives for his part of the country, I would be particularly interested to know what initial reaction he has received in that respect. 1 know that he keeps very close contact with his constituents and the people of that part of the country. What is their initial response on both those issues?


Lawrence I. O'Neil: Mr. Speaker, first I would say to the Hon. Member that we, like all Canadians, having gone through a period of spiralling deficit and high unemployment, realize that deficit spending does not necessarily result in job creation.
I believe that the proof is here today.
We have gone through the other scenario and my constituents realize, as do all Canadians, that with approximately one-third of their tax dollars paying interest and servicing the national debt, the Government's flexibility with respect to introducing new programs and creating jobs in any area of the country is severely restricted.
With respect to the tax incentives, my constituents are very hopeful that this incentive package will attract new industry. I was very pleased to learn from the Minister of Regional Industrial Expansion last evening during the committee meetings that he has had eight to ten inquiries from business people and entrepreneurs who are interested in taking advantage of this additional incentive to locate and create jobs in northeastern Nova Scotia. We are very hopeful, Mr. Speaker.


André Ouellet: Mr. Speaker, the Hon. Member is certainly aware of the Department of Transport's closure of the Eddy Point Traffic Centre in his area. Does he support this decision, which has apparently been made by reason of cost effectiveness? The decision has been appealed. There are a number of organizations and individuals who are very concerned about that cost effectiveness concept being applied to the safety of human lives and the protection of the environment.
Is the Hon. Member going to join forces with those who want the reopening of the Eddy Point Traffic Centre, or would he prefer to approve the unilateral decision of the Minister of Transport (Mr. Mazankowski) which has created much uneasiness, dissatisfaction and apprehension in his riding?


Lawrence I. O'Neil: Mr. Speaker, first, I shared the concern of my constituents upon the announcement of a decision to close down the Eddy Point Traffic Centre. I put the case very aggressively to the Minister of Transport on behalf of continuing the operation.
The Budget-Mr. O'Neil
However, it is not solely a question of cost effectiveness. There are other factors that come into play. The Hon. Member will know that one of the primary incentives for establishing this traffic centre was the existence of an operative oil refinery at the Strait of Canso. That refinery closed down several years ago under the previous administration.
I would say at this time that were it not for the very severe financial situation of the Government and the irresponsible spending of the previous administration, and had we not inherited such a massive deficit, we would have the revenue not only to fund and continue an operation such as the one at Eddy Point but to create many more Eddy Points, expand safety programs and address all the environmental concerns we have.


André Ouellet: Mr. Speaker, I see quite clearly from the answer that the Hon. Member is ready to approve a Budget that gives millions of dollars to multinationals. He is approving the additional two cents a litre on gas that will be a bonanza for American multinational companies. He is also saying that he is ready to accept the Government's penalizing the poor and those who live in remote areas, including people in his riding, in order to satisfy the multinationals.


Lawrence I. O'Neil: Mr. Speaker, I suggest to the Hon. Member that the greatest penalty that has been inflicted upon my constituents has been the gross unemployment they have incurred over the last number of decades under his administration.
Let me tell the Hon. Member that this Budget introduced a Cape Breton tax credit. It is that tax credit that we identify as the hope that jobs will be brought to the area, jobs that have been denied to my constituents for decades, and not by a Conservative Government. It is a new incentive and there will be jobs.


Bill Rompkey: Mr. Speaker, I want to welcome the Hon. Member to the House as an Atlantic brother. However, 1 want to ask him some questions about some matters he raised in his speech.
First, with respect to the tax incentives, does he really believe that a tax incentive in the Atlantic area where the private sector is already weak, not to mention below capacity, will be of any value? Indeed, there has been and at present there is a tax incentive program in place. It is a 50 per cent tax relief for businesses setting up in the area. The problem is that in order to get tax relief one must have a profit. You have to make money in order to pay taxes. Entrepreneurs and small businessmen who want to establish businesses in the Atlantic regions need something up front. They cannot wait until they get into business and begin making money.
Would the Hon. Member not think it would be a better idea if the Government were to take a position that it was going to build up infrastructure in the Atlantic area, which is weak, and if the Government were to provide up-front money for

May 31, 1985
The Budget-Mr. McCurdy
businesses wanting to start up in the Atlantic area rather than extending a tax incentive which, I submit, as the record will show, has already been in place and has not been effective?
Second, the Hon. Member talks about the impact of the Budget on the Atlantic area. 1 think all of us from the Atlantic area have a responsibility to put the case of our people and the case of the Atlantic Provinces was put, it seems to me, by the Atlantic Provinces Economic Council. It stated that in the Atlantic area 80 per cent of the gross provincial product comes from government sources, only 20 per cent from the private sector, compared to 55 per cent from the private sector in other parts of Canada. In other words, the important point is that the economy of the Atlantic area is more dependent than any other area of Canada on government spending. When you cut government spending and increase taxes you have a negative impact on a weak economy where the private sector is unable to respond.
1 wanted to put those cases to the Hon. Member. Does he agree or disagree with them? If he agrees, would he take that position in his caucus with Cabinet and would he try to help all of us from the Atlantic area who want to see a fair deal made for our people?


Lawrence I. O'Neil: Mr. Speaker, first I would say that the Hon. Member for Grand Falls-White Bay-Labrador (Mr. Romp-key) does not understand the tax credit of which 1 spoke earlier. The tax credit is designed to attract business to the area. It is not only designed for the businesses and the entrepreneurs already there. There are people in other parts of Canada and in other parts of the world whom we are enticing to northeastern Nova Scotia and to Nova Scotia to create employment.
When the Hon. Member talks about the Atlantic Provinces Economic Council and its statistics about dependence upon the government coffers, he is identifying the greatest failing of the previous administration, that is, its failure to develop a private and independent private sector in Atlantic Canada. That is what we are seeking and what we are going to accomplish, Mr. Speaker.


The Acting Speaker (Mr. Paproski):: On that note, questions and comments are now terminated.
1 would like to recognize the next speaker, the Hon. Member for Windsor-Walkerville (Mr. McCurdy).


Mr. Howard McCurdy (Windsor-Walkerville):: Mr. Speaker, it is not especially surprising to find the Hon. Member for Cape Breton Highlands-Canso (Mr. O'Neil) being seduced by the Budget of his Party and seeking to find all means available to adapt it, in terms of his local riding, in the most attractive of terms even in the face of the facts that have been repeatedly revealed to him.
This Budget oozed in on the soothingly silken yet not really sincere promises of the Prime Minister (Mr. Mulroney) that fairness would be assured to all. It is packaged in pounds of paper camouflage, partial data and hidden facts. It was so seductively wrapped that, in addition to the Hon. Member for
Cape Breton Highlands-Canso, it fooled many of the rest of us. It did not appear to initiate a new era but at least it seemed to avoid serious mistakes, and it did contain some elements attractive to many of us, such as the beginning of pension reform, the making available of our RRSP in pension funds for small business investment, labour-operated venture capital funds, and some slight redistribution of child benefits to low income families.
On closer examination, the Budget turns out to be machiavellian in its deviousness and unscrupulous in its results.
This Budget turned out not to mark a new era but to repeat old errors. It was the Hon. Member for St. John's West (Mr. Crosbie) who, when he characterized the last Lalonde Budget, equally characterized this one. It is like a beached dead fish, all shiny on the outside, but give it a poke and there is nothing but rot on the inside. If there is doubt about the similarity of this Budget to the last Lalonde Budget, we should recall the unintentional but nevertheless enthusiastic acknowledgement of that fact by Members opposite when the Lalonde Budget was read to them by my colleague. They responded to it with reflex enthusiasm and with reactionary rhetoric that characterized that Budget as well as this one. But it is not just the rhetoric that is the same, so is the substance. It is the same substance which led the Hon. Member for Kingston and the Islands (Miss MacDonald) to condemn benefits to the wealthy at the expense of the poor. It is the same substance that drew scorn, again from the Hon. Member for St. John's West, in its failure to deal with consumer demand. It is the same substance which the Hon. Member for Joliette (Mr. La Salle) savaged for failing to address the aspirations of youth and for failing to create employment.
We could rebut this Budget quite effectively with speeches made by government Members when they were in opposition. We remember that the Prime Minister said that Canadians are over-taxed and that he did not favour higher personal taxes to reduce the deficit. We remember the Tories promised once more to index the OAS to the cost of living on a quarterly basis. When our ears reject as background noise the empty Tories' slogan of jobs, jobs, jobs, we recall again the words of the Hon. Member for St. John's West that "the people see a Government ripe with dishonesty and they make all politicians seem the same".
This Budget causes us all, and should cause us all, embarrassment. Look at the benefits to small business, Mr. Speaker. My God, this is supposed to be the pet constituency of the Party in government. Stimulation of small business was supposed to produce jobs. New rules would provide equity financing for small business from RRSPs and pension funds. Economists are already beginning to question whether these funds will be diverted to equity, risky investment, as compared to the secure investment that in the past has characterized the placing of such funds. On the other hand, we see the three-fold increase in foreign holdings allowed which could see billions of dollars leaving this country rather than being invested here.
May 31, 1985

The $500,000 capital gains exemption is unlikely to help either. We can already see evidence for a thousand budding Mort Schulmans quick and ready to invest in real estate, precious gems, gold, art, and antiques. There is no particular inducement whatever to invest in any useful job-creating enterprises or even in our country.
There is no other inducement to help except patriotism, and that has not so far characterized the kind of investor which the $500,000 exemption has benefited.
Sure, the research and development tax credit for small business may help. The release from the surtax being imposed on large corporations may help. Perhaps the most significant step for smali business is the fact that $7.6 billion will be removed from the hands of consumers in 1986. I ask you, Mr. Speaker, will that condition induce small business people or anybody else to rush out and invest when so much buying power is taken away from them? Of course, the money is being taken out of the hands of the consumers, at least in part to benefit the wealthy and the oil companies, mostly foreign-owned, which are the most clear beneficiaries of this Budget. The benefits to small business are left to fate, but there is certainty with respect to the oil companies.
There is no direct attack on deficits-which has resulted in weak economic conditions and unemployment, whether that attack has been in West Germany, Great Britain, or British Columbia-that has been successful in achieving its end. It was not successful when it was done by MacEachen or Lalonde. It will not be successful when it is done by the present Minister of Finance (Mr. Wilson). The pattern of the attack on the deficit is always the same. Use the poor, use the elderly, use lower middle-income people and the unemployed as cannon fodder in the war on the deficit.
The PC attack on the deficit is a little less blunt. It is more like a guerilla war with hit and run attacks, so that at first the wounds are slight and the long-term effects deliberately obscured. Next year the last of personal income reductions will amount to a mere $80 million. By 1990, $695 million will be taken in the form of loss of income tax reductions. The change in the child tax credit is a subtle one. There is no loss, and the implication of some gains in 1986. However, by 1992, $235 million will be taken from the hands of low and middle-income people.
The loss of the indexation of pensions is another sneaky one, but we are catching on. Old age pensioners and senior citizens across the country are beginning to realize that $35 million in 1986 will grow to $2 billion in 1990. Sales and excise tax increases of $250 million now will grow to nearly $3 billion by 1990.
In terms of ordinary Canadian families, they will experience in that period a 30 per cent increase in income tax. On average, old age pensioners will lose $680 per year, for an approximate total loss of $2,200 by 1990. At a time when the National Council on Welfare indicates that the number of poor people has increased by 660,000 over a two-year period,
The Budget-Mr. McCurdy
we witness a continued massive transfer of wealth from the poor to the wealthy and from individual taxpayers to corporations. However, I understand that just yesterday the Minister of Finance said that we just do not have enough rich people. He also told us that pensioners were knocking down the door in an orgy of self-sacrifice in order to attack the deficit, and that senior citizens were telling him that they know there will be some small sacrifice but that they thought the Government was on the right track. Well, 400,000 members of The National Pensioners and Senior Citizens Federation, 8,000 members of the Association of Jewish Seniors, 10,000 members of Canadian Pensioners Concerned Inc. of Ontario, and 300,000 members of The United Senior Citizens of Ontario do not agree.
It is a mystery why the rich have not been given an opportunity to exhibit their patriotic zeal. Surely the immediate imposition of a minimum tax would have sent them into an orgy of delight. Instead, we receive this curious document indicating a minimum tax for Canada. What an amazing document it is! After some fast footwork we realize that there are only about 4,000 rich people, and that it is such a complicated matter to tax them that it is too much bother. Come on, give us a break!
The Tories promised to reduce the deficit. They have not done very much and will not do very much because as the rate of unemployment continues to increase, as purchasing power continues to be eroded and as social payments continue to increase, it is a race in which we cannot catch up. They are taking the wrong approach. They make the assumption that the deficit is the cause of our economic problems rather than the result.
What we need are increased jobs, but there is not a word about jobs in the Budget. I understand that the Minister of Finance said in Toronto the other day that perhaps they would create about 500,000 jobs. A careful examination of the Budget reveals nothing in terms of parameters, terms of reference or imposed mechanisms to achieve that end, with the possible exception that there very well may be 500,000 new jobs for accountants as they find ways to ensure that those who already have money will have more. It has always been beyond my understanding how it is possible to justify the opposition of a capital gains tax, while the work of ordinary labourers has always been considered to be taxable, whether it be physical or mental work. There is no thought of the depreciation of the body, nothing of the sort. The basic thesis, totally unquestioned by anyone on the other side of the House, is that if one has money, one deserves to get more money, that every encouragement should be offered, and to hell with the rest of the population which does not have those benefits.


An Hon. Member:: Unparliamentary language.


Mr. Benjamin:: No, it ain't.


Howard Douglas McCurdy: Then I withdraw the word "hell".


Leslie Gordon Benjamin: Don't do that; it is hell.

May 31, 1985
The Budget-Mr. McCurdy


Howard Douglas McCurdy: However, Canadians still have deep suspicions about the motives of those who would make that argument.
I should like to refer to what members of the New Democratic Party would have done. We would have declared that a goal should be established year by year for the reduction of unemployment and for the production of jobs. Our Party did not play games with consultation. It consulted across the land. The answer it received from Canadians was that cutting the deficit was not the goal. They had a greater economic appreciation of the significance of deficits and they knew that if jobs were created, a deficit reduction would follow because it is occasioned by unemployment. What we would have done in some respects is similar to what the Conservatives have proposed. Indeed we would have offered stimulus to small business. We would have proposed, as did the Budget, that RRSP and pension funds be made available to small businesses. However, no one on our side would have been foolish enough to take money away from the people upon whom we depend most to purchase from small businesses.


James Douglas Manly: The consumer.


Howard Douglas McCurdy: Yes, the consumer. We would have initiated tax reform to put money in the hands of consumers and in the hands of the unemployed. Indeed, even large corporations would have benefited from tax measures, if those corporations had undertaken to commit themselves to job production and other steps in the interests of the Canadian economy.
Increased consumer demand would have increased investment, jobs and revenues, and would have decreased social expenditures and the deficit. Of course this would take time, so we would have made an immediate investment intended to accomplish economic and social ends. Direct job creation would have more immediate effects and, in the long run, would contribute to economic growth. In forestry, fisheries, agriculture and energy we would have created, by the investment of some $800 million, a great many jobs over a five-year period, perhaps as many as 400,000.
Our municipalities are falling apart-roads are decaying, water is polluted, basements are flooded. There are various kinds of immediate physical and infrastructural changes which are necessary. They have been documented by the Federation of Canadian Municipalities which recommended that $1.2 billion be spent each year to take care of the needs of the municipalities, at a cost of $450 million per year on the part of the federal Government, and would have created 40,000 jobs per year.
Housing is a national disgrace. It is made worse now by the fact that a key area of capital investment, by virtue of the capital gains tax exemption, will be in real estate. It will likely spur a degree of real estate speculation the likes of which we have not seen for many years. It will increase the cost of housing for ordinary Canadians. We would have recommended an increase in expenditures on social housing of $500 million, supplying 50,000 units and creating 66,000 new jobs in the construction industry where unemployment is very severe.
We have received pleas from across the country for opportunities to take control of economic growth at the local community level. We would have committed $850 million to community initiative funds for new co-operatives, community development corporations and small businesses, to give opportunities to local communities to create jobs and to take advantage of the resources and talents at the local level. Instead of taking $2 billion out of the hands of the provinces, we would have ensured that expenditures on education and social services would have continued. New revenues would have been brought about through the implementation of a minimum tax, a more progressive income tax and through changes in corporate taxes and lesser expenditures as a result of a decreased requirement for social measures.
Before I close, I wish to take notice of two issues of particular concern to me. I am the youth critic for my Party. In none of the pounds of literature is there anything which addresses the needs of youth, who now have a 17 per cent unemployment rate. The only reference in this area is to some streamlining of employment centres in universities and a cut of $78 million from training programs.
In Windsor, where we are awaiting government action on quotas, on Canadian content, we are further burdened by an increase in the sales tax which, no doubt, will decrease the sales of automobiles, not to mention a 2-cent increase on gasoline, which will not help either.
There is not only that to consider, Mr. Speaker. Windsor is, essentially, a one-industry town which has a future in tourism. We have been told that the federal Government will no longer be involved in ERDAs involving federal funding of tourism at a time when it is critical for job creation in Windsor.
This is not a Budget which is fair. This is not a Budget which creates jobs. This is not a Budget which will knock down the deficit, since it is a foolishly designed approach to that end. This is a Budget which will leave us waiting another year for what the Canadian people want-economic growth based on job creation.


The Acting Speaker (Mr. Paproski):: Questions or comments? The Hon. Member for Selkirk-Interlake (Mr. Holtmann).


Mr. Holtmann:: Mr. Speaker, I would like to ask the Hon. Member what his ideas are with respect to the area of job creation. The last administration pumped in billions of dollars with respect to this area but unemployment continued to rise. The Hon, Member opposite has said that we should place $500 million in this area and another billion dollars in that area. He thinks that will create jobs. It did not do so in the past. All of a sudden, the dreamer and schemer opposite supposes it will work now. On what basis does he make the claim that jobs can be created by throwing funds into these different municipalities? How will this create jobs when it did not create them before? I would like him to comment on that.
May 31, 1985


Howard Douglas McCurdy: Mr. Speaker, I am a microbiologist. 1 really am not qualified to give lessons in economics.


Some Hon. Members:: Hear, hear!


Howard Douglas McCurdy: However, I can read. I want to assume that the Government and its members are engaged in the type of consultation about which they talk so much. The Federation of Canadian Municipalities has provided for our benefit a detailed examination of the serious needs of the municipalities in the country. These are severe needs which must be met.
I agree with the Hon. Member opposite when he says that the short-term measures in which the last Government engaged were undesirable and useless. What we are talking about is job creation through meeting serious economic needs. If he is not aware of this, then he can come to my office and 1 will give him a copy of the report from the federation. He will then understand how jobs can be created in the public sector.


Mr. Kilgour:: Mr. Speaker, we are faced with a $200 billion debt at this time. That works out to some $8,000 to $9,000 for every man, woman and child in this country. How would the Hon. Member opposite deal with this problem?
It seems to me that everything the Hon. Member has been calling for was tried by the Mitterrand Government in France after 1981. In that country there was massive nationalization and spending. Some 50,000 new public servants were added to the Government's payroll. As the Hon. Member well knows, the French franc has been devalued three times. Bankruptcies have increased in France, as has unemployment. The policies which the Hon. Member seems to be advocating have been a total failure in France. That country has reversed almost all of them. Will he speak to those matters?


Howard Douglas McCurdy: Mr. Speaker, the Thatcher Government attacked the British deficit. The Governments of West Germany and British Columbia attacked their deficits. To what end? To create unemployment. In fact, in the final analysis, it discouraged investment.
The President of the United States, however, in his supply side rhetoric, did not attack the deficit. He built up the deficit. I am not suggesting there should be increased investment in Canada with respect to the area of defence. However, the fact of the matter is that government expenditures in the United States have created jobs. That has been the most effective attack on the problem of unemployment.
I suggest to the Hon. Member opposite that he look at the Swedes. Then, perhaps, he would learn the lesson of how a country of similar size with similar problems has dealt with the problem of unemployment and economic growth in all its elements in a far more effective way than this Budget attempts to do.


Mr. Fraleigh:: Mr. Speaker, I have some comments to make. I hope 1 will be allowed the use of the word with which the Hon. Member opposite seems to be obsessed, that is, the word "orgies". The only orgy I can see coming out of his proposals will be with respect to a massive increase in the deficit. If a
The Budget-Mr. Malepart
massive increase in the deficit would have worked, then we would not have any unemployment in the country.


Some Hon. Members:: Hear, hear!


Sidney Arthur Fraleigh: The Hon. Member admits he is a biologist, or something or other. I refer to those people as being academics who have no idea of what makes the country tick. If they want to find out what makes the country tick, then they should get out and talk to the small businessmen and the farmers in the country who create the jobs and wealth on which the rest of us survive. I hope that he will urge his western counterparts who represent rural ridings to return to their ridings and tell the farmers and small businessmen there what a tremendous rip-off the capital gains tax exemption is. I urge the Hon. Member to do that. I urge each and every one of the Members opposite to carry that message back to their western ridings. Tell the farmers that, because they will receive a tax break on something they have worked hard for all their lives, it is a rip-off.


Howard Douglas McCurdy: Mr. Speaker, I am surprised to hear such a spurious and ad hominem argument. Am I supposed to be incapable of being effective in representing my constituency simply because I am a biologist? I do not know what the Hon. Member opposite is; but I am sure 90 per cent of the subjects debated in the House are not closed to his intelligent consideration because he is not those 90 things. That is simply ridiculous.
I have talked to small business people and they do not see how it is possible for them to be successful-


The Acting Speaker (Mr. Paproski):: I regret to advise the Hon. Member that his allotted time has expired.
As a humble and ordinary Canadian who is sitting in the chair today, may 1 take the opportunity to congratulate a hometown team which has won a great Stanley Cup. I feel another dynasty has started in Edmonton.
It being one o'clock p.m., I do now leave the chair until two o'clock p.m.
At 1.00 p.m., the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
The Acting Speaker (Mr. Paproski):: When the House rose at one o'clock, I believe that the period for questions and comments had terminated. I will now recognize the Hon. Member for Montreal-Sainte-Marie (Mr. Malepart).
[ Translation]


Jean-Claude Malépart: Mr. Speaker, I welcome this opportunity to rise, as so many Members of this House have done, to speak to the Budget of the Minister of Finance (Mr. Wilson) and the Right Hon.
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May 31, 1985
The Budget-Mr. Malepart
Prime Minister (Mr. Mulroney). I would like to consider, in an objective and positive manner, what this Budget holds in store for our senior citizens. I do not think anyone will be surprised to hear I was very disappointed when the Minister of Finance and the Prime Minister decided to maintain in the Budget the discrimination against the elderly, especially women, who are single, separated or divorced.
I believed and hoped that at least the Minister of Finance, following consultations, petitions and meetings of the Parliamentary Committee, where all groups were unanimous in asking the Government to extend the spouse's allowance to all persons living alone, whether they were single, separated or divorced . .. Mr. Speaker, 1 wonder whether the Minister of Finance has a heart or a bank vault, because he has failed to understand what the point is and has maintained discrimination against the elderly who are single, separated or divorced. I hope there is still a possibility changes can be made when the Bill is considered in committee. I hope the Minister and the Prime Minister realize that if the Bill is not amended, in every riding in Canda, individuals between the ages of 60 and 64 who are in need and living below the poverty line will not be eligible just because they are single, separated or divorced.
Mr. Speaker, let us take a look at what the Minister of Finance and the Prime Minister have decided to do about our elderly. During the election campaign, in Sherbrooke in the Province of Quebec, we received a solemn commitment and the Prime Minister's word of honour, on July 26, when he told the Canadian people, followed by all his Conservative Members and candidates, that if he was elected, he would restore full indexation for Old Age Security pensions. Who would doubt the word of a Prime Minister? Even I said: Bravo! I think he is sincere, I think he is honest. Like all people across this country, I took the Prime Minister at his word. Mr. Speaker, a little later, in January, in a consultation paper tabled by the Minister of National Health and Welfare (Mr. Epp) in the House, and announced at a press conference to the entire public here again, on behalf of the Government, on behalf of the Prime Minister there was solemn commitment that consultation and restructuring of social programs would have the result of improving the situation of the neediest in our society. Even then, Mr. Speaker, I believed that the Minister of National Health and Welfare would keep his word.
As the Prime Minister has said in reply to my questions, the Parliamentary Secretary speaks in his own name and not on behalf of the Government. He told us where we stand. The only two persons in this House who speak for the Government about social programs are the Minister of Finance and the Minister of National Health and Welfare. Everyone, including myself, the entire population and all Members of Parliament, whether they are New Democrats, Conservatives or Liberals, believed in that document. It is written in black and white in paragraph 3: "Any savings which may result from program changes will not be applied to a reduction of the deficit."
Who could question the word of honest people? No one! Everyone believed in the promise and the commitment made by the Prime Minister during the election campaign and the commitment made in his name by the Minister of National Health and Welfare, who said on page 9 of the discussion paper: "Changes in these programs which may result from this review should improve-and I emphasize the word "improve- benefits for those most in need."
Mr. Speaker, it is important that I repeat this for the information of all Members of this House and the general public listening to us: "Changes in these programs which may result from this review should improve-and I did say "improve"-"benefits for those most in need."
That is the second commitment made by the Government. 1 can honestly say that, following publication of this discussion paper, the Hon. Member for Gaspe (Mr. Marin), myself and other Members of this House head in committee 92 groups representing senior citizens and Canadian families, who also trusted the Prime Minister and the Government. Those people took the trouble to come here. They are people who often do voluntary work in addition to raising their families. They are middle-aged people who came from Western Canada, Vancouver, the Maritimes, Quebec and Ontario with confidence, and 1 believe that the word "confidence" is very important for the population, they came to say to the Prime Minister, to the Government, to the Minister of Finance, to the Minister of National Health and Welfare: "Here are the recommendations to improve benefits for those most in need, which you requested in your discussion paper."
All groups recommended improvements to the child tax credit in order to help low and middle income families, all groups believed that, as promised in the discussion paper, there would be no immediate changes affecting senior citizens. The Government had promised to set up another task force. During the election campaign, the Prime Minister made a solemn commitment in Sherbrooke to consult senior citizens before making any changes.
Mr. Speaker, what do we find in the Mulroney-Wilson Budget? What do we find in this document which affects our senior citizens? Contrary to what the Prime Minister, the Minister of Finance and the Minister of National Health and Welfare had promised, not only there is no improvement for our senior citizens, but their purchasing power is reduced and their income will increase at a lower rate.
What happened, Mr. Speaker, is that, contrary to what the Mulroney, Wilson and Epp trio had formally and solemnly promised in this House, senior citizens will face a 3 per cent decrease in the indexation of their income.
Remember all the fuss about universality! The Prime Minister was the first one to say that bank presidents did not really need allowances. But bank presidents have remained untouch-
May 31, 1985

able. The Government went as far as penalizing 1.3 million elderly Canadians who get the guaranteed income supplement, 60 per cent of whom live below the poverty line as it is. So much for the promises and commitments of that trio.
Let us consider together who are those senior citizens who will be shortchanged as of next January. 1 recall that the Parliamentary Secretary to the Minister of National Health and Welfare (Mrs. Bertrand) said that a $100 reduction spread over a number of weeks does not amount to very much. It may not be very much for a well-heeled Member of Parliament, but it is quite a lot of money for someone whose only income is the old age security pension. The prospect of a $10 monthly income drop next year can be quite depressing for that person.
I wish Members on the other side, the Prime Minister, the Minister of National Health and Welfare or the Minister of Finance would tell us just how elderly persons can cut expenses. What can they do without? The steak they can afford to buy once a week? Will they cut $10 a month off their meagre entertainment budget for that outing with the local Golden Age Club? Should they stop buying newspapers? Will they stop living because their income has gone down? Not only did the Conservative Government cut old age security pensions, it even imposed a hidden tax on essential services. Who is the smart and intelligent Government Member who suggested that a bar of soap is not essential and should be taxed? Mr. Speaker, who is the genius who said that toothpaste is not essential? Tax it! Who in that Party made the bright suggestion that shampoo is not important, let us tax it? Not satisfied with reducing the purchasing power of elderly Canadians through a 3 per cent cut in future old age security pension increases, they turn around and shamelessly increase inflation by 1 or 2 per cent. This Government has said: "We will arrange it so that everybody will be taxed. We will see that inflation is increased. Inflation will increase by 2 per cent because of the Wilson, Mulroney and Epp decisions. But that will be absorbed by the people because the first 3 per cent, are not to be given to you."
Mr. Speaker, this is unheard of. Even the Secretary of State for External Affairs (Mr. Clark), the former Prime Minister, would not have accepted that, because he was in Government in 1979. Even the Minister of Justice (Mr. Crosbie), who was then Minister of Finance, would not have had the gall to do something like that to his fellow citizens. And even the Minister of Indian Affairs and Northern Development (Mr. Crom-bie), who was then Minister of Health, would not have dared do anything like that, Mr. Speaker. Those three guys have betrayed the people. And this has not been said by Liberals. Those commitments are written in black and white.
Mr. Speaker, if the Government does not change that, 1 can imagine what will happen to the Conservative Members when they go back to their constituencies; their senior citizens will tell them: "Mr. or Mrs. M.P., you will have to dig for votes
The Budget-Mr. Male part
comes the next election." The Members will answer: "We need you people 65 or 68 years old". But the senior citizens will ask them this: "Where were you when the Budget was brought down, when your Government in its Budget denied me the spouse's allowance because 1 was separated? And now you have the gall to come and see us? Go your way, Sir, go away Madam! You were not there when we needed you."
Senior citizens as a group have the poorest organization in Canada. Next to them are the families. We saw a report on television saying that the big corporations', the multinational corporations' lobbyists are spending millions of dollars to keep a bunch of suckers around Parliament to live off Members of Parliament and get contracts. But is there one group of senior citizens in Canada who can afford to organize itself, to come over here and make representations on the assistance they need? They are not looking for million-dollar contracts like the one the Minister of Finance's brother will be getting without tender. They want to get and keep getting their little cheques each month, Mr. Speaker. Let us see who those people are, whom the Progressive Conservative Government wants to penalize starting in 1986. Those people have known the hard years. They have lived through the great depression. They are the mothers and fathers of all of us here, the people who made every sacrifice to send us through school at a time when education was not free. It is our fathers and mothers who had to foot the bill when we were ill and there was no Medicare. In my own riding, there are now senior citizens who, as parents long ago, had to agree to abide by the provisions of the Lacombe Act, because they could not pay the doctor's bills for their sick children. I think that most of us have experienced this in our own respective ridings and regions. And now the Minister of Finance, who associates with the pick of the crop of big business, is trying to con us into believing that he has consulted and told these senior citizens: "You should sacrifice a little, for you would not want the Mulroney or Wilson kids who are so pampered to pay our debts later on, would you?"


The Acting Speaker (Mr. Paproski):: Order, please!


Jean-Claude Malépart: Mr. Speaker, the children of the Prime Minister or the Minister of Finance do not want us to leave any unpaid debts. I have a heart, Mr. Speaker, and several other hon. members have hearts too, I am sure. I would not want my mother ... Is the Parliamentary Secretary to the Minister of Finance saying that he will ask his own mother to add these new sacrifices on top of all those she has already made for him? If he is against that, and if he has any guts as a Parliamentary Secretary, he will stand up in his caucus and say: "I refuse to ask my father and mother to make any more sacrifices and l strongly urge you, Mr. Minister of Finance, to reverse your decision and maintain full indexation of the Old Age Security pensions at least for needy senior citizens who are living below the poverty line."

May 31, 1985
The Budget-Mr. Malepart
Now that I have described for you the older people the government is viciously attacking, Mr. Speaker, let us consider now the families, especially those with dependent children. All those groups who came here were seeking improvements, Mr. Speaker. I realize that I am running out of time, and I have still so much to say. We have reached a point in Canada, and it is not up to Parliamentarians to decide whether married couples can continue living together. Problems can and do occur, and even Parliamentarians are not exempt from that. There is an increase in the number of single parent families. The Hon. Member for Gatineau (Mrs. Mailly) is certainly aware that women most of the time are left with the financial burden of raising the children.
In the area of family allowances and children tax credits the purpose of which is to help poor families which, according to the most recent statistics, are on the rise in Canada-
The same government decides to index the child tax credit beyond 3 percent. Not only does it de-index basic family allowances up to 3 percent, but the supplement it grants them to make both ends meet is reduced by 3 percent, Mr. Speaker. That is the result of this government's decision.
Mr. Speaker, I am ready to trust once more this Government and its Progressive Conservative members, because I believe they will think it over in their caucus. The word of the Prime Minister may still mean something because it is written. The word and honour of the Minister of Finance mean something and the honour of the Minister of National Health and Welfare may still have some meaning in these written documents. But let us see who will benefit from this budget. Oil multinationals will get $2.5 billion, and there is a giveaway of $125,000 for the wealthiest people who want to speculate in this area.
Mr. Speaker, I had a lot more to say but you have just indicated to me that my time has expired. 1 am sorry, but 1 wished to say a lot more than that.


The Acting Speaker (Mr. Paproski):: Questions or comments. The Hon. Member for Gatineau (Mrs. Mailly).


Mrs. Mailly:: Mr. Speaker, since the Hon. Member for Montreal-Sainte-Marie (Mr. Malepart) is referring to his mother-and mine, because they are probably the same age-
I should like to remind him what happened during our brief stint in office in 1979. We introduced a bill to assist widows and widowers, providing an allowance for spouses between 60 and 65 years of age, the spouse's allowance. The Minister of National Health and Welfare succeeded in having that bill passed by this House but unfortunately it was part of the budget on which the government was defeated. Thus, spouses were deprived of that assistance. Eventually, Mr. MacEachen restored that measure and today, those who were members of his government are trying to say that it was a Liberal measure. It is entirely false.
Secondly, we increased the price of gas in our budget because we had to face a substantial deficit causing punitive inflation not only for senior citizens but for all Canadians. What did they do, Mr. Speaker? They rejected the budget because it was awful to ask for such an increase. They then proceeded to tax heating fuel, which we had not done in our budget, and that tax was very harmful to old people. Since he is referring to our mothers, I would like to ask him a question. Today I met university women between 40 and 50 years of age. They are not rich because they probably paid their own fees and stayed at home to raise their children. Do you know what they told me? Well done, Mrs. Mailly. Your government understands that I do not want to be dependent on my children. I would like the economy to allow me to save and look after myself when I retire. They told me: "Well done, Mrs. Mailly, because I do not want to be dependent on the State, I do not want to live in a nursing home, I want to look after myself, 1 am a responsible and proud individual". You should not forget that when you criticize the steps taken to promote the creation of jobs.
I would also like to tell the Hon. Member about a retired gentleman of my constituency, Mr. Tasse, who has a $17,000 income per year. He is not rich. He sent back to me his pension cheque for May telling me precisely what those ladies told me today. He said: "Mrs. Mailly, I do not want the deficit to increase because the Liberals are doing the same thing they did in 1979, frightening the elderly and the poor. What they say is wrong. I want you to remain determined to control inflation and create jobs for our grandchildren. So Mr. Tasse sent me his cheque and he invited Mr. Pierre-Elliott Trudeau who is now retired and very rich as well as all the Liberal ministers and senators who are retired to do exactly the same thing.


Jacques Guilbault: Order!


Claudy Mailly: Finally, Mr. Speaker, I should like the Hon. Member to explain to us how he can complain about this so-called enormous cut now that inflation is a mere 3.9 per cent, while he voted in favour of limiting indexation to 6 and 5 per cent at the time his party was in power and inflation was rampant at 12 per cent?


Jean-Claude Malépart: Mr. Speaker, I am sure the Minister in front of me was raised as a rich kid who rejoiced whenever the poor suffered.
Mr. Speaker, the show the Hon. Member for Gatineau has just put on clearly indicates that when she talks ... I beg your pardon .. . when she pontificates-


Mr. Masse:: Ouch! That really hurts!
May 31, 1985


Mr. Siddon:: Mr. Speaker, I rise on a point of order. I just want to assure the Hon. Member that as a prairie boy growing up in Alberta with five brothers and sisters I was supported by a father who cut hair for a living.


Jean-Claude Malépart: Mr. Speaker, the Hon. Member gives me as an example the retired fellow with a $17,000 income. Do you know how much an individual who relies on the guaranteed income supplement gets?


Claudy Mailly: It is entirely indexed.


Jean-Claude Malépart: Do you know how much that person gets: $7000 a year. Do you know how a couple receiving $10,000 can manage? With an additional $7000, you can save and give some away. I am referring to poor people. There are 1,300,000 of them, Mr. Speaker. The Hon. Member for Gatineau understands nothing. She should read the budget over again. When she speaks about those ladies who attended the university I agree, but her government, instead of changing the colour of the soldiers' uniform and wasting $100 million per year to send troops to Lahr in Germany, should keep that money to reduce the deficit. Instead of joining the star war, the government should launch a fight against unemployment. The Hon. Member for Gatineau was not honest enough to say so. The Prime Minister wasted half a million to give a Tory party for Mr. Reagan. He should have saved it rather than pay, as Mrs. Michele Tremblay from the Journal de Montreal pointed out, $1000 a minute to act hypocritically at the economic summit convening groups to do afterwards exactly the contrary and let our national Kid Camera appear in the limelight.
Mr. Speaker, I thought that the Tory members ... I thought that the Minister of Finance was the only one to have a safe instead of a heart but I realize that there are others like him in his party. I realize that some among them, as the minister has just mentioned, were raised in poverty. They have long forgotten it. He has forgotten that others need him. He forgets that some older citizens made sacrifices to allow him to become what he is today. However, he is not ready to let those people take advantage today of the wealth which he and his children are enjoying.


Mr. Redway:: Mr. Speaker, I was very interested in listening to the comments of the Hon. Member for Montreal-Sainte-Marie (Mr. Malepart) with respect to old age pensions and allowances for people between the ages of 60 and 65. I was very interested to hear what he had to say today and since November when the House reconvened. While listening to his comments it struck me that he is certainly a great advocate for senior citizens. I thought that perhaps he is now taking the place of the dean of the House, Mr. Stanley Knowles, in that regard. It struck me that he must have had some very interesting things to say about senior citizens in the past. I was sure
The Budget-Mr. Malepart
that in the time that he has spent in the House his speeches must have been constantly and continuously emphasizing the plight of senior citizens. I was sure that every time he rose to speak he must have had something to say about senior citizens.
I looked back at some of the things which the Hon. Member had to say in the past. I brought with me today the index of the Debates of the House of Commons of 1983-84. 1 see that under the heading, Mr. Jean-Claude Malepart, Liberal Member for Montreal-Sainte-Marie, there is not a very long list. He made comments on the Canada Mortgage and Housing Corporation, government buildings and interest rates. He presented a report on labour, manpower and immigration from the Standing Committee on Labour, Manpower and Immigration. He made a statement under Standing Order 21 on medicare. He made a comment on the National Housing Act and on the Residential Rehabilitation Assistance Program. Nowhere in that list did I see any reference to pensions, spousal allowances, or anything of that sort. I was rather surprised in light of the fact that he now seems to be such an advocate of those issues.
This afternoon the Hon. Member said that very shortly the people of Canada will be asking all of us where we were when this Budget was passed. Mr. Speaker, where was the Hon. Member when his Government, of which he was a Parliamentary Secretary, dealt with the deindexing of old age pensions down to 6 and 5 per cent when inflation was 12 per cent, and when there were no dealings with spousal allowances or allowances of any kind for people between the ages of 60 and 65?


The Acting Speaker (Mr. Paproski):: I am sorry, the time for questions and comments has expired. 1 will give the Hon. Member 30 seconds.


Jean-Claude Malépart: Mr. Speaker, with the consent-


The Acting Speaker (Mr. Paproski):: I am sorry-


Jean-Claude Malépart: Mr. Speaker, with the unanimous consent of the House, may I be allowed to answer?
On a question of privilege, Mr. Speaker ... It is unfortunate that conservative members should play politics on "the backs" of senior citizens.
Mr. Speaker, in closing, I would like to say that even with the 6 and 5 policy pensions were fully indexed in the case of the most destitute among senior citizens those who received the guaranteed income supplement, which does not happen with the present government, Mr. Speaker, the Liberal government had agreed to the full indexation of the supplement and of the basic pension to make up for the loss. 1 would ask the member to withdraw his remarks concerning me. What he said is false; he is a liar.


Mr. Lanthier:: It is not true! Order, Mr. Speaker.

May 31, 1985
The Budget-Mr. Tupper


The Acting Speaker (Mr. Paproski):: Before I recognize the point of order, I think I heard something from the Hon. Member which should not be said in the House. I hope that the Hon. Member will retract that statement.


Jean-Claude Malépart: Mr. Speaker, I will withdraw my remarks if the Conservative Member who has just spoken on the 6 and 5 program agrees to tell the truth.


An Hon. Member:: Do not start all over again your little game of the other day!


Jean-Claude Malépart: The House of Commons is a place where truth must be spoken and not-


The Acting Speaker (Mr. Paproski):: No, the Hon. Member knows that we should not use words like that in this Chamber. The Hon. Member realizes that he has done this once before in this session. We realize that in the heat of battle people sometimes say things they should not say, but I hope the Hon. Member will retract the statement. Let us leave it at that.
[ Translation]


Jean-Claude Malépart: Mr. Speaker, I do not think you got the point. 1 said that I would agree to withdraw my remarks, if the member would do the same. However, even if he does not do so, I will withdraw my comments.


William Tupper: Mr. Speaker, I am happy to rise in the Chamber this afternoon on behalf of the residents of Nepean-Carleton to offer an analysis of our current Budget and to participate in the debate on it. This is a Budget of opportunity, change, redirection, innovation, and hope. This is a Budget which the Canadian population has been waiting for. It comes at a time when our unemployment rates are falling but are still unnecessarily high. It comes at a time when interest rates are lower than they have been in many years. It comes at a time when mortgage rates are falling.
We must consider the Budget as a whole. I suggest it is unfair to isolate parts of the Budget because it has far reaching measures that affect every segment of society and business. It is a fair and balanced Budget which must be considered in its entirety.
The two thrusts of the Budget are to reduce unemployment and to tackle our over growing deficit. It will attempt to reduce our deficit by approximately $4 billion next year and $8 billion the following year. It is a noble attempt to address a great malaise in Canada.
In many ways my riding of Nepean-Carleton is a microcosm of Canada. It has a population of approximately 122,000
people and is a community with an agricultural base, small business base, high-tech base and a public sector base. There are approximately 1,100 operating farms in my riding, one-third of which are associated with the beef industry, approximately a quarter with the dairy industry, and others run by pork producers, poultry producers and cash croppers.
The small business community is far-reaching, as is the high-tech community. In my riding lies the high technology centre of Canada. Nepean-Carleton is a microcosm of a country which is dependent upon jobs in the small business community.
Nepean-Carleton was originally an agricultural community. As Ottawa grew, it took on the form of a bedroom or urban riding where people resided but worked in the metropolitan area. That dimension of the riding has changed in the recent years to the point where yesterday, at the opening of the Bell Northern Laboratories in the City of Nepean, the Mayor indicated that in the City of Nepean alone there were 30,000 jobs created. Nepean-Carleton leads the nation in some aspects and is a self-contained, self-producing, proud and dynamically growing community that is a microcosm of the country.
The total workforce in my riding is 70,000, 30,000 of whom are women. The riding has had great representation over the years. At one time, Sir John A. Macdonald represented Nepean-Carleton. Others to follow were Bracken, Drew, Bell and Baker. They were great men who have contributed to the nobleness and productivity of the House.
I became involved in a very competitive nomination and election campaign in 1984. During those campaigns, I consistently emphasized four issues, not only with people in my Party but with the constituents of Nepean-Carleton. I stressed the importance of the farm community and the farm family as a basic unit in Canadian society. I recognized that Canada could be a superpower in agriculture with tremendous opportunities to produce far more food, given the right opportunities and incentives. This would not only help to raise the standard of living of Canadians but would also help others around the world.
I also recognized the importance of the small business community in that process. Small business in Canada is really big business. When one takes into account the family and corporate farm in that milieu, at least two-thirds of the workforce in Canada and two out of every three jobs created in Canada are from the small business community.
I also recognized the importance of research and development which is as crucial to my constituency as it is to the rest of Canada. The high-tech industry could be a tremendous economic innovator and creator of jobs.
Yesterday, when I attended the opening of the Bell Northern Laboratories in my riding with the Minister of State for Science and Technology (Mr. Siddon) and other members, the President of Northern Telecom announced that his company will be spending $5 billion on research and development during the next five years. The President and his company know the
May 31, 1985

importance of research and development for innovating our way into international markets.
At the same time, I also recognized the importance of a strong, viable and responsible civil service to help the Government and the nation develop and grow.
In his Budget speech, the Minister of Finance (Mr. Wilson) said:
In these three areas-small business, research and development and energy- the government has clearly identified the components of economic growth most likely to result in the greatest and fastest response.
You can understand my belief in the importance of those words to people in my riding. Let us study the Budget in more detail to find those measures which relate to the small business community. First, there is the capital gains initiative of a $500,000 once in a lifetime deduction to be introduced generally in Canada over a number of years but starting immediately for the farm community. That is a tremendous economic multiplier. For example, the number of new businesses that were created in the United States a few years ago as a result of a similar measure was overwhelming. We fully expect that to happen in Canada.
Second, the small business bond program will be extended for another two years to the beginning of 1988. Farmers and small business people can finance up to $500,000 at interest rates several points below the market value. One can imagine the benefits of that program for the farmer, small business person and the high-tech innovator.
The small business community is exempt from the 5 per cent corporate surcharge that is being levied on big business. Pension funds will be relaxed to allow those moneys to be invested as equity capital in small- and medium-sized businesses. Although it is difficult to predict how much will be available at this time, consider the benefits from the estimated $2 billion or $3 billion that will come on stream in the next four to eight months.
The Budget also provides for a freeze on unemployment insurance rates through 1986, which indicates to the farm community and small business community, which face difficulty with these deductions, that they will not be faced with an increase in unemployment insurance rates for the next 20 months. Furthermore, the small business community will note that there will be a thorough and fair review of the unemployment insurance program in order to ensure fairness and equity.
As well, there are many things relating to pension reform in the Budget that dramatically affect the small business community, especially the self-employed person. Over the next five or six years they can increase investments in retirement programs from $5,500 to $15,000 annually. Think of how that will allow the small business person, who cannot rely on a company pension, to build up his or her equity and to have some protection for himself and his spouse when the time comes to lay down the work mantle and enter into the senior years.
The Budget-Mr. Tupper
There is an array of very delightful measures that are associated with small businesses that will help them to become the innovators and big business in the days ahead.
Let me quote a few things about this Budget that 1 have run across recently. Marcel Cote, an economist with Radio-Canada, said:
This is a Budget which is not as tough as we had anticipated, it is quite skillful over all, I think it is fair.
John Bulloch of the Canadian Federation of Independent Business said:
This Budget is a small business blockbuster.
In some private conversations I have had with Mr. Bulloch recently he has indicated that the small business community in Canada in the First half of this year will create at least 200,000 new jobs. When you superimpose on that the new flood of investment money, think what will really happen, Sir.
Geoffrey Hale, speaking on behalf of the Canadian Organization of Small Business, said:
The most encouraging Budget in the past ten years. Mr. Wilson has acted in a number of ways to get individuals greater control of the spending and saving of their money. The changes have been approached with the maximum of common sense.
The small business community across Canada and in Nepean-Carleton very much welcome the initiatives in our Budget.
Can 1 take us back to July and August of last year when we were in the midst of an election campaign, Mr. Speaker? This is what we said then about the small business community:
As a vital part of our economy in every community in Canada, our 750,000 small businesses create half of all new jobs in the private sector. We are committed to reducing the barriers facing small businesses and providing them with as much support as possible through: reducing the burden of excessive regulations and reporting requirements with which small businesses have to cope.
We have met that commitment, Sir. We also said:
Reviewing Government purchasing policies to ensure small businesses obtain a fairer share of Government business.
We have met that. The Minister of Supply and Services (Mr. Andre) has enunciated across the country how businesses and suppliers can participate in government purchasing.
Third, we promised to reduce the level of taxation facing small businesses and the complexity of the tax system with which they must cope. We have responded to that. Our Minister of National Revenue (Mr. Beatty) has been very enlightening with the small business community.
Finally, we said, "We will do everything in our power to improve the economic climate to reduce interest rates and stimulate investment in the small business community". Point after point in the short life of this Government we have worked to improve health and innovation, and to increase the productivity of the small business community in Canada.
I can identify with those facets of the Budget in a remarkable way. They are important to Nepean-Carleton. 1 wanted to go on and say a great deal about research and development but I see I have used up my time.
So much of what applies to the small business community also applies to research and development. The capital gains

May 31, 1985
The Budget-Mr. Tupper
aspect, the small business loan and the pension fund diversion are all important to research and development in freeing up funds for that purpose. Equally important is the initiative to refund 100 per cent of the tax credit which is earned on the first $2 million of research and development. Furthermore, we have broadened the definition of research and development so that it is a much more realistic definition and identification of what research and development are in Canada.
I have gone through the effects of our campaign initiatives on the small business community, I could equally well do that with our commitments to research and development. The Minister of State for Science and Technology tabled some remarkable information about Canada's potential to increase its endeavour in research and development with the Standing Committee on Miscellaneous Estimates yesterday morning. It was a remarkable document, one that strongly suggests we can meet as a Government our commitment of 2 per cent to 2.5 per cent investment in research and development in Canada in four to five years' time.
From the standpoint of a constituent in Nepan-Carleton, the emphasis in this Budget on agriculture, on research and development, and on helping the small business community, our real engine of growth in Canada, shows it to be a Budget with which I can identify, worth which Canadians are generally happy, and a Budget for which Canadians have been waiting. It is a Budget of opportunity. I hope this House will endorse it with enthusiasm.


James Douglas Manly: Mr. Speaker, I was interested to hear the Hon. Member for Nepean-Carleton (Mr. Tupper) say it would be unfair to isolate a part of the Budget and to look at it by itself.
I do not think the Opposition has been doing that. Rather, we have been focusing on one particular part of the Budget and looking at it in relation to what other parts of the Budget have been doing. We have been focusing on the fact that this Budget, by deindexing seniors' pensions, by deindexing the first 3 per cent of Old Age Security, is robbing seniors. They will lose SI00 next year and more than $200 the following year, for a total of $6.6 billion at the end of five years. That is on what we have been focusing on. We question the fairness of that when we compare it to the fact that oil companies will get $950 million through the removal and the phasing out of the PGRT.
We question the value of this Budget. The Government says it is a Budget of opportunity and one that will create jobs, but the Government will be losing some $1 million a year by making capital gains exempt from taxation up to a total of half a million dollars per person.
A representative from Coopers, Lybrand said how surprised he was by the wide open tax exemption given under this section rather than focusing specifically on some kind of venture that would create jobs. John Bossons from the Institute for Policy Analysis pointed out that the removal of the capital gains tax will result in real estate speculation. It will not result in increased jobs. In fact, it will result in the transfer of money from high risk venture or start-up businesses into real estate speculation.
What does the Hon. Member consider to be fair about a Budget which takes some $6.6 billion from senior citizens in the next five years and gives it to oil companies and real estate speculators? What does he think is in the Budget to create jobs? There is opportunity for people with money to speculate, but I do not see any opportunity for ordinary Canadians. I would like the Hon. Member to account for that.


William Tupper: Mr. Speaker, I would be pleased to respond, and I welcome the opportunity to do so. I understand what the Hon. Member is speaking about, but I am not sure that he listened carefully to the introductory part of my remarks. I tried to share with him my feeling that the Budget extended out to every person and to every home across Canada, and that in that sense I felt it was fair.
If I can be somewhat personal, my father is a retired, very senior person who resides in Nova Scotia. Over the weekend I telephoned him in particular to obtain his reaction to the Budget. I wanted his feeling on how he thought it would affect him, and I was also interested in the reaction in Nova Scotia about the heavy water plants. He said to me: "Bill, I don't know very much about heavy water plants, but I know that they should have been closed a long time ago". He said that it would have been cheaper for Canadian taxpayers to have given every employee in those two heavy water plants a pension and to put the matter to rest. I said: "Dad, what about yourself?" It was on Sunday night, and he said: "Bill, I can live with it".
Some senior citizens have telephoned me in a moment of annoyance or of concern, but when I have had a chance to share with them the problems in the Canadian economic and social fabric, they indicate that they are willing in 1985, and as it grows into 1986, to give up a small amount so that Canada tomorrow will be a better place for their grandchildren and for our children.


Donald James Johnston: Mr. Speaker, l would like to return to two points in particular. First, the Hon. Member for Nepean-Carleton (Mr. Tupper) did not answer the question put to him with respect of the effect of these capital gains incentives. We learned that his father was happy with the Budget, but 1 should like to say to him that there are many people in my riding receiving the Guaranteed Income Supplement, particularly those in the Saint-Henri portion of the riding, who now know that their purchasing power will be eroded. They now live under the poverty line as defined by Statistics Canada and now know that they will lose at least $50 or $60 per month by 1990. I know the amount is debatable because it is difficult to calculate. However, I find it difficult to believe that they will be happy. Has the Hon. Member spoken with people in his riding who are on the Guaranteed Income Supplement? Has he asked them whether they are prepared to sacrifice that amount of purchasing power in order to reduce the federal deficit? That is my first question.
I have a second question for the Hon. Member. He talked about the investment climate and made reference to the tax changes. We would all like to see more investment in the small
May 31, 1985

business sector, but the capital gains exemption, the way in which it is drafted, allows the Hon. Member for Nepean-Carleton to make a decision as to whether he would invest in a piece of real estate or in a small business here in Canada, perhaps in the Ottawa area, or in the State of Massachusetts. If the same benefit accrues, surely the investment, whether it is Florida real estate, Massachusetts real estate of whatever, will be attractive to him. Would he not consider making representations to his Minister to ensure that if he insists upon continuing in the vein of accepting capital gains within the $500,000 range, that money at least goes into the Canadian small- and medium-sized business sector, not into real estate speculation, as suggested by economists, not into yachts, Florida real estate or condominiums outside the country? Would he at least do that? Would that not be an appropriate role for him to play as a concerned and intelligent Member on the government back-benches?


William Tupper: Mr. Speaker, I thank my Liberal colleague for the compliment of being a concerned and intelligent backbencher. I am proud to be part of this House and to be part of the process of allowing Canada to grow and develop. 1 hope the atmosphere in this House will be one of team-work, problem solving and going forward together.
The small business community in my riding talks about investing at home. It talks about investing down the street, in our industrial parks. It does not talk about investing in Massachusetts, about yachts or recreational vehicles. It talks about Canada, Canadians and their families.
In an attempt to answer part of the Hon. Member's other question, I receive concerned telephone calls from senior residents in my riding. I do not hide that fact. I use the opportunity to chat with them and to share with them the various problems. I ask them what will happen if we do not attack the deficit or where we will be in five years' time. We will be bankrupt. There is not a senior citizen out there who wants that to be the heritage of their children or their grandchildren.


Thomas Edward Siddon: Mr. Speaker, I commend the Hon. Member for Nepean-Carleton (Mr. Tupper) for the outstanding manner in which he is following in the footsteps of his predecessor, who was an eminent Member of the House and whom we all respected greatly.
I want to say by way of observation that some years before entering into public life I acquired a piece of property in the United States, not far south of the border. I intend to sell that piece of property because I think I should bring the money home to Canada where it will do a much better job for the benefit of Canadians, industry and enterprise. The reason I was not prepared to sell my property previously was because of the repressive capital gains legislation brought in by the Liberal Government in 1971, legislation which has hung as a millstone around the neck of the country, in terms of attracting investment and encouraging economic growth.
In response to the comments of my hon. colleague, I would point to the decision by Northern-Telecom to invest $4 billion into the Bell Northern Research Laboratory, Phase III. This
The Budget-Mr. Jourdenais
represents the confidence which that corporation places in this country. Could the Hon. Member relate the some 10,000 person-years of new jobs which that facility represents-and they are over and above its previous investment in research and development-to the present unemployment rate in his riding? There will be 2,000 new jobs per year arising from this investment. Would the Hon. Member comment on how important this will be?


William Tupper: Bell-Northern and Northern Telecommunications, of course, is one of the most significant tandem research, development and production high-technology teams in existence in Canada today. Over the past four years, they have invested about $1.5 billion in research and development. With about 40,000 employees-


The Acting Speaker (Mr. Paproski):: I regret to inform the Hon. Member that questions and comments are now terminated.
I wish to recognize the next speaker, the Hon. Member for La Prairie (Mr. Jourdenais).


Mr. Fernand Jourdenais (La Prairie):: Mr. Speaker, I must say, quite frankly, that ever since 5 p.m. on Thursday May 23,
I have been absolutely bursting with enthusiasm. That day, at 4.30 p.m., the Minister of Finance (Mr. Wilson) finally decided to do what no politician had done before, which is to act. Before that day, the word deficit sent shivers up and down my spine, as it does even now, but I can say now: We have a handle on it, things are going to start moving. After all, it is the Progressive Conservatives, not the Liberals. Mr. Speaker, since May 23 I have been terribly excited. Whenever I meet people, in my riding or elsewhere, they are talking about the Budget. I have yet to meet a single person, except for the Opposition, of course, who is against the Budget. Everyone is saying it was high time we chopped Government spending, it was high time we stopped Government waste, and I for one am proud to be a Progressive Conservative.
Mr. Speaker, I am sure my dear Liberal friends are going to say: O.K., but what about jobs? Believe me, if we cannot get jobs by reducing the deficit, they certainly did not get any by increasing it, because at the rate their deficit was going, we would have had minus zero jobs and minus zero unemployment insurance. The unemployment rate was at 10, 11 or 12 per cent and varied from time to time because to get the rate to go down a mere fraction, they would send three people out to work and that would do the trick. That is exactly what they have been doing during the last 18 years.
Upon analyzing the Budget of the Minister of Finance, we see that for once, a Government has had the good sense to stop minding other people's business and let small business take over. I thought there were only half a million small companies, but during the debate on the Budget, I heard, and I did not

May 31, 1985
The Budget-Mr. Jourdenais
know this there are 700,000 small companies, 700,000 companies that could be helped, but not like the Liberals used to do. They would say: Here, take $200,000, shut up and work. You don't need ideas or enthusiasm. Spend the money, there is more where that came from. Now this Government is saying: We will help you but you will have to show what you can do. Which reminds me, I had a terrific argument last week with a Liberal, and I told him: When you went to school, they gave you a gold star if you got good marks on your test. But under the Liberals during the last 18 years, people were given gold stars before, not after. That does not make sense. They seem to be pretty intelligent people and they are supposed to be very able and some of them are economists, teachers, lawyers, in fact, people from every walk of life. They are supposed to be intelligent, but as soon as they get to Parliament, that's it!
I can tell you, quite honestly, I am a small businessman from a region that is as big as Saint-Henri and Point Saint Charles. I always hear the Hon. Member for Saint-Henri-Westmount (Mr. Johnston) saying: My people in Saint-Henri, but he is really only concerned about the people on the other side of the hill. They are going to be as pleased as Punch. And we did not do what he said, which was we ought to tax businessmen. I think he would have to shell out his whole Member's salary if we decided to tax him, because he comes from the top of the hill!
1 have been a Conservative since 1 was 18, which means that I was fighting against arrogance all that time. I have heard people indulging in petty politics since the age of 18. I see some Members rising now, and in fact, one Member rose earlier and said: Enough petty politics! It is not true, I did not speak four times. I have risen in the House three times in four years. That is what is happening to him. I have been waiting for this opportunity for a long time, for weeks and months. And finally the Budget came and now i am going to say what I think of the previous Government. There was one of them, I think his name was Trudeau. Trudeau was the leader. Today people tell me that I am lucky because I can talk to Brian. We do not say Mr. Mulroney, we do not say Mr. Prime Minister, we say Brian. That is what the Progressive Conservative Party is all about, that is why we have a Budget which will help the people in my riding, as it will those in Saint-Henri and Westmount, believe me.
When I came here I decided I would sit on several committees because 1 really wanted to work, 24 hours a day, seven days a week, and 30 or 31 days a month. I recall a minor incident that hurt and upset me. One evening I attended a sitting of the Committee on Regional Economic Expansion where we were discussing those programs and how the famous Liberal system of patronage hand-outs worked. We were listening ot the explanations, then all of a sudden we were interrupted by a man who came in, a Quebec Minister of Expansion who looked at us and said: I must tell you, I have just managed to obtain more, and I was able to make myself
better understood in two hours than I ever could in six years with the Liberal Party. That is harmony, that is understanding, that is the Progressive Conservative Party.
Since September, or in fact since November we have begun to show how Government should be run. There have been many changes in immigration, new employment and training programs, and there are more to come. Believe me, I will make sure that unwarranted hand-outs are a thing of the past. We have launched quite a few regional economic expansion projects and awarded contracts in energy and resources from one end of the country to the other, and we did not even have a Budget. It is fantastic! Well, we have a Budget now, so just watch out, there will be lots of jobs because we have just told businessmen: Go ahead, we will not lead you by the hand, we will stay out of your business, we will give you tax credits. People will get down to work and invest their extra earnings in Pointe-Saint-Charles, Saint-Henri and La Prairie instead of buying boats, going down to Florida or travelling through foreign countries.
The Minister of State for Science and Technology (Mr. Siddon) said earlier that he was going to sell a property he has in the United States. Let me tell you that the Progressive Conservative Government is honest and open, and it will stand as an example for other people. Lots of people own a business or a building, or have something they could sell to make a capital gain. I am sure my colleague from Saint-Henri-West-mount has had 15 or 20 offers to sell his business under the table so he would not have to pay the capital gains tax-better to keep the money for himself. I am sure this sort of thing has happened. I have businesses, I have industries. Well, a business rather than an industry. I own commercial buildings and I have had offers not so long ago, but I said to myself: Just a minute, things are going to change. Everything will be in the open, you will be able to act honestly, and then you can invest your money and create jobs. That is what I have decided to do.
What I like about this Budget is that it will help small businesses, the corner stone of our economy. We are going to tell the businessman: Help yourself, then we will help you. The Liberals did as they would have done with a six-month old child. You hold his hand when he starts to walk. When the child is 10 years old, he is still being held by the hand. At 15, he is still being held by the hand, but he has become an invalid and he no longer wants to help himself. That is when businesses go bankrupt, like Maislin did. It is exactly the same situation. Maislin Transport on Newman Boulevard got $5 million, my friend, so that they could spend it.
When I look at the deficit, being a businessman, I ask myself how intelligent people in Parliament could have decided to stay in the red, as we, business people, would say. To show a deficit is to be in the red. They would have gone on being in the red. If we had a company as large as the Government, I
May 31, 1985

can assure you that not one businessman, not one financier, not one bank, and certainly not the Hon. Member for Saint-Henri-Westmount (Mr. Johnston), would be willing to lend it any money. You can bet on it no one would want to.
You know, some will say, and it is unfortunate that he is no longer here, the Hon. Member for ... I am sorry, but I cannot say that. 1 no longer call him "the Hon. Member for Mont-real-Sainte-Marie" but the champion of old age pensions that he failed to defend when his Party was in power. It is unfortunate that he is not in the House because I would have liked to tell him something. I am sorry, Mr. Speaker, but we are not supposed to say that someone is not in the House. He was here earlier. He had promised that he would listen to me. I hope that he is watching on television. Some have said that, by deindexing the old age security pensions, we would take $50 or $100 away from senior citizens. Astronomical figures have been mentioned. People are being scared, and it is exactly what happened in Quebec in 1976 with Brinks, for those who remember, and there also had been an election at the time. I must say that I really like senior citizens. In my constituency, there are 31 or 32 senior citizens' organizations. I take care of them, but there are about 12,000, 15,000, 18,000 or 20,000 young people whom I do not want to put into debt, children who have not even started to walk yet. My grandson, who is 2 years old, already has a $24,000 debt, and because of whom? Because of the former Liberal Government. Believe me, I have nothing against the elderly, because they have built Canada and they have helped us. If they worked hard during their lifetime, they will understand. They will not let themselves be deceived by the free spenders in the New Democratic Party, those charitable people who play Santa Claus. They do not even have any money and they want to give it away. For their part, the Liberals say: "It is dangerous, you will not get it. You will not be able to buy a pound of butter. You will not be able to buy such and such a thing." As recently as yesterday, I saw a Liberal Member eating chocolate even though it is now taxable. She did not care about her grandfather and grandmother. She did the same thing.
I could go on the whole afternoon. Believe me, I like it, because all this has to come out. I have been waiting for a long time to say these things. I could speak about the famous grants. Apparently, that is not what caused the deficit to increase. Apparently, they created one-, two- or three-week jobs. That is what those grants did. I would like to tell you a story about my constituency. However, I would like to tell you first about a whopper. During my campaign, when I said that I would abolish tolls on Champlain Bridge, I was asked: Where will you get the money? With the sports car that belonged to Minister Olivier from Longueuil. That was $1.5 million a week and I needed $3 million in one year. It was a cinch. However, when the Conservatives were elected, we said: This has to be cut. We already had saved of $1.5 billion even before the Budget. It is great.
The Budget-Mr. Jourdenais
I have another one I could tell you about the constituency of Longueuil. If someonw wants to buy a museum . . . there is one for cheap sale. I do not know how the Liberal grant was called at the time, but in my eyes it was a slush fund, a money bucket, a money spender. They built a museum worth $ 1,400,000 that is now on sale for $40,000 because the organization that was to operate it does not have the money to do so. It is going for $40,000. That is business management for you! With that, you will have a job and you will be somebody! They cal! that helping small businesses! True! And then they cry and lament, they scare people and they say: Watch out, you will you no longer be able to afford chocolate, toothpaste, or whatever. This is just too bad, my dear friends, but it is not the mere $50 tax difference or $1 if you want per day, as the Liberals have been clamouring about for I do not know how long. If it is not worth $1 to be a Canadian, my friend, it is not worth a peanut, and that is just too bad.
I am a Member of the Standing Committee on Labour, Employment and Immigration ... Concerning the Liberals again, I have a file that thick, believe me, that thick, of people ready to put $100,000 and $200,000 to come to Canada. Surely it is not that bad here. Those are not refugees, people in dire straits, hungry people. They are people with money, and if we do not have money, we will not go through.
The Hon. Member for Saint-Henri-Westmount (Mr. Johnston) must be aware of it. My examples relate to the richest people. This is the way things go. He does not remember me. The first year he was elected, he came to one of my shops. I remember. I did not vote for him. Do not fret about it. I did not vote for him because I was not in his constituency.
I could mention a grant in my constituency. This is what 1 am against, the wasting of money. You are going to say: The Budget, he only talks about that. Yes, because it is important to stop throwing money around. I have nothing against charitable institution. I have nothing against non-profit organizations, but I cannot stand people picking my pockets, especially against my will, to give it away as Government grants. He told two or three people: Shut up and go to work, this will do. We create jobs. Sometimes we were lucky, they lasted 48 hours.
In my constituency, I was lucky enough to open, believe it or not, a youth center, and this made headlines, believe me! 1 am allowed to quote the name of the guy I defeated, Pierre Deniger. He gave a $700,000 gift to a youth organization called "Intersection Jeunesse", a very five organization, very laudable goal, very good idea, but alas, they had forgotten about the revenues needed to operate the building from then on. Since I have been elected here, I have been fighting, trying to help them, not by getting funds here, but by helping 10, 12 organizations to make sure that this organization will keep afloat. I did not do it with money takes from the Hon. Member for Saint-Henri-Westmount (Mr. Johnston) or the Hon. Member for St. Maurice (Mr. Chretien) or any other Member. I think the Hon. Member for Ahuntsic, in Montreal,

May 31, 1985
The Budget-Mr. Jourdenais
would be willing to help with her money, not with Government money. Well, that organization just sold the building, believe it or not, for $1. This is what they call doing business, $700,000 for $1. You do not go bankrupt by charging 25 cents for a package of cigarettes, but by selling something worth $700,000 for $1, a museum for $90,000, $700,000 worth for $1.00. Surely, they know nothing about business.
I have so many things to say, Mr. Speaker, that 1 do not know where to start. Yes, indexation. The famous 3 per cent was discussed. 1 think the cost of living index is at 4.5 per cent right now, so an indexation of 1.5 per cent will be allowed.


Claudy Mailly: 3.9 per cent.


Fernand Jourdenais: 3.9 per cent, this is even better, thank you. That means pensioners will get an indexation of 1 per cent and will lose 3 per cent. Have you ever thought that the Liberals were to blame for this regrettable 3 per cent contribution? They should not have made my father and my grandmother pay. It is awful to make them pay. But the cost of living will not get higher. For instance, products will not cost more because we will see to it and we will put small industries to work; we will help small business operators, not only one, two or three, but 700,000 small businessmen. Have you thought about it? There will be no more unemployment. I own a small business and I know it will be the easiest thing to do. I remember something now that I forgot to tell the Opposition. If I were given $700,000, I would create fifty jobs that would last twenty years. That is the amount that was given in my riding to create about fifty jobs for a month and a half. That is interesting.
I repeat that I have been a member of this party since I was 18. I heard someone say in 1974 that the 5 to 6 per cent controls Mr. Stanfield was proposing to increase profits was not a good proposal. Then the man who came into office, what was his name, I forget? Trudeau! He said: Now that we are the Government, the proposal makes send. Do you not see that the Liberals change their minds when they change sides in the House? Once in office they implemented policies taken from the Conservative Government they said they did not like. The same thing happened in 1979. The Clark Government was defeated. Why? For 30 cents worth of gas. That was increased to $1.18 once the Liberals were back into office. They had plenty of money that did not come from their pockets but from those of all the taxpayers. It is about time this should be stopped.
Mr. Speaker, I still have five minutes, right?


The Acting Speaker (Mr. Paproski):: Three minutes.


Fernand Jourdenais: My goodness, I must hurry!
I sit on the House Standing Committee on Employment and Immigration. There are 20,000 outstanding cases. I do not know how much that costs because the system developed by
the previous Government is too fouled-up. I cannot say. There is nothing one can do but leave one's name and wait until Mr. So-and-So of one of the departments get hold of the file. It may take as many as four years. What is the cost? Who cares? The people of Canada, the people of Laprairie, Saint-Henri and Westmount also, my friend, are the ones who will pay. 1 should like to reply to the Hon. Member for Montreal-Sainte-Marie (Mr. Malepart) who complained about the new uniforms for the Armed Forces. We cannot let them walk around naked, damn it! Do not try to con me into believing that red, blue, yellow or green uniforms-I should have left red out- will cost more than bottle-green ones. Do not bother me, for we must clothe our soldiers so they will look like something to be proud of, instead of a gang of nincompoops who could not be found in the fields because their uniforms were the same colour as the trees.
We are going to help people, starting for instance with widows and widowers 60 to 64 years of age. When they were the government, they used to limit the pensions to senior citizens over 65. Those who were only 64 would have to kick the bucket before getting a pension. We want to give it to them when they reach age 60. They insist on our paying the pension to people who are separated, divorced or what have you. One day, have no fear, they will get it. We will lower the age limit and we will have the money to do that, thanks to the small businesses which are supporting us.
Because I am running out of time, Mr. Speaker, 1 will take a sip of water and explain something that will knock over all those who are still here. Believe it or not, I have just learned, and I would appreciate the members of the opposition- [English]
-so that you would listen, especially to those who were in power before, who thought they were in power.
I have just heard that in my constituency there are $3 million worth of goods for Bolivia, I repeat, $3 million, packed in containers since January 1982. What about that? Three million dollars, would that pay for what the people of Saint-Henri want? Would it pay for the increase? There are $3 million worth of goods in my riding, and how many elsewhere? Reporters who might be listening to me can always call me at home; I am prepared to tell them all about it. It has gone on long enough. In containers, $3 million worth of goods: the rent costs $4,000 a month! If you add it up, since 1983, it's $200,000 wasted! And then people say that the budget is not good. Here, you can have quotas, containers; $3 million for Bolivia! Three million dollars.


Some Hon. Members:: Hear, hear!


Marcel Masse: You can have another five minutes!
May 31, 1985


The Acting Speaker (Mr. Paproski):: I am sorry but the Hon. Member's time is expired. Questions and comments. The Hon. Member for Saint-Henri-Westmount (Mr. Johnston).


Donald James Johnston: I have just one question, Mr. Speaker. I would like to ask the Hon. Member for La Prairie (Mr. Jourdenais) whether he gives shows in some other place than the House so that we can go and see them sometimes.


Claudy Mailly: Just like you!


Fernand Jourdenais: I apologize, Mr. Speaker, but I would like to answer either his question or his comment; it was all mixed up and I did not understand anything. I would like to know what he told me because 1 was not plugged in and he does not speak loud enough.


Mr. Waddell:: Mr. Speaker, I have a couple of comments and a question. No doubt the Hon. Member is asking us what was in the containers. That is a good question. Perhaps it was fish or beef because the smell was sort of coming over


Some Hon. Members:: Oh, oh!


Ian Gardiner Waddell: -as the speech went along.


Marcel Masse: Do not put the cart before the horses.


Ian Gardiner Waddell: -the beef, if was the beef!

I understand also that there is not going to be much change in uniforms since the Minister of National Defence has departed. I am told there will be the same pants but different coats.
I have a question I would like to ask the Hon. Member. [Translation]
He suggested, I think, that it was possible, or he favoured the situation where a person can buy a Canadian passport; if you have money, if you are rich you could come in Canada. Are these the Hon. Member's policies?


Fernand Jourdenais: Mr. Speaker, first, I am going to answer his question. It was not fish, and my speech did not smell, but school equipment. Believe it or not-

It was school furniture, two trucks, two tractors and 38 full containers of merchandise which had been there for over three years. The cost price is exactly $3 million, plus $4,000. The first year I am told $15,000 a month was paid for rent. This is what is in it.


The Acting Speaker (Mr. Paproski):: Order, please. This is not a show and tell. I have let the Hon. Member show the picture once. I wish Hon. Members would stop bringing in to this chamber their little signs, otherwise the next thing we will
The Budget-Mr. Jourdenais
be doing is stopping for commercials. The Hon. Member for La Prairie (Mr. Jourdenais) has the floor to comment.
[ Translation]


Fernand Jourdenais: Mr. Speaker, I hope we will not have to bring more pictures. For the sake of Canadians, I hope there is no other similar situation across Canada.
You misunderstood what I said regarding immigrants. I mentioned that a large number of applications which have been rejected came from people, from businessmen who are willing to pay if necessary, to give money, to be able to come to Canada. 1 did not say we were going to accept such a thing. I said these people want to become Canadians because we have a great country, with a better economic climate than many countries. These people are probably even told that money grows on sidewalks. This is what I said, my friend. I am not in favour of people paying in order to come to Canada, but I would like to bring more business people into our country and to change the rules, for instance. I do not want to discuss immigration matters with you. Come anytime when the Standing Committee on Labour, Employment and Immigration is sitting, three or four times a week, and you will see. We try to bring investments to Canada through small businesses. Why should we not bring immigrants with capital to open small businesses and create jobs? This is what I said, Mr. Speaker.


Mr. Hawkes:: Mr. Speaker, I would simply like to compliment the Hon. Member on what I think is a first rate speech in this chamber.


Some Hon. Members:: Hear, hear!


Frederick James (Jim) Hawkes: He has brought several things to our attention.
I think it behooves us all to read his speech when we receive Hansard on Monday because there is a lot of thought and merit in it.
The Hon. Member has raised the issue of waste. The Budget does deal with the reality that 80 per cent of the deficit cuts are coming through reduced expenditures. We on this side of the House are looking for as much waste and as much duplication as we can find. I wonder if the Hon. Member might tell us how he became aware of these examples? I suspect that people in his riding brought them to his attention. If that was the case, perhaps he could inform us. I think we are all looking for those examples of waste wherever we can find them, and we need as much help as we can get. Would the Hon. Member share with us his thoughts as to how he found out about these examples?


Fernand Jourdenais: Mr. Speaker, 1 thank the Hon. Member for his question. I got the documents and I know what is happening in my riding because I returned to my riding last week-end and gave a speech to people who have decided to bring their organization under control. They need $600,000 and already have $100,000. They told me: "We will not have to go very far

May 31, 1985
The Budget-Mr. Waddell
to find the money, because there is some lying around in the yard over there." This is exactly what I was told. Because I am a government Member who wants to help people and not waste money, I decided to have a look. So I went there and discovered $3 million worth of goods which have been in containers since 1982, two trucks which have never been moved, which have never been used. They were supposed to- [English]
-for Bolivia. 1 don't know why it is there. I am sure there must be some other examples of waste because this was done by the previous administration, which worked in this way. I am positive that there must be some millions, probably in Liberal ridings, perhaps not now in Conservative ridings but probably in Liberal ridings. So this is the way I found out. If you want to know more-
[ Translation\
- sorry, the Right Hon. Member-

-come and see me and I will tell everything because right after I think I will have a press conference.


Ian Gardiner Waddell: Mr. Speaker, I would like to ask the Member a question. Has he changed his carpet since he became a Member of the House of Commons? ... I do not mean here, but in his office.


Fernand Jourdenais: I thank the Hon. Member for asking that question, Mr. Speaker. No, I did not change my carpet. I still have the same carpet, but I had one room painted because I wanted it blue and not red. That's it.


The Acting Speaker (Mr. Paproski):: Since there are no further questions for the Hon. Member, we shall resume debate.

The questions and comments period has now expired. [English]


Ian Gardiner Waddell: Mr. Speaker, I asked about the carpets because I understand a lot of Conservative Members of Parliament like to change their carpets from brown to blue, at the same time as they talk about government waste. However, I am not here to talk about carpets. I want to talk about the Budget.
Outside this House at this very moment, the Minister of Finance (Mr. Wilson) is touring the country and speaking about his Budget. It is the first Conservative Budget, indeed, the first full Conservative Budget before this House which will pass the vote in 20 years since the Diefenbaker era. It is an important Budget because it finally forces this new Government to show its true colours, to finally commit itself to something. The Canadian people began to see the choices they made, the groups they accepted consultation and advice from,
and who won, who lost and who did or did not benefit from this Budget. That is what I want to talk about today.
The Minister of Finance said yesterday in Montreal that we do not have enough rich people in this country. Well, in this Budget he seems to be trying to show how he can create more rich people. What we need to do in this country is not create rich people. We need to eliminate the existing poverty and help the middle class, the ones who always seem to be victimized by these Budgets, because they end up paying more and more in taxes. The Prime Minister (Mr. Mulroney) has said this is a fair Budget. My question is: fair to whom? The Prime Minister and I have something in common, we are both sons of electricians, working people. I can imagine what the average electrician will think of this particular Budget when he realizes who wins and who loses and who pays.
Over the last few days, and in the days to come, we have seen and will see an opposition attack on the pension aspect of the Budget. Let me just explain how I see it, and if 1 am wrong, I no doubt will be corrected or challenged by Conservative MPs. As I understand it, the old age pension which people get at age 65 is universal and indexed. As inflation goes up, people get more so that they do not fall behind the increase in the cost of living. That is also true of the GIS, which goes to the poorest of pensioners. This Government has now cut the indexation of the OAS for any amount under 3 per cent. If inflation goes above 3 per cent, then it is indexed for that amount, but that 3 per cent is cut right off the top. Now, we are going to have inflation. We have now what, 4 per cent or 5 per cent inflation?


David Kilgour: Four per cent.


Ian Gardiner Waddell: In previous years we have had 8 per cent, 9 per cent or 10 per cent. We are going to have inflation at leat over 3 percent. That will mean that pensioners will lose, and calculations have been made as to how much they will lose. Pensioners will lose $100 a year, or $200 million for all pensioners. This, of course, is contrary to Conservative campaign promises. As the Hon. Member for Beaches (Mr. Young) pointed out, it is even contrary to a newspaper ad taken out by the Conservatives when they were in opposition. They tell the Canadian public and the old people one thing when in opposition, and another thing when they become the Government. I am told that over five years, pensioners will lose over $1,000. We are talking about the lowest income segment of our society. When people realize what has been done, 1 predict we will see a reaction, and I hope it is a reaction like the Government has never seen before.
Why has the Government done this? The Government's line is that it is attacking the deficit, which is the real problem. I said the other day-

The other day, I said in this House that it was putting the cart before the horse. In my opinion, we have a struggle against unemployment. We must create jobs. This is not a
May 31, 1985

stuggle against the deficit. This budget is wrong about unemployment. It is placing the cart before the horse.

The Government is focusing on the deficit at the expense of jobs. The Government cannot have it both ways, but I think that is the position the Government is taking.
I now want to refer to energy. The other day the Minister of Energy, Mines and Resources (Miss Carney) claimed that as a result of the Western Accord, some $15 billion worth of investment would be created and there would be 300,000 jobs. The Government's case involves subsidizing the oil industry. It is removing taxes from the oil industry. One tax alone, the Petroleum Gas Revenue Tax, involves $5.6 billion over five years. The oil industry has had some difficulty, but over the last year it has been recovering, thank you, but the Government is removing that tax and ploughing more money into the industry. The Government's line is that it is doing that in order to create more jobs.
That is what the Government has to prove, and if it fails, then the Government is really negligent and breaking faith with the pensioners and other taxpayers, ordinary Canadians who pay for a transfer of money like that to the oil companies. The Government is taking money from the pensioners by eliminating indexing and giving the money in tax breaks to the oil companies. 1 challenge any Member of the House to challenge me on that particular statement. I hope they will get up after I have finished, because that is certainly what the Government is doing.
The Minister said that there has been $3.6 billion worth of investment already as a result of the Western Accord. Well, I made a list and checked it out to see what the investment was. The first one amounts to $1.75 billion for TransCanada Pipelines. The Western Accord was reached about a month ago, in April. It turns out, according to the senior vice-president of TCPL, that this project has been planned for a couple of years. It had nothing to do with the Western Accord. Then the Minister said there was $500 million for Nova Corporation to expand its gas gathering system. However, the vice-president of Nova said in Calgary that the application for that system was placed before the National Energy Board on February 13, 1985, two or three months before the signing of the Accord.
The next project is Esso Resources, $200 million at Cold Lake. It turns out that is in the 1984 annual report of Imperial Oil. This project has been long planned; it is phases five and six and they are going ahead. There was $80 million, she said, for Ocelot Chemicals, covering an ammonia plant near Kiti-mat,British Columbia. We find that was planned in 1984 and, therefore is not as a result of the Western Accord. There is a fertilizer plant worth $600 million proposed by Westcoat Transmission Company Limited before the Accord was signed. Trans Mountain Oil Pipe Line Company, $75 million to change the pipeline, and that was proposed before the Accord as well. To top it all off, the Minister cites the Wolf Lake oilsands project, British Petroleum, $450 million. She opened the project on Tuesday, May 28, so it is laughable that the Minister would count that as part of the fruits of the Western
The Budget-Mr. Waddell
Accord. When you analyse those projects, you can see that they are all going to happen anyway.
She also said that $11.8 billion in investment would come in the future as a result of the Accord. She cited Petro-Canada's oilsands plant at $4.1 billion, but it has been in the planning stages for two years. Talk to Petro-Canada officials. Then there was Husky Oils upgrader at $3.2 billion. A 1984 report of Husky Oil says that the work on the upgrader is well underway. The Syncrude expansion, costing $4.1 billion, is already planned. The Trans Mountain pipeline from Edmonton to Vancouver, which will cost $400 million, has already been planned.
This is shocking, Mr. Speaker. The Minister of Energy, Mines and Resources is misleading the Canadian people about the results of the Western Accord and the Budget. The onus is on the Government to show the pensioners of Canada that jobs will be created as a result of the Budget.


Claudy Mailly: On a point of order, Mr. Speaker.


The Acting Speaker (Mr. Paproski):: The Hon. Member for Gatineau on a point of order.


Claudy Mailly: Mr. Speaker, 1 would need guidance from you. If I understand correctly, the Hon. Member is directing his whole speech to a Minister who is not in the House to answer his questions. Consequently, I was wondering whether that was acceptable.


James Douglas Manly: Where is the Minister? Why isn't she here?


The Acting Speaker (Mr. Paproski):: We are on the main motion and it is very general. It is not a requirement that the Minister be in the House. The Hon. Member for Vancouver-Kingsway (Mr. Waddell) has the floor.


Ian Gardiner Waddell: I challenge any Member of the Conservative Party to answer my questions. This is very important for the pensioners of Canada. The Government is saying that it will create jobs as a result of giving this windfall to the oil companies. The Minister said that 300,000 jobs will be created.
I found the submission of the Canadian Petroleum Association to a standing committee on energy. It is dated April 10, 1984. The Canadian Petroleum Association is the lobby group for big oil. This town is full of lobby groups for big business, big oil, manufacturers and so on. There is not much for the ordinary people of Canada, and very little for pensioners and consumers, but the big boys have their people here.
The brief of the Canadian Petroleum Association is very interesting to read. It asks for increased security of supply to consumers at negligible cost. It suggests 1 to 2 cents per litre at the gasoline pumps. In the Budget, the Government announced a tax of 2 cents a litre at the gasoline pumps. The

May 31, 1985
The Budget-Mr. Waddell
Association asked for market prices for oil and natural gas. In the Western Accord, the Government announced market prices for oil and natural gas, deregulation, and great windfalls for the oil companies. It asked for increased revenue for the industry.
According to The Financial Post, this industry will get $9 billion by 1990. Compare the $9 billion going to the oil industry and the almost $1 billion taken away from the Canadian taxpayers. The Association asks for a tax based investment incentive rather than grants. Soon there will be new depletion and super depletion allowances for the industry. It asked for a phase-out of the Petroleum Incentive Program and the Government has announced that. It wants elimination of the 25 per cent Crown back-in in Canada Lands, which the Government has announced. Finally the brief says that 300,000 jobs will be created. That is the figure the Minister used. It is the figure of the Canadian Petroleum Association.
In committee I asked the Deputy Minister whether there were any studies on the jobs that will be created as a result of taking money from pensioners and giving it to oil companies. He said that they had studies and would get them for me. They delayed and delayed, so on May 8 I filed under the Freedom of Information Act asking for the studies. I said, "1 seek documents produced by the Department of Energy, Mines and Resources which show that between 100,000 and 300,000 jobs will be created as a result of the specific provisions of the Western Accord. These documents would include impact studies on the employment which would be generated by the Accord in its present form."
I received a letter signed by the Co-ordinator, Access to Information and Privacy, Energy, Mines and Resources. It says, "I regret to inform you that after thorough research and consultations with our Department's officials, the Department of Energy, Mines and Resources holds no such documents that include or show impact studies on the employment which will be generated by the Accord." It is negligent to give $9 billion to the oil industry without having their own studies on the number of jobs that will be created.
There is a study of the Economic Council of Canada which I traced down. The Council's director estimated that 100,000 jobs could be created by 1990, but that is based both on oil and natural gas prices reaching world levels. Natural gas prices are not at world levels. World prices for natural gas would be responsible for creating energy industry activity that would probably result in one-half of the 100,000 jobs. There is a fat market for natural gas, so let us eliminate the 100,000 and make it 50,000.
John Helliwell, a renowned economist in British Columbia, said that the removal of $5.6 billion from the Petroleum and Gas Revenue Tax by 1990 would create 15,000 jobs. He said, however, that a general reduction in personal income taxes in an equivalent amount would create 40,000 jobs. The Government has raised sales taxes, which means that people will have less money to spend on things that would create jobs. He said that since the Government would have to raise taxes in order
to make up for the money lost to the Treasury through the removal of the PGRT there will be a net loss of 35,000 jobs.
The Government is giving all that money to the capital intensive petroleum industry, which spends most of its money on equipment from abroad. It is true that some jobs will be created, but jobs may be created more cheaply in other places. The point is that the Government has no studies and the Minister of Energy, Mines and Resources has been misleading the Canadian people about the jobs that will result from the Western Accord. She has been misleading the Canadian people about the reinvestment rate of the industry. She said that the Western Accord requires the companies to reinvest their windfalls in job creation although that is not what the Accord says. Reinvestment will only be monitored. The companies could take the money and run back to the United States where the majority of them are based.
We have an unfair system of taxation in energy. Money is being taken from pensioners and given to big business, especially the oil companies. I think there will be a reaction from the pensioners of the country. Although they do not have a lot of power, they will have to mobilize because the Budget does a real injustice. The Budget is unfair in taking money from the pensioners, who have worked hard for the country and deserve those benefits, and giving it to the oil industry which is already very rich and is 55 per cent foreign owned. The Government is doing that on a hope and prayer that the money will be reinvested, but that will not necessarily create jobs. I think that is criminal negligence of the worst sort, and the victim is the Canadian pensioner.
[ Translation]


Claude Lanthier: Mr. Speaker, since this morning allegations are being made about what the Minister of Finance (Mr. Wilson) might have said. I would like, for the record, to make a correction about what he said in his speech yesterday. This has been mentioned all day and I would like to quote what the said, to avoid that he be quoted again by others and his words taken out of context. He was speaking at the annual meeting of the Canadian Economics Association, in Montreal, yesterday afternoon, and-
Mr. Speaker, it was alleged a moment ago that the Minister had unfortunate choice of words when he said that there were not enough rich people in Canada. This is the part I would like to correct for the record. I would like to quote what he said in English in order for everyone to understand. Here is what the Minister really said, in the proper context, and I quote:
Now I acknowledge that it would be just delightful if we could solve our fiscal problems by asking only rich people to carry the burden of restoring fiscal responsibility. But this brings us face to face with another one of those sobering realities that finance ministers cannot escape: No matter how we define the term, Canada has an acute shortage of rich people.
For example, those reporting total incomes greater than $60,000 in 1982 accounted for-
May 31, 1985

If they want the exact quotation of the Minister of Finance they can either ask the Minister of Finance or me. It will be a pleasure to supply the exact phrase he said without interpreting it.
Second, the Hon. Member for Vancouver-Kingsway (Mr. Waddell) alleged that 45 per cent was Canadian owned because he said 55 per cent was foreign owned. It is not something that we can neglect in the treatment of our fiscal responsibility to the oil industry.

On the other hand, domestic or foreign investments will create jobs for Canadians because the majority of people working in these areas either as wage earners, subcontractors or small businessmen, who are in a way "commercial parasites" of larger corporations, a term without derogatory meaning nowadays, are Canadians. We therefore suggest that any supportive action like the new proposal will promote employment. I would remind the Hon. Member once again that the President of the Treasury Board stated this morning that we were not in any way taking anything away from pensioners. As a matter of fact, we are making sure that over 3 per cent, they will be protected against inflation, against the spectre we once faced, that there will be no more 6, 8 or 10 per cent inflation rate as we have known with the famous 5 and 6 per cent magic conjured up by the former government. Pensioners will not lose anything this year and nothing will be taken away from them next year, of course. But nevertheless, we will ensure payments to the most needy. That is exactly what the Hon. Minister intended to do in his Budget. I believe, like all of us and indeed the majority of Canadians, that he was successful.


The Acting Speaker (Mr. Paproski):: The Hon. Member for Vancouver-Kingsway. I will then recognize the Hon. Member for Selkirk-Interlake (Mr. Holtmann) and the Hon. Member for Edmonton-Strathcona (Mr. Kilgour).


Ian Gardiner Waddell: Mr. Speaker, I said in my speech that the Government makes wild statements that it will create jobs. The Minister of Energy, Mines and Resources has been the worst offender, saying that the Government will create 300,000 jobs. She cannot name the jobs that will be created and she has no studies to prove that. All she has is the Canadian Petroleum Association study-


Claude Lanthier: Experience.


Ian Gardiner Waddell: She does not have experience. You are like Tinker Bell who once advised the kids if you want to fly, put your hands over your eyes, and say "I wish I could fly". That is not how you fly.
I am not opposed to more people being rich. I wish we were all rich. However, the fact is that the Government had to get the money from somewhere to replace the money that it transferred to the oil industry. An Hon. Member spoke about the deficit. The Government got the money partly through
The Budget-Mr. Waddell
taking away from the senior citizens; by making them poorer. That is undeniable. They will be poorer.


Claudy Mailly: Eighty per cent comes from-


The Acting Speaker (Mr. Paproski):: Order. The Hon. Member for Selkirk-Interlake.


Felix Holtmann: Mr. Speaker, sometimes the intelligence of what is said by Members opposite absolutely appalls me, especially in regard to the oil industry. What does the Hon. Member for Vancouver-Kingsway (Mr. Waddell) know about the oil industry?
If he were to tour Alberta, which contains the bulk of our oil in this country, he will know that when the oil industry boomed, jobs were created in Ontario, Quebec and all across the country. Pipes were manufactured in Ontario and boilers were manufactured in Quebec for the good of the whole country. When that industry boomed, industry throughout the country flourished. That would be very evident to the Hon. Member if he were to see what is happening. I am surprised that he does not know any more about it other than to say that we have taken money from senior citizens to put into the oil industry.


Steven W. Langdon: It is true.


Cyril Keeper: It is in the Budget.


Felix Holtmann: That is absolutely ludicrous. The Hon. Member takes a narrow view because the fact is that investment in the oil industry will probably create more jobs than any other single industry in this country.


An Hon. Member:: Wow!


Felix Holtmann: He is excited too. The previous adminsitra-tion could not achieve self sufficiency in oil. When we can't achieve that self sufficiency in oil, we lose millions of dollars in revenue as a result of having to import foreign oil. The Hon. Member says that everyone opposes the Budget. I have been reading some of my mail. The Prairie Theatre Exchange in Winnipeg is an arts group which also employs people. This letter was not solicited, but it states:
Having been quick to protest the November cuts to cultural agencies. I wish to be as quick to congratulate you on what you and your colleagues have achieved in the May budget.
The author is talking about the arts community which they believe was threatened. The arts community also employs people.


Cyril Keeper: More than the oil industry.


Felix Holtmann: Perhaps more, but we cannot be sure because the Hon. Member does not know where all the jobs are created. He wants the Budget to be specific and name where each job will be created. That does not make sense.
We will know where the jobs are when the financial atmosphere is ready to create them. I am not talking about the kind of jobs that the Government stipulates because we know that

May 31, 1985
The Budget-Mr. Waddell
they never lasted. They are the kinds of jobs that his Party would create. They did that in Manitoba and it does not work. The letter goes on:
The task force to investigate the stimulation of private and individual investment and contribution to cultural activities is a superb initiative.
That is the reaction we are getting to the Budget. We will point out further reactions to the Hon. Member as they come in, because he will turn a blind eye in the same way he described before. His Party wears blinkers that extend around to the front. Before the Hon. Member makes statements about the oil industry, rather than referring to documents, I suggest that he visit those working on the oil wells to discuss what has actually happened. Don't make blanket statements like that.


Ian Gardiner Waddell: I know that the Hon. Member farms pigs. He knows a lot about pigs. Let me tell him that I tried to learn about the oil industry. I am a senior member of the energy committee and I have visited virtually every large oil project in the country in the last 10 years.
Let me make two brief points to the Hon. Member. First, it was my understanding that police, firemen, teachers, garbage collectors and construction workers on public highways also held jobs. Let us not criticize them. I realize that programs such as LIP and OFY were of no benefit, but they do not attack the real public sector jobs. The Canadian Federation of Municipalities suggested that if it was given half the money being given to the oil industries, it could create 300,000 jobs repairing some of the cities in this country.
Second, of course giving money to the oil companies, the biggest windfall of which was to Texaco, was a strange choice, but that money will create some jobs. It will if you give anybody money. Do not buy the line that the Canadian Petroleum Association has succeeded in implanting in the Conservatives brains that it is the engine of economic growth, the only engine. In fact, it costs a heck of a lot of money to create jobs in the oil industry because it is a capital intensive industry. The Conservatives have bought the line hook, line, and sinker and it is taking the money out of the pockets of the Canadian pensioner to pay for it.


David Kilgour: Mr. Speaker, did the Member seriously tell my colleague, the Hon. Member for Selkirk-Interlake (Mr. Holt-mann) that he visited every oil installation in Canada?


Ian Gardiner Waddell: That is not what I said.


David Kilgour: Does the Hon. Member stand for repealing the National Energy Program or changing it in any way? Does the Hon. Member stand for leaving in place the PGRT? Does the Hon. Member want PIP to remain? Could he answer some of those questions, Mr. Speaker?


The Acting Speaker (Mr. Paproski):: Very quickly, please.


Ian Gardiner Waddell: Mr. Speaker, I will need two hours. I told the Member that I visited the major projects. We have the Beaufort, the off-shore, east and west, the tar sands, the heavy oil,
the light crude and the natural gas. Those are the plays, if you like, in the oil industry. I have tried to listen to the oil industry. I know a lot of people in the oil industry with whom I disagree, but I respect a great deal. We did not support the National Energy Program. Look at the vote. Look at the record. We supported the thrust of Canadianization, of energy security and of a fair taxation regime, and that is where the new energy policy of the Budget breaks down.


The Acting Speaker (Mr. Paproski):: Questions and comments are now terminated. I will recognize the next speaker. The Hon. Member for Timmins-Chapleau (Mr. Gervais).


Mr. Aurele Gervais (Timmins-Chapleau):: Mr. Speaker, although I have previously spoken under Standing Order 21 and I have asked questions during Question Period, 1 rise for the first time today to address the House on what I consider to be one of the most important documents ever brought before this assembly, the Wilson Budget.


Some Hon. Members:: Hear, hear!


Aurèle Gervais: It is a good Budget, one which will help create a turning point in Canadian history, just as the election of the Prime Minister (Mr. Mulroney) and a majority Progressive Conservative Government on September 4 was the beginning of a new era.
Before I turn to the Budget itself, I would like to mention that I represent the Riding of Timmins-Chapleau, a great riding in northern Ontario, one of the largest in area in Canada. I live in a town called Iroquois Falls. Timmins is the major community in the riding, consisting of 46,620 square kilometers. Timmins is probably one of the best known cities in all of Canada. As a major mining community since 1909, Timmins is known around the world. For the first 52 years of its existence, Timmins was known as a gold mining centre. Since 1964 it has been known as the home of the fabulous Kid Creek Mine. This mine ranks as the world's number one producer of silver and zinc. It also produces lead, copper, gold, and cadmium, as well as sulphuric acid as a by-product.
I started with mining because mining is one of the economic pillars of Canada. In my riding, it is the number one employer in terms of jobs. It employs 5,735 out of the 29,540 total workers in the riding. When one thinks of Timmins, one automatically thinks of mining.
I might mention there is some good news for the mining community in the Wilson Budget. I refer to the Minister's decision to correct the inequalities in the current system regarding tax treatment of certain allowances and benefits paid to persons residing in the North and in other isolated communities. There is a tendency to think of northern allowances and of problems in isolated communities as relating only to the North or north of the 60th parallel, but in reality we have those problems in every province.

Mr. Speaker, I am proud to give Hon. Members some information on the mining association since there is a problem
May 31, 1985

in my riding. It is a fact that mining operations are removed from large centres, so that it is difficult to attract and keep workers in those communities. Not only are there centres such as Timmins, but new development like Detour Lake next to my riding, and also Hemlo which is located in the northwestern part of Ontario.
1 am quite happy that Mr. Wilson's Budget states:
The current system does not apply uniformly to employees in these communities. Consultations are commencing on how the existing system might be improved.

That is one major problem. There is a second one in connection with mining. What happens to the community and to the workers when an ore body is exhausted and the operation is closed? Again, I know 1 speak for the thousands of miners in my riding and the many thousands of miners throughout Canada when I say the initiatives outlined in the Budget are most welcome. Let me quote the Minister of Finance (Mr. Wilson):
The Government believes that when industrial closures occur, it is often appropriate to join with employers to assist those who were displaced. Accordingly, the Government remains ready, on a case by case basis, to consider exempting severance pay and termination payments from tax in the case of closure of the principal industry in remote communities where alternative employment opportunities are limited or simply do not exist.
I am also pleased the Budget calls for reform to the pension system. As a result of the new Budget, employees under federal jurisdiction will have their pension contributions locked in after two years and their pension plans will be portable. Unfortunately, Mr. Speaker, this cannot be extended to the mining and forestry sector at this time because those sectors come under provincial jurisdiction. Workers in the forestry and mining sectors have long requested the portability of pension plans due to the transient nature and the many closures within the industries. We will continue to negotiate with the provinces with a view to having them follow our lead on pension reform.
I am proud of the strong economic base in my riding, a strength which has increased with the election of a Progressive Conservative Government and the start of a renewal of the nation as a whole. The three major mining companies in Timmins, Kidd Creek Mines Ltd., Pamour Porcupine Mines Limited and Dome Mines Limited returned to the proper side of the ledger for their local operations in this first quarter of 1985, and the outlook for mining appears bright for the years ahead, especially since I am expecting the Minister of State for Mines (Mr. Layton) to do someting to protect those mining communities from fluctuations in the price of gold. Elected municipal representatives from my riding have headed two delegations from the community which have met with the Minister of State for Mines.
As well, the outdated regressive taxation system imposed on the mining industry by some provincial governments should be examined. As part of our ongoing consultation process with the provinces, taxation reform to the mining industry should be set as a priority.
The Budget-Mr. Gervais
Another major mining centre in my riding is Wawa. Again there were problems as the workforce was substantially reduced between 1981 and 1984. The economic turn-about as a result of this Budget should offer some security to those employed in the iron ore operation on the shores of Lake Superior.
The second most important industry in my riding is forestry, which is based on a renewable resource, in comparison with mining, which is based on a non-renewable resource. Lumber and waferboard, as well as pulp and paper, are the products. Not only does our forest provide a means of livelihood for 2,550 men and women but for entire communities such as my home town of Iroquois Falls and Chapleau. My constituents were pleased when the Hon. Minister of State for Forestry (Mr. Merrithew) signed a recent, long overdue, forestry agreement with the Ontario Government under ERDA. A long lasting supply of timber is paramount to the continued prosperity of those communities, and reforestation is therefore vital.
I hope all Hon. Members realize that the Budget is a turn toward economic sanity. There is an ancient Chinese saying that the longest journey starts with a single step. The Budget now before this assembly is that step. We are embarking upon a long and difficult journey toward the day when there will be a fair and just tax system which Canadians will support and of which they will be proud.
I should now like to deal with a rather amazing situation, that is, the reaction of some senior citizens in my riding to the news that they were being asked to play a part in the great renewal taking place in Canada. 1 am happy and proud to say that not a single complaint by senior citizens was registered either in my constituency office in Timmins or with any of my six contact people who work in such communities as Iroquois Falls, Wawa, Chapleau, Gogama, Cartier and Foleyet; not a single one.

On the contrary, Mr. Speaker, I am pleased to inform you that many senior citizens have called me to say that it is time that we put our economic house in order and that we try to redress the damage caused by the wasteful years of the previous Government.


Some Hon. Members:: Hear, hear!


Aurèle Gervais: Senior citizens are important in my riding since there are 5,445 people aged 65 years or older, who represent 8.3 percent of the population. Mr. Speaker, these people have nothing to prove and they should not have to be obliged to anyone.
Many pioneers are still living in Northern Ontario. Those men and women arrived when that land was still wild in order to build railways, industries and communities. There are still log cabins that were built by these people who are senior citizens today.

May 31, 1985
The Budget-Mr. Gervais

Recently I had the honour to present a remarkable woman, Mrs. Annie Wilkes, with a plaque from the Prime Minister and with one from myself on her hundredth birthday. Mrs. Wilkes came to Iroquois Falls in 1916 by canoe, where she raised a large family while coping with a harsh climate and a lack of amenities and services which those in large centres took for granted. It is people such as Mrs. Wilkes and her younger associates who deserve and will get protection and help from the federal Government. In the Budget of the Minister of Finance, the Guaranteed Income Supplement continues to be fully indexed against inflation and benefits to veterans remain fully indexed.
The decision to rationalize soaring social costs, a central part of the deficit, was a courageous one. I commend the Minister of Finance for tackling the issue head on. Northern Ontario seniors have fought all their lives, and I sense in their comments both in my office and on the street that they are prepared once again to be part of the national effort. The decision to increase old age security payments by the amount which exceeds 3 per cent of annual hikes in the Consumer Price Index is a clear signal to the world that Canada and its Government are desirous about getting control of spending.
Despite the overwhelming need to get everyone involved in the fight to restore a balance to spending and income, the Government has found a way to help needy families with children. The child tax credit will be increased by $70 per child, from $384 to $454, in the 1986 taxation year. This is important because of the large number of children in my riding-19,850 or 30.9 per cent under the age of 18 years at the time of the last census in 1981.
My riding is a perfect example of why the Government is trying to help low income families through the child tax credit system. Of the 16,505 families in my riding, there are 2,535 that earn less than $10,000. This represents 15.4 per cent, and is just one of the many examples of Liberal Government policies harming Canadians who cannot help themselves. It is a situation which must be changed, and I will dedicate my term in the House to improving the lot of those families.
At this time I feel it is appropriate to explain my personal philosophy about the economy in general and its effects in my riding in particular. 1 feel Canada is blessed with an abundance of natural resources. As a nation which must trade to live, I believe we must use these resources. Therefore, the first point in my economic creed is to protect existing jobs and, where possible, to expand them. My second point is to build upon what we have. In northern Ontario, we have minerals and trees and a workforce of dedicated men and women who ask nothing of anyone but a chance to support their families through their own efforts. We in northern Ontario, in Tim-mins-Chapleau, have clean air, fresh water, wildlife and basically an unspoiled wilderness. 1 feel tourism is the answer when one considers how best to expand the economic base.

I am proud of my French heritage and my ability to communicate in both official languages of Canada.


Some Hon. Members:: Hear, hear!


Aurèle Gervais: As regards bilingualism, 1 wish to inform the House that Timmins-Chapleau is an example for the nation:
31.7 per cent of the constituents speak French at home and
64.8 per cent speak English. However, 48.3 per cent of the residents of Timmins-Chapleau speak both French and English fluently.

I never forget, however, that people of many backgrounds played an important role in developing northern Ontario, especially my riding of Timmins-Chapleau. Ethnic groups, such as the Finns, Croatians, Ukrainians, Polish, Chinese, German, Italian and Jews, all played important roles in creating a cultural mosaic as varied and strong as any area in Canada.
It has often been said, and 1 am proud to repeat it here today, that Timmins-in fact, any community in my riding- is an example to the rest of the nation, and the world, with respect to how people from different ethnic backgrounds can work, study, play and live together. Among those playing a key role in the cultural development of the riding are the native people. While there are five reserves in my riding, only 220 native people have chosen to live on them. There are 825 living elsewhere. We are proud to have them as friends and neighbours.
I wish to state that 1 was born, raised and have lived all my life in northern Ontario and, more specifically, in the territorial district of Cochrane, in the federal riding of Timmins-Chapleau. I am proud to represent the residents of that riding.
[ Translation]
I am very proud to be the first Progressive Conservative Member to be elected in the riding of Timmins-Chapleau.


Some Hon. Members:: Hear, hear!


Aurèle Gervais: Mr. Speaker, it shows clearly that my constituents wish more than anything else a positive change for Canada.

In closing, I am proud of My French-Canadian parentage. I am proud of my family. I am proud of the accomplishments of the residents of my riding. I am proud of my riding. Today, I am also proud to be a Member of the present Prime Minister's Government, a Government which has such people as the Minister of Finance in it. I am proud that he is our Minister of Finance. 1 am proud of his Budget.


Some Hon. Members:: Hear, hear!
May 31, 1985


Aurèle Gervais: 1 have always been proud to be a Canadian. When the Budget becomes law, 1 will be especially proud to have played some small part in bringing it about by speaking here today.


The Acting Speaker (Mr. Paproski):: Questions and comments? The Hon. Member for Essex-Windsor (Mr. Langdon).


Steven W. Langdon: Mr. Speaker, I want to congratulate the Member on a heartfelt and carefully constructed maiden speech. I do have several comments. I do not wish to make them critical since it is the Hon. Member's maiden speech. However, I do wish to raise two or three points.
First, I want to say that our action group visited the constituency of the Hon. Member in Timmins-Chapleau. Our visit brought to us many of the same points we heard elsewhere across the country, with the same sense of urgency people have with respect to rising unemployment. Timmins itself has shown a significant increase in unemployment, unlike some other parts of the country in recent months, because of problems in the resource sector.
With respect to the position of pensioners in this Budget, is the Hon. Member prepared to recognize that they are, in fact, being hit twice? They are being asked to pay the great range of increased taxes which all other Canadians-apart from the very rich-are being asked to pay. They are being asked to pay increased sales taxes because of the 1 per cent increase in federal sales tax. They are being asked to pay increased taxes because of the extension of sales tax to other items. They will pay higher income tax because of the elimination of the $50 deduction. They will pay other increases because of deindexation. Thus, pensioners are being asked to pay a significant share. We have estimated the figure at something in the order of $2,000 per pensioner family over the next five years as a result of this Budget.
The question is not whether it is fair that pensioners should pay some share with respect to the sacrifices which are being borne by all Canadians. That is not the issue being debated in the House. Given the sincere presentation the Hon. Member has made, 1 would like to ask him if he truly thinks that it makes sense to ask for an extra burden from pensioners, an extra burden over and above the amount of tax burden which they are required to pay already. I am speaking of the extra burden which comes from the loss of indexation with respect to the 3 per cent figure.
Has the Hon. Member received letters from constituents, such as the ones I have received, pointing out one of the other major costs for people who will be retiring? I have a letter in front of me which 1 received today. It is from a person who is now 56 years of age and who will be ready to retire in nine years. This person has an income of $17,000 and was able to contribute 20 per cent of his income to an RRSP. The amount of his contribution has been cut back to 18 per cent, thereby costing him the possibility of tax relief now and an improved pension in the future. This is a fact which has not been widely recognized, but one which is contained in the Budget. Does the Hon. Member recognize the fact that these extra burdens have
The Budget-Mr. Gervais
been imposed on pensioners over and above the extra taxes they have to pay, along with other Canadians?


Aurèle Gervais: Mr. Speaker, I would like to thank the Hon. Member for his kind words following my inaugural speech.
In reply to his question with respect to unemployment, I, too, am concerned with the high unemployment rate, not only in Timmins, and throughout my riding, but, indeed, throughout the country. It was precisely to that point I was speaking in my inaugural address and in respect of the turnaround in the economy.
We cannot sell mineral products produced in Timmins when the economy has slowed to the pace which it has since 1981. Before the recession, Timmins had no unemployment. Why? Because the oil industry was booming. All types of equipment were being built around the areas of Hamilton and Toronto for use in the oil Fields. This equipment was being made out of steel and other types of minerals which come out of northern Ontario. It was being used for expansions in paper mills and sawmills. During the recession, that expansion slowed to a crawl and, consequently, there were no buyers for our products. With the turnaround in the economy this Budget will bring, I would like to tell the Hon. Member that the question of unemployment should resolve itself, not only in Timmins but throughout the country.
With respect to the point he makes concerning the hardship on pensioners, as the Minister of Finance has said so often, and as I think the Prime Minister has said on a number of occasions, the economic pain of this Budget has been spread as evenly and fairly as possible.
To illustrate my point, on the plane coming back from my constituency last Monday, I sat beside a gentleman from the banking community in Toronto. I know very well that this gentleman is the first vice-president of a mine close to Timmins and travels to and from the area on occasion. His comment was very interesting. He asked me why, after all the taxes that Canadians are required to pay, the Government placed another two surtaxes on Canadians and another tax on capital. He asked me why the banks had not been singled out.

It is not only the older people who will feel the pain of the legacy of the tremendous national delficit which has been left to us. That deficit must be resolved. Opposition Members have referred to the middle-income earners. Sure, they will suffer as well. Everyone will suffer. That is the way it was meant to be in the Budget.


Frederick James (Jim) Hawkes: Mr. Speaker, I would like to make a brief comment. The Hon. Member for Timmins-Chapleau (Mr. Gervais) made his maiden speech today. 1 have been in the Chamber for six years and I continue to be in awe of the new Members in the quality of their thinking and in the quality of their speeches.


Some Hon. Members:: Hear, hear!

May 31, 1985
The Budget-Mr. Hopkins


Frederick James (Jim) Hawkes: I wanted to make a comment, because the NDP was on its feet so quickly as the protector of the poor. My maiden speech in the Chamber followed the Budget which was brought down by the Hon. Member for St. John's West (Mr. Crosbie) when he was Minister of Finance in 1979. He brought a Budget into the Chamber which the Canadian Welfare Council said was the fairest Budget to the poor people of the nation in the decade of the seventies. At that time, the NDP moved a motion which tossed out that Budget. It reached an unholy alliance with the Liberal Party of Canada and succeeded in tossing out a Government on a Budget which was viewed by the Canadian Welfare Council and other analysts as the fairest Budget to poor people in the decade of the seventies. I would like to say to all new Members in the Chamber that when NDP Members stand up and try to portray themselves as the champions of senior citizens, they are talking to somebody whom 1 have not yet met. Every senior citizen whom I have encountered wants to be a part of society and wants to contribute to the nation. Senior citizens understand that the contribution of 3 per cent will let them do their part to ensure that in 1990 they will not be $3,000 more in debt than they are today. That is what the Budget is about. That is what the Hon. Member has outlined. He knows that senior citizens want to be a part of the country and not hived off into some Never Never Land.


The Acting Speaker (Mr. Paproski):: The period for questions and comments has now terminated. I will now recognize the Hon. Member for Renfrew-Nipissing-Pembroke (Mr. Hopkins) on debate.


Mr. Len Hopkins (Renfrew-Nipissing-Pembroke):: Mr. Speaker, I would like to say to the Hon. Member for Calgary West (Mr. Hawkes), who has just finished his remarks, that the senior citizens of Canada know that the Liberal Party has done more for them over the years and has made them a real part of society than any Party in the country.


Thomas Edward Siddon: They voted you out, Len.


Leonard Donald Hopkins: I can understand that my comment hurts, because everyone wants to be a hero.
During election campaigns, promises are made by candidates. Promises are also made by potential Prime Ministers. There is always a certain amount of distrust on the part of the public toward politicians, and that is sometimes justified by the results.
On August 22, 1984, the Prime Minister (Mr. Mulroney) sent a telex to the Progressive Conservative candidate in my riding. That telex was eventually transformed into a newspaper ad which was accompanied by a picture of the present Prime Minister. The article was entitled: "The P.C. Commitment to Chalk River Nuclear Laboratories." The article read:
Since September 1945, when Canada's first civil reactor started to produce energy at the Chalk River Nuclear Laboratories, Canada's nuclear power program has grown with each new step-the NPD at Rolphton, Douglas Point and finally Pickering-to become the most successful nuclear power system in the world, CANDU.
That was stated by the late Hon. C. D. Howe. However, the Prime Minister did not mention Mr. C. D. Howe in the article. The article continued:
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 governments engaged in similar research.
As a final comment, the Prime Minister's ad stated:
This is the Progressive Conservative commitment: Job security for you-and jobs for your children.
Then we came to reality, the Budget which was brought down last week, and are told the results of that firm commitment. The Minister of Finance (Mr. Wilson) slashed research and development funding for Atomic Energy of Canada Limited from the present $200 million level down to $100 million by 1990. Since more than $110 million of the current $200 million goes to Chalk River-


Thomas Edward Siddon: Mr. Speaker, I rise on a point of order.


The Acting Speaker (Mr. Paproski):: The Minister of State for Science and Technology (Mr. Siddon) on a point of order.


Thomas Edward Siddon: Mr. Speaker, the Hon. Member would not want to mislead the House on this matter. He has cited from the Budget and alleged that the Minister of Finance (Mr. Wilson) slashed research and development funding to AECL by $100 million. I would challenge the Hon. Member to produce such a quote or statement from the Budget. Indeed, it is not true.


The Acting Speaker (Mr. Paproski):: That is a point of debate. I believe that the Hon. Minister and the Hon. Member will have a chance to go at it during the period which is allotted for questions and comments.


Leonard Donald Hopkins: The Minister should read his Party's Budget. Since more than $110 million of the current $200 million goes to Chalk River, and provides 75 per cent of its total budget, the planned cuts to AECL will have a devastating effect on the laboratory the Prime Minister promised in writing not only to maintain, but possibly to consider expanding. Another $70 million was taken out of the company's earned savings.
If AECL's research and development effort is decimated every year until 1990, as the Budget of the Minister of Finance requires, the loss to Canada in scientific and technical capability will be enormous. If we as Canadians continue to accept the breaking of promises as a politician's right, we stand to lose as much in our nation's character.
Only two years ago, a study by the U.S. Office of Naval Research pointed to AECL as the second most productive organization outside the United States in one field alone- basic physics. The only institution with a better record was in
May 31, 1985

Juelich, West Germany. IBM Switzerland was third. The measure of each laboratory's success was the number of times its results were published in the prestigious American journal, Physical Review Letters. The journal has a strict refereeing system which accepts for publication only the very best international work.
The report notes that over the 10 year period from 1970 to 1980, the success of U.S. laboratories in basic physics declined, while that of foreign laboratories like those of AECL increased. The report also expressed concern that U.S. industry is "just not playing the game" in its support of science.
The budget papers of the Minister of Finance suggest that the cut in government support funds to AECL should be made up from other sources, but he has not come up with any. Presumably, he is thinking of Canadian industry, although it is not usually noted for doing better in R and D than its U.S. counterpart. No body, whether it be Government, business or agency of Government, has come forward to take up the slack as Atomic Energy of Canada's research and development allotment of funds decreases. Therefore, it almost looks as if it is the gradual winding down of one of the greatest long-term success stories of high tech in this country and this happens at a time when the Minister of Finance comes in with a Budget which he says stresses research and development in Canada. However, his Budget is winding down one of the best we have in the country.
Many businesses and organizations inside and outside Canada which have done business with Atomic Energy of Canada Limited over the years know that its research capacity is not debatable fact. Federal funds for research and development by Atomic Energy of Canada are cut in half by the recent federal Budget of the Minister of Finance. This cut could cripple Canada's nuclear industry and cause significant damage to many sectors of our economy, because this industry does a lot of work with private enterprise inside Canada and internationally. Prospects for foreign sales of the Candu power reactor in an already tough market will suffer if Canada's commitment to the system now falters.
The statement by the Minister of Finance that federal support for nuclear research and development would be cut in half over the next five years is causing grave concern among members of the society of AECL professional employees at the Chalk River nuclear laboratories of Atomic Energy of Canada, and, indeed, it is of grave concern to the Crown Corporation in general.
The AECL laboratories were established 40 years ago to exploit peaceful-and 1 emphasize the word peaceful-uses of atomic energy. Its most visible product, Candu, has been acknowledged by the present Prime Minister as the most successful nuclear power system in the world. It is a leader in reliability of operation and low electricity costs. However, any high-tech activity must have continuing development to stay competitive. It must have continuing research. Tomorrow's buyers of power reactors will be interested in only technologi-
The Budget-Mr. Hopkins
cally advanced models. They will not be interested in those of yesteryear.
Research and development, associated with the upkeep and maintenance of current Canadus, can be the responsibility of existing users-that is the great theory-but users' interests do not guarantee adequate funding for future development. If the ongoing development of Candu and other nuclear technology is curtailed, the future energy needs of Canadians, and the commercial prospects of a key Canadian industry, will indeed be jeopardized. These cuts come at a time when foreign competitors are increasing their commitment to, and investment in, nuclear technology.
In his budget speech, the Minister of Finance said that Candu technology is now well established. There is a quote, Mr. Speaker, in the May 31 edition of the Ottawa Citizen. James Donnelly, the President of the Crown Corporation, told the House of Commons National Resources Committee yesterday that he does not share the Government's view that the Candu reactors' program is established to the point it no longer needs a large infusion of research money. In fact, he said, Canada is only at the threshold of nuclear science. The Liberal energy critic, the Hon. Member for Cape Breton-The Sydneys (Mr. MacLellan), said that the Tories are hanging AECL out to dry by cutting support to power reactor development.
No product, certainly not a high-technology product like a reactor can stop developing and still remain competitive. That argument is ridiculous. The United States, France and Germany, our competitors in the reactor market, all maintain strong government funded research laboratories. Their products will continue to develop while ours, without AECL's research and development, will not. The result will be the death of Canada's nuclear industry. That means a total of about 30,000 lost jobs and there are up to 55,000 indirect jobs involved.
AECL is like a service industry to many private industries, Mr. Speaker, and works with them on a continuing basis year by year. Research at Chalk River is not only a matter of reactor product development, as some people know. The laboratory is a national resource with an international reputation in many areas of pure and applied science. In fact, together with the White Shell Laboratory in Manitoba, it constitutes a unique blend of pure and applied skills which are not matched anywhere else in the country, nor, indeed, in most of the western world. This means that in solving many technical problems, the laboratory can draw on scientific depth to whatever level is necessary, and it can do so rapidly and at one site.
One consequence has been the effective response to requests from the nuclear industry to diagnose the recent problem with the Pickering pressure tubes, for example. Chalk River's contributions to a wide spectrum of science on an ongoing basis has been very important. Chalk River is doing world class science of which our country should be proud. It is also keeping an important national industry competitive. If the cuts by the Minister of Finance are proceeded with, the best of the

May 31, 1985
The Budget-Mr. Hopkins
scientists and engineers will be lost, many to other countries. It will be another Avro Arrow. We will lose talent from Canada, driving it out of the country. Surely it is not the intention of the Government to dissipate its research and development resources at a time when they are most needed. Surely the national good will be better served by the Prime Minister keeping his promises of last August rather than accepting the budget statement of last week.
The cuts in research and development have great significance which may not even be appreciated by the Government itself. The statement of the Minister of Finance to Parliament explicitly promised no reduction in spending on R and D related to health and safety. It implies that the Candu is sufficiently mature that its future is not jeopardized by a winding down of government support, something with which the president of the company does not agree. There is no evidence of the government's appreciation of how lean Canadian nuclear R and D already is.
AECL operates two nuclear research laboratories at Chalk River in Ontario and at White Shell in Manitoba. While they are smaller versions of the nuclear laboratories found in almost all of the developed countries, their 3,500-strong work force is unique in Canada in its capabilities to bring together longterm peer research and large mission oriented development and application. The work covers a vast range. It includes world leadership in aspects of nuclear physics, cancer research funded by the U.S. National Institute of Health, a dominant world position in production of some of the radio isotopes most widely used in cancer therapy-


The Acting Speaker (Mr. Paproski):: Order. Should the Hon. Member wish to continue his speech, he will have four minutes, plus a question and comment period, the next time we debate the Budget.

It being five o'clock p.m., the House stands adjourned until Monday at eleven o'clock a.m., pursuant to Standing Order 2(1).


[Stage Direction]
The House adjourned at 5 p.m.
[Stage Direction]
Monday, June 3, 1985