1985-10-29

[Stage Direction]
The House resumed from Monday, October 28, consideration of the motion of Mrs. McDougall that Bill C-80, an Act to amend the Excise Tax Act and the Excise Act and to amend other Acts in consequence thereof, be read the second time and referred to a legislative committee.
Mr. Patrick Crofton (Esquimalt-Saanich):: Mr. Speaker, I am very pleased to have this opportunity to offer a few remarks on Bill C-80, an Act to amend the Excise Tax Act and the Excise Act and to amend other Acts in consequence thereof. In considering this Bill it is necessary to start from the basic and fundamental starting point of our national debt, that horrendous figure, that tragic legacy of the previous administration. It is almost impossible to overstate the magnitude and seriousness of that Liberal legacy. Not only did we inherit the debt, we also inherited a Government financial operation that is completely out of control. The problem has been created because successive Liberal administrations over the years believed in deficits of ever-growing proportions regardless of the state of the economy. Thirty to 40 per cent cost over-runs were a matter of course because of financial incompetence and indifference. Year after year this is what was served up to the Canadian people, a terrible legacy for this and future generations. We were elected to deal with this situation, Mr. Speaker, and deal with it we shall.
I will not bore you with statistics, Mr. Speaker. The House has heard often enough the price that current and future generations will have to pay for this lamentable legacy. We have heard of the amount owed by every man, woman, and child in this country for past spending excesses and how interest alone on the accumulated debt exceeds the total budget of a few short years ago.
I want to address solutions to this problem. We have to come to grips with our national debt in exactly the same way as one reduces a personal debt. We either achieve a higher income, reduce expenditures, or seek a combination of the two. This combination of the two mechanisms is what we proposed in the May Budget; increased federal income, partly through
tax changes, on the one hand, and reduced federal expenditures on the other. It is important to recognize that action to increase revenue accounts for only 20 per cent of this year's attack on the deficit. Bill C-80 is but one part of a comprehensive approach the Government has initiated to break the financial hemorrhage we inherited in September, 1984.
Opposition spokesmen have sung a song about ordinary Canadians at every opportunity. They would have you and others, Mr. Speaker, believe that they and they alone speak for ordinary Canadians. Indeed, it was the ordinary Canadians, the many responsible and caring voters in this country, who cried "enough" just over a year ago. By the hundreds of thousands they threw out the tired and incompetent Liberal Government, rejected their fellows in arms, the NDP, and elected a Progressive Conservative Government which pledged to raise revenues, control spending, reduce the deficit and create jobs. This is exactly what we are doing, Mr. Speaker. We are keeping our campaign commitment on this issue as we have in the many other important policy areas.
Spending money is easy, Mr. Speaker. Our predecessors showed all of Canada just how good they were at spending money. Never mind any controls, think of a spending program and we will give you the money. Do not worry about accountability or prudence, there is more money where this came from. Their NDP colleagues chortled with joy. We have been witnessing a spending binge for over a decade, each encouraging the other with their spending zeal.


Mr. Turner (Ottawa-Carleton):: Terrible.


Patrick Dermott Crofton: For years the Auditor General has decried the lack of financial responsibility and accountability. The SRTC boondoggle was one of the last in a series of Liberal extravaganzas. Two billion? Three billion? Five billion? The financial bleeding still has not stopped from that great Grit scheme. The Canadian people said "enough".
Raising funds is not a popular or pleasant activity, but it is essential for the economic future of Canada. The majority of Canadians supported the initiatives in the May Budget. Public reaction was very plain on that score. Indeed, there was some strongly voiced criticism that the financial change of direction was not strong enough, that deficit reduction in our first Budget was too gentle. This time last year we were seeing the first faint signs that the recession was easing. The economy was still very fragile. Clearly, a responsible balance was required between necessary expenditures for essential social programs and job stimulation on the one hand, and economies in Government activity in other areas. The November economic statement and the May Budget struck that essential balance.

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What has occurred in the 13 months since we came to office? The opposition Parties appear to be negative about everything that happens in this place. They certainly are negative about everything said by Members on this side of the House. Are they opposed to the fact that interest rates, bank rates, are down by over 3 per cent in the last 12 months? Are they opposed to the reduction in unemployment of 1.5 per cent over-all and over 2 per cent among young Canadians? Does the fact that bankruptucies are down 13 per cent find disfavour with them as well?
[DOT] (mo)
The inflation rate is steady at just under 4 per cent, business confidence is up in the past six months, the investment rate is up, housing starts have increased and consumer spending is up. Can the opposition Parties be opposed to all these important financial indicators? Canadians are not opposed to it.
In part, this improvement in the past 12 months, which is at least welcome on this side of the House, is the result of actions taken by the Government. Another important ingredient in this welcome change is the anticipation of stated government intentions, competent financial management and deficit control.
Earlier in this debate, Members opposite lamented the amount of money these tax measures in Bill C-80 would take from ordinary Canadians. As usual, they put forward very selective arguments and did not mention some of the offsetting benefits Canadians have received as part of the Government's actions. They include lower interest rates, over 300,000 new jobs, pensions for widows and widowers between the ages of 60 and 64, new increased pensions for the handicapped, increased pensions for veterans, substantial new funds for direct job creation and training, and funding for record-sized ERDA agreements with the provinces. There is a whole range of initiatives of direct benefit to Canadians in all walks of life. These are actions which have injected money and confidence into the economy.
Members on the other side have complained that Bill C-80 is a tax on the poor. However, they conveniently ignore the fact that the Government has invoked a surtax on the rich and will shortly introduce a Bill for a minimum tax, to commence in January, 1986, to ensure that all Canadians will pay a fair share of tax in the future. The Liberal Party, for all its years in office, did not have the wit or inclination to deal with this important matter. As well, we have introduced a surtax on corporations and a surtax on large banks and trust companies. All of these measures were contained in the May Budget. Since the Opposition is so negative, must one conclude that it is opposed to these measures as well?
Bill C-80 is an essential stage in restoring sensible fiscal management to our nation's affairs. The opposition Parties have shown considerable ingenuity in developing spending programs and indeed I will not deny that some of their ideas over the years have been good. We have endorsed some of them. Unfortunately, the Opposition does not seem to know how to raise funds adequately, sensibly and prudently and
certainly how to account for these funds once they have been raised. Spending money is easy and oftentimes popular. Raising money tends to be unpopular and contentious. Nevertheless, it is an essential part of responsible Government, and responsible people must take responsible action to discharge this essential obligation.
Bill C-80 does that. It is a necessary response to the budgetary needs of this country. It is a proposal maligned by the unthinking and regretfully acknowledged as necessary by the rest. Bill C-80 is just one step in a long vital journey back to the economic safe ground where our massive debt can be brought under control, where competent and responsible fiscal management is restored to this country and where Canadians, after a number of years of uncertainty and doubt, can look forward to financial security for themselves and their families wherever they may live in Canada.


Mr. Nystrom:: Mr. Speaker, I wish to direct a question to the Member for Esquimalt-Saanich (Mr. Crofton). The Bill before the House adds some $3.5 billion to the tax load of Canadians over the next couple of years. Many of those taxes, including the increased sales tax, an increase of some 2 cents a litre on gasoline and increased tobacco tax, will affect ordinary people.
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In his opinion, is this the best way of reducing the deficit? Often if you reduce the spending power of consumers, you take money out of their pockets which goes into the federal Government's pocket. Doing that can slow down the economy at times. This does not necessarily increase the economy or make it more productive. To bring down the deficit, we have to become a nation of producers and we have to start doing things. Is not one way of doing that by increasing consumer spending? Rather than putting all this money into government coffers, are we not better off to leave that money in the pockets of ordinary Canadians who will spend the money for food, clothing and shelter, which will stimulate the economy and create more jobs?
Will the Hon. Member comment on the argument used by a lot of economists that the way to bring down the deficit is to leave more money in the hands of ordinary Canadians, who will spend it stimulating the economy from the grass roots up?
I know that one of the philosophies of the Conservative Party over the years was to stimulate the small business sector and consumer spending. When the Tories were on this side of the House they made speech after speech that that was the way to go. They did not argue before the election campaign that they should be raising taxes. Why is there this change in tune? I realize that the Hon. Member for Esquimalt-Saanich is a new Member, but does he agree with this approach or is he trying to defend the Minister of Finance (Mr. Wilson)?


Patrick Dermott Crofton: Mr. Speaker, I thank the Hon. Member for his question. There are several comments I would like to make in reply.
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First, I again draw to the Hon. Member's attention the fact that Bill C-80 and the proposed tax measures are a part of the 20 per cent reduction in the deficit for this year. To suggest that Bill C-80 is the only measure that has been taken is, of course, quite wrong.
There is, indeed, a place in the scheme of things for deficit budgeting. Unhappily, the previous administration, over a great many years in good times and bad, indulged in that practice. If deficit budgeting had been properly co-ordinated and organized so that it was genuinely benefiting the Canadian economy, there might have been some purpose to it. But when you start getting 50 per cent cost overruns year after year to the point, as I emphasized earlier, that just interest payments on the debt are more than the whole budget of a few years ago, clearly corrective action has to be taken. If deficit spending was all that successful, why are we in the mess we are today? No control is the reason.
It is essential that revenues be raised to pay the debt and to pay for ongoing expenses. This Bill is an attempt to spread the load evenly. Action is being taken prudently, and in many instances phased in. It is irresponsible to do otherwise.
The Opposition has had a lot to say about proposed spending reductions, trimmings and cuts, and does not like any of them. That, however, is an essential part of the budgetary process. The additional revenues are only 20 per cent of the approach in this fiscal year to deal with the monumental problem that we have inherited.


Mr. Riis:: Mr. Speaker, I appreciate the comments of the Hon. Member who comes from an area of the country where tourism plays a critical role. Perhaps if the Hon. Member is considering some areas where cuts would be appropriate, it might be in some of the tax expenditure areas which the Minister of Finance (Mr. Wilson) has identified as being relatively non-productive. These are areas where there is little, if any, gain to the country as a result of some fairly large tax expenditures presented in his paper, which I appreciate.
Could the Hon. Member comment on the effect in his own area, particularly, where tourism plays such a critical role, of additional taxes on alcoholic beverages? Representations by the tourist community remind us time and time again that we cannot price ourselves totally out of the market. For American tourists coming to British Columbia for Expo '86, gas, accommodation, food and entertainment will be very expensive. Now we are to increase the cost of alcoholic beverages. Does the Hon. Member have some views to share with us on this point?
[DOT] (U20)


Patrick Dermott Crofton: Mr. Speaker, I appreciate that question as well. I remind the Hon. Member that in the rules which we inherited there was an automatic 4 per cent increase. This particular budgetary proposal reduces that increase to 2 per cent. Indeed it is a benefit to people in the entertainment industry.


An Hon. Member:: It was a campaign promise.
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Patrick Dermott Crofton: As my colleagues says, it was a campaign promise. It was but one on a long list of promises which we have kept.
I should like to refer to another matter at this time. The Opposition has criticized some of the tax proposals, such as the gasoline tax and the tax on alcohol and liquor. However, some of the Hon. Member's colleagues only a few short days ago were decrying the fact that the Government was proposing to talk with the Americans to try to deal with some serious trade matters. They were terribly afraid that somehow we would bargain away our social programs. They pointed with long fingers to the Americans who do not have a social security program like ours. Many of the social measures of our country are not enjoyed by the Americans. They cannot have it both ways. If we are to have these programs, the Government requires the revenue to pay for them. If they prefer cheaper gas, that is fine, they can live in the United States and do without medicare. That is the choice they have.
[Translation}


The Acting Speaker (Mr. Paproski):: The Hon. Member for Yorkton-Melville (Mr. Nystrom) for a supplementary question.


Lorne Edmund Nystrom: Thank you, Mr. Speaker. You speak French very, very well now.

I wanted to ask the Hon. Member for Esquimalt-Saanich another question. When the Minister of Finance was talking about our finance system a few months ago, he said that Canada had an acute shortage of rich people. Does the Hon. Member agree with that?


Patrick Dermott Crofton: Mr. Speaker, if I had my druthers, all Canadians would be rich. The fact that there are not very many who are is no great source of pride-and it should not be-on the part of any Member of the House. I hope the standard of living and incomes of all Canadians will be improved. Unquestionably, over the years, there have been well-to-do Canadians who have managed to escape paying their proper share of taxes. The previous Liberal administration, for all its puffery, never got around to doing anything about it, as I said earlier. Indeed, we intend to. We have already introduced a surtax for this year. We also intend to introduce a minimum tax, which we hope we will be debating in the House very shortly, to take effect in January, 1986. It is long overdue. When we talk about rich Canadians, it is high time they paid their fair share. If that is the point the Hon. Member is trying to make, 1 share it.


Lorne Edmund Nystrom: Mr. Speaker, if that is the case, how can the Hon. Member support putting this extra $3 billion in taxes on ordinary Canadians? How can he support things such as partial deindexation of family allowances? Why did he support last spring, before the Prime Minister (Mr. Mulroney) did a flip-flop, partial deindexation of old age pensions? If he is concerned that many people are not getting a fair deal in our

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taxation system, why does he support these kinds of measures? Obviously we have a very unfair taxation system.


Patrick Dermott Crofton: Mr. Speaker, maybe the hon. gentleman was not paying attention. I drew attention to the fact that indeed a number of initiatives were taken by the Government of benefit to ordinary Canadians, not the least of which was the reduction of 3 per cent in interest rates. That puts a great deal of money back into the pockets of Canadians, hundreds of thousands who were paying mortgages on which formerly there were usurious interest rates of over 20 per cent. For the first time in a long while, five-year mortgages are being offered. These are all beneficial things.
We have introduced a number of new pensions for people who were not getting them previously. Indeed, there is a fair bit of money being injected back into the economy. Job creation is a very important part of it. Whether the sales tax goes up 1 per cent or down 1 per cent is of cold comfort and not of a great deal of interest to someone who does not have a job and cannot even buy the essentials in the first place, whether or not their price has gone up by a few pennies. We are trying to take measures on a broad front.


The Acting Speaker (Mr. Paproski):: The period for questions and comments is now terminated. Is the House ready for the question?


Mr. George Baker (Gander-Twillingate):: Thank you, Mr. Speaker, I have just a few words to say concerning this Bill.


Mr.   de Corneille@: The House will never be ready for the question.


George Baker: I think it should be kept in mind that Clause 9 of the Bill means that the telecommunications programming tax rises from 6 per cent to 7 per cent; Clause 13 of this Bill before the House increases the excise tax on wine; Clause 15(3) will repeal a Section of the Excise Tax Act, the effect of which imposes sales tax on certain building components and materials; Clause 16 increases the federal sales tax from 10 per cent to 11 per cent.
From listening to the Conservative Members, one would not know but that this was a good Bill for Canadians. Clause 49 increases the gas excise tax by two cents a litre as of September 3 and one cent a litre on January 1, 1987. Regarding that September 3 date, on which the two cents per litre increase in gas excise tax becomes applicable, I am sure Canadians will remember that marvellous statement in the Budget Speech that said that the increase in the tax on gasoline would be held off until just after the summer vacation, so it would not affect the tourist trade for 1985. What a ridiculous statement for the Minister of Finance (Mr. Wilson) to make in the Budget! Obviously, it is going to affect the tourist trade every year after 1985.
Let us continue. Clause 15 increases the excise taxes on cigarattes, tobacco and cigars.


The Acting Speaker (Mr. Paproski):: Order, please. We are in second reading and the Hon. Member knows, and surely I do not have to tell him, that we are speaking to the Bill in general terms and not clause by clause. That will come a little later. I hope that the Hon. Member, who has been here a few years, as long as I can remember, will comply with those rules.


George Baker: Generally speaking, it is a terrible Bill. If I were to run through all of the tax increases that are included in this particular measure it would take me my entire 20 minutes in this Chamber. Canadians who pick up the daily newspaper know that these taxes should not be imposed, that this is not the right time to impose these taxes.
Today in The Globe and Mail there is a story which quotes the National Anti-Poverty Organization. It said the following:
A study by the organization of the Budget's tax measures concludes that families with incomes of less than $10,000 will pay, on average, an extra $128 a year. For families with annual incomes of $25,000 to $30,000, the increase will be an average of $308. For those with annual incomes of more than $50,000, the extra cost will average $547.
Then the article goes on to say:
The tax increase for families making more than $50,000 a year is 0.69 per cent of their income, compared with 1.39 per cent for families making less than $ 10,000 a year.
Those are facts that they have dug up, and here they are under the heading "Taxes Worst for Poor".
In the same newspaper and in every newspaper in Canada we read that today the first contract for the Prime Minister's Office to install new communications equipment is estimated to cost $7 million. We read about the UI premiums scheduled to rise on January 1. That is what employees and employers have to pay into the system. No problem. Hit the poor, and there is money for such things as a communications system for the Prime Minister's Office. We all know that a new communications system is what is probably needed in the Prime Minister's Office. It appears as though the communications system in the Prime Minister's Office is not all that great. Perhaps this might solve the problem. After all, it will only cost about $7 million, according to the media.
In the past few days, we have heard the Minister of Energy, Mines and Resources (Miss Carney) say that she is renegotiating gasoline prices with the producing provinces. There will be all of these tax increases for Canadian consumers. The Government has increased the unemployment insurance premium while a study is in progress. The Government announced in the Budget that it would re-analyse the unemployment insurance scheme because it said that there is too much wastage in the system. After all that, we hear announcements like the one which emanated from the Prime Minister's Office. We see that there appears to be two rules for the Government: one for the rich and one for the poor, one for ordinary Canadians and one for the select few.
Perhaps the worst aspect of this Bill is that it will impact more on the poorer provinces than it will on the richer provinces. When analysing how these taxes are collected, one
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discovers that after the federal tax is put on, there is a provincial tax levied on the bottom line.
The Government announced in the Budget that it would increase gasoline prices by 2 cents per litre, but because it did not want to disturb the tourism industry in 1985, it waited until September 3, 1985, to do it. The Government did not take into consideration what would happen after September 3,
1985.
What is also not taken into account by the Government is that there are provinces in this nation that have provincial taxes that are as high as 22 per cent. As well, there is one province with no taxes. In effect, this particular Bill provides a windfall to provincial administrations with excessive taxation on the bottom line. Someone living in Newfoundland is hit worse by the Budget than someone living in another province of Canada. It is estimated that Newfoundlanders have to pay again 50 per cent of the taxes imposed under this Bill. Surely that is not fair. The Bill is not fair to all Canadians.
The same thing applies to the changes in income tax. When filling out one's income tax form, one first fills out federal tax payable and then provincial tax payable as a percentage of federal tax payable. When a change is made to the federal tax payable, it influences the provincial tax payable. In provinces like Newfoundland with high provincial income tax, one ends up paying even more provincial income tax. This is how the budgetary measures brought in by the Government provide a windfall for the provincial administrations as well as the federal administration.
Canadians in the poorer provinces who have to pay double what people in other provinces have to pay because of the provincial take on the bottom line, whether in income tax or sales tax, wonder what the Government is doing. Those people see the Government spending $1 billion here and $1 billion there with only a sweep of the pen. The spending of this money occurred because of an on-the-spot decision made by the Minister of Finance or the Minister of State for Finance (Mrs. McDougall) under the direction of the Prime Minister (Mr. Mulroney) in a private meeting held on a Saturday afternoon while the economic conference was going on and the TV cameras were rolling. The Prime Minister had to make a decision on the spur of the moment and he made a decision that will cost Canadians $1 billion.


John Barry Turner: Stop! Stop!


George Baker: Those are the decisions that make ordinary Canadians ask what the Government is doing. They ask why the Government is hitting them at the gas pumps and on their income tax and everything else.


An Hon. Member:: To pay off our debts.


George Baker: The hon. gentleman says that it is to pay off our debts. If there has to be a pay-off of our debts, then why are we giving away so much money? Why is the Government giving to the rich people and taking away from the poor people? Why is the Government so flippant about a measly $1
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billion here and $1 billion there while it increases the unemployment insurance premiums? Why has the Government examined the unemployment insurance scheme and come to the conclusion that it is a giveaway? Why are there so many contradictions?
During the election campaign, every single Conservative Member complained about the giveaway make-work projects. I must admit that that hit home with a lot of people. A lot of people agreed that some of those projects were a waste of money. However, what has happened? Nothing has happened. Nothing has changed. Just yesterday, the Government of Canada with the Government of Newfoundland announced make-work projects for fishermen on the northeast coast of Newfoundland. That was a great announcement and I applud the Minister of Employment and Immigration (Miss MacDonald). However, why in goodness' name did she not do something about this problem when it was brought to her attention some three months ago? If she had done something then, we would not have to be in such a rush and we would not have to make up short-term make-work projects so that people can get their 10 stamps. It is little consolation to Canadians to realize that the Government of Canada is in the process of re-examining the entire unemployment insurance scheme but that a couple of years down the road, many Canadians will not qualify for it in any event.
I think I have said almost everything that needs to be said about this Bill. It is a terrible Bill. Mr. Speaker would not allow me to run through all of the tax increases. 1 accept his decision. He has been in the chair for some years and he knows the rules. I should know the rules as well. However, the point is that this particular Bill is a terrible Bill. It cannot be justified by the Minister of Finance or the Minister of State for Finance or the Prime Minister. It cannot be justified by any member of the Conservative Government. It is a Bill that goes against all campaign promises. I can assure Conservative Members that we will pull every stunt in the book to delay this Bill because it is a bad Bill. All Canadians agree with us that it should not be passed by this Chamber.


Lorne Edmund Nystrom: Mr. Speaker, I think the Hon. Member for Gander-Twillingate (Mr. Baker) has given a very fine speech on the unfairness of this Bill. I wonder if he would agree with me that the way this Government treats ordinary Canadians is almost as bad as the way the former Liberal Government treated Canadians.


George Baker: Mr. Speaker, that is an interesting question. If the former Liberal Government behaved in the manner in which this Government is behaving, half of us would have resigned.


Mr. Murphy:: Or gone to the Senate.


George Baker: Half of us would have sat as independents if it had behaved in the manner in which this Government is behaving. It has reached the point now in Question Period when the Prime Minister will not answer, the Minister of

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Finance will not answer-nobody will answer the questions because, of course, they are embarrassing questions.
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I do not recall, and I am sure Hon. Members will agree, when we have had a Government which has taken so many actions against ordinary Canadians in such a short period of time. I think the Hon. Member from the New Democratic Party would agree that we have never seen such a mess in the past 12 to 15 years as we have seen with this Government over the past year.


Lorne Edmund Nystrom: Mr. Speaker, the Hon. Member said that if a Liberal Government ever brought down a Budget such as this one half of its members would resign. Is it not true, Mr. Speaker, that in the last federal election about 70 per cent of them were forced to resign?


The Acting Speaker (Mr. Paproski):: Would the Hon. Member like to comment on that?


George Baker: Mr. Speaker, my only response to that is that in the next election the Hon. Member will see an awful lot of people coming out of retirement.


Lorne Edmund Nystrom: Mr. Speaker, I cannot resist saying a few words with respect to this Bill. I had no intention of speaking on it today, but as my hon. friend from Ottawa-Carleton interjected a few moments ago from his seat: "This is a very tough Bill." He said it is a very, very tough Bill. It is a tough Bill. Tory times are tough times, as we used to say on the Prairies. I am sure you as an Albertan, Mr. Speaker, remember those comments as a kid. Tory times are tough times. I am not old enough to remember, since I was born in 1946, but my father and grandfather used to talk about the great recession and the great depression when R. B. Bennett was in power in Ottawa and when we had a Conservative Government in power in the Province of Saskatchewan. Those were really tough times on the Prairies. They also had what was called the Bennett Buggies on the Prairies. These were old cars from which the engines were removed and horses were hitched up to them because Tory times were tough times. Once again, we are seeing that type of phenomenon.
My friend from Ottawa-Carleton says it is a tough budget measure-it is a tough budget measure. Tory times are terrible times. Tory times are tough times. We are seeing exactly that type of Bill before the House today.
Why do I say that? I say that because the ordinary Canadian family will be hit with an additional tax load of $500 per family as a result of the Bill which is before us today-$500 per family.
Another reason I am standing in my place speaking now is I concur with the comment made by the Hon. member for Ottawa-Carleton (Mr. Turner) who says that this is a very tough Bill. He is a Tory whom I really admire. He is willing to stand up and tell the truth. I notice his analysis of this measure is confirmed in a report found in The Globe and Mail of this morning. If Hon. Members read the paper this morning they
will have seen a story with the following headline: "Taxes worst for poor, poverty fighters say". The article quotes the National Anti-Poverty Organization which represents poor people from across the country who say that this particular Bill hits the poor Canadians, the ordinary Canadians, exactly twice as hard as it does rich Canadians. The article reads in part:
Federal tax increases announced in the budget will take twice as much from the poorest Canadians as they do from the most affluent, and Ottawa must consider a new tax credit to mitigate the effects, the National Anti-Poverty Organization says.
The sales- and excise-tax increases announced in the May budget "have a much greater impact on the bank teller than they do on the bank president,"-
The article goes on:
The study says those estimates "make it clear that the poorest of Canadians will pay increases in federal sales and excise taxes at twice the rate paid by the most affluent families."
The organization goes on to state that, in fact, the increase for the poorest Canadians, those who earn under $10,000 a year as an average income, compared to those who earn over $50,000 a year as an average income, will be twice as great. Thus, my friend from Ottawa-Carleton says it is a tough Budget-of course it is a tough Budget. It is very tough on ordinary Canadians, the poor people of the country, the unemployed, those working at the minimum wage, people who do not have skills or the breaks that those of us in society have who are making over $50,000 a year.
So the Hon. Member for Ottawa-Carleton is right when he says that it is a tough measure and that Tory times are indeed tough times. Tory times are bad times, and we see a good example of that in Bill C-80 which we are debating before the House today.
As I have said before, the Bill proposes to increase the tax load on the average Canadian family by $500 a year-$500 a year. This comes from a Party which a year and a half ago in the election campaign did not promise to raise taxes. This comes from a Party that did not say: "Elect me and we will increase your taxes." Members of that Party did not say that at all. In fact, when tax measures were before the House a year and a half ago when the governing Party sat in opposition they got up and said: "This is not the way to bring down the deficit. This is not the way to solve the problems of ordinary Canadians. The problems of the ordinary Canadian can be solved by making sure there are fair tax cuts given to ordinary Canadians". However, once in office, members of that Party are doing exactly the opposite of what they preached a year and a half ago. Thus, we now see an increase of $500 in taxes for the average Canadian family on the one hand, while on the other hand we find that there is a tax decrease for the corporations of the country of at least $500 million in the calendar year 1986.
This is only one Bill which is being dealt with by Parliament. There is another Bill before the House which proposes to bail out the banks by $1 billion. This is a Bill for big, wealthy depositors, many of them foreign banks which, if this Bill passes, will be subsidized-forgiven-because they had deposits at the Canadian Commercial Bank. At the same time 1
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represent a riding of western Canadian farmers who are having difficulties making ends meet. In my province we have a tremendous drought in the southern part of the province. A study was conducted of that drought in southern Saskatchewan by the Hon. Member for Assiniboia (Mr. Gustafson). It took him several weeks to carry out the study. Once it was done he presented his report to the Prime Minister (Mr. Mulroney). We had a commitment in the House from one of the Ministers that at a cabinet meeting of last week the Government would make a decision with respect to this matter. No decision has been made and I am told by reliable sources that one will come in about two weeks' time at the minimum.
Why are we so quick in the country to pass Bills to bail out bankers? Why are we in such haste to increase the tax load on ordinary Canadian families by $500 a year? Yet we cannot assist farmers who are suffering from a tremendous drought in southern Saskatchewan. All summer long we saw pictures on our television screens of the drought in the southern part of Saskatchewan. Yet there is still no help for those ordinary Canadian farmers.
I ask you, Mr. Speaker, why should we support this tough budget measure? The Hon. Member for Ottawa-Carleton is right. I hope he will get up and make another speech on this point. I hope that he will go before the committee to explain to us what he means when he says that we are dealing here with a very tough Government Bill. Indeed, it is a tough Bill because Tory times are tough times. Just as they were in the 1930s, they will be tough times again. The Bill bofore us should not pass. The National Anti-Poverty Organization of this country says that it should not pass. It will affect the poor people twice as much as it will the rich. We are supposed to be here to make sure things are more fair and equal for each and every Canadian.
Another matter which strikes me as unfair with respect to this particular Bill and with respect to our tax system in general, since we are having a general discussion on whether this Bill is fair in principle or not, is that we are collecting far too little from the corporations of the country. I make no apology for saying that I advocate some tax increases. However, I advocate them for the rich and for the corporations of the country. The Economic Council of Canada in its 1984 review said that corporate tax expenditures through forgone tax revenue represent a loss of around $30 billion to $50 billion a year to the Canadian population. To put that more clearly, what the council is saying is that we could be collecting between $30 billion and $50 billion more a year.
I find it almost impossible to believe that we could be collecting that much more in taxes from corporations in the country. According to the 1984 annual review by the Economic Council of Canada-by no means a radical body, a socialist body or a bunch of crazies-we can collect in addition between $30 billion and $50 billion a year from corporations. Even taking the lower sum of $30 billion a year, this increase of $500 a family would not be necessary. Instead of increasing taxes by $500 a year, we could decrease taxes by $500 a year.
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We could also have an extra several billion dollars a year to reduce our deficit. The Hon. Member for Esquimalt-Saanich (Mr. Crofton) argues that our debt is too high and that the Liberals, when they were in power, were irresponsible. Of course, we know that the Liberals spent irresponsibly and more importantly, they collected irresponsibly. They failed to plug the tax shelters and loopholes such as the deferred taxes of Canadian corporations. And if the Economic Council of Canada is right, they could have collected $30 billion plus per year from the corporations, which would have reduced our deficit and the tax load which ordinary Canadians have to pay. That money could have been used to stimulate agriculture, forestry, the fishery and small business, thereby creating more jobs, and we would have had a more affluent Canada, to boot. It is not only members of the opposition Parties who are saying this. The Economic Council of Canada, a cross section of experts, says the same thing.
I believe that is the way we should go. Let us collect taxes from those who are most able to pay. Let us have a tough economic measure with respect to the large corporations rather than being tough on ordinary Canadians and, as the Hon. Member for Ottawa-Carleton (Mr. Turner) says, Bill C-80 is tough on ordinary Canadians.
[ Translation]
However, in that Bill, Mr. Speaker, we find tax increases for the ordinary Canadians. There will soon be a 7 per cent tax on building materials in this country at a time when we need more funds for housing. Yesterday, my eye caught a large headline in the Ottawa Citizen which said that Ontario needed increased housing.
Mr. Speaker, there will be a 7 per cent tax on pay television and on cablevision. There will be a 14 per cent tax on alcoholic beverages; I am not against that one, it is a sensible tax.
Mr. Speaker, I also approve of another provision in that Bill and it is the 14 per cent tax on cigarettes, cigars and other such products. However, there are too many taxes to be collected from ordinary Canadians and this is not fair. The sales tax will be increased as well as the tax on gasoline. [English]
In fact, Mr. Speaker, the increase in the sales tax on gasoline will be two cents per litre, which is about 10 cents per gallon. That in itself will cost ordinary Canadians several hundreds of millions of dollars.
We had an election back in 1980. The main issue during the election campaign was the proposal of the then Minister of Finance, the Hon. Member for St. John's West (Mr. Crosbie) of an 18 cents per gallon excise tax on gasoline. The Hon. Member for Yellowhead (Mr. Clark) was the Prime Minister at that time. After only nine months in office he was clobbered in the following election partly because of the 18 cents a gallon he wanted to impose as a sales tax on gasoline.


Patrick Dermott Crofton: The truth hurts.

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Lorne Edmund Nystrom: I did not quite hear the interjection but I believe the Hon. Member for Esquimalt-Saanich said that the truth hurts. I suspect he was agreeing with me that the truth certainly hurt the former Prime Minister, because following the election he became the Right Hon. Leader of the Opposition. Canadians do not like that kind of increase. In my own province of Saskatchewan the CCF was defeated in 1964 by the Liberal Party partly because the Liberals came out with a policy of purple gas for the farmer. This was very popular with the farming community. They needed that kind of tax break. That was one reason why the old CCF Party lost the election.
In 1982, after the New Democratic Party was in power for 11 years, Grant Devine, as Leader of the Conservative Party, came out with the promise that if he was elected, there would not be any gas tax. That also was a very popular measure. The politics of gasoline taxation in this country are very powerful. Whether it was the Hon. Member for Yellowhead in 1979, Grant Devine in 1982 or Ross Thatcher in 1964, people are not going to favour those who want to impose steep taxes on gasoline.
In spite of all the evidence to the contrary, the Conservative Government is now increasing the tax on gasoline by two cents per litre. That is not just on gasoline for cars but on aviation and diesel fuel. That is a big tax increase to impose on ordinary Canadians.
The total of these increases comes to about $3.5 billion. As the Hon. Member for Ottawa-Carleton said, it is a tough measure and it was a tough Budget. And as the National Anti-Poverty Organization states, it hits ordinary Canadians twice as hard as it hits the wealthy in this country. If Hon. Members of the Conservative Party can stand in the House and refute what was said by the National Anti-Poverty Organization, I would be pleased to see them do it. If they can refute the arguments of the Economic Council of Canada which said we should be collecting an extra $30 billion or $50 billion of taxes from corporations every year, then I would be pleased to hear those arguments. If not, let them pay heed to the Conservative Member of Parliament for Ottawa-Carleton and agree that it is a tough measure to impose on ordinary Canadians. It is reactionary and regressive and is reminiscent of the old Liberal days. Let us defeat this legislation or else radically amend it.


Mr. Minaker:: Mr. Speaker, I have a question for the Hon. Member for Yorkton-Melville (Mr. Nystrom) and a comment I would like to make. The Hon. Member describes these present days as Tory tough times and tries to relate back to the depression days which I did not personally experience as he himself did not. I would like to ask the Hon. Member if 304,000 new jobs created in the first year of Government-if the rate continues for four years it will mean 1,250,000 new jobs-means tough times? Unemployment is down by over 1.5 per cent, I believe, and it is down 2 per cent with respect to young people. People are getting jobs now. Is it tough times when people can get jobs?
There were 177,000 new home starts in the first year. There were 177,000 new homes built with mortgages which now have
an interest rate of 3 per cent to 3.5 per cent lower than previously. Is that tough times? There has been a 25 per cent increase in car sales. People are buying cars now. Is that tough times? The Hon. Member describes the Bennett buggy. I suggest that there are not very many Bennett buggies around in these Tory tough times, as he describes it.
Business investments are up. People are now investing in Canada. New factories are being built, which creates new jobs. Is that tough times? Consumer confidence is up. Purchases by consumers are up. Is that tough times?
My last point is that we have kept the inflation below the 4 per cent level. We know that increasing inflation creates recession and depression. That is why I would like to ask the Hon. Member if he is in favour of these Tory tough times I have just described or is he opposed to that type of growth?


Lorne Edmund Nystrom: If Tory tough times are so great, why do we have to impose this $500 tax per family through this budget measure? If things are so great and prosperous, why do we have to increase taxes on ordinary Canadians by $500 apiece? Why do we not listen to the National Anti-poverty Organization which says that we are hitting ordinary Canadians harder than we are hitting rich people? I ask the Hon. Member for Winnipeg-St. James (Mr. Minaker) why we must take that kind of reactionary measure if we have all that money, if things are beautiful and if there is a golden tap out there?
To take this point by point, the unemployment rate has dropped by a little over 1 per cent in the last year. The unemployment rate is dropping around the world, Mr. Speaker. What is the Government doing that is different from what is being done in other parts of the world? Our unemployment rate is not dropping any faster than that of our major trading partners. A major report on poverty was released last Thursday. It says that about 4.5 million Canadians are living in poverty. Those are Canadians who will say that Tory times are tough times. They are not tough times for wealthy people who have a few bucks with which to build apartment buildings or take holidays in the Caribbean. I know that they are not tough times for the wealthy people of this country. This Budget is reducing taxes for corporations. It creates an exemption of $500,000 on capital gains.
I agree with my hon. friend that these are not tough times for wealthy people. However, come to my riding and talk to the ordinary farmer. There are more and more farm bankruptcies nowadays. The price of grain is down around the world. There is more and more difficulty for young farmers to stay on the farm. There is a drought in southern Saskatchewan. The Government has been sitting on a report now for several weeks refusing to assist farmers who are suffering because of the drought. Yet there is $1 billion for banks and all kinds of money for large corporations.
For the farmers in the drought area, Tory times are tough times. For the mothers who have kids and are living below the poverty line and have their family allowances cut back, Tory times are tough times. Mr. Speaker, for ordinary Canadians
October 29, 1985

who are going to pay an extra $500 a year because of tax measures in this Budget, Tory times are tough times. The Member for Ottawa Carleton is absolutely right. This is a tough measure on ordinary Canadians and we should not be doing this in a country as affluent as Canada.


Patrick Dermott Crofton: Mr. Speaker, I would like to put a question to the Member for Yorkton-Melville (Mr. Nystrom). He wants to draw a comparison between the early 1930s and the present day. I would like him to reflect for a moment upon what was happening to the economy prior to this election and what was happening to the economy before the election of 1930. 1 would like him to reflect upon who was in office when these two great recessions afflicted the country and which Government was spending money in a profligate manner. Which Governments were in office on those occasions? What did the Canadian people do at their first opportunity? Which Party did they turn to to take the appropriate and necessary measures to put the country back on track? I ask the Member to reflect on that and I would be interested to hear his response. Which Governments were in office when the two bad recessions hit and to whom did the Canadian people turn for the stern and necessary measures to put us back on track?


Lorne Edmund Nystrom: The answer to that is very simple. The Liberal Party was in power prior to the 1930s when the Great Depression started and the Liberal Party was in power prior to September 4. We all know that. It is history. The Conservative Party was elected in both cases. However, it is interesting that the Member asks which Party came to power and took the "appropriate and necessary action" to put things in order. The Member says that the people turned to a certain Government to do the necessary thing. It was R. B. Bennett who did the appropriate thing in this country.
Is the Member for Esquimalt-Saanich (Mr. Crofton) saying that R. B. Bennett is the model, that what R. B. Bennett did in the 1930s the man from Manicouagan is going to do in the 1980s? Is he telling the Canadian people that R. B. Bennett was right and that we are going to follow his model? The Member said that R. B. Bennett did the appropriate, right and necessary things. I do not think that people want to follow in the footsteps of R. B. Bennett.
I come from the Prairies and I know that those Tory times were tough times. I know that my grandfather sold a steer and shipped it by rail to Winnipeg. He received a freight bill for $1.87 because he got less for the steer than what the CPR charged him for the freight. Mr. Speaker, for my grandfather Tory times were tough times, but the Member for Esquimalt-Saanich is saying that R. B. Bennett did the appropriate, necessary and right thing. The Member is implying to the House that the man from Manicouagan is going to do exactly the same for the economy in the 1980s as R. B. Bennett did in the 1930s. If I am misinterpreting what the Member said, he can get up and make another comment or ask another question. He said that the Liberals were in power prior to the 1930s and prior to 1984, that the Tories took over and did the right, necessary and appropriate things. After about six years
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of the administration of R. B. Bennett the Tory Party was tossed out on its ear and stayed out of office for 30 or 40 years except for the five years of the Diefenbaker administration.


Patrick Dermott Crofton: Mr. Speaker, I would like to make a comment in response. The difficulties of the 1930s were inherited from the previous administration, as were the present difficulties. I suggest to the hon. gentleman that the circumstances of the 1930s were unique because it was a financial dilemma experienced in the western world far beyond anything that had been previously known, and it was magnified by a very serious drought on the Prairies. Many of the essential social programs which we enjoy in Canada were initiated during that period. We now have a number of new social initiatives to deal with the underprivileged and people in need in Canada today. There is a parallel, but I assure you that the initiatives which are being taken now are being enacted with sensitivity. They are essential and the entire country would be a lot further ahead if members of the New Democratic Party were a part of the reconstruction process rather than being an encumbrance.


John Barry Turner: Mr. Speaker, I am honoured to have been referred to so frequently by the Hon. Member. I did not realize that he had such an affection for the riding of Ottawa Carleton and I am very taken by this. However, it is tough to sit here and be told that I am being tough. It is tough to make tough decisions when you are bailing out a country from an unbelievable fiscal mess inherited from our predecessors.
The Member spoke about Tory times being tough times. He is from Saskatchewan. This August I took the trouble to go to Saskatchewan and look at the effects of the drought. 1 agree that it is terrible and the Government will respond accordingly. However, you cannot blame the drought on the Tories. Let us keep the drought problem in perspective.
However, what can be blamed on western Canada is the National Energy Program, that great socialist axis which destroyed the oil and gas industry of the western economy, which industry has now been rejuvenated by the Western Accord. Those are not tough times but good times for westerners, and the Member should remember that. I ask the Member to keep in proper perspective what we are doing with this Bill and other fiscal measures to restore the health of the Canadian economy. My colleague mentioned some of the very positive key economic indicators. He must not lose sight of the tremendous economic achievements which we have had in our first 13 months in power.


Lorne Edmund Nystrom: Mr. Speaker, the Member for Esquimalt-Saanich said that there is a parallel between the 1930s and 1980s in terms of what the Tories will do. He said that they inherited all kinds of serious problems, and I assume there is a parallel between the solutions as well. He seemed to be quite proud of some of the social and economic accomplishments of R. B. Bennett. Maybe this gives us some insight into the philosophy of some members of the Conservative Party.

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My friend, the Member for Ottawa Carleton, was in Saskatchewan and saw the drought conditions. I am glad he was there. We need to have a lot of Members of Parliament become more aware of particular regions. I hope the Member will join us in putting pressure on the Prime Minister to come up with funds for the people in southwestern Saskatchewan.


John Barry Turner: I already have.


Lorne Edmund Nystrom: I am glad he has done that. The Member for Assiniboia has put a lot of time into working on a special report, but the Prime Minister has been sitting on it. There was a commitment in the House that it would be made public a long time ago. Perhaps even you, Mr. Speaker, can lend your considerable weight to putting pressure on the Prime Minister because we need that money and I am sure those people would appreciate it.
The Tories do not control the weather. I know that the Prime Minister believes he can control much, but he does not control the weather. However, the Tories control the pursestrings and if a billion dollars can be spent on the banks, we can spend a few million dollars for the farmers as well.


The Acting Speaker (Mr. Paproski):: Questions and comments are now terminated.


Mr. Louis Plamondon (Richelieu):: Mr. Speaker, I wish to thank the House for this opportunity to speak to a Bill that will help to restore the economy of this country.


An Hon. Member:: Oh, oh!


Louis Plamondon: You will have your turn.
Mr. Speaker, Bill C-80, which is aimed at amending the Excise Tax Act and other acts in consequence thereof, will increase the Government's revenues by $2.5 billion in 1986.
Mr. Speaker, our task today as Members of the Progressive Conservative Party is, of course, not a very cheerful one. Asking people to make sacrifices is never an easy thing to do. However, considering the financial situation we inherited from the previous Government, we had, need I say it again, no choice. What makes our task even more difficult is the realization, and I hope I can say this calmly, that the Members of the previous Government had created an untenable situation in this country, as a result of poor financial management, lack of interest in the economy, a complete absence of administrative skills and their chronic fear of taking action to contain inflation because they were afraid to arouse the displeasure of the people, and all this for the sole purpose of maintaining their little kingdom, and there was also their increasing tendency distributing favours, thus aiding and abetting the kind of bandaid policies they incorporated into the system for over fifteen years, with their legendary arrogance which deprived
this country of the views of all its economic and social partners.
For more than fifteen years, as a result of their absurd phobia, their incredible excuse that all the ills of this country were to be blamed on nationalists, whether they were from Quebec or anywhere else in Canada, and by their legendary but ill-famed skill in focussing the attention of the media on artificial problems while the real ones were waiting desperately for solutions, yes, Mr. Speaker, those people, and I hope no one will ever forget it, plunged this country into the morass from which it is now emerging, thanks to the responsible attitude of this Government's Members.
Mr. Speaker, we are not talking through our hats. In less than one year and a half, we have done more for Canadians than the so-called New-Liberal-Democrats managed to do in fifteen years.
During the election campaign, Mr. Speaker, we had promised to shift into reverse and get rid of those famous hand-out programs which had made a good many Canadians rely exclusively on their good old paternalistic Members of Parliament. Those popular programs had undermined the creative vitality of our country's most innovative, most promising and most sacred resource, our youths, programs which practically eliminated all retraining opportunities for workers in their forties who had just lost their jobs because the Government, totally unimaginative as it was, simply could not bring itself to get off the beaten path.
Mr. Speaker, this Government is extremely proud to have completely destroyed all such remnants of the mental atrophy of pseudo-Jesuits.
Our Government strongly believed that Canadians were determined to build a new country, a country which is not afraid to take bold steps, a country which affords every citizen the opportunity to open up a new career, which gives its people the incentive to start up new businesses and provides them with the proper tools to shed fears created by ignorance and generated by paternalism.
Mr. Speaker, the Minister of Employment and Immigration (Miss MacDonald) rose to the challenge and did get off the beaten path. She expressed full confidence in the private sector. She knew she could count on the intelligence of youths and Canadians generally, and she simply would not baby them as the previous Government had done. Well, Mr. Speaker, she did live up to the challenge, and how!
The programs we now have cannot in any way be considered as crutches one must carry throughout life, for they are indeed stepping stones towards the kind of training which is absolutely essential in our days.
Mr. Speaker, I have not lost sight of the issue as I speak these words because, sure enough, every good thing has its price, and Canadians were aware of this when they elected us. No Government, even if I am willing to render unto Caligula
October 29, 1985

the things which are Caligula's, can deny its responsibility for a disaster simply by passing the buck. It should act and try, as a good Government, with all the resources at its disposal and the cooperation of the people in all walks of life, to find the best and cheapest solutions, especially if it assumed power at a time when the country was on the brink of bankruptcy.
Mr. Speaker, this Government having decided to act with, I repeat, the consent of the Canadian people, it has felt that a tax increase on various commodities was the price to pay to help our economy recover. I said the Government had the consent of the Canadian people, Mr. Speaker, because in the September 1984 election, the Canadian people clearly demonstrated to our hon. friends opposite that they had lost faith in their quack remedies, that they did not believe that they could reduce the deficit with quasi-usurious interest rates, with uncontrolled unemployment, with an elitist, arrogant and despising attitude, by encouraging a number of provinces at the expense of others, and with the narrow-mindedness of their elected representatives. No, Mr. Speaker, the Canadian people clearly demonstrated that they had reached the age of political maturity, that they realized finally that those who borrow money must pay it back sooner or later, and that if we did not reimburse what we owe, we would jeopardize forever our future.
Because it wants very strongly to put Canada back on the right track again, the Government will not surrender its responsibilities simply to make political gains as the former Liberal administration tried to, because it was in utter disarray. The Hon. Minister of Finance (Mr. Wilson) announced in his Budget that Canada would no longer bury its head in the sand and that it would make a voluntary collective effort to get out of the hole.
It is the mark of a good leader and a good people when, together, they decide to apply difficult but effective constraints to put their country back on track. Such an attitude can only lead to success.
Mr. Speaker, it was said about the Budget on which Bill C-80 is based that it was regressive in that it hit poor people harder than the rich. Those who said so consciously omitted the fact that a taxpayer with an annual income of $100,00 will be hit by a $1,629 tax hike next year, while a taxpayer with an income of $30,000 will only have to face an increase of $133.
What this shows, Mr. Speaker, is the will to balance the Canadian taxation system. It is the wish of this Government to put more equity into a system which, until now, rewarded the rich too easily and taxed the poor too heavily.
Mr. Speaker, what Bill C-80 tells us, as it is an integral part of this Budget, is that, if the Government really tries to balance the tax burden and to make it more equitable, each citizen will also have to be willing to do his fair share of this national economic readjustment effort. Bill C-80 is not unfair.
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In view of the situation existing when we took over the reins of this country, it seems to be instead a logical solution which should have been applied long ago by this House, but which never was because of the lassez-faire attitude of the previous Government.
Mr. Speaker, with all these Budget measures aimed at reducing expenditures rather than at increasing taxes, the Progressive Conservative Government sets an example by saying that the effort must be collective and fair for everybody.
Our friends over there did not hesitate one moment to revile against the budget, calling us all possible names. Still, Mr. Speaker, have they not read as we all have, that this great budget directly resulted in increased investor confidence, a factor of economic renewal that is vital to economic liberalism? And I am referring here to the genuine thing, the liberalism of Rousseau, Montesquieu and the like, rather than to the gutter class of liberalism espoused by our friends over there, the kind that has taken on the electoral ambitions of those Sunday phoney Socialists.
As did the fathers of our capitalistic system, we are looking for stability and justice in our relations with our fellow men, which indeed have made a success of that system. Have not our friends over there, Mr. Speaker, seen as we all have that another direct consequence of that budget was the reduction in the unemployment rate? Have they gone blind? Were they so overwhelmed by the situation when they were in Government that they lost confidence completely in the ability of Canadians to correct any situation? The answer is yes, Mr. Speaker, they had lost faith. But nothing is lost thanks to us, the strayed sheep roaming in the limbo of disbelief will find their way again.
Have our friends over there not seen, as we all have, that interest rates are declining, another consequence of the Budget? No, Mr. Speaker, they saw nothing. Not only have they become blind, but they have forgotten their mathematics. They have forgotten that with low interest rates, there are increased consumer expenditures, increased housing starts and a decrease in the number of failures.
Maybe they have not forgotten anything, maybe they never could count? If that is the case, Mr. Speaker, with our new employment strategy-


Mr. Guilbault (Saint-Jacques):: On a point of order, Mr. Speaker.


The Acting Speaker (Mr. Paproski):: The Hon. Member for Saint-Jacques (Mr. Guilbault) on a point of order.


Jacques Guilbault: Mr. Speaker, we have been listening with interest to the Hon. Member's long dressing-down. As is his right he is throwing all kinds of insults at the Liberal Party of Canada. But it seems to me this bears little relevance to Bill C-80 now before us, and I would ask you to

October 29, 1985
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call the Hon. Member back into line and ask him to deal with the matter at hand.


The Acting Speaker (Mr. Paproski):: I am sure the Hon. Member was getting to the principle of the Bill. I find that, generally speaking, the Hon. Member for Richelieu (Mr. Plamondon) was speaking to the whole principle of the Bill. Maybe 1 have missed something.


Jacques Guilbault: You have, Mr. Speaker.


The Acting Speaker (Mr. Paproski):: I am sure the Hon. Member will come back to the relevancy of Bill C-80.


Louis Plamondon: Mr. Speaker, I am very much surprised the Hon. Member does not see the connection between out-of-proportion expenditures and the deficit inherited by our Government, and the steps we are now taking to correct the situation.
I was indeed suggesting-no problem, Mr. Speaker-that considering our new employment strategy with the required training aspect, we will be in a position to send the Hon. Member for Montreal-Sainte-Marie (Mr. Malepart) and the Hon. Member for Shefford (Mr. Lapierre) on a re-training course, and thanks to the Minister of Employment and Immigration (Miss MacDonald), perhaps they finally will see the light.
Seriously, Mr. Speaker, this Government wants more than that. It wants to restore Canada to its economic strength of the 60's. It wants Canada to recapture the leading role it once had, and to that end, clearly, the Government and the people must strive harder to regain lost ground.
Mr. Speaker, we are perfectly aware that speeches are not enough, as the previous Prime Minister once believed. Unfortunately, the cost of success is very high. Bill C-80 is an example. But everyone should know that it was not of its own free will that this Government decided to introduce it. But it is just and fair for everyone. Canadian citizens must contribute to this country's success. Some may believe that the Government alone must look after the needs of society. This is their right. But clearly, on the night of September 4, 1984, Canadians believed otherwise. They preferred to be on the spot, to roll up their sleeves and help their elected representatives rebuild a new country.
Mr. Speaker, I am honoured, and prouder than ever to be a Canadian and to contribute with this Government to putting our finances back in order with Bill C-80.


The Acting Speaker (Mr. Paproski):: Questions, comments. The Hon. Member for Ottawa-Vanier (Mr. Gauthier).


Mr. Gauthier:: Mr. Speaker, I listened closely to the Hon. Member's speech, and I would have a question to ask. We know that in Bill C-80, there is reference to the Excise Tax
Act and the Excise Tax. This Bill amends existing statutes and is a bulky and intensive piece legislation. If you look at the Bill, you also find that the people, the consumers of Canada will pay $4.1 billion in additional income tax between now and 1990-1991. We also find that there will be increased sales tax and excise tax for a total amount of $2.6 billion between now and 1990-91. On the other hand, corporations will be getting a gift, they will be getting some $2.2 billion in tax reductions. And the rich-because we should remember than when Tories are in Government the rich get richer-I repeat, the rich will be entitled to a tax deduction, that is if they invest and earn half a million dollars in capital gains, they may reduce their income tax accordingly.
I am asking the Hon. Member a very simple question: Where is the fairness in all that? Where is the fairness, when we know that average consumers will be taxed, while big corporations, friends of the Conservative Party, will get tax benefits and tax concessions?


Louis Plamondon: Mr. Speaker, I am rather surprised at being asked such a question. We have always advocated that this country's economic renewal would be accomplished by the private sector with the help of tax measures that would contribute to create jobs. The previous Government tried its hand at it by constantly increasing the deficit and we saw the economic disaster which followed. We came and changed the course of things and already after one year, interest rates have gone down and Canadians are quite pleased with the recipe we proposed since it is the only solution to reduce the deficit and launch Canada on the way to prosperity. Therefore, this exercise is fair to all. It enables the poor to get jobs and the corporations, by way of tax rebates, to create those jobs.


The Acting Speaker (Mr. Paproski):: Order. A brief supplementary.


Jean-Robert Gauthier: My question will be quite brief, Mr. Speaker, because I intend to stick to the 10-minute rule. We have just heard the Hon. Member restate the old theory of the horse and the sparrow. If we put enough oats before the horse ... enough will come out to feed the sparrow.
Mr. Speaker, this is not good enough.


Louis Plamondon: Mr. Speaker, should I reply to such nonsense? Should we have continued adding to the deficit? We know that 24 per cent of our revenues are used specifically to pay the deficit which has never created the promised jobs and has never had the expected economic consequences.


Lorne Edmund Nystrom: Mr. Speaker, I do agree with the Hon. Member because we are now paying almost 25 per cent towards the Canadian deficit.
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However, I should like to ask two questions because I know that the Hon. Member for Richelieu (Mr. Plamondon) is a very politically and socially progressive Member-


Mr. Malepart:: That is not true!


Lorne Edmund Nystrom: Yes, he is; I know him well. 1 would like to ask him these questions: Does he agree with the provisions contained in this Bill to the effect that the sales tax will increase from 6 to 7 per cent after January 1, 1986, since an increase in the sales tax is a regressive measure which dicrimi-nates against the disadvantaged and the poorest people in this country? Does he agree with this means of collecting money for the Government of Canada?
Second, the Economic Council of Canada said last year that we were losing from $30 billion to $50 billion in corporate taxes. Does the Hon. Member for Richelieu agree that we need such measures to increase corporate taxes in this country? Does he agree that we should collect more taxes from Canadian businesses?


Louis Plamondon: Mr. Speaker, I think that the answer to that question has been given many times already, and that is that we are asking all Canadians to make a collective effort. Of course, I would like to be able to say that no one should pay for the deficit and that it will go away by itself. However, we have no choice. We have to ask everyone to make a minimum effort. Everyone in Canada must contribute and this is what Canadians asked when they elected this Government on September 4, 1984.
As concerns businesses, they must also do their share, and this is why I believe that Bill C-80 is fair and equitable, as 1 have already said. It is equitable because it asks for an effort by both the disadvantaged and corporations, and the latter must do a bit more since they have access to wealth. At the same time, the Bill promotes the use of tax initiatives aimed at creating jobs. This past year, they made the creation of
300,000	jobs possible and allowed corporations to lighten their tax burden if they do create jobs.


Jean-Claude Malépart: Mr. Speaker, I first want to congratulate the Hon. Member because his secretary prepared a very good speech for him, even though it contains a few inaccuracies.
I would like to ask a question to the Hon. Member for Richelieu (Mr. Plamondon). He says that his Government consults the people and does what the people want, but what does he think about all the mothers who came to Parliament Hill and all the groups who expressed their disapproval of the plan to deindex family allowances? Has the Hon. Member told his constituents that he agreed to this proposal and that the Government was exploiting the illness of Canadian citizen by imposing a 10 per cent tax on medication and taking $56 million of the taxpayers' money to change the colour of the Armed Forces uniforms? Has the Hon. Member told his constituents that, to reduce the deficit, his Government is
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deindexing family allowances and taxing illness to give $1 billion to people who had deposits of over $60,000 in certain banks?
I shall close with this comment, Mr. Speaker. The Hon. Member says that his Government has confidence in the business sector, but has he told his constituents that businesses in Eastern Montreal will lay off 5,000 people?


Louis Plamondon: The usual exagerations of my colleague are completely beside the point and have no bearing on Bill C-80 now under consideration.
Your colleague called me back to order earlier when I spoke about the matter under discussion, and he will probably want to do the same in your case since the purpose of Bill C-80 is to correct through the taxes we collect the inequities created by your Government.
As concerns the readjustment of family allowances, this reflects the will of the population to reduce the deficit which, as noted in the MacDonald report, is stifling all Canadians. This is a priority.
Second, we believe that what people want most of all is to be able to pay for the services they expect to receive by getting a permanent job instead of relying constantly on the Government since they will have to pay eventually in any case.


The Acting Speaker (Mr. Paproski):: Questions and comments are now over. The Hon. Member for Montreal-Sainte-Marie (Mr. Malepart).


Jean-Claude Malépart: Mr. Speaker, I am convinced all Members of this House will agree that Bill C-80 is hardly a cheerful topic to discuss. The previous speaker, the Hon. Member for Richelieu (Mr. Plamondon), gave us ample proof that his speech was written by his secretary, because he did not even read Bill C-80. In fact, Bill C-80 provides that the Progressive Conservative Government, led by the Prime Minister of Canada (Mr. Mulroney), will levy a 10 per cent tax on drugs.
Mr. Speaker, I fail to understand how a human being, whatever his political stripe, could take pleasure in considering and adopting a Bill of this kind. However, I am beginning to understand why some Conservative Members agree with the Bill. It is because they have not read it. They do not know what they are talking about, and their speeches are prepared by Ministers' offices, Mr. Speaker.
If the Hon. Member for Richelieu (Mr. Plamondon) would care to stay in the House, I will give him a list of products appearing in the papers of the Minister of Finance (Mr. Wilson). Let him stay here in the House. I will give him a list of the products that his Government... And I can say to him, because most Progressive Conservative Members do not know who had the bright idea to use the illnesses of Canadian citizens to reduce the deficit... Never has any previous

October 29, 1985
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Government, whether Liberal or Conservative, been so hostile to the elderly, the ill and the children, with a Budget like this one and a Bill like the one before the House today.
Mr. Speaker, first of all, we know that the person who urged the Minister of Finance and the Prime Minister to slap a 10 per cent tax on drugs and on everything that affect the health of our Canadian citizens, was our brilliant Deputy Prime Minister (Mr. Nielsen), who is also Minister of National Defence. Today, 1 understand why he has no trouble getting funds to change the colour of our military uniforms, to spend $100 million more annually and send 1,000 soldiers over to Europe to spend their money, and recover $25 million from Canadians who are ill, in order to reduce the deficit.
Mr. Speaker, if Conservative Members want to know where I got the idea it was the Deputy Prime Minister and his task force that recommended this measure to levy a 10 per cent tax on drugs, all they have to do is read the Budget Papers tabled by the Minister of Finance, in English, on page 77, under item 6, "Removal of Federal Sales Tax Exemptions".
The Hon. Member for Richelieu had been trying to disprove what I had said. Mr. Speaker, to prove what I said was true, I intend to quote from the paper presented by the Minister of Finance: "The exemption from sales tax applying to a range of consumer goods is being ended, effective July 1, 1985."
That was a nice birthday present for Canadians, when the Prime Minister and the Minister of Finance decided to levy a sales tax on drugs.
[DOT] (U40)
Prior to the mid-1960s, the federal sales tax applied to most consumer goods. Since then, exemptions have been granted to a number of products in response to the social and fiscal policy goals-
And I repeat, previous Governments, Liberal and Conservative alike.
-exemptions have been granted to a number of products in response to the social and fiscal policy goals of the Government of the day. This Government has re-examined a number of-
Referring to the Government now in office, the Government of the little guy from Baie-Comeau, Mr. Speaker-
-of these tax exemptions, as has the Ministerial Task Force on Program Review-
-headed by our brilliant Deputy Prime Minister, Mr. Speaker-
-which has recommended a repeal of several of them. These exemptions have resulted in a significant erosion of the federal sales tax base.
The rationale which originally prompted the exemptions is no longer valid in many cases.
As a result of all this, Mr. Speaker, anyone suffering from diabetes became less seriously ill as of September 4. That was the judgment which had prompted the Deputy Prime Minister to recommend something to the Prime Minister, who promptly fell for it. According to the recommendations of our Deputy
Prime Minister, fully endorsed by the Prime Minister, all people with a heart condition did not suffer as much as of September 4, so it was quite all right to impose a 10 per cent tax. The same scenario applied in the case of others suffering from arthritis or respiratory aliments.
I would like to give you an idea of the number of people with such diseases whom the Conservative Government-led by the Prime Minister and supported by all his Conservative colleagues-was and, unfortunately, still is pleased to use to reduce its deficit, sick men and women all of them. In fact, that will not reduce the deficit. The Government chose to change the colour of uniforms and took $1 billion of the taxpayers' money-the sick, the elderly, mothers with children-to rescue some of its cronies who had more than $60,000 in bank accounts.
Mr. Speaker, 2,620,000 Canadians suffer from cardiovascular diseases and every day they have to take nonprescribed drugs. Perhaps our Conservative colleagues would like to know why these are nonprescribed drugs? The person suffering from a heart condition has no time to visit his or her doctor to get a prescription. All Governments before this one had hearts, even Progressive Conservative ones; a Government under Mr. Clark (Yellowhead) would never have agreed to that, Mr. Speaker. Mr. Diefenbaker must certainly roll over in his grave when he realizes that this Progressive Conservative Prime Minister is trying to reduce his deficit on the backs of sick people or squandering the taxpayers' money, Mr. Speaker.
There are in Quebec and Ontario respectively 730,000 and
950.000	persons suffering from cardio-vascular disorder. For the information of the House, may I add that there are in Canada 300,000 people suffering from diabetes, including
30.000	in the province of Quebec, who must give themselves a shot of insulin everyday. It is not for fun that they do so; for them, it is a matter of survival. This heartless Prime Minister and his whole Government behind him have decided that all Canadians suffering from diabetes should pay a 10 per cent tax on the syringes and the other paraphernalia they must use, in addition to all the other taxes they have to pay as ordinary Canadians.
How about the people who are suffering from arthritis? 1 am sure all Hon. Members have among their friends, relatives and acquaintances someone who is suffering from arthritis. As a matter of fact, Mr. Speaker, there are in this country 3.2 million Canadians who are suffering from that condition, including 620,000 in the province of Quebec; there are in Canada 30,000 children under 15 years of age suffering from it, including 4,000 in the province of Quebec. There are in Canada 1.1 million senior citizens 64 years of age and over who are suffering from it, including 300,000 in the province of Quebec.
Mr. Speaker, can you imagine that nowadays, with all the know-how and resources at our disposal, there are human
October 29, 1985

beings who are delighted they have found a way to levy a tax on sickness?
Mr. Speaker, this is a shame, this is a scandal. In August, after pressure had been brought to bear by the Canadian and Quebec Diabetes Associations, by the Canadian Cancer Societies, by the Canadian Consumers Association, I had the privilege to work with all those groups to see that the Government withdrew that shameful decision. For the second time the Government was forced to back down and to recognize it had blundered as it had with senior citizens. But this time, contrary to what he did with senior citizens, the Minister of Finance issued a short press release stating that those suffering from arthritis suffer less than those suffering from diabetes. And he started to make comparisons, always anxious to bring people down, to extort money from them, after implementing a 10 per cent tax on 5,000 important pharmaceutical products that are important for the people. He agreed to back down on drugs for diabetics, but this was not self-prompted. It is a shame that people with illnesses had to put pressure on to wake up the Prime Minister and the Tory Members. He backed down on certain drugs for people suffering from cardiovascular diseases.
And then again, Mr. Speaker, it seems to me that someone with heart disease should avoid energy and stress. I would have thought that at least one Tory Member out of 211 would be humane enough to say: "Listen, Brian, wake up!" People are suffering, Mr. Speaker. Another group, persons with respiratory diseases among others, had to embark on a coalition.
The Government backtracked on a number of goods, but unfortunately, it only backtracked on 20 or so drugs, after deciding to levy a 10 per cent tax on 5,000 products. Who is being affected by Bill C-80? I am saying this, because in addition to the tax on drugs we also have the increase in the price of gas, consumer goods and also the price of cement and so forth in the construction industry. However, I intend to concentrate on the tax on illness, Mr. Speaker, and on that shameful 10 per cent tax on drugs.
What are these drugs and who uses them? Who is going to be penalized by this 10 per cent tax? First of all, the usual family remedies, familiar to everyone here, are being taxed. Everybody knows that people who suffer from arthritis have to take what is referred to as buffered aspirin to ease the pain. This isn't chewing gum! They aren't taking these for fun! They have to take buffered aspirin to keep from getting ulcers. The Prime Minister and the Government have decided to maintain the 10 per cent tax on these products.
Mr. Speaker, these products include everything that families with children need, including baby lotion, children's aspirin, bandages for sprains, and what are usually referred to as plasters. And the bigger the family, the more they need for their medicine cabinet, and the more drugs they have to buy and the more this Government is going to gain from their illnesses.
Excise Tax Act
Soon we will be back in the flu and cold season. Because of our climate and the weather here in Canada, people are going to be ill. When I see Progressive Conservative Members rubbing their hands with a glee, I wonder whether they are not secretly hoping that more Canadians will get sick, so that the Government can draw more revenue from the 10 per cent tax on drugs. All drugs that ease suffering and pain when people have a cold or the flu, whether we are talking about drugs for sinusitis or decongestants to ease pain, the Prime Minister and the Conservative Government have made their decisions and this Bill is intended to levy a 10 per cent tax on these drugs.
Mr. Speaker, coughdrops, cold remedies and even ointments for burns and scrapes carry a 10 per cent tax. You people who suffer from athlete's foot will now be able to do your share when you pay the 10 per cent tax levied on your affliction by this Conservative Government.
Mr. Speaker, I mentioned aspirin and medication for acne. Most of the people here have families with children, and pharmacists and doctors tell me that this kind of medication is sold especially to young girls at a certain age. Even those items, and in fact all medication and products used by young people, whether boys or girls, whether it is medication for acne or some other kind of medication, on all these goods, this Government-I see the Progressive Conservative Members rubbing their hands with glee-is levying a 10 per cent tax.
And there are also laxatives, eczema remedies, food substitutes, vitamins, medication for sinus trouble .. . Mr. Speaker, people have hemorrhoids, I know it is not a subject-


An Hon. Member:: Oh, oh!


Jean-Claude Malépart: -no, Mr. Speaker, it is not a subject people like to talk about, but it is a serious matter, and many Canadian men and women suffer from this affliction and when a Government stoops to tax the ointment sufferers require to cure this affliction, I say that Government's logic has gone by the board. Laxatives, liniments, medicinal chewing gum, poison ivy medication-
Mr. Speaker, to hear the Progressive Conservative Members, I get the distinct impression they have not read the Bill. I am not making this up. This is a press release from Revenue Canada, Customs and Excise. Before adopting this Bill and making any more speeches, I would strongly urge Conservative Members to read what they are going to vote on. This is what is happening, Mr. Speaker. They are now taking advantage of the aches and pains of Canadians. As more people get sick, the Government gets richer and will be able to give more money to the rich! That is the Conservative policy. However, it was not what these people promised before September 4 last year. Is there a single Conservative Member in the House who can tell me that when he went on the hustings in his riding, he promised to put a 10 per cent tax on medical products, and

October 29, 1985
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said he would be proud to see the Government get richer as people got sicker? That is just not true. There is not a single Member who had the courage to say so, Mr. Speaker.
I see them laughing in the House today, Mr. Speaker, but this is a serious debate. This 10 per cent tax affects poor families, not only wealthy people. I can understand why the rich Conservative Members, the millionnaires, could not care less about this issue. They all have their own business through which it becomes a deductible expense, they can reduce their tax load and make other taxpayers pay for this.
Mr. Speaker, each one of us represents a certain number of poor or low and average income families. When we talk about the 10 per cent tax on family drugs, we must keep in mind that most of them are probably young couples just starting out in life. These are young couples without much experience, with low paying jobs. They are just starting out in life and such young couples will think twice before raising a family, what with all those taxes, the deindexation of family allowances and the lower level of the child tax credit through deindexation.
Such are the consequences of the irresponsible measures I mentioned earlier, all of them advocated by the Deputy Prime Minister (Mr. Nielsen). The next recommendations of the task force will reflect the same kind of principles which brought us the tax on drugs.
Mr. Speaker, it is unthinkable that a human being, someone who has been elected to represent people, would have us believe-as he made all Conservative Members believe-that there is no longer such social justice as existed before last September 4, and that the 5,000 drugs which had been tax-exempt for social reasons should have become taxable as of July 1, the Prime Minister's gift to celebrate Canada Day. The social conditions which existed under the Liberal Government and the Conservative Governments of Mr. Clark (Yellowhead) and Mr. Diefenbaker-and I should call these two gentlemen "Honourable", Mr. Speaker-no longer exist today.
Mr. Speaker, we could go on at length about every aspect of the tax on medicine, I trust that some of the Conservative Members will make an effort, but I am not asking the majority of them to do so. I know that they have a mission. They have the right to have one. In fact, they have decided to come here to defend the rich. Everyone must make his own choice and it will be up to the population to judge. However, I sincerely believe that the majority of the Conservative Members do not share this philosophy. The Conservative Members should recall what they were saying before they lost face in the debate on old age security pensions after their Prime Minister retreated. Members of the Progressive Conservative Party, remember what you said about the fact that senior citizens in your constituencies accepted this measure. Remember how you looked when the Prime Minister had to retreat after Mrs. Denis had come to Ottawa to speak to Charlie Brown. You will remember the speeches that you are now making when the population discovers the hypocrisy behind this Bill, because the Government is exploiting the illness of the people in all our ridings, Mr. Speaker. When the public realizes what you have done, Mr. Speaker, you will lose points in the polls and you
will not be here much longer because the public will know where each of you stood on this issue.
1 shall close on this comment, Mr. Speaker. Unfortunately, 1 would have liked to talk about the tax on gasoline, which will be applied in spite of the promises made by the Progressive Conservative Party and the Hon. Member for Duvernay (Mr. Della Noce). This will also have an impact on poor families.
Mr. Speaker, I shall close by urging all the Hon. Members to forget about party politics, to reread this Bill, the Budget speech and the advice of the Department of National Revenue, and to amend this bill and leave sick people alone. They should not be exploited. We should be defending instead of trying to use them to increase revenues.


The Acting Speaker (Mr. Paproski):: Questions and comments. The Hon. Member for Yorkton-Melville (Mr. Nystrom).


Lorne Edmund Nystrom: Mr. Speaker, I should like to direct the following question to the Hon. Member for Montreal-Sainte-Marie (Mr. Malepart). He made a fine speech and mentioned many regressive provisions in this Bill. I agree with him. However, 1 should like to ask him the following question. Does the Hon. Member not agree that the Progressive Conservative Party is almost as reactionary and regressive as the former Liberal Governement?


Jean-Claude Malépart: Mr. Speaker, since I have been sitting in this House I have never had to give an answer to a phoney socialist, to an NDP Member.
I should like to remind my hon. friend that before being a Member in Ottawa I was a Member in Quebec and there were six PQ members who, like the New Democrats, were going to save the world. From the day they came to power, they became the nastiest Government against the poor. It was the first Government in Quebec, a PQ Government, which while in opposition was as dishonest as the New Democratic Party seemingly tends to be, deindexed as the Tory Government is doing, the welfare allowances to reduce them proportionally to increases in family allowances.
Mr. Speaker, it was the PQ Government which decided to give lesser welfare benefits to young people below 30 years of age than to those over 30. I still hope, Mr. Speaker, that the NDP Members will not act like the PQ members.


The Acting Speaker (Mr. Paproski):: The Hon. Member for Montreal-Sainte-Marie has still seven minutes for questions and comments.
It being one o'clock, I do now leave the chair until two o'clock this day.
At 1 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
October 29, 1985

Mr. Speaker:: I have the honour to lay upon the Table the report of the Auditor General of Canada to the House of Commons for the fiscal year ended March 31, 1985.

I will remind all Hon. Members that, pursuant to Standing Order 70(1 )(<?)>
that report is deemed to be permanently deferred to the Standing Committee on Public Accounts.


STATEMENTS PURSUANT TO S.O. 22
[Stage Direction]
[ Translation]

Jean-Claude Malépart: Mr. Speaker, I would like to inform Hon. Members of the decisions that were reached yesterday by the Survival Committee to prevent the shutdown of six plants in Eastern Montreal and the loss of 5,000 jobs.
First, members of the Survival Committee of Eastern Montreal are asking to meet the Prime Minister in order to explain the situation and suggest steps he should take to prevent the shutting down of those plants.
Second, the Committee suggested a mass meeting of working men and women in Eastern Montreal to sensitize the population.
Third, the Committee accepted the appointment of a manpower retraining committee that could study the problems of plant shutdowns and bring about longer term solutions.
Fourth, that the federal Government declare Eastern Montreal a designated area with the best program, rather than mere crumbs as the Government seems intent on doing.
Fifth, that a regional employment schedule be drawn up to adjust the situation in Eastern Montreal with a view to preventing those plants shutdowns.
To conclude, Mr. Speaker, I call on the Prime Minister and I ask both Conservative and Liberal Members, my colleagues from Eastern Montreal, to urge the Prime Minister to meet those people within the shortest possible timeframe in order that those plant employees may enjoy a Merry Christmas like all other working men and women in Quebec.


EXTERNAL AFFAIRS
Mr. John Parry (Kenora-Rainy River):: Mr. Speaker, I would like to recall to the attention of the House the plight of the adherents of the Baha'i faith living in Iran. The persecution of Baha'is in Iran died down in 1983, with world outrage being expressed over the hanging of 10 Baha'i women and girls simply for teaching their religion to the youth of their community.
We are now told that the imprisonment, torture, and executions of Baha'is have resumed once again on a large scale. Let us and our Government not be silent on this grave matter, for the Government of Iran may be looking to eradicate its Baha'i population.
The Baha'i religion, with its origins in Persia, is the largest religious minority in Iran with 300,000 members residing there. Their doctrine forbids involvement in politics. Canada was the first country in the world to speak out on this issue in the past, unanimously passing parliamentary resolutions through the House on July 16, 1980, and June 9, 1981, in support of the Baha'is in Iran. The Canadian delegation to the United Nations has also actively pursued the matter there, and Canada has been open to refugees from the area.
We in the New Democratic Party call upon the Prime Minister (Mr. Mulroney) and Secretary of State for External Affairs (Mr. Clark) to do what they can through their offices to impress upon Iran that Canada wants to see the repression of the Baha'is in Iran stopped. We ask the Government to pay close attention to the report of the special representative on human rights to the UN General Assembly pertaining to this matter, which is expected to be released in late November or early December.


Mr. Speaker:: 1 regret to advise the Hon. Member that his time has expired.


THE ECONOMY
Mr. Marcel R. Tremblay (Quebec East):: Mr. Speaker, because I am generally inclined to see things from a point of view which is more and more positive and optimistic, I realized a couple of months ago that PC could also stand for positive consistency.
Ever since our party came to power in September 1984, Mr. Speaker, Canadians have become more aware that the economic outlook in this country has markedly improved thanks mainly to this Government's initiatives. These initiatives are indeed responsible for the giant steps Canada has taken toward a full recovery. Our hon. friends opposite had brought

October 29, 1985
this country to the brink of bankruptcy and they had swept under the rug all economic concerns.
Contrary to them, Mr. Speaker, we have taken up the challenge and created 304,000 new jobs, including more than
84,000	in the province of Quebec, and it is only the beginning. According to a recent survey by the Canadian Federation of Independent Businessmen, 26 per cent of small and mediumsized businesses, that is, more than a quarter of all such businesses in la belle province, are planning to create new jobs within the next six months. In other words, one such business in four is going to expand.
Moreover, 37.2 per cent of them intend to increase their investments in Quebec. That, Mr. Speaker, is the result of our efforts-


Mr. Speaker:: I must regretfully advise the Hon. Member that his time has expired.


PROVINCIAL AFFAIRS
Mr. Felix Holtmann (Selkirk-Interlake):: Mr. Speaker, I wish to speak today on behalf of ordinary Canadians-more specifically, ordinary Manitobans. The NDP would have the public believe they are the Robin Hoods of Canadian politics. They would chastise the Government for the bail-out of depositors in two recent bank failures. Never before have the people of Canada been deceived by such unadultered, hypocritical hog-wash.
The NDP Government of Manitoba has behaved not like Robin Hood but like the robbing hoods of Canadian politics in giving out $3.2 million in venture capital interest-free loans. Did the NDP hold true to their policy of assisting the placing confidence in ordinary Manitobans? Did they hold true to their promise of making the rich pay their fair share into the public coffers to distribute the wealth better?
They shared the wealth all right-they shared it with a numbered corporation, lawyers, and multimillionaires. They gave it interest-free to the rich. Why? So the rich could invest and profit from the labours of ordinary Manitobans.
They are secretive about their venture capital lending and do not want to release details because their actions are in direct contradiction to their Party's policy and commitment to ordinary Manitobans.
The sherrif-


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


FINANCE
Mr. Dave Dingwall (Cape Breton-East Richmond):: Mr. Speaker, 1 rise under the provisions of Standing Order 22 to seek the assistance of all Members of the House to change a very regressive measure which was imposed with the budget statement of the Minister of Finance (Mr. Wilson) on May 23, 1985. It should be noted that this particular measure affects not only companies in my own province but, indeed, companies in other provinces. It also has devastating effects for the construction industry which, on a sector basis, could be indicated quite clearly, suffers from perhaps the highest unemployment in the country.
The Nova Scotia Roadbuilders Association representing the road-building and heavy construction industry in that province finds itself in a catch-22 situation because of the federal Government's May 23 Budget. The imposition of a 6 per cent sales tax applies to, among other things, ready-mixed concrete and asphalt. This has created havoc in that industry.
Companies employing 3,500 people find they are tied into contracts with no tax escalation clause, which means that they must absorb unforeseen costs which, for some, means that they are actually losing money on projects. These small-businessmen find the budget changes an affront to the very principles of free enterprise that the Government espouses. In fact there will be hundreds of construction workers who will either be laid off or be without permanent employment for numerous months ahead. On behalf of them, the workers of Nova Scotia and of other provinces, 1 ask that the Government and the Members of this House change this regressive tax measure.


BAN ON CIGARETTE ADVERTISING ADVOCATED
Ms. Lynn McDonald (Broadview-Greenwood):: Mr. Speaker, the Minister of National Health and Welfare (Mr. Epp) is proceeding with timid measures indeed to counter a growing health problem in Canada. Recently he announced a $1 million program of counter-advertising to discourage young people from smoking, while the tobacco companies themselves spend more than $90 million to encourage young people to start.
He has now requested a tobacco company not to violate the terms of the industry's own so-called voluntary code of advertising which prohibits advertising to young people. As of next year the company will stop flogging its cigarettes at an amusement park catering largely to young people. But should we be grateful for mercies so small? Every year 35,000 Canadians die of tobacco-related diseases. That is three-quarters of the death toll of Canadians during the whole of World War II.
October 29, 1985

Since adults, especially men, are quitting in record numbers, the tobacco companies are increasingly going after children and are succeeding. The only responsible public policy in the face of this slaughter is to develop a comprehensive plan to reduce tobacco use, including a complete ban on advertising. Legislation to prohibit all advertising was introduced in 1971, but it was not passed.
I call upon the Government to get serious about Canada's number one preventable health problem and to begin by banning all cigarette advertising, and do it now.


THE LATE MAURICE CARDINAL ROY
Mr. Gabriel Fontaine (Levis):: Mr. Speaker, 1 wish to join all the people of the diocese of Quebec and all Canadians in paying tribute to Maurice Cardinal Roy, who died on October 24, 1985.
Head of the Church in Quebec for 34 years and Primate of Canada, Cardinal Roy served the Church and society with great intelligence, dedication and a mind open to the needs of modern society.
He was active internationally in the important roles with which he was entrusted by Pope Paul VI, as president of the Council for the Promotion of the Laity and the Commission on Justice and Peace.
After serving as a military chaplain from 1939 to 1945, Cardinal Roy was for a long time the bishop responsible for the Canadian Forces.
His modesty, discretion and hard work made him a figure who reflected the grandeur of this country.
All Canadian men and women are proud of him.
We pray God that he may rest in peace.


EXTERNAL AFFAIRS
Mr. Gabriel Desjardins (Temiscamingue):: From October 8 to 23, Mr. Speaker, I had the honour to accompany the Canadian delegation to the opening of the UNESCO's 23rd General Conference which is being held in Sofia, Bulgaria, until November 12.
In view of the serious crisis which the organization is facing, Canada's speech was eagerly sought after by the member countries generally.
Mr. Speaker, I can assure the House that the Minister for External Relations (Mrs. Vezina) made quite a remarkable speech on October 21. As a matter of fact, comments heard immediately following her speech confirmed that hers was undoubtedly one of the very best speeches because it outlined perfectly the ills that are undermining UNESCO's credibility and raised plainly the basic issues which the Conference should address.
Contrary to what was reported the next day by the France Presse news agency, whoever makes an honest effort and carefully reads the Minister's speech, just as Angele Dagenais did in the October 26 issue of the news paper Le Devoir, realizes that although Canada is dissatisfied with the situation which exists today within UNESCO, it will continue to adhere to this organization.
In view of the fact that the United States has withdrawn from UNESCO, and because the United Kingdom has openly indicated its decision to do likewise immediately after the Conference, this organization really needs Canada which will be called upon to play an increasingly greater role.


ENVIRONMENTAL AFFAIRS
Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, since spring the price gap between unleaded and leaded gasoline has gone from 2.5 cents to three cents per litre. The taxation on gasoline which is recommended by the Minister of Finance (Mr. Wilson) in his Budget will widen the gap between leaded and unleaded gasoline prices even further because a lower tax is imposed on leaded gasoline than on unleaded. In making unleaded gasoline more and more expensive relative to leaded gasoline, the Minister of Finance is in effect rewarding the polluters.
The Minister of the Environment (Mr. McMillan) seems silent, unaware, or indifferent. He should impress on the Minister of Finance the fact that leaded gasoline affects health and that it is the policy of the Government of Canada to reduce acid rain emissions by shifting consumption in favour of unleaded gasoline. Therefore, the thrust of the Budget measure affecting gasoline should be reversed so as to impose a smaller tax on unleaded gasoline and a greater tax on leaded gasoline, achieve parity in the price of both gasolines, and wipe out misfueling.
The Minister of Finance is wrong in imposing a tax on unleaded gasoline which is greater than that on leaded gasoline because it will encourage greater use of leaded gasoline, thus increasing air pollution and acid rain damage at a time when the Government proclaims its intent to reduce acid rain damage. The Government is not practicing what it preaches.

October 29, 1985
Oral Questions PASSPORTS


RECOMMENDED LISTING OF PHARMACISTS AS GUARANTORS FOR APPLICANTS
Mr. William G. Lesick (Edmonton East):: Mr. Speaker, over the years a number of pharmacists have been elected to this House. Many of them have quietly attempted to add pharmacists to the list of eligible guarantors for passport applications. Although there has been no change to date, pharmacists have continued to solicit the support of the Secretary of State for External Affairs (Mr. Clark).
While no one disputes the qualifications of the existing list of eligible guarantors, many of them are not as accessible as a community pharmacist. How many people get to know personally their bank manager, lawyer, or veterinarian? Have you, Mr. Speaker, ever tried to get hold of your bank manager on a Friday night? How often do you see your veterinarian? Do you even know who is your local commissioner for oaths?
A recent United States survey indicated that pharmacists rank number two on a list of the most trusted community people. Pharmacists, by the nature of their profession, develop personal relationships with their customers. As professionals then, it would seem reasonable and logical for pharmacists to be added to the list of eligible guarantors for passport purposes.
I urge the Secretary of State for External Affairs to consider recognition of pharmacists as trusted community leaders who should be added to the list of guarantors.



ORAL QUESTION PERIOD


Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, my question is directed to the Prime Minister. Would he be good enough to tell the House why it was he overruled the Minister of State for Finance and ordered a bail-out of the Canadian Commercial Bank in March? And will he tell us why he has stated consistently during the last seven months that he acted on the best advice available when it is clear he either did not have any advice at all or ignored the advice of the Director of Inspection of Banks, or he suppressed such advice? Why did he give this statement to the House of Commons?


Right Hon. Brian Mulroney (Prime Minister):: Mr. Speaker, I gave the statement to the House of Commons because it was accurate. As my right hon. friend knows, the Government acted upon advice which was received. The Government considered that advice, decided it was appropriate and in the
national interest, governed itself accordingly, and will accept the consequences.
One of the reasons we appointed the Estey Commission, for example, was to provide an impartial review and permit fair-minded evaluations to be made.


INFORMATION AVAILABLE TO PRIME MINISTER
John Napier Turner: Mr. Speaker, would the Prime Minister admit that when he ordered the bail-out of the bank he did not have the facts because a proper audit of the books of the Canadian Commercial Bank had not been done, as it appears from evidence which was submitted before Mr. Justice Estey, or that the advice given to the Minister of Finance and the Minister of State for Finance by the Inspector General's office was to the effect that, even on the basis of the information it had, the bail-out package was inadequate at that time? Would the Prime Minister say to the House that he was operating on the basis of insufficient information at that time?


Martin Brian Mulroney: I suppose, Mr. Speaker, that we are all much smarter with hindsight; in fact, we are just about infallible with the benefit of hindsight. All I can tell my right hon. friend is that the Government acted on the best advice available from its public servants and from the officers of the Crown, which was considered by the Government of Canada and acted upon in the manner I have described.


ROLE PLAYED BY PRIME MINISTER
John Napier Turner: want to ask a supplementary question, Mr. Speaker. Concerning the Canadian Commercial Bank, it was not only a matter of advice given by the Government of Canada, but it reflects the judgment of the Prime Minister himself.


Some Hon. Members:: Right on!


John Napier Turner: Here is my question: Does the Prime Minister claim that he had exercised judgment as Prime Minister of Canada without being fully informed or after suppressing information given by the Inspector General of banks?


Martin Brian Mulroney: No, I did
not suppress anything, Mr. Speaker. On the contrary, as I said we acted in the light of the best advice provided in an objective manner. The Hon. Member for Saint-Maurice (Mr. Chretien), referring to the Canadian bank in question, because but I am told the problem with this bank did not begin yesterday or the day before... On the contrary, when the Hon. Member was a Minister, it seems that this banking institution was reported to be in serious difficulties. So I would think that the Estey Commission will make a value judgment not only on the facts

October 29, 1985
raised by my Right Hon. colleague, but also on earlier facts which gave rise to the problems we know.


MINISTERIAL ACCOUNTABILITY
George Baker: Mr. Speaker, we have heard conflicting accounts in this Chamber of who knew what and when with regard to this bank bail-out. The Prime Minister and the Minister of Finance are refusing to answer pointed questions and are expressing no enthusiasm about appearing before the Estey Commission. What does the Prime Minister intend to do to account to the Canadian people for his actions in the bank bail-out, or is he going to save it for his memoirs?


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, we are back on the same track as we were on yesterday. The Hon. Member must realize that there is a purpose for the Estey Commission, and that is to consider the range of points of view that will be presented to the commission over the course of the inquiry. At that time, or possibly during the course of this inquiry, if members of the Government are called, we will have an opportunity to discuss some of the points of view. However, I caution the Hon. Member that it would be wrong, in relation to Mr. Justice Estey, for us to comment on individual pieces of information as they are presented to the commission.


Mr. Speaker:: Supplementary question.


George Baker: Mr. Speaker, the only supplementary question to ask in light of that non-answer is to ask the Minister of Finance to confirm a rumour that he overheard the Prime Minister rehearsing In the Sweet By and By.


Mr. Speaker:: Order. The Hon. Member for Oshawa.


AUDITOR GENERAL'S REPORT
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, I have a question for the Minister of Finance which arises from the Auditor General's report which came out today. It has informed Canadians that there has been another billion dollar tax bonanza. According to the report, the former Government, headed by the present Leader of the Opposition, made a decision the day after the election was called to enable Dome Petroleum to get a billion dollar tax gift or concession.
The Minister of Finance spent all last fall admonishing Canadians about the problems of the national debt and suggesting that we had to cut back on social programs. Therefore, why did his Government announce in February an agreement confirming this billion dollar gift to Dome Petroleum?
Oral Questions


Michael Holcombe Wilson: Mr. Speaker, let us go back over the sequence of events. I believe it was in 1982 that the previous Government entered into extensive negotiations with Dome Petroleum and the chartered banks to provide support for Dome Petroleum, for a number of reasons about which I am sure the Hon. Member for Saint-Maurice would enlighten the Hon. Member. It was pursuant to that, and pursuant to the announcement that Mr. Lalonde made in July, 1984, to the effect that a remission order would be granted on the basis of certain actions taken by the company. The company followed through on those actions and, because it did so, and in order to fulfil the commitment made by the previous Government, we acted on the basis that is set out in the Auditor General's report.


John Edward Broadbent: Mr. Speaker, to use an old phrase, the Minister of Finance had a choice.


REASON FOR GOVERNMENT ACTION
John Edward Broadbent: Mr. Speaker, the Minister of Finance was not legally locked in. He could have renegotiated and used a number of options rather than giving away $1 billion of the taxpayers' money at a time when he was increasing taxes for ordinary Canadians across the land. Therefore, why did he give this $1 billion to Dome Petroleum?


Michael Holcombe Wilson: Mr. Speaker, I ask the Hon. Member to think back to the circumstances. It was not a gift as the Hon. Member sets out, because if Dome Petroleum had been called upon to pay those taxes it would have gone bankrupt. If it had gone bankrupt it would have taken with it a number of the smaller oil services companies in the western economy that were suppliers of and had trade accounts with Dome Petroleum. That is a consideration that I ask the Hon. Member to take into account when he draws conclusions on this particular matter.


John Edward Broadbent: Mr. Speaker, the Minister of Finance knows that there are a lot of other options such as deferred taxes, special loans, and special Financial agreements through which Dome Petroleum would be obligated to pay back to the people of Canada the $1 billion it got, instead of getting the gift which the Conservatives gave it.


PUBLICATION OF DECISION
John Edward Broadbent: Since the Government made this unnecessary and wasteful decision about the taxpayers' money, will the Minister of Finance confirm that the Government did not even publish the details of that in February, but simply made a brief reference to the deal in what it gazetted, without telling the people of Canada that it cost taxpayers $1 billion?


Michael Holcombe Wilson: Mr. Speaker, let me remind the Hon. Member that we were honouring a deal that had been entered into-

October 29, 1985
Oral Questions


John Edward Broadbent: You had an option.


Michael Holcombe Wilson: The Hon. Member does not like the answer. He should listen to the answer and maybe he will learn something from it. We were honouring a deal entered into by the previous Government. We made the decision public at the time it was made. If the Hon. Member looks back he will see it in black and white.


NATIONAL REVENUE
Hon. Donald J. Johnston (Saint-Henri-Westmount):: Mr. Speaker, my question is directed to the Prime Minister. During his absence the former Deputy Minister of Finance revealed that the Gulf deal had been discussed a couple of times by the Priorities and Planning Committee which the Prime Minister chairs. Would the Prime Minister confirm that the Gulf tax ruling was in fact discussed by the Priorities and Planning Committee, contrary to the impression which he left at his press conference on October 11 ?


Martin Brian Mulroney: Mr. Speaker, I have the transcript of the October 11 press conference. It is entirely in keeping with what transpired. O&Y exercised the rights of any citizen under the Act to seek a ruling. The ruling was made by departmental officers, public servants, pursuant to objective criteria that exist under a statute which I understand was passed by this House under the Liberal Government. That is what transpired. Any discussion of any proposal was appropriate.


FINANCE
Mr. Mike Cassidy (Ottawa Centre):: Mr. Speaker, my question is directed to the Prime Minister and has to do with the $1 billion gift his Government gave to Dome Petroleum on February 5, 1985. During the election campaign the Prime Minister, in no uncertain terms, told the former Prime Minister that he had a choice and that he should have disregarded the decisions made by his predecessor on patronage issues. Why then did the Government honour the commitment towards Dome Petroleum, which cost taxpayers $1 billion, instead of taking the option to renegotiate the deal?


Michael Holcombe Wilson: Mr. Speaker, I have answered that question to the Hon. Member's Leader. We respected a deal that was made by the previous Government. The company had fulfilled its obligations under that deal. The Government of Canada was going to fulfil its obligations.


REASON FOR DECISION
Michael Morris Cassidy: Mr. Speaker, my supplementary question is directed to the Minister of Finance if the Prime Minister chooses not to answer. When it came to patronage, his Leader said to the Leader of the Government at the time that he had an option and that the former Prime Minister should have rejected the patronage option. Why did you not reject this option and save the taxpayers a billion dollars in this bonanza to Dome?


AUTHORITY FOR ISSUING TAX RULING
Donald James Johnston: Mr. Speaker, is the Prime Minister asking us to believe that a thousand million dollars of taxpayers' money can be drained from the public treasury without any consideration being given by him, the Minister of Finance or any other Ministers? If that is the case, how on earth is any control exercised over the finances of the country by the Government?


Martin Brian Mulroney: Mr. Speaker, the Liberals introduced and passed this legislation in the House of Commons. A taxpayer of the country, corporate or otherwise, came before the Department of National Revenue in the ordinary course of business and availed himself of the rights of any Canadian taxpayer to seek a ruling. That ruling was granted objectively pursuant to those criteria which govern in such cases and are determined upon by public servants, and public servants alone, acting in the public interest. That they were able to make such a finding was because of a piece of legislation which existed empowering them to so do. That piece of legislation was enacted because of the desire of the Liberal Government.


Michael Holcombe Wilson: Mr. Speaker, because there was not going to be a savings of a billion dollars as the Hon. Member sets out. The fact is that if Dome Petroleum had not received the remission order, as had been promised by the previous Government, that company was not going to exist. It would not exist to pay the taxes that are foregone as a result of this remission order.


John Edward Broadbent: There are lots of other options.


Michael Holcombe Wilson: As a result, the oil service industry in western Canada-


Michael Morris Cassidy: Lots of choices.


Michael Holcombe Wilson: -which was under a great deal of pressure at the time-


John Edward Broadbent: Like the banks.


Michael Holcombe Wilson: -would not have survived either, because there were a tremendous number of companies in that industry that had trade credits out to Dome Petroleum and they would have gone under as well.

October 29, 1985


PRESENCE IN GALLERY OF DEPUTY PRIME MINISTER OF HUNGARY
Mr. Speaker:: May I draw to the attention of Members the presence in our gallery of His Excellency Jozsef Marjai, Deputy Prime Minister of the People's Republic of Hungary.


Some Hon. Members:: Hear, hear!


PRESENCE IN GALLERY OF WESTERN EUROPEAN UNION PARLIAMENTARIANS
Mr. Speaker:: May I also indicate the presence in our gallery of the Parliamentarians of the Scientific and Technological Committee of the Western European Union, led by Mr. Christian Lenzer.


Some Hon. Members:: Hear, hear!


BANKS AND BANKING
Miss Aideen Nicholson (Trinity):: My question is directed to the Right Hon. Prime Minister. Although the Prime Minister approved the bail-out of the Canadian Commercial Bank on March 23, no moneys were paid out until the end of April because the participating banks required written assurance that the support package would ensure the CCB's viability. Who instructed the Inspector General to issue such a letter on April 26, although it was known from April 4 that at least $100 million more would be needed?


Michael Holcombe Wilson: Mr. Speaker, the Minister of State for Finance is not in the House today. That is her area of responsibility.


Some Hon. Members:: Oh, oh!


An Hon. Member:: You are the Minister of Finance. You made a decision.


Michael Holcombe Wilson: I will raise the question with her when she returns.


Some Hon. Members:: Oh, oh!


Mr. Rossi:: She is your sidekick.


Mr. Speaker:: Order, please.


IMPLEMENTATION OF GOVERNMENT DECISION
Aideen Nicholson: Mr. Speaker, my supplementary question is directed to the Minister of Finance. Will he tell the House why the Government pushed ahead with the March 23 decision when nothing had been signed and the
Oral Questions
initial information was so disquieting? Why not do a complete audit in the month of April and change the terms?


Michael Holcombe Wilson: Mr. Speaker, I believe that question has also been put in the House before. The Hon. Member knows that if there had not been a deal agreed upon by the Monday morning, that bank would not have opened on Monday morning. That is the reason why the deal had to be agreed upon-in order to allow the bank to proceed with its business. She should know that there are many, many examples of instances where a deal is agreed upon but the paper work may take up to three weeks, and sometimes longer, to be put together. That is what happened in this case.


AUDITOR GENERAL'S REPORT
Mr. Stan J. Hovdebo (Prince Albert):: Mr. Speaker, my question is directed to the Minister of Finance. In his Budget speech in May he made specific reference to the elimination of the deficit and the soaring national debt. Therefore, when the Dome remission came forward, which was the expenditure of a billion dollars of taxpayers' money, why did he not bring that before Parliament? Was it not something that Parliament should have known about?


Michael Holcombe Wilson: Mr. Speaker, there is no basis in past practice for remission orders to be brought before Parliament.


John Edward Broadbent: Maybe you should change some of the practices. Change the practices. That is what Dye says.


Michael Holcombe Wilson: Mr. Speaker, I am happy to answer the question, but if they are not going to listen to the answer they will not get one.
The point I was making is that there has not been a practice of bringing remission orders before Parliament. There are hundreds of remission orders granted each year, some of them big and some of them little. We discussed this one at some length in Government. Furthermore, there was also a public statement and announcement, not just by the Government but by the previous Government as a result of the announcement made by Mr. Lalonde, committing the previous Government to this remission order. Therefore there was a significant amount of public discussion that was available to Members.


PARLIAMENTARY APPROVAL INQUIRY
Stanley J. Hovdebo: Under the circumstances, are you suggesting that a billion dollar expenditure by Parliament does not require parliamentary approval? That Auditor General, in his report, suggests that every expenditure of taxpayers' money requires the approval of Parliament.

October 29, 1985
Oral Questions


Michael Holcombe Wilson: Mr. Speaker, as I indicated, there are hundreds of remission orders that are granted each year for a variety of reasons.


Nelson Andrew Riis: Billion dollar ones?


Michael Holcombe Wilson: There has not been a practice of presenting these before Parliament and we follow the prevailing practice.


CANADA-UNITED STATES NEGOTIATIONS
Hon. Lloyd Axworthy (Winnipeg-Fort Garry):: Mr. Speaker, I wish to ask a question of the Secretary of State for External Affairs. Yesterday the American Secretary of State, Mr. Shultz, announced that he, or the American administration, would propose to the U.S. Congress the specific package upon which they would base their negotiations with Canada on the trade issue.
When will the Government provide the Canadian people with the same courtesy and bring something forward in this Parliament that would detail the kind of proposals that we will be presenting, as recommended by an all-Party committee? It recommended that parliamentary discussion and debate be held before the formal negotiations begin. Will the Minister make a commitment that he will bring that kind of proposal to this Parliament before January?


Right Hon. Joe Clark (Secretary of State for External Affairs):: Mr. Speaker, regrettably the Hon. Member is misinformed. Secretary Shultz did not say that.


UNITED STATES POSITION
Lloyd Axworthy: Mr. Speaker, I presume that the Secretary of State was part of those discussions. He held a press conference in which they jointly announced that proposals would be going forward to the United States Congress. The American administration is required to do that under American trade law.
Is the American administration not going forward to its Congress to ask for authorization? Will he tell us what they intend to do?


Charles Joseph Clark: Mr. Speaker, I think it would take more time than the House has to try to inform the Hon. Member for Winnipeg-Fort Garry-


Lloyd Axworthy: Not really.


Charles Joseph Clark: -about anything.


Some Hon. Members:: Hear, hear!


Some Hon. Members:: Oh, oh!


Lloyd Axworthy: Answer the question.


Charles Joseph Clark: The Government of Canada was very pleased yesterday at the-


Lloyd Axworthy: Answer the question, Clark. Never mind the nonsense.


Some Hon. Members:: Oh, oh!


Lloyd Axworthy: Answer the question.


Charles Joseph Clark: Mr. Speaker, is it permissible for him to ask a supplementary from his seat?


Some Hon. Members:: Oh, oh!


Mr. Speaker:: Order. The Hon. Member for Thunder Bay-Nipigon.


MARINE TRANSPORT
Mr. Ernie Epp (Thunder Bay-Nipigon):: Mr. Speaker, my question is directed to the Minister of Transport. Consultations with management and workers at the Port Arthur shipyards have again underscored the seriousness of the situation in the Canadian shipbuilding industry. Almost a year ago the Minister of Transport promised that there would be additions to the CN Marine Gulf ferry service. Will the Minister tell us today what will be done about this in the context of what he promised, that such additions would have a tremendous impact upon the shipbuilding industry and, therefore, create jobs?


Hon. Don Mazankowski (Minister of Transport):: Mr. Speaker, as the Hon. Member knows, the launching of the Caribou took place in September, I believe. It will be in service by the beginning of the year.
The issue of further vessel replacement is currently under consideration by CN Marine and is being considered as part of its five-year plan.


PLACEMENT OF ORDERS
Abram Ernest Epp: Mr. Speaker, can the Minister guarantee that the addition of a second Caribousized vessel and others will be vessels built in Canadian yards by Canadian workers, using Canadian materials, so that there really will be jobs in the Canadian shipyards?


Donald Frank Mazankowski: Mr. Speaker, I believe the Hon. Member is aware that my colleague, the Minister of Regional Industrial Expansion, is very actively involved, as am I, in promoting the shipbuilding industry and ensuring that not only vessels are acquired but vessels are acquired in Canada which will provide jobs and the efficient service that is necessary. As I indicated, these are
October 29, 1985

things that are under consideration by CN Marine. I am sure the Hon. Member would not want me to dictate to the CN board of directors and/or management how to run their affairs.


SCIENCE AND TECHNOLOGY
Mr. Bill Tupper (Nepean-Carleton):: Mr. Speaker, my question is for the Minister of State for Science and Technology. The Science Council has recently recommended that a National Space Agency be formed in Canada to co-ordinate Canada's research effort in space research. Could the Minister please tell the House what the reaction is from his Ministry to this recommendation?


Hon. Thomas Siddon (Minister of State for Science and Technology):: Mr. Speaker, the Science Council has proposed this very intriguing concept of a unified space agency for Canada. We, at the present time within the Ministry and the Government, are studying this proposal, with other similar proposals, in the context of developing a long-range strategic space plan for Canada. I expect to be able to report to this House within the next couple of months on our deliberations to that effect.


EMPLOYMENT
Jean-Claude Malépart: Mr. Speaker, my question is for the Prime Minister, if he wants to listen to it. He is certainly aware of the tragic situation in which the people of Montreal East now find themselves since they might lose 5,000 jobs because of plant closings by Versatile Vickers, Bombardier, the Gulf refinery, and so on. If the Prime Minister will listen to my question, I would like to ask him whether, following the meeting of the Montreal East Survival Committee, he would accept to meet the members of this committee next week to hear proposals to solve this problem.


Martin Brian Mulroney: Mr. Speaker, we are indeed not only aware of these problems, but very sensitive to the situation, especially in Montreal East. This is why we are all very encouraged to see that the unemployment rate has gone down from 11.6 per cent to 10.1 per cent in eleven months, that youth unemployment has fallen down from 18.3 to 16.1 per cent, that 304,000 new jobs have been created in one year, that our rate of growth has reached 4.1 per cent,
Oral Questions
and most important, that interest rates have gone down by 3 per cent to their lowest level in seven years. These are substantial indications of economic development because of which we are able to work with all the regions, including Montreal East, to stimulate an economy which had effectively been under attack for too long.


DEMAND THAT PRIME MINISTER MEET EMPLOYEES FROM MONTREAL EAST
Jean-Claude Malépart: Mr. Speaker, if the Prime Minister has any courage, he will come with me next Tuesday to repeat this answer to the Vickers employees he met at the Journal de Montreal. If the Prime Minister has any courage, he will come with me to meet the Bombardier and Gulf workers-


An Hon. Member:: Question!


Jean-Claude Malépart: My question to the Prime Minister is this. Statistics cannot buy food for these people. Will the Prime Minister have the courage to meet the members of the East Montreal Survival Committee and will he grant designated zone status to Montreal East to save the 5,000 jobs which are now in jeopardy?


Martin Brian Mulroney: To the
contrary, Mr. Speaker, the Conservative Government has created tens of thousands of new jobs in Quebec since the election. The people of Montreal are well aware of it. In certain regions-


An Hon. Member:: Small jobs!


An Hon. Member:: Insignificant jobs!


Martin Brian Mulroney: One says "small jobs" and the other says "insignificant jobs". However, the unemployed in Quebec will remember the Liberals who say such things because they know that we have created lasting jobs in Quebec. They know it!
We are going to work with all those involved, including of course the people of Montreal East, to promote a valid economic recovery.


CANADA-UNITED STATES NEGOTIATIONS-VIEWS OF PROVINCES
Mr. Steven W. Langdon (Essex-Windsor):: Mr. Speaker, my question is for the Secretary of State for External Affairs. Such provinces as Manitoba and Ontario have stressed that cultural industries, agricultural support policies, and regional development aids should not be on the table in U.S. free trade talks. Did the Secretary of State for External Affairs convey

October 29, 1985
Oral Questions
these views to Foreign Secretary Shultz yesterday, and did our Minister indicate his support for these provincial views?


Charles Joseph Clark: Mr. Speaker, the Government of Canada very much welcomed the decision by the United States Government to send a signal yesterday of U.S. interest in responding positively to the invitation that was offered by the Prime Minister to enter into a discussion of possible trade arrangements.
The Hon. Member knows, because he and I have discussed it at length, that I am very sensitive to the interests of Canadian industries that might be affected in any negotiation that develops. I have given a commitment to maintain the active process of consultation that is involved.
The Hon. Member asks if I indicated to Secretary Shultz what I have indicated to him, in general, yes, I did.


JAPANESE CAR MANUFACTURERS
Steven W. Langdon: Mr. Speaker, 1 have a supplementary question. Did the Secretary of State for External Affairs sense that the decisions announced by the Japanese Ambassador yesterday, cutting back the commitment we had anticipated from companies like Toyota to produce here in Canada, reflected at all the concern of the Japanese that we were becoming part of a fortress North America through this trade pact, which would have fewer beneficial trade ties with Japan?


Charles Joseph Clark: On the contrary, Mr. Speaker. I think that the Government of Japan and, indeed, other Governments of the world with which we are involved in seeking new discussions under the MTN, know the strong commitment of this Government toward a freer trade arrangement in the world.
Naturally, we are interested and looking to the advantages that exist for Canada in that kind of an arrangement on this continent. But the record stands, and the record is strong, that this Government is pursuing that kind of freer regime around the world.


PROTECTIONIST MEASURES PROPOSED IN UNITED STATES CONGRESS
Mr. Bill Attewell (Don Valley East):: Mr. Speaker, my question is also for the Secretary of State for External Affairs. Some Canadians are concerned about the rising tide of protectionism in the United States, especially as we are just beginn-ning our negotiations. Since the Secretary of State for External Affairs has just finished preliminary negotiations and discussions with Secretary Shultz, can we count on President Reagan's veto powers when any extreme protectionist measures arise in that country?


Charles Joseph Clark: Mr. Speaker, that commitment was given by the President to the Prime Minister at Quebec, and it was renewed
in conversations between the Prime Minister and the President in New York last week. I believe if there is any threat of the kind described by the Hon. Member that that will be the response of the American President.


AGRICULTURE
Mr. Maurice Foster (Algoma):: Mr. Speaker, my question is for the Minister of Agriculture. As the Minister knows, agriculture is facing the worst economic crisis in history. This is being highlighted today by the Canadian Federation of Agriculture in a massive visitation to Members of Parliament. Unfortunately this morning only one Member of the Alberta P.C. caucus showed up for a meeting. The Minister of Finance did not show up at all.
Is the Government ready to take the representations of the CFA seriously by agreeing to provide 10 per cent loans to farm families to save family farms, which is a recommendation of the CFA?


Hon. John Wise (Minister of Agriculture):: Mr. Speaker, 1 am tempted to respond to some of the many inaccurate statements with which the Hon. Member began his question. Perhaps, though, I will ignore them.
As the Hon. Member should know, this Party, whether it be in Opposition or in Government, has always regarded the CFA as one of the outstanding and credible farm organizations we have. We have always taken its representations to heart. I look forward to meeting with its representatives later today.


GOVERNMENT FUNDING
Maurice Brydon Foster: My supplementary question is also for the Minister of Agriculture. Is the Government prepared to show its long-term commitment to agriculture by reinstating the $50 million which was taken out of the Department's budget this year, and is it prepared to commit more funds for agricultural research?
[DOT] (M50)


John Wise: Mr. Speaker, that seems to be the Hon. Member's daily or weekly question. I can only again remind him to check the record. The record speaks for itself. The Government has passed more agricultural legislation in the last eight months than the previous Government did in the last eight years. The Government has taken over 90 initiatives providing support to the agricultural industry, to the extent of $2 billion.


Some Hon. Members:: Hear, hear!


John Wise: And, Mr. Speaker, we have only just begun.

October 29, 1985


VETERANS AFFAIRS
Mr. Gaston Isabelle (Hull-Aylmer):: Mr. Speaker, I have a question for the Minister of Veterans Affairs.
It would seem that the Department of Veterans Affairs is one of the most recent victims of the May budget move to blindly and savagely cut jobs in the federal Civil Service. Recent reports show that 218 jobs will be abolished by next May. Could the Minister comment on the accuracy of such reports, and if such is the case could he tell the House how he will go about achieving the increases and improvements in services to veterans which he has so often been referring to this last year while slashing some 6 per cent off the overall staff? This is absolute inconsistency, Mr. Speaker.


Hon. George Hees (Minister of Veterans Affairs):: Mr. Speaker, in answer to the Hon. Member's question I would advise him-and I think he knows this-that for the next six months there will be no lay-offs. Two hundred and nineteen positions have been declared surplus. Of that 219, 104 are either vacant or held by people who have already indicated their intention to retire, or are held by people who were hired on a term basis. We can see that only 114 positions are affected. I assure the Hon. Member that the Department will do everything possible in the next six months to find alternative employment for those people.


VICTIMS OF EMPLOYMENT CUTBACKS-GOVERNMENT POSITION
Joseph Gaston Isabelle: Mr. Speaker, the Hon. Minister has always been seen as a Conservative gentleman with very liberal behaviour and manners.
Could he tell us exactly what he intends to do, in order to specifically help the victims of those cuts by a Government that is in the process of committing hara-kiri? Is he bent on concluding his prestigious political career by making himself known as the hatchet Minister?


Mr. Speaker:: Order, please.


George Harris Hees: Mr. Speaker, if the Hon. Member will take the trouble to talk to any members of the Veterans Affairs Department he will find two things: they are very satisfied with the work they are doing and with the treatment they are receiving. I can assure him, with regard to how we intend to improve services to veterans, that the trimming of these various positions will not affect our efforts in this regard in any way, and that we will continue in the next few months and years to give veterans a steadily improving service with courtesy, generosity, and speed.
Oral Questions


Some Hon. Members:: Hear, hear!


Lorne Edmund Nystrom: George for Leader; Mulroney for Veterans Affairs.


Some Hon. Members:: Leader, Leader!


Mr. Speaker:: Order, please.


CANADIAN SOVEREIGNTY
Lynn McDonald: Mr. Speaker, my question is directed to the Prime Minister who will remember how pleased Canadians were last summer when citizens themselves, through the Council of Canadians, proclaimed Canadian sovereignty in the North when his Government did not have the courage to act.


Some Hon. Members:: Oh, oh!


Lynn McDonald: Will the Prime Minister assure the House-


Mr. Hnatyshyn:: Your tie is too tight.


Lynn McDonald: Will the Prime Minister assure the House that no sanctions will be taken against the pilot who dropped the flag on the Polar Sea, our Canadian flag, for all of us?


Donald Frank Mazankowski: Mr. Speaker, the allegations to which the Hon. Member referred are indeed being investigated by Transport Canada officials. There is evidence that there was an infraction. The investigation is going on internally, and I will be pleased to report back to the House on the outcome of that investigation.


DROPPING OF CANADIAN FLAG ON UNITED STATES VESSEL
Lynn McDonald: Mr. Speaker, again my question is directed to the Prime Minister. On the public policy aspect of the matter, does the Prime Minister consider it good public policy that, according to the Aeronautics Act, the Canadian flag might be deemed a dangerous object? Would it not be more dangerous for us not to have spoken up at that time? Should the pilot not be getting a medal rather than an investigation?


Martin Brian Mulroney: Mr. Speaker, the dangerous aspect of public policy was the policy of absolute neglect of the North and the Arctic by the Liberals for 16 years. That was the dangerous aspect of public policy.


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: The comprehensive statement in regard to the integrity and the sovereignty of the North set forth by the Secretary of State for External Affairs in the House of

October 29, 1985
Oral Questions
Commons will rank as an outstanding contribution to the protection of the integrity of the nation.


NATIONAL REVENUE
John Napier Turner: Mr. Speaker, my question is directed to the Prime Minister. I want to be assured of his answer in response to my colleague, the Hon. Member for Saint-Henri-Westmount. The Prime Minister insists upon continuing the statement that the Gulf tax ruling was a purely bureaucratic phenomenon created by officials of the Department of National Revenue in the ordinary course of events. On the other hand the former Deputy Minister of Finance, Mr. Cohen, said in an interview that the Gulf matter came before the Priorities and Planning Committee chaired by the Prime Minister on two occasions. The Assistant Deputy Minister of Finance was there-


Mr. Speaker:: Order, please.


John Napier Turner: Is the Prime Minister saying to the House that, despite those two meetings of Priorities and Planning, the tax aspects of the Gulf purchase were not discussed and made aware to members of Cabinet? Is that what he is saying to us, that they did not come before Cabinet or before himself?


Martin Brian Mulroney: Mr. Speaker, we are saying exactly what we have always said, which is the absolute clear statement of fact that the tax ruling was rendered objectively by officers of the Department of National Revenue pursuant to their procedures in a matter totally unrelated to anything which transpired subsequently, from the Government's point of view. Anything that was discussed by the Government in Cabinet would be under sceau de la confidence, on the one hand, but in complete conformity with the national interest, on the other hand.


CABINET COMMITTEE MEETINGS
John Napier Turner: Mr. Speaker, is the Prime Minister saying that the tax aspects of this purchase, which were such an integral part of the arrangement, were not before the Priorities and Planning Committee, which he chaired, and were not brought to his attention and the attention of the Minister of Finance? Is that what he is saying?


Martin Brian Mulroney: Mr. Speaker, I think-


Ms. Copps:: Tell the truth.


Some Hon. Members:: Order!


Some Hon. Members:: Shhh!


Martin Brian Mulroney: I think I have responded fully to my right hon. friend who, previously as Minister of Finance, Minister of Justice and Prime Minister, knows full well the manner in which these tax rulings take place. The ruling was sought, and rendered by the Department of National Revenue on the one hand. A governmental decision, which involved in part a Canadian corporation and in a substantial part as well a Crown corporation, was rendered on the other hand. In both cases the Government conducted itself completely properly.


Maurice Brydon Foster: That is not what Mickey said.


AGRICULTURE
Mr. Vic Althouse (Humboldt-Lake Centre):: Mr. Speaker, my question is directed to the Minister of Agriculture. He will know that farmers are in the gallery today looking for some action by the Government on the farm situation in Canada.


Some Hon. Members:: Hear, hear!


Victor Fredrich (Vic) Althouse: A smaller part of that situation exists in Saskatchewan. According to recent reports, farmers are expected to have net incomes of less than $5,000 this year per farm in that province. That is only partly due to the drought.
What is the Minister proposing to do? When will we hear the report from his committee, for which we have been asking for three months? Is he serious about helping those farmers? Is he really serious about agriculture at all?


John Wise: Mr. Speaker, it is rather interesting to note that the only time we get questions from the two opposition Parties is when they have an audience in the gallery.


Some Hon. Members:: Hear, hear!


Some Hon. Members:: Oh, oh!


Mr. Speaker:: Order, please.


Mr. Deans:: The only time you are here is on Tuesday.


John Wise: What would-


John Edward Broadbent: That is not fair, and you know it. Cheap shot, brother.


Donald Frank Mazankowski: Truth hurts.


CLERK OF PETITIONS' REPORTS
Mr. Speaker:: I have the honour to inform the House that the petitions presented by Hon. Members on Monday, October
October 29, 1985

28, 1985, meet the requirements of the Standing Orders as to form.



THE ROYAL ASSENT

['No, there is no [joint of order and there is no question of privilege here. Order, please.']
Mr. Speaker:: Order. 1 have the honour to inform the House that a communication has been received as follows:
Rideau Hall, Ottawa,
Sir:
29 October, 1985
I have the honour to inform you that The Right Honourable Brian Dickson, The Chief Justice of Canada, in his capacity as Deputy Governor General, will proceed to the Senate Chamber to-day, the 29th day of October, 1985, at 4.45 p.m., for the purpose of giving the Royal Assent to certain Bills.
I have the honour to be,
Sir,
Your obedient servant,
Esmond Butler,
Secretary
to the Governor General



Victor Fredrich (Vic) Althouse: Mr. Speaker, I rise on a point of order. I draw to your attention the response of the Minister of Agriculture (Mr. Wise) which, I think, went beyond the rules of the House regarding the activities and presence of Members in the House of Commons. I think if the record were to be checked, you would know, Mr. Speaker, that we ask this particular question every Tuesday because Tuesday is Cabinet day. If the Government acted with the generosity, courtesy and speed with which the Minister of Veterans Affairs (Mr. Hees) assured the House it always acts, we would have had an answer and would not have to keep asking this question.


Mr. Speaker:: I think the Hon. Member has made his point. He knows that this is not a point of order and he knows that any reference by any Member of the House to the presence of someone in the gallery is out of order.


PRIVILEGE
Maurice Brydon Foster: Mr. Speaker, I rise on a question of privilege regarding the comments made by the Minister of Agriculture (Mr. Wise) today. It was very inappropriate for him to say that the only time questions are put in
Petitions
the House is when the CFA is meeting here in Ottawa. In fact, questions on agriculture have been put by me every week. The problem is that we never get any answers.


Mr. Speaker:: Order, please.


Maurice Brydon Foster: I would ask the Minister to withdraw-


Mr. Speaker:: Order, please. I think the same comments apply to the Hon. Member for Algoma (Mr. Foster) as those that applied to the Hon. Member for Humboldt-Lake Centre (Mr. Althouse).


John Wise: Mr. Speaker, I rise on a point of order.


Mr. Speaker:: No, there is no [joint of order and there is no question of privilege here. Order, please.



ROUTINE PROCEEDINGS


Mr. Don Blenkarn (Mississauga South):: Mr. Speaker, I have the honour to present the tenth report of the Standing Committee on Finance, Trade and Economic Affairs. The report extends the period of reporting, and if the House will give its consent, I intend to move concurrence in this report later today.
[Editor's Note: For above report, see today's Vote and Proceedings.]


PETITIONS
Mr. Neil Young (Beaches):: Mr. Speaker, I have the pleasure to introduce a petition to the House signed by a number of residents of the east end of Toronto. Those petitioners state that the deindexation of the universal family allowance is an unfair attack on women and families and they further state that this attack will not be offset by changes to the child tax credit and that other tax increases in the May Budget will place an unfair burden on low and middle-income earners.


Nelson Andrew Riis: Mr. Speaker, it is my privilege to present a petition on behalf of a large number of western Canadians who are concerned about the Government's plans to deindex family allowances and are concerned that the cut-backs in child benefits on top of the sales tax changes and increases, the excise tax increases and the stiff income tax increases are all unfair and place an extraordinary

October 29, 1985
Petitions
burden on middle and lower-income Canadians. They therefore ask that the Government reinstate full indexation of universal family allowances and rescind the unfair tax increases presently before the House.


Ms. Margaret Mitchell (Vancouver East):: Mr. Speaker, I have a petition from a number of citizens from Halifax, Springhill, Dartmouth, Lawrencetown and East Preston in Nova Scotia as well as from New Brunswick and Prince Edward Island who are appealing to the House of Commons to reinstate full indexation of the universal family allowance and to rescind the unfair tax increases which are having such a negative impact on families.


Stanley J. Hovdebo: Mr. Speaker, it is my honour and duty to present to the House of Commons of Canada in Parliament assembled a petition signed by a number of people from the constituency of Prince Albert who ask the House of commons to reinstate full indexation of universal family allowances and to rescind unfair tax increases.


Mr. Don Boudria (Glengarry-Prescott-Russell):: Mr. Speaker, I have a number of petitions which have been signed by hundreds of Canadians who object to the horrendous decision of the Tory Government to deindex family allowances.
More specifically, I have petitions from constituents of Drummond, Manicouagan and Renfrew-Nipissing-Pembroke in Ontario.
I also have another petition signed by constituents of Hull-Aylmer in Quebec who are so well represented in this House; I also have some from the constituencies of Shefford and Trois-Rivieres in Quebec.
I also have a petition signed by constituents of the federal constituency of Kent in Ontario, Victoria in British Columbia, and finally a petition signed by constituents of the federal constituency of Grand Falls-White Bay-Labrador in Newfoundland.
Those people, Mr. Speaker, want to state their grievance. I am pleased to present those petitions.


Mr. Alain Tardif (Richmond-Wolfe):: Mr. Speaker, I also have the honour to present some petitions to this House.
The first one comes from the constituency of Saint-Hyacin-the-Bagot in Quebec where hundreds of people deeply regret the fact that family allowances are being reduced. Under the circumstances, they would like to enjoy full indexation. Also, several dozen constituents from Brome-Missisquoi, Beauce, Outremont, Rosemont, Saint-Henri-Westmount and Saint-Michel-Ahuntsic in Quebec deeply regret the reduction in family allowances which, in many cases, are part of the minimum resources for which those families have an urgent need.
Finally, Mr. Speaker, a petition from the federal constituencies of Saskatoon East and Saskatoon West in which once again the Government is asked to reconsider its position and grant full indexation.


Lynn McDonald: Mr. Speaker, I have a large number of petitions to present to the House on behalf of constituents in my home riding of Broadview-Greenwood. They point out that the accelerating cut-backs in child benefits as well as sales and excise tax increases place an extraordinary burden on middle-and low-income households. They therefore call upon the House of Commons to reinstate full indexation of universal family allowances.
Similarly, I have another number of petitions from citizens across Ontario, namely Toronto and Windsor, who point out that the cut-back in family allowances and the tax increases are inequitable and unbearable in the face of budget hand-outs such as half a million dollars of tax-free capital gains and the bail-outs to the banks. They therefore call upon the House of Commons to reinstate full indexation of the universal family allowance and to rescind unfair tax increases.


Abram Ernest Epp: Mr. Speaker, it is an honour and a duty for me to present petitions on behalf of more than 150 persons resident in my riding of Thunder Bay-Nipigon. More than one-third of the signatories are residents of classes of the Lakehead University, students joining in the protests that the decision of the Government to deindex the universal family allowance and to carry through other cutbacks in the public commitment to child benefits represents an unfair attack on women and families with children. These persons are well aware that even the poorest will be worse off by 1990, and they call on the House of Commons to re-establish full indexation for family allowances.


Mr. Alfonso Gagliano (Saint-Leonard-Anjou):: Mr. Speaker, I have here a number of petitions dealing with the Government's intention to deindex the family allowances. They are from the Quebec ridings of Saint-Leonard-Anjou, Langelier, Saint-Hyacinthe-Bagot, Shefford, Drummond, Lac-Saint-Jean, and from the British Columbia riding of Richmond-South Delta, the Ontario riding of Guelph, and the Nova Scotia riding of South Shore.
Mr. Speaker, all these petitions humbly pray the House that the Government re-establish full indexation of the family allowances and the Child Tax Credit.
October 29, 1985


Donald Alex Blenkarn: Mr. Speaker, if the House gives its consent, 1 move, seconded by the Hon. Member for Kamloops-Shuswap (Mr. Riis) that the tenth report of the Standing Committee on Finance, Trade and Economic Affairs presented to the House earlier today be concurred in.


[Stage Direction]
Motion agreed to.

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Paul Dick (Parliamentary Secretary to President of Privy Council):: Mr. Speaker, the following question will be answered today: 398.


Mr. Gauthier: 1.	Since January 1985 to date, under the Department of the Secretary of State's Court Challenges Program, did the Government allocate funds for (a) assembling the elements of a case (b) defending a case in court (c) pursuing a case already under way and, if so, for each category, what organizations and individuals received support?
2.	In each case, what was the subject matter of the challenge and in what court was it or will it be heard?
3.	What funds have been committed or promised to the program?


Hon. Benoit Bouchard (Secretary of State of Canada):: 
Paul Wyatt Dick: Mr. Speaker, I ask that the remaining questions be allowed to stand.


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


Don Boudria: Mr. Speaker, I have a question 1 want to ask the Government House Leader or his Parliamentary Secretary. I wonder if they could indicate to the House when the Government will reply or when they intend to reply to Question No. 285 that I placed on the Order Paper on February 28; Question No. 287 that I placed on the Order Paper on March 6;
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October 29, 1985
Excise Tax Act
Question No. 313 that I placed on the Order Paper on March 28; and Question No. 319 that I placed on the Order Paper on April 4, which concerns the Quebec City extravaganza of last March 17.
Could the Government House Leader respond to these questions that I have been asking over and over in this House, about which apparently the Government must have something to hide?


Paul Wyatt Dick: Mr. Speaker, perhaps the Government House Leader does not, but the Parliamentary Secretary to the Government House Leader might have something to say, and the innuendoes cast by the Hon. Member are not worthy of him.
However, since he did bring this matter up just yesterday I can report that I had the matter looked into, and I can indicate to him that Question No. 285 is in the process of being prepared and has not yet been completed. Question No. 287 is assigned to seven different Departments; two of them are still outstanding and until those two Departments report we cannot return it because they all have to be completed together. Question No. 313 was a question which dealt with all Cabinet Ministers and was assigned therefore to all 40 Government Departments, of which 15 have not yet responded. When those 15 Departments respond we will be able to supply the answers. Question No. 319 was in 20 parts and it cannot be answered until all 20 parts are completed and they have not yet been completed.
As to Question No. 386, which was referred to yesterday as well by the Hon. Member for Ottawa-Vanier (Mr. Gauthier), it is in 18 parts and all 18 parts are not yet completed. It will be answered as soon as we have them all completed.


Mr. Speaker:: Shall the remaining questions be allowed to stand?


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mrs. McDougall that Bill C-80, an Act to amend the Excise Tax Act and the Excise Act and to amend other Acts in consequence thereof be read the second time and referred to a legislative committee.
Mr. Speaker:: Debate. Questions and comments. Question: the Hon. Member for Ottawa-Vanier (Mr. Gauthier) has the floor.


Jean-Robert Gauthier: This morning, Mr. Speaker, 1 listened closely to the remarks of the Hon. Member for Montreal-Sainte-Mar-ie, and the first thing I want to do is commend him for his well-structured speech and especially for his widely acknowledged concern over poor people in our society and low income individuals.
Bill C-80 makes provisions for higher taxes on gasoline and nonprescribed drugs. This morning the Hon. Member read a list of ailments which could be treated with such nonprescribed drugs as will now be subject to a 10 per cent tax, and I wonder if he might give us more details concerning this famous tax on nonprescribed drugs?


Jean-Claude Malépart: Mr. Speaker, I am pleased to answer my colleague. I see the Minister of National Health and Welfare (Mr. Epp) is in the House, and we would normally expect him to defend the interests of people who are suffering, people who are sick.
Unfortunately the Minister of National Health and Welfare has not done his job, just as he did not either with respect to elderly Canadians and families with children.
My colleague is right to point out that the 10 per cent tax on sick people affects more than only those who are gravely ill. I must say that the Minister of National Health and Welfare did not make any effort to force his Government to reverse its decision concerning people who suffer from diabetes, heart conditions and respiratory ailments. The Government maintains its position and the Bill will indeed impose a tax on people who suffer from arthritis. The Minister of National Health and Welfare invests a lot of money in research to find cures for various illnesses, yet that same Minister will not do anything to convince the Prime Minister and the Minister of Finance to repeal the 10 per cent tax on drugs which are necessary.
Mr. Speaker, my colleague quite properly stressed the odious nature of this measure and this policy. We know very well that people will pay $125 more for family drugs as a result of all the new taxes contained in the Bill, yet on the other hand the Government will deindex family allowances and change the child tax credit. My colleague is therefore quite justified to say that this odious and immoral tax is unacceptable to most Canadian men and women.


The Acting Speaker (Mr. Charest):: Questions or comments. The Hon. Member for Yorkton-Melville (Mr. Nystrom).


Lorne Edmund Nystrom: Mr. Speaker, the Hon. Member for Mont-real-Sainte-Marie referred this morning to our discussions in this House about the issues of the partial de-indexing of family allowances and the de-indexing of old age security pensions.
Did the Liberal Member agree with the decision made by the former Liberal Government at the time of the 6 and 5 program, when the Trudeau Government did exactly the same thing by partially de-indexing family allowances and old age
October 29, 1985

security pensions for all Canadians? It was exactly the same. It was partial deindexing. It is exactly what the Conservative Government has done. Did the Hon. Member agree with this? If so, why does he not agree now?


Jean-Claude Malépart: Mr. Speaker, I can understand that the Minister of National Health and Welfare (Mr. Epp) and the Conservative Members would want to play politics on the backs of low-income people and poor Canadians. I did not expect this from a Member of the New Democratic Party, and this is the first time that I see such a thing, Mr. Speaker.
In reply to the Hon. Member, I must say that he should know the difference between the 6 and 5 restriction program and the initiatives of this Government. I would have thought that the Hon. Member would know all about it. First, the purpose of the 6 and 5 program was to reduce inflation and increase the purchasing power of consumers. Second, the Government had also increased the tax credit for low income families and this initiative was to apply for two years only.
Mr. Speaker, the difference between this initiative and the 6 and 5 program is that this Government is removing the first 3 per cent of increase from the very beginning. All the taxes imposed under various programs will increase inflation and therefore the costs for the public. What the Conservatives have said about the changes they have proposed to family allowances is that they will take money away from the taxpayers to reduce the deficit, but in fact, they are not even reducing the deficit. They are taking money from poor people and giving it to the wealthy. If you remember the 6 and 5 program, the tax credit was fully indexed while we now have a partial deindexing as the first 3 per cent of inflation will not be taken into account.
As for middle and low-income families, those with an income of $26,000 will no longer be eligible as the amount will be reduced to $23,000 because of the changes made by this Conservative Government. Middle-income families with three children will lose $400 in the first year because of these changes.
If the Members of the New Democratic Party want to play politics on the backs of the poor, it is their business, but I for one refuse to do it.


Margaret Anne Mitchell: Mr. Speaker, I would like to ask the Hon. Member a question with respect to the subject of taxes. I am sure he is aware of the study conducted by the National Anti-Poverty Organization, which was released today, which shows that federal increases in sales tax will take twice as much from the poor families in Canada as from those who are more affluent. On top of that there are also cut-backs with respect to family allowance. What does the Hon. Member think of this matter? Also, what did the Liberal Government do in this respect when it was in power?
Excise Tax Act
[ Translation]


The Acting Speaker (Mr. Charest):: The Hon. Member for Montreal-Sainte-Marie (Mr. Malepart), but very quickly.


Jean-Claude Malépart: Mr. Speaker, the Hon. Member's question is a lot smarter than that of the Hon. Member who preceded her-


The Acting Speaker (Mr. Charest):: Order. I am sorry, but the period provided for questions and comments has now expired.
The Hon. Member for Ottawa-Vanier (Mr. Gauthier), on a point of order.


Jean-Robert Gauthier: Mr. Speaker, I may refer to an opinion given by the Chair yesterday about this specific 10-minute period following speeches. I would like to ask the Chair whether in the particular case we have just seen, where the Hon. Member asked a question, in fact it was a very good question which required an answer ... I dont't think the Hon. Member for Montreal-Sainte-Marie (Mr. Malepart) was given enough time to answer the question.
I would therefore ask the Chair if from now on, when there is a one-minute or perhaps two-minute limit, to perhaps let the House know that only two minutes of the 10-minute period are left, so that both question and answer are given equal time.


The Acting Speaker (Mr. Charest):: Perhaps 1 may explain to the Hon. Member for Ottawa-Vanier (Mr. Gauthier) that I was absent yesterday, so unfortunately, I was not aware of what may have transpired from yesterday's debate. In any case, as a courtesy to Members, the Chair often indicates, while they are making their speeches, when their time is nearly up. And I think most Members have made a habit of watching the Chair because of that. That is what I just did in the case of the Hon. Member for Vancouver-East (Ms. Mitchell). I indicated to her very quickly that she had very little time left.
It is all more or less left to the discretion of the person in the Chair. I think we should remember that the only hard and fast rule we have left, and one which treats all the Members of this House as fairly as possible, is the rule of 20 minutes plus 10. And this rule is applied as fairly as possible in each particular case.


Jean-Robert Gauthier: I just want to explain to the Chair that I am not questioning the Chair's ruling on the 20 minutes or the time allowed Members to make their speeches. What I mean to say, and I would invite the Chair to read yesterday's Hansard to become familiar with the case, is that the 10 minutes allowed for comments and questions should be fairly distributed on both sides of the House. I have noticed on occasion that at the end of the 10 minutes allowed for questions and comments, some Members take advantage of this to put a question that requires a far more elaborate answer. So in that case, if the Chair could indicate to both parties that their

October 29, 1985
Excise Tax Act
time is limited, so that we could have a constructive dialogue on both sides ... I would simply ask the Chair to check yesterday's Hansard to make sure I am not referring to the 20-minute period but to the 10-minute period.


The Acting Speaker (Mr. Charest):: I shall consider the comment by the Eion. Member for Ottawa-Vanier (Mr. Gauthier) as a constructive one. I intend to consult yesterday's Hansard, and I may remind the Members of this Elouse that at least as far as I am concerned, if we consider the time allowed Hon. Members, and stick to that question in particular, it is first of all their responsibility to keep track of their allotted time and not the responsibility of the Chair. So perhaps we could start there.
Resuming debate. The Hon. Member for Ottawa-Carleton (Mr. Turner).


John Barry Turner: Mr. Speaker, I am pleased to rise to take part in the debate on Bill C-80. I did not think I would survive the onslaught from my hon. friend this morning, the Hon. Member for Yorkton-Melville (Mr. Nystrom). I did and I am looking forward the debating Bill C-80. I regret the Hon. Member is not in the House at the moment. I hope he will return shortly.
This morning we spoke about the toughness of Bill C-80. I would now like to speak about its fairness.

Mr. Speaker, Bill C-80 implements the budget proposal concerning the federal sales tax and excise tax and the excise duty as announced by the Minister of Finance (Mr. Wilson) in his May 23rd budget.
The Bill moves in four major directions.
First, pursuant to the recommendations made by the Nielsen Task Force, this Bill would enlarge the sales tax base, putting an end to a trend that leaves only 30 per cent of possible profit subject to federal taxation.
Second, this Bill would implement one component of the Government strategy to reduce the deficit by increasing the federal sales tax rate.
Third, this Bill would implement the election promise to eliminate automatic indexation of the taxes on alcohol and tobacco, an indexation which would have increased the taxes by 4 per cent in September and by an indexed amount over the coming years. In lieu of indexation, there will be a tax rate increase of 2 percent on alcoholic beverages and a 25-cent tax on the 25-cigarette package.
Finally, this Bill introduces an extensive system for assessing the objections and appeals under the Excise Tax Act. This new system is similar to the current one under the Income Tax Act, and includes recent improvements made to that Act with respect to search and seizure and the presumption of innocence
that prevents seizure until the taxpayer has a chance to resolve any litigation as to his Fiscal responsibility.

Before I continue with my remarks with respect to Bill C-80 I want to say that, in the true spirit of practical reform of some of our parliamentary procedures, the budgetary reform process is also of paramount importance. Some five months and six days after being introduced on May 23, 1985, we are still debating our first full federal Budget. I Find this a bit strange since we are effectively running the largest business in the country without having all of our fiscal plans in legal place. Some of my constituents, in fact, are asking me why we have not voted on all of the Budget yet and I find that sometimes difficult to answer. What I feel we should be looking at-and I know the Government is and will be looking at it more closely-is limiting and perhaps regularizing the Budget debate in future.
I would like to continue on a bright note and to end on an even brighter one. The Minister of State for Finance (Mrs. McDougall) said in the House last Thursday, October 24, and I quote from page 7941 of Hansard:
Early this week the Royal Bank of Canada confirmed that economic growth in this country is proceeding at a steady pace, that inflation and interest rates will continue to decline and unemployment will be at its lowest level in years. The Royal Bank says that the Canadian economy is looking better because Canadian businesses are spending more money producing more goods and employing more people.
The Minister went on to say, and I quote from page 7943 of Hansard:
I said it was a tough Bill but I believe it is also fair. It asks all Canadians to share in the effort to restore the fiscal health of our country.
I could not agree more. The Economic Council of Canada said in one of its recent reports that the real growth is expected to continue for the next four to five years in a very positive way in Canada. The Conference Board of Canada recently revised its growth projections upward for 1985-86 by a full 2 per cent of GNP increase. This is bright news and it is getting brighter every week. The Throne Speech spoke of national reconciliation and economic renewal and we are on track with both of these two national themes. The economic statement of November 8 spoke of a course of action to create jobs, growth and opportunities. If we look at the recent record of this Government, we find it has been simply remarkable. The Budget of May 23, 1985, builds on our successes to date by creating more opportunities through encouraging private initiatives and incentives in a realistic, fair and effective way. The fiscal course we have set is obviously working so far and will continue to work well into the future. All Hon. Members of the House know deep down that all of the economic news is good news.
Bill C-80, which represents one slice of the over-all budgetary process, concentrates on revenue raising measures from federal tax changes on candy, confectioneries, soft drinks, pet food, beauty and health goods, gazoline, beer and wine, construction materials, tobacco and a few other products, but the
October 29, 1985

over-all theme we must maintain is budgetary control of the deficit and its reduction through fiscal responsibility.
In the fall of 1984 I did a survey in my riding and I asked my constituents to tell me what they thought the top priority should be for the new Government. Three out of four of those who responded-75 per cent-indicated that deficit reduction was at the top of their list. I remind the House that we are exercising deficit control through and 80 per cent reduction of Government expenditures and only 20 per cent through tax increases. That is pretty responsible management, in my opinion.
Let me compare Bill C-80, in an over-all broad context, to an expandable swimming pool full of money-sometimes called "capital". Those who want to dive into this pool of money, the people who would use these funds, are you and I, Mr. Speaker, my constituents, businesses inside and outside of Canada-that is, the international community-and municipal, provincial and, obviously, federal levels of Government. We are the largest player in the pool and as our capital needs become greater, we squeeze out others from competition. That is bad because Governments do not create jobs, they create the environment for others to create jobs. Today's environment is now healthier than it has ever been. We compete for a part of that capital pool. The greater the competition to buy or borrow, the higher the price, and the price of money is interest. Therefore interest rates would probably rise unless we could lower our needs for our part of the pool. We cannot expand the size of the pool very quickly because it would mean printing more money or more capital. That could be inflationary. The over-all amount of money in the pool can only expand as the over-all wealth of our nation expands. With the elimination of the hideous National Energy Program, replaced by the very successful Western Accord, the very negative Foreign Investment Review Agency, replaced with a well received Investment Canada; and with capital gains incentives in the Budget, our over-all wealth is increasing and will continue to increase, thereby giving the Government more room to manoeuvre.
Since we cannot expand the size of the pool too quickly, we must lower our demands and swim in a smaller part of the pool so that others who are competing for those funds, such as businesses and other borrowers, will have a little more room.
Bill C-80 necessitates some of the changes we must make in order to allow the Government to have more financial flexibility. On the surface, the waters may look a little rough, a little tough, in fact, as it was said this morning, but fair. No one likes tax increases, myself included, but underneath the waters are much calmer. Our plan is obviously working. One can see the increased confidence levels in the private sector as it finds more areas to swim in and therefore the price of borrowing money is lowered.
1 can see the western energy developments are increasing tremendously in western Canada. The automobile industry of Ontario is operating near capacity. The housing industry is undergoing a tremendous uplift in new housing starts. The manufacturing industry is showing tremendous growth as consumers buy more and more durable goods.
Excise Tax Act
As the Miniser of State for Finance said with respect to Bill C-80, it is a tough Bill but it is fair in that all Canadians are asked to contribute. We must keep in mind the over-all budgetary themes such as economic growth. Recent economic indicators are all strong; deficit reduction, 80 per cent through expenditure reduction and 20 per cent through tax increases; and job creation, especially our great achievement in lowering the unemployment levels of the youth of our country in the last few weeks and months.
An area of real concern with which 1 have to deal in my riding concerning Bill C-80 is the increased taxation of construction goods manufactured other than at a construction site, such as steel, concrete, asphalt and even asphalt shingles for roofs, and others. A number of businesses in my riding reacted against the date of the proposed increase of July 1, 1985. They wanted to put it off until January 1, 1986. I met with a lot of these business representatives, with officials from the Department and discussed the issue with the two Ministers concerned who listened very attentively, but it was decided that the federal Treasury needed the revenue as soon as possible.
Normally these increases are effective immediately a Budget is brought down. As you will recall, Mr. Speaker, the measures in the Budget were put off for a period of about six weeks in order to allow for a reasonable adjustment by the affected businesses. 1 find that very fair. The affected businesses in the construction industry were not questioning the need for the Governemnt to raise more revenue. They were merely asking for the effective date to be put off to January 1. They understood that we had to start to live more within our means. I think everyone in the House understands, as do my constituents, that we have to do the same. Mr. Speaker, what happens to you when you live beyond your means and for how long can you do that? You get a phone call from the bank. You are told that your credit is up, that you must turn in the plastic and have no more credit cards. On September 4, 1984, the people of Canada called up the former Government and said its credit was up, it was time for a change. They wanted to give the Tories a chance to run the business. Our track record to date is simply outstanding, but the struggle continues. The passage of Bill C-80 will give us more financial freedom to do more for those in the greatest need in Canada.


Maurice Brydon Foster: How can he read that crap?


John Barry Turner: Recently the Business Council on National Issues was referred to in an article in The Toronto Star. Its President, Mr. Tom d'Aquino, who happens to be a constituent of mine, indicates that businesses are preparing for a powerful lobby to back deficit cutting. This article indicates that one of the purposes of this lobby is going to be to convince the public that it is better to make small sacrifices in government services now to get the deficit under control than to allow interest payments on the country's burgeoning debt to eat up an ever-greater portion of the country's resources. That is what we are trying to do. In an

October 29, 1985
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editorial in The Globe and Mail of October 25, Jeffrey Simpson says the same thing. I quote as follows:
Only radical measures can turn the deficit problem around by the early 1990s.
These measures of tax increases in Bill C-80 are not only necessary but essential to the on-going process of fair tax reform and economic renewal in Canada.
I would like to refer to some even brighter aspects of what has been happening since the Government took power. We spoke of farmers today during Question Period. Interest rates paid by farmers have fallen significantly since the election last year. One year ago five-year mortgages given by the Farm Credit Corporation carried an interest rate of 14 per cent. Today the interest rate is eleven and seven-eighths. That is a drop of two and one-eighth percentage points and that is pretty significant. Some other good news deals with employment. Of course we hear this every day because it is such good news. Employment has risen by 2.7 per cent in Canada in the last year compared to 2 per cent in the United States of America. Our track record is much better and more positive than that of the United States. In September of this year 175,000 more women were working than in September 1984. That increases the confidence level in what the Government is doing.
In the energy and mining sector drilling activity is up significantly this year. Well completions in the first eight months of 1985 are up 19 per cent over last year's levels. I was in Saskatchewan in August. I went out to look at the effects of the drought. It is a tragic situation, but I also saw tremendous activity in drilling for new oil in the southern part of that province, particularly around the area of Macoun and Estevan.
In the 1980 election the Liberals promised cheap gas. Between 1980 and 1984 gas went up by $1.15 per gallon.


Abram Ernest Epp: And it will go up some more now.


John Barry Turner: Mr. Speaker, the deficit today exceeds total spending a decade ago and is three times greater than total spending was in 1967. That is difficult to imagine, but those are real numbers. In fact, the entire length and width of the Trans-Canada Highway could be paved with dollar bills adding up to the amount of the deficit of today. That is a lot of miles and a lot of wasted money. The cost of servicing the debt this year is equal to $1,024 per capita, compared to $174 a decade ago, or $63 in our Centennial year. Debt service costs account for one revenue dollar in three today. That is a lousy way to run a business, Mr. Speaker, and we must do more to manage our national affairs more effectively.
The list goes on. The successes we have had are absolutely outstanding, as I said earlier. The non-residential portion of construction is up by 12 per cent over last year. With regard to small businesses, 173,000 of Canada's small businesses are retailers. The value of retail trade climbed 10 per cent in the first seven months of 1985 compared to the same period last year. Mr. Speaker, the good list goes on. Although Bill C-80 is a Bill to increase Government revenue, when taken in its
global budgetary context it is actually contributing to increasing the level of confidence that Canadians have in their Government to live more within its means so that others can share in the capital pool that I spoke of earlier more equally and fairly.


Abram Ernest Epp: Mr. Speaker, I would like to offer comments on several aspects of the speech of the Hon. Member for Ottawa-Carleton (Mr. Turner). I am sure some questions will emanate from that to which he will want to respond. He has made a good deal of the fairness which the provisions of Bill C-80 which grow out of the Budget of last May represent in his opinion. He cites the Minister of State for Finance (Mrs. McDougall) to that effect. I do not see how provisions which are applied at the same level to purchases of various products can represent fair taxation when persons of greatly differing income levels are purchasing these goods. The amount that each person spends on these products might conceivably be the same, but the proportion of income spent by the various persons on the purchase of gasoline, confectionery, tobacco or alcohol would be very different. To the person earning $10,000 a particular amount may represent a very large proportion of his income while a person earning $200,000 hardly notices the effect of these purchases. It escapes me, Mr. Speaker, how that kind of tax provision can be fair. I suggest that this is not simply a matter of rhetoric with members of the Government wanting to uphold the fairness of the tax system and members of the Opposition wanting to criticize it. It is in fact directly related to the matter of economic performance in the country.
The Member suggests that all the indicators are good. Surely the unemployment rate in the country is not a good economic indicator. The deficit to which the Member has pointed is not a good indicator either and he has recognized that. He can point to interest rates as being satisfactory although, again, I do not understand what action the Government has taken to produce lower interest rates. Surely good sense in the American Federal Reserve Bank system has primarily been responsible for lower interest rates and those have had happy results.
How can the Member believe that these tax provisions represent fairness? How can he also assert, aside from Government rhetoric, that the economic indicators are satisfactory? The capitalists are unhappy about the deficit his Government is running and the unemployed people of the country are unhappy about the lack of jobs.


John Barry Turner: Mr. Speaker, I appreciate the questions of my colleague. I want to answer with the following question: Was it fair that year after year since 1972 the federal Government lived beyond its means and accumulated an unbelievable national debt of $224 billion? Is it fair that one in three dollars in federal revenue goes to pay interest alone to service this accumulated national debt? Is that a good way to run a business or a fair way to have run a country since 1972 when we first went into a deficit situation?
October 29, 1985

The Member stated that the unemployment level was still unacceptable. I agree. However, let us give credit where it is due. In September, 1984, the unemployment rate was 11.6 per cent. In September, 1985, it was 10.1 per cent. That is a significant decrease in the over-all unemployment statistics.
The Hon. Member talked about people with low income who need a greater opportunity to increase their income. There are 300,000 more people working today. Does that not mean that they will be earning more income?
In the last 20 years we have lost 2 per cent of our world trade. Canada used to occupy 5.5 per cent of world trade but through bad economic policies of former successive Governments, our world trade is now approximately 3.5 per cent. If we are able to regain 1 per cent of world trade in the next three and a half years of this Government's mandate, we will create 400,000 new jobs in Canada. That is why we are looking to expanding our trade and regaining economic stability and growth. That is why we are looking at lower interest rates which will mean more investment in Canada by Canadians to develop their own businesses.
The list goes on. I do not understand how the Member can say that we are not headed in a positive economic direction.


Abram Ernest Epp: Mr. Speaker, perhaps I could add a third area of comment and question, relating to the metaphor of a pool of capital to which the Hon. Member was alluding. He used that metaphor to make a point about the interest rates facing Canadians.
Metaphors can be very dangerous forms of expression. The Member raised a picture of a fixed amount of capital in the country. The Government takes a part of this capital but if it takes too much there will not be enough left for others. When he gives this metaphor he is creating quite the wrong impression. There is no such fixed amount of capital available to the bankers and financiers of this country. One need not believe in social credit to appreciate that the expansion of credit is carried out not just by the Department of Finance and the Bank of Canada, or to realize that when worthy projects can be carried out, whether public or private, the capital will be found and the credit will be extended so that the pool will grow, to use the Hon. Member's metaphor. It is not at all obvious that the Canadian Government's call on Canadians to buy savings bonds and other financial instruments has in any way driven up the interest rates in this country.
Therefore, I suggest that the Hon. Member's metaphor leads us astray. Moreover, I would suggest that if the Hon. Member wants to appreciate what constraints may exist in this area, he can look at the early 1940s when the Government of Canada was coming out of the Depression. It felt just the kind of constraints that he is talking about now. When the Government began meeting the challenges of the Second World War, it discovered that the constraints were not ones of finding money because Governments can easily find the necessary capital. The real constraints involved how rapidly one could
Message from the Senate
invest that money and how rapidly one could expand productive facilities with the necessary equipment and so on.
When we have hundreds of thousands of people unemployed and ample productive facilities wanting work, it seems to me that the metaphor of the pool is totally wrong. I am sure the Hon. Member will have a comment about that.


The Acting Speaker (Mr. Charest):: I am convinced that the Hon. Member for Ottawa-Carleton (Mr. Turner) will have a comment.


John Barry Turner: Mr. Speaker, I am pleased that I have convinced somebody in the Chamber. Certainly the Hon. Member for Sherbrooke (Mr. Charest) is a man who is not easily convinced.
I believe the pool of capital is a good metaphor. I am not sure what the Hon. Member suggests we should do. Is he suggesting that we should print more money? We cannot simply start the press. One cannot simply run off paper money and distribute it to whoever wants it unless the country is wealthy enough to permit it.
Our approach is to change investment opportunities in this country for foreigners and Canadians. If Canadians invest in their country and keep that pool of capital here rather than investing in foreign countries, then the wealth of the nation will increase. The size of the pool to which I referred will increase. As the Government reduces its need to dip into that pool, more money will be available for businesses, individuals and domestic and foreign corporations. It will be easier and cheaper for them to compete for the same funds. That will keep the level of interest rates much lower in a domestic context.


The Acting Speaker (Mr. Charest):: The period for questions and comments has now expired.
It has been brought to my attention that I referred to the Hon. Member for Thunder Bay-Nipigon (Mr. Epp) as being from Thunder Bay-Atikokan. I cannot understand how I could ever make that error, but it has been brought to my attention.


MESSAGE FROM THE SENATE
The Acting Speaker (Mr. Charest):: I have the honour to inform the House that a message has been received from the Senate informing the House that the Senate have passed Bill C-73, an Act to validate certain ordinances of the Yukon Territory and the Northwest Territories, without amendment.

October 29, 1985
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EXCISE TAX ACT AND RELATED ACTS
[Stage Direction]
The House resumed consideration of the motion of Mrs. McDougall that Bill C-80, an Act to amend the Excise Tax Act and the Excise Act and to amend other Acts in consequence thereof, be read a second time and referred to a legislative committee.
The Acting Speaker (Mr. Charest):: Henceforth, there will be only ten-minute speeches, no questions or comments. The Hon. Member for Thunder Bay-Nipigon (Mr. Epp) has the floor.


Abram Ernest Epp: Mr. Speaker, I suppose if you placed the Members for Thunder Bay-Nipigon and Thunder Bay-Atikokan (Mr. Angus) side by side the mystification may come to an end.
May I confirm, on a point of order, that we are permitted 10 minutes at this point?


The Acting Speaker (Mr. Charest):: Yes.


Abram Ernest Epp: 1 can only say that I regret that, but I am grateful that I spent some time in comments with the Member for Ottawa-Carleton (Mr. Turner) which allowed me to dispose of some items.
Even though the Government is a little over a year old and Parliament convened less than a year ago, one can already have moment of deja vu.
Bill C-80, an Act to amend the Excise Tax Act and the Excise Act, imposes increases as a result of the Budget of last May 23. There is an increase of 1 per cent in the rate of federal sales tax on various products, effective January 1,
1986.	There are other changes as well. For example, there is the extension of the federal sales tax on a variety of products enjoyed by men, women, boys and girls across the country. They will face increased charges for such things as candy, confectionery, soft drinks, pet foods and certain health goods.
There is tax on energy conservation equipment from a Government that claimed to be concerned about this matter. It is imposing sales tax on energy conservation equipment soon after it ended programs that supported energy conservation in this country. On that point alone, surely we have evidence of how reactionary this Bill is. There is also an increase of 2 cents per litre on gasoline and aviation gasoline, diesel fuel and aviation fuel which came into effect on September 3. There will be an additional increase of 1 cent per litre on January 1,
1987.	These tax increases go well into the future.
As I contemplate these increases I am reminded of the debate we had in the first weeks of this Session of Parliament. The Government had to consider the question of whether to go through with an increase in the sales tax which the previous Liberal Government had planned for October 1. It was surely very significant of what the Government would continue to do, that instead of cancelling that particular increase as it had
given every indication it would do before its success in the election-it was very critical of that Liberal sales tax increase-it decided to proceed with that 1 per cent increase. The following May, in the Budget measures we are debating here, the Government decided to add to those increases in sales tax. We have in the last minutes been considering the fairness of all this. It is not simply a question of fairness, but a question of the economic wisdom of following this course in the fiscal and financial policy of the Government.
There is a deficit, which is very significant. Why do we have a deficit? This Government will answer first by saying that too much is being spent. The Government does not very often say that there is a deficit because not enough taxes are being raised in certain areas, although in the practice of the Budget and in the Bill, C-80 that we are debating today, there is a suggestion that the people of Canada, as far as sales and excise taxes are concerned, should pay more. There is a deficit then, at least in part, because the ordinary people who already bear and excessive burden of taxation need more burden laid on their shoulders.
What has not been considered at all is the distinct possibility that there is such a large deficit in our federal fiscal operations because the Government of Canada has increasingly slipped into allowing various kinds of activity, particularly on the side of capital investment, to escape taxation. This has resulted in the rich getting richer, succeeding more and more in concentrating their economic power while the poor keep paying more and more taxes. That comes from a Conservative Government which likes to think it speaks for ordinary Canadians, that it is anxious about them and wants to ensure that prosperity genuinely comes to Canada.
It is not simply a question of fairness as I have said. It is also a question of economic sense. When you decide that the largest part of the burden of taxation is going to be borne by individuals who have to pay the sales and excise taxes willy-nilly, whatever they may want to do, they face these charges when necessities need to be purchased. They are sneaky taxes because they are hidden charges. As a rule they are simply in the price and there is no way of knowing what they were originally unless you check the charts.
There is little opportunity to appreciate exactly how serious these charges are as they get worked into the cost of things and percentages are added to them in additional charges. It is a matter of economic stupidity to make individual Canadians the basis for the fiscal system in this way. These are exactly the people on whom we depend to ensure business is being done in our communities, that people come into the shops with money to spend and buy things. That purchasing power gets translated into demand to wholesalers, factories and employment throughout our industries. If we insist on using these means to add inexorably year by year to the burden individuals have to bear, then we will find, as we have found in the past decade and a half, that all the inducements we may provide in the way of our tax expenditure system, accelerated capital cost allow-
October 29, 1985

ances and so on, do not succeed in ensuring that there is enough investment taking place to give us anything like full employment. What it does, Mr. Speaker, is to make the rich far richer than they would be otherwise and to reduce more and more of the Canadian population to poverty. That was obvious by the beginning of this decade when the Department of Finance provided some evidence of the benefits that federal tax expenditures amount to for Canadians at various income levels. On the basis of the 1979 returns, Canadians who had incomes of $7,500 to $10,000, obviously very poor Canadians as far as the demands of life in our cities and towns are concerned, were receiving over $300. It was well under 5 per cent benefit as a percentage of income. But Canadians who had incomes of over $200,000 were receiving benefits that exceeded $50,000.
An individual Canadian in the existing system, which dates back to the early 1970s and which has been quite fundamental in creating the deficit situation we have, could receive in tax expenditure benefits more than the total income of five or six other Canadians. There is the rank unfairness of the system which the Liberals created through the 1970s and early 1980s and which to date the Conservatives have done absolutely nothing to change.
There is the ultimate foolishness, the economic stupidity, with what we are faced in Bill C-80. We want the Bill taken back. We want the Government to come to grips with the fact that tax expenditures may well be running at the $30 billion to $50 billion level, meaning that the deficit impact of these tax expenditures may be as much as $15 billion, almost 50 per cent more than the total deficit the Government is presently running. If that were the case, we would have the clearest of arguments for an actual reduction in taxation for invididuals. We would have an argument for reducing the sales tax, not increasing it. What would happen at the same time the Government came to grips with tax reform as it should and if the Government recognized as the Minister of Finance (Mr. Wilson) stated last November? Let me quote his statement:
As we grapple with the technicalities, the subtleties and the complexities of our tax system, we must never lose sight of the citizens it is ultimately meant to serve. That is what our efforts are all about. The real bottom line is people.
I could not agree more with that Mr. Speaker, but where is the action that is required to operate on this statement?


Alain Tardif: Mr. Speaker, I am also proud and pleased to take part in this discussion.
In my view, Bill C-80 probably is since the Progressive Conservatives came to power the document that best depicts and defines the true faces of those men and women who are now at the helm.
This Bill enables us to understand how and where the Government team wants to lead this country over the coming years. Let me say first that we all admit and accept the fact that the national debt is tremendously large, that it requires
Excise Tax Act
and deserves particular intention, so that steps will be taken to eventually reduce that deficit.
On the other hand, we all admit that this country has had to go through an historically unprecedented period in every respect, and Canada did so in a way that is simply fantastic, and at the end of that crisis, steps had to be taken to restore and straighten out our public affairs. And today we are witnessing the impact, the spin-offs of measures that were put forward by the previous administration. We see the levels of job creation and inflation-
On the other hand, Hon. Members opposite suggest: "Listen, if interest rates went down, if inflation abated, if there is job creation, it is because of measures, of initiatives we have taken since we came to power on September 4." But this is my view is not the case, and it is certainly not where that improvement is concerned.
To me, the important thing today is to get into details, and see the true orientation which this Progressive Conservatives Government wants to impart to the country.
We now have before us Bill C-80, the basic aim of which is to collect taxes, to extort money from the smallest people possible, middle and small income earners, the have-nots, those who find it most hard to make ends meet under current condition.
In this context, they put forth Bill C-80 in order to pick money from small people's pockets, the purpose, of course, being to collect $15 billion or so.
In other words, middle and low-income taxpayers are being asked to bear the whole burden of our financial problems in
Canada.
It would be both unacceptable and just as unbearable, but it would nevertheless keep up the pretence of some sort of justice if, at the same time and in the same breath, the Government told the wealthy, those with substantial means, that they must also make an effort and do their share to reduce the deficit.
However, that is not the point. The point is that, with Bill C-80, the Government is going to take millions of dollars away from the poor, from those with very low incomes, and give this money to multinationals, to individuals who can pay and who have made it through the recent crisis without any problem.
In this regard, I believe that it is important and relevant to list some of the initiatives which favour the wealthy in Canada. If I may, I would just like to mention the capital gains exemption with which the Government tells those who make profits in real estate or on the stock market: The next few years are going to be highly profitable years for all you Ladies and Gentlemen who are involved in big business. During the next few years, you will be allowed to claim as non-taxable income up to $500,000 in capital gains for Personal Income Tax purposes. It is assumed that you will re-invest that money

October 29, 1985
Excise Tax Act
in the system. But what guarantee do we have that you are indeed going to do so? All Hon. Members are aware of course that the taxpayers who are going to benefit most from these generous provisions are not those who are living in poverty and who can hardly make ends meet. The taxpayers who will benefit most are those who are well-off, if not outright rich, and who could, without depriving themselves of the necessities of life, make a special effort to reduce the national debt. I feel this measure is quite unfair for all middle-income Canadians.
There is another matter which I find especially odious. We are dealing today with Bill C-80. Well, the same Minister, namely, the Minister of State (Finance) (Mrs. McDougall) introduced recently Bill C-79 to ask Canadians for SI billion to compensate these honourable gentlemen and corporations who had invested in a bank at very favourable rates in excess of the $60,000 of normally fully insured deposits. The Government needed $1,000 million to reimburse these people all the money they had invested in these Western banks, capital and interests, and for that purpose the Government introduced Bill C-79, the legislation that was immediately followed by Bill C-80 we are now studying.
In the following Bill, Bill C-80, the Government is telling people who can hardly make ends meet: Ladies and gentlemen, you will have to play your part to help the Government meet its obligations. You will have to tighten your belt. You will have to do your share by paying a surtax or a higher tax so we can meet our obligations. This is happening right after another Bill to raise $1 billion to repay individuals and companies that, in many cases, will take the money and invest it outside Canada, in foreign countries where it will not do anything at all to spur the Canadian economy.
Well, Mr. Speaker, barely 14 months have elapsed and this Government is giving us today an opportunity to see how it is reacting to the vote of confidence and support it received from Canadian men and women last September 4. The Conservatives told the Canadian people that universality was a sacred trust, that it was here to stay, that ordinary Canadians would be protected and have the resources required to face the future with serenity. So here we are, hardly 14 months later, debating a Bill which to me is historically odious and altogether shameful, a measure through which the Government will take $15 billion from low and average income Canadians, $15 billion in taxes on products which in many cases are absolutely essential.
Of course we know that under Opposition pressure the Government caved in on the pension issue, as it did with respect to certain drugs for diabetics. But there is still a very large number of drugs which are taxed and which in many cases are essential medicine and this is the indisputable proof that the Government does not care a hoot about ordinary Canadians while it surely pampers our few thousand very rich Canadians.
At present, there is another very important political debate going on in Canada, the one dealing with the footwear industry and the Government will very soon have to reach a decision to protect 20,000 jobs, to protect the consumers, to create 6,000 new jobs but its decision is long overdue. We have every reason to believe that the decision which will soon be made public will be in favour of a few hundred importers who are already taking in prohibitive profits. Once again, a measure that will protect a few hundred rich individuals at the expense of thousands and millions of Canadians unable to cope with the real difficulties that they have to meet.


Stanley J. Hovdebo: Thank you, Mr. Speaker, for the opportunity to speak on Bill C-80. This piece of legislation implements some of the key elements in the May Budget, unfortunately some of the elements which the ordinary Canadian least likes to see implemented in that they mean an increase in the federal sales tax and the excise tax.
Although we have been talking about the Bill for several days, I remind the people of Canada and the House just exactly what we are talking about. The federal sales tax will be increased by 1 per cent as of January 1, 1986 if the Bill passes. Canadians would be interested in knowing what rate they will now be faced with as far as the new rates are concerned. For example, they will be paying 7 per cent on all construction materials, 7 per cent on cable and pay television services, 14 per cent on alcoholic beverages, 14 per cent on tobacco products, and 11 per cent on all other taxable items. It is very interesting to note that the whole process will cost Canadian consumers $990 million in 1986-87.
Today the Auditor General brought down his annual report. One item in it concerned something done by the Government on February 5, 1985 when it gave a remission to the Dome Petroleum company. This will cost Canadian taxpayers in the next 10 years something over $1 billion. Dome Petroleum will not have to pay taxes for the next 10 years which is going to cost us something over a billion dollars. That is considerably more than the total revenue from all these taxes. There was an alternative to this taxation. The Government had an option, to use the words of the Prime Minister (Mr. Mulroney). It did not have to pass that remission. It could have taken equity in Dome Petroleum so that at the end of 10 years we would have an equity of a billion dollars in that company, or it could have given it a loan. It had an option but it chose instead to give Dome Petroleum, the Hudson's Bay Oil and Gas Company, a billion dollars. This money is derived from increases in excise and sales taxes on the ordinary Canadian.
The federal sales tax is being expanded as well. Sales tax exemptions on candy, confectionery, soft drinks, pet foods and certain health foods and energy conservation equipment are repealed. All of those items, which have been non-taxable up until now, are going to be taxed. These are areas where the ordinary Canadian spends a little bit of money for his comfort or his recreation.
The excise taxes, which are direct taxes added on to the prices and not a percentage tax, not an ad valorem tax as the
October 29, 1985

sales tax is, are two cents per litre on gasoline and aviation fuel and two cents per litre on diesel fuel. That was applicable September 3 and effective January 1, 1987 we will have one cent per litre on gasoline and aviation fuel and one cent per litre on diesel fuel also added.
In their unsuccessful invasion of Prince Albert in the last federal election this Conservative Government, then in Opposition or then in an election process, promised the farmers of western Canada that it would reduce the price of fuel, give a rebate on the taxes being paid for the fuel that the farmers, as primary producers, used to produce much of the food of this country. With this one cent on January 1, the two cents on September 3 and the past increases in fuel over the last year, instead of a 20 cent reduction per gallon that the farmers were promised they have instead a 20 cent increase per gallon in the cost of fuel. That, Mr. Speaker, is having a real impact on the production of food in this country. There are many farmers that are close to the line as far as survival is concerned. They are not making very much profit and a couple of cents per gallon, when you use several thousands gallons of fuel, makes quite a bit of difference in the cost of their production.
It is very interesting to notice that compared to the increase in taxes for the ordinary Canadian and for the primary producer, we have in a publication by the Economic Council of Canada this kind of a statement and it is a very telling statement because it gives some kind of a comparison between the corporation tax and the tax on the individual. It reads:
If there were no inflation. Canadian industries would pay virtually no income tax.
The speaker here is Glenn P. Jenkins, a Harvard University Economist who has done some work for the Economic Council of Canada. He makes this statement, and I quote:


Mr. Crosbie:: He worked for the Government-Assistant Deputy Minister of Taxation.


Stanley J. Hovdebo: He said:
The corporation income tax system has been made so generous that were it not for the spurious effects of inflation the effective corporate income tax rate would, on average, be close to zero.
We have the situation of a Government which has reduced by its very generous taxation process the taxes on corporations to zero and at the same time has added one cent on gasoline, two cents on gasoline, two cents on diesel fuel, 1 per cent on all the goods that we buy. When the Minister introduced this tax she was very careful to say that this is a fair tax. How fair is it? What is the definition of fair? In our tax system a definition of fair has always been taxes as a percentage of earnings. These taxes do everything but that. They are repressive taxes. The poorer the people, the larger proportion of their income they pay. If the tax on a bottle of pop is five cents or ten cents that is a much larger proportion of the income of one who earns $5,000 than of one who earns $45,000.
Mr. Speaker, what I wanted to do here was to present to this House and to the people of Canada the difference in the process of taxation that this Government is opposing. The poorer the people, the less income they have, the more they are
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going to feel the effects of this tax; and that is wrong. Therefore, it should not be a method of raising revenue for this Government at this time.


Jean-Robert Gauthier: Mr. Speaker, it is not with any particular pleasure that I take part in this debate, because I believe that the Bill in question is a regressive measure that increases the tax burden of Canadians and does absolutely nothing to reduce the deficit. The Government's friends, the big corporations, are making a tremendous profit with the tax benefits they were given, while on the other hand, money is being taken out of the pockets of the average and low-income Canadian as a result of increasing taxes, including sales tax, the tax on fuel, and an increase in the tax on non-prescription drugs.
Bill C-80 before the House today is aimed specifically at taking money from Canadian consumers to try and balance the budget of a Government that has not hesitated, on occasion, to spend billions on banks or on administrative decisions in favour of large companies such as Olympia and York, which helped that company make a profit of $500 million.

The Bill before us, of course, adds immensely to the taxes of Canadian consumers who will have to pay these increases in excise taxes to the extent that the Bill, taken globally, will add some $2.4 billion over the years from now until 1990-91 to consumer taxes. At the same time corporations will enjoy a $2.2 billion decrease in taxes. Under the good Tory Government, the rich get richer. Those who have capital gains will be able to deduct $500,000 thus costing the federal Treasury $1.25 billion in lost revenue.


John Carnell Crosbie: Are you a broken record?


Jean-Robert Gauthier: I would ask the Minister of Justice (Mr. Crosbie) where the equity is in these arrangements. The Minister is part of the Government. Are his friends not receiving the benefit of the $500,000 capital gains tax exemption?


Maurice Brydon Foster: His friends are retractable.


Jean-Robert Gauthier: The Hon. Member for Algoma (Mr. Foster) said that the Minister's friends are retractable. It could be that they are, but his comments are certainly retractable at times.
I would like to address this difficult and regressive legislation. The tax increase on motor fuels is something that will touch every consumer except those using diesel fuel in the generation of electricity. All others will have to pay, whether they be municipal Governments, commercial businessmen, fishermen, trappers, farmers, hunters or those involved in transportation services. The amazing thing about this is that the Government is now changing the rules. This tax will now be called an ad valorem tax. This ad valorem tax will encour-

October 29, 1985
Excise Tax Act
age pollution because the tax itself is lower on leaded fuels than it is on unleaded fuels.
Yesterday when the Hon. Member for Davenport (Mr. Caccia) put a question to the Minister of the Environment (Mr. McMillan), he tried to bring it to the attention of the House that the Government is giving a subsidy, if I may use that word, to those who consume leaded gasoline while we are all trying to reduce acid rain and encourage the use of unleaded fuels. The ad valorem tax on fuels will be .32 cents per litre for regular leaded gasoline while it will be .35 cents per litre for unleaded gasoline. The tax is higher for unleaded gasoline. I wonder about the commitment of the Government to purifying the atmosphere, to creating a better environment and to reducing acid rain.
I would like to touch on a few other items of the Bill. [Translation]
Mr. Speaker, we were surprised to find that regressive measures, which means a tax that applies to some and not to others, that is what the word regressive means, that these measures do not seem to stop our Tory friends from attacking the average consumer. They have increased the excise tax on gas, as I said earlier, but they have also increased the tax on alcoholic beverages, tobacco products, wine, and programming services provided by telecommunications. The sales tax has been raised, and that is a very big source of revenue for the Government, by levying taxes on a number of construction materials and certain prefabricated materials.
By levying taxes on equipment and building materials used for energy conservation, such as controlled combustion stoves, for instance, the Government is discouraging Canadian efforts at conserving energy, by taxing items that once could be bought without paying tax.
Taxes are being levied on candy, on soft drinks, on pet foods. People say: So what! It is only pets, after all. Well, some of those pets are dogs used by blind people, they can be very important for the every day life of those whose sight is impaired. And it is unfair in my view to impose an additional tax on those people. I find this absolutely unacceptable.
Taxes will be levied on non-patent drugs and the list is quite exhaustive as the Hon. Member for Montreal-Sainte-Marie (Mr. Malepart) has shown. I do not find it here but it is an exhaustive list, it goes from acne to hemorrhoids, Mr. Speaker. All sorts of drugs that are used daily by Canadians will be subject to an extra 10 per cent tax, in order to do what, Mr. Speaker? To pay for this Government's errors.
How do they dare come in this House and suggest, as I heard the Hon. Member for Ottawa-Carleton (Mr. Turner) state earlier: "You know, we are giving $1 out of every $3 to pay debt interests." Mr. Speaker, if the Government's argument is to reduce the deficit, this should not be done on the backs of medium and lower class consumers. Other steps should be taken.
I read today in the report submitted by The Canadian Council on Social Development that they consider the sales tax as regressive. I quote:

The Canadian Council on Social Development has estimated that the combination of increased sales, gasoline, alcohol, and tobacco taxes will result in tax hikes of $140 for a $15,000 annual income couple in 1990, $282 for a comparable couple with $20,000 income, and $361 for a $40,000 income couple.

Mr. Speaker, this therefore is a tax that applies regressively to middle-and low-income Canadians.
Mr. Speaker, I would like to go back to the question of people and the extra burden that this legislation appears to be imposing upon them.

Consumers will pay $2.6 billion more in sales tax by 199091 as a result of the changes contained in Bill C-80. At the same time, corporations will enjoy a decrease of $2.2 billion in tax and capital gains tax breaks alone. Where indeed is the equity in this Bill?
Because of higher fuel costs, hundreds of small and medium-sized construction companies will see costs rise. God knows that the increase in costs on inputs to construction companies will discourage the construction industry as it will find the costs harder to bear. When added to other budget measures such as the general tax increase, higher fuel costs, CMHC cuts and elimination of the Registered Home Ownership Plan, this becomes a heavy blow to the industry at a critical time when we need the construction of new homes.
I would like to go on to talk about the tourism industry and how the additional cost of motor fuels will have a negative impact on tourism. I see, however, that you are rising, Mr. Speaker, to cut me off because my 10 minutes are up. 1 regret that, Mr. Speaker,



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Gervais):: It is my duty, pursuant to Standing Order 46, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the Hon. Member for Welland (Mr. Pietz)-St. Lawrence Seaway-Welland Canal blockage. (b) Request for extension of shipping season; the Hon. Member for Thunder Bay-Nipi-gon (Mr. Epp)-Co-operatives-Government response to task force report. (b) Request that co-ordinating agency be established; the Hon. Member for Winnipeg North (Mr. Orli-kow)-Social Affairs-Increased role of voluntary organizations. (b) Request for Federal-Provincial discussions.
October 29, 1985



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mrs. McDougall that Bill C-80, an Act to amend the Excise Tax Act and the Excise Act and to amend other Acts in consequence thereof, be read the second time and referred to a legislative committee.
Hon. Herb Gray (Windsor West):: Mr. Speaker, I am rising to oppose this Bill for a number of reasons. First, when we are talking about sales taxes, we are talking about taxes that are regressive and place a more severe burden on lower-income earners than on people with higher incomes. People with lower incomes spend a greater proportion of their incomes on the basic necessities of life including food, clothing, shelter and other things needed to carry out a daily existence. Therefore, when it comes to sales taxes, people with lower incomes are hit more severely by increases. This was confirmed by a recent study carried out and released by the National Anti-Poverty Organization. Regarding this study, an article in The Globe and Mail reads as follows:
The study says that those estimates "make it clear that the poorest of Canadians will pay increases in federal sales and excise taxes at twice the rate paid by the most affluent families."
The article is quoting a study done by the National AntiPoverty Organization. It is not a political group. It is not a supporter of any political party. It speaks objectively about the plight of lower income Canadians, the poorest Canadians, all across the country. Yet, when the Government decided to obtain more tax revenue, not for expanding programs to help lower income Canadians but to reduce the deficit, it decided to place an undue and unfair share of the burden in reducing that deficit not on the backs of well-to-do Canadians but on the backs of the poorest of Canadians through measures such as Bill C-80. As we know, the Budget increased and expanded federal sales taxes, according to the press report with respect to the study of the National Anti-Poverty Organization, "by raising the rate on such items as construction materials, alcohol, tobacco and extending coverage to such other items as candy, pet food, many health and personal care products and insulation materials". Is that not the height of insensitivity and lack of concern for the needs of lower income Canadians? Even the candy bought by children on the way home from school is to be hit by this additional sales tax.


Some Hon. Members:: Shame.


Herbert Eser (Herb) Gray: Even the food for the pets of our children, the pets which provide comfort and companionship for older Canadians, for senior citizens, will be hit by this unfair and regressive Tory sales tax. Even the food for the seeing eye dogs, the companions and helpers of sightless
Excise Tax Act
Canadians, will be hit by this unfair and regressive Tory sales tax.
In addition to that move, by extending the base of the federal sales tax to all sorts of non-prescription medication, the Tories are imposing an unfair, heartless and cruel tax on the sick and on sickness. They originally intended to impose this tax on hypodermic needles which are absolutely essential for people with diabetes to take insulin, a product required to keep them alive. After a determined outcry the Tories backed down on imposing this sales tax on hypodermic needles used by diabetics for ingesting insulin. However, they maintained the tax on a whole range of other products which are equally or almost as important to maintaining the health of Canadians, particularly older Canadians. For millions of older Canadians a product such as aspirin is absolutely essential to contain the pain and swelling of arthritis. There is no substitute for it- certainly no substitute within the easy reach of millions of older, lower income Canadians and millions of Canadians generally. However, even aspirin used to reduce the pain and swelling of arthritis is subject to this unfair and regressive Tory tax on illness.
This heartless Conservative Government is creating problems for Canadians generally. They are being given headaches by these problems. I refer not just to the effects of having rancid tuna in the market-place, or the effects of being asked to pay the bill for the incompetence, poor management and poor judgment of Government in the mishandling of the bank fiasco, but to the general burden of this unfair and unduly burdensome federal Budget of which Bill C-80 is one part. These measures must be giving millions of Canadians millions of very severe headaches. One would think that this cruel, heartless and incompetent Government might at the very least exempt aspirin from the imposition of sales tax because the Conservatives should certainly be willing to provide some relief to Canadians from the headaches they are giving them as a result of their incompetent and heartless management. Instead, these headaches have to continue until the next election when Canadians will finally receive relief by voting out this incompetent, heartless and cruel Government.
In the meantime, we have to speak out strongly in the House and across the country against measures such as Bill C-80.


An Hon. Member:: To pay your bills.


Herbert Eser (Herb) Gray: Mr. Speaker, the Tories in the back row keep saying: "To pay your bills." I say let us have the well-to-do and the multinational corporations pay those bills. Do not put that burden on millions of lower income Canadians. If that burden were fairly distributed we would not have had a report such as the one received from the National Anti-Poverty Organization which states:
The sales- and excise-tax increases announced in the May budget "have a much greater impact on the bank teller than they do on the bank president,"-
That is what was said in a brief prepared for submission to the Minister of Finance (Mr. Wilson). If the Minister of Finances has not been able to find time to meet with the farmers, then I hope that he can at least find time to read the

October 29, 1985
Excise Tax Act
brief prepared by this organization and react to it by withdrawing Bill C-80. If the Government is not willing to withdraw the Bill, then certainly we have to insist that there be a vote on it and that this Bill be defeated. If this Bill is not defeated then it will be another black mark added to the many already in the debit column when it comes to the very poor record of this Conservative Government. I say on behalf of middle and lower income Canadians: Let us vote to defeat this Bill. If it cannot be defeated, then let us remember that this heartless, cruel and incompetent Government has offered it and that it will pay the bill when we come to vote in the next election.


Ian Deans: Mr. Speaker, I anticipate that we will be having a vote on this Bill shortly. In fact, I thought all that had to be said with respect to it had already been said. Then it struck me, as my friend and colleague the Opposition House Leader rose, that there were two or three things that really ought to be tied together to clarify once and for all what is wrong with the way the Government approaches tax policy.
This is a Government which preaches fiscal restraint. This is a Government which told us it was going to manage the financial affairs of the country in a way previously unhead of. In fact, it may well have done that now that I think about it, but it was probably not exactly what it had in mind. This is a Government which told us that belt-tightening was the order of the day. This is the Government which said to the elderly that it would be desirable if they carried a share of the cost of tightening the nation's belt and subsequently withdrew what it was attempting to do, but only after great pressure. This is the Government which said to families: "You can no longer expect to have your family allowance indexed." This is the Government which told us that it was necessary for those in the upper income levels who previously had not paid any tax to pay their share and then it introduced a surtax on the tax payable. If anyone were to stop to look at it they would realize that a surtax on tax payable if one does not pay any tax means absolutely nothing. If one is in that upper income level which pays no taxes as a result of the loopholes left by the previous Liberal administration, and which have been left in place by this Government, then a surtax on the tax not paid will not result in any great hardship, certainly not to the person who does not pay the tax in the first place.
This is the same Government which said: "We could not find the money necessary to top up the unemployment insurance payments," of many who were finding their UI payments running out and who could not find employment and were therefore left in abeyance, left hung out to dry.
On the other side of the ledger, this is the Government which found something in the order of $3 billion to bail out certain banks in the country. It is the Government which found $1 billion to bail out Dome, which company should have been paying its share but was not required to pay it. Notwithstanding the financial problems facing the nation, this is the Government which was able to say to Olympia & York: "We do not need your nearly $1 billion in taxes, it is okay, you can
keep it." This is the Government which speaks out of both sides of its mouth.


Some Hon. Members:: Hear, hear!


Ian Deans: I hear applause from the Government benches. This is the Government which, as a result of this piece of legislation, is inflicting upon those who can least afford it an even larger burden of taxation. On the one hand, the rich pay less and, on the other hand, the poor pay more. Those who can barely eke out a living are asked to contribute significantly more to the cost of running the Government and those who already have an adequate income are not asked to pay one penny more. Those who are not now paying will still not be paying. Those corporations which mismanaged their affairs over the course of the last 14 months are still benefiting from the largess of their Tory friends now in office. That is why this Bill is wrong. That is why these taxing provisions are wrong. This Government starts at the wrong end of the spectrum. Instead of beginning by creating some sense of fairness within the tax structure and making sure that those who have more than they need pay their fair share, the Government follows the lead of the previous Liberal administration and imposes on those who have the least an additional burden.
I say to you, Mr. Speaker, that that is why we in the New Democratic Party refuse to support this kind of legislation. I am not surprised that the Liberal Party has decided to oppose this Bill. I suspected all along that those who managed to survive the 1984 election were in fact more intelligent than the others. They probably opposed these measures when the then Government of the day, of which they were Members, introduced them. Those Hon. Members probably felt at the time when these tax give-away schemes and inadequate taxing provisions were being put in place that the Government was wrong but they could hardly raise their voices, being a part of that Government. I am therefore pleased that now that they are on this side of the House their consciences allow them to speak out and they can stand up for what they really believe and are now able to say that those things they supported over the years were wrong, that when they stood in their place and nodded assent to those inappropriate measures, they were wrong. I am glad they are joining with us now in opposing this terrible tax measure which is brought in by this inadequate Conservative Government.


Mr. Marcel Prud'homme (Saint-Denis):: Mr. Speaker, 1 know that like all of us in this House, you are waiting for the other Chamber to call us in for the Royal Assent. In fact, there are so few Bills passed that we will be very happy to hear the Senate's call. Meanwhile, I see it as my duty to join my colleagues at this late hour in condemning this practice which we find again in Bill C-80, an Act to amend the Excise Tax Act and the Excise Act and to amend other Acts in consequence thereof. I always like to demonstrate, for the informa-
October 29, 1985

tion of the people watching us, the scope of a Bill that affects Canadians in their daily lives.
As my colleague from Ottawa-Vanier (Mr. Gauthier) said earlier in his own speech, we must oppose this Bill, because we all know that if there is one thing that is expensive in this country, it is gas, and it is getting more expensive every day. We all know that this Bill authorizes a two-scent per litre increase in the price of gas, effective last September. The most insidious aspect of this Bill is that like the former Quebec Minister of Finance, Mr. Parizeau, who introduced Bills that, once passed, dealt with both present and future situations. We are voting today in the knowledge that on January 1, 1987, another additional cent will be added, in addition to the provincial taxes that will be added as well.
Which means that a lot of taxes are being levied on one of Canada's natural resources, and this is not going to benefit the producing provinces-


An Hon. Member:: Or the consumers.


Marcel Prud'homme: Governments are making money out of the abundant primary resources of our country which are not getting any benefit out of it, because these are all federal and provincial taxes, and in the case of my own province which will soon be judging a Government that introduced what is referred to as the "taxe ascenseur", the escalating tax, which means that as soon as we increase here . . . and I would ask my hon. colleague from Ottawa-Vanier to stop me if I am mistaken, but in any case, this new federal tax will help provincial taxes, because in Quebec with its so-called escalating tax, as soon as another level of Government introduces a tax in a way as-


Jean-Robert Gauthier: -insidious-


Marcel Prud'homme: -insidious, as my colleague said, in such an undercover way, without any legislation, they are just adding to what another level of Government is already levying on the people . . . they are just adding another tax.
As for the increase in taxes on alcoholic beverages and tobacco products, as far as tobacco products are concerned, I can announce officially, and I want to do this, because I know that if I do, I won't have as much trouble sticking to it, but I was smoking three packages of cigarettes a day, until my Whip told me about a month ago this was ridiculous, and 1 must say, Mr. Speaker, that since that time I can safely state, and I hope this will be an example for our young people, that, across my heart, I have not touched a cigarette for a month, and that is why a debate like this one this afternoon gets on my nerve.


Jean-Robert Gauthier: You feel better, any way.


Marcel Prud'homme: And I feel better for it. I owe it to my whip who watches me constantly. However, it still remains that those who want to smoke can do so, as Canada is not a
Excise Tax Act
dictatorship yet, but at what price? It will cost even more now. As for those who want to drink ... 1 really like what the Minister of Justice said recently in his advertisements: If you want to drink, do not drive. In fact, I remember that the one who said this for the first time was the then Minister of Justice, who later became Prime Minister of Canada, and who is now our distinguished Leader of the Opposition, the Right Hon. John Turner. When he was Minister of Justice, he said: If you drink, don't drive, and if you drive, don't drink. He also said: I have made my own choice and I do not drive. I really liked his honesty, and no, I am not speaking about myself.
Mr. Speaker, the new taxes that we are going to vote are once more taxes which people will not even remember even though they will be hit hard by them and will be placed in serious difficulties because of the Budget and these economic initiatives.
The Government wants to promote economic recovery, and I am trying to defend the point of view of the party in power by saying that the Government had promised jobs, jobs, jobs, but the situation is really bad in Quebec and Montreal East.
I hope that my friend, the soon to be Right Hon. Minister of Public Works, will be able to find someone to defend the interests of Montreal because, while he himself is now doing an honest job and acting very responsibly, there is a serious lack of concern on Montreal Island, and I can tell him that the people of Montreal, especially in the east, are beginning to feel the effects of the indifference of some of his colleagues who do not seem to be concerned about the problem and who prefer to boast, like the Minister of Employment and Immigration (Miss MacDonald), who says each time that the problems in Montreal are mentioned: "Oh, but you do not know how many jobs have been created." This is not what the people of Montreal East want to know.
All these new provisions that the Government wants to have adopted in this very substantial bill can be considered indirect taxes because, in certain cases, people will even forget their very existence.
There are people who want economic recovery ... I see that my allotted time is coming to a close and 1 thank you, Mr. Speaker for informing me that I only have thirty seconds left, but I want to tell you, Mr. Speaker, that our party will be voting against this bill, that we are not about to agree to it today, tomorrow or later this week and that we shall fight against it as long as there is one of us left to do so.


Mr. Speaker:: It being five o'clock p.m., the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.

October 29, 1985
Housing


PRIVATE MEMBERS' BUSINESS-MOTIONS   HOUSING ADVISABILITY OF CREATING MINIMUM STANDARD FOR HOUSING
Mr. Dan Heap (Spadina) moved:: That, in the opinion of this House, the government should consider the feasibility of creating, in consultation with the provinces, municipalities and Indian organizations, a five year plan which will ensure that every Canadian can have decent, affordable housing under a national minimum standard of social housing.
He said: Mr. Speaker, I am very pleased to have this time to tell my understanding and my hopes about the housing that the people of Canada need and to hear the comments of others on the same subject. The resolution as correctly transmitted on the Order Paper unfortunately contains three minor typographical errors for which I only am responsible. 1 wish I had said "native housing" rather than "Indian", "according to a national minimum standard" rather than "under", and that I had deleted as redundant, the last three words "of social housing". In other words, I wish, Mr. Speaker, and I would ask unanimous consent if this might be so varied by the House. I wish it read: "That, in the opinion of this House, the Government should consider the feasibility of creating, in consultation with the provinces, municipalities and native organizations, a five-year plan which will ensure that every Canadian can have decent, affordable housing according to a national minimum standard".


Mr. Speaker:: I am sure that the House is prepared to give unanimous consent to the Hon. Member for those changes. Is there consent?


Some Hon. Members:: Agreed.


Mr. Speaker:: There is consent.


Daniel James Macdonnell Heap: I thank Hon. Members of the House for their consideration. Mr. Speaker, Canada is a rich land and Canadians are productive people. Yet, one-sixth of the people of Canada, according to a recent report, are living in poverty as it is understood in our country. One of the chief causes of this poverty is the lack of decent, affordable housing. The Government of Canada can lead the way to remedying that lack and, therefore, I shall propose a plan to ensure that every Canadian can have decent, affordable housing. After I have outlined my plan I shall explain my reason for it which arises from the failure of the privately run real estate and housing industry to meet this goal. Finally, I shall show why I believe my plan is financially workable.
The first principle of the plan is that housing for Canadians shall be decent and affordable. By "decent" I mean in accordance with the standards of CMHC for health and safety standards. That means it would include weather-tight shelter, no crowding, proper bathroom and kitchen facilities and modern heating and lighting. By "affordable" I mean it would
cost the residents no more than one-quarter of their income for rent and utilities.
The second principle is that both publicly owned and privately owned rental housing shall be subject to rent control. Since a growing number of Canadians live in cities-about three-quarters of Canadians in fact live in cities-and the majority of those in multiple dwellings owned by absentee landlords, mainly the large corporations, tenants need a statutory basis for organizing in order to bargain on more equal terms with their landlords to attain reasonable accommodation and service for reasonable rent. Therefore, the federal Government, in the course of negotiating cost-sharing programs with the provincial and other jurisdictions, must ensure that the best use of federal moneys is made by negotiating for rent control and rent registry. Rent levels must be registered with Governments and the information available to tenants and prospective tenants. There must be no exceptions, either because of public ownership or because of rent level.
The third principle is that Canada must create a national home-building program. The federal Government must negotiate with the other jurisdictions, according to needs in each, to devise a program aimed at creating, in five years, the half a million units needed by the families and singles presently without decent, affordable housing. In order to control costs and ensure responsible maintenance this housing should be either co-operatively produced and owned or public produced and owned with as much management responsibility as possible assumed by the tenant associations.
The fourth principle is that existing substandard housing should, where practical, be rehabilitated with Government assistance. Tens of thousands of rental apartments in Canada's major cities need rehabilitation because federal tax benefits have encouraged builders to throw buildings together fast but not to do maintenance. Roofs and garages are leaking and plumbing, heating and elevator systems are breaking down. To allow the absentee owners 20 per cent or 25 per cent permanent rent hikes, as is proposed, in order to increase the owner's equity by rehabilitation, would, therefore, be compelling the tenants to pay once through rents and once again through taxes which would be a massive injustice. It would also depress the tenants' buying power for food, clothing and other necessities that Canadians earn a living by producing. Therefore, Governments must devise ways to assist tenants to buy their buildings for co-operative or non-profit ownership and that way to ensure a motivation for responsible maintenance and taking the buildings out of the inflationary market, somewhat in the manner of utilities like schools, roads, and public hospitals.
The fifth principle is that private homeowners must also receive aid to remedy the damage done to them by the same land, interest and tax squeeze that has made tenants poorer. Public loan funds must be established, or private loan funds within Government legislation, that will provide mortgages to homeowners at no more than 2 per cent above the rate of inflation. These would be solely for a family or person buying,
October 29, 1985

building or repairing a principal residence, not for use in revenue properties.
The sixth principle is that there should be annual targets and reports. The federal Government should, after negotiations, publish, jointly with the other jurisdictions, the outline of the five-year plan with annual targets. Parliament, other jurisdictions and the public-



THE ROYAL ASSENT

[Stage Direction]
A message was delivered by the Gentleman Usher of the Black Rod as follows:
Mr. Speaker, the Honourable Deputy to the Governor General desires the immediate attendance of this honourable House in the Chamber of the honourable the Senate.
Accordingly, Mr. Speaker with the House went up to the Senate Chamber.
O)
And being returned:
['I am very sorry to interrupt the Hon. Member for Montreal-Sainte-Marie (Mr. October 29, 1985', "Malepart), but the hour allotted for Private Members' Business has now expired."]
Mr. Speaker:: I have the honour to inform the House that when the House went up to the Senate Chamber, the Deputy Governor General was pleased to give, in Her Majesty's name, the Royal Assent to the following Bills:
Bill C-60, an Act to authorize procurement of the dissolution of certain Crown corporations and to amend or repeal other Acts in consequence thereof- Chapter No. 41.
Bill C-71, an Act to amend the Customs Tariff-Chapter No. 42.
Bill C-69, an Act to amend the Canadian Institute for International Peace and Security Act and certain other Acts in relation thereto-Chapter No. 43.
Bill C-77, an Act amend the Criminal Code (pari-mutuel betting)-Chapter No. 44.
Bill C-72, an Act to amend the statute law relating to income tax and to make a related amendment to the Tax Court of Canada Act-Chapter No. 45.
Bill C-73, an Act to validate certain ordinances of the Yukon Territory and the Northwest Territories-Chapter No. 46.



[Stage Direction]
The House resumed consideration of the motion of Mr. Heap:
That, in the opinion of this House, the government should consider the feasibility of creating, in consultation with the provinces, municipalities and Indian organizations, a five year plan which will ensure that every Canadian can
Housing
have decent, affordable housing under a national minimum standard of social housing.
Daniel James Macdonnell Heap: Mr. Speaker, I believe I had been speaking for approximately eight minutes and 1 was saying that the sixth principle of the program I am proposing is that there should be annual targets and reports. The federal Government shall, after negotiations, publish jointly with the other jurisdictions the outline of the five year plan with annual targets. Parliament and other jurisdictions and the public will be encouraged to debate this plan for possible amendment and adoption. Thereafter they shall jointly publish an annual report showing progress toward the targets, the numbers of men and women employed in construction, maintenance and management, relations with labour unions, and the growth of co-operatives and non-profit corporations.
As I have said, Mr. Speaker, the substandard housing produced in such large numbers by the present housing and real estate industry is itself, of course, not the main cause of poverty. The main cause is low income. However, substandard housing also contributes heavily to poverty.
I would like to give some examples of how bad housing deepens poverty, increases poverty and makes poverty harder to overcome. In the Northwest Territories, for example, according to a survey made a year ago as many as 11 people in some settlements were living in two bedroom bungalows with leaking roofs and faulty wiring, often sleeping in shifts to compensate for the fact that there were too few beds. There is an increase in family violence, assaults between spouses, in breakdowns of families and in high school drop-outs. There is a zero vacancy rate for rental units in Yellowknife. Waiting lists there contain up to 100 names for a single apartment when there is a vacancy. In other words, life is being damaged by bad housing.
In Toronto, a recent Metro Social Planning Council report said that the high cost of rental housing is leading to hunger, sickness and emotional trauma for many of Metro's most vulnerable and disadvantaged households. This is in Toronto where the vacancy rate in the city is .03, or three apartments or houses out of 1,000 for rent. The result is malnourishment of the children and neglect in families. There are more than 20,000 men, women and children waiting for subsidized housing in Metro. There are more than 4,900 families and 441 seniors on the waiting list for the Metro Toronto housing authority units. Children have been placed, of necessity, into foster homes only because their parents' homes were too crowded to help them. Yet this year, City Non-profit Housing and Metro Toronto Housing Company Limited could only build 300 new units each. We are not nearly keeping up with the need.
In Halifax, it is stated that the vacancy rate for rental housing in the Metro area has consistently been below 1 per cent since 1981. The average cost of a three-bedroom apartment is between $550 and $750, yet the poverty line of $20,000 would mean such a family should probably have only

October 29, 1985
Housing
about $410 to pay for rent. Four hundred and ten dollars could not possibly get a three-bedroom apartment, which a family of four very likely needs, depending on the age of the children. They have asked for assistance to build 1,000 social housing units this year because only 252 were constructed in the last five years. Again, the result has increased homelessness- families of four and five persons are living in one room- increased family breakdowns, and increased child abuse. Physical and mental health is being affected. There are unnecessary hospital admissions and food money is spent on shelter. There is frustration of human service workers, and this does not come only from the poverty itself and the lack of income of those people, it comes from the housing and the condition of that housing. The point is we have to arrive at the understanding that housing, like education and health service, is a necessity for Canadians to provide so that Canadian children can grow up as a healthy part of this country.
One more point in regard to the effect of housing itself on poverty, Mr. Speaker. Over one-sixth of Canadians were below the poverty line in 1984, that is, half of the single elderly and half of the singles under 25 years of age, but the gap between rich and poor also widened during the last four years. What this means is that every year there are more people who are in poverty, and those are nearly always the same people who are damaged by the substandard housing.
Let me now outline how the real estate and housing industry, helped by the federal Government, so misdirected and squandered the wealth and revenues of Canada over the last generation that many hundreds of thousands of house and apartments fall below the national standards of health and welfare.
First, the land. Land prices for housing have risen crazily since World War II in most cities, where three-quarters of Canada's people live. Prices often jump by 10 times over 10 years, five times faster than wages. The land sharks defend this price gouging as the natural, inexorable product of the impersonal market. But we know from experience that that argument is unparallelled, unmitigated, and self-serving balderdash. It is politicians in Government who help their friends in business by spending huge sums of taxpayers' money on roads, railroads, port and airport installations in a way so as to enable land owned by their friends to fetch a higher price. Tenants and homeowners must pay twice, once in their taxes and again in rent or mortgages because the Government will do nothing to set a ceiling on prices.
Look at Toronto's Dome Stadium, Mr. Speaker. The CNR, a Crown corporation, is giving $50 million worth of public land to private corporations so that they can skim a profit. They plan to build luxury office buildings around it, maybe luxury condominiums and a few luxury rental apartments, although the rental vacancies in Toronto are .03 per cent. Offices, which Toronto needs like the bubonic plague, are several hundred times higher in their vacancy rate. People are not renting offices but that is what the builders build. Many condominiums are going unsold. Why is the land not donated for low rental housing instead?
Second, interest rates. Since the federal Government 18 years ago lifted the ceiling off housing mortgages, the banks have increased the 2 per cent spread between what they pay for the money they invest and what they get for it. They have increased it to as much as 6 per cent, 8 per cent or 9 per cent, triple or more the take. No wonder no more than one Canadian in five can now really afford to start buying a house.
The federal Government, which enjoys restraining workers and small business, ought to begin by restraining the banks. Even if the Government cannot control inflation rates, it can and must stop the banks from pushing inflation higher through extortionist interest charges on mortgages.
For example, in August 1981, the Consumer Price Index was high enough-12.8 per cent-but the prime loan rate-


The Acting Speaker (Mr. Charest):: Order, please. I regret to interrupt the Member. I would just like to call his attention to the fact that he has approximately one minute left. Perhaps he would like to wind up.


Daniel James Macdonnell Heap: Mr. Speaker, I thought I had 12 minutes from the time we came back because I had eight minutes before.
The prime loan rate at chartered banks was 22.75 per cent, nearly 10 points higher than the inflation rate. The conduct of the banks helped bring down the last Government and is now helping to bring down this Government.
I am sorry on account of the interruption I will not be able to make all my points. I want to point out that the third reason for the unreasonably high cost of housing is that the taxes which the federal Government collected have been given disproportionately to developers over the last eight years, $1.5 billion on one program alone, namely, the Multiple Unit Residential Building programs. The money would have been better spent if it had been given to the co-operative and the non-profit corporations so that residents of those apartments, who have an interest in the maintenance and in creating a community, would be able to preserve the benefit of that investment. It has not happened in the way the fly-by-night developers have done it. I am asking that half a million houses be built by the Government over the next five years.


The Acting Speaker (Mr. Charest):: I am sorry to call the Hon. Member for Spadina (Mr. Heap) to order, but the 20-minute period is now over.


Mr. Joe Price (Parliamentary Secretary to Minister of Labour):: Mr. Speaker, by way of introduction, I should like to ask the Hon. Member where he stood when the "Clark" Government of 1979 introduced the mortgage interest deductibility feature and was partially defeated on it. I assure him that such a program was not designed for the rich. It was designed to make housing available to those people who were having difficulty finding suitable housing.
However, the Government welcomes the motion of the Hon. Member, for it raises some very important matters upon which we have acted during the past year. Of course I am referring
October 29, 1985

to the housing review and consultation process. This process involved and continues to involve the active participation of the provinces, representatives of municipal interests, natives and many other important players in the housing sector. Moreover, one of the key purposes of the process is to develop better ways of ensuring that Canadian in need have access to affordable, adequate and suitable shelter. Today, and in recent weeks and months in the House, the Hon. Member has raised some important questions about the consultations and about the directions of federal housing policies. On behalf of the Government, and in particular the Minister responsible for CMHC, I will take this opportunity to address some of those questions and to speak generally about the housing consultations and policy directions which are emerging.
A good place to begin is with the question as to why the housing consultation process was undertaken. The answer in large part was indicated in the economic statement of the Minister of Finance (Mr. Wilson) in November of last year. At that time the Government committed itself to renewing the strength of our economy. To do this, we pledged to put our own fiscal house in order and to get control of the deficit. We also set out to improve co-operation between the two main levels of Government and to get Canadians in general working again in pursuit of national goals. These objectives bear directly on housing.
When the new Government assumed office a year ago, federal housing expenditures were on the rise. There was a pressing need to get those expenditures under better control and to ensure that limited funds were expended efficiently and effectively. There was also a clear need to improve federal-provincial co-operation in housing. Housing is one of those areas in which both levels of Government have roles and some very important responsibilities. At times we had programs working at cross purposes, as well as duplication in programs and administrative overhead. This created confusion in the minds of the people the programs were supposed to help. It also increased the costs to both Governments and of course to Canadian taxpayers.
The housing actions of Governments also created problems for the housing industry. There was particular concern about the "on again-off again" programs initiated at both levels of Government. What the industry needed was reasonable stability and certainty in its operating environment. It wanted the federal and provincial Governments to commit themselves to a common approach, a common game plan. It wanted the federal and provincial Governments to consult, to co-operate and to co-ordinate their housing activities. All it was asking for was a stable housing environment within which to operate. It was certainly not an unreasonable request.
There is one further point about federal-provincial relations in housing which needs mentioning here. Over the last decade the federal Government has assumed on a national basis an increasingly larger share of social housing expenditures. In some provinces the federal Government has been bearing nearly all the costs of new activities.
Housing
Provinces must recognize their responsibility to act in partnership with the federal Government. This means that they must contribute their fair share to the costs of housing programs. The reasons I have just discussed for undertaking the housing review and consultations suggest the objectives toward which federal housing policies should strive.
In many speeches to housing groups in the last eight months to ten months, the Minister has outlined four objectives of the Government. One is to build a national consensus on appropriate objectives of federal housing policies and programs. Second is to design effective programs to meet those objectives. The third is to improve the relationship between the federal and provincial Governments in housing and remove needless duplication in the administration of programs. The fourth is to achieve a fairer balance on a national basis between federal and provincial housing expenditures. Considerable progress has been made toward achieving these objectives, thanks largely to the co-operative participation of the many housing interest groups as well as the provinces in the review and consultation process.
I will now outline some of the conclusions and directions which are emerging from this process. A consensus has been building around a number of objectives for federal housing policy. What Canadians have been telling us is that the paramount purpose of social housing programs should be to assist households that cannot afford decent shelter; that federal housing policy should aim to strengthen security for home owners and prospective home owners through steps to foster private market development of longer term, fixed interest rate mortgages; that the Government should ensure continued access to mortgage funds in all parts of the country; and that moderate-income households unable to afford home ownership should have opportunities for security of tenure.
The next question concerns programs to meet those objectives. In the case of social housing, it is generally accepted that there is a need for a mix of programs involving the construction or acquisition of housing, the provision of assistance to enable households to pay market rents, and the rehabilitation of substandard low-cost housing to bring it up to minimum standards. If the most cost effective solution is to be put in place, flexibility to apply these approaches in different proportions across the country is required.
In the consultations it was generally felt that the federal Government could take steps to help Canadians achieve the security they desire through home ownership. This assistance can be achieved by the federal Government working with the private sector to create an environment for the development of long-term, fixed rate mortgages. There is universal support among housing interest groups and the provinces for mortgage-backed securities, which will contribute to the develop of longer term, Fixed rate mortgages. The Government has indicated that it intends to proceed with a mortgage-backed securities program.
There was also strong support for the need to ensure access to mortgage funds on an equal basis across the country. Not

October 29, 1985
Housing
surprisingly, there was considerable suppot for the continuation of public mortgage insurance.
Another objective around which a consensus has been building is what the Minister has called opportunities for security of tenure for moderate-income households unable to afford home ownership. The Government recognizes that the co-operative housing movement has made a significant contribution to housing in Canada, and that many moderate-income households look to co-operative housing as a way of achieving their housing aspirations. The Co-operative Housing Foundation has put forward an innovative proposal for financing co-operative housing, and the Government is continuing to consult very closely with it on the proposal which involves the use of index-linked mortgages.
I have talked briefly on the merging consensus on appropriate objectives of federal housing policy and on programs to meet those objectives. I want to move on now and talk about the federal-provincial discussions in housing. Last December federal and provincial housing Ministers met in Ottawa and agreed to work together in a new spirit of co-operation and to examine housing programs to ensure that they are effectively targeted to those in greatest need, and efficiently delivered. I might note here that, under the previous Government, the last multilateral meeting of federal-provincial housing Ministers was held in June, 1981, some four years ago; whereas this Government has participated in two such multilaterals in the space of eight months.
The second meeting of federal-provincial housing Ministers was held in Calgary in early July of this year. The Ministers reached an agreement on a number of matters including acceptance of a report on market housing, a declaration of unanimous support for mortgage-backed securities and agreement to a set of principles to govern future federal-provincial territorial activity in social housing. These developments have led some to worry that the federal Government might be removing itself from social housing and simply turning it over to the provinces. I can assure those that might think that is happening that the federal Government has no intention of reducing its commitment to social housing.
The discussions that have been ongoing between federal-provincial housing Ministers and officials have focused on ways of co-ordinating federal and provincial initiatives, of overcoming duplication between Governments and rebalancing, on a national basis, the relative expenditures of both levels of Government.
The set of principles on social housing agreed to at the July conference did include the principle the provinces may deliver social housing under conditions acceptable to both levels of Government. From the federal point of view, those conditions include assurances that federal housing objectives are met and that mechanisms are in place to ensure federal accountability.
There should be no doubt about federal objectives nor about the Government's commitment to ensuring that its objectioves are met. Regardless of what happens in program delivery,
there will remain the need for the federal and provincial Governments to continue to work together and plan social housing strategy.
In addition to concerns about future federal-provincial roles in social housing, there have been charges from some who should know better that the review and consulation process has not been open and fair, that groups interested in housing have been excluded from the process. There is absolutely no truth to this. From the start, the Government was committed to an open process and welcomed, indeed encouraged, the participation of all interested parties. I think a look at the process that has been followed clearly demonstrates this fact.
In late January the Minister released a consultation paper on housing. It was intended to stimulate and focus discussions during the consultations. About 8,000 copies of that paper have been distributed to date. The response to it has been substantial. In fact, it has been overwhelming. The Minister has received over 300 briefs and letters from a wide range of interested parties including social policy and service organizations, local tenant associations and co-operative housing groups, native associations, business groups, representatives of municipal interests and many individual interested Canadians. Also included among the respondents were all of the major housing interest groups.
Following receipt of the briefs the Minister and myself began a series of personal meetings, most of which took place in March and April of this year. The purpose of these meetings was to clarify issues in the briefs and to discuss housing generally with the groups. These meetings have involved the participation of some 21 different groups. The participants included industry association, social housing groups, financial organizations and groups representing women, the poor, the elderly, the disabled and natives.
In all cases, though, regardless of whether meetings with interested parties took place, responses to briefs and to the many letters were provided. Over the summer the responses were closely analysed and it was then that the Minister turned to intensive consideration of the housing direction that the Government might pursue.
Furthermore, subsequent follow-up meetings have been held by the Minister's staff and senior CMHC officials with major interest groups. The purpose of these meetings has been to inform the groups about federal-provincial discussions, to respond further to proposals contained in their briefs, and to outline and discuss possible directions that we might take.
I want to tell the Hon. Member, because I know he has a special interest in native housing, that native groups are among those with whom the Government is closely consulting. The Minister has received a number of briefs and letters from native organizations across the country. He has met twice now with the Native Council of Canada and has extended an open invitation to the Assembly of First Nations. In addition, members of the Minister's staff and senior CMHC officials have met with the Metis groups and the Inuit groups of Canada, as well as with the NCC and the AFN. The views and
October 29, 1985

concerns of native groups are being taken into full account in the housing review.
The openness and co-operation that has been displayed in the consultations will not be lost. The Government intends to continue to rely on the co-operation of all those involved in the housing sector as we proceed to develop and put in place policies and programs that effectively and efficiently meet the housing needs of Canadians.
Mr. Speaker, in conclusion, the housing policies and programs that this Government will develop and implement will be widely accepted because they will have evolved out of the input of all interested Canadians. Those policies and programs will be the products of consultations promoted by a Government that listens and then acts.


Jean-Claude Malépart: Mr. Speaker, I am pleased to take the floor on such an important issue as housing, and I want to commend the New Democratic Party Member for introducing this motion.
Mr. Speaker, before dealing with the motion I would like to comment on the remarks of the Progressive Conservative Member who just spoke about consultation. Perhaps they are trying to make people believe that the Government is concerned about social housing and housing generally, but we have to remember that the President of the Treasury Board (Mr. de Cotret) tabled a document last November, and that the first step taken by this Government was in the sector of social housing where they slashed $9.6 million off the envelope for social housing, cooperatives, low rental units and nonprofit organizations.
There is another sector where the Progressive Conservative Government did not hesitate to wield the axe-$29.4 million cutbacks in the Residential Rehabilitation Assistance Program, RRAP for short.
Here is what the Progressive Conservative Government did with respect to two programs which had been very popular for a number of years because they were designed to improve housing in Canada: cutbacks of $29 million in RRAP, Mr. Speaker, and the people of Quebec had to bear the unfairness of those measures taken by the Government. Unfortunately all Quebec Conservative Members did not say a word about this.
Mr. Speaker, cutbacks amounted to $17 million in Quebec, as compared with only $2 million in Ontario.
As we recall, Mr. Speaker, this decision was made before the elections in Ontario and we know it was a political manoeuvre to try and save Mr. Miller's neck, but the people saw through this scheme and threw out Mr. Miller and the Ontario Conservative Party.
Mr. Speaker, in this field the previous Government always saw to it that funds were available to improve the quality of
Housing
housing and create jobs. The funds available under RRAP were quite useful and even necessary in Quebec and the Maritimes, while Ontario and the western provinces were spending funds allocated under rental unit construction programs. That was the request. In view of the fact that Ontario and Western Provinces needed money for the construction of rental housing, while Quebec and the Maritimes needed less, the previous Government made sure that in terms of fairness and equity in the area of housing funds, Quebec and the Maritimes received extra money under the residential rehabilitation program.
Unfortunately, this Conservative Government last year, as I said, slashed $17 million from the residential rehabilitation programs and cuts were made in all the constituencies represented by Conservative Members. The only area where this could be saved is the City of Montreal, on Montreal Island, because there was quite a bunch of Liberal Members who knew about the issue and we had a Mayor who looked after it.
Mr. Speaker, in the area of rental housing construction, still before the election, the Province of Ontario received $22 million, the Province of Quebec, nothing; Manitoba, $4.9 million, the Province of Quebec, nothing. The Province of Saskatchewan, $1.9 million, the Province of Quebec, nothing for the construction of rental housing, in addition to having suffered a $17 million cut under the RRAP program.
I have clippings here, Mr. Speaker, which show that these are not just partisan comments from an Opposition Member trying to bicker at Government Members.
Mr. Speaker, the Mayors are opposing the decision, including the Mayor of East Angus. I have another here, the Saint-Colomban Home and other areas where the Mayors, the Regional Community of Becancour oppose the decision made by the Conservative Government and the lack of action by the local MP to defend the interests of his constituency with regard to those cuts. The Regional Municipality of Arthabas-ka, Mr. Speaker, and this is in my press clipping, on the regional level. In the Bellechasse area, cuts in the RRAP program, Mr. Speaker; nearly 50 per cent of the former budget is slashed out.
Mr. Speaker, there are places, with the distribution that had been made for all municipalities, where there was a budget to restore one unit per municipality. That is stupid, but it is a fact.
Mr. Speaker, the Municipality of Rouyn-Noranda, and there are Conservative Members here, sitting before me. Mr. Speaker, I would be furious if my Party had done this to me. In Montreal, we looked after that, we provided protection. And there also, they allotted $81,000 instead of $140,000! The city of Sherbrooke, and I presume you know that area, and I have here a clipping from La Tribune of April 11, 1985; the City of Sherbrooke was frustrated at the cuts in the RRAP program, and, moreover, certainly the City of Sherbrooke was frustrated because it was run from Longueuil, Mr. Speaker.

October 29, 1985
Housing
As far as Windsor, Arthabasca and many other municipalities are concerned, I can tell you that all the cuts in the RRAP have affected ridings held by Conservative MPs from Quebec. I am aware that they were not very clever at the time and they could not even find the washrooms on their own, but I dare hope that they will wake up in the coming year and make sure Quebec gets its fair share, just as Liberal Members used to.
Mr. Speaker, these cuts have resulted in 4,600 fewer housing units, a loss of some $17 million which Quebec was supposed to get but did not, and a loss of 1,330 jobs in the construction industry. Now you know!
Mr. Speaker, the Conservative Member who took part in the debate-the Parliamentary Secretary to the Minister I think it was, but I am not sure-referred to the Government's famous consultations and Blue Paper. The Minister responsible for housing is a Minister in name only, for we know that it was the Deputy Prime Minister who was in charge of the study, and I demonstrated to you this afternoon that it was the Deputy Prime Minister who insisted that the social reasons behind the tax exemption on drugs no longer existed. What can you expect in the area of social housing from a Minister who is going to levy a 10 per cent tax?
After spending a great many years in the opposition claiming they knew all the answers. Conservative Members, many of them freshly baked greenhorns now sit on the Government side and do anything but ask questions. In Montreal, the Front d'action populaire en amenagement urbain has held a press conference. This organization includes technical resources and cooperative groups who are asking that the Government establish a Parliamentary committee to consider a reform or an improvement of our housing programs.
Mr. Speaker, the consultation now going on is only a sham. The people in Quebec have not even been able to meet the Minister. They had to be content with the fellow who carries his suitcase, the Parliamentary Secretary. In addition, this meeting could not even be held in French in Quebec. Yet, we all know that Quebec has always been to the forefront as far as housing, cooperative, rehabilitation and repair programs are concerned, that it has innovated in this field under governments of all parties, whether under the Liberals of Robert Bourassa, when I was Member of the National Assembly with my colleague, or under other administrations. Quebecers have always been innovators.
Yet, there is no Quebecer in the consultation group, no Quebecer to take part in the decision-making process. Quebec was ripped off by the Prime Minister when the RRAP and the social housing program were axed.
Mr. Speaker, if we really want to have an effective and healthy policy for housing, we have to stop using band-aid solutions. First, it is essential to hold a national conference and include all those involved in this field. For the moment, the Conservative Party is content to meet its friends who own multiple unit buildings. Of course, and I do not blame them,
they want to make some money, but they forget that they have tenants. We should do what was done in the case of pension reform by Miss Begin and Mr. Allen MacEachen, the former Minister of Finance, who organized a national conference to discuss the issue of pension reform with all the interested parties. As long as there are secret consultations, apparently by the Minister responsible for housing, but in fact by a task force led by the Deputy Prime Minister, the Government should say so and stop lying to people. The national conference on housing should include architects. They have a lot of impact on the cost of residential construction. The conference should also include young families who could suggest mechanisms to provide ownership opportunities to young couples who want to look forward to the future. Why is it that, as the Hon. Member seems to be trying to say, and I know what he means as I was Parliamentary Secretary for housing, and the Hon. Member has read the text prepared by the officials, will it be suggested that there be a 50 per cent cutback in social and cooperative housing and that this money be used instead for housing subsidies?
Mr. Speaker, if there is no rent control in a given province, a housing subsidy would simply mean that the landlord would increase the rent and the taxpayers' money would go directly into his own pockets. On the other hand, if the housing subsidy is given only to tenants, what will happen in all the rural areas where there are small homeowners who cannot make both ends meet?
Cooperatives therefore were essential and needed to house senior citizens who had low income, had worked all their lives and received small pensions, for they were not accepted in social housing units and did not have enough money to live in residences where rents are higher and geared to more affluent people. So they got together in housing cooperatives or nonprofit corporations which made it possible for all people with average income to find accommodation in homes for the elderly where they felt secure because these were new buildings offering protection and various facilities.
The federal-provincial link should also be discussed at those meetings, at this national conference. I happen to know that the Government of Quebec wants the Canadian Government to hand over all such funds so that the province might allocate them as it sees fit. I met with most Quebec groups responsible for cooperative housing and nonprofit organizations, and they all say no. I can tell you that some of them voted yes in the referendum, but in this case they say no, we need protection and the low rental housing sector in Quebec must be administered by the province.
In conclusion, Mr. Speaker, I would say it is imperative to debate the housing issue, and I dare hope that the Government will put an end to its pseudo-inquiry and set up a true national housing conference.


The Acting Speaker (Mr. Charest):: I am very sorry to interrupt the Hon. Member for Montreal-Sainte-Marie (Mr. October 29, 1985

Malepart), but the hour allotted for Private Members' Business has now expired.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the House under Standing Order 46 deemed to have been moved.

Mr. Allan Pietz (Welland):: Mr. Speaker, the question I wish to address this evening is one I raised with the Minister of Transport (Mr. Mazankowski) in Question Period on October 21 having to do with the upgrading of the Welland Canal section of the St. Lawrence Seaway. The blow-out of Lock 7 on October 14 has served to focus attention on the need to look again at upgrading the canal facilities. We now know that the canal will be open on November 6. The St. Lawrence Seaway Authority is to be commended for the fast action taken in repairing the damage. Notwithstanding this, the matter of upgrading the canal is one which must be addressed.
The recent accident has affected all of the communities along the canal. Sailors have been laid off and industries, both local and across the country, have been affected. Detractors would have us believe that the canal has outgrown its usefulness. That is not true. According to statistics gathered by the Canadian Trade Commission, 26 per cent of Canadian goods are transported by truck; 32 per cent by rail; but fully 40 per cent of Canadian commodities are shipped by water. There is no indication that this will change. Water transportation is cheap, fast and efficient and it will continue to be that way if we maintain our waterways to international standards.
I would like to take a few moments to outline briefly some of the history of the canal. 1 think it is important for Hon. Members to realize what this engineering marvel has done for the country's development. When the first Welland Canal was completed in 1829 it provided the means to bring grain cheaply and quickly from the interior of the country to the St. Lawrence River and on to Europe. One forgets what an incredible achievement it was and is to have conquered the obstacle presented by Niagara Falls, making it possible to link the Canadian West along 2,200 miles of continuous inland waterways to the Atlantic Ocean.
Since 1829 the canal has been rebuilt four times. The first canal included 40 locks. Later this was reduced to 27 locks and still later to 26 locks.
At the turn of the century, a report of a Government-appointed commission which said that wheat, lumber, copper and iron from the upper lakes would pass through the canal in
Adjournment Debate
increasing amounts were it not for the fact that larger boats of the period could not go through the then existing canal resulted in the 20-year construction of the present waterway which was opened in 1932 and which became generally known as the fourth Welland Canal.
For this fourth canal a new route was chosen which would take ships across the Niagara Peninsula in virtually a direct north-south line of only 26 miles. The difference of 326.5 feet between the levels of Lake Ontario and Lake Erie was overcome by seven lift locks and one control lock. Three of the seven lift locks are twinned, thus allowing ship traffic to move in both directions simultaneously.
Improvements have been ongoing over the years. In anticipation of the opening of the St. Lawrence Seaway in 1959 the depth was increased to 27 feet. A sophisticated control centre was installed in 1966 and it is being updated this year. The most important improvement, however, was the $200 million Welland Canal bypass which was completed in 1973. The old nine-mile stretch of the Welland Canal which bisected the city of Welland and imposed a navigational problem for the new and larger ships was abandoned and replaced with a new bypass.
This project took seven years to complete, during which period I was mayor of the city of Welland. 1 am, therefore, very aware of the immense amount of work which went into this realignment project not only to the canal itself but to the railway and road systems which were taken under the new channel by means of tunnels.
The completion of the bypass channel allows lakers 730 feet long to travel through the Seaway locks. What a difference this is from the 100 by 20 foot vessels which used the first Welland Canal.
1 hope through this brief historical outline I have illustrated how ongoing improvements to the Welland Canal have kept it up to world engineering standards. The Seaway's corporate plan, however, indicates that the Welland Canal will not be able to handle the increased demand which will be placed on it in the future in terms of both the number of ships using the canal and the larger size of ships which will be in use in the 21st century.
The corporate plan indicates that the capacity pressures will surface in about 15 years, around the year 2000. That is not a long time away, Mr. Speaker, for improvements to be planned. The recent accident at Lock 7 is currently holding up 107 ships in the Great Lakes system. The financial losses this is causing to the Seaway, shipping companies and suppliers are running at a very high level. I therefore suggest that the Seaway authority consider a program of upgrading the lock system at an early date.
A necessary part of this process would be a cost benefit analysis of proposals which have already been made. These proposals include three conceptual plans for lock improvements. One plan is a new system of superlocks in a new location which would lower the number of locks to three, as

October 29, 1985
Adjournment Debate
well as widening them for larger vessels. The necessary land was purchased in the three communities at that end of the Seaway in 1975 but the project has since been placed on hold.
The second plan is the conventional twinning plan which would twin locks numbered 7, 3, 2 and 1 in the same manner as the flight locks 4, 5 and 6. Here again, the necessary land is in place.
The third proposal is the hybrid twinning plan which also calls for the existing locks to be twinned but with longer and wider locks to accomodate the larger ships of the future.
As these plans are already drawn up, and considering the importance of the canal to Canada's future economy, I would like to ask my question again, this time to the Parliamentary Secretary. In light of the recent accident and in light of the future demands which will be placed on the current facilities, will these proposals be given serious consideration with a view to implementing one of them in the near future as the Government looks at improving the Welland Canal?


Mr. J. M. Forrestall (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, given the importance attached to this waterway system, of course the Minister will give very serious consideration to the proposals put forward by the Hon. Member this evening and which have been reiterated by him on a number of occasions.
I would like to take the opportunity to briefly indicate to the House, first, that because of the uniqueness of the accident of the blow-out-the fact there was no history to rely on- congratulations are probably in order to the officials of the Seaway, the contractors, subcontractors and the men who actually worked on the site for the splendid and 1 feel very responsible and professional way they effected the repairs. Concrete will be poured into the blow-out hole commencing later today, if it has not already been done. We are indeed optimistic that the reopening date of November 6 not only will be met but will be exceeded. Hopefully we might have ships moving prior to that date. There are 107 ships in the system. We can move these at the rate of about 24 or 25 a day so it will take about a week to clear up the backlog and return the activities of the Canal to normal.
To address very briefly the contingency plans that have been put in place, the House will be aware that the Minister of Transport (Mr. Mazankowski) and the Minister responsible for the Canadian Wheat Board (Mr. Mayer) have made the offer and, indeed, grain will move assisted by CN which will locate and operate grain hopper cars east of Thunder Bay. The Government, in its wisdom, and to facilitate the movement of this product, will assist in the payment of any additional costs that are incurred. We are very pleased with the progress of the repairs. Those involved with them are to be congratulated.
With respect to the cause of the blow-out, I do not think we will know that with any certainty for some time to come. The detailed analysis will take quite a while. I thank the Hon.
Member for his suggestions and reassure him that the Minister and the Government will take them seriously.


CO-OPERATIVES-GOVERNMENT RESPONSE TO TASK FORCE REPORT. (B) REQUEST THAT CO-ORDINATING AGENCY BE ESTABLISHED
Abram Ernest Epp: Mr. Speaker, 1 appreciate the opportunity of saying something more this afternoon about the importance of co-operative development in Canada. Two weeks ago today I asked the Minister responsible for liaison with co-operatives (Mr. Mayer) about a Government response to the report of the National Task Force on Co-operative Development. I was not satisfied with his answer at the time, but I feel honoured today to have him in the House to respond further in the minutes that he has to this report. 1 really do look forward to him saying good things about what the Government plans to do.
In the minutes that lie before me, Mr. Speaker, I would like to say something about the importance of co-operatives and to underscore the importance of a substantial federal response. Mr. Ray Siemens, the President of the Co-operative Union of Canada, wrote to all Members of Parliament early this year sending along copies of A Co-operative Development Strategy for Canada which dates from May of 1984. He sent a memorandum with that, the second paragraph of which reads:
The new government has indicated that its primary objective "is to put in to place a policy framework that will release the creative energies of Canadians to build a better future for themselves" and challenged Canadians to participate in wide-range consultations about this framework and the future direction of our country.
He goes on to indicate that people involved with co-operatives in Canada were very happy to have that invitation and joined in the consultation. I am aware that those discussions continue.
The report itself, A Co-operative Development Strategy for Canada, makes a number of points that I think help us to appreciate how very important co-operatives could be to achieving just what the Government set out in the fall of 1984 as its own objectives. On page 5 of the report it reads:
Pairing the democratic responsiveness and economic efficiency that characterize co-operative business, we believe that co-ops can play a key role in Canada's national development. As serious as the new problems are that face Canada, they also open many opportunities for new development. We have identified four such areas where co-ops can make a difference. Worker-owned co-operative businesses offer a direct means of meeting the often desperate need of many Canadians for jobs and a sense of control in their lives. The rapidly increasing costs of health care systems are straining government finances; co-operative health care delivery systems provide an attractive and affordable solution. Fisheries co-ops are an overlooked, yet critical part of the solution to problems facing the fishing industry. And in meeting the demand for affordable housing in this country, the co-operative model has proven to be a successful alternative and could be expanded to the benefit of many Canadians.
The report focuses on these four areas. In scanning the 32 recommendations which this task force arrived at last year for developing co-operatives in Canada, I will note those that deal specifically with matters that the federal Government could support.
October 29, 1985

Therefore, in connection with worker co-operatives, I note that Recommendation No. 12 focuses the importance of a support system which could provide the encouragement that workers need to develop co-operative policies for control of their industry. In fact, I might point to Canadian Porcelain in Hamilton as an example of such a development being undertaken or approached last spring. I do not believe it would be unfair to the Government to express regret that the Department of Regional Industrial Expansion did not ensure that that project moved ahead.
A support system established under this recommendation and, as Recommendation No. 13 says explicitly, the endorsement of the federal Government having been given to such possibility, we would see worker co-operatives as one of the means by which individual Canadian workers in their communities and work-places could have a larger role in the direction of their work-place and could actually see a return in the gains in which they participate.
Recommendations Nos. 15 and 16 deal with the matter of health care, specifically the possibility of health co-operatives. In both cases, they call for federal Government participation. It is suggested that it would be very useful to have a substantial conference to explore this, since these possibilities have in fact been demonstrated by community clinics. It would be useful to have such a conference, with the Federal Government playing its part in funding it. It would also be useful, as Recommendation No. 16 suggests, to establish a development assistance group in this area. Again, the federal Government could play a very useful part.
There is the question of housing and the importance of co-operative housing in this country. Recommendation No. 23 suggests that that be continued. I understand that the federal Government appreciates the importance of this sector. I realize that another Minister is responsible for housing and I am very pleased to hear that progress is being made.
The fourth area that this task force singled out concerns the matter of fisheries co-operatives. There are a number of recommendations that help us to appreciate more of the challenge that faces the Minister, who is here this afternoon, and the federal Government. It is important that co-operatives receive similar financial treatment as the conventional capitalistic enterprises with which we are familiar. Surely worker co-operatives should not be discriminated against simply because they are co-operatives.
There is the matter of the establishment of a central division in the Department of Fisheries and Oceans and the importance of technical resource groups.
Although I may have started a minute or two late, Mr. Speaker, may I conclude by suggesting that with respect to Government support generally, it is important that the federal Government take up the recommendations, specifically Recommendations Nos. 30, 31 and 32. I look forward to hearing the Minister talk about the progress he is making in finding personnel and establishing exactly how the federal Government plans to move ahead in providing a response to
Adjournment Debate
this matter. He has already indicated that he fully appreciates its importance.


Hon. Charles Mayer (Minister of State (Canadian Wheat Board)):: Mr. Speaker, first I want to thank the Hon. Member for the way he co-operated with my office in arranging this time so I could be here to respond this evening. Second, I want to thank him for being the first person to ask me a question in the House of Commons about this very important sector. It is a sector that accounts for approximately $15 billion in sales and it employs 70,000 people. Approximately one out of every four Canadians belongs to a co-operative organization of some form.
In the time I have available, I want to cover two areas. The Hon. Member will know that we made some specific progress in the area of employment co-operatives. The Minister responsible for CMHC is also very aware of the potential and in fact has paid more attention to co-op housing, as far as allocations are concerned, than has previously been the case with other Governments.
We are very much aware of the specific concerns with regard to finance in the Minister of State's financial paper. We are also aware of the potential in co-op to co-op international trading for expanding our ability to export outside the country. The Department of Agriculture, which has most of the support staff with which the Government presently works with co-operatives, had a trade mission to Japan last fall for that same purpose.
We are also aware of the potential in health care and in fisheries. We could go on and on. There is potential in the co-op sector in this country to expand and deliver programs effectively and as efficiently as any other sector. We certainly do not want to do anything but encourage that sector to continue.
Those are the specifics, Mr. Speaker. Now to a larger more general question. The Hon. Member for Thunder Bay-Nipigon (Mr. Epp) has the report and he is obviously very familiar with it. He will know that Recommendation 30 talks about a small secretariat within government that could be used to support the co-op sector. That is the one with which we want to take the most care and be the most diligent about because it is the one that will provide ongoing support for the co-op sector.
I think it is very important that we put something in place with which the co-op sector feels comfortable and with which it can work. It is something that is not going to take over and expand as a bureaucracy or attempt to direct the co-op sector in the direction it would see it go. That is the area in which we want to take the most care, and I have been in very close contact with the co-op sector on it, including all the people connected with the executive of the CUC. We are close to being able to announce two names. These people will be on a contract basis to help us draft a response to the specific recommendations. When co-op people come to Ottawa and to

October 29, 1985
Adjournment Debate
the federal Government we want them to find a co-ordinated approach, one that can carry their concerns after they leave town.
As a first example the first ever meeting of Ministers responsible for co-ops was held in Regina two weeks ago. I think it was a very successful meeting in that the people who were there were very pleased about having the opportunity to attend. For the Hon. Member's information, we announced then that we will be meeting again in February in Ottawa, specifically to come with recommendations and thoughts about how to use the employment co-op idea to expand the number of people who are working.
I thank the Hon. Member for his question and I thank him for giving me a chance to expand a little bit on the attitude and on some of the things we are doing as far as this important part of our society is concerned, both on the economic and the social side of it.


SOCIAL AFFAIRS-INCREASED ROLE OF VOLUNTARY ORGANIZATIONS. (B) REQUEST FOR FEDERAL-PROVINCIAL DISCUSSIONS
Mr. David Orlikow (Winnipeg North):: Mr. Speaker, last week I directed several questions to the Minister of Finance (Mr. Wilson). I pointed out that an increasing number of people were finding it necessary to depend on voluntary agencies for food baskets, for meals and for clothing. I asked the Minister whether it was not time to discuss with his counterparts in the provinces what was wrong with the social security system established over the years since the end of World War II; why so many people seem to be falling through the cracks in the system and why so many people are having to depend on charity. I urged the Minister to work with the provincial Ministers to improve and expand the Government programs so that people would not have to depend on charity.
In the last 40 years, since the end of World War II, we have developed a whole host of programs which we thought would meet the needs of Canadians; for example, the unemployment insurance program, the pension programs, the medical and hospital insurance plans and the provincial social welfare programs, funded in part by the federal Government. Most Canadians believed that we established a system which would meet the needs of Canadians.
As unemployment has grown in recent years, and we have seen the number of unemployed people increase to 1.5 million or over 10 per cent, we have witnessed a growth in the voluntary effort. Last week it was brought to the attention of the people of Canada and to Members of Parliament by the National Council of Welfare that over four million Canadians now live in poverty, or 17.8 per cent of the population, and that the number of low-income children under the age of 16 years has risen steadily each year from 1980 onward, so that we now have 1.2 million children living in poverty, or one child in five is poor. I could continue with those Figures. The situation is unacceptable to me and should be to all Canadians.
We have seen in every city, town and village in every province from the Atlantic to the Pacific tremendous growth in the number of voluntary church, native and community groups which have established food banks so that people can obtain the food baskets, the meals or the second-hand clothing which they need. We know that in many cities some children get their first meal of the day at noon at the school they attend, and that some can only attend school after being given used clothing obtained at one of these voluntary centres. I believe Canadians in need should not have to depend upon charity. I give a great deal of credit to them and respect the efforts of voluntary organizations, but I believe the needs of Canadians should be met by government programs, provided as a right.
I call upon the Minister of National Health and Welfare (Mr. Epp) to work with provincial Ministers to upgrade and expand our existing assistance programs which are partially funded by the federal Government through the Canada Assistance Plan, so that those in want will again have their needs met by government programs, to which I believe they are entitled, and that the generous efforts of the voluntary groups can be cut back as they become less necessary.
I call the attention of the Government to the recent study conducted by the National Anti-Poverty Organization in which it was pointed out that the increase in the sales and excise taxes included in the May Budget had very adverse effects upon the poorest of Canadians. It pointed out that these taxes would cost each Canadian family several hundred dollars a year, and that the poor, or those with incomes of less than $10,000 per year, would pay twice as high a percentage of their income as wealthy Canadians with incomes of $50,00 or more. NAPO has proposed that the Minister of Finance establish a refundable federal sales and excise tax credit for those in low-income brackets. I urge the Minister of Finance to give careful and sympathetic consideration to that proposal of the National Anti-Poverty Organization.


Mrs. Gabrielle Bertrand (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, I welcome this opportunity to respond to the concerns of the Hon. Member-concerns which certainly are and ought to be those of all the Members of this House-regarding the number of Canadians living in poverty, and also to point out to the Hon. Member what is being done by this Government to combat poverty, without, of course, overlooking the increasingly important role played by charitable organizations.
We want to combat poverty in two ways. First of all, we want to take the direct approach by providing increased employment opportunities. Second, we are taking steps to improve financial support for those who are most in need.
We realize that Canadians want to work. During our first year in Government, 304,000 jobs were created. We have set up a number of projects aimed at improving opportunities for employment. For instance, the Canadian Jobs Strategy announced by Miss MacDonald was set up after consultations
October 29, 1985

with Canadians. Certain elements of this strategy are specifically aimed at improving the employment potential of certain Canadians whose chances of entering the labour market would otherwise be very slim.
In addition, the federal Government has recently reached an agreement with the provinces and the Territories to increase labour market opportunities for social assistance recipients. This agreement will make support under the Canada Assistance Plan and the Canadian Jobs Strategy more flexible while helping welfare recipients to develop skills and experience to assist themselves.
During our first year in office we have also been combatting poverty through initiatives to provide more financial assistance to those who are most in need. For example, by extending the Spouse's Allowance Program the Government has increased the income security of an estimated 85,000 widows and widowers aged 60 to 64, the majority being widows.

As a more direct response to the concerns of poor families with children, the Government, Mr. Speaker, has consulted
Adjournment Debate
with Canadians and produced a series of changes in child benefits, in its May Budget. These changes will provide increased benefits for families who are least well-off, including low-income families, by raising the ceiling of the child tax credit to $524 per child over the next few years.
We are also taking other steps to upgrade income and job securities, and I am thinking of the employment equity legislation.
Mr. Speaker, generally speaking, the measures taken by the Government to provide for economic renewal and recovery, job creation and reform of social programs, clearly demonstrate our concern and our commitment to fighting poverty in Canada. By improving our economy and our general economic productivity, we will be able to provide all Canadians with a more secure future in which they will have a better chance of making a decent living.


The Acting Speaker (Mr. Charest):: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 2 p.m., pursuant to Standing Order 3(1).


[Stage Direction]
The House adjourned at 6.32 p.m.
[Stage Direction]
Wednesday, October 30, 1985