1985-06-03

[Stage Direction]
The House resumed from Friday, May 31, consideration of the motion of Mr. Wilson (Etobicoke Centre) that this House approves in general the budgetary policy of the Government.
Mr. Len Hopkins (Renfrew-Nipissing-Pembroke):: Mr. Speaker, when I interrupted my remarks at five o'clock on Friday 1 was talking about Canada's dominant world position in the production of some of the radio isotopes most widely used in cancer therapy and the tremendous work done by the Chalk River Nuclear Laboratories. 1 spoke about the development of small reactors for heat and electricity in remote communities, which is very useful for a country like Canada. There are numerous other programs designed to ensure that nuclear power is the safest form of energy; 1 talked about continuing the development of nuclear science and to apply it in many different and peaceful ways. I emphasize "peaceful" because that is the type of nuclear energy I am talking about today.
The Government does not seem to appreciate fully the fact that all the technical and scientific capabilities of this program cannot be picked over to select some for continuation and some for termination. This has been done before anything has been put in place to take up the slack. Will the question of who should have been funding an abandoned program be addressed only when some unexpected technical difficulty has idled Ontario Hydro's reactors and we have an energy problem? We have been assured that health and safety aspects of the atomic energy programs will not be cut, but has the Government really examined the effect on these programs of the envisaged reduction in AECL research manpower? Radio isotope production for cancer therapy, for example, depends on the operation of reactors serving many other purposes. Extracting the isotopes is dependent on many technical skills. You cannot cut off the muscle power in the human limbs and still run a competitive race any more than you can cut off in-depth research and development on nuclear energy or Candu technology, and still remain competitive in the reactor market of the world.
The most worrying aspect of the comments of the Minister of Finance (Mr. Wilson) on AECL is that none of those considerations seem to have been discussed. One wonders if they have been addressed or whether one of Canada's few successes in high technology is going to be casually sacrificed, bit by bit, for a superficially favourable entry on the right side of the budget ledger. The Government just wants AECL to make it look good. The Government wants $100 million of the research and development money of AECL over the next five years. It wants $50 million of the earned savings of AECL this year and another $20 million next year.
The Prime Minister (Mr. Mulroney) is telling AECL not to worry about all the firm commitments the Government made to the Chalk River Nuclear Laboratories during the last election campaign. The Prime Minister's commitment was not worth the paper it was written on. Because of Candu technology, Canada is today the fourth largest producer of hydroelectric power in the world. Only the United States, the Soviet Union, and Japan produce more hydroelectric power than Canada. Pickering is one of our prides. There is far more power generated there since its beginning than it was ever thought would be produced at Niagara Falls.
The people working and living in the communities for many miles surrounding the Chalk River laboratories are worried. Deep down they are hurt and angry because they feel that they have been had by the Government. In the next two years alone, $110 million will be taken from them. That is a sudden shock which the industry cannot absorb at a time when nothing is in place to take up the slack. On the basis of this budget decision the nation is wondering whether it can remain competitive or whether one of the greatest successes in science research in the country, namely Candu technology, will be gradually destroyed.
I appeal to the Government to give the Chalk River Nuclear Laboratories a chance to continue this program. Keep the faith with them. Our science and research is in good shape in that area in this country. I appeal to the Prime Minister and the Government to keep this commitment. No one in the country will ever be sorry. Indeed, we will become competitive in the world, and AECL will become a jewel of pride for the country. I ask parliamentarians, as loyal Canadians, to take part in that pride in the production of modern technology, such as the Candu reactor, cancer research and other AECL programs for the good of Canadians and indeed for the good of the world.
[DOT] (mo)


Mr. Gurbin:: Mr. Speaker, will the Hon. Member elaborate
on what he believes the future of nuclear energy will be,
particularly with the NDP-Liberal alliance in Ontario? Does

June 3, 1985
The Budget-Mr. Hopkins
he think that this bodes well for the future of nuclear energy, particularly with respect to the very clear policy espoused by the federal NDP?
Would he also comment on the fact that it was John Diefenbaker and John Robarts, who was then Premier of Ontario, who initiated the construction of the first commercial-sized Candu reactor in Canada?


Leonard Donald Hopkins: Mr. Speaker, 1 expected the pressure in this debate to be diverted from the main issue in the very manner shown by the Hon. Member. It is the present Government that is cutting $100 million from Atomic Energy of Canada research and development for Candu reactor technology. It is also removing $70 million from its reserves.
The Hon. Member should not tell me about what Mr. Diefenbaker did for high technology in this country. We remember the Avro Arrow and we know what is happening today. There is a parallel between that Government and the present Government.
I would remind the Hon. Member that it was the Right Hon. C.D. Howe who started this high technology research in Canada 40 years ago. He must be turning over in his grave today at what is happening to that jewel of high tech which he created together with the Liberal Government of the day.
The Hon. Member talks about the Liberal-NDP alliance in Ontario. That is nothing compared to what is happening with the present Government. During the last election campaign, the Prime Minister sent a telex stating his commitment to the Chalk River Nuclear Laboratories, a commitment which is stronger than a promise. Yet the Minister of Finance introduced a Budget which is cutting research and development of Candu reactors in this country by $100 million over the next five years. As if that is not enough, the Government wants to make itself look good by reducing the national debt, so it will take $50 million from the earned savings of the company in 1985-86 and another $20 million next year. That is $110 million in total to be taken from the company in the first two years. That is a clear indication of the Government's intent to kill that company.
Furthermore, the discussions, which have presumably taken place, have produced nothing to replace those cuts. The Budget indicates that the Government will negotiate with Ontario Hydro, the provinces and other agencies to try to find people to take up the slack and work with Atomic Energy of Canada Limited. We have heard nothing about any action in that regard.
There are 2,350 employees at Chalk River who are concerned about what is happening to them today and to the 40 years of research that has taken place. The Government ran a campaign on what it would do for research and development. At the same time, it is downgrading and gradually destroying Atomic Energy of Canada Limited. That industry does a great deal of work for private enterprise. The Government correctly puts emphasis on private enterprise. I favour private enterprise, particularly when it produces jobs and works well. However, private enterprise cannot afford the equipment used
in high-tech research at Chalk River nuclear laboratories and within AECL generally. Therefore, it contracts out to Chalk River Nuclear Laboratories, which can take on any problem and come up with an answer.
U5)
Do not try to pass the buck to the Ontario Government. The new Ontario Government, hopefully, will have a new resource available to it called decision-making. This Tory Government we have here today has obviously been talking to the Government of Ontario over past months, but what has it come up with? Both Governments are Conservative. Do not talk to me about an alliance. The Government has decided to go ahead with this cut, upsetting the science community. For every scientist who becomes unemployed or goes south of the border or elsewhere, we will have a brain drain once again for which the Conservative Party was famous under the leadership of the Right Hon. John G. Diefenbaker, something which the Hon. Member mentioned, not I. Right now we can make the decision whether to continue to move ahead with high-tech and whether we shall service all those companies that need research and development, whether we shall continue in-depth cancer research, because not very many people realize that Chalk River is the birthplace of the cancer therapy unit.


Mr. McDermid:: It was not touched.


Leonard Donald Hopkins: Of course it was not touched. It was first put into action in London, Ontario. The Hon. Member for Bramp-ton-Georgetown (Mr. McDermid) said it was not touched. 1 did not say it was touched. What I said in my speech, and I will back up, is that you cannot be selective. You cannot go to an organization with in-depth expertise such as is in the Chalk River Nuclear Laboratories and, on a selective basis, say, "We are going to cut this and shove it aside. We are going to shove this aside but we are going to keep research on health and safety". You cannot do that.


Mr. Andre:: Why not?


Leonard Donald Hopkins: You need reactor research to produce medical isotopes. You cannot cut off your left arm and still carry the same pile of papers you carried before.


Gary Michael Gurbin: Mr. Speaker, I think the Hon. Member has established several things. First, he does not care about the debt. Second, he likes to talk about the livestock after the horses are out of the barn. One of the things in which people who might read these debates on Chalk River will be interested in what C. D. Howe actually did. Those who go back far enough and really understand what happened at the time know that because of him we lost ten years in our nuclear energy program. He did not like what they came up with. He said no, and it was held in abeyance for ten years. That is not a very broadly known secret, but that is the truth. When John Diefenbaker came to power he had a choice between an aeroplane that would not travel high enough and the Candu system. He chose the Candu system. That is why Ontario is where it is and why Canada is where it is.
June 3, 1985

Would the Hon. Member comment on the number of engineers who have been laid off by AECL in the past two years and the difference between that and what he is trying to tell us? He is very good at raising fears and concerns among people in the nuclear industry.
Could the Hon. Member explain to us the real strength in the nuclear industry and whether he thinks things have been OK in the last four or five years in the way Canada has been proceeding with the Candu system and the whole nuclear energy system? Has it been fine and dandy? Would the Hon. Member have kept the two heavy water plants going the way they were going? Could he comment on why we have had so many sales of Candu reactors abroad in the last four or five years? Could the Hon. Member explain some of those things to us? Is he arguing for the status quo?


Leonard Donald Hopkins: Mr. Speaker, the Hon. Member starts talking about the great successes of the previous longer term Conservative Government in the late 1950s and early 1960s. If that Government had been so good it would have lasted a few more years than it did.
The Hon. Member said that I do not care about the national debt. Let me tell the Hon. Member that one does not solve the national debt by destroying the very base of the high-tech research and development in Canada that helped companies around the world to solve problems. They in turn create capital. The Hon. Member knows that industries cannot go on year after year without in-depth research. If they cut back on research and development, where does it leave productive companies which in fact produce the tax dollars that help to retire the national debt? When they start cutting back one, two or three research laboratories and saying that they are doing something for the national debt, it is a farce.
The Hon. Member also talked about employment, scientists and so on. Chalk River Nuclear Laboratories have the kind of scientists who do not have to worry about jobs. In fact, we have many friends around the world because these scientists are members of various world organizations. I pointed out some time ago that possibly the lowest level of employment at Chalk River Nuclear Laboratories in the last 20 years occurred in December 1979 when his Party was in power. If he wants to check the facts and figures, they are there. He should not try to throw that red herring across the floor of the House. He accused me of raising fears. Who is really raising the fears? Who started this great scenario? It was the Minister of Finance who started this scenario in his Budget a week ago on Thursday night. It was the Prime Minister who sent a telex to Chalk River Nuclear Laboratories and made a firm commitment that the Conservative Party, if elected, would be solidly behind them. Then what happened?


John Horton McDermid: Answer the question.


Leonard Donald Hopkins: The Hon. Member for Brampton-Georgetown has a lot of shouting to do. He can shout away. I do not blame him for shouting. He should have a guilt complex. The
The Budget-Mr. Andre
Minister of Finance came in here and virtually cut this Crown corporation by $170 million, a corporation which has been productive over the years. I just want to say-


Mr. Deputy Speaker:: Order, please. I regret to interrupt the Hon. Member, but unfortunately the period for questions and comments is over.


Harvie Andre: Mr. Speaker, I say to the Hon. Member for Renfrew-Nipissing-Pembroke (Mr. Hopkins) that I don't have a guilt complex. I have listened to the budget debate and that to which I could not listen, I read about. It established clearly in my mind-and I think it would be the case in the mind of any objective listener-that the two opposition Parties have transformed themselves-perhaps they have always been that way, but in disguise-into the two most reactionary Parties the country has ever seen. All I have heard in the debate, stripped of its frills, was a demand that we continue the economic policies of the last 15 years-spend, spend, spend; do not cut, do not cut, do not cut; forget about the future. Occasionally there has been a genuflection toward the fact that we should be concerned about the deficit, but there has not been a single worth-while suggestion as to how in fact the deficit should be addressed.
Fifteen years of those policies have led us to the point where we have had one of the worst recessions since the 1930s, highest unemployment rates and a monstrous debt which we are leaving as a legacy to our children. That is what the last 15 years of Liberal policies, supported by the New Democratic Party when it really counted, have brought us.
What do the Members of the opposition Parties say? They say that they want more of the same. Last September, Canadians voted for change. They voted not just for a change in policy-though they certainly wanted a change in policy-but for a new approach to making public policy.
As Hon. Members will recall, there was good reason for this new approach. After all, what state were we in last September? We were a country whose confidence in the future had all but disappeared. We had more than 1.6 million unemployed. We had a budgetary deficit so out of control that it had to be revised upwards on a monthly basis. We had a national debt approaching $200 billion and threatening to double within five years. In western Canada, the economy had been totally throttled, destroyed by a disastrous national energy policy. What have we heard from the NDP Members during this debate? "How dare you undo the national energy policy," they said. They want it to stay in place. It amazes me when members of the NDP from the West say that. It is almost as if they needed the votes of the unemployed in order to get re-elected. It seems as if they might be in danger of losing their seats if people were put back to work.
Among other things, farmers and small businesses were going bankrupt in record numbers last fall, due partially to record high interest rates brought on by economic policies

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The Budget-Mr. Andre
about which the opposition Parties say we need more of. At that time, our investment capital supply had completely dried up.
As we discuss some of the implications of the first Budget of our Government, it is worth remembering where we started, Mr. Speaker. In November, the Government set out an agenda for economic renewal. It set out its principles and new policy directions. We said we would make the necessary changes to promote growth, to create jobs and to improve social programs. We said we would act fairly. We said we would consult with Canadians before we acted. We said we would avoid unilateral decision making wherever possible. Also, we said we would bring government spending under control.
Since then, we have listened to the concerns and aspirations of Canadians, in the most extensive consultative process ever undertaken in Canada. This Budget reflects the sound advice we received from Canadians with respect to a wide range of issues.
The first Budget of the Minister of Finance (Mr. Wilson) focuses upon three strategic means to address our economic problems. It focuses; first, upon the encouragement of private sector initiative and risk taking; second, upon the improvements to the efficiency and management of government programs and services; and third, upon the control and ultimate reversal of the spiralling deficit. The encouragement of initiative and risk taking in the private sector is fundamental to new job-creation efforts. New business activity and employment will be created in an environment free from government intervention. The Government will be a catalyst-not a hindrance.
In order to encourage more Canadians to invest in Canada's growth, the Government is proposing a lifetime capital gains exemption for individuals of $500,000. The full $500,000 exemption will be available to ranchers and farmers immediately, in recognition of their special problems and their contribution to Canadian society. I wonder if members of the New Democratic Party from Saskatchewan are opposed to this particular provision.
This measure alone will benefit over one million Canadians.
I have heard members of the Opposition say it is of benefit only to the rich. It might interest Hon. Members to know that the vast majority of Canadians who are taxed for capital gains earn less than $40,000 a year. The vast majority are not rich, as implied by the opposition Members in their criticisms. The vast majority who fall into this category are middle class and lower middle class Canadians.
What the Government is saying loudly and clearly is that we want to reward success and not subsidize effort. We just heard the tail-end of a speech by the Hon. Member for Renfrew-Nipissing-Pembroke (Mr. Hopkins) in which he suggested we should continue our subsidies to effort. He said we should continue that even though, after years and years, that subsidy has not produced any economic benefit. It has not provided the value it ought to have provided.
The Government is challenging Canadians to create jobs and wealth by investing in Canadian enterprise. The capital gains incentive is a strong signal indicating that the Government wants people with good ideas and the will to persevere to be rewarded for their success. We are confident that Canadians will accept that challenge and we have reason to be confident as evidenced by the reactions of spokesmen for the small business sector.
Small and medium-sized business will also benefit from our proposals to change regulations governing RRSP pension fund investments. These changes will encourage investment in small business by two of the largest and fastest growing pools of capital in Canada.
There are other measures to encourage private-sector growth and job creation. These include tax credits to individuals investing in labour-sponsored venture capital funds set up to invest in small and medium-sized business. I have not been able to discern the reaction of members of the NDP to that particular giveaway, to use their language. Perhaps that is because it was a suggestion made by Louis Laberge of the Quebec Federation of Labour that we encourage investment by labour people in the small business sector, something we applaud greatly. I would hope that one of the members of the New Democratic Party would have the grace to applaud the Government for exempting the small business sector from the 5 per cent corporate surtax.
Contrary to the statements made as recently as last night by the Leader of the New Democratic Party (Mr. Broadbent) who said on television that taxes to corporations have been cut, there is a 5 per cent corporate surtax. That does not represent a cut in anyone's language except that of the Leader of the New Democratic Party. As well, the small business bond program will be extended until 1987.
In addition, the Western Accord signed last month signalled a new era in the relationship between western Canada and the federal Government. As well, it will end the unmitigated disaster of the National Energy Program. These changes, among others, indicate the Government's commitment to fairness and equity and brings to a close that chapter of western history in which the federal Government unilaterally changed the rules of the game and indeed became one of the players, costing this country at least 150,000 permanent jobs.
All of those mesures and incentives have a single objective, and that is, to put economic decision making back in the hands of private entrepreneurs so that they can create jobs and be rewarded for their success. The potential of these changes is enormous. It has been said before, but bears repeating, that if every small business in Canada generated one single job, the unemployment rate would decrease by 50 per cent.
In the last 12 years, over two-thirds or something in the order of 70 per cent of all new jobs in Canada were created by small business. During the recession, more than 100 per cent of all new jobs were created by small business because big business was cutting back. There are 20,000 fewer employees
June 3, 1985

in the auto industry today than there were a few years ago because of automation and improved productivity made necessary by international competition. It is the small business sector that is generating those meaninful, long-term jobs that count ant that contribute to wealth.
Those who suggest we should carry on the practices of the last 15 years through the so-called government job-creation programs, through which grants were handed out for people to paint for the fourth year in a row the white picket fence around the local cemetery, call that job creation. Those are the kinds of absurd policies which have led to this disaster. It is difficult to understand how any responsible parliamentarian can continue to advocate that sort of thing, yet that is all I have heard from both opposition Parties.
Opposition Members want more of what we have had for 15 years. Surely modern history demonstrates that the private sector is the only sector in which meaningful, long-term jobs are created. It is the small business sector which will be the generator of those jobs. I hope that, at some point in time, some members of the New Democratic Party and the Liberal Party will have the grace to acknowledge that fact. We are not asking for applause, but I hope they will at least acknowledge the fact that this Budget will be of very significant help to the small business sector. The small business sector is responsible for the vast majority of job creation in this country and in that regard at least, the Government deserves applause.


Some Hon. Members:: Hear, hear!


Harvie Andre: This Budget also takes up the challenge of fiscal responsibility that has been ignored for so long that it has become the very root of our economic problems. In this Budget, the Government has set for itself the fundamental goal of eliminating the obstacles to economic renewal posed by waste and inefficiency in Government itself. During the past few months, Canadians have told us emphatically through extensive consultations that they are willing to share in the burden of deficit reduction as long as the Government demonstrates its commitment to the same process. They want us to get our house in order.
The Budget contains measures that will result in a more efficient, effective, responsive Government. In my Department alone, we have managed to save $100 million within Statistics Canada without reducing the level of service. The Supply side of my Department is on full cost recovery and more of my Department is moving to full cost recovery. The Supply side is on a program of increased efficiency that will see the reduction in the next three years of some $20 million in the charges we make to other Departments for the services we provide. As the old joke goes, with $20 million here and $20 million there, we will soon be talking real money.
As we announced in the Budget, we are privatizing Canadian Arsenals Ltd. Corporation. We have already folded up Crown Assets Disposal. We have integrated the management of the Supply side and the Services side to eliminate duplication and prevent unnecessary growth. That will result in substantial savings to the taxpayer and will increase efficiency
The Budget-Mr. Andre
and effectiveness. These things are being pursued by every Department of Government. Every Minister is aggressively pursuing these kinds of initiatives, leading to a much more efficient, effective use of taxpayers' dollars and, incidentally, to a happier Public Service.


Mr. Gauthier:: What a statement! Read the weekend press.


Harvie Andre: The Hon. Member for Ottawa-Vanier (Mr. Gauthier) laughs.


Jean-Robert Gauthier: Lose your job and you'll be happy?


Harvie Andre: He is implying that his constituents and other public servants like to be associated with inefficient, wasteful activities, and he is dead wrong.


Jean-Robert Gauthier: Not when they lose their jobs.


Harvie Andre: They do not want to be associated with such activities.
In addition, the Government has identified programs and policies that can be eliminated as they serve no useful purpose, and this will create further significant savings. The task force chaired by the Deputy Prime Minister (Mr. Nielsen) is carrying out a comprehensive examination of government programs. It did an inventory and found that there are 1,053 different government programs. Not surprisingly, there is some duplication. Some of the results of that study were reflected in this Budget, and others will be forthcoming.
The work of these joint public-private sector committees will continue to improve the management of government programs and services. The Public Service Pension Plan will be put on a fully funded basis with no taxpayer subsidy. Full indexation of MPs' and Senators' pensions will be terminated effective January 1. The size of the Public Service will be reduced. There will be no compensation for inflation in the Government's operating and capital budgets. We are operating with no indexation for inflation within our own operations.
Making programs more effective does not simply mean cutting expenditures. It aslo means that limited resources must first go to those in need. The Government is taking action to ensure that our social programs are more progressive and fair. We have announced changes to a wide range of social programs, job benefits, pension reforms and RRSPs and greater fairness in the tax system itself.
The first two goals which the Budget is designed to address are encouragement of private-sector initiative and improvement of effectiveness in the management of government services. The third goal is the control of our spiralling national debt. This Budget attacks that major problem.
Control of the debt is critical for a number of reasons, not the least of which is the crippling effect of the deficit on our ability to respond to new social and economic needs. Hon. Members opposite have talked about the cuts which have been made, the adjustments and so on. They have told us that we

June 3, 1985
The Budget-Mr. Andre
should have more compassion. I would ask them to show a little bit of compassion for people in the future and the situation in which they will find themselves if the deficit is not controlled. If the deficit is not controlled, Canadians will look forward to the same situation in which Argentinians and Brazilians find themselves in trying to cope with monstrous inflation rates which are a direct result of those Governments running deficits year after year. We cannot continue to do that without putting the future of all Canadians, particularly young Canadians, and the economy into jeopardy.
Some will say that we have not cut the deficit enough. Some will say that we have cut the deficit too much. Bringing the deficit under control in the right way is the way to maintain confidence in the economy. There are no magic studies to which the NDP continues to refer. There is no computer program which will indicate the right level of deficit to reach-the nirvana which we all want. We know that the deficit must be controlled. The right level is a question of judgment. We have consulted widely with Canadians, more than any other Government in Canadian history, in trying to establish what would be the appropriate level. If we cut too far, we are in danger of affecting confidence because of the reaction which would result from the cuts. If we do not cut at all and the deficit continues to increase, we very seriously jeopardize the confidence factor in the economy and the future ability of the Government to act.
We have made some very significant steps in the right direction. We believe that it is the appropriate level. Had we not made the changes and followed the advice of the Opposition-no cuts, continue spending, and more programs-we know that the situation in the country would be worse next year than it is now. We have had 15 years of those policies.
We have also had to deal with the question of indexation. I was a strong advocate of indexation. When indexation was proposed, we were dealing with constant dollars and it seemed to be a fair system. However, after reading extensively and talking with senior economists, the Government of Brazil and the Government of Israel, 1 am satisfied beyond a shadow of a doubt that indexation is not a cure for inflation; it is a part of the problem. It had to be addressed. We have taken-


Mr. Murphy:: You did not say that when you were on this side of the House.


Harvie Andre: That is right. I have changed my mind in the last 10 years.


Mr. Cassidy:: You promised to keep it during the election campaign. That is what your Leader said.


Harvie Andre: Mr. Speaker, I would like to repeat what I said. Members opposite have established for me my original thesis, namely, that the most reactionary Party in Canada is the NDP. Don't change anything, even if it does not work! Carry on with what we have been doing for 15 years, even if it does not work. Never change. That is the NDP line.
Change is what Canadians voted for in September and change is what we are bringing for a better future for Canadians.


Michael Morris Cassidy: Mr. Speaker, I have two or three comments which I would like to make. First, as he is the Minister of Supply and Services, he will understand the concern of people in the Public Service of Canada over the cuts which have been proposed. I would like an assurance from him that there will be no lay-offs in the Public Service as a result of the cuts which have been announced by the Government, which will take effect over the course of the next five or six years. Certainly, it is feasible to have that shrinkage without lay-offs. While I have concerns about the direction in which the Government is going, if it feels the need to shrink, 1 would like the assurance that it will be achieved without lay-offs.
Second, the Minister said that the Conservatives promised change when they assumed power on September 4. it is now clear that they have changed their minds on absolutely every policy which was advocated during the course of the election campaign. The Minister knows that it was the Progressive Conservatives who originally advocated the indexation of the personal tax system. Now they are abandoning that to the tune of 3 per cent a year. The Minister knows that during the election campaign the Progressive Conservatives promised to maintain, not to undercut, the indexation of pension incomes. However, now that they are in office, they are undermining those pensions to the tune of 3 per cent per annum. That will mean that a person who is 50 years old today will have a pension which will be worth only half of his current purchasing power by the time that person reaches the normal retirement age of 65. That is not the maintenance of a sacred trust. It is an erosion of the sacred trust to the tune of 3 per cent per year.
Does the Minister believe that it is equitable to remove taxes from 5 per cent or 10 per cent of the population of Canada who invest heavily in the stock market or in real estate? They will be in a position to benefit from the capital gains tax exemption to the point where they will be able to save $125,000. Does the Minister believe it is fair to those people to do that at the same time that the Government has decided to erode progressively the old age pension for people who often find themselves in poverty, who have worked a lifetime, and who expect, when they retire, that the sacred trust, which the Government is now abandoning, will be honoured?


Harvie Andre: Mr. Speaker, first, I would like to address the question of lay-offs. There is no intent to lay off public servants. The intent is to downsize the Government in a reasonable and proper manner, by virtue of the fact that in the 1,053 different programs which the Deputy Prime Minister has discovered there is duplication and activities which no longer make sense in terms of the changing needs and priorities of Canada. By way of example, one of my first responsibilities was to wind up the Canadian Unity Information Office. There were approximately 79 employees involved. Ultimately, only one person was laid off after eight months. We tried everything possible to avoid that. We did everything we
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could to find employment for that person in the Public Service. He had received several offers, but had turned them down because they did not meet his requirements. That is the kind of approach which we will use. It should not be difficult. Within my Department, the normal turnover is more than 500 employees a year, due to retirements, transfers and so on. With that kind of turnover, there should be no difficulty in accommodating the downsizing without resorting to lay-offs.
The Hon. Member referred to indexation. He is right. In 1972 and 1973 I was a strong advocate of indexation. I believed in that because we were dealing with constant dollars and we could stop the bracket creep produced by the so-called progressive income tax system. It was fair. It was a restraint on Government if taxes did not automatically increase due to inflation. In fact, if Governments wanted to increase taxes, they had to make that concrete step. I still feel that way, but the result of full indexation has had the effect of automatically biasing things toward inflation. In a free market situation, when prices increase on a commodity-and the one law of social sciences which I accept absolutely is the law of supply and demand-there should be a decrease in demand. But when prices go up and there is an automatic salary adjustment to meet that increase, the market does not get a chance to operate and you have an inflationary spiral.
That is most emphatically the reason why countries like Israel have 300 per cent inflation today, and they will tell you point blank that full indexation is the reason. They admit it was a terrible error because it stopped the law of supply and demand working in both directions. But the Hon. Member is being unfair in the extreme in relating that to the question of pensions and our alleged lack of concern for senior citizens. He forgets that the first piece of legislation we brought in was the extension of the spousal allowance. An early piece of legislation, I do not know whether it was the second, third or fifth, was to increase veteran's pensions to reflect the fact we owe so much to that group of Canadians for what they have done.
The Hon. Member talks about this 55 year old working person reaching retirement age and finding his or her pension will be somewhat less than it might otherwise have been. However, he forgets to acknowledge the very important changes we made to the pension system so that this 50 year old worker will be in a better position to look after himself when he reaches retirement age. Surely the NDP would agree with me that in the best of all worlds each of us would have the means to look after ourselves. Well, we have made important changes in this Budget so as to make that possible for more Canadians. I hope he will have the good grace to acknowledge that and express his appreciation for those particular changes.
He also made the statement that the capital gains tax changes benefit only a small percentage of the population. Perhaps he was not in the House when I pointed out that, based on data from Revenue Canada-


Mr. Hovdebo:: Selective data.
The Budget-Mr. Andre


Harvie Andre: -something over one million Canadians have been taxed on capital gains. The vast majority of those people earn less than $40,000 a year. The Hon. Member sitting next to the Hon. Member for Ottawa Centre (Mr. Cassidy)-


Stanley J. Hovdebo: Prince Albert.


Harvie Andre: Sorry, Stan. The Hon. Member for Prince Albert (Mr. Hovdebo) is heckling a little bit, but I have not heard him stand up and say he is opposed to the capital gains exemption for farmers. If it applies to farmers, ought it not apply to small businessmen? If it applies to small businessmen, have we not, in essence, said that in the Budget? How can they, in all good conscience, heckle and complain and say this measure is for the rich but, on the other hand, want it for the farmers? They want it for some small businessmen but apparently not for corporations because corporations are bad. But they do not want to talk about that; they want to talk about the rich who are going to benefit. Yes, some rich people may benefit, but they are a very small chunk. The real beneficiaries of this measure are people who are going to create jobs.


Mr. Deputy Speaker:: Order, please. Questions and
comments?


Leonard Donald Hopkins: Mr. Speaker, the Minister wound up his speech in a very strong fashion, but a strong pair of lungs is no substitute for logic.


Mr. McKenzie:: Then sit down.


Leonard Donald Hopkins: The Minister stated that he had consulted with more groups than any other Government in Canadian history. But there are many groups out there today who are saying: You may have consulted, but you certainly did not listen. The Minister started his speech by saying: "They want us to spend, spend, spend". But we are not asking the Government to spend, spend, spend. All we are asking Members opposite to do is to keep their election promises. Is the Minister telling us that when he went around this country talking about a 5 per cent or 6 per cent real increase in defence spending, he did not know it was going to cost money? Today we have an increase of 2.1 per cent in real defence spending, and yet this Government is accusing the previous Government of not doing enough for defence. All the Minister has to do is to look at the record over the past few years and the billions of dollars spent to upgrade the Canadian Armed Forces.


John Horton McDermid: After you let them go down the tubes.


Leonard Donald Hopkins: Is the Minister saying that he cannot spend today? I say that if he did, he would be keeping his election promises. Is the Government going to keep those election promises? Obviously not.
I am glad that the Hon. Minister of Employment and Immigration (Miss MacDonald) is in the House because she assured me that she was going to be very sensitive to the wishes of members of the Armed Forces regarding severance pay and unemployment insurance. She said that the early retirement pensions of members of the Armed Forces and

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severance pay of public servants and people in industry would not be deducted from their claims for unemployment insurance when they became unemployed. But we have not heard any firm statement from her as yet. Where is the commitment?
Without mentioning the LLAD program which was in the making when his Government took over, or the North Warning System which was 90 per cent completed before his Government took over, I want to ask the Minister of Supply and Services (Mr. Andre) if his Government is going to keep those promises, or is it going to say that it cannot keep them because, if it does, it will be spending money? Is he really telling us that they made those promises last summer without thinking it was going to cost them any money? Is that really what he is telling this House? Is this Government going to keep its firm commitment to the members of the Armed Forces?


Mr. Deputy Speaker:: I ask the Minister for a short answer, please.


Harvie Andre: I will be very brief, Mr. Speaker. The Liberal Party defence critic talked about the North Warning System being 90 per cent completed before this Government took office. I wish he would communicate that information to the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy) who keeps insisting this is some sort of sneaky plot on our part to bring in SDI and star wars. As defence critic he has the responsibility of bringing the knowledge level of the Hon. Member for Winnipeg-Fort Garry to the point where he can start asking intelligent questions in the House.
Yes, we are committed to increasing Canada's defences. If you look at the Budget and the fiscal plan as well as at the projections, you will see that this is very clearly indicated because after 15 years of rule by the Trudeau Government, as the Hon. Member well knows, we are only ahead of Luxembourg in our ability to defend ourselves.


Leonard Donald Hopkins: It was 4.1 per cent last year. Canada was one of three countries-


Harvie Andre: That has to be remedied, and it is going to take us more than nine months to undo 20 years of misrule by the Liberal Party.


Leonard Donald Hopkins: Same old song.


Rodney Edward Murphy: Mr. Speaker, I am going to take up the Minister's challenge. He asked what our basis was for saying that the Government is not keeping its promises. I want to go through the PC campaign handbook which was used last year in talking to Canadians. It was authorized by the PC Canada Fund, which was the registered agent for the Progressive Conservative Party of Canada. This booklet was sent to all the candidates, and all those PC Members who are here in this House now used it when they were talking to Canadians. It contains the promises that they made to Canadians.


Mrs. Mailly:: It contains the solutions to problems.


Rodney Edward Murphy: I agree that a lot of the things said in this campaign handbook were solutions to problems. The problem that we have now is that they did not keep their promises to Canadians. What they said to Canadians is not what is found in the budget papers. When the Conservatives came to power they followed the old Liberal tradition of not keeping promises.
On page 83 of their campaign document they said, "We will establish an agri-bond program to provide loans at reduced rates to producers". It goes on to say that funds invested in agri-bonds can then be lent to farmers by the Farm Credit Corporation at interest rates below prevailing bank rates.


Claudy Mailly: The rates are lower now.


Rodney Edward Murphy: The Deputy Whip, who never seems to get up and speak intelligently, seems always to yap from her chair. If she wants to enter debate, she can do that.


Claudy Mailly: I rise on a point of order, Mr. Speaker. This is the second time that the Member refers to the fact that I am commenting, as he did all through the Minister's speech. He refers to my comments as "yapping". I presume he refers to his as intelligent conversation.


Mr. Deputy Speaker:: Unfortunately, that is not a point of order. The Hon. Member for Churchill (Mr. Murphy) has the floor.


Rodney Edward Murphy: Thank you, Mr. Speaker. She may yap if she wishes to. The issue is that the Government did not keep its promise to the farmers of the country. As a result of that, they are still paying the prevailing bank interest rates. One of the main problems which farmers in the country face at the present time is the amount of debt that they are carrying on their businesses, debt which has increased rather than decreased since the Government has been in power.
Many of the government Members who have participated in this debate have spoken about the fact that the Government kept its promise on capital gains. However, what the Government actually said was that it would abolish "the imposition of capital gains tax on the sale of farm property for continued agricultural purposes". That happens to have been the policy of my Party for many years. When the Government created this new tax loophole for the rich of the country, farmers were included, but there was no attempt to ensure that the land would be used for continued agricultural purposes. This means that we will continue to lose valuable agricultural land which is needed to feed our people and the hungry of the world. Now land will go to the highest bidder. With the removal of taxation on capital gains, more and more farmers are likely to be forced into the position of having to sell their land to those who will no longer be involved in agriculture.
The Government broke its promises made to Canadians in other areas as well. With regard to the CBC, the Government
June 3, 1985

said that it believed in the need "for the CBC to serve special interests in our society". As a result of the cut-backs in the CBC, Our Native Land, the only program provided to the native people of our country as a special need, is being cut. That is another broken promise.
With regard to excise tax on alcohol and tobacco, the Government said in its document that the present policy of the Liberals has had a "negative impact on both the tobacco and tourist industries". The Conservative Government increased the very taxes which it had criticized only a year ago. The Conservatives said that they could "reduce the deficit without increasing taxes or reducing the level of social services". That promise is obviously not going to be kept. The net effect of the Budget has been to increase the cost of living to an average family by $500 a year in increased taxes on top of the $500 a year in taxes and loss of services which resulted from the November 8 economic statement.
With regard to oil and gas, the Progressive Conservatives said that the "tax system must be adjusted to help lower the price of consumer oil and gas products". They broke that promise to Canadians as well. They have made promises to the women of the country. They talked about improving "federal housing, employment, and public education programs to assist victims of family violence". One of the results of funding cut-backs will be that there will no longer be transition houses for victims of family violence.
1 can go on and on, Mr. Speaker, and 1 will because it is very important that Canadians realize that when the Conservatives were campaigning last year, they were not telling the truth. They had no intention of keeping the promises they made. This Budget has proven that Conservatives do not keep their promises.
With regard to post-secondary education under Established Program Financing, the Conservatives said that they would "return to the 1977 funding formula". That formula provided more money for post-secondary education and medicare than did the 1982 formula which was then in place. Through the Budget, the Government is going to reduce by $2 million by 1990 the amount of transfer payments for post-secondary education, medicare, and the provision of a basic level of services to Canadians. Since that reduction will be phased in over the next year it will obviously mean less money for post-secondary education. That is again a complete contradiction of what they promised during the campaign.
The Conservatives also promised to ensure that "Canada had a sufficient supply of tradesmen to meet our needs". In the Budget they cut $78 million from the critical trades program, with no new program yet in place. Our nation is suffering from a lack of qualified tradespeople. Over the years we have had to import such people. We have a large number of unemployed youth who would love the opportunity to take the necessary training, and yet the Government cuts the existing program.
In relation to the disabled, the Conservatives said that they would assist "Canadians who, due to age, disability, or lack of employment opportunity are unable to provide for their own needs". They also talked about affirmative action. Yet in the
The Budget-Mr. Murphy
Budget they announced that they will be cutting back the Public Service by 15,000 positions over the next few years. It means that women, native people, and handicapped people who are not in the Public Service at the present time will have very little opportunity of ever moving into that system.
I received a letter from one of my constituents who has already suffered because of the cut-backs introduced by the Government. Let me read from part of the letter:
I am a handicapped person who is a single parent with a ten year old child. I was employed with the Canada Employment Centre in a term position.
I just cannot understand why a Government that says they are pushing for affirmative action, could cut back person years so much that it won't allow me to work.
Although I have some vision, I am registered with the Canadian National Institute for the Blind. I am enclosing a letter of reference which my former manager wrote for me. This will prove that 1 was capable of my duties and not layed off because I couldn't perform them. I am not the only one whom this cut back has affected. A native woman who has worked in the office for two and a half years has also been layed off.
I don't want to be on unemployment benefits, I want to work, and I know I was good at my job. As I said before, how can you say that you are pushing for affirmative action and not go through with it?
Please try to understand my situation and look at it from my point of view.
Her local manager said in his letter:
Her employment with us was terminated due to cut-back in staff and not due to her performance. We would not hesitate to rehire her should a position become available.
The point I am making is that in eliminating full-time jobs in the Public Service of those who were hired last, that will continue the lack of opportunities for women, the handicapped and native people within the Public Service. This is another example of the Government doing the exact opposite of what it has promised.
The Government promised "to create more job opportunities for youth and to reduce the number of students requiring student loan assistance". I have had an opportunity to see the amount of money coming to my riding under the Challenge '85 Program for students announced by the Government. In my riding alone, there has been, in effect, a one-third reduction of the number of jobs from 581 to 395 over a one-year period. Furthermore, that funding has been cut by 40 per cent from $1,293,593 to $762,568. Therefore, in my area of the country there are fewer jobs for students who are looking for employment in order to continue their education.
The Government came into power on the basis of change and on the basis of trust. Canadians were angry and frustrated with the former Liberal Government because they felt it was arrogant and uncaring. The Progressive Conservatives received a sweeping majority on the basis of change and the need for a Government that could be trusted. In the time available to me today I have pointed out numerous areas in which the Government has reneged on promises it has made. It has reneged on its promise to farmers, to women and to the handicapped of this country. Although the Government has been very generous to its friends, it has not established the trust or the credentials for implementing the changes it promised.
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In closing, let me refer to a final promise that the Conservatives have broken. It is typical of what the Government has done. During the election campaign, the Conservatives promised old age pensioners that, "a PC Government would once more index the old age pension at the actual cost of living on a quarterly basis". They said that they would respect the right of pensioners to receive the full amount of any increase in the cost of living. That has not happened.
As my colleague, the Hon. Member for Ottawa Centre (Mr. Cassidy), said a few moments ago in response to the Minister of Supply and Services (Mr. Andre), as a result of breaking that promise, the Government has told Canadians between the ages of 50 and 55 that their pensions in ten years will only be worth one-half of what they are worth today. The old age pension will no longer be a universal benefit which Canadians can rely upon in any significant manner.
The Prime Minister (Mr. Mulroney) talked about sacred trusts. If the Government cannot provide trust to our seniors, obviously it is not concerned about providing that trust to others in our society. It made a specific promise and then broke it as soon as it introduced its first Budget. Canadians deserve better, because although they voted for change in September, they got a repeat of a tired, cynical Government that does not believe it is necessary to keep its promises. They have a Government that is showing no concern for the ordinary Canadians, working women or senior citizens. It is a Government of broken promises.
[ Translation]


Mr. Deputy Speaker:: Questions and comments. The Hon. Member for Gatineau (Mrs. Mailly).


Claudy Mailly: Mr. Speaker, I welcome this opportunity to comment on the Hon. Member's speech. Before doing so, however, I may recall that this is my first term in the House and that I have a great deal of respect for the institution. Unfortunately, the attitude taken by the Hon. Member who just spoke is so obnoxious that it certainly diminishes much of the pleasure of being present in this House. I wish the Hon. Member would follow the example of new Members in the way they speak and their concern for maintaining a climate of respect in Parliament.
As for the points raised by the Hon. Member, there is one I would like to comment on and that is the elimination of capital gains tax on farms. He says we failed to keep our promises. As 1 informed the Hon. Member earlier, our campaign manual, which I helped prepare because I was executive director of the advisory committee on policy, so I know the manual very well . .. What the Hon. Member calls promises were solutions we were proposing to problems created over the last two decades, and created partly because at the time the Liberal Party was in a minority position and it had been obliged to bow to the doctrine and ideology of the Hon. Member's own party. The Liberal Party was obliged to alter its perspective, and although it might have preferred to add a measure of
discipline to Government operations, the fact that it was in a minority position and dependent on a party that had no financial responsibility, that had no administrative responsibility because it had never had a hope of forming a Government, was instrumental in making the Liberals adopt policies that created the situation we are trying to remedy today.
What he refers to as promises, Mr. Speaker, were the solutions we were proposing to problems his party had created for Canada. These include, for instance, the screening agency which his party made the Liberal Party adopt when it was in a minority position, an agency that did not accomplish what the New Democratic Party thought it would accomplish, which was to Canadianize our economy. All FIRA has managed to do is to weaken that sector of our economy, and I am referring to the oil industry, that might have been able to create the jobs we needed. Furthermore, it established a system that discouraged investment that could have created jobs. Today, we have one million and a half people out of work. So when the Hon. Member talks about promises, he should remember that these were the solutions we were proposing for specific problems. And, Mr. Speaker, we are providing those solutions.
For instance, the Hon. Member said no provisions are made for training. He was referring to one specific program that was terminated because it was due to expire. However, $100 million in training funds are being provided under this Budget. The same amount was already earmarked for 1985-86, and another $900 million has been allocated for 1986-87.
The Minister of Employment and Immigration is drafting a training program that at last will provide for a complete re-training program and a training program for youth in Canada's growth sectors.
The Hon. Member is therefore wrong to say that just because we eliminated a single program that was about to expire anyway, we are doing nothing for training. We are, Mr. Speaker.
With respect to women, I am always inclined to laugh when I see the New Democratic Party posing as the great defender of women. Which portfolios are women in that Party responsible for? Traditional portfolios, for women have nothing to do with those portfolios which can have an impact on the future of this country. But in our Government we do have women in energy, a leading sector, in finance, again a leading sector. The Minister of Employment and Immigration (Miss MacDonald) holds the Government's most important portfolio, and she is a woman. Our Party does more than pay lip service to women.
Mr. Speaker, they keep forgetting as well that their image of the Canadian woman is not that of a woman living on social welfare. Unfortunately, too many women depend on social benefits. Why? Because traditionally women used to rely on men as wage earners. But nowadays there are independent women and they can look forward to a better retirement. They can prepare for their own retirement. Some women operate small and medium-sized businesses and they will avail them-
June 3, 1985

selves of the Budget measures to create jobs. The Budget provisions will enable them to put money aside for their retirement years. These are Canadian women and, fortunately, they make up an ever growing majority because they are no longer satisfied with social welfare benefits, they want to be self-sufficient. They would rather not have to depend on men-husbands, brothers-or on the State. The New Democratic Party wants to substitute the State for men in the lives of women. They want women to be dependent on the State. The State will tell them where and what to study, how much they will earn. That is altogether different, it is not freedom.
The NDP also talks about the handicapped-


Mr. Deputy Speaker:: Order, please. 1 regret to interrupt the Hon. Member. The Hon. Member for Churchill (Mr. Murphy).


Rodney Edward Murphy: Mr. Speaker, let me first respond to the Hon. Member's beginning remarks. 1 certainly do not mean any disrespect to her. Unfortunately, when she does heckle, which is on a fairly constant basis-and 1 do not mind people reacting in the House-my problem with it is that she is not loud enough for me to hear her, but she is loud enough to create some noise in the Chamber. That is my particular problem with the Hon. Member's heckling. If she wants to be louder, I do not mind responding to her.


Claudy Mailly: You are loud, but I do not say you are yapping.


Rodney Edward Murphy: I am not sure what the Hon. Member talked about after she went through her initial concern about my reference to her yapping. I did not talk about FIR A. 1 did not talk about a number of things which the Hon. Member went on to talk about. I did not talk just about the Liberals' broken promises. In the Hon. Member's remarks she said that we forced the Liberals to do certain things and that perhaps if the Liberals were left alone they would be more like the Conservatives and somehow that would be better. What I objected to was not the Liberals stealing our ideas, but the fact that the Member herself was part of the group that put together the PC campaign handbook which took a lot of our ideas that were quite good and on which our people had worked for many years but which the Conservatives did not implement. I talked about capital gains being handled in such a way as to make sure that land is there on a continued basis for agriculture. That is what the Conservatives promised and that is not what they have done. They talked about making sure the old age pension was there and that it was fully indexed to the cost of living. Good. That is something we agree with, but it is not a promise the Conservatives kept.
With regard to women, the Conservatives made various promises regarding child care to help women get out into the workforce, a promise yet to be kept. What about transition houses? Again that was a promise made in the campaign. I
The Budget-Mr. Murphy
referred to it by quoting from the appropriate section of the PC campaign handbook. Again that is a promise not kept.
The Government can implement the policies it wants. What 1 have been saying throughout my speech, and what I am saying now in my rebuttal, is that the Conservatives made a whole bunch of promises to specific groups, to farmers, to women, and to old age pensioners, but they were not kept.
For that matter, in some areas, such as, as I have said, in the case of the old age pension, the Conservatives have not only not kept the promise but they have gone in the opposite direction. It is the same thing when we talk about money for post-secondary education. The Conservatives talked about a formula that existed in 1977 that would have provided more money for post-secondary education. This Budget talks about cutting money for transfer payments in such a way that obviously there will be no more money, and it is obvious it will not be as rich as the 1977 formula.
[ Translation]


Mr. Deputy Speaker:: Questions or comments. The Hon. Member for Hochelaga-Maisonneuve (Mr. Desrosiers).


Mr. Desrosiers:: I have a question for our colleague, the Hon. Member for Churchill (Mr. Murphy). He was talking about public servants a moment ago. 1 hope he is not really concerned about public servants. You know, Mr. Speaker, this is such a nice day that I would dare you to find one, especially the senior officials of the Department of Employment and Immigration. They have all gone to play golf while we are working here in the House. Perhaps some of us would enjoy a game of golf, but we have to stay here. I hope the Hon. Member is aware of that. You know that Canadian taxpayers are paying for all that. The Liberal Party hired too many employees, five where one would do. Hopefully the Hon. Member is not worried because the Government will put an end to that one of these days, and 1 wish he would comment on that.


Rodney Edward Murphy: Mr. Speaker, I was alarmed when I heard the specific reference which the Hon. Member made. He said that he cannot find a director of the Department of Immigration and Employment because they are all playing golf. I see the Minister of Employment and Immigration (Miss MacDonald) sitting in her seat. I hope she will look into it.


Mr. Lanthier:: She is doing her job.


Rodney Edward Murphy: If the Hon. Member wants to list specific examples and say that every director-and I am not the person who should be defending the Department, it should be the Minister herself-is out playing golf, and 1 noted some of the Tory back-benchers were clapping when the Hon. Member made remarks to that effect, then I think he is not doing a very good job of checking his facts. What concerns me about what the Member said is his attitude. I believe the people who are working for us are working for the benefit of the Canadian

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The Budget-Mr. Horner
people and they, just as much as anybody else and any Member in this Chamber, are doing an honest job for Canadians. Certainly you can find exceptions and certainly the Hon. Member for St. Boniface (Mr. Duguay) can mention teachers who may not be quite perfect, but most of them do a damn good job for Canadians. That kind of insidious remark is completely despicable.


Mr. Deputy Speaker:: Resuming debate. The Hon. Member for Mississauga North (Mr. Horner).


Mr. Bob Horner (Mississauga North):: Mr. Speaker, it gives me a great deal of pleasure to rise in this House today to take part in the debate on the first Budget brought down by the new Government under the leadership of the Right Hon. Prime Minister (Mr. Mulroney). I want to tell Members present about the fine reception to the Budget that I am receiving in my riding from all people in all segments of society and their approval for the actions we have taken in this Budget.
The great riding of Mississauga North which 1 have the pleasure to represent in this House is one of prosperity and growth with its almost one quarter million Canadians working very diligently for themselves and their families. Many of the families in my riding have both spouses as wage earners. Many of the changes in this Budget are particularly important to them. I refer to the beneficial changes in the area of pension reform introduced by the Minister of Finance (Mr. Wilson) and 1 will elaborate on that further a little later.
First, 1 wish to discuss a few of the important background reasons that this Budget has received such high acclaim from the people in my riding and from a great majority of the people across the nation.
As is the habit of the Conservative Party of Canada, our Members have gone out and consulted with the widest possible cross-section of community members to ensure that what is being done by our new Government is what is best for Canada and for all Canadians. Evidence of the success of this endeavour is the high amount of popular acclaim we have received to our Budget as it was presented. It is through this process of consultation that we have come to understand the need to work closer with small business people to provide better benefits for all, to work hard to ensure that everyone is treated equally and everyone is given the same chance in achieving his or her goals.
I wish to direct the majority of my comments today to the many improvements offered in the pension programs available to all Canadians. I shall now do a quick review of these many excellent improvements.
Amendments to the Pension Benefits Standards Act, affecting directly and indirectly some 4.5 million Canadians, will be tabled in Parliament and will be brought into effect on January 1, 1987. Through close co-operation with the provinces, the federal Government has worked hard to ensure that amendments to pension standards legislation in different jurisdictions are comparable. We are working to ensure that uniformity and fairness is the order of the day for all Canadians affected by the Pension Benefits Standards Act.
Today's rapidly changing economy makes mobility the key to success in nearly all occupational groups. With this reality in mind, the federal Government has taken dramatic steps through the Budget to increase the portability of pensions. Working hand in hand with high mobility is the amendment that ensures that pension rights will be acquired much more quickly. These two changes are of great significance to many young people who have found early on in their careers that, through moving from one job to another or from one area of the country to another, they can best prosper and provide for their families. We have provided for them the assurances that while they are working hard to support their families, they will not, through poor government regulations, be losing rights to pensions they will require in their later years.
I am pleased to say that after only two years of participation in a plan, employees will be entitled to retirement funds including that portion provided by the employers' contribution. Hence, vesting will occur after a minimum of two years instead of the five years of the past. These vested benefits will become far more portable, ensuring that employees will not lose what they had paid for in those two years, when they move on to seek better opportunities to support their families. Under the new program, they will be able to transfer the vesting accumulated to a locked in RRSP or directly to their new employers' programs. Another option includes leaving vested pensions with former employers until retirement or, finally, transferring their own contributions together with interest to a locked in RRSP while leaving the remaining entitlement with their former employers as a deferred benefit for their retirement.
It is the concept of choice, the choice of the individual Canadian to decide what is best for him or her in determining his or her own future, which is key to this proposal and indeed to the entire theme of the Minister's Budget. We firmly believe that all Canadians have the right to determine what should be done with their own lives and with their own earnings. Through these steps we are ensuring that these rights will be protected.
To show the sensitivity of the Minister of Finance to the small business sector in particular, and the understanding which we in the Conservative Party have gained from our years in private business and through our extensive consultations with all members of society, provisions have been included which will lessen the administrative burden for small business when maintaining records and providing payment on extremely small pension amounts.
It is thoughtful consideration and action on problems such as these which have generated such an overwhelmingly positive response to our budget proposals by the small business sector. Any Member should know from speaking to small business people that one of their greatest concerns is the concept of free enterprise. I am pleased that the Budget takes us along the
June 3, 1985

path that we have laid down, freeing enterprise from government over regulation and interference.
Another important change in the program so far as contributions by employers are concerned is that there will be regulations which require employers to contribute at least 50 per cent of the value of pensions earned. This is necessary because in some plans employers do not contribute to workers' pensions until after many years of service. This will ensure that employers share the cost of their employees' pensions and that short service workers are treated equally with long service workers. Of course, this measure is extremely important to individuals who return to the workforce after staying in the home with children, to ensure that they will receive fair pensions when they retire and that they are not penalized for working many years in the home raising their families.
Another change in the plan is that employers will be required to refund employees' contributions to any plan less than two years old, and along with those refunds there must be interest paid not less than the amount currently being paid on non-chequing savings accounts. This is important in that it ensures that individuals do not lose the money they have put into pension programs before vesting takes effect.
In the beginning of my remarks I talked about the tremendous importance and impact that the amendments brought forward by the Budget would have on the many families in Mississauga with two working members. Of particular importance to many of my constituents is the extending of eligibility to all full-time and part-time workers. Under the new program, part-time workers who have earned in two consecutive years at least 35 per cent of Canada Pension Plan yearly maximum pensionable earnings, which in 1985 will be $23,400, will be eligible to join pension plans available to their full-time co-workers. This measure recognizes the tremendous contribution which so many individuals make through parttime work and rewards them in a just and fair way when the time comes for their retirement.
A further change, which allows plan members to elect early retirement beginning at age 55, is yet another indication of our commitment to giving Canadians the greatest possible freedom in determining their own lifestyle. It is again an indication that we in the Conservative Party feel that government is here to serve the people, not the people to serve government. I suggest to Hon. Members of the House that all Canadians will benefit from these proposals. However, those individuals who will benefit the most will be women in our society. After over 10 years of Liberal indecision, we in the Conservative Party have acted on the appreciation and respect we have for the contribution which women make to the Canadian way of life. We have taken major steps to ensure that they receive the equality and just treatment which they have been denied for so long.
Perhaps the most important change in this regard will require plan sponsors to provide equal periodic benefits to men and women retiring in identical circumstances. Such has not been the case in the past where women have been unjustly discriminated against due to the use of annuity factors which differentiate between men and women, or due to inequality of
The Budget-Mr. Horner
pay received for work of equal value. There are also many changes which will positively affect women who are working in the home. These include pension plans which will be required to provide benefits to surviving spouses of plan members who are retired at the time of death. The benefit to the survivor must be no less than 60 per cent of the amount payable had both spouses lived. The pension plan will also be required to transfer the full lump sum value of the pension earned by a plan member who dies prior to retirement to a locked in RRSP of the surviving spouse, or to provide a monthly survivor pension for the remaining spouse; again the option being their choice.
In the event of marriage breakdown, the value of pension credits and pensions already being paid will be split equally among spouses or will be split as determined by the courts or by the individuals themselves. An important consideration in this item is that marriage breakdown will include the ending of common law relationships. There are not only benefits for women but indeed for all individuals who are surviving spouses in that survivor pensions will no longer be terminated if a survivor remarries. All these steps will do much to help soften the blow of the move to retirement years which is currently a problem for many Canadians, particularly women.
It is important also to note the many flexible and varied programs from which employees will be able to choose when deciding how best to deal with their own future. To enable maximum flexibility, it is essential that employees be allowed access to all information about their plans in regard to accumulated contributions and degree of funding on the part of the employer. To this end the Government will require annual disclosure of this information to members of plans and their spouses. The same information will also be made available to individuals dealing with the affected people serving in the capacity of financial adviser or agent.
Under the terms of the Pension Benefits Standards Act, there will be requirements that plan members be represented on management committees if they so desire. It is important that employees not only have a say in what they do with their money upon completion of their working years, but also that they have input as to how it is invested and used prior to retirement benefits commencing.
The Budget goes further, in that the Minister of Finance has proposed a form of tax assistance for retirement savings. This new system will result in an expansion of the Canadian system of tax assistance for private pension arrangements, both in terms of the number of Canadians covered and in the amount of income funded. The Government has been mindful of the need to limit the complexity and reporting requirements for employees and employers in the design of the new system. The changes will be phased in over the next five years in recognition of the current fiscal constraints of the Government.
There currently exist three vehicles by which individuals can establish retirement funds. These three vehicles can be transferred into two methods of disbursement of income at retire-

June 3, 1985
The Budget-Mr. Horner
ment. Under existing legislation there are a great number of disparities in these programs. Many of them serve to discriminate against people in the various schemes of tax assistance available for retirement savings. Accordingly, there will be major changes to all three of these vehicles by which contributions can be made to ensure that all Canadians, regardless of the occupation they choose, will be better able to provide for themselves and their families in the long term while taking full advantage of all tax incentives.
Perhaps the most important consequence of these many changes is the raising of the ceiling on RRSP contributions through several of the programs to where, over time, it will be set at $15,500.
Again, in recognition of the special problems faced by small business people in this country, the Budget also proposes that unused contribution amounts will be permitted to be carried forward for a period of seven years. As suggested, this is of particular importance to small business people, since they experience wide fluctuations from time to time in their capital requirements and, therefore, may not be able to provide for their own retirement funds on a consistent basis.
In my speech today I have touched on a few of the many important changes which are being made to pension programs in Canada. These are changes which will be of great benefit to all Canadians, particularly those who have been discriminated against in the past, including part-time workers and women.
After extensive consultation, the changes introduced in the pension program are a hallmark of Conservative approach to government. They represent our underlying philosophy that government should be a servant of the people and not vice versa. We want Canadians, not the politicians and the bureaucrats, to control their own destiny. We want Canadians to invest in their future.
We have a different philosophy from that of the members of the Opposition, who want government to control everything. It would appear that members of the Opposition have no faith in ordinary Canadians. We have that faith.
I know Canadians do not want hand-outs; they want opportunities. Over the past 20 years, the Government has done everything possible to stamp out the dreams of Canadians. An entire generation has grown up with a Government of fear and negativism. It is a testament to the strength of the desire of Canadians to improve their lot that on September 4 ordinary Canadians proclaimed their belief in their ability to control their own destiny. This is the philosophy of the ordinary Canadian-this is the philosophy of the Progressive Conservative Party.


Mr. McCurdy:: Mr. Speaker, the Hon. Member for Mississauga North (Mr. Horner) referred to the abundant consultation which took place before the Budget and the enthusiasm with which it has been met. This has been referred to repeatedly by members of his Party. With respect to the issue of pension reform, the direction of portability, vesting and the extension of pensions to part-time workers, I am willing to concede, as will most Members of the House, that that probably does reflect consultation since these are matters which have been raised over a good many years.
I wish to ask the Hon. Member the following question, and I hope he will be clear in his answer for the benefit of his constituents: Am I to understand that prior to the election, his constituents who are recipients of OAS clamoured to ensure that their payments would be deindexed and that they now approach him in his riding saying, "Thank you, oh, thank you, for cutting down my pension; do some more for me next year in the same fashion"?


Robert Nesbitt Horner: Mr. Speaker, as a matter of fact, I would like to inform the Member for Windsor-Walkerville (Mr. McCurdy) that I have received quite a few calls from senior citizens in my riding. While I was in my riding over the weekend, I received close to 20 calls. What I told these callers was that we were not deindexing pensions and that they would not be receiving less. I told these people we were modifying the indexation system so that on the first three points of the CPI they would not see indexation.
I also told them that, as a result of the provisions in the Budget, they would be paying approximately 27 cents per day this year. I told these callers that that was a small price to pay to ensure that they would have any pension at all 10 years from now. I also told them it was a small price to pay for an insurance policy which guarantees that their grandchildren will not be saddled with a debt which would place us in the same class as countries such as Argentina and others which are totally out of control.


A. Daniel McKenzie: Mr. Speaker, I wish to congratulate the Hon. Member for Mississauga North (Mr. Horner) on his maiden speech and for the way in which he has handled himself in the House. One would think he is a 20-year veteran of this place.
Contrary to the comments of the Hon. Member for Windsor-Walkerville (Mr. McCurdy), it is encouraging to see that seniors are finally speaking out on their own behalf. Mr. Andre LeBlanc, Director of the National Council on Aging, said his 18-member body of government appointees is determined to start projecting "a more positive and realistic image" of seniors in Canada to counter the prevailing impression of older people as poor, unhealthy and living in long-term care facilities.
The impression given by members of the Opposition is that every single senior citizen in the country is hard up and broke. That is one of the most insulting insinuations which could be made with regard to our senior citizens.
Statistics show that many seniors are comfortable, healthy and well-educated. The National Council on Aging maintains that that reflects the situation of the majority of seniors in the country.
The Council states that 37 per cent of those 65 and older now participate in sports or exercise, compared with 13 per cent in 1976. A 1984 Statistics Canada publication indicates that 40 per cent of families headed by seniors have an annual
June 3, 1985

income greater than 25,000. It also indicates that 25 per cent of men and 10 per cent of women are still in the labour force, and that 90 per cent of elderly Canadians live in private households as opposed to institutions. These are not ramshackle homes in which they are living. They are beautiful homes and apartments. They also have automobiles, and condominiums in the southern United States. The 10 per cent of seniors who cannot maintain a home live in modern, high-rise homes and small side-by-side duplexes. My riding is full of them.
The Progressive Conservative policy is for seniors to maintain the quality of life they had upon reaching retirement age. With the improvements to the RRSPs, all Canadians will be able to retire in comfort. Also, many seniors who still live in their own homes are assisted by the provinces in paying their municipal taxes. There is no impoverished group of senior citizens in my riding who are starving, hard up and broke. I would like to ask the Hon. Member for Mississauga North if he finds that the senior citizens in his riding are starving, hard up, broke, destitute and living on the street, as implied by members of the Liberal Party and the NDP.


Robert Nesbitt Horner: Mr. Speaker, 1 would like to thank the Hon. Member for Winnipeg-Assiniboine (Mr. McKenzie) for his question. In Mississauga, there is a group of seniors who have looked after their own needs. There are people who need extra help. We all know that and that is no problem. The Guaranteed Income Supplement will be fully indexed. These people will get the help they need.
Let me describe the type of senior citizens who live in Mississauga North. They are people who have looked out for their dollars. They have lived through two World Wars and a depression and they have learned how to save and get along. All of those people to whom I spoke told me, when I mentioned 27 cents a day, that they were perfectly willing to give that up. They told me that they realized that this country had been put in a terrible financial position and they wanted to create employment for their children and granchildren.
As an example, I could tell the House about my own mother. She worked for 27 years as a school teacher. The highest salary she ever received as a school teacher was $7,800 per year. Out of that she was able to save enough to support herself and invest money so that today, with her pensions and everything else, she receives more than double that. She is better off than she ever was before. I realize that not everyone is in that position, but the senior citizens are a very responsible group of people. We should be very proud of them. We should not degrade them the way the Opposition does.


Mr. Deputy Speaker:: Resuming debate.


Mr. de Corneille:: Mr. Speaker, it being seven minutes to one o'clock, I wonder if I might have the unanimous consent of the House to complete my remarks by extending past the lunch hour.


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


Roland de Corneille: In that event, Mr. Speaker, 1 wonder if the House would consider my calling it one o'clock.


Mr. Deputy Speaker:: Is there unanimous consent to call it one o'clock?


Some Hon. Members:: Agreed.


Mr. Deputy Speaker:: Very well. It being one o'clock, I do now leave the chair until two o'clock this day.
At 12.56 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.


Mrs. Therese Killens (Saint-Michel-Ahuntsic):: Mr. Speaker, last week the Liberal Task Force on Peace, Security and World Disarmament began its first week of public hearings to consult with Canadians from coast to coast on Canada's future role with respect to peace, security, and world disarmament.
The Winnipeg Co-ordination Committee for Disarmament presented a very thorough and comprehensive brief to our committee. That committee represents a coalition of over 30 organizations working for peace. The committee made many good recommendations, some of which need to be urgently and seriously considered.
The Winnipeg Co-ordination Committee for Disarmament is holding its fourth annual Walk for Peace in Winnipeg, Manitoba, on Saturday, June 8, 1985 at 11.30 a.m., beginning in front of the Legislature. Its representatives have asked me to extend an invitation to Members of Parliament and Senators from the three political parties, and any other Canadians who wish to express their concern for peace, to join them on Saturday, June 8, in Winnipeg.



ENVIRONMENTAL AFFAIRS


Mr. Bill Vankoughnet (Hastings-Frontenac-Lennox and Addington):: Mr. Speaker, in recognition of Environment Week, June 2 to 8, I wish to raise a matter which concerns all Canadians.

June 3, 1985
In this age of industrialization we must constantly seek ways to ensure that the rules and regulations which are laid out for the safety of our citizens are followed. We also have a responsibility to protect those citizens who carry out their civic duty and report the illegal or unethical activities of which they have knowledge.
For example, if an employee knows that his or her employer is dumping toxic wastes illegally, the first step is to approach the management directly. If the employer then tells him or her to keep quiet or risk losing his or her job, the person is faced with a moral dilemma. The choice is to say nothing and keep the job, or to blow the whistle and risk losing the job.
The people who blow the whistle should be protected from dismissal or other retaliatory measures. These are people who are convinced that there are illegal or unethical activities going on, and have been specifically directed to say nothing.
A "Whistle Blowers' Protection Act" would ensure that the people who step forward to report such activities are not punished. They should not have to pay, in real terms, by losing their jobs, their seniority, or financial security, as a result of making the public aware, as it is the public's right to know of potentially hazardous situations.
It is time for us to examine the necessity of bringing in legislation to protect such civic minded people.



THE BUDGET


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I rise to tell the House about a letter which was sent to the Prime Minister (Mr. Mulroney), with a copy to me, concerning the Budget. The letter comes from Cathy Syse, a constituent of mine, who is a secretary in Winnipeg. She has been working for nine years, grosses $15,204 a year, and nets $12,376. She wants the Prime Minister to understand better how middle working class people live. She wrote in part:
The following list are the payments that I have to make this year. Rent $4,140; hydro $360; telephone $240; gasoline $1,440; food $2,040; cigarettes $780; liquor $120; insurance $500.
The balance of $2,756 has to go for clothes, entertainment, Christmas and increases in my rent, food etc.
The car that I am driving is a 1973 model and I haven't bought any new furniture for the last five years. My holidays are spent sitting at home and I don't go to nightclubs or out for dinner because it's too expensive.
1 simply cannot afford this new Budget of Mr. Wilson's. Perhaps Mr. Wilson can draw up a budget for me so that I can afford this new federal Budget.
I am a simple average working person with very few luxuries-and now you want to tax the only luxuries I have so that I won't be able to afford them either. Is that what you had in mind?
I doubt Mr. Prime Minister if you will ever read this letter or if I'll even get some sort of reply. It will probably be thrown in the garbage-


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



ENVIRONMENTAL AFFAIRS


Mr. Gerald Comeau (South West Nova):: Mr. Speaker, I want to take advantage of this opportunity to draw the attention of the House to the fact that this week, from June 2 to June 8, is Canadian Environment Week. One priority has been set aside for each day: parks, wildlife, research, volunteers, acid rain and hazardous products.

The purpose is to demonstrate how each affects the environment.
The reason I think this is important is because I represent the South West Nova area which is known for its beautiful beaches, rivers, lakes, and unspoiled lands. I realize that I am not the only Canadian who is blessed with such magnificent natural gifts in his backyard.
We have to be vigilant if we want to protect our environment. The threat of acid rain is real, and only through co-operation can we achieve success.
The point I want to make is that the concern for an improved environment is everybody's responsibility. [Translation]
We can all, by our behaviour, help improve the environment: from the driver who can demand unleaded gas to industries that have a responsibility to control the environmental consequences of their activities.

Each and every one of us has a responsibility and I am very pleased that the theme for the Canadian Environment Week is "Environment... A Shared Responsibility".

[ Translation]



FINANCE


Mr. Carlo Rossi (Bourassa):: Mr. Speaker, after making a number of attempts to arrange a meeting with the Minister of Finance (Mr. Wilson), the Quebec Confederation of Family Agencies has yet to receive a favourable reply.
That is at least what was reported in La Presse on May 8. The organization in question, referred to as COFAQ, is an umbrella organization for fourteen federations of family agencies across Quebec, and had asked for an urgent meeting with the Minister of Finance to inform him of the concerns of Quebecers with respect to the Minister's "sacrifice Budget".
The Confederation is asking for a Budget that is fair and
equitable for our families. It is also asking that child tax
credits and family allowances be left intact.
June 3, 1985

Everyone knows that family agencies have a reputation for being understanding and cooperative. However, Mrs. Denise Laporte-Dubuc has informed the Minister of Finance that if he did not take their recommendations into consideration, the COFAQ would feel obliged to react by organizing a demonstration in Ottawa after Budget Day.
I hope the Minister, who claims his Government is one that consults, considered the requests made by the Confederation of Quebec Family Agencies.



THE BUDGET


Mr. Alan Redway (York East):: Mr. Speaker, as a taxpayer I was delighted to hear in the Budget of the Government's commitment to manage more effectively, as evidenced by its undertaking to improve cash management and to dispose of unneeded property.
I am sure the Government will also move quickly to correct the numerous other areas of mismanagement and misspending which were identified by the Auditor General in his 1984 report, including the misclassification of public servants which he estimated costs us all $125 million each year.
In addition, 1 was pleased to learn of the progress which is being made by the Task Force on Program Review which is headed by the Deputy Prime Minister (Mr. Nielsen). That task force is aimed at simplifying programs and eliminating duplication. It is a task force which should produce not just millions, but billions of dollars in savings that should be reflected in a lower deficit next year.
Improving government management is the key to ensuring that our tax dollars are being spent as effectively and as efficiently as possible. I am never really happy, as a taxpayer, to pay taxes, but the next time I write a cheque to the Receiver General of Canada I will feel a lot better to know that my tax dollars are not being wasted.



THE PRIME MINISTER

Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, the Prime Minister's (Mr. Mulroney) delusions of grandeur keep growing. I am referring to a newspaper article on Friday which stated that, from now on, when the Prime Minister travels abroad it will be with two aircraft, one for him and one for the press. I guess two jets constitute an "airfarce".
The way the new system will work is that the plane with the press in it will touch down first. Then, all the journalists will run to position themselves, and wait for the great event. Finally, the announcement will come-"The ego has landed".
The Prime Minister brags about being able to pick up the telephone and talk to Ronald Reagan any time, but I think it's
Uncle Ronnie who does the talking. He tells the Prime Minister how to act like a President. "Get your own podium", Ronald Reagan says, and presto, the Prime Minister has a podium. "Get your wife her own office and staff', and presto, the Prime Minister's wife is installed in the Langevin Block. "Pretend that you are the head of state when I come to call; it will make for better television", and presto, the Governor General is not even invited to Quebec City. What is next, a helicopter pad at 24 Sussex?
The latest advice from Uncle Ronnie is that separate planes will help in news management. For once maybe the President is right. The Prime Minister (Mr. Mulroney) does need two aircraft when he travels: one for himself, and one for his ego.



HUMAN RIGHTS


Mr. John Oostrom (Willowdale):: Mr. Speaker, a few nights ago I attended a very moving ceremony in Willowdale, presented by the National Council of Jewish Women. The guest speaker was our Ambassador to the U.N., Mr. Stephen Lewis. In an eloquent, dignified ceremony, 14 Canadian students in cap and gown received graduation diplomas on behalf of 14 Soviet Refusenik students who were denied the right to Jewish religious education and university admittance. These are basic rights we take for granted in Canada and the western world.
In his address Ambassador Lewis stressed five key points to help Soviet Jewry. Each Member should continue to speak up in Parliament for human rights; the issue should be stressed through quiet diplomatic manoeuvres; the issue of human rights should be kept at the forefront of bilateral negotiations; debates in international forums, as my colleague for Calgary West (Mr. Hawkes) did so effectively at the U.N., and through human rights conferences such as those currently taking place in Ottawa; public pressure should be kept up by keeping their cause alive every day.
The gravity of this issue is illustrated by an important fact. In 1979 some 51,000 Soviet Jews were allowed to leave, while in 1984 the number was only 876. I applaud the tremendous and courageous action taken by the Secretary of State for External Affairs (Mr. Clark) in Russia this spring. As a Government we must continue to press the Soviet Government to release another 50,000 Jews. This would show the world the good will of the U.S.S.R. and its humanitarian interest in family reunification.

June 3, 1985



THE ADMINISTRATION


Mr. Don Boudria (Glengarry-Prescott-Russell):: Mr. Speaker, the Minister of Justice (Mr. Crosbie) has been caught with a snout in the trough in the latest incident of pork-barrelling.
The people of Newfoundland thought they had left the merchant family mentality behind after 1949, but now it appears the Minister of Justice is trying to revive the good old tradition. A merchant family, as we know, must have one member in business, one in government, and a few scattered around the courts. The Minister's family has one member who is a prominent businessman, and from whom Revenue Canada is now claiming $380,000. Both of the Minister's sons are legal agents for the Department of Justice, courtesy of their father, and have as their responsibilities the task of acting on behalf of Revenue Canada.
The question is: will the Minister's sons, who were named as federal legal agents by their father, act to prosecute the uncle, who is their father's brother, and who owes the Government of Canada $380,000?
This whole incident gives new meaning to the theory of relativity, and this outrageous conflict of interest makes Billy-gate look mild by comparison. The Prime Minister (Mr. Mulroney) ought to relieve the Minister of Justice of his responsibilities until this whole mess can be cleared up and corrected.



THE BUDGET


Mr. Gordon Taylor (Bow River):: Mr. Speaker, the Liberal and NDP Members of the House are demoralized and confused. For years Liberal Budgets put Canada deeper and deeper into debt, reaching a total of $200 billion, with an annual deficit of $38 billion. They threw money around like drunken drug addicts. For example, they sent a secretary to the Riviera to improve her French, and threw millions of dollars at jobs which actually increased the number of unemployed, and so when the PC Budget, (1), reduced the deficit and started Canada on a free enterprise road, by creating a climate and providing incentives for small business that will encourage investment, and which will mean jobs instead of increasing the debt; and (2), it offered a glad hand of co-operation to all provinces, instead of the former one finger salute with policies which crippled their industries; and (3), it placed a surtax on corporations and the banks, along with a notice to the wealthy that a minimum tax is coming later instead of destroying incentive by heavy taxation, the Liberal and NDP went into a mad frenzy. They moan because interest rates are down, and weep because the deficit is decreasing. Yes, their negativism and confusion are evident every day. But who cares? The people of Canada are happy because the Budget is the beginning of a new and prosperous Canada, a Canada
which will pay its debts. So I say, down with the negative opposition, and up with the people!


Some Hon. Members:: Hear, hear!



PRESENCE IN GALLERY OF ICELANDIC MINISTER OF FISHERIES

Mr. Speaker:: Before proceeding to Oral Question Period may 1 indicate to the House the presence in our gallery of the Minister of Fisheries for Iceland, and a delegation from his country.


Some Hon. Members:: Hear, hear!



PRESENCE OF PROVINCIAL LOTTERY MINISTERS

Mr. Speaker:: We also have with us four provincial Ministers who are responsible for lotteries in their provinces: the Hon. Rick Folk from Saskatchewan; the Hon. John Baxter from New Brunswick; the Hon. Bill Joe MacLean from Nova Scotia; and the Hon. Lloyd McPhail from Prince Edward Island.


Some Hon. Members:: Hear, hear!



PRESENCE OF NEWFOUNDLAND ENVIRONMENT MINISTER

Mr. Speaker:: I am also told that the Hon. John Butt, Minister of the Environment for the Government of Newfoundland and Labrador, is with us today.


Some Hon. Members:: Hear, hear!



ORAL QUESTION PERIOD


Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, in the absence of the Prime Minister I will put my question to the Minister of Finance. Like thousands of other Canadians, I suppose, I received a letter from the Hon. Member for Pembina suggesting that Canadians write to myself and the Hon. Member for Oshawa urging us to take the heat off the Prime Minister as a result of the Budget. The Hon. Member says in the letter: "I would not even think about writing you now except that the situation in Ottawa is critical. If we don't help, our Prime Minister will have great difficulty." 1 will have to have some private consultations with the Hon. Member for Oshawa to see how we respond.
June 3, 1985

The Minister of Finance knows that, as a result of his Budget and the deindexation of old age pensions, the value of an old age pension by the year 1990 will be lower by $30 a month in real terms. During the election campaign the Prime Minister said in Sherbrooke, on July 26 of last year, that he was committed to "complete indexing of old age pensions to the actual cost of living as of January 1, 1985." 1 ask the Minister if he would repeal the deindexing of old age pensions, not only because of the justice of doing so, but to render his Prime Minister honest once again in what he said to the old age pensioners.


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, I am very pleased that the Right Hon. Leader of the Opposition and the Leader of the NDP were able to break up their consultation in time to make it into Question Period today.


Some Hon. Members:: Oh, oh!


Michael Holcombe Wilson: I do not think they liked that, Mr. Speaker. Let me respond to the question-


Mr. Blackburn (Brant):: Try a two-liner next time.


Michael Holcombe Wilson: -of the Right Hon. Leader of the Opposition.


David Orlikow: It is about time you tried.


Michael Holcombe Wilson: If they would like an answer. What we have set out to do in the Budget is to attack two major problems with which senior citizens are very concerned. The first is unemployment, the unemployment of their children and grandchildren. The second concern is the rising cost of debt, which last year grew at fully three times the rate of growth in the economy. It is in that context that we are approaching a broad expenditure control program in which we have asked senior citizens to participate. I believe that senior citizens, when they see the range of people in Canada who are participating, are quite prepared to be part of that over-all effort.


John Napier Turner: Mr. Speaker, we suggested to the Minister's colleague, the Minister of State for Finance, last week that we did not think there was a grandchild in the country who wanted his or her grandparent to have their pension reduced by $30 a month because of this Budget. No one.


FAMILIES WITH MODEST INCOMES
John Napier Turner: Mr. Speaker, I have a supplementary on the Budget. I am absolutely flabbergasted at the Government's claims that the Budget will increase the child tax credit for families in need.
Is the Minister of Finance prepared to admit that the real value of these benefits to families with an annual income of $12,000 will be less in 1990 than it is today? Is he going to
Oral Questions
admit that he is actually reducing the real value of benefits earmarked for hundreds of thousands of Canadian families living below the poverty line? Is he going to admit that de-indexing of family allowances deprives all low-income families of hundreds of thousands of dollars, in real terms?


Michael Holcombe Wilson: Mr. Speaker, 1 want to draw the attention of the Right Hon. Leader of the Opposition to the fact that through the Budget we have done something to address a fundamental problem in family benefits. That is that today, under the regime that has been in place for a number of years, those who are earning $10,000 or $15,000 receive less from the family benefit package than those who are earning $20,000 and $30,000. I think that we have taken a major step forward, and I believe the Right Hon. Leader of the Opposition would agree with that. As a result of the Budget low income Canadians will receive $100 more by 1989 than is the case today. That is a good step forward.


John Napier Turner: That is not what the numbers say, Mr. Speaker, but we will address that on another occasion.


CAPITAL GAINS TAX EXEMPTION
John Napier Turner: As
the Minister knows, the capital gains tax exemption which he announced is not targeted to investment in Canadian small business. An investment is eligible for that exemption whether it is in real estate or in South African diamonds. Since the Minister trumpeted that exemption as a stimulus for Canadian small business, will he revise the provision to target it more specifically as an exemption available only for investment in Canadian small business?


Michael Holcombe Wilson: Mr. Speaker, the Liberal way is to target things so precisely that there is no freedom left for Canadians to decide how they should deal with their investments. We looked at that but decided that it would have added a tremendous amount of complexity to the system. There would have been multitudinous ways in which Canadians could have gotten around that. As a lawyer he knows that, because that is probably how he made a lot of his money before he got into politics.
As I have said before, by making the environment much better for investment we will attract investment capital here. In the first quarter of this year we had real growth of 4 per cent. Last year we had a surge of real growth at the end of the year directly in response to the things that we are doing. Things are going well in our country and all Canadians know it.

June 3, 1985
Oral Questions THE ADMINISTRATION


JUSTICE DEPARTMENT APPOINTMENTS
Hon. Bob Kaplan (York Centre):: Mr. Speaker, I had wanted to ask the Minister of Justice about his two sons who have received important agency work from the Department of Justice. I will direct my question to the Deputy Prime Minister instead. I would like to remind him that when the Secretary of State for External Affairs saw his brother become an agent of the Department of Justice with a very large award in the Province of Alberta, and when the Minister of Finance saw his brother-in-law and sister similarly rewarded by the Government, the Prime Minister made the point that this was not nepotism because it was another Minister completely who had made the award.
In this case two young lawyers, who were called to the bar in 1983, have received very significant appointments out of their father's Ministry. Did an outside member of the Government look at the award in this case as well? Is this not a clear case of patronage and nepotism which even the Conservatives in Newfoundland must find insulting and unacceptable to themselves?


Mr. Chris Speyer (Parliamentary Secretary to Minister of Justice):: Mr. Speaker, I would like to acquaint the Hon. Member with the following facts. Firstly, firms were appointed rather than individuals.


Some Hon. Members:: Oh, oh!


Chris Speyer: Secondly, the amounts that have been billed in the eight months to date amount to $712 in income tax, $891 in oil pollution, and $983 in the Fisheries Act.
In contrast, in the last fiscal year the fees of the standing agents appointed by the Liberal Party amounted to $84,000 and $75,000 respectively. The article to which the Member refers views this as a plum. I view it more as a crumb.


Some Hon. Members:: Hear, hear!


APPOINTMENT OF NEWFOUNDLAND FIRMS
Robert Phillip Kaplan: Mr. Speaker, I would like to ask the Parliamentary Secretary to table those figures so that we can look at them. I certainly recognize that the amount billed depends on the amount of work done. If a Russian or Spanish trawler comes into our waters, we will have a lawyer who was called to the bar in 1983 to deal with that. If there is another terrible oil spill or other type of disaster, we will be defended by a young man who failed two years in law school. Would the Parliamentary Secretary check his assertion that this work goes to the firm? My understanding is that it is addressed to the firm, attention young Mr. Crosbie.


Chris Speyer: Mr. Speaker, the appointments were made on the basis of competence and frugality, characteristics to which the Hon. Member is probably a stranger. These firms are capable
firms which are doing an excellent job. We make no apologies whatsoever for their appointments.


FINANCE
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, my question is directed to the Minister of Finance who made what could euphemistically be called an interesting speech to a group of economists last week in Montreal. In the course of that speech he noted that, in his view, there were not enough rich people in Canada and therefore the Government, in his judgment, had to turn to other Canadians for a source of revenue.
Will the Minister admit to the House that if the Government had imposed a 20 per cent minimum tax on the rich, and restored the tax level which the rich were paying before the Liberals cut it in 1981, he could have obtained an additional $2 billion in tax revenues from upper-income Canadians and left pensioners and other Canadians alone?


Michael Holcombe Wilson: Mr. Speaker, the Hon. Member neglected to say that in the Budget we have imposed a surtax on upper income Canadians who are earning over $40,000. We have introduced new rules which will eliminate fairly widespread use of income splitting among family members which we felt was unfair. We have also removed a number of loopholes for invesment, one being the scientific research tax credit which the Hon. Member has raised in the House before. Therefore we are doing a number of things to impose a heavier burden proportionately on upper-income Canadians in order to create a balance among all Canadians to share the load as evenly and equitably as possible.


REQUEST THAT MINIMUM TAX BE INTRODUCED
John Edward Broadbent: Mr. Speaker, as the Minister knows, the surtax he has talked about is on tax payable. Since he did not introduce a minimum tax on the rich, the same people who did not pay tax last year can get away without even paying the surtax that he is talking about now. He also knows that the surtax is on for only a limited period of time, whereas he will continue to hit pensioners for an infinite period.
If the Minister was concerned about fairness which he and the Prime Minister talked about, why did he not simply restore the tax on the rich to the level it was before 1981, and bring in a minimum income tax for the rich now? Reagan in the United States is talking about increasing the minimum tax on the rich, and this Government has not yet even introduced one.


Michael Holcombe Wilson: The Hon. Member knows full well that in the Budget it says that we will introduce a minimum tax for the taxation year 1986. He wants us to impose it without consultation or trying to get a degree of
June 3, 1985

harmony between the provinces. When we have Saskatchewan going one way and Quebec another, it is very important that we have taxpayers in different parts of the country being treated equitably. That is the purpose of this consultation paper.


John Edward Broadbent: The Minister likes to make much out of a federal system that recognizes different jurisdictions and, in terms of their responsibility, they ought to note what he has just said. We know, and the Minister knows, that one can have a federal minimum tax on the rich and it is up to the provinces to do what they want. If they are just, they should do the same thing. He does not have to wait for Saskatchewan or Quebec; he should do it now in terms of setting a fair tax.


PENSIONS
John Edward Broadbent: Mr. Speaker, my supplementary question is directed to the Minister of National Health and Welfare. When he was in opposition he made an interesting point on June 29, 1982, when he noted the responsibility of the Minister of Health to speak out for those who needed assistance in Canada, particularly noting pensioners.
Clearly, the Minister of Finance stands up for the rich in Canada. In terms of the responsibility of the Minister of National Health and Welfare in Cabinet, will he act as a spokesperson for the pensioners? Furthermore, if pensioners let him know that they want the indexation system restored to their pensions, will he promise to take their battle back to Cabinet and insist that the Government restore indexation for our pensioners across the country?


Hon. Jake Epp (Minister of National Health and Welfare);: Mr. Speaker, if the Leader of the NDP looks at the statements on June 29, 1982, the deficit that was operative at that time, and the cost of paying the debt at that time, he will know that it was a very different scene from what it is today.
There is another point to be made with respect to pensions. I spoke to old age pensioners again this weekend. They very much understand the cost of debt which today, in fact, is greater than the total expenditure on health care on the federal side, on old age pensions, and GIS. They are telling me to bring down that debt-


Some Hon. Members:: Oh. oh!


Arthur Jacob (Jake) Epp: -in order that our services can be protected.
_______________________________________5325
Oral Questions THE ADMINISTRATION


JUSTICE DEPARTMENT APPOINTMENTS
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, the Parliamentary Secretary's answer to my colleague's question regarding the appointment of the sons of the Minister of Justice to patronage appointments in Newfoundland was indeed unbelievable and in complete disregard of the public interest.
Robert Pittman, the campaign manager of the Minister of Justice, was appointed to be prosecutor for all drug cases in the Avalon Peninsula, at approximately $200,000. Was that also prompted by the same great principles which led to the appointment of the two sons? Are there no Tory lawyers in Newfoundland who are neither related to the Minister nor worked on his election campaign?
Chris Speyer: Mr. Speaker, as I said, the standards that are employed are based on competence, and they have been vetted through the Department of Justice. To hear the other side make these hypocritical statements is nothing short of stunning.


GOVERNMENT POSITION
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, I wish that the Prime Minister were here, but I will direct my supplementary question to the Deputy Prime Minister. Are appointments such as the two sons of the Minister of Justice and his chief campaign organizer the new direction, or new beginning, that the Prime Minister spoke about during the election campaign? Does the Deputy Prime Minister approve of these kinds of appointments? Does he realize that he and the Prime Minister had a choice; they could have said no to the Minister of Justice, and cancelled those appointments? Does he realize that he had that choice?
Hon. Erik Nielsen (Deputy Prime Minister and Minister of National Defence):: Mr. Speaker, if the Hon. Member does not know the answer to that kind of question-


An Hon. Member:: Neither do you.


Erik Nielsen: Yes, I do know the answer, in reply to that intervention. It is glaring evidence of the reason why he did not hold a Cabinet post for very long.
The answer is simply that the Minister of Justice has made these appointments on the basis of well recognized, longstanding principles of competence and frugality.


Some Hon. Members:: Oh, oh!


Mr. Gray (Windsor West):: Even you can't say it with a straight face.

June 3, 1985
Oral Questions PENSIONS EFFECT OF BUDGET


Mr. Neil Young (Beaches):: Mr. Speaker, last week every major pension organization told the Government that under no circumstances did they support what the Government was doing to old age pensions. During the weekend 1 and members of my caucus also spoke to seniors across the country. I want to tell the Minister of National Health and Welfare that over 1,000 Canadian seniors told the Government that they do not support what it is doing. As the Minister responsible for the welfare of Canada's senior citizens, why the hell is he cutting them loose the way he is?


Arthur Jacob (Jake) Epp: Mr. Speaker, we all recognize that we want to protect senior citizens and their pensions. Inflation protection is not fully indexed on the OAS as of January 1, 1986. That is the contribution that we have asked senior citizens to make to the debt. We have made that very clear.
I say to the Hon. Member that when he looks at that $100 for 1986, while that is a reduction against the total amount of income or purchasing power that they would have had if full indexing had been maintained, it should also be made very clear that the services that they require must also be maintained. We must have a method to prevent being consumed by the red ink of the national debt. That impacts on pensions, health care and other programs-


Mr. Speaker:: Order.


POSITION OF MINISTER
Neil Young: Mr. Speaker, my supplementary question is directed to the Minister of National Health and Welfare. Let me tell him what seniors understand. It is that the Government has put the boots to them. That is what they understand.
Perhaps the Minister will be interested in a petition that was taken up in the riding of the Minister of State for Finance, in the constituency of Eglinton-Lawrence. That Minister has been telling the House and seniors that they support the Government. The Minister's own constituents don't support it. As the Minister responsible for the seniors, will he fight within Cabinet to make sure that the Government does not deindex old age pensions but reindexes them? I want to tell the Minister that this is only the beginning.


Arthur Jacob (Jake) Epp: Mr. Speaker, before I answer the Hon. Member I want to tell him that Eglinton-Lawrence is the riding of a Member other than the Minister of State for Finance. Perhaps he should look at those details as well. He should be accurate with what he says in the House.
The Member wants to suggest that there is disagreement in the Cabinet. The general argument is that we must protect seniors, but we must also protect them from the very debt load
that has been impacting upon them and every Canadian. That is also a priority, and they understand that.
I understand the Hon. Member when he says that not every senior citizen in Canada prefers the option that was put forward.


Mr. Deans:: There was no option.


Arthur Jacob (Jake) Epp: However, I believe that senior citizens understand the cost of debt and the reduction of flexibility. If the Hon. Member is honest as well, he will note that there is full indexing for those receiving the G1S. He should mention that as well.


WESTERN ACCORD-EFFECT ON DEVELOPMENT PROJECTS
Mr. Russell MacLellan (Cape Breton-The Sydneys):: Mr. Speaker, in the absence of the Minister of Energy, Mines and Ressources, my question is directed to the Deputy Prime Minister. If he sees the Minister of Energy I hope he asks her to drop in for Question Period now and then.
Last week the Minister of Energy, Mines and Resources tabled a list of projects, saying that these projects will only proceed now that the Western Accord is in place. The Government knows that most of those projects were announced well before the Western Accord.
Is the Government saying that the prospects for creating jobs as the result of the Western Accord are so dismal that it must reannounce programs that were already planned, and thereby mislead the Canadian people?
Mr. John McDermid (Parliamentary Secretary to Minister
of Energy, Mines and Resources): Mr. Speaker, the answer is no.


Russell Gregoire MacLellan: Mr. Speaker, I suggest to the Government that the only reason it is reannouncing projects is that, in its desperation, it must try to justify the money grab from the Canadian people to finance the Western Accord.


John Horton McDermid: That was a statement, Mr. Speaker. I do not think it is worthy of a reply.


Derek Nigel Ernest Blackburn: You will never get to the Cabinet that way, John.


THE ADMINISTRATION
Mr. Svend J. Robinson (Burnaby):: Mr. Speaker, my question is for the Deputy Prime Minister. It concerns the carrying
June 3, 1985

on by the Minister of Justice of that great Liberal tradition of patronage by the appointment of the Minister's own sons, Michael and Chesley, as standing agents of his Ministry. These are appointments which were made with the personal knowledge of the Minister.
Does the Deputy Prime Minister accept this blatant pork-barrelling by his colleague, the Minister of Justice? Will the Deputy Prime Minister indicate to this House under what circumstances the Government feels it is appropriate for Ministers to appoint their own sons and daughters to positions at the expense of the taxpayers of Canada?


Erik Nielsen: Mr. Speaker, the Hon. Member was sitting in his place when he heard the Parliamentary Secretary respond to that question-


John Edward Broadbent: He didn't answer.


Erik Nielsen: -in sufficient detail even for him to understand. The explanation is there. The appointments are the responsibility of the Minister of Justice. The Minister of Justice has made those appointments-


Mr. Hnatyshyn:: On merit.


Erik Nielsen: -on the excellent criteria of merit and responsibility.


REQUEST FOR INDEPENDENT APPOINTMENTS MECHANISM
Svend Johannes Robinson: Mr. Speaker, I have a supplementary question. If in fact the appointments are to be made on the basis of merit, is the Government at least prepared to accept that there should be an independent mechanism for the appointment of standing agents to avoid this obvious scam of the Minister of Justice appointing his own sons?
Will the Deputy Prime Minister not recognize that the time has come to put an end to this kind of patronage, because Canadians are sick and tired of sons and daughters, brothers and sisters, aunts and uncles of this Government being appointed purely on the basis of their own political connections?


Erik Nielsen: The only scam, Mr. Speaker, is that which is imbedded in the preamble and the questionable question put by the Hon. Member himself, in attempting to lead the Canadian public to believe a scam that he and his colleagues are attempting to perpetrate on the floor of the House of Commons so as to leave that kind of impression in the minds of the public.
The Hon. Member knows, as well as all Members of the House know, that his Party is participating, as is the Official Opposition, in a special committee set up under the leadership of the distinguished Member for St. John's East to look into
Oral Questions
the whole broad question of reform of the parliamentary process.


John Edward Broadbent: It will be too late by the time they make the report.


Mr. Fulton:: There won't be a single, breathing Tory left, not even you.


Erik Nielsen: Even he or the worst advocates of those statements the Hon. Member professes would not surely subject the whole process of thousands of appointments to the kind of detailed examination the Hon. Member would suggest, at the consequent cost that that would incur to the Canadian taxpayer.


PENSIONS
Mr. W. Paul McCrossan (York-Scarborough):: Mr. Speaker, my question is for the Minister of Finance. When the Minister was a member of the Opposition he called several times for the publication of actuarial valuations of the Members of Parliament and Senators' pension plan as well as of other public sector pension plans. Has the Minister caused actuarial valuations for these plans to be made? Do the valuations indicate that the assets are sufficient to cover the liabilities, and will the Minister table the valuations in the House?


Michael Holcombe Wilson: Mr. Speaker, 1 want to respond to the Hon. Member by saying yes, in fact I have sought out this information in the Government. I might say it did not come to light until quite recently.
We are looking at a specific report that had been prepared in 1983 but, for some reason or other, had not been made public in response to the requests that I had made. I hope I will be in position to make this public shortly.


THE ADMINISTRATION
John Napier Turner: Mr. Speaker, I am prompted to rise as a result of the replies of the Deputy Prime Minister to questions relating to the Minister of Justice. I am going to call him the Archie Bunker of Parliament, star of All in the Family.


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!

June 3, 1985
Oral Questions


John Napier Turner: 1 want to read from Section III of the Conflict of Interest Guidelines relating to Ministers:
Ministers shall not accord preferential treatment in relation to any official matter-
That includes an agency. It continues:
-to relatives or friends or to organizations in which their relatives or friends have an interest.
That includes a legal firm.
Is it the Deputy Prime Minister's view that the Minister of Justice has or has not contravened these guidelines for Ministers?


Herbert Eser (Herb) Gray: Very clear guidelines.


Erik Nielsen: Mr. Speaker, the Right Hon. Leader of the Opposition knows better than to expect me to pass, in effect, a judicial judgment on a question such as that he put to me. I can say that those guidelines for the time being are in force and all Ministers of the Crown are expected to abide by them.


DISASTERS
Mr. Maurice Foster (Algoma):: Mr. Speaker, my question is for the Deputy Prime Minister. It concerns the disastrous tornado which struck Barrie and several surrounding communities last Friday afternoon, resulting in some 12 tragic deaths, several hundred injuries, the destruction of several hundred homes, as well as thousands of people being left homeless. I know that every Member of the House would want to extend the sympathy of the House to the relatives and loved ones of the victims of that tragedy.
Is the Government prepared to make a commitment today to implement the provisions of the Disaster Financial Assistance Arrangements Program between the federal and the provincial Governments, as well as to clear away red tape through CMHC, to assist the victims in expediting insurance claims so that they may begin to rebuild their homes and their lives?


Erik Nielsen: Yes, indeed, Mr. Speaker, I am sure I am speaking on behalf of all Members of the House when I say how appalled we were at the tragic proportions of the disaster that struck Barrie.
As soon as that occurrence took place, the Prime Minister appointed the Hon. Minister of National Revenue to co-ordinate all federal effort to extend all possible assistance to the area. For my own part with respect to the Ministry of Defence, I think all Hon. Members should note the immediate and extremely helpful response that was made by some 700 of our
Armed Forces who were on the scene very quickly to assist with local authorities.
A telegram was received today from the Government of Ontario requesting assistance under the legislation mentioned by the Hon. Member. My response has gone today to that telegram, offering every possible assistance available under the legislation to the Government of Ontario.


Some Hon. Members:: Hear, hear!


DESTRUCTION OF GREENHOUSES IN LEAMINGTON, ONT.
Maurice Brydon Foster: I thank the Minister for that statement, Mr. Speaker.
Last Thursday night there were serious storms in the Niagara Peninsula and in Leamington affecting many farm and agricultural producers, involving some $15 million worth of damage to greenhouses alone in the Leamington area.
Last December 21 the Minister of Agriculture announced that the federal Government would not provide ad hoe disaster assistance to farmers due to crop damage. Have the provisions of the Disaster Financial Assistance Arrangements Program been cancelled for farmers? Does that mean there will be no assistance made available to these farmers who suffered losses in the storms last Thursday night?


Erik Nielsen: No, Mr. Speaker. The Hon. Member should not draw that sort of conclusion. The legislation is in place for assistance in the area affected by disasters. The process is triggered by a request from the provincial or territorial authority, to which the Government of Canada responds. As far as I am aware, no such request for assistance has been received concerning the incident about which the Hon. Member speaks. However, there are others of like kind which have been received and upon which the Government of Canada will act. I emphasize that it is a sharing exercise which is envisaged by the legislation, but in all cases requiring triggering by the provincial or territorial authority.


SHIPBUILDING
Mr. Joe Reid (St. Catharines):: Mr. Speaker, my question is directed to the Minister of Transport. He knows full well that all segments of the marine industry are in a sad and depressed state. What action is being taken to reinstitute or reinvigorate the deep sea merchant marine industry, or to bolster the shipbuilding industry in Canada?


Hon. Don Mazankowski (Minister of Transport):: Mr. Speaker, the task force which was assembled by the previous Government will be issuing its report; I believe it will be released today. Hopefully it will contain some positive recom-
June 3, 1985

mendations and will be of such a nature as to contribute toward the establishment of a positive environment for the gradual development of a deep sea fleet in Canada.


PENSIONS
Lorne Edmund Nystrom: Mr. Speaker, my question is directed to the Minister of National Health and Welfare. That Minister and the Minister of Finance are very fond of saying that senior citizens support the deindexing of old age security pensions. I have a statement prepared by the National Advisory Council on Aging in which it is indicated that deindexing is most unfair. The Council asks the Government to reconsider and to keep indexing for our senior citizens. This organization is the Government's own organization, it is its advisory council, its advisers. Will the Minister accept the advice of its own Council and ensure that pensions for senior citizens remain fully indexed?


Arthur Jacob (Jake) Epp: Mr. Speaker, I wish the Hon. Member had also read other parts of the press release in which the National Advisory Council on Aging made very strong and positive statements on other aspects of pensions, especially the Pension Benefits Standards Act. They made very positive statements about that section.
Regarding the second point in the Hon. Member's question,
I said in a former answer that, given the circumstances, no Member of the House-and I am sure no senior citizen- would not have opted for an option in wich full indexing would have been retained both for the GIS, as it is now, and for the OAS. That is a statement which everyone accepts and recognizes, but that is not the only issue which applies to pensions of senior citizens. For instance, if the Hon. Member takes a look at page 134 of the Budget he will see that we have said very clearly that we will monitor the situation and address it as needs arise.


SASKATCHEWAN SENIOR CITIZENS' ORGANIZATION
Lorne Edmund Nystrom: Mr. Speaker, my supplementary question is directed to the Minister of Finance. When he was not here on Friday I asked the Minister of State for Finance why the Government had snubbed the senior citizens' organization of Saskatchewan three weeks ago by refusing to meet with its members. I have a copy of the telegram which they sent to the Minister this morning, inviting him to its annual convention today and tomorrow in Moose Jaw, and inviting him to answer their concerns about deindexing. In light of the snub by the Government three weeks ago of that seniors' organization in Saskatchewan, is the Minister now ready,-
Oral Questions


Ramon John Hnatyshyn: At least Jake goes to Saskatchewan more than once a year.


Lorne Edmund Nystrom: -despite the protest of the Government House Leader-to go to Moose Jaw tonight or tomorrow, or send one of his colleagues to meet with them to discuss their concerns about the deindexing of old age pensions?


Michael Holcombe Wilson: Mr. Speaker, I do not know how the Hon. Member can refer to this as a snub. My colleague has met on many occasions with a wide range of senior citizens' groups, as have I.


Lorne Edmund Nystrom: Not in Saskatchewan.


Michael Holcombe Wilson: If it was three weeks ago, that request came right in the middle of the final throes of preparation of the Budget and it was not possible for me at that time to meet with people. However, if they would wish to meet with me at some time in the future, I would be glad to consider it.


FISHERIES
James Ross Fulton: Mr. Speaker, my question is directed to the Minister of Fisheries and Oceans. The Minister is aware that extremely serious charges of fraud and bribery are being directed at his Department's handling of illegal fishing activities by 17 nations fishing within Canada's 200-mile fishing zone. Since contradictory statements were issued by his senior officials regarding these matters, particularly regarding prosecutions, will the Minister today order that all records and allegations of violation be turned over the RCMP for investigation, or is he satisfied with the status quo?


Hon. John A. Fraser (Minister of Fisheries and Oceans):: Mr. Speaker, the allegations appearing in the press are very serious. I advise the House and the Hon. Member that tomorrow I will be meeting on this issue with the chief of enforcement for the Newfoundland region, the co-ordinator for the observer program who wrote the letter to which reference was made in The Globe and Mail today, the chief of enforcement for the Scotia Fundy region, the co-ordinator from that region, and the regional director from Newfoundland and Labrador.


RCMP INVESTIGATION
James Ross Fulton: Mr. Speaker, the problem seems to be that the people responsible for reporting the violations, recommending on the violations, and acting on the violations, are also the ones who regulate the allocations to foreign fleets. My question to the Minister is a very simple one. Is he satisfied with the status quo, or will he do the proper thing, show some leadership, and get the Solicitor General to send in the commercial crime squad to get the crime out of our offshore fisheries?

June 3, 1985
Oral Questions


John Allen Fraser: Mr. Speaker, I suppose the Hon. Member is referring to justice which, in his mind, would be to accuse and condemn without a hearing. I hope Hon. Members will let me proceed in the way that I am doing. As the Hon. Member knows, the Royal Canadian Mounted Police is already conducting its investigation. There is an internal audit ongoing within the Department. 1 met the senior people in that audit this morning. As a consequence of discussions with them, and the information revealed in The Globe and Mail this morning, I ordered these particular officials to see me tomorrow. I will report back to the House as soon as I can.

[ Translation]


THE BUDGET
Ms. Sheila Copps (Hamilton East):: Mr. Speaker, my question is directed to the Minister of Finance. On December 20 of last year, the Prime Minister promised the House of Commons that he would not touch tax exemptions for families with dependent children.

The same doublespeak is now being used by the Minister of Finance when he says that the Budget is fair. Does he think it is fair that, by 1990, a $15,000 per year family of four will pay $413 more in taxes while a $200,000 per year family of four, which takes advantage of the capital gains bonanza, will pay $2,352 less in taxes as a direct result of his blue blooded Budget?


Michael Holcombe Wilson: Mr. Speaker, the way that question was phrased, I have some grave doubts as to the accuracy of those numbers. However, I will say to the Hon. Member that in the Budget we have increased the Child Tax Credit substantially. We have reduced the child tax exemption substantially. Those two measures are very progressive in their nature. As I said to her Leader a few minutes ago, they have the effect of increasing the amount of family benefits payable to those Canadians or Canadian families earning between $10,000 and $15,000. Whereas now they receive less than those earning $20,000 to $30,000, after this Budget they will receive more. I think that is a very progressive move.


LETTER SENT BY PC ASSOCIATION PRESIDENT
Sheila Maureen Copps: Mr. Speaker, the Minister knows quite well that this shell game which he is playing on families of $15,000 to $20,000 a year will not be bought by Canadian people. Is the selling job so difficult for his 211 Members in the House of Commons that he has given the task and responsibility for marketing the Budget to the Hon. Member for Pembina, the President of the Progressive Conservative Association of Canada, who said in a letter to all
Canadians: "If we fail to assure each Canadian of our commitment to the plan for job creation and deficit reduction, I fear the whispering campaign and outright attacks by our Liberal and New Democrat opponents could severely undercut our efforts"? The undercutting of the efforts is not by the Liberal and NDP whispering campaign; it is by the Budget which is hitting out at Canadian families earning $15,000 and $20,000.


Michael Holcombe Wilson: Mr. Speaker, I think this Budget will sell by itself.


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: Mr. Speaker, I appreciate the Hon. Member giving me the opportunity of telling her- and I hope she will convey these views to the Canadians she is speaking to-that there is a special tax on banks, a surtax on large corporations, a surtax on upper income Canadians, that an end has been brought about to income splitting and other loopholes in the tax system, and that there will be a minimum tax in the next taxation year. These are measures which make this Budget a fair and equitable Budget, one which will be accepted by Canadians from coast to coast.


Some Hon. Members:: Hear, hear!


YOUNG OFFENDERS ACT
Mr. Reg Stackhouse (Scarborough West):: Mr. Speaker, my question is for the Acting Solicitor General. This weekend a 15-year old, said to be armed with an automatic pistol, was arrested in connection with the slaying of a Port Credit, Ontario, woman and her daughter. According to a senior officer of the Peel Regional Police, difficulties in making the arrest resulted from the Young Offenders Act. In view of repeated claims by police that their work is being handicapped by this Act, will the Minister initiate a review of the legislation?


Ramon John Hnatyshyn: Mr. Speaker, I appreciate the question from the Hon. Member who is always sensitive to matters of great importance which occur not only in his own province but across the country. I wish to point out to him once again that the administration of the legislation of which he speaks is in the hands of the provincial authorities.
Having said that, there is to be a meeting of federal and provincial authorities with respect to the operation of the legislation. The federal Government and the Department of the Solicitor General are monitoring the operations of this important legislation. The Hon. Member can rest assured that
June 3, 1985

the representations made by him and by the police forces of the country will receive serious consideration.


CLERK OF PETITIONS' REPORTS
Mr. Speaker:: I have the honour to inform the House that the petition presented by the Hon. Member for Grand Falls-White Bay-Labrador (Mr. Rompkey) on Friday, May 31, 1985, meets the requirements of the Standing Orders as to form.
The petition presented by the Hon. Member for Winnipeg North Centre (Mr. Keeper) does not meet the requirements of the Standing Orders as to form.


BUSINESS OF THE HOUSE
Herbert Eser (Herb) Gray: Mr. Speaker, I would like to ask the Government House Leader what business he proposes to call for tomorrow and the balance of the week.


Ramon John Hnatyshyn: Mr. Speaker, 1 appreciate the question. Having regard to the overwhelming support indicated by the most recent Gallup poll with respect to measures which will bring investment to Canada, it occurred to me that we should perhaps deal with the report stage of Bill C-15 tomorrow. I would like to put forward Wednesday as an allotted day under the supply period.
Mr. Speaker, we will continue to have consultations with respect to the business of the House. I will advise the House at the earliest possible date with respect to business for the balance of this week and the beginning of next.


POINT OF ORDER
Neil Young: Mr. Speaker, earlier in Question Period I suggested to the Minister of National Health and Welfare (Mr. Epp) that the Minister of State for Finance (Mrs. McDougall) came from the riding of Eglinton-Law-rence. That, of course, is not correct. The constituency of the Minister of State for Finance is St. Paul's in Toronto. That is the place of origin of the petition which I wish to present now.
Petitions



ROUTINE PROCEEDINGS


Neil Young: Mr. Speaker, I have the honour to present two petitions to the House. One is from senior citizens in the constituency of St. Paul's who protest the Government's proposal to deindex pensions and who respectfully ask the House to reverse that decision.
The second petition is from residents of the constituency of Beaches, also senior citizens, who complain that the Government's proposal to deindex pensions does not have their support. They ask the Government to reverse that position.


Rodney Edward Murphy: Mr. Speaker, 1 have a number of petitions to present from people in the Province of Manitoba, who indicate their opposition to the Government's breaking of its promise with respect to indexing pensions on a quarterly basis.
The second petition I have the honour to present is also from the Province of Manitoba. The people who have signed this petition complain about the fact that the Government has not kept its promise when it said it would index old age pensions to the actual cost of living on a quarterly basis.


Mr. Cyril Keeper (Winnipeg North Centre):: Mr. Speaker, I have the honour to present a number of petitions from people in Manitoba who consider the Budget unfair in that it deindexes pensions. They point out that this will cost senior citizens $100 next year and $600 in six years' time.
This is a break with the Government's promise-


Mr. Speaker:: Order, please. A summary of petition is all that is allowed.


Michael Morris Cassidy: Mr. Speaker, 1 have the honour to present a petition signed by a number of residents from one of the senior citizen apartment buildings in my riding. They protest the Government's decision to deindex the old age pension. They call upon the House of Commons to ensure that the Progressive Conservative Government's promise given in the election campaign with respect to indexing the old age pension to the actual cost of living on a quarterly basis should be honoured by the House and not abandoned.


Mr. Iain Angus (Thunder Bay-Atikokan):: Mr. Speaker, on this first day of Senior Citizens' Month, I have the honour to present a petition signed by a number of residents of Thunder Bay-Atikokan, seniors and their supporters, who state that the Budget imposes an undue and unfair hardship on pensioners by indexing the Old Age Security. They call upon the House to reinstate full indexing of the OAS.
I might add, Mr. Speaker, that the signatures include that
of the Conservative Member of the provincial Parliament for
Fort William.

June 3, 1985
Order Paper Questions


Howard Douglas McCurdy: Mr. Speaker, 1 have the honour to present a petition from Windsor-Walkerville, and elsewhere in Ontario, signed by senior citizens to whom the Budget has not sold itself and who protest the suggestion that they be asked to sacrifice their indexation on behalf of the rich.


Mr. Bill Blaikie (Winnipeg-Birds Hill):: Mr. Speaker, 1 have the honour to present a petition on behalf of senior citizens in Winnipeg who protest the lopsided nature of the Budget and the unfair demands which are being made of seniors in the country in contrast to the demands which are being made of the rich.


Lorne Edmund Nystrom: Mr. Speaker, I have the honour to present a petition on behalf of 40 or 50 citizens from the great city of Yorkton and the Towns of Churchbridge, Ebenezer, Springside, Kamsack and Willow-brook. Through their petition, these people are protesting the undue hardships imposed upon senior citizens because of deindexation. They are calling upon the House to restore and reinstate fully the indexation of the Old Age Security Program in the country.


Mr. Ernie Epp (Thunder Bay-Nipigon):: Mr. Speaker, I have the honour to present a petition from citizens in my constituency who protest the fact that the May 23 Budget imposes an undue and unfair hardship on citizens. They protest the fact that the promise which the Conservative Party gave in the last election campaign was broken. The petition calls for a return to full indexing in order to ensure that the poor, the unemployed and women do not lose anything, as they are faced with losing under the Budget.


Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, 1 have the pleasure to present a petition on behalf of a number of constituents from my riding. Their petition points out that the May 23 Budget imposes undue and unfair hardship on pensioners by deindexing the Old Age Security Program. They call upon the House to reinstate full indexation of the Old Age Security Program for Canada.

[ Translation]


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Paul Dick (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, the following question will be answered today: No. 238.


Mr. Howie: 1.	Has the Department of National Health and Welfare undertaken any studies in relation to the increased possibility of sick children being treated with aspirin contracting Reyes Syndrome and, if so, what conclusions were reached?
2.	Are protective measures such as warning labels on product containers justified and, if not, will the Department undertake such a study?


Arthur Jacob (Jake) Epp: 1. The Department of National Health and Welfare has not undertaken any studies relating to the use of ASA in children and the possible association of such use with the subsequent development of Reye's Syndrome, except to gather information on the incidence of the disease. In 1984 about 15 cases were reported.
2. The detailed results of the latest United States pilot study are not yet available to the Department for analysis, and are only expected in the fiscal year 1986-87. The Department has in the past drawn the attention of health professionals and parents to the problem by way of cheque inserts and newsletters. It has counselled caution in the use of ASA in children to reduce fever associated with viral illnesses. Manufacturers in the United States and Canada are voluntarily taking steps to add warning statements to their labels.


Paul Wyatt Dick: 1 ask, Mr. Speaker, that the remaining questions be allowed to stand.


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


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Wilson (Etobicoke Centre) that this House approves in general the budgetary policy of the Government.
Roland de Corneille: Mr. Speaker, 1 speak in sorrow and in anger with the Government for its absolute and abysmal failure to live up to the explicit promises it made during the election campaign to the charities, to the voluntary sector of the country, to take action on the proposals which was and is called "give and take". It is just one more of the many promises, sacred and otherwise, that the Tory Government has broken.
June 3, 1985

The give-and-take proposal, as it is called, provides for a 50 per cent tax rebate on what people contribute to charity regardless of their income. For example, for every one dollar a Canadian gives to charity, that contributor would receive a rebate of 50 cents on their income tax return. This would have the benefit of equalizing the cost of giving by offering equal incentives to all regardless of earnings and the rate at which they are taxed.
At present, as 1 think we all know, the higher one's income, the more benefit one receives from being able to deduct charitable donations at a higher tax rate. For example, right now a person who earns $50,000 per year and gives $200 to charity will be able to get back $100 because he is taxed at 50 per cent. A person who now earns $30,000 per year who gives the same $200, which is taxed at 30 per cent, will only be able to deduct 30 per cent of his or her gift, so that that person will only get back $60 rather than $100. It is unequal and unfair that one person gets back $100 and the other gets back $60. It is unfair that the one who earns more gets back more. The give-and-take proposal would equalize the benefits to all Canadians and of course encourage them to give more to charity.
Because the give-and-take proposal would encourage more people to give to charity, it would also secure larger memberships in charitable organizations and more participation in the voluntary sector. There is a proven relationship between one's giving and one's participation. It is a well-known axiom that where your treasure is, there will your heart be also.
During the election campaign, the Prime Minister (Mr. Mulroney) made a promise which was printed in the bulletin of the umbrella organization that relates to the voluntary sector. The bulletin reads:
We are committed to implementing a Tax Credit equal to a percentage of donations made to registered charities.
That was a firm commitment and it is here in black and white. Tory Members made this promise or, as they called it, commitment, but that was when the Prime Minister was in opposition and running for office. That was before the election. Since that time, he has become the Prime Minister. Where is this promise after almost nine months? Of course, the place for this promise to have been kept was in the Budget.
Voluntary organizations across the country waited for an announcement. Where is this announcement? Where is the give-and-take tax credit program in the Budget recently tabled by the Minister of Finance (Mr. Wilson)? It has vanished. It is not to be seen and not to be heard.
The Opposition of old has now become the Government and, abracadabra, it has become a Government of magic vanishing acts. With the Prime Minister, now you see it, now you don't. Not only did we not get jobs, jobs, jobs, but we did get promises, promises, promises which have been broken, broken, broken. The Prime Minister has done it again, and three million volunteers working for 40,000 charities now know the value of the promises made by the Prime Minister.
The Budget-Mr. de Corneille
What about the Secretary of State (Mr. McFean)? He made the give-and-take proposal his pet crusade while he was on the opposition side. Let us take a look at a few of the promises he made. It would require days and even weeks to recite them all to you, Mr. Speaker. I can hardly do justice to all of the commitments and promises made by my hon. friend on the issue of give and take. For example, when he was in opposition, the present Secretary of State said the following:
We are committed to a fundamental realignment of the tax treatment for charitable giving-the principle of a charitable tax credit-which will offer equitable incentives to all taxpayers to support their charities.
In other words, he said that he was entirely for the give-and-take proposal. He also said that the voluntary sector was the largest employer of lower and middle-class Canadians, and he was right when he said that. In addressing the voluntary sector, he said the following:
You (the Voluntary Sector) offer many less advantaged Canadians a bridge to employment. Canada's Voluntary Sector is an untapped resource that not only can reduce government spending but can actually create jobs in the process.
This is why we are committed to a principle of a charitable tax credit, to a tax environment which will offer equitable incentives. Give and take is on the agenda.
He said that give and take was on the agenda. Where is it on the Tory agenda? Is it only on the Tory agenda when Tory Members are in opposition? Now we have a Tory Government but we do not see that promise. Give and take was on the agenda of the Secretary of State when he was the Conservative critic for this area and spoke to the National Voluntary Organizations in the spring of 1984. All of the quotations which I have just read come from that one particular speech addressed to the National Voluntary Organizations.
Give and take was on the agenda then. Only a year ago, the Secretary of State told us that it was on his talking agenda, his speaking agenda, his promises agenda and his "get-the-Tories-elected" agenda. Where has the give-and-take proposal gone? Is the Secretary of State a magician as well? It appears as though we had another vanishing act here. I could paper my office with the promises made by the Secretary of State throughout his years in the House of Commons. He made promises not only in the House of Commons but in committees and in speeches to voluntary organizations across the country. Whenever he had a chance, he made these promises.
It is interesting to note that in 1980, the Secretary of State told us that the Government must act on this issue on behalf of the voluntary organizations "to provide voluntary agencies with financial aid to support their fund-raising activities". Then in 1982 he told us not to think "of the decrease this would bring to federal coffers but to think of this as an engine for employment creation". Those were the words of the Secretary of State. As far back as five years ago, the Secretary of State was telling us that the voluntary sector needed this give-and-take program so that it could create jobs.
The Minister of Finance (Mr. Wilson) insists that, above all, his Budget is designed to create jobs. If so, why did the Secretary of State not tell the Minister of Finance about this marvellous way to create jobs? It is a marvellous way to create jobs. If the sorrow of the Secretary of State was so great, why

June 3, 1985
The Budget-Mr. de Corneille
did he not cry on the shoulder of the Minister of National Revenue (Mr. Beatty), on the shoulder of the Minister of Finance or on the shoulder of the Prime Minister in order to make sure that give and take really got on the agenda as he promised? I am afraid his tears were crocodile tears. Now that Tory Members have been elected on the basis of their election promises, they can forget all of them.
The Secretary of State accused the past Government of being guilty of a stark contrast between words and deeds, rhetoric and action, but the former Liberal Government never made a promise to instate the give-and-take proposal. However, the Secretary of State and the Prime Minister did make that promise. They are the ones who are guilty of rhetoric rather than action.
Is this House an echo chamber? Indeed, the Secretary of State really shot himself in his foot with his own words, words which I am sure he wishes the voluntary agencies and charities across the country would quickly forget.
The Secretary of State saved the best for last. On December 7, 1983, the Throne Speech of the Liberal Government proposed to set up a joint parliamentary task force consisting of Members of the House of Commons and the other place to consider all issues related to formulating an appropriate definition of a charity and what a charity could do under the Income Tax Act, in order to speed up the possibility of moving toward the consideration of the give-and-take program. The Liberal Government realized that it was an important issue to resolve. It was important enough to be in the Throne Speech. What happened to the proposal? Did it have an opportunity in its important work? Clearly the answer is no. It was obstructed by the present Secretary of State. He blocked the formation of the task force. He said that it was not good enough for the Liberal Government to deal only with the important definition of a charity. The Secretary of State maintained that he wanted a package deal. He wanted to tie it to the consideration of give and take. His position was: unless there was a discussion of give and take, then there would be no consideration given to the definition of charities. According to the Secretary of State, the agenda of the task force had to be all or nothing at all.
At the National Voluntary Organizations consultation meeting in 1984, the Secretary of State was heard loud and clear on the issue. Quoting from a copy of his speech which he circulated to. members of the National Voluntary Organizations:
Just last Thursday, the Hon. Serge Joyal called to discuss the task force and to seek Progressive Conservative Party support for a resolution in both the House of Commons and the Senate.
The present Secretary of State continued:
I have responded that quick agreements can be achieved, if the frame of reference is broadened to address the fiscal framework as well as the legal. Your tax proposal should be part of the reference, not just the definition of charities.
The Liberal Government was blocked by the present Secretary of State and the Tories from doing anything constructive in attempting to resolve the issue of an appropriate definition
of charities for income tax purposes. It was a very important issue, and it still is.
The Secretary of State cannot be proud that he, the most vocal spokesman for the Tories for voluntary organizations, should have blocked the progress of the former Government. He made promise after promise and then blocked action on the very things which he had promised were most dear to his heart. That was unconscionable.
In 1985 the Tories formed the Government. Finally, the first Budget was brought down. What is in it? 1 can hardly believe it. The Tories have decided to do something about part of the issue of the definition of charities for income tax purposes. Wonder of wonders. The Secretary of State blocked the former Government from forming an all-Party committee to consider the whole definition of charities, including the political activities which they would be allowed and many other complex aspects of what constitutes a charity. It is now a year later. What have we got? We have less than that which he blocked the former Government from doing. It does not include the former Government's proposal of a fiscal give-and-take program. Where is the give and take? It is not even on the agenda. It has vanished by Tory magic. One and a half years later, voluntary organizations are less well off than they might have been. They owe that to the man who was purported to have fought the hardest for them, the present Secretary of State. It is unbelievable. It is a "now you see it, now you don't", brought to us by the Tories. "Give and take" the proposal is called. That is precisely what the Tories have done. They promised to give but have taken away what they promised. The Secretary of State has found a new way of communicating on the issue-absolute silence. Mr. Speaker, have you ever heard him speak one word in the House on give and take since the Tories were elected? You haven't, not a word. Why did he not dig in his heels the way he did with the previous Government and say to the Minister of National Revenue, the Minister of Finance, or the Prime Minister that he wants a fiscal and legal framework, a definition of charities, and give and take considered in one package? Now that he is in government where are the eloquent speeches and demands? Silence, like the silence of the Berlin Wall.
Did the Tories think they could get away with this? Apparently they did. They thought they could distract attention from broken promises by offering partial action on the definition of charities to voluntary organizations. They thought the National Voluntary Organizations, its constituent organizations, and some 40,000 voluntary organizations in Canada, would buy the pay-off to forget.
The press release from the National Voluntary Organizations and reactions from a number of societies, associations and churches show that they are not amused. The Government will be hearing from them. The Tories' sop to voluntary organizations and charities has not worked. The Tories have underestimated the wisdom of such organizations if they believe that they can get away with this ruse. It will not work. The people of Canada are too smart for the Tory shell game. Regarding the give-and-take tax credit program for charitable
June 3, 1985

organizations in Canada, the Tories gave and the Tories have taken away. Blasted be the game of the Tories!


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


Mrs. Bourgault:: Mr. Speaker, I am sick and tired of hearing Opposition Members using the elderly and volunteer agencies to make political points, and I hope Canadians are not taken in by what the Hon. Member for Eglinton-Lawrence (Mr. de Corneille) said about charitable organizations. I would qualify as self-serving and political rhetoric what the Hon. Member has been saying today about the voluntary sector and nonprofit organizations, for which my Government, Mr. Speaker, has boundless admiration and respect, which is reflected in the Budget by a proposal that makes it easier to donate gifts to charities, and by a consultation process that will help us do even more for these organizations. The Hon. Member fails to mention this. He is setting himself up as the defender of the voluntary sector by indulging in a lot of calculated rhetoric.
Mr. Speaker, we all know we should not expect others to do what we cannot do ourselves. The Liberals should not ask this Government to accomplish in nine months what they were unable to do in 20 years. I would like to hear what he has to say about that.


Roland de Corneille: Mr. Speaker, first, I am not sure that was a question. It sounded like a rather pathetic attempt to shake off some dust, in view of the fact that the Secretary of State has said nothing and done nothing about give and take. There is no suggestion of trying to hurt anybody. On the contrary. The point is that those people were given solemn promises by the Prime Minister and the Secretary of State. The voluntary organizations are searching through the Budget and finding that there is not a single, solitary mention of the give and take, 50 per cent-


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


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


Claudy Mailly: Mr. Speaker, the Hon. Member for Bourassa (Mr. Rossi) keeps coming in the House and standing in the back, where he shouts all kinds of stupid remarks. He should at least have the courage to sit down and wait his turn. I am sick and ... He has been doing this for months-


An Hon. Member:: That is not a point of order, Mr. Speaker.


Mr. Deputy Speaker:: -that this is a point of order.
The Budget-Mr. de Corneille Mr. Rossi: Do your homework, bossy!


Mr. Deputy Speaker:: The Hon. Member for Eglinton-Lawrence (Mr. de Corneille) has the floor.


Roland de Corneille: Mr. Speaker, 1 really believe that the subject of my speech-I will wait until we have some order here.


Mr. Deputy Speaker:: Order. Very well.


Roland de Corneille: 1 would suggest that the problem has to do with the question of-
[ Translation]


Claudy Mailly: On a question of privilege, Mr. Speaker. 1 would like to listen to the Hon. Member's reply to my colleague's comments. Could he stop shouting back there?


Mr. Deputy Speaker:: 1 would ask all Hon. Members to please listen to the reply by the Hon. Member for Eglinton-Lawrence (Mr. de Corneille).


Roland de Corneille: Mr. Speaker, obviously I woke them up. They are staring at one more in a long line of broken promises. Tragically, these people were elected by promising the moon, sky and the stars. Then, once into office, they conveniently forget all those promises. The Canadian people are not amused, and that is what is stirring them up. They have seen the senior citizens of this country betrayed by the Prime Minister's broken promises. Now, again, one of the clearest promises which has been made year after year has been broken.


Claude Lanthier: On a point of order, Mr. Speaker.


Mr. Deputy Speaker:: The Parliamentary Secretary to the Minister of Finance (Mr. Lanthier), on a point of order.


Claude Lanthier: Mr. Speaker, I realize I am a new Member and this may not be a point of order. However, 1 think that what is happening at this time is highly improper. First of all, we are getting comments from the other side of the House, making it impossible for us to listen. We cannot hear the other side. Second, some highly inappropriate comments are being exchanged from either side of the Table. It seems to me that Members should be called to order once and for all. We each have our own seat. There is a procedure, and as a junior Member, I wish the confusion would stop, with all this procedural wrangle.


Carlo Rossi: On the same point of order, Mr. Speaker.

June 3, 1985
The Budget-Mr. de Corneille


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


Carlo Rossi: Mr. Speaker, I would like to inform the Hon. Member on the other side of the House that often his own colleagues are behind the curtains making inappropriate remarks. They can't take their own medicine, Mr. Speaker. Well, they might as well learn! Your colleagues are doing the same thing we do on this side of the House. We are not going to take this lying down!


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


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


Claudy Mailly: Mr. Speaker, you did remind me that the only way to seek redress in the House from this Member who does not know how to behave is to rise on question of privilege. The Hon. Member has been doing the same thing for weeks now. He stays behind the curtain and insults me. He calls me the "Hitler-woman", he calls me "dictator" and all sorts of names which are unacceptable in this House. If ever he should decide to enter the House, 1 wish he would sit down like everybody else and do his work. I am really fed up with the way he behaves. He is vulgar, unfair and boring.


Carlo Rossi: Talking about vulgarity, Mr. Speaker, 1 can tell my colleague that she too is vulgar because she does the same thing when she is behind the curtain. I learned my lesson from her, Mr. Speaker, ever since she first came here. I learned from her.


Claudy Mailly: Mr. Speaker-


Mr. Deputy Speaker:: I would ask Hon. Members to show courtesy to their colleagues. That is the proper attitude, in keeping with the traditions of the House of Commons.
As to the question of privilege raised earlier by the Hon. Member for Gatineau (Mrs. Mailly), I will take it under advisement and make a ruling later.
For the fourth time, I would ask Hon. Members to be courteous and listen to the Hon. Member for Eglinton-Law-rence (Mr. de Corneille) who is trying to answer a question.


Roland de Corneille: Mr. Speaker, I have a very simple observation to make. First, the give-and-take proposal is a good one. It was endorsed by the then Secretary of State and promised by the present Secretary of State (Mr. McLean) as well as the Prime Minister (Mr. Mulroney). It was a good proposal which Members of the Liberal Government wanted to move toward. The Government which is now in power promised that it would bring this about. That is fact number two. Fact number three is simply that it has vanished.


Lise Bourgault: Mr. Speaker, the Hon. Member has yet to answer my question. We all know that charitable organizations had difficulty in the past because it was not easy to obtain a tax credit for a donation. The Budget of the Minister of Finance (Mr. Wilson) makes it easier for individuals this year, enabling them to help charitable organizations indirectly. How come the Hon. Member for Eglinton-Lawrence (Mr. de Corneille) did not mention that? This has to be a step in the right direction! I told him we could not do in nine months what the previous Government was unable to do for 20 years. I should think he would take that into account.
In 1979, my learned colleague and I had a motion under consideration by the Standing Committee on Finance, Trade and Economic Affairs, but it was defeated by the Liberals. The motion was on that issue, but you rejected it. Answer my question. You do not agree that we should make it easier for organizations and individuals, to help the voluntary sector?


Roland de Corneille: Mr. Speaker, I think she is obviously at a distance from reality. 1 do not know what she is talking about when she says this Budget makes it easier to make donations. I can advise her that in order to facilitate this whole process and move it along, the previous Minister of Finance, Mr. Lalonde, eliminated the $100 automatic deduction in order to make it possible for people to claim their charitable donations separately. They would be able to estimate what their loss might be and what the gain might be and how much would be involved, and we would then be facilitated in taking the next step. That was put in place not by this Government, but by the previous Government. It was applauded by the voluntary organizations because it was a step toward being able to assess what was involved in charitable donations. As to this Budget making it easier to make a charitable donation, I cannot imagine what she is talking about. It certainly does not have anything to do with a tax credit.
Let us be clear. The issue is that a promise was made. Strangely enough, we are told this Budget is about jobs. Strangely enough, the Secretary of State said that if you allow this 50 per cent tax credit, it will create jobs. The Prime Minister acknowledged that. If this Budget is about jobs, why is this provision not in the Budget? That is the question. We are talking about give and take; where is it?


Mr. Deputy Speaker:: The Hon. Member for Gatineau (Mrs. Mailly) for a question or comment.


Claudy Mailly: Mr. Speaker, I want to say to the Hon. Member that this give-and-take program was introduced when the Clark Government was in office. 1 was then political advisor to the Minister of Finance, and the National Volunteer Organization came to see us. What we did was to put a note in Mr. Crosbie's 1979 Budget to the effect that the measure would be considered by the Standing Committee on Finance,
June 3, 1985

Trade and Economic Affairs, and also by the special committee struck to study the rights of the handicapped and services to be offered to the handicapped and the voluntary sector.
We were then quite anxious to study that very good measure and Mr. Crosbie had urged the committee to consider it. Unfortunately, as we all know, his Government defeated the Crosbie Budget and our Government along with it.
Now, five years later, the economic situation is worse than in 1979 and we simply cannot promote all the measures we would like to implement in order to help the voluntary sector, charitable organizations and community groups. But it is only a matter of time because our Minister of National Health and Welfare (Mr. Epp) and the Secretary of State for External Affairs are fully aware of the contribution of voluntary organizations.
That is why the Secretary of State for External Affairs (Mr. Clark) encouraged all Canadians to help relieve famine in Ethiopia instead of again letting the Government alone contribute funds to assist that country. We know very well that the voluntary sector in Canada is second to none and that Canadians are very generous. So we will study the measure he mentioned, along with all the others. Given the deficit we inherited and our sluggish economy, we simply cannot afford to promote all worthy causes. That is precisely why we are so pleased that the Canadian people turfed out that Government and put us in office so we may at last take a different approach and improve the quality of life for all Canadians.


Roland de Corneille: Mr. Speaker, I am very interested to learn that this is a great trump up their sleeve. With all the unemployed people around, I wish they would play this trump which would create jobs. If what the Hon. Member said is true, it is even worse than I thought. She is saying that when the Right Hon. Member for Yellowhead (Mr. Clark) was Prime Minister, they were aware of this program. It was recommended, but did not even appear in the Budget of the present Minister of Justice (Mr. Crosbie). Therefore, it seems that they have missed the boat not once, but twice. It had already been proposed and they knew about it. They had looked at it once already and did not put it in the Budget of the present Minister of Justice.
The present Budget took nine months to create and was supposed to be focused on jobs. Everyone has agreed that this give-and-take process is valuable, but there is not even a suggestion in the Budget that it is going to be studied. I looked through the budget papers and saw no reference to indicate that the subject of give and take would be studied. I would certainly welcome an immediate move by the Minister of Finance (Mr. Wilson), with the support of the present Secretary of State (Mr. McLean) to set up such a committee to allow us to study the implications of this for the sake of employment and the charitable organizations of the country.
The Budget-Mr. Jepson


Mr. Jim Jepson (London East):: Mr. Speaker, it gives me a great deal of pleasure to rise today, on the sixth day of the budget debate, to support the measures announced in the Budget by the Hon. Minister of Finance (Mr. Wilson).
For almost 14 years I have experienced the ups and downs of trying to run a small business in my riding of London East.
I think it is extremely important that this Budget reflects the views, not of politicians, but of Canadians from all regions and many backgrounds who have brought their different perspectives to Ottawa to serve the national interest.
As a small businessman, I believe that the collective wisdom of the market-place must be given priority that it has not received in the past. To restore a body to health and to make it grow, the first requirement is nourishment. At long last our economy is now receiving more than the temporary band-aid solutions of the past. Although these might have provided some short-term relief, they only dealt with the surface problems and not the root causes.
Small businessmen, and indeed most Canadians who have experienced the problems first hand, realize the previous approach has not worked and the time has come for a new direction. We believe this Budget reflects the views of the Canadian people because we have benefited from the collective wisdom of many Canadians from across Canada who have generously shared their views with us these past months.
In rising to speak in the budget debate, 1 can tell the people of London East that the commitment for change that was made to them by our Party has taken a progressive step forward. The discussion surrounding the Budget projects two emergent themes. The first of these reflects the approach of the previous administration. That approach was rejected by the Canadian people. It consists of judging Government by what it gives out. Members of the Opposition Parties are telling each Canadian to look at the Budget and ask what it does for them personally rather than looking at it collectively in the best interests of all Canadians.
This approach did not accomplish what it hoped to achieve in the previous Government, although 1 am sure it was brought in with the best of intentions. It did nothing to encourage investment and create jobs and opportunity, but rather saddled our recovery with a debt load that now absorbs one of every three dollars paid by Canadian taxpayers.
I ask both my Liberal and NDP colleagues in the House to consider looking at the Budget from a more positive and objective viewpoint. The questions that should be asked in order to arrive at an objective evaluation of the merits of the Budget look at it as a whole and with the big picture in mind. We all realize that the prime function of the Budget is to begin the process of restoring confidence in our business communities and our country. A working economy reduces employment and will allow the Government to provide effective protection and renewed hope for those experiencing the perils of a struggling economy,
In view of the critical state of our economy, 1 believe the
time has come to put aside the temptation to score political

June 3, 1985
The Budget-Mr. Jepson
points and to work together in the best interests of all Canadians. The best thing about our Budget is its realistic approach to alleviating Canada's problems of unemployment and economic inertia. This has to be the focus of any responsible Budget because these fundamental problems lead directly to the countless serious problems experienced by Canadians that the Government is committed to assisting.
This Budget is a realistic answer to the record of the last Government. That Government was faced with serious problems and decided that a strategy of massive government spending would be the best route to go. However, we still have the problems of unemployment, a spiralling debt, and a structural deficit which has limited the opportunity for recovery.
I would like to speak to this Budget from the perspective of a small businessman. Everyone knows the importance of this sector. The Canadian Federation of Independent Business estimates that it creates at least 80 per cent of all new lasting jobs. The key to a healthy economy is a healthy small business sector. The health of the small business sector depends on the commercial environment which is, to a great extent, determined by the tax framework. This has a direct influence on the willingness of people to invest, of businessmen to take risks, on the flexibility and supply of labour, and on the ability of consumers to buy.
Today I will focus my remarks on the effectiveness of the Budget in changing the tax structure into one that will allow small businesses to start the process of economic renewal. The single most impressive change announced in the Budget is the long overdue measure that extends to all Canadians a $500,000 lifetime exemption from capital gains. In 1972, on the recommendation of the 1966 Royal Commission on Taxation, the taxation of capital gains was introduced primarily in the interest of equity. The decision at that time to include only one-half of capital gains as taxable income reflected the concern that such a tax would have some adverse effects on the economy. Furthermore, the erosion of the cost base of assets by inflation was also regarded as something that should be compensated for.
In 1985 it is appropriate to adjust this legislation because of the circumstances. The balance has shifted in a way that makes it necessary to use new measures to encourage investment and enterprise, thereby creating jobs and opportunities for Canadians. Businessmen and women are not taking the initiatives that will lead to the growth of our economy, but with this Budget, we believe they will.
The capital gains tax made it less attractive to make equity investments. The system allows a limited deductibility of capital losses which are particularly significant during a recessionary period. The hidden tax effect of inflation has already been mentioned as creating a taxable capital gain on paper even when an asset has actually lost value. Finally, the capital gains system tends to lock in investments, or to inhibit their investment altogether.
The point of these observations is that the capital gains exemption gives small business a more just return on the risks they have taken with the hope that they, in turn, will invest
and expand in their business, thereby creating more jobs and opportunities for Canadians. If money invested in a small business is given a better rate of return, we believe that more money will be invested than has been in the past.
A final point I would like to make with respect to capital gains concerns the signal it sends to all Canadians. All of the measures in the Budget, but particularly this one, tell people that we are counting on them to go out and do well. If people get the feeling that they can succeed by using their resources, then this Budget has accomplished a great deal.
Reflecting their grave doubts about the character of the Canadian people, the Opposition say that the capital gains exemption will only result in rich people benefiting from the purchase of a Florida condominium. We are different as a Progressive Conservative Government. We have great faith in the Canadian people, that they will respond to those initiatives and share this opportunity with all Canadians.
Unfortunately, they do not seem to make the connection that the single most important reason for taking capital out of Canada and investing it in another country is a taxation and regulation environment that made Canada a bad place to invest. We say that Canada is a good place to invest and this will be reflected in the days ahead. Already, we have seen many positive economic signs in the market-place and sense a renewed feeling of confidence and optimism. FIR A tried to keep jobs in Canada, but in the long run it destroyed them by making other countries more attractive places to invest. This was the same short sighted philosophy underlying the National Energy Program and the Petroleum and Gas Revenue Tax.
In 1985, Canada is turning into one of the best places to invest because of the confidence we have shown in the decision-making of consumers and business persons alike. Two years from now, we believe the Opposition will be surprised to see how Canadians of all income levels have responded in a positive way to invest in their own country. We believe in Canadians. A capital gains exemption will not mean much if there is no money available to be invested. The Budget addresses this question and contains a number of measures that compliment the exemption in ways that will channel the benefits toward the ordinary Canadian. The Budget opens a number of new sources for investment capital that will find its way into investments that will create jobs.
Venture capital funds patterned after the Quebec Federation of Labour Fund will be encouraged by the Budget. This is a direct instrument, to benefit both labour and small business, that will be advanced by the extension of a generous tax credit for people taking advantage of this opportunity. Investment tax credits have been recognized as one of the most positive ways to encourage entry into the market. This credit will bring the coverage up to a possible 40 per cent of the value of the investment. Sixty per cent of this investment will go into the equity of the small and medium-sized Canadian businesses.
The innovative Quebec Federation of Labour program that inspired this measure has been a genuine success story. Le
June 3, 1985

Fonds de Solidarite des Travailleurs du Quebec was the initiative of workers who wanted to help themselves out of the doldrums of the recession. The Quebec fund has been in operation for two years and has been a significant benefit to participants, both for its investment value and as a tax credit. Furthermore, it has been said to have provided Quebecers with
1,000	jobs through the impetus it provides for the economy.
This measure has been largely ignored by the Opposition speakers, which I suppose is the highest endorsement we would expect from them. Since it is a tax credit, this is a very progressive instrument to bring about the objective of labour participation in business equity. It will also present the opportunity for people with lower income to take advantage of their lifetime capital gains exemption. It is hard to say whether the investors or the businesses will benefit more from this, but it is good to see policies that do not lopsidedly distribute benefits while taxing the system as a whole. I hope all Members will join me in congratulating the Minister of Finance for extending this innovative proposal. I believe that it merits encouragement as something that will be of great economic significance to all regions of Canada.
Another progressive measure announced in the Budget was raised in the course of the exhaustive consultation process. Both the Canadian Organization of Small Business and the Canadian Federation of Independent Business strongly recommend the making available of certain pension funds to provide equity for small business. The availability of several billion dollars for equity financing will have considerable impact in making our small business sector one that will be able to respond to changing technologies and market conditions. By giving small business both the incentive and the opportunity to increase its equity, the Budget has taken a giant step forward to achieving a secure economic renewal.
A key to any competitive economy in the next few decades will be the priority it places on high technology and research. Both Japan and West Germany have recognized this and their economies reflect it. Unfortunately, our social and economic policies in the past have ail but ignored the need for a thoughtful approach to fostering innovation that can both be developed and applied to the manufacturing process. Other major industrialized economies average close to twice Canada's proportionate expenditure in R and D as a percentage of Gross National Product. The R and D tax credit for small businesses consists of 35 per cent of research and development spending up to a total of $700,000. This credit will be refundable in full to the company that uses it. This will make it a much more direct benefit, since only 40 per cent was refundable in the past.
The resources for this program are closely focused on the small business sector. This is a progressive step because this money will get some operations off the ground that would not otherwise have existed. If an economy is to adjust to a format that is both specialized and flexible, this is exactly the sort of policy that we need. The essence of the idea of competition is efficiency, that is the most productivity for a given level of available resources. I believe the specific tax measures
The Budget-Mr. Jepson
described in the Budget serve very valuable policy objectives. At the same time, it is good to see that the system itself will get a comprehensive review through the corporate income tax system discussion paper.
In the pre-Budget consultation, representatives of the business community never objected to paying their fair share of tax, but they did wonder why the system had to be so complicated. This was seen as a cost in the same way that high tax rates area. A complicated tax system absorbs time, energy and expense. It deeply affects the profile of corporate structures and planning for both small and large businesses. Our Government is sensitive to the problems created by a complicated tax system.
Let me conclude my remarks with some observations on the deficit. All thinking Canadians realize that we cannot continue to spend beyond our means, but we cannot accomplish this reduction overnight. We must, at the same time, maintain that high level of effective social programs which is important to all of us. The Minister of Finance considered this carefully, and I support the resulting Budget. Important programs have been maintained and the tax level remains at an equitable level. At the same time, we have launched a vigorous program to reduce the level of our deficit.
Budget '85 is an historic change for Canadian Government; it charts a bold new direction, rightfully placing responsibility in the hands of the private sector. This is the only basis for a strong and viable economy. I urge all Members to avoid spreading fear and to join the Government in supporting a Budget that is clearly setting a new, positive direction for Canada. It is a direction that will utilize the vast and rich natural and human resources we possess in this country and that have been left untapped for far too long.


Michael Morris Cassidy: Mr. Speaker, I want to make a couple of comments on the speech by the Hon. Member for London East (Mr. Jepson). I think there are some basic inequities in the Budget that I do not believe Members of the Government have accepted or understand. He is defending the fact that the capital gains exemption will now allow people to make $500,000 in capital gains without paying any tax at all. What he does not speak about is from where that money is going to come. It will come from the imposition of deindexing the old age pension.
That will go on year after year. It is $100 a year for a pensioner in 1986; $200 in 1987; and $300 in 1988. You can double the amount for a couple both receiving the old age pension. When the Minister of Finance (Mr. Wilson) or his colleagues say that pensioners have to contribute to bring down the deficit, the fact is that is not true. Pensioners are being asked to make that contribution from the pittance on which they have to live to finance this enormous tax exemption on capital gains, a tax exemption which will rise to more than $1 billion a year within the course of two or three years. It starts small and gets bigger and bigger.

June 3, 1985
The Budget-Mr. Jepson
It is argued by the Government that that is OK because it is putting a surtax on people who are well off, on corporations and the banks in 1986. That is correct, but what the Government does not say is that it is for only one year. The benefits in terms of the tax exemption on capital gains will go on in perpetuity if this Government has a chance to stay in office. The cost to pensioners in order to take tax off the rich will go on in perpetuity.
Is it any wonder that millions of Canadians are skeptical about the Budget? They look at the fact that the Canadian association for small business, big business, corporate presidents, people in the investment community on Bay Street and St. James Street were amply consulted. The pensioners' organizations and organizations representative of the aged were either not consulted at all, or what they had to say was completely ignored, Mr. Speaker.
How can the Hon. Member defend in glowing terms a Budget which on the face of it is so inequitable? It takes from the poor, particularly the elderly poor, and particularly from that group of women who are 65 or over, widowers, separated or divorced and who have only one income. They will have to pay for the tax exemption on speculation in real estate, art and perhaps the occasional investment in small business. Is that really fair? I ask the Hon. Member to defend that.


James Kenneth (Jim) Jepson: I thank the Hon. Member for his question. We believe it is a fair Budget. We believe that with the election of 211 Government Members, people were telling us very clearly that it was time for a change in the economic policy of Canada and that it was time to make some of those hard decisions.
As I have studied this Budget, I believe the Minister of Finance is to be congratulated on distributing those changes in a very fair and equitable way. I believe all Canadians, including seniors, are prepared to make those sacrifices in the short term to look for the long-term benefits, benefits that will not be there when many people reach retirement because the pension funds have been seriously depleted, and virtually exhausted, covering the massive debt we have had to finance these last years.
1 would suggest to the Hon. Member there is an overwhelming feeling that we must come to grips with this debt and make sure that we have a vibrant and secure economy to allow those Canadians in the years ahead, when it comes time for them to retire, funds for their retirement and security.


Mr. Gagliano:: Mr. Speaker, I have a question for the Hon. Member for London East (Mr. Jepson). Has the Hon. Member read the article in The Citizen dated May 30, 1985, under the heading, "Federal Budget presents problems for small business"? The article in part reads:
The small business community might have been too quick to sing the praises of last week's federal budget, a panel of Ottawa tax experts said Wednesday.
The article goes on:
The only jobs that are sure to be in demand as a direct result of the Budget are those of professional tax advisers-because many of the measures will be hard to understand without professional advice.
And because some of the measures go only halfway-for example, increasing the limits of registered retirement savings plan contributions without allowing entrepreneurs or their relatives to invest RRSP funds in their own businesses- they are virtually useless for small business.
Could the Hon. Member comment on such a statement?


James Kenneth (Jim) Jepson: I thank the Hon. Member for his question, Mr. Speaker. I did not see the article in the paper. I did speak to Mr. John Bulloch, who heads up the Canadian Federation of Independent Business, who is representative, 1 would say, of a clear majority of small businesses in Canada. Mr. Bulloch was overwhelmingly impressed with the Budget. He sees it as a real vehicle, as a springboard for the economy for small businesses to create jobs. He is looking with great anticipation, as are I believe most Canadians, to the positive results that will come.
Let me underline to the Hon. Member that this is not an overnight situation. It will take time. We as a Government are clearly saying to the people that we have faith in them and faith in the business community. We have a country that is rich both in human and national resources and we trust the business sector to play a large role in the recovery. We have every confidence that it will do so.


The Acting Speaker (Mr. Paproski):: We shall now resume debate. The Hon. Member for Winnipeg North (Mr. Orlikow).


David Orlikow: Mr. Speaker, I welcome the opportunity to speak at this very critical time. It seems to me that what this new so-called Progressive Conservative Government is doing with this Budget is beginning the destruction of the social security system which has been built up in Canada over the past 50 years.


An Hon. Member:: Who are you trying to scare?


David Orlikow: We have seen one of those hidebound, old-fashioned-and when 1 am talking about old-fashioned, 1 am talking about a million years ago-Conservatives who just asked who I am trying to scare. I do not have to scare anybody. Any person, except a few of the very rich, who looks at this Budget will knows and recognizes that substantial cuts will result in every person's standard of living. Those are the facts, Mr. Speaker. I do not have to scare anybody.
We are back to debating some of the first principles which we thought we settled a long time ago on such matters as pension policies, social services and the support which Governments should give to those people in need. Let me bring to the attention of those Conservative Members who would like to ignore the real facts some of the very timely information which was contained in a report issued recently by the National Council of Welfare called Poverty on the Increase. Those are not my words. That is the title of a report put out by the National Council of Welfare.
Let me indicate briefly what this report says. This report indicates that Canadians have been hurt very badly by the recession. It reports that the decline in the number of people living in poverty which had been going on since 1969 has now
June 3, 1985

stopped. From 1981 to 1983, there has been a substantial increase in the number of people who are living in poverty. From 1981 to 1983, 600,000 more people were added to the number of Canadians living in poverty. We now have over four million Canadians living in poverty; a 24 per cent increase in two years.
One person in six in Canada is now living in poverty, a sharp increase from the best performance of a few years ago when one person in seven was living in poverty. This is a very significant deterioration. The Budget will compound the trend of the last couple of years and will prove to be a disaster for people in lower income brackets.
Let us look at what will happen to pensions. We have been repeatedly told that the deindexation of pensions will not reduce the living standards of pensioners in the next few years. I do not think, in the years I have served as a Member of Parliament, that we have ever made a more important decision than we did when we indexed old age pensions. I ask Lion. Members to think back to how the system operated before pensions were indexed. In particular, I remind Conservative Members that one of the biggest factors in defeating the Liberal Government, which was in office from 1945 to 1957, was that in 1956 or 1957 the then Liberal Government with its very great revenues was only prepared to increase pensions by $6 per month. The Conservative Leader who brought the Conservatives out of the wilderness and into Government for the first time in generations, Mr. Diefenbaker, went across the country, quite properly heaped scorn on the Liberals and called them; "Six-buck boys".
Mr. Diefenbaker won the election and increased pensions, but despite the calls by pensioners and people who spoke up for them, calling for fairly regular increases in pensions because the cost of living was rising, they did not get pension increases except in election years, at which time a Conservative or Liberal Government, trying to get support from pensioners, would increase pensions. One of the most important decisions made by any Canadian Parliament-and if 1 remember correctly, it was done with the unanimous support of all Parties then in Parliament-was to index pensions so that as the cost of living rose, the real standard of living of pensioners would not be reduced.
Now the Government has decided to deindex pensions. The only increase pensioners will receive will be if the increase in the cost of living rises by more than 3 per cent, at which point they will receive the difference between 3 per cent and the actual rate of inflation. This means that the standard of living for all people receiving OAS-and I am not talking about the Guaranteed Income Supplement-will be reduced by 3 per cent each year as long as we continue with this deindexation.


John Horton McDermid: Unless inflation falls below 3 per cent.


David Orlikow: 1 hear the Hon. Member's interjection. Inflation is now beginning to rise in the United States and in Canada. I ask Hon. Members to think of what this means to
The Budget-Mr. Orlikow
someone who will retire this year at age 65. In five years-and more and more people are living longer-the real value of old age pensions will be reduced three times five, compounded, or by more than 15 per cent.
What about the person who is now 50 years of age and is thinking about how he or she will manage after reaching retirement age at 65? They had every reason to believe that they would receive their Canada Pension, whatever it would be 15 years from now; whatever was in their private pension plan to which they may belong; and whatever they had in savings or in RRSPS. However, the most important part about the way in which most of them would live was what they would receive from OAS, which is now about $269 per month. If the cost of living rises each year for the next 15 years by 3 per cent or more, it will mean that when they retire at age 65, 15 years from now, the value of their old age pension through OAS will in fact be just about half what it is now. This has tremendously disturbing implications for all those people who are trying to plan for their retirement, people who were hoping, expecting and were led to believe that they would live on retirement in some comfort and dignity. This deindexation of OAS destroys that belief.
If it is right or necessary to deindex OAS, I ask government Members whether there is anything wrong with deindexing the Canada Pension Plan. Will we get that next year? At the same time the Government is doing this to ordinary people, it is giving rich people the opportunity to invest $15,500 in RRSP plans each year. Who can invest $15,500 in an RRSP each year-only people with very high incomes.
The former Liberal Government lowered the marginal rate at which high income people paid income tax. Now they are being told not to worry about paying that lower rate of income tax, and that they can avoid paying any income tax, while in high income brackets and before retirement, on $15,500. This will give them a tax break of somewhere in the neighbourhood of $6,000 or $7,000 per year. Let us compare that with what the Government is saying to old age pensioners.
It has been estimated that this reduction or deindexation of old age pensions will save the Government $1.6 billion, but of course that will be taken away from old age pensioners. At the same time-and I do not have the time to discuss it today, but I will certainly do so on another occasion-the Government has given tax concessions and tax breaks to the wealthy. The Government will lose $1.4 billion in revenue and the wealthy will gain almost that amount. In other words, the Government is saying that it will take away $1.6 billion from old age pensioners and give almost that amount to the very wealthy. That is where the Government wants to take the people of Canada. The Government cannot fool old age pensioners. It cannot hide the facts from them. Our pensioners may be old, but they are not stupid.


John Horton McDermid: That is right.


Claudy Mailly: Exactly.


A. Daniel McKenzie: That is right.

June 3, 1985
The Budget-Mr. Orlikow


David Orlikow: That is right. I must have hit a nerve because suddenly Conservative Members are interjecting. It will take a few months for old age pensioners to realize what is happening. They will know what has happened when they go to the supermarket to do their shopping and find that the price of groceries-meat, milk, cheese, everything-has risen, and when they receive their pension cheques and discover that they are not receiving the kinds of increases they used to get until now. They will not have to depend on the Members of the Opposition. They will not have to depend on old age pension organizations, which are already speaking on their behalf. Each and every one of them will know what has happened because they can clearly see what has happened.
A large percentage of our old age pensioners, particularly single women, widows, those who have never been married, and those who stayed home while they were married bringing up their children and who have certainly not worked in recent years, are living in poverty now, It is a sad fact that we really do not know how they live. We do not know how bad it is for them.
I see that the Hon. Member for Winnipeg-Assiniboine (Mr. McKenzie) is here in the Chamber, Mr. Speaker. Since Parliament will not be sitting in July, I invite the Hon. Member to spend a half a day with me to visit some of the soup kitchens operating in our great City of Winnipeg. Let us go to the soup kitchen off Broadway which is operating in the Broadway Optimist Building. Let us visit the Salvation Army and some of the native centres which are feeding people. Let us visit those Catholic churches which are handing out parcels of food, groceries and canned goods. Let us talk to the people at these centres. Perhaps the Hon. Member for Winnipeg-Assiniboine and I could urge the Hon. Member for Brampton-Georgetown (Mr. McDermid) to do the same type of thing in Toronto. It will be seen that there are hundreds of thousands of people in this wealthy country who are living in conditions akin to the way people live in the Third World.
In Winnipeg, we have a successful school nutrition program in place. When it was first started, many people said it was not necessary. It was said that this was not the responsibility of the schools. There are young people in Winnipeg whose one and only nutritious meal a day comes from the school. I say that is a disgrace. It is a disgrace to every Canadian. It is a disgrace to every Member of Parliament that this type of situation can exist in our country.
I say to the Members of the Conservative Party: Go out and look at what is happening. Go out and see how people are living. If those Members have any kind of heart, they will say to the Prime Minister (Mr. Mulroney) and to the Minister of Finance (Mr. Wilson), "You are moving in the wrong direction." We cannot, in all conscience, permit so many people to continue in the way they are living, not if we have any shred of compassion, any shred of decency.
I would like to deal with what the Budget means for
children. What we have in place is a clearly regressive plan. By
the very calculations of the Minister of Finance, there will be a withdrawal of some $15 million from families in the period 1985-86 and some $40 million in the period 1986-87 because of cut-backs in the family allowance program. These family allowances are being cut back because we are abandoning their indexation. In fact, the purchasing power of that money has lost one-third of what it could buy 10 years ago. The child tax exemption is being significantly reduced through this Budget. The child tax credit has been significantly altered through a reduced income threshold for qualifiers and through reduced indexing.
I would now like to deal with poverty in families. According to the report to which I referred earlier, the poverty rate for a family with one child increased by 17.2 per cent from 1980 to 1983. The poverty rate for a family with two children increased by 25.7 per cent from 1980 to 1983. The poverty rate for a family with three or more children increased by 33 per cent from 1980 to 1983. These are shocking figures. I urge the Government to consider the real situation and increase the disposable income of people in low income brackets instead of decreasing it, as has been done through the proposals in the Budget.
I suggest we should not be thinking about increasing regressive sales taxes on essentials. We should be removing these taxes. We should be removing the sales tax from the important and necessary items required by all families. We should not be increasing these taxes. In conclusion, I say again that this Budget is probably the worst I have ever had to deal with in my more than 20 years in Parliament.


Some Hon. Members:: Hear, hear!


James Kenneth (Jim) Jepson: Mr. Speaker, as I listened to the Hon. Member's speech, I found it regrettable that all he had to offer was doom and gloom. It is unfortunate that he dwelt on the negatives and the past. We have a Budget which sets a new direction, one which creates a spirit of optimism and hope. I would ask the Hon. Member to consider that.
I sincerely believe the reason the New Democratic Party is suffering at the polls is because of the negative approach taken in looking at the situation from a textbook perspective as opposed to the real world perspective. 1 would ask the Hon. Member to consider looking in the new direction we are setting for Canada. I ask him to do this objectively. I ask him to join with us in giving all Canadians a new future and new hope.


David Orlikow: Mr. Speaker, the Hon. Member for London East (Mr. Jepson) says that the Budget and his Government are taking Canada in a new direction. There is not very much new about the Budget. Several years ago, when Mrs. Thatcher was first elected, she started to carry out the very same measures which this Government is proposing. I suggest the Hon. Member look to what has happened in Great Britain where unemployment is at an all time high.


Nelson Andrew Riis: All time high! It is the worst it has ever been.
June 3, 1985


David Orlikow: Yes, 1 think you are right. It is the worst it has ever been. It is certainly worse than the situation which existed during the time of the Great Depression in the 1930s. 1 would ask the Hon. Member to look at the situation in Germany. A few years ago, German voters defeated a social democratic Government.


An Hon. Member:: Turfed them out!


David Orlikow: An Hon. Member says, "Turfed them out!" That is a true statement. They had every right to do that in a democratic system. It was assumed, and reported by all the so-called experts, that it would be a generation before the social democratic party would come back to form the Government in Germany. The present German Government is following the same type of policies which this Government is proposing for Canada. Recently, elections were held in the two largest states in Germany. Some two years after the election, the popularity of the government party has dropped by some 7 per cent.
I wish to make one more prediction for the Hon. Member. If it were not illegal, I would like to make a bet with him. I am prepared to make a small wager with the Hon. Member that in a year from now, because of this Government's policies, there will be 100,000 more people unemployed than there are at the present time.


John Horton McDermid: Mr. Speaker, I always enjoy listening to the Hon. Member for Winnipeg North (Mr. Orlikow).


Derek Nigel Ernest Blackburn: Here we come with pearls of wisdom.


John Horton McDermid: His sincerity is unquestionable, unlike that of the Hon. Member for Brant (Mr. Blackburn). I would like to say one thing about the approach taken by the Hon. Member. Certainly we have problems in this country. There is no question about that. However, the deficit is growing at an unconscionable rate. We are now paying 25 per cent in interest payments alone on the deficit. This leaves us with 75 per cent to spend on the various programs of the federal Government.
All I hear from members of the New Democratic Party is that we should be spending more and that we should not be paying any attention to the deficit, except in one area. They say that we should cut out defence, get out of NATO and get out of NORAD. That is the only area in which they suggest we cut expenditures.
If we go on running up our debts at this crazy breakneck speed, the senior citizens and the health care and post-secondary education programs and the other myriad of programs that come from the federal Government will suffer. They will suffer even more if we do not tackle the problem now so that down the road we can assure the senior citizens and all those people who need our help that it will be there for them.


David Orlikow: Mr. Speaker, of course we have a large deficit
about which we should all be concerned. I would ask the Hon.
The Budget-Mr. Orlikow
Member to think about why we have this very large deficit. I say to him that we have this large deficit not because the Government is spending too much money and not because the Government is providing too many services, but because there are a million and a half people who are unemployed.
I urge the Hon. Member to read an article which appeared in the New York Times a few days ago, a copy of which 1 can send to him. The article was about a report from the OECD. What the OECD predicted for Canada next year was that this country would have a rate of unemployment of 11.5 per cent or 11.6 per cent and that that would be the highest rate of unemployment of any country in the OECD. That is not my estimate, that is the estimate of the OECD.
Let me deal for a moment with the deficit. We have a deficit because we have an unemployment rate which is over 11 per cent. There are a million and a half people who are unemployed. Those people are either drawing unemployment insurance benefits or welfare payments. We have a deficit in the unemployment insurance account of $5 billion or $6 billion, I have not looked at the exact figures lately. If one million out of the 1.5 million unemployed were working rather than unemployed, they would not be drawing unemployment insurance payments and they would not be drawing welfare payments. They would be working and they would be paying income tax. They would have the money to purchase things and those purchases would generate sales taxes, both federal and provincial. If one million of the 1.5 million people who are now unemployed were working, the deficit would be quite small.
It is much more important to deal with unemployment than it is to make the number one issue the reduction of the deficit. That is what the Conservative Party and the Prime Minister promised during the election campaign, when he promised "Jobs, Jobs, Jobs". Since the election campaign, unemployment has been forgotten by the Government and they tell us we must now concentrate on reducing the deficit. We are going to do that on the backs of the poor and the old.


Claudy Mailly: Mr. Speaker, it seems to me that the Hon. Member for Winnipeg North (Mr. Orlikow) agrees that the problem is the lack of jobs. However, we differ about the methods that should be used to solve the problem. In 1979, when the Conservative Party was in Government for a few short months, the deficit was $11 billion. Today it is $35 billion. A lot of money has been spent in the interim, but the employment situation has not improved. Obviously we must change our methods.
We are trying to create jobs because we believe that in the chicken and egg situation, the chicken is private enterprise and it, rather than the state, must lay the golden egg that will create the jobs. The Hon. Member believes that it is the state that should create the jobs. However, when the state does that, the jobs do not last.
I have heard some of the Hon. Member's colleagues ask how we can talk about reducing the deficit and giving incentives to industries when we have full capacity or close to full capacity in some of our industries. The Hon. Member for Winnipeg

June 3, 1985
The Budget-Mr. Toupirt
North does not seem to realize that we have structural problems. We have capacities in industries which do not have markets. We must find new industries for which we have markets so that we can sell our goods and create the jobs we need. We agree on the problem. We simply differ on the method that should be used to solve it.


David Orlikow: Mr. Speaker, of course we agree on the problem and of course we disagree on the method. The method of this Government has been tried in Great Britain and in Germany. It would have been tried in the United States in a more obvious way than it has been tried there. The United States has avoided the kind of problem with which we will soon be faced because that country, under the leadership of President Reagan, has pumped billions of dollars into defence. This has been called by some who are better economists than l "military Keynesianism".
This Government is proposing to follow the words of President Reagan who has said that they must deal with the deficit. But under President Reagan, the United States has the biggest deficits it has ever had. If we follow that prescription, then a year from now, as I mentioned to the Hon. Member's colleague, there will be much more unemployment.


The Acting Speaker (Mr. Paproski):: Order. I regret to inform the Hon. Member that his time has expired. Questions and comments are now terminated.
[ Translation]


Mr. Robert Toupin (Terrebonne):: Mr. Speaker, the Budget speech and the Budget papers demonstrate, in my opinion, an attitude on the part of the Progressive Conservative Government and its Minister of Finance (Mr. Wilson) that is realistic, courageous and honest. This Budget reflects a new vision of Canada.
The Budget reflects a realistic attitude because it truly addresses the deficit. The present Government knows that if it does not reduce future deficits and the upward spiral of the national debt, it will inevitably be necessary to increase taxes drastically and make cuts in basic social programs. The present Government is very reluctant to take such measures, because a drastic increase in taxes would have a disastrous effect on the country's productivity and our international competitive position, and as for cutting social services, the human cost would be totally unacceptable. The Budget is realistic because it takes a balanced and sensible approach. It is balanced because tax increases will be phased in gradually up to 1990-91.
The Budget is sensible because as we all know, increasing taxes too quickly would have undesirable effects on our economic growth. It is sensible, Mr. Speaker, because it leads the way to further reduction of our deficit. It is sensible, Mr. Speaker, because it takes into consideration the position of Canada's economy vis-a-vis that of the United States. On a per
capita basis, our national debt is twice that of the United States. However, our tax field here in Canada does not afford the same possibilities for taxation as in the United States, because much of the territory is already covered.
Mr. Speaker, this Budget is courageous because it increases indirect and direct taxes, a measure that is not particularly popular with the general public. We must act immediately, however, because the Budget reduces Government spending and in so doing, has a direct impact on groups with specific interests and privileges.
We are also well aware, Mr. Speaker, that such "house cleaning" measures may alienate certain interest groups. The present Government, however, will continue to act in the best interests of all Canadians.
This Budget reflects an honest attitude on the part of the Government, Mr. Speaker, because it candidly discusses the not very encouraging state of our finances. Today, we have an annual deficit of $35 billion. We have a national debt of over $190 billion. Twenty-five per cent of all Government spending now goes to service debt charges. In five years, if no action is taken immediately, this will rise to nearly 46 per cent.
I also want to say that this Budget reflects a new vision of Canada, a faithful reflection of the Throne Speech and the financial statement, tabled last November. Mr. Speaker, this Budget gives form to the new vision of Canada that all Canadians supported by electing a Progressive Conservative Government. A new vision of Canada, where politicians and public servants will have a more modest role to play. No more almighty government, no more omnipresent government! A new vision of Canada where individuals and the private sector will play an increasingly important role. The birth of a State that creates freedom and the spirit of entrepreneurship. A new vision of a Canada where the State will act as a mediator, and the ultimate goal will be our common prosperity.
The Speech from the Throne, last November's financial statement and the present Budget have proposed a new direction for Canada: a balanced vision of a strong and united Canada where the provinces are given their due.
I would like to discuss some of the principles contained in this Budget. I also intend to provide evidence to support these principles.
Mr. Speaker, first of all, this Budget constitutes a turning point in Canada's social and economic evolution. It uses the living strength of the market and banks on the entrepreneurship of Canadian men and women by placing at their disposal new financing tools and sources.
Let us look at these new financing tools and sources. There is the $500,000 lifetime capital gains tax exemption for an individual taxpayer. This proposal promotes risk-taking and investment in small and medium-size businesses in order to create permanent jobs.
June 3, 1985

In this regard, Mr. Speaker, I would like to set the record straight on two points, one of which concerns an allegation made by the Hon. Member for Laval-des-Rapides (Mr. Gar-neau). He said in this House last week that such a proposal would give rise to land speculation. This allegation surprises me all the more as the Hon. Member for Laval-des-Rapides was once Minister of Finance in Quebec. Mr. Speaker, under the Income Tax Act and Canadian law, and this is very clearly explained in the interpretation bulletins of the Department of Revenue, any gain derived from any land, speculation, any gain derived from the sale of real estate involving speculation, is not taxed as a capital gain, but as income, fully taxable income. This means, Mr. Speaker, that this $500,000 capital gains tax exemption does not apply to such gains. It is quite untrue to suggest the contrary. I also heard certain Members and other people say that this proposal might promote speculation or the purchase of real estate in the United States or in other countries. Once again, Mr. Speaker, under Canadian tax laws and international tax treaties, which avoid double taxation in principle, if someone invests in the United States or elsewhere, the resulting capital gains will be taxed in that country. Here, in Canada, we are taxed on our total income, domestic and otherwise. What we do is to take these gains, to tax them in Canada and to apply the foreign tax credit against the taxes payable in Canada. Mr. Speaker, this proposal to abolish the capital gains tax not only will fail to promote investments in real estate in other countries, but will have the opposite effect and allow investments to remain in Canada, for the simple reason that there will be no capital gains tax payable in this country, while a capital gains tax will be payable in other countries but no tax credit applicable in Canada.
Mr. Speaker, the cost of this measure will be $550 million in 1985 and $700 million in 1986. The principle is as follows: instead of collecting this potential revenue, we are relying on the private sector to put it to good use. We feel the economic impact will be greater this way than if the Government had spent the same amount of money. Mr. Speaker, this has been amply demonstrated by the results of the previous Liberal Government's way of doing things.
I realize I do not have much time left, but we have a number of measures I could mention to support the first principle 1 mentioned earlier. There is the new tax credit encouraging individuals to invest in labour-sponsored venture capital funds, a measure that will help create new jobs and help maintain existing ones, a measure, Mr. Speaker, that demonstrates the cordial relationship between the new Federal Government and the provinces.
There is also an extremely innovative measure aimed at tapping a new source of financing, in a fact, a very important new source of financing, for small and medium-sized businesses that are Canadian-controlled and located here in Canada. This measure makes available, as a source of financ-
The Budget-Mr. Toupin
ing, funds in registered retirement savings plans, registered retirement income funds, deferred profiteering plans and pension plans. A very innovative measure, Mr. Speaker, that will help create permanent jobs.
There is also the measure concerning housing loans aimed at facilitating mobility, which will help both the employee and the companies involved.
I could go on to mention the new tax measures for the oil industry in connection with the National Energy Program. A while ago, I heard the Hon. Member for Laval-des-Rapides (Mr. Garneau) claiming that the Progressive Conservative Government was subsidizing the oil industry. I would like to remind the Hon. Member that the subsidies that were paid to the oil multinationals were in fact paid by the previous Liberal Government. We are eliminating those subsidies. As a result, in 1985-86 we will be saving $800 million. In 1986-87 we will be saving another $800 million. I felt I had to set the record straight, Mr. Speaker, despite the fact the Hon. Member is not in the House at this time.
Once again, I would like to mention that the National Energy Program was designed to subsidize the price of oil.
Mr. Speaker, new taxes were levied and new grants awarded under the National Energy Program. Oil prices were subsidized to prevent them from going up. At the same time, a litre of gas was selling for half the price in the United States, and without any grants either.
Since I have only about five minutes left, I will deal more quickly with my second point. This Budget faithfully reflects Canada's changing approach to social services. Those measures include assistance to poorer families through the child tax credit of $70 in 1986 and $35 in 1987 and subsequent years. Help will be extended to the voluntary sector, among other things by making it easier to donate to charitable organizations. More handicapped will receive assistance since the basic definition is now less restrictive so that 185,000 rather than
65,000	people will be entitled to claim the $2,590 exemption for 1986. Through tax incentives, Canadian men and women will be encouraged to save more for their retirement years, and well-to-do individuals, major corporations and financial institutions will pay more taxes.
My third point, Mr. Speaker, is that the Budget shows our growing concern for the situation of women and provides a retirement income plan which is more equitable for women. Here are some of the highlights: the survivor's pension will continue to be paid in case of remarriage; pension plans will have to pay benefits to the wife of a deceased pensioner; the value of pension rights and existing pensions will be split between spouses upon divorce, separation or a break in common law relationships, subject to a court decision; an additional $900 million earmarked for job creation by the
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June 3, 1985
The Budget-Mr. Toupin
Department of Employment and Immigration in 1985, and again the same amount in 1986-87, Mr. Speaker.
The fourth point is that the Budget makes for greater tax equality by asking rich people to pay their fair share. The tax credit for scientific reearch-a tax loophole as big as they come, Mr. Speaker-has been eliminated. Some $100 million will be recouped in 1986 by doing away with tax shelters where a tax credit was given to the investor or the individual who bought certain things. This relates, for example, to companies offering leisure services, pleasure boats, recreational vehicles, hotel accommodation and the like.
Amendments which will prevent taxpayers from avoiding tax by splitting income between spouses.
A minimum income tax.
Next to last point, Mr. Speaker. This budget proposes measures to streamline the tax system, rationalize the many government programs, encourage financial responsibility and reduce the enormous size of the bureaucracy.
I wish I could mention measures to support this statement, but I am running out of time.
Sixth point, Mr. Speaker. This budget takes into account the inequalities between the regions, especially the more disadvantaged ones.
Again, I could provide concrete proof of this.
As a seventh and final point, Mr. Speaker. In this budget, we practice what we preach by asking senators and former members of Parliament for additional sacrifices, in the direction shown by the Speech from the Throne and last November's economic statement. In this regard, I should like to remind the House that the Right Hon. Prime Minister (Mr. Mulroney) has asked Canadian men and women for sacrifices. He was the first to lead the way by initiating a 15 per cent put in his own ministerial salary.
Finally, by way of conclusion, the Progressive Conservative government has asked all Canadians, especially those with higher incomes, to make sacrifices themselves, in order to put Canada back on the right track financially and to ensure for our country a sound economic future.
Following a dramatic turn all the while striking a happy medium, the Progressive Conservative government is striving for economic renewal as a source of real and permanent jobs and increased and enhanced basic social programs.


The Acting Speaker (Mr. Paproski):: Questions and comments. The Hon. Member for Gatineau (Mrs. Mailly) has the floor.


Claudy Mailly: Mr. Speaker, I would like to commend my colleague for his speech, and also ask him a question.
In his speech the Hon. Member for Winnipeg North (Mr. Orlikow) referred to the experience in other countries, like
Great Britain, the United States. However, it seems he failed to tell us what is happening in France. Therefore could the Hon. Member tell us whether the measures proposed by the Hon. Member for Winnipeg-North were used in France and whether the success was tremendous, as he suggested we should do in Canada.


The Acting Speaker (Mr. Paproski):: Order, please. The Hon. Member knows we should not comment on the previous speaker's speech.


Claudy Mailly: Mr. Speaker, I had not finished asking my question. Could the Hon. Member comment on the present situation in France?


The Acting Speaker (Mr. Paproski):: The Hon. Member for Terrebonne (Mr. Toupin) can answer that question briefly.


Robert Toupin: Mr. Speaker, I would not want to stray from what I said in my speech. And, clearly, in view of the situation in France, I would not want either to perhaps create problems internationally. Simply said, the situation in France is very well known. The thrust of the Hon. Member's comments indeed agrees with the general opinion shared by most people who are really aware of the situation.
I would like to mention, without further discussing the subject, that previously, that person indeed discussed this situation in Britain or elsewhere, or in Germany. But I would also have wanted her to deal with the situation in the United States. This is all I want to say.


The Acting Speaker (Mr. Paproski):: Questions and comments are over. The Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy).


Hon. Lloyd Axworthy (Winnipeg-Fort Garry):: Mr. Speaker, thank you very much for recognizing me in the waning hours of the Budget debate. I recognize that in this, the last lap, spirits are flagging a little and, from what I heard in the last speech, some of the acumen is obviously growing weaker as time progresses.
It is a privilege for me, as it is for every Member of Parliament, to speak in a debate which is certainly one of the high festivals of parliamentary democracy. It is a very important event in the parliamentary calendar. Not only are we debating specific measures of economic initiative, we also have the opportunity to ferret through the various contradictions and high-falutin but broken promises made over the years in order to get to the gist of what the Tories are trying to achieve in their Budget.
A Budget is probably more than the sum of its parts. It is
not just a series of strung-out measures. If you bring them all
June 3, 1985

together, it reveals an approach or the blue-print of what a particular Government is trying to achieve for the country. Therefore, we must read into the Budget what it tells us about the modern day conservatism, the new "Mulroney revolution", the new social aura that has been heralded far and wide as being the hallmark of the new Government.
Unfortunately, there has been one basic mistake. We have been trying to analyse the Budget by finding some unifying or organizing principle in economic textbooks. We have tried to decide whether it is a form of Reaganomics, Keynesian, supply side, or a Thatcherism. This Budget does not fit any of those current definitions. It is impossible to go into economic textbooks and find a proper definition of this Budget. One must really go into the works of fiction. One must look at how our novelists see things in order to properly describe what the Government is trying to achieve.
This weekend I had the opportunity to reread some novels which I thought might give me a better sense of perspective. As 1 first reached into my bookshelf, I saw a novel which cut through all the confusion, obfuscation, and public relations to get to the heart of the matter. It was a wonderful novel written in the 1920s by Sinclair Lewis called Babbitt. All of a sudden it struck me that the Budget is all about Babbittry. This Budget was not conceived in terms of the broad range and perspective of all Canadians. It was conceived by the Babbitt minds of our country in the private schools, private clubs and private boardrooms. It was not done in a malicious or malevolent way, but in a narrow-minded way that does not see the full range of concerns anxieties, hopes, and fears of Canadians. It was conceived in the hothouse atmosphere of a very restricted business community which wants to be the economic elite to lead the salvation.
It was no accident that the Minister of Finance (Mr. Wilson), in one of his all too frequent mistaken statements, once again told us the truth. He did not think we had enough rich people in Canada to supply the tax revenue. That clearly described the whole problem. The Government really believes, as Babbitt did in the 1920s, in a form of social Darwinism. It believes in some kind of natural order of economic elite that will make decisions for the rest of Canadians.
When the Government talks about inspiring and stimulating Canadians to produce better, it is talking about a very narrow range of Canadians. It is not showing any understanding, comprehension, sensitivity, or feeling for the family of a miner in northern Manitoba who waits week after week for a decision to be made in a Toronto boardroom as to whether the mine will stay open or not, knowing that the Government in Ottawa does not give a damn whether it is open or closed because it is not providing any support or encouragement.
That famous line in the Budget said that the Government will reward success, not subsidize effort. I do not believe there has been a crueller or meaner statement issued by a Minister of Finance in the history of this Parliament. That goes right back to the philosophy of the 1920s that there is an economic jungle
The Budget-Mr. Axworthy
out there and only the fittest will survive. The Government is going to reward the survivors, but the rest of them can take their lumps as they may.
This Government does not care much about those people who have to strive in other ways. It does not care much about a young family that wants to buy a home. With one stroke of the pen in the Budget, the Registered Home Ownership Savings Plan was wiped out. That was the one avenue through which young families could hope to put money aside as an incentive to eventually get their own homes.
There is probably no more deep-rooted feeling of concern and interest of young Canadians than to acquire a stake in their own community. What does that matter to the Minister of Finance or the Government? Those young people do not play squash at the Albany Club, so why bother with them? Well, they represent a large majority of young Canadians who are trying to achieve something with important economic benefits. That young family who would have some day bought that home would have provided the market for the lumber, craftsmen, and tradesmen which would generate the economy.
What does the Government care about the young farmer in western Canada or southwestern Ontario who has been striving to keep his head above water against drought, falling commodity prices, and hard to achieve capital? Those farmers looked hopefully toward the recommendations of the Commons committee and listened to the promises made by the present Prime Minister (Mr. Mulroney) in the election campaign. He said he was out to help the farmers, and in this Budget they got higher fuel taxes and higher user fees. The only assistance they will get is if they sell their farms to a big corporate business. There is no assistance for the farmer who wants to stay in business to keep growing his commodities and developing his property. That is not the interest or concern of this Government.
The single parent mothers in downtown Winnipeg have always felt that the federal Government had a basic willingness and generosity to assist them in raising their children. The Minister of Finance tells us how he has increased the child tax credit. However, he does not explain that the figures of his own budget paper indicate that by 1990 some $550 million will disappear from the family trust in the federal Budget. It will no longer be there to help children or to keep families together. It will just disappear. If you combine the deindexation of the family allowance and the child tax credit and the reduction of the exemption, the net loss to lower income families in the country is substantially more than if things had remained the way they were. Do not believe the Minister of Finance when he tries to throw up a dishonest smoke, screen which is fooling a lot of Canadians. It is once again the young Canadian families who will suffer from the measures of this Budget.
What about the young people who are looking forward to achieving new skills and abilities to meet the world of change in which they live? What more important investment can any Government make than an investment in people? The last speaker proudly beat his chest and said that the Government is going to spend $900 million next year on training. However, in

June 3, 1985
The Budget-Mr. Axworthy
the previous Liberal Government, $1.4 billion was spent on job training and creation. How can the Government justify a net reduction in this year of $75 million? That affects the women who are trying to get back in the workforce. They are not being accepted in our community colleges because there is no allowance for them, and still the Government cuts $75 million from that budget. The Government cut the direct assistance to provincial Governments to build new classrooms and provide new laboratories and technical equipment to allow workers to be retrained for the new world in which we want to live.
The Government does not want a new world. It wants to return to the age of Babbittry, back to the 1920s. It does not want to help people to deal with the new world of change. It only wants to ensure that its friends in the investment clubs are happy and that the security funds are satisfied. The Government says it is making these changes to raise the money to reduce the deficit.
However, it will not reduce the deficit. The money which is being denied to senior citizens, young families and housing will be used to pay the $2 billion price tag for the Western Accord and the capital gains investment of $700 million. It has nothing to do with deficit reduction. I suggest that Tory backbenchers conduct their own study because they will see that the budget papers say that the deficit reduction of two billion dollars will come from "better management practices". Those practices involve a classic example of paper shuffling. The Government will not have Supplementary Estimates and will not provide any inflationary increases. The Government will not realize a saving of $2 billion from that procedure.
The Government is not really interested in economic growth. Growth is not simply generated by giving a tax relief to the investment community. Businesses grow when there is a market and people can buy goods and services. The removal of $37 billion from consumers between now and 1990 will result in fewer homes, cars, furniture and other products being bought from the small business community. If the business community cannot sell its products, it will not invest new capital, expand factories and develop new products for which there is no market. One must wonder about the strange, neurotic, ideological thinking taking place in the minds of the Cabinet when it reduces consumer demand by $37 million while saying that it wants the economy to grow. One need not be a genius in economics-which the Government obviously is not-to know that there must be a demand factor in the economy.
What sort of factors are there in the Budget? There is the capital gains exemption which has some marginal benefit. However, the Minister has provided a carte blanche capital gains exemption with no rules or conditions. The Minister of Finance does not believe in rules or conditions in his wonderful free enterprise society. Once given these capital gains, will people invest in blue chip stock or in venture capital in a small business? Will they invest in speculation for a quick turnover or for a long term development in small business?
I suggest that the majority of that capital will not go to aid small Canadian businesses, but there will be an increasing inflation in this country because of the speculative fever that will be released by that measure. There will be large investments on the stock market, but the stock market does not create a lot of wealth in the country. Wealth is created by people going to work and by factories expanding. It is not created by a paper economy in Toronto, Montreal or Vancouver. While investors have fun creating their mergers and acquisitions, it does not create the wealth. Wealth is created by ensuring that there is a market and that the capital serves that market.
The Budget is not designed for all Canadians but a select and privileged group of Canadians. All budgets should attempt to release those energies of growth that provide a sense of aspiration by Canadians. This Budget does not do so.
The Budget has another great flaw. We hear Conservative members say in the committee and in the House that private enterprise will create the growth in this country. While private enterprise creates growth, it does not do so by itself. The history of this country has been a clear partnership between Government and private enterprise in a mixed economy. The Government has always supplied important investments in transportation, in infrastructure and research and development. It has provided the basic sinews of economic strength that allows the private market to proceed and build.
Private companies do not build the roads, bridges, ports or schools. They cannot supply the type of collective co-operation that only Government can provide. However, the Government is so paranoid about itself that it refuses to recognize that the Government has a constructive and positive role to play in the economy. The Government should be used rather than feared. It can be used to stimulate because it is an investor in the economy.
From the time of the CPR, the St. Lawrence Seaway and the Trans-Canada Highway, the Government has been a major investor. When the Government calculates the deficit figure, it should recognize that part of that deficit goes into long term investments that will create wealth in this country. Government basically supplies what no one else can.
The Government does not recognize the importance of government as an investor in capital goods. The Federation of Mayors and Municipalities released a very important report at their meeting taking place this week in Calgary. The cities of this country will require $12 billion of new capital in order to simply maintain the present sewer and road systems. If those deteriorate, the productivity of this country goes down. The ability of trucks to move goods across rutted roads costs more. Each time there is a pothole, a weak bridge or a sewer that gives out, we are losing in the economy. At a time when we have to be at our competitive best and meet incredible international challenges, we are surrendering one of our advantages, which is a highly modern efficient infrastructure.
When I was the Minister of Transport, we made some major
decisions to invest capital in projects such as the Western rail
system. That is paying off because it will ensure that foreign
June 3, 1985

buyers will have a sure market for our grain commodities. We had the nerve to take that decision. Although it cost money, if we had not made that decision, the ability of the country to maintain a competitive edge in world grain markets would have been sadly reduced.
However, the Government has nothing in its Budget for that kind of capital investment. It has reduced the Budget for the Industrial Regional Development Program by 50 per cent during 1984-85. It has given up on regional development with the assumption that the private market will respond. Will that happen with the private market in Cape Breton? Will it happen with the private market in northern Manitoba? Those are markets which require the full partnership and co-operation between levels of Government and the private sector.
This is not a growth Budget, one that is designed to stimulate growth or even reduce the deficit. Its purpose is to serve the interests of those who already have a certain advantage in this society. Its greatest weakness and its greatest tragedy is that it does not unleash the energies of all Canadians. It does not meet the concerns of workers who must meet new technological change and will need the Government to help them.
The Government has cancelled the Industrial Renewal Board. I must tell those brave Members from Quebec who stand up in support of the Canadian Industrial Renewal Board that it is no longer in the Budget. It has been put out of business. Those Members will have to rewrite their speeches when they go back to their textile towns. There is no mechanism to help those industries modernize.
This Budget does not encompass the aspirations and hopes of all Canadians, but serves the interests of those who already have advantages. Canadians do not want to have their economic future determined by a corporate elite. They have no interest in letting a small, privileged group of Canadians make their decisions. The Budget has provided the subject for the great debate in this country between those who believe that Canada will prosper by making sure everyone is treated equally and fairly and those in the Government who believe that the economic future in this country can be determined just by their friends.


Mr. Kindy:: Mr. Speaker, the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy) was a member of the Government that introduced the National Energy Program and a budget in 1980 that devastated the western economy. Today he tells us that he is amazed that we signed the Western Accord. I cannot understand why he thinks restoring the economy in western Canada is bad. The economy in Calgary, Alberta and western Canada generally was not bad when the Government introduced the NEP. However, a year after its implementation, the economy went downhill. Now he criticizes the new Accord which brings hope to western Canada.


Lloyd Axworthy: Mr. Speaker, perhaps I could help the Hon. Member to reinterpret history somewhat differently. I know it is part of the Tory mythology that the National Energy
The Budget-Mr. Axworthy
Program was the sole cause for our problems. That is part of the propaganda. It is like what the Soviets said when they took over in the 1920s. They rewrote all the history books to make sure it was their interpretation. The National Energy Program was brought in at a time when oil prices around the world were soaring. It was brought in at a time when there was a great fear because of the actions of many multinationals that this country would not be self-sufficient. It came in at a time when the opportunity for small Canadian oil and gas producers was very limited. The National Energy Program responded to each of those concerns. First, to Canadianize the industry-


John Horton McDermid: Nationalize.


Lloyd Axworthy: -so we would not be totally at the mercy of large multinationals. We said Canadianize it.


John Horton McDermid: Nationalize.


Lloyd Axworthy: We said Canadianize it because the National Energy Program provided through the incentive program the opportunity for a number of Canadian firms to get into the gas and oil business.


John Horton McDermid: You chased them all out of the country.


Lloyd Axworthy: No. The Tories seem to forget that the oil rigs down in Oklahoma, West Texas and that the oil industry around the world was going through a recession at that time because of the change in prices and the change in supply.
It would seem to me, Mr. Speaker, that if the Tories were going to sign the Western Accord, and they had a right to do it, did they have to pay for it by taking money away from senior citizens, taking money away from families and by increasing taxes by $400 or $500 a year on middle class Canadians? If the Tories wanted to sign the Western Accord, they should have had the guts and the fortitude to bring in a proper tax rather than trying to hide under a bunch of hidden taxes like sales tax and deindexation. That is what the Government is doing. If the Tories want the Western Accord, that is their business, but they should not try to pay for it by hitting the people who can least afford it. That is exactly what the Tories are up to in this Budget.


Claudy Mailly: That is not true.


Alex Kindy: Mr. Speaker, I tend to disagree with the Hon. Member. What we got rid of was the PGRT which taxed the oil industry on gross revenue. It selected that industry specifically. There is no other industry in Canada taxed on gross revenue. That was an unjust tax.


Ian Deans: It was not unjust.


Lloyd Axworthy: Mr. Speaker, the Hon. Member called it an unjust tax. That is how we tax people. We tax people on their revenues. We also say that corporations should somehow be treated differently. The PGRT was used to gain revenue because why should windfall profits gained by exceedingly large oil prices be given to multinational corporations?

June 3, 1985
The Budget-Mr. Axworthy
Resources that are in the ground did not get there because Esso created them. Esso might have found oil, but Esso did not create it in the ground. The money that came from that kind of tax revenue was to pay for the total rehabilitation and development of the western railway system so the farmers of western Canada could move their grain in an effective and efficient way. The money was used to reinvest in the country to pay for things which this country needed rather than simply being transferred out of the country into the coffers of oil companies outside.
[ Translation\


The Acting Speaker (Mr. Paproski):: The Hon. Member for Hochelaga-Maisonneuve (Mr. Desrosiers).


Édouard Desrosiers: Mr. Speaker, I would ask the Hon. Member whether he is not ashamed now of throwing at us all kinds of insults, like paranoiacs, and others, when he was one of the people in high places responsible for everything that is now happening in Canada. He is one of those responsible for that gigantic $224 billion bankruptcy. I would like to ask, since he made reference to a novel a while ago, whether he has read the Auditor General's novel describing the biggest Liberal scandal of all times, the wastage of billions. I am at a loss to find names to call these people today, but 1 would like to quote one of our great authors, Corneille, who said: "Even in a drawingroom, one must not hesitate to call a pig by its name".


Carlo Rossi: Look who is talking about scandals.


Lloyd Axworthy: Mr. Speaker, I will say to the Hon. Members that I am quite proud of the Trudeau government record-


Édouard Desrosiers: Shame!


Lloyd Axworthy: -because we had the answer for the poor in this country. We were also taking regional responsibilities and the tax rates set by the former government-


Claudy Mailly: On heating fuel!


Lloyd Axworthy: -and unemployment, yes-


Claudy Mailly: On heating fuel!


Lloyd Axworthy: -and unemployment. When I was Minister of Employment and Immigration, we had some 300,000 jobs. It was a better record than that of this government in the current year.


John Horton McDermid: Mr. Speaker, it is always fun to come into the House and listen to the Liberals' public apologist. He did it again today.
When we talk about the PGRT, the Member said that the money derived from that tax went for real services in the west. We have also heard from the Liberals that it went to pay for
the PIP grants for exploration. We have also heard that it has gone to pay for pensions, health care and post secondary education. All the speeches from the Liberals and the New Democrats have said that is where the money went. Now that the PGRT is off and there are more areas where that money is going, if the Hon. Member were honest in his presentation, he would see that the cancellation of the PGRT comes very close to the phasing out of the PIP grants as the PGRT is phased out, including the cuts in expenditures in the Department of Energy which, next year, will be some $333 million less than this year. To equate the cancellation of that tax being placed on the backs of pensioners and those on welfare or unemployment insurance is grossly unfair. I wish the Hon. Member would get his facts and figures correct when he is making that type of presentation.


Lloyd Axworthy: Mr. Speaker, 1 am always pleased to take the advice of my hon. friend when he is right. Unfortunately this time he is not. He was right in the first half of what he said. It is true that the revenue we got from the PGRT did go to help build the railway system, for the PIP grants and for other investment over a period a time.


John Horton McDermid: It does not add up.


Lloyd Axworthy: 1 commend the Hon. Member for being accurate and fully understanding the value of that important source of revenue, but when you look through the budget papers to determine how the Government is paying for the elimination of those revenues, we see the answer. People, ordinary Canadians, are now having to pay for it. Ordinary Canadians will have to pay for that giveaway to the multinationals, for which we will gain very little benefit that we would not have had anyway, because the real determination of health in the oil industry is dependent upon the kind of price in effect. I agree with the Hon. Member when the Tories talk about deregulation which was a move started last spring-


John Horton McDermid: Sure.


Lloyd Axworthy: It was. 1 know the Tories do not read history much. I know they only read the novel Babbitt because we have already discovered that in the speech, but I will not repeat myself, Mr. Speaker. I think enough has been said.


The Acting Speaker (Mr. Paproski):: One short question and one short answer please.


Mr. Ravis:: Mr. Speaker, I want to make a short comment. It has to do with honesty and the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy) even believing what he said.
1 come from western Canada. I was a small businessman. One of the reasons I am here today is that the MacEachen Budget of 1981 got me so frustrated as a small businessman, and I expect dozens and dozens of other people here felt the same way, that I eventually ran for Parliament. Here we are today with a mandate of 211 seats. It seems to me the Hon. Member for Winnipeg-Fort Garry should ask himself what happened to the great Liberal Government when it brought
June 3, 1985

down its Budget. He should be standing here apologizing to Canadians, not chastising this Government for the Budget brought down last week.


The Acting Speaker (Mr. Paproski):: Since the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy) does not want to make a very short reply, and since the period for questions and comments has now terminated, I will recognize the Hon. Member for Pembina (Mr. Elzinga) on debate.


Mr. Peter Elzinga (Pembina):: Mr. Speaker, in recognizing your outstanding job on a continuing basis in the chair, 1 am sure you will ignore the clock at 5.45 in acknowledgement of the fact that you have given opposition Parties much more time to speak than they were allotted. However, I pay sincere tribute to a dear friend, the Hon. Member for Edmonton North (Mr. Paproski), who has done an outstanding job in the chair.


Some Hon. Members:: Hear, hear!


Peter Elzinga: It is a privilege and honour to serve in this Chamber with you, Sir.
I regret that I cannot say the same about the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy). However, there is one area upon which we agree, that is, the belief that a small, select group of people should not govern the nation. This is exactly why his Party was thrown out of office, because a small, select group of people governed the nation. We are taking the reverse approach. We want to consult with Canadians. We want to allow Canadians a greater opportunity to participate in their own affairs.
He asked what we were doing for young people, among other things. Since we became the Government, interest rates have dropped close to three percentage points. That will have a substantial impact on all mortgage holders. In relation to the farming sector-and I will say a great deal more about that sector if I am allowed the time-the Hon. Member indicated that fuel costs have risen, whereas in reality under this Government they have gone down. It is just another area in which opposition Parties are attempting to mislead Canadians with their deceit and dishonesty.
1 do not want to dwell on those matters because I believe that we as a Party are participating in "new time" politics. Canadians want to know for what we stand. We have indicated it on a consistent basis, unlike the opposition Parties which have nothing but criticism for our sound economic proposals. We have come forward with a clear-cut Budget. I am honoured to stand in my place today to endorse the proposals of the Minister of Finance (Mr. Wilson) which he started on February 8 and which he brought down in his Budget on May 23.
For the first time we are at a crossroads in the history of our great nation. For the first time we have a sound economic Budget which will restore economic activity in this great country. On September 4, Canadians voted for change. They
The Budget-Mr. Elzinga
voted for a change in the national affairs of our nation. As 1 indicated on November 8, the Minister of Finance began the process of change. On May 23, we saw more of that. Our economic documents are tough but fair.
We recognize that no one wants to pay additional taxes, but 80 per cent of the budgetary deficit reductions are reductions in government expenditures. We are asking all Canadians to participate to a small degree in restoring an economic climate which is suitable and will encourage growth in many sectors- small business, energy and agriculture.
I say in all sincerity-and 1 look at the three opposition Members who are in the House on this important debate- that all of us are in the Chamber because of our deep love for the nation and our deep concern that in some respects we can contribute to making the country a better place for all. Our Budget represented a turning point, whereby in reality Canadians again enjoy the opportunity and freedom to invest money in areas as they see fit.
We are asking the average Canadian family to contribute $1 per day to budgetary deficit reduction and the restoration of our economic activity. I would think that the majority of Canadian families would be happy to contribute, on average, $1 per day so that we can turn around the sad inheritance which we were left by the Liberal Party.
Our Budget tackles three areas-deficit reduction, job creation and more freedom for Canadians to participate in their own investment choices. We have just come through a period of difficulty. Canadians have suffered anxiety, fear and anger at, as my hon. colleague from Calgary just mentioned, the suggestion that this Government attempted to stifle the engine of growth, not only in the energy sector but also in the agricultural sector. In my travels throughout my constituency 1 sense that a mood of optimism and a mood of faith have been restored because of the actions we have taken. We are encouraging that very important engine of growth by reducing the budgetary deficit by some $4.4 billion. The projections indicate that it will be reduced by another $8.3 billion next year, and individual constituents have indicated that that is not enough. We approached it on the basis that we did not want Canadians to suffer any more than was necessary and that we would not hurt them. We have lived up to our commitments.
Our major commitment during the election campaign was budgetary deficit reduction. We indicated that we would create jobs. I recall my friends opposite, on November 8 when the Minister of Finance brought down his economic statement, indicating how many jobs would be lost in Canada. In reality,
100,000	jobs were created because of the incentives we offered to Canadians. We are asking for an act of faith by the business community, to live up to its commitments to the free enterprise system. It is when Government, business, labour and management are working together for the betterment of our country that we will truly succeed.
If budgetary deficits created jobs, as my friends opposite indicate, we would not have any unemployment today. If we look at the record of previous administrations and their budgetary deficit spending, we see that it is unreal. I would feel

June 3, 1985
The Budget-Mr. Elzinga
truly ashamed, if we as the Government did not tackle this area while i was here as a Member of Parliament, to think of the sad legacy we would leave our children.
Our Leader has approached Canadians on the basis of compassion and fairness. We will ensure that those in the lower income levels are cared for. We have made sure that the safety nets remained in place. Individuals opposite have indicated that we cut back on pensions. That is another area in which they are misleading Canadians. The Guaranteed Income Supplement will continue to rise with the full rate of inflation for those individuals who require that safety net. They are spreading all types of falsehoods, simply for their own shallow, political ends.
I recall as a youngster sitting on my father's knee when he indicated why he immigrated to this country. He emigrated from Holland, a country which was liberated by Canadians some 40 years ago, because Canada was a country of hope and of opportunity, a country wherein if one worked, one prospered. However, that opportunity has been stifled by consistent socialist Governments over the last number of years. Canadians are looking to us and expecting us-and we shall deliver- to restore economic stability. I could go through a long list of what is included in the Budget and the number of positive measures which it contains.
I would like to indicate something with respect to the Prime Minister (Mr. Mulroney) of this nation. Our Prime Minister has a sense of purpose. He is a healer. He has brought together the various regions of our country. He has indicated on a consistent basis that if the candle burns a little brighter in one region, then it burns that much brighter in all our country. He has shown a deep sensitivity to the regions of the country. He has shown a deep sensitivity to the minorities of the country, whether they be religious, linguistic or ethnic. I salute him, as many Canadians do, for his deep, compassionate attitude which he has shown to all parts of our great nation.
I wish to touch upon some of the specific initiatives which are beneficial to the agricultural sector. We have reduced the excise tax on primary fuel. There have been substantial payouts under the Western Grain Stabilization Act. The Minister of Agriculture (Mr. Wise) reduced interest rates under the Farm Credit Act. There is a Bill presently before committee which will truly help the red meat industry in Canada. The Minister of Transport (Mr. Mazankowski) has introduced measures with respect to seaway tolls. A substantial item in the Budget deals with the relief of capital gains. My friends opposite cannot say that in every rural community of the country the citizens did not push for the removal of these capital gains.
If one were to review our record of action, one would see investment now in place which will produce jobs for Canadians. We have successful energy agreements in both western and Atlantic Canada. We have made progress in terms of our environment. We have extended the spouse's allowance to some 85,000 individuals in low income brackets. Severance
benefits have been extended. There have been amendments made to the Criminal Code. Over all, in excess of 200,000 jobs have been created.
I wish to close by dealing with two points, Mr. Speaker. The first point is with respect to the appointment process which we have in place and which we as a national Government are exercising. We face criticism from Members of the Opposition with respect to the individuals we appoint. However, to implement the change we have been elected to implement, it is important that we put in place individuals who have the same philosophy as we on this side of the House. There has never been a Prime Minister in the history of this nation who has been so non-partisan in his appointments.
I would like to share with the Members of the House some facts. These are facts with respect to the appointment process. The prime prerequisite to date of every individual who has been appointed is competence. In looking at the list of appointments, there are a number of Liberals and New Democrats of promiment stature who have been appointed to various positions. I am speaking of Senator Pierre De Bane, David Smith and the Hon. Don Johnston, who received Queen's Counsel appointments from our Government. Ms. Sylvia Gold, a well-renowned New Democratic Party supporter, was appointed as chairperson to the Advisory Committee on the Status of Women. The Hon. Bud Drury was appointed to the Official Residences' Commission. Mr. Gerry Kaplan, another prominent NDP supporter, was appointed as co-chairman of the task force on broadcasting. The Hon. Lloyd Francis, another Liberal, was appointed as Ambassador to Portugal. Stephen Lewis, another strong New Democratic Party supporter, was appointed Ambassador to the United Nations.
These are all excellent individuals. We are not so narrowminded as our friends opposite. We seek talent wherever it lies. We have sought talent. The prerequisite with respect to every one of our appointments has been competence. We cannot help if there are more competent Conservatives in the country than there are New Democrats or Liberals.
We can assure you, Mr. Speaker, as we can assure Canadians, that the prime prerequisite for all of these appointments is competence. We will continue, on a competent basis, to appoint individuals to positions of responsibility so that we as a national Party can carry out the mandate which we were elected to carry out on September 4.


Some Hon. Members:: Hear, hear!


The Acting Speaker (Mr. Paproski):: Order. It being 5.45 p.m., it is my duty to interrupt the proceedings pursuant to Standing Order 64(8) and put forthwith the question necessary to dispose of the motion now before the House. The question is the following one. Mr. Wilson (Etobicoke Centre), seconded by Mr. Mulroney, moves:
That this House approves in general the budgetary policy of the Government.
All those in favour of the motion will please say yea.


Some Hon. Members:: Yea.
June 3, 1985


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


Some Hon. Members:: Nay.


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


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


Mr. Speaker:: I declare the motion carried.
It being 6.10 p.m., this House stands adjourned until tomorrow at 11 a.m., pursuant to Standing Order 2(1).


[Stage Direction]
The House adjourned at 6.10 p.m.
[Stage Direction]
Tuesday, June 4, 1985