1985-09-30

[Stage Direction]
The House resumed from Friday, September 20, consideration of the motion of Mr. Epp (Provencher) that Bill C-70, an Act to amend the Family Allowances Act, 1973, be read a second time and referred to a legislative committee; and the amendment of Mr. Frith (p. 6625).
Mr. Alfonso Gagliano (Saint-Leonard-Anjou):: Mr. Speaker, the cuts proposed in the Progressive Conservative Budget brought down in May 1985 are a direct contradiction to the commitment made by successive Federal Governments to fight poverty in this country. As a result of Conservative measures, the poorest in this country will be losing income and paying more taxes.
Mr. Speaker, we need only analyze the impact felt last spring when the Progressive Conservative Government gave away nearly $2 billion to the oil multinationals. We need only analyze the $500,000 capital gain exemption offered in the May Budget, to realize that this Government is giving to the rich and taxing the poor.
Mr. Speaker, how is it that in 1985, after so many years of debate aimed at establishing a system of social justice that would be fair to everyone in this country, that we should now have to discuss cutbacks that are entirely unacceptable to Canadian families? The Budget is proposing a significant change in the way family allowance payments are distributed. The Government's contention that these changes will increase amounts received by low-income families is incorrect. In fact, most low-income families and all families on modest incomes will be receiving less than they are receiving at the present time.
Families that are most in need, that is, those who are living below the poverty line, will be receiving less in 1986, while the rich-and I am not referring to people like some of my constituents who have a duplex where they use half as their own residence and rent the other half, they are not going to
benefit from this capital gains exemption-while the rich, and I mean those who own land for speculative purposes, and those who own apartment buildings, these people will be able to take advantage of the capital gains tax exemption, while our neediest families will have to suffer the consequences of having their purchasing power reduced and having less money to spend on essential needs. The vast majority of these families, including many families living below the poverty line, stand to lose substantial income because of the series of measures proposed by the Conservative Government.
Mr. Speaker, in the May Budget it was announced that the $500,000 capital gains tax exemption would be spread over five years, and the resulting spate of tax planning we are seeing is very discouraging. In fact, call a real estate agent today to ask whether there is any good income property on the market, and the answer will be no, because everyone is waiting until 1988, 1989 or 1990 to take advantage of this measure. And such measures will not create jobs.
Today, the Government wants to cut the average income of our families by deindexing family allowance payments. Families with an income of $15,000 in 1986 will lose $1,879 in income over the next five years, while a family with an income of $35,000 in 1986 stands to lose $3,452 during the same period. By adding tax increases to cuts in the amounts provided under the three family allowance programs, the Conservative Government has created an untenable situation for many Canadian families. Furthermore, since on the whole, the Budget measures tend to benefit rich Canadians, a family with an income of $80,000 in 1986 will suffer a loss of income of only $1,125 over five years. The poor stand to lose $754 more than the rich. Families on modest incomes will be losing over three times as much as Canadian families that are well off. [English]
The Government began by the deindexation of the pensions of our senior citizens, a most vulnerable group. Yet with the Liberals' influence and persistence the senior citizens of our great nation were able to speak aloud and defend themselves. The Minister of National Health and Welfare (Mr. Epp) said it is the family and a commitment to community which guarantees stability in our social fabric. He further stated, "it is my role as Minister of National Health and Welfare to put forward signals and initiatives which will strengthen the role of the family and give it more prominence in society". Let me ask this, Mr. Speaker. How is a family to be strengthened under already tight allowances? They are struggling now, and to further decrease their allowance will only create more problems. We all know that family breakdowns are generated

September 30, 1985
Family Allowances Act
mainly because of financial problems before all else. It is unworthy and unacceptable for the Government to reduce the deficit at the expense of the nation's families, our children. With the many alternatives available to the Government, Members opposite should carefully re-examine this approach to reducing the deficit and begin to tax the rich, as they proclaimed they would do in their May Budget.
[DOT] (mo)

Mr. Speaker, the Conservative Government, with its misleading rhetoric, is trying to hide the fact that, for instance, by 1990-91, Canadian families will be receiving $55 million less in family allowance benefits.
Mr. Speaker, that is why this morning, I rise in the House to protest against this measure.


Mrs. Gabrielle Bertrand (Parliamentary Secretary to Minister of National Health and Welfare):: Last May 23, Mr. Speaker, the Minister of Finance, the Hon. Michael Wilson, tabled his Budget in the House of Commons. An adjustment in social programs was one of the measures announced. Mr. Wilson said this in his statement: "When resources are increasingly limited, we must also adjust social programs so that benefits are targeted to those most in need and funds are freed for other social priorities".
Well, these adjustments will be made through Bill C-70. I agree it is a partial response to suggestions made by a great many citizens, social interest groups and the Standing Committee on Health, Welfare and Social Affairs.
Obviously all such groups will always ask for more money to help underprivileged people and try to better living conditions. We understand that and we share this concern for social justice. Still it does not mean that they are against opposed to our social policy readjustment and reorganization program, especially if it is to benefit very low income Canadians.
The situation of families with children is in constant evolution and programs designed to help them cannot always be geared automatically to their changing condition. Hence it does become necessary to revamp such programs now and then, and that is the purpose of Bill C-70. We believe our approach to be realistic and fair.
Mr. Speaker, our system is basically sound, but this Bill attests to our intention of fine tuning it and making it even better. We are not advocating radical changes, only slight alterations to improve the product.
For the benefit of the House I should like to recall the principles which guided us in our consultations and which are reflected in this measure.
The main objective of the review of the child benefit system we have undertaken so far is to define and upgrade programs, the better to meet the needs of Canadian families and of our
society. One of the most significant aspects therefore is to ensure that benefits and tax incentives will help those who need it most, particularly low income Canadians. For example, a family with two children under age 18-let us say they live in Ontario-with an annual income of less than $20,000 will have a net increase of $328 in yearly benefits between now and 1989, whereas a similar family whose annual income is $60,000 and therefore among the fairly well-to-do will see its benefits drop by $284 over the next three years.
It is patently clear that our aim is to help the most needy.
The second objective of the Bill is to maintain the principle of universality. I should like to emphasize that, in keeping with the recommendations of the Standing Committee on Health, Welfare and Social Affairs, universality remains the basic principle underlying our social security net. Family allowances are a secure source of benefits for families with children and our Government is there to help them.
Our friends opposite make disparaging remarks about those changes, but what did they do? Between 1974 and 1984 the Liberal Governments cut expenditures for social programs down from 50 to 43 per cent of total public outlays-a one-year temporary suspension of indexation in 1976, a monthly reduction of family allowances from $25.68 to $20 per child in 1978, elimination of the $50 tax reduction then applicable to each child, reduction of the child tax exemption for youngsters aged 16 and 17, and the 1983-84, 6 and 5 per cent ceiling on family allowances indexation and the child tax exemption which was announced in 1982.
Mr. Speaker, the previous Government also made changes in the family assistance system, changes which were much more radical than those we are now suggesting. If family allowances had been fully indexed to the increase in consumer prices since 1976 without interruption, they would amount this year to $51 a month compared with the current figure of $31. When they were in power, the Liberals therefore caused a loss of $20 a month for Canadian families.
Some people sometimes become demagogic at the expense of low income Canadians. Last summer, I saw the Hon. Member for Montreal-Sainte-Marie (Mr. Malepart) on television. He was speaking about our poor little children and showing boxes of baby powder. Maybe the Hon. Member for Montreal-Sainte-Marie lacks experience in this field. Perhaps he is not yet a grandparent, but for my part, I have seven grandchildren and I can tell him that baby powder is out of fashion and is even considered bad for babies.
I said earlier that this Bill brings about a readjustment made necessary not only by our economic situation, but mostly by the very serious difficulties in which many low income families find themselves. I would add that this is the first step in a new direction.
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I can but refer to the recent report of the MacDonald Commission which pointed out many weaknesses in our family assistance system. What did this Commission suggest? In addition to recommending the elimination of present child benefits and the establishment of a guaranteed annual income, the Commission presented two options which are similar to what we are proposing. These are benefit readjustment formulas aimed, first, at providing maximum assistance for low income families and second at protecting poor families through a reduction in Government expenditures. This is very close to what we are suggesting and what will be the purpose of our reforms.
The Opposition argues that the measures in this bill are regressive and hit poor people harder than the well-off. I would like to remind the Elouse that this bill is only one component of a package proposed by our Government to reform the Canadian child benefit and taxation systems.
As concerns child benefits, the child tax credit will be substantially increased in coming years, which will be of further assistance to needy families. In addition, the reduction of tax exemptions for dependent children will benefit these same people rather than the rich.
Hon. Members will recall that measures were announced in the Budget last May to bring more equity and objectiveness to our tax system, such as the implementation of a minimum personal income tax beginning in the 1986 fiscal year. Second, there will be a temporary additional tax for high income taxpayers and big businesses. Third, there will be a capital tax for financial institutions, including the major banks and trust companies. There is therefore no question of regressing, but rather of progressing towards a more equitable system.
For us, Mr. Speaker, a family policy does not consist simply in a cheque at the end of each month for the welfare of a child. It is much more than that. Jobs for the father, the mother and the children leaving school are really what matters. Fortunately, our economy is showing signs of vigour. Over the past year,
284,000	jobs have been created by our Government. The unemployment rate, which reached 11.6 per cent in September 1984, is now down to 10.3 per cent. In the Eastern Townships where my riding is located, the unemployment rate went down from 10 per cent in July, 1984 to 8.1 per cent in 1986. Interest rates have decreased by 2.75 per cent since September, 1984 and are now at their lowest level in seven years. That is a positive record.
Mr. Speaker, I should like to conclude my remarks by saying that the time has come for us to give a new direction to our social policy for Canada. It should be based on our country's economic recovery. That was the underlying philosophy of the Wilson budget introduced last May. By adopting this budget, the House gave its support to changes. The time has come to implement the proposed measures and to act for the benefit of all Canadians. That is the reason we should act now, Mr. Speaker. Canadians voted for change last Septem-
Family Allowances Act
ber, and I wish this Bill to be sent to the legislative committee for a detailed study.


Mr. Dan Heap (Spadina):: Mr. Speaker, I am very pleased to have an opportunity to speak against this Bill. I am speaking in defence of all the children of Canada, including my 10 grandchildren. If any Hon. Member suggests, because he has fewer than 10 grandchildren, that I have a conflict of interest, I will point out that he has an equal conflict of interest.
One might call this Bill hate literature against children. This Bill, plus other budget measures, cuts hundreds of millions of dollars from the effective income of families who are raising children.
A typical family with two children and two income earners-which is becoming more common-is likely to lose approximately $2,000 by 1990. Let us look more closely at some other examples. A family earning $10,000, while receiving $79 more in benefits next year, would pay $37 more in tax. Therefore, it would have $42 more. However, by 1990, it would have less in benefits, would pay much more in tax, and would lose $280 altogether. The same picture applies to a family earning $20,000. However, a family earning $80,000 will receive $141 next year and $1,708 in 1990.
We can look at it another way. Family allowance in 1985 is $375. In 1990 it will be $404, an increase of $29. The child tax credit maximum benefit is now $384 and it will go up to $550, an increase of $156, less than $200 altogether. But the chjld tax exemption will drop from $710 to $404, a drop of $306. In other words, families will lose 50 per cent more than they will gain. The net loss will be 50 per cent.
Let us look at it another way. On these benefits and taxes a family earning less than $10,000 a year by 1990 will perhaps come out to the very same income now less $3. A family earning $10,000 will lose $35 if we reckon 1990 money in 1985 dollars, taking account of inflation.
At $20,000 in 1985 dollars, a family will lose $199. At $30,000 a family will lose $530; at 40,000 a family will lose $486, and so on. Families will lose, and these are families raising children. It is an attack on children. It is an attempt to go behind the progress made in the last two centuries. During that time we had to counteract the effect of the market system. In pre-modern times, families recognized responsibilities within the family and communities recognized reciprocal responsibilities within the community. Nobody was considered absolutely alone, fending totally for himself or herself at whatever age.
Now we are getting into a new scene. We now have a scene in which, for a couple of hundred years, the market overtook nearly all those relationships, nearly everything was marketable and the poor, the women and the children were downgraded, in fact degraded. There was a fight against it. First, child labour was prohibited in the mines and in the mills. Free

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schools were established because it was found necessary for the nation that everyone have schooling.
Since World War II, family allowance has been based on the principle that everybody, regardless of prosperity, should have an agreed minimum amount. Families who are raising children should not be forced to live at a lower standard than childless families.
We have now had another attack in the last several decades on the principle established to make veterans happy when they came out of the Forces in 1945.
The business elite has attacked, first through the Liberals and now through the Conservatives. In 1945, the family allowances program was established. In 1947, it was made universal when its cost was only 22 per cent of the federal expenditures, the same percentage as it is now. At that time it was 7.7 per cent of the federal expenditures.
Over the last 20 years, payments have been seriously cut. The Liberal Government, through the then Minister of Health, Mr. Munro, together with the Finance Minister, now the Leader of the Liberal Party tried to cut payments by reducing all payments to anyone earning more than $10,000 in the family income support plan. That plan was blocked by the 1972 election when the Government lost its majority and, with the NDP, the Government was obliged to double family allowances. Since then the Government cut back again, by about 20 per cent in 1974. The Liberals again made cuts indirectly through selective child tax credits in 1978. Then, in 1982 and 1983, the Liberals cut back still further with the six and five program, as the previous speaker has reminded us. By 1984, as a share of Government expenditure, the family allowance was cut to 2.4 per cent instead of 7.7 per cent. Now we have the attack by the business elite through the Tories. We have a Budget which, through sales tax on gas, other energy products, health products and other basics of family life, will cost every family about $1,000. What is being taken out by a shovel is being put back with a teaspoon for show.
Also, the Government has cut back on social housing, which is needed by the same families. Almost all families requiring social housing are raising children, and it is about to increase those rents by 20 per cent. It cut the money for planned parenthood. In fact, it will be saving on family benefits, directly and indirectly, $130 million in 1986 and $600 million in 1990. That money is being taken from families with children.
The cost is supposed to be too great. In fact, the cost is less than $2 billion when we consider what is paid out and what is recovered in taxes. The Government wants to take $2 billion from families but is eager to give $ 1 billion in fresh tax rebates to oil companies and $1 billion to the richest investors in a bank which went broke because of its greed and the greed of its investors. This is an anti-child Government leading an anti-child business elite. It is cutting family allowances, education, health and social housing. At the provincial level, Conservative Governments, such as in Ontario, are supporting indirectly adult only apartments.


Miss MacDonald:: What kind of Government is that in Ontario?


Daniel James Macdonnell Heap: They do not want anyone with children to live in many of the new apartments which have been built in the last dozen or so years. Both the Liberal Party and the Conservative Party blocked any attempt in the Ontario Legislature in past years to correct that discrimination against children. The message from the Government to the women of this country is that it will cut back on family planning programs and that once they have given birth, they are on their own. It says to these women: "Don't come to us for help because we must give the money to the banks and oil companies; there is not enough left for children".
In conclusion, 1.2 per cent of the Gross National Product for 1974 went to family allowance. Today, before these cuts, it is .57 per cent of the GNP, and the Government wants to cut it even further. Shame on it.


Mr. Dave Dingwall (Cape Breton-East Richmond):: Mr. Speaker, I am pleased to participate in the debate on the deindexation of family allowances. As my colleagues before me have indicated, particularly those in the Opposition, this particular measure will have some very serious effects upon the livelihoods of many young children. This particular measure cannot be looked at in a vacuum. We must remember some of the measures which came down in the Budget of the Minister of Finance (Mr. Wilson) which were equally harsh. Collectively, they indicate to Canadians that the measures will be devastating.
For instance, we will have increased consumer and gasoline taxes, notwithstanding the fact that there will be a deindexation of family allowances. There has been the imposition of taxes on health goods. Of course, there was the attempt of the Prime Minister (Mr. Mulroney) and the Minister of National Health and Welfare (Mr. Epp) to deindex the old age security. However, because of the fight on the part of Her Majesty's Official Opposition, they have backed down. Also there is the erosion of the family benefits package, which will result in less benefits by 1990 to low and middle-income families.
Our official critic with regard to social programs outlined in great detail the ways in which these cut-backs will affect average Canadians and average Canadian families. However, the hypocrisy of the Conservative Party of Canada seems to be appalling. It was not all that long ago that the Conservative Party ran advertisements in newspapers. Its members advertised en masse, at the expense of the Conservative Party of Canada. I will refer to one particular newspaper article which reads: "You have heard a lot about the Constitution lately, but how much have you heard about deindexing?" That ad goes back to 1980. They seem to have forgotten, or perhaps they have not. Maybe the true, classic philosophy or ideology of the Conservative Party is taking over the Chamber-the rich get more and the poor get less. That is very evident in numerous
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measures which have been put before the House. The Budget in May, and prior thereto the November economic statement of the Minister of Finance, suggest to our Party-and I think very clearly to many Canadians-that the Conservative Party believes there is no room in the country for weak individuals.
Why else would it viciously attack our senior citizens in the deindexation of their money? Fortunately, because of the opposition Parties and because of the strong will of our senior citizens, this measure has been curtailed. I have said in the House before-and I will say it again-that that was the first attempt against senior citizens, and I suggest that the Conservative Party will try again, when the opportunity arises, to implement deindexation for our senior citizens.
Now we have a deindexation proposal for family allowances. Unfortunately there are numerous Canadian families who use that money to buy the necessities of life. There are certain individuals, to whom the Prime Minister refers as bank presidents, who receive sums of money under the Family Allowances Program which they do not need. However, there are literally thousands of young families who purchase the necessities of life with their family allowance payments. In the wintertime those cheques are used to purchase such articles as boots, snowsuits and a whole host of necessities. Hon. Members of Parliament, whether they be Conservative, Liberal or NDP, would not want to begrudge young children that income in order to purchase such goods. Some families use family allowance for investing in the education of their children, whether they attend post-secondary institutions or training schools; some of the money may be put away for that sole purpose. What is the Conservative Party doing as a national Government by saying to young families that they will no longer be given that opportunity, that family allowances will be decreased because it needs to rid itself of debt? The Government ought to have thought about that when it bailed out the Canadian Commercial Bank. We are led to believe that an audit was requested by the chartered banks with regard to the money which was thrown into the CCB, and that was denied. Yet, the Government has the audacity to come before Parliament and to say that it wants to reduce the deficit by taking away money from the Family Allowances Program.
Surely the Government could have attacked some other area in its efforts to save money for the Canadian taxpayers. What about the billions of dollars which have been given in relief to the multinational oil companies, Mr. Speaker? Would it not have been better to deny that relief, instead of denying benefits to young families? Perhaps the Government could have looked at the capital gains exemption. Billions of dollars will be lost to the national treasury as a result of the implementation of the capital gains exemption which is afforded to the rich in this country. This is another example of where money could have been saved to reduce the deficit. But collectively, as a Party and as a Government, they have singled out families in this country to bear the brunt of reducing the deficit, and thus they deny, in my view, young families and young children, and some not so young, an income that they had become accus-
Family Allowances Act
tomed to having. Some Hon. Members suggest, either implicitly or indirectly, that sometimes this money is not used for beneficial purposes. There is no question. There may be some abuses. But does that mean the entire system should be destroyed? I say quite frankly that that is not the way the difficulties should be resolved.
Many families have learned to depend upon family allowance payments. Notwithstanding the gross family income, many women in particular depend upon family allowances in order to exist in what could be a very difficult economic life.
I could go on at length and indicate to the House where I think other cuts could take place in order to save money, but I think it is fair to say that when a national Government selects families to bear the brunt of its total incompetence, whether it is its dealings with the Canadian Commercial Bank, its placing of a million tonnes of tuna on the shelves, or with regards to the bail-outs of the multinational oil companies, that incompetence, in my view, should not become a burden to young families. Many members of our society, and particularly young people, are in desperate need of financial assistance. 1 would urge Government Members as well as Cabinet Ministers to review this measure which will have such a devastating effect on Canadian families.


Mr. Frank Oberle (Parliamentary Secretary to Minister of State (Mines)):: Mr. Speaker, I am pleased to make a few comments in regard to the Bill that is before us. I had not really intended to get into this debate, but in listening to the comments of the opposition members this morning which compared this Bill with the bail-out of banks and rotten tuna, I think it is timely that someone put the matter into proper perspective.
In the few moments I have I will not engage in the suppositions that have been advanced here this morning, namely that by the year 1990 the net revenue to a family with children will be something less than what it is today and by the year 2000 it would be literally impossible for a family to make a living. My hon. friend, the Hon. Member for Spadina (Mr. Heap), says that the children will be back in the sweat shops and in the salt mines by the year 2000 if we keep going the way we are. All of us here know, of course, that that is not so.
What this Bill attempts to do in order to maintain the concept and principle of universality is to use the tax Act, which of course is already arranged in such a way that the rich pay a little more than the poor on a graduating scale, to use scarce public resources to help those who are in greatest need of this kind of help. My friends say that families put the family allowance away in a savings account to help their children or their grandchildren obtain a proper education. People in the higher income tax brackets, with greater disposable income, have other ways of doing that through family trusts. Parents or grandparents can put money away for children in a family trust and thus get some tax concessions. People in the lower income tax brackets do not have sufficient disposable income to create these trusts. Therefore, that argument does not wash.

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An Hon. Member:: That's what they were saying.


Frank Oberle: What we have to look at is the fact that we have accumulated over the last 15 years of Liberal socialism a debt of $190 billion. Over the last three years the current account deficit grew by 25 per cent a year. The problem with universality is that if it is continued in the same fashion as it has been, particularly over the last three years, not only will family allowances be threatened but so will the unemployment insurance fund, old age pensions and everything else. The only real way we have to guarantee and to enhance these social programs is to make sure that the economy on which we rely to pay for these programs is healthy and is restored to its former dynamism and health.
How is that done? When things get tough, those who are in greatest need are helped, and that is what this Bill attempts to do.
I look at these social programs in two ways. The unemployment insurance fund and the Canada Pension Plan are programs to which people contribute during their working lives and which will help them when they are in need, that is when they lose their jobs, have to make a transition from one job to another or when they reach old age. We pride ourselves with having one of the most advanced social programs in the world. That, of course, is a myth but it is only a myth because it is in its starting phase. I compare social programs with those of some of the European countries. Bismarck started the old age pensions program in Germany in 1871. The program, which is much more generous than what we have presently and what we hope to have once the Canada Pension Plan becomes mature, has survived two major depressions and two world wars, and people are infinitely better off in their retirement years than they were during their working years. That is, I suppose, responsible management.
We began thinking about pension plans in the Diefenbaker years, but it was not until 1965 that we started the Canada Pension Plan. It will take until the year 2005 or 2010 before that particular program has reached its full value and maturity. In other words, people have contributed to it all their working lives and should therefore be entitled to adequate income in their retirement years. Thus, we have to do something in the meantime, which is where the old age pensions and the guaranteed income supplements come into the picture.
No one has contributed to the guaranteed income supplement or to the old age pension programs. That comes directly from general revenue-


Mr. Benjamin:: What about the taxpayers?


Frank Oberle: The taxpayers contribute, of course; but they have not contributed directly. Nor is the old age pension program universal, since there is the basic old age pension and then there are the income supplements which are designed to help those who are in the greatest need. No one argues with any of these measures. All we are saying is that at this time
the country is in such precarious circumstances that we have to ensure that the scarce public resources which are available are put to the best use. This is what the Bill before us proposes to do.
My hon. friend from Spadina said he has ten grandchildren. I have four myself. I suggest that the Hon. Member for Spadina (Mr. Heap) is in a better position than most to help his children and his grandchildren with respect to obtaining a proper education. The problem which the NDP and the Liberals face presently is that they are not so much concerned with helping the needy, which is our main concern. Their concern is with helping the greedy.


Some Hon. Members:: Oh, oh!


Ms. Mitchell:: You are reducing it for the needy. What about the banks and the oil companies, are they not pretty greedy?


Frank Oberle: I note the reactions to my comments of a particular Hon. Member opposite.


Mr. Hovdebo:: Helping the greedy, that is the basic policy of the Conservatives.


Frank Oberle: The Hon. Member opposite to whom I refer lives in a social housing project in Ottawa because projects of this type are supposed to be universal. There is not supposed to be a stigma attached to being poor. Therefore, everyone, regardless of income, whether it is $100,000 a year or $23,000 a year, should be entitled to these social, non-contributory social programs. However, we know that that is not possible. We know that that will not be possible, particularly in the foreseeable future. We know that it will be necessary for us to bring about measures which will help those in the greatest need to continue to receive these social benefits and to make every effort to see that those in greatest need have these benefits enhanced for them. However, that will have to come about at the expense of those in the higher income brackets, such as the Hon. Member opposite whose income is not great but who can educate his children and look after himself in his old age, particularly with the generous benefits Members of Parliament have. I note my time is up, Mr. Speaker.


Leslie Gordon Benjamin: Mr. Speaker, the amendment with respect to a six-month hoist is not nearly long enough when a Bill such as the one before us is concerned. I appreciate that if there were a last minute conversion on the government side and it decided to support the amendment, the Bill would die on the Order Paper. Although, knowing the Conservatives, I think they would probably bring it back in again at a later date.
Since the establishment of the first social programs in this country, the attacks on them have started the very next day. That has been the history of social programs in our country. It does not matter at all whether we are speaking of old age pensions, medicare, hospitalization, unemployment insurance or worker's compensation. There are those in our society, usually the well-to-do, the organized and the powerful, who
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start attacking them. Even Governments which institute social programs attempt to erode them, whittle away at the benefits and try to bring into disrepute the fundamental purposes of the programs. With medicare, there is extra billing. Medical care and hospital premiums now amount to a sum of almost $700 per year for a family of four in Ontario, which is the richest province in Canada. These attacks do nothing more than whittle away at the accessibility and the universality of measures such as medicare and hospitalization.
We went through bitter experiences in this regard in Saskatchewan for all too many years. However, we went ahead anyway and saw them through. Every time we have had Liberal and Conservative Governments in this country nationally-which is the only kind we have had-they start something which they then attempt to undo. I think the Liberals have a lot of nerve. In 1970, just two years after Mr. Trudeau took over, they sought to wipe out family allowances completely and replace them with an income test called the family income security plan. That is a plan which would enable the Government to snoop into everyone's affairs. The Family Allowances Program is universal. Those in higher income brackets will have family allowance benefits taxed back and then some. The process is a great deal more efficient in this way. With a little restructuring of the income tax system, this tax back could be all the more certain.
The Liberals wanted to wipe out the family allowance. I am glad to see that they have been converted, although I suspect the conversion will last only as long as they are in opposition. They are notorious for being great progressives when they are in opposition. However, as soon as they are in government they revert to the traditional conservative style of governing and the traditional conservative attitudes toward social programs. It was only when there was a minority Government from 1972 to 1974 that we were able to force the Liberals to abandon the family income security plan. I must say that at that time the Conservatives were just as vociferous as we were that there be no tampering with the Family Allowances Program. The Conservatives and the New Democrats fought together at that time and we won that round.
The faces have now changed but the speeches have not. We have had Liberals stand up in the House and make the same speeches which Tories made in those two years. We have Tories standing up and making speeches which the Liberals made during that period of time. That is something which has occurred a great deal since last September 4. It is pure hypocrisy to hear the Liberals defending the principle of universality in social policy given their record in office. A former Minister of National Health and Welfare, John Munro, assailed universality, while his Cabinet colleague and Minister of Finance at the time was none other than the present Leader of the Opposition. How much credibility do they think they have?
Much has been made about the national debt and the ability of the country to afford family allowance benefits. In 1974, the interest on the national debt was 22 per cent of all federal expenditures, the same percentage as now. In 1947, some 7.7
Family Allowances Act
per cent of federal expenditures went to family allowances. In 1984, some 2.4 per cent of federal Government expenditures went to family allowances. The last major increase in the program occurred in 1974, due to the fact that a minority Government was in power and we forced the Government into making the increase. From 1972 to 1974 family allowances were doubled and indexed, which accounted for only 6.1 per cent of federal expenditures. Today, they make up 2.4 per cent of Government expenditures.
The National Council on Welfare has pointed out what deindexing will mean to families on low incomes. The council has pointed out that those in the $9,000-a-year or less range will lose money. There are many Members in the House with families in their constituencies who fit into that category.
I do not understand the Government now after its many years in opposition-and I have been here for almost 17 of those years. The Conservatives joined with the New Democratic Party to fight the efforts of the Liberal Government to whittle away and destroy universality. But now they do not believe in universality. It seemed then as if the Liberals thought that the old age pension would destroy incentive to work, just like the Tories do now. It does pay to be consistent, Mr. Speaker, when it comes to one's own basic principles, as well as the principles of a political Party. If the Conservatives had stood up in the debate on this Bill and said they have changed their minds and admitted they were wrong, their credibility would have been improved. If they had said that they were wrong in the years in which they fought the Liberals to get those family allowances indexed, if they had said they now agreed with the position the Liberal Party took a number of years ago, then there would be some semblance of honesty in the position taken by both Parties.
We welcome the Liberals who joined with us in fighting to preserve full indexing for family allowances, just as we did when the Conservatives joined us in supporting full indexing. But I wish the Conservatives would be straightforward and tell us honestly and openly that they have changed their minds, that they were wrong before. But, of course, Mr. Speaker, all they have done is to change positions, and there is nothing new about that. The only difference between the Conservative Party and the Liberal Party is that one is in and one is out. In fact, Mr. Speaker, both Parties notoriously and historically have taken money from the rich and votes from the poor, and then promised to protect them from each other. Surely a kind of straightforward honesty is needed from both the Government Party and the Liberal Party. The Conservatives should have the courage to stand up and say, "We've changed our minds. We want to do what the other fellow wanted to do before". If they were honest about this, perhaps they would receive a little more credible treatment from the people of Canada.
I hope the House will decide at the eleventh hour to support the six-month hoist, and that will be the end of that. The Government can come back with a host of other means which

September 30, 1985
Family Allowances Act
are available to it to make up whatever extra funds full indexing will cost. All the Government has to do is to charge a modest interest rate on the $35 billion worth of deferred corporate taxes which are owed to the people of Canada-that is at 10 per cent interest, which is modest-and it would have $3.5 billion to reduce the deficit and maintain full indexing. There are a lot of options open to the Government which would receive the support of the House of Commons. It should look at those options rather than resorting to chiselling the old people, poor families and their children.


Mr. Dan McKenzie (Parliamentary Secretary to Minister of Veterans Affairs):: Mr. Speaker, this is a wide-ranging debate. We are talking about multinationals and oil proposals and so on. It was interesting to listen to the Hon. Member for Regina West (Mr. Benjamin) talking about speeches. We have been listening to the same NDP speeches for years and years and it still has only 30 seats and 20 per cent support, so obviously its line is not being received very well.


Mr. Deputy Speaker:: Order, please. I regret to interrupt the Hon. Parliamentary Secretary but according to the list I have, the Hon. Member has already spoken on the amendment and cannot speak twice.


Mr. Manly:: On the hoist motion.


Mr. Deputy Speaker:: On the hoist motion. The Hon. Member has already spoken on the amendment, therefore, he is not able to speak again on the same amendment.


Mr. Darryl L. Gray (Bonaventure-Iles-de-la-Madeleine):: Mr. Speaker, I must say that during my 13 months as a new Member of Parliament, I found it interesting to look at the old faces in the House who do their talking in the way of the old Liberal Party, which controlled, ruled, and governed this country for so many years. My hon. friend in his speech talked about a national debt for $200 billion. The Conservative Government was elected with a large majority by the people of Canada who asked us to give them a better administration and that is exactly what we are doing at this time.
My riding of Bonaventure-Iles-de-la-Madeleine for the past 22 years under what we called Liberal despotic rule. My riding has one of the highest rates of unemployment in the country and we have seen the full gambit of Liberal programs. Every now and then we listen to a member of the New Democratic Party criticizing the Conservatives but providing no better answers than the Liberals had. We can never forget, Mr. Speaker, that the economy must go hand in hand with our social programs. When our pockets are empty, we cannot buy food, and this is the dilemma we are in now in 1985. This is the great heritage left to us by our Liberal predecessors.
Being a young politician and a young man with four children, I realize that with our country' national debt, my children and their children will not be able to survive on our present programs. This is the reason the Government has taken these steps. When the Opposition cries that the poor people are not going to get as much as they already receive,
this is false. Families earning less than $25,000 will receive more. The 3 per cent indexation represents 94 cents per month, which, in this day and age, Mr. Speaker, means absolutely nothing. But whether it is a family who earns under $25,000 or a family who earns over $100,000, there is no national pride, and the deeper our national debt grows, the less our national pride will be.
On September 4, 1984, we said that we would put our house in order, and that is exactly what we are doing. The old Liberal programs did not succeed. The only thing the Liberals succeeded in doing was to create a situation where the people could not work and had to depend 100 per cent on Liberal hand-outs. This new Government is about to change completely the national image and will once again instil a national pride in our people. Speaking on behalf of my constituents, Mr. Speaker, I can assure you that the change which was made in September of 1984, was a change desperately needed and a change about which the people are proud and happy. They finally have a Government which is realistic, a Government with a good administration, and a Government which is concerned with the poor people in this land.
I trust that the Conservative Party will be in power for the next 100 years. Unfortunately, we in this House will not be around that long. However, I assure you, Mr. Speaker, that with the new Government programs and with the contribution of every single Canadian, we must attack our national debt. We must all contribute, and that is what this Government is asking. I can assure this House, as I can assure all Canadians, that with good Government administration, our children, our grandchildren and those who follow will be much better off in the years to come.


Mr. John Nunziata (York South-Weston):: Mr. Speaker, I appreciate the opportunity to make some general comments concerning Bill C-70. A previous Conservative speaker said that "our main concern is to help the needy". I have some difficulty believing that Member. I believe that Canadians generally have considerable difficulty in believing that the main concern of this Conservative Government is to help the needy, and I want to indicate why.
If one looks at the Budget of May 23 and its over-all impact, one cannot help but conclude that the Budget is unfair. It is sneaky. It is a vicious attack on the needy and the disadvantaged in our society. Before the Budget was handed down, we were told by the Prime Minister (Mr. Mulroney), Ministers of the Crown, indeed all Conservative Members, that it was going to be tough but fair. Ministers fanned out across the country to tell people that it would be tough but fair. The Opposition asked for the Budget at an early date, but were told by the Prime Minister that the Government was in the process of consulting with Canadians. The Government wanted to know what Canadians had to say about the Budget that was to be handed down, but we were continually told that it would be tough but fair. I would like to ask you, Mr. Speaker, what is fair about that Conservative Budget? What is fair about a
September 30, 1985

Budget that tries to deindex senior citizens' pensions on the one hand, and on the other give a $125,000 cash bonanza to the most affluent in our society by means of a capital gains deduction? Where is the fairness, where is the equity? There was none in that Budget.
The Government recognized that the proposal to deindex senior citizens' pensions was not fair, equitable or just. As a result of the position taken by the Opposition in this Parliament and as a result of a groundswell of opposition to that measure, the Conservative Government had to back down. It had to admit to the people of Canada that what it proposed to do was a mistake. It was unfair. However, not only that measure was unfair, so is this measure we find in Bill C-70. It is an attempt by the Government to deindex family allowance payments.
In his opening comments, the Minister indicated it was the intention of the Government to give more to the needy in society and that Bill C-70 would not only do that, it would also attack the deficit. I need not say that this Government is preoccupied with deficit reduction. It is paranoid about the deficit. It is for that reason we have this Bill before us. It is not, as the Government says, to help those most in need in our society.
If we closely examine the motivation of this Government it is easy to conclude that it is motivated by debt and deficit reduction. That is why this measure is before Parliament. Well, I say to Hon. Members opposite that we in the Liberal Opposition are concerned about the deficit as well. We believe in fiscal responsibility. We believe as parliamentarians and as a Government that we must act responsibly when it comes to the finances of the nation. However, unlike the Conservative Government we believe in people. We believe in families. We believe in children. We care about families and children. This Conservative Government does not appear to care. It is quite prepared to reduce the deficit on the backs of the disadvantaged in our society. Where is the justice, where is the fairness? We in Her Majesty's Loyal Opposition say, if you want to reduce the deficit, do not do it on the backs of the disadvantaged, the poor, the elderly, the young and the unemployed because we will not put up with it. We will fight you every inch of the way. If the Government is concerned about reducing the deficit, then let us be fair and just about it. If the goal of this Government is to redistribute the wealth in this society so that those most in need receive more, then let us not tinker with universality. Let us not assault the social safety net. If the Government is truly concerned about giving more money to the needy, then let us talk about reforming the tax system. Let us talk about a minimum tax on the rich.
In the last election compaign, indeed in this House, Conservative Members indicated that they intended to bring in a minimum tax. Well, here we are a year later and where is that minimum tax on the rich? Where is the fairness and equity in allowing people earning $100,000 or $200,000 to avoid paying any taxes at all? Where is the justice? There is none.
This Government believes that Government is in business to reduce the deficit. Members opposite believe that running this
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country is like running a business. You know as well as I do that the purpose of a business is to show profit. You must show to your shareholders that you are balancing the books and you are showing a profit. On the other hand, we in the Opposition believe that Government is in business to serve people. Yes, it is quite possible to eliminate the deficit overnight. We all know that. We can do that, no problem at all. Let us get rid of universality and unemployment insurance. Let us get rid of all the transfer payments to the provinces regarding health and education. If we do that, we can eliminate the deficit, no question. But Canadians do not want that. We have a standard of living second to none and Canadians have come to expect and appreciate the highest level of health care and education in the world. Canadians have come to appreciate the fact that regardless of where you live in this great country you will receive a high level of education. But Canadians do not want our standard of living to be affected.
I note that you have indicated that I have but a minute left, Mr. Speaker. In conclusion, Mr. Speaker, this piece of legislation is regressive, anti-family, and anti-children. I hope that the Government will reconsider and withdraw this unfair piece of legislation, just as it did the proposal to deindex senior citizens' pensions. If the Government truly believes in helping the needy and less fortunate in our society, let us talk about a more equitable and more progressive income tax system.


Mr. Jim Edwards (Edmonton South):: Mr. Speaker, I appreciate the opportunity to speak in this very important debate. We have heard some suggestions that the Bill before us and the policy which it represents are sneaky. I suggest to you that there is nothing more sneaky than theft, particularly theft in the night. It was the previous Government that stole Canada's Visa card and ran up $8,000 of charges on it for each man, woman, and child in the country. It cannot be paid off. The previous Government would not pay it off. The interest is accumulating at $100 per individual per month and more charges were made at a rate exceeding $1,000 a year for each person in the country until the present Government took office.
This Government is determined to bring the Canadian spending spree to a halt, but not at the expense of social programs. This Bill is about fairness, not sneakiness. The previous speaker referred to some sense of paranoia about the deficit. I would ask him what he would do about the deficit. Would he monetize it? The Liberal Party was at one time interested in balancing the books of this country. Where have its morals and principles gone?
In all seriousness, Mr. Speaker, one of the difficulties which besets us is the fact that following the calamity of World War II our entire system was geared to a preindustrial society. Suddenly most western Governments became affluent and demands were made upon them in the area of invasion of the economy generally that had never been anticipated. Governments responded to those demands, the people responded to

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those who responded to their demands, and the vicious circle was compounded.
The New Democratic Party has attributed all kinds of woes to the Conservatives and the Liberals. That is awfully easy to do because the New Democratic Party has never had the responsibility of administering anything. When it does take office in other jurisdictions it is clear that sooner or later it has to face the realities of economic life. There have been some drastic roll-backs of benefits in the western European democracies which have had socialist Governments. The proposal here is not to roll back benefits, but rather, as part of a bigger package, to transfer resources to needier families. This whole package has that objective and effect. To move away occasionally from the principle of full indexation is nothing new. No Party has a monopoly on virtue in that regard. I cite the examples of 1976 and 1978 and the six and five program in 1983-84.
The Hon. Member for Spadina (Mr. Heap) referred to some seven, eight, and nine-year projections and predicted calamity for our nation if we proceeded along what was called an anti-family course. We are here proposing to change the structure of these benefits over a three-year period. To assume that that would go on to infinity is ridiculous. I suggest that Members opposite would contribute more to this debate if they occasionally made some constructive suggestions. I believe that among the salient achievements of this Government to date is that we are grapsing the nettle. We are taking the initiative and making hard choices for Canada, which is what Canadian people are looking for. I suggest that members of the Liberal Party and those of the New Democratic Party would benefit greatly from reading some of the wisdom contained in the report of the Macdonald Royal Commission. That commission, appointed by the previous Government, took a fresh look at some programs and has suggested constructive alternatives.
The proposals before us in Bill C-70 relate to the whole package of child and elderly benefits. Family allowances will be increased in future years by the annual increase in the Consumer Price Index in excess of 3 percentage points. That measure takes effect on January 1, 1986. The current value of family allowances is $31.27 per child per month. The child tax credit, which will be payable in the spring of 1987, will be increased by $70 per child from $384 to $454. The income threshold above which the child tax credit is phased out as income rises, currently frozen at $26,330, will be set at $23,500 and will be increased in future years by the annual increase in the CPI in excess of 3 percentage points. So it goes into taxation years 1987, 1988, and 1989. The whole principle is to give the opportunity to needier families to benefit more greatly from these well-placed and, hopefully, well-financed social programs. However, the programs cannot be well financed if we continue along the reckless binge of spending that was initiated by the previous administration.


Mr. Steven W. Langdon (Essex-Windsor):: Mr. Speaker, it is a pleasure to be able to take part in this debate. I would like to begin by asking why it is that Governments that get themselves into financial difficulty look to the children of this
country as the target for reduction in expenditures. It is striking that this has not only happened with this Government, but has characterized Governments that have got themselves into financial difficulty for 15 years in this country.
There are two reasons for this focus. One is a sense of misunderstanding with respect to what is being accomplished by the Family Allowances Program. People in the context of this House talk about family allowances in terms that demonstrate a lack of understanding about the transfer process that is taking place through the family allowance system. They talk about it as a transfer system from rich to poor, which, of course, it was never designed to be. It was, instead, designed to be a transfer system from those families and individuals without the responsibility for children to those families which have that responsibility. In that sense, to examine and evaluate the program effectively you must look at the significance of the costs of raising children for all categories of families in our society. I think that any Member of the House of Commons who has children would recognize that the costs are significant from a financial viewpoint, but also in terms of the sacrifice of time and the commitment of energy, the process of giving of oneself to the future of your children.
I think that family allowance represents a minor attempt- we must recognize that it is minor-to balance out within our society the burden of taking on the responsibility of the next generation of Canadians. I believe it is a transfer that is badly misunderstood and the reason Governments pick out the family allowance and view it as a magnificent target when looking for ways to achieve economy.
I also believe that the second factor that explains making this the target is the sense of lack of consultation in the real sense and the lack of caring in a sensitive way that characterizes Governments with respect to the future problems of many families in our society.
With respect to the consultation process, although the Government has made an effort to talk with a great many groups about its plans for the future, that talk has not constituted a capacity to listen. Otherwise, how can it be that, at the end of the consultation process, we find that major groups that speak for people who receive the family allowance, who speak in the area of social policy in this country, find themselves completely opposed to what the Government is doing?
For instance, it has already been stated for the record that the Canadian Council on Social Development has opposed this deindexation; the National Council on Welfare has opposed this deindexation; and the Canadian Advisory Council on the Status of Women has opposed this deindexation. The Government will have to realize that it is creating a tremendous sense of cynicism about its own commitment to consult.
I believe that its commitment is quite well intentioned and it started out attempting to reach many groups across the country. I see one of the Ministers on the front benches who has, frankly, taken a lead in that consultation process. I know that she is a Minister who has listened-not enough with respect to
September 30, 1985

certain issues such as unemployment insurance changes-and has taken the process seriously. I hope that she will be able to reach the other Ministers in the Government and persuade them to take the commitment to real consultation as seriously. I believe it represented an interesting new initiative on the part of the Government. Initiatives are only as good as the degree to which they are carried through.
With respect to family allowances, however, all six organizations that are part of the social policy reform group have recognized that consultation as a sham. It is a sham because at no point in that process of consultation did any one of these groups concerned with social policy and the social welfare of families and children in this country, or indeed any other group representing women, children or people interested in the social policy in the country, suggest to the Government that it should effectively cut the value of family allowances by 3 per cent year.
My colleague, the Member for Vancouver East (Ms. Mitchell) was a member of that committee. She sat and listened to the representations made throughout that set of hearings and she certainly heard no one come before that committee to recommend a real cut-back of 3 per cent in the value of the family allowance. That is because family allowance is a critically important ingredient in the household budget of very many families across the country. These include families led by mothers in single parent situations and families characterized by low incomes. The amount of money received from family allowance is crucial to make ends meet within family budgets.
Therefore, I finish my contribution to this crucial debate with a plea to the Government. First, it is a plea to take its consultation process seriously in the future, unlike this case, and second, to request that it look at what family allowances are actually doing-transfering income from the childless to those who bear the responsibility for the future generations in this country. I ask that the Government cease this attack on the children of Canada.


Mr. Gabriel Fontaine (Levis):: Mr. Speaker, I welcome this opportunity today to speak in this debate on family allowance. First of all, I must say I am somewhat surprised at seeing the Opposition trying to delay the passage of this legislation. I get the impression it has forgotten that from 1974 to 1984, it promoted measures to cut back social programs by 50 per cent. In 1976, the same Opposition extended indexation for one year. In 1978, that same Opposition brought about cutbacks in family allowances from $25 to $20 per month per child, it reduced and finally eliminated the $50 per child tax reduction then in effect and reduced the exemption for children of 16 and 17, and finally, in 1982, that same Opposition capped indexation of family allowances at 6 and 5 per cent respectively, for 1983-84.
Their attitude is therefore surprising, to say the least, and one wonders why they now want to postpone the passage of
Family Allowances Act
this measure for six months. Mr. Speaker, I suppose it is to give them another chance, as the demagogues they are, to alarm Canadians without telling the whole story, to make people panic and to prolong the debate and waste the time of the House for no good reason. I would therefore ask the Opposition to be a little less partisan and a little more supportive of the legislative process.
To achieve social justice, this Government wants to realign assistance programs for families with children, the emphasis being on the neediest families. We could always help more, we could always cut back more. When the Opposition was in power, although its avowed purpose was to redistribute the wealth of this country, it was actually redistributing its debts. In so doing, it has now put us in a position where we owe $200 billion. This year, the deficit will be more than $35 billion, and we must consider that our measures must help the neediest families and they must also have an economic impact. That is why we are proposing this Bill.
The Opposition should realize that the best way to help our families is not by giving the money borrowed by a Government that is getting deeper and deeper into debt. The best way to help Canadian families is to reduce unemployment and give jobs to the mothers and fathers of those families.
Some 300,000 new jobs have been created over the past year. That is a positive accomplishment which is the result of our administration. The reduction in interest rates is also contributing to our job creation efforts by encouraging new investments. This is the way to help Canadian families.
Our various Ministers have indicated clearly that they were there to help Canadian families through economy-oriented measures.
The Wilson budget mentioned for instance the loans to small businesses and partnerships which will also help promote small businesses.
There have been changes proposed to the use of RRSPs. These changes are likely to have a major impact on the development of small and medium-size businesses, because the self-administered REERs had been previously directed towards national trusts companies and, through them, channelled to every large multinational or national entities, with the result that the capital and the investor were miles apart, Thanks to the Wilson budget, they will be brought closer together, so that larger amounts of capital will be made available to small and medium-size businesses within our respective communities.
That is the way our Government is planning to help Canadian families much more than by increasing by a few dollars the family allowances. In other words, we are not going to give them a fish, but we are going to teach our businessmen and families how to fish.
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There are in Canada 750,000 small and medium-size businesses. If each and everyone of them were to create two jobs because of our incentives, there would hardly remain any unemployed people in this country.
I have been talking about the Minister of Finance (Mr. Wilson) who put forward proposals, and now I will mention the Minister of Consumer and Corporate Affairs (Mr. Cote) who discovered that his department under the previous Liberal administration had been storing up without using them tremendous data concerning the various registered rights and patents. He is considering marketing those data, giving Canadian men and women and entrepeneurs access to existing patents so they could be made viable and marketed. This is another initiative that will now help create jobs, that will help businesses and, by the same token, Canadian families.
We have seen the Minister of Regional Industrial Expansion (Mr. Stevens) making money directly available, under Investment Canada and the new Small Business Loans Act, through credit unions, banks and caisses populaires, rather than through bureaucratic laboratories.
Also, rather than asking foreign entrepreneurs to consider investing in Canada as a burden, we opened the door to them, and we now tell them: Come and invest in Canada. Those also are concrete steps.
And you have more of them. I see in front of me the Minister of Employment and Immigration (Mrs. MacDonald). She handles a $1.8 billion budget and I would ask Opposition Members to please read her programs for promoting employment. I would ask them to pay special attention to how she is communicating with Canadian men and women, asking them for employment development proposals and offering them Government support, both financial and technical. In addition, we are not merely creating, as was done before, jobs that will simply postpone the payment of unemployment benefits, having them alternate between a short 20-week work period and 20 weeks of UI benefits. Quite the opposite, she is providing Canadians with opportunities to exercise their entrepreneurship. This is what we said during the elections, and this is what we are doing.
Those are initiatives involving a few Ministers, Mr. Speaker, which are much more significant, and Liberal members in particular should be wary of deferring the legislative process in order to score political points. Let us do our job and acknowledge the fine results all our Ministers are getting. This is what I had to say, Mr. Speaker.


Mr. Len Hopkins (Renfrew-Nipissing-Pembroke):: Mr. Speaker, as I rise to take part in this debate, I would like to remind all Members of this House that the major part of the social policies of this nation has been Liberal legislation over the years. The Liberal Party of Canada laid the foundation for the young, the old and the unemployed in Canada.


Mr. Towers:: You forgot about John Diefenbaker.


Leonard Donald Hopkins: The Leader of the Liberal Party (Mr. Turner) has maintained throughout that the reduction of the deficit will not be done on the backs of the poor, the unemployed and the disadvantaged.
There is one thing I want to put on the record today. In the House of Commons Debates for December 20, 1984, at page 1401 of Hansard, the Hon. Member for Laval-des-Rapides (Mr. Garneau), the associate finance critic, asked the Prime Minister (Mr. Mulroney):
Could the Prime Minister inform the House whether it is his Government's policy, or whether his Government intends, to reduce gradually over the years the tax exemption for families with children?


Right Hon. Brian Mulroney (Prime Minister):: No, Mr. Speaker. That is not what the Government intends to do.
Here for several days in this House we have been debating a Bill brought in by the present Prime Minister's Government which does that very thing.
In speaking a few moments ago, I noticed that the Hon. Member for Edmonton South (Mr. Edwards) said he wished the opposition Parties would bring forth something constructive in this debate. Let me say to him through you, Mr. Speaker, that if there is anything constructive we have to offer in this debate, it is for the Member to tell his own Prime Minister and his own Cabinet that when they make statements, they should either back them up or they should not make them in the first place.
This Government's biggest weakness, and it will be the Government's biggest weakness in the future, is its total lack of credibility. You cannot trust what the Government says it is going to do. If you take for granted what the Government says it is going to do and then take the opposite stance, you will probably know precisely what the Government is going to do.
The child tax exemption and other that exemptions brought in via the May 1985 Budget are affecting children and low income families. That is the reason for this wide-ranging debate. Many other items are increasing local taxes creating an added burden on low-income people. Other services are being withdrawn by this Government. These were not paid by low-income people before but they now face those charges. Tax exemptions for families with children will be reduced gradually over time.
This Government told the senior citizens exemptions would be reduced gradually over time. The Government told senior citizens that it was going to forget about the first 3 per cent of inflation and only pay senior citizens on the increase of inflation above that amount. That policy brought forth a new pressure group called "grey power". This new pressure group, "grey power", won its case and deserves full marks for doing so. Exemptions will be reduced gradually over time-$710 per child by 1986, $560 per child by 1987 and $470 per child by 1988. It does not stop there. The family allowance will be deindexed from 1986 and the child tax credit will be deindexed from 1989 onward. The deindexation of personal income tax exemptions will push lower and middle-income Canadians into higher tax brackets. There is no question about that. Not only are low-income families losing indexation of the child tax
September 30, 1985

credit, they are also being pushed into higher tax brackets. They are getting a double whammy.
Federal sales tax has been increased, which will hit the same families. Low-income families making less than $15,000 per year will lose more than $1,800 due to all these measures. Meanwhile, high-income families have been given various advantages.
A startling revelation is that advantages given to the rich will cost the Government more than the savings realized from changes in the child tax credit and in the child tax exemption. In other words, the money saved from the changes and reductions in the child tax credit and in the child tax exemption will go right across the board to the wealthy. That is what the Government calls progress.
The Government talks about new and innovative policies, but it has removed funds for security services at small airports. Who will pay the bill? Of course it will be local taxpayers. In areas where local airports are not owned by municipalities, the Government wants to sell them to the municipalities. That will be a burden upon local people in those areas. What about CMHC? CMHC has done a pretty good job over the years in terms of building houses for low-income families. What is the Government doing? It is removing the regional offices from various areas in Canada. I lost a CMHC office in my constituency.


An Hon. Member:: Good.


Leonard Donald Hopkins: I hear the Hon. Member saying "Good". I want all people in the Ottawa Valley to know that there is a Conservative Member over there who thinks that was a great idea. We will remember that.
People in large rural areas could come into those CMHC offices to sit down and talk. Those managers go with low-income people to see bank managers and real estate agents. These people do not always have an understanding of such dealings. What will they do now? There will only be a long distance system to Ottawa or an impersonal effort.
I see you signalling, Mr. Speaker. In conclusion, the Government promised that it would do all kinds of wonderful things for the Canadian farm community; it was promised the world. Today, hog producers and many other farmers are facing serious conditions.


Mr. Dick:: We are talking about family allowances.


Leonard Donald Hopkins: The Hon. Member for Lanark-Renfrew-Carleton (Mr. Dick) is becoming a bit upset. I tell him to tell his Prime Minister to start backing up some of his promises.


Paul Wyatt Dick: We are talking about family allowances, not about hogs.


Leonard Donald Hopkins: Does the Hon. Member think that hog producers and people who live on farms do not raise children? They are in serious circumstances. The Conservative Govern-
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ment promised them all kinds of income. It is even importing more meat into the country at a time when our red meat industry is in serious trouble. That is the new Tory approach.


Thomas Gordon Towers: Mr. Speaker, I rise on a point of order. The Hon. Member is usually an honest Member in what he says. There is an element of truth in what he is saying, but last year the Liberals allowed 50 million pounds of imported beef from Ireland into the country. He says that it was our administration. He is entirely misleading the House-


Mr. Deputy Speaker:: Order, please.


Leonard Donald Hopkins: Mr. Speaker, I am not surprised by that. The other day, when I delivered a speech and used factual information, as I am doing today, the Hon. Member sent a note across the floor saying: "And you are a Rotarian; don't you believe in the four-way test?" I say to him that one of those four-way tests is: Is it fair to all concerned? I ask him and I ask the Prime Minister of Canada: Is it fair to all concerned that although the Government had promised not to deindex family allowances or the tax system as it affects children, now it is going ahead with it? Is that fair to all concerned? He had better start talking to his Leader.


Mr. John Reimer (Kitchener):: Mr. Speaker, I should like to make a few comments on Bill C-70, an Act to amend the Family Allowances Act. I should like to refer to a few historical facts arising from the time of the previous administration. I hope the Hon. Member for Renfrew-Nipissing-Pembroke (Mr. Hopkins) listens. At the time of the six and five program, that Member voted for a reduction in the increases to the child allowance system of $1.97; not the 94 cents proposed by this Bill if inflation continues at 4 per cent. 1 remind the Hon. Member that he voted for that in the past. I think also he was a Member of the House back in 1976. At that time inflation was running at 11.2 per cent, and the child allowances were frozen at $22.08. That resulted in cost of living minus 11.2 per cent, not cost of living minus 3 per cent as proposed in this Bill.
I also remind the Hon. Member that he should be truthful to all of us and to his constituents. He should remind them of all the facts and remember what he did, as part of his Government, back in 1976. Also in 1976, there was no offset increase in child benefits as proposed in our Budget. If Canadians had had full indexation under the previous Liberal Government since 1976, and starting with a child allowance of $22.08 at that time, the child allowance today would be $51.83, not the $31.27 it is now. I remind the Hon. Member for Renfrew-Nipissing-Pembroke that his Government did that, not this Government. He prided himself on being a member of the Liberal Government which brought in social programs. I remind him that if the child allowance were fully indexed today, that allowance would not have been reduced from $51.83 to $31.27, a reduction of some $22. I remind him of that, and it was done without any offsetting benefit to the child tax credit. May I call it one o'clock, Mr. Speaker?

September 30, 1985


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


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.

[Stage Direction]
[ Translation]

Mr. Carlo Rossi (Bourassa):: Mr. Speaker, as if things were not going badly enough for the Prime Minister (Mr. Mul-roney), the less than influent Conservative Member for La Prairie (Mr. Jourdenais) has just delivered an ultimatum to him. Sure thing, we learned through The Gazette of September 25 that the Member for La Prairie is threatening not to run again in the next election if the Prime Minister does not abolish tolls on the Champlain bridge.


Mr. Boudria:: Now that would be a catastrophy!


Carlo Rossi: The Hon. Member for La Prairie-who would be better off if he did not make waves and who claims he got elected on his own rather than by riding on the Prime Minister's coattails-just might upset our election plans, Mr. Speaker.
That is why I plead with the Prime Minister to fight his enduring urge to look for a better representative in La Prairie and abolish tolls on the Champlain bridge, for what we fear, Mr. Speaker, is that the current incumbent just might decide not to run again.


PLANNED PARENTHOOD WEEK
Mr. Neil Young (Beaches):: Mr. Speaker, today is the first day of Planned Parenthood Week, an annual public education program of the Planned Parenthood Federation of Canada. The theme of this year's program is "Kids Need to Know".
As part of the week's kickoff, the Federation released the results of a Gallup poll which for the first time surveyed 15 to 20-year-olds. It indicated that only one-third of teenagers rely on their parents as the primary source of information on sexuality.
Other important sources of information for young people are their peers and school, yet only half of the schools in Canada have sex education programs. Young people have no one reliable source for this information.
The tragically high rate of unplanned teenage pregnancies and the unfortunate number of abortions which partially result from the lack of sex education are totally unnecessary.
The Conservative Government has followed the pattern established by its Liberal predecessor in cutting funding to Planned Parenthood. This year funding from Health and Welfare was cut by 12.5 per cent. 1 call on the Government to face up to its responsibilities and restore funding to Planned Parenthood to a more realistic level.


CANADA POST CORPORATION
Mr. Bill Vankoughnet (Hastings-Frontenac-Lennox and Addington):: Mr. Speaker, Members of Parliament who represent rural constituencies appreciate the dedication and service provided by the country cousins of urban mail carriers. Rural route couriers give their utmost, in many instances at great personal sacrifice, to the rural areas they serve.
It is only fair that these dedicated people be appropriately compensated by Canada Post for this vital service to rural Canadians and for all their expenses which relate to mileage, density of the rural routes, preparation and sortation hours worked. For too long this service has been carried out at great personal cost.
While Canada Post has dramatically increased the rates for change of address and temporary redirection services, not to mention the cost of postage stamps, the rural route couriers continue to be underpaid. It is time that they received recognition for their services and economic parity with their urban counterparts.
I urge all Members of Parliament to support the Association of Rural Route Mail Couriers of Canada in their attempt to improve their conditions of employment with Canada Post.


SOCIAL SERVICES
Mrs. Pauline Browes (Scarborough Centre):: Mr. Speaker, the need for affordable and accessible child care services is growing in Canada as more and more women enter the labour force. Yet, as Judge Abella noted in her report on equality in employment, Canada lags far behind western nations in its provisions for child care services.
It is time to put child care at the top of our social services agenda. The federal Government needs to continue to work closely with provincial and local Governments, community

September 30, 1985

agencies, and the private sector to help develop new and creative child care services.
A very innovative and worth-while project is under-way in Scarborough to introduce private businesses to child care ideas. With the help of a federal grant, the Human Services Organization of Scarborough is holding a series of seminars throughout the city to help interested businesses establish affordable, on-site child care centres.
I applaud the efforts of the Human Services Organization of Scarborough and encourage the Government to continue to fund projects like this, since child care is an investment in Canada's future.


CANADIAN NATIONAL RAILWAYS
Ms. Sheila Copps (Hamilton East):: Mr. Speaker, last summer during the election campaign, or in the summer of 1984, we heard a number of promises, including a promise by the Prime Minister (Mr. Mulroney) to recognize and respond to the special needs of Atlantic Canada for better transportation to strengthen the economic base of the entire area and to provide jobs with the transportation sector.
In fact, Mr. Speaker, what we have seen is a Government that has allowed Canadian National to do the exact opposite. It has recently announced its intention to lay off indefinitely more than 1,300 workers across the country, as well as to freeze hiring and reduce management and non-union work force. This pronouncement was made after the CN already reduced its staff complement by 1,350 workers since January.
Where are these jobs going to be lost? In Atlantic Canada, Moncton, 185 shop jobs; Montreal, 262 jobs. Where are the promises of the Prime Minister? Where are the promises of the Government to protect jobs in transportation? This Prime Minister and this Government did not believe the promises when they spoke them, and the Canadian people will make sure they realize that in the next election.


SOCIAL SECURITY
Margaret Anne Mitchell: Last Friday the Ottawa Council for Low-Income Support Services demonstrated on the Hill on behalf of all mothers across Canada to oppose deindexing of family allowances. They said: "The twentieth of the month is baby bonus day. That's the day the cheque arrives, the little bit of money, that is for you, for running shoes, hairdo money or new jeans. For some of us it is the money that will pay for an extra few days of food or keep the phone from being cut off. Thirty-one dollars and twenty seven cents is not a princely sum. If we are lucky it will keep us in Kraft dinners.
The mothers and children of this country are a resource. We are the future. If we are going to be a strong future we need strong children. Strong women and children need good food and warm clothes. Not much to ask for in a country as wealthy as ours.
I am tired of the suggestion that we don't really need the baby bonus. I'm tired of it being our money they want to cut off every time there is an economy drive. I'm tired of having to prove mothers and children are worth spending money on. I'm tired of hearing how good we've got it.
Do soup kitchens and snowsuit funds show how lucky we are? Millions of women and children in poverty in this country are not having it good. These are the people who will not see their money pegged to rises in the cost of living if this Government has its way.
So we are shouting 'Raise the baby bonus or lower the cost of living. Hands off the family allowance'."


Mr. Speaker:: I would advise the Hon. Member that her time has expired.


THE ECONOMY
Mr. Alan Redway (York East):: Mr. Speaker, as you well know, during the last election compaign the main issues were the economy and jobs. Prior to that Canadians had suffered through three years of record high interest rates, bankruptcies, inflation, and unemployment. This month marks the Government's first anniversary in office so it is a good time to review just what has happened to the economy during this past year- the first year of a Progressive Conservative Government.
To begin with, interest rates are down. The Bank of Canada rate, the prime bank rate, and mortgage rates have all fallen by approximately 3 per cent. We now have the lowest borrowing costs in seven years.
The bankruptcy rate has also fallen. Business, individual and farm bankruptcies are down by 12 per cent. Inflation has held steady and during the past year we have experienced the greatest price stability since 1971.
Most important of all, employment is up-up by almost
300,000	jobs which have been created since the last election.
These facts speak for themselves. They may not be news, but they certainly are reality. They demonstrate that the Government has established a climate which has allowed our economy and our country to start growing again.

September 30, 1985


EMPLOYMENT
James (Jim) Stewart Edwards: Mr. Speaker, I rise today to commend the Minister of Employment and Immigration (Miss MacDonald), private business throughout the country, and provincial Governments for their roles in what has turned out to be an exceedingly successful summer job program-Challenge '85.
In my constituency of Edmonton South 386 jobs were created from the 171 projects funded under Challenge '85. Some $956,000 was spent to employ students in Edmonton South.
The Challenge '85 package of programs is a comprehensive plan designed to provide career-related summer employment for people moving through the educational system. The success of this program cannot be underestimated. Throughout Canada, students and employers applauded the program. Students found it easier to obtain work related to their studies through the student employment offices. Employers found the program to be an excellent way to hire younger talent eager to work for them. This was the first time that Provinces collaborated with the Government in a job strategy for students.
The program resulted in a much improved employment picture in 1985 over 1984. Throughout Canada we created
14,000	more jobs for students than last year. A total of 100,020 jobs were created this summer. This success was reflected in the youth unemployment rate which fell from 18.3 per cent in August of 1984 to 15.9 per cent in August of 1985.
The Government has proven its commitment to students and youth through Challenge-


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


COMMUNICATIONS
Don Boudria: Mr. Speaker, the Government is proposing to centralize public opinion polls in the country. Not content with handing out public opinion poll contracts as patronage plums, as the Government has been doing since last September, it now wants to centralize the results of such polls in the Prime Minister's office. This system will fit in well with the new scheme of the Prime Minister (Mr. Mulroney) to control information, control the power, and share the blame with everyone else.
Canadians are wondering will the provisions of the contract for this new polling system guarantee access to information for all people. Will the results be made public? What safeguards do we have that the Conservative headquarters will not merely use those polls to their own benefit thereby having polls subsidized by the taxpayers of Canada?
This is a new Pravda Canada scheme by the Conservative Government. It ought not to be implemented. It should be withdrawn immediately.


LAW ENFORCEMENT
Mr. Barry Turner (Ottawa-Carleton):: Mr. Speaker, I had the privilege on Sunday, September 29, to participate in the eighth annual memorial service for police and correctional officers who have given their lives in the service of our country. The names of nine officers who lost their lives since last year's memorial service were added to the Honour Roll in the Memorial Book which is located in a room in the East Block of the Parliament Buildings.
We were reminded by Dr. Allen Churchill, Prostestant Chaplin of the RCMP, that the job of our peace officers, as they are commonly called, to maintain law, order and peace in our society, is not only their responsibility but one that we all must share.
The cities within our national capital region of Hull, Aylmer, Gatineau, Ottawa, Gloucester, Vanier, Nepean and Kanata-indeed all cities and towns across Canada-are continually patrolled and protected by our well trained and dedicated police officers. Our prisons are protected by correctional officers.
As we pursue peace in a troubled world, we should never forget the officers who gave their lives so that our families, our friends, our homes and our businesses can continue to remain safe and sound.



ORAL QUESTION PERIOD


Mr. Raymond Garneau (Laval-des-Rapides):: This morning we heard the news that a liquidator has been appointed for a second Canadian bank. I would have liked to direct my question to the Prime Minister but in his absence, I shall direct it to the Minister of Finance.
Could the Minister of Finance give the House the assurance that the Committee on Finance, Trade and Economic Affairs will meet as soon as possible to examine the circumstances that led to the second bank failure in just a few months?


Hon. Ray Hnatyshyn (President of the Privy Council):: Mr. Speaker, the Hon. Member will be aware of the fact that there
September 30, 1985

was an announcement today with respect to the establishment of a commission of inquiry. Because members of the Opposition have not been prepared to proceed with the matter, and because they have stonewalled this matter in terms of proceeding-


Some Hon. Members:: Oh, oh!


Ramon John Hnatyshyn: -and for other good and legitimate reasons, the committee will not be proceeding to consideration of the matter in light of the fact that the commission is now in place.


Raymond Garneau: Mr. Speaker, the Government House Leader knows perfectly well that he could have called the motion on the Order Paper several days ago. I do not think he should blame the Opposition!


REASONS FOR SIMULTANEOUS DEMANDS FOR LIQUIDATION OF NORTHLAND BANK AND CANADIAN COMMERCIAL BANK
Raymond Garneau: My supplementary is also for the Minister of Finance. I would like to ask him, regarding the Northland Bank affair, why he and his colleague, the Minister of State (Finance), decided to put the Northland Bank and the CCB in the same bag by putting them both under curatorship in the statement made in the Commons at the beginning of September.


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, as the Hon. Member knows, the Minister of State for Finance and I have been concerned about this matter for a number of weeks. We have carefully watched the development of this debate in the House and in the media. It was felt that we should establish a commission of inquiry to get to the heart of some very complex issues, in a dispassionate and objective way.
In answer to the Hon. Member's question with respect to the establishment of two separate commissions, we believe there are certain common problems between the two matters which should be dealt with by one commissioner. That same commissioner can deal with the individual, specific items relating to each bank. Because there are some common problems we think it would be helpful to have them considered by one commission of inquiry.


GOVERNMENT DECISION
Raymond Garneau: Mr. Speaker, I do not think the Minister of Finance understood my question. I asked the Minister why, on September 2, when the Government announced the appointment of a curator to the Canadian Commercial Bank and the Northland Bank and asked for liquidation of both banks the Minister of Finance decided to put the two banks in the same basked requesting liquidation of
Oral Questions
the Northland Bank at the same time as he was going to ask for liquidation of the CCB.


Michael Holcombe Wilson: Mr. Speaker, I am not quite sure I understand the thrust of the Hon. Member's question.
On September 2 we appointed curators to both banks. We had one bank put into immediate liquidation, that is, the Canadian Commercial Bank. However, because there was a sense on the part of management that there was a chance that they could find a partner for restructuring to save the Northland Bank we felt it was in the interests of the bank, as well as the country, to give them the opportunity to seek out a partner to save the bank. That has not been possible. Thus, today, we have moved to appoint a liquidator for the two banks.


MINISTERIAL RESPONSIBILITY
Hon. Jean Chretien (Saint-Maurice):: Mr. Speaker, my question is for the Minister of Finance. I understand the very delicate position in which the Minister of Finance finds himself today with respect to the liquidation of a second bank in Canada. Because of the difficult situation which exists at this time, can the Minister assure the House that from now on he will take all his responsibilities as Minister of Finance seriously and that he will handle this case himself so that the people of the country know that it is a major problem which faces the Government and not something to be delegated to a junior Minister?


Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: Mr. Speaker, let me be quite precise on this point. The Minister of State for Finance has been delegated these responsibilities by me. At no time have we had any differences. Every move we have made has been fully discussed and has had my full involvement with respect to the decisions taken. I take those responsibilities very seriously and I will continue to do so. I caution the Hon. Member that he should not try to put any differences between the Minister of State for Finance and myself.


MINISTERIAL CONTROL
Joseph Jacques Jean Chrétien: Mr. Speaker, 1 am not trying to show a difference between the two. 1 have been in that position. I know how the market looks at the Government in a situation like that. I know that the Minister is facing a terrible and difficult time now. But one thing I am urging him to do, to help him, is to make sure now that the Canadian people will know that we have a Minister of Finance who is in charge, and who is in charge 24 hours a day, so that we will not see again a repetition of the disaster which has come to Canada.


Michael Holcombe Wilson: Mr. Speaker, let me assure the Hon. Member and my colleagues in this House, as well as Canadians who are watching, that the

September 30, 1985
Oral Questions
Minister of Finance is in charge. The Minister of Finance is watching very closely over the things which are happening today and which have been developing over this last six months in relation to these banks. And the Minister will continue to take those responsibilities very seriously.


COMMISSION'S POWERS
Hon. Bob Kaplan (York Centre):: Mr. Speaker, in the absence of the Prime Minister, my question is directed to the Government House Leader. Will the Government empower the Commission which was established today, by special legislation, if necessary, to tell Canadians who the uninsured depositors are who will receive compensation, and who are the depositors who may have bailed out early on the basis of insider information and, perhaps, contributed to this failure?


Michael Holcombe Wilson: Mr. Speaker, I think if the Hon. Member reads the terms of reference very carefully, he will see that the Commissioner has a wide scope to study all aspects of this particular matter so that those things which the Hon. Member has put before the House to date will be taken into account by the Commissioner.
I should remind the Hon. Member, however, as my colleague, the Minister of State for Finance, has said on a number of occasions, there is a legal impediment to us being able to do that. I am sure the Commissioner will take that legal impediment into account.


UNINSURED DEPOSITORS
Robert Phillip Kaplan: Mr. Speaker, as my supplementary question I want to ask the Minister if he will agree that no uninsured depositors will be paid by the Government, and that its legislation on that subject will not be pushed through this House until the Commission has made its report public and has dealt with those questions?


Michael Holcombe Wilson: Mr. Speaker, we have asked the Commissioner to make his report available "as soon as possible". Those are the words which are in the Order in Council appointing the Commissioner. But 1 should remind the Hon. Member that there are people who are in need of those funds. They rely on those funds for the running of businesses, their farms, and for personal expenses. That, I should say, has got to be kept uppermost in our minds in order to make sure we do not disrupt the financial markets by long delays.
I encourage the Hon. Member, and his colleagues, to deal expeditiously with this Bill when it is brought forward by my colleague.


COMMISSIONER'S TERMS OF REFERENCE
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, my question is directed to the Minister of Finance. Given the fact that the people of Canada want Mr. Justice Estey to have all of the
power and authority to get to the bottom of the Government's $1 billion fiasco with these two banks, will the Minister assure the House that Mr. Justice Estey, in the terms of reference he has been given, will be instructed to get all the information he needs, including a list of the depositors?


Hon. Erik Nielsen (Deputy Prime Minister and Minister of National Defence):: Mr. Speaker, the Commission of Inquiry, and the Commissioner, have been appointed. The terms of reference have been made public. It is the intention of the Government to co-operate in every way possible with the conduct of that inquiry in order to ensure its complete examination in a non-partisan way of all of the circumstances to which it has been referred, and just as quickly as possible, including, I might add, some of the statements which have been made by the Leader of the Opposition himself, and others in the House of Commons, where it has been suggested that perhaps their neck is out a mile, if not a more vulnerable part of their anatomy.


John Edward Broadbent: Mr. Speaker, all of that and a dollar may get you a cup of coffee, but it did not answer the question.


MINISTERIAL RESPONSIBILITY
John Edward Broadbent: We on this side of the House want to get to the bottom of this fiasco and we do not want a judge to be given the kind of mandate which is going to allow him to look into a certain question but to avoid dealing with certain questions if he does not want to. That is what we want to know. We want the Government to assure us that the Commissioner will be looking at the right questions.
The Deputy Prime Minister is apparently going to be answering, so I will ask him if the question of ministerial responsibility will be looked at. The president of the Northland Bank said about 10 days ago that the Government was, to put it mildly, ignoring its responsibility in helping the restructuring of Northland. Will the inquiry deal with the important question of ministerial responsibility in this $1 billion fiasco?


Erik Nielsen: Mr. Speaker, it would be of no purpose to take up the time of the House in reading into the record the precise terms of reference-


Mr. Waddell:: Say yes or no.


Erik Nielsen: -which have been made public in the appointment of the Commission of Inquiry. I am sure that knowing the high regard in which both professionally, and as an individual, Canadians hold Mr. Justice Estey, they will have confidence he will make the fullest and broadest possible inquiry into every aspect of the matter in keeping with his terms of reference.
With respect to the question of ministerial responsibility, at 3 p.m. the Minister of State for Finance will be making a statement and, among other things, that will be a matter which will be refered to. But in the meantime, I would once again
September 30, 1985

refer the Hon. Member to the terms of reference where he will see at once that the fullest possible inquiry has been mandated-


Mr. Speaker:: Order, please.


COMMISSION'S REPORTING DATE
John Edward Broadbent: Mr. Speaker, as the Minister has indicated, the terms of reference have been released. I have seen them. They are very general. They do not instruct Mr. Justice Estey to look at certain specific questions and, if the Government wanted to get to the bottom of this, it ought to have made those instructions very clear.
Considering the Government was prepared to have a Committee of the House look into this fiasco and report back by November 30, will the Government assure us that the report which is to be done by this Commission will be back before the House of Commons, more important before the people of Canada, by November 30?


Erik Nielsen: Again, Mr. Speaker, I refer the Hon. Member to the terms of reference. Mr. Justice Estey has been asked to report back as soon as possible so as not to impede the fullest and broadest possible inquiry which he has been mandated to conduct. No limitation has been placed on that. If a limitation had been placed, the first criticism we would receive is that we are lowering the guillotine on Mr. Justice Estey's inquiry.
I am sure that, given the calibre of the commissioner who has been appointed, we will see that report done in the most thorough and timely fashion. Certainly that is the hope of the Government. And the Hon. Member would have noted that, as soon as that report does come back, it is to be made public immediately, subject to any conditions which Chief Justice Estey might believe are necessary.


PRESENCE IN GALLERY OF MR. RENfc SOUCHON, SECRETARY OF STATE, FRENCH MINISTRY OF AGRICULTURE
Mr. Speaker:: Order, please. I would like to draw the attention of the House of the presence in the gallery of our distinguished guest, Mr. Rene Souchon, Secretary of State to the Minister of Agriculture of France.


PRESENCE IN GALLERY OF ARGENTINE MINISTER OF EXTERNAL RELATIONS
Mr. Speaker:: I would also like to draw the attention of Hon. Members to the presence today in our Gallery of His Excellen-
Oral Questions
cy Mr. Dante Caputo, Minister of External Relations and Worship of Argentina.


Some Hon. Members:: Hear, hear!


BANKS AND BANKING
Mr. Mike Cassidy (Ottawa Centre):: Mr. Speaker, I wish to direct a question to the Minister of Finance.
It had been estimated that losses incurred as a result of the Canadian Commercial Bank collapse will cost taxpayers anywhere from $600 million to $1 billion, thanks to the mistakes of the Government.
Can the Minister estimate the total cost of his decision to liquidate the Northland Bank? How much will it cost each taxpayer-$60, $70 or $80? How much will this bankruptcy cost?


Michael Holcombe Wilson: Mr. Speaker, as has been indicated, my colleague, the Minister of State for Finance, will be making a statement later on this afternoon and I would think some of the questions the Hon. Member has posed will be the subject of that statement.


REQUEST THAT POWERS OF INSPECTOR GENERAL OF BANKS BE INCREASED
Michael Morris Cassidy: Here is my supplementary question, Mr. Speaker. The Minister would rather not make a guess even though some estimates have already been made public.
Can the Minister tell us what the Government has done since March to widen and beef up the administrative powers of the Inspector General of Banks and to monitor this country's banking institutions? We do have 60-odd banks in Canada. Have the powers of the Inspector General of Banks been strengthened, considering the restricted authority which the incumbent has had for a long time under the Liberals and now under the Conservatives?


Michael Holcombe Wilson: Mr. Speaker, the Hon. Member rightly points out that over the years there has not been a proper amount of attention given to regulation. My colleague, the Minister of State, from the minute she got into office, started taking steps to strengthen the regulatory process in Canada. That is a continuing objective of our

September 30, 1985
Oral Questions
Government. On September 2, with the announcement of the appointment of curators for the two banks, she announced specific measures to strengthen the Canada Deposit Insurance Corporation's powers of inspection. I should also inform the Hon. Member that steps have been under way for a while now to add to the staff of the Inspector General's office, and that goes back to the middle of the summer.


COMMISSION'S TERMS OF REFERENCE
Hon. Herb Gray (Windsor West):: Mr. Speaker, my question is directed to the Deputy Prime Minister. In the Prime Minister's statement announcing the appointment of the Estey Commission the Prime Minister says in part:
Mr. Justice Estey will examine all circumstances and factors... including regulatory and administrative action taken by the Government of Canada with respect to these institutions.
Can the Deputy Prime Minister explain why the actual terms of reference in the Order in Council setting up the Commission authorize the Commissioner to look into and report on the state of affairs surrounding the cessation of operations of the two banks only with respect to the regulatory action taken by the Government of Canada and its agencies? The word "administrative" appears nowhere in that connection.


Michael Holcombe Wilson: Mr. Speaker, if we are going to get into a reading of the specific terms of the Order in Council, it says:
-to inquire into and report on the state of affairs surrounding the cessation of operations of the Canadian Commercial Bank and the Northland Bank-
Those are very broad terms of reference which provide the Commissioner with tremendous scope to explore any elements of the situation which he feels are appropriate. Then there are some specific references, as the Hon. Member has said, but:
-if the Commissioner concludes that the circumstances so require, to recommend any changes in the regulatory and administrative control of the banking industry-
These terms of reference refer specifically to administrative control.


PARLIAMENTARY COMMITTEE-GOVERNMENT POSITION
Herbert Eser (Herb) Gray: Mr. Speaker, I want to direct my supplementary question to the Government House Leader because the Minister of Finance should go back and read the terms of reference again.
The Government House Leader said that the Royal Commission was appointed because the Opposition was not prepared to proceed with the matter, and for further good and sufficient reasons. Is it not a fact, as widely reported in the press over the weekend, that both I, as Opposition House Leader, and the NDP House Leader, stated publicly on Friday that we were quite prepared to have this matter go to a parliamentary committee?


Some Hon. Members:: Oh, oh!


Herbert Eser (Herb) Gray: And is it not curious that only after we confirmed our willingness to have this go to committee the Government suddenly decided to have this hidden in a Royal Commission?


Mr. Clark (Yellowhead):: Wiggle and run, Herb.


Herbert Eser (Herb) Gray: Isn't that curious?


Ramon John Hnatyshyn: Mr. Speaker, I have always considered it to be part of my negotiations with the Hon. Member that we would not negotiate outside of House Leaders' meetings. I am interested to see that at long last the Opposition is now ready to give consideration to the parliamentary committee, but the Hon. Member will be the first to admit that there were a number of items, which we had put forward right at the beginning of this whole process when I laid down the terms of reference, which would have provided for an open and thorough examination by parliamentarians but the Opposition refused to go along with it because they were interested only in cheap political points, not in getting to the bottom of a very serious matter for Canadians.


Some Hon. Members:: Hear, hear!


FISHERIES
Mr. Ray Skelly (Comox-Powell River):: Mr. Speaker, my question is directed to the Acting Minister of Fisheries. He will know and I hope confirm for this House that orders have gone out within the Department of Fisheries that no one is to speak to the former Minister of Fisheries. No one is to speak to the political staff of the former Minister of Fisheries who are still working. No one is to return calls to the Premier of Nova Scotia.


Some Hon. Members:: Oh, oh!


Raymond John Skelly: The Premier of New Brunswick.


Charles Joseph Clark: They are all the same to the NDP.


Raymond John Skelly: Is it the Government's intention to root out and get rid of officials in the Department who, it believes, are responsible for the present scandal which affected the Government? Or is it in order to get the heat off the Prime Minister's Office?


Erik Nielsen: Mr. Speaker, to my knowledge the entire preamble of the Hon. Member's question is totally unfounded, and the inferences contained in the question itself are totally unworthy of him.
September 30, 1985


APPOINTMENT OF ACTING MINISTER
Raymond John Skelly: Mr. Speaker, the basic facts contained within the case are there. The morale in the Department is in serious condition. I wonder whether the Minister might be prepared to stand up in this House and admit that the reason he was appointed Acting Minister of Fisheries was to conduct a reign of terror in that Department?


Some Hon. Members:: Shame!


Erik Nielsen: My only response, Sir, can be that the Hon. Member brings immediately to mind an analogy between him and the caterpillar discussing with Alice in Alice in Wonderland the meaning of a word or the meaning of a phrase.


NUCLEAR ARMAMENTS
Hon. Lloyd Axworthy (Winnipeg-Fort Garry):: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. Last evening on W5 there was a story on the trade in uranium with the United States. U.S. energy officials were quoted to the effect that Canadian uranium is used in the development of nuclear weapons. This totally contradicts the statements by the Minister in this House last week.
In light of that information will the Minister now take the proper action to ensure that the treaty is lived up to? Will he go so far as to put an embargo on the trade in uranium with the United States until such time as we can put safeguards in place to make sure that very vital treaty is honoured?


Charles Joseph Clark: Mr. Speaker, 1 have looked at the provisions of the treaty. I have looked at the degree to which they are being honoured. The treaty obligations and the treaty assurances with respect to Canada in relation to the U.S. and other countries are being honoured. I watched the television program with some care last night. I have neither seen nor received any evidence to suggest that the treaty is not being respected. If I may say so, I find it a curious interpretation of responsibility by the Leader of the NDP that he should claim to have such evidence yet will not give it to me.


Some Hon. Members:: Hear, hear!


USE OF URANIUM BY FRENCH AGENCY
Lloyd Axworthy: Mr. Speaker, I can only say that is an unacceptable and disappointing response by the Minister. If there is any abrogation-


An Hon. Member:: Absolutely.


Mr. Speaker:: Order, please.
Oral Questions


Some Hon. Members:: Oh, oh!


Lloyd Axworthy: Mr. Speaker, I will then put another question.


Mr. Speaker:: Order, please. With great respect to the Hon. Member, I cannot hear him until certain other Members allow him to be heard.


Lloyd Axworthy: Mr. Speaker, they are all auditioning for The Gong Show.
These reports also include the fact that Canadian uranium is now being used by the French nuclear agency which could have a potential for use in weapons. Has the Canadian Government investigated that possibility and are we also looking into what safeguards are in place to make sure that the French Government, in light of its production of nuclear weaponry, is also not using Canadian uranium for those purposes?


Charles Joseph Clark: Mr. Speaker, the Hon. Member was a Minister of the Crown and it was a Government of his Party, led by a distinguished former Prime Minister, Mr. Pearson, who brought this treaty into place. With regard to France, he knows that our arrangements with Euratom ensure that Canada's standards are met with regard to France as they are with others. I ask all Members of the House, if they have any proof that there is any failure to abide by the provisions of Canadian treaties, please bring that evidence to my attention.


Lloyd Axworthy: It was in front of your eyes


Charles Joseph Clark: I have received none at all to this point, and I invite Members of the House not to make vague accusations and not to indulge in innuendo but, if they have facts, to bring those facts to my attention and I will pursue them.


TELEVISION PROGRAM
Ian Gardiner Waddell: Mr. Speaker, my question is directed to the Secretary of State for External Affairs and it is with regard to the same issue. He said that he saw the program in question last night. Did he not see the pictures of the barrels of depleted uranium? Did he not hear the American official say that Canadian uranium was being mixed in and was in fact being used to make nuclear bombs? Did he not hear Americans say that there was a piece of Canadian uranium in every American nuclear bomb?


Charles Joseph Clark: Mr. Speaker, I heard those statements by Mr. Arkin. I have heard the allegation that the Canadian treaty assurances are not being respected. That allegation is false.


Ian Gardiner Waddell: I don't know what more evidence the Minister needs.


Mr. Blackburn (Brant):: There's your proof.

September 30, 1985
Oral Questions


Mr. de Corneille:: The Americans would hardly know; after all it's the Americans who are using it.


REQUEST THAT MINISTER CONDUCT INQUIRY
Ian Gardiner Waddell: Mr. Speaker, in order to clear this matter up, is the Minister saying that he has washed his hands of the whole matter, or is he telling the House that he will continue to look into the matter? It is a historic Canadian principle enunciated by Prime Minister Pearson in 1965 that we will use our uranium for peaceful purposes. Therefore, will the Minister look into this matter further, and is he prepared to have an inquiry with respect to the use of-


Mr. Speaker:: Order. That is three questions.


Charles Joseph Clark: Mr. Speaker, I have explicitly, and now for the third time, asked Members of the House to provide me with any information that they have, and said that I will look into it. So far we have received no evidence at all from CTV, from the NDP, or from anyone else that there has been a violation of treaty.
With regard to commissions, the Hon. Member may well know that there was a Commission of Inquiry appointed by the New Democratic Government of Saskatchewan, the Bayda Commission, which looked into precisely the question that is now being raised, including whether or not there was a danger to proliferation policy. The new Democratic Party commission in Saskatchewan concluded that the treaty provisions that are now in place were adequate. That was the position of Mr. Blakeney in 1978. He has changed his position now, but the facts have not changed.


FEDERAL-PROVINCIAL FISCAL ARRANGEMENTS AMOUNT OF TRANSFER PAYMENTS
David Charles Dingwall: Mr. Speaker, my question is directed to the Minister of Finance. The Minister's decision to cut off $2 billion in transfer payments to the provinces will result in much hardship for students, the elderly, the provinces, and indeed the municipalities. Is the Minister of Finance prepared to table in the House today copies of the impact studies that his Department or other Departments of the Government have done with regard to these cut-backs and how they will affect the individual provinces?


Michael Holcombe Wilson: Mr. Speaker, I indicated in the Budget last May that we were going to reduce the rate of growth of the federal-provincial transfers by $2 billion by 1990-1991. That means that instead of going that fast, they are only going to go less fast, and less fast is still pretty fast because there is still going to be a considerable amount of money available to the provinces to be used in the
range of programs that are supported by the federal Government. I presented this proposal to the Finance Ministers against the background of the very serious financial position of the federal Government. One thing that came through loud and clear was that the Finance Ministers themselves understand, probably considerably better than the Member opposite, the serious financial position that we are in and, therefore, the need to take this decision.


POSITION OF PROVINCES
David Charles Dingwall: Mr. Speaker, I remind the Minister of Finance that this measure will substantially reduce the revenues of the provincial Governments, therefore causing extreme havoc for a great number of people. Will the Minister of Finance indicate to the House what remedial measures he will take in his capacity as Minister of Finance to assist those poorer provinces and those poorer municipalities throughout the country?


Michael Holcombe Wilson: Mr. Speaker, I recognize that it is not easy for any province to see its rate of growth reduced. However, I remind the Hon. Member that the percentage of Government spending in these areas in 1990-91 will be the same as today. The share of the federal Government Budget will be unchanged. By making this announcement today we have given the provinces ample warning and ample opportunity to change the method of delivery of programs by working with the federal Government in order to have the least disruptive transition to this new regime.


DISARMAMENT
Mr. Reg Stackhouse (Scarborough West):: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. With the success of the nonproliferation treaty conference behind us and the Geneva summit in front of us, what initiative can the Government take on its own, or with other countries, to move the super powers at Geneva toward definite, clear-cut actions that will lift higher this window of opportunity, specifically the possibility of a comprehensive test ban?


Charles Joseph Clark: Mr. Speaker, I share with the Hon. Member, and 1 am sure with all Members of the House, a great deal of satisfaction with the success that was found by all nations in the nonproliferation treaty negotiations in Geneva, particularly because there was some great concern before that conference that no consensus would be found. I think that demonstrates that when all nations are prepared to work toward some agreement, rather than leaving matters exclusively to the super powers, there is an opportunity for progress to be made. We will be continuing the initiatives that Canada has followed in
September 30, 1985

various forums and certainly will be working toward a comprehensive test ban.


NUCLEAR ARMAMENTS
Ms. Pauline Jewett (New Westminster-Coquitlam):: Mr. Speaker, my question is directed to the Secretary of State for External Affairs and is with regard to this very troublesome matter of Canadian depleted uranium being used in the United States for both nuclear and conventional military purposes. Can the Minister now give us the reasons why he is absolutely certain that depleted uranium is not being used for those purposes?
Right Hon. Joe Clark (Secretary of State for External
Affairs): Yes, Mr. Speaker, I can. The matter was raised both by television reporters and the other day in the House of Commons in a very general way by the Leader of the New Democratic Party. I consequently looked into it. I have informed myself on the principle of fungibility and other arcane matters that are involved in this question. I have learned that there is, in the treaty, a requirement for administrative arrangements to be put into place that deal with the residue as well as with the original uranium. I have learned that those administrative arrangements are in fact in place. I am satisfied, on the basis of the information I now have available, that the treaty is being respected.


Derek Nigel Ernest Blackburn: What's your proof?


Charles Joseph Clark: I am asked for proof. The proof is that I have looked for any weakness in the treaty and I have found none. If Hon. Members have any information that that treaty is not being respected, I ask them for the fourth time not to be so secretive. Come forward with your allegations so that we can find out whether they are true or false.


Lloyd Axworthy: Do a proper investigation.


CANADA-UNITED STATES TREATY
Pauline Jewett: Mr. Speaker, apart from the fact that three experts on the matter have said that Canadian depleted uranium is being used, can the Secretary of State for External Affairs assure us that, under the treaty, depleted uranium is dealt with similar to the way in which special uranium is dealt with, or can he tell us that it is dealt with differently and that it is not allowed the proportional treatment that he has been talking about?
Right Hon. Joe Clark (Secretary of State of External
Affairs): Mr. Speaker, it receives the proportional treatment. There has been no change in this matter in the last 20 years with one exception. As a result of the Royal commission carried out at the instruction of the New Democratic Party Government in Saskatchewan, that Government invested hun-
Oral Questions
dreds of millions of dollars of the people of Saskatchewan in the development of the uranium industry and uranium mining in the Province of Saskatchewan.


Pauline Jewett: Answer the question.


Charles Joseph Clark: That now involves some 7,000 Canadian jobs and some leading programs for the training of natives.


Pauline Jewett: That's not answering the question.


Charles Joseph Clark: My questions to the NDP are: one, will you give me some facts; two, why are you opposed to those
7,000	jobs in Saskatchewan; three, why are you opposed to a training programs for Canadian native people?


Some Hon. Members:: Hear, hear!


Pauline Jewett: You are avoiding the question.


John Edward Broadbent: You tried that on fish for a while, too. This sounds like tuna fish all over again.


Ramon John Hnatyshyn: Phone Allan Blakeney and get a supplementary.


Mr. Speaker:: Order, please.


CANADA-UNITED STATES NEGOTIATIONS-GRAPE AND WINE INDUSTRY
Mr. Joe Reid (St. Catharines):: Mr. Speaker, my question is directed to the Minister responsible for International Trade. With the Canadian grape and wine industry at the crisis point, mostly because of imports, putting the Niagara fruitlands in jeopardy, what action does the Minister propose to take as he undertakes these negotiations so that the grape and wine industry will not become a loser?


Hon. James Kelleher (Minister for International Trade):: Mr. Speaker, we have heard representations from the industry. We are aware of their concerns and they will be taken into consideration in the formulation of our negotiating policy.


BANKS AND BANKING
Mr. Brian Tobin (Humber-Port au Port-St. Barbe):: Mr. Speaker, my question is directed to the Government House Leader. It concerns the decision enunciated today not to have a Commons committee look into the Canadian Commercial Bank collapse.

September 30, 1985
Oral Questions
On Friday, September 27, both the New Democratic Party House Leader, the Opposition House Leader, and the Prime Minister himself, during his press conference which was televised live, indicated to Canadians that they wanted to have a Commons committee investigate the CCB bank failure. What changed in either the House Leader's thinking or the Prime Minister's thinking between Friday morning and this morning to result in the Government's announced intention of scrapping the Commons committee?


Ramon John Hnatyshyn: Mr. Speaker, there was no change of thinking on our part. The change of thinking was on the part of the Opposition.


Brian Vincent Tobin: The House Leader will know that Canadians saw the Prime Minister indicate that he wanted that committee to work. He said it Friday morning.


APPOINTMENT OF MR. JUSTICE ESTEY
Brian Vincent Tobin: Mr. Speaker, my question concerns bargaining in good faith. When did the Government first approach Justice Estey and ask him to undertake this Royal commission, because you were negotiating with two House Leaders until Friday afternoon?


Ramon John Hnatyshyn: Mr. Speaker, I am glad that the Hon. Member made reference to "bargain in good faith". "Bargain in good faith" means that there is a sense of confidentiality in House Leaders' meetings where we discuss matters proceeding before the House from time to time. That is my idea of a fair method of negotiation.
I do not negotiate in the media. I have always made a point of respecting the confidentiality of House Leaders opposite and I will continue to do so until it is proven to me that that is not the appropriate way to operate on the basis of actions on the part of the Opposition.


CANADA-UNITED STATES NEGOTIATIONS-CANADIAN CULTURAL AFFAIRS
Steven W. Langdon: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. Despite the Prime Minister's promise last week that our cultural identity was not on the table, the United States Ambassador said yesterday: "I would like to see a discussion between the U.S. and Canada ... of what has come to be known as the cultural area ... to include broadcasting, book publishing, magazines, cable television, movies, et cetera".
Will the Minister take this opportunity to tell the United States quite explicitly that we will not put Canada's cultural industries on the table and that we will not negotiate these crucial elements of our national independence?


Charles Joseph Clark: Mr. Speaker, the Prime Minister has already made it very clear that Canada's cultural identity is not negotiable. I am proud to repeat that assurance.


Steven W. Langdon: Of course, the point is to find out whether cultural identity means cultural industries.


BOOK PUBLISHING INDUSTRY
Steven W. Langdon: Mr. Speaker, will the Minister give a specific commitment, in view of last week's sale of Classic Books and in view of Commerce Secretary Baldridge's recent pressure, that the Government will stick to its Canadian control policy with respect to the book publishing and book distributing industry specifically?
Right Hon. Joe Clark (Secretary of State for External
Affairs): Mr. Speaker, this is the Party that brought to Canada the Canadian Broadcasting Corporation. This is the Party that had the courage, after 16 years of indolence by the Liberals, to declare Canadian sovereignty in Canada's North. This is a Party that will maintain the strength and vitality of Canada's culture and identity. We are so confident of our culture that we are not afraid of seeking commercial arrangements that will provide jobs and security for Canadians.


Some Hon. Members:: Hear, hear!


Charles Joseph Clark: If some of my colleagues opposite had been around at the time, their caution would have been such that they would not have let Christopher Columbus get in the boat.


Some Hon. Members:: Hear, hear!


BANKS AND BANKING
Sheila Maureen Copps: Mr. Speaker, my question is also directed to the Government House Leader. In order to refresh his memory, let me quote a statement repeated by the Prime Minister in a news conference on Friday when he said that he desired to have a Commons committee investigate the Canadian Commercial Bank September 1 collapse. He said:
It must be investigated and those responsible must be held accountable.
When did the Government, the Prime Minister or the House Leader first approach Justice Estey about his taking over the commission which should have been conducted here in the House of Commons? When did he in fact contact Justice Estey?


Ramon John Hnatyshyn: Mr. Speaker, I have not spoken to Mr. Justice Estey for some
September 30, 1985

weeks now. Therefore, I cannot give any response to the Hon. Member.
All I can say is that also in the article referred to by the Hon. Member, the Opposition were complaining about the fact that they did not think we were going to give them enough information. On the contrary, I want it on the record that we were going to give them so much information that they were afraid to go ahead with this inquiry.


MINISTER'S POSITION
Sheila Maureen Copps: Mr. Speaker, I want to give the House Leader the benefit of the doubt.


Some Hon. Members:: Oh, oh!


Mr. Mazankowski:: He does not need your doubt.


Sheila Maureen Copps: You may think that a billion dollar bail-out is a big joke-


Donald Frank Mazankowski: I think you're a big joke.


Sheila Maureen Copps: -but it isn't a joke to the taxpayers.


Mr. Speaker:: Order, please.


Sheila Maureen Copps: When he misled the House today he said that the reason that the Commission was called for was that the opposition Parties would not agree to a parliamentary investigation. Why in fact did he mislead the House the way he did in Question Period today?


Ramon John Hnatyshyn: Mr. Speaker, whenever the Official Opposition is on a sticky wicket and on weak ground, they call on the rats. I am not answering that question. It is simply untrue and unworthy of the Hon. Member. I would ask her if she would not mind trying to do something to restore in her Party at least some of the civility that we expect in the House from Members of Parliament.


CANADA-UNITED STATES NEGOTIATIONS-PARLIAMENTARY DEBATE
Alan Redway: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. It concerns Canada's trade negotiations with the United States. The Minister will know that most Canadians understand the difficulty of discussing trade negotiations in detail before they take place. However, he will also understand that they are most interested in knowing that sort of arrangement is worked out before it is signed.
Will the Minister assure the House that Parliament will have an opportunity to debate and approve of any trade
Oral Questions
agreement with the United States before it is signed by Canada?


Charles Joseph Clark: Mr. Speaker, I am prepared to go farther than that. Of course we will do that. We are also anxious to have the issue debated here in the House of Commons. That is why we had the matter go before a committee that travelled the country. That is why the Prime Minister, in his statement in the House the other day, said that there would be discussion early in the House if possible, if agreeable with the opposition Parties. We have just learned, in the case of the bank, that Governments might want debates and Governments might want references but we cannot achieve them in the face of an obstructionist Opposition.
We want to have the question of trade and the question of our relations with the United States debated in the House.


BANKS AND BANKING
Mr. Ian Deans (Hamilton Mountain):: Mr. Speaker, for a Government that wanted debate, it is strange that we did not talk about the matter for a whole week. However, will the Deputy Prime Minister assure us that all of the information that up until now the Government said it could not provide to the committee because it was illegal will be provided to the commissioner?


Erik Nielsen: Mr. Speaker, why can the Hon. Member not wait with patience for Mr. Justice Estey-


Mr. Gauthier:: We don't trust you, Erik.


Erik Nielsen: If the Hon. Member does not trust me, perhaps-


An Hon. Member:: No one does. Even your mother doesn't, Erik.


Erik Nielsen: She passed away many years ago.
Perhaps he might trust the Hon. Mr. Justice Estey, who is conducting this inquiry. Let us be patient and see what his requirements are.
I can assure the House that all information that it is possible for us to provide, which has been our position all along, will be provided to assist him in conducting that inquiry.


AVAILABILITY OF INFORMATION TO COMMISSION
Ian Deans: Mr. Speaker, will all the information in its entirety, that the Ministers had, that the Inspector General of Banks had, that was available to those

September 30, 1985
Privilege-Ms. Copps
three individuals prior to the decision to bail out the bank, and prior to the decision to close the banks down, be available to Mr. Justice Estey for the purposes of conducting his Commission of Inquiry?


Erik Nielsen: Why do we not allow Mr. Justice Estey to determine what information he deemes necessary for the proper conduct of his inquiry, Mr. Speaker?


John Edward Broadbent: He has to operate with your instructions.


Ian Deans: Why don't you give us the answer?


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!


CLERK OF PETITIONS' REPORTS
Mr. Speaker:: I have the honour to inform the House that the petitions presented by Hon. Members on Friday, September 27, 1985, meet the requirements of the Standing Orders as to form.


PRIVILEGE
Mr. Speaker:: I should indicate that I am, contrary to what I thought earlier, in a position to rule on the question of privilege raised by the Hon. Member for Hamilton East (Ms. Copps) on September 24.
Her complaint was based on a document, a copy of which she furnished to me and which I have read very carefully. It is an unidentified document of unknown authorship which purports to advise on the strategy to be employed in communicating with the public on the bilateral trade initiative between Canada and the United States.
The Hon. Member for Hamilton East complains that certain passages of this document violate her privileges as a Member of Parliament. It is not for the Chair to determine whether or not this is so, but only to decide whether sufficient evidence has been presented to justify according priority of debate to this matter.
In the first place, the Hon. Member's complaint does not seem to be directed against any identifiable individual organization. The Chair has no information as to who wrote the document or who issued it.
Second, the Chair must determine whether the document provides evidence of interference with her right to freedom of speech or whether it in any way obstructs her in the fulfilment of her duties.
She is mentioned by name in the document where it is indicated that her riding has the steel industry to represent. This is a statement of fact which is not, in itself, defamatory.
The document also suggests that some Opposition Members, including the Hon. Member for Hamilton East, represent ridings which stand to benefit from the trade initiative and that this could be productively exploited as part of the proposed strategy.
The Hon. Member perhaps, and I presume clearly, does regard this suggestion as offensive, but does it constitute a threat or an attempt to intimidate her? Has it impeded the Hon. Member in any way in the performance of her duties? I have to say that I can find no evidence in this document which would substantiate an affirmative answer to those questions. I am, therefore, unable to accord this matter precedence over other business.



ROUTINE PROCEEDINGS


Hon. Barbara McDougall (Minister of State (Finance)):: Mr. Speaker, pursuant to Standing Order 46(2), I have the honour of tabling, in both official languages, copies of correspondence relating to the liquidation of the Northland Bank.


BANKS AND BANKING
Barbara Jean McDougall: Mr. Speaker, this morning, I announced on behalf of the Government that a court order is being sought today under the Winding Up Act to permit the liquidation of the Northland Bank.
Also this morning, the Prime Minister (Mr. Mulroney) announced that Mr. Justice Willard Estey has been appointed to inquire into and report upon all circumstances and factors that contributed to the condition of the Canadian Commercial Bank and the Northland Bank and resulted in their cessation of operations.
I want this afternoon to explain to the House the circumstances leading up to and the reasons for these decisions. [Translation]
Mr. Speaker, first of all, I want to point out that the problems experienced by the Canadian Commercial Bank and the Northland Bank reflect a unique and specific situation.
September 30, 1985

Canada's banking system is and remains one of the most stable in the world. In fact, as I pointed out earlier, the assets of these two institutions represent less than one per cent of the total assets of the Canadian banking system. Both banks had their beginnings in Western Canada, in the mid seventies. Both banks were established in a region that was experiencing rapid economic growth as a result of an energy boom, and developed significantly during that period.

The banks focused upon attracting wholesale deposits from corporations and others like municipalities, hospitals, colleges and pension funds with substantial funds to invest. In their loans and other investments, these two banks had highly concentrated exposure in western real estate and in energy-based businesses.
The banks were particularly vulnerable when the resource based boom in western Canada came to an abrupt end. As we all know, the boom was followed by a very severe recession that dramatically weakened the western economy. In fact, only now is the western economy beginning to shake off the effects of that recession.
In March, the Government was approached by the management of the Canadian Commercial Bank for support. At that time, the Bank required write-downs on its loan portfolio. The net effect of these write-downs would have been to erode the capital and reserves of the Bank to such an extent that it would no longer be viable. A Government decision to support the CCB, or any financial institution for that matter, was not an easy decision to make. The Government, over the course of March 14 to March 25, explored many options, asked many questions and produced alternatives. That was our responsibility-
Let me state, Mr. Speaker, that this Government believes that regional financial institutions can play an important role in the development of strong regional economies. Because of this, we decided that it would be appropriate to make all reasonable efforts to enable the CCB to continue to serve western Canadian businesses.
There were a number of very important considerations behind this decision. The recovery in Alberta and British Columbia was lagging behind that of the rest of Canada. The Government was concerned that a regional bank failure would set back the economic recovery that was occurring in western Canada. Liquidation of the CCB in March, when the economy was less healthy, would have considerably disrupted the affairs of many western businesses, with serious risks to their recovery and, indeed, to their future survival. At the national and international level, there was considerable uncertainty in financial markets. The Canadian dollar had recently reached its lowest point ever. Interest rates were high. Financial institutions' failures in the United States had shaken confidence. The prospect of a bank failure in this unsettled environment carried with it significant but incalculable risks.
Faced with these risks, to jobs in western Canada, to the integrity of our banking system and to international confidence
Statements by Ministers
in our economy, the Government decided to pursue efforts to support the Canadian Commercial Bank.
In the light of the best information we had available, and recognizing the limited time for decision, we agreed, together with two provincial Governments and the six largest Canadian chartered banks, to propose the support package approved by Parliament in Bill C-37.
The support package was constructed to restore to CCB's viability by the participants absorbing $255 million of losses on the non-performing portion of the loan portfolio. The non-performing loan portfolio was identified by the management of the CCB and,in the limited time available, reviewed by the Inspector General of Banks and representatives of some of the chartered banks that participated in this support package.
Following the passage of Bill C-37 in March, and in consultation with the Chairman of the Board of the CCB, I took steps to attract new board members to strengthen the management of the Bank. I was looking for individuals of the highest professional calibre. Unfortunately, I was not successful in those recruiting efforts.
As required by the support agreement, two special representatives of the office of the Inspector General of Banks were appointed to supervise the arrangement. Those two experienced credit officers conducted a thorough review of the loans in the support package.
Also, as part of the follow-up to the support package, the Government arranged to have a team of banking experts led by Mr. George Hitchman review the total loan portfolio of the CCB. Mr. Hitchman's report identified the need for substantial write-down of the loans covered by the March support package, as well as other loans the Bank had made which the management of the Bank had excluded from the support package. At the same time, it was apparent that the support package had not restored market confidence in the Bank. The result of this lack of confidence was that Bank of Canada advances to the CCB increased substantially over the summer until they amounted to $1.3 billion by late August.
It became clear through the process that significant additional write-downs would be required. In the view of the IGB, the extent of these write-downs was such that the CCB could no longer be considered viable. Based upon these findings, the Bank of Canada could no longer continue to provide liquidity support.
In the absence of any other option, including potential merger opportunities that were explored, the resonsibility of the Minister of Finance (Mr. Wilson) was to appoint a curator to conserve the financial position of the Bank pending liquidation proceedings. We did not reach this decision on September 1 lightly; we came to it reluctantly and only after the most serious deliberations. We knew that there would be some disruption to the Bank's clients, but we had to weigh that factor against the knowledge that the Bank was no longer a viable financial institution.

September 30, 1985
Statements by Ministers
To help minimize the impact to western businesses, we asked the curator to carry out his duties in a manner which created the least possible disruption to the business clients of the CCB. That is the background with respect to the Canadian Commercial Bank.
I now want to turn to the situation of the Northland Bank and the decision that was announced this morning. The Office of the Inspector General of Banks has been in frequent contact with the Northland Bank since the Bank was created and has participated in many discussions with management concerning internal operations, audit arrangements, specific lending and financial proposals, and other aspects of the Bank's operations.
When the Canadian Commercial Bank informed the Government of its difficulties that resulted in the March support arrangements, the Office of the Inspector General of Banks, the Bank of Canada, the Minister of Finance and myself were aware of the potential implications for Northland. Over the period following the March support package, it became increasingly clear that the Northland Bank was suffering a lack of market confidence that led to serious funding problems. Bank of Canada advances increased to more than $500 million by the end of August. Through this period the Government worked closely with Northland's officials to try to find solutions to the Bank's problems. As part of this exercise, the Inspector General of Banks undertook a comprehensive examination of the quality of Northland's assets. His report in late August made it clear that Northland's problems were not limited to funding. Indeed, the value of Northland's assets was seriously impaired and the IGB concluded that Northland also was no longer viable.
At the time the decision was being made to liquidate the Canadian Commercial Bank, the Minister of Finance and I met again with officers of the Northland Bank. Northland officials repeated their assurances that a reorganization or merger could soon be accomplished. We agreed that this effort should be accommodated. However, it was clear to us that Northland could not continue normal operations while this effort was in progress. Thus, at the beginning of September, we agreed to treat Northland as a separate situation from the CCB and give the Bank time to develop alternative proposals to liquidation. The Minister of Finance appointed Touche Ross Fimited curator of the Northland Bank, with the understanding that Northland management was to be given time to reorganize its affairs to seek amalgamation partners. At that time I retained Mr. Robert Bellamy of Burns Fry Fimited to work with the Northland Bank in an attempt to arrive at a reorganization or amalgamation.
On September 27, I received a report from Touche Ross Fimited which confirmed the IGB's report that Northland was no longer able to meet its financial obligations as they fell due. The curators stated that the interest of the creditors and the shareholders would best be served by an orderly liquidation. I also received from Mr. Bellamy his conclusions with respect to potential restructuring arrangements for the Northland. Mr. Bellamy concluded that none of the proposals he had discussed with interested parties and examined in detail was likely to be
successful. The proposals examined did not effectively limit the exposure of the federal Government, in effect the taxpayers of Canada, in that they required a more or less open-ended commitment to assume the Bank's non-performing loans. Nor did they provide a sufficient degree of certainty that the reorganized Bank would be able to carry on as a viable financial institution without continuing Government support. Those are the documents which I tabled today, the curators' report and Mr. Bellamy's conclusions.
While the Government went to significant lengths to accommodate Northland in its search for a merger partner, we were not and are not prepared to enter into an open-ended commitment. Nor were we prepared to support a solution which did not carry with it the certainty, the absolute certainty, that the Bank would emerge as a viable operation in the foreseeable future. We did not receive a single proposal that met these two basic conditions, despite the fact that Mr. Bellamy, on my behalf, approached a number of parties to see if they were prepared to submit proposals. Given no acceptable proposals and the deteriorating situation at Northland, the Government had no choice but to take the decision announced today. I want to say and to emphasize to all Members of the House that we did everything in our power to assist the Northland Bank in its merger and reorganization efforts. While our efforts were unsuccessful, let me assure you, Mr. Speaker, that it was not for lack of trying.
We could not continue with the search for a merger partner indefinitely. Not only was the situation with regard to Northland's current financial picture deteriorating, but we also had the depositors' interest to consider. As you are aware, Mr. Speaker, the Canada Deposit Insurance Corporation cannot pay insured depositors until an appropriate court order is obtained. Thus I assure you, Mr. Speaker, the decision to liquidate Northland Bank was made regretfully but not until all other possible alternatives were considered fully.
Let me now turn to the announcement by the Prime Minister (Mr. Mulroney), on the recommendation of the Minister of Finance and myself, to appoint a commission to inquire into the events resulting in the cessation of operations of the Canadian Commerical Bank and the Northland Bank. Since September the Government has been pressing for a full, complete and non-partisan discussion of the circumstances and decisions which have brought these two financial institutions to their current state. We have concluded that the public right for a full and dispassionate investigation can best be served through a commission of inquiry. A further reason for a commission of inquiry is to ensure that all the relevant facts surrounding the liquidation of the two Banks come out and are dealt with appropriately. The issues are complicated, as discussions in the House over the past few weeks have made abundantly clear. Analysis and evaluation of these issues require the expertise that Mr. Justice Estey's commission will bring to bear.
We have no parameters on the extent of the commission of inquiry. It will be up to Mr. Justice Estey to determine the scope and nature of the investigation in any way that he sees
September 30, 1985

fit. We are looking forward to what an independent, objective and most eminent jurist has to say about this entire matter, just as I am sure Hon. Members opposite want to see these results. Further, the Government intends to make public Mr. Justice Estey's report upon receipt, except for any parts of his report that he himself feels should remain confidential. Again in this area, I want to stress that we have not constrained him in any way.
I believe that the approach we are taking in asking Mr. Justice Estey to conduct a commission of inquiry is the approach which is most likely to satisfy the public interest as well as result in a complete explanation of the circumstances.
Mr. Justice Estey has been asked to commence his commission of inquiry immediately and has advised the Government that he will begin hearings on Wednesday, October 2, 1985. He will submit his report to the Governor in Council as soon as possible.

Hon. Members will have further opportunity to debate these issues when the Bill authorizing the Government to compensate uninsured depositors is tabled in the House. In fact, this legislation is to be tabled very shortly, Mr. Speaker.
As I indicated in this morning's press release, the legislation will provide for payment to uninsured depositors of the principal amount plus interest up to September 1, 1985. Sixty per cent of the amount will be paid to each depositor concerned as soon as possible after passage of the Bill, with the remaining amount to be paid by an additional cheque post-dated April 1, 1986.
I may add that no payment will be made for interest that would have been due after September 1.

I hope that we will have the full co-operation of Members opposite in completing all stages of the legislation expeditiously so that the uninsured depositors can receive their payments.
As you are aware, Mr. Speaker, these depositors include some municipalities whose ability to function financially has been seriously impaired by the state of affairs involving the Canadian Commercial Bank and Northland.
Hundreds of small businesses, some credit unions, associations, charities, cultural organizations, hospitals and colleges, as well as individual Canadians are also affected and will benefit by the speedy consideration of the proposed legislation by this House.
Mr. Speaker, I hold the view that we in this House should strive to ensure that our financial system remains effective, prudent and well respected in Canada and around the world. To that end the Government will be seeking the co-operation of all Members of the House to revise and reform the legislation and regulatory processes governing the operation of Canadian financial institutions.
Statements by Ministers
On September 1, I announced our intent to introduce legislation that would give federal regulatory authorities increased powers to protect the stability and the soundness of the Canadian financial system. In addition, I have announced my intention to introduce amendments to the Canada Deposit Insurance Corporation Act to ensure that the deposit insurance system will have the financial resources to continue to protect Canadian depositors of modest means. The Government intends to proceed with these reforms in the near future.
In addition, the House Finance Committee is currently holding hearings on the Government's discussion paper on financial institution reform. This document outlines the Government's over-all approach to modernizing legislation respecting Canada's financial institutions.
The recent events involving the Canadian Commercial Bank and the Northland Bank highlight the importance of this work and the need to move quickly but effectively in completing it.
Finally, Mr. Speaker, I want to repeat that I have every faith in the viability and the strength of the Canadian banking system and in its national and international reputation. I am very much looking forward to the work and the report of Mr. Justice Estey. I assure all Members of this House that Mr. Justice Estey can count on the complete co-operation of this Government throughout his inquiry.


Raymond Garneau: Mr. Speaker, in these 24 pages of ministerial statement there is one paragraph missing and it has to do with the resignation of the Minister of Finance (Mr. Wilson) and of the Minister of State for Finance (Mrs. McDougall).


Some Hon. Members:: Hear, hear!


Raymond Garneau: It is a very sad day indeed that should be remembered by all Canadians for many years. After 13 months of Conservative Government we have learned today that the second Bank will be wound up.


An Hon. Member:: How many more?


Raymond Garneau: Worst of all, this Government after 13 months in power was taking advantage of the employment situation, the job creation. It has taken all the credit for that even though everybody knew that it was the result of the last Budget speech. But today-


Some Hon. Members:: Oh, oh!


Mr.   La Salle@: I would have a lot to say about that.


Mr. Speaker:: Order. Order, please-


Mr.   La Salle@: At least we act responsibly!


Mr. Speaker:: The House has listened very attentively to the Minister's statement.

September 30, 1985
Statements by Ministers
I would now appreciate it, please, if the Hon. Member speaking for the Liberal Party could perhaps be afforded the same courtesy in the House.


Raymond Garneau: Mr. Speaker, it is a very serious matter. I do not want to joke about it, and certainly not take those interruptions from the Minister of Public Works who knows nothing about banking except to borrow from the bank.
Worst of all, Mr. Speaker, now we have been told that the parliamentary committee will not be allowed to look very carefully into those two bank failures. In fact, we have been told that a judge has been appointed, and don't tell us that it is not due to the fact that the Member from the Liberal Party tried to ask for more detail before going into the parliamentary committee. I do not know what they have to hide but the Minister has certainly refused to appear before the TV camera in the parliamentary committee. The Prime Minister (Mr. Mulroney) of this country had promised Canadians a televised inquiry. What are they hiding now, and don't give us the Irish blarney.


An Hon. Member:: Another broken promise.


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


Raymond Garneau: Mr. Speaker, it is a sad day for Canada when in a matter of weeks, we are now informed of the failure of a second bank.
I think we should consider this as a matter involving the Minister's credibility. That is why I said there was a paragraph missing from this long 24-page statement, a paragraph containing the resignation of the Minister of State (Finance) (Mrs. McDougall) and the Minister of Finance (Mr. Wilson).
On March 29 of this year, the Minister said here in the House that with the exception of the Canadian Commercial Bank, no other financial institution was either in difficulty or appeared to be in difficulty. And now she says in her statement that she had been aware of the problems of the Northland Bank since March!
Mr. Speaker, there is the issue of credibility which is extremely important. If the Minister wants to discuss the bank question and obtain the co-operation of the Members of this House on this very important matter, she must realize that her statements must be consistent. If she does not know the answers, she should remain silent. But she should not tell Canadians that no other bank in this country is or appears to be in financial difficulty.
Why do I hesitate today to ask the Minister: Is there another financial institution in danger? Mr. Speaker, I dare not ask the question because I am afraid I will not be told the truth.


An Hon. Member:: Right on!


Raymond Garneau: It is a very serious matter. For instance, here is what the Minister said in her statement today:

"These banks were particularly vulnerable when the resource based boom in western Canada came to an abrupt end".

Compare today's statement with her remarks to the House last March 25 when she told the people of Canada and Members of the House that the difficulties experienced by the Canadian Commercial Bank stemmed from those loans in California.
Will the Government today, considering the dreadful situation which undermines the security of our entire banking system-
Will the Minister of State . . . and so far the Minister of Finance has refused to assume his responsibilities under the Act. By means of a letter you may delegate certain administrative responsibilities to a Minister of State, but the bottom line is that the Minister of Finance has the ultimate responsibility under the provisions of the Act. I find it rather strange that in such a serious situation he would let the Minister of State (Finance) face the music and assume the responsibilities, while in fact he is the one who should have risen to make the statement.


An Hon. Member:: He is scared!


Raymond Garneau: Mr. Speaker, if the Minister expects cooperation from the House she will have to be more careful with her statements. If she wants our cooperation she will have now only to tell us the truth but also appear as if she were telling the truth. Again I would refer to her statements of March 25 and 29 when she said:

Mr. Chairman, this situation was caused by an isolated incident.
She was speaking about the CCB.
There are no other financial institutions in the country at the moment that are appearing to be insolvent in any way.

It is a very specific statement. If the Minister wants us to cooperate with her with respect to the Bill she is planning to introduce, she will have to learn to tell the whole truth or refrain from commenting on things which she does not know anything about.
Now I would like to say something about the appointment of Mr. Justice Estey. In my opinion, Mr. Speaker, it is totally inappropriate, particularly after the statements made recently by the Chief Justice of the Supreme Court to a gathering of well known lawyers-I think it was in Halifax where he said it was "inappropriate"-to ask a judge of the Supreme Court to
September 30, 1985

defend the Government. That is exactly what is happening today.
We will be putting a justice of the Supreme Court in a situation where he will have to pass judgment on political decisions that were taken by two Ministers of the Crown. If he does not dwell-as I hope he will not-on the political actions that were taken, on the political decisions that were made by the Minister of Finance, the Minister of State (Finance) and the Prime Minister (Mr. Mulroney), I submit, Mr. Speaker, it is urgent that the Standing Committee should meet, because nobody will have me believe that a Minister of that Government who made the wrong decision concerning a few cans of fish could have had to resign, that another Minister who ventured into a bar to meet a strip-tease dancer could have been forced to resign, while another two Ministers who will be costing the taxpayers $1 billion will manage to whistle their way out of this mess without a word of excuse to the Canadian people. There are limits, and this is not acceptable.
Mr. Speaker, it is my view that the political judgment that was made brought about the demise of the two financial institutions. First, I thought there was one, but now I am more and more convinced that the way they went about it, they killed both Western Canada's financial institutions. And I say they killed them in terms of the relative costs to Canadian taxpayers, and relative costs in terms of Western Canada's economic development.
Mr. Speaker, the decision was made, as announced today for a second time, that all depositors will be reimbursed, and in the statement she made earlier today, the Minister did not draw any line as to who held the deposits. I may therefore conclude that all deposits, outside of equity, will be reimbursed. If everything is reimbursed, this means that the true costs to the Canadian taxpayers originate from the bad loans in that Bank's portfolio.
Well, if that was the cost, why then not have directly invested in the bank's equity those very sums of money, which would have amounted to the same for the Canadian taxpayers and not have written off the bad loans? If there are legal proceedings to be taken against the management, there is nothing to prevent that. But for the same cost, they could have saved those banks with actual Government support, instead of announcing a rescue plan on March 25 and a few days later calling the financial institutions over the telephone and asking them what they would say if the plug was pulled out-
Mr. Speaker, before one undertakes such an operation, one must first consider the situation and not put Parliament and the Canadian citizens on the spot, in a hurry, to avoid bad publicity at the economic summit, where the Prime Minister glowered before TV audiences. They would not tarnish the image . . . They made a decision within a few hours, and this will be costing not only $1 billion in taxes but also the demise of two financial institutions. If I were a Westerner today, as I said recently in the emergency debate we had with the support
Statements by Ministers
of Progressive Conservatives, but during which we were provided with no additional information because many Ministers had taken off, Mr. Speaker-In this case, as I was saying, if I were a Westerner, I would be deeply humiliated today by this Government's actions.
As a French-speaking Quebecer, I have to wonder what would happen if institutions as well established in our region as the credit unions or Caisses populaires had to close because of similar problems. This is not at all the case at the present time. These institutions are in very good shape, but in a similar situation, I would feel humiliated as a Quebecer, and I can understand how humiliated the residents of the Prairie provinces must feel because of the action and behaviour of this Government.


Some Hon. Members:: Hear, hear!


Raymond Garneau: Millions of dollars of the taxpayers' money have been invested, but finally, both banks will close and the Prairie provinces will lose two of their regional institutions that they wanted to keep and for which Westerners had fought for years.
However, Mr. Speaker, if it had been decided, as it could have been, to let the CCB sink completely last March, my comments would be different today, but as it was decided to reimburse everyone, including the foreign banks, the Canadian banks, the municipalities and the Credit Unions, the real cost of this operation will be the cost of the bad loans. In my opinion, these two institutions could have been saved, but only if the Government had put all its weight behind this operation. Now, we shall have to pay, the banks will close, hundreds of jobs will be lost, and God knows when Western Canada will be able to develop another similar institution.
Mr. Speaker, I would like to come back for a few moments to the role which Mr. Justice Estey will play. Without wanting in the least to minimize his legal ability, I believe that Mr. Justice Estey will be asked to rule on a Government decision which was a political decision made on behalf of all Canadian citizens, and he will be asked to say publicly in a report that the Minister of Finance (Mr. Wilson), the Minister of State for Finance (Mrs. McDougall) and the Prime Minister made a bad decision. To ask the question is to answer it, Mr. Speaker. It is ridiculous. This is why, at this very moment, my Leader, Mr. Turner, is now in Toronto giving a press conference which was scheduled to begin at 3.30 and where he is requesting the same thing we are requesting in this House, namely that a Parliamentary Committee be asked to rule on the political decisions which this Government has made and which have destroyed two financial institutions.
I think that it would be proper and probably normal to ask a judge to determine whether any thefts or illegal acts were committed by the administrators of these banks, but after the comments made by the Chief Justice recently, you should not ask a judge, especially a Supreme Court Justice, to rule on a

September 30, 1985
Statements by Ministers
political decision. I think that this would place him in an untenable position.
Finally, Mr. Speaker, I wish to point out to the Government and to the Canadian people that I find it strange to hear in this House the Opposition being accused of delaying unanimous consent for a referral to the committee.
I think we should emphasize, for the benefit of the public who is watching us, we should shed light at least on that part ... The Government has tried-I do not know whether this the correct Parliamentary expression-to have this issue quickly referred to a Parliamentary committee without assuring us that the said committee would have every opportunity to examine it in depth. Mr. Speaker, when we are asked to carry out an investigation of this type in only one and a half or two months, when we know how heavy the Parliamentary workload is; when we are told that there is no way we could have a look at the Hitchman report, or consult the list of depositors or find out about the types of assets these banks had, what do you think we will be able to do in committee except participate in the cover-up this Government was trying to force upon us? To do a really good job, we need a minimum of documents.
About this politicial decision which is likely to cost $1 billion, I suggest it will not be possible to get to the bottom of this as long as the committee will not have the privilege of calling as witnesses the Minister of Finance, the Minister of State (Finance), the Prime Minister, and all the other people involved in this matter, And I suggest also that if a judge can carry out an administrative investigation, he cannot carry out a political one. That is the reason why, and I will conclude my remarks with this, I feel today is a very sad day. I just cannot accept that these two banks can go under, that Canadian taxpayers can be called upon to pay up to $ 1 billion, and that two Ministers can wash their hands of the whole mess by referring it to a judge and remain comfortably seated without assuming their responsibility in the matter.


Michael Morris Cassidy: Mr. Speaker, it was with a great deal of regret that we learned today of the collapse of the Northland Bank. The Government's attempts to rescue the Bank will not succeed and the Government has decided to put the Bank into liquidation. I think this collapse will be a further blow to the economy of western Canada as well as to the taxpayers both in the West and across Canada. Perhaps I can put it into perspective, Mr. Speaker, by reminding the House that the combined cost of the collapse of the Canadian Commercial Bank and the Northland Bank is in the order of $1 billion to the Canadian taxpayer. A great deal of that money has to be put down to this Government which in 12 months or 13 months has intervened directly, has made decisions in supervising officials who, I believe, made errors and we are now seeing the chickens coming home to roost.
This has come about at a time when this House has just had closure imposed on a project of law to deindex the family allowance and to take money out of the mouths of the children of Canada, and we are doing that so that we can spend $1 billion for the depositors of the Canadian Commercial Bank and the Northland Bank, many of whom were uninsured depositors and who had absolutely no contract or guarantee that they should get their money back.
I would like to cite for the record the names of Robert Wilson, the chairman, Mr. Charles Neapole, the president and Mr. Martin Fortier, the executive vice-president of the Northland Bank who, according to this week's Financial Post, in August were each given, to compensate for the lack of bonus, a brand new $50,000 Jaguar automobile. That is how it is reported. I hope it is not true. However, 1 certainly wonder about bail-outs in this kind of stratospheric operation which is so far out of the reach of ordinary Canadians. Ordinary Canadians are spending $60, or $70 per person on the bail-out of these banks.
It is of regret to us, Mr. Speaker, that negotiations between the Government and the Northland Bank were not enough to save the bank. We will learn, as details about the Northland Bank become public, what exactly led to the Bank's ultimate demise. I note in looking at the Minister's statement that, if nothing else, there was something of a double standard which appears to have been imposed in this particular case. The Government claims that it was not prepared to accept an open-ended commitment with respect to the Northland Bank. Yet that is precisely what was done with respect to the Canadian Commercial Bank. The Government says it needed a solution which had certainty that the banks would emerge as a viable operation. It is certainly obvious now, if I can quote the Prime Minister (Mr. Mulroney) about the Canadian Commercial Bank, "There was no certainty it would emerge as a viable operation*.
If the Government had been adequately informed abou the situation of the Canadian Commercial Bank back in March I wonder whether in fact the Northland Bank might have been saved by intervention at that time, even if the cost was that one of the two banks would have gone down. I noted the Minister's statement-
[ Translation]
Mr. Speaker, I notice that in her statement, the Minister once again has blamed this mess on the economic situation in Western Canada without mentioning either the CCB's investments in California, the monitoring and administrative failure of the Inspector General of Banks, the Governor of the Bank of Canada and the Bank of Canada itself, or the administrative and political blunders of the Government of Canada.
The Minister does not recognize that the regulators, the Bank of Canada and the Ministers themselves must have played a major part in this situation which has cost so far $1 billion to Canadian taxpayers.
The Minister keeps repeating that the Government acted back in March on the basis of the best information available at
September 30, 1985

the time. In her 24-pages long statement, the Minister has failed to mention that between March 14 and the month of July, the Government did not even try to find out about the CCB's situation as to the so-called non-public assets.
The Government turned down the five chartered banks' request for an examination of the bank's assets. The banks offered to send their own people to carry out this examination. Their offer was repeatedly rejected over a period of several months, until the chartered banks decided to withdraw their investments from the Canadian Commercial Bank.
The Government refused to find out what sort of institution this was in which it decided to invest $250 million, mostly from taxpayers' money, while assuring all organizations with money invested in this institution that they would be fully compensated in case of a failure.
In her statement, Mr. Speaker, the Minister has indicated that ever since September the Government had been trying to set up a full, complete and non-partisan investigation. She has chosen to ignore the fact that it was the New Democratic Party, frustrated by the Government's refusal to provide the Parliamentary committee with the documents it needed to do its job, which last week began to push for a judicial inquiry, with the assurance that the appointed judge would have access to all the information refused to the Parliamentary committee. [English]
I am distressed, Mr. Speaker I say to the Minister of Finance (Mr. Wilson), as well as to his junior minister, that when the Deputy Prime Minister (Mr. Nielsen) was asked specifically about information which would be available to the judge in making his inquiry, the Deputy Prime Minister fudged. He repeated the words which have been given time and time again over the course of debates in this House, saying, "All the information it was possible to provide would be made available to Justice Estey". Frankly, I do not feel that is good enough. We were told that it was not possible to provide the report from the United States. It was not possible to provide the report by Mr. Hitchman when he was sent in to look at the other aspects of the Canadian Commercial Bank. We were told it was not possible to provide the list of depositors because of restrictions of the Bank Act. We were told it was not possible to have witnesses come under subpoena. It was not possible to get full and complete answers from the Inspector General of Banks in the spring and we had no guarantee that the Committee would have that right in the fall, Mr. Speaker, if it resumed its inquiry.
Are we being told that a justice of the Supreme Court of Canada is going to be treated in that way by the Government? I would hope not, Mr. Speaker. Yet that was the declaration which came from the Deputy Prime Minister today.
I would like to comment today about what we think should have been in these terms of reference and also what we think Justice Estey should have been asked to do. The Minister states in her statement that there are no parameters, that there are no restrictions surrounding this investigation. That is
Statements by Ministers
better than an investigation which is so restricted that it is bound to become a whitewash. However, I have a sense, Mr. Speaker, that this could turn out to be an exercise in using vanishing ink. It could be used as a means of deflecting concern from the Government's activities in this particular area, especially if the inquiry is allowed to go on and on and on without any cease at all. The questions which are very simple, which should have been put to Justice Estey are, to inquire into the matter of the demise of the Canadian Commercial Bank and the Northland Bank. This is to be "Without limiting the generality of the foregoing"; that is the phrase commonly used, and then some specific questions should have been put. The Minister could have ensured that Mr. Justice Estey was not restricted, but she could also have asked the questions that we in the Opposition and the people of Canada want answered. The first question is: Why did these banks fail? The second question is: What role did the Ministers and the Government and its officials play in the failure of these two banks? I have a number of more specific questions which I will outline and which I hope Mr. Justice Estey will look into. I know, being a conscientious jurist, he will read these statements quite seriously. I respect him for that. However, the Government should have provided this guidance without limiting the area into which Mr. Justice Estey must look.
Over a period of three and a half weeks of negotiations, Mr. Speaker, the Government insisted that the Standing Committee on Finance, Trade and Economic Affairs conclude its inquiry by November 30. We raised this question in the House today, and if this is so, then some sense of the urgency of the matter should have been communicated to Mr. Justice Estey as well.

We are now in a situation where the House of Commons is being asked to agree to a bill to compensate the institutions for their deposits in the two bankrupt banks.
We are supposed to authorize the Government to increase the Canadian deficit by $1 billion so as to pay $1 billion to the companies and institutions which were not insured, in other words, to give out the taxpayers' money to people who are not in the least accountable.
Mr. Speaker, do we really have to make such a decision without knowing all the facts? Why did the Government not ask Mr. Justice Estey to present his report by November 30, as we had asked the Committee on Finance, Trade and Economic Affairs? This would have allowed the House of Commons to conclude its debate on the Bill before Christmas, but with the added information contained in the report of Mr. Justice Estey.

If the committee is expected to report by November 30, surely we can have at least a preliminary report from Mr. Justice Estey by that time, perhaps even by the end of October. To ask this House to give $1 billion to un-named deposi-

September 30, 1985
Statements by Ministers
tors with no information from this inquiry is, it seems to me, prejudicial to our doing a decent job. It is a violation of the privileges and rights of Parliament. Certainly it is offensive to the people of Canada who are going to have to shell out this money without knowing why.
Given the number of areas into which Mr. Justice Estey can inquire, this inquiry could become like the Ontario commission on the northern environment. That went on for seven and a half or eight years. The report finally came down last month and everyone heaved a sigh of relief that it was out of the way. It cost $9 million or $10 million and this is far past the time when it could be of any use. Therefore, given that the Green Paper is under consideration and that Mr. Justice Estey may want to comment on such matters as regulation of the banks, the quality of inspection of the banks, the quality of the advice coming from the Bank of Canada and the Inspector General and that kind of thing, let alone about the political responsibilities, I do not think his inquiry should under any circumstances last beyond, say, six months. He should be finished by March and we should have an interim report in time to enable us to pass judgment on the Government's request for $1 billion. I do not have any assurances about that because it is not in the terms of reference. Mr. Justice Estey could go on and on and on. I suppose the Government could vary his terms of reference by putting some time limits on it and I regret it was not done at the very beginning.
The matter of information is raised, Mr. Speaker. When the Government gets to reply, either now or later, I would like assurances that the Hitchman report will be available to Mr. Justice Estey, and not barred to him as it was barred to the committee.


Michael Holcombe Wilson: It was not barred to the committee.


Michael Morris Cassidy: The Minister is shaking his head. I am not sure what that means.


Michael Holcombe Wilson: It means you could have had it if you had not been so stubborn.


Michael Morris Cassidy: I would like assurances that the Government will press the American authorities at the Prime Minister's level to share with Mr. Justice Estey the report of the Federal Deposit Insurance Corporation concerning their findings on the Westland Bank and the CCB's American operations, because that was the trigger which should have signalled to the Government that there were very serious problems. What the Americans found out about the operation of that bank in the U.S. should have been such that the Minister would not write a $1 billion blank cheque as has now been done.
We would like assurances that the list of depositors is available to Mr. Justice Estey. Frankly, I would like him to come back and indicate in no uncertain terms that this House should not give away $1 billion without ensuring that anyone who wants the money, if it is the wisdom of the House to give it, should at least have to reveal who the devil they are. If they want to maintain their confidentiality, that is fine. The rules of
the market-place say that they deposited the money in the banks and they should not get it back if they are not prepared at the very least to indicate who is getting it. The Government's secrecy is, to my mind, deplorable.
I want to talk now about the more specific questions which Mr. Justice Estey should be addressing. As I said, in general the question is why did these banks fail and what role did the Government play? One of the major things we want established is the role of Government Departments and ministerial responsibility. If we do not have that determined in the report, then corrective action cannot be taken either by the House or the Government. As I have reconstructed the situation, the Ministers were involved in turning down the repeated requests of the banks to let someone go in and look at the books of the CCB to find out what the devil was happening. Again the Minister of Finance is shaking his head. I am not sure why because those are the facts. I have heard the presidents of two or three of the banks testifying before the committee on this subject. When you ask them if the names of the depositors should be made public, they say that is a Government decision. In other words, they are not going to be critical if the Government decides that should be the case. They know there is nothing to hide. It is the Minister of Finance sticking up for his friends in certain portions of the banking community.
It may become clear that the Department of Finance lacked adequate monitoring of the state of the banks. It may become clear that the Bank of Canada, with all of its resources, inadequately monitored the banks to which it provided liquidity. It may become clear in the end that the entire decisionmaking process was based on the inadequate advice of an overworked official who had failed to take the appropriate steps to reinforce his demand for adequate staff to do the job. I speak of the Inspector General of Banks. Under the Liberals as well as the Conservatives no action was taken to give that official the kind of resource he needed and, in my view, he should probably have resigned to take his case to the public if he was not able to do the job in the new banking environment which has emerged with the kind of corporal's guard of inspectors that he had to work with. If in fact everyone was relying on the testimony of this poor, overworked official who was stuck here in Ottawa with no real knowledge of what the devil was going on, then you have to ask questions not only with respect to him but with respect to his political masters who came in committed to a mandate for change some 13 months ago and in all that time were unable to enforce effective change in an area where it has been proven we are vulnerable, to the tune of $1 billion.
I would like Mr. Justice Estey to look into the question of the Government role in seeking a partner for the Northland Bank. The events last week were quite extraordinary. The president of the Bank, Mr. Neapole, a former president of the Montreal Stock Exchange, a man with wide experience in business-


Michael Holcombe Wilson: No.


Michael Morris Cassidy: Was it his brother? I am sorry.
September 30, 1985


Michael Holcombe Wilson: Wrong again.


Michael Morris Cassidy: Wrong again. Okay, I apologize.
Mr. Neapole went public, after agreeing not to do so, because of his frustration with the assistance he was getting from Government with respect to getting a partner for the Northland Bank. The Government has said that it did not want an open-ended commitment. However, it certainly appears from statements made by Mr. Neapole a week and a half ago that in fact the Northland Bank was less than justly dealt with in terms of its efforts to get a partner that would permit the bank to continue as a viable entity. I would like to ensure that that question is fully looked into and reported on by Justice Estey.
The third question is what in fact has the Government done to reinforce the capacity of the Inspector General of Banks since it was revealed in the spring that he did not have the staff. The fourth question is how much this will cost the taxpayers, both through the Canada Deposit Insurance Corporation and also directly. Finally, with respect to the relationship between the United States and the Canadian parts of the CCB, it is my hunch that because the American regulators were vigilant, they bailed out before they had to compensate depositors in that particular bank and we are paying the price for a double failure because of assets that went from the Canadian Commercial Bank into the American bank. That subject should in fact be reported on. Why was no new management put in place? If the Minister could not find any directors, why did she not put some officials from the Bank of Canada or the Department of Finance in as interim directors and tell the CCB that she would remove them when they found some decent directors since she could not find any. I know my time is up, Mr. Speaker.
[ Translation]
In all of this, one question is left unanswered. This will cost the Canadian taxpayers about $70 each. One billion dollars was lost because of the mistakes of the Government and the mismanagement of these banks. We have to know who is responsible. Judge Estey must not be prevented from doing his job by a lack of information and his report must be made completely public.


PETITIONS
Margaret Anne Mitchell: Mr. Speaker, I have the honour to present a petition which came from a number of women across Canada who attended the Canadian Labour Council Conference of Affirmative Action last week. In this petition they say that deindexation of the universal family allowance and massive cut-backs in public commitment to child benefits are an unfair attack on women and families,
Order Paper Questions
especially single-parent mothers. They go on to say that family allowance deindexation will not be off-set by changes in the child tax credit and that cut-backs will mean about $600 million taken from child benefits by 1990, and furthermore, that the cut-backs-


Mr. Speaker:: Order, please. I think the Hon. Member knows that summaries of petitions should be very brief. I thank the Hon. Member. Further petitions?


Margaret Anne Mitchell: Yes Mr. Speaker, I also have a petition from a group of mostly women who are connected with the Ottawa Council for Low Income Support Services. The undersigned ask the Prime Minister to restore full indexation to the family allowance and child tax credit as this Budget measure will take away $50 million in family benefits by 1987.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Doug Lewis (Parliamentary Secretary to President of the Treasury Board):: Mr. Speaker, I wish to advise that question No. 132 will be answered today.


Mr. Malepart: Will jobs be lost following (a) cutbacks within the National Capital Region (b) the deferral of capital projects and of the construction of an office building in Halifax (c) the deferral of capital investments for dredgers destined to the Department of Public Works (d) the re-examination of redevelopment projects for federal lands located in Montreal's Vieux Port and in the Chicoutimi marina and, if so, in each case, how many?


Ramon John Hnatyshyn: September 30, 1985
to the Chicoutimi Marina, the effect will be the loss of 17 direct and 10 indirect person-years in the construction industry in 1985/1986. The cancellation of the marina will not result in the loss of jobs at Public Works Canada or the permanent loss of on-going jobs in that operational resources would have been transferred from another marina.


Douglas Grinslade Lewis: Mr. Speaker, I ask that the remaining questions be allowed to stand.


Mr. Speaker:: The question as enumerated by the Hon. Parliamentary Secretary has been answered. Shall the remaining questions be allowed to stand?


Some Hon. Members:: Agreed.


Mr. Speaker:: 1 am in receipt of an application under Standing Order 31 from the Hon. Member for Laval-des-Rapides (Mr. Garneau). The original notice I had was that it was coming from the Hon. Member for Windsor West (Mr. Gray) in the name of the Hon. Member for Laval-des-Rapides, but the Hon. Member being present-


Raymond Garneau: Mr. Speaker, the reason why we are suggesting an emergency debate is that we learned officially today about the bankruptcy of the Northland Bank and we believe that the Canadian taxpayers should know more about the circumstances of this affair. Even the Minister's statement that we have just heard did not mention any specific figure of what our taxpayers might have to pay and I think that it would be entirely proper to have an emergency debate before a judicial inquiry is launched.


Mr. Speaker:: It is the first time that the Hon. Member has followed the procedure under Standing Order 31. Usually, the letter sent to the Speaker is read. This is all. It is in no way a criticism.

In effect, the Member did send me his preference for his application and the duty of the Chair, as the House knows, is to determine whether an application for an emergency debate under Standing Order 31 meets the requirements of the Standing Order. The House will recall that the Chair received several applications for an emergency debate on the potentially imminent collapse of the Northland Bank and of the consequences thereof, and that the Chair accepted the application that was accepted on the basis that the potential failure of this bank and the consequences therefor constituted an emergency as envisaged by the Standing Order. The House will also
remember that that debate took place last Wednesday, September 25.
I cite to the House Standing Order 31(16)(t/) which states:
-the motion must not revive discussion on a matter which has been discussed in the same session pursuant to the provisions of this Standing Order;
The Hon. Member for Laval-des-Rapides is now requesting an emergency debate on the Government's winding up of the Northland Bank. With all due respect, it seems to me that the subject matter of this application is no different in any crucial respect from the subject matter of last Wednesday's application, and therefore I must say no.
May I also advise the House at this time that because of the Ministerial statement consideration of Government Orders will be extended by 57 minutes this day. So that the House is aware of these procedures, Private Members' Hour will also be affected, but will begin immediately after the vote that is called for later today. The Hon. Member for Ottawa Vanier (Mr. Gauthier) on a point of order.


Jean-Robert Gauthier: Mr. Speaker, you just made a statement to the effect that the Private Members' Hour will start after the vote. The vote having been called for 15 minutes prior to five o'clock, I guess it will be 15 minutes prior to-


Mr. Speaker:: Let us make an assumption that the vote is called for 15 minutes prior to 5:57. Read 5:57 as five o'clock in the rules and the Hon. Member knows what happens thereafter.


Jean-Robert Gauthier: But my point, Mr. Speaker, is that Private Members' Hour will not be a total of one hour. It will be whatever is left after the vote is taken.


Mr. Speaker:: That is absolutely correct. I simply indicated that it would begin after the vote. I hope that is what 1 indicated. I take it the Hon. Member is raising the confusion which arises when we talk about Private Members' Hour as a title. Private Members' business will commence immediately after the vote. I thank the Hon. Member.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Epp (Provencher) that Bill C-70, an Act to amend the Family Allowances Act, 1973, be read the second time and referred to a legislative committee; and the amendment of Mr. Frith (p. 6625).
John Henry Reimer: Mr. Speaker, in his remarks this morning the Member for Renfrew-Nipissing-Pembroke (Mr. Hopkins) was suggesting that it was the Liberals who
September 30, 1985

were the creators and defenders of our social programs and senior citizens. Before the lunch break, however, I pointed out to him that the Liberals had introduced the 6 and 5 per cent limitations on Government programs, that the Liberals had frozen the child allowances in 1976, and finally, that had full indexation been in place since 1976 for the child allowance it would be $51.83 today rather than $31.27.
Our seniors have nothing to fear from this Government. When seniors objected to the six and five program under the Liberals, the Liberals did nothing. In comparison, when the seniors objected and pointed out the problem in our Budget in May, this Government listened, admitted its mistake and changed. That is a tremendous difference from what we saw for 20 years from the previous administration. Seniors have absolutely nothing to fear from this Government. Bill C-70 makes very simple changes. The changes are a limitation to the increases to child allowances which will only begin after inflation exceeds 3 per cent. Therefore, if inflation continues at the present rate of 4 per cent into 1986, the increase will be 94 cents less than the present system. Therefore, there will be no reduction in child allowance and, in fact, there will be a 1 per cent increase of 31 cents. That is far better than what happened under the Liberal regime when they froze child allowances in 1976. If child allowances had been fully indexed since 1976 they would be $20.50 higher today.
This Bill has a twofold purpose. The first is deficit reduction, and the second is a more rational system of aiding those in greatest need.
With respect to deficit reduction, we must remember that presently we are paying $26 billion just on interest on the debt. When we consider the total federal share for health care, old age pensions-including the OAS and GIS combined-the spouses allowance, the entire family allowance system, welfare, social assistance to the needy, the federal share for medical research, we see that all of these cost less than the $26 billion just to pay interest on the debt. If we do not begin to slow the increase of our debt we will not be able to afford our social programs.
Second, we must not consider this measure in isolation but see it in conjunction with other packages in the Budget. We will be enhancing the child tax credit system which will in fact ensure that those at the lower end of the income scale will be receiving more money than they presently receive.
Therefore, I suggest that this is a responsible measure of deficit reduction while ensuring that those whose need is greatest will receive even greater aid from the Government. I commend this Bill for speedy passage.


Carlo Rossi: Mr. Speaker, as I rise to speak in today's debate on the intention of the Conservatives to de-index family allowances, I find it extremely difficult to accept their decision to gag the Official Opposition.
Family Allowances Act
Mr. Speaker, that is why I urge all fathers, mothers, grandfathers and grandmothers of my riding of Bourassa to get in touch with my constituency office and seek information concerning a petition which is being circulated to express opposition to the deindexation.
Mr. Speaker, I take this opportunity to thank the local newspaper Le Point for telling people how they can add their name to the petition.
Mr. Speaker, I would have thought that a party with such a commanding majority would appreciate that it was in its own interest to discuss and listen to the remarks and suggestions of as many Members as possible. But it can readily be seen that mum is the word among Conservatives and what the boss wants the boss gets. That fully explains the silence of Members opposite, and I direct my remarks more particularly to the Quebec Conservative Members who, during July and August, kept shouting that things would change but of course that there would be no change made in family allowances.
To my Quebec Conservative colleagues I say that now is the time to stand up and uphold the right of mothers to continue to get their family allowances.
If I were a Government Member, Mr. Speaker, I would be ashamed to face my constituents after having voted to prevent a real debate on family allowances.
Mr. Speaker, family allowances are sums of money paid to mothers in addition to wages, charitable donations and other supplements, in recognition of the expenses of families, many of whom are single-parent families. This kind of attack against Canadian mothers is tantamount to undermining the very foundations of our society.
The Progressive Conservative Government had no trouble finding and spending $55 million to change the colour of military uniforms, but it did not have $55 million to spend on Canadian mothers. The Progressive Conservative Government had no trouble finding and spending one billion dollars for the big lenders of the Canadian Commercial Bank but it was unable to find $55 million for Canadian mothers. The Prime Minister (Mr. Mulroney) and his Cabinet have doubled and even tripled their budget for offices and personal consultants, but the same Prime Minister, Mr. Speaker, and his Cabinet were unable to find $55 million for Canadian mothers.
Mr. Speaker, it is quite obvious that for the Government opposite, family allowances have no importance whatsoever. The Progressive Conservatives fail to realize that the family allowance payments made to Canadians reflect, above all, a concept of social justice. And that concept, Mr. Speaker, is totally absent on the other side. If they had the slightest notion of social justice and responsibility, Canadian men and women would not have found tainted tuna on foodstore shelves. If they knew what social justice meant, they would never have tried to deindex Old Age Security pensions. If they knew what social justice meant, they would never have decided to deindex

September 30, 1985
Family Allowances Act
family allowances. The Conservatives had to backtrack on Old Age Security pensions and restore full indexation. I still have some hope if only Members on the Government side had a little more courage that the Conservatives will backtrack on the family allowance issue.
Mr. Speaker, every day, thousands of Canadian men and women are abandoning the Progressive Conservative Party for the simple reason that this Government and this party have no courage and no convictions, and are led by a man and a bunch of non-elected people who have no time for Government Members.
Last night, Mr. Speaker, during the CBC report on the election of a new Parti Quebecois leader, which I followed very attentively, the Progressive Conservative Party was represented neither by a Conservative Senator nor by a Conservative Member. However, that same Progressive Conservative Party was represented by Mr. Jean Bazin, a good friend, I may say a very good friend, of the Prime Minister of Canada. Am I to infer, Mr. Speaker, that if our mothers want to retain full indexation of family allowances, they should go to Fernand Roberge ou Jean Bazin? Every day, and especially today, we are seeing examples of the uselessness of elected representatives.
They are gagging Members and deindexing family allowances.


Gabriel Fontaine: On a point of order, Mr. Speaker.


Mr. Deputy Speaker:: The Hon. Member for Levis on a point of order.


Gabriel Fontaine: The Hon. Member was referring to the Parti Quebecois Convention. This has nothing to do with the issue at hand. I would therefore ask the Hon. Member to either aside by the rule of relevance or simply sit down.


Carlo Rossi: Mr. Speaker, I think this is most relevant, even though it concerns the Conservatives, and I will leave it to the Chair to decide that this is not a point of order. But it does get on your nerves!


Mr. Deputy Speaker:: The Hon. Member for Bourassa (Mr. Rossi) has the floor to carry on with his speech.


Carlo Rossi: I have concluded my speech, Mr. Speaker, and I would invite my colleague opposite to get a good look at the Standing Orders. And besides, he has much to learn.


Mr. Deputy Speaker:: The Hon. Member for Beauharnois-Salaberry.


Mr. Jean-Guy Hudon (Parliamentary Secretary to Minister of Employment and Immigration):: Mr. Speaker, I welcome of course this opportunity to take part in the debate on the
motion this afternoon, because from the outset, and to respond to the suggestion made by the Hon. Member for Bourassa (Mr. Rossi) that among the Progressive Conservative Members silence is golden, we have been debating the issue for quite a while speaking within our alloted time, and we do not make a habit of constantly repeating ourselves.
We are often told that we forget because we came here from the other side of the House that there is a lack of consultation as we were told this morning, and an Hon. Member opposite also told us this morning that we are running the Government as if we were operating a business and, this might not be good, although in the same speech there was a contradiction on that.
I would like to return to each of those points, Mr. Speaker, not to over-justify but to explain. My honourable friend for Bourassa (Mr. Rossi) said this morning: "You voted for a change and you were elected on a change". The least they can say is that we fulfilled our promise. My colleague referred last night to a leadership convention, he said: "At least I wanted to rank last, and I fulfilled that promise".
It is not that we are necessarily forgetting, but we must assess the situation as it is. The Hon. Members opposite are often making fun about the fact that we often mention the deficit, as we often do. But that deficit, the billions of dollars accumulated in that deficit, certainly forced us to revise certain decisions and certain directions in the statements we made. On that point, there was a change. During my election campaign, as people in Beauharnois-Salaberry will admit it, I often repeated that we should, if there was a Conservative vote ... the Liberal Party always said: "From now on, tomorrow, it will be like yesterday, but with a slight indexation." This is what we wanted to change, Mr. Speaker, and I think we are in the process of changing it.
Indexation, Mr. Speaker, and I am now speaking on my own behalf, is an indebtedness we are laying on our children's shoulders and which we cannot evaluate right now. Honestly I do not think, and when it was stated this morning that we should not run the Government as one operates a business, I believe that quite to the opposite, indexing was not hatched by Canadian Quebec businessmen necessarily, it was devised by the Government and it was not necessarily a good thing for the Quebec Government in 1974 to introduce that. I am in a good position to know, I was a negotiator at that time, and admittedly it was quite reluctantly that I ended my negotiating career for the reason that we were giving something we could not evaluate. It is not possible, Mr. Speaker, to manage the general finances of a country by stating that next year, this or that will be indexed! And when they blame us for not having consultations, I think it is pushing it too far. There were parliamentary committee hearings on that, there were even working papers issued. This was widely discussed, to a point that in my constituency, in many constituencies and even in Liberal and New Democratic constituencies, consultation meetings were held. If we hear Hon. Members speaking here
September 30, 1985

this afternoon, certainly it is because I suppose they consulted people, and I do not question whether this was done in good faith. Let us recognize we had time to consult. If consultation means that we have to listen to everything that people want to say about the matter, no responsible Government can do such a thing. We listen, we assess the advantages and the disadvantages and we make decisions in accordance with the policy or the direction which the Government has chosen. I do not think that there was a lack of consultation. The direction taken is not that suggested by some people and 1 fully agree but some consultations were held, we listened and we assessed the advantages and disadvantages.
Mr. Speaker, I think that the Government must operate along the same lines as a business or an undertaking, that is on the basis of figures, results and directions, taking into consideration the capacity of the citizen to pay and especially the capacity of our children to pay.
When I was mayor of the City of Beauharnois, I used to say to my people: "I must try to build a city for my children, not for myself, for my children. I want them to stay there." I think this is what the Government is doing by putting an end to that measure which is the largest question-mark in the management of our national finances. If we want to build a country for our children, we have to be wise and acknowledge that this indexation is no longer possible.
In short, Mr. Speaker, I am going to vote for that motion not because I am in favour of reductions, but because I think that we have to stick with our present orientations.
In 1979, my hon. friend who spoke earlier was in this House when indexation was removed. The amount of pensions and family allowances would now be $20 higher each month if indexation had been maintained. I have the speech made by the Hon. Minister at the time, in 1979, and you acted cautiously. You said at one time: We have to put a stop to this automatic increase. In my opinion, it was important to do so. Otherwise, family allowances would now be $20 more a month. Do you really believe that the Canadian people could afford that? You stopped indexation because of that. The issue was quite real at the time. No Minister of Finance ever managed financial affairs of the Government that way.
Mr. Speaker, as this is a motion moved by the Liberal Party, it is very important for the other side to take a positive part in this debate, and I am happy to see that all the Liberal Members are here to defend their motion. Do not leave, everyone; one is staying. All the Members are here to defend the Liberal motion and that is very important.
You know, there is a lot of exaggeration. People have said that the Government has spent $55 million to change the colour of Army uniforms, but is not willing to give the same amount to mothers. I would like to point out that there are mothers working in the worsted and cotton industries, that a $7 million contract was awarded in Huntingdon to produce the new colour material for the Army uniforms, and that these $7
Adjournment Motion
million are important for the men and women who work in these industries in Huntingdon.
It is not 94 cents a month per child which will change anything, but the colours of Army uniforms have changed, even though a lot of uniforms remained exactly the same. In any case, they would have had to be changed within two years. A comparison is being drawn between two completely different matters. We can give a different orientation to our social policy, but we can also keep a commitment which is to provide uniforms for our military. A comparison is being made between two things which have nothing in common. People do not necessarily forget when they move from one side of the House to another, but they have to make their decisions accordingly. There have been consultations and I believe that the Government should be managed in a businesslike way.


Carlo Rossi: On a point of order, Mr. Speaker.


Mr. Deputy Speaker:: The Hon. Member for Bourassa (Mr. Rossi) on a point of order.


Carlo Rossi: Mr. Speaker, I simply wanted the record to show that my hon. friend for Beauharnois-Salaberry (Mr. Hudon), for whom I have a lot of respect, said: "Do not go away, everyone!" However, I was called to the phone at the back, Mr. Speaker, and I did not leave because I did not want to listen to his excellent speech. I was simply called away and no Liberal Member left the House because he was speaking. His speech was-



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: It is my duty, pursuant to Standing Order 46, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the Hon. Member for York East (Mr. Redway)-Young Offenders Act-Request for amending legislation; the Hon. Member for Glengarry-Prescott-Russell (Mr. Boudria)-The Administration-(a) Request for review of contract awards. (6) Conflict of interest guidelines; the Hon. Member for Broadview-Green-wood (Ms. McDonald)-Cultural Affairs-(a) Canada-United States talks-Government policy. (b) Time magazine- Possible re-emergence of Canadian edition.

September 30, 1985
7166_____________________________________
Family Allowances Act



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Epp (Provencher) that Bill C-70, an Act to amend the Family Allowances Act, 1973, be read the second time and referred to a legislative committee; and the amendment of Mr. Frith (p. 6625).
Pauline Jewett: Mr. Speaker, the move of the Conservative Government to deindex the Family Allowance Act is one to which we are unequivocally opposed. The fundamental effect of the Bill, together with the other measures proposed in the Conservative Budget, is to take from the poor and give to the well to do.
The Government was forced by the overwhelming opposition of Canadian senior citizens to back away from its plan to deindex seniors' pensions. Canadian seniors, men and women, have demonstrated that they are a force to be reckoned with fairly, and they fought off the pension grab of the Conservatives. Now it is Canadian women who are the subject of the attack of the Conservatives-women and the family. Canadian women are having to fight the Government on so many fronts in the battle for economic equality that the Conservatives think they will be able to slip this one by without anyone noticing. Canadian women are watching. They are watching while the Conservatives, frequently in an underhanded fashion, break every promise made to us, Canadian women, in the last election. On the matter of family allowances, it was Canadian women, under Therese Casgrain, who struggled to have the first family allowance Bill introduced in the mid-1940s. In subsequent years, family allowances were constantly eroded by Liberal Governments. At one time they even wished to abolish them; they sixed and fived them. They cut them back to the point that we have now reached. Since 1974 family allowances have lost a full third of their purchasing power, thanks to the Liberals.
Now the Conservatives want a kick at the can, as is evidenced by their present proposal to deindex family allowances. However, like the Liberals, they are underestimating the concerns and intelligence of Canadian women. The Conservatives say that they are doing this to protect and to promote the family. The Minister has even said: "This Government wants to bring forward initiatives that will both enhance the Government's position relative to the family and, more important, show that the family is the cornerstone of society". How credible can the Government be when it claims to support the family yet introduces legislation such as we are discussing today which will help to undermine the family?
The Canadian Council on Social Development concludes that the impact of the 3 per cent reduction in the indexation of family allowances proposed by the Bill, combined with other budget changes to family benefits, sales taxes and personal income taxes, will decrease the buying power of a typical
family with two children by more than $1,000 in 1990. Contrary to the Government's claim that it is increasing support to the most needy, in fact the poor, middle-income and elderly lose more as a percentage of income in real terms through the combined effects of the Conservative Budget.
The Budget proposals reduce the child tax exemption and deindex family allowances and the child tax credit. In the deceptive style which has become characteristic of this Government, as it was with the Liberals, the child tax credit will be increased for three years prior to being deindexed in 1989, providing some small additional benefits to poor families for a little while. However, benefits will decline by 3 per cent per year so that even the poorest families are eventually worse off. As the Hon. Member for Vancouver East (Ms. Mitchell) indicated, the poor in Canada now number 4.5 million. This figure includes 1.5 million children. While one in every six Canadians live in poverty, the figure for children under 16 years of age is one in five. In 1982 and 1983 the number of poor people rose by 1,100 per day. In my own Province of British Columbia, one in five are living on social assistance because of years of Socred-style fiscal management. Nowhere is the depression of the eighties more vivid than in British Columbia.
British Columbians are further suffering because of another action of the Conservative Government here in Ottawa. It recently cut federal funding to the voluntary unemployed action centres of the B.C. Federation of Labour, the last remaining lifeline for many unemployed families in that province. The Government does not care, as it says it cares, about the survival of the family in British Columbia and in Canada generally.
The Government says that we cannot afford adequate family allowances and that it would rather give that money to private investors, under the naive and misguided belief that giveaways to the private sector will fuel the engine of growth and create jobs. We in this Party would like to know how the economy is better off and how growth is generated when $ 1 is taken away, for example, from a low or middle-income earner in British Columbia and is given to a high-income investor in Toronto to buy real estate in Florida. Where is the economic sense in this supply side miasma of the Conservative Party which squeezes the buying power of the low and middle-income Canadians to line the pockets of the well to do or rich. It is all based upon some mystical notion that the private sector, in its usual benevolent manner, will reinvest that prize in Canadian jobs and Canadian industry. Certainly that has not been the case in British Columbia, nor has it been the case in most of the rest of Canada.
These are not the actions of a Government which has a Firm grip on the economic realities of this decade or on the kinds of policies which will fulfil the Government's own declared intent, namely, of supporting and enhancing the support of the Canadian family.
We in the New Democratic Party urge the Government to withdraw this regressive piece of legislation. We beg it not to make it any harder than it now is for families already strug-
September 30, 1985

gling to survive. It should reform the tax system, by all means, so that the well to do and the rich are paying their fair share and are taxed back for the benefits they receive as a result of universality. It should increase the child tax credit by 80 per cent to ensure that more tax revenues go to families in greatest need. Above all, it should not fight the deficit on the backs of those who can least afford it.


Mr. Paul Gagnon (Calgary North):: Mr. Speaker, it is a pleasure to address the House on Bill C-70. I have listened with some anticipation to the debate on this matter. I find that the Opposition has a total disregard for the truth in this Bill.
I should like to refer to what we inherited as a system. For example, a single-parent family in Ontario with two children and a zero family income receives from this whole system $1,484, whereas a similar family with an income of $50,000 nets $1,048 from it. In other words, the wealthy net 71 per cent of the amount netted by someone truly in need. The system which we inherited last September 4 from the Liberals is not a fair one. We cannot look at this whole system in a vacuum. It is really three separate distinct parts. There is a family allowance portion which is the cash which comes every month; there is the child tax credit and the child tax exemption. The family allowance is available to residents of Canada independent of the recipient's income. The rich get it and the poor get it. These benefits are taxable so they are of the greatest value to people on low income and are of progressively lower value as the income rises.
The second section of this over-all system is refundable tax credit which is a selective program in which a level of benefits is determined according to family income and above a specific threshold the assistance is phased out. Thus this program targets assistance to low-income people and less to the modest-income families.
The third segment of this over-all program is the child tax exemption which reduces the taxable income and thus provides benefits in proportion to the applicable margin rate. It helps the most affluent of our society.
Mr. Speaker, those are the three segments. Let us talk about what this proposal does. First, the child tax credit will be increased, commencing in the 1986 taxation year, by $70 per year per child. It will be increased a further $35 per child per year for each of the years 1987 and 1988. That Mr. Speaker, gives more money to the needy and in conjunction with this child tax credit the threshold is being lowered so, because of this modification, there will be less money available to the affluent of our society. The family allowance portion, that cash portion, is still universally available and will continue to be indexed for any consumer price index increase in excess of 3 per cent. The third segment, that exemption for dependent children, is currently $710 per child. It will be reduced until it is equal the value of the family allowance.
What do all these three things do? Basically it means that more money will go into the hands of the needy and less money
Family Allowances Act
will go into the hands of the affluent. Specifically, if you make a comparison of somebody earning $10,000 or less in family earnings, they will get an extra $328 per year per child between what they get in 1985 and what they will be getting in 1989. Conversely the affluent families earning $50,000 or greater in family earnings will decrease their benefits by $284. We have one increasing by $328 to the needy and the affluent decreasing their benefits by $284. I ask you, does this program help the needy? Yes. Is it less help for the affluent? Yes.
Mr. Speaker, I am very strongly in support of this program.


Robert Phillip Kaplan: Mr. Speaker, I am glad I finally have the opportunity to stand up and say a few words against this particular feature of the Budget and against this procedure of the Government, the idea of having closure. We are now in a debate which is subject to time allocation as a way of preventing, I submit, our fellow Canadians from finding out what really is in this Budget. That is the reason we were so strongly against closure in the first place. That is the reason why the motion has been made by my colleague, the Hon. Member for Sudbury (Mr. Frith), to give the country some time to realize what is happening in this particular budget provision.
The Hon. Member across the aisle who just spoke was talking about the round one implications of this Bill. But, of course, the Bill has an impact on a number of policies that affect payments and tax credits for families over the next few years. To have talked about only the initial impact of the legislation is to misrepresent it. When one looks at the effect of this legislation over the next four, five or six years as the deindexing feature takes hold, what becomes apparent, and I wonder if my friend has the courage to recognize this and to admit it, is that those low-income families who initially benefit from an increased tax credit end up, with the impact of deindexing, further behind four years from now than they would have been if the Government had not bothered to bring this legislation forward.
It is not legislation to help poor families. It is legislation which gives a good talking point in year one, but by year four those very poor families to whom the Hon. Member opposite advertised and proclaimed this great reform will be further behind than they would have been if this budget measure had not been introduced. That is why we are standing up to oppose it. We want the poorest of Canadian families to know that this beneficent Government is looking to them and to some others over the next five years for a saving of over $11 billion in payments which would otherwise be going to families in Canada if the Government would take our advice and withdraw this feature of the Budget.
We do not think, of course, that it is as bad as the measure that they introduced for senior citizens, the one in which the deindexation caused near riots across the country and united senior citizens, maybe for the first time, to come forward and demand that that aspect of the Budget be withdrawn and that their contribution to and their interest in Canadian society be considered. If I can put it this way, they demanded that they be given a voice and be allowed to say what they felt should be

September 30, 1985
Family Allowances Act
in the Budget. The Minister of Finance (Mr. Wilson) consulted with a few friends in Etobicoke Centre and claimed that he had found some senior citizens who agreed with the deindexing, but when we asked him to identify them he could not do it. As the impact of the Budget on senior citizens became known to them they managed to come forward and communicate their wishes.
I say this is not as bad but, as my leader characterized it, it is a sneaky feature of the Budget because it makes the poorest families of the country believe that they are going to be better off as a result of this measure, and therefore they would be inclined to support it. However, four years down the road, as long as the rate of inflation is not more than 3 per cent, they will be worse off than they would have been if the Government would withdraw this feature of the Budget.
I am not asking Hon. Members opposite to take the word of a Liberal Member of Parliament or of the Official Opposition. The Canadian Social Welfare Council, which is not a Liberal organization, which is not in partisan politics, whose mandate is the poor and the poorest in our society, made this observation. It said this feature takes away from the well-to-do but it also takes away, after four years, from the poorest families in the country. We on this side of the House, the Liberals, are standing up for the poorest of families. We are asking the Government to leave the social welfare programs the way they are in that respect so that the poorest families will at least derive the same benefits they derive under the existing arrangements. If the Government really had a heart it would look to different approaches such as tax credits for the poorest families, a measure we do not oppose. It is a measure in which we would be in favour, but not when meshed with another feature which would result in reducing the amount of money going to the poorest families.
Not too much has been said in this debate about the impact this measure will have on average Canadians and on those families which are better off. I think that is as it should be. We have to be most concerned when we talk about a social program such as this one and about its impacts on the poor. I have many poor families in my constituency, most of whom will be hurt by this budget measure. Those families look to their Members of Parliament to be their voice. I wish to make this statement for them. I wish to tell them that we will continue to fight this provision in every way we can. Time allocation has been imposed on us and very little time has been allotted to debate this Bill. A propaganda campaign has been launched by Members opposite to make the poorest families think they are getting something extra out of this measure instead of having something taken away.


Alan Redway: That's not propaganda.


Robert Phillip Kaplan: The Hon. Member for York East (Mr. Redway) will be able to look at the impact of this measure when the next election is called. He will have to look at what he told the poor people in Toronto because by the time the
next election comes around they will be receiving less, unless the Government pulls back on this measure now. I do not want to be side-tracked by my hon. friend.
I know the Government claims it believes in the family. The Government says it wants to use the responsibilities it has and the opportunities it has to reinforce the family. That is the issue which arises when one looks at the situation of the middie-income families affected by this Budget.
We know that the average income of a family in Canada is around $26,000 to $30,000 a year. If we consider a family with around $30,000 to $35,000 of family income, Members opposite will say this is a family that does not need the benefits of a social program. Members opposite will say that the effect of this Budget will be that the best of families, and even those in the middle, the ones I have just spoken about, will receive little value from the family allowance. I wish to argue that that is a mistake. The Government should not withdraw indirectly and piecemeal the universal feature of the family allowance. We recognize the fact that a family of whatever income level, be it average or middle, deserves greater recognition by the tax system of their situation than another individual with a similar income who has no family to support.
With respect to someone who is making $50,000 a year, we have heard arguments from Members opposite that that person does not need to be the beneficiary of any social program. That is not the way the Liberals look at the situation. We consider that a person earning $50,000 a year, who has no children and no dependants, should receive the same recognition in terms of the tax system when compared with another person with the same income who has a dependent spouse or who has children they are supporting and educating, doing all the things people wish to do for their families. What the Conservatives are saying to these people earning anywhere from $35,000 to $50,000 is that they should not expect any recognition from the state. Our argument is that that type of family situation, which involves extra expenses and so on, is something that society can afford to support and that we need to support in order to have a fair system. We want to encourage the family. We want our system of taxation and social programs to recognize that fact. Of course, a family in the middle should not receive the same benefits from fellow taxpayers for the children they are raising and for a dependent spouse as poor people receive. I have already made the case that the greatest need is with poor families, which is where we have to do the most. However, it is completely wrong to take this system and work toward the elimination of any recognition that there are extra costs involved and that this society has agreed and has a contract with families to recognize that.
With respect to not being able to afford our social welfare system, and I note my time is almost up, I wish to recognize the fact that more and more analysis is being done with respect to where Canada places internationally. We are not at the top of the list with respect to providing social benefits for our people, nor are we at the bottom. Of the 20 or 25 most prosperous countries we are near the bottom of the list with respect to what we do for our families. Provision of family
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allowance benefits is something which we can afford. The measure before us is a sneaky one. It is being misrepresented to Canadian people. We in the Liberal Party will do everything we can to prevent it from coming into effect.


Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, I have just a few words with respect to the Bill before the House today. I wish to begin by saying that it is very unfortunate that the debate with respect to this Bill has been restricted by time allocation. It has been placed under the guillotine. There is no difference between the Bill before us which will partially eliminate the indexing of family allowances and the Bill which was before us last June with respect to deindexing old age pensions. Last June, the Conservative Party was attacking the old people of the country. Today, the Conservative Party is attacking the children of the country. It is really the same Bill. I think the Government is afraid to give the Bill the appropriate debating time because it realizes that if Canadian people realize what is going on, then, the opposition we saw last June will occur again with respect to the deindexation of family allowances.
I remember well back in June when Madame Denis confronted the Prime Minister (Mr. Mulroney) out on the front lawn of the Parliament Buildings. In effect, she said to him that he had misled the Canadian people. She used much more colourful language than I can use in the House. She told him that he was not being honest with the Canadian people and that he had promised not to tamper with social programs such as the old age pension and family allowance. However, once in power he changed his mind and brought forward a Bill to partially deindex the old age pension. There was a massive uprising of senior citizens. If the children of the country could speak for themselves and organize as the senior citizens did, there would be as massive an uprising today with respect to this Bill as there was then.
For the life of me, I am amazed to see so many silent Conservative back-benchers in the House. During the election campaign they said that social programs were sacred and that they would not be deindexed. All of a sudden, they have changed their minds and are supporting a Bill which attacks the children of our country. They are doing this in the name of the deficit, or so they say. They say that the deficit is too large and that we have to save money. This Government has $1 billion to bail out large depositors in banks which went bankrupt, yet it cannot spend a few tens of millions of dollars for the kids of the country. This is money which goes to the women of Canada who, in many cases, are the poor people of the country.
By the year 1990, the Government will have saved around $500 million or $600 million through this partial deindexation measure. Now, with a snap of its fingers, the Government wants to spend nearly $1 billion to bail out the banks because of their bungling with respect to the bank fiasco. That is not right, nor is it proper. I do not think that is what those Members were elected for. We have to do whatever we can to force the Government to withdraw or amend this Bill.
Family Allowances Act
Family allowances were instituted in the country back in 1945. Benefits were made universal for every Canadian mother in 1947. In 1947, some 7.7 per cent of our federal expenditures went to the payment of family allowances. That is down to only 2.4 per cent of the expenditures of the Government of Canada. About one third of what we spent in 1947 is being spent today in terms of relative expenditures of the Government. Yet it is saying the deficit is too large and it must cut back on social programs to save money so it can bail out "Barbara's banks". I do not agree with that and the ordinary people of this country do not agree and I am sure you, Mr. Speaker, in the chair, sometimes would like to rise and make a speech about how unfair this particular Bill is. That is not what the Government was elected for.
There is something else I find very strange. I remember the Minister of National Health and Welfare (Mr. Epp) standing in this House of Commons last fall saying that the Conservative Party had a heart, it had compassion for the poor and that it would do whatever it could to help the ordinary Canadians in this country. He rose in the House and said that any money the Government saved by cutting back on certain social programs would be redistributed to the poorest people in this country in terms of improving the social programs for them. He said that none of this money would be used for cutting the deficit. That is not what the Conservative Party is saying now. It is not what the Minister of National Health and Welfare is saying now. He is saying the deficit is too high, that we have to cut back so that we can lower the deficit. I believe that once again, Mr. Speaker, we are seeing a really serious change of heart by the Government. No wonder people are cynical about politicians, about Governments and political Parties, when they are promised one thing and once these people are elected, they do exactly the opposite. I ask the Government where its priorities are.
I come from a part of the country where there is a tremendous drought. The farmers are in dire need. However, we are told day after day that the Government cannot provide an acreage payment. There can be no emergency assistance for the farmer because we have a big debt. We are now told that we have to cut back on family allowances which will affect the kids of this country and the welfare people of this country, because we have a big debt. At the same time the Government wants $1 billion to bail out the bankers in this country. It will spend hundreds of millions of dollars because of the $500,000 capital gains exemption which will basically go to the wealthy people of this country. It wants to spend hundreds of millions of dollars to subsidize the oil and gas industry. All of this, Mr. Speaker, adds up to billions of dollars. Yet we cannot spend a few extra tens of millions every year to make sure we have indexation of family allowances so that if the cost of living goes up 9 per cent, the family allowance will go up 9 per cent, or if the cost of living goes up 6 per cent, the family allowance will go up 6 per cent.
There are people in this country who, if the family allowance cheque is cut back by even $2 or $3 a child per month,
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will suffer. It is going to make a major impact on their budget in terms of buying milk and nutritious foods for their kids. The money that the mothers of this country receive for family allowances is money that they spend on consumer goods. That stimulates the economy and provides jobs for Canadians whether they buy milk which helps the dairy industry or clothes for the kids which helps the textile industry. They spend that money in the main creating jobs for Canadians.
I would like to conclude, Mr. Speaker, by saying that I wish the Conservative Members of this Parliament would rebel a little. I wish they would stand up for the principles for which they were elected. I wish they would support the Government child benefits' position paper which was tabled last January. It said that it would redistribute income to help the poorest but it would not take away from social programs to reduce the deficit. I ask the Government Members, where is your courage, where are your convinctions for which you were elected? I ask them not to let the Minister of Finance (Mr. Wilson) and the Prime Minister continuously push them around in terms of what is important in this country.
I remember when the Conservative Party was in opposition. Those Hon. Members used to make all kinds of speeches about the importance of universality of our social programs and how we should not be cutting back on things like that. All of a sudden they are in Government and they are doing the same thing the Liberal Party used to do year in and year out.
It was interesting to hear the Hon. Member for York Centre (Mr. Kaplan) speak about how concerned the Liberal Party was about family allowances. I only want to remind the House that back in 1970 the Liberal Party brought in a White Paper which would have virtually wiped out universality of our family allowances. It was called FISP, the Family Income Security Program. The Government wanted to put a cap of around $10,000 per family above which no family would receive the family allowance. Yet we heard a speech a moment ago about the importance of universality. After the Liberal Government tabled its particular White Paper on eliminating universality and family allowances, it introduced two Bills in the House of Commons, and the people of Canada rebelled against them and they were never passed. In 1972, we had a minority Parliament. The Government withdrew those Bills and because it was a minority Government, it doubled the family allowances and indexed them, which was a very progressive move. However, as soon as that Party received a majority once again, after 1974, we saw a cut-back in family allowances by some 20 per cent. Then we saw the family allowances being brought under the six and five program so that if the cost of living went up over six per cent and Five per cent, of course, the poor families and their children lost. I therefore make an appeal for pressure to be put on the Conservative Members of Parliament, on the Minister and on the Prime Minister to be honest and true to the promises they made in the election campaign and to withdraw this Bill. The seniors of this country forced the Goverment to withdraw the Bill deindexing pensions last June. Just as that Bill attacked the seniors of this country, the Tories are now going after the
children of Canada. The principle is the same and the people of Canada should rally to the defence of their kids and make sure the Government withdraws this very odious Bill.


Mr. Marc Ferland (Portneuf):: Mr. Speaker, I welcome this opportunity to speak to the House on Bill C-70, which concerns family allowances.
For a number of days I have heard the Opposition accusing the Government of launching an attack on the universality of social programs. The Liberals and New Democrats are saying that these measures are unfair, anti-family and regressive, and that such action is unconscionable. I wonder, Mr. Speaker. Where were these political wonders, where were the Tino Rossi stars we hear singing the same old song in the House for days on end, accusing us of launching an attack on our families? Where were they in 1982-83, Mr. Speaker, when interest rates had reached record levels amounting to sheer usury, and the Liberals even had to amend our loans legislation because interest levels were so high? Where were today's knights riding to the rescue of widows and orphans, when the cost of living index was at 12 and 13 per cent? What did they do to help families when they really needed help? They introduced the 6 and 5 program! They took away their purchasing power, they cut back their purchasing power by an annual 6 and 7 per cent. Today, those same people are here in the House, but at the time we never heard them speak. Maybe they were being restained by their Minister. That was the time their Members were told to keep quiet. At least our Ministers encourage us to speak in the House and defend legislation.
What we are proposing is for families to carry the first 3 per cent of indexation, and not 7 and 8 per cent as was the case in 1982-83. Today, those very same Members are saying: No, you cannot do that. You must give them full indexation. Ladies and gentlemen, why did you not speak up at the time? That was when you should have risen in the House and told your Government: We do not agree with that. What you are trying to do now is play for time and try to discredit the best Government Canada has had since Confederation.
You would have people believe we want to launch an attack on children, the elderly, the aged, and on just about everyone, but you are jealous of our record of activities for this First year.
I have 22 pages here, a summary of the 20 or so Bills and measures we introduced within a few months' time in the House. Looking at the economic indicators, we have more than
300,000	real jobs, not 20-weekers, no band-aid policies. We have created 300,000 real permanent jobs since September. When we came to power, interest rates were at 13 and 14 per cent, and we have brought them back to a seven-year low: 9 per cent at the present time.


An Hon. Member:: 
Marc Ferland: Not our fault? Come on! Where were you at the time . .. Just because we made it possible, because it is happening, it cannot be the present Government's fault... Luckily the Liberals were there to make it happen. You should have made it happen at the time, gentlemen, when you were in power and you were able to. The trouble is, you had the support of the New Democrats in all this!
The consumer price index has declined. National reconciliation is something over which the Liberals never did lose much sleep. What have we done? The economic and regional development agreement signed with Quebec, British Columbia and Ontario; improved search and rescue facilities off the coasts of Newfoundland; the Atlantic energy agreement; the acid rain program; the settlement of the Mirabel dispute; the western agreement on energy; the transfer of five wildlife interpretation centres to private industry; the Yukon agreement on financing reform; the agreement with the Northwest Territories concerning the financing formula. Those are some of our achievements, Mr. Speaker, but the Liberals are trying to hoodwink the Canadian people and the Canadian taxpayers by telling them that the Progressive Conservatives are undermining the social programs.


Carlo Rossi: It is true!


Marc Ferland: Mr. Speaker, we are not undermining the social programs, on the contrary we want to strengthen them. I will tell you all about-


Carlo Rossi: It is true, you are being unfair!


Marc Ferland: I will tell you all about our achievements and our concerns over the past year, the joint studies on the feasibility of the Saguenay marine park in Quebec. What about consultation? We set up review committees on illegal immigrants; briefing documents on vocational training; the conference on taxation on authors and actors; the establishment of a private sector committee to review the activities of the Canada Deposit Insurance Corporation; consultation papers on child and elderly benefits. So what have we done? We have not done anything over the past year? And that is not the end of the list: consultation papers on farm taxation; perhaps you think that is of no interest to the Canadian farming community? On the contrary, they know we took action, they know we are not launching an attack against their children and their families. Then there were consultation papers on small businesses.


Carlo Rossi: How is that?


Marc Ferland: Small businesses also know that we are not attacking children and workers. Consultation papers on the mining industry, on tourism, the national economic conference, something the Liberals were never able to achieve. National
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unity: you never did understand the meaning of it. The proposed minimum tax; you kept talking about if for years, but we did come up with a concrete proposal. The refundable research and development investment tax credit, the special tax credit for regional investment; the regions, something which did not even exist for the Liberals. Extension of the small business bond program. We are also taking care of small businesses. We have closed down the Canadian Unity Information Centre. We know what it was used for under the Liberals. New air traffic control techniques, improved services to small businesses through Canada Employment Centres.
Let me continue to list these extraordinary achievements, Mr. Speaker. A committee responsible for looking into the productivity mandate of Canada Post, a problem which the Liberals have failed to solve. Report of the internal task force on possible improvements to the administration of the veterans' pensions. Privatization of the Northern Transportation Company Ltd. Announcement concerning the Unemployment Insurance premiums: no change in 1985.


Mr. Deputy Speaker:: Order, please. I would ask the Hon. Member to deal... I understand that he is quoting from this document, but I would like him to stick to the amendment and the debate.


Marc Ferland: Mr. Speaker, I was merely trying to prove that the opposition parties are making every effort to divert the attention ... I do not have to add anything to what my hon. friends have said about the validity of this Bill. With this filibuster, the Liberals are trying to prevent this Bill from going to committee for a clause by clause examination.
That is all what I wanted to say.


Jean-Robert Gauthier: That is enough, you have not said much. [English]


Roland de Corneille: Mr. Speaker, I appreciate the opportunity to speak on the subject of family allowances. I am one of the few who will have that opportunity because, unfortunately, this important measure has had time allocation or closure placed upon it. That means those of us in the Opposition who would like to present our concerns as Members of Parliament on behalf of our constituents will be denied an opportunity to do so. It is an important subject and it is too bad that the Government feels it must muzzle us, silence us, and strangle us. Even though we have a rather small number of people in Opposition, apparently it is still too many for the Government and it has to impose upon us the silence of closure.
Nonetheless, I have this opportunity to make my voice heard today and speak on behalf of my constituents. At the moment I have in mind a single parent in my riding who is living on welfare. Her husband just walked out and left her with two children aged two and four. Her husband, of course, "cannot be found". Mrs. Smith, as I will call her, has a grade 12 high school diploma. Before her marriage she worked as a recep-

September 30, 1985
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tionist. Now she has no money. Her husband cleaned out the bank accounts. She is using our welfare system to buy food and pay her rent. Of course, she is going to have to find a new and cheaper apartment to try and make ends meet. She has to find a job which is never and easy task, especially these days. She has to find someone to look after the kids. She has to cope with the devastating loss of her husband, loss of status as a married woman, her enormous financial difficulties, the hurt feelings of her children; in other words, the stress of these emotional problems. Yet this Government wants to take money away from this woman's mothers' allowance. This Government wants to deindex the baby bonus and, in due course, the child tax credit. It does not want to pay for the rising cost of living for this woman, the increase in cost of groceries or rent or clothing or drugs or whatever. The Government will only give her money in her baby bonus cheque to cover inflation in excess of 3 per cent. Most of us know that inflation right now is around 4 per cent. In other words, there will be no indexation for almost all of the inflation. This woman's ability to purchase the things she needs will be constantly reduced.
The baby bonus or, as it is sometimes called, the family allowance is often the only independent source of income for women such as Mrs. Smith who face enormous problems with suddenly having to cope in a situation. Therefore, why on earth would this Government want to do anything to hurt her even more? Perhaps we should not be surprised. The Prime Minister (Mr. Mulroney) is dumping on the poor once again. He did it to the seniors and now he is doing it to the Mrs. Smiths of this country. He is going to take $55 million from them in family benefits by 1987. Yes, $55 million by 1987. At the same time that the Minister of Finance (Mr. Wilson) is doing all this, he says he will increase the child tax credit for the neediest families.


Alan Redway: Hear, hear!


Roland de Corneille: They say "hear, hear". What a sad week the Tories have had, Mr. Speaker.
This all sounds good on paper, but once again this Government is trying to put one over on the people. Whether it is canned tuna or the banks or any other thing, it is another attempt to put something over, slide it by, as the Government tried to do with the senior citizens. The truth is the Government is really not going to increase the incomes of the neediest families at all. In three years the child tax credit will be deindexed and this will have the effect of reducing the actual spending money in real dollars that a needy family will get.
I would like to refer to an editorial in The Toronto Star which I hope is being read by all people who have children and by all people who have compassion, whether they are rich or poor. The editorial reads:
According to the budget papers, an Ontario family of four whose income is $20,000 a year (below the poverty line in a large city) now receives a total of $1,673 in a child benefits. By 1989, the value of the benefits would rise to $1,812 under the proposed reforms. But these figures are misleading since they ignore
the cumulative effect of inflation. If it is 4 per cent a year between now and 1989, the real value of these benefits in 1989 would not be $1,812 but $1,549, actually less than they are getting now.
That is not more for the neediest families, that is less than they are getting now. Mr. Speaker, this is a two-faced Government which gives with one hand while it takes with the other. My hon. friends on the Tory benches still refuse to look at evidence like this and refuse to listen to the counsel of social services that are the most responsible and represent the poor and the needy. They do not want to hear that evidence. They want to continue to move forward with blinders and insist that they, in their wisdom, know what is best for the poor. They do not even listen to something that is in black and white in every newspaper in the land. They refuse to hear the words as the poor cry out to them.
How is this possible? Is not one of the purposes of the Government in deindexing the universal baby bonus by 3 per cent to free up more money to give to the poorer families? Is that not what the Government keeps telling us? Is that not what the tell-the-truth Prime Minister and his Minister of Finance are telling us in their reasoning? Mr. Speaker, the Government does not seem to find it easy to tell it like it really is. It hedges and blames others as the Prime Minister has been doing in the fishy tuna incident and the investigations about the banks. This Government, this Minister of Finance, and this Prime Minister cannot seem to tell it like it is because, if they could, they would tell the Canadian public that a needy family in my riding will not gain anything by the so-called increase in child tax credits because the Prime Minister and the Minister of Finance are going to deindex the child tax credit too so that the gains this poor family might have made will be wiped out by inflation and additional taxation which the Government is also proposing in its unfair Budget.
The Tories will gouge this poor family of four which is struggling to live on $20,000 a year by $239 by 1989. This is how the Government claims it is going to help families like this. What is more, Mr. Speaker, the baby bonus comes to the single mother in my riding, of whom I was speaking, immediately and directly when she needs it month after month and she often depends upon it as the only source of cash which she can say is hers. That is going to be reduced. It is cruel to do this to our families in need. It is shameful to try to pull the wool over the eyes of Canadians and say that deindexing the baby bonus will add money to the federal treasury which will then be used to help the poor and the needy. It is not true.
The Government says that it wants to cut the deficit so it tries to deindex seniors' pensions and deindexes our taxes in a sneaky way while spending billions of dollars on a bank fiasco and giving $500,000 capital gains grants to the wealthy. The poor, the weak, and the middle class will be the victims of the Government's financing. It is no wonder, Mr. Speaker, that confidence in the Government is rapidly dissipating.


Raymond John Skelly: Mr. Speaker, it is with a great deal of pleasure that I participate in this debate today. It is amazing to see the hypocrisy of Liberals standing in the House and criticizing the Government for indexing
September 30, 1985

family allowances. It is absolutely astounding. For example, the backbench of the Liberal Party, as they were gutting old age pensions and social programs, sat like a bunch of sheep and clapped when Mr. Trudeau stood up in the House and said that this is good for people. They stood like sheep backing a Government destroying social programs. The ironic thing is that maybe today the Conservative back-benchers should have a look at themselves. Through you, Mr. Speaker, I would like to speak to some of them today.
What have they been supporting since the Government came to power on September 4 after they wandered the land making promises on both sides of issues raising expectations out of sight? Mr. Speaker, the Government has raised taxes. We are not only talking about family allowances today, we are talking about the style of Government and gutless back-benchers. What have they been supporting? Every time the dude from Baie Comeau-pardon me, the right hon. gentleman from Baie Comeau-stands up in this House we see the back-benchers cheering and clapping for the raising of taxes which will affect low and middle-income Canadians. If that is what they believe in, the next election will tell the tale. The Conservative back-benchers have been supporting cuts in Government services which affect low and middle-income Canadians and a whole wealth of programs that we treasure in this country. The sacred god that these people worship is Government cuts and smaller public service. However, the cuts and tax increases always seem to affect the low and middle-income Canadians.
The Opposition has a big caucus today, but that will not last forever, especially with what it is doing. I have seen numerous Conservative back-benchers back the deindexing of the old age pension until it was shown that it was one of the most colossal political errors ever committed by any Government. Then the Government moved back. The Cabinet and the Planning and Priorities Committee realized that they had made a terrible mistake and hung the Conservative back-benchers out to dry. The back-benchers were asked for their support and when they gave it they wound up holding the bag. Their constituents will remember whether they spoke out publicly for them. It is time to show some guts and speak up when policies are wrong. Your constituents will remember your record and we will be there to help them.
It is absolutely wrong to deindex pensions of members of the Armed Forces. Yet, back-benchers support a Budget which advocates that. None of them are speaking out against that. Their constituents will know that before the next election. They will know that they failed to speak out. Deindexation of the pensions of public servants is a wrong-headed policy and the constituents of the Conservative back-benchers will know that. A few of the back-benchers may have the guts to speak out. That is the character of this Government. We do not blame the Cabinet Ministers. We know the things they have done and the directions they have taken.
With regard to the Prime Minister's integrity, the other day a poll indicated that 30 out of 30 people thought that he was not being forthcoming, but, of course, that was not the term
Family Allowances Act
they used. I would challenge the Conservative back-benchers to stand up and show some guts and some leadership to their electorate. Throughout the tuna scandal, I wonder if the sheep in the Conservative back-bench-the people-


Mr. Deputy Speaker:: I would ask the Hon. Member to speak to the motion.


Raymond John Skelly: Mr. Speaker, we are building the context within which to develop the critical thoughts about deindexing family allowance. I will come to the point. Since we know the view of the Cabinet, the deindexing of family allowance shows the failure of the back-benchers to stand up and say that this is a misguided policy. They do not stand up to say that they do not believe in attacking women in Canada and eroding their income because it is the only source of income for many women who are attempting to raise children. Rather than showing independence, the Conservative back-benchers are prepared to stand up publicly and applaud those who are proposing this measure. They are attacking children in this country because those children and families depend on that income. As the inflationary process continues, they fall farther and farther back. It is not Members of Parliament or bank managers whose families fall further back, it is low and middle income people in this country. They are the ones who these back-benchers are attacking.
When will they have the courage to stand up and speak against those who are determined to deindex the old age pension and thereby leave those back-benchers high and dry? When will they speak out against those who created the bank scandal and failed to protect the interests of Canada? They assured us that they did not create this scandal but then watched two banks suddenly fail.
When will those back-benchers stand up publicly to say that they are not part of that mess and are not interested in defending it? When will they show their integrity by speaking out publicly in the interest of those issues for which their constituents elected them?
Considering the Government's past actions, it is certainly time for back-benchers to speak out and not become sheep like Liberal Members during the Trudeau era. It was sad and disgusting to see and I remember many Conservative Members opposite criticizing those Liberal Members. The Liberals deserved that criticism when one recalls the deindexing of social programs, although I recognize some Members who spoke out and now have been sent to oblivion.
The time has come and I believe that the political future of many Members opposite has been cast because people in their ridings-especially senior citizens-have listened for a public statement of solidarity to protect their interests.


An Hon. Member:: We were here.


Raymond John Skelly: I saw you here. Everyone else saw you here, cheering the Prime Minister (Mr. Mulroney) on, saying, "Go for it, Brian". However, we saw the Prime Minister take a 180

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degree turn and drop the whole deindexing issue because it was politically dangerous for him while leaving those Members hanging in the wind.
The Bill before us today is as misguided as the proposal to deindex Old Age Security or any Bill that has been introduced. When the constituents of Members opposite ask what their position was on this issue, those Members will say that they were right behind the Prime Minister when he was taking money from their pockets with respect to the family allowance because they thought their constituents had too much money and were living too high on the hog. They will say that they were right behind the Prime Minister when he jacked up taxes affecting low and middle income Canadians because they had too much money. They will say they were there when the Government took money from the pensiona of retired members of the Armed Forces, the RCMP and public servants. They will say they were there when the Prime Minister decided to increase the price of gas and thereby take more money out of the pockets of their constituents.
The point I am making is that Conservative back-benchers are exactly like back-bench Liberal Members of the previous Government, and they know what happened to them. The day draws nigh. Let us see some courage and integrity over there for a change.


Jean-Robert Gauthier: Mr. Speaker-


Ramon John Hnatyshyn: Mr. Speaker-


Mr. Deputy Speaker:: I am sorry. I recognized the Hon. Member for Ottawa-Vanier (Mr. Gauthier).


Jean-Robert Gauthier: Do you want to speak?


Ramon John Hnatyshyn: No.


Jean-Robert Gauthier: Even the Government House Leader does not want to speak. I do not blame him for not wanting to speak.


Ramon John Hnatyshyn: 1 want to speak.


Jean-Robert Gauthier: I think it is dishonourable to have such a motion before the House to cut off debate so quickly.


Don Boudria: Let the record show that the House Leader does not want to speak.


Jean-Robert Gauthier: The record now shows that the Government House Leader does not want to speak. I don't blame him. Mr. Speaker, today we are speaking to a motion put by my hon. friend, the Member for Sudbury (Mr. Frith), to hoist this debate six months hence so that this measure will receive the necessary study and serious consideration it deserves.
In 1981-82, the Progressive Conservative Party published an advertisement which stated, "You have heard a lot about the Constitution lately but how much have you heard about deindexing?" It goes on to make several points which are enlightening and interesting. For instance, it states, "The less your income, the harder you get hit". That means that indexing helps those who have less income. Therefore, indexing helps those maintain their purchasing power and gives them a chance to fight inflation and fight lower income.
The ad says, "Deindexing would take away the protection you now have against inflation". That is what the Conservatives were telling Canadians in 1981. The ad goes on to say, "But while deindexing would impose the greatest economic hardships on people living on low incomes, it would mean higher and higher taxes for all Canadians living on any income". It says that deindexing would mean a massive tax increase for all Canadians. That is what the Progressive Conservatives said.
This spring I asked constituents in my riding what they thought of the Government's proposal to deindex the family allowance, the Old Age Security and family benefits, particularly the proposal to deindex the income tax table. Out of 2,733 who responded, 73 per cent said to keep the system as it is and not touch it; 10 per cent said to reduce the monthly instalments to $20; 16 per cent said to abolish the program and 1 per cent had no opinion. When 73 per cent of my constituents say that they want to keep the system, I listen.
Did the Government ask Canadians for that kind of mandate to cut indexing? They would never dare attempt that. The Minister of Justice (Mr. Crosbie) said, "If I told you what I think we will do, we would never get elected". He said that it would be unbelievable for them to tell the truth.
The Government asks for trust and understanding but it deserves to be told that they are a bunch of reactionaries. They are reacting to events and God knows that there has been enough reaction. We want leadership in this country. Canadians do not want leadership about tuna issues and deindexing family allowances, they want leadership to deal with jobs and a social security system that will be maintained. Canadians do not want the Conservatives to tamper with our social security system in order to lower the deficit.
The Government promised Canadians that the deficit would not be lowered by reducing social programs. However, in a few minutes we will vote on a measure introduced by the Government to deindex family allowances. I think we are justified in suggesting that the Government is being dishonourable by using deindexing to increase its revenues.
I want to say to all Canadians who are listening that the result of a reduction in child benefits and income tax benefits between 1986 and 1990 will cost the poorest families in Canada with an average annual income of $15,000, some $1,879. Middle income families earning $35,000 a year who have two children will see a reduction in their income of $3,452. Those wealthier families earning $80,000 or more who have two children would see a decrease of $1,125.
Who was taking it on the jaw, Mr. Speaker? The middle-income people and the poor, not the rich. That is unacceptable to us. We will vote against this motion for deindexing and we will vote against this Government when it brings in such regressive measures.
September 30, 1985


Mr. Vic Althouse (Humboldt-Lake Centre):: Mr. Speaker, in the short time 1 have available before the Government motion to reduce debate takes effect, I would like to express my displeasure with Bill C-70 before us, which is an attempt to deindex the family allowances paid to mothers by 3 per cent per year. The effect will be to reduce money mothers have to spend on their children. By 1990, this will have reduced the actual spending power of Canadian families by $600 million. Why did it happen to mothers and children when the Government backed off on a similar proposal to pensioners?
I think it is very clear. The Government found when it was dealing with pensioners that it was dealing with an older, politically experienced, group of people. Children and mothers do not have time nor the experience to organize politically. They have other things to do. Pensioners are voters. They have long memories and they will be around for the next election. Pensioners would analyze the effects of deindexing when it came time to vote next time. Children do not have votes.
Unfortunately, this callous Government has decided that since children do not have votes, there is no one there to listen to and so the Government can go ahead and make the reduction without any thought being taken to people's special needs.
There are special needs, Mr. Speaker. In a recent report from British Columbia, it shows that 10 per cent of that province's population and 10 per cent of its children are living in real poverty. It is estimated with this change and other changes foreseen in British Columbia that fully one-third of British Columbia's children will be living in poverty by 1990.
I see your signal, Mr. Speaker. I hope the House will vote against this proposal to deindex pensions today.


Mr. Deputy Speaker:: It now being 5.42 p.m., according to an order made on Thursday, September 26, 1985, pursuant to Standing Order 84, it is my duty to interrupt the proceedings and put forthwith every question necessary to dispose of the second reading stage of this Bill.

The question is as follows: Mr. Epp (Provencher), seconded by Mrs. Blais-Grenier moves that Bill C-70, an Act to amend the Family Allowances Act, 1973, be read the second time and referred to a legislative committee, and on the amendment of Mr. Frith, seconded by Mr. Robichaud that the motion be amended by deleting all the words after the word "That" and substituting the following therefor:
Bill C-70, an Act to amend the Family Allowances Act, 1973, be not now read a second time but that it be read a second time this day six months hence.
The question is on the amendment. Is it the pleasure of the House to adopt the amendment?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


Mr. Deputy Speaker:: All those in favour of the amendment please say yea.
Family Allowances Act


Some Hon. Members:: Yea.


Mr. Deputy Speaker:: All those opposed please say nay.


Some Hon. Members:: Nay.


Mr. Deputy Speaker:: In my opinion the nays have it.
And more than five Members having risen:


Mr. Speaker:: Call in the Members.


Mr. Speaker:: I declare the amendment lost.

September 30, 1985
Family Allowances Act


Herbert Eser (Herb) Gray: Mr. Speaker, the Official Opposition would be willing to have the results of this vote apply to the vote on the main motion but, of course, in the reverse.


Ian Deans: We are also willing to have the reverse of the vote apply, Mr. Speaker.


Ramon John Hnatyshyn: Mr. Speaker, I appreciate the offer made by the Opposition. Even if we lost the vote, I am sure we would have an overwhelming victory and come back with 250 seats.


Mr. Speaker:: Is the House ready for the question?


Some Hon. Members:: Question.


Mr. Speaker:: The question is the following one. Mr. Epp (Provencher) moves that Bill C-70, an Act to amend the Family Allowances Act, 1973, be read the second time and referred to a legislative committee.


Mr. Speaker:: I declare the motion carried.
Bill read the second time and referred to a legislative committee.


PRIVATE MEMBERS' BUSINESS-MOTIONS   SOCIAL SECURITY ADVISABILITY OF EXTENDING SPOUSAL ALLOWANCE PROGRAM
[Stage Direction]
Following the interruption of Thursday, April 18, of Mr. Malepart's motion, the House resumes said consideration:
That, in the opinion of this House, the Government should reconsider its intention to limit the eligibility of the spousal allowance to needy widows and widowers between the ages of 60 and 64 and that it should extend the program to all persons of this age group living alone and having the same means, without taking their marital status into account.
Gabrielle Bertrand: Mr. Speaker, I rise to reply to a motion presented by a Member who is not in the House, but I trust the information will be passed on to him.


Ian Gardiner Waddell: He is finished with debate.


Gabrielle Bertrand: I am referring to the Hon. Member for Montreal-Sainte-Marie (Mr. Malepart), who is asking the Government to reconsider its intention to limit eligibility to needy widows and widowers between the ages of 60 and 64.
Mr. Speaker, it is clear there is one point that must be made above all and it is that the Government has not restricted eligibility to the spousal allowance. On the contrary, it has expanded eligibility, since thanks to recent changes to the program, 85,000 new recipients will be benefiting from this allowance. 1 cannot imagine how the Hon. Member for Montreal-Sainte-Marie could see this improvement as limiting eligibility. The Government and 85,000 new recipients see this change as a step in the right direction and a step towards greater social justice.
Like many other social programs, the spousal allowance is not a panacea. It has evolved and will continue to do so, reflecting the changing needs of our society. I say evolve, because even in 1975 when it was introduced, the program was far from perfect. At the beginning the spouse's allowance
September 30, 1985

program was available only to the spouses of old age security pensioners who were getting both the basic old age pension and the guaranteed income supplement, provided the spouse was between the ages of 60 and 64 and the income of the couple did not exceed a set ceiling. This program had been designed to help only those low income couples whose sole source of income was the old age security benefits paid only to the pensioned spouse.
Although this new program did contribute to improve the living conditions of a category of elderly people, its promoters had excluded a fair number of destitute individuals aged 60 to 64-widows, widowers, persons living alone, and married couples, if both spouses were under age 65. Since then, however, the initial eligibility conditions have been relaxed and the program made more generous in order to better meet the needs of a greater number of disadvantaged people within our society.
First of all, in 1979, the coverage of the program was extended so that, when a pensioner died, the surviving younger spouse could continue receiving this allowance. Later, in 1985, the coverage was extended to all widows and widowers between 60 and 64 years of age whose incomes are low, no matter the age of the spouse when he or she died.
Mr. Speaker, you certainly remember that before this amendment to the spouse's allowance, there was a good time to become a widow or a widower and a bad time. If the death of the spouse occurred when he or she was 65 years old or over, the surviving spouse was eligible for an allowance. If, on the other hand, the spouse died at age 64, the widow or widower was not eligible for the allowance. We have eliminated this condition which, more often than not, resulted in disastrous consequences: in addition to being faced with the loss of a loved one, the widow or widower had to cope with a painful financial situation.
Mr. Speaker, we have eliminated this unfair situation, and I am proud of it. We have corrected an injustice against many Canadian men and women who now owe their peace of mind to an amendment to an existing program and not from a program right out of Utopia.
Since September 1985, the spouse's allowances have been made available to all needy widows and widowers between the age of 60 and 64, no matter how old their spouse was when he or she passed away. Rest assured, Mr. Speaker, that when the Government decided to grant the spouse's allowance exclusively to widows and widowers, it never crossed its mind, as the Hon. Member for Montreal-Sainte-Marie seems to believe, that they were more deserving than other Canadians because of their legal status.
Rather, it decided, in view of the limited resources available, to help without further ado one at least of the groups of early retirees in need. Would it be rational, Mr. Speaker, for the Government to deny help to one group it could assist, under the pretext that available financial resources do not allow it to help everyone? In my view, the Government has the moral obligation to help to the extent it can those who are most vulnerable in our society. The new measure now being the
Spousal Allowance
extension of the spouse's allowance program to 85,000 people who were excluded since its inception in 1975.
Needless to say, legislators have a difficult task. Every legislative measure has limits. Also, every social program has special eligibility criteria. Let us take for instance the unemployment insurance program. To qualify, one must have had insurable employment for a specified number of weeks.
If we look at the eligibility criteria for total or partial pension under Old Age Security, we find that a person must be 65 or older and meet certain residence requirements. There are other programs, such as veterans allowances, workmen's compensation and so on that have special eligibility criteria.
One may ask: Why do all social programs have eligibility criteria? One thing is certain, they are intended to meet specific needs, to face circumstances which Canadian men and women face in every day life such as death, disability, unemployment, old age. All social programs have different goals, but their only reason is to help persons in need. Needless to say, Mr. Speaker, we would much prefer helping every person in need, but our resources are not unlimited.
The recent change in the program will cost Canadian taxpayers $190 million for the 1985-86 fiscal year and $350 million in 1986-87. To extend the Spouse Allowance Program, as suggested by the Hon. Member for Montreal-Sainte-Marie (Mr. Malepart), to all low income citizens between 60 and 64 years old whatever their marital status would cost an estimated $1.5 billion. New expenditures as substantial as this are impossible in the present economic situation. This is why we cannot introduce for the moment the kind of new social benefits suggested by the Hon. Member for Montreal-Sainte-Marie.
Before closing, Mr. Speaker, I would like to add that this Government is helping and will continue to help people who have difficulty making ends meet and who are not eligible to the spousal allowance. Indeed, these people can receive assistance under provincial programs the costs of which are shared equally by the Federal Government and the provinces. While there are still people between the ages of 60 and 64 who cannot be eligible to the spousal allowance, it still remains that, since September 1, 85,000 of them are better off than before.


Neil Young: Mr. Speaker, I welcome the opportunity to say a few words about the motion which is presently before the House. During debate on the Bill which expanded the benefits under the spousal allowance program to include the individuals who are covered by the Bill, the Minister neglected to include those individuals who are over age 60 and, by circumstances or by choice, never married. The Hon. Stantley knowles has often said in this House that it is totally discriminatory to adopt that kind of attitude. What the Government is doing in essence is saying to women over age 60 that if they did not choose to live with a man in a common law relationship or to become married, that they would not be

September 30, 1985
Spousal Allowance
eligible for any pension benefits or spousal allowance after age 60. That is the major complaint the opposition has in this measure and I presume that is why the Hon. Member for Montreal-Sainte-Marie (Mr. Malepart) presented his motion to the House.
I made the lengthy argument during second reading of that particular Bill when it was before the House and I do not intend to take up too much time at this point except to point out several things. While the Government argues that it cannot afford to include those single elderly people in this measure because of fiscal restraints, I find it strange that the Government did not use the same argument when it managed to find a substantial amount of money to bail out a couple of banks. We do not know who, because the Government will not give us the information, but in effect, the Government is going to give a sizeable chunk of the taxpayers' dollars to individuals who have invested in excess of $60,000 in that particular bank to compensate them for any moneys lost over that amount. It seems to me, Mr. Speaker, to be a little bit cynical, if not hypocritical, to make the argument that the Government cannot help the single elderly because it does not have the fiscal means to do it at the present time.
I would like to quote what someone once said about this:
The fact that we have 600,000 elderly Canadians living in poverty in a country as rich and bountiful as Canada, in a society supposedly as compassionate and humane as ours, is a national disgrace. The fact that this has been allowed to continue month after month, year after year, is a telling indictment of the Government. The Government is breft of ideas, drained of decency and unable to recognize the priorities which must be dealt with in this society. I know the Government has its priorities: Bail-outs of de Havilland, Canadair and Maislin; bonuses for executive officers in de Havilland and the Canada Development Investment Corporation;... We know what the priorities of the Government are. For the people who have, throughout their lifetimes, worked for and contributed to the development of this great country, there is only a promise trotted out time and time again that some day, some time, they too will become a priority.
Is it any wonder, Sir, that today we condemn the Government? We condemn it not only for its failure to introduce legislation that would meet the current needs of today's elderly poor, but also for its failure to bring about long overdue pension reform of the whole system so that we can ensure that the poverty of today will not be meted out to those who will be senior citizens in 10, 20 or 30 years' time. We must begin to come to grips with this issue and reverse what is happening.
The words I have just quoted were said by the Hon. Member for Kingston and The Islands (Miss MacDonald), who is now the Minister of Employment and Immigration, on May 10, 1984, when she was in opposition and was levelling a great deal of criticism at the previous Government for not doing exactly what we argue the present Government should be doing today.
I know that the Hon. Member for Kingston and The Islands has been a strong advocate on behalf of women and women's rights. She has been a strong advocate for adequate pensions for elderly Canadians. I know she is as disappointed as we are that the Government did not include the single elderly who have never been married under the provisions of that particular Bill.
What I am really saying, Mr. Speaker, is that it is time Governments stopped saying they do not have the fiscal capability of helping people who really need it at present and that they will look into it when the economy improves. The same argument has been used for many years for not increasing pensions for those between 60 and 64 who are single and elderly. It is time this Government stopped that and said it will put an end to this nonsense, do what should be done and include those individuals in this legislation.
The Government has argued that seniors, if not collectively then certainly on a selective basis, have other Government programs available which make life a bit easier. For example, there is the rent geared to income formula for CMHC housing. However, earlier this year CMHC notified tenants in buildings it owns and operates that it proposed to increase rents this year in the neighbourhood of 10.4 per cent. In one building located in my constituency, the Main Square apartment building, the tenants have been so notified. There are many elderly people living in those buildings and that increase practically eliminates the $50 increase they got in the supplement last year. It will wipe it out. They will be no better off. In my arguments to the Minister I have said that is totally unfair to seniors. You cannot give them an increase with one hand and then take it back with the other as this Government is doing.
As well, I understand that CMHC is flying kites at this time. Under the rent geared to income program you pay a maximum of 25 per cent of your monthly income in rent. I understand that CMHC is seriously considering raising that limit to 30 per cent. This, on top of everything else the Government is doing to seniors, will devastate many of them.
Most seniors that I know of have a very hard time of it living on a month-to-month basis. When you consider what CMHC will be doing in these subsidized apartment buildings, in addition to all the other items we saw in that Budget last May, things such as increased taxes on gasoline, alcohol, cigarettes, reduced personal exemptions as well as deindexation, we estimate that in all probability this will reduce the disposable income of seniors by something like $500 a year. That is $500 a year they cannot afford to give up.
Rather than talking this Bill out so that it becomes a dead issue after today, if Government back-benchers had any sense of fair play and decency at all they would agree to refer this Bill to the Standing Committee on Health, Welfare and Social Affairs so we can hear from senior citizens. They have not had a chance to talk about what the Government is doing to or not doing for them. Why not allow seniors to come before that committee and tell us how they are living today? In that way, all Members can get a better appreciation of the difficult financial circumstances they are living in, and perhaps we collectively could persuade the Cabinet to do what is right and proper to ensure that senior Canadians who have given their lives to our country are allowed to live their years of retirement in dignity.
September 30, 1985

As I said, I am not going to take up too much time. I have said what I wanted to say. It is up to the Government and Members opposite to do the right thing by the seniors of this country.


Mr. Girve Fretz (Parliamentary Secretary to Minister of Indian Affairs and Northern Development):: Mr. Speaker, I am pleased today to make further comments on the motion presented by the Hon. Member for Montreal-Sainte-Marie (Mr. Malepart) which asks that the spouses allowance benefit be extended to all needy persons aged 60 to 64 who live alone, regardless of their marital status.
It gives me particular pleasure to discuss this subject on the final day of September, because in the past few days thousands of needy widows and widowers in the 60 to 64 year old age group have already received their first spouses allowance cheques as a result of legislation passed by this Parliament on June 20 and given Royal Assent on June 28.
In his first speech delivered to the House regarding this Bill on April 18 the Hon. Member, I think rather misleadingly, stated that the intention of the legislation is to limit the eligibility of the spousal allowance to needy widows and widowers between the ages of 60 and 64. He seems to wish to imply that the Government has introduced a cut-back in this program which, in recent years, has grown into an increasingly important vehicle for assisting significant numbers of needy Canadians in that near elderly age group. However, the Government did not limit but rather expanded the existing program to provide income assistance to all needy widow and widowers in this age group.
I believe, then, it will be helpful for the Hon. Member to recognize that no single assistance program can respond to the requirements of all needy Canadians. In a democracy social programs inevitably are designed to provide the maximum possible assistance to a recognized group of beneficiaries within the limitations imposed by current and foreseeable economic realities. Improvements are possible over time in these programs. None of them are perfect and we concede that. All Members will agree that the needs of many groups in our society are of importance and concern to us. But no Government, past, present or future, would have the economic capacity to deal with all of those needs in one single step. It just cannot be done. Everyone must have the courage to look at the situation in their time with a sense of both justice and compassion and decide where the dollars, however limited, can be spent to achieve a positive goal.
To properly appreciate the intention of this Government's new legislation in extending this spouses allowance to all needy widowed persons in the near elderly age group, I think one must first look back to the benefit's introduction 10 years ago. The spouses allowance was created at that time for the particular purpose of assisting low-income couples where only one partner had reached the age of eligibility for the OAS basic pension and the income-tested GIS. Prior to the introduction of the spouses allowance these couples had to get by on benefits designed only for one pensioner and, at best, depending on the couple's assets and resources as well as available
Spousal Allowance
income, the younger spouse might have been eligible for provincial welfare. The spouses allowance, however, when introduced, provided these couples with an income guarantee which could be compared with that available to low-income pensioner couples where both had been become eligible for the OAS basic pension and the supplement.
In 1979 the federal Government extended the program so that a recipient, or even a widowed individual who became eligible for benefits at the time of his or her pensioner-spouse's death, could remain eligible for the allowance until reaching age 65 and becoming eligible for full Old Age Security benefits including the supplement.
Nonetheless, there continued to be criticism that the program could be considered arbitrary in providing benefits to men and women who, after they had reached their sixtieth birthday, were married to a pensioner-spouse eligible for the Guaranteed Income Supplement who died subsequently, but not to widows and widowers who had lost their spouse before they could become eligible for the allowance. I am gratified, Mr. Speaker, that our new legislation has corrected this anomaly. We can be proud that we have gone one step further in developing the spouse's allowance program and, consequently, in extending to more Canadians the protection of Canada's on-going system of social program benefits.
I believe I should remind the Hon. Member that the extension of spouse's allowance benefits to all needy widowed individuals from age 60 to 64 was a major recommendation of the all-Party parliamentary task force on pension reform in its final report to the House of Commons during December 1983. The task force's recommendation was made, moreover, for the same reasons that I have been discussing.
I trust, therefore, that the Hon. Member can now agree that our recent improvement to the spouse's allowance program has implemented an important expansion in benefits under the program, and not a restriction as the wording of his motion would indicate. We consider that this legislation, Mr. Speaker, is an important step toward greater social justice.
Naturally, I recognize that there are other persons in need in the 60 to 64 age group who will not benefit from this initiative. Nevertheless, I believe that this improvement to the spouse's allowance is a clear demonstration of the federal Government's firm commitment to provide assistance for all needy Canadians. I can assure the Hon. Member that the decision to extend the spouse's allowance at the present time to all low-income widowed individuals in this age group was not based on any assumption that such persons are more deserving than any others simply by virtue of their former marital status. Rather, given our limited financial resources, it was felt that we had to immediately improve assistance for at least one segment of Canada's near elderly population who have been facing severe financial hardship.
At the same time, Mr. Speaker, I must emphasize the commitment upon which all members of the present federal Government have agreed, to fiscal responsibility and, in par-

September 30, 1985
Spousal Allowance
ticular, to an improvement in our control of the alarming rise in Canada's national debt. I must point out that the cost of the Hon. Member's proposed amendment to the spouse's allowance legislation would be an additional $300 million during the first full fiscal year. He may be aware, also, that there have been proposals to extend spouse's allowance benefits to all low-income married couples where both partners are between ages 60 and 65. The cost of this proposal would be in the order of $820 million annually. In fact, to extend the spouse's allowance to all single and married low-income individuals in this age group would cost in the order of $1.5 billion per year. Such a drastic expansion of social program benefits that are funded from general taxation revenues is simply out of the question in light of the nation's present economic situation. That is why the level of increased assistance that the Government has determined can be responsibly undertaken at the present time has been directed to a group of Canadians who are among those most in need, namely, 60 to 64 year old widows and widowers.
Rather than lament what might be, Mr. Speaker, we should continue to do what can be done in a fiscally responsible way to help the members of our society most in need while not imposing an unfair burden on all Canadian taxpayers.


Mr. Geoff Scott (Parliamentary Secretary to Minister of Communications):: Mr. Speaker, I am pleased to follow my distinguished colleague, the Member for Erie (Mr. Fretz) and participate in this second round of debate on the motion of the Hon. Member for Montreal-Sainte-Marie (Mr. Malepart). It is interesting to note that neither he nor any other member of the official Opposition is present for the discussion on such an important subject matter.


Mr. Keeper:: The real Opposition is here.


Geoffrey Douglas Scott: Of course, as all Members are now aware, it is not just the Government's intention to extend the spouse's allowance program to include all widowed persons 60 to 64 years of age; the Government has already done so effective September 1985. Now, for the first time, 85,000 widows and widowers between the ages of 60 and 64 are guaranteed a level of income which is adequate to meet their basic living costs. This group of low income near-elderly persons, like the 89,000 persons who were previously entitled to spouse's allowance, are receiving very necessary and well-deserved financial assistance from the federal Government.
I recognize that it is very easy to criticize a social program. One can always fault the program's design, its eligibility criteria, its benefit amount, and also its cost. I for one want to see more praise for our social programs, not the least of which is the spouse's allowance program. This program is a prime example. These programs have enjoyed the support of all Canadians because they are directing help where it is most needed. Let us ensure that they will continue to deserve their support by keeping social program costs at an affordable level.
Through the application of an income test, many 60 to 64 year old persons residing in this country are provided with
sufficient income to assure them some measure of comfort and security so that they can live with dignity. Mr. Speaker, the 60 to 64 year olds in receipt of spouse's allowance-the vast majority of whom are women-have supported this country in many ways over the years. In this group we find the mothers who have stayed in the home for the better part of their adult lives raising their children, caring for their sick relatives, and providing the necessary volunteer labour without which most of our community projects could not operate. This was an important role that these women played in the unpaid labour market for most of their adult lives. They depended financially on the earnings of their husbands.
These women are now widowed, and with their husband's death went the greater part of the family income. In some cases, this income had been partially protected through insurance or under private pension plans. However, more often than not, unfortunately, the widow was left with minimal, if any, income protection either through survivor benefits or through the family's personal savings. And so, what recourse do these women now have? Some are lucky and find paid employment. Very often, though, this is of the physically demanding and low paying type because these women have not had the opportunity to acquire or keep up the technological skills required in today's constantly changing workplace.
For many others, the only avenue of financial assistance is welfare. These menas and/or needs tested provincial social assistance programs are an important part of Canada's social safety net and provide much needed financial assistance to the many thousands of Canadians who are unable to provide for themselves. However, Mr. Speaker, as funds permit, I believe our elderly residents deserve special recognition, and that is exactly what the spouse's allowance program does. That is why the Government took the steps necessary to extend this income-tested assistance to 60 to 64 year old widowed persons.
I am the first to admit that there are other persons in the same age group who have given of themselves just as selflessly. However, I cannot believe that the Hon. Member who proposed this motion would have us deny much-needed financial assistance to 85,000 widowed persons because the money is not available at this time to extend the spouse's allowance program to all 60 to 64 year olds.
The step-by-step approach which successive Governments have followed in building good social programs is not wrong. If it were, then the spouse's allowance program would not have even been introduced in 1975. You remember that at the time, when the program was introduced, it was designed to protect only the 60 to 64 year old spouses of low income Old Age Security pensioner. It left out all other 60 to 64 year olds.
Nevertheless, through gradual steps, the spouse's allowance program has been improved. First, in 1978, the allowance was extended for six months after the Old Age Security pensioner's death. This extension was intended to give widows or widowers a chance to adjust to their changed circumstances.
September 30, 1985

Then in 1979, under a Conservative Government-as has been pointed out by some of my colleagues-the spouse's allowance was extended until the recipient reached age 65 and became entitled to the Old Age Security pension and its income tested component-the Guaranteed Income Supplement.
We wisk now six years ahead to June, 1985. Parliament took the next logical step when it gave its approval to Bill C-26 and extended the spouse's allowance program to all widowed persons age 60 to 64, regardless of the age of their spouse at death, thus ensuring that some 85,000 more near-elderly persons were guaranteed an adequate basic income. I think it is important to emphasize that the decision to extend the allowance to widowed persons was not just a whim of the Government. This was a proposal resulting from an extensive review of Canada's retirement income system conducted by the allParty Parliamentary Task Force on Pension Reform.
After carefully considering the views of all interested Parties in that pension reform debate, the Task Force recommended that the spouse's allowance program be expanded to include all widowed persons in the 60 to 64 year age category. As responsible representatives of the people of this country, that Task Force recognized it would be too expensive to extend income tested assistance to all 60 to 64 year olds, as was pointed out by my colleague, the Hon. Member for Erie. The spouse's allowance program may still not be as good as it could be, but it is better than it was prior to September. I, for one, am pleased that the Government has moved so quickly to legislate this proposal.
The Guaranted Income Supplement is another example of a social program which, since its inception in 1967, has been gradually improved. In step-by-step increments, the level of income guaranteed to Old Age Security beneficiaries was increased so that today, all OAS pensioners are assured of a monthly income which is adequate to meet their daily living needs.
Of course, the Hon. Member for Montreal-Sainte-Marie did not suggest that we extend the income tested spouse's allowance to all 60 to 64 year olds, but rather to those in this age group who live alone. I cannot help but wonder why one's living arrangements should be added to the eligibility criteria for this program. Many people share living accommodation with relatives or friends for reasons other than financial. There are those who are not well enough to live alone and those who want the companionship and shared responsibility of living with another person.
It must be remembered that many 60 to 64 year olds live in their own homes; homes that they previously shared with their late spouses and their children. Now that their spouses have died and, in most cases the children have left home, these widowed persons are left alone to maintain, both financially and physically, the family homes.
I commend those persons who open up their homes to others. Not only do they have someone with whom to share the burdens, they are providing alternate housing arrangements to
Adjournment Debate
people who might otherwise find themselves living in a small apartment or, too often, a room.
I believe that the Government has demonstrated its sincere concern for elderly Canadians by extending the spouse's allowance program to 85,000 new beneficiaries. Given the enormous Financial deficit we inherited when the people of Canada asked us to take charge in September of 1984, it would have been justified had we said, "Sorry, we cannot help any new groups of needy Canadians. The money is just not available". However, that would have been irresponsible. We cannot and will not turn our backs on Canada's needy. We took what money we felt could reasonably be added to the spouse's allowance program and we extended the protection of this very important social program to 85,000 needy 60 to 64 year old widowed persons.
This does not make the spouse's allowance program perfect but the Government recognizes the need to make certain that Canada's needy, particularly those in this age group-spouses aged 60 to 64-do indeed live in dignity in this great country. By working together we can improve Canada's fiscal position which will in turn result in further resources for improving our social programs.
Until that time, I think we should be proud of the help that the spouse's allowance is providing, and let us not down play the importance that the allowance is now playing for an additional 85,000 low income Canadians.
The motion by the Hon. Member for Montreal-Sainte-Marie reads;
That, in the opinion of this House, the government should reconsider its intention to limit the eligibility of the spousal allowance to needy widows and widowers between the ages of 60 and 64 and that it should extend the program to all persons of this age group living alone and having the same means, without taking their marital status into account.
It strikes me that even the Hon. Member for Montreal-Sainte-Marie and his ghostly colleagues on the other side of the House would realize that not only is this an extremely expensive proposition, but that the Government has bitten the bullet as far as doing as much as possible for the spouse's allowance and making certain that 85,000 seniors between the age of 60 and 64 who had never been considered or been eligible for this kind of Government assistance would be included.
I am proud to be a Member of a Government that has taken the spouse's allowance program this far. I will work hard toward taking our social assistance programs for Canada's needy and elderly even further in the future.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the House under Standing Order 46 deemed to have been moved.
[Stage Direction]
September 30, 1985
Adjournment Debate

Alan Redway: Mr. Speaker, during the last election campaign there were many issues in my riding, but however, there were two primary issues. First was the economy and jobs, and the second was the whole issue surrounding the question of capital punishment.
In my view capital punishment is really a descriptive term that characterizes a much broader issue. That broader issue is the whole question of the adequacy of the criminal justice system at the present time. There are many people in this country who are very concerned about the adequacy of our criminal justice system and feel that it is not working. From time to time we hear Hon. Members from the Opposition say that we have a marvellous system of criminal justice that is working fine and to which no changes are needed. However, that is not the impression of Canadian citizens. That is why I believe that the whole issue of capital punishment is so substantial and why there is a great effort to bring it back after being put aside for many years.
I believe that the issue is not really capital punishment but the criminal justice system as it relates to areas such as the sentencing by judges of those convicted of crimes, the parolling of people either immediately after their conviction or after they have served some time in prison, the whole question of mandatory release of those convicted of crimes as well as the whole question of the Young Offenders Act itself.
All of these issues are part of the question the Canadian public has about our criminal justice system. If we were able to solve some of the issues that are bound up in those questions, the issues relating to sentencing, parole, mandatory release and to the Young Offenders Act, I do not think we would have the same pressure we now have from the public on this matter of a return to capital punishment.
The Government has moved in recent weeks, by the introduction of Bills C-67 and C-68, to addressing the question of mandatory release. Those two Bills have been debated in this House. They have had second reading and have been referred to a committee. The next step, in my view, toward dealing with this whole criminal justice issue is to get on with the amendments which are essentially needed to the Young Offenders Act.
A great many people in recent weeks have pointed out problems with the Young Offenders Act. An example of one of those problems arose in metropolitan Toronto a few months ago. A man who had allegedly committed armed robbery with a sawed- off shotgun was captured. While in prison waiting to be brought before the courts, he escaped custody. The individual was under the age of 18. Therefore, the police were unable to protect citizens of metropolitan Toronto by disclosing the name of the person, which would have been of help in capturing and returning him to custody. They were unable to do so because of provisions in the Young Offenders Act. That is one of many examples.
Another of the problems with the Young Offenders Act involves the whole question of criminal records and how they should be dealt with. There is also the question of young offenders under the age of 12 and how they should be dealt with.
On September 23, I raised a question in the House concerning the Young Offenders Act. I asked when amendments to the Young Offenders Act to correct all of the problems would come forward. The Minister at that time indicated he was still reviewing the matter. It seems to me the time has passed for reviewing the matter. Police departments across the country have pointed out and have identified specific problems with this Act in meetings of chiefs of police and in meetings with deputy attorneys general. Recently these problems have been pointed out in meetings of provincial attorneys general. The Solicitor General of Canada (Mr. Beatty) has met with them and has heard submissions. The time has now come for action.
Can the Parliamentary Secretary tell us tonight whether the Government is now prepared at long last to introduce some amendments to the Young Offenders Act, which will set these things right and allow the police departments to protect the citizens of Canada properly.


Thomas Gordon Towers: Mr. Speaker, I am pleased to respond to the question posed by the Hon. Member for York East (Mr. Redway) to the Solicitor General (Mr. Beatty) with respect to amendments to the Young Offenders Act, to correct issues identified by the chiefs of police and the attorneys general. He has just now elaborated further upon these problems?
In June 1985, the Deputy Solicitor General met with deputies responsible for juvenile justice to discuss key areas of concern. On that occasion, the provincial and territorial Governments identified four areas of concern: first, the requirements for predisposition and detention; second, to review provisions to assist in the enforcement of dispositions ordered by the court; third, the limitations occasioned by the ban on publication of the name or identify of a young person, and fourth, the administrative burdens and complexities occasioned by the provisions for the maintenance and destruction of records.
Since that time federal and provincial officials have been carefully reviewing these proposals for change. The Solicitor General has also stated his desire to review all these concerns and to solicit broad input.
As the Hon. Member for York East is aware, the Young Offenders Act is, for all intents and purposes, a new piece of legislation which was proclaimed in force on April 2, 1984, with the uniform maximum age provisions only coming into effect on April 1, 1985. Clearly this Act is in its formative stages. This fact is certainly evident from a number of decisions presently before the courts. As the Solicitor General noted on September 23, when he responded to the Hon. Member's question, it would be premature and indeed improp-
September 30, 1985

er to comment on matters which are before the courts and may still be subject to appeal.
Independent of these issues, however, it may be helpful to highlight the principal areas of concern. From a public perspective, media commentary has centred around the belief that the Young Offenders Act is lenient in its treatment of young criminals. Consequently, media criticism has focused upon the exclusion of children under 12; the ban on publication of names and identities; the upper age limit of under 18; and the maximum penalties available under the statute, which are perceived to protect young people at the expense of the public. From a provincial perspective, the concerns appear to focus around administrative and procedural matters. In this regard, the Solicitor General is awaiting a report of the meeting of the provincial Attorneys General which took place in Regina on September 19 and September 20.
While the concerns of citizens for public safety cannot be minimized, it is evident that many of the criticisms and the demands for change which have been advanced are the result of a serious misconception about the nature and implications of the Young Offenders Act for the administration of juvenile justice. In short, it could be said at this moment that there is no unanimity of opinion as to the problems with the Young Offenders Act, and certainly as to their solutions.
However, I should like to assure the Hon. Member that the Solicitor General is aware of the concerns of the public and the provincial and territorial Governments and is prepared to respond fairly and effectively to those concerns. In so doing, the Minister recognizes the need for countering unfounded criticisms and unsubstantiated fears about the implications of the Act, so that efforts may be concentrated on those areas which clearly require change.


CULTURAL AFFAIRS-CANADA-UNITED STATES TALKS- GOVERNMENT POLICY. (B) TIME MAGAZINE-POSSIBLE RE-EMERGENCE OF CANADIAN EDITION
Ms. Lynn McDonald (Broadview-Greenwood):: Mr. Speaker, the question I raised in the House last week with the Prime Minister (Mr. Mulroney) concerned the very urgent question of cultural integrity. It is a very simple question. Do we want to have our cultural industries up for bargain in any free trade negotiations? Do we really want to build Canadian culture in the country and ensure that all aspects of it have an opportunity to flourish? Do we want to ensure that jobs are kept for Canadians? Do we want to ensure that there are more opportunities in publishing, music, dance, theatre and all other fields of artistic expression?
The Government's answer has been a little two-faced. When it comes to rhetoric, its Members are quite clear. They are on the side of Canadians and on the side of cultural integrity. I am raising the questions and want very straightforward answers because their practice does not fulfil their rhetoric.
The then Minister of Communications at a conference in Halifax, in reply to questions, suggested that cultural industries were linked to other industries which would be in free
Adjournment Debate
trade talks, so they will not be exempted as clearly as they should be in any discussion of free trade. The Government's policy in Investment Canada is clear enough, that there will be exemptions for cultural heritage and national integrity. However, when it comes down to specific cases, we see that the Government does not live up to its promise.
I have raised the case of Prentice-Hall in the House, and all we have seen is delay. There has been an extended period of investigation, and we do not have any assurances. There is the take-over by W.H. Smith of the Classic book chains, which is quite unacceptable to the Canadian cultural community. It promises to have up to 20 per cent Canadian shares in the near future, but that is hardly Canadian control. It is a matter of real concern.
The possibility of a revival of the so-called Canadian edition of Time is a very troubling one inded to the magazine publishing industry. People will recall that when the previous Canadian edition of Time, of which the Canadian content was absolutely minimal and quite laughable, after a very protracted struggle disappeared it meant that advertising dollars were available and went into other Canadian publications. Indeed we saw a flourishing in the Canadian magazine publishing business. Smaller magazines increased their circulation. This was the time when Maclean's went weekly, and it has been an important news magazine for Canada.
We are very concerned that any revival of the so-called Canadian edition would not be truly Canadian in terms of its content and yet would suck off the advertising dollars that are now being spread throughout a growing and quite vital magazine publishing industry right now.
It is troubling also when we get rumours in the press of the possibility of the Prime Minister appearing at a Time sponsored event-perhaps later this fall, perhaps in Chicago, perhaps in November, the rumours are not terribly specific-that would name him on behalf of Time magazine statesman of the year.
Well, Mr. Speaker, one country's statesmen may be another country's sellout and we have to be very concerned about this kind of flattery that has been used by Time magazine in the past. We think of a former Prime Minister, Mr. John Diefen-baker, who was courted actively by Time magazine, flattered and indeed got a great deal of circulation and a great deal of press. We are very troubled to think that a Prime Minister might succumb to the gentle persuasion of a large and important mass media magazine.
The threat of the Time magazine revival is a very real one in the Canadian cultural community and I want the Government to be very clear that the arts community does not want more rhetoric. We do not want these statements of good book publishing policy which then get reversed in practice in Investment Canada and in other decisions that come up. We want the Government to be consistent and to accept the concerns of the arts community and indeed of all Canadians to build Canadian culture, and to make it strong. The talent is there

September 30, 1985
Adjournment Debate
and we want them to have the opportunity. They can only have that by having good policies that are realized in practice.


Geoffrey Douglas Scott: Thank you, Mr. Speaker. It is with great pleasure that I respond on behalf of the Acting Minister of Communications to the concerns raised by my friend, the Hon. Member for Broadview-Greenwood (Ms. McDonald) on the subject of Canadian cultural policy and the possible re-emergence of another Canadian edition of Time magazine.
These matters are of great interest to all Members of this House. It is very timely that the Hon. Member should bring this forth at this adjournment debate on this particular day when she will know that earlier today in Question Period the Secretary of State for External Affairs (Mr. Clark) has reiterated the very clear and unequivocal statement made by the Prime Minister of Canada (Mr. Mulroney) that Canada's culture is not an issue in any forthcoming talks with the United States relating to enhanced trade.
The former Minister of Communications, the Hon. Marcel Masse issued in his release at the close of the meeting of the federal-provincial Ministers responsible for culture in Halifax this statement:
Any trade negotiations we may enter into with any country must and will take into account the fundamental principle that it is culture that guarantees the expression of the distinctive character and identity of a people.
I stand by every word in that news release. The Hon. Member may put that down to rhetoric but not when it is stated in as clear and definite terms by the former Minister of Communications, the Secretary of State for External Affairs and the Prime Minister of Canada. I shall give the hon. lady my assurance that I share her concerns. I am making my views known to the people responsible as we head into those very delicate negotiations.
With respect to the question of Time magazine, 25 years ago the Royal Commission on Publications recommended that Canadian publications should have better access to the advertising dollars spent by Canadian companies in Canada. In 1965, the Government amended the Income Tax Act to stop Canadian advertisers from buying ads for the Canadian market in foreign publications.
Shortly after the introduction of Bill C-58, Time Inc. decided to stop publishing its Canadian edition. This amendment of the Act meant for Time Inc. a loss in advertising revenues. Canadian advertisers could no longer deduct their advertising expenses in Time Inc. from their revenues for income tax purposes.
The return of a Canadian edition of Time involves a transaction that would transfer 75 per cent of Time Canada's shares to Comae Publications, a large Canadian publisher of controlled circulation publications, and the transfer of 25 per cent of Comae's shares to Time Inc. of New York.
I am informed that while there have been some informal suggestions made by Time that it might want to start up a Canadian edition, they are strictly informal. Time knows what it is up against. We still concur with the philosophy behind the law. We believe that the Canadian newspaper and periodical industries must evolve in a favourable economic context which will consequently guarantee the largest possible dissemination of our Canadian cultural values.


Mr. Deputy Speaker:: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 11 a.m., pursuant to Standing Order 3(1).


[Stage Direction]
The House adjourned at 7.16 p.m.
[Stage Direction]
Tuesday, October 1, 1985