1985-05-27

[Stage Direction]
The House resumed from Friday, May 24, consideration of the motion of Mr. Wilson (Etobicoke Centre) that this House approves in general the budgetary policy of the Government, and on the amendment of Mr. Johnston (Saint-Henri-West-mount), p. 5043, and on the amendment to the amendment of Mr. Riis (Kamloops-Shuswap), p. 5047.
Mr. Speaker:: Is the House ready for the question? The Hon. Member for Ottawa Centre?


Mr. Cassidy:: Mr. Speaker, I am ready for my speech, not for questions.


Mr. Speaker:: I was informed it was time to resume debate, but the Hon. Member is not in the House. Debate. The Hon. Member for Ottawa Centre (Mr. Cassidy).


Michael Morris Cassidy: Mr. Speaker, there are one or two things to welcome in this Budget. As you know from the other day, I had proposed that the Government look favourably on the plight of home brewers who have been forced to act illegally for many years. This has been addressed in the Budget, but it is unfortunate that it is one of the very few things that was addressed in the Budget that affects ordinary Canadians. I want to speak about the impact of this Budget on ordinary Canadians, the impact of the Budget on people in the Province of Quebec, and about the way that the Budget is going to affect people in my riding of Ottawa Centre and people living in the National Capital Region.
Perhaps I can put on the record what the impact of the Budget will be on a family earning $30,000 or $40,000 a year, a middle-income family which has been trying to get by and finding it very difficult with the present cost of food, housing and the other essentials that it needs in order to survive. At the time of the November statement, the new Government effectively increased the tax burden on that average family by about some $500 per annum by incorporating the sales tax
increase which it had previously resisted in opposition when it had been proposed by the Liberal Government, and by bringing in other tax measures which had that effect.
It has done it again. The increase in the taxes on the average family in the new Budget will be of the order of $500 per family; $100 through the elimination of the federal tax reduction, $115 in loss to the average family through the modification of indexing; $22.50 through the cut in family allowance payments; some $75 of increase if that family smokes and drinks the occasional bottle of beer or wine; the sales tax increase will cost the family $150; and the gas tax, as a very conservative estimate, will cost $ 1 a week on a tank of gas, or another $50 a year. That adds up to $512.50 for the average family.
The promise of the Budget was that it would be tough but fair. It certainly is tough on that family who now has to pay $1,000 a year more in taxes than it had to pay just a year ago, thanks to the new Conservative Government. The toughness is reflected in the fact that by 1990, the Government expects that personal income taxes will rise by $4.1 billion and that sales and excise taxes will rise by another $2.6 billion. The fairness will be fair only to a very limited proportion of the tax-paying public.
Corporation taxes are expected to fall by $2.2 billion by 1990 according to budget figures. In other words, it is more taxes on individuals and less taxes on corporations. That unfairness is particularly evident if you look at what the Government has done with the $500,000 exemption for the capital gains tax. That will cost $300 million in 1985. It will result in $600 million in lost revenue in 1986. The Government does not estimate what it will cost in subsequent years, but since the limit on capital gains that will be tax free goes up year by year, one has to assume that we will be talking about $1 billion or more per annum, which is being given not to every Joe and Jane across the country, but is being given to that small proportion of the tax-paying public who have the disposable income and can benefit on substantial amounts of capital gains.
If the Government had said that it wanted to encourage small business and encourage people to launch themselves into equity investment by making a certain small proportion of capital gains tax free, I would not have been happy about it, but I could have at least seen the point. However, huge profits on Miami condominiums, the New York art market and the London Stock Exchange will all be eligible for this treatment. It does not make a lot of sense, particularly when you look at who is paying.
Who is paying? One of the major groups that is paying is old age pensioners. They will give up the equivalent of $225

May 27, 1985
The Budget-Mr. Cassidy
million in pension next year due to the de-indexing of the Old Age Security. That money is not being applied, as the Minister of Finance (Mr. Wilson) said over the weekend, to reduce the deficit. It is being applied to give a great, big fiscal carrot to the top 5 or 10 per cent of taxpayers who will get this capital gains tax elimination beginning next year. That is not fair in any kind of taxation system that I can understand.
During the election campaign, Progressive Conservative Members promised a minimum tax at the urging of NDP Members. Now they have deferred that minimum tax. At the same time, they have opened up the most glaring loophole yet for upper-income earners in the form of the $500,000 exemption.
Back in the 1960s when the Carter report came out, the concept which I thought was reasonable was that a buck is a buck is a buck. Certainly when one spends a dollar earned through capital gains, it has the same spending power as a dollar earned through an employment salary or income. However, that is not reflected in the Budget. After the Liberals eroded the tax base in the corporate sector, the Progressive Conservatives now intend to erode the tax base in the personal tax sector by taking tax burdens away from people who are upper-income earners.

Mr. Speaker, I would like to talk about the situation in the Province of Quebec, in connection with the Budget brought down by the Minister of Finance (Mr. Wilson). This spring and during the winter, the New Democratic Party's Task Force on Unemployment travelled through Quebec. We went to Quebec City, Montreal, Chicoutimi and the Outaouais to meet people, union members and workers, community groups and municipalities, to talk about the priorities they were seeking in the Budget.
The situation in Quebec is not very good. The unemployment rate is still over 12 per cent, Mr. Speaker. There has been a slight drop since April 1984, but nevertheless, we still have a situation where one out of eight workers is unemployed. Among young people, the unemployment rate in many parts of Quebec is over 20 per cent. In Chicoutimi, for instance, it is as high as 26 per cent. Time and time again, Quebecers told us they were looking for positive action to boost the economy in their province, and they told us about some very important community projects they were ready to start with the support of their government, meaning not just the Government of Quebec but also the Government of Canada. Now I am well aware that Mr. Duhaime, the Quebec Minister of Finance, "welcomed" Mr. Wilson's Budget. These are two birds of a feather, Mr. Speaker. We have in Quebec a government that we could now call a Conservative PQ government, because they have the same views on budget priorities. However, Mr. Speaker, these priorities do not provide anything for the average Quebecer.
In Chicoutimi people are wondering what the Budget is going to do for them at a time when the forestry industry is not doing enough reforestation and the region's main industrial base, the aluminum industry, cannot provide new jobs. It is a desperate situation, but at the same time, we see people who are looking for projects and for the necessary funding and resources to help the economy in their own region get back into gear.
Mr. Speaker, what is the Budget doing for farmers in Quebec? The answer is: nothing! What is the Government doing for disadvantaged regions? The answer is: nothing! What has the Government done for farmers and the agricultural industry? There again, the answer is: nothing! I remember how during the election campaign, the Conservatives, or rather the Hon. Member for Joliette (Mr. La Salle), wrote a symbolic cheque for pork producers, by giving them access to the Federal Stabilization Fund. Unfortunately, this promise was not kept. During the election campaign, the Conservatives promised an enormous sum of money to finance farm mortgages at reasonable rates: another promise that was not kept.
Mr. Speaker, it seems to me this new Government is not listening, because it was very obvious on September 4 that Quebecers voted for a change of government at the federal level. They were fed to the teeth with the Liberals. They wanted to get rid of the Liberal Government and bring about real change that would benefit everyone in Quebec, and not just the businessmen on St. James Street: the Paul DesMarais, the Westmount bankers and the rich in Quebec generally. But what are this Government's priorities regarding Quebec? Of course, the deficit is their priority. I welcome their gesture to the solidarity fund, and I say it is a step in the right direction. But aside from that, they have done nothing that is going to have any effect on Quebec's disadvantaged regions.
Quebec is not just St. James. It is not just the Montreal area. Quebec is the Gaspe, Chicoutimi, Lac-Saint-Jean, the Abitibi area and the Eastern Townships, Mr. Speaker. Quebec is the Saint-Maurice area and Trois-Rivieres, and all these regions are suffering from a lack of jobs. Their basic industries are threatened, and nothing is being done by the Federal Government to help these industries and to help save the province's economic base.
Under the former PQ Government, I mean the Government that was in power before 1985, real efforts had been made to promote consultation between Quebec's various regions and its major industries. There were economic summits in each region, attended by employers, industries, municipalities, community groups, unions and workers. Everyone was involved in looking for ways to rebuild and boost their industries and regions. And in each case, Mr. Speaker, it was clear that federal assistance was needed, because the Federal Govern-
May 27, 1985

ment was just as involved in Quebec's economy as the Quebec Government.
Now, in order to implement the consultation policy proposed at these economic summits, it will just not do to maintain a policy of ignoring, of patently ignoring Quebec's needs. The Federal Government's participation is necessary to help specific industries and specific regions to get back on track. That is what is lacking in this Budget, Mr. Speaker. One wonders, for instance, how the capital gains exemption is going to help Quebec's shipyards, where the present situation is that 60 per cent of shipyard workers are out of work. The problem is that Davie Shipyards in Lauzon has just laid off half of its workforce, with the remaining half to be laid off this fall. The Government, however, continues to ignore the promise it made last August to give $75 million to the shipbuilding industry. In fact, it has had to withdraw the shipyard subsidy program, effective the end of June 1985.
That is the Government's policy on one of Quebec's major industries. As far as forestry is concerned, Mr. Speaker, no promises were made. And the same applies to the manufacturing industry in Quebec. Even in the Montreal area, the citizens' committee noted that the future of Petromont was not dealt with in the Budget; that today, with the reduction of subsidies to VIA Rail, the future of VIA Rail's maintenance centre is again in doubt; that privatization of Crown corporations as suggested in the budget is specially threatening to Montrealers, because many corporations are located in Montreal. The committee also noted that there was no reference to strategic proposals for Montreal's future as a transport and communication centre or international banking centre.
Mr. Speaker, we must have participation. We do not, however, need consultations between Mr. Duhaime and Mr. Wilson on measures that will compromise the future of the Province of Quebec. We must work together to provide a better economic base for Quebec, and that is what the New Democratic Party proposed through its employment task force. We must work together with all groups in the Province of Quebec, not just those that supported the Progressive Conservative Government's election campaign.

I would like to comment briefly on a number of areas in the Budget which have troubled me. However, there are one or two areas in the Budget which might have some promise.
In the area of pensions, the Government is promising two-year vesting, better provisions for women, and increasing portability. Those are good measures, except for the fact that they will not come into effect until after 1987 and, therefore, there will be no workable benefit until 1989 and no pension entitlement earned prior to 1987 will count. That is inadequate, Mr. Speaker, and makes this forward-looking promise effectively worthless as far as most Canadians are concerned.
The Budget-Mr. Cassidy
In the area of research and development, the Government makes bold promises, but the Minister of Finance ignored in his speech the fact that just last week the Minister of State for Science and Technology (Mr. Siddon) effectively repudiated the Government's campaign promise to double Canada's percentage of research and development spending to 2.5 per cent by 1990.
While the measures in the Budget may be welcome to small companies, they will come nowhere near to undoing the damage that has been done by the Government's destruction of federal public research and development efforts, its undermining of the National Research Council, and the fact that the Government has not been prepared to bring forward a plan to see how we increase the 1.3 per cent of spending on research and development to the proposed 2.5 per cent.
I would like to talk briefly about a situation right here in Ottawa in my home riding. Ottawa is a bit of a microcosm of the country in how it is affected by the Budget. We are fortunate that our unemployment rate is down around 8.5 per cent. That is better than that in the country as a whole. But with the cut in 15,000 government jobs over the course of the next six years, there will be no job opportunities for the young people coming out of high school, community colleges and universities here in Ottawa. I repeat, there will be no job opportunities because of the loss of about 15,000 potential jobs which would have been created in Ottawa over the course of the next six years. That is almost equal to the total number of young men and women coming out of grade 12 in schools in Ottawa over the course of the next five or six years. There will be an awful lot of job opportunities which will dry up.
There may be some increased employment in the high-tech sector. I hope that that is in fact the case. Nonetheless, we have a lot of running to do in Ottawa just to catch up with the situation which was created by the government's cut-backs. In addition to that, one has to be aware of the fact that there is a very real danger that good jobs in Government will be replaced by part-time help, minimum wage and contracted out jobs because of the Government's policy of putting jobs into the private sector. There is a real prospect that essential services to Canadians will be no longer available by the cut-back of 15,000 jobs. I bring to the attention of the Government the fact that already in the Canada Employment and Immigration service, there have been cut-backs at a time when overtime has been used as a matter of course week after week and month after month by CEIC employees who are trying to provide services to unemployed Canadians. Even now they cannot keep up with the demands which are being made upon them.
As far as the young people in Ottawa are concerned, Mr. Speaker, the unemployment rate is running around 14 per cent or 15 per cent, and I note that the student employment centres at Carleton Unversity and other universities will be closed. The Government is effectively making life extremely difficult for those young people who really deserve more from Government. They deserve more from us in Parliament than they are getting in this particular Budget.

May 27, 1985
The Budget-Mr. Cassidy
I would also like to speak on behalf of the superannuated federal government employees and plead with the Government not to assume that it can simply, with the stroke of a pen, take away the indexing for which these pensioners have been paying in their pension contributions these past many years. The Budget of the Finance Minister seems to take it as assumed that it is OK to take away that indexing. I want to tell the Minister of Finance that there are a lot of superannuated federal public servants who are extremely concerned. People have called me in the last couple of days almost crying over the telephone because they don't know how they can survive if the indexing which enables them to cope with the cost of living is in fact not going to be maintained. The Budget ignores the fact that negotiations with the Public Service Alliance and other unions have not so far been successful. The Public Service employees have earned that indexing. If something else is put in its place, those employees have to be guaranteed that they are still being fairly dealt with. That is not being done right now, Mr. Speaker, and that worries me very much. I will continue, as one representative of the people of the Ottawa area, to make sure that they are not unfairly dealt with in this Budget.
I would like to ask the Government to assure the House that there will be no lay-offs of Public Service employees as a consequence of this Budget, because that would be a particularly cruel, unpleasant and undesirable result of the Budget.
I would like to conclude by saying that we in the New Democratic Party saw the prospect for a positive Budget rather than just eight months of rumbling before a mouse emerged from the Government. We foresaw a Budget which would be fair to ordinary Canadians rather than only to people who have the prospect of earning $.5 million in capital gains tax free. We thought that we could set unemployment reduction targets as they did in the Province of Manitoba to reduce unemployment by 2 per cent or 2.5 per cent this year. That would have been fair to ordinary Canadians.
We saw the prospect for investing in our future in areas such as the upgrading of resources, community development, technological development, housing, and municipal investments. We saw the prospect of bringing ordinary Canadians on board in terms of research and development by ensuring that they would be partners in technological change rather than victims of new technology. We saw the prospect of reforming the tax system to sweep away that $15 billion or $20 billion of tax concessions to corporations which contribute so much to the deficit and are creating such a difficult situation for Canadians.
Rather than that, Mr. Speaker, those concessions are essentially untouched and the surtax which has been put on upper income Canadians and corporations is for one year only, whereas the benefits to upper income Canadians and large corporations will go on in perpetuity. Mr. Speaker, this Budget is reminiscent of the Budgets of Ronald Reagan in the United
States. It is not quite as vicious or brutal on the surface, but the philosophy is the same. We have seen in the United States, in British Columbia, and in Great Britain that the approach of putting money in the pockets of the rich in hopes that it trickles down to the poor is not an effective policy for creating jobs for Canadians. That is why we have grave reservations about this Budget.


Mr. Lewis:: Mr. Speaker, I would like to correct the impression of the Hon. Member that Ottawa is a microcosm of the country. He should realize that in the rest of Canada Ottawa is viewed as 20 square miles surrounded by reality.


Some Hon. Members:: Oh, oh!


Douglas Grinslade Lewis: The Hon. Member knows that the Progressive Conservatives have led the way in demanding a minimum tax on the rich. We promised that minimum tax during the election and we brought it in in the Budget.


Mr. Keeper:: Your nose is getting longer.


Douglas Grinslade Lewis: I am going to give the Hon. Member a chance. Let him just wait a moment.
We announced a minimum tax in the Budget effective January 1, 1986. We brought forward a discussion paper laying out three methods. As a chartered accountant I am tempted to ask the Hon. Member which method he prefers, but that would be unfair because at this point I, as a chartered accountant, am not exactly sure which method will do what we want it to do in terms of taxing the rich. That is not my question. We have provided for consultation with the people. We have provided for examination by a parliamentary committee. We have said that it will start on January 1. I suggest to the Hon. Member that that process is fair to the taxpayer and also to the tax collector. In my opinion, it would create undue chaos to introduce that type of tax in the middle of a fiscal year. I think the Hon. Member would agree that that type of tax must be instituted at the start of a taxation year.
Why are we not getting support from the NDP after we brought in this minimum tax? This lack of minimum tax has been nothing but a Liberal ploy to benefit their friends in big business. We brought it in. Why can we not get some support from the NDP for the process and the principle both of which are important? Will we have the support of the NDP when we go to committee in order to get the best result rather than the usual moaning and groaning?


Michael Morris Cassidy: Mr. Speaker, if the Government had brought in a minimum tax in this Budget, one which was tough and effective, he would have had the support of the NDP.


Some Hon. Members:: Oh, oh!


Michael Morris Cassidy: By deferring in order to have consultation, the Government is going to give every advantage possible to the former colleagues of the Minister of Finance in Dominion Securities and to the financial interests in Vancouver, Toronto, and Montreal to find ways of cutting down the minimum tax
May 27, 1985

to the point where it will be a piece of cosmetic window-dressing and nothing else.
Why did the Government not defer the de-indexing of old age pensions for a year until it has had a chance to consult with old age pensioners to discover whether they would be in favour of that? Why did the Government not defer the increase in the sales tax until it has had a chance to consult with ordinary Canadians to discover whether they were prepared to pay and thought it was a fair tax, particularly when the revenue is required mostly to pay for the concession of capital gains? The Government wasted no time putting the capital gains tax exemption into effect for the 1985 tax year in order to give something to the rich. However, in attempting to tax people who are very rich, the Government gave them every opportunity to resist it by a process of added consultation.
If the Government introduces a tough and effective minimum tax and makes it retroactive to 1985, it will have our support. However, I do not believe that is its intention.
I would also point out that the New Democrats have been talking about a fair tax system year after year. When the Hon. Member was in opposition, did he talk about a minimum tax? It was only when his leader was challenged by our leader in the television debate during the election campaign that the Conservatives finally committed themselves to some form of minimum tax.


Mr. Blais:: Mr. Speaker, I listened to the remarks of the Hon. Member for Ottawa Centre-where I reside three and a half days a week-and when I heard him talk about a microcosm I thought he ought to get out of it now and then, as suggested earlier by my colleague.
When New Democratic Party Members claim that they crisscrossed the country to consult Canadians-


An Hon. Member:: They never came around my place.


Pierre Blais: Nor did they ever come anywhere near my place either because, had they done so and travelled throughout Quebec they would have found out that, barely a few weeks ago, the Minister of State (Forestry) (Mr. Merrithew) signed a $300 million agreement with the Province of Quebec. Three Ministers were there-two from Quebec, one from Ottawa- along with 15-odd Members representing various Quebec regions to witness this agreement to spur the forest industry which the previous Government ignored for years. Here they are now saying that we have not done anything for forestry. You could at least check your notes and those of your colleagues who were involved in the consultation process, if indeed they were.
The Hon. Member talked about shipyards, and I wondered whether we both read the same newspapers. Everybody knows that an agreement was signed recently to put Lauzon's Davie
The Budget-Mr. Cassidy
shipyards back in business at a time when the shipbuilding industry is in the doldrums not only in Quebec and the rest of Canada, but throughout the world as well. Of course, Marine Industries on the shore of the Richelieu River are in a predicament as a result of the on-going strike, and all parties involved are trying to arrive at a settlement which will serve the interests of the unions and those of the Quebec Government which happens to be an active partner. The federal Government has nothing to do with that. We have contracts and we are living up to our commitments with the shipbuilding industry as a whole.
Mr. Speaker, I wish the Hon. Member for Ottawa Centre (Mr. Cassidy) would tell us just what he thinks of those special measures taken even before the Budget was brought down. Consultations had been going on for years, but to no avail because the federal Government did not do anything. Well, in six months, we did consult, we sat down with the Minister and hammered out an agreement. Why should you say that the forest industry was left out in the Budget?


Michael Morris Cassidy: Mr. Speaker, first I note that my friend still talks as though Ottawa is not representative of the rest of the country, as if it were privileged territory. I can assure him that a lot of people who live here in Ottawa know something about substandard housing, are affected by unemployment, earn incomes below the national average and have to cope with the same problems as those experienced by his constituents.
I do not particularly fancy the remarks of his colleague the Parliamentary Secretary who has just suggested the new Government should ignore Ottawa because the city has been so generously treated in the past. Mr. Speaker, I too have constituents who must live with their problems. If we were to look at the situation of the shipbuilding industry, among others, I can tell my colleague that 60 per cent of the shipyards workers are idle. But in spite of that and the Prime Minister's promises in an August 26 speech before the Toronto Empire Club, as I recall, the Government has scrapped its $75 million assistance program for shipbuilders. The Lauzon shipyards were not spared despite the fact that, after the Government announcement, they laid off half their work force and will dismiss the other half this fall because there are no contracts. How can the Government remain so indifferent to the plight of that industry? I simply cannot understand.
Now, Mr. Speaker, concerning agriculture, the Government-


Pierre Blais: I asked you a question about forestry.


Michael Morris Cassidy: The Hon. Member does not say anything about the cheque of the Hon. Member for Joliette (Mr. La Salle), for example, or about the Government's unkept promise to set up a $100 million agricultural mortgage financing program.

May 27, 1985
The Budget-Mr. J. Epp
With respect to forestry, I was in touch with people in the Chicoutimi-Lac-Saint-Jean region and I know they do not expect their problems to be solved simply because the Government has just made a few announcements.
[English)


Mr. Deputy Speaker:: Resuming debate.


Hon. Jake Epp (Minister of National Health and Welfare):: Mr. Speaker, this opportunity to participate in the budget debate allows me to put on the record the views of my constituents as well as the considerations from a social policy point of view that make this Budget worthy of support. I am pleased to have this opportunity.
No Member of the House-certainly no Member of the Government-takes any pleasure in the fact that there are those who say that the Budget is tough. However, we do take a measure of pride in the fact that we have attempted to be fair in the manner in which the Budget addresses Canada's economic crisis. My colleague, the Minister of Finance (Mr. Wilson), has done an admirable job of seeking out a national consensus for the direction of the Budget by taking often divergent views and opinions and bringing about a fair and balanced Budget.
I said that Canada faced an economic crisis. I believe very strongly that such has been the case and that we will be on such a crisis footing for some time. This is a crisis not only in the economy but, as a result, in all aspects of our social and national life.
Let me illustrate by reminding the House that during the last years of aggravated conflict between Ottawa and the provinces, many of us argued that the failure of the federal Government to show national economic leadership increased the strain on Confederation. The weak state of the economy led to many of the inter-regional and federal-provincial conflicts that we witnessed during those years.
In the same way, failure to recognize an economic crisis as a crisis can only put in jeopardy the social security system and the social infrastructure that, as parliamentarians and Canadians, we cherish so much.
This Government recognized the gravity of the economic situation and we have acted. More to the point, the Government recognized what would be the inevitable consequences of our economic problems and we have acted now.
If Members of the House are honest with themselves, they will know that tough choices had to be made. We know, having been in the Opposition, how very easy it is to sit in the Opposition and decry hard choices, claiming that the pain was somehow avoidable. I can understand that posture, and in fact I hear some Members today using that very same argument.
However, being the Government is another story. To do nothing about the situation that was described to the House by the Minister of Finance last Thursday would be irresponsible and would have earned the scorn of the Canadian public. First and foremost, that situation to which I refer is the mounting public debt, flowing from a national deficit that has skyrocketed in the last two decades. Without action, the deficit this year would have been over $38 billion and next year over $40 billion. The debt is not a myth. Nor is the debt a fictitious monster or, for that matter, as some in the Opposition might want us to believe, is it a benign giant. The debt is a burden. It is a burden which is real, a burden which is heavy, and a burden which will affect decisions made both in the House and by Canadians as individuals. The debt will not go away by wishing it to do so. Without determination to arrest the debt, sooner or later it would lead to the paralysis of the Government of Canada. Being the Minister responsible for the Department which consumes roughly a quarter of the federal budget, I see first-hand on a day by day basis the costs of our social infrastructure, and I am inclined to believe that the paralysis would come sooner rather than later.
Let me put it into an even clearer perspective, from the point of view of the Department. At the present time the cost of the debt to Canadians is approximately $22 billion on an annual basis. The total cost of health care to the provinces and the federal Government is approximately $22 billion. Thus today we are spending as much to service the debt as Canadians across the country spend for health care. Anyone with a bit of understanding, regardless of his or her partisanship, will have to come to the quick conclusion that that loss of money, money which does not buy a new service, brings into jeopardy the very services we want to maintain. Or, to put it another way, the $22 billion of debt is roughly equal to federal government, federal taxpayer, expenditures for the federal share of health care costs and pensions combined. We as Canadians spend about the same amount on the debt today as we do on the federal share of health care and pensions.
If we could reduce the cost of that debt by 25 per cent, we as the federal Government, as federal taxpayers, would have 50 per cent more money for health care, or we would have 50 per cent more money than we are spending now on pensions, or a combination thereof, obviously. When people talk to me about the Budget not having a social policy component, I say they are wrong. The fact is that to retain social policy we have to create wealth and, if we do not have wealth or if we do not create wealth, we cannot have a sustained social policy. If Hon. Members opposite do not believe that, all they have to do is to take a look at some of their neighbours in the international community to make that point.
Being a Member from the Province of Manitoba, a province which is dependent to some degree on transfer payments, I realize that it is also important from that perspective to understand that debt costs are losses to those provinces and citizens as well.
I should like to make another argument. There are those who say that we should raise the deficit and create employment. I ask them a simple question. We now have a very high deficit. I have shown the cost of the debt. If that is the case, and if that system works, why do we still have 1.4 million Canadians unemployed? Surely, as Hon. Members return to

May 27, 1985
their ridings, as I did this weekend-and I had a number of meetings with senior citizens, business people, farmers-


Mr. Boudria:: What did they think?


Arthur Jacob (Jake) Epp: I will tell the Hon. Member, because he loves to speak from the seat of his pants. What they were saying-and they were understanding it-was that we could not sustain those kinds of debt charges and still maintain the services they wanted to see maintained. Another point they made was that they were pleased as farmers and as small business people that pools of capital which they had earned would stay in their hands as a result of the capital gains changes. What will they do with that capital? They will invest it in their farms and on Main Street, Canada.
What I am saying to Hon. Members opposite, to everyone, is that when they look at job creation and at social policy, they should start relying on their neighbours and their vision of their communities. They should start relying on the ability of their friends and neighbours to invest in their communities so that they can create infrastructure and jobs for their children. They should start relying on their friends, not always think that Government will do better for communities than their friends and neighbours can do.
For too long, I believe, economic policy and social policy have been treated in isolation. I believe the Canadian public knows more than we in the House give them credit for knowing. Action was needed to restore fiscal integrity to our national affairs. Canadians are not prepared to see a greater and greater percentage of our finances devoted to carrying interest charges on the national debt when our social services and hospitals are choked for funds, yet that is exactly what was threatened. The public will not tolerate the continued reality of waste and efficiency in public expenditure at the expense of flexibility to meet new social needs or to seize new economic opportunities. In the vital challenge of creating new jobs, Canadians increasingly want priority placed on effective and permanent solutions, not short-term band-aids. These national objectives-security of our social programs, flexibility to meet new needs, and lasting solutions to the unemployment crisis-are addressed by the Budget.
The Budget involves certain adjustments-adjustments to promote private sector job creation, adjustments to reform employer-sponsored pension plans to assist Canadians in their retirement income planning, and adjustments to a new competitive economic environment in which the realities of markets make it easier to help workers adapt to new employment than to subsidize a failed industry. If we had not made those hard choices now, we would have had to make even harder choices down the road. In the face of that reality it would have been irresponsible-and I suggest to the House heartless-to put off the inevitable.
It would be inaccurate in the extreme to portray this Budget, as those in the Opposition have tried to do, as a bad news Budget. About 185,000 disabled persons, for example, will benefit from a new definition of disability for the purposes of the Income Tax Act. Many Canadians suffering from
The Budget-Mr. J. Epp
disabling conditions, who are presently neither blind nor confined to a bed or to a wheelchair, do not have access to this deduction from taxable income. The new definition to be administered by experts in the Department will improve the situation for these Canadians. In this action the Government has responded to the Special Parliamentary Committee on the Disabled and the Handicapped by promoting the role of independent living.
Other speakers in this debate may well refer to the assistance to artists contained in the Budget. Tax changes affecting artists recognize their unique professional circumstances and seek to make it easier to donate works of art to public charities and to write off the costs of their inventories.
The voluntary community which forms part of the experience of every Member of the House will benefit from two changes to the treatment of their tax affairs. It will now be easier to donate gifts of intangible capital property to charities, and the Budget clarified the right of charitable organizations to engage in non-partisan political activity.
Members also know that while preserving the principle of universality, as we said we would do, the structure of the child benefits system has been made more progressive. The new structure provides a better basis for changes that any future Parliament may wish to make in response to the evolving needs and circumstances.
More than with any of these advances in social policy contained in the Budget, I am pleased by the reforms to the pension system announced by my colleague, the Minister of Finance. I take this opportunity to stress again that the Government is not closing the doors on pension reform with these announced changes to the Pension Benefits Standards Act. Rather, reforms to the Canada Pension Plan, including the proposal of a home-makers' pension, remain the firm commitment of the Government. The Minister of Finance has already had some discussions with the provinces in this area. We will each be pursuing this discussion with our provincial colleagues in the months to come.
In the meantime, these improvements to minimum pension standards for private pension plans under federal jurisdiction should be given recognition for what they are, that is, major improvements in the rules for vesting, portability and survival benefits. We expect these improvements to be of major benefit to Canadian women who in the past have not been able to participate in full numbers in these plans.
Access to pension plans for part-time workers will be provided. Generally more workers will have the opportunity to join private pension plans, and their participation in the management of their pension funds will be recognized as a right. Equal pensions for men and women retiring under identical circumstances will also be provided. Greater flexibility for workers taking early retirement will now be possible. Vesting and portability changes, as well as improvements to survivor benefits, are among the changes that will be especially satisfactory to Canadian women. The equality of women is further

May 27, 1985
The Budget-Mr. J. Epp
recognized by the provision of splitting up pension benefits between spouses in the event of marriage breakdown.
These elements of pension reform are important not only because they improve equity and solidify the rights of workers now in pension plans, but also because they provide greater access among the workforce, especially women, to private pension plans. A great deal is left to be done in the reform of the Canada Pension Plan, but this Government believes that more Canadians will be able to contemplate a secure and rewarding retirement if they have planned previously in their working life for their retirement. These pensions reforms are a step in the direction of providing many more Canadians with the means to enjoy a secure old age with dignity.
We are acutely aware of the circumstances of older Canadians who are dependent to a greater degree on the public pension system. The decision not to modify indexation for the Guaranteed Income Supplement and veterans assistance was taken with this greater dependence in mind. I want to assure Canadians that the Government will be looking very carefully at the circumstances of these Canadians. We will monitor the adequacy of these payments and, as resources permit, they will be enriched.
This Budget asks Canadians to be realistic about the future. Everyone is asked to contribute to the restoration of sanity to our national finances. Tax increases have been contemplated as a last resort, and only because they were demanded in the circumstances in which the Government found itself. The Government has attempted, and I believe has been successful, to spread the burden of recovery as widely as possible. Business, especially the small business sector, is asked to play its part in the creation of thousands of new jobs. The stimulus given to our small businesses will enable them to grow and expand. I have no doubt that small business owners across the country, both in the commercial and in the agricultural field, will be equal to the challenge.
Governments are asked to play their part in the management of their affairs, to ensure efficiency and show leadership by example. Not least, Governments must work together, especially in the design and implementation of the new labour market strategy. The resources devoted to these training and employment programs will go farther than any previous program because of federal-provincial harmonization, local initiative and the use of the private sector as the driving force.
The Budget draws on the lessons of our history to chart a new course for the future. Canada was built on the vision and initiative of men and women who work not just for themselves, but for their children and for their communities. It would be nothing less than tragic to accept the situation of spiralling deficits that condemned our children to paying a debt they did not incur and ate away at the social infrastructure that is at the very heart of our community commitment.
Canadians elected a Government last September to show realism and compassion, blended together. No blend can be perfect. The value of this Budget is that it comes to grips with the reality of the situation and does so in a way that is fair. That is the best, the only guarantee of social security.
I say to Hon. Members that this Budget is a direct reflection of what Canadians asked us to do on September 4. I have been listening to Canadians over the last number of days since the Budget. They believe this is a response that is fair. I have been in the House for a few years. I know the immediate response to other Budgets. Other than the naysayers across the way, who already had their lines written before the Budget was even read, having already made up their mind, what is important is that Canadians wanted this direction. Canadians believe in the country. Canadians believe in their ability to invest. Canadians believe in the future. They know that future for them and for their children is best guaranteed when they have a Government that is respectful of the taxpayers' dollar and gives those Canadians the tax room and the ability to invest and develop that future. As that takes place, all of us will benefit.
Mir. Nunziata: Mr. Speaker, in his comments the Minister stated that the Budget represents advances in social policy. He referred to senior citizens and said that this will enable senior citizens to proceed through old age with dignity. He went on to say that the Budget is a direct response to what Canadians asked them to do on September 4.
Did the Minister tell Canadians, specifically senior citizens, during the election campaign that he intended to cut their pensions? Did he or his Party tell them during that election campaign that no longer would senior citizens of this country be protected against inflation? I say that the Conservative Party did not tell the Canadian people that.
I would further like to ask the Minister whom he consulted. Which senior citizens did he consult with before deciding to de-index or partially de-index the Old Age Security? Did he speak to Harold Ballard or the blue rinse set on Bay Street? He certainly did not speak to the senior citizens in York South-Weston.
Does the Minister agree with the Minister of Finance (Mr. Wilson), who is quoted in The Toronto Star yesterday as saying that the senior citizens of this country are prepared to sacrifice in order to reduce the deficit, or does he agree with me and the Liberal Party when we say that the senior citizens of this country have sacrificed long enough and hard enough over the years? They have sacrificed for the benefit of Canadians. They have worked long and hard. They have fought in world wars and have struggled to make Canada a better place in which to live.
Why is the Minister and his Government showing complete disregard for senior citizens and plunging a great many of them into poverty because of their insensitivity by de-indexing the Old Age Security? Does that indicate caring on behalf of the Government, or does it indicate an insensitivity toward the senior citizens of this country and a disrespect for everything they have worked for and fought for?
In conclusion, where is social justice? Where is fairness when you attack the very heart of this nation? You pierce the very heart of a nation when you attack the senior citizens.
May 27, 1985


Arthur Jacob (Jake) Epp: Mr. Speaker, I will try to address those questions, not necessarily in sequence because a number of them were repeated.
First, senior citizens have sacrificed. That is why the Hon. Member and I enjoy the standard of living that we now enjoy. However, no one understands debt better than senior citizens.


Mr. Nunziata:: Because they have their own.


Arthur Jacob (Jake) Epp: I listened to you. Perhaps you could give me the same courtesy.
Senior citizens understand better than anyone else that debt has to be repaid. They also understand that if debt becomes too large, the very cost of that debt reduces the flexibility and ability to have programs which are wanted. It reduces the ability to expand businesses or farms. It reduces the ability to own homes and educate children. The list is endless. Senior citizens understand that.
By the way, the Hon. Member should be careful when he begins to draw the kind of picture he is trying to draw. I can take him back to 1976 if he wants to talk about the record of the Liberal Government. I will leave it at that. I can talk to him about the six and five program which was implemented when inflation was running at 13 per cent. Governments of the past had to look at those circumstances.
I hope the Hon. Member understands what I am saying to senior citizens. It is that-


Don Boudria: Sacred trust.


Arthur Jacob (Jake) Epp: Yes, the sacred trust of universality has been maintained. Liberals knocked on doors campaign after campaign as did the NDP, saying, "Don't vote for the Conservative Party because it will remove pensions".


Don Boudria: And we were right.


Arthur Jacob (Jake) Epp: We have not done away with the pensions. Universality has been maintained. Full indexing has been maintained on the GIS. Full indexing has been maintained on the veterans' pension. Partial indexing has been maintained on the OAS.
Again, I do not think the Hon. Member was listening. If he had listened to my comments or to the Minister of Finance (Mr. Wilson) who said that we would monitor the situation closely-


Don Boudria: So we are monitoring.


Arthur Jacob (Jake) Epp: That is right. Do not waste all your breath because you might have to walk over your backside again. Be very careful about what you say.
I am saying this about senior citizens because I have talked to them. Of course senior citizens would like to see an economy in which pensions could be expanded. However, they also know that the best way to have those pensions expanded is to
The Budget-Mr. J. Epp
get the deficit under control and to create wealth. Hon. Members opposite have the idea that wealth has no relationship to the ability to provide social programs.
Yes, consultation took place. Yes, senior citizens understand that. Senior citizens do not want the debt to become so large and the cost of servicing the debt so great that their children and grandchildren will be forced to pay such a large portion of their incomes that they will not have the potential to buy their own homes and give educational opportunities to their children. All senior citizens understand that in order to have that kind of security, we must get our economic house in order.
The people who should stand condemned are Hon. Members opposite. Hon. Members opposite stand condemned because in 1968, the accumulated national debt was $17 billion. Today the national debt, after the Liberal legacy, is $180 billion. That is why the cost is so high today.


Michael Morris Cassidy: Mr. Speaker, among other things, I would point out to the Hon. Minister that one of the side effects of the Budget has been to disadvantage in a small way people who are blind. They will now have to pay sales taxes on dog food for their guide dogs. That is the level to which this Government is sinking. I would say to the Minister that I hope we will see that changed.
The main point I would like to make is that the $225 million that will be taken from senior citizens next year will not go to the reduction of the deficit. Not a nickel of that money will go to reduce the deficit because the Government is taking $225 million from seniors through indexing but is giving $300 million to the upper 10 per cent of taxpayers through the capital gains tax exemptions. In 1986, it will take $450 million from seniors, a group that is poor, and give $600 million through capital gains tax exemptions to a group that is extremely well off. That will go on year after year.
The speech made by the Minister was a disappointing one from a Minister of National Health and Welfare and from a man who has been known in the past to be compassionate and caring about ordinary Canadians. How is it fair to take so much from senior citizens on a pretence which is fraudulent in order to give money to the people who are receiving the benefit of the capital gains tax exemption? How can the Minister justify that inequity?


Arthur Jacob (Jake) Epp: Mr. Speaker, first I would like to say to the Hon. Member that the approach he is taking is a traditional NDP approach. Members of the NDP try to create a class struggle as if there were a class war. The Hon. Member is only talking about the upper 10 per cent of income earners. If he were to look at the situation of the average blue-collar worker in the United States, he would find that because of the tax incentives there, a very high percentage of blue-collar workers have invested in industry and are stockholders. They have invested because they have got some advantage from the very economic base of investment, risk taking and return on risk taking. That is one of the problems here in Canada. The present tax structure allows only those in the corporate sector to have those advantages. Because of the new capital gains tax

May 27, 1985
The Budget-Mr. Boudria
system, ordinary people who work for a wage can invest in stocks. The Hon. Member should not be so imprisoned by his own position. He should open his eyes a little bit.


Michael Morris Cassidy: You are taking from the poor to give to the rich.


Arthur Jacob (Jake) Epp: Just listen. 1 listened to you. Members of the NDP always argue that they are the ultimate Canadian nationalists. What better way to have investment by Canadians in the Canadian economy than by having average workers who work on salary invest and take some of those advantages?


Michael Morris Cassidy: Half a million dollars?


Arthur Jacob (Jake) Epp: Just a moment. Did you not listen in Queen's Park? Are you trying to bring the same attitude here?
The third point I would like to make is that if the Hon. Member were to look at the social policy envelope and the expenditures, for instance, on the spousal allowance for widows and widowers, something which I hope his Party will begin to support, he would see that the cost of that program is greater than the figures he gave as being those which are being withheld by the partial de-indexing. If he were to take a look at his figures very carefully, he would see that the arguments he makes do not hold water.


Don Boudria: Mr. Speaker, I am quite pleased to participate in this debate.


Some Hon. Members:: Oh, oh!


Don Boudria: I see that Conservative Members have already started to heckle me. I wish that they would listen to the advice given by the Minister who said to listen when other Members are speaking.
After listening to the "Minister of social injustice", I can understand why it is that Disraeli once said that a Conservative Government is an organized hypocrisy. It is now fairly easy to understand why he would have said that.
The Government said that its Budget would be tough but fair. What is so fair about consulting with the rich for a year and taxing the poor immediately? Perhaps the Minister of National Health and Welfare (Mr. Epp) could answer that question later if he is given the opportunity. I would ask him what is fair about that kind of system.
If you think for one moment, Mr. Speaker, that I am being partisan-


Some Hon. Members:: No!


Don Boudria: I knew some Conservative Members would never think that.


Mr. Blenkarn:: You're not even sensible, let alone partisan.


Don Boudria: Let us listen to what the press has to say about this Budget. Here are a few headlines: "Mike's gambling your money .."Middle-class bears budget brunt", "Tory budget
is enormous gamble". Other headlines read: "Those little treats-candy, pop, booze and cigarettes-they'll all cost more", "Family with $30,000 income faces $400 increase in taxes", "Tories ignore election promise to put housewives in pension plan". The headlines continue: "Give and take", "Home-ownership plans cut as tax shelters", "Budget zaps Canadians for $1B extra income tax in 1986", "15,000 PS jobs to be cut over 5 years", "Half-billion in cuts hits all regions, every department", and "Many rich people untouched by budget".


Donald Alex Blenkarn: Great.


Don Boudria: Is that great? I am sure the Member opposite thinks that is great because it is Tory policy not to touch the rich but to attack the poor.
There are more headlines. They read: "Rich helped at expense of average Canadians .." 'Jobs, jobs, jobs' cry becomes 'tax, tax, tax' "Despite jobs promise, Wilson cuts $78M from training programs"; "Transfer payment reductions will cost provinces $2 billion". Those are newspaper headlines concerning the horrible Budget which was presented by the Government of Canada.
In questioning the people of my constituency, which I do very frequently-


Mr. Clifford:: What kind of questions?


Don Boudria: Well, I would like to tell the Hon. Member opposite that I won with the largest Liberal majority in Canada. If he is questioning what kind of communication I have with my constituents, perhaps he should remember that. If Tories do not respect anything else, at least they should respect democracy.
I asked my constituents the following question: "Do you feel that the Government should create employment for the youth and chronically unemployed even if it means increasing the deficit?" Of the 1,600 people who replied to the questionnaire, 69 per cent said yes. The Government's obsession with the deficit should take into consideration the wish of the people. If the program which the Government has is so great, why was it not promised during the election campaign? There were 338 Tory promises. We all had to listen to the orgy of promises during the election campaign. The Conservatives promised everything to everyone.
I heard the "Minister of social injustice", the Minister of National Health and Welfare, speak about the sacred trust of the Conservative Party. The sacred trust dealt with pensions, among other things. I would like to remind the House of a few Conservative campaign promises.
Concerning senior citizens, the Conservatives promised that they would reinstate complete indexation of old age pensions to the actual cost of living as of January 1, 1985. That was a so-called sacred trust. What happened to it? I want Tory Members to tell the people of Canada that they have decided that the promises of last August are no longer valid. Forget
May 27, 1985

about the hypocrisy. Let those Members stand and say that they have deliberately broken the promises and have misled the people of Canada, if that is the position of the Conservative Party. But Conservative Members will not say that. The Government does not have the intestinal fortitude to be forthright with the people of Canada.
The Member for Simcoe North (Mr. Lewis) a short while ago made certain remarks about workers in the national capital area. Those comments were extremely uncalled for. The people of that community, like any others, have the right to earn a decent living. I am sure the Hon. Member for Ottawa-Carleton (Mr. Turner) and the Hon. Member for Ottawa West (Mr. Daubney) will want to dissociate themselves from those remarks.
I would like to speak about job creation programs. [Translation]
I am sure the Hon. Member for Argenteuil-Papineau (Mrs. Bourgault) who I notice is at her place in the House, would have liked the government to act, for instance, to expedite the construction of a bridge between Hawkesbury and Grenville. I am sure and I know for a fact that she would have appreciated capital investments of this kind which would have meant new job opportunities in both our ridings. I know also that the Hon. Member would have been grateful for a necessary replacement of the connecting structure between our two provinces. And I know that she is as disappointed as I am that this government has decided not to fund any direct job creating scheme, which is unfair.

I would like to speak briefly about agriculture. The Government has decided to cut $50 million from agriculture programs. The Parliamentary Secretary to the Minister of Agriculture (Mr. Blais) and I have listened to discussions in committee dealing with the state of farm finances in Canada. He knows, as I do, that the farmers of Canada cannot afford to pay one cent more, let alone $50 million. If he believes the farmers can pay more, let him stand and say that the farmers are too rich and can afford a $50-million cut. However, I do not believe he feels that. He knows that the farmers of the country cannot afford the Budget which was brought down. Farmers cannot afford the fact that the promises which dealt with Section 31 of the Income Tax Act were not respected. Farmers cannot afford not to have the agri-bond program which the Conservative Party and the Liberal Party promised during the election campaign. Members of the Standing Committee on Finance, Trade and Economic Affairs listened to witnesses for weeks, and subsequently recommended in favour of that measure. Last Friday, one Conservative Member asked why those agricultural programs had not been adopted. However, the Minister of Finance (Mr. Wilson) had no reply.
This Budget resembles the Miller Budget of 1982. We all recall what that Budget did in the Province of Ontario. We all know that that Budget was largely responsible for the Conservative Party's electoral defeat in 1985. For the same reason, the Budget which was brought down last Thursday will be the
The Budget-Mr. Boudria
beginning of the end of the Conservative Party at the federal level.
I would like to speak briefly about consultation. The Government told us that it consulted. I do not know one of my constituents who was consulted before gas prices increased two cents a litre. Neither do I know of a constituent who was consulted before the federal excise tax jumped 1 per cent. If Members across know of constituents who were consulted, they should name them. People at the lower end of the economic scale have to buy soap and other consumer goods. Those people will have to pay more than their fair share of that increase. It is unfair. There was no consultation. To claim otherwise is simply not true. With whom did the Tories consult? They consulted with the rich. There will not be a minimum tax for Canadians until a full consultation process is held. There will not be a different corporate taxation policy until consultation is held. Why is it that the Government does not consult with the people at the lower end of the economic scale before it viciously attacks their wallets? We are now finding out of what this Government is truly made. The promises of last September were simply empty rhetoric. It is becoming more and more obvious to all Canadians that it is a true saying that "Tory times are tough times for Canada".
I would like to talk briefly about the capital gains tax. All members of the Standing Committee on Agriculture were agreeable because we said unanimously that there should be no capital gains tax on farm land.


An Hon. Member:: That's right.


Don Boudria: I am glad to see Hon. Members opposite agree. But why are we exempting from capital gains tax someone who sells his yacht, his Rembrandt or his condominium in Florida at the same time as we are cutting $50 million from the budget of agriculture? Are those members of the Committee on Agriculture agreeing that we should take money away from the farmers and give it to people who are selling their condos in Florida, Mr. Speaker? I don't hear any Hon. Member saying yes to that. Yet that is what the Minister of Finance is doing. That is the action he is perpetrating on the farmers in the constituency I represent, and in many other constituencies across this country.


Mr. Malone:: Speak louder. No one can hear you.


Don Boudria: The Hon. Member for Crowfoot (Mr. Malone) seems to have a contribution to make to this debate. He can rise later and tell the farmers of his riding that this Budget is good for them. Let the Hon. Member stand and say that, if that is his view. But that Hon. Member will likely do as many others. He will sit and remain silent except for the odd heckle when we wake him up or he will read the prepared text which someone from the Department of Finance has written for him. I tell you, Mr. Speaker, if that is the limit of the contribution from members of the Conservative Party, we might as well forget about their speeches.

May 27, 1985
The Budget-Mr. Boudria
I see that the Hon. Member for Lanark-Renfrew-Carleton (Mr. Dick) is here. No doubt he rushed to the House immediately when he heard what his colleague had to say about the public servants in the national capital area. I am sure it will not take too long before he goes over to his colleague and tells him what he really thinks, and I want the Hon. Member for Lanark-Renfrew-Carleton to know that we are 100 per cent behind him when he chastises the Hon. Member for Simcoe North for the remarks he made about the public servants in the national capital area.


Mr. Dick:: We on our side allow free opinions.


Don Boudria: The Hon. Member for Lanark-Renfrew-Carleton tells us that free speech is allowed in his Party. I would like to ask him, Mr. Speaker, since when? Whenever we have heard a dissenting voice from that Party, there is usually a knife stuck in the back of whoever is speaking.


Some Hon. Members:: Oh, oh!


Don Boudria: That is the legacy of the Conservative Party. Our young people, our farmers, the unemployed and the elderly suffered a very severe blow last Thursday when this Budget was inflicted upon them.


Mr. Crosbie:: You are crying crocodile tears. Which half of Laurel and Hardy are you?


Don Boudria: The Hon. Member opposite who is heckling at this particular point, no doubt has senior citizens in his riding, as I have myself, who are not all that wealthy.


John Carnell Crosbie: They love me.


Don Boudria: No doubt if those senior citizens did love him before, they don't think too highly of him after this Budget. I am happy that he is no longer the Minister of Finance, Mr. Speaker, because perhaps the Budget would have been worse, heaven forbid. We all remember what happened to the last Budget which was presented by the Hon. Member for St. John's West (Mr. Crosbie). Of course, it was a disaster, as was stated so correctly by the Hon. Member for Ottawa-Vanier (Mr. Gauthier).


John Carnell Crosbie: We wouldn't need this Budget if the last one hadn't been tampered with. It's the greatest Budget of the 20th century.


Don Boudria: There are 39,000 young farmers, Mr. Speaker, who are deeply in debt and who were looking forward to assistance from this Government. I can tell you, Mr. Speaker, that the small business people, the farmers and other people of my riding were anxiously awaiting this Budget. They were expecting that we would see programs for direct job creation such as, for instance, the NEED Program which was brought in by the previous Liberal administration. That was a program which was very useful in expanding facilities and for job-creation both in the public and in the private sector. If this Government, because of its narrow way of viewing things, had
chosen to place only those kinds of programs in the private sector, so be it. At least they could have done something to assist the people of Canada. But what this Government has decided is that it is not interventionist. It will wash its hands of everything, sit back, perhaps say a little prayer, and hope that everything will solve itself. Again, Mr. Speaker, I remind you of the promises made by this Government. This Government should have promised last summer only one thing, "Vote for us and we'll do absolutely nothing". They could have kept that promise. But that is not what it did. It made 338 promises-


Arnold John Malone: Hear, hear!


Don Boudria: -but it did not promise that if the people voted for it it would do nothing. The Hon. Member cheers while his Government and his Minister of Finance is doing just that, nothing, instead of helping out the unemployed and the socially disadvantaged people of this country.


Mr. McDermid:: Oh, oh!


Don Boudria: I hear the Hon. Member for Brampton-Georgetown (Mr. McDermid). I cannot blame him for being nervous now that his riding at the provincial level has been lost to the Liberals, as will likely happen federally in the next federal election, Mr. Speaker.


John V. Nunziata: No doubt about it.


Don Boudria: I do not blame the Hon. Member for Bramp-ton-Georgetown for being nervous because if I was a member of the Conservative Party trying to defend this Budget I would probably be as nervous as he is. Of course, I do not have to worry about that because happiness is never having to say you are a Tory, and I will likely never have to say that.


John Horton McDermid: We don't want you to have to say that either. We wouldn't accept you.


Don Boudria: This Budget is all about give and take. The people of Canada give, and these Tories take.


Donald Alex Blenkarn: Mr. Speaker, I was just wondering what happened to the Hon. Member. He was on the Committee on Finance dealing with tax issues and agriculture. He will recall that the recommendation of that committee was the complete abolition of capital gains tax for everybody.


Don Boudria: That's not true.


Donald Alex Blenkarn: The second recommendation was an allowance of $400,000 to farmers against capital gains. But the committee report, to which the Hon. Member was a party, in the preparation of which he heard evidence and which he approved and voted for, recommended the complete abolition of capital gains tax. But today in the House he says what a terrible thing that is. He has a limited memory. He really does not understand what he is saying. He has been given new lines. Talk about a conversion! One day it is good for the farmers. Another day it is bad for the farmers. One day it is good for
May 27, 1985

business, and another day it is bad for business. It all depends on what the Liberal Party wants to say at the time.
Perhaps the Hon. Member can explain to us how he manages to change his tune so frequently.


Don Boudria: Mr. Speaker, I would love to respond to the Hon. Member's question. I can say that I understand the Hon. Member's convoluted sense of logic. It is undoubtedly caused by the embarrassment he feels in trying to justify his objection to this Budget. I do not blame the Hon. Member for acting like that, but he will recover, perhaps after the next electoral defeat of his Party.
The Hon. Member knows better, Mr. Speaker, he being the chairman of that committee. He will recall that what the committee asked for was that capital gains tax be abolished on farm land.


Donald Alex Blenkarn: On everything.


Don Boudria: On farm land. The Hon. Member will know that that is the case.


Donald Alex Blenkarn: You read the report that you voted for.


Don Boudria: No one in his right mind, Mr. Speaker, would want a condominium in Florida to be sold without paying capital gains tax at the same time as we are taxing the poor-


John V. Nunziata: And the senior citizens.


Don Boudria: -to pay for the extravagance of this Conservative Government. The Hon. Member opposite should know better than that, but he must have forgotten about the report and about the fact that he himself chaired the committee at the time this was discussed. What we asked for was that there should be no capital gains tax at all on the sale of farm land which was to remain in agriculture, and that if the Minister of Finance could not possibly deliver on that, the second best alternative would be to remove the capital gains tax on the first accumulation of $400,000-I remember that because I added the word "accumulation" myself-on the sale of farm land which was to remain in agriculture. I know, because we had considerable discussion about how one would determine how land would be retained for agricultural purposes as opposed to some other use. We decided at that point in committee that the Government could find a way to achieve that. But I distinctly remember it was a case of farm land being used for agricultural purposes.


Donald Alex Blenkarn: Your memory is weak.


Don Boudria: At the same time the farmers of this country have their budgetary allocation reduced by $50 million so that this Government can give tax breaks to the rich. That is not what the people of my riding want and that is not what the farmers of my riding want, and neither do the farmers anywhere else in Canada. They are looking for meaningful assistance and they are looking for the Government to fulfil its
The Budget-Mr. Boudria
campaign promises. If the Government could not live with those promises, it was its duty not to make them in the first place.


Mr. Deputy Speaker:: The Hon. Member for Argenteuil-Papineau (Mrs. Bourgault).


Mrs. Bourgault:: Mr. Speaker, I am happy to reply briefly to my friend from Glengarry-Prescott-Russell (Mr. Boudria) because, as you will be aware, our constituencies are joined by a bridge.
Mr. Speaker, the Hon. Member seems to forget that last September 4, the Canadian people elected a Progressive Conservative Government and were therefore expecting a Progressive Conservative Budget. I also want to remind him of an important concept in the Parliamentary process. As a former British Prime Minister said, I do not understand why it is that, in a democratic parliamentary institution, Opposition Members always say no to the Government and Government Members say yes all the time, even though their conscience would sometimes allow them to say no.
Today, Mr. Speaker, what I want to tell my hon. friend is that I took part in a radio show in Hawkesbury last Saturday and that I received phone calls from his own constituents, farmers and small businessmen, who thought our Budget was great. Strange enough, Mr. Speaker, we represent neighbouring constituencies, but my hon. friend says one thing and the people who call me say the opposite. My hon. friend, you should go on a radio show in Hawkesbury. What you are saying today might not be the same as what you would hear.
I would like to ask him something. He said, for instance, that the Budget did not mention the Hawkesbury-Grenville bridge. As this bridge, which is administered and maintained by the Federal Government, joins two provinces, we should perhaps find out what Quebec and Ontario want to do. The Hon. Member says that there has already been some talk of consultation and cooperation, which is the way to help our constituents. In any case, I think that what the Hon. Member for Glengarry-Prescott-Russell wants to do is to put together a householder this thick to say that they are against the Government only for the sake of opposing. I warn him to watch his words because our ridings are adjacent and I assure you that what I hear is quite different. You should read the editorial of Jean-Louis Roy in this morning's Le Devoir, which is selfexplanatory. You should read it. It is interesting and would answer your questions. In any case, I simply wanted to say that we do not hear the same version of the facts, even though there is only a bridge between us. Go on the radio in Hawkesbury and you will hear another side of the story.


Don Boudria: Thank you, Mr. Speaker. I am quite aware of the fact that Mr. Roy writes editorials for Le Devoir. 1 can confirm the fact, it is true indeed. Still I would like to tell my

May 27, 1985
The Budget-Mr. Boudria
colleague the Hon. Member for Argenteuil-Papineau (Mrs. Bourgault) that it may be true that the Conservative Government had every right to present a conservative Budget, but what really matters is that the Government was committed to follow up on its promises to the electorate. If the Hon. Member opposite feels that her Government should now forget all about those promises, I would have expected her to rise and tell the House that the Conservative Government no longer has to honour its commitments, if that is what she thinks. But she did not say that. What I hear, Mr. Speaker, is that the Government has every intention of keeping its promises-but it simply does not do so. That is why I said earlier that the Government, not the Hon. Member, is hypocritical. I know she is very honest with her constituents and that she will hurry back to her riding to speak the truth to the people of Argenteuil-Papineau and tell them that the Budget is a disaster. I am sure she will do that next weekend.
Now, Mr. Speaker, if the Glengarry-Prescott-Russell Conservative association president phoned her on the air last Saturday, all the more power to her. I want her to know that the Conservative association president is free to phone whomever he likes. But if the Hon. Member were to take a public opinion poll. I wish she would call upon the Prescott-Russell union of social welfare recipients and try to convince them that it is a good Budget. Mr. Speaker, she would do well to put on a football helmet before praising the Budget in front of those social welfare recipients because it has not been such a big hit, particularly with older people in my riding.
Mr. Speaker, I am sure the Hon. Member for Argenteuil-Papineau knows her files and her riding, but she ought to realize that the only person in my riding who could have called her to rave about the Budget is the president of the Conservative association. If she wants his number, Mr. Speaker, I can give it to her so she might call him back and again sing the praises of the Budget. I see nothing wrong with that and the Conservatives are quite free to talk to one another over the air.


Michael Morris Cassidy: Mr. Speaker, I realize time is limited and I certainly have respect for the new Hon. Member for Glengarry-Prescott-Russell (Mr. Boudria), but he has charged the new Government with organized hypocrisy. While I have no problems with that charge, I would like to ask him this. If it is true, as it certainly is, that the old Government took money out of pensioners' pockets through its six and five program, and if that Government had programs to put money into the pockets of the rich through RRSPs, RHOSPs and MURBs, along with other tax concessions, how was the old Government any less hypocritical than the new Government?


Don Boudria: Mr. Speaker, I am glad that the former leader of the Ontario NDP and the new Hon. Member for Ottawa Centre (Mr. Cassidy) asked me this question about how our Party established social programs. I am glad to have the opportunity to tell him that all the social programs we have, or
most of them, were established by Liberal Governments of the past.


John V. Nunziata: And we are proud of them.


Don Boudria: I know that he would want to take this occasion to congratulate the Liberals, and I accept that message of congratulation.


Ms. Mitchell:: But we pushed you into them.


Don Boudria: As to the RHOSPs, I did not know that the NDP was against that program. Perhaps that is a new policy for it, but as far as I as a Liberal am concerned, a program which encourages young families to put money aside in order to put a large payment down on a new house is a very good program, one that our Party is very proud of. If the NDP is now against that kind of program to assist young people, so be it, but I maintain that RHOSPs were a very good program for the young people of Canada and that this Government has made a terrible mistake in cancelling RHOSPs.


Douglas Grinslade Lewis: Mr. Speaker, I appreciate this opportunity to address a few remarks to the subject of the Budget. This past weekend I convened two public meetings, one in Orillia at nine o'clock in the morning and one in Midland at two o'clock in the afternoon. There was good attendance and a great deal of interest in the Budget we brought down. I am pleased to tell the House that there has been general acceptance of the Budget and that the people of Simcoe North realize that over the past few years the Liberals had spent us into oblivion. They realized that there was a desperate situation which had to be addressed by all walks of life. The people of Simcoe North were pleased to be part of the solution to the problem rather than having to watch the problem occur as they did in the past.
There is no question that this Budget is a break with the past. If higher deficits could have created jobs, there would have been many jobs created in the country. However, we have seen higher deficits and a climbing unemployment rate under the Liberal Government. This is a break with the past. It is an opportunity for Canadians to address the deficit and to create a climate which will encourage the creation of jobs. As a result of this Budget, the estimated deficit for 1985-86 will be reduced by $4.4 billion. That is actually the third step that we took to bring our fiscal house into order.
Step one was taken last November when we brought in the expenditure reduction program. We said that the Government could cut back on what it was spending. We said that we intended to examine our expenditures in order to give Canadian taxpayers the best value for their dollar. That was universally accepted by Canadians. As a result, the investment community, our trading partners, and the international monetary community all applauded our efforts as a Government to bring our fiscal house into order.
May 27, 1985

Step two was taken last February when we introduced Estimates for our spending and borrowing, which were exactly as we said we would spend in November. Having been a Member of the House for the past six years I can assure you, Mr. Speaker, that the Liberals used to bring in one set of figures which escalated by the time you saw them again. Our figures were the same in February as they were in November.
It is apparent to every Canadian that we will not reduce the deficit in one fell swoop. We need a planned program which can be defended step by step. Thai is what we are doing. We have terminated programs and projects. Over the course of the next few years we intend to reduce the number of public servants through attrition. It is important to focus on the word "attrition". We intend to examine the number of people employed by the Government and the projects in which they are employed. As people retire or resign, we will replace them with fewer people. We intend to give the Canadian people a more effective and efficient Government.
We are examining Crown corporations. We are asking whether each Crown corporation fulfils the mandate which it was given when it was created. We are asking whether there is a reason, for public policy purposes, to keep that Crown corporation and whether it is operating as efficiently as it should. That is the method through which we are attacking the deficit. We have a targeted reduction which we intend to meet over a series of years to keep faith with the Canadian people and reduce the deficit.
Another issue which is addressed as part of the Budget is job creation. Job creation was a major platform of the Government. We promised "jobs, jobs, jobs". We promised to do it by creating a climate in which jobs could be created. We did not promise that bureaucrats would create jobs. That is not a function of the bureaucracy. Bureaucracy has a definite function in External Affairs and Supply and Services, but the creation of jobs is not a function of the bureaucracy. That should be done by private enterprise. The job of the Government is to encourage businesses to invest, research, innovate, and take a chance.
The small business people who came to see me on Saturday said that they like the capital gains tax exemption. It is not that they will make a lot of money from it. Every business person in Canada who has a chance to make a dollar, knowing that he will pay only 25 cents on it, will go out and make that dollar. They are doing it now. However, through the capital gains tax exemption we want to create the perception that they can make that money and produce the jobs.
I suggest in sincerity that members of the Opposition may be missing the point. It is not the rich people who are looking forward to the capital gains tax exemption. The small business people and their employees, the backbone of the country, are the ones who are looking forward to this tax exemption because they perceive themselves to be participating in that $500,000. The rich people will pay the 25 per cent tax. This tax exemption gives every Canadian employed by small business the chance to take a chance and have a return on his or her investment.
The Budget-Mr. Lewis
Prior to the Budget we did other things to stimulate job creation in the country. We reduced federal Government expenditures, as I indicated before. We introduced Investment Canada to encourage foreign investment. It is sad to see the Liberals and New Democrats fight a Bill which would create jobs in every riding in Canada.
We have had consultation in many areas. The Minister of State for Tourism (Mr. McMillan) was in my riding consulting on the tourism business. That is the first time a Minister of Tourism did anything other than go down to Cleveland to get his picture taken on a streetcar. That is what the last joker from the Liberal Party did. We know where he is now. The Government is serious about consulting and about the tourism business in Canada.
We have changed the approach and attitude of the Department of National Revenue. That will defeat the underground economy which says it does not have to pay taxes. We are changing the attitude of the Ministry of National Revenue, which was created, fostered, and promoted by the Liberals. It cracked down on decent people. The former Minister defended that attitude, and he is gone too. Those are the steps we took before the presentation of the Budget to promote fairness and equity and to create jobs.
The consultation on the Unemployment Insurance Act is part of "creating a climate". Through consultation we will tell the business community, labour, and the bureaucracy that the Unemployment Insurance Act is not working exactly in the way we want it to. There are improvements which can be made and we will test them through consultation. That, coupled with the fact that we promised not to increase pensions, is going to help create the climate in the business community that will create jobs.
We said that we would be tough but fair. We are introducing a minimum income tax on high income Canadians. Under a series of Liberal Governments the rich people were allowed to get away without paying tax. As of our January 1 implementation date we will ensure that fairness is returned to the income tax system. I would have thought that the "holier than thou" New Democrats might have joined us in this exercise. Instead, they do not know how to handle the fact that we brought in this minimum tax.


Mr. Parry:: You haven't brought it in.


Douglas Grinslade Lewis: I take it as meaning that Pierre Berton has got to the NDP and it is afraid to lose Pierre Berton's support.


John Edmund Parry: That is nonsense, boring nonsense.


Douglas Grinslade Lewis: What will you do when Pierre Berton, the ultimate socialist, says that he will no longer support the NDP if it supports that minimum tax on the rich? The NDP has abandoned its support of a minimum tax because Pierre said not to do it. When you are going to stop playing the tune that Pierre Berton dictates to the rest of you socialists?

May 27, 1985
The Budget-Mr. Lewis
I wanted to illustrate something for the socialists but the paper is in my briefcase-


John Edmund Parry: We are not interested in your briefcase. Let us hear your views.


Douglas Grinslade Lewis: A minimum tax cannot be implemented immediately.


John Edmund Parry: That is all we have heard, briefcase talk.


Douglas Grinslade Lewis: When you find out how to open one, I will show you what to put in it.


Some Hon. Members:: Hear, hear!


John Edmund Parry: When you can open your mind, I will show you what to put in it.


Douglas Grinslade Lewis: You can interject any time.
Last Thursday, they sat in their seats, thunderstruck by the fairness of this Budget. When the Minister of Finance (Mr. Wilson) came to the point in his speech at which he introduced a minimum tax on banks, they were thunderstruck and there was silence once again. This suggests that once again the banks have got to the New Democrats. When will they stop supporting the banks and join us in taxing the banks and trust companies? We are shocked by the way the New Democrats have abandoned their principles.
This Budget takes action for which Canadians have been asking for years. We said that there should be changes to the Pension Benefits Standard Act. The people with whom I talked at a meeting last Saturday agreed with what we are trying to do because there are people in Canada who would gladly invest but do not know exactly how to do it. They said that through expanding the vehicle of the RRSP, Canadian workers and salaried employees will be given an oportunity to invest through the RRSP mechanism. They are in favour of that. I cannot understand why the NDP is against giving workers and salaried people an opportunity to invest in this country. What could be wrong with that? Why do they take that indefensible position? Why do they not trust ordinary Canadians who want to invest in this country? It is hard to understand that lack of trust from the NDP. Other measures in this Budget include eliminating the tax shelters that existed under the former Liberal Government.
We have attempted to return fairness and equity to a system which we all support and believe can bring this country to greatness. Under the Liberals, the tax system became a haven for the rich. The system was abused as a result of the New Democrats, who do not understand the system, propping up the Liberals.
We have attempted to explain that we are in a serious situation and that we are asking all parts of the country to participate in the solution. I think the argument on fairness is valid. I do not back away from that argument for a moment. The Opposition is right to call fairness into question because the purpose of this exercise is to question the entire package.
However, when the opposition Parties talk to Canadians about the Budget I caution them to remember that any budget is a package and must be considered as a packaged proposition. I caution the Opposition seriously to consider the Budget on that basis.
I talked to a number of Canadians over the weekend. A number of Canadians also talked to my executive and campaign committee, which met for two and a half hours on Sunday morning. It is the view of those people that we have brought down a Budget with which Canadians will agree.
With respect to the budgetary process, I believe it should be addressed by all Parties in a non-partisan way. I have challenged the chartered accountant profession in my riding to review carefully the Canadian budgetary process. I believe we should review it on a non-partisan basis because for too long Governments have brought in Budgets in Canada in every month of the year. That creates problems for the business community, the professions which advise the business community and the people who work in Canada, whether they are the employers or the employees.
There is much merit to reviewing the Canadian budgetary process and asking what would suit the country. We could reach a consensus on what process would suit everyone in order to adopt a sensible process that would benefit Canadians and Parliament. Personally, I would like to see all the budget provisions passed by a certain date. I held the same view when I was in opposition. Whether or not one agrees with the provisions, the community wants certainty. While there is ample provision to argue the philosophy of a Budget as we are doing today, I believe all parliamentarians support the view that certainty in the budgetary process is important to every one of us. It is important to the people whom we represent. I ask Members of the House to consult with the professionals who advise businesses, business people and employees, in order to come up with a means to make the budgetary process work better.
I appreciate the unexpected opportunity to enter into this debate. I was simply going to question my colleagues opposite, but I appreciate this opportunity to speak.


John V. Nunziata: Mr. Speaker, the Hon. Member is drenched in hypocrisy.


Douglas Grinslade Lewis: If I am drenched, you are drowned.


John V. Nunziata: He speaks of a specific date on which to hand down the Budget. However, he knows, as every Member of the House knows, that his Government delayed the Budget because of the election in Ontario. Members of his Party withheld the Budget because they were concerned about the negative impact it would have on the electorate in Ontario. I suggest to the Hon. Member and all Conservatives opposite that Canadians and the people of Ontario knew better and repudiated Frank Miller and the Conservative Party in Ontario, and they intend to repudiate the Conservative Government in Ottawa, given the next opportunity at the polls.
May 27, 1985

Hon. Members speak of fairness, equity and justice. Where is the justice, equity and fairness in this Budget when senior citizens are attacked? They are no longer fully cushioned from the ravages of inflation. Where is the equity when poor senior citizens from across the country are losing a significant portion of their pension? Where is the equity when poor senior citizens are made to suffer, on the one hand, while oil barons in Alberta, the rich multi-nationals, are given a windfall profit? Where is the equity when senior citizens suffer, on the one hand, while, on the other, rich people are given a windfall profit, a hand-out bonanza of $125,000 as a result of changes to the capital gains provision?
Will the Hon. Member honestly tell us where are the fairness, justice and equity? I am sure he will agree that there is no fairness in the Budget. It is a Budget for the rich and by the rich and it attacks the poor, especially the senior citizens in the country.


Mr. Deputy Speaker:: The Hon. Member for Simcoe North (Mr. Lewis) will have an opportunity to answer the question this afternoon.
It being one o'clock, I do now leave the chair until two o'clock p.m.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.

[Stage Direction]
Mr. Speaker, I could go on and on like this, but I feel I have conveyed the essential of my message. The Government is altogether indifferent to women's needs, as evidenced once again by the Budget it tabled last Thursday.

Margaret Anne Mitchell: Mr. Speaker, the fear expressed by Canadian women that the Conservative Government would sacrifice its election commitment to equality for the sake of a deficit first strategy has come true. The Budget of the Minister of Finance (Mr. Wilson) continues past Liberal traditions of broken promises, cuts, and taxes at the expense of Canadian women and their children. Deindexing of the old age security pension will harm the most vulnerable members of Canadian society, elderly women. Over 60 per cent of them now live in poverty, and the Budget does nothing to provide relief.
For unemployed women there are no jobs. For the average women in the workforce the Budget does nothing, either. There are cuts to training programs. Lay-offs in the Public Service and privatization will hit women the hardest. There are no additional funds for the Canadian Human Rights Commission to enforce equal pay for work of equal value and employment equity.
Cuts in transfer payments to the provinces are of particular concern to women. Promised funding for child care has been ignored. Battered women will see no increase in protection from violence for themselves and their children. Canadian women who took the promise of consultation in good faith have been betrayed.


THE BUDGET-GOVERNMENT POSITION
Mrs. Lucie Pepin (Outremont):: Mr. Speaker, I should like to emphasize today this Progressive Conservative Government Budget's complete disregard of the needs of Canadian women.
First of all, in the area of employment. This Government's decision to eliminate 15,000 Public Service positions will affect 5 per cent of women employed in the Public Service. The Government has implemented no special job creating scheme. Instead of fulfilling its promise to help women benefit from the technological revolution, the Government has decided to cut $78 million from training programs this year.
The Budget says nothing about part-time workers of whom 72 per cent are women. It penalizes low and medium income families through regressive sales taxes on consumer goods.
The desindexation of social programs will especially hurt people at the lower end of the economic scale who are mostly women.


ECCLESIASTICAL AFFAIRS
Mr. Gilles Bernier (Beauce):: Mr. Speaker, yesterday in Rome, Pope John Paul II honoured a famous "Beauceron", and I would like to announce here in Parliament the great honour that reflects on the great riding of Beauce following the elevation to the College of Cardinals of Monsignor Louis-Albert Vachon, Archbishop of Quebec City.
Cardinal Vachon was born in 1912 in Saint-Frederic de Beauce. After a life dedicated to others in his capacity as priest and as Rector of Laval University for many years, he was made Archbishop of Quebec City and Primate of the Catholic Church in Canada, and today, a cardinal.

May 27, 1985
Throughout his life he has been an example to us, reflecting the basic values that are part of our heritage in Beauce. Truly great men do not tolerate mediocrity, and many Beaucerons have, like him, aimed for excellence and achieved it.
He reached his goals through hard work and sheer tenacity. He is an honoured member of his community, and today, the entire Christian and Catholic community of Canada, Quebec and Beauce is honoured to have him in their midst.
His appointment to the highest post in the Catholic Church gives us cause for rejoicing as a community. Again, I am indeed honoured to be able to pay tribute to this famous Beauceron, His Eminence Cardinal Louis-Albert Vachon.


INCOME TAX
Mr. Alan Redway (York East):: Mr. Speaker, during the past federal election campaign the Progressive Conservative Party pledged to improve the fairness of our tax system by introducing a minimum personal income tax. That tax will take effect on January 1, 1986. The date was chosen to allow for consultation and to avoid, as much as possible, any adverse effects on farmers, people starting new businesses, and retired people living on fixed incomes from dividends. Adverse effects could very well result from such a major tax change midway through the taxation year.
Opposition Parties have expressed concern that the minimum tax did not take effect as of the budget date of May 23. This is most surprising, bearing in mind their well-known sense of fair play and equity. I am sure that upon quiet reflection opposition Parties will enthusiastically agree the Government has not only kept its word but has chosen the best, fairest, and fastest way of implementing the minimum tax.
[DOT] * *
[ Translation]


SOCIAL SECURITY
Mr. Raymond Garneau (Laval-des-Rapides):: Mr. Speaker, Prime Minister Mulroney made a solemn commitment during the election campaign-he was not going to tamper with social programs, especially old age security pensions. As the Progressive Conservative Leader himself put it at the time, it was a sacred trust.
Well, Prime Minister Mulroney has failed to live up to that solemn commitment and, among people most penalized by the Mulroney-Wilson Budget, we must include the senior citizens of Canada who between now and 1990-91 stand to lose $4.5
billion as a result of the 3 per cent old age security desindexation.
Since 2.5 million elderly Canadian men and women receive pensions, it means that each senior citizen will lose $1,800 between now and 1990-91. The Mulroney-Wilson Budget amounts to a direct attack against the purchasing power of elderly Canadians, for they will have to do with $54 less a month in 1990-91. Is it fair to expect men and women aged 65 or more to carry such a burden while multinational oil companies will be getting $2.5 billion in 1990-91 alone?
The Mulroney-Wilson Budget is unfair to millions of taxpayers and even more so to older people, most of whom have nothing else but their old age security cheques to make ends meet. Old age security pensions will be reduced by $54 a month in 1990-91, and that is unfair to the elderly to whom Prime Minister Mulroney promised during the election campaign that social programs, and especially old age pensions, would not be tampered with.


FINANCE
Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, rumour has it that the Minister of Finance (Mr. Wilson) has ordered the minting of a new Canadian coin to symbolize the sacrifices he has required each Canadian family to make through tax increases in order to pay for the multibillion dollar giveaway to the corporate sector and to upper-income earners. The new coin is valued at $3, to symbolize the daily increase in family taxes flowing from the November statement of the Minister of Finance and last week's Budget.
In November the Minister of Finance announced a 1 per cent sales tax increase, an unemployment insurance increase, a gasoline tax increase of eight cents per gallon, and elimination of the standard $100 deduction, a deindexation of threshold for child tax credit, a deindexing of exemptions for dependent children, and a reduced federal tax reduction, totalling approximately $500 per family per year.
In the May 23 Budget we saw another sales tax broadening, a 1 per cent increase in sales tax, alcohol and tobacco excise tax increages, a gasoline tax increase, a deindexing of personal tax exemptions, an elimination of federal tax reduction, an elimination of RHOSPs, a deindexing of OAS and a deindexing of family allowance, totalling approximately $500 per family per year.
These amount to an approximate $1,000 per year tax increase for the average family in Canada. This means that the Budget and the November statement will call upon the average family to support the federal Government and its giveaways to the corporate sector and to upper-income earners by approximately $3 per day.
May 27, 1985


THE BUDGET
[Stage Direction]
Mir. Gabriel Desjardins (Temiscamingue): Mr. Speaker, on September 4, Canadians across the country voted massively in favour of a change of Government. During the last election campaign, the Progressive Conservative Party and I in my own riding repeated time and time again that what this country needed was a team of administrators and good managers to stop the appalling waste of public funds.
Mr. Speaker, the first Wilson Budget is a clear departure from the budgets brought down by our predecessors, in that it resolutely comes to grips with the problem of our national debt. Our Government has realized that accumulating deficits is no way to solve the problem of unemployment in this country. It is the kind of theory that has brought us economic disaster.
Some day, a government would have to act responsibly, and that is what this Government has done. This first Budget, Mr. Speaker, is realistic, effective and fair. For the first time even, the Budget provides for a minimum income tax for the wealthiest in our society, and also a tax on financial institutions.
Mr. Speaker, many residents and organizations in my riding told me they were very concerned about the possibility that the principle of universality for social programs might be abandoned. Mr. Speaker, all these people now have the assurance that this is not so, since the Budget has not altered the principle of universality of social programs and is maintaining unemployment insurance benefits at their present level.
Mr. Speaker, this first Budget does ask Canadians to make some sacrifices, but-
Mr. Speaker:: I must inform the Hon. Member that his time has expired.



Mr. Gordon Taylor (Bow River):: Mr. Speaker, weep for the people of Ontario. The palsy-walsy puppy love of the NDP for the Liberals blossomed into a common law arrangement, with the Liberals caving in to socialist demands even though three-quarters of the people of the province are free enterprisers. The Liberals and socialists have made love before-yes, in the federal House when they joined hands to take property rights out of the Charter after the PCs had put property rights in. So weep and beware, Ontario.
Nationally, Canadians are happy. Last Thursday our Minister of Finance (Mr. Wilson) threw out the hodge-podge borrowing policies initiated by "Emperor" Trudeau and still followed by the Liberals and the NDP, who believe you can borrow the country out of debt. The ancient regime has given up the ghost, and we can look forward to bright tomorrows under the strong leadership of our Prime Minister (Mr. Mul-roney). This Budget is one of hope and confidence. It puts its faith in Canadians, not manipulative and conning backroom socialists. It is designed to cut the deficit and put people to work, not to buy Liberal seats with public money.
Our Minister of Finance has put people first, not the money lenders, as was done by the Liberals. New investment will provide work, for Canadians have faith in our Budget and in our Leader. In spite of all the doom and gloom of the Liberals and the NDP, the PC Party will build a new Canada, a prosperous Canada, and a greater Canada. So, hurrah for the emperor slayer, our Minister of Finance.


Some Hon. Members:: Hear, hear!



Ms. Sheila Copps (Hamilton East):: Mr. Speaker, 1 believe that those poor government back-benchers should be getting a punishment commission for having to go out and sell the Budget. True Tory colours have come out with a blue-blooded Budget for the rich in Canada. Cut-backs in family allowances and old age pensions fly in the face of Mulroney's own promises to Canadians. Mulroney's idea of fair tax reform is a half million dollar capital gains tax write-off for the rich, and a tax on pet food, chocolate bars, and soap. Where are the jobs, jobs, jobs promised by the Mulroney Government last year during the election? Harsh cuts to federal programs and Departments will result in a combined loss of 125,000 jobs for all Canadians. Closures, lay-offs, sell-offs, and sell-outs are the hallmark of the Budget. No new job creation measures have been introduced.
The Budget is a direct kick in the teeth to the unemployed and the poor. Why didn't the Prime Minister (Mr. Mulroney) address the needs of the unemployed? Why did he not assist potential home owners? One and a half million people are in need of adequate housing, and 1,400,000 people are out of work. Mulroney has not given Canadians anything to look forward to with his Budget. It is a slap in the face to middle-income Canadians, and we are going to fight it with every tooth and nail that we have.


Some Hon. Members:: Hear, hear!

May 27, 1985


THE ADMINISTRATION
Mr. Jean-Guy Guilbault (Drummond):: Mr. Speaker, our Government was elected on a platform for change, and on that basis we have charted a course of action to create jobs, growth and increased Government responsibility.
Since November, over 200,000 real jobs were created, and this Budget is to be an effective tool for creating jobs for Canadians. It will reduce the deficit inherited from the previous Liberal Government by the end of the decade, without compromising economic renewal, and it contains proposals for more effective management of government operations.
The Budget proposals encourage private initiative and private sector growth. These measures represent a fundamental break with the past. For instance, this Government is proposing a life-time capital gains exemption of $500,000 for each Canadian, a measure aimed at encouraging Canadians to invest in small and large businesses, which will help stimulate the economy and counter the effects of the underground economy.
The Budget promotes job creation in strategic sectors by encouraging private initiative, improving effectiveness in management of government operations and the Public Service, reducing the deficit and controlling our national debt.
Mr. Speaker, this Budget was brought down following the most extensive round of pre-budget consultations ever held. We listened to representatives from all groups and all regions across Canada.


PATENTS
Michael Morris Cassidy: Mr. Speaker, the proposed elimination of the Canadian Patent Office announced in the Conservative Government Budget does not make any sense.
It would seem that, as a result of the Government's decision to eliminate 15,000 public sector jobs, 233 Patent Office positions will disappear, including 120 held by highly specialized patent examiners who have made the Canadian Patent Office second to none in the world.
Mr. Speaker, this decision is one more failure in this country's commitment to research and development. The Patent Office is responsible for millions of dollars of Canadian research projects to avoid duplication. As well, Mr. Speaker, the Patent Office plays a leading role in the promotion of new
technology by putting our patent examiners in direct contact with international technology.
Mr. Speaker, the Government has done very little if anything at all to promote research and development, and it has failed to keep its promise to double the percentage of our Gross National Product earmarked for research. We must support the expansion of an institution like the Patent Office instead of closing it.



ORAL QUESTION PERIOD


[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, my question is directed to the Minister of Finance. With all the rhetoric surrounding his budget speech last Thursday, there was a lot of talk about job creation. However, when we examined his budget speech and budget documents in detail, we found that there were no specific plans for job creation, no policies for job creation, no specifics whatsoever. When it comes to the imposition of new taxes, they are immediate and specific, but with respect to job creation it is very hypothetical, very pie in the sky.
Can the Minister give us the information on which he makes the statement that the Budget will produce those jobs which are necessary to get the economy moving? Can he produce for us the working papers that he must have prepared, the impact studies? Can he give those to the House today so that we will know on what he makes the claim that the Budget will give us the jobs that we require?
Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, I said in the budget speech that this is a break from the past. It is a new approach to economic management. If we could count on deficits to produce the lower unemployment rate that the Hon. Member is calling for, we would have had that many times over in the last 10 years. That has not worked before, it will not work now.
What we are doing is encouraging the small business community in particular to go out, invest in Canada, invest in something for themselves, create something for themselves and their families that they did not have before, and in that way create jobs. I am not going to stand here in front of the Hon. Member and say that I can tell him precisely what those jobs are going to be, but I remind him that last November his Leader said we would lose 50,000 to 100,000 jobs, and since then 149,000 have been created.


Some Hon. Members:: Hear, hear!
May 27, 1985


PROJECTED ECONOMIC GROWTH
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, it is unbelievable in this age of computers, econometrics, and sophisticated statistics, that the Minister and his Department have not made a serious analysis of the impact on employment of his budget measures. It seems he is leaving it all to faith, hope, and charity, with respect to the business sector and the Tory Party. In his Budget of escalating taxes and cut-backs, and these are his own figures, by 1990 he will take out of the economy approximately $11 billion.
Next year he predicts a growth rate of 2.4 per cent, down from 4.7 per cent in 1984. How does he expect to create the necessary jobs with that kind of growth when he has no policy for direct job creation, and no policy to stimulate the economy and bring about that growth?
Geoff Wilson: Mr. Speaker, let me remind the Hon. Member that the direct job creation, the make-work programs, the dead-end programs, have not worked. They have not produced the jobs that are necessary. They have not produced the hope. They have not produced the-


Some Hon. Members:: Hear, hear!


Mr. Wilson (Etobicoke Centre):: Let us talk a little bit about these econometric models. The econometric models can produce a number, a response to direct impacts. What the econometric models do not measure is the impact on the small businessman of this Budget when he sees the hope and the encouragement that is being given to him. That cannot be measured. I can assure the Hon. Member that the small businessman has been performing since September 4, because 201,000 jobs have been created. In the comparable period before, it was around 72,000 jobs.


CONSEQUENCES FOR WOMEN
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, in his Budget, the Minister made only two references to women and employment, and then only very vaguely and indirectly. In the United States, as a result of the same kind of policies in recent years, the situation has been very hard on mothers and their children. Recently, we received a report indicating that in the United States today, 22.2 per cent of children are below the poverty line, compared to 13 per cent in 1969. With the kind of laisser-faire policy he is proposing for the private sector, how can the Minister give Canadian women the assurance that the outlook for their employment, training and salaries will improve, and where are all those promises on these matters that were made to Canadian women during the election campaign?
Oral Questions
Geoff Wilson: Mr. Speaker, the Hon. Member made passing reference to the United States. He forgot to mention that the unemployment rate in the United States is 7.5 per cent as against 10.9 per cent here. I think a good objective to have is to reduce the unemployment rate to that level.
Let me remind the Hon. Member that in April 89,000 jobs were created, the largest single monthly increase in five years. About 60 per cent of those jobs were for women, and 1 believe that that is the direction we should be taking.


PENSIONS
Miss Aideen Nicholson (Trinity):: Mr. Speaker, my question is also for the Minister of Finance. By 1990, as a result of breaking its promise to maintain full indexing of old age pensions, the Government will be withdrawing $1.6 billion per year from senior citizens. How can the Minister justify this assault on the pocketbooks of senior citizens?


Geoff Wilson: Mr. Speaker, in the budget speech, I indicated that we would be modifying indexation and that we would not be providing a full recompense for the degree of inflation because the first 3 per cent would not be compensated for. I have talked to a number of senior citizens and-


Mr. Broadbent:: Where? At the Albany Club?


Michael Holcombe Wilson: I repeat, I spoke to a number of senior citizens over the weekend and many of them have said that we were right to do what we are doing because they are worried about their grandchildren. They are worried about the $6,000 debt that is put on the head of every new baby when it is born. They are worried about the debt that will grow to about $12,000 per head by the time those children are five years old if we do not do anything about this. That is why senior citizens are in support of this move.


FEDERAL-PROVINCIAL FISCAL ARRANGEMENTS TRANSFER PAYMENTS TO PROVINCES
Aideen Nicholson: Mr. Speaker, 58 per cent of those who receive old age pensions also receive the Guaranteed Income Supplement because they have no other income. The Minister is only partially indexing the GIS even though he claims otherwise in the budget Figures.
There is a further cut in the Budget, and that is a $2 billion cut in transfer payments to the provinces in 1990, which will impact on services provided to senior citizens. How can the Government justify reducing payments to the provinces when
5090

May 27, 1985
Oral Questions
the need for services remains the same and the provinces will have to raise taxes? How can this be called a true effort to reduce the deficit?


Geoff Wilson: Mr. Speaker, I would like to make two points in response to the Hon. Member's question. First, we are fully indexing the Guaranteed Income Supplement. The second point I would make is that the federal-provincial transfers will be increasing each year by a rate of around 5 per cent assuming certain levels of inflation rates that we are projecting today exist. The amount the provinces will receive will be the same as a per cent of total spending in 1990-91 as it is today. I believe that giving the provinces lots of warning of the impact of this change is far, far better than the two, three, or four-week notice given by the previous Government, thus putting the provinces off stride without giving them a chance to manage into the change in funding levels that they were to receive.


SMALL BUSINESS
Nelson Andrew Riis: Mr. Speaker, the Prime Minister was overheard last week urging Conservative Members to go out at the weekend to talk about the Budget. Members of the Opposition did so as well. I was in Kamloops main-streeting over the weekend and I spoke with some small businessmen.


Mr. Hnatyshyn:: Did they recognize you?


Nelson Andrew Riis: Yes, they recognized me. I talked to a small business operator who indicated that, for the last three years, he has been struggling to make ends meet. He has not made a profit but is struggling just to break even. He asked me to ask the Prime Minister how he would be able to survive in the next year or two now that $1,000 per family has been taken out of the pockets of all of his customers.


Right Hon. Brian Mulroney (Prime Minister):: Mr. Speaker, I am surprised that the Leader of the NDP did not rise so we could see his new wedding suit that he will be wearing at Queen's Park next week.


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: I understand he is going to be giving away the bride.


John Edward Broadbent: Sour grapes.


Martin Brian Mulroney: The Hon. Member for Windsor West will be singing I Love You Truly.


John Edward Broadbent: Nothing like a rejected lover.


Martin Brian Mulroney: Ah, it is going to be sweet.
I am sure the small-businessman also told the Hon. Member about his delight with the tax changes that will give small-businessmen the chance to create jobs so that they can retain the benefits of some of the tremendous effort they put into building the Canadian economy. That is what this Budget is all about: job creation and hope for the entrepreneurs who build real jobs in Canada.


INCOME TAX
Nelson Andrew Riis: Mr. Speaker, my supplementary question is also directed to the Prime Minister. A little later on the same weekend I was travelling in Clearwater, British Columbia, where I ran into the head of a young family, a logger making $25,000 per year and paying about $4,000 per year in income tax as his contribution to the country. He had heard that, because of the Budget, stockbrokers can now sell their condos in California without paying any income tax at all. He wanted me to ask the Prime Minister how this would be considered fair taxation.


Martin Brian Mulroney: Mr. Speaker, that is because the Budget also contained measures to end income splitting among family members, to end tax shelters for yachts, hotels, and other properties, to put a surtax on higher-income individuals and large corporations, and to put a two-year tax on the capital of banks and trust companies. That is the first time that has taken place, and that indicates the Government is committed to fairness in the tax system. The Hon. Member should be applauding this rather than denigrating the attempt to bring fairness and equity to the tax system of Canada.


TOURISM
Nelson Andrew Riis: Mr. Speaker, later on that same weekend-


An Hon. Member:: What did they say in Salmon Arm?


Nelson Andrew Riis: -I went to Salmon Arm.


Some Hon. Members:: Oh, oh!


Nelson Andrew Riis: I am very serious about this. I talked with an individual who has owned a resort on the shore of the Shuswap Lake for a number of years. Again , he is not making any money but is simply struggling to survive. He asked me to ask the Prime Minister, if I had the opportunity, the following question: he is looking forward to the fall and the year 1986, Expo year, because he believes there will be more and more tourists visiting the area. He feels that this will help him get
May 27, 1985

out of a break-even situation and enable him to make a few dollars of profit. He wants to know how a nine-cent increase per gallon of gasoline in this Budget, coupled with a seven-cent increase per gallon of gasoline in the November statement, would help the travelling public and his business this fall and into 1986.


Martin Brian Mulroney: Mr. Speaker, my hon. friend should have indicated to the gentleman from Salmon Arm that the information was misleading. There is no such increase of taxation in the Budget; on the contrary.
I ran into somebody from Kamloops the other day and he said to me: "If you see Nelson Riis, tell him to get back to Ottawa and do some work, rather than run around his riding".

Oral Questions BUDGET'S JUSTICE


Raymond Garneau: Mr. Speaker, my figures were taken from a so-called secret document that has been circulating for a number of days and bears the title: Direct Impacts of Budget Measures by National Accounts Component.
My supplementary is also based on these data, most of which may be found in the Budget documents we have been given. Could the Minister, since we are talking about fairness in the Budget, inform the House why, if he was agreeable to removing the first 3 per cent of indexing on our tax tables, which will give the Treasury $11.5 billion more in revenue, he then turns around and, in the same Budget, gives away $8.5 billion to the oil multinationals between now and 1990-1991?


Some Hon. Members:: Hear, hear!


THE BUDGET
Raymond Garneau: Mr. Speaker, the Prime Minister was talking about fairness and equity, but my question is directed to the Minister of Finance and concerns the fair distribution of the tax burden among the country's taxpayers.
Mr. Speaker, if we analyze last Thursday's Budget more carefully, it becomes clear that Canadian taxpayers will be paying $37 billion more in income and other taxes by 19901991 and that of that $37 billion, only $1.4 billion will be paid by the big corporations, banks and trust companies, to which the Prime Minister referred earlier, and by the wealthiest among us.
My question is as follows: Could the Minister of Finance, who promised a Budget that would be fair to all taxpayers, inform the House what is so fair about taxing Canadian working men and women who belong to the middle class of our society, 26 times as much as the rich and the big corporations, including our banks?


Geoff Wilson: Mr. Speaker, I think those same Canadians might have some questions about the figures which the Hon. Member is putting before the House today. I would ask him to look at the impact of the range of measures which we are taking. We will reduce the debt of Canada by $75 billion over and above what it would have been had there been no action taken. Of that reduction, 80 per cent is in expenditure cuts. That is why I have very major doubts about the figures which the Hon. Member put forward. Only 20 per cent will be based on revenue increases.


Geoff Wilson: Mr. Speaker, as I indicated in response to a previous question, I think Canadians, particularly elderly Canadians, are very sensitive to the impact of the policies which have been followed in recent years which have led to a high degree of inflation- much higher than is the case in other countries-and the relationship between that inflation and the growing level of debt which we have had in Canada. A great deal of support has been expressed to me and to my other colleagues during the past weekend that Finally a Government has come to power which will take action on the deficit to minimize the degree of inflation which has devastated their lives. Therefore, they are very thankful for the measures which we have taken and they are prepared to make that small sacrifice.


PENSIONS
Mr. Neil Young (Beaches):: Mr. Speaker, my question is directed to the Minister of Finance. The Minister has continually been telling the House that senior citizens support his measures to slash their incomes by 3 per cent a year. That will come as a great surprise to the Canadian Pensioners Concerned and to the United Senior Citizens of Ontario, which organizations over the weekend made their objections to the Minister's plans clearly known.
During the last election campaign when the Government was looking for votes it promised to improve Old Age Security benefits. However, in the Budget the Minister slashed the incomes of seniors over the next five years by $2 billion and at the same time increased the incomes of corporations by $2 billion. I want to ask the Minister of Finance: Is that fair?


Geoff Wilson: Mr. Speaker, the Hon. Member neglected to make one point. In the November statement we increased the spouse's allowance for many low income Canadians who are 60 to 64 years of age.

May 27, 1985
Oral Questions


Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: Yes, we are very sensitive to the position of senior citizens. But, as I indicated in responding to other questions, we are also sensitive to the concern which they have about the growing debt, the impact which that will have on inflation, and the impact which it will have on the residue which will be left for their grandchildren.


Some Hon. Members:: Hear, hear!


CONCEPT OF UNIVERSALITY
Neil Young: Mr. Speaker, I would like to direct my supplementary question to the Minister of Finance. Many Canadians view that move in the Budget as being an attack on universality, which the Prime Minister has repeatedly said is a sacred trust. I would ask the Minister of Finance: Is universality to be 97 per cent this year, 94 per cent next year, 91 per cent the following year, and so on? When will the Government do something about the universal application of old age pensions, particularly on behalf of the many senior women who are living in poverty?


Arthur Jacob (Jake) Epp: Mr. Speaker, I want to tell the Hon. Member that universality has been maintained. The same number of people who were eligible for the old age pension before the Budget are eligible for it after the Budget. Additionally thereto, 85,000 Canadians who are not getting the spouse's allowance will be eligible once that legislation is passed. I hope the Hon. Member would endorse that.
There is another point which I would like to make. The cost of the deficit-and obviously they want to have a greater cost-is greater today than the federal share of health spending and pensions. In order to maintain both, we must get the deficit under control.


Some Hon. Members:: Hear, hear!


ROYAL CANADIAN MOUNTED POLICE
John V. Nunziata: Mr. Speaker, my question is directed to the Solicitor General and it concerns the Hatfield-MacKay affair. The RCMP report, which was released last Friday, confirmed what we in the Liberal Party have said from the outset-Richard Hatfield was given special treatment because he is a Premier. Indeed it is a sad day for the criminal justice system in Canada, and the Solicitor General should hang his head in shame.
Will the Solicitor General finally admit that special treatment was given to Richard Hatfield? Will he admit that it was wrong to treat Richard Hatfield differently from any other Canadian in similar circumstances? Or should Canadians
conclude that there is one law for the rich and powerful, and another for the poor?


Hon. Elmer M. MacKay (Solicitor General of Canada):: Mr. Speaker, I would like to tell my colleague from York South-Weston that the way in which I read the report indicated that the RCMP proceeded, as I said at the outset, with meticulous care to make certain that all proper procedures were followed with respect to the manner in which Premier Hatfield's case was handled.


REQUEST FOR PUBLIC INQUIRY
John V. Nunziata: Mr. Speaker, perhaps the Solicitor General should reread the report as he certainly was mistaken in what he said. The very integrity of our criminal justice system has been challenged by the inequities and the improprieties of this particular case. More questions have been raised than answered in the report. Commissioner Simmonds confirmed that the report is incomplete and that it leaves a number of interesting questions unanswered. In view of the fact that the Solicitor General claims he is a man of fairness, a man of-


Mr. Speaker:: Order, please. It was a very long preamble. Right to the question, please.


John V. Nunziata: I would like to direct the question to the Prime Minister. Will he initiate a public judicial inquiry into the whole affair in order to restore confidence and respect to the Canadian criminal justice system? If not, what is he hiding? Of what is he afraid?


Elmer MacIntosh MacKay: Mr. Speaker, in response to that question put by my hon. colleague I think I should quote to him what the Commissioner of the RCMP has concluded, and I will quote very briefly:
My own view is that such an inquiry would accomplish little other than provide public entertainment while every person who has anything to do with this matter, and all the peripheral issues connected with it, were examined under oath as to their exact conduct and knowledge by a battery of lawyers-
Under the circumstances, unless the Hon. Member has something better than that to offer I do not believe that the interests of justice would be served one iota by any judicial inquiry.


THE DISABLED AND THE HANDICAPPED
Mr. Jim Hawkes (Calgary West):: Mr. Speaker, I was also in my riding on the weekend. Many of my constituents asked me to come back and express some sense of appreciation to the Minister of Finance and to the Government.


Some Hon. Members:: Hear, hear!
May 27, 1985


Mr. Speaker:: Order, please. Question.


Frederick James (Jim) Hawkes: They are very pleased with the special provision for the disabled.


Some Hon. Members:: Question.


Frederick James (Jim) Hawkes: And they would like me to ask in this Chamber if the Minister of National Health and Welfare could provide the House and the Canadian people with a slightly better view of the kinds of disabled people who will now be included under this provision. We understand there are 120,000 or more. What are the characteristics of these people? How will they be defined, and how will they apply for that special kind of relief?


Arthur Jacob (Jake) Epp: Mr. Speaker, I want to thank the Hon. Member for that question.


Some Hon. Members:: Oh, oh!


Arthur Jacob (Jake) Epp: I also want to remind the House that he has been one Hon. Member who, while on both sides of the House, has been very diligent in following the needs of the disabled and trying to improve their position.


Some Hon. Members:: Hear, hear!


Arthur Jacob (Jake) Epp: At the present time, Mr. Speaker, about 60,000 Canadian families have qualified under the definition of "disabled" for the enriched tax exemption where they are taking their responsibilities as families for the disabled. That definition will be expanded to include, we calculate, approximately another 120,000 Canadians. This will include people, for instance, who are suffering from profound deafness, severe mental retardation, who have severe heart or respiratory conditions, and who are not confined either to a wheelchair or to a bed.


WESTERN ACCORD-BUDGET'S IMPACT ON CONSUMERS
Mr. Ian Waddell (Vancouver-Kingsway):: Mr. Speaker, my question is directed to the Minister of Energy, Mines and Resources. On March 29 she said in this House: "As I have repeatedly said, there is nothing in the Western Accord with the producing provinces that hurts consumers". She said again: "As I have said repeatedly, there is nothing in the Accord which would lead to increases in consumer prices". Now the Government has socked it to us in the form of higher energy prices in the Budget. Given that it has taken money out of the pockets of ordinary Canadians, what has the ordinary Canadian gained from the Budget, as opposed to what we all know the oil companies have gained, and that is windfalls and more tax breaks?
Oral Questions


Hon. Pat Carney (Minister of Energy, Mines and Resources):: Mr. Speaker, I would like to take this opportunity to say how dismayed I am-


Some Hon. Members:: Oh, oh!


Pat Carney: -that the Hon. Member for Vancouver-Kingsway does not understand the Western Accord. He cannot apparently read the Western Accord and doesn't understand it. There is nothing in the Western Accord which is increasing costs to consumers. There is no point in me trying to refute a question asked by the Hon. Member which contains no basis in truth.


Ian Gardiner Waddell: The Minister knows that the Western Accord is being paid for by the Budget which came down the other night. She cannot kid anybody otherwise.


CREATION OF JOBS
Ian Gardiner Waddell: The Minister also said in the House that the only justification-her argument- for giving so much money to the oil companies was that they would create jobs, that they would reinvest the money and create jobs. In view of the fact that I have asked her Department under the Freedom of Information Act how many studies there are which show that jobs are being created or will be created-


Mr. Speaker:: Order, please. That is again a very long preamble to a supplementary question. Is there a question, please?


Ian Gardiner Waddell: Does she have any studies in her Department which will show that 100,000 to 300,000 jobs are going to be created by taking money out of the pockets of ordinary Canadians and giving it to rather fat oil companies?


Pat Carney: Mr. Speaker, I don't understand why the Hon. Member for Vancouver-Kingsway wants us to continue, as the Liberals did, to pay oil companies $40 a barrel for crude at a time when it is selling at world prices for $29.75.


Some Hon. Members:: Hear, hear!


Pat Carney: That is one of the reasons why, with the support of the New Democratic Party, we are left with the deficit position with which the Minister of Finance has dealt. On June 1 we are going to deregulation where Canadian crude prices go to world prices.
In terms of the jobs which are being created, I have already advised the Hon. Member that we already have about $15 billion worth of projects which have been announced since the Accord, or the economics of which have been approved since the Accord, and those are the kind of projects which will create the jobs which we want.

May 27, 1985
Oral Questions


MEMBERS OF PARLIAMENT
Hon. Bob Kaplan (York Centre):: Mr. Speaker, my question is directed to the Prime Minister. Last week it became public that the Hon. Member for Cumberland-Colchester was the subject of a complaint to the Canadian Human Rights Commission. My colleague, the Hon. Member for York South-Weston, called for greater confidentiality at the commission. But on Friday the Solicitor General took a totally different tack. He actually took sides in the case, saying he was doing it as a Minister and a friend of his former Cabinet colleague. He rejected the evidence even though he admitted not having seen it. Does the Prime Minister not feel that his Solicitor General showed poor judgment in taking sides in a case before a federal commission?
Hon. John C. Crosbie (Minister of Justice and Attorney
General of Canada): Mr. Speaker, as I am the Minister who answers for the Human Rights Commission let me say that many Hon. Members of Parliament have expressed some disquiet with respect to certain aspects of the policy of the Human Rights Commission relating to complaints which are unsubstantiated accusations at that particular stage in the process. The same kinds of views have been expressed before the House of Commons justice committee. We are considering possible amendments to the Human Rights Commission legislation at the present time, and this is one of the areas which will have to be considered.
I am sure that all Hon. Members of this House realize the perils with which people in public life are faced in this kind of situation. My colleague was expressing his concern in that area, and I believe it is a concern which we all have to consider.


SOLICITOR GENERAL'S STATEMENT
Robert Phillip Kaplan: The Minister of Justice is throwing us a red herring. I am not talking about the procedures of the commission. That is fair game for legislators. What the Solicitor General did in this case was to challenge the evidence, and say he didn't believe the evidence against his former colleague even though he had not seen the evidence. I want to ask the Prime Minister again, because it is a question about the Cabinet not about the Human Rights Commission, does the Prime Minister continue to have confidence in a Solicitor General who would take sides and challenge the impartiality of the commission like this?


Martin Brian Mulroney: Mr. Speaker, I construed the comments of the Solicitor General as comments of concern about the procedure which could affect any Hon. Member of this House, in much the same way as the Hon. Member for York South-Weston indicated his concern about the same kind of problem. Inasmuch as it is a quasi-judicial process I would not want to go beyond that except to say that I thought that the Hon. Member for York South-Weston
and the Solicitor General were expressing a concern about injustices which could flow from the procedures themselves.


REQUEST THAT PRIME MINISTER TAKE ACTION
Mr. Ian Deans (Hamilton Mountain):: Mr. Speaker, my question is also directed to the Prime Minister. Given what he has just said, will the Prime Minister instruct the Solicitor General that is is inappropriate, holding the position that he does, for him to make comment about the innocence or otherwise of any person who is either before the courts or who is being investigated by a tribunal, during the time the investigation is being conducted or while the matter is still before the courts?


Martin Brian Mulroney: Mr. Speaker, I discussed with the Solicitor General the views expressed by the Hon. Member for York South-Weston and himself, and I construed in both cases those views to be an expression of frustration with a system which could cause any Hon. Member of the House of Commons to be dealt with unfairly. The Solicitor General assured me that his comments were meant in that regard and in the same vein as the expression of concern by the Hon. Member for York South-Weston.
[DOT] (M50)


COMMENT BY MINISTERS
Ian Deans: Mr. Speaker, given the somewhat privileged position a Solicitor General holds, will the Prime Minister discuss, not only with him but with Cabinet in general, the inappropriateness of commenting on the innocence or otherwise of any individual who is either before the courts or who is being investigated by a tribunal, in advance of a decision having been made on the one hand whether or not to proceed and therefore finalize the charge or, on the other hand, until after the innocence or guilt has been proven by the court itself? Will he make that a general rule for Cabinet, notwithstanding the fact that we may well agree that the procedures in place are inappropriate?


Martin Brian Mulroney: The comment by my hon. friend is fundamentally appropriate and will be happy to discuss again not only with all members of the Government and caucus but indeed Members of the House of Commons, and ask them to bear in mind the injunction of which my hon. friend speaks so well.


INCOME TAX
Mr. Aurele Gervais (Timmins-Chapleau):: Mr. Speaker, my question is directed to the Minister of Finance. I visited my riding over the weekend, the great riding of Timmins-Chapleau, and found that the great majority of my constituents are
May 27, 1985

truly impressed by the block-buster Budget announced by the Minister here last week.


Some Hon. Members:: Hear, hear!


Aurèle Gervais: I would like to ask the Minister to explain to this House once more the implementation of a minimum tax on the rich. Specifically, why are we waiting until 1986 for it to take effect, and what are the three options outlined in the discussion paper?


Geoff Wilson: Mr. Speaker, I very much appreciate the comments of the Hon. Member and the support expressed by his constituents. Let me respond directly to the question of the alternative minimum tax. We could have brought in a tax immediately.


Some Hon. Members:: Hear, hear!
Mr. Broad bent: You could have.


Michael Holcombe Wilson: But there are some problems in doing so. We were concerned that the implementation of this tax right away would have a retroactive impact in much the same way the 1981 Budget did, which resulted in 45 changes having to be made before the ink had even dried on that Budget.
There are two provinces which have taken a somewhat different approach to a minimum or flat tax. We want to use the opportunity over the next six or eight months to consult with the provinces-I met with the provincial Finance Ministers last night-and discuss with them the means of implementing a minimum tax so that it will be as effective and harmonious as possible for the 1986 taxation year.


CANADA MORTGAGE AND HOUSING CORPORATION
Sheila Maureen Copps: Mr. Speaker, it is funny how the slap at senior citizens is very timely but the minimum tax on the rich is not too timely.
In the absence of the Minister responsible for housing I would like to ask my question directly to the Prime Minister because I know the stake he has in the Budget. With 1.5 million Canadians without adequate housing, and one million homes in need of major repair, does the Prime Minister agree with the assessment by the Minister of Finance that $26 million of CMHC funds are "surplus to current requirements"?


Martin Brian Mulroney: I think the important thing to remember, Mr. Speaker, in any discussion of housing is that since this Government came to office, and this is what matters to the ordinary taxpayer, interest rates are down almost 3 per cent. That is what we are doing.


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


Martin Brian Mulroney: That is the way you get home ownership in this country. We are following a course which, hopefully, will ensure that interest rates come down further so that housing becomes available to more and more Canadians. That is what it is all about.


FUNDING OF TRANSITION HOUSES FOR BATTERED WOMEN
Sheila Maureen Copps: Mr. Speaker, the Prime Minister is displaying his fundamental ignorance of the position of 1.5 million Canadians who can never aspire to home ownership.
There are more than half a million battered Canadian women, Mr. Speaker, and last year CMHC funded start-ups for only 11 transition houses. Is the Prime Minister telling the Canadian people that the transition needs of half a million Canadian women are "surplus to current requirements"?


Arthur Jacob (Jake) Epp: Mr. Speaker, the issue of transition houses was discussed between the provincial Ministers of Health and Social Services, especially social services, at the federal-provincial meeting. The provincial Ministers have taken a very direct role because they feel it is very much a provincial matter. But we have said that we want to co-operate in whatever way we can in order to develop that.
If you really get down to the argument of the Hon. Member, we are talking about transition-houses to which people in need of help and support go. It is not a matter of whether they are eligible, which has long been a problem in these transition houses, under CAP. If she really looks at the issue, she would not mix various issues together as she did in her question.


FEDERAL-PROVINCIAL FISCAL ARRANGEMENTS TRANSFER PAYMENTS TO PROVINCES
Mr. Rod Murphy (Churchill):: Mr. Speaker, my question is directed to the Minister of Finance. The Minister indicated in his Budget last week that he is going to be reducing provincial transfer payments over the next five years compared to what they would be receiving under the present formula. Conservative MPs when they were in opposition, including the present Minister of National Health and Welfare, and the Minister responsible for the Wheat Board, attacked the 1982 formula because there was not enough money for medicare, postsecondary education, and other programs. Given that, how can the Government say it is now going to cut back from the existing formula?


Geoff Wilson: Mr. Speaker, what I indicated in the budget speech was that the level of federal-provincial transfers will be increasing at a significant rate between now and 1990-91. The percentage of government program spending through transfer payments will be the same in 1990-91 as it is today.

May 27, 1985
Oral Questions
I met with the provincial Ministers of Finance last night and 1 told them I wanted to work with them in determining the best way to manage this transition to a new level of funding so that their Ministers of Health and Education would have the greatest opportunity possible to adjust their programs, in order to avoid the disruption which occurred back in 1982 and the fundamental changes made at that time.


Rodney Edward Murphy: Mr. Speaker, it is obvious that a $2 billion cut from what they would receive under the present formula is, in fact, a cut.


ELECTION CAMPAIGN STATEMENT
Rodney Edward Murphy: Mr. Speaker, my supplementary is directed to the Prime Minister. Does he believe that the Conservative Party was being honest during the last campaign when it indicated "we will return to the 1977 funding formula"? That formula provided more money for the provinces than they have at this time. He made that promise during the election campaign and the Minister of Finance has gone in the opposite direction. Is that honest?


Geoff Wilson: Mr. Speaker, I had a fairly full discussion with the provincial Ministers of Finance last evening. We discussed at some length the basis on which this change was made. I think they recognize the very difficult financial position of the federal Government. They acknowledge the fact that all government programs have been affected as a result of the Budget. As I said in my speech the other day, it was very difficult for me to exclude a major portion of government spending from the changes we made. But I will be meeting with those Ministers in September, and again in December, to discuss further the position they wish to take in this matter.


Mr. Speaker:: The Hon. Member for Glengarry-Prescott-Russell; one question.


PUBLIC SERVICE
Don Boudria: Mr. Speaker, on page 9 of the budgetary document entitled "New Management Initiatives" there appears the name of Dr. Peter Meyboom as the Public Service Advisor to the Nielsen Task Force. Is the Minister aware that one of the persons assisting Dr. Meyboom in providing technical assistance was Mr. Jack Threader of the office of Regulatory Reform of the Treasury Board, the same Jack Threader involved with Mystl Management? In other words, at the same time Mr. Threader was providing technical assistance on the budgetary document, he was offering, along with his associates, inside information on dealing with the Government?


Hon. Perrin Beatty (Minister of National Revenue):: Mr. Speaker, I would like to answer that in my capacity as Acting President of the Treasury Board. Over the weekend the Hon. Member contacted the Treasury Board. At that time he was told that this individual did not have direct access to the work of the task force. I am disappointed that, knowing that, the Hon. Member would have made an allegation similar to the one he made in the House today.


Don Boudria: No, Sir.


Henry Perrin Beatty: I can also indicate that the report that is being conducted by the Treasury Board should be completed within about 24 hours. The results will be made public by the Government. Mr. Speaker, I call upon the Hon. Member, if he still has some vestige of honour, to respect the position of public servants and not to make false allegations in the House of Commons.


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, May 24, 1985, meet the requirements of the Standing Orders as to form.


PRIVILEGE
Don Boudria: Mr. Speaker, I have a question of privilege.


Mr. Speaker:: The Hon. Member for Glengarry-Prescott-Russell (Mr. Boudria) on a question of privilege arising out of Question Period.


Don Boudria: Mr. Speaker, the Minister across has obviously accused me of lying to the House when all facts that were stated by me today were made in a conversation that I had with officials of his Department. It is he, Sir, who should apologize to the House for accusing other Members of giving false information when that which he gave was obviously grossly inaccurate.


Henry Perrin Beatty: Mr. Speaker, I did not accuse the Hon. Member of lying. However, I can say that he and his colleague have given information that was wrong. Unfortunately, they have been so consumed by their interest in promoting themselves by destroying the repu-
May 27, 1985

tation of others that they have given false information to the House of Commons, albeit inadvertently.


Some Hon. Members:: Oh, oh!
* Mr. Speaker: Order. I take it the Hon. Minister is indicating that a question of fact that has been presented to the House by another Hon. Member is, in his view, not factual. That strikes me as a difference of opinion about facts and not as a question of-


Sheila Maureen Copps: He is imputing motives, quite clearly.


Mr. Speaker:: I have listened very carefully and I have heard someone saying that one thing is true and someone else saying that it is not true. I then heard the Minister say that he has his own views as to why those things are being presented to the House. If Hon. Members would prefer that I reserve my judgment and read the "blues", I would be happy to do so.


Sheila Maureen Copps: Yes.


Mr. Prud'homme:: On this question, yes, I would like you to do so, Mr. Speaker.


BUSINESS OF THE HOUSE
Ramon John Hnatyshyn: Mr. Speaker, I rise at this time with respect to House business. The House Leaders have had discussions with respect to the business for this week. On the basis of those discussions it was our intention to proceed with the Budget debate on a continuous basis. However, there is a necessity to pass through both Houses and to receive Royal Assent on a Bill relating to variable entry requirements under the Unemployment Insurance Act, which is to be introduced later today by my colleague, the Minister of Employment and Immigration (Miss MacDonald). We have therefore come to the agreement that we will interrupt the proceedings with respect to the budgetary debate and tomorrow will be a day for government business. The Bill which is to be introduced by my colleague will receive all three readings in the House. There will be one speaker on behalf of each Party.
It will be my intention then to call the Bill with respect to borrowing authority which was introduced on Friday by my colleague, the Minister of State for Finance (Mrs. McDou-gall). I am hoping that we can make progress to second reading of that Bill tomorrow. If we are successful in reaching second reading, it will be my intention to call Bill C-32 in relation to amendments to the Fisheries Act.
As it now appears, Mr. Speaker, the budget debate will continue on Wednesday, Thursday, Friday, and conclude on Monday on next week. I expect that we will have the usual vote on Thursday night. We will wait to see what happens on
Order Paper Questions
Monday night. It is now my intention to continue to the conclusion of the budget debate.



ROUTINE PROCEEDINGS


Donald Alex Blenkarn: Mr. Speaker, I have the honour of presenting a petition from 900 residents of Canada who are most concerned about the abuses of the present abortion laws in the Criminal Code. They petition this honourable House to introduce legislation to amend the Criminal Code in order to protect the lives of the unborn.


Hon. Flora MacDonald (Minister of Employment and Immigration) moved: for leave to introduce Bill C-52, an Act to amend the Unemployment Insurance Act, 1971.


Mr. Speaker:: Shall the Hon. Minister have leave to introduce the Bill?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, Bill read the first time and ordered to be printed.

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Paul Wyatt Dick: Mr. Speaker, the following questions will be answered today: Nos. 197 and 294.


Mr. Stackhouse: What is the government's current participation in developing space based navigational satellite systems?


Ramon John Hnatyshyn: 1 am
informed by the Departments of National Defence, Regional Industrial Expansion and Transport as follows:

May 27, 1985
Order Paper Questions
Canada through the Department of National Defence has been involved with the NAVSTAR Global Positioning System (GPS) since 1978. This is the NATO endorsed space based navigation system which is being developed and funded entirely by the U.S. military. Canada and nine other NATO nations provide personnel and funds for a NATO Project Office at Space Division in Los Angeles. To date, DND has expended $380,000 and provided two officers to the project office and total cost is not expected to exceed $980,000 when the present agreement terminates at the end of 1988.
When NAVSTAR GPS becmes fully operational in 1988 it will meet the majority of military navigation requirements. It also will be available to civil users. Offshore resource exploration, hydrographic and geophysical surveying, and maritime navigation are but a few areas where the system has great potential.
Canadian Marconi Company is currently being assisted via the Department of Regional Industrial Expansion's Defence Industry Productivity Program (DIPP) in the development of NAVSTAR/GPS receiver technology. The development program comprises three areas:
(1)	the exploration and implementation of several areas of technology common to all types of receiver;
(2)	the development of the market/product potential for low-cost, moderate performance receivers suitable for military and commercial transport aircrafts and ships;
(3)	the development of the market/product potential of a highly accurate and versatile receiver suitable for geodetic, surveying and positioning applications.
This DIPP assisted development program started in 1981 and is anticipated to be completed in 1986. Expenditures to date are in the amount of $484,070. Total expenditures upon completion of contract will be approximately $3,075,000.
Transport Canada has through the issuance of a Canadian Airspace Systems Plan indicated that the present ground based navigational system will continue as the navigational guidance system for civil aviation aircraft flying in Canada until at least the year 2000.
Presently the International Civil Aviation Organization is addressing the issue of future navigation system including the option of a satellite based system in the early 2000s as part of a new committee FANS (Future Air Navigations Systems).
The Canadian Air Transportation Administration as a member of this committee heads the Canadian delegation.
Transport Canada is also involved in the following activities:
(i)	participation in the U.S.-based consultative agency developing standards and techniques for the future NAVSTAR/ Global Positioning System in the Differential Mode, which is of interest to special marine and offshore industry users,
(ii)	evaluation, under contract, of differential NAVSTAR/ GPS for Coast Guard missions such as buoy positioning and
(iii)	technical supervision of DRIE-sponsored contract to Canadian Marconi Company for development of low cost civil air and marine NAVSTAR/GPS receiver.


Mr. Boudria: 1.	Did the Secretary of State for Canada take a recent trip to Europe?
2.	Was a jet chartered to transport the Minister and/or his staff from Belgium to London (England) and, if so (a) for what reason was such an aircraft chartered instead of travelling by a regular carrier (b) what type of aircraft was involved (c) how many persons were on board and what were their names, citizenship and reason for being on the aircraft (d) what was the cost to the taxpayer for the charter?


Hon. Walter McLean (Secretary of State):: 1. Yes.
2. No.


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


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


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Wilson (Etobicoke Centre) that this House approves in general the budgetary policy of the Government; and the amendment of Mr. Johnston (p. 5043); and the amendment to the amendment of Mr. Riis (p. 5047).
Mr. Speaker:: When the House rose at one o'clock p.m. the Parliamentary Secretary to the President of the Treasury Board (Mr. Lewis) and completed his speech but had the floor for questions and answers. I recognize the Hon. Parliamentary Secretary on a response.


Douglas Grinslade Lewis: Mr. Speaker, at the close of business at one o'clock I had been asked a question by the Hon. Member for York South-Weston (Mr. Nunziata). Not wanting to bring into question his whereabouts at this time, because I am sure he is doing what he does best, and that is seeking publicity, I would like to reply to him at that time.
The Hon. Member made the comment that I might be drenched in hypocrisy. As I ran along the Ottawa River I told myself that on that basis the Hon. Member for York South-Weston would require a frogman's suit to survive his daily hypocrisy.


Some Hon. Members:: Hear, hear!
May 27, 1985


Douglas Grinslade Lewis: I do want that on the record for the Hon. Member to read when he returns to the House from the glare of the cameras which he enjoys so much and does so poorly at.
There was a valid question among all the nonsense that the Hon. Member gave the House. The Member suggested that we were attacking the senior citizens by putting a limit of 3 per cent on de-indexing. I would like to point out to the House that the annual Guaranteed Income Supplement is indexed fully as are veterans pensions. Therefore, there is absolutely no question that through the Budget the Government has done its very best to protect the people who cannot afford complete de-indexation.


John Edmund Parry: Mr. Speaker, during his address before lunch the Hon. Member stated that it was not the wealthy of the country who would be pleased with the $.5 million capital gains tax exemption which in Ontario is equivalent to $135,000 freedom from taxes over the course of a lifetime. He suggested that it is the blue collar workers of the country who are supporting this exemption. Personally, I have rarely heard such nonsense. Does he have any shred of evidence to suggest that the introduction of capital gains tax in 1971 led to a flight of blue collar investors from the market?
Furthermore, is he prepared to stand up and repeat the assertion that the wealthy would not support the capital gains tax exemption?


Douglas Grinslade Lewis: Mr. Speaker, I do not remember making the assertion that the wealthy would not support the capital gains tax exemption. However, I would suggest to the Hon. Member that the farmers in my riding and his, tourist operators in my riding and his, the blue collar workers in my riding and his, and those people who make those small investments to make this country strong would support this exemption because that is what they told me on the weekend. I am surprised that the Hon. Member did not return to his riding to find out that very fact. He should have been out there asking them.


Paul Wyatt Dick: Mr. Speaker, I have a question for my colleague. There has been much discussion about the lack of job creation funds in this Budget. Has the Hon. Member found from his experience that people are sick and tired of having 20-week job creation programs whereby they fall back on unemployment insurance and have to scramble up again? Are young people especially not looking for permanent and full-time jobs that can be created by private industry?


Douglas Grinslade Lewis: I thank my colleague for that very thought-provoking question. There is absolutely no question that in his riding, my riding and the riding of the Hon. Member for Kenora-Rainy River (Mr. Parry), people are fed up with throwing money at job creation. They realize that all the money that has been thrown away by the Liberals has gone for nought and that the Liberal Government has created 13 per cent unemployment.
The Budget-Ms. Mitchell
As the Hon. Member aptly points out, we are trying to create a climate in which small a big business will invest, innovate, take risks and do those things that it does so well. It is another step toward creating a climate in which we will employ people in long-term, meaningful jobs.


Mr. Deputy Speaker:: The Hon. Member for Saint-Leonard-Anjou, for questions or comments.


Mr. Gagliano:: This is question, Mr. Speaker. The Hon. Member has been talking a lot about small business.

I agree with the Hon. Member that small business is creating the real jobs. However, if he believes in small business, why does the Budget not allow small business to invest in small business through a retirement savings plan? Why not allow small businesses to invest in that plan? Why does the Government limit their possibilities if it believes that small business creates jobs?


Douglas Grinslade Lewis: Mr. Speaker, that is a good question. 1 think it is valid to suggest that we have done something that previous Governments of the Party to which the Hon. Member belongs have failed to realize. Perhaps, as a result of the Hon. Member's contribution, there is a glimmer of hope in the Liberal Party that it is starting to understand small business. I compliment the Hon. Member for bringing that knowledge to the wilderness of that Party.
1 like the Hon. Member's idea. Perhaps with his help we can bring forward some ideas for implementing a means by which such a provision would not be open to abuse.
I am reminded of some of the provisions of the Challenge '85 program which do not permit owners of limited companies to employ their children. That is something about which I have written to the Minister, saying that it should be broadened to allow such employment while being cognizant of the rules.
The Hon. Member makes a good point. It would be a question of how to ensure that the privilege is not abused.


Mr. Deputy Speaker:: The period for questions and comments has expired. Resuming debate.


Margaret Anne Mitchell: Mr. Speaker, the 1985 Wilson Budget shows that the same economic myths and regressive Conservative goals which prevailed when I first came to the House in 1979 were present in the abortive Crosbie Budget certainly prevail in the Budget we are debating today. The mukluks have been exchanged for the Bay Street boots, but when one looks beyond the PR and the pizzaz, Tory policies are still policies of restraint, increased taxes and high unemployment. The policies are the same in Ottawa as they are in British Columbia. I note the similarity to the policies in the United Kingdom which I visited recently, and the results of those policies are devastating.

May 27, 1985
The Budget-Ms. Mitchell
There is no question that the new Government, and especially the new Prime Minister (Mr. Mulroney), are more slick and perhaps more slippery than they were in the Joe Clark days.


Arnold John Malone: Order.


Margaret Anne Mitchell: The new Prime Minister is a master of hypocrisy-


Arnold John Malone: A point of order.


Mr. Deputy Speaker:: I assume the Hon. Member for Crowfoot (Mr. Malone) rises on a point of order to remind the Hon. Member for Vancouver East (Ms. Mitchell) that she should refer to Members by position and not personal names. 1 am sure it is a slip because the Hon. Member is aware of the rules.


Margaret Anne Mitchell: Mr. Speaker, I delete the name of the former Prime Minister, but I am referring of course to the 1979 Conservative Government.
We know now that this particular Government, under the present leadership, may have a few more tricks up its sleeve and certainly has much more media awareness. I was about to say that I think the Prime Minister shows us that he is a master of manipulation and media hype and hypocrisy. For example, we know that his pretence to consult with people who were invited to the economic summit was actually just that.
[ Translation]


Mr. Deputy Speaker:: Order, please. The Hon. Member for Gatineau (Mrs. Mailly), on a point of order.


Mrs. Mailly:: Mr. Speaker, if I understood correctly, the Hon. Member just said that a Member of this House indulged in hypocrisy. I would like, to know whether that is what she said, and if so, I believe the Hon. Member is out of order.


Mr. Deputy Speaker:: Of course, the Hon. Member knows that it is not proper to refer to a specific Member in the House as being a "hypocrite". Possibly it has been allowed to be used in reference to a group of individuals, to a Party or to a Government, but I believe the Hon. Member knows that it cannot be used with regard to a specific Member.


Margaret Anne Mitchell: Mr. Speaker, of course, I am referring to the characteristics of the Government. The participants at the Summit Conference, particularly the representatives of consumer groups, labour groups and women's organizations, unanimously wanted a "jobs first" priority. This was quite evident on television every day.
The Prime Minister pretended to listen very seriously, and I am sure those groups believed that their views would have some impact. However, the Budget reveals that it was his corporate friends to whom he was really listening. There are no funds for job creation provided in the Budget. The unemployed are completely ignored, as if they did not exist in this country. The Budget caters to the corporate sector with capital gain gifts, tax loopholes and a $2 billion bonanza for oil companies.
Middle income earners and the poor will bear the brunt of the increased sales tax, including taxes on health products and energy conservation products, as well as a nine-cent per gallon gas tax.
As the Hon. Member for Kamloops-Shuswap (Mr. Riis) pointed out in his statement today, if one adds the increased cost of taxes and the reduction on indexation in this Budget to the increases of some $500 that were implemented last fall, average families will pay $1,000 more this year. This is not only a burden upon families. It is also a burden upon small businesses, the very sector in which the Government professes to put all its faith for job creation. How can small businesses survive, expand and employ more people if consumer demand is down? With $1,000 less to spend, surely that will happen.
1 challenge Tory Members in the House today to convince me and the women of Canada-and I hope they will do so in the question and comment period-that the Budget is not anti-women. Canadian women, who earn on average 60 per cent of men's wages, will pay $1,000 extra in taxes or reduced benefits. Increasing numbers of women are sole supporters of their children and are on very low incomes, if not already on welfare. There is no job creation targeted for women in the Budget. Indeed, training funds are being reduced. Women are faced with being displaced or phased out, either entirely or in part-time jobs, by technological change. This is the time when they need retraining opportunities, new job creation and alternative kinds of work. There are no funds allocated in the Budget to employment equity, the Government's own program which it introduced and in which it presumably believed. There is nothing to increase funds for the Human Rights Commission.
Cuts in public services, privatization which will go along with phasing out Crown corporations, and the contracting out of all these techniques, will have a proportionately greater impact on women because they are the last hired and the first fired and they are in the lowest paid clerical and service positions. They will be the ones who will not have jobs. They will be the ones who will be in part-time work. They are the ones about whom the Government does not care. It did not do anything about the prorated benefits for part-time workers. Of course, elderly women will continue in poverty because public pension reforms, which are so desperately needed, have been ignored.
As the Hon. Member for Vancouver East, I must say that we in British Columbia know from experience the devastating impact of a tough, deficit-reducing, Conservative restraint Budget. In British Columbia, experience shows that restraint has resulted in a chronic unemployment rate of 15 per cent. Skilled people have been unemployed for two or more years now. Also, it has resulted in chops in essential services such as educational, health and social services. Failures of small businesses have resulted rather than increases of new enterprises which the Government thinks will occur by some magic.
May 27, 1985

There is a lack of job creation and economic planning, particularly in the resource sectors, as is the case now. There are high costs as a result of increased violence, crime and social stress which go along with high unemployment and low incomes. The B.C. experience proves that Conservative economic policy, whether it is the Progressive Conservative Party federally or the Social Credit Party in British Columbia, simply does not work. Even Conservative business people, people who supported the Social Credit in British Columbia, are saying that the economy has been stultified, that we need change, and that this is not the way to go. The Fraser Institute is somewhat apologetic, and there is absolutely no evidence that the private sector, if left to do these things, will automatically create jobs when there is this kind of oppression in the economy. The federal Conservative Budget will add another layer of hardship on B.C. residents and on the residents of other provinces, particularly those in eastern Canada. There is no increase in job creation to help alleviate the high unemployment rate. Ordinary citizens will pay more in taxes.
No funds are budgeted for the ailing forestry and fishery industries, for housing or for municipal development. Even shipbuilding subsidies are being cut, which concerns me in my riding of Vancouver East. Revenues which should have been taxed from the wealthy are now lost because of the removal of the capital gains tax and other tax loopholes. The temporary minimum surtax is a laugh. We wanted a real, effective 20 per cent minimum tax. This is what the Prime Minister promised and has neglected to enforce.
Public services will also be cut back federally and Crown corporations will be privatized. In British Columbia we know that this will mean a lack of services, inadequate services, a loss of jobs and reduced social conditions with increased costs of health, educational and social services. A $2 billion cut in transfer payments, which one sees if one reads carefully the small print in the Budget, is a very, very serious concern. I hope very much that there will be a mass move to ensure that this does not happen. It will definitely worsen the situation in my province. The Budget is bad news for Canada generally and it is double bad news for British Columbia.
I would like to refer to the particular impact of this Budget on areas of social policy. What will the Conservatives do now in the area of health and social services to improve the general well-being of Canadians, especially the well-being of poor Canadians and of women? As I have said and will keep on saying, the lack of new funds for job creation is really difficult to believe. It condemns many thousands of Canadians to chronic unemployment, to the insecurity, stress and poverty of years ahead, not to mention the high cost of maintaining people on social programs and unemploynment.
It is not only the lack of money which concerns us. Of course money is the basic cause, but it is the absolute dwindling of self-confidence which occurs when persons go day after day lookind for work, submitting resumes, feeling that they are losing their skills and their employability, feeling that they cannot remain competitive, and feeling worthless and angry. We know that when there is lots of anger, it leads to
The Budget-Ms. Mitchell
violence. In society today we have an increase in family violence and abuse of children, which I am sure is not unrelated to high unemployment. What is more, there is the lack of opportunity for a whole generation of young people.
All of us in the House say this day after day, but I hope we really feel it. It is not only the lack of jobs, it is the lack of opportunity for the future which is really so depressing. On top of that of course, there are the cuts which have occurred in education, training a work-related experiences. Again the federal Government is neglecting to increase shared funding in the Budget for these areas.
I think it is immoral of this Government to have turned its back on the unemployed, and it was hypocritical of the Minister of Finance (Mr. Wilson) who had the gall to say: "This Budget is about jobs".


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


Mr. Deputy Speaker:: The Hon. Member for Gatineau (Mrs. Mailly), on a point of order.


Claudy Mailly: Mr. Speaker, the Hon. Member just made the same mistake she made a while ago. She referred to a Member by name and accused him of hypocrisy.


Mr. Deputy Speaker:: I am sure the Hon. Member for Vancouver East (Ms. Mitchell) did not mean to imply that the Minister himself was a hypocrite but rather was alluding to the Government as she did before.


Margaret Anne Mitchell: Mr. Speakr, I quoted the Finance Minister as saying: "This Budget is about jobs". It is a direct quote of the Finance Minister. If that statement is not hypocrisy, I do not know what is.


Mr. Deputy Speaker:: Am I to understand that the Hon. Member for Vancouver East is accusing a specific Member of being a hypocrite? If that is so, the Hon. Member would know, with her experience in the House, that that cannot be done.


Margaret Anne Mitchell: Mr. Speaker, I think it is quite obvious that what I am saying is that this is a hypocritical Budget and that the policies of the Government are completely hypocritical, as is that statement. I would like to say also that he and his colleague


Claudy Mailly: A point of order, Mr. Speaker.


Mr. Deputy Speaker:: The Hon. Member for Gatineau (Mrs. Mailly) on a point of order.


Claudy Mailly: Mr. Speaker, I am not satisfied with the answer of the Hon. Member. She can play with words, but the fact is that she indulged in a personal attack on the

May 27, 1985
The Budget-Ms. Mitchell
Minister of Finance (Mr. Wilson). She used a word which is not acceptable in the House and I would ask her to make a proper apology.


Mr. Deputy Speaker:: The Chair is satisfied with the explanation given by the Hon. Member for Vancouver East (Ms. Mitchell). The Hon. Member may continue.


Margaret Anne Mitchell: Mr. Speaker, it seems that Members are touchy when there are direct quotes. The quote I read is that this Budget is about jobs. I will leave it to the Hon. Member to interpret that in her own conscience.
In his Budget, the Minister of Finance went on to say that they are going to cut 15,000 jobs in the public service. A lot more jobs will be cut because of privatization and doing away with Crown corporations. That is quite obvious.
A similar kind of misleading of the public in budget policies is evident in the statement by the Prime Minister and the Minister of National Health and Welfare (Mr. Epp) who said that their priority is to be Canadians with the greatest need. I challenge the Conservative Members to prove this. I assume those Canadians with the greatest need are the low-income Canadians. However, they are the hardest hit by this Budget. Not only are they being whacked with $1,000 in extra taxes, but their family benefits will be affected as well. There is a slight, token increase in the child tax credit for the lowest-income people, but that is about one-tenth of the actual extra cost they will be forced to pay with the extra taxes.
As my colleagues have said, and others will elaborate, the limit on the indexation of Old Age Security may not sound much to seniors right now, but if you look at the cumulative effect, it is a very serious and unfair policy. I am told by the social policy reform group that by 1987 this will mean a cumulative loss of about $1,577 for a single pensioner. By 1990, they will lose $537 in one year. That is what this reduction of indexation of old age pensions means.
The indexation on family allowance is also being limited. This is contrary to what the Minister of National Health and Welfare said twice in the House today. It is an erosion of universality. The Liberals tried this trick. They kept eroding family allowances and other social benefits by not indexing them fully. As a result, the real value of those benefits has gone down over the years. Therefore, it is a real erosion of univerality in both cases.
The child tax exemption for older children, those who are going on to post-secondary education, will also be restricted. For low-income families, those earning under $22,000, there is a slight increase in the child tax credit, but far less than we recommended in the Standing Committee on Health, Welfare and Social Affairs. We spent weeks talking to witnesses and doing other work among ourselves. Surely even the Conservative Members will admit that that was a wasted effort. They did not pay any attention to it. This year an extra $70 will be given in the child tax credit. However, this will be taken away because of the increase in the sales tax. Most witnesses who appeared before us in committee advocated removal of the
regressive child tax exemption. Conservative Members seem to be in favour of this. I am sure my colleague, the Hon. Member for Sudbury (Mr. Frith) will agree that most of the witnesses were in favour of this. There was nothing in the report that advocated the kind of cut-back that comes out in this Budget.
According to the social policy reform group, the changes in this family benefit package that are evident in this Budget mean a loss of $400 million from the child benefit package. That $400 million is being taken away from Canada's children. Therefore, you cannot say the children are not victims of government cuts. By 1990, all families will be net losers under the child benefit package.
I want to concentrate my remaining time on what this Budget means or does not mean for Canadian women. Will it take them a step closer to equality in the workplace? Cutting 15,000 public service jobs will have a disproportionate impact on women, as will selling off Crown corporations and moves towards privatization. Women will largely be the victims. They will be left unprotected, with non-unionized part-time jobs with inadequate benefits. We only have to look at what Air Canada is doing in trying to promote unlimited part-time jobs to see that this is the way things will go in Canada. Our Government should not be encouraging that.
The Government has taken no steps to require prorated benefits for part-time workers, most of whom are women. There should have been amendments to the Canada Pension Plan as well as for private pensions. Although they are minimal, we certainly support the changes that are suggested, as far as they go, for public servants. The Government made no reference to employment equity programs. As I said earlier, the Canadian Human Rights Commission must have more money to enforce the employment equity provisions.
I could go on. I will conclude by saying that the cuts in transfer payments will not only be cuts to the provinces. They are basic cuts to new programs, including child care which desperately needs funding. The Prime Minister said the problem is urgent. As will, it means cuts to health care; really to a new kind of health care, community health care, which in the Throne Speech this Government said it was committed to. In its election promises, it even put a figure of $150 million on reforming the health system, with more emphasis on community health prevention.
I wish I had time to outline the budget proposals which the New Democratic Party developed after weeks of discussion and visits to over 24 centre across Canada. Unlike the Liberals, who offered no alternatives, and who have a despicable record, we developed a jobs first proposal. We have a jobs first proposal with many recommendations that are practical. We show how they can be paid for. We do not believe that the deficit is the first priority. People must be the first priority. It means that job strategy must be the first priority of this Government. It means federal leadership, public leadership. In the short-term, funds are required to create meaningful community jobs so that people can be fulfilled, use their skills and have a secure future. Then our country would truly be more productive.
May 27, 1985


Claudy Mailly: Mr. Speaker, as a woman in this Government I feel personally offended by the remarks made by the Hon. Member for Vancouver East (Ms. Mitchell). We, the women in this Government, have worked very hard to represent our sisters across Canada. This Budget will be helpful to them. Her remarks were very offensive. It will be helpful because up until now women have had to live with temporary jobs created by emergency measures. Those jobs, if they were lucky, lasted about 20 weeks. They were then back on welfare. We want to stop this vicious circle. This is why this Budget has been shaped in this way. We want jobs to be created by the small business sector in our communities, the most vital job creation sector in our country.
In my riding of Gatineau, which is in the Outaouais, the small business sector is the most dynamic sector in that part of Quebec. Like the Hon. Member for Kamloops-Shuswap (Mr. Riis), this past weekend I was in my riding. I spoke to small business-people, many of whom are women who have managed to create small businesses in the area. They are very pleased with this Budget because at last they will be able to create permanent jobs. They were sick and tired of these temporary job-creation programs.
I would also like to remind the Hon. Member for Vancouver East of what the Minister of Finance (Mr. Wilson) said in Question Period today, that 89,000 jobs were created in April, 60 per cent of which were for women. That is a fact as well. I would also like to remind her that the training allowance in the Budget of $900 million for 1986-87, the same as it is in this year's Budget, will give better allowances for women who go on training. Up until now allowances were not sufficient for women because they have extra expenses that men who have women at home looking after the children do not have. That too will be an improvement of the women's lot.
I would also like to remind her that at the request of the labour sector, which she purports to represent, we will now allow a deduction for contribution to the-

-Solidarity Fund of Quebec.

That will go a long way toward restoring jobs for women who are being laid off in small industries and in the forestry sector in the Outaouais and Abitibi. That is a very positive thing for the women of Canada.
I would also like to remind the Hon. Member that there will be access for homemakers to the pension plan after discussions are terminated with the provinces. That is something that must happen before it can be put in the Budget. Quebec has signalled that it is interested in finding a formula so that women who stay at home because they want to bring up their families at home will be able to.
I hope that women will have the right to choose the way of life they want. They do not have to listen to the Hon. Member for Vancouver East, living only the way she thinks is the right
The Budget-Ms. Mitchell
way for women to live. That is the other thing that offends me. She talks about taking away the total deduction for couples when the woman stays at home. She is dictating to the women of Canada the lifestyle that they should lead, and I object to that. I think women will be equal the day they can decide how best they want to live without being punished for the choices they make.


Some Hon. Members:: Hear, hear!


Mr. Deputy Speaker:: I regret to interrupt the Hon. Member for Gatineau (Mrs. Mailly).

Would the Hon. Member for Vancouver East (Ms. Mitchell) care to make a few comments?


Claudy Mailly: Mr. Speaker, I-


Mr. Deputy Speaker:: No, I have given the floor to the Hon. Member for Vancouver East.


Margaret Anne Mitchell: Mr. Speaker, first I would like to say to the Hon. Member opposite that I would hope that she would be an advocate for women, and I think from some of the things she was saying that she possibly is an advocate for women. I would hope that she would not be offended by some of us believing very strongly in and working very hard at being advocates as well, as that is our job.
I wish I could ask the Hon. Member some of the questions she asked me. Of course we do not want 20-week jobs. No one has ever suggested that we want 20-week jobs. I have certainly never said that. I want long-term jobs but I do not think that the only way to get long-term jobs is through some magic worked by the private sector and small businesses while small businesses themselves are saying that they simply do not have the kind of consumer demand to do so. I do not really see what she is getting at.
I think it will be great if many more jobs are created by small business. We would all like that. We need millions of jobs in this country. However, that will not happen overnight, as the Minister has said and I am taking into account the first-hand experience we have had in British Columbia. As well, I just returned from Britain. The job situation over there is so dreadful that Conservative Members are splitting from the Margaret Thatcher position. I really do not have any great confidence that this approach will work.
We are all for jobs and we are all for small business. I hope, though, that as an advocate for women and as an advocate for small business, the Hon. Member will be doing something very dramatic to persuade the Government to make it possible for women in business to have more access to credit. It is disgusting that nothing has been done about that.
The Hon. Member raised the matter of the training allowances. Women's organizations and others have been fighting for years to have more adequate provisions for women. I congratulate the Government for putting this in place. It is

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doing a better job in some areas than the Liberal Government did. However, there is not enough. What is the point of having some improvement in benefits if the women cannot get into those training programs? I have heard from women right across the country who indicate that they cannot get into nontraditional jobs. They are being phased out of traditional jobs in many instances and cannot get into training programs or pre-employment programs that will help give them equal access to non-traditional jobs, and that is a fact. If the Hon. Member could figure out some way to help that situation, more power to her.
Regarding the question of choice, I really did not understand what the Hon. Member was saying when she accused me of trying to restrict the choices of women. That is the last thing I would ever do. I believe in complete freedom of choice; not only in freedom of choice, but in the opportunities that allow women to have a choice. I believe women should have enough income that they can choose to remain at home or go into the workforce if that is their choice. I also believe, and I hope she does as well, in freedom of choice as far as reproductive rights are concerned. That is something on which the Government has taken no position. I very much fear that if it did take a position it would be a negative one.


Arnold John Malone: Mr. Speaker, I would not expect to do as the Hon. Member for Vancouver East (Ms. Mitchell) asked us to do earlier, that is to persuade her of something. She knows as do I that we begin with fundamentally different philosophies and ideologies. Her view is that the Government ought to be doing for the people everything that she can imagine needs to be done. The fact of the matter is that in her request for more jobs, reasonable as it is, she fails to recognize that the approach that she is advocating is precisely the approach utilized by the Liberals for most of the last 15 or 16 years. That is an approach of extending the debt and presuming that the Government, through some make-work program, will put in place jobs that are real. That approach has proven to be a dismal failure.
The fact is that in the approach that has been taken since September, 1984, there has been to date 210,000 jobs created, 89,000 of them since April and 60 per cent of which were for women. That is in considerable contrast to what was put forth by Opposition Parties when they indicated that the November 28 statement would cost 50,000 jobs.
What we must recognize fundamentally is that there is a significant and basic philosophical difference in the approaches to creating jobs. Surely the Hon. Member should find no objection to putting in place a system that creates permanent jobs, a system that allows the thrill of the entrepreneurial mentality to go forward and be productive, a system that allows business to hire people who will remain permanently hired as opposed to having the Government create jobs by having people paint churches, fix fences and clean up roadsides.
When the Hon. Member indicates that the Minister is hypocritical because he had said that the Budget was about jobs, jobs, jobs and then cuts Crown corporations, which she then relates to hypocrisy, she is basically supporting the notion
that the debt should continue. Where does she find within her reflection on this matter that it is productive for Canada to continue having one out of three tax dollars doing nothing more than paying for the interest on the accumulated debt? If the debt were gone, the Government could do 30 per cent more for all the social services of Canada. We could have 30 per cent more for hospitals, airports and virtually everything for which the Government spends money.


Mr. Deputy Speaker:: Order, please. I will recognize the Hon. Member for Vancouver East (Ms. Mitchell) on a short answer.


Margaret Anne Mitchell: Mr. Speaker, I am not quite sure what were his specific questions, but I will comment on his comments.
I disagree with the Member that what we are proposing is the same as the Liberals. I agree with the Member that the major focus on job creation, with some exceptions, was on short-term, make-work projects which recycled people on and off unemployment insurance benefits. While those projects were not entirely a waste of money, they were not productive as far as creating something new was concerned. Often, people felt abused by that system.
In our report, Canada Unlimited, we made 70 recommendations to create meaningful and productive work. The report also places a great emphasis on enterprises, not only on small business, which we agree certainly generates jobs, but also on co-operative endeavours. The report recommended more startup funds, low interest loans and so on to help start workers' cooperatives. That is something to which I hope the Government would give more emphasis. One of the Liberal programs which was fairly good in that endeavour was LEAP. That was a three-year program which helped people to develop skills as well as to set up non-profit enterprises.
I cannot agree with the assumption in the question the Hon. Member asked me about the national debt. Of course, we do not want things to continue as they are. Our Party wants, as much as the Government, to bring down the national debt. But, it must be done in a sensible manner in order that people will not be hurt. It cannot be done in the way in which it was done in British Columbia. For heaven's sake, the Hon. Member should visit British Columbia to see what has been done to the people there. That system has abused people, created hardships and added to unemployment rolls, social assistance rolls and health costs. It has destroyed families. We should do it in a manner which will give some public leadership and encourage the private sector to do as much as possible.


Hon. J. Robert Howie (York-Sunbury):: Mr. Speaker, I appreciate the opportunity to take part in this debate. I have enjoyed all the comments which have been made by colleagues to date.
At the present time the spending of the federal Government accounts for roughly 67 per cent of the total economic activity in New Brunswick, my province. Most of the expenditures are
May 27, 1985

in the form of payments to the provincial Government and to individuals. The level of dependency on federal expenditures in New Brunswick is shared proportionately by all Atlantic Provinces. That dependency is the result of federal policies which have been practised over the last 20 years, and it leaves the Province of New Brunswick and other Atlantic Provinces in a fragile and tragic position.
I would like to emphasize that the industrial policies which were practised by the former administration did much more to maintain incomes and employment in other parts of Canada than they did in New Brunswick and other Atlantic Provinces. Federal subsidies to de Havilland and Canadair alone have been greatly in excess of the sums paid for any industrial development program in the Atlantic Provinces since World War II. The rate of unemployment in New Brunswick is a stain on the conscience of the nation. The level of wages is two-thirds of the national average and the resource-based economy is extremely vulnerable to international and national cyclical downturns.
The basic characteristics of New Brunswick and the Atlantic econoy in the mid-1980s are: resource-based industries; a good record in job creation out-stripped by more people looking for work, resulting in higher unemployment than nationally; lower personal incomes, especially earned incomes; higher levels of federal transfer payments to individuals, with unemployment benefits assuming increasing importance; lower levels of private investment; higher levels of government spending and employment; higher levels of federal transfers to other Governments, and declining levels of trageted regional development spending, to a point where they are a small fraction of increased unemployment insurance transfers.
In summary, at the present time the economies of New Brunswick and other Atlantic Provinces are much too dependent on the flow of federal transfer payments. Strong new policies to expand the industrial base of New Brunswick and other Atlantic Provinces will bring great benefits to both the regional economy and the economy of Canada as a whole. To achieve that goal is the challenge that faces our Government. The severe economic problems that face our nation do not make it easy to meet that challenge.
For a moment, I would like to look at the expenditures in New Brunswick to see if they could not be re-allocated to generate more economic growth and help put in place a badly needed private sector economy.
DREE expenditures in 1971 dollars declined from $145 million in 1972 to $45 million in 1982. I suggest that other evidence of a reduced commitment toward the importance of regional development can be seen with the relative proportions of spending in other regional development programs over the past decade.
During the past decade, the federal Government spent $412 million in New Brunswick for projects associated with regional development. That is roughly equal to the $440 million paid to Canadair in two years. Those pay-outs are insignificant compared with the $1.4 billion which was written off at Canadair by the Canadian taxpayers.
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Regional development expenditures have been reducing in Atlantic Canada as unemployment expenditures have been increasing. In 1972, DREE expenditures were 67 per cent of unemployment insurance payments. By 1982, the reduced DREE expenditures were 10 per cent of unemployment insurance payments.
The complexion of federal expenditures in New Brunswick and other Atlantic Provinces has been more like foreign aid and mere spending than economic assistance and investment. The balance is wrong. We must change the balance to foster more economic development.
Private sector stimulation will be necessary if our smaller private sector is to be the engine of economic growth. Enhanced and improved regional development programs that provide long-term job opportunities for Atlantic Canadians are essential if we wish to reduce dependence on the federal Treasury and increase the long-term economic viability of our region.
Federal policies to promote regional economic development should be concerned primarily with expanding the industrial base of the region. Economic problems of the region cannot permanently be solved by transfer payments or by a dependence on high expenditures by the federal Government.
If Atlantic Canada is going to compete, we must ensure that our incentives are adequate. Our private sector is underdeveloped and so are the capital markets. If Atlantic Canadian industries are going to be established, grow and prosper, we must create a climate that is attractive to industry. The federal Government's policy of reducing interest rates is a major step in that direction.
Proposals to develop freer trade are attractive to Atlantic Canadians whose products seek expanding United States markets. Programs to improve productivity are another major step in that direction.
I would like to mention some of the things which the Government has done recently to move in the direction of which I have been speaking.
Federal support for the establishment and expansion of Process Technology Ltd., in my constituency, is a major step in the diversification of the economy, with special emphasis on non-resource-based manufacturing. Process Technology embodies new technologies and is the flagship of the high technology industry in the Province of New Brunswick.
The province possesses a number of strengths which can be the basis for growth opportunities in the development of products and services embodying new technologies. These include the New Brunswick Research and Productivity Council which has attracted worldwide attention for its work in metallurgy; a well established engineering school at the University of New Brunswick, which offers the only Ph. D. in North America in computer assisted design and manufacturing; and excellent schools of computer science and world class expertise in telecommunications technology. The use of CAD/

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CAM techniques, being assisted by the province's manufacturing technology centre, has the potential to greatly improve the competitive position of small companies. My Government has just given the New Brunswick Research and Productivity Council a $4.2 million grant for that purpose.
It is important to improve the over-all productivity and competitive position of New Brunswick's industries. The leading industry in New Brunswick which provides the largest number of jobs is the forest industry. The Minister of State for Forestry (Mr. Merrithew) has just announced a $35 million contribution to the forestry complex being located in Fredericton which will open a unique window on research for the entire forest industry in the region. This will greatly enhance the transfer of new technology to industry and expand the research and development component for this vital industry.
The availability of unskilled and semi-skilled labour provides a challenge for Government to provide needed facilities now in order to stimulate employment now. The announcement by the Minister of Public Works (Mr. La Salle) of the commence of construction this year of "J" Division Headquarters of the RCMP in Fredericton-a $20 million project-is a step in this direction.
The need to increase added value in New Brunswick products by increasing the level of processing the New Brunswick resources is another important strategy and a worthy strategic objective. The announcement by my Government of its $42 million participation in the development of the REPAP paper mill project on the Miramichi, which will produce a high grade of lightweight coated paper to be sold largely in the United States, is an example of putting your money where your mouth is. The retention of the military base on the Miramichi is another objective achieved by this Government.
Another major industry in New Brunswick, which at the moment is underdeveloped, is tourism. The Minister of State for Tourism (Mr. McMillan) in this Government has recently implemented a federal-provincial program involving $22 million federal dollars and $10 million provincial for this very purpose. The Minister of Supply and Services (Mr. Andre) has signed a joint agreement with his New Brunswick counterpart to improve and increase purchasing in that province. Jobs are the number one priority of this Government and the $60 million development of the Canadian Forces Base at Gagetown already announced by my Government will help provide them.
The new course of action for 1985-1986 commits Canada and New Brunswick to pursuing measures undertaken in existing subsidiary agreements and to undertake new joint measures in support of economic development in New Brunswick. Two of these, an ERDA subsidiary agreement for industrial development and a subsidiary agreement for industrial innovation and technology development, are expected to be signed in the near future. Premier Hatfield and Minister of Regional Industrial Expansion (Mr. Stevens) also agreed to assess where supplemental measures may be required for certain regions of New Brunswick. Current plans indicate that both Governments will expend an estimated $93 million in total in New Brunswick under existing agreements during 1985-1986.
It is crucially important to New Brunswick, which sells more to New England than it does to other eastern Canadian provinces, that Canada's trade policy emphasize the development and maintenance of positive trade relations with the United States with the aim of reducing obstacles to increased trade flows.
There are other challenges which face us. Because of its dispersed population and heavy dependence on exports, and to a lesser extent, central Canadians markets, the quality and costs of transportation services are crucial to New Brunswick's economic development. As just one example, an assessment for Transport Canada indicated that New Brunswick would be the most adversely affected of the four Atlantic Provinces by the removal of freight rate subsidies now provided under the Maritime Freight Rates Act and the Atlantic Region Freight Assistance Act. Recent announcements concerning freight rate subsidies by the Minister of Transport (Mr. Mazankowski), who understands our problems, the reintroduction of the Atlantic Limited rail passenger train service and the continuation of the dayliner between Fredericton and Saint John, indicate that we have a Government which will listen and respond to our needs. It gives us the confidence that our problems will be addressed.
The upgrading of highways in the northern and eastern regions of the province to an all-weather standard has been a major federal priority. This work is now nearing completion and has succeeded in reducing the cost of moving resource exports to markets and improving the linkages between the northern regions and the urban centres of the south.
It may now be appropriate to consider how transportation measures can be used to improve the linkages between the complementary business functions distributed among the major urban centres; Saint John, manufacturing and port; Moncton, distribution and business services; and Fredericton, public administration, education and research. The upgrading, and in some cases, realignment of the highway link between the three centres represents one such approach.
There may also be opportunities now with the new federal airline deregulation policy to achieve improved air service between the major New Brunswick centres and between New Brunswick urban centres and other Maritime cities. As well, a third level air carrier service, for example, if established between New Brunswick centres, might make feasible improved service to the important New England market. Potentially, such improved air service could reduce the cost of doing business and greatly increase the attractiveness of a New Brunswick location for secondary manufacturing and services industry.
Another important issue in the transportation area relates to the ability of the port of Saint John to undertake the investment required for it to maintain its competitive position. The port is still heavily in debt from the expansion program undertaken in the 1970s and is not currently in a position to finance new investments. The existing debt load has prevented the port from obtaining local port commission status, as the new federal policy requires that a port demonstrate financial
May 27, 1985

self-sufficiency in order to be eligible. However, the port urgently requires new facilities such as a roll-on-roll-off service, to improve its competitive position. Such a facility would benefit New Brunswick exporters through reduction in handling costs and through an increase in the availability and quality of shipping services.
The resource based economies of the northern counties of New Brunswick have helped close the gap in employment income per capita with the provincial average which was made possible in part by federal-provincial programs.
Another factor behind the growth in the economies of the Madawaska, Gloucester and Kent Counties, has been the emergence of small manufacturing firms established by local entrepreneurs and selling primarily on regional and national markets. This underscores the importance of a small business incentive program. It also underlines the key thrust of this budget. The budget stimulates the small business sector, which is the engine of jobs, by creating more potential pools of capital, more generous research and development incentives and an attractive capital gains tax exemption. With a realistic and balanced medium-term strategy, the Minister now controls the deficit without threatening economic recovery, social programs or job-creation, while ensuring significant deficit reductions later.
The federal Government has been acting in a spirit of national conciliation and co-operation throughout its short term in office. It has attempted to put its house in order, to create a climate that is attractive to industry. It has also attempted to increase its ability to help regions of the country which suffer from disparities.
I reject the claim of Hon. Members of the Opposition who speak of sneaky and dishonest tax increases. Nothing could be sneakier than crippling the government's ability to deliver necessary services by strangling it in its own debt. We have had enough of grandiose announcements and constant shifts in direction which have created major problems with investor and consumer confidence over the past few years. This budget points out the direction rather than pretends we can do everything in one fell swoop. The corollary to that, the budget has planned the gradual phase-out of many loopholes in the taxation system and in programs. After all, these were legitimate deductions to which persons were properly entitled and they are entitled the reasonable notice of their discontinuance. That is what the Minister of Finance (Mr. Wilson) is giving.
Significantly, major issues involving social policy are not decided unilaterally or arbitrarily by the federal Government because they involve the provinces. Our Government is under no illusion that it is going to be easy to get us out of the mess the previous Government put us into. But this Budget does point in a new direction; it is a break with the past and a serious effort to maximize the delivery of quality service at the lowest possible cost.
Some of our opponents refer to the Budget as gutless. I reject that allegation. By putting its credibility on the line, by
The Budget-Mr. Henderson
saying it trusts the private sector to make wise decisions, by making no attempt to hide its direction, the Government has indicated it will stand or fall by what it believes in. This is an example of political courage which is so rare that some of our opponents appear unable to recognize it for what it is.


Mr. George Henderson (Egmont):: Mr. Speaker, to listen to the speech of my friend from New Brunswick, the Hon. Member for York-Sunbury (Mr. Howie), you would think that all is well in Atlantic Canada. But I do not think that is the case.
First I would like to address the issue which has been on the minds of Canadians since Thursday, and that issue is jobs. The Minister of Finance (Mr. Wilson) said this Budget was about jobs. Well, I say to you that this Budget is not at all about jobs in Atlantic Canada, and I do not think it is about jobs in Canada as a whole. Fewer dollars will be spent, as I read this Budget, on training and job creation. So how can the Government claim that the priority goal is jobs for Canadians? Where are all those jobs we were told about by the Prime Minister (Mr. Mulroney) and the Minister of Finance? As I say, I have not seen them in the Budget plans.
There is a plan, of course, to free up the entrepreneurial spirit, and we on this side, and I think all Members of the House, agree that there is an engine of growth there, but we have to consider those areas of the country where it is very difficult to get the entrepreneurial spirit in gear and where it will take some time to do so.
Therefore, what about the immediate job crisis we have on our hands? The Minister is taking quite a gamble by leaving everything up to the private sector, and hopefully it will work in the long term, over the next eight or ten years, but there are 1.5 million Canadians who are out of work today and that has to be addressed.
I do not see how those people who were left out of the Budget can be very excited about the investment incentives. In fact, I think they are sorely disappointed. The Budget leaves those Canadians out in the cold. The entrepreneurial spirit proposed in this Budget certainly will achieve some praise from some corners of this country and economy, and I hope it does. But I am telling you, Mr. Speaker, that praise is not going to be very great in Atlantic Canada, especially from those poor people on unemployment insurance whose benefits are running out and who will be unable to get jobs when that happens. These people have to look forward to going on the welfare roles. So this Budget is definitely not about jobs.
I can assure all Hon. Members that this Budget promises to aggravate the economic problems of my province. Prince Edward Island, and the rest of Atlantic Canada. The Budget clearly demonstrates the lack of understanding of Atlantic Canada which this Government suffers from. It is a region hampered by unemployment, where jobs are seasonal, and where the private sector is not the dominant force in the economy. This Budget baffles Atlantic Canada. They are asking me where the jobs will come from and it is obvious that

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the Minister does not have the answer, so the Budget is bitter medicine for those people in that part of the country.
The riding I represent, Egmont, is much like other areas of Atlantic Canada. It relies heavily on transfer payments from the federal Government. Those payments are the largest single source of revenue for Prince Edward Island, and now the Minister of Finance has shown to Canadians that job creation is not a priority goal with this Government. The Minister delivered another blow to my province with this holdback of $2 billion in transfer payments over the next five years. Is that fair to the have-not provinces of this country? It means that essential medical services will be curtailed and in some cases eliminated, and dollars for post secondary education will shrink. Atlantic Canadians, especially those in Prince Edward Island, will have to dig pretty deep for this deficit-slashing Budget.
We have heard for the last three months the cliche that the Budget would be tough but fair, so let us look at the fairness of this Budget. First, the average family loses the federal tax reduction of $50. The child tax credit will be lowered. Family allowance cheques will shrink. On top of that, the average family gets hit with taxes on items like pet food, soft drinks, candy and band-aids, all of which are essential to the ordinary and poor Canadian.
Of course, the financial squeeze gets even tougher as we look at other areas where the Government is going to increase taxes, especially the gasoline tax. I happen to live in an area with three main industries: agriculture, the fishery and tourism. For Atlantic Canada as a whole you can add the forestry and mining sectors. These sectors are all heavy users of energy, and when you hit them with that kind of a tax it has to be extremely regressive. Therefore these excessive taxes will pinch the average wage earner, Canadians who scrape from one pay cheque to another. The Minister wants them to spend their savings and they will, but not on investments to stimulate the economy. No, they will cash in their savings to survive, to save their families from poverty. So it is not the families earning $50,000 and more who are going to be hurt. The families who can least afford it, the ones earning $20,000 or $25,000, or even up to $30,000, are going to pay for this Budget.
As I read through the Budget papers, another important concern for Prince Edward Island was totally lacking. There was no mention whatsoever of an energy agreement between the Province of Prince Edward Island and the Government of Canada. The Premier in his 1982 election campaign announced with great fanfare that we were going to have a 20 per cent reduction in energy rates. That was three years ago and what has happened since? There has been not only no reduction, but in fact a 30 per cent increase.
The Prime Minister, during the election campaign, promised to rectify that situation for Prince Edward Island. He recognized, as we all do, that energy rates were too high and he was going to quickly reduce them whenever he got the reins of power. Conservative members were in Halifax during the election campaign and they also said that they were going to find a solution to the energy situation in Prince Edward Island.
The Minister of State for Tourism (Mr. McMillan), who is from Prince Edward Island, said that when they got power we would have a one-shot subsidy. But nothing has happened; in fact it has gone the other way. How long can Prince Edward Islanders continue to shell out to cover their astronomical power bills? It is taking everything they have to turn on the light switch and heat their homes. I can see where the Government is fattening its coffers by proposing a 10 per cent tax on things such as wood stoves, insulation, wind generators and solar panels, all equipment used for alternate energy sources. At the same time we are trying to get these people in the hard-hit regions off high cost non-renewable energy resources and onto renewable energy resources. All the incentive is directed toward western Canada, and particularly the Province of Alberta.
The Maritime provinces are the major producers of potatoes in Canada. Forty-five per cent of Canadian potatoes are harvested in Atlantic Canada. However, Maritime farmers are no longer able to boast about this prize crop because when the statement of the Minister of Finance was introduced in November they were hit with all kinds of fees. On top of that there will be a 2 cent a litre increase on fuel just at the time when farmers are harvesting their crops. That is another sector which is hopelessly going into the hole. The farmers of the country were looking for some relief from interest on loans. Instead another $50 million of farm subsidies was cut from the Budget for next year and every year thereafter, in addition to the cuts which were made in November. It is very difficult for farmers to put up with these uncertainties. They already have to put up with the uncertainties of prices, weather, and escalating energy costs.
Another important group of people living on Prince Edward Island is the senior citizens. Prince Edward Island has the highest per capita rate of senior citizens in Canada. Due to the de-indexing of Old Age Security payments their cheques will not stretch as far next year or in the following years. They will be cut by 3 per cent every year. Many seniors in the country are already living in poverty. Why did the Government take a swipe at the elderly, most of whom are women, who rely solely upon Old Age Security cheques to buy groceries and pay the rent? Three per cent means an awful lot to these people. Three per cent puts food on their tables. Senior citizens will have fewer dollars to spend on consumer goods. That, coupled with the absence of a significant job creation program, will swell the unemployment and welfare rolls. These people merely get by and do not have extra cash to spend. How will that help small businesses, which rely on consumer spending, to create jobs?
A family business which was incorporated 125 years ago went into receivership a week and one-half ago. Approximately 95 to 125 employees will be unemployed. That is the kind of business that we need in Atlantic Canada to create jobs. It is all tied to consumer spending. This Budget has not addressed that situation. In fact, it is going the opposite way. Being faced with even more cuts, it will be very difficult for any company
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to take over R. T. Holman's and make it work. We desperately need to put Canadians back to work. This Budget is definitely not designed to do that.
Let us consider the fishery. During the election campaign we heard an awful lot about the fishery. We heard of all the things the Government was going to do for fishermen. It almost sounded like Orwell's book of fiction entitled 1984 in which he predicted what society would be like in 1984. The Tories also had a great book of fiction about the fishery. The number one author of that book was the present Prime Minister who had a riding in Atlantic Canada at that time. He was then showing some concern for Atlantic Canada. The Minister of Fisheries and Oceans (Mr. Fraser) was the co-author of that book.
After the Prime Minister got elected and formed the Government he forgot what Atlantic Canada was all about. The proof of this was in the November 8, 1984 economic statement. In this anti-Robin Hood, take from the poor and give to the rich Budget, the nasty sheriff of Nottingham Forest, the Minister of Finance, robbed one of Canada's poorest industries, the fishing industry, of some $40 million in November. On top of that he has robbed them of $25 million for next year.
Since the Government has taken office we have seen a hefty increase in the staff of the Prime Minister's office. There has been an increase in the staff of Minister's offices. There are 80,000 plus people employed in Ministers' offices. The only reason I can see for this is to find new and better ways to take money from the poor. That is exactly what they have been doing. They have been taking money away from fishermen and farmers. The "new and better" that was talked about during the election campaign was a new way for the poor and middle-class to become poorer and a better way for the rich to become richer.
I feel a bit sorry for the Minister of Fisheries and Oceans. Recently he came to the Committee on Fisheries and Forestry and asked all members of the committee to support him in his attempt to get far more money for small craft harbours. I have proposed on several occasions that we should have no less than $150 million for small craft harbours in Canada. I think every Member of Parliament agrees that there is not enough money in the Budget for small craft harbours. Even Members of Parliament from Ontario and Quebec have come before the committee asking for more money. Last week we had $54 million but on Thursday night we discovered that we have only $25 million left in the global budget of the Department of Fisheries and Oceans. This is crazy, Mr. Speaker. It is penny wise and dollar foolish. Our wharves are collapsing before the Government's eyes for need of maintenance. If the maintenance is not done this year it will cost five times as much next year. We have severe ice problems in Altantic Canada and there is a lot of destruction during the winter due to storms. If the necessary repairs are not made we could lose a total wharf. Instead of costing $100,000 to do the repairs now, it will cost the Government $1 million in the future.
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This is an area in which the Government could look to create jobs. That would provide the infrastructure to expand the fishing and agricultural industries. Unless something is done to provide this infrastructure and keep it in place jobs will be lost. Fishermen can no longer afford to take part in the industry in which they have participated for many years.
I do not know where the Minister will make the cuts in the Budget. He tried in November. It was announced that Ste Anne de Bellevue would be closed and they had to retract that. It was announced that fisheries development programs would be cut in Quebec, Labrador, Manitoba and Saskatchewan. They had to backtrack on that and will have to backtrack on this too.
On behalf of the fishermen of this country whom 1 am trying to represent, I ask the Government to take a more sensible approach to the fishery so that it can become more efficient and create the jobs that are necessary. I hope the Minister of Finance and the President of the Treasury Board (Mr. de Cotret) will heed my words and consider that sector as one which will generate jobs.
The Budget will have a disastrous effect on tourism throughout the country, particularly in my province where it is the third main industry. The majority of tourists from the United States are blue collar workers. They too have budget restrictions, and higher transportation costs will prevent them from staying in Canada longer. That, coupled with the increased ferry rates that were implemented in November, the increased national parks fees as well as other increased costs make it a sad day for Atlantic Canada.
The President of the Atlantic Provinces Economic Council, Bob Stuart, said in a speech that the impact of the increased investment and expenditure cuts of 10 per cent will mean one per cent growth in central Canada and western Canada and it will mean a minus 6 per cent growth in Atlantic Canada where the private sector makes up just 20 percent of the economy and the public sector accounts for 80 per cent. This is compared to the West where it is 55 per cent in the private sector and 45 per cent for the public sector.


Douglas Grinslade Lewis: Mr. Speaker, I listened with great interest to the Hon. Member. I heard him say specifically that farmers in Prince Edward Island are no longer able to boost about their potato crop. I should point out to the House that the Minister of State for Tourism who is the Hon. Member for Hillsborough (Mr. McMillan), the Member for Cardigan (Mr. Binns) and the Member for Malpeque (Mr. Gass) consistently boast about the potato crops on Prince Edward Island. The Member represents Prince Edward Island and I think it is shameful that he is not boasting about the potato crops there. 1 hope that his constituents will bring him up short for that.
The Hon. Member has been a member of the Liberal Party and the Liberal Government for several years. He knows that his Party refused to introduce legislation recognizing that the family farm is the pension fund of the farmer. Consistently the

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Liberal Party taxed capital gains on the sale of the family farm. The Conservative Party has given the farmers of this country that exemption on capital gains. It is something the Liberal Party refused to do. Is the Hon. Member prepared to agree that this exemption which the Liberals refused to provide will have a long-term effect on the farmers of Canada?


George Roland Henderson: Mr. Speaker, obviously the Hon. Member did not understand what I said. Unfortunately, potato farmers on Prince Edward Island will no longer be able to boast about their potatoes as a result of these increased costs. There will no longer be any potato farmers if the Government proceeds with its increased cost measures. That is what I am saying and that is what his colleagues from Prince Edward Island should be saying.
It is not a question of the quality of our potatoes, it is how long we can continue to grow them at a loss. That is what the Government must consider.
With respect to capital gains, I agree with the positive measure in the Budget. I believe we all agree with that provision and it is a positive move for the farmers who are getting out of agriculture, but is is not positive for those trying to get into agriculture. While a capital gains exemption is an excellent program for farmers, the Government has not addressed the plight of young farmers and new farmers. That is the point I am trying to make to the Government.
Unless it addresses that situation there will be no potatoes in Prince Edward Island to boast about, or any agriculture to boast about. Even milk production is becoming less attractive as a result of high energy costs in Prince Edward Island. The profit margin is almost nothing compared to Ontario. I hope the Government will seriously look at what is happening in Atlantic Canada-particularly my Province of Prince Edward Island-and recognize the situation.


Frederick James (Jim) Hawkes: Mr. Speaker, in order for the Hon. Member to be fair about farm issues, he might recall the steps that were taken in November to reduce the input costs and the impact of a 3 per cent or 25 per cent reduction in interest rates on the input costs of farmers and the ability of consumers to pay for the products they produce.
At the beginning of his speech the Hon. Member talked about jobs. He concluded with a special plea for Prince Edward Island because 80 per cent of the economy was in the public sector and 20 per cent was in the private sector. He belongs to a political party that has essentially been in charge of this country for the last 20 years, during which time the proportion of public sector spending has grown in order to keep the community alive, while private sector employment and private sector spending has declined. I found his remarks rather confusing. Does he choose to make that proportion 85 per cent and 15 per cent, 90 per cent and 10 per cent for the future, or does he support our Government's goal of 50-50 in the economy, where everyone has a job because the private sector is strong and healthy? If he believes that, could he identify some measures in that Budget which will help realize that goal?


George Roland Henderson: Mr. Speaker, I was quoting a speech given by the President of the Atlantic Provinces Chamber of Commerce. He said that the Budget will decrease by minus 6 per cent the growth of Atlantic Canada. Those were his words, not mine.


Frederick James (Jim) Hawkes: Is he a Liberal?


George Roland Henderson: I do not know the gentleman. However, after the Budget I presume he would not be a Conservative, if he uses figures like that.
The Hon. Member asked about the ratio in the economy between the public and private sector. I would like to see it at 50-50, just as the Hon. Member would. However, we must be realistic. Cars are not manufactured in the Province of Prince Edward Island, they are manufactured close to the markets. The Hon. Member should know that. We do not have oil wells or spin-off industries from oil wells in the Province of Prince Edward Island. We must rely on three very important industries; agriculture, fisheries and tourism. The other sectors are related to consumer spending.
The disturbing aspect of the budget, as is reflected by the mentality of the Hon. Member, is that Members opposite do not understand what all of Canada is about. They do not understand the situation in Labrador. They do not understand the situation in Cape Breton or they would never have closed two heavy water plants without providing an alternative.
I do not understand downtown Calgary but I suggest it is much easier to create jobs in downtown Calgary, Edmonton, Toronto, Montreal or, indeed, in Ottawa. There are construction cranes everywhere, in Ottawa. I do not think there is one crane in my province of Prince Edward Island. There are some blue herons, but no cranes.
These are areas at which all of us have to take a look. In northern Ontario we will find the same situation. It is not unique to Prince Edward Island or to Cape Breton. There are outlying areas in the country which have to be taken into consideration. Unless the Government is prepared to address the situation, we will have unemployment like we have never seen before. What will happen to the deficit in that event? These people will have to survive. They will have to be paid welfare, UIC or something. All I am saying is that we will have to take a long, hard look at it.


Mr. Crofton:: Mr. Speaker, the Hon. Member talked about the agricultural industry in Prince Edward Island, and he used some figures regarding fuel prices which I think were somewhat misleading. Perhaps in fairness he might want to correct what he said. He talked about the price going up in September by two cents per litre, but he neglected to mention that on June 1 it would go down .7 cents. Therefore the net additional cost to consumers in September will in fact be 1.3 cents per litre. He gave no credit whatsoever for the fact that the Government, since assuming office, has given a federal tax
May 27, 1985

remission to primary industries, which happens to include farmers as well.


George Roland Henderson: Mr. Speaker, I would like to comment on that question and to set the record straight. The tax remission which was given as a result of the November economic statement went into effect on January 1, 1985. It expires, and this is what we have to watch in these Budgets and economic statements-this is the trickery which I am glad to be able to expose today-on January 1, 1987. It is for two seasons. On top of that, they have already put on two cents per litre as well as the other increase last November. Where is the net benefit of that to farmers? There was no mention of that when the Conservative Party promised that if it was elected it would eliminate the excise tax on gasoline for two years. Conservative Members said that they would eliminate it. I have their list of promises. There is no sunset clause on it whatsoever. It was a good idea, a tremendous idea, but many farmers went to the polls to vote thinking that ever after there would be no tax on gasoline. What did the Government do? It will be the same this coming September as it was last August.


The Acting Speaker (Mr. Paproski):: A short question by the Hon. Member for Crowfoot (Mr. Malone).


Arnold John Malone: Mr. Speaker, I must say that I find the comments of the Hon. Member interesting. If one were to believe all that he was saying, one would expect that the netted gems on Prince Edward Island no longer see eye to eye. Bearing in mind that the Hon. Member indicated that the tax on gasoline was going somewhat higher, some 1.3 cents per litre in total, would he not concede, nevertheless, that it will be cheaper than when the Liberals were last in office?
Further, bearing in mind that one of the major costs to agriculture is the cost of capitalization, does the Hon. Member not recognize that interest rates are now 3 per cent cheaper then they were when he was on the government benches about a year ago? He said that we did nothing with the capital gains tax for new farmers to get started and that it would only help older, retiring farmers. Does he not recognize that the removal of $500,000 in capital gains tax will have a downward pressure on land prices and therefore make it more possible for younger farmers to become established?
Does the Hon. Member not huff and puff a bit too hard by not recognizing that part way through our term one of the major aspects at which we are looking is opening up the market to the United States? This could make his netted gems happy again and give farmers an opportunity for some sales. Surely he puffs too hard after being a Member on the Government side.
Finally, does the Hon. Member project a continuation of the Liberal policies of ever increasing the debt, ever increasing the burden, and believing that somehow that creates jobs and economic stability?


The Acting Speaker (Mr. Paproski):: The Hon. Member for Egmont (Mr. Henderson) has 30 seconds to answer that question.
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George Roland Henderson: Mr. Speaker, you do not give me much time within which to answer that question. It is interesting to hear government Members taking credit for the interest rates. Right after they were elected interest rates started to rise again, and they said that was the fault of the United States as the rates in the United States were going up.


An Hon. Member:: They were fluctuating.


George Roland Henderson: They were fluctuating. During the election campaign it was all the fault of the Liberals, but when they were elected and they started to rise it was all the fault of the United States. However, when they started to come down again they started taking credit for it. If they go up again in the United States and then go up here, they will say the same thing.
It is interesting that the Hon. Member mentioned the United States market. This is at a time when our hog farmers are in extreme difficulty trying to sell pork in the United States, when our fishermen are having problems trying to sell salt cod, and when the Prime Minister said that he would buddy up with Reagan and settle all these problems. However, the Hon. Member knows full well that if the agricultural, fishing and tourism sectors are allowed to die, there will be a deficit situation the likes of which Canada has never witnessed before.


The Acting Speaker (Mr. Paproski):: I regret the Hon. Member's time has expired for questions and comments.


Geoff Wilson: Mr. Speaker, I am honoured, as a government Member from western Canada, to join in this budget debate. My constituency of Swift Current-Maple Creek covers 18,000 square miles in the southwestern corner of Saskatchewan. The main business and occupation is agriculture, with some secondary oil and gas activity. What I say will be from that perspective.
The Budget is very important to my area of the Prairies, indeed to all western Canada, because it was this area, perhaps more than any other, which endured hardship and neglect over the past 20 years. Western Canada was particularly devastated by twin hammer blows 10 years apart. The 1971 Budget brought us capital gains and 1981 brought us the MacEachen Budget and the infamous National Energy Program. The emancipation of western Canada was launched at the historic meeting in the City of Prince Albert last July. There the Progressive Conservative Party confirmed that western Canada had to be brought back into Confederation. The Prince Albert Declaration indicated that a Progressive Conservative government would prove to western Canadians, by listening and taking action, that the federal Government was as much their Government as that of any other region; westerners would again see Ottawa as a friend, not as a foe.
Last September Canadians voted for change. They voted not just for a change in policies, they voted for a new approach to making public policy. Two months later, in November, we set out our agenda for economic renewal, an agenda which laid out our principles and new policy directions. We said at that

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The Budget-Mr. G. Wilson
time that we would make the changes necessary to promote growth, create jobs and improve social programs. We said that we would act fairly, and we said that we would consult and listen before acting.
Since that time we have listened to the concerns and aspirations of Canadians in the most extensive consultative process in Canadian history. However, consultation has not been an excuse for inaction. Since September we have implemented many of the policies defined in Prince Albert. We said that we would implement a taxation system which recognized bottom line profits as the basis for assessing taxes in order to stimulate the investment needed to bring on new energy resources. In keeping with this, the Western Accord has been signed, thus concluding negotiations with the western provinces and the oil industry. The Western Accord signals a new era in federal-provincial relations and the end of the national energy policy. This new policy will mean opportunity for all Canadians through balanced development of our resources for all regions. Jobs in exploration and drilling will mean jobs in manufacturing plants. Development in the oil and gas resource areas will mean jobs and growth in Ontario and Quebec. The Western Accord brings to a close that bitter chapter of western history in which the federal Government unilaterally changed the rules of the game and caused untold misery for hundreds of thousands of Canadians.
In the areas of transportation and agriculture we have frozen existing freight rates from further increases for the next two crop years. The 31.5 tonne volume cap in the Western Grain Transportation Act is being removed. We have preserved a number of rural rail branch lines. We have implemented the $60 million federal-provincial drought assistance program. The Farm Credit Corporation has reduced interest rates by some 4 per cent for 5,600 farmers. It has announced a shared risk mortgage program. We have allowed voluntary dual labelling in imperial as well as in metric on farm products.
Last fall this Government reduced the price of fuel to primary producers by some 22 cents a gallon. We are in the process of legislating a national voluntary tripartite red meat stabilization program. We amended the Western Grain Stabilization Act to trigger a timely and substantial pay-out of $450 million to producers. The strong-arm and confrontational tactics of the Department of National Revenue have been abolished and taxpayers' rights have been enshrined in the declaration. All these actions prove this Government's commitment to the needs of western Canadians and to Canadian farmers.
On Thursday last, the Minister of Finance (Mr. Wilson) reaffirmed this commitment when he announced the immediate $500,000 capital gains exemption on the sale of farm property while at the same time preserving the tax free intergenerational rollover of land. Since the Liberal Government instituted capital gains in 1972, that unfair tax has hung like a poisonous cloud over the farm community. It hit hardest the
farmer who found the fruits of his life's work locked up in the ground and, on retirement, subject to considerable income tax.
I am privileged to be a member of the Standing Committee on Finance of this House, a committee which in the month of March held extensive hearings on a number of agricultural issues and listened to briefs and presentations from all sectors of agriculture. From these hearings, it became obvious that the major concern was capital gains. The elimination of capital gains on farmland will enable a generation of older farmers to turn over their farm and receive a fair price which will permit them to retire with some dignity. At the same time, opportunities will open up to younger farmers to acquire this land at a more reasonable price. A further benefit will accrue to agriculture through obvious simplification in farm estate planning. In most instances, the lifetime capital gains exemption will do away with the widespread use of phoney custom work contracts and other back-door agreements which maintain roll over eligibility. Western agriculture today rejoices in the elimination of this odious and unfair impediment to individual freedom. The spirit and intent of the Prince Albert declaration manifests itself once again.
Thus far I have concentrated on our actions to help Canadian farmers, but farmers have wider interests. I know they share our concerns for the future of this country, for the unemployed and for our national financial problems, so I want to leave the subject of agriculture and talk generally about the comprehensive plan for economic review and renewal which the Minister of Finance unveiled on budget afternoon.
I, along with many other new Members, entered this federal level of public life because we feared for the future, the future of our families, our children and for their children, indeed for the very future of our way of life. We could see we were heading in the wrong direction. We were at the crossroads, the crisis stage, as the interest on the debt begins to feed on itself like a snowball rolling downhill. This Budget represents an historic moment in Canadian history. It is a watershed. It represents the turning point, the beginning of the ascension from the far depths of the fiscal imprudence of the past administration.
There is no magic to it. It faces the fundamental truth. You cannot spend indefinitely that which you do not have. There will be no more bribing Canadians with their own money, no more spend now and pay later. This Budget is realistic, fair, effective and honest. It is based on extensive consultation with Canadians.
This Budget is part of the agenda announced November last, an agenda for action to break the vicious circle of high unemployment and spiralling national debt. This Government seeks to break that cycle by taking decisive action on three fronts: first, by encouraging private initiative enterprise and productive investment by increasing the availability of capital and by rewarding success instead of merely subsidizing effort; second, by managing Government more effectively; and third, by gaining control of the national debt through a realistic medium-term strategy.

May 27, 1985
This Budget represents a fundamental break with the past, a significant change of direction as Canadians turn away from big Government toward the private sector, particularly small business, for growth and jobs. The personal lifetime capital gains exemption is designed to let all people of Canada- individual Canadians who have a personal stake in their affairs-to choose when and where to invest and how to create jobs. For too long politicians and bureaucrats, who have no investment, have been telling Canadians what to do. It has not worked, and it never will. There is no substitute for individual decision-making by Canadians who can best decide for themselves their own course of action. The jobs will follow. This is no great leap of faith; it is just plain common sense.
Government has become too big. It has become part of the problem instead of being part of the solution. That is why we have been combing Government for waste and inefficiency since September, and our efforts are starting to pay off. We will be lowering government overhead, rationalizing and improving government programs and selling off Crown corporations which do not serve an essential public policy purpose. The civil service will be reduced and public sector pensions put on a sounder footing. The search is still on to ensure that we provide maximum value for tax dollars.
This Government is first putting its own House in Order. It will be leaner, more efficient and cost effective, but savings from this better management will not be enough in itself to end the debt spiral. In order to deal with this problem we must increase growth, reduce spending and increase taxes, because failure to contain the debt now will force future Governments to drastic measures. We must reduce spending now to save programs later.
It is important that Canadians understand the magnitude of our deficit and debt problem and why it poses serious risks to our ability to achieve sustained economic growth and full employment. The public debt is simply the sum of all past deficits. It took 100 years to accumulate a debt of $18 billion and now, less than two decades later, the debt is approaching $200 billion, and is doubling every five years. Like any borrower, the Canadian Government pays interest on the debt and, like any borrower, the Government has been affected by high interest rates. Interest charges have been the fastest growing component of government expenditure. However, unlike most individual Canadians, the Government has been borrowing additional funds to pay the interest on past debts. That is why our debt is spiralling out of sight. If we do not show the resolve to deal with this problem now, the inevitable result will be the financial paralysis of the Government of Canada.
This Government has inherited a fiscal mess of such magnitude that urgent remedial action must be taken. Government spending has virtually doubled in the past four years. Expenditures today exceed revenues by 50 per cent. Government spends more on your behalf, 50 per cent more in fact than it gathers in taxes and other revenues. The deficit is growing three times faster than the economy. This year's deficit is approximately $35 billion. For every three dollars spent, two
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are collected and one is borrowed. Surely even the most profligate spendthrift would agree that this cannot long continue. We are mortgaging our tomorrow, our children's future to pay for today's excesses.
The annual deficit or shortfall amounts to about $1,400 per Canadian or approximately $5,600 for a family of four. Any family that continues to spend $5,600 more each year than it takes in will soon find itself in financial jeopardy. That family may be able to borrow for a while, but the interest charges will mount up and it will soon be faced with hard choices: to bring in more money, to spend less or declare bankruptcy, and the option of bankruptcy is not open to Government.
The net national debt is now closing in on $200 billion. It is not the debt itself that is the problem. It is the cost of the debt, the interest burden. This is not a little interest free loan from mom and dad. This is a cross that all Canadians have to bear. This year alone, $25 billion will be required to pay interest on the previously accumulated debt, the Liberal legacy. This is about $1,000 per person this year alone. One out of every $4 the Government spends goes to interest. One out of every three dollars of government revenue goes to service the debt. Projecting this kind of fiscal insanity into the future will indicate that all revenues may be required to service the debt in the 1990s.
What then? We might try to borrow money, but that just continues to build up future problems. At some point the bills come due. We could simply print more money, but to do that would guarantee an outbreak of inflation and rising interest rates that would damage confidence, investment and growth in the same way it did in the 1970s and early 1980s. This would be an abdication of responsibility. It is not an option.
The only other choice would be to find the money through drastic cuts in government services and major tax increases. Many government programs would be in jeopardy. Obviously this is also unacceptable. This situation is so compelling that I am sure all Members of this House will understand that the matter of reduced government spending, consequent debt reduction and lower interest rates are conditions precedent for greater employment and job opportunity for Canadians. I know that Members will unite and support these budget proposals which are necessary, and at the same time fair and reasonable. The people of Canada expect their representatives to put the fiscal house in order. They expect a responsible and prudent response. They want deficit reduction. They want to get this country moving again.
Some say that faster economic growth will solve our fiscal dilemma. As the Minister of Finance said, it will be an important part of the solution and the measures we have introduced will boost economic growth, but growth alone will not solve our problem. If we are to get off this treadmill, we must also slow down the debt spiral through lower deficits and lower interest rates, and that is what we have done in this Budget. We have taken that decisive first step to arrest and reverse the trend of increasing annual deficits. We have taken the tough decisions necessary to prevent future disaster. Though the measures are tough, they are also fair. Most

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important, they are being implemented in a way that will not threaten our economic recovery. The Government has consciously chosen a plan of action which controls the deficit now while ensuring substantial reductions in the future. It is a plan that will help us create jobs now and ensure that we can create even more jobs later.
Many Hon. Members have heard or read that the Government is obsessed with the deficit. That is simply not true. Our obsession is with jobs; good, satisfying and lasting jobs for Canadians. If we believed higher deficits and a rapidly growing debt, the Liberal legacy, would help us create those jobs, we would gladly have increased the deficit. In the past four years, the deficit has tripled and unemployment has doubled. Obviously that approach does not work. It has not in the past and it never will.
Government job creation is band-aid stuff: twenty weeks of work and then back onto unemployment insurance. That is not good enough. Instead, the Government has brought in a realistic agenda for action that tackles our problems as they exist and as we found them on taking office last September. When we set out the problems and our directions for solving them in November, we were not building illusions. We were honest with Canadians. We accepted our mandate for change and made clear that implementing and adjusting to change would test the strength and resolve of all of us. We promised to act but first we promised to consult fully and openly with Canadians in reaching the decisions presented in the Budget.
We have acted to control and reduce deficits in a balanced and careful way that will not tip the economy off its current course of action. However, we acted with firmness and determination because, without control of our accumulating debt, the economy would be unable to produce the jobs we need.
This Budget is responsible, effective and fair. It is responsible because it faces up to the challenges, the same challenges that were irresponsibly ignored by the former Government. It is effective because, it reduces the deficit by $4 billion this year and by $8 billion next year and reduces growth in the national debt. It is fair because the measures to reduce the deficit do not endanger the economic recovery. All Canadians are asked to contribute fairly and equitably, but those in greatest need receive adequate protection.
The Minister of Finance should be congratulated for carefully constructing a package that must be viewed in its entirety. We must go past the individual trees to look at the forest. The Budget asks individuals and corporations to pay their fair shares, and it also uses the tax system to promote economic growth and job creation. It contains expenditure reductions and program reviews and it also increases funding for job-creation and training programs and raises the child tax credit for lower-income Canadians.
This is a Budget for the 1980s. It builds on our strengths for a better Canada and a better tomorrow. It indicates to individual Canadians that for too long Government has made their decisions for them. Now is the time to revitalize, to
rejuvenate and to transform ideas and energies into the kind of Canada we all want for ourselves and our children.
The Budget is realistic. It is fair and it will be effective. It will be effective because the action we have taken in this Budget reflects our faith in people, our faith in the ingenuity and drive of individual Canadians to seize opportunities and invest in their own futures.


Gordon Edward Taylor: Mr. Speaker, first I would like to congratulate the Hon. Member for a very excellent speech which was splendidly delivered. I was interested in what he had to say about capital gains. The Leader of the NDP (Mr. Broadbent) and NDP Members who have spoken so far have claimed that capital gains are for the rich and some Liberal Members have taken the same attitude. That shows their ignorance of what has been going on with capital gains. The Hon. Member mentioned very carefully that capital gains formed the nest-egg of farmers and businessmen, and that is quite right. In fact, it is the only nest-egg they have. However, it goes beyond that.
One day I was standing on the street in Black Diamond when a businessman of about 35 or 40 years of age came up to me. He asked me, "When are you going to remove this capital gains tax?" I asked him why he was interested in that as he was not ready to retire. He said he was not ready to retire but he went on to say, "See that land there beside my service station? I own that. I would like to expand that business by hiring another seven people, but as long as the capital gains tax exists, which will rob me of my heritage, I will not do it. I will work my fingers to the bone for my wife and my children but I will not do it for any blankety-blank government".
I wonder how many businessmen have refused to expand their businesses because of capital gains taxes. This measure is not just for the rich, is is for everyone.
There is another point I would like to mention but I do not have the time as I know that these questions are to be short and concise. The Hon. Member indicated that he supported the capital gains measure because it was the nest-egg of farmers and businessmen, and that would be a good enough reason to do so even if there were no other reasons. However, is the Hon. Member aware of other reasons for the capital gains measure to be so important to this country? Is he aware of the terrible attitude of western members of the NDP who say that capital gains tax elimination is only for the rich? I wonder if the Hon. Member would like to say that to the farmers of Saskatchewan.


Geoff Wilson: Mr. Speaker, I thank the Hon. Member for Bow River (Mr. Taylor) for his observations and comments and for his question. I personally got into this business mainly as a result of seeing what capital gains had done to the farmers and small-business people of western Canada. Without doubt, capital gains tax has hung like a sword over their heads since its inception. It has backed up a whole generation of older farmers and business-people who have been basically unable to dispose of their assets to the next generation because of the prospect of that unfair tax
May 27, 1985

hanging over their heads. This measure will stimulate activity all across Canada, and, more important, I think it gives the younger generation an opportunity to strive and to succeed.
I know, as do many of my confreres, of many young people who are bushy-tailed and eager to get out to work. They want to work long hours. They are quite prepared to work nights and weekends but they will not put out if they see that their hard earned efforts are taxed away. This measure gives the entrepreneur, the person who wants to take on the extra responsibility of building a business, that opportunity. People will be employed by these businesses and that is the side benefit. That as well is the main thrust of this Budget.
We should point out that the capital gains measure is something that is fair for all Canadians. I think it is something all Parties of the House should support. I really have not detected any particularly strenuous objections coming from Members of the Opposition Parties. I mentioned earlier that I had participated in the hearings of the Finance, Trade and Economic Affairs Committee. It is my understanding that the recommendation of that committee was to eliminate capital gains taxes completely. I am pleased to see that the Minister of Finance has been able to respond at least in part to that request by putting forward the cumulative lifetime exemption of $500,000.


Arnold John Malone: Mr. Speaker, like the Hon. Member for Bow River (Mr. Taylor), I would like to add my congratulations to the Hon. Member for his very excellent speech and particularly for the manner in which he was able to set out the comerposts of economics, and the fact that we do need to base the advantages of our nation on solid principles. Hes has outlined them in a way which I believe to be clear and understandable.
Bearing in mind the rational and reasoned way in which the Hon. Member set out his case, and knowing that Members of the two Opposition Parties have rather enjoyed an interesting time since the Budget was delivered by attacking point after point as if they existed in isolation, I would like to deal with a matter that relates to the cost of fuel. I would like to ask the Member, knowing that he views that in a broad perspective and that he has a true desire to do what is best for Canadians, what response he would give if someone were to ask him about the increase in the cost of fuels. Perhaps the House might have the benefit of his reasoned and measured judgment.


Geoff Wilson: Mr. Speaker, I thank the Hon. Member for Crowfoot (Mr. Malone) for his question. It is a question I was asked in my constituency this past weekend. Certainly, it is a concern, particularly to the agriculture sector which is a large user of fuel.
It is my understanding, that effective June 1, as a result of the Western Accord, oil prices will be deregulated. At that time the Canadian Ownership Special Charge will be abolished. Members will recall that the COSC was imposed in 1981 as part of the original National Energy Program. Its
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purpose was to allow Petro-Canada to embark on expansion plans. Of course, one of the early purchases was the famous Petrofina purchase in which the previous administration saw fit to squander $1.6 billion of hard earned tax dollars to acquire a string of gas stations which already had their pumps in the ground. Those gas stations were already subject to Canadian taxation and regulation. That was the source of the COSC. That is the .7 cents a litre which will terminate on June 1. It is true that in order to put together the Western Accord package there will be an increase in the excise tax on motor fuels of some 2 cents a litre, effective September 3. I firmly believe, if analysts' predictions of lower oil prices in the months ahead are true, that we could be paying less for gasoline. The world is awash in oil. There is absolutely no question that the reduction in the world price will be passed on to the consumer in the normal course of events. That is speculation, but I believe there is every likelihood that there will be a reduction. If not, we are looking at an increase of two cents a litre on September 3, minus the .7 cents a litre which will terminate on June 1. Therefore, the net effect will be 1.3 cents a litre, which is approximately six cents a gallon.


Mr. Hovdebo:: I will believe it when I see it.


Geoff Wilson: Of course, the purveyors of gloom and doom in the NDP will sneer at that. We know they are professionals at complaining, whining and snivelling. They do it day after day.


Mr. de Jong:: That is one of the effects of deregulation.


Geoff Wilson: The Hon. Member for Regina East (Mr. de Jong), who so rudely interrupted, gets a glow whenever there is a possibility that a financial institution might be in some difficulty. He comes alive at the prospect that there might be some crack in the foundation of the private enterprise system.


Stanley J. Hovdebo: What question are you answering?


Geoff Wilson: The Hon. Member is miserable enough as it is, I certainly would not want to carry it on.


Frederick James (Jim) Hawkes: Mr. Speaker, the Hon. Member will know that there was an economic statement in November, and that there was another clear-cut statement made in the Budget concerning the importance of creating jobs for Canadians through encouraging the private sector to produce more and to sell aggressively in order to produce the jobs which we need.
A previous speaker spoke about the farming community and the fact that there were no provisions in the Budget for farmers. The Hon. Member for Swift Current-Maple Creek (Mr. Wilson) represents a community which has a large number of farmers. Could he indicate to the House what parts of the Budget and what parts of the November economic statement are important to the farmers in his riding?


Geoff Wilson: Mr. Speaker, 1 would ask the Hon. Member to review my speech, which listed

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at least a dozen initiatives upon which the Government has already embarked-


Stanley J. Hovdebo: Not this Budget.


Geoff Wilson: He will recall that the Hon. Member for Prince Albert (Mr. Hovdebo) asked what the Government has done since it came into office. In responding to the question of the Hon. Member for Calgary West (Mr. Hawkes), I can tell him that at least a dozen initiatives were put forward. A most important initiative was the reduction of 22 cents a gallon on the price of fuel to primary producers. The other initiative, which will be of enormous benefit to all Canadians, particularly those involved in the agricultural sector, is the lifetime $500,000 capital gains tax exemption. That is the single most important tax development to hit Canada in the last 15 years.


Some Hon. Members:: Hear, hear!


Simon Leendert de Jong: Mr. Speaker, in entering the debate on the Budget, I have cause to reflect once again on what the Canadian Conference of Catholic Bishops stated in their report which was released January 5, 1983. The report was entitled, "Ethical Reflections on the Economic Crisis". At that time, the Bishops gave a general description of the realities which faced Canadians. They said:
Along with most people in Canada today, we realize that our economy is in serious trouble. In our own regions, we have seen the economic realities of plant shut-downs, massive layoffs of workers, wage restraint programs, and suspension of collective bargaining rights for public sector workers. At the same time, we have seen the social realities of abandoned one-industry towns, depleting unemployment insurance benefits, cut-backs in health and social services, and line-ups at local soup kitchens. And, we have also witnessed, first-hand, the results of a troubled economy: personal tragedies, emotional strain, loss of human dignity, family breakdown, and even suicide.
In reading that statement, and looking at the Budget which was brought down by the Conservative Party, I am concerned about the way in which the Budget addresses the realities which the Bishops laid out in their statement of 1983. 1 found a lot of what the Bishops spoke about in 1983, and the criticisms which they had of the Liberal Government and its economic policies, are very much applicable to the Budget which was delivered last Thursday.
For example, in the statement, the Bishops pointed out that the economic strategy of the Liberal Government was one which they described as:
To stimulate economic growth, Governments are being called upon to provide a more favourable climate for private investments. Since capital tends to flow wherever the returns are greatest, reduced labour costs and lower taxes are required if countries are to remain competitive. As a result, most Governments are introducing austerity measures such as wage restraint programs, cut-backs in social services and other reductions in social spending in order to attract more private investment.
Again, what the Bishops pointed out in their 1983 statement is very much what this Government and previous Liberal Governments have done. They have reduced taxes in order to encourage private investment at the expense of social programs, in the hope that it would generate the economic activity which would benefit the majority of Canadians.
The Bishops' statement continued:
As recent economic policy statements reveal, the primary objective is to restore profitability and competitiveness in certain Canadian industries and provide more favourable conditions for private investment in the country. They private sector is to be the "engine" for economic recovery.
It is that economic order about which the Bishops wrote. Their statement continued:
-we firmly believe that present economic realities reveal a "moral disorder" in our society.
The Budget which was brought down by the Conservative Government is a moral disorder. It is a budget based on false premises, based on the notion of greed and encouraging the accumulation of private and corporate wealth in obscene proportions.
Let us have a look, Mr. Speaker, at past records to see whether this economic policy of encouraging the private sector in order to have economic renewal has actually worked. Let us look first at some of the corporate tax breaks which exist now.
For example, in 1983, Northern Telecom, had $3.3 billions in sales, showed $325 million in profit, yet managed to end the fiscal year paying no taxes. TransCanada PipeLines Limited has $4.7 billion in assets and its 1982 pre-tax earnings were $482 million, yet it paid just 7 per cent in taxes. Shell Canada Limited, with assets of $4.7 billion and pre-tax earnings of $302 million, paid no income tax in 1982.
This Government talks about fairness. Is it fair that Shell Canada and Imperial Oil pay no taxes when they make hundreds of millions of dollars? But the poor person who is earning $15,000 to $20,000 a year will have removed out of his pocket $1,000 because of this Tory Government. Is that fair? Is that equitable? I agree with the bishops when they say there is a moral disorder in this country and in this economy.
There is the other area of tax deferrals, Mr. Speaker. In 1982 it was estimated that we had some $29 billion owing, increasing by approximately $1 billion every year. So let us assume that in 1985 we have $32 billion or $33 billion in tax deferrals. These are taxes which corporations admit they owe, but they made an agreement with the Government that the taxes would be deferred until some time in the future. Will they ever be paid? No, Mr. Speaker. Anyone who is wise in the ways of the world knows that these taxes will never be paid. Is any interest charged on these taxes? No, Mr. Speaker, none whatsoever.
The Government, of course, has to pay interest on money it borrows. I heard the Hon. Member for Swift Current-Maple Creek (Mr. Wilson) explain that anyone who borrows money has to pay interest so, therefore, the Government has to pay interest on its deficits. Yet there is some $30 billion out there owed to the federal Government. Is any interest being paid on that money? No, Mr. Speaker. If the Government would only charge interest at 10 per cent on the $30 billion, it would collect $3 billion this year which would reduce the deficit to a much greater extent than did the Minister of Finance last Thursday evening. Thel Governmenticould just collect 10 per
May 27, 1985

cent interest on the $30 billion which is owing to it. That is a very handy and neat way of reducing the deficit. Charging 10 per cent interest is just one little item. Most people who borrow money in my constituency, Mr. Speaker, would love to pay 10 per cent interest on their borrowings. Many small business people and many farmers would love to pay 10 per cent interest. That's fair, isn't it? Let's charge 10 per cent interest on these deferred taxes. We can really reduce the deficit with some $3 billion. But, no, Mr. Speaker, the Gover-nemnt is not going to touch those corporations.
There is also the research and development tax credit, Mr. Speaker, which is something that our Liberal friends introduced. We were going to lose some $200 million on this. But apparently, we have lost some $2.8 billion on the R and D tax credits. Are we going to put a stop to this? No, Mr. Speaker. When the Tories came in they realized it was a little too much so they introduced a grandfather clause. When the Tories took power it was estimated we had lost some $1.5 billion in lost government revenues just on this one scam alone-and it is a scam. The Minister of Finance knows it's a scam. Every Hon. Member opposite knows it's a scam. There is no $2.8 billion in new research and development which has occurred in this country. So the Conservatives were going to shut that down. At that stage it was estimated we had lost some $1.5 billion. Some shut down, Mr. Speaker. We lost another $1.3 billion under the research and development tax credit scam after the Tories were in. And they say, "No problem. Let's feed those guys some more tax breaks and eventually some of it will trickle down and create some jobs. Prosperity is just around the corner".
But, Mr. Speaker, as the bishops pointed out in their statement, "Since capital tends to flow to wherever the returns are greater, reduced labour cost and lower taxes are required if countries are to remain competitive".
What we are doing is giving these corporations more tax incentives and tax breaks in order to compete with what is given by the Governments of the United States, England and in other places. So it continues, Mr. Speaker, and the result is that the wealthy and the multinationals, who have the power to move their capital around the globe, essentially hold this Government, and Governments around the world, up for ransom. That results in the wealthy and the multinationals not paying their fair share. All this budget has done is give further service to the corporate sector.
Let us continue to look at the Tory philosophy of helping the well to do. I have a copy of The Globe and Mail of July 7, 1984. The headline reads, "Unemployment Good Alberta Minister Says", and I quote:
Unemployment is good for the economy because it controls wage levels and increases productivity. Alberta manpower Minister Ernest Isley says.
"From an economic point of view, if you define full employment as everyone having a job, that's not a healthy thing"-
The Minister says full employment is not a healthy thing. I am waiting for some of the Tories to come out of the closet and repeat what the Alberta Minister of Manpower says, because I believe that a fair number of those Tories do not
The Budget-Mr. de Jong
really believe in full employment. They believe in keeping working people down and reducing the cost of manufacturing so that we can compete with the wage levels of Hong Kong and Singapore. That is what those Hon. Members want. They do not believe in full employment because what full employment will do is allow working people to get better wages and they are not interested in that. All they are interested in is having the corporate sector, their wealthy friends, doing quite all right, thank you.
Then there are some 7,782 persons who paid no tax this year. These are people who earn more than $50,000 or $60,000 a year and pay absolutely no tax because of all of the different loopholes and schemes in which they can get involved. The Government says, "We are going to get these characters. We are introducing this surtax". But that is a joke, Mr. Speaker. The surtax is a tax on the tax that you pay. But the 7,782 people who earn more than $60,000 who didn't pay any tax, are not going to be paying a surtax. All the surtax will do is penalize those people who do not play the tax loophole game. It is going to force those people who have been paying their fair share of the tax, and who have not gotten involved in any of the tax avoidance schemes, to get involved in tax avoidance schemes. I would suggest, Mr. Speaker, that the surtax will produce less revenue than is now being collected because it will encourage people to attempt to avoid taxes through different tax schemes.
We come now to the other goody in the Budget, the capital gains goody. The Tories are quite smart. They have learned some lessons from the Liberals and definitely from the Republicans in the U.S. Essentially what they have done is taken one good item and used that as an excuse to bring in all sorts of questionable items. They allowed farmers to escape paying taxes on $500,000 of capital gains. This is a good move. It is something which has been in our-


Some Hon. Members:: Hear, hear!


Simon Leendert de Jong: Mr. Speaker, could you please ask the jackasses to stop braying.


Douglas Grinslade Lewis: That is not a nice thing to say about the NDP.


Simon Leendert de Jong: It is something which has been-


The Acting Speaker (Mr. Paproski):: Order, please. There will be an opportunity to ask questions or make comments after the Hon. Member's speech.


Simon Leendert de Jong: Mr. Speaker, that item has been in the NDP platform for most of the 1970s. However, the problem is that the Government at the same time is allowing tax-free capital gains for all sorts of wheelers and dealers and speculators. To achieve one good thing they have drafted legislation which is so broad I predict it will put to shame the Liberal research and development tax credit scheme so far as Government revenue loss is concerned.

May 27, 1985
The Budget-Mr. de Jong
There is a very good reason why a farmer who toils on his land has seen very little return on his labour, especially over the last decade. The reason is that the cost of production is about equal to the prive he gets for the goods he produces. The only profit he really produces is in the improvements to his farm. So when he sells his farm I think it is right and just that he not be taxed on the first $500,000 of his capital gain. But is this also true for people who buy condominiums and flip them a year later? Is it also true for people who speculate? I say it is not.


Arnold John Malone: Why not?


Simon Leendert de Jong: Because the farmer is engaged in some honest labour, whereas the bloody speculator flipping apartments or condominiums in Florida should be taxed on his capital gain.
So we see a Budget based essentially on a very simple notion of making the guys at the top happy and eventually the benefits will trickle down. It is called the trickle-down theory. Essentially it means feed the horse a lot of oats and eventually the sparrows will get some. That is the essential notion. Except that some Members opposite obviously continue to step in that under the mistaken belief that they are receiving a benefit.


Geoff Wilson: Check the floor by your desk.


Douglas Grinslade Lewis: We call it the NDP platform.


Simon Leendert de Jong: I claim this Budget is essentially obscene. The Bishops, in their statement, pointed out:
At the same time, working people, the unemployed, young people, and those on fixed incomes are increasingly called upon to make the most sacrifice for economic recovery.
-even if companies recover and increase their profit margins, the additional revenues are likely to be reinvested in more labour-saving technology, exported to other countries, or spent on market speculation or luxury goods.
In this Budget we see that older retired people have been asked to carry the burden; they will be losing $1.6 billion in the next few years. They are the ones who are called-upon to sacrifice in order to reduce the deficit. Yet there is no call for Imperial Oil or TransCanada Pipelines or Northern Telecom to pay their share, or for the Government to call in the $30 billion in deferred taxes. No, those companies are not to participate in reducing the deficit, just the old folks, and that I call obscene. It is an obscene Budget and it is certainly not in keeping with the traditions and sentiments of the Canadian people.


Douglas Grinslade Lewis: Mr. Speaker, I must confess that I listened to the Hon. Member's speech with a great deal of concern. We have expanded the capital gains tax exemption beyond farmers alone, but the previous Liberal Government, as everyone in this House knows, applied that capital gains tax to farmers without any understanding of the situation. No one in this House would doubt the effort made by people who earn their living from the soil, but I am shocked to hear to Hon. Member infer that the tourist operators, hardware store operators, contractors and real estate agents in my riding, all of them
people who make legitimate capital gains by working at what they do best, just as hard as farmers work at what they do best, do not perform honest labour. I ask him to immediately stand in his place and refute the irresponsible charge that those people who work so hard in this country do not achieve what they do through honest labour.


Simon Leendert de Jong: Mr. Speaker, it amazes me how hyped-up Government Members are. Obviously they have gone through a good mind training session. They remind me of a group of Amway salesmen. They have been hyped-up, given the line, and they are out there like little robots delivering their lines and points. Here in the House they are hyped-up to the point of impoliteness and discourtesy, I might add. They have to do this little number of show and tell for Canadians because they realize that this Budget is dishonest, and they have to shout loud and long in order to try and convince the Canadian people they have something worthwhile. But in fact it is the biggest con we have seen in a number of years.
The Hon. Member talks about the hard-working Canadian people that this Budget is supposed to help. I have no doubt that this capital gains provision will help some people who have needed and need help.


Some Hon. Members:: Hear, hear!


Simon Leendert de Jong: Fine. But I want the Hon. Member to stand up and state in this House that it will also help people who do not need to be helped and should not be helped. I challenge the Hon. Member to make that statement right now.


The Acting Speaker (Mr. Paproski):: The Hon. Member for Ottawa-Carleton (Mr. Turner).


Simon Leendert de Jong: I note the Hon. Member is not standing up.


Mr. Turner (Ottawa-Carleton):: Mr. Speaker, the Hon. Member referred to the Bishops, and I was just going to call a Bishop because I think he is bordering on cardiac arrest. He talked about the Budget being a moral disorder. On the contrary, I think it is a serious act of fiscal responsibility. I think the Hon. Member for Regina East (Mr. de Jong) will agree that the Budget is a break from the past. We know the old ways were not working. Pouring funds into the public trough was not creating jobs in the country. The ball is now in the court of all Canadians. It is up to Canadian businesses to invest and create real jobs rather than short-term, make-work projects.
Does the Member for Regina East think the Government should have printed more money which would create inflation? Does he think the Government should continue to pour money down the deficit drain, or does he think we should eliminate short-term, make-work projects in favour of long-term, real, lasting jobs, allowing the private sector to create more jobs in the country?
May 27, 1985


Simon Leendert de Jong: That is a very interesting question, Mr. Speaker. As I answer it I wish to note that the former Member to whom I made the challenge chose not to respond to it.
Government studies show that the people who have received the most tax breaks have been the least productive in creating new jobs. I find it amazing that the Tories can say that the Budget is a major break from the past. That is not true. The Lalonde Budget and the MacEachen Budget before it were essentially based on the trickle down notion. The $30 billion in deferred taxes and the drop in the corporate tax rate which has occurred in the last number of years are just continuations of that policy. We must ask whether that policy has worked. It has not.
Will the tax breaks to corporations produce jobs? A Statistics Canada report found that incentives to business are not likely to create more jobs. In the last quarter of 1984 there was "little incentive for most companies to increase their spending on plant and equipment since most sectors are burdened with ... excess capacity". For the manufacturing sector the capacity utilization rate was only 77 per cent. If you are only utilizing 77 per cent of your plant are you going to create more jobs and open more plants? Of course not. Therefore, why does the Hon. Member ask such a silly question? Is it economic sense that if you give someone who is only operating his plant at 77 per cent capacity more tax breaks he will use those tax breaks to build new plants and equipment? Of course he will not. The problem is that the public does not have the income to buy the goods and services which are produced.
I do not understand why the Tories do not understand simple straight economics. It is the lack of people being able to buy the goods and services that they need. We have people lining up at food banks because they do not have the income to go to a grocery store and buy a pound of hamburger. That is why we have a downturn in the economy. No matter how much money is given to the person who is only operating at 77 per cent capacity, he will not increase his capacity. He will only take the money and build condominiums in Florida or use it for a take-over. He will not create jobs.


Some Hon. Members:: Hear, hear!


Mr. Lanthier:: Mr. Speaker, I can understand the Minister of Finance (Mr. Wilson) when he asks when the Opposition is going to stop running around with a little black cloud over its head.

And I think that if this black cloud is as thick as their arguments are sound it will not cast much of a shadow. A moment ago, I heard the Hon. Member for Regina East (Mr. de Jong) say that 7,700 people would not pay any tax, so they would not pay any surtax either.
I would also like to hear the real figures. I draw the attention of the House to the fact that indeed 1.2 million people will pay the surtax in Canada. Well, no one can claim that 1.2 million is a negligible amount compared with the 7,700 people who will not pay any tax.
The Budget-Mr. de Jong
Another interesting figure has to do with the fact that 6,600 companies will also be paying the surtax. Again if we compare that with the 7,700 people mentioned earlier, I think it is a very sad performance.


The Acting Speaker (Mr. Paproski):: I will give you 30 seconds to respond.


Simon Leendert de Jong: Mr. Speaker, those are estimates which his Department has produced. I suggest that the surtax will be like a disincentive or penalty for those people who have been paying their tax. They will find themselves paying more tax on the taxes that they have been paying. They will look for tax loopholes and tax avoidance schemes in order to stop paying that tax. I suggest that the surtax may very well mean an over-all drop in revenues because it is a penalty for the people who have been doing the honest thing and paying their taxes.


The Acting Speaker (Mr. Paproski):: The questions and comments are over.

It being 5.45 o'clock p.m., it is my duty, pursuant to Standing Order 64(6), to interrupt the proceedings and put forthwith any question necessary to dispose of the amendment to the amendent which is now before the House.
Mr. Wilson, seconded by Mr. Mulroney, has moved:
That this House approves in general the budgetary policy of the Government.
In amendment thereto, Mr. Johnston, seconded by Mr. Turner (Vancouver Quadra), has moved:
That the motion be amended by deleting all the words after the word "That" and substituting the following therefor:
"this House condemns the Government for its betrayal of the trust of the Canadian people by producing a budget that destroys jobs, that offers neither help nor hope to the working poor and the unemployed, that brutalizes the middle class, that imposes massive and unfair tax increases on middle and lower income Canadians and that is devastating to the economically disadvantaged regions of the country."
In amendment to the amendment, Mr. Riis, seconded by Mr. Murphy, has moved:
That the amendment be amended by changing the period at the end thereof to a comma, and by adding immediately thereafter the following words:
"and this House further condemns the Government for actions which will effectively reduce pensions for senior citizens, for gasoline tax increases to pay for the Western Accord, for its failure to take immediate and determined action to reduce the ranks of the unemployed, and for the absence of a minimum tax on wealthy Canadians who pay no income tax."
The question is on the amendment to the amendment. Is it the pleasure of the House to adopt the amendment?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


The Acting Speaker (Mr. Paproski):: All those in favour of the amendment to the amendment please say yea.


Some Hon. Members:: Yea.

May 27, 1985
The Budget-Mr. de Jong


The Acting Speaker (Mr. Paproski):: All those opposed please say nay.


Some Hon. Members:: Nay.


The Acting Speaker (Mr. Paproski):: In my opinion the nays have it.
And more than five Members having risen:


The Acting Speaker (Mr. Paproski):: Call in the Members.


Mr. Speaker:: I declare the amendment to the amendment lost.
It being 6.13 p.m., this House stands adjourned until tomorrow at eleven o'clock, pursuant to Standing Order 2(1).
At 6.13 p.m. the House adjourned.

Tuesday, May 28, 1985