1985-06-17

[Stage Direction]
The House resumed from Friday, June 14, consideration of the motion of Miss MacDonald (for the Minister of State (Finance)) that Bill C-51, an Act to provide borrowing authority, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
Mr. Sergio Marchi (York West):: Mr. Speaker, it is a pleasure to resume debate from last Friday. At that time I was indicating that the Government's Budget resembled A Tale of Two Cities. One city is the shining city on the Hill in which the Government sees the economy improving and an economic state which is progressing well. The other city reflects the other side of the tracks that the Prime Minister (Mr. Mul-roney) and the Government have difficulty understanding.
If the Government understood these problems, it would not have imposed the partial deindexation of old age pensions for seniors across the country. It would not ask consumers to pay 2 cents a litre more to make up for the shortfall as a result of what was given to the multinational oil companies. It would not have cut nearly $100 million in job training programs. It would not have increased sales tax across the board, which is a very regressive step. It would not have asked families with two children who earn between $15,000 and $20,000 annually to pay 36 per cent more tax by the year 1990 while the $200,000 family with two children is looking simply at a 2 per cent raise in their taxes.
The Government would show that it is beginning to understand this other city if it were to forget its obsession with the deficit and introduce job creation programs in order to put Canadians back to work. However, the Budget is simply bankrupt of any new or worth-while job creation initiatives.
Without a job, an individual loses that sense of dignity and purpose. As a result, the country loses that same sense of dignity and purpose. That is the tale of the city which the Government has failed to recognize.
Certainly nothing depicts that better than the Government's attack on senior citizens by partially removing the full indexation that they thought was theirs. One of the measurements of
a progressive, mature and compassionate country is to see how its society treats its senior citizens. Certainly, with the Budget proposal to deindex partially senior citizens old age pensions, we cannot say that we are as progressive and compassionate as we would like to believe.
However, the Government can vindicate itself and correct the wrong. In order to do so, the Prime Minister and the Government must understand the other city to which I have referred. It is one in which there are more poor than ever, more families in financial trouble and where the line-ups at the food bank and soup kitchens are increasing. It is a city in which there is an increasing need for shelters for the homeless and where thousands of young people have less opportunity to find their first jobs. It is a city where students cannot afford the tuition for their education and the unemployed cannot change their fate despite their efforts.
Ottawa may well be the shining city on the Hill and one may get a good view from 24 Sussex, but one cannot see from there the other city in which thousands of Canadians live. The Prime Minister must visit this other city to see the despair painted on people's faces. The concern of the unemployed worker in Sault Ste. Marie must become his concern. The problems facing the high school graduate who cannot afford to enroll at York University must become his problem. The struggle of an elderly disabled person in Sarnia must become his struggle. The future of a woman in Hamilton striving to find her rightful place in the work world must become his future. Our failure to have compassion and understanding for these dilemmas facing Canadians will be our misgiving and a failure of our country to react to a situation that needs attention.


The Acting Speaker (Mr. Charest):: Are there questions or comments? Resuming debate.


Mr. Ernie Epp (Thunder Bay-Nipigon):: Mr. Speaker, I rise to speak to Bill C-51 with decidedly mixed feelings. No one would question the need for borrowing authority in present circumstances. However, the extent of the borrowing authority can be criticized, and in that respect I want to explore that situation in the time available to me this morning.
The Bill seeks to authorize the borrowing of $18.2 billion, only $16 billion of which is money that is directly required for this year. The other $2.2 billion is designed to cover borrowing that was made necessary last winter because of the actions of the Liberal majority in the Senate.
My colleagues and I are justly critical of the need for that borrowing to cover action under Section 39 of the Financial Administration Act. If we had no Senate there would not have

June 17, 1985
Borrowing Authority Act
been a need for that part of the borrowing authority that we are debating and eventually voting on.
However, I believe there are deeper reasons for being critical of the Bill before us. It is, in a sense, dealing with the bottom line in the country's accounts, in the Government's financial operations. It is here that decisions on taxation and expenditure come out. It is here that one has to provide the funds required to make up the shortfall in taxation which will be required if the Government is to carry on operations for the coming year.
I want to consider both the possibility that sounder fiscal policies on the taxation side would have made necessary a smaller borrowing and, without meaning to contradict that conclusion, to consider the possibility that the kinds of development policies Canada needs in the present depressed circumstances might well call for larger borrowings than the Government is in fact undertaking. Before beginning that explanation, I might note that the borrowing authority Bill has been brought in properly, as we had arranged in December that it should be, at a time when the Government was considering a very large Bill covering this year in quite an inappropriate way. Our opposition persuaded the Government to break down the matter into other Bills. Within days after the Budget had been brought down in the House on May 23, on May 28, the Bill came before us for first reading. That appropriate action is one I want to recognize.
In considering the weaknesses of the Budget on the taxation side, I should like to indicate the first aspect of weakness which concerns me in this borrowing authority consideration and to compare this Budget with Budgets of recent years and with Budgets of the early 1930s when another Conservative Government had to deal with the problems of Depression and did so in many ways by actions which are quite similar to the ones this Government has undertaken in 1984-85. Of course, at that time revenues fell off sharply. The Customs Tariff was a much larger part of the basis of income for Government. Obviously that would fall off as trade values decreased and trade declined. Revenues fell off in sales tax and excise taxes, with only income tax seeming to be a sound basis for the Government to predict what its revenues would actually be.
In those days, Finance Ministers were as determined to balance the Budget as is the present Minister of Finance (Mr. Wilson). Of course it was not possible to take in enough in taxation to cover the relief costs and certain public works expenditures, which somewhat compensated for declining private sector activity. However, certainly every attempt was made to try to cover the costs of the ordinary operations of Government.
I have just referred to some public works expenditures. At the beginning of that Government's administration there was a good deal of public works authorization, but that fell off very rapidly. By 1932 and 1933, the Bennett Government was behaving very much the way the present Government is behaving. It was involved in a decrease of public works activities and
in an increase in various taxes. Interestingly enough, sales tax was put on ice-cream cones and other things back in 1932, in the same way the present Minister of Finance has decided to tax various confectionary and drugstore products. The refusal to make any significant change in the tax system in those days was very much like the determination of the present Minister of Finance to leave the basic structure of taxation unchanged. There was, interestingly enough, in the very first Budget brought down by R. B. Bennett as both Minister of Finance and Prime Minister, a rejoicing in foreign investment, specifically the American investment which had come into Canada in the first months after his Government took office. In fact, the Budget Speech contains a long list of enterprises, practically all of them in Ontario and Quebec, which presumably represented some triumph of Conservative policy as early as 193031. All of this was carried out in the context of what a Minister of Finance, looking back in 1933, characterized as being done against the backdrop of the dead hand of past lavish expenditures and borrowing, by Liberal Governments, of course. If that kind of phrase does not evoke the spirit of the present Government's fiscal policy and attitude, I cannot imagine what would.
M5)
Perhaps the most striking contrast between the Budgets of those days and the Budget which we heard on May 23 of this year is the fact that the Government recognized that the wealthy should bear their fair share of the burden of government. Consequently, year by year, the income tax increased. It may astound my colleagues across the way to realize that by 1933 millionaires in Canada were paying income tax of more than 50 per cent. The actual tax bill for someone with $1 million of income in 1933-34 exceeded $500,000. That is the kind of taxation which allows a Government to try to cover the costs of its normal activities. It was of course not sufficient to cover the development needs the country had.
The Budget also talked about the irresponsible borrowing patterns of the past 10 years and excoriated the excesses of Liberal Governments in the past for their lavish expenditure and the consequent borrowing needs. The sad reality of this Budget, of course, is that the patterns it follows are so largely the budget patterns of years past, that is, the Liberal policy of trying to shift the burden of taxation to individuals and allowing all sorts of tax breaks to corporations. Those patterns are certainly followed in this Budget, excessively so on the individual's side. The hope that it will increase economic activity and lead to jobs is one which past Governments have expressed in a series of Budgets. The Budgets of Marc Lalonde and Allan MacEachen certainly expressed those hopes. The consequent failure of those hopes, the failure to move any closer to full employment, the run-up of large deficits and the resulting need to borrow are quite in keeping with what the present Government holds out to us. What we have then, surely, in this Budget is no departure from the past.
Conservative Members have moved to government benches and taken up Liberal ideas, which they of course evinced often enough when they were voting on Budgets in the past in
June 17, 1985

support of a Liberal Government. One wonders, then, how we can break out of the situation we are in if then Liberal and now Conservative policies do not do it. I want to suggest that, on the one hand, there be a thorough reconsideration and reform of our taxation system. This would provide us with a basis for raising far more revenue and allow us to readjust the burden of taxation in such a way that we would give a strong and healthy stimulus to the economy which, accompanied by other policies, could ensure that Canadian citizens would be able to give that impetus to the private sector, the small and large businesses which the Government talks about so much. There, it seems to me, is the Budget's most overwhelming failure. I recognize deindexation as being a political blunder of the largest scale. The Government now realizes that as well.
The failure to deal with tax reform and in fact the rejection of any kind of massive tax reform by the Minister of Finance is far-reaching and touches the lives of all Canadians. The Budget in its fiscal projections recognizes that the revenues of the Government will come in the proportion of 45 cents from individual taxpayers and only 15 cents from corporations. The balance that prevailed within the last quarter century when corporations paid rather more to Ottawa than individuals has now shifted so far that individuals pay three times as much in taxation to Ottawa as corporations. When we recognize that there has been that kind of shift in the taxation system of the country, we can recognize the hand of excessive and outrageous taxation of individuals which leaves individuals unable to support fundamentally their households and therefore unable to produce the impetus that is required for a sound economy to develop in this country again.
The failure of the Conservative Government to make any progress in the taxation system by loading even more taxation on poor and middle-income Canadians while leaving the rich even less burdened with taxation creates the kind of imbalance in which the fiscal statements of the country become a means for enriching some and impoverishing others. It seems to me that that makes this a Government which speaks for the wealthy in a way that the voters across Canada did not foresee when they voted for Conservatives on September 4. It seems to me that that is a ticking time bomb that deserves to go off in Government ranks sooner rather than later.
That is the fiscal side of the borrowing coin. If the Government allows those billions of dollars of tax breaks and refuses to collect taxes, it will inevitably have to borrow. If Canadians were to realize the amount of money that has gone into businesses through tax breaks, the extent to which ordinary Canadians pay interest on the investment capital of companies rather than having them depend on the stock exchanges and brokerage houses on Bay Street, St. James Street and beyond, and that Liberals and Conservatives have burdened them with paying for the capital for business investment, we would see a revolt of the proportions at which senior citizens have only begun to hint. That, then, is one of the reasons for borrowing. It is sad to say that there has been no fundamental shift in the attitude of Conservative Members.
Borrowing Authority Act
On the other side of the borrowing coin, there has been no real consideration of the development needs of this country. I feel for the Hon. Member for Qu'Appelle-Moose Mountain (Mr. Hamilton), recognizing what he once did as a Member of the last successful Conservative Government of 1957 to 1963. At that time, national development programs of all sorts were developed. It was a Government of which Canadians could be proud because of its vision of what this country should be. For all of its failures, and some of those failures were failure to act on those national development programs, that Government had a vision for this country. These days, in the most despicable and contemptible way, we have a Government that hopes it can ride on the coat-tails of the American recovery which has been flagging these days, and that suggests that we will continue with the recession. We have a Government which thinks that foreign investors will save Canada. No Canadian can be proud of that. The Minister of "Regional Industrial Stagnation" takes pride in the Government's reduction of support for the shipbuilding industry. The day after the Budget was brought down, the shipbuilding industry was told that the subsidy program would be discontinued. That program has been important to the industry. The Government also cancelled the productivity improvement grant, which was about the only thing that was left for the shipbuilding industry, other than the tariff. A Minister of that sort does not deserve to be in a Canadian Government at a time of depression.
Canada has other needs. I would like to deal with the need for housing. We are falling further and further behind in the housing industry. Canada requires tens of thousands of housing units. I would suggest that the Government look at cooperative housing. That type of housing is the most efficient and socially sensible way of providing housing. It is a context in which people can establish the community and become involved in the committee and board structure. Canadians could begin to pull themselves together sufficiently enough to enter the job market. Co-operative housing suffered at the hands of the Liberal Government. So far it is not doing much better. However, I do not want to speak very severely to this issue because the Minister of Labour (Mr. McKnight) who is responsible for housing has a sensitivity for it. Will he be provided with the funds? Will the Canada Mortgage and Housing Corporation have the means to undertake the housing programs which Canada needs? It is not clear that it will have the funds. Fiscal measures such as the capital gains tax holiday are likely to increase the cost of land and housing. Therefore, CMHC policies which gear income to the market will be more difficult.
The Budget is designed to make things more difficult for the people of Thunder Bay. The waiting lists for housing are very long in Thunder Bay. The people of that community are seeking better and reasonably priced housing. We are not experiencing the general impetus that residential housing construction could provide from coast to coast. That would put people back to work, and it would produce a sound demand for small and large businesses.

June 17, 1985
Borrowing Authority Act
The Government has failed to recognize the developing needs of Canada and to respond in an imaginative manner. The Minister of "Regional Industrial Stagnation" takes pride in packaging a variety of principles from years past in a document which requires agreement among all Governments. There may be something to be said for agreement on a statement of principles, not that there is anything remarkable about the details. Beyond that, will we have policy development which is applicable to industries and communities? Will there be financial assistance? Giving tax breaks is the easiest way to go. The distressing thing about tax breaks is that one does not have the means by which to assess their effectiveness and to recognize the cost.
We will vote against the borrowing authority Bill for a variety of reasons. The Government needs borrowing authority because it has failed to tax properly. The Government needs the money because it has failed to develop the kind of policies which Canada needs to get businesses moving and to get people back to work. The failures of the Government in its Budget are just as clear in the borrowing authority Bill as they are in various other areas.


The Acting Speaker (Mr. Charest):: Are there questions or comments?


Mr. Baker:: Mr. Speaker, the Eton. Member referred to trade with the United States. Does the Hon. Member have any opinions regarding the recent protectionist tariff policy of the U.S. Government as it relates to Canadian products? I refer, Mr. Speaker, specifically to protectionist measures on hogs, lumber, footwear, raspberries and saltfish which, of course, affect the riding of the Prime Minister (Mr. Mulroney) just as much as they affect Newfoundland and all the Maritime Provinces. It is an absolutely outrageous protectionist tariff of 20 per cent on the export of these products into the United States from Newfoundland and from the north shore of Quebec. This tariff was imposed last Thursday evening. I am wondering whether the Hon. Member would have any thoughts on the subject as it relates to the policy of free trade which this Government announced. And is this really free trade when it is free for the Americans only but Canadians have to pay 20 cents on the dollar? Why is all of this happening now with the advent of this new Conservative Government?


Abram Ernest Epp: Mr. Speaker, that is a very good question. The desire of Canadians to have free trade with the United States is older than the Dominion of Canada.
1 think of a Conservative Minister of a little more than a hundred years ago who spoke in terms of reciprocity of trade or reciprocity of tariffs. The desire of Canadians and their Government to achieve freer trade agreements with the United States has usually been a desire which Americans have failed to entertain. I suppose the year 1911 would be the main exception when an American Congress and an American administration was suddenly ready for the negotiation of a freer trade agreement with Canada, a significant agreement,
and the Canadian people turned it down at, we might remind ourselves, the behest of the Conservative Party of the day through an unholy alliance with nationalist interests in Quebec which were also fighting the Liberal Government's naval policy at the time. The desire to achieve freer trade arrangements with the United States, then, is an almost universal Canadian desire. In this century, of course, we have become concerned about maintaining economic activity in this country which has been built up at much cost and great pain because the Americans would not allow us to trade freely with themselves.
I think what the American Congress is doing these days in one area or another, Mr. Speaker, is demonstrating again the protectionist tendencies which have been so strong in that body time after time and term after term. We, for our part, can succeed only in minimizing the damage in one area or another. We have worked hard in the area of lumber exports to keep that particular trade open. That is one item in the Hon. Member's list which, I suppose, is directly relevant to northwestern Ontario. But it takes inordinate effort to achieve some opening in the American market for these products.
I am sorry to say that, aside from much determination and all the lobbying efforts we can make in Washington with Members of Congress, there is nothing more 1 can offer the Hon. Member whose constituents are now affected by a tariff on saltfish. We will have to work as hard as we can and remind the Americans of those freer trade traditions which they came to after the Second World War on which, I hope, enough of them still believe their prosperity after the Second World War was based. And we must maintain our pressure on them for freer trade.
Long ago we Canadians settled on reciprocity of tariffs because we could not get reciprocity of trade with the Americans. We should remind the Americans that we do not want to be driven to reciprocity of tariffs at a time when we have in fact been reducing our tariffs and opening our economy more and more to the rest of the world. We should press the United States not only to stop these attempts to put quotas, tariffs and other restrictions on Canadian natural products, a battle which takes us back at least to the 1840s or 1850s, but we should in fact press them in other ways to open the state economies and various industries to Canadian production. We must convince the United States to lessen those "Buy America" policies. We would like to be sure that as much as possible industries which produce, for example, rail rolling stock, city streetcars and subway systems, such as, for example, the CanCar rail plant in Thunder Bay, can produce these systems in our country and that we are not forced by other rules of the United States to manufacture them in the United States, therefore getting some of the earnings back to this country but not the employment which we need so desperately.
I am sorry I do not have any additional solutions at the moment for the Hon. Member except to say that we must press on and remind our friends in Government that the rhetoric we are hearing now will not in fact bring us anything
June 17, 1985

without a great deal of hard work, and even the hard work may not do the job.


George Baker: Mr. Speaker, the Prime Minister of Canada met with the President of the United States at Quebec City. The Prime Minister at that time informed his constituents- because they were affected-of the pending tariffs which were to be imposed, the tariffs which were under consideration by, I think, the United States International Trade Commission at that time. Yet, in spite of the discussion of the Prime Minister with the President of the United States, which was verified by the Prime Minister publicly in responding to his constituents- and, of course, that matter affected my constituents and a lot of constituencies right throughout eastern Canada-and in spite of the intervention by the Prime Minister, last Thursday night the United States Government imposed that atrocious tariff. It appears that all the representations, which were supposedly to have been made by the Minister of State for External Affairs (Mr. Clark) together with the Prime Minister, have had no effect whatsoever on the imposition of these tariffs.
So I would like to ask the Hon. Member, in light of what he was saying, whether or not he believes that intervention at the policitical level has any effect at all on general U.S. trade policy as it relates to protectionist tariffs? Historically speaking, would he say, for example, that once that trend is in place, not even the politicians can stop it?


Abram Ernest Epp: Mr. Speaker, I thank my good friend for another splendid question. What one can derive in the way of lessons from the experience of the late 1940s would suggest one particular word of wisdom for the Government in its present circumstances. I am saying that against the background which my friend has evoked of the summit of the Prime Minister with the President of the United States in which it was suggested that all sorts of good things will follow from the fine relations between the two countries. What Canadians so often forget-and I trust the Prime Minister knows better-is that the American constitution provides for a division of power in which the President has limited authority on many of these matters. He certainly faces the actions of a Congress made up of hundreds of Members representing their districts from coast to coast, and two Senators from every state, all of whom will go their own way. The President might conceivably have the best of intentions, but if those Congressmen do not agree with the decisions he has arrived at, he will not get anywhere.
I think of the late 1940s. The key point in the circumstances of 1947 through 1949 was that the dealings from executive to executive were not nearly as effective by themselves as the Government's holding out the prospect, or the fear, to the American administration and to Congress that the Canadian response in the way of trade restraints, which would be made necessary by our shortage of American dollars at the time, would have a very serious effect in one area or another of the United States. In each of those areas where a congressional
Borrowing Authority Act
district was involved there was a Congressman who was going to feel the direct impact of Canadian action.
The moral of the story is that a Government which can only see Americans as friends, instead of realizing the need to be businesslike and tough at times with them, will lose the opportunity to drive home to Americans that if they set out to hurt us, as happens in area after area, we may have to take action to hurt them in Michigan and other parts of the United States. I have yet to see that kind of toughness from this Government.


Mr. Maurice Foster (Algoma):: Mr. Speaker, 1 am delighted to join in the debate on Bill C-51, an Act to provide the Government with borrowing authority of $18 billion for the succeeding months and year. I am disappointed that there is no provision in Bill C-51 for the indexation of old age pensions next January 1.
Last weekend I had the opportunity to visit half a dozen communities in my constituency. In each community I was met by senior citizens who presented petitions to me to present to the Prime Minister (Mr. Mulroney) and the Government. A senior citizen couple, both receiving Old Age Security pensions, will have their purchasing power decreased by $200. By 1990 they will lose approximately $1,200 of purchasing power per couple.
While I was in my constituency 1 received petitions from senior citizens groups in Little Current, Gore Bay, and Silver Water on Manitoulin Island. As well, I received a petition from the Senior Citizens' Club 455 in Espanola with several hundred names on it. It calls upon the Government to reinstate full indexation of the old age pension. In Elliot Lake 1 was presented with a petition by the President of the Senior Citizens' Group, Mr. Laverdiere. In each case the senior citizens groups make a very strong presentation for the Government to reinstate full indexation.
Perhaps the most poignant story was that of Mr. Ivan Bailey from Evansville who came to see me in my constituency clinic in Gore Bay. He told me of his situation, which 1 think is typical of so many senior citizen couples across the country. He told me that he was 76 years of age and that he and his family had been pioneers in western Manitoulin. His wife is partially disabled and he himself had a heart attack a couple of years ago. In spite of that, they are able to cope and live in their own home. He pointed out that they are very thrifty. For instance, he cuts his own wood and burns that rather than heating oil. They do not splurge in any way. He was simply asking why the Government is going to cut back on their old age pensions next January when they are struggling and working so hard to make it on their own.
I hope that the Government will amend Bill C-51 in Committee of the Whole and provide for full indexation of old age pensions. I think that is the only way in which the Government can correct the situation of the senior citizens of the country. It is not only senior citizens who are very concerned about the

June 17, 1985
Borrowing Authority Act
deindexation of old age pensions. People who are from 55 to 60 years of age, many of whom have taken early retirement and are counting on the old age pension in order to have a certain level of purchasing power, are concerned as well. If deindexation goes through, over a period of five years a couple will lose $1,200 of purchasing power. Over a period of 10 years they will lose $2,000 or even $2,400 per couple. Someone who has made retirement plans based on receiving benefits of a certain level will not have the expected purchasing power in four or five years when he or she does retire.
There is very great concern about the authenticity of the commitment of the Prime Minister. Last year he called the indexation of old age pensions a sacred trust, saying that he would maintain it fully. Now that is being taken away. We want the Prime Minister to keep his commitment. He has indicated that he is waffling. I know that he is getting a lot of pressure from his caucus. I do not think he should wait until after the adjournment of the House a week from Friday to make that commitment. Senior citizens are very concerned about this cut-back and he should make his announcement in the next few days. Senior citizens of my constituency are sending in petitions which will be presented in the House. We will be making the strongest possible arguments that indexation of old age pensions should be maintained.
When the Minister of Finance (Mr. Wilson) was interviewed on CTV Question Period in April he indicated that he thought he could make cut-backs in a number of government programs and would not have to increase taxes. He seems to have changed his mind because many taxes will be increased for medium and low income families. This Budget does not provide much benefit for low income families. One of the concerns of senior citizens about the Budget is that at the same time as they will be losing $1.6 billion a year, a capital gains tax provision has been instituted which will cost the Government $1.25 billion per year within five years. If there must be a trade-off, surely senior citizens ought to be the beneficiaries rather than high income groups.
The Minister of Finance has indicated that he is not satisfied with the number of rich people in the country. Surely even the Minister of Finance would not wish to see people benefiting enriching themselves to the disadvantage of senior citizens. When this Bill goes to Committee of the Whole I hope the Government will back down on its plan to deindex old age pensions and reinstate the full benefits.
There are a number of other provisions of the Budget I want to mention because I believe that they all impact on this borrowing authority. Clearly, one sector which received no assistance from the Budget was the farming sector, except perhaps to help farmers get out of farming. Over the weekend, the Prime Minister said that his Budget was so popular that he thought he would be able to back down and give old age pensioners their full indexation. I hope he will do so very soon.
The budget provision of a capital gains tax exemption up to $500,000 allows those involved in agriculture to get out of
farming. That was a commitment made by the Tories during the election campaign although their commitment was to provide full capital gains tax exemption.
The agricultural community is clearly dissatisfied with the federal Budget. For instance, the board of directors and county presidents of the Ontario Federation of Agriculture met in Toronto on June 6. Their resolution states:
Whereas the federal Government has betrayed the farmers of Canada by presenting a Budget which totally ignored the results of its own consultative process and the commitments of the Government of Canada; and whereas the Government has not only ignored its own promises, it has ignored the legitimate needs of our farmers; therefore be it resolved that we are demanding that the Government live up to its own commitments made during and after the election campaign and that in order to get this message across to our Government, we recommend the following action-
They recommend that each MP from the Province of Ontario be petitioned by several members of the Ontario Federation of Agriculture and that the Ontario Federation and the Canadian Federation of Agriculture hold an executive meeting on June 19 to form a national action plan to bring the frustration and disenchantment of the agricultural community over the Budget to the attention of the Government.
Clearly the Budget strikes out at Canadian agriculture. For instance, the Government will impose a 9 cent per gallon tax on gasoline and farm fuels early in September of this year. Out west, where agriculture and the use of fuels is a major industry, they are terming this the "harvest tax". It is a tax on western Canadian farmers' harvest, imposed by the Tory Government. This will cost several hundred dollars, and perhaps more, on very large farms. The tax will increase once again in January when the 1 per cent sales tax is imposed on agriculture and all commodities in the country.
Last fall, the Government flamboyantly boasted about how it would reduce the tax on farm fuels. In fact, it is reimposing that tax this September, early in the harvest season. It is interesting to note that the Government was considerate enough of the tourist industry not to impose that tax during July and August, but it had no reservations whatsoever about imposing it just as harvest begins. For that reason western farmers are calling it the harvest tax.
Not only will the 1 per cent sales tax increase tax on farm fuels on January 1, it will be imposed on other agricultural input costs and production costs. Furthermore, a massive tax has been imposed on our tobacco farmers who have been suffering from changes in the personal lifestyle throughout the country. The Minister talked about some accommodation in that respect but no backing down. The wine growers in the Niagara escarpment and other areas of the country have expressed their concern about the 2 per cent excise tax on alcoholic beverages. Clearly, the Budget practically ignores agriculture.
The Government said that it would clarify Section 31. In fact, it did not do that in the Budget and has taken no action, although a committee report recommended that the limit of deductibility for off-farm expenses be increased from $5,000 to $10,000. There was a commitment during the election campaign as well as a recommendation by the Finance Committee
June 17, 1985

of the House to establish an agri-bond program providing money at 8 per cent interest. These would be long-term, low interest rates to assist some 39,000 farmers who are facing serious financial difficulty. There was no action on that agribond program.
Therefore, groups such as the Ontario Federation of Agriculture are planning an emergency meeting on June 19 to prepare a national action program to counter the lack of action by the federal Government in its Budget.
The Prime Minister stated at the First Ministers' meeting on the economy in Regina that no one has increased productivity and assisted the country more than agriculture in the past several years. People like Harry Pelissero, President of the Ontario Federation of Agriculture, are now calling on the Prime Minister to explain why that sector is not recognized in the Budget if it has made such a great contribution to our economy.
One of the few areas singled out for cut-backs by the Nielsen committee is agriculture. Some $50 million a year will be cut from the Department of Agriculture. Although a number of programs will be severely cut back by the Government, it does not make it clear which ones. However, it is clear that the cut-backs will be $50 million this year, $50 million next year and $50 million the year after that.
The budget documents refer to programs like the dairy support program, agricultural commodity transportation and crop insurance as being subject to cut-backs. While it has not been made clear what will be cut back, we know that the Department of Agriculture is facing those cut-backs.
All of this is taking place when agriculture is under attack from beyond our borders as a result of the bungling of the Government. Last week, for instance, the United States Government imposed an even larger countervail duty of 5.5 cents a pound on our hogs and pork products going into the United States. That is a very substantial increase which will cost the hog producers of this country very dearly.
The Prime Minister met with the President of the United States in Quebec City. They were to solve all these problems in terms of trade with the United States. Clearly, these problems have been exacerbated in every realm. Whether it is steel, raspberries, pork or fish, our entire trade system with the United States, at a time when the Prime Minister talks extensively about improving trade relations, is incredibly worse. The support or bonus program on grain will drive down the international price of grains and have a devastating impact. Not only in North America, but in Europe and in other areas, the Government has clearly bungled our international trade relations. This is having a devastating impact upon our agricultural community, along with the lack of action in its Budget.


George Baker: Mr. Speaker, I have a question for the Hon. Member. He talked about reductions in the agricultural sector. I should like to refer to a document which was tabled in the House recently. It is entitled New Management Initiatives,
Borrowing Authority Act
and it contains the initial results from the Ministerial Task Force on Program Review. In the sections under agriculture we find some very interesting words. It talks about improving and the targeting of scientific research and development. In part it reads:
The Department will eliminate, or obtain full outside client funding for identified current low priority research.
Then under the section entitled Limit Freight Subsidy, it reads:
The Government will propose changes to limit future expenditures to current levels.
The next section is entitled Study Feed Freight Assistance, which in part reads:
-feed freight assistance will be examined for consistency with the commodity development strategies for feed grains and livestock.
Other sections are entitled Recover Costs for Grain Commission Services and Harmonize Production Development Assistance. They contain some very interesting words, such as the following ones:
Provincial Governments also provide assistance for various such groups.
Then under the section entitled Inspection and Regulation Programs, it says:
-the Government will consult with provincial Governments to determine areas in which federal-provincial duplication can be eliminated-
Does the Hon. Member have any opinion as to the assumptions in this document that the Government will harmonize, regulate, recover costs, limit, study and improve targeting? When we really get into the document, it talks about cuts which will come in the agricultural sector. Is there really that much duplication by provincial Governments? Is it correct, as the document assumes, that the agricultural sector is receiving so much money from provincial Governments and from the federal Government that we can do away with, as indicated in the document, duplication of these programs? Is the agricultural sector really receiving that much money? Is it possible for the federal Government to eliminate programs and to retarget programs, which will automatically be replaced by existing provincial programs?


Maurice Brydon Foster: Mr. Speaker, the Hon Member for Gander-Twillingate (Mr. Baker) raised a very important matter. I appreciate his question. He drew some similarities between the problems of fishermen in Atlantic Canada and the problems of farmers. Clearly there are some comparisons which can be made.
I should like to look at the quotas and countervail duties which have been imposed by the United States. In fact, last week it imposed a duty on fish from Atlantic Canada of approximately 20 per cent, while at the same time it imposed a countervail duty on our hogs of some 5.5 cents per pound. This is having a devastating impact on the price of hogs and has had such an impact since April 1 when the United States imposed it. We certainly see the similarity. There is sort of similarity in the approach of the United States, despite the comments of the Prime Minister about how he will improve trade relations.

June 17, 1985
Borrowing Authority Act
1 cannot remember, in the 17 years I have been a Member of Parliament, so many duties, countervails and threats of countervails being imposed. They are all on our primary producers who are already faced with very low commodity prices, for example, fish, agricultural products and softwood lumber. I do not believe anyone in the House will remember such massive countervails and quota plans between Canada and the United States in the past. It is clear that the Government is messing up our entire relationship in terms of those products, all of which have been in very low price positions for the last while.
With regard to the Hon. Member's question concerning duplication of federal and provincial government programs, I doubt that there is that much duplication. For instance, if we look at crop insurance, the federal Government has put up half the premiums and the producers have put up the other half. In most cases the provincial Governments have administered the crop insurance program. It has been a very beneficial program. The Minister runs around the country proclaiming what he has done for farmers since last September 4. One figure he quotes is something like $530 million which has been paid out in crop insurance. That is an insurance program which the former Liberal Government put in place, into which producers pay. As well, the federal Government pays into a fund and the provincial Governments administer the program at a relatively small cost compared with the cost of the premiums for the program. If the Government is proposing that provincial Governments, as I understand it is doing, will put up a third of the cost, similar to the proposed tripartite red meat stabilization program, I think it will find a very cool reception. The reception on the part of provincial Governments having to put up as much as the federal Government will be about as cool as the reception of the deindexation of old age pensions on the part of Atlantic Premiers, all of whom are Conservatives. I do not think many provincial Governments are prepared to put up that additional money for the crop insurance program.
With regard to research and so on, it seems to me that the money spent on research and on developing new varieties of grain, fruit and vegetables, is really a reach toward the future. If we develop a grain which is more hardy or more resistant to disease or will produce greater yields by 5 per cent or 10 per cent, that is the price we pay to be successful five, ten or fifteen years down the road.
In the tripartite red meat stabilization hearings, we heard that provincial Governments in the Maritime Provinces really wanted to see feed freight assistance provided, whether it was provided through the stabilization program or through a direct feed freight assistance program. I do not think they want to see the Government cutting back on it. It seems to me that the Government should be providing a feed freight assistance program, while at the same time doing the necessary research and development to make Atlantic Canada self-sufficient in grain so that hog and beef production can continue there, even though in the initial drafting of the tripartite red meat stabilization program they may not be qualified.
So I think the Hon. Member has raised some very important points concerning the Government's attitude towards management, where it essentially wants to cut back on programs like agricultural assistance, feed freight assistance, grain inspection and crop insurance.


Mr. Derek Blackburn (Brant):: Mr. Speaker, I am very interested in participating in this debate this morning and I want to get very quickly to the heart of my remarks because they relate to a very serious situation which has developed in my constituency. Usually I do not use the 20 minutes allotted to me to make a speech in this Chamber to speak on a local issue, but the subject of my speech today is a very serious one and it relates to job creation and the possible collapse of a major and historic industry, the former Cockshutt Plow Company, now called White Farm Equipment Canada Ltd. This firm goes back to the 1870s, so it is really a historic company with regard to the production of agricultural implements.
Bill C-51 is an Act to provide borrowing authority, and certainly there is nothing new or revolutionary about it. Usually Members of Parliament do not question the amounts of money involved because we all know that, particularly these days, it takes a lot of money to run a country. Governments run out of funds and they have to seek authority from this Chamber, Parliament, in order to borrow funds to keep payments going. However, we do use a Bill such as C-51 to question the Government's wisdom in spending that borrowed money. From time to time we put forward suggestions as to how we on this side of the House think the money should be spent. For example, in my opinion very often public funds are spent frivolously by this Government, and this is true of other Governments in the past.
We have the wife of the present Prime Minister (Mr. Mulroney) who has, so I understand, a spanking new office in the Langevin Building, and I question whether or not the taxpayers of this country should be paying for the operation of that office. It is my right to question that, and I do not know whether the money should be spent in that way. This certainly should be examined very thoroughly. Something else which might strike one as being very trivial but nonetheless symbolically important is whether public funds, even a few dollars, should be spent on a new presidential style podium for our present Prime Minister bearing a coat of arms not of a political Party, not of an office, but one that is symbolic or emblematic of our country. It is not a symbol of office, it is an emblem of Canada. If any person in this country should have the right to use that emblem, it is not the Prime Minister, it is the Governor General. I question the propriety of that use. In the former Prime Minister's household we used to question whether or not the taxpayers should pick up the tab for his and his family's food, and for the nanny or nannies, present and past. These are probably nit-picking examples but symbolically they represent our concern on this side of the House as to how this borrowed money is spent from time to time.
June 17, 1985


Miss MacDonald:: As well as on a car and chauffeur for the Leader of the NDP (Mr. Broadbent).


Derek Nigel Ernest Blackburn: We could, on the other hand, spend borrowed money to maintain pensions at a respectable level for seniors who built this country. We have gone into great detail on that issue on both sides of this House over the last few weeks. We could also borrow money to help keep Canadians from falling further and further into poverty. We could borrow funds to help preserve the quality and way of life for many other Canadians. We could use borrowed money to create meaningful jobs.
I have a modest proposal for the use of some of the borrowed money and, as I said at the outset, it has to do with a very serious financial and industrial problem in my constituency of Brant. This Government could offer to guarantee loans to White Farm Equipment Canada Ltd. in order to keep it from going under, thereby putting about 600 human beings out of work and on unemployment insurance. It would also take with it other smaller industries and suppliers, along with their employees, to say nothing of the hundreds of employees in the dealer network across the country. So we are talking about a very, very serious situation, one which I have raised on a number of occasions in the House and privately with the Minister of Regional Industrial Expansion (Mr. Stevens). I must say that he has been very accommodating and very positive, but so far no action has been taken. This would not cost the taxpayers one cent. Granted, the agricultural implement industry is going through tough marketing times. Harvesters or combines are certainly not in any great demand and the market is depressed. As my hon. friend from Algoma was saying a few moments ago, one reason for this is the deplorable state of finances in which our farmers find themselves at this time. The last Budget certainly did nothing to help that situation. Indeed, as the Hon. Member and others have pointed out, all that that Budget did was to make it easier for farmers to quit, give up and sell out. Well, that is a hell of a way to try to keep a basic major industry going in this country. What is happening to White Farm is the industrial spinoff from that kind of policy.
When I say this will not cost the taxpayers a cent of this borrowed money, I mean it. The money would only be in the form of a loan guarantee to tide this company over for a year, possibly two years, until, hopefully, the western agricultural market picks up, as well as that of central Canada. I call upon the Minister, then, to show some entrepreneurial spirit on the part of his Government and take a risk, as the former Government did. I would point out that as a result of the 1983 bail-out, so called, White Farm not only continued in production for two more years, but it increased its share of the Canadian combine market from 7 per cent to 22 per cent. The company is doing very nicely with a new Canadian owner, a president who is on the job in Brantford every day at his office, with a Canadian management team and a state of the art R and D facility, which was paid for in part by taxpayers' money over the years. The rug was pulled out from under the company, not because it was mismanaged or the market
Borrowing Authority Act
disappeared, but because of a foreign finance company, Borg-Warner, which decided, legally and quite properly, that it no longer wanted to have any of its money invested in White Farm Equipment Canada Ltd. The rug was pulled out at the very worst time. We cannot say that it was unfair on the part of Borg-Warner to do so. I suppose from its point of view, it was just good business. However, it dumped the whole financial problem back in the lap of White Farm Equipment of Canada.
For the first time in years, the profits that were being made at the Brantford facility were staying in Brantford. In the 1970s, when White Motor of Cleveland owned it, the Brantford facility made profits at a time when the market was buoyant. However, where did the money go? It was sucked out of Brantford to Ohio year after year. That was one of the things that lead to the financial problems of White Farm Equipment. When the recession hit in the early 1980s, it had no reserve capital. Furthermore, after the Cockshutt family sold out to foreign interests, virtually nothing was done to improve the plant or facility. There were virtually no capital expenditures at all. The only thing that was improved upon, updated or upgraded was the R and D facility which produced the state of the art axial-flow combining technology, and that facility would not have been built had it not been for the Canadian and provincial Governments which turned over a great deal of money to get that project launched.
Last week we did away with FIR A and brought in Investment Canada. We told Americans to come to Canada to buy us out. I have just given a perfect example not of why we should keep foreign money out but of why we should keep a very tight rein on how foreign investment in this country is used. It must always be used for the benefit first of this country and second of the foreign country or corporation.
Brantford is facing a very tense situation this morning. The deadline of the receivers, Peat Marwick, was arrived at last Friday at twelve o'clock. To the best of my knowledge, it has not been legally extended as Peat Marwick did not advertise an extension. So far, no word has come from the office of the Minister of Regional Industrial Expansion regarding an extension. We are hanging in the balance right now and are waiting with bated breath.
We do not know whether or not White Farm Equipment will be alive tomorrow or whether or not those 600 men and women who work in the plant and office will have jobs. We do not know whether or not the Government has the courage to put up a loan guarantee of some $30 million in risk capital to save those 600 jobs at the plant plus several hundred other jobs in the dealer distributorships and supplier industries, and indeed to save several of those supplier industries.
We are only asking for $30 million in loan guarantees to save White Farm Equipment. That is not a great deal of money. It equals the approximate cost of giving away capital gains tax exemptions to about 50 of the wealthy friends of the Minister of Finance (Mr. Wilson). That is really what $30

June 17, 1985
Borrowing Authority Act
million amounts to. It would preserve a way of life that began when the Cockshutt Plow Company opened its doors in 1877. At that time, it became a world renowned harvester company and its products were extremely popular in the Canadian West for many generations.
The recent history of White Farm Equipment is one of ups and downs, lay-offs and recalls, recessions and depressions. We saw interest rates choking off sales in 1981. We saw the recession hit both the farm community and urban Canada in 1981, 1982 and 1983. Some parts of Canada are still suffering from that recession. As I said earlier, we saw the former American owners siphon off profits in good times and then shut the plant down in tough times. We saw the American owners sell out when the times became so bad and the future so grim that it was not worth keeping the company. However, no one in Brantford really ever believed that Cockshutt, or White Farm Equipment as it is called today, would ever really disappear. They believed that it would survive somehow.
White Farm Equipment was not a leach industry. In 1983, it went to the provincial Tory Government and the federal Liberal Government to ask for loan guarantees to keep it going. As I said a few moments ago, it increased its share of the Canadian combine market from 7 per cent to 22 per cent during the toughest years experienced on the farm front in recent history. White Farm Equipment proved that it can produce a state of the art harvester like the axial-flow combine. It was all set to produce a new, smaller version of the 9,700 class harvester that would be more economical to operate and would sell at a lower price when Borg-Warner in the United States pulled the plug. Unfortunately, that could not have come at a worse time.
What can be done to rectify the situation? I suppose that what I am pleading for this morning is for the Minister to announce sometime today that there will be a loan guarantee forthcoming to White Farm Equipment because times are going to improve on the farm front. If they do not improve, we are going to go right out of the agricultural business altogether. If times get any worse, it will be the end of the agricultural sector, we will end up importing almost all our food and we will be paying world prices.
I think the Government had better put aside its ideologies for the time being and realize that there are some sectors in the Canadian economy in which the private enterprise system simply does not function at 100 per cent efficiency and cannot do so for a number of natural and normal reasons, perhaps unlike private enterprise in the United States. If the farm community needs assistance at this time, surely this is not the time to reduce aid to farmers by $50 million per year, but it is the time to increase aid to those who are just on the brink of going under.
In the newspaper, I read the other day that net farm incomes are supposedly up by 30 per cent this year. I cannot for the life of me understand that figure. My riding is often referred to as an urban riding, but it includes the entire county of Brant. Some of the best farmers and some of the ones that were the most prosperous in the past live in Brant, and are still
trying to hold on. Last week I spoke to some of those farmers. They were even more shocked than I was to read in the paper that net farm incomes were up by 30 per cent. Everyone to whom I spoke had a net farm income that was down.
As I said this morning, the Government, through its Budget, proposes to make it easier and financially more inviting for established farmers to sell and get out of the farm business. That will certainly not help the agricultural implement industry and it will certainly not help a community like Brantford, a community which has already been sorely hit by the recession of the early 1980s.
The community of Brantford is slowly climbing back to a better employment figure. There is still an unemployment rate of about 14 per cent in the City of Brantford. Even with the Summer Works Program, it will still be a very serious situation. Are we going to add another 600 and possibly another 200 unemployed to that list? I sincerely hope not.
What we are going to have to do is what the Government did in the case of Domtar. The Government is going to have to set aside its ideological strait-jacket for the moment and ask what is in the best interests of the public. It must ask itself what, apart from what is in the best interests of the company, is in the best interests of the public.
I urgently call upon the Minister of Regional Industrial Expansion, today, or at the earliest possible opportunity, to announce that the Government-as in the case of Domtar- will guarantee a loan of $30 million so that White Farm can continue until the market picks up, which should not be more than two or three years. The Conservative Government at Queens Park is prepared to give $10 million. There is private sector financing to the tune of approximately $5 million. However, another $30 million in loan guarantees is required.
I would also like to thank Members of Parliament of all Parties from southwestern Ontario who wrote letters of support, after receiving a letter from me which requested that support. I am not going to suggest what those Members recommended, but it was gratifying to know that they too are interested in maintaining those jobs.
I hope the Minister will consider every avenue and come forward today or tomorrow with a positive statement which will keep those 600 families out of poverty and put them back to work.


The Acting Speaker (Mr. Charest):: There being no questions or comments, I will recognize the Hon. Member for Sudbury (Mr. Frith) on debate.


Hon. Douglas C. Frith (Sudbury):: Mr. Speaker, in order that I maintain the rules of relevancy, I will preface my remarks by saying that there is absolutely nothing in the Borrowing Authority Bill of $18 billion which will solve the problems that were created in the Budget which was tabled on May 23 by the Minister of Finance (Mr. Wilson).

In the last six or seven days I have had the opportunity to travel widely throughout western Canada and parts of Ontario to ascertain firsthand the reaction of a number of groups in our society who have been affected adversely by the Budget. I was absolutely astonished to realize how little support the Government has for some of the measures in the Budget. I am surprised that members of the Conservative Party have been so silent throughout the debate which has taken place during the last two or three weeks in the House. I must admit, there are some rather courageous Conservative back-benchers who have had the conviction to stand and ask the Minister of Finance to reverse himself on some of the very unpopular measures which are in the Budget.
In addition, I note with some surprise, and I suppose with some contentment, that as a result of the Budget, the Conservative Party was forced to hold a special caucus in Ottawa this past weekend. Of course, I did not have the privilege to enter that room. Frankly, after witnessing the way in which the Conservative Party's blueprint for economic renewal was delivered on May 23, I can say that under no circumstances would any opposition Member even contemplate the idea of agreeing with it. I hope that the Members who attended the special caucus meeting at least had the courage to indicate their constituents' response and to give, Firsthand, their opinions on the ridiculous and unfair deindexation proposal which was made by the Minister of Finance. I am sure, within the confines of those four walls, that both the Minister of Finance and the Prime Minister (Mr. Mulroney) learned that there are the makings of a taxpayers' revolt against some of the measures in the Budget.
I see that the Hon. Member for Saskatoon West (Mr. Hnatyshyn) is in the House. I visited Saskatoon last week and met with hundreds of concerned senior citizens. They are concerned about the impact of deindexation, not only on Old Age Security and the Guaranteed Income Supplement, but also about what will be the future intent of the Government on issues which affect the elderly and those in our society who are below the age of 65, who will be affected adversely by deindexation. Those people have no common voice to speak for them. I know that the senior citizens in Saskatchewan who represent those groups have repeatedly asked for the presence of their Conservative Members of Parliament to explain and convince them of the fairness of that tax measure. I suspect the reason for which those people have not seen Conservative back-benchers or front-benchers is that those Members are afraid to face the people who will be affected adversely by the Budget.
Where in the Borrowing Authority Bill are the funds which will reverse some of the direction which was in the economic blueprint of May 23? I have called the Budget a reverse Robin Hood budget. Not only does it take from the poor to give to the rich, the Budget will make the rich richer and the poor poorer. Any Conservative Member of Parliament who can stand before his constituents and attempt to justify the Budget as being fair and compassionate will require a good speech writer.
Borrowing Authority Act
It took approximately two weeks for the full impact of the measures to be understood by Canadians. They are now very much aware of exactly what is the full intent of the Government with respect to deindexation, not only as it pertains to senior citizens, but as it pertains to personal exemptions and the effect which that will have on middle-income Canadians.
Canadians will no longer be fooled by the rhetoric which was heard during the 10 day debate on the Budget. In those 10 days I heard Minister after Minister tell the House that they had the support of the senior citizen of Canada for the deindexation proposal. The Minister of Finance indicated that old people had said they were pleased that the Government had brought in deindexation. He said they were willing to do their bit to ensure that the federal deficit is reduced. They did not mind that the Government was taking $50 a month away from them and giving $2 billion in tax cuts to the multinationals. The Minister of Finance said that the senior citizens did not mind the fact that the rich would get richer. He said the senior citizens felt that it was their sincere pleasure, as people who live close to the poverty line, to ensure that the acute shortage of rich in Canada would be remedied by the Budget. He said they felt happy that they would make the rich today even richer, because they know what the rich can do for Canada.
I listened to the rationale behind the moves of the Government to increase the capital gains exemption to $500,000. In essence, the Government is taking money away from middle-income Canadians and the people who live close to the poverty line and it is adding $125,000 to the pockets of the rich people of the country. I am sure there is some support. However, I would have to stretch my imagination to contemplate which two Canadians might agree with the proposal. We now recognize the facts. The Government has no support for the measures which will take away from the poor and give to the rich. That is the reality.
I defy any Conservative back-bencher who has been back to his riding during the last 10 days to rise in his place and give me the names of the people and groups in this country who support these tax measures. I believe there are some rather compassionate Conservative Members of Parliament who are silent in the confines of this chamber, who have a great deal of concern about those people in our society who are below the age of 65. I am speaking about the widows in our constituencies who are between the ages of 60 and 64 years and whom you and I both know, Mr. Speaker, represent true hardship cases because there is no support system within our Governments, either provincial or federal, which represents their interests.
One thing I have learned in the last two weeks is that the New Horizons program which we instituted some six years or seven years ago was instrumental in creating a number of senior citizen groups and infrastructures across this country. It has allowed the senior citizens to form groups which can speak with one voice in representing their interests. However, there is

June 17, 1985
Borrowing Authority Act
another group in our society which will be just as adversely impacted by this Budget but which does not have the infrastructure or the organizations to speak for it. There is no voice for the poor in our society who are below the age of 65 but whose needs are just as crucial. I can report to you, Mr. Speaker, that in my travels across the country last week, 1 found that every one of those senior citizen groups I spoke with in order to solicit their views on the Budget indicated to me that they are prepared to take up the challenge for those people under the age of 65 years who are going to be just as adversely impacted by this Budget. Thank heavens there are people in this society who have some compassion and some sense of justice.
When the Minister of Finance indicates he is prepared to have the burden of the deficit reduction taken out on the backs of the poor, it seems to me that the Conservative Party has a warped sense of justice. Now I understand why it was required in the Budget speech to put in the word "fair" 26 times. Members of the Conservative Party had to first convince themselves that the Budget was fair before they attempted to do their sales job on the people across this country. We as an Opposition Party have indicated that there is no support for the move of deindexation, the federal excise tax changes and gasoline tax increases. I would like to focus for one or two moments, Mr. Speaker, on these particular areas. We have had the impact of those taxes pushed through a computer model, just as the Minister of Finance had the opportunity to do before he put his budget to the Canadian public. I am sure that the Minister of Finance and the Prime Minister of this country knew, when that Budget was tabled on the night of May 23, that as a result of deindexation, the increased federal excise tax and gasoline tax, another three-quarters of a million Canadians who are presently living just above the poverty line were going to be pushed below it over the next five years. Those figures have now been confirmed by the Canadian Council on Social Development.
When I put these questions to the Minister of Finance some 10 days ago, he had no quarrel with the numbers I presented to him. We see four or five days later in a report by Canadian Press that in fact, the Minister of Finance was aware. He had economic econometric models done which indicated that in fact three-quarters of a million additional Canadians would be pushed below the poverty line as a result of his budgetary measures.
I recognize that in the last 10 days we as an Opposition Party and the media have primarily focused our attention on the impact of deindexation on senior citizens. In the days ahead we will still push the Minister of Finance to reverse himself on his decision. The fact is that of those 750,000 persons who are going to be pushed below the poverty line,
230.000	persons will be senior citizens. That leaves another
520.000	Canadians who are below the age of 65 who will experience the same loss of roughly 20 per cent purchasing power, which will force the poor in our country to be poorer by 20 per cent. I find it incredible that the Conservative backbenchers have not risen in this House of Commons and asked
their own government front-bench to reverse itself on these issues which are affecting their constituents.
Surely you will understand, Mr. Speaker, because you come from the Province of Quebec, that there have been fluctuations in the unemployment rate there. There is not one Member of Parliament in this House of Commons who has a monopoly on poor people. There is not one Member of Parliament in this House who has a monopoly on senior citizens. In every one of our constituencies there are senior citizens who have been adversely impacted by this Budget. There are people in our constituencies who are poor by anyone's definition of poverty, including Statistics Canada. We all have those kinds of constituents in our ridings.
I feel very strongly, Mr. Speaker, that it is our duty as Members of Parliament to come to this forum and place before the front-bench opposite these questions so that people can fully understand the need for reversal of many parts of this Budget.
We are witnessing the anger of senior citizens toward the Government on these measures and, quite frankly, what I believe to be the snowballing effect of this anger so that the Government will have to reverse itself on the issues which affect senior citizens. Once that has been accomplished, whether that takes the next two weeks before the summer break or whether the Prime Minister will wait all summer to reverse himself, therefore bringing more political damage to the Conservative Party, there are still a number of other issues.
This is not a one-issue Budget. There is a smorgasbord of questions which have yet to be asked so that we can properly focus the attention of the Canadian public on the need for reversal in a number of other areas in the Budget. I really wonder, Mr. Speaker, if the intent of the Government is to arouse the Canadian taxpayers and make them so angry that there will be in essence a Canadian taxpayer revolt and a re-enactment of the Boston Tea Party. Is that the hidden agenda of the Conservative Party? If that is what it is waiting for, believe me it is going to come. If the Conservative Party believes that this issue is going to go away quietly over the summer, it is dead wrong. I can only say that in terms of philosophy, in terms of my sense of justice and compassion, this Government deserves to have the political fall-out and loss which will result from a Budget which creates wealth beyond comprehension for the select few. These capital gains provisions are going to cost the Canadian taxpayer more than all of the indexation which will affect the poor.


Mr. Fennell:: That is inaccurate.


Douglas Cockburn Frith: The number I have is $1.6 billion. I could stand corrected on that, and I will verify it in the national accounts component, but let me tell you, Mr. Speaker, if there is a thought in this country that we do not already have enough concentration of rich, one might want to read some of the articles in the Financial Post and in the Globe and Mail business section, which indicate that nine Canadian families in this country control 46 per cent of the share wealth of the stocks in the Toronto Stock Exchange. Are we supposed to
June 17, 1985

worry about those people? It is a travesty of justice to make those nine families even richer than they are by taking the money from the poor who live in every one of our ridings across this country.
I was asked to check my figure and I stand to be corrected, Mr. Speaker. The capital gains tax provision will cost the Canadian taxpayer $1.25 billion-


Thomas Scott Fennell: That is not accurate.


Douglas Cockburn Frith: -over the next five years, and the deindexation of the senior citizens is going to cost in the neighbourhood of $1.6 billion. So, 1 do stand corrected.
However, I would indicate one other thing for the Hon. Member for Ontario. In the quest for justice in the country and the pursuit of happiness for the multinationals, the Minister of Finance has managed, through the Western Accord, to give the multinationals of the country $2.4 billion.
What Party which has a sense of the mood of the Canadian public would have the courage to introduce budgetary measures which would put $2.4 billion into the hands of the multinationals while taking equivalent amounts from the hands of the poor? It is impossible to believe that. That is what leads me to believe that the Government will have to reverse itself in these areas of very complex taxation. If I am not mistaken, four Conservative Members of Parliament have had the courage to stand up during Question Period and publicly disavow themselves from the measures put forward by their own Finance Minister. I give them credit.
However, I forecast that unless the Government decides to reverse itself on the issue of deindexation between now and June 28 when we rise for the summer break, the momentum created as a result of this Government decision will not die out. There will be a unification of 2.3 million Canadian seniors, the like of which has never been witnessed before. The demographic trends in our society indicate that the population over the age of 65 will be doubled in the next 20 years. I predict that that generation will become political activists in a sense that the Prime Minister never envisaged when the Budget was introduced. That will be a very positive thing. A political force has been created in this country which will be reckoned with for decades to come.


Mr. Cassidy:: Mr. Speaker, I appreciated very much some of the comments made by the Hon. Member for Sudbury (Mr. Frith). However, there seems to be a state of selective amnesia among members of the Liberal Party with regard to the issue of deindexation of old age pensions.
The Conservatives have taken a measure which we find objectionable and which 2.5 million senior citizens find extremely intolerable. Their view has been echoed by children, grandchildren, and entire communities. On Friday night the Minister of State for Finance (Mrs. McDougall) was asked to defend this position in front of 1,000 women at the National Arts Centre. Never have I seen a Cabinet Minister as incoher-
Borrowing Authority Act
ent and incapable of defending an item of Government policy. She had just told the meeting that she herself had been very closely involved in the preparation of the Budget. If the junior Minister of Finance is not even prepared to defend this particular measure, it is obviously time for it to go.
I believe there were 130 or 150 Liberals sitting on that side of the House of Commons when Old Age Security was cut back by 5 or 6 per cent as a consequence of the six and five program. That was as cruel a blow to senior citizens in those days as what the Government is doing to senior citizens today.
I question why the Liberals can be a bit sanctimonious now. They are getting up to condemn what those who were in Government refused to say a word about at the time of the six and five program. Perhaps the Hon. Member could explain what has changed now, apart from the fact that he is in Opposition, to put him on the side of senior citizens today when he was not on their side two and a half or three years ago and did not at that time publicly break rank with the Government as he is urging Conservative Members of Parliament to do today.


Douglas Cockburn Frith: Mr. Speaker, talk about a selective memory process. I will tell you the difference between Liberal compassion and Tory compassion. Under Liberal compassion, every person who lived below the poverty line or was on a Guaranteed Income Supplement received full indexation against the cost of living. It was as a result of the six and five program that we were able to break the psychological inflation barrier of double digit inflation. Does the Member really believe that today's inflation rate of less than 4 per cent came about as a result of Conservative economic policy instituted last fall? That began when the Liberal Government had the courage to witness the ravages of inflation on everyone in our society. We took a common front position.
Members of the Government front-bench who are now trying to defend their deindexation proposals should read in Hansard some of the comments they made at that time. How can they justify the fact that in their Budget of May 23 they did not have the decency to protect those who need help and protection in our society? There is not one iota of support for them. Their attitude is to let them eat cake and share in the burden of deficit reduction.
The Liberals did not do that. I am proud to be a Liberal because the Liberal Party understood what it was to be poor and underprivileged in our society, living below the poverty line as defined by Statistics Canada. Having understood what it was to be in those economic conditions, we fully protected those people in our society against the full CPI index.


Mr. Iain Angus (Thunder Bay-Atikokan):: Mr. Speaker, I am pleased to participate in the debate on the Borrowing Authority Bill. I intend to make a speech about jobs; not possible jobs, nor jobs at some undefined date in the future, but real jobs now to help alleviate the suffering that is faced every day by the unemployed in the country.
This speech is also about fairness; not the kind of Tory fairness that gives pensioners and the poor tax increases while

June 17, 1985
Borrowing Authority Act
the wealthy get more handouts, but real fairness which ensures that all Canadians contribute according to their ability, real fairness that does not benefit one Canadian at the expense of another.
This is also a speech about justice. It is not about Tory justice which can ignore line-ups at food banks or tell a miner in Atikokan who has not worked since the mines closed five years ago that he will have to wait for the private sector to find a job, but real justice which puts the welfare of people before the welfare of capital. It is about justice which realizes that we must stimulate job creation in the private sector, but also realizes that we must move immediately to create employment directly in order to ease the pain of poverty. As well, we must put an end to line-ups at food banks and restore dignity and hope to the 1.5 million Canadians who have been betrayed and ignored by the Conservative Government.
The Government had an option to say that it would live up to its election promises and the commitments it made to the unemployed, seniors, native people, young people, and women. Instead, it chose to wash its hands of its responsibilities and the trust placed in it. It says that job creation is up to the private sector.
We have seen great evidence of the trust that was placed in the Conservative Party last September 4. It is exemplified by headlines such as one appearing in the Thunder Bay Chronicle-Journal of Thursday, June 13, 1985, which reads, "Tories Robbing Poor", and one of June 10 which reads, "No Support for Deindexing". There is clearly a great movement in Canada. That is one thing I will give the Conservatives credit for. They have given senior citizens across the land the reason they have been looking for to unite, mobilize, and create a force which we have never seen before in the country and which will be around for a long time.
Something I learned as a community worker many years ago is that if you want to build a cohesiveness and pull people together, then threaten their basic existence. Developers do it all the time with their zoning applications and it seems as though the Government has copied its corporate friends.
Not only senior citizens but other Canadians are very concerned about what the Government has proposed. One seniors group in Thunder Bay, the Sunshine Club, has begun writing letters to their MPs, the Prime Minister (Mr. Mul-roney) and the Minister of Finance (Mr. Wilson). About 1,000 seniors in 15 clubs in Thunder Bay will be asked next week to join in an organization to lobby the Government of Canada strenuously.
Some individuals are already speaking up. An acquaintance, George Andrew-Cotter, a former City of Thunder Bay worker, is quoted in the paper as saying that widows are the ones who will be affected most. Widows have no other incomes. If they worked, it was in private homes or on farms. They have no other pension. He said that deindexation will hurt, not help the economy. Most of these people on Old Age Security spend all their pensions, and to reduce it reduces the amount of money
going back into the economy. He said, "there must be other ways of reducing the debt load without jumping on us seniors".
In Thunder Bay in 1981 there were approximately 11,327 people receiving government retirement income. About half of them received only the Old Age Security and the other half received Old Age Security and the Guaranteed Income Supplement. That is an indication of the size of the group we are talking about in Thunder Bay, with a population of 120,000, who are angry.
Last Wednesday when my colleague, the Hon. Member for Thunder Bay-Nipigon (Mr. Epp) and I were travelling to our ridings to attend local functions, we discussed the growing movement in opposition to the government's Budget. We decided on Wednesday afternoon that we would give senior citizens in our ridings an opportunity to get together and express their frustration directly to us so that we could bring it back to the House and to the Conservative Party particularly.
I am pleased to announce that with 36 hours' notice, via the media, posters in buildings and by word of mouth, 225 senior citizens crammed into the Lakehead Labour Centre to voice their anger and outrage about what was contemplated to be done to them. They were not there just to talk; they were there to take action. They presented us with a number of petitions which, later today, the Hon. Member for Thunder Bay-Nipigon and I will begin to introduce to the House.
They took more petitions to every corner of the community, to every senior citizens' building, to every church and corner store throughout Thunder Bay. Beginning today we will be presenting upwards of 1,500 signatures on petitions from all corners of northwestern Ontario; from Shebandowan, Kakabe-ka, Nolalu, Kaministikwia, Vickers Heights, Geraldton, Atikokan, Emo and Dryden. We will also be presenting petitions signed by delegates to the Manitoba-Northern Ontario District Command of the Royal Canadian Legion who held their annual conference in Thunder Bay last week. A number of them signed the petitions.
That organization also passed a resolution. They are representatives of the people who fought for freedom so that Canada could be the place it is today. They stated very clearly that they do not accept deindexation. We should remember that the Legion is an organization that tries to stay out of the political limelight. It wants to be seen as an organization serving its members. However, they recognize that in this instance they had to speak out because it is their members and their colleagues who are being affected by the Government's decision.
We also received a number of letters from individuals, a few of which I would like to read into the record. This is a letter from a retired businessperson in Thunder Bay, an individual who has been involved in the retail sector for some 30 years. He wrote to the Minister of National Health and Welfare (Mr. Epp):
Dear Sir:
I confess I do not know whether to call you the "Right Honourable" or the "Honourable" Jake Epp, but since the budget was brought down, I assume it safe to omit the "Honourable" altogether.

You claim, sir, that we seniors support the budget. Here is one that does not. I contributed in my community as a small businessman and employer for 30 years.
I asked no government aid in business or providing my family's education. I was the exemplary taxpayer.
Now, sir, I face a dilemma. Your government has thrown out RHOSP. You have all but deindexed our pensions. Somehow the $500,000 capital gains exemption does not fit in with my financial plans. But how can anyone plan a future if they cannot trust the government? There is one thing I can do.
I have always voted Conservative, no more. I have been betrayed. Please tell Mr. Mulroney that here in Thunder Bay we don't like broken promises. We won't be fooled by deep toned double talk and we don't support your "tricky dickie" budget.
Another young individual from Atikokan wrote:
I would like to say a few words about the Conservative's plan to deindex pensions. I think it stinks.
I find it hard to believe that they can justify hitting our senior citizens with backwards punitive cuts, saying that it is time that the seniors did their part to help the country's economy. It seems to me that they already have.
The citizens which the Conservatives have chosen to rob have suffered the hardships and deprivations of recessions and depression, have fought in world wars to keep Canada a free country, and have worked all their lives to build a better place to live.
It is especially galling to see this substantial slashing of Senior Citizen's incomes when the Conservatives have decided, in the same budget, not to initiate their promised tax on the rich who manage to get away without paying any income tax. We are told that this tax would be complex and must be studied. Obviously the Conservatives feel it is easier to withhold from the Senior Citizens their rightful pension payments than to tax rich big wheels who might make waves or perhaps (how cynical) withhold political contributions.
The third letter regarding this subject comes from a gentleman I know well from the village of Vickers Heights, which is part of Thunder Bay. He writes:
My wife and I must heartedly protest the latest round of cuts especially to seniors.
Mr. Wilson in his latest budget is totally unfair to us the seniors of this great country. With the rise in the cost of living being a constant threat to our way of life, we must be indexed to the full amount of the cost of living. You should come down to our level and find out that it is tougher each year.
Further:
The latest federal budget has been a rather tough one for us that are retired.
It is not only individuals who are responding to the grounds well but editorials as well. Lakehead Living, an award winning weekly in Ontario, wrote in an editorial this past week:
There is an ironic twist to the federal government's recent budget. The government has produced a budget which puts further hardship on senior citizens and has released it just a few days before the proclamation of a month devoted to saying "thank you" to our senior citizens.
If the partial deindexing of the Canada Pension Plan was not such a blow to the income of our senior citizens the timing of the release of the budget, so close to Senior Citizen's month, would be laughable.
However, the deindexing of the pension system is a serious matter and is one that will take hundreds of dollars away from our seniors each year. That is money they cannot afford to lose.
Finance minister Michael Wilson's statement that seniors must share their portion of bringing down the national deficit is an insult to our elderly. Many of our senior citizens have already gone through one recession in the 1930's and have "shared" the burden of putting that economy on its feet. Mr. Wilson is very mistaken when he says seniors support his new budget. Opposition to deindexing is quickly gaining momentum among seniors across the country.
The Conservative government has awakened a potent political force in our senior citizens and if they are not careful they may pay for it in future elections.
Some would suggest that these are New Democratic senior citizens or that, heaven forbid, Lakehead Living is a New
Borrowing Authority Act
Democratic front. This is an issue which has stretched across all party lines.
In the public meeting which the Hon. Member for Thunder Bay-Nipigon and I held on Friday, we heard clear representations from every political party in the House and in the electoral system of Canada. I draw the attention of back-bench Members of the Conservative Party to the fact that they should not be afraid; they are not alone if they object to deindexation. For example, the Provincial Member for Fort William, a gentleman who took my place in the Ontario Legislature some eight years ago, attended our meeting to support senior citizens, wrote a letter to the Minister of Finance and ran a newspaper ad in the Thunder Bay newspapers which read: "Support Senior Citizens-Protest Deindexation of Old Age Pensions", in which he indicated that he strongly protested the deindexation of old age pensions and urged the federal Government to reconsider. He invited the constituents of Fort William and Port Arthur to write to him and that in turn he would forward them to the Minister of Finance, to let him know that not only New Democrats and Liberals but Conservatives objected to deindexation, this attack on our senior citizens.
The Government has awakened a giant, and it will regret it, not just today, not just tomorrow. Senior citizens, those who voted Conservative last September, did so with some unease. On one hand, they voted to get rid of the Liberal regime with which they were fed up. We can understand that. In many cases they went to the Conservatives because in those ridings they tended to be number two and they saw it as a way to get rid of the then Government. However, on the other hand, in the back of their minds they were thinking about other years and other Conservative Governments under which they had suffered; they suffered through four years and quickly turfed them out. The Government has rekindled that fear. It has confirmed their worst fears. 1 can assure the Government that they will not forget three years or four years from now.
Before turning to other aspects of the Budget, I want to wind up my comments on deindexation with an appeal. This is an appeal which I made to senior citizens in Thunder Bay on Friday when we talked about how one can get one's word to Ottawa, not only through petitions but by writing letters. I told them that their letters did not have to be long ones, that they had to be directed to the Prime Minister and read as follows: "Dear Brian: Deindexation stinks. Yours truly". 1 encourage senior citizens and all others across the nation to write to the Prime Minister in care of the House of Commons.
I should like to move on to other matters. The most significant line in the entire Budget suggests that the new direction for Canada's Government is to reward success rather than subsidize effort. We should think about that comment for a moment and what a dramatic shift it represents, not only in Canadian public policy but in terms of our view of the world. It used to be that in this country effort was important and that the role of the Government was to assist Canadians to further

June 17, 1985
Borrowing Authority Act
develop the development of our culture and economy. That is no longer the case. They cannot come to the Government for help because they cannot find any, unless of course they have already made it and really do not need it, unless of course they are successful and can come to the Government for their rewards, their hand-outs. This view is callous and regressive. It is social Darwinism at its worst. It is a denial of all on which society is based.
Those words were echoed in a communique from a group which calls itself the Community Business and Professional Association of Canada and has as its motto "Fair Enterprise", an interesting approach. Its analysis of the federal Budget contains a number of important points which I would like to bring to the attention of the House. It indicates that the philosophy of rewarding success rather than subsidizing effort is very dangerous, in that it will curtail entrepreneurship in frontier areas of economic development. Risk taking is definitely discouraged in favour of classical endeavours. As indicated in the budget papers, the result will be that a greater number of profitable companies within each industrial sector will be taxable.
I see that my time is winding up. I have a number of other comments which I will reserve for another time, but in conclusion I should like to refer to how construction association representatives in Thunder Bay feel about the proposed 6 per cent sales tax on ready mix concrete and related building products:
We wish to register our most vigorous protest against the proposed imposition of this tax.
The construction industry (the country's largest single employer) has been devastated by the slowdown in the economy; registering unemployment in our area of up to 40 per cent. Investors need low interest rates and confidence in a stable construction climate, as stimulus to develop; not more taxes on the beleaguered construction industry and its suppliers to drive costs higher.
Our industry represents 15 per cent of the Gross National Product and 650,000 direct jobs, with an equal number in allied industries and professions.
The long-term effect this will leave on construction, and on employment in the construction trades is obvious.
At a time when the construction industry is at a low ebb, we must demand that these changes be rescinded.
Yours very truly,
Robert L. Irwin,
(Past President, Construction Association of Thunder Bay)
(Director, Ready Mixed Concrete Association of Ontario)
Whether it is senior citizens or business people, the Budget will not help them. It will hurt them. For that reason, we will not support the Government's financial plan.


Michael Morris Cassidy: Mr. Speaker, I want to say a few words in this debate about pensions and also about another issue which may not relate directly to the Budget but certainly relates to the policies of the Government during the course of its First year in office. Of course I am referring to the question which was a key issue in my campaign in Ottawa Centre during the course of the election campaign last
summer, that is, to provide people who work in the Public Service of Canada the political rights which were promised them by the Conservatives when they campaigned for office.


Mr. Hnatyshyn:: Is that relevant?


Michael Morris Cassidy: Yes, it is relevant. Among other things, we are talking about 500,000 people who work for the Government of Canada, directly and indirectly, and are now deprived of their opportunity to protest the deindexation of pensions despite the fact that many of them will in fact be retiring shortly and will find themselves in a situation where the purchasing power of what they receive is gradually diminishing, thanks to the hard-hearted policy of the Government.
I cannot tell the House how concerned pensioners in my riding are about the Government's decision to deindex pensions. Some of the double-talk and gobbledegook which is coming from Cabinet Ministers and even from the Prime Minister (Mr. Mulroney) is very confusing, to put it mildly. I always thought that when a measure was announced in the Budget, it had the force of law. In fact, it has been a tradition in Parliament that once a tax increase has been announced by the Minister of Finance, it takes effect immediately, despite the fact that it may take a number of months before the particular tax measure is translated into law. However, now we have the spectacle of the Government back-pedalling and trying to pretend that it really did not mean to do this to pensioners and, as a consequence, saying that of course it will monitor the situation, that it will not take place for several months, and that it was a proposal or an academic exercise.
If the Economic Council of Canada, the Business Council on National Issues or some other such body had come up with a series of proposals including the deindexing of pensions, it would have been appropriate for the Government to say that it would listen to the proposals with great interest. If a committee of the House of Commons had made suggestions for radical reform in terms of social security benefits or Old Age Security, again the Government of the day could have distanced itself from those particular proposals. However, we are now talking about a set of proposals contained in a Budget which took eight months to prepare and presumably set the course for the economic policy of the new Government over the life of its first term in office.
As I mentioned to the Hon. Member for Sudbury (Mr. Frith) a few minutes ago, I was struck by the fact that the other evening, the Hon. Member for St. Paul's, the Minister of State for Finance (Mrs. McDougall), the junior Finance Minister, appeared in front of a meeting of 1,000 women in the National Arts Centre and when she, having worked with the Minister of Finance (Mr. Wilson) on the Budget, was asked to defend the deindexing proposal, she did not know what to say.
The situation now is that virtually all Conservative Members of Parliament wish this proposal had not been made. They are distancing themselves to the point where the Minister of Finance is the only Member of Parliament adamantly in
June 17, 1985

favour of this proposal. I say to the Government it is about time it backed down and made sure that pensioners could sleep easily, knowing that their purchasing power was not going to be eroded because of a misguided proposal which should never have been brought forward and which should be withdrawn now. If Members opposite have made a mistake, be man and woman enough to admit it and withdraw the deindexing proposal now.
I think it is grossly wrong for the Government to decide it will double index the G1S but continue to take purchasing power away from senior citizens who happen to be just above the poverty line. I think that is the Government's intention, and I suspect if it acts at all, that is what we will hear, and I want to say in advance that it is wrong. Those pensioners who may be just above the poverty line right now are not very far above. In many cases in my riding, they still have to pay rent amounting to $400, $500 or $600 a month. If they are hanging on to their own homes, the average property tax for a home in Ottawa Centre is about $150 or $160 a month. The expenses of operating a home are rising rapidly and people in that situation cannot afford to see themselves lose $100 in purchasing power this year, $200 next year, $300 the year after and so on.
If the Government decides to restore indexing only to those who get the GIS, it will be doing by degrees what the Prime Minister said categorically the Government would not do when this issue was debated in Parliament in December. At that time he said universality was a sacred trust. It now appears he may decide to announce it is not a sacred trust anymore, but something to be eroded by 3 per cent per annum. This will go on until the present OAS is worth only 50 per cent of what it is worth today. For someone who is aged 50 and expects to retire at 65, the OAS will be virtually worthless and we will have what amounts to a means tested pension for the poor and nothing better. I think our country can do better than that.
I want to point out also that the other day the Senior Citizen Council of Ottawa-Carleton had a meeting. They represent all of the old people living in Ottawa-Carleton. They have some 60 affiliated organizations. They are strong, tough, bold, lively, and they said categorically that this cold-hearted proposal to reduce their inflation protection should be abandoned forthwith. While the NDP has been presenting petitions in this House for the last two and a half weeks, that organization has also been collecting petitions to see that this misguided proposal is withdrawn. They moved that copies of the resolution should be sent immediately to the Prime Minister and leaders of both opposition Parties, and they remind the people of Ottawa-Carleton that during the election campaign the Government said quite clearly that the PC Government would once more index the old age pension to the actual cost of living on a quarterly basis.
When they were in opposition, the Progressive Conservatives fought deindexing of the OAS. Now they are in Government, they suddenly find there are all kinds of reasons to take it away. Their excuses are just as hollow as the excuses of the Member from Sudbury when he tried to explain why the
Borrowing Authority Act
Liberals brought in six and five and cut back old age pensions by 6 per cent or so per annum.
The Council also pointed out that in the January 1985 Consultation Paper on Child and Elderly Benefits, the Government was again categorical in stating that in its view, no change was required in the OAS-GIS payment system. What was the Minister of Finance doing at that time? Did he sit in Cabinet when this question was discussed and the paper was reviewed and say he was going to get them in two and a half months, but he was not going to say what he was going to do right then? Was he refusing to play squarely and deal fairly with the Minister of National Health and Welfare (Mr. Epp), or was that Minister being duplicitous in publishing a consultation paper which he probably knew was going to be changed or violated in a very short time?
I think it is about time the Government stuck to its promises on this issue. We have seen a lot of broken promises and as far as our senior citizens are concerned, if 1 had a set of priorities regarding which promises to break, it would be to not break any at all, but if the Government is determined it is going to break its word, for God's sake, don't break your word to those senior citizens who contributed so much to our country.
A week ago today, at about this time, I was out on the steps of Parliament Hill when a number of people arrived to commemorate the fiftieth anniversary of the great trek to Ottawa which was broken up in Regina with tragic results by a previous Progressive Conservative Government. Some pensioners came to me and said "We want you to know that during the Depression we worked for 20 cents a day. We lived in the camps. There was no radio, no newspaper. It was like a concentration camp, or just about." They tried to break out but they could not. They lived in abject poverty year after year. They said "Now the country is prosperous and look what they are doing to us today." They asked me to please pass that message on to Mr. Mulroney and Members of the Government, and I am doing that right now.
The Government seems to have a passion for deindexing. It seems to have bought the gospel according to Colin Brown and the National Citizens Coalition right down the line. The Government is wrong on this issue, and I want to suggest that it is also wrong on deindexing pensions of people who work now or who have worked for the Public Service of Canada.
Last Friday I had a chance to meet with representatives of the Union of Economists and Statisticians. We talked about the Government's deindexation proposal which had been announced in conjunction with representatives of the PSA but quickly abandoned because it was clear that the Alliance spokespeople perhaps had made some mistakes. Certainly they did not understand what the Government understood they were getting. Public Service pensioners paid for indexing. They pay about the highest proportion of income for their pension benefit plan of any group of workers in Canada.
The actuarial assumptions the Government is using to try and back away from its commitments to indexing of Public Service pensions are hollow, unfounded, and have a great deal to do with the fact that for many years the earnings of the
5826

June 17, 1985
Borrowing Authority Act
Public Service pension fund have been grossly below those that private sector pension plans were getting in the private market, or had it been able to get the benefit of interest rates available on long-term Government bonds. It looks as though the Government is trying to send this matter back to the advisory committee on pensions which has already dealt with it once and made recommendations which effectively amount to deindexing. You can hardly expect a group which has come up with one lousy proposal to turn around and give a better proposal the second time.
Therefore, I want to echo the concerns of many people in the Public Service or retirees and say that I for one, and my Party as well, would support the matter of Public Service pension plans being referred to a parliamentary all-Party committee which can get objective advice and make some objective recommendations. I think it would be grossly wrong to refer this to an in-House advisory committee which did a bad job last time, which perhaps badly advised the President of the Treasury Board (Mr. de Cotret). This in turn led to an unfortunate rift between the President of the Treasury Board and the leaders of the major Public Service unions over something which in my opinion should never be implemented.
Public Service employees to whom 1 have spoken indicate quite clearly that if what they contribute is not sufficient to continue to pay for full indexation of their pension plans, they are prepared to look at a change in contribution rates. However, all of the actuarial calculations they have made indicate that what they are paying now is ample to maintain that indexation, particularly if they were to stop playing games by joining together the basic superannuation fund and the supplementary fund which has been created for indexation. That should be done, but if it is not done directly, I suggest that it be done by means of a review by a parliamentary committee.
I would like to conclude my remarks by speaking on the question of political rights. I do so in sorrow and with regret. During the election campaign, the Progressive Conservative Party promised, as did the NDP to provide full political rights for people working for the Public Service of Canada. I fought and won the election in the riding of Ottawa Centre on that particular issue and I am pledged over the life of this Parliament to do everything I can to make sure that those Public Service employees who deserve to get political rights do get them.
I believe that the President of the Treasury Board has been acting in good faith in terms of the discussions that he has initiated. I think, however, that he is being undermined by the Public Service Commission, which has been carrying out a holy war in favour of maintaining the present restrictions and by a number of senior mandarins at the Deputy Minister and Assistant Deputy Minister levels who believe that the present system should stay because it is necessary that a very small proportion of people working for the Public Service be untainted, pristine and seem to be non partisan. Most everyone to whom 1 have spoken agree that keeping a small proportion of
the Public Service in a state of political virginity is probably not a bad idea, but that should not apply to the 250,000 others who work for the Public Service of Canada, yet that is the position being taken by those who I believe are stoutly resisting the efforts of the President of the Treasury Board to implement the promise the Government made last fall.
I must say with regret that last week 1 held a press conference to announce that the court case which I initiated in conjunction with a number of members of the Public Service Alliance who are federal Government employees will go forward. We expect and hope to get a date before the Federal Court of Canada early in the fall. The lawyers are now getting together to resolve the subsidiary and minor issues so that the case can focus on the constitutional questions of the denial of fundamental rights of freedom of speech and association to people working for the Public Service because of the current restrictions in the Public Service Employment Act. That case will go forward because I felt I had no choice. After 10 months of a PC Government, the Government mandate is beginning to weaken a bit. The Government is having some set-backs in areas like pensions and there is a grave danger that it will forget this promise the way it has forgotten so many other promises it made to pensioners, public service employees and ordinary Canadians.
We have seen during the course of the elections held in the Yukon and Ontario that the situation facing people who work for the Public Service has not changed one tittle since the election. Members of the Public Service of Canada are no more free today than they were during the election campaign leading up to the September 4 election. They can give money, they can go to political meetings, they can hold membership in a political Party but they can do more. If a member of the Public Service of Canada were to have knocked on doors for a political candidate in the Ontario election, he or she would have run the risk of losing his or her job as a consequence. That is how serious the situation is, and no change has taken place.
I thought that the Treasury Board might have issued instructions to personnel officers in different departments indicating that it is doing its best to implement these changes and asking the personnel departments to inform those people who are members of bargaining units that it is okay for them to take part in election campaigns while keeping a low profile but that if they want to be campaign managers or candidates, of course the normal rules will apply. However, no such compromise was reached. In the meantime, the Public Service Commission has continued, in its status as an independent Commission reporting to Parliament, to give advice to the people who run the Public Service in the various departments to say that it is an offence to take part in elections. To reiterate the guidelines issued in the spring of last year, they effectively say that any action by anyone in the Public Service that might give the least cause to think that a Public Service employee is not impartial is suspect and should not be engaged in.
A few weeks ago when he appeared before the committee, the President of the Public Service Commission made public a
June 17, 1985

poll on political rights that had been carried out by Carleton University. That poll indicated that 30 per cent of the people working for the Public Service of Canada would in fact exercise more political rights if they were granted them through legislative action. I think that the President of the Public Service Commission was taking the view that that proved that most members of the Public Service do not want to have political rights. I say that when 80,000 people are saying that their fundamental rights are being denied them, something is wrong.
I think all of us know how small of a proportion of the general population is in fact politically active. Perhaps 2 per cent or 3 per cent of the population of Canada, during the course of an election year, goes to a political meeting or takes part in a political campgaign. If 30 per cent of the Public Service indicates tha they would like to be politically active, that is a very major proportion. I would say that if only 1 per cent said that their fundamental rights were being denied, something would be seriously wrong.
The Charter of Rights says that everybody enjoys freedom of speech, and that does not include an exemption with respect ot all people working for the Public Service of Canada. The Charter of Rights guarantees fundamental democratic rights to everybody and does not exempt people working for the Public Service of Canada. The Charter of Rights provides for freedom of association and does not except people who work for the Government of Canada but wish to take part in the activities of a political Party.
The Government has time before we adjourn on June 28 to make its intentions clear. I look forward to a statement by the President of the Treasury Board because for Public Service employees, this issue is just as important as the issue of pension rights and deindexation is for the two and one-half million senior citizens who have been so cruelly treated by this Government.


The Acting Speaker (Mr. Cooper):: Questions or comments? Debate.
[ Translation]


Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, 1 welcome this opportunity to speak to Bill C-51, but I would like to start by refreshing the memory of the public and explain that this is a very important piece of legislation which authorizes the Government to borrow an amount not exceeding 18 billion 200 million dollars for its operations, or as it says here: "... as may be required for public works and general purposes." In fact, this also means that when speaking to this Bill, Members are allowed to comment on a variety of subjects.
Mr. Speaker, if we look at the Government's strategy we are tempted to ask: Where is this Government going? Or if you prefer: What is their strategy? Actually, during the past nine months, we have seen the politics of style, the strategy of style, an attempt to sell a large Cabinet with a new Prime Minister-and I must say that on occasion, the Prime Minister and
Borrowing Authority Act
his Cabinet have cut a dashing figure on television-but that is not the primary responsibility of Government. It must be consistent and serious, and it is imperative that this Government firmly establish its policies both in the economic and social sphere. So at last we had a Budget, on May 23. We discussed this Budget for several days, and now we are considering this particular Bill which is aimed at authorizing the Government to borrow $18.2 billion. Billion, Mr. Speaker! Recently, someone asked me, and I was talking to high school students: what is a billion? So I said it was 1,000 million, and to try and put it into more concrete terms, I told them that to spend a billion, you would have to spend $1,000 every day for
3,000	years. They were speechless. I said yes. And of course $18 billion means you would have to spend $18,000 every day for 3,000 years.
So we cannot think in those terms. It is an incredible amount of money. It is a lot of money, and because this is a wealthy country, we have very big budgets.
Mr. Speaker, the Government is trying desperately to sell its budget. It is trying to save face by saying that the Budget has been well received. It should realize, however, that it contains a major defiency, which we have pointed out, and that is the proposal to de-index Old Age Security pensions. This is how the whole discussion on the Budget started, because we realized that in the figures we were given, the Government indicated the scope and the size of the Budget measures it was proposing.
The Government is desperately trying to sell the Budget to Canadians because, in my view, not many Canadians want to buy it. Conservatives have realized that the country is not willing to accept a Budget which will put the highest burden on those who are least able to carry it-the poor, the elderly and the unemployed. In his attempt to sell the Budget to Canadians, the Minister of Finance (Mr. Wilson), in a recent speech to The Empire Club of Canada in Toronto, said that the Tory Budget upholds public morality. Obviously, the Conservative Government distorts the understanding of the word "morality".
In its Budget, the Government has partially deindexed Old Age Security pensions. I have a document from the Department of Finance, released after the Budget, which indicates the effects of the various budgetary measures up to 1990-91. The document indicates that the deindexation of senior citizen's pensions will have an impact of $1.6 billion by 1990-91. The document outlines the revenue and expenditure impact of budget measures by national accounts component. The third column of the document from the Department of Finance was not made pulic. The first two columns which dealt with 1985-86 and 1986-87 were made public, but 1990-91 was not.
I would like to return to Old Age Security. That will have an impact on the deficit. Reductions in other fields of taxation, such as the modified indexing of personal income tax and the

June 17, 1985
Borrowing Authority Act
personal surtax, the RHOSP and the child exemption will also have an impact on the deficit. The disability deduction has gone from minus-$15 million to minus-$50 million. Capital gains tax will cost the taxpayers of Canada S300 million this year, $600 million in 1986-87 and $1.2 billion in 1990-91. Canadians have a $500,000 capital gains exemption which will allow a $10,000 exemption this year and which will gradually increase over the next few years. They will be allowed to use those capital gains as a tax shelter.


An Hon. Member:: It is not a tax shelter.


Jean-Robert Gauthier: Yes, it is a tax shelter. No tax will be applied to the capital gains which people realize, whether it is realized on a Kentucky horse, a condominium in Miami, paintings or jewels. In that $500,000 capital gains exemption, we would have liked to have seen some encouragement for jobs, small enterprises and research and development. In other words, the Government should insist that the money be used for the benefit of Canadians in Canada.
The tax treatment of pensions will mean a reduction of $235 million by 1990-91. Housing loans will be reduced by $45 million by 1990-91. The document lists other examples. For example, the freezing of unemployment insurance premiums will provide a reduction in the deficit of $10 million. I could list all the financial consequences of the Budget, but the one measure with which all Canadians are preoccupied is the measure which deals with the partial deindexation of Old Age Security. Child benefits will also be changed, including the family allowances. Tax exemptions for dependent children will mean a net reduction of $600 million by 1990-91. The families of Canada will say that is immoral. I cannot blame them.
By 1990 the Government will have cut social programs by more than $2 billion a year. That money will not be redistributed to needy Canadians-the old, the poor and the unemployed. It is another election promise which has been broken by the Government. It says it will use the money to reduce the deficit, although it promised that it would not do that. That is immoral. The 1.4 million unemployed Canadians say that it is immoral.
The Government will probably come to its senses in the next few days and change its mind on the question of the Old Age Security pension. I hope the Prime Minister (Mr. Mulroney) will have the guts to come into the House and say that the Government has made a mistake and that it will not proceed in January 1986 with the Ways and Means motions which are necessary to implement the measure.
Mr. Speaker, the last time the Government asked the House to approve borrowing authority legislation, the circumstances were, of course, quite different. Hon. Members will recall that at the time, there had been no Budget, and we were being asked to provide borrowing authority for an amount that was far in excess of projected spending. The Government wanted to
borrow more than it had said it was going to spend. Obviously, we objected to that. This caused quite an upheaval in Parliament which went on for several months, until last December, when the Bill was passed because the Government, which was involved in a debate on universality at the time, wanted to reach agreement at any price before Christmas, and since time was running out in two instances, namely for the borrowing authority which it needed and which was essential, and there was also the debate on universality which was becoming an embarrassment, the Government set aside the last day of the session before Christmas for a debate on universality, in exchange for the Opposition's consent on the borrowing authority legislation.
Subsequently, the Senate or perhaps I should say the other place, Mr. Speaker, made a fuss, and this caused a number of problems that were perhaps more a matter of image than substance. The situation today with respect to Bill C-51 is different. The Government has brought down a formal Budget and tabled its Estimates. But there is another difference, and that is because the Government is asking for $18.2 billion to finance its extravagant gifts to the multi-national oil companies and rich investors, while at the same time it is telling the elderly they will have to tighten their belts. They were unable to set aside any part of the $18.2 billion to provide for full indexation of the Old Age Security pension for Canadians. That is the difference, that is what is so immoral and that it is why it is wrong.
Mr Speaker, what we are considering today is the morality of the situation. Is there any moral justification for telling
200,000	senior citizens that they will become poor? Because that is what the result will be, Mr. Speaker. Between now and 1990, this measure will put 200,000 Canadians below the poverty line. The immorality of this Government's request in the Bill before the House today prompts me to dwell a little longer on the Budget brought down on May 23 of this year, since as I said before, the Government's request is closely linked to the Budget. What the Government is suggesting, Mr. Speaker, is a single, primary and very narrowly-based objective. The purpose of the Budget is to bring down the deficit, so the deficit comes first and nothing is going to stop that.
Mr. Speaker, I do not think any Member in this House is against bringing down the deficit. It is a very worthy goal, and it is very important. But it must be done without putting the burden on the wrong people. What the Tories have done is regressive and unfair. They are well aware of that. Why put a tremendous tax burden on the consumer while giving big corporations and wealthy individuals special privileges? Why not be a little more flexible and allow more generously for job creation? Why did they cut $78 million from the Budget for training, development, and especially manpower training? Mr. Speaker, there is a very real possibility that all these measures will reduce purchasing power and with all these tax increases,
June 17, 1985

the situation is not going to improve, and it may well get worse later on.
Let us look at the figures, Mr. Speaker. These are not my figures, they appear in the Government's Fiscal Plan, a document given to us along with the May 23 Budget. In 1987 middle-income consumers will have to pay $2.4 billion in additional taxes, while at the same time about $540 million in benefits will be given to the companies that are so friendly with this Government. We know them. And the figures keep increasing, Mr. Speaker, to the extent that the business community will have a field day by 1990, while elderly and ordinary Canadians will have to make do with ever diminishing assistance.
Mr. Speaker, the social planning council recently published a very interesting document indicating:

"Summary of Major Budget Measures", and these are not my figures, these are the figures of the Canadian Council on Social Development. These are the costs, and I will repeat them again because it is extremely important for Canadians to know them. For example, Mr. Speaker, the Budget will decrease the buying power of a typical family with two children by more than $1,000 in 1990. By deindexing tax systems, by capital gains exemptions, it lowers the revenues of the Government of Canada which results in increased taxation on consumers. The increased pension contributions will be lower. It will eliminate the federal tax reductions, reduce the child benefit systems and reduce old age security. By 1990, Mr. Speaker, $2 billion will be cut from provincial Governments for post-secondary education.
I really would have liked to continue my remarks for the next half hour because I still have notes. However, Mr. Speaker, I would just remind Hon. Members that on voting on Bill C-51, they are voting on $18.2 billion. That is a lot of money and, for God's sake, let us put it where it should be, that is to help the aged, the poor and the unemployed.


Mr. Keeper:: Mr. Speaker, I appreciate the comments of the Hon. Member and I am glad that he spent a good deal of his time calling for justice for seniors. However, I wonder how he can explain to an ordinary citizen who may be watching this debate in the House of Commons how he can now condemn the government's plans to deindex seniors' pensions-which is a just and reasonable condemnation-when at the time his Party was in office it also had a plan for partial deindexation of seniors' pensions? I would welcome some explanation from the Hon. Member because I know him to be a man who is sincere and genuine.


Jean-Robert Gauthier: Mr. Speaker, I appreciate that question. I believe my constituents will know that I can rise-


Mr. Gormley:: In all modesty.


Jean-Robert Gauthier: Yes, in all modesty, and say that the Government when it did apply the six and five made sure of two things; first, that the measure applied for two years and,
5.0. 21
second, that it did not touch those in need. Those in need who received the GIS were double indexed. They all know that in my riding. It was a question at that time of anticipating the inflation to be what it was. We were having double-digit inflation. We had a problem and tried to resolve it. I am not saying that it was the best way of doing it. As a matter of fact, Hon. Members know where I voted on that issue. I would say it did work, the six and five measure did bring down inflation so that indeed senior citizens did not lose very much.


Cyril Keeper: Mr. Speaker, I appreciate the comments of the Hon. Member. With regard to his present position on this issue, is the Member asking the Government to restore deindexing fully as it applies to Old Age Security across the board, or has he some more watered down position on double deindexing with regard to the Guaranteed Income Supplement? I am wondering about his concern regarding the Old Age Security.


The Acting Speaker (Mr. Cooper):: I regret to interrupt the Hon. Member but, it being two o'clock p.m., the House will now proceed to Statements by Members pursuant to Standing Order 21.



STATEMENTS PURSUANT TO S.O. 21


Ms. Sheila Copps (Hamilton East):: Mr. Speaker, hundreds of thousands of Canadians are sending a message to the Government about its refusal to provide full pensions for all our senior citizens. The offices of Members of Parliament from coast to coast have been flooded with calls. The rallying cry of the Minister of Finance (Mr. Wilson) of a tough but fair Budget has been exposed for the Conservative hypocrisy of the rich that it really is.
Last March we said that the Prime Minister (Mr. Mul-roney) put the "sham" back into the word "shamrock". It is now clear from his broken promises that he has put the "con" back into the word "Conservative". The Canadian people were conned last September, but they are mad now and will not take it any more. That is why life-long Conservatives in my riding have renounced their Party and expressed dismay at their betrayal by the Prime Minister. That is why seniors from across Hamilton will be gathering Friday morning at First Place Community Centre to let our Liberal Operation Justice Team know how they feel about so-called Tory justice.
Tory times are tough times, and now we see that Tory times are con times. Canadians are not going to be conned by the Government. We demand that the Prime Minister live up to his promises to the Canadian people and move today to restore

June 17, 1985
5.0. 21
full indexation to senior citizens' pensions so that people from coast to coast will finally be able to sleep at night. The con game is up, Mr. Prime Minister. Come clean.



PENSIONS


Abram Ernest Epp: Mr. Speaker, the senior citizens of Thunder Bay are fighting mad about the Conservative Government's threat to deindex their pensions. With less than 48 hour's notice, more than 200 of them gathered at 2 p.m. last Friday to tell my colleague from Thunder Bay-Atikokan and myself what they thought of the Government's budget proposal.
George Andrew-Cotter pointed out that senior women are already $2,000 below the poverty line. Dutchie Gall pointed out that many seniors had been unable to save for their retirement years and are entirely dependent on the Old Age Security and Guaranteed Income Supplement. Mike Chicorli called on City Council to add its voice to the demand that the Conservative Government keep its election promises. Norman Richard described the budget proposal as a real scam, made in the name of grandchildren but designed to put their fathers out of work. Romeo Turcotte pointed to the ever-rising cost of living as requiring that pensions increase as well. Mike Comi-shin declared that seniors were not ready to lie down and accept what the Prime Minister (Mr. Mulroney) threatened to do to them. Louis Johnson asserted that if the Prime Minister has $500,000 to spend on a party with President Reagan, he could find money for seniors. Molly Kapush urged the Government to borrow as needed from the Canadian people so the interest would be spent in Canada, rather than in Germany or the United States.
The senior citizens of Thunder Bay and northwestern Ontario demand an end to the deindexation proposal. When will the Government act?



CAPITAL PUNISHMENT


Mr. Gordon Taylor (Bow River):: Mr. Speaker, how much longer are are we going to tolerate the mollycoddling of murderers who have been convicted of deliberately planning and killing one or more human beings? We put them in prison for 20 years and, during that time, we provide extra protection for them. They have security, and are given far better food than hundreds of decent, law-abiding citizens can afford.
They are entertained and taken to sporting events. Hundreds of our taxpayers' dollars are spent for pool tables and equipment, and periodically they may have their spouse or common law partner as a guest in a government trailer. All of this, of course, is with the compliments of the Canadian
taxpayer. We put the lives of prison guards on the line while they are with these murderers.
What about those who were murdered; young girls, young boys, women, police officers, and prison guards, many of whom were tortured and physically and sexually abused before their lives were snuffed out? Their bodies lie in the cold earth, with only relatives and friends visiting their graves. The loved ones left behind are the forgotten people of our nation.
"It would be barbaric to execute these murderers'', the bleeding hearts cry. They ignore such barbarism as molesting and then murdering a four year old boy, or the agony suffered by a teenage girl before her body was raped and burned, or the pain of forcing policemen to dig their own graves before being slaughtered. A majority of Canadians want such murderers executed. I grieve and weep for the murdered and their loved ones, not for the murderers.



EXTERNAL AFFAIRS


Mr. Jean-Guy Guilbault (Drummond):: Mr. Speaker, I am pleased to commend the Secretary of State for External Affairs (Mr. Clark) for his Green Paper on foreign policy.
This consultation document pinpoints directions for change and parametres with respect to international development, human rights, environment, trade and strategy.
Our Governement wants to set up a democratic consultation process through a parliamentary committee which, for the first time in the history of this country, will enable us to give Canadians an opportunity to participate directly in the preparation and drafting of Canada's foreign policy.
After beating around the bush for a while, the Official Opposition reconsidered its position and now agrees that the public and the Parliament of Canada ought to be able to discuss foreign policy issues.
Notwithstanding the negative criticism of the Liberals who, in fifteen years, were unable to make an over-all survey of external relations, people interested in Canadian diplomacy did make positive comments. Among other things, it was said that the Green Paper is intellectually more challenging than the former Government's 1970 White Paper, particularly in connection with economic questions.
In addition, Mr. Speaker, apart from any partisan consideration, organizations that are interested in Canadian foreign policy are enthusiastic about the prospect of a genuine international affairs debate in Canada, and that is the objective of the Progressive Conservative Government.
June 17, 1985



OLD AGE SECURITY


Mr. Fernand Robichaud (Westmorland-Kent):: Mr. Speaker, this is not the first time 1 rise to tell the House that the senior citizens of New Brunswick disagree with the Conservative Government's proposed deindexation of pensions.
Today I would like to read a letter 1 received last weekend from the Golden Age Club of Scoudouc. Here it is:


Fernand Robichaud: We, the 160 members of the Golden Age Club of Scou-bouc, are strongly opposed to the changes advocated in Mr. Wilson's recent Budget. Senior citizens deserve more than they are getting now, but the present Government does not seem to realize that. We hope you will bring pressure to bear with us senior citizens so that no change be made that might harm us. Thank you and good luck.
The message is clear, Mr. Speaker. This letter reflects the discontent and concern of elderly people. There is no doubt that the policy of the Government is inhumane and that, as long as it does not change its position concerning pension deindexation, senior citizens will continue to speak up, demonstrate and protest.



PENSIONS


Cyril Keeper: Mr. Speaker, as Members belonging to the governing Party have risen in the House and complained about a lack of mail delivery in new suburban developments, l too have noticed prolonged delays in the delivery of mail, lost mail, and even misdirected mail which ends up in the wrong place. Mr. Speaker, we in the Opposition share these concerns about inadequate mail service. We sincerely hope that the Government will listen to its own backbenchers, if it will not listen to opposition Members, and improve mail delivery before increasing postal rates.
However, there is another kind of misdirected mail around this place. I am receiving a continuous stream of mail condemning the deindexing of senior citizens' pensions. This mail calls for justice for seniors, and it must find its way to the proper place, to government Members. A number of ordinary government Members have already spoken out on this issue and I urge those government Members who are calling for good mail service to call for justice for seniors, and to condemn the deindexing of seniors' pensions.



EXTERNAL AID


Mr. Bill Attewell (Don Valley East):: Mr. Speaker, in the International Year of Youth it is most gratifying to see the
major role the World University Service of Canada is playing in relief to Ethiopia. Its Adopt-a-village concept is unique and thrilling. Several cities in Canada have adopted a village in Ethiopia.
Toronto has adopted the village of Gode. Gode is located in the Agadon desert of southeastern Ethiopia. The Agadon has been suffering from a three-year drought wihch has devasted crops and depleted all water supplies. There is malnutrition, starvation, and other diseases associated with poor nutrition. There are already 300,000 displaced persons who are seeking food and water, and Canadian and Ethiopian relief workers expect the total to rise to over 1 million by the end of this year.
There are real practical needs. Two 10-tonne trucks, a mobile medical unit, medical supplies, water storage facilities, and more personnel are urgently needed. The cost is $450,000, and I urge all residents of Metro Toronto and other Canadians to support the Adopt-a-Village concept developed by the World University Service of Canada.



HUMAN RIGHTS


Mr. Reg Stackhouse (Scarborough West):: Mr. Speaker, as one of the Members of Parliament who is privileged to be attached to the delegation to the World Conference on Human Rights, I would like to say a word of congratulations to Ambassador Jay and all the officials of the Department of External Affairs who have formed the Canadian mission at that important conference. They have performed with a professional commitment worthy of the best traditions of the Canadian diplomatic corps.
Many people wonder, however, if it has been worth the effort. When the conference adjourns today and the delegates go home, it is feared that they may go home with little more than a communique phrased in diplomatic generalities and with a few rhetorical flourishes. Blacks can still be gassed at a peaceful demonstration in South Africa. Dissidents can still find penal servitude their reward for even a whisper of criticism behind the Iron Curtain.
But there is one gain from the conference. It is the recognition that if nations of the world can come together to discuss human rights within the borders of each other's countries, then human rights are not simply an internal matter anywhere. Human rights belong to everyone and they are a world responsibility that commands the concern of us all, not as citizens of one country intruding into the affairs of another, but as men and women who are sharing with others in their sufferings because we share a common humanity.

June 17, 1985



THE ADMINISTRATION


Mr. John Nunziata (York South-Weston):: Mr. Speaker, the appointment of Jim Wood, a former RCMP corporal, to the Canadian Pension Commission at a salary of up to $65,000 has given further evidence of the Solicitor General's (Mr. MacKay) tendency to assist his friends at the expense of his official responsibilities. During the 1970s Mr. Wood was responsible for leaking confidential information on RCMP activities to the Hon. Member for Central Nova, now the Solicitor General.
This was in total violation of the oath of secrecy that Mr. Woods swore when he entered the force. By arranging for his friend, Jim, to receive this appointment, the Solicitor General has debased the RCMP oath of secrecy. He has sent a message to members of the force that they can violate their oath with impunity. Indeed, if they violate their oath for the greater glory of the Tory Party, they may even be rewarded.
Ironically, the details of Mr. Wood's appointment come at a time when the RCMP Commissioner is attempting to restore respect for the oath of secrecy within the force. Commissioner Simmonds stated in the Hatfield report that the value of the oath is "in setting a standard of professionalism and integrity that will assure public confidence and trust in the force. When the standards are not maintained, there is a consequential lessening of respect for the organization".
The Solicitor General is like a wrecking ball in his own Ministry. He should resign, and the Wood appointment should be rescinded.



CANADA POST CORPORATION


Mrs. Lise Bourgault (Argenteuil-Papineau):: Mr. Speaker, following complaints from some of my constituents in Argenteuil-Papineau that I was not answering their letters, I made enquiries and found out that it takes at least two or three weeks for mail to get to Ottawa from my riding.
Mr. Speaker, my constituents, and I as a Member of Parliament, refuse to be victimized by the Canada Post Corporation. How can a Crown corporation do what private enterprise would not dare? Why is the absentee rate among the corporation's employees so abnormally high? Why are rates going up while the quality of service is going down?
I would like to ask the Minister responsible to reconsider the mandate Parliament has given this corporation and to order an investigation of the corporation's management. My constituents are reasonable people. They are aware of the corporation's tremendous deficit. When service is good, they are willing to pay the cost, but now they feel they have a right to complain
because Canada Post has given them a raw deal since it became a Crown corporation. One does not do this to Canadians without suffering the consequences, Mr. Speaker, and the people who are responsible for the corporation's failure to live up to its mandate will sooner or later be held accountable before Parliament.



ORAL QUESTION PERIOD


Hon. Jean Chretien (Saint-Maurice):: Mr. Speaker, my question is directed to the Deputy Prime Minister. As we have seen over the weekend, the honeymoon is over for the leadership of the Tory Party, and the dishes have started to fly in the Tory kitchen. We saw many Members of Parliament from Victoria to Ottawa, to Montreal and on to Halifax, get up and say that the mistake made by the Minister of Finance about deindexation in the Budget should be corrected. Is it the intention of the Government to stop the anxiety of the old age pensioners of Canada, make it known right away that the Government intends to backtrack on that terrible decision, and give justice to the old age pensioners?


Hon. Erik Nielsen (Deputy Prime Minister and Minister of National Defence):: Mr. Speaker, I am not as familiar as the Hon. Member with flying dishes in the kitchen particularly as a result of his most recent foray into the Atlantic provinces with what he is pleased to call his task force on world disarmament, where his co-chairman, the Hon. Member for Winnipeg-Fort Garry, was saying precisely the opposite thing to what he was saying in public.
The question put by the Hon. Member today was asked repeatedly last week and was repeatedly answered by the Prime Minister, as it has been by the Minister of Finance in the past.
I merely quote a small excerpt from Hansard of last Friday at page 5772, when the Prime Minister said:
I acknowledged at the press conference, without hesitation, that one of the issues affecting the elderly poor clearly is a source of concern for all of us, which was why a provision was inserted in the Budget that we would monitor that very carefully.
According to the Budget, this measure would and will become effective on January 1 of next year, but also according to the Budget, we are monitoring the situation on a regular basis to ensure, as far as possible, that no problems will result for the neediest in our society.
[ Translation]


DEINDEXATION OF PENSIONS
Joseph Jacques Jean Chrétien: Mr. Speaker, instead of repeating at length what the Right Hon. Prime Minister
June 17, 1985

said, 1 hope the Deputy Prime Minister can inform the House whether instead of just "monitoring" the situation, the Right Hon. Prime Minister intends to act on the unanimous resolution of the Legislative Assembly in Quebec, the views expressed by the Premier of Quebec and the opinion of Conservative Members from Montreal who spoke out against the Government's de-indexation measure, and inform the elderly in the province of Quebec this evening, in Manicouagan, that the Conservative Government has made a mistake and that it intends to correct it immediately and put an end to a situation that is causing the disintegration of the Progressive Conservative Party.


Erik Nielsen: Mr. Speaker, the farce with respect to government ended last September 4.
The Prime Minister has answered that sort of question repeatedly, in a very forthright, upfront fashion, as when he said, again last Friday in the House of Commons in answer to a Member from the Hon. Member's Party:
-I heard the comment which was made by the Premier of Nova Scotia in regard to that budgetary provision, t heard it from leaders of the business community, the BCNI, leaders of trade unions, and my hon. friend from Beaches. I indicated at a press conference this morning that only a very foolish individual would be insensitive to that kind of comment and analysis. With regard to the question. I think we have been prudent. I hope, at the earliest possible moment, that we can make a statement which would be consistent with the intentions set forward by the caveat which was placed in the Budget.
Why the Hon. Member cannot accept that forthright, honest reply by the Prime Minister, similar to the replies made by the Minister of Finance, must find its motivation in the roots of his own political set of values.


GOVERNMENT POSITION
Joseph Jacques Jean Chrétien: Mr. Speaker, it is evident that I will get nowhere with the Deputy Prime Minister who cannot make up an answer but just reads from Hansard. Therefore I will direct my supplementary question to the Minister of National Health and Welfare.
As the Hon. Minister is responsible for defending the people who are less privileged in society, will he suggest to the Minister of Finance that if he were to stop the capital gains tax exemption for rich people, not give the $11 billion to the oil industry, then he, the Minister of National Health and Welfare, will be in a position to tell old age pensioners, those who live on family allowances and those who benefit from personal exemption on income tax, that the deindexation of these programs will not take place and the social contract will be preserved in Canada?


Erik Nielsen: Mr. Speaker, the Prime Minister had made very, very clear, by way of his explanatory statements, the Government's position in this matter. He has pointed to the commitment of the Finance Minister in the Budget, on
Oral Questions
behalf of the Government, to full indexation of the Guaranteed Income Supplement. He has pointed to the further commitment, carefully spelled out in the Budget, which promised that the Government would, and I quote, "review the adequacy of payments in light of future circumstances and will increase them as resources permit".
This is a clear commitment by the Government that the deficit will not be reduced on the backs of needy pensioners. Nothing could be clearer than that. That process is now going on, and we are monitoring it with respect to the degree to which the economy has responded to the Budget. If they would like to embark upon inquiries in that regard, we would have something to say to them as well.


GOVERNMENT POLICY
Sheila Maureen Copps: Mr. Speaker, it is quite clear that the Prime Minister and the Government have put "con" back into the word "Conservative". If the Deputy Prime Minister wants to talk about honesty, why does he not tell us why the Prime Minister made the promises which he made to Canadian people?
Last week two life-long Conservatives came into my office to tear up their PC membership cards and pledge to work for me in the next election.


Some Hon. Members:: Hear, hear!


Sheila Maureen Copps: One of them, Thomas Ashthorpe, said:
Mr. Mulroney promised he wasn't going to touch our old age pensions... I feel betrayed.
How many more torn PC membership cards will it take before the Government reinstates full pensions for all senior citizens from coast to coast?


Erik Nielsen: Mr. Speaker, one of the reasons why there was a change on September 4 was not because of the tearing up of a couple of cards, but because of the tearing up of virtually hundreds of cards by members of her Party and the NDP.


Some Hon. Members:: Hear, hear!


Erik Nielsen: Thousands; thousands. We were elected to address the horrendous legacy left us by that Party over there in terms of the economy of the country. Instead of preambling her questions as she does, she should look at the rate at which unemployment has declined since last September, at the new low level of interest rates, at the increased rate of growth of confidence in the Government, at consumer spending rises, at manufacturing orders which have risen, at price stability return, at farm cash receipts having risen, at exports having risen, and at bankruptcies declining. These are the things which the hon. lady and those with her should be thinking about.

June 17, 1985
Oral Questions


REINSTATEMENT OF FULL INDEXATION REQUESTED
Sheila Maureen Copps: Mr. Speaker, if the Deputy Prime Minister thinks that only two Progressive Conservatives opposed these measures, I have seen his velcro lips sink into the political sand for the last time.
Mr. Ashthorpe told the Hamilton Spectator that the measure by the Government, a Party of which he has been a member for 72 years, could put him into an old age home. Will the Deputy Prime Minister act today to reinstate immediately full pension benefits, so that hundreds of thousands of seniors-Progressive Conservatives, Liberals, New Democrats and those who are apolitical-can sleep tonight?


Erik Nielsen: Mr. Speaker, I think I have already answered that question four or five times today, as well as the Prime Minister having answered the question repeatedly for almost the entire Question Period last Friday, and the Minister of Finance before that. If the hon. lady cannot yet understand that-


Joseph Jacques Jean Chrétien: Answer the question.


Erik Nielsen: -or the hon. gentleman opposite who is interjecting now, I simply give up hope for their reason.

[ Translation]


OLD AGE SECURITY
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, my question is directed to the Minister of National Health and Welfare. After the Conservative Caucus meeting on the weekend, the Prime Minister indicated that the Government may be changing its policy on pensions, perhaps this week or next week. My question to the Minister is as follows: Does the Minister agree with the spokesperson for one million pensioners who indicated that the Government will have to fully re-index pensions for all pensioners in Canada, and do so forthwith?


Erik Nielsen: Mr. Speaker, it seems that there is still an Hon. Member who has failed to understand and to hear the message in the responses by the Prime Minister to himself and to others last Friday. Let me, by referring to page 5776 of Hansard, answer that question directly in terms of what the Prime Minister said. He said:
We indicated that one of the responsibilities of a Government was to listen to people, to reasonable debate in the House of Commons, and to criticism. I do not take it as a sign of weakness to acknowledge that we are, indeed, listening to people such as my hon. friend. One of the reasons for which the budgetary document was so framed was in anticipation of the kind of difficulty which has been raised by many people in the House, and particularly by my hon. friend.
We will act as quickly as we can. We will continue to pay very close attention to what he and others say.
I wish that he would pay as close attention to the answers which he is getting from the Prime Minister and other Ministers of this side of the House.


PENSIONS
John Edward Broadbent: Mr. Speaker, it is one thing for the Deputy Prime Minister to answer for the Prime Minister and the Minister of Finance who are not here, but it is quite another thing for him to try to answer for the Minister of National Health and Welfare who is responsible for questions directed to him in the House. The Minister should be answering these questions, not the Deputy Prime Minister.
I will try again by directing my question to the Minister responsible for Canada's pensioners. I hope he will stand up and be counted, rather than leave it to the Deputy Prime Minister to reply. Given that the Prime Minister indicated that the Government may indeed change its policy on pensions, may reindex the pensions of Canada's pensioners before we recess for the summer, will the minister now guarantee to Canada's pensioners that the Government will do that, will remove their anxiety, and fully index the pensions of all Canadians before we recess?


Hon. Jake Epp (Minister of National Health and Welfare):: Mr. Speaker, 1 would like to refer the Leader of the New Democratic Party to page 5776 of Hansard, about which he has already heard, I am sure. I will not repeat it for him because, no matter what are his qualities, I am sure he now understands what is on that page.
As the Prime Minister said, both in the House and on the weekend, we are listening to Canadians. The decision, if any decision is to be taken, will be done in the usual fashion. That stands.


RUMOUR ANTICIPATING DECISION
John Edward Broadbent: Mr. Speaker, "done in the usual fashion" may mean that we will be waiting for another three or four years for the Government to act. Canadian pensioners want an answer now. They do not want to be sitting around all summer waiting for the Government to make up its mind.
I should like to ask the Minister a final two-part question. First, concerning the rumour which is going around that the Government is considering simple double indexation for those who are receiving GIS, will he assure the House that when the change comes there will be full indexation for all Canadian pensioners, not just those receiving GIS? Second, will he assure the House that the decision will be made before we recess? Why wait for fall? Do it now.
June 17, 1985


Arthur Jacob (Jake) Epp: Mr. Speaker, with respect to rumours, the Hon. Member should keep in mind that he probably knows the rumours best; he probably started them. I think he would admit that, in the best traditions of the Opposition, he has not only started that rumour but some others, and that he has also tried to use it for his own political purposes. I say to him: Check your own rumours that you have been making, and wait for any developments.


Mr. Speaker:: The Hon. Member for Sudbury.


Douglas Cockburn Frith: Mr. Speaker, 1 might add that Canadian senior citizens do not want to hear a rehash of Hansard. They want a decision by the Government to reverse itself on deindexation.


FULL INDEXATION-REQUEST FOR RESTORATION
Douglas Cockburn Frith: Mr. Speaker, my question is directed to the Minister of National Health and Welfare. Every senior citizen with whom 1 met in the last six or seven days, as I travelled across the country, wants me to put the following question to him; When will the Government do the compassionate and fair thing, reverse itself on deindexation, and restore full indexation to Canada's seniors?


Arthur Jacob (Jake) Epp: Mr. Speaker, 1 remind the Hon. Member of the speech he made regarding six and five. When he speaks to seniors 1 am sure he also puts into his presentation what the Liberal Government did at that time when inflation was eroding the purchasing power of Canadians, and of the senior citizens who were especially vulnerable. Knowing him, I am sure he did that.
As to the second part of his question, he really repeated the question which has been asked by his Party and the NDP. The answers given by the Deputy Prime Minister and myself also apply to the second part of his question.


REQUEST FOR IMMEDIATE ANNOUNCEMENT
Douglas Cockburn Frith: Mr. Speaker, the Minister knows full well that the decision has been taken to reverse deindexation. It is no longer a question of if, it is just a question of when. Therefore, does the Minister believe that senior citizens who have fought wars, gone through depressions, and paid a special 3 per cent surtax to ensure their OAS pensions, should wait and worry all summer before they find out the Government is going to reverse itself? That is the question Canadian seniors want answered here in the House today, not tomorrow, next week, or the day we leave before summer break.


Arthur Jacob (Jake) Epp: Mr. Speaker, regarding any decision, 1 repeat what has been said by the Prime Minister and repeated today by the Deputy Prime Minister. As to any other question relating to timing or
Oral Questions
anything else, 1 suggest that he refer to the answer we so frequently received when he was on this side.


Douglas Cockburn Frith: In due course.


Arthur Jacob (Jake) Epp: That is, in due course these things will be answered.


SENIOR CITIZENS' REPRESENTATIONS
Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, my question is directed to the same Minister. He will recall that last week the Prime Minister said that the Government was anxious to receive news which would be helpful on this matter of deindexation. He will also be aware, if he was in Manitoba over the weekend, that the Manitoba Society of Seniors published 30,000 copies of a journal in which they suggested the Government and the Minister failed to keep their promise to pensioners, ignored seniors' advice, and ignored their pleading. Since the Minister has the responsibility for pensions, would he now stand up and say that he is prepared to announce the Government is not going to proceed with deindexation?


Erik Nielsen: Mr. Speaker, 1 think it was the Hon. Member who last week put the question to the Minister of Finance with respect to consultation. 1 could be wrong about it being he, but 1 think they should be seen for what they are. They speak of consultation, they speak of listening. The Minister of Finance today, on the invitation of members of that Party to attend a meeting in Halifax, has been trying to communicate with the office of the Leader of the NDP to obtain the time and place of that meeting in Halifax. Through last Friday he had no success. But he is there now meeting with the Chairman, Mr. Gifford, referred to by the Hon. Member for Beaches; meeting with representatives of the concerned pensioners, representatives of the senior citizens of Nova Scotia, and he is meeting with the Halifax Seniors Council.
Surely, Mr. Speaker, those Hon. Members cannot have it both ways, accusing us of not meeting, not consulting and not listening to interested bodies, in light of that kind of activity by the Minister of Finance.


Nelson Andrew Riis: Mr. Speaker, the Minister may be meeting, but is he listening?


Some Hon. Members:: Oh, oh!


An Hon. Member:: Sit down.


Mr. Clark (Yellowhead):: You may be talking, but are you awake?


PENSIONERS' ORGANIZATIONS
Nelson Andrew Riis: Mr. Speaker, the Minister of National Health and Welfare, to whom this question is directed, will have received a letter from 10 differ-

June 17, 1985
Oral Questions
ent pension groups representing over one million pensioners. They say that there is only one option, and that is reindexation.


Mr. Speaker:: Does the Hon. Member have a supplementary question?


Nelson Andrew Riis: Are the Minister and his colleagues prepared not only to meet with seniors but to listen to what they have to say, and admit that there is only one option, complete reindexation?


Arthur Jacob (Jake) Epp: Mr. Speaker, regarding listening, what the Hon. Member said was pretty ridiculous, that when the Minister of Finance or anyone else in this House sits down with seniors or other groups they are not listening.


Nelson Andrew Riis: Well, their view is unanimous.


Mr. Andre:: All one million of them? Every one of them?


Nelson Andrew Riis: Yes.


Arthur Jacob (Jake) Epp: To say they are not listening is patently ridiculous. We have said many times in the House that we are listening, and I would suggest we would listen to him as well if he did not come up with such ridiculous suggestions.


BUDGET CONTENT
George Baker: Mr. Speaker, a constituent of mine writes: "This Government is made up of a bunch of opportunists who underestimated the intelligence, vigour and energy of our senior citizens". I am sure everyone is happy to learn that this is now all under review. However, I would like to seek a clarification from the Acting Prime Minister, who cites a sentence on page 18 of the Budget which he says makes it a proposal and not a policy, whereas a clear reading says it is policy, and when the policy has been instituted it would then be reviewed. Was it a policy, or was it a proposal?


Erik Nielsen: The Hon. Member should read the Budget. It has been quoted ad nauseam in this House by the Prime Minister in response to the nauseous questions from the Opposition. I do not intend by that reference to denigrate for one moment the seriousness of the subject with which we are dealing. The words are in the Budget that the Government will review the adequacy of payments in light of future circumstances, and will increase them as resources permit. Now, I think I would be presuming on the time of the House to repeat the kind of answers that I have given today, and that the Prime Minister gave in his very forthright and fully open fashion last Friday. Why can the Hon. Member not accept those answers? Can he not think of anything more positive?


SOCIAL SECURITY
George Baker: Mr. Speaker, the reason I was asking was because that sentence in the Budget not only applies to deindexing of OAS payments but also to deindexing of family allowances. Is it correct that family allowances are not a matter of policy but simply a proposal? Who did not read the Budget now?


Arthur Jacob (Jake) Epp: Mr. Speaker, the question that has been coming up here has been on the matter of pensions, that is the matter on which the answer has been given, and I would suggest he not draw any other conclusions.


PENSIONS
Mr. Ian Deans (Hamilton Mountain):: Mr. Speaker, I want to raise with the same Minister a question not at all unlike that being raised on a regular and daily basis. The Minister must surely be aware that we have at least 10 groups representing over one million pensioners who have asked for only one thing, a simple request that the Government move now to reinstate indexing for all old age pensioners. Will the Minister stand in his place and say that he supports them?


Arthur Jacob (Jake) Epp: Mr. Speaker, I can repeat again what the Deputy Prime Minister has said today, and what the Prime Minister has said previously. I say to him that 1 support old age pensions, I support social programs, and so does everyone here.


Some Hon. Members:: Hear, hear!


Arthur Jacob (Jake) Epp: But I do not know if he has noticed that in the last year in the expenditures of the previous Government, compared with 10 years ago when we were spending 50 cents of every dollar on social policy, we are down to 43 cents, but we have gone from 11 cents on deficit payments to 25 cents. I say that he should look at both of these matters. Of course we would like to expand social programs, but we have to do it in light of the financial circumstances of the country.


PLEA BY PENSIONERS
Ian Deans: Mr. Speaker, having looked at both sides of the question, does the Minister support the request of literally millions of senior citizens who have asked that the Government simply put on the shelf its proposal to deindex old age pensions partially? As the Minister responsible, does he believe that the cause they have been fighting for is just, and will he rise and say he supports them?
June 17, 1985


Arthur Jacob (Jake) Epp: Mr. Speaker, I would return to the answer to that question which I have already given, which is that everyone supports old age pensioners and the need for them to live in dignity. Every one of my colleagues in Cabinet and every one of my colleagues in the House of Commons support that. I would know of no Canadian who would not support that policy.
I would say to the Hon. Member again that, when looking at social policies, or any public policies, we must also be realistic in terms of the expenditures and the deficit faced by Canadians, as we face not only the question of social policies but the ability to maintain programs.


SOCIAL SECURITY
Maurice Brydon Foster: Mr. Speaker, my question is along the lines of the one put by the Hon. Member for Gander-Twillingate to the Minister of National Health and Welfare. On page 17 of the booklet entitled The Budget Speech, it says:
Accordingly, I propose to modify indexation for old age security payments and family allowances.
The Prime Minister has indicated that he is planning to back down on deindexing old age pensions. Is he also giving consideration to backing down on the deindexation of family allowances?


Arthur Jacob (Jake) Epp: Mr. Speaker, the Budget has been well received by Canadians. Canadians feel that the Budget is taking the right direction. Canadians are realistic people and know full well that the deficit should not continue.


Some Hon. Members:: Oh, oh!


Arthur Jacob (Jake) Epp: I welcome back the lawyer from Bay Street who was in part the architect of that trend. Today, the largest single account in the Public Accounts of Canada is the servicing of the debt. After being on Bay Street last week, the Hon. Member is telling us not to worry about that but to make sure that the deficit has no relationship to public policy or social policy.


GOVERNMENT POLICY
Maurice Brydon Foster: Mr. Speaker, the Hon. Minister is obviously skating around the issue. He is not telling us whether or not he will remove the deindexation of family allowances as well as the deindexation of the old age pensions. I wish he would clarify that point.
How can the Minister of National Health and Welfare justify deindexing old age pensions, a move which in the next five years will cost old age pensioners $1.6 billion, while at the
Oral Questions
same time he is reducing taxes to the multinational oil companies by $2.4 billion per year? Can the Minister explain how that can be justified? Does he think that that has been well received by the old age pensioners?


Erik Nielsen: Mr. Speaker, I can answer the Hon. Member's question. He has asked the question in his usual manner which distorts the real facts. One thing that we cannot accept is the unscrupulous scare tactics that are being adopted by the Hon. Member in what he thinks is a very smooth fashion and are adopted even more so by Members of the NDP. We are not paying off the deficit on the backs of senior citizens.
Certainly the NDP and the Party of which the Hon. Member for Algoma is a Member are trying to ride, for their own political motivations, on the backs of the senior citizens by giving them misleading information, and telling them that there will be a reduction in their pay cheques when there will be no reduction. That sort of misinformation only exacerbates an anxiety rather than proffering reassurance. 1 have told the Hon. Member, as has the Prime Minister, the Minister of Finance, and the Minister of National Health and Welfare, that the situation is being monitored extremely closely and that, when resources permit, the appropriate action will be taken.


PENSIONS
Mr. Bill Blaikie (Winnipeg-Birds Hill):: Mr. Speaker, I have a question for the Minister of National Defence. Perhaps the Minister is aware that recently the Manitoba and Northwestern Ontario Command of the Royal Canadian Legion passed a resolution at its meeting in Thunder Bay calling for the restoration of full indexation of the Old Age Security payments. Knowing that veterans have a keen sense of sacrifice but also a keen sense of justice, 1 wonder whether or not the Minister would indicate that the Government will respect the Canadian consensus now developed and established, and recently joined by members of that particular Command of the Royal Canadian Legion, by announcing before we recess that the Government has abandoned its plan partially to deindex old age pensions.


Erik Nielsen: Mr. Speaker, that is a perfect example of the kind of distortion that the Hon. Member, and most Hon. Members of his Party, attempt to make. The only exception is the Hon. Member for Beaches.
The fact is that the Government, in the short time it has been in office, has done more for veterans than any other Government, in my perception as a veteran. The Hon. Member knows, or should know, that one of our first acts as a Government was to index veterans pensions fully, a move made by the

June 17, 1985
Oral Questions
Minister of Veterans Affairs. There is as much connection between what he is attempting to link as there is between the old grey mare and the grey ghost.


TELEPHONE CALLS FROM MINISTER'S CONSTITUENCY
William Alexander (Bill) Blaikie: Mr. Speaker, the Minister did not say whether or not he was going to respect the views of that particular Command of the Royal Canadian Legion on this issue. My supplementary question is directed to the Minister of Health and Welfare. I wonder if he could explain why my constituency office keeps getting calls from people in his riding who claim that they are being put on hold when they phone to talk about pensions.


Arthur Jacob (Jake) Epp: Mr. Speaker, the Hon. Member can say whatever he feels might benefit his political purposes, but that is not what is happening. I would suggest that the Hon. Member reconsider a question of that nature.


CANADA POST CORPORATION
Reginald Francis Stackhouse: Mr. Speaker, my question is for the Minister in charge of Canada Post. The President of Canada Post has advised the Committee on Transport that he could withdraw half of the proposed increase in postal rates if he could reduce absenteeism to the level it is in comparable industries. In view of that, what priority will Canada Post give to reducing absenteeism in its strategy for controlling costs and limiting increases in the future?


Hon. Perrin Beatty (Minister of National Revenue):: Mr. Speaker, I would like to thank the Hon. Member for asking that very important question. It is one that is of concern to all Canadians. The fact is that Canada Post Corporation properly assigns a very high priority to reducing the rate of absenteeism in the Corporation, a rate which is roughly twice the rate of absenteeism in the private sector.
I think the bottom line is that Canadians are entitled to get a day's work for a day's pay. Nobody at all would complain about someone being absent from work because of bona fide causes such as sickness, but I think Canadians have the right to the assurance that any claim for days off is in fact legitimate.


SOCIAL SECURITY
Mr. Jacques Guilbault (Saint-Jacques):: Mr. Speaker, my question is directed to the Minister of National Health and Welfare. I believe that the families of our country have a right
to know what is happening to them as well. For the sake of these families I would like the Minister to clarify what we read on page 17 of the booklet entitled The Budget Speech, as follows:
Accordingly, I propose to modify indexation for old age security payments and family allowances. Beginning January 1, 1986, these payments will be indexed only for the annual increase in the consumer price index greater than 3 per cent.
In other words, families are in the same situation as far as knowing what is going to happen to them as the seniors of this country. Is this a trial balloon? Is this a proposal? If so, is this proposal going to be reversed? What are families going to expect? Are they going to expect the same treatment as senior citizens?


Arthur Jacob (Jake) Epp: Mr. Speaker, the Hon. Member just likes to expand the scare tactics that the has been using. I have heard opposition Members say, for instance, that senior citizens' pension benefits are going to go down. He knows full well that that is not the case. He knows that the increase would have been reduced, as he has tried to put it forward. He read the Budget correctly.
I suggest that he follow exactly what he read.


GOVERNMENT POLICY
Jacques Guilbault: Mr. Speaker, what the Minister did not understand is that what we have read in the Budget does not tell us whether it is a measure or a proposal. Now we know that pension deindexation was a trial balloon from which the Government is backtracking. What I want to know, on behalf of families, is whether this is another trial balloon or whether it will it be done to the families.


Arthur Jacob (Jake) Epp: Mr. Speaker, he should remember what the Liberal Government did with six and five, and what it did during other periods of time when family allowances were touched by Liberals, when inflation was at 11 per cent and when the deficit was below $20 billion on an annual basis. I would suggest to him that he should first take a look at the details of what his Party did during the time when it was in government. Again, I would remind him that it is exactly what the Budget said.


UNITED STATES TARIFF ON CANADIAN PORK
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, in the absence of the Prime Minister I would like to direct my question to the Secretary of State for External Affairs. [Translation]
Last week in Montreal, I had a meeting with the Union des Producteurs Agricoles. For the UPA, the most important issue
June 17, 1985

is the tariff levied by the United States on imports of Canadian pork.
Mr. Speaker, my question is as follows: considering the special relationship formed by our Prime Minister with the President of the United States after the Shamrock Conference in Quebec City, could the Minister perhaps arrange for a telephone call between the Prime Minister and the President of the United States, to ensure that the tariffs on pork are lifted?


Charles Joseph Clark: Mr. Speaker, I appreciate the question put by my Francophone friend from Saskatchewan, and I hope to answer the question with the same courtesy and . . . the same accent!
In fact, we do not think the time is right for a telephone call between the Prime Minister of Canada and the President of the United States, but my colleague, the Minister for International Trade, has arranged for a meeting tomorrow with the provinces affected by this decision and union representatives for the pork producers to discuss their taking a joint Canadian position and ensure that in the last stages of the American process, we can increase Canadian pressure to bring about a policy and an approach that will protect the interests of Canadian pork producers.


PORK PRODUCTION-GOVERNMENT POSITION
Lorne Edmund Nystrom: I have a supplementary, Mr. Speaker, for my friend the Francophone from Alberta.
Until now, Mr. Speaker, no ministers have been to Washington to discuss a subject that is vital to Canadian pork producers, an industry that is worth $2 billion per year. Is the Minister prepared to make a commitment today to go to Wahstington himself to discuss a question that is extremely important to all Canadians with the U.S. Government?


Charles Joseph Clark: Mr. Speaker, my colleague, the Minister for International Trade, will be in Washington this week to discuss the question raised by the Hon. Member, as well as other questions that are important to Canadian U.S. relations.


GOVERNMENT ADVERTISING
Mr. Don Boudria (Glengarry-Prescott-Russell):: Mr. Speaker, the Government may be totally heartless when it comes to senior citizens, but let it not be said that it is not compassionate when it comes to handing out untendered government advertising contracts.
Will the Minister of Supply and Services explain to the House why Mr. Robert Byron, a former member of the Tory election campaign committee who now heads the government agency responsible for advertising, has awarded $169,000
Oral Questions
worth of contracts to Case Advertising Associates, a company for which Mr. Byron was formally the Vice-President before heading the government agency? Why was Mr. Byron allowed to give such contracts to his former company without the Minister's intervention?


Harvie Andre: Mr. Speaker, Mr. Byron was hired by myself to co-chair the Advertising Management Group because of his expertise. He has done an outstanding job.
Incidentally, the Advertising Management Group, under my supervision, is costing the taxpayers $7,825 a month less than the Advertising Management Group under the Liberals.


Some Hon. Members:: Hear, hear!


Harvie Andre: And incidentally, the Advertising Management Group has shown us how we can save something in excess of $20 million in advertising less than the expenditures of the previous administration.


Some Hon. Members:: Hear, hear!


Harvie Andre: And incidentally, Case Advertising undertook three small contracts for the Department of Employment and Immigration. That Department has indicated that the contracts were handled and that the program was undertaken in such an exemplary fashion that it is extremely pleased. That Department feels that it got more value for its money than it got from an advertising contract for many years.


Some Hon. Members:: Hear, hear!


STATEMENT ATTRIBUTED TO MINISTER
Don Boudria: Mr. Speaker, as interesting as that answer might be, it had nothing to do with the question.
In a recent report by Douglas Goold, in the Edmonton Journal, the Minister said: "Charges of nepotism and favouritism and patronage are always used by anybody who doesn't feel they have the right friends". Does the Minister think that anyone who complains about patronage only does so because he or she did not get it? Does his statement confirm our worst fear that the promises of the Prime Minister during the election campaign to reform patronage were nothing more than empty rhetoric? Does the Government not intend to follow up on those promises?


Harvie Andre: Mr. Speaker, I will always applaud any public servant or employee who gets exceptional value for money, as Mr. Byron has for us. The Member was talking about conflicts, the implication being that somehow Mr. Byron did something which was improper. He severed all relationships with Case Advertising Associates. He did absolutely nothing which was improper.
If the Member is suggesting a new standard, perhaps he should approach the Right Hon. Leader of the Opposition who resigned some directorships at the end of June last year, yet

June 17, 1985
Oral Questions
during July and August, when he was Prime Minister, there were some untendered contracts with companies for which he had formerly been a director. We do not consider that a conflict of interest. We consider it reasonable, once a person has severed a relationship, to conduct good business deals. This was a very good business deal on behalf of the taxpayers, and he ought to applaud us for it.


Some Hon. Members:: Hear, hear!


INDUSTRY
Derek Nigel Ernest Blackburn: Mr. Speaker, in the absence of the Minister of Regional Industrial Expansion I will direct my question to the Minister of State for Finance. My question deals with White Farm Equipment. The deadline for tenders was last Friday at twelve o'clock noon. I would like to ask the Minister if there have been any firm offers from the private sector to come to the aid of White Farm Equipment. If not, what is the Government prepared to do to save the 600 jobs at White Farms, and the approximately 300 jobs in the supplier industries and the dealerships?


Hon. Barbara McDougall (Minister of State (Finance)):: Mr. Speaker, I recognize that this issue has been of great concern to the Hon. Member for some time. I will give the appropriate Minister notice and will have him get back to the Hon. Member right away.


REQUEST FOR LOAN GUARANTEES
Derek Nigel Ernest Blackburn: Mr. Speaker, I would like to direct my supplementary question to the Deputy Prime Minister. In view of the fact that the deadline was last Friday at noon for tenders to buy out White Farm, and in view of the fact that Peat Marwick, the receiver, did not advertise any extended period, could the Deputy Prime Minister assure the House that the Government will at least guarantee loans in the interim, due to the fact that the private sector has not come to the rescue of that company?


Erik Nielsen: Mr. Speaker, I am sure the Hon. Member would not expect me to be fully familiar with the details of such a question. Certainly I will take careful notice of the representations which he has made and see to it that they are drawn to the personal attention of the Minister.
[ Translation]


TEXTILES AND CLOTHING
Jean-Guy Guilbault: Mr. Speaker, since the request to re-open negotiations on the GATT agreement was unsuccessful at the Bonn Summit of industrialized countries, could the Minister for International Trade inform the House whether the Government intends to start negotiations on bilateral trade agreements with the Pacific Rim countries and propose measures that will help the Canadian textile and clothing industry to penetrate the markets in this area, which would help the industry play a prominent part in Canada's economic development strategy?


Hon. James Kelleher (Minister for International Trade):: Mr. Speaker, as I am sure the hon. gentleman is aware, Canada is a signatory to the multifibre agreement which expires in July of 1986. Canada is presently preparing its negotiating position and will be discussing with the other countries what should be done with respect to the renewal of this agreement. One of our objectives is to try to obtain entry to the countries to which the Hon. Member referred in his question.


CLERK OF PETITIONS' REPORTS
Mr. Speaker:: I have the honour to inform the House that the petitions presented by Hon. Members on Friday, June 14, 1985, meet the requirements of the Standing Orders as to form.


PRIVILEGE
Mr. Speaker:: I am in receipt of a notice of a question of privilege from the Hon. Member for Oshawa (Mr. Broadbent).


John Edward Broadbent: Mr. Speaker, I rise on a question of privilege. Earlier in the Question Period, the Deputy Prime Minister (Mr. Nielsen) misled the House, no doubt inadvertently, I say-and I mean that-when he suggested that the Minister of Finance (Mr. Wilson) had attempted to find out the location of a meeting today in Halifax and that my office either refused or did not give the information. I simply want to indicate clearly to the House that what the Deputy Prime Minister said was not the case. The meeting took place at Spencer House Senior Citizens' Apartments at
June 17, 1985

5596 Morris Street in Halifax today. The Minister of Finance was told last Thursday. They are still waiting to hear from him any time today.


Erik Nielsen: Mr. Speaker, I am, of course, going by information which has been provided to me by officials in the Minister's office. The gentleman in the offices of the New Democratic Party who was contacted was Mr. Jim Thompson,
1 believe. These efforts have been ongoing for some time in response to an invitation made by a member of the New Democratic Party, but all that the Minister of Finance apar-ently has been receiving is the run around. Fortunately, the Minister of Finance is meeting with those very people today.


Mr. Speaker:: There clearly is not a question of privilege here.


REFUGEES
Flora Isabel MacDonald: Mr. Speaker, pursuant to the provisions of Standing Order 46(2) I am tabling in both official languages two copies of a report entitled Refugee Determination in Canada.
It would be my predisposition, Sir, to see if there is unanimous consent to have this report permanently referred to the Standing Committee on Labour, Employment and Immigration. If that is not possible today, I will look to have that unanimous consent tomorrow.


CANADA DEPOSIT INSURANCE CORPORATION
Barbara Jean McDougall: Mr. Speaker, pursuant to Standing Order 46(2), I would like to submit for tabling in the House, in both official languages, a copy of the final report of the working committee on the Canada Deposit Insurance Corporation.


Mr. Hawkes:: Mr. Speaker, I happen to be the Chairman of the Standing Committee on Labour, Employment and Immigration and I understood that the Minister asked for unanimous consent of the House to have a permanent reference-


Mr. Speaker:: We will get to it under motions, unless the House wishes to deal with it now.
Petitions


PETITIONS
John Kenneth Gormley: Mr. Speaker, I have the honour to present to this House of Commons a petition signed by 58 people from Lilac, Saskatchewan. These citizens protest the planned closure, on June 30, of Rural Route 1 in Maymont. They say it would be unfair, discriminatory and would inhibit their ability to receive mail. These citizens call upon Parliament to prevent the closure of Rural Route 1, Maymont.


Douglas Cockburn Frith: Mr. Speaker, I would like humbly to submit a petition I received in my travels across the country last week. It states that whereas any reduction in the pensions to seniors would create great hardship to a large segment of the population who helped to build our great country, and whereas the Government's election promises guaranteed that the structure of the seniors' pensions would not be changed, we petition the Government of Canada to remove the 3 per cent indexing of the Old Age Security pensions. This petition is signed by hundreds of citizens from the City of Toronto.
In addition, Mr. Speaker, I would like to present a petition on behalf of the residents of metropolitan Toronto and the Beaches outlining their concern for the Government's plan to deindex senior citizens' pensions. They wish to have restoration of full indexation.
In addition, Mr. Speaker, I have before me a petition signed by several people from the ridings east of the great metropolis of Toronto, Oshawa and Scarborough East, who have outlined their concerns about the Government's plans to deindex the senior citizens' pensions in this country.
In addition, Mr. Speaker, on behalf of hundreds of senior citizens in the City of Saskatoon-the riding, I might add, of the Government House Leader (Mr. Hnatyshyn)-I would like to present a petition. These petitioners have indicated to me that they wish me to place before you a petition in which they humbly ask the Government of Canada to reverse itself on the issue of deindexation and restore full indexation to all pensions for senior citizens.
I have another petition, Mr. Speaker, outlining the concerns of hundreds of senior citizens in the Province of British Columbia. They reside in several ridings in the metropolis of Vancouver. They have indicated that they respectfully request that the proposal by the Government be deleted from any approved federal Budget. In addition, they point out that Canada was built upon the backs and hard labour of its senior citizens whose Government now seeks to heap further insult upon what is already a grievous situation. These petitions have been presented to me in my travels across the country.
In addition, Mr. Speaker, I have a petition which indicates that there are several constituents of ridings in Toronto as well

June 17, 1985
Petitions
as the Beaches who are humbly asking this Government to reverse itself on the issue of deindexation.
I would also like to place before you, Mr. Speaker-


Mr. Speaker:: Order, please. Is the Hon. Member rising to present further petitions on the same subject?


Douglas Cockburn Frith: Yes, it will be on the same subject, Mr. Speaker.


Mr. Speaker:: I believe the Hon. Member knows the practice. Would the Hon. Member indicate how many there are? Otherwise, he has the right to file them with the Clerk.


Douglas Cockburn Frith: I was personally asked, Mr. Speaker, by the citizens with whom I met, to present these petitions on a case by case basis, and I will wait until tomorrow to produce any further petitions.


Jean-Robert Gauthier: Mr. Speaker, I have the honour and the privilege of presenting a petition in this House, signed by constituents of the riding of Vanier, and according to these petitioners, the Budget of the Progressive Conservative Government is tough and merciless for the elderly since it eliminates full indexation of Old Age Security pensions.
Mr. Speaker, I also have the honour of presenting another petition from constituents of Ottawa-Vanier, this time from the Overbrook area, which says that the Progressive Conservative Government has failed to keep its promise made in January 1985: "Any savings which may result from program changes will not be applied to a reduction of the deficit."
Mr. Speaker, I have another petition humbly submitted by constituents of Ottawa-Vanier, again asking the Government to reconsider its position taken in the Budget, and to eliminate a provision which they deem to be tough and merciless for the elderly, since it eliminates full indexation of Old Age Security pensions.


Hon. Herb Gray (Windsor West):: Mr. Speaker, I am very honoured to be able to present what I know will be the first group of a large number of petitions. They are signed by people from Windsor, Ontario. The petitions I am presenting today say that the pensioners ask the Government to respect the commitment it made during the 1984 federal election campaign and maintain full indexing of the old age pension.


Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, I as well have the honour to submit petitions in certain numbers signed by residents in the riding of Davenport, in west Toronto, as well as residents in metro Toronto, who feel that submissions and presentations should be made to the Right Hon. Prime Minister (Mr. Mulroney) asking him to respect his commitment made during the 1984 election campaign and urging him to maintain the full indexation of old age pensions. I submit them in one group for your consideration.


John V. Nunziata: Mr. Speaker, I have a petition signed by a number of residents of the federal riding of York South-Weston, the riding of Mississauga North and the riding of Etobicoke Centre. These senior citizens are requesting that the Government protect their pensions. This is only the first of a number of petitions that will be presented from the riding of York South-Weston.


Don Boudria: Mr. Speaker, I have the honour and the privilege of presenting in the House a petition signed by fifty-six residents of the Village of Sarsfield in the electoral district of Glengarry-Prescott-Russell, and these people, Mr. Speaker, wish to protest and express their disagreement with the budgetary measures aimed at reducing indexation of Old Age Security pensions.


Mr. Thomas Suluk (Nunatsiaq):: Mr. Speaker, I have the honour to present three petitions from three different communities, namely Arctic Bay, Pond Inlet, and Broughton Island. Some 411 citizens are protesting the high cost of transportation in the region of Baffin Island.
[ Translation]


Fernand Robichaud: Mr. Speaker,
I have the honour of presenting in the House a petition from constituents in my riding who are residents of the village of Saint-Louis de Kent, and these people humbly ask the House to urge the Minister of Finance (Mr. Wilson) to reverse his decision to de-index old age security pensions.


Cyril Keeper: Mr. Speaker, I wish to present a petition which calls upon the Government to reverse its position with regard to the deindexation of seniors' pensions.


Cyril Keeper: Mr. Speaker, I wish to present a petition which calls upon the Government to provide youth employment programs that are accessible to the non-profit sector and provide adequate employment for young people.


Mr. Geoff Wilson (Swift Current-Maple Creek):: in Saskatchewan protesting the lack of urban residential mail delivery service. They request that door-to-door mail delivery to this new subdivision be instituted.


Maurice Brydon Foster: Mr. Speaker, I have the honour to present a petition on behalf of several dozen constituents in Espanola, Ontario, calling on the Government to reinstate the indexation of old age pensions and deploring the fact that pensions will be deindexed next January.
I also have a petition from a dozen constituents in the Hamlet of Silver Water on Manitoulin Island also calling on the Government to continue its full indexation of old age pensions in 1986.
I also have a petition signed by about a dozen constituents in the Town of Little Current on Manitoulin Island calling on the Government to re-establish old age pensions in 1986 on a full indexation basis as in the past.
I also have a petition signed by several constituents in Meldrum Bay calling on the Government to reintroduce old age pensions with full indexation.


Derek Nigel Ernest Blackburn: Mr. Speaker, I, too, have the honour to present a petition from the residents of Brantford. It says that the undersigned, your petitioners, humbly pray and call upon the House of Commons to reinstate full indexation of the Old Age Security program in Canada.


Mr. Morrissey Johnson (Bonavista-Trinity-Conception):: Mr. Speaker, on behalf of several hundred residents of Pool's Cove, English Harbour East, and Rencontre East, I wish to present this petition protesting CN Marine's decision to eliminate their communities along the south coast of Newfoundland as ports of call.


Mr. Vic Althouse (Humboldt-Lake Centre):: Mr. Speaker, I have a petition signed by several hundred residents of the Town of Southey and surrounding districts calling upon the Government to reintroduce the indexation of pensions so tha senior citizens will not lose buying power as proposed in the Budget.


William Alexander (Bill) Blaikie: Mr. Speaker, I have the honour to present a petition containing the names of hundreds of senior citizens from my riding who join with the many others whose names have been presented over the last few weeks in protesting the deindexation of old age pensions by the Government.


Nelson Andrew Riis: Mr. Speaker, it is a pleasure to present a petition on behalf of my constituents of
Motions
Kamloops-Shuswap. The petitioners ask the Government of Canada to reconsider its move to reduce indexation of the Old Age Security Program of Canada causing over 200,000 senior citizens to exist below the poverty line.


Mr. Howard McCurdy (Windsor-Walkerville):: Mr. Speaker, I have the honour to add nearly 200 names to the list of petitioners who have already submitted petitions from Windsor. They protest the Government's intent to deindex old age pensions and call upon the Government to revoke that decision.


Abram Ernest Epp: Mr. Speaker, I have petitions from residents of my riding whose signatures were obtained by a student, Mike Fricker, a student volunteer who was hard at work on this campaign. There are also signatures from residents from 63 Carrie Street, Dawson Court, and Cumberland Hall who protest that the May 23 Budget imposes undue and unfair hardship on pensioners by deindexing the Old Age Security Program and that it flies in the face of Progressive Conservative promises that a PC Government would once more index the old age pension to the actual cost of living on a quarterly basis. They request that deindexation be cancelled.


Iain Francis Angus: Mr. Speaker, I have the honour to present petitions signed by members of the Slovak Legion Branch 129 and the Ortona Branch 113 who call upon the Government to reject the deindexation proposal.
1 also have the honour to present a petition signed by three dozen delegates to the Manitoba-Ontario Command of the Royal Canadian Legion who, at their convention in Thunder Bay, indicated very strongly that they were against deindexation.
I also have a petition from 150 constituents of the Thunder Bay-Atikokan and Thunder Bay-Nipigon ridings who also indicate very strongly that deindexation is not something they are very happy with.


Mr. Speaker:: The Hon. Member for Bow River (Mr. Taylor) on a point of order.


Gordon Edward Taylor: Mr. Speaker, I rise on a point of order, or maybe a point of information. I hear the words "restore", "reinstate", and "reintroduce" in connection with pensions. How can you do that when they have never been taken away-


Mr. Speaker:: Order.


Ramon John Hnatyshyn: Mr. Speaker, there have been discussions and I believe that you

June 17, 1985
Borrowing Authority Act
would find unanimous consent for this motion and for the moving of it in the first place. It is as follows:
That it be an Instruction to the Standing Committee on Finance, Trade and Economic Affairs that, in relation to the Committee's order of reference of April 18, 1985, the Committee consider the document entitled "Final Report of the Working Committee on the Canada Deposit Insurance Corporation" tabled earlier this day before making its final report and that for the purposes of this study the said document shall stand referred to the said Committee.


Mr. Speaker:: Is there unanimous consent for the waiving of notice and the introduction of the motion?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.
Mr. Speaker:: I apologize. I thought that was the one moved on behalf of the Hon. Minister of Employment and Immigration (Miss MacDonald). Does the Hon. President of the Privy Council (Mr. Hnatyshyn) seek unanimous consent on the earlier request of the Minister of Employment and Immigration?


Ramon John Hnatyshyn: Mr. Speaker, discussions are carrying on with representatives of the Liberal Party on that one.


Mr. Speaker:: I apologize. I understood notice of intent had been given.


QUESTIONS ON THE ORDER PAPER
Mr. Paul Dick (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, I ask that all the questions be allowed to stand.


Mr. Speaker:: Shall all the questions stand?


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Miss MacDonald (for the Minister of State (Finance)) that Bill C-51, an Act to provide borrowing authority, be read the second time and referred to the Standing Committee on Finance, Trade, and Economic Affairs.
Mr. Speaker:: Before the period for Statements Pursuant to
S.O.	21, there were seven minutes remaining in the question and comment period following the speech of the Hon. Member. The Hon. Member for Winnipeg North Centre (Mr. Keeper) had the floor for either a question or a comment. I
propose to let the Hon. Member finish his comment and we will then move on to debate.


Cyril Keeper: Mr. Speaker, I was simply asking the Member, who is no longer here, about his Party's position with respect to deindexing of seniors' pensions. Obviously, the move by the Government to deindex seniors' pensions is totally uncalled for and unjust. I welcome the fact that a Liberal Member of Parliament would understand that and would speak out against this unjust measure by the Government. However, I was curious why the Liberals chose to do the same thing when they were in office.


Mr. Speaker:: Debate.


Herbert Eser (Herb) Gray: Mr. Speaker, the Government is asking the House for the approval of Bill C-51. 1 ask the House to consider how it can give its approval to such a Bill when the Government has betrayed elderly Canadians in its May 23 federal Budget. The Budget attacks the well-being of millions of elderly Canadians living on fixed incomes by increasing the cost of living for senior citizens through hidden and regressive taxes, while moving directly to cut the purchasing power of the Old Age Security pension.
Over the last few days, the Government, facing the understandable fury of millions of elderly Canadians and millions of Canadians generally about what it intends to do in its Budget, is hinting that it might be backing down on what it has said it would do when it comes to cutting purchasing power by deindexing the Old Age Security pension. Whatever the Government ultimately does, I do not believe that senior Canadians or Canadians generally should ever forget what the Conservative Government fully intended to do and may well still do in the Budget it presented to the House on May 23.
What were the promises made to elderly Canadians and later broken by the Conservative Government? On July 26, 1984, during the election campaign, the Prime Minister (Mr. Mulroney), speaking in Sherbrooke, Quebec, tried to create the impression that the Progressive Conservative Party would actually increase pension benefits for Canadians. He said, "We are committed to full pension fund reform to eliminate poverty among retired Canadians and to improve their standard of living".
In January this year, after the Conservative Government was able to examine fully the books of the Government and its financial requirements now and into the future, the Minister of National Health and Welfare (Mr. Epp) issued a consultation paper on benefits for the elderly and for children. The Conservative Government set out a number of principles in that paper which were to be considered as firm commitments. Let me quote the key principles. "Any savings which may result from program changes will not be applied to a reduction of the deficit". Second, "It should be stated at the outset that the Government regards the present system as a good one, which is working well". Third, "Changes in these programs which may
June 17, 1985

result from this review should improve benefits for those in need".
The final principle states:
Any net savings which may then remain, whether resulting from reductions in expenditures or additional revenues, should be applied to other priority concerns in the social affairs envelope. No such savings should be transferred to deficit reduction.
These are direct quotes from the paper that was issued on behalf of the Conservative Government in January of this year. The record of the Budget shows how far the Government has broken the commitment in that consultation paper.
Having outlined the basic principles that I have quoted in the consultation paper, we can see how the Conservative Government moved all too quickly in its Budget to try to fool Canadians into believing that it was acting to maintain the basic principles of protecting the well-being of elderly Canadians.
The Budget Speech delivered by the Minister of Finance (Mr. Wilson) devotes only four lines to state that old age pensions are being deindexed. That is to say, its purchasing power is to be reduced in perpetuity for all increases in inflation below 3 per cent, but indexation would remain for the Guaranteed Income Supplement.
Although the Conservatives try to show that indexing the Guaranteed Income Supplement makes up for deindexing or cutting the purchasing power of the Old Age Security pension, the fact is that continuing indexing of the Guaranteed Income Supplement protects only the purchasing power of that supplement. It does nothing to protect the purchasing power of the Old Age Security pension which represents at least half of the pension income of those elderly Canadians whose incomes are so low that they receive both the old age pension and the Guaranteed Income Supplement.
This Budget is deceptive and sneaky, as the Leader of the Opposition (Mr. Turner) put it, because nowhere in the Budget Speech is there an explanation of the true ramifications of deindexing. There are no concrete examples of how incomes of senior citizens would be affected by what the Budget-therefore the Conservative Government-fully intended and likely still intends to do. Through its broken promises and deception, the Conservative Government is betraying our senior citizens. The Conservative Government promised in its January consultation paper that no savings or additional revenues in the area of social programs would be applied to reducing the deficit but would actually be applied to increasing benefits. However, that commitment to elderly Canadians was betrayed in the Budget, and the confirmation of that betrayal was given on May 24 in the House when the Minister of Finance stated, "Everyone has been asked to share a little of the burden in order to get the budget deficit and the accumulating debt problem under control".
Last weekend in my community of Windsor I talked to many people. Many were senior citizens who asked me why the Government is expecting them to bear any burden of deficit reduction. They asked, "why does the Government believe that we are as well equipped as wealthy Canadians to
Borrowing Authority Act
bear any part of such a burden, if that is required? They said to me, "We have already made our sacrifice for this country. We have survived a depression and the Second World War and the post-war period." They said, "We have paid our dues. We have made our sacrifices. If there is a need for deficit reduction", they told me, "that burden certainly should fall on people much better off than us".
In January the Government told elderly Canadians that it regards the present system as a good one, one which is working well. It said that it is a sound system, one which should not be disturbed, and that changes in these programs which may result from this review should improve benefits for those in need. It said that savings should not be transferred to deficit reduction. However, the Conservative Government totally reversed itself on this by attacking the income and well-being of elderly Canadians for years to come, in perpetuity.
The reality is that the Conservative Budget is punishing middle and lower-income Canadians but is especially cruel to the elderly.
Figures developed by reputable bodies-not only a very reputable body like the Official Opposition-show that the four lines devoted to the elderly in the Budget of the Minister of Finance failed to note certain facts. First, as a result of the Budget, the real income of an elderly couple will fall nearly $1,200 by 1990. By 1995, the real income of an elderly couple will be cut by almost $2,600. The real income of elderly singles, mostly women, will be cut by $560 in 1990. By 1995, the real income of elderly singles will be cut by almost $1,300. Only Conservatives would believe that our senior citizens could afford cuts of this magnitude. Elderly Canadians, as well as all Canadians in general, will have to pay sales tax increases for gasoline, health care products, pet food, shampoo and other goods, which will amount to hundreds of dollars per year in lost income.
These facts represent the truth which the Conservative Government failed to tell Canadians in its Budget. These facts expose the broken promises and the deception of the Conservative Government in its Budget. The Conservative Government did not tell Canadians that its Budget would increase poverty. The Budget provisions introduced on May 23 will see more than three-quarters of a million Canadians fall below the poverty line by 1990, and more than 200,000 more elderly Canadians living on fixed incomes will be forced into poverty. The Conservative Budget will cast more Canadians into poverty than the global economic recession in 1981-82. All the assurances and commitments given by the Conservative Government were exposed as being empty and meaningless. In fact, they were replaced in the the Budget by what I believe to be a long-standing, hidden Conservative agenda to weaken the social safety net built over decades. With the Budget, the broken promises and deception of the Conservative Government, it is seen for what it really is-cruel and manipulative. It betrays elderly Canadians. How can the Government ask for

June 17, 1985
Borrowing Authority Act
support of Bill C-51 when it betrays in this and in many other ways the trust of Canadian people?
Throughout his budget statement the Minister of Finance continued to use, but in fact abused, the word "confidence". Certainly Canadians are finding it impossible to have any trust in a Minister or in a Government claiming to restore confidence when the Minister's own projections and forecasts for the economy, set out in his Budget Speech, and after taking into account the impact on the economy of that Budget, show a growth rate decline from the 4.7 per cent record increase in 1984, a year of Liberal Government, to 3.1 per cent for 1985 and dropping further to only 2.4 per cent in 1986. Jobs will not be created, unemployment, which is all too high, will not be reduced without a continued and in fact an accelerated pace of economic growth. Because of its own policies as set out in the Budget, the Government admits that it will be causing a slowing of the rate of growth on one hand. On the other hand, it continues to speak of confidence while in fact it puts both hands into the pockets of lower and middle-income Canadians through hidden and sometimes not so hidden tax grabs in its Budget.
This is what we must learn to expect from a Finance Minister who said during his speech to the Canadian Economics Association in Montreal on May 30: "Canada has an acute shortage of rich people". The Minister of Finance does not intend that rich people in Canada should bear their fair share of responsibility. We know this by looking at his Budget. Ordinary Canadians will be taxed an additional $400 to $500 per year when all tax increases in the Conservative Budget are taken into account. There is no stipulation that these revenues will be directed toward the poorer regions of the country, toward unemployed youth, toward elderly Canadians, toward single parents or toward the less advantaged people who need assistance. This money, taken from ordinary Canadians in extra and new taxes, will likely go into the pockets of rich Canadians through new tax breaks like the lifetime capital gains exemption set out in the Budget, as well as through following a blind priority of reducing the deficit rather than a priority of job creation and economic growth.
The Hon. Leader of the Opposition put this point in simple, straightforward terms when he said:
The $500,000 capital gains tax exemption is a cash bonanza of $125,000 ... The average family faces a $500 a year tax, while the wealthy have a cash lifetime bonanza of $ 125,000.
The value of the capital gains exemption has been estimated by the Department of Finance at $1.2 billion in 1990. Only 63 per cent of this capital gains benefit has been shown to go to people earning over $50,000 per year who represent only 4 per cent of Canadian taxpayers. Even if we ignore the effects of the capital gains tax exemption, the family earning only $15,000 annually will pay 36 per cent more in income taxes, while the family earning $200,000 will pay only 2 per cent more.
Is that fair? The answer of ordinary, individual Canadians and their families is that it is not fair. They say that the
Budget and any legislation connected with it should not be allowed to go into effect.
Among the other 96 per cent of taxpayers, most of whom cannot use the capital gains exemption, are old age pensioners. I have already indicated to the House the damage the Conservative Government intended doing to their basic income in the Budget, as presented to the House on May 23. Its program of deindexation, applied not only to the Old Age Security pensions but also to the family allowance and the basic tax payable by individual Canadians, takes desperately needed money from senior and lower and middle-income Canadians and does severe harm to the economy.
If the Government is willing to reconsider the desperate and dangerous mistake it made in intending in its Budget to cut the purchasing power of the pensions of elderly Canadians, why will it not do the same thing when it comes to the purchasing power of middle and lower-income Canadians through the basic family allowance? After all, figures have been presented by reputable bodies such as the Canadian Press and the Canadian Council on Social Development, showing that the net effect of the Conservative Budget of May 23 is to begin cutting family benefits on an income of only $20,000 per year. There are not too many people who will say that such a family income in Canada today is a starting point for wealth; quite the contrary. Budget documents of the Department of Finance, which were not tabled with the Budget because of the truth they contain, show that the Government will take away at least $1.6 billion from pensioners by 1990. It is a well understood fact that pensioners struggling near the poverty line spend this money on the goods and services which they need to live. In addition to the damage to pensioners, the Government is taking $1.6 billion out of the Canadian economy. At the same time as the Government reduces demand in this manner, a leaked Department of Finance document shows that it is piling up a $1.3 billion tax break through its new capital gains tax exemption. This tax break does not even have to be used to invest in productive economic activity in Canada. It is all right, according to the Conservative Government, to invest those gains in condominiums in Florida, in works of art or in jewellery. That is Tory economics; it is not the economics of Canadians generally.
As we predicted before the Budget was brought down, Canadians will be forced to pay an additional nine cents per gallon at the gas pumps after the beginning of September, to pay for tax breaks for multinational oil companies of more than $2 billion by the conclusion of the next fiscal year. Individual Canadians will be hit by an increased federal sales tax and an extension of the sales tax base to candies, soft drinks, pet foods and cosmetics. On top of these and other tax increases required to make up the shortfall of $8.5 billion in revenues from oil industry taxation by 1990, the Government's deindexation measures alone will take $11.5 billion out of the hands of ordinary Canadians and their families in the next five years.
In conclusion, the Budget is built upon shameful principles involving an abdication of fairness and a disregard of fairness.
June 17, 1985

Its economic assumptions are as wrong as the public policy ethics between its lines. It is a mean-spirited scheme which seeks to implement the mistaken belief that deficit reduction above all will provide the conditions for private sector investment and therefore economic growth. On the contrary, it is public policy devoted above all to the goal of economic growth and full employment that in reality creates jobs that provide the tax base needed to reduce government deficits.
The Government has this reality all mixed up. It is undoubtedly, given its own predictions, going to move us backwards when it comes to economic growth. This mean-spirited Budget will cause joblessness and increase poverty and despair among Canadians. This Budget is advanced by a Government that does not, and I think cannot, understand that fairness and justice are integral parts of both the meaning and the generation of economic prosperity. For this reason let us send a message to this mean-spirited Government on behalf of senior citizens, Canadian families, indeed on behalf of all middle and lower-income Canadians, that the Budget is damaging to them and to Canada and thereforre Bill C-51 must be soundly rejected.


William Alexander (Bill) Blaikie: Mr. Speaker, there are a few areas of government policy I would like to comment on in this debate on the borrowing authority which the Government requires to carry on with its platform. First, I would like to comment, as environment critic for my Party, on how the Government is performing with respect to the environment and environmental issues. We notice with some satisfaction that there are no further cuts in the Department of the Environment itself in the Budget as it now stands. I think credit has to be given to many Canadians who let their anger be heard over the cuts in the Canadian Wildlife Service and other areas announced in the statement of November 8. I think the Government, once bitten, is twice shy about cut-backs in the environment. But the real test will come whenever the Nielsen task force reports. If the Department of the Environment and environmental sensitivity survives that report, then indeed Canadians who are concerned about the environment will be able to congratulate themselves on a job well done. They will have made it clear to the Minister and the Government that they did not have a mandate to go ahead with cuts in the Department of the Environment, in the Canadian Wildlife Service, or in the environmental monitoring which was taking place under the National Research Council.
Although Canadians from time to time may not be pleased with things the Government does for which it has a mandate, they are even less pleased when it goes ahead on things it did not seek a mandate for. Surely the Government did not seek a mandate to make cuts in the Department of the Environment. All we have to do now is to get the Minister of the Environment (Mrs. Blais-Grenier) to realize that what she says, where and how she says it, is very, very important, not just for her own political fortunes, however short they may be, but for the well-being of the environment. As I said the other day in the
Borrowing Authority Act
House when she was asking the Canadian Nature Federation to judge her by her actions and not her words, her words are important. If she says, as she did in committee once, that there are people who have worked with PCBs for 30 years and there is nothing wrong with them, well, that is not the kind of argument you expect from the Minister of the Environment. It is reminiscent of the argument made by Rothmans and other cigarette companies 30 years ago-and they might even be making it today-that there are people who have smoked for 40 or 50 years and they do not have lung cancer, so let's not get excited about the causal relationship between cigarette smoking and lung cancer. You cannot have these kinds of gems coming from the Minister of the Environment without there being some anxiety created on the part of those people who are concerned about the environment. If the Minister muses about privatization of the national parks system, this sends out a signal to people who may be interested in exploiting our national parklands for private purposes. The same holds true if she muses about logging and mining in national parks. I am told there are already some logging companies in Alberta who have expressed an interest in that. Since then the Minister has gone some way toward the goal of clarifying her remarks, but she has not ruled out logging and mining in new national parks, and that is still unacceptable to us. In any event, I wanted to put on the record the concern that I and a lot of other people have about the way the Minister is performing.
Members will be aware, I hope, that at this very moment, and since Friday, there has been a blockade going on at Wollaston Lake in northern Saskatchewan having to do with the concern of people there about the extent of uranium mining going on there and its potential expansion. I support that group and I feel for their desperation in trying to get someone to listen. I hope the Minister of the Environment will do the right thing and initiate an environmental review process, which I understand has never really taken place up there, either provincially or federally, regarding the new mines being planned. I hope she will try to initiate a process whereby the people there could be listened to and the effects of these new mines on the renewable resources economy of that area, on the native community and on the environment in general, could be assessed.
To be honest about my own biases in this area, I say that in the context of my opposition to uranium mining anyway. 1 put that opposition on the record when I first came to this place, even when there was a NDP Government in power in Saskatchewan. My opposition has been consistent throughout, and so when I am critical of the provincial Government of the day in Saskatchewan for not doing what I think it should do, 1 want no one to think that I am singling out the Progressive Conservative Government. I think uranium mining is a mistake no matter who is responsible for it and no matter to which Government the Crown corporation involved is responsible. It is one of the most hideous way we have yet developed as a white industrial society of trampling on the lives of native communities. We do this in the name of the international arms

June 17, 1985
Borrowing Authority Act
race and sell uranium to countries like France so they can blow up innocent little islands in the Pacific and continue their ecological crimes, sins against the planet which they seem determined to commit regardless of the opinion of the international community, or anyone else for that matter.
I think it is high time that Canada got out of the uranium mining business altogether and said that we do not want to play a part in this. We do not want to be a part of the international uranium system which is part and parcel of the nuclear arms race. We have often got up in this place and been critical about the arms race, yet at the same time we remain silent about that aspect, the uranium mining which is taking place in northern Saskatchewan.
In that context I would call on the Minister of Energy, Mines and Resources (Miss Carney) to institute the kind of public or parliamentary inquiry into the whole nuclear fuel cycle which was promised by the Progressive Conservative Party in 1979. That promise was in its Throne Speech of 1979, but since it came back to power in 1984 we have heard absolutely nothing about such an inquiry. I used to have the impression that that Party was critical of the nuclear future which was imposed on Canada by the Liberals without any real consultation with the public and without any real debate about the role that nuclear power should have in our energy future. I had some hope that that was one area in which the Conservatives might do something I would agree with, but we have had complete silence since the election of September, 1984. When the silence has been broken, there have been statements from the Minister of Energy, Mines and Resources which are, to put it bluntly, quite frightening. The Minister has said that the only problem with Candu and the whole nuclear power option is a marketing one. That is not a view that goes to the root of the more fundamental question of whether or not this is an energy option that we ought to be pursuing in any event.
With regard to radioactive waste disposal, in a letter the Minister sent to the town of Gimli and other municipalities that passed resolutions expressing opposition to Manitoba becoming a radioactive garbage dump as a result of the research going on at Pinawa, the Minister said that the Government was interested in the commercial aspects of radioactive waste disposal. She went on about how Canada might be able to profit by becoming a repository for the radioactive garbage of the rest of the world. That is what I call a commercial world view taken to its most ridiculous extreme.
1 have taken every opportunity to ask the Government to repudiate its view of radioactive waste disposal, but no word has been forthcoming with respect to whether or not an inquiry will take place. If one were to read the comments made by the Minister of Energy, Mines and Resources to the Canadian Nuclear Association the weekend before last, one would get the impression that it is business as usual and that we will see no different action taken by the Conservatives when it comes
to the question of nuclear power except for some of the cuts that we have seen at AECL.
The third thing on which I would like to comment is the underlying values in the Budget. Through this Budget we have learned a lot not just about Tory economics but about Tory values. We have learned more than we ever really wanted to know about those things. The key phrase in the Budget was the Minister of Finance (Mr. Wilson) saying that the Tories wanted to reward success rather than subsidize effort. What does that tell us?
There is a tendency on the part of the Progressive Conservative Members, collectively and individually, to think that the financial world is the real locus of human activity and that everyting else has to play second fiddle to that. That can be seen in the summer job program through which the only jobs that are regarded as worth-while are those which can be hitched to the private sector. Those jobs which may be community oriented and deal with people are put in a kind of second class category because the real jobs are created when a small business hires people to help it market a product that nobody needed in the first place so that it can produce more junk. That is real economic activity as far as Progressive Conservative Members are concerned.
What did we see in the Budget? The Government is going to reward success rather than subsidize effort. What government Members are saying is that it is not how one plays the game of life but it is whether or not one wins. That is the value that lies at the root of the Tory Budget. The Government is telling all those people who do not have $500,000 in capital gains that they are not successful. Government Members do not regard them as the kind of people who make the economy run.
Pensioners on GIS, people who might receive a small company pension, people who worked hard all their lives and raised families but who do not have the level or the kind of incomes that will enable them to benefit from this Budget are not the people who really count. The people who really count are the people who can come into a $500,000 capital gain or be eligible for all the other goodies that are made available to the investment community. As far as I am concerned, that is bribery. It is nothing other than a bribe to rich and powerful Canadians who will not make the effort unless there is a buck in it for them. Pensioners and everyone else will make the effort anyway because they are decent Canadians who would invest their money in this country without even considering buying condominiums in Florida or doing whatever else it is the rich do with their money.
Rich Canadians have to be bribed by their Government to invest in Canada. I say that that is the very kind of economic system that the NDP and before that the CCF were created to resist. That is why we are here. We are here so that we can point the finger at this kind of shallow, immoral economics which makes the ordinary people pay through the nose because they do not have any choice. The rich people for whom there are no borders-their only border is the almighty dollar- might invest their money somewhere else because they do not really care about the country, and so we must cater to them.
June 17, 1985

What Progressive Conservative Members are doing here is capitulating to the very worst elements in our economic system. 1 was never more proud not to be a Progressive Conservative Member than 1 was when I saw 211 Members give their first standing ovation in the Budget Speech to the statement about the $500,000 capital gains exemption. That was one of the grossest things I have seen since I came here. That was the most disgusting display that I have ever seen. Members gave their first standing ovation to the statement about the $500,000 capital gain exemption. Boy, oh, boy, is that not something great for all their constituents?


Mr. Mayer:: You have the sense of a goose.


William Alexander (Bill) Blaikie: I would say to the Hon. Minister of State responsible for the Canadian Wheat Board that we are not opposed to the capital gains tax exemption for family farms, so I hope he will not begin to deal with that issue.


Charles James Mayer: Be honest and straightforward about what you are saying then.


William Alexander (Bill) Blaikie: Conservative Members are saying that everything we have been taught over the years by our Sunday school teachers, our cub and scout masters and our parents, is not true. They are telling us that it is not how one plays the game but rather whether or not one wins. Progressive Conservative Members are telling the people who already have money that they are willing to give them even more money to spend more money. They are saying to the rest of us who did not make it big that that is tough luck. 1 say that this Budget deserves every element of criticism that is delivered against it for that underlying philosophical reason.
Much attention has been paid to the question of deindexing pensions, and properly so. However, 1 would like to see more debate about the kernel that lies at the root of this Budget, which is, that the business of life and the business of Government is to reward those who are already successful and to demand from those who have not made it big in the economy that they give up their indexed pensions and make other economic sacrifices so that those who already have money can be paid to make more money.


Maurice Brydon Foster: Mr. Speaker, 1 wanted to comment on the Hon. Member's speech. He began his speech by talking about how the Minister of Environment (Mrs. Blais-Grenier) often shoots from the lip and ultimately backs down on many issues. I think that occasionally the Minister makes really colossal mistakes in the operation of her Department. I believe that she made a colossal mistake last December when she approved the decision made by the Minister of Finance (Mr. Wilson) to cut out the proposed toxicology centre at the University of Guelph. That centre was proposed by two world-famous universities, the University of Guelph and the University of Toronto. It was being supported by the federal Government, the Province of Ontario and the private sector. It was a model about which the Government has been talking-co-operation between the private sector and federal and provincial Governments. It took many years to complete the proposal for the centre. With
Borrowing Authority Act
respect to its funding, the federal Government provided $16 million, the Province of Ontario provided another $16 million, auxiliary assistance was received from the universities, and some $8 million was provided by the private sector. It was a world-class facility which was designed to deal with the toxicological problems of the world. We hear about these problems from newscasts and from concerned Canadians daily, whether it is with respect to the control of diseases and infection in the environment or whether it is leakage problems in the Niagara River. However, the Minister cut that facility which would have given Canada a world-class capacity in dealing with those problems. It would have provided a facility for research and the development of new techniques. It would also have assisted in scientific training. It is a very specialized field. It does not only deal with toxic chemicals, it deals with chemicals which may cause cancer or other diseases which are so prominent in society. I spoke to the Chairman of the Board, who is a research scientist at the University of Toronto, and to other people from the University of Guelph. They indicated that there has been no consultation. The Government thinks that by talking about consultation it makes it so. However, it does not make it so. The decision to cut the centre was a unilateral decision. I am sure even the Hon. Member for Guelph (Mr. Winegard), who is a former President of the University of Guelph, was not consulted. The Minister of Finance simply cancelled the project. There was no consultation with the original team which was appointed to guide the development of the centre.
The Hon. Member for Winnipeg-Birds Hill (Mr. Blaikie) was quite right. The Minister often shoots off rockets which she has to retract. However, she also cancels projects such as the centre at the University of Guelph, which will be a severe impediment in the research and training of people in that very important field.
The promise of research and development is simply "Mul-roney baloney". The same applies to the question of indexation, agriculture and the rest of the promises. It is political rhetoric. When the Prime Minister (Mr. Mulroney) has a research audience in front of him, he promises research. When his audience relates to fishery, he makes promises in that area. When his audience is from the agricultural field, he makes promises in that area. The policy of the Government changes every time the audience changes. It is a very serious problem.
Bill C-51 should provide some of the things about which Hon. Members on this side of the House are talking. We are being asked to grant $18 billion of borrowing authority to the Government. The Government made commitments to research, the environment and many other areas. Now the Government is backing off and asking for a blank cheque, with no promises.


George Baker: Mr. Speaker, I would like to add a few comments to what the hon. gentleman said about national parks. In fact, a lot of the decisions which were made by the Government, as they relate to increases in fees, are now being

June 17, 1985
Adjournment Motion
announced. A couple of days ago, as the hon. gentleman suggested, the new fee structure for the national park in my riding was announced. I was surprised. People who buy family rates in the national park in my area-


The Acting Speaker (Mr. Charest):: It is with great regret that I interrupt the Hon. Member for Gander-Twillingate (Mr. Baker), to remind him that his comments and the comments of the preceding speaker should be relevant to the speech which was made by the Hon. Member for Winnipeg-Birds Hill (Mr. Blaikie). He may be coming to another question which is more relevant.


George Baker: Mr. Speaker, the Hon. Member did mention national parks and the new rates. It would cost about $1,000 to buy family rates for the season to take advantage of all the services of the Terra Nova National Park.
The Hon. Member spoke about the cuts in the Canadian Wildlife Service. That service was destroyed. Since the Hon. Member was intimately involved when the cuts were announced and when the programs were cancelled, what person-years were reinstated following the outburst from the general public and from members of the standing committee of which the Hon. Member is a member? Was there a resintate-ment of any services as the Minister claimed?


The Acting Speaker (Mr. Charest):: I am sorry, the period for questions and comments has now expired. I am sure there will be other opportunities for the Hon. Member to anser that question.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Charest):: It is my duty pursuant to Standing Order 45, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the Hon. Member for Don Valley East (Mr. Attewel!)- Canada Post Corporation-Request for postponment of rate increases; the Hon. Member for York East (Mr. Redway)- Transportation of dangerous goods-Retail carriage hazard to Toronto; the Hon. Member for Davenport (Mr. Caccia)- National Parks-Parks policy-Minister's position, b) Request for ministerial assurance.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Miss MacDonald (for the Minister of State (Finance)) that Bill C-51, an Act to provide borrowing authority, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
The Acting Speaker (Mr. Charest):: I would like to remind all Members of the House that the initial eight-hour period of 20-minute speeches and the 10-minute questions and comments period, according to Standing Order 35(1), has now expired. We are now moving into the period of 10-minute speeches with no questions or comments.


Hon. William Rompkey (Grand Falls-White Bay-Labrador):: Mr. Speaker, I have previously made some comments regarding the effects which the Budget will have on the Atlantic area. I said that it would be devastating because the private sector is not strong in that area. As a matter of fact, 80 per cent of economic funding in the Atlantic area comes from the Government. It is betwen 35 per cent and 45 per cent elsewhere in Canada. Since the time when I set out the effects which the Budget will have in the Atlantic area, the Atlantic caucus has gone to Atlantic Canada to seek the views of the people. I thought it would be useful to read into the record some of the press reports from business groups, senior citizens' groups, local politicians and other groups in the Atlantic area. First, I would like to read an article from the Journal-Pioneer in Summerside, Prince Edward Island. It reads;
The May 23 federal Budget further injured all Canadian farmers, but it may kill hopes of survival for many farms already suffering badly because of high debt and low prices, National Farmers Union spokesman told members of the Atlantic Liberal caucus in Summerside today.
A brief presented on behalf of the farm organization's Maritime region criticized the Wilson Budget for failing to represent or protect the basic interests of most Canadian farmers. Regional co-ordinator Gordon Vessey and P.E.l. director Urban Laughlin charged that present and proposed federal agricultural policies "spell disaster" for many farmers.
That is a comment from the farmers' spokesman in Prince Edward Island, Mr. Speaker. I would like to quote again from that same news paper. It reads:
A volley of verbal abuse was lobbed on the recent federal Budget by an Island farming organization and a union representing public employees when Budget hearings initiated by the Atlantic Liberal caucus opened here Wednesday morning.
"We fell the result of this Budget will be higher unemployment, lower consumer demand, increased hardship for the poor and near poor and, contrary to expectations, a larger deficit," Aubrey MacDonald, President of the P.E.L division of the Canadian Union of Public Employees said, "This is not a Budget appropriate for the times".
I have another quote from the same News paper, and I will read the first couple of paragraphs as follows:
June 17, 1985

The Atlantic Provinces and Prince Edward Island in particular, will be hit hard by the Budget introduced in the House of Commons May 23 by Finance Minister Michael Wilson.
That was the collective opinion of eight groups representing interests as diverse as tourism and day care, who appeared before a hearing of the Atlantic Liberal caucus Wednesday at the Linkletter Convention Centre.
To continue on with the feeling of the people in the Atlantic area, Mr. Speaker, I would like to quote from The Guardian in Charlottetown as follows:
If farmers were getting a fair price for their commodities there would be no need to ask for special consideration from the federal Government, a spokesman for the P.E.I. Federation of Agriculture said here Wednesday.
Federation President Ray O'Brien told the Atlantic Liberal task force the recent federal Budget has all people in Atlantic Canada, not just farmers, concerned the federal Government has "totally abandoned'' any notion of special consideration or assistance because of geographical position.
In other words, that idea of special consideration for have-not areas and for developing areas such as the Atlantic, has been completely forgotten by the Government.
1 have another quote from Moncton, New Brunswick, which reads as follows:
Charging that Finance Minister Michael Wilson's Budget stinks, the executive director of the New Brunswick Senior Citizens' Federation-
I notice that there are senior citizens in the gallery today, Mr. Speaker. If they could only come down here to the floor of the House of Commons and say themselves what they think about this Budget. It goes on to read:
-told the federal Liberal caucus Thursday that seniors are mobilizing against its plans to deindex old age pensions.
And we have seen that mobilization now taking place across the country, Mr. Speaker. It goes on:
"The elderly have no political clout," he said. "We use whatever methods we can to spread the word. We don't demonstrate or stage marches. We will continue our fight both on the federal and provincial level".
I have another quote from an editorial in The Journal Pioneer, which reads:
The Wilson Budget shows no sign of leaving the consciousness of Canadians, the main reason being that Finance Minister Wilson designed the Budget so that it would affect the maximum number of people. This was probably the outcome of his efforts to ensure that nobody got hurt-
Continuing with the quotations from the Atlantic area, Mr. Speaker, I quote the following from The Telegraph Journal of June 6, 1985:
The recent federal Budget may spell the end for many farmers already suffering because of high debt and low prices, the Atlantic Liberal caucus was told Wednesday.
A headline in The Times transcript of June 7, 1985, reads, "Richard pulls no punches in ripping Budget". It reads, and I quote:
-the May 23 federal Budget "stinks ...". The Executive Director of the New Brunswick Senior Citizen Federation did not mince words Thursday in Moncton in lambasting the move by Ottawa to deindex the country's old age pensions.
These are just a sample, Mr. Speaker, of the reactions from farmer's groups, fishermen's groups, senior citizens, union leaders, businessmen, and from boards of trade throughout the Atlantic area. The plain message is that this is the first time in history that a Government has failed to recognize that all parts
Borrowing Authority Act
of this country are not equal and that there are some parts where the private sector is weaker. If we bring in a national policy that applies the same to everyone across the country, we are naturally going to hurt the weakest.
I think a case is to be made that senior citizens in the Atlantic region will suffer more because the Atlantic region will suffer more from this particular Budget. The public sector, as I have already pointed out, is what we have depended on for many years to provide employment, and the private sector is not strong enough to provide that employment. That is why we are going to be more hard hit than anyone else.
The cut-backs we have seen in the various programs we depend on will be disastrous. There is a cut in the fisheries of $25 million, in addition to a previous $40 million cut. We do not know what the effect of cuts in transportation is going to be on CN Marine, for example, on the ferry services. Bear in mind, Mr. Speaker, that the only way we can get to the islands of Newfoundland and Prince Edward Island is by sea. That is the only way we can carry large and heavy merchandise, and it is also the way many tourists travel. If we cut the transportation budget and affect those ferry services, we will naturally affect both the cost of goods and materials and the tourism industry.
I said earlier on, and it bears repeating, 1 think, that the reductions in transfers is also going to hurt us in the Atlantic area. While there will be an increment, the over-all increase to the Atlantic area in transfer payments under the Established Programs Financing by 1990, is going to be cut. That is going to hurt because the provincial Governments will have to recoup in some way. If we increase the tax, we obviously increase the cost of all materials which are coming in by truck, by air and by other conveyances. So that is going to result in an increase as well in the Atlantic area. All of this points to the disastrous effect that the Budget is going to have. Indeed, that was recognized by the Government. The Minister of Justice (Mr. Crosbie) when he was in Newfoundland was less than sanguine about the effects of the Budget and was less than enthusiastic. The Minister of Justice said at that time that if the Budget had any negative effects on areas like Newfoundland, then Ottawa would take measures to deal with them. He went on to say, and I quote:
If it turns out that in any of the approaches taken in this Budget there is any possibility of any damage to regionally deprived areas, then there will be changes made to deal with that.
The time has come, Mr. Speaker, for the Minister of Justice and the Government to live up to the commitment he made in his speech on this particular Budget. We have heard from a host of groups all over the Atlantic area. They are not political groups. They are union groups, business groups, farmers' groups and Fishermen's groups. And all of them have said there is going to be a disastrous effect on the Atlantic area because of this Budget. I call upon the Government now to follow through on the commitment made by the Minister of Justice when he spoke and tried to support this disastrous Budget some time ago. He said, and 1 quote:

June 17, 1985
Borrowing Authority Act
"If they don't perform, then big brother will have to be given the job back again", he warned.
He admitted the private sector in the Atlantic area is weaker than any other parts of the country and said there will have to be more government support in the Atlantic region.
That is a quote from the Evening Telegram in St. John's of what the Minister of Justice said on May 25.
So I call upon the Government now to follow through on the commitment made by the Minister of Justice that if the Budget is seen not to work in the Atlantic area, then changes would be made. I call upon the Government to restore the programs that we have depended upon, to restore the support which the Government of Canada has historically given to the Atlantic area and to retract those disastrous measures which are going to have such a negative impact on the Atlantic region.


Victor Fredrich (Vic) Althouse: Mr. Speaker, in the 10 minutes I have available to me, I would like to make some comments on Bill C-51, which is an Act the Government has introduced in order to increase its authority to borrow funds to spend on operating expenses during the course of this fiscal year. As you know, Mr. Speaker, having read the Bill, what the Government is asking for is an additional $18,200 million on top of the borrowing authority which already exists.
Just so that we can compare that borrowing authority with previous ones, I would like to take the House back for a moment to the Minister's speech when he introduced this Bill on May 28. As recorded at page 5133 of Hansard, he said at that time:
With the passage of this Bill, the Government will have a total of $32.2 billion of borrowing authority for the current fiscal year.
Later, on that same page, he compares this year's borrowing authority with the previous year's borrowing authority. He points out that the total amount of borrowing authority for the 1984-85 fiscal year was $31.9 billion. Today we are being asked to increase the borrowing authority by about $300 million over and above what this House allotted the previous administration.
The Government is increasing the amount of money it wishes to borrow after arguing that it was busy cutting deficits, reducing expenditures, and creating an era of confidence in the country. I am wondering what type of signals of confidence are being sent out from a Minister of Finance (Mr. Wilson) who says he is cutting the borrowing of the country and reducing the deficit, then asks the House for more money than, even to use his assessment of them, the accursed Liberals asked for in the previous year.
Parliament is being asked to give the executive branch of the Government an additional $300 million over and above what it spent in the previous year. Why is this extra money necessary? It does not seem to be for the provision of goods and services. In fact, the Minister of Finance does not seem to have taken any substantive action to reduce the deficit. He has reduced expenditures to a lot of key people. Pensioners will be asked to
take a cut in the real value of their pensions. Families will be asked to take a cut of $500 per year in their spending power based on the May 23 Budget. That falls on top of a tax load imposed in the November 8 statement, which cost ordinary families approximtely $500 in increased taxes and reduced government services.
In the course of less than a year, average families with average incomes will have approximately $1,000 less to spend than they had with previous administrations. Therefore, why does the deficit not seem to be going down? It is not going down very quickly, as even The Globe and Mail has noticed. It points out that the deficit may be trimmed by as much as $1 billion in 1985-86. The forecast would only be for another $1 billion in 1986-87, which would leave the annual deficit at $32.7 billion in a total budget of just over $100 billion. The Minister of Finance is not changing the proportion of deficit very much as compared to previous Ministers of whom he was so critical.
The most important point is how much of the Gross National Product the Minister is going to ask the Canadian people to carry by way of debt charges as compared to previous administrations. One would expect the amount would be going down. However, the Government's own papers indicate that debt charges seem to be growing somewhat faster than the Gross National Product. In fact, by 1990-91 public debt charges will represent about one-half of a percentage point more of the expected Gross National Product than they did in the budget year 1984-85. Even the budget papers indicate an expected increase in the deficit in the next five years. Yet the focus of the rhetoric from that side of the House continues to be on what a great job they are doing of attacking the deficit.
The facts are becoming more clear as Canadians understand what the Budget is about. They can now see that the attack is not on the deficit, but rather on the pocketbooks of ordinary Canadians. The focus of this Budget and of these spending policies is to effect a transfer of income. It seems that the stated policy of the Progressive Conservatives is to have a transfer of investment income from the pockets of those people who have only ordinary amounts of money, or are very poor, to those individuals who are already wealthy in their own right.
I cite a number of budgetary measures to back this up. They are reinforcing a trend that has occurred, even under Liberal Budgets, over the last four or five years. We are now at the point where approximately 4 per cent of the population of the country has control of about 40 to 42 per cent of the country's resources. There has been no effort to redistribute those resources to less fortunate people. In fact, this Budget will exaggerate that process.
To give an illustration of how corporations have been assisted by this process, let us look at income tax paid by individuals and corporations. In 1950, income taxes paid to the federal Government were shared roughly equally between individuals and corporate citizens. By 1980, 70 per cent were paid by individuals and 30 per cent by corporations. Through the Budget provisions of May 23, by 1986-87, 77.3 per cent of income tax will be paid by individuals and a mere 23.6 per
June 17, 1985

cent by the corporate sector. That accretion of wealth by the already wealthy continues.
The move for the virtual elimination of capital gains tax is being sold to the country as a means of allowing the accumulation of capital in hands which will reinvest it. I submit that we have seen programs like this in previous Budgets. The Lalonde Budget contained an ISIP provision which stands for Indexed Securities Investment Program. That afforded people who wanted to invest in stocks the option of setting up an ISIP in order to avoid paying capital gains on most of their profits from stock investments. This Budget almost entirely eliminates the little capital gains tax that was being charged under the Lalonde Budget.
As a result of such government and budgetary policy, shareholders put different requirements on company officials than may be expected by budget makers at the federal level. They do not use the money saved through decreased taxes to start new businesses or hire more people. Instead, they take the safe route and buy up existing small businesses, which often puts people out of work. The actual result is quite opposite to what the budget planners had hoped for. We must recognize that we are not dealing with rational people. They have failed to study what happens in the real economy.
This particular program, as well as the entire Budget, should be opposed. We should all take every opportunity available to explain why we cannot support this Budget.
MO)


Cyril Keeper: Mr. Speaker, I am pleased to enter into this debate in spite of the impatience of Members on the other side of the House to dispose of this legislation. Bill C-51 seeks to increase the Government's authority to borrow by S18.2 billion.


The Acting Speaker (Mr. Charest):: Order, please. Has the Hon. Member for Winnipeg North Centre (Mr. Keeper), already spoken to Bill C-51?


Cyril Keeper: No, Mr. Speaker. 1 have not spoken.


The Acting Speaker (Mr. Charest):: I am sorry to interrupt the Hon. Member. He may continue.


Cyril Keeper: Thank you, Mr. Speaker, I assume that means that when we get up and ask questions in the House, Members opposite become very sensitive and notice our presence.
Every day the Government claims to be decreasing the deficit. It is asking Canadians to shoulder the burden of that decrease and is particularly asking senior citizens to shoulder the burden. It is significant to note that when the Government asks for increased borrowing authority we must question everything it says about its intentions to reduce the deficit and the impact its economic policy will have on the economy. Seniors are being asked to disrupt their own economic package to which they have contributed with their hard-earned money over a lifetime. Yet the Government is calling into question its own economic policy and its effectiveness in reducing the
Borrowing Authority Act
deficit by seeking this borrowing authority of SI8 billion. I suggest that it confesses a failure. Deindexing will cut the purchasing capacity of the Old Age Security pension which makes the credibility of the Government's economic policy crucial.
The Government has accused both the Opposition and the media of distorting the reality of these deindexation proposals. However, whether we call it partial deindexing or deindexing the fact is that the purchasing power of seniors will be $100 less next year, $200 less the next and $300 less the year after that, while the cost of the Government's economic policy increases for the senior citizens who have made this country what it is today.
Although the Government claims to be cutting the deficit, its Budget will cut pensions. Furthermore, the fact that the Government is asking for increased borrowing authority shows that its attempts to cut the deficit have been ineffective. At the same time, the impact of this on seniors is very real and will remove real dollars from their pockets.
Perhaps a partial deindexation of pensions could be justified if everyone was sharing in the burden of deficit reduction. However, the Government's Budget is tough and unfair. The Budget is tough on senior citizens and other groups in this country and is particularly unfair because it gives a tax holiday to the very wealthy in this country. Those who will be eligible for this capital gains tax holiday are those with considerable assets. In the meantime, the Government is asking seniors and others to reduce their incomes in order to combat the deficit.
That is why the Budget is unfair and that is also why it is being rejected. More and more petitions are being presented from Members from all sides of the House. Senior citizens and other Canadians throughout Canada are signing petitions and asking the Government to withdraw its deindexation proposals because they recognize that the Budget is unfair and unjust.
Those petitions will continue to come in until the Government has reversed its position on deindexation. The New Democratic Party has a long traditions of supporting pensioners-beginning with the Canadian Commonwealth Federation, which is the Party from which the NDP grew. We are accustomed to calling on Governments to meet the needs of senior citizens. It is important for us to continue that tradition because Governments must realize that we will fight for seniors every time that they are attacked.
In conclusion, the Government's request for increased borrowing authority shows that its efforts to reduce the deficit have not worked. It is understandable that Canadians are outraged when it asks seniors to cut their incomes in the name of deficit reduction. The Government will have to reverse its position on the deindexation of seniors' pensions.


Howard Douglas McCurdy: Mr. Speaker, it is a pleasure to have the opportunity to stand before this august assembly to consider Bill C-51, which would accord to

June 17, 1985
Borrowing Authority Act
Her Majesty's Government authority for borrowing an additional $18 billion this fiscal year.
I have been listening to the debate. In a certain sense it is rather peculiar. The Government is being berated because it has been observed that it is committed to a redistribution of wealth in favour of the wealthy at the expense of the poor and the elderly. This kind of debate has been deemed by some as rather strange. After all, this is a Conservative Government. What would one expect of a Conservative Government except that it would do what it has set about doing? It should not be of any particular surprise that there should be a capital gains tax exemption in favour of the wealthy. It should not come as a particular surprise that those making over $200,000 per year will pay less taxes, while those making less than $30,000 per year will pay more taxes. It should not come as a particular surprise that more money will be furnished to the oil companies for their benefit at the expense of the rest of us. There are no surprises. This is what one would expect of a Conservative right-wing Government. One must ask why there is so much upset and why there is such a tremendous reaction. Perhaps one could attribute the reaction of so many to the fact that the Government has proved to be so precociously hyprocritical.
I direct the attention of the House to a matter which I think should be of great concern to the Government. It said that it would help out small business persons. I do not know to what small business people Hon. Members of the Party opposite have spoken. However, I know that the small business people to whom I spoke, small retailers, small manufacturers and so on, are a little concerned that $7.6 billion will be taken out of the pockets of consumers next year. They have great difficulty trying to understand why they should be encouraged to invest more, why they should expect to have increased sales, and why increased investment and hiring are justified.
The trouble is that the Government promised to be so different. We had a smooth talking salesman and his colleagues going across the country promising that things would be different. I will always remember the day that the present Prime Minister (Mr. Mulroney) seemed almost to declare himself a New Democrat by saying: "I agree with you, Ed; there should be a minimum tax on the rich". However, the promise which hurt was the one given several times, the promise that there would continue to be complete indexation of the Old Age Security. As I said, that promise was thrice given. We have heard about confidence, consultation and sacred trust. It is to be observed that the word "sacred" has come into serious question in the last few weeks.
Many Canadians, including senior citizens and the elderly, were convinced by the smooth performance during the election campaign. They were further reassured in the House, despite the fact that they were somewhat miffed by having a Saturday Night Live show with clackers on the Government side. They had no reason to believe that they would be so treacherously treated as to have experienced a proposal, as it now is, to deindex the Old Age Security.
The problem is that it is very difficult to establish trust, especially for politicians. I am willing to accord to the present
Prime Minister that during the first portion of his tenure he communicated to all of us at least a basis upon which we could trust him, so we thought. So competently, so sincerely and so soothingly presented were his promises that we thought at the very least that he would live up to what he said. He did not. By so doing, he has wrought almost a revolution among senior citizens and elderly of the country. So offensive was the breaking of those promises that no one has been able to produce a single soul representing any significant organization in Canada who is prepared to accept that deindexation of the Old Age Security was a reasonable and just proposal.
I know Hon. Members opposite feel very uncomfortable in the position in which they find themselves. It is a tragedy when the Prime Minister has created an image of hucksterism in that office. It is offensive and dangerous to the democratic process when the slick promises of a vacuum cleaner salesman become the rhetoric of a Prime Minister. It is dangerous when the Prime Minister is imaged as an individual from whom one would not buy a used car. If I were sitting on the side opposite, I would seriously question the future of a Party which has projected an image that has been so viciously contradicted. A Party which has offended the notion of the morality involved in breaking promises in the fashion that has been done is a Party which will be in trouble.
I stood before about 1,200 senior citizens last week and I asked the following question: Is there anyone here willing to stand up and defend the position that senior citizens should sacrifice what little income they have in order to decrease the deficit or to increase the wealth of the wealthy, that they should be the sacrificial lambs for increasing employment? As the record has shown all over the country, not an individual stood up. It is a sad day when the Leader of the country, having projected an image of trust, of assurances to the elderly and the poor, of honesty and of marriage to sacred trust, should so badly translate it into such treatment of those in society who need a more positive thrust in the direction of this country, a thrust to development of employment and economic growth which we should demand and have.
It is not a situation which does any of us proud. I hope we will proceed just a little farther than this backtracking which is already on the record. Canadian senior citizens know that the forces for revision of the Budget are strong even within the Conservative Party. There is no reason to delay. There is no reason to continue the worry, concern and prospect of suffering among senior citizens who will be placed below the level of poverty as a consequence of deindexation. There is no reason the Government should not accede to the demands of virtually every person in the country, live up to its promise and return to an image of trust within its own ideology. I cannot accept that ideology, but at least it should be true to its ideology and to its promises, and then perhaps we could return the debate to a more reasonable basis.


Ms. Pauline Jewett (New Westminster-Coquitlam):: Mr. Speaker, in discussing the borrowing authority, very little
June 17, 1985

attention has yet been paid to the money spent by the Government on international development assistance. Some really quite tragic developments are taking place and are being encouraged by, particularly, the Minister of Finance (Mr. Wilson) and the Minister of Regional Industrial Expansion (Mr. Stevens), apparently without the knowledge or concurrence of either the Secretary of State for External Affairs (Mr. Clark) or the Minister for External Relations (Mrs. Vezina). There is a conflict between finance and regional industrial expansion on the one hand, and external affairs and external relations on the other, and it has been growing since the present Government came into power September 4.
You will recall that the Secretary of State for External Affairs announced at the UN that Canada would continue to have a target of .7 per cent of GNP on official development assistance by 1990. Apparently without discussion with that Minister, the Minister of Finance announced in his November statement that the deadline date would be moved from 1990 to 1995. That came as a surprise to everyone since we had taken the Secretary of State for External Affairs' word that the deadline date would be 1990. As I said, that was the beginning.
We then saw the Minister for International Trade (Mr. Kelleher) get into the act in his January discussion paper on international trade in which he mentioned the desirability of linking trade and aid through something called the trade and development facility. I think he had intended that originally this would be in the Export Development Corporation, where it might indeed very appropriately belong, but it has now suddenly turned up in the Canadian International Development Agency. Indeed, the Minister of Finance in his Budget stated that the trade and development facility would be in CIDA.
Most significant of all, and it seems to me that this has been almost entirely ignored, the Minister also announced that this trade and development facility would receive half of all increases in the foreign aid Budget for the next decade. Apparently this was done again without the knowledge or concurrence of either the Secretary of State for External Affairs or certainly the Minister for External Relations who is responsible for CIDA.
It was some two months later, after the statement of the Minister for International Trade, that the Minister for External Relations decided it was time to consult the non-governmental organizations about this linking of trade and aid. Now the Green Paper comes out with a list of extremely interesting questions which have again been largely ignored because only four paragraphs are devoted to international development assistance. Nevertheless, it is a series of very interesting questions which it would like the public consultation process to help the Government answer.
One of these questions concerns the nature of the linkage between our trade and aid program. This is put as a question in the Green Paper. The Minister has made a great deal of having full consultation with the Canadian public before any decision is taken. Yet, as we have already seen, a decision has been taken that this new facility established in CIDA with its
Borrowing Authority Act
emphasis on trade will receive half of all increases in the foreign aid budget for the next decade. This just shows how little the Government really believes in the consultation process which it talks about all the time.
It was prepared to decide on star wars without consultation. It was prepared to decide on bilateral trade with the U.S. without consultation. It has now agreed to a couple of weeks' consultation this summer and, if you work out the probable agenda for the hearings, as I have been doing, given the translation requirements and notice to all interested groups, it seems to me to be impossible to hold more than two weeks of hearings if the deadline date of August 23 is to be met. That is just a facade, it is not consultation at all.
In the case of trade and aid, the deed has already been done and it has been announced in the Budget. As far as I can see, the Minister for External Relations, who is responsible for CIDA, is watching the Canadian International Development Agency being turned into the Canadian Export Development Agency. The purpose of this new facility in CIDA is to in a sense duplicate the Export Development Corporation, perhaps because it is not doing a good enough job, and provide export subsidies chiefly to uncompetitive and inefficient Canadian businesses.
A second recent development shows that it is not only the Minister of Finance and the Minister for International Trade who are now determining our international development assistance policy, but also the Minister of Regional Industrial Expansion.
It is very interesting that while the Minister for External Relations was in San Salvador signing an agreement to provide a loan, presumably for development assistance, to El Salvador despite the continuation of the death squad activities, the special envoy of the Minister for Regional Industrial Expansion, who is a Salvadoran and who at one time I am told worked for the Salvadoran Embassy in Ottawa, was meeting with a small right wing business clique in Salvador, almost all of whose members are participants in the ARENA Party of D'Aubuisson, telling the elite that they would be the conduit for the development assistance being proposed by the Minister for External Relations.
I know the Minister was asked to meet with the Minister for Regional Industrial Expansion for two hours prior to her going to Central America. No doubt she got the word on how the linkage between aid, trade and export subsidies would be facilitated in the loan to El Salvador. What she probably did not know was that the envoy of the Minister of Regional Industrial Expansion was in Salvador at the very same time giving guarantees that the aid would be, as is the case in other development which I have mentioned, subsidized trade linked in with the small right wing business community in Salvador.
What this House must do, and in the very near future, is persuade the Government to not continue making the final decisions on linking of aid and trade but to genuinely consult the Canadian public as the Green Paper says it wishes to, and see if the Canadian public would like to see a genuine aid

June 17, 1985
Borrowing Authority Act
program or simply one which subsidizes Canadian and other businesses.


The Acting Speaker (Mr. Charest):: Is the House ready for the question?


Some Hon. Members:: Question.


The Acting Speaker (Mr. Charest):: Miss MacDonald (for the Minister of State (Finance)), moves that Bill C-51, an Act to provide borrowing authority, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
Is it the pleasure of the House to adopt the said motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


The Acting Speaker (Mr. Charest):: All those in favour of the motion please say yea.


Some Hon. Members:: Yea.


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


Some Hon. Members:: Nay.


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


The Acting Speaker (Mr. Charest):: Call in the Members.
And the division bells having rung:


Ramon John Hnatyshyn: Mr. Speaker, there have been consultations and I think you will find a disposition, by unanimous consent, that notwithstanding the form of the motion on the Order Paper, it be amended to refer the Bill to Committee of the Whole rather than to a standing committee.


Mr. Speaker:: Is that agreed?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.
Mr. Speaker:: The question is as follows. Miss MacDonald (for the Minister of State (Finance)) moves that Bill C-51, an Act to provide borrowing authority, be read the second time, and, by unanimous consent, referred to Committee of the Whole.


Mr. Speaker:: I declare the motion carried.
Bill read the second time and, by unanimous consent, the House went into committee thereon, Mr. Charest in the chair.


The Assistant Deputy Chairman:: Order. House in Committee of the Whole on Bill C-51, an Act to provide borrowing authority.
Shall Clause 2 carry?
On Clause 2-


George Baker: Clause 2(2) of the Bill states:
All borrowing authority conferred by subsection (I) that remains unused and in respect of which no action has been taken by the Governor in Council pursuant to Section 37 of the Financial Administration Act shall expire on March 31, 1986.
Would the Minister of State for Finance, in requesting such a large amount, enlighten us on the projections of the President of the Treasury Board? His November statement dealt with the raising of additional revenues to the Government of
June 17, 1985

Canada by increasing fees and eliminating certain programs. Could the Minister indicate to the House whether or not the projections by the President of the Treasury Board and the Minister of Finance are on line, in view of the fact that many Ministers have cancelled fund raising activities; funds which were supposed to be derived from increasing certain fees. What effect would those modifications in the financial statements have on the requirements of the Government of Canada and the requirements as stated in the borrowing authority Bill?


Barbara Jean McDougall: Mr. Chairman, the changes that have been instituted since the original projections in the fall, based on the kind of fees that the Member is talking about, would be marginal at best.


George Baker: Mr. Chairman, I imagine that they are marginal in the Minister's eyes when we are talking about $18.2 billion. However, even the smallest projection made in each Government Department means something to that Government Department.
Would the Minister reconsider her answer? Projections have been made by each Minister as to how much the Government of Canada would gain from increased fees as a result of modifying certain fee schedules and modifying the collection of fees from the general public in many areas. Many of these announcements have since been cancelled. In other words, there were subtantial modifications made by every Minister since the November financial statement and since the Ministers made statements regarding the increased revenues to the Department.
If the Minister finds it difficult to understand what I am talking about, let me give her an example. The Department of the Environment said it would raise fees by charging people for telephone calls. As I understand it, that will not now be done. It also said it would save the Government of Canada money by cancelling park guides. That will not be the case. There are a number of examples of increased fees for public usage which have since been cancelled.
Surely the Minister cannot say that these millions of dollars are only marginal. Surely the Minister must have some opinion as to what the effect of those cancellations have been as a result of public uproar in various parts of the country? What effect will that have on the needs of the Government of Canada under this borrowing authority?
Does it give further reason for the inclusion of Clause 2(2) as outlined in the Bill?


Barbara Jean McDougall: Mr. Chairman, I am sure that even the Hon. Member knows that projections are always estimates. There are adjustments to them as time goes along. That should not be a surprise. However, if the Hon. Member will check the Main Estimates again, he will discover that the rate of increase in Government spending is at its lowest in many years. I would suggest that perhaps he is the one who should examine the figures.
Borrowing Authority Act


George Baker: Mr. Chairman, I am not supposed to be the one answering questions here. The Minister is supposed to be an expert on this Bill and is supposed to give the House some general opinion of the requirements of the Government of Canada as outlined under this borrowing authority. All that she has told the House so far is that the effects will be marginal because it is only a few hundred million dollars, give or take a few hundred million.
1 am asking the question in all sincerity. Has the Government re-examined its financial needs for this financial year in view of the modifications and changes that have been made since the President of the Treasury Board outlined the vicious cuts in Government Departments and projected increases in revenues amounting to hundreds of millions of dollars? Much of that is from programs that have been reinstituted or changed from the collection of higher fees to the collection of lower fees. Surely the Minister knows what 1 am talking about. Perhaps the President of the Treasury Board, who knows exactly what I am talking about, could give the House the answer to the question.


Barbara Jean McDougall: Mr. Chairman, I believe I have answered the Hon. Member's question. I said that the changes are marginal and that there is information available in the Main Estimates. There is up to date information available in the Budget.


Don Boudria: That means she doesn't know.


George Baker: Mr. Chairman, if the changes are marginal and do not really have any effect on the needs of the Government of Canada, why is there this increase in fees in the November statement? If it is only marginal, why is so much attention being paid to it by Ministers of the Crown? Surely it is not only marginal. Surely the President of the Treasury Board could stand in his place and tell us what the negative figure has been since his November statement?
Members of the House deserve to have this information. You cannot have a Government operating like this, saying that it needs $18.2 billion, give or take a billion dollars, and just letting it go at that. It is then said in Clause 2 that anything left over will terminate March 31, next year.
Surely we deserve some information regarding the actual figures. What happened since the President of the Treasury Board tabled his statements of cuts and increased revenue measures to the Government of Canada? Surely with such a blanket proposal, the House deserves some statement from the Government regarding its needs for the coming year? If it is not forthcoming, maybe I should give an hour long speech on some of these cuts and decreases in revenue. Maybe that would be a good idea. I am calling upon the Minister to take a stab at answering the question which has been directed to her or, as I said, I can go into specifics regarding the difficulty with which the Government of Canada will be faced as far as realizing certain objectives are concerned.
5858

June 17, 1985
Borrowing Authority Act


Barbara Jean McDougall: Mr. Chairman, the Hon. Member will find our projections in the Budget. There are some on page 12 and some on page 13. They are public documents. They have been tabled in the House. If he is having difficulty with this, I suggest that he look it up.


George Baker: Mr. Chairman, I have a few comments to make about the particular Clause; perhaps some Hon. Members would like to have a cup of coffee. It is not a joke or a laughing matter. When we examine the document entitled Expenditure and Program Review, tabled in November 1984 by the President of the Treasury Board, it is no laughing matter that we see in every government Department tens of millions of dollars being required and being obtained by the Government of Canada through increased fees to the general public. It is not a laughing matter when the Government of Canada tells everyone that they have to pay for their telephone calls to the weather office. The Government of Canada should be encouraging fishermen and everyone else who needs weather updates to telephone the weather office, not discouraging them. It is no laughing matter to have the Minister of the Environment increasing park fees to such a degree.


An Hon. Member:: She didn't.


George Baker: I hear the Hon. Member. 1 would like to tell her that they just came out a couple of days ago in our region. They were some of the hidden costs. There will be approximately $9.2 million in increased revenues for the Department of the Environment through increased user fees in national parks.
What does that mean? I will tell the committee what it means for a family. It means in Terra Nova National Park in Newfoundland that to tie up or moor one's boat, the charge will start at $110 for the season and go up to $590. In view of the imposition of that kind of fee scheduling in national parks, I say to the Minister of State for Finance that people will not use the mooring facilities or the wharfs. Therefore that $9.2 million will be substantially reduced.
Let me look at another fee in national parks, the one related to the use of golf courses. It will cost a family over $500 per season. Obviously people will not use the golf courses on a regular basis. Therefore the $9.2 million will be reduced even further.
In that same "little" saving, according to the Minister of State for Finance, we also see an increase in the cost of semi-serviced lots for people using camp facilities. To what will the increase amount? According to the Government of Canada, it must be equal to or more than that offered by private enterprise. Consequently those charges have risen to exceed those of private enterprises adjacent to national parks.


An Hon. Member:: Equal to.


George Baker: I hear the hon. gentleman across the way. 1 should like to tell him something. The fee for a semi-serviced lot in the Terra Nova National Park is over $8. Since the Hon.
Member wants me to get specific, in Beothick Park at East-port, the charge is $7.


An Hon. Member:: I didn't say that.


George Baker: Perhaps he did not say it, but I will tell him in any event. Even down at Trinity Cabins, the charge is $7. The Government's increase is a substantial one over the rates charged by private enterprise. There is no place in Newfoundland where one has to pay to moor a boat, so what did the Department say? It said that it would have to go by a national standard of dockage fees somewhere in central Canada. At what did the Department look when it looked at golf course fees? It said that it could not compete with private enterprise, so it would increase the rates more than those of private enterprise.
Apart from that, things have happened to the Government since these projections were made which could substantially impact upon its requirements. I give as an example for the Minister of State for Finance the protectionist tariffs imposed by the Government of the United States on Crown corporations involved in international marketing practices. Obviously they will impact upon the requirements of Crown corporations which, by law, would have to be written off by the Government of Canada. The Government cannot say that they will not have any impact at all.
The Prime Minister is in his own riding tonight attending a meeting. He has to answer to 700 fish plant workers who are being discriminated against by the United States protectionist tariff on saltfish. These workers went to the Prime Minister prior to the Quebec Summit and told him that this problem would arise. The Prime Minister indicated that he would raise it with the President of the United States and that he thought there would not be any problem. On Thursday night, at nine o'clock, down comes the decree from the United States Department of Commerce indicating that there would be a 20.75 per cent tariff on saltfish from the north shore of Quebec, affecting the riding of the Prime Minister, my riding and several other ridings represented in the House. That does not have to be made up by private enterprise. That has to be made up by an agency of the Government of Canada, and that one action will cost that agency millions and millions of dollars. It has been established by law that that Crown corporation must buy all saltfish from fishermen in its coverage area, which includes the entire Quebec north shore and all of Newfoundland.


Fernand Robichaud: And Labrador.


George Baker: And all of Labrador, yes. I am not talking about the tariff imposed on saltfish as it relates to private companies. They have been subjected to an 11 per cent or 12 per cent charge by the Government of the United States, but in this case with 20.75 cents on the dollar, the Department of Fisheries and Oceans will have to come up with the difference to make up for the tariff.
The Minister of State for Finance should realize that when establishments which are in place as a result of regulations.
June 17, 1985

Crown corporations, announce to fishermen in the riding of the Prime Minister, or for that matter in any riding in Newfoundland or Labrador, a new price structure for the coming year, as was done three weeks ago, they have to pay that money. On top of that, fishermen have to be compensated for the U.S. tariff. They cannot compensate by charging fishermen less because by law this particular corporation announced its fee structure.
I have another example for the Minister of State for Finance. The Government indicates that it will triple the rates. After looking at the statement of the Hon. President of the Treasury Board, who was only doing what he was ordered to do by Cabinet in November 1984 and in the subsequent statements emanating therefrom, we see that the cancellation of several federal government programs was announced. For example, the cancellation of the fisheries vessel insurance program was announced. What did the Liberal Opposition do in this Chamber? It rose and said that the Government could not cancel it, that it had to reverse its decision. The Minister of Fisheries and Oceans rose and said that that program could be cancelled because the President of the Treasury Board said so. However, as time went on, and as we in the Opposition put on the pressure, the Minister of Fisheries and Oceans realized that he could not cancel that program and that therefore he could not save the projected $8 million. He could not save the money, so what did he do? He turned around and said that he would triple the rates. We are back into the same situation of having tripled rates and fishermen, who do not require it because the loan authority does not demand it, are not getting the insurance. In that event the projection of the Department of Fisheries and Oceans as far as the $8 million is concerned goes completely out the window.
The Minister of State for Finance and the President of the Treasury Board have to go back to the drawing board. They should ask the Minister of Labour what he is going to do when every provincial administration says that he has to increase the federal minimum wage. What will that do? It will increase the cost of every single contract the Government has with security companies and cleaning companies in airports. It will increase charges to the Government through the Department of Public Works and the Department of Supply and Services.
The Government has to increase the minimum wage. It said it was not going to do it, but I say it will have to do it and very quickly because the federal minimum wage, for the first time in our history, is less than that of any province in Canada. Tory times are hard times. In your province, Mr. Chairman, the minimum wage is $4.58 an hour and the federal minimum wage is $3.50 an hour. That cannot continue because it violates the Labour Code. The Code does not spell it out directly, but it does say that it must reflect the average minimum wage rate across Canada and there is no way the Government can get out of it. But it has not included that in any financial statement or expenditure review program.
Borrowing Authority Act
So my original question for the Minister is very relevant. What are the actual projections? What is it going to do? There are big gaps in the program announced by the Government to raise fees, increase rents and everything else. You know that a lot of these programs have been cancelled or reorganized. So the question to the Minister was a perfectly logical question and 1 would be pleased now to take my seat and-


Some Hon. Members:: Hear, hear!


George Baker: If the Minister will recognize that I have a legitimate point, then yes, Mr. Chairman, I will take my seat. But I am sure you will recognize me again if she says that it is only a flash in the pan, that a couple of hundred million dollars here or there or everywhere does not really matter.


Barbara Jean McDougall: Mr. Chairman, I never suggested that the question was not a terribly serious question. 1 indicated that in my considered opinion the impact would be marginal. The reason for that is that we have been working very hard as a government to cut our expenditures and keep the management of government services under control. If there are adjustments within departments they will be within good management practices, and if there are additional expenditures, as the Hon. Member well knows, they will have to be approved by the House, will they not?


George Baker: Mr. Chairman, 1 do not think the Minister completely understands what 1 am talking about.


Mr. Lewis:: Even Herb Gray is leaving.


George Baker: I was requesting some indication from the Minister about just how much money was going to be required by every Government Department in order to function.


Mr. Oberle:: You have the figure right there.


George Baker: Let me elaborate some more, then perhaps the Minister might be able to understand what 1 am talking about.


Barbara Jean McDougall: George, I can hardly wait.


George Baker: Right now, at this very minute, the Government of Canada has decided to cut back on person years in its various departments.


Philip Derek Lewis: What?


George Baker: To cut back on person years. We used to call it man years, now it is person years.


Philip Derek Lewis: The Minister understands that.


George Baker: The Government notified every federal Department that there must be a cut-back in the number of people hired in the Departments. The Government talks about savings in person years, but nowhere in the financial statements or the Budget papers does it indicate what the increased costs will be to the Government. Yesterday we heard the Government was going to cut back the number of RCMP officer in certain

June 17, 1985
Borrowing Authority Act
airports. They will be replaced by private security companies. It is one thing to do that, but it is another thing when Government Departments bring in an employee who has been working for 19 years, as was the case with one I had the other day, or 10, 12, or 13 years, and saying to them that we cannot afford to pay them because our person-years have been cut. However, we will offer you a personal contract. 1 do not see that in the Department of Supply and Services' envelope, Mr. Chairman.
For example, what actually happens is that 350 employees of the Small Craft Harbours section of the Department of Fisheries and Oceans across the country will be offered a personal contract or be hired through a private engineering or consulting company to do their work. As a result, all those Departments which have been cut back will now have to supply money to the Department of Supply and Services to pay for those personal contracts, or that Department will have to pay.
Here is the shame of it. With that policy, the Government still has to pay wages, overtime and an amount to make up for the loss of benefits, but it also has to pay a profit to the person who is hiring the worker concerned. So when you ask the Department of Supply and Services how much extra that person-year is going to cost the Government, they say from 25 per cent to 30 per cent more. But what do you see when you look at the financial papers? You see a saving because of cuts in person-years. There are orders given to Government Departments to cut back on this or that function or to cancel this or that program. There are only six or seven small craft harbours people who are in the field now in Newfoundland. There are only 10 or 12 of them in Nova Scotia and 30 or 40 in Quebec. However, this adds up to about 300 people. This measure in the budgetary papers appears on only one line.
However, these people are losing their positions as public servants. They are losing their pensions and all of their benefits for all time and they are being offered a personal contract or the opportunity to work through a private consulting firm. These people are professional engineers. They have always done that type of work. They go to the communities along the coastline of eastern Canada and the Arctic to help build wharves, slipways or breakwaters. They consult with local community groups who apply for what we used to call Canada Works programs before the present Government got its hands on them. We do not know what that program will be called in the fall.
It is true that the service to the community groups and the local organizations will still exist. However, it will exist at an increased cost to the Government of Canada. It is not, as the budgetary papers would show, a reduction in the cost of Government. It is not a reduction in the amount of money required just because there is a reduction in person-years. It is actually an increase to the expenditures of the Government of Canada because it has to pay for those contracts, either directly or indirectly.
Let me deal with another area that is hazy. I am again discussing the Minister of Labour and a matter that has not even been discussed in this Chamber. It is a matter that should have been discussed; there are a great many matters like that.
The announced reductions in the Expenditure and Review Program of the President of the Treasury Board and the statement made by the Minister of Labour indicate that the Government is going to save money by cutting 25 per cent of the budget on the home repair program across Canada. That shows up as a 25 per cent reduction in the Expenditure and Review Program and in the Budget papers. This works both ways. In this particular case, the reduction will be greater than 25 per cent. Why is that?
1 do not think that the cuts contained in these Budget papers and the Expenditure and Review Program was completely fair. Newfoundland got cut by 44 per cent and Quebec got cut by 48 per cent while the national average was 25 per cent. How the Government arrived at those figures, I do not know. However, when this cut was made, the Department, the Minister, the President of the Treasury Board, the Minister of Finance and all Members of this Chamber did not realize something.
When the cuts went into place only a month ago, all of these offices that administered the program that was cut by 25 per cent through this Expenditure and Review Program could no longer exist. They existed on the fees that they received for the number of applications they processed. That figure was an average of $450 across the country, $500 if it was a municipality and $1,300 if it was in the north. The salaries of the clerks, inspectors and managers were paid on the basis of the number of applications that were processed. Along comes this Expenditure and Review Program which cuts everything across the nation by 25 per cent and cuts some provinces by more than 40 per cent. All of a sudden these offices were left with one-third of the money they had to spend last year, money on which they were just getting by. They could not process enough applications to maintain their existence. The offices are therefore closing down.
The Minister of Labour should know about this. Obviously his advisors have told him that last year some areas were extended for coverage under this home repair program. Big announcements were made in every single province of Canada indicating that the Government would extend this program, just like it did last spring. All of a sudden the Government was left with all of these extended areas but a budget that was cut by 25 per cent. All organizations that were operating the RRAP program got hit twice. They got hit by the reduction of 25 per cent and they got hit with another reduction because the areas of coverage were extended.
What are we now left with? We are left with hundreds and hundreds of homeowners in every single community in this country who are being told that they are too far down on the list to be serviced. However, they were told last year that their turn was coming up next. Now the CMHC and the provincial housing authorities are devising criteria so that they can knock people off the list. If they have a list containing 500 families

June 17, 1985
and they know that they cannot deliver, they say that they are going to restrict the criteria and make it more difficult to qualify.
This is happening when all of these people felt that the home repair program was a cheap way to get their homes repaired, because anyone could get a loan to cover the cost. If one was a millionaire, one could still get a loan. Anyone qualified for a loan. The public felt that this was a great program. All homeowners needed to do was establish the fact that they needed that loan, based on the size or condition of their dwellings and the size of their families. Now, because of this new measure brought about by the reduction in expenditures, there are hundreds upon hundreds of people who will not be able to receive the benefits of the program which has been hit by the 25 per cent cut.
The Minister of Labour cannot now turn around and tell the Minister of State for Finance that he needs additional money because the program was not only cut by 25 per cent but was knocked out of half the country. Now all these areas of Newfoundland no longer qualify because there are no longer any RRAP offices in operation. The provincial administrations refused to operate the program and, since they refused to operate the program and pay the salaries, those offices have to close.
The Minister of State for Finance should realize a couple of realities as they relate to eastern Canada. There has been one of the worst fishing seasons in living memory. The ice is still blocked in on certain parts of the coastline. Fishermen are unable to fish. Fish plants are unable to operate. Even in areas where the ice went out, the water is still too cold for fish. If the water is very cold, the fishermen cannot fish.
Now the Government of Canada has made an about turn. The Minister of Justice announced on behalf of the Minister of Employment and Immigration that the Government would extend unemployment insurance benefits for fishermen this year because the fishery is bad. What was the mistake which was made in the submission to Cabinet, that was approved, which appears in the expenditure program of the Department of Fisheries and Oceans?
The error was that the Government thought that it was just as bad a year this year as it was two years ago when a similar program was implemented. In other words, the Government is going to be faced with the reality this week of having to approve more money for that program. Once the Government has announced it, it cannot stop it. The Government cannot tell people that they will receive an extension of unemployment insurance benefits and then say that it only meant to provide an extension of two weeks. The announcement indicated that the benefits would be extended until the ice was gone and the fishermen could once again fish. That is what was in the announcement of the Minister. Therefore, the Government of Canada, because of the adverse weather conditions, the temperature of the water, and the ice that surrounds the coastline, knows that it must cough up more money in order to satisfy
Borrowing Authority Act
that program and the terms and conditions which were announced by the Minister of Justice.
Changes will have to be made before the end of the summer. The Minister of Employment and Immigration recognizes that some changes will have to be made as far as her general policy is concerned. She said that she would save $250 million. The Minister of State for Finance probably is thinking that $250 million is only marginal. However, $250 million would reduce the borrowing authority to only $18 billion! Presently it is only $18.2 billion! The Minister of Employment and Immigration has announced that she will not need approximately $200 million this year because of reductions and redefinitions within the Department that controls unemployment insurance. The figure that is used in the Expenditure Review Program is absolutely crazy.
The Minister cannot say in a financial review that she will save $200 million in the coming year because modifications will be made to the interview process for unemployment insurance purposes. I would like to tell the House why that is wrong. The Minister is talking about bringing people into an unemployment insurance office and interviewing them. The Minister is talking about picking up the telephone in every office and asking people if they are looking for work. If those people cannot be reached-Mr. Chairman, I see that my time has expired.
I am sorry that there is not another Clause in the Bill. I have not yet said what I wanted to. However, I suppose my time has expired. I will conclude by saying that in passing this Bill we will give the authority to the Government of Canada to borrow $18,200,000,000, give or take $600 million!


Some Hon. Members:: Hear, hear!


Nelson Andrew Riis: Mr. Chairman, I have a number of questions I want to ask the Minister of State for Finance. I know that the House would like to pass this Bill quickly, but I would remind the Minister that the Bill involves $18 billion. The Minister is familiar with the amount of deferred corporate tax which is presently on the books. Could she give us an approximate idea of what that sum is?


Barbara Jean McDougall: Mr. Chairman, I would be very happy to tell the Hon. Member what is the current amount of the deferred corporate tax. However, I would first like to explain to him that the most important expenditure which the Government makes is on the interest on the debt. The interest on the debt is $22.6 billion. That is more than we are able to pay for health care, Old Age Security and other things. It is because of that debt that we must borrow this money. Had we not inherited the profligate record of the former Government, we would not be in this position and we would be able to get on with the job of managing the Government and the programs in which we, as a Government, are so interested.
The good management which we have brought to the Government is a record in which we take some pride. Our expenditures show the lowest increase in 17 years. Ministers are managing their Departments in a manner which keeps their

June 17, 1985
Borrowing Authority Act
expenditures under close control. We have been able to establish an exceptionally good record for expenditures on training and employment initiatives which involve the private sector and local communities as well as the federal Government. It is very important for the Hon. Member to know those things. He should also recognize the efforts which we have made in inflation control and in bringing the debt to a level we will be able to manage much more effectively in future years.
I should also point out to him that in response to the wishes of the House, and as an act of good management, the Borrowing Authority Bill was introduced within two days after the presentation of the Budget. Of course, that means that our figures are up to date. We recognize the connection between having good records before the House and being able to make an assessment of the amount of borrowing authority which will be required. The responsible actions which we have taken are a very important part of the future financial management practices of the Government. The fees to which the former Member referred are part of our management practices. I believe that we have established the most appropriate way to deal with the deficit and the accumulated debt. As a result, we will be able to ask for less borrowing authority next year than would otherwise be required.
One of the important items we have brought forward-and I know the Hon. Member will be interested in it-is the review of corporate taxation. That review will be under way shortly. We are looking at all the measures we use in the corporate sector to raise money. We are also looking at how the corporate tax structure should be changed so that it will be fair and equitable, and will raise the revenues the Government needs. That will give us more flexibility in revenue and expenditure planning.
We are attempting to ensure that Canadian people have the jobs and the social policy framework which they require for the future. And I think what we have attempted to do in the small sector is going to be very important to that.
In response to the direct question, I will get back to the Hon. Member with the answer. I might tell him, however, that the underlying principle of classification, of course, as between budgetary and non-budgetary transactions, is that transactions changing the net indebtedness of the Government are classified as budgetary while transactions involving the creation of an offsetting financial asset or liability are non-budgetary. For example, a loan by the Government increases financial assets since the recipient incurs an obligation to repay the loan. And the creation of the asset for the Government is offset either by a reduction in another asset, which is typically cash, or a corresponding increase in a financial liability, which is typically unmatured debt. I am sure that answers the Hon. Member's question.


Nelson Andrew Riis: Mr. Chairman, I am not sure if that answers my question or not.


Victor Fredrich (Vic) Althouse: We were looking for a number, I think.


Nelson Andrew Riis: Is the Minister saying that it is at this point difficult, if not impossible, to arrive at a figure for the amount of accumulated deferred corporate tax? I am not looking for a specific number but even within 10 per cent or 20 per cent would be helpful. Surely the Minister must have some general idea.


Barbara Jean McDougall: Mr. Chairman, I think what I am indicating is that we do not have the number in our documents, but obviously there will be a lot of variables in the future as to what the implications are, and it will depend on corporate revenues and profitability, how that is effective over time and how much investment corporations continue to make.


Nelson Andrew Riis: Let me be more specific, Mr. Chairman. I don't want to pursue this needlessly but what I want to know is, as of today-not what the future holds-what is the existing value of deferred corporate tax? Is it $20 billion, $5 billion, $18 billion? That is the question. It is not what is going to happen but what it is as of today when we are requested to approve $18 billion in borrowing authority.


Barbara Jean McDougall: Mr. Chairman, perhaps if the Hon. Member would indulge me for a moment, one of my officials will attempt to get an answer to that question.


Nelson Andrew Riis: Thank you. I would appreciate that. Again to set some of the Minister's earlier comments into context, regarding the amount of money this year-the 1985-1986 fiscal year-what is the value of the corporate tax expenditures for this period? Is that question clear to the Minister?


Barbara Jean McDougall: No, not really.


Nelson Andrew Riis: In other words, we know what are certain costs to the Government. This particular provision costs the Government this much and another provision that much. A lot of people ask the question in terms of the corporate expenditure account, such as the Minister laid out back in 1979. He laid out what the accumulated value of that was, as well as under the corporate tax expenditures for the various programs so that we could evaluate. While the Minister says this may be done in the future or this will be evaluated, could we have some idea of the total value of corporate tax expenditures in the country?


Barbara Jean McDougall: Perhaps when my other official comes back he could change places and one of them will try to find out. I doubt that we would have a record of that, Mr. Chairman.


Nelson Andrew Riis: Mr. Chairman, the Minister has indicated that there is a great deal of fiscal management now in place in the various Departments as reflected in the Estimates and the generation of the Estimates. Within the Ministries and Departments which come under what is called the "social envelope", how is it that the Government evaluates the efficiency of its expenditures? In other words, we have had projections from previous speakers if we cut 10 per cent here
June 17, 1985

or 25 per cent of this program. How does the Minister evaluate whether or not these programs are effective?


Barbara Jean McDougall: Mr. Chairman, all that would be up to individual Ministers, not up to the Department of Finance. The Ministers themselves bring judgment to their Departments. There has obviously been a great deal of overspending in the past, and it is a case of looking at each envelope on social programs and bringing the best judgment to what is effective; have the needs in the country shifted or have they not shifted. Those are ongoing evaluations which I believe any intelligent Minister would make in a social portfolio as well as an economic portfolio-I think we owe that to the Canadian public-so that we do put our resources to work in ways which deal with the present and the future and not with the past.


Nelson Andrew Riis: Mr. Chairman, perhaps the Minister could respond to this question, and it is one which is on a lot of people's minds these days, that is the critical cuts in pension increases which has been debated. How did the Government evaluate that in terms of deciding that this was an appropriate action at this point in time to reduce the increase in OAS?


Barbara Jean McDougall: Mr. Chairman, I think the question of the evaluation which would be done by the Minister of National Health and Welfare should probably be directed to him. In terms of the Department of Finance, the Minister of Finance in bringing this Budget made an assessment of how we could meet the real needs of the elderly poor, which was why the Guaranteed Income Supplement was fully indexed, and we took into account that most Canadians we spoke with in our pre-Budget consultations all suggested that we ensure, if we only had a limited amount of money-which the people understand in this country-that we look after the neediest people first. That is why the evaluation was that the Guaranteed Income Supplement should remain fully indexed, and we were more than prepared to do that.
We have tried to be as fair as possible in spreading through the system how we deal with the problems we have. It is always a very difficult line to draw and we brought our best judgment to that. I think that we will find before our first term is up that social policy will give us more flexibility. This is our first Budget and not our last.


Nelson Andrew Riis: Mr. Chairman, what I find interesting, in light of the Minister's last response is that she will know, of course, as everyone in the House knows, that as a result of the deindexing of the increase to OAS, 220,000 pensioners will now be receiving incomes which place them below the poverty line, by the government's own definition of "poverty line". When one sees 220,000 seniors now living below the poverty line, one would have to say that that is inappropriate; it surely is not an appropraite step to take. However, Mr. Chairman, we will leave that for another discussion at another time.
With respect to this Bill before us, the Minister is requesting SI8.2 billion in borrowing authority. She obviously feels that reducing a senior's disposable income by 3 per cent will not cause undue hardship. How would the Minister feel if Hon.
Borrowing Authority Act
Members of the Opposition tonight decided that it might be a prudent measure to reduce this borrowing authority by 3 per cent which would eliminate $546 million? If 3 per cent is nothing to worry about, how would the Minister feel if we moved an amendment later tonight to reduce it by 3 per cent?


Barbara Jean McDougall: Mr. Chairman, the Government is attempting to manage its affairs well and will continue to do so. We have budgeted very closely and would prefer not to borrow any money at all. The easiest government policy in the world is to write a cheque. The former Government did that time after time. It is the easy policy, but not one which is fair or good for the future of the country.


Nelson Andrew Riis: Mr. Chairman, we are certainly concerned about the amount of government spending, but by the same token we do not talk about the hundreds of millions of dollars that are being offered to all sorts of sectors of the economy which we might feel are highly questionable. In order to bring some wisdom to the way in which funds are expended by the Government, it may be appropriate to reduce the amount by $546 million in order to bring some extra pressure to bear. We are certainly not prepared to accept the priorities of the Government in terms of expenditures and cut-backs. The increased user fees in many areas are inappropriate, particularly now that we are giving vast sums of money to the oil companies as a result of the Western Accord.
If we are to give the Government authorization to borrow an extra $18 billion, it is not unrealistic for Members of the House of Commons to ask for some projections. During discussions on the Budget, it became clear that the Department of Finance has done these projections. They have factored in, as well as possible, the various elements of the economy and the Government's measures. Can the Minister give us any indication of what the Government programs will do in terms of increased employment?


Barbara Jean McDougall: Mr. Chairman, the record of this Government in terms of jobs has been very good. There has been a steady increase in the number of jobs. I think something like 235,000 have been created. The regular increase in employment has been spread throughout the country. The Western Energy Accord has resulted in greater investment throughout Canada. The jobs from the Western Energy Accord are not just in Alberta and the other energy producing provinces, they exist throughout Ontario and Quebec in the manufacturing sector. The number of jobs that have been forthcoming reflect the fact that there is a real awareness of Canada and a need for private sector initiative and development which will enable us to create those jobs. That is what we have done in this Budget.


Nelson Andrew Riis: The Canada Permanent Trust Company recently completed a survey of the forecasts of a number of business economists. Interestingly, none of the economists interviewed agreed that the promise of job creation by the Minister of Finance will succeed. About 20 per cent of those business

June 17, 1985
Borrowing Authority Act
economists interviewed expect the jobless rate to be higher than it was before the Budget.
The other day 1 read some comments made by R. B. Bennett during the 1930 election campaign. At that time he, too, was saying that they were going to create tens of thousands of jobs in the next number of years.


Ramon John Hnatyshyn: We have done it.


An Hon. Member:: Look at the facts.


Steve Eugene Paproski: Order.


Nelson Andrew Riis: They get a little sensitive when I remind them of what R. B. Bennett said. I suspect that if we compared the campaign rhetoric of 1930 with that of 1984 we would find some real similarities. Perhaps a little later in the evening we will have a chance to do that, Mr. Chairman.
The Minister commented on her wish list or hope list in terms of employment figures. With regard to the economic intelligence that she has from the Department of Finance, what does the Minister believe about disposable incomes of Canadians as a result of the Budget? Surely that is critical in terms of an economic recovery and in terms of encouraging the small business sector to expand. What do the Budget and the policies of the Government do in terms of disposable income for Canadians?


Steve Eugene Paproski: A very short answer, please, by the Minister of State for Finance.


Barbara Jean McDougall: Disposable income is a very important part of public consumption, just as business investment is. I know that the Hon. Member is very fond of quoting business economists indicated that our actions would lead to fewer jobs. They were not correct then and I do not think they will be correct now.


Nelson Andrew Riis: I would like to make one last comment and then 1 will give the floor to my hon. colleague. In order not to disappoint the Minister, I will once again quote her collection of business economists. In their analysis they say that the new tax measures in the Budget will drastically reduce the spending power of the average Canadian. The November statement of the Minister of Finance and the Budget will together take $1,000 a year out of the pockets of the average Canadian family through increases in taxes and reduced deductions. Mr. Chairman, $1,000 a family is going to have a very important impact on the ability of the small and medium sized business sectors to expand in spite of their best intentions. How is $1,000 taken from every family in Canada going to be useful in terms of encouraging economic expansion and development?


Barbara Jean McDougall: Mr. Chairman, the best thing that we can do for the country is to lower interest rates because interest rates get built into the costs that people pay. We have a responsibility to the people of Canada to ensure that in the future we will not have the kind of inflation and interest rate policies that we had in the past, which have cost the country so
dearly. They are the reason that we have a high unemployment rate and a high deficit. They are the reason that we must bring some sense into our fiscal framework which we have not seen in this country for many years. We are not taking money out of the pockets of the people for no good use. It is for the purpose of building up the fiscal integrity of how we deal with the future so that we are able to bring forward the programs and flexibilities that people will need in the future.


Mr. Hopkins:: Mr. Chairman, when the Minister of State for Finance and her colleagues promised the sky to voters last summer, did they not realize that they might have to face the music some day and pay for those promises? Can she and her front-bench colleagues not add and subtract? There is no justification for getting up in the House day after day and saying that they cannot do it because of the debt situation in the country. There was a debt situation last summer which they talked about all the time, but they still went ahead and made all kinds of promises. The Prime Minister even went to the extent of putting his name on a telex sent to the Chalk River Nuclear Laboratories in my riding of Renfrew-Nipiss-ing-Pembroke. He said not to worry one bit, that not only were they going to retain the present research facilities, they were even considering expanding them. Did the Prime Minister not realize at the time that there had been deficit budgeting in the country? Did he make that promise seriously? Obviously not.
The Government has just chopped 50 per cent from research and development in Atomic Energy of Canada Limited. The Chalk River Nuclear Labs are a very important part of that research and development. For the Prime Minister to go back on a promise is unforgivable, just as it is unforgivable for people on the front benches of the Government to state day in and day out that they did not know the country was in debt so they cannot keep their promises. Is that what the Prime Minister meant when he told the senior citizens of this country that their financial situation was a sacred trust?
The Minister of Finance introduces a Budget, along with the Minister of State for Finance and the Cabinet, that knocks out the first 3 per cent of indexing of the inflationary increase from the pensions of senior citizens of this country. The Government thought it could get away with this by saying that it would provide jobs for the children and grandchildren of pensioners. However, senior citizens of this country are smarter than the front bench of the Conservative Government because they can see through that ploy very easily. The Government is simply trying to make itself look good by cutting back.
A review of history shows that when Marc Lalonde left the finance portfolio, there was a $30 billion debt. When the Conservative Government took office, it ran that debt up to $38 billion and brought it back to $34 billion, then suggested that it had made great progress. That is their logic.
Since the Conservatives follow their great process of consultation, did the five or six conservative MPs from the Ottawa area suggest to the Minister of State for Finance that the
June 17, 1985

Public Service of Canada should be cut by 15,000? Did they support that concept? Was it the Minister of National Health and Welfare who suggested to the Government that it cut research and development in Atomic Energy of Canada Limited by $100 million? He has Whiteshell in his constituency, another AECL facility. I doubt very much that he made that suggestion.
The Prime Minister of the country not only promised but made a commitment to the Chalk River Nuclear Laboratories that there would be no cuts in that institution. He knew full well at the time that there had been deficit financing in this country. The Government cannot deny that there was insincerity in that promise and that it was absolutely unfulfilled. Not only did he not fulfil that promise, the Government wants to make itself look good by removing money that those labs have managed to earn. It will lift $50 million from AECL's reserves this year and another $20 million from its reserves next year and are applying it to the national debt. Those labs will be left with nothing to back up the situation they will be facing as a result of the $100 million cut on research and development.
One of the platforms on which the Government ran during the election was that it would increase research and development in the country and fully encourage it. The Minister of State for Science and Technology, who has four degrees behind him, went to the Chalk River Nuclear Laboratories to visit the scientists and declare his friendship. He is certainly not a friend today. He is following the Government without any sympathy for the fact that $100 million is being but back from research and development, which is 50 per cent of the Government grant to that institution.
We are sometimes told not to raise the question of the Avro Arrow because there is no comparison. I say that there is a comparison because Atomic Energy of Canada Limited has some of the finest engineers, chemists, physicists, and scientists in the country. Furthermore, the Government is driving the talent away from the National Research Council. It cannot stand success.
It took years to build a success story in research and development in this country. For example, cheap hydroelectric power has been produced through the nuclear reactors in this country. The Province of Ontario alone has saved the residents of Ontario billions of dollars in energy costs by providing energy from Candu reactors. Canadians take it for granted that everyone knows about these successes, but obviously the Government does not know. Without those reactors which produce the cheapest form of hydro that can be found, central Ontario, the home of the Minister of State for Finance and the Minister of Finance, would not have the energy resources to run those industries, factories and businesses in Toronto.
The Minister of Finance talks about rewarding success. However, the way he rewarded success was to chop 50 per cent from the research budget of the very people in AECL who have saved Canadians billions of dollars in energy costs alone. The Government cut $100 million from the research and development budget of AECL and also took $70 million from its reserves without warning. Furthermore, it has proposed no
Borrowing Authority Act
alternative. While it proposes to charge users more, there is no firm agreement in that respect. Although there are those who say the cut-backs will not be so detrimental, why is the Government sending public relations officers to those institutions to offer early retirement in order to reduce the number of jobs by 450? Even that will not be enough to cover the bill, and others will have to be laid off.
Again, the Government is downgrading one of the finest research establishments in the country. I was told by one Member that it is not paying its way. However, that is another story. Many companies, both domestic and foreign international companies are related to the nuclear industry in this nation. They send programs to the Chalk River Nuclear Laboratories and other facilities at AECL to conduct research and development. Once their problems are solved, they use those solutions in their industries. That is the pay-off. The Government is slashing that capability. It is saying: "Okay, tomorrow you face the music; we will not give you any more money for it or any time to bridge the gap."
I have another very good example. The present Minister of Supply and Services said outside the base gate at Petawawa in my home community during the election campaign that if the Conservatives were elected, they would increase in real terms national defence expenditures by 6 per cent. I am sure Hon. Members remember that famous pamphlet, Honour the Commitment, which was circulated among Canadian Armed Forces personnel. Where is the honour and where is the commitment today? The Government is not even meeting the NATO commitment decided upon by NATO Ministers.


Paul Wyatt Dick: It is better than the Liberals did.


Leonard Donald Hopkins: I hear the Hon. Member for Lanark-Ren-frew-Carleton. He just proved that he does not know what he is talking about. When we left power, we were at a 4.1 per cent real increase in spending on national defence, and the Conservatives are away below that percentage today.


Paul Wyatt Dick: Are those your projections or what you were spending?


Leonard Donald Hopkins: The Hon. Member is good at coming into the House and shouting. Sometimes he is better at it from the seat of his pants than from the soles of his feet. Another example would be the promises to the agricultural industry, all those great promises to help out farmers.


John Kenneth Gormley: Capital gains.


Leonard Donald Hopkins: The Hon. Member refers to capital gains. That helps them get out of farming. It does not help them to remain in farming, to become involved in farming for the first time or to help those in trouble in the agricultural industry. That is what the Hon. Member's Party promised to do during the election campaign, and it has not been done. Let us talk about subsidization and assistance to farmers. Today, Canadian farmers are competing with the European Economic Com-

June 17, 1985
Borrowing Authority Act
munity and its great subsidizations to agricultural industries in European countries. Agriculture is one of our greatest industries. However, people do not look upon it as an industry. They look upon it as a bunch of homes in which people live. Agriculture is big business today, and it is time for everyone to recognize it.
What will happen to all the equipment promised for the Canadian Armed Forces? Thank goodness the Liberals got most of it ordered and on stream before they left office. Otherwise, the Armed Forces would certainly not have it today. I am sorry that the Deputy Prime Minister and Minister of National Defence is not in the House this evening. Where is the pay increase for the Canadian Armed Forces? They have been looking for it for weeks, indeed for months. Why was it not announced in April? Is the Minister of State for Finance prepared to tell us today where that increase is?
The Minister of National Defence himself did the cutting as chairman of the cutting committee in Cabinet. Is he saying that the money to pay for the increase for the Armed Forces is in this package? We have not been told about that. All we have is a one-page Bill which does not tell us a thing about that. I ask the Minister of State for Finance, where is the pay increase for the Canadian Armed Forces? Is the Government holding it up as a money saving device as well? Is it holding it up the same as it is trying to hold 3 per cent back from senior citizens on an annual basis? The Minister says that it is only 3 per cent, but what will it be over two, three, four or five years?
It is great to go out in an election campaign, as did the Conservative Party last summer, and make all kinds of promises. However, when it comes time to keep them, that Party says that it did not know there was no money and that it cannot do those things. People are sick and tired of hearing that from the Ministers on the government front benches. An Hon. Conservative Member from the Cobourg area-the name of his riding escapes me at the moment-at a committee meeting one night at least had the courage to say to the Minister of National Defence that it was time that he got off his butt and started to give some answers. He also said that it was time for the Government to get off its collective butt and to start giving some answers. Now that the answers are forthcoming, we know why they were so long in coming. These people did not want to give those answers in the first place.
During the election campaign, the Prime Minister ran around the nation and called the interest of the senior citizens a sacred trust. He said that nothing would happen to them and that they would be looked after. Afterwards, in a rather underhanded manner through the Minister of Finance and his colleagues, he proceeded to pull 3 per cent out from underneath them on an annual basis. Also, he placed a half page ad in a local newspaper which indicated: "You are safe". He indicated that they were committed to full funding and to the full operation of the Chalk Nuclear Laboratories. He indicated that they were safe in Conservative hands, that nothing would happen to them. However, a few months later, after being in power, they chopped $170 million and have no shame about it. That is the worst part of it. The people out there are beginning
to know the scenario and what this new Government is all about.
Also, the Government said that it would increase jobs through the private sector. However, it goes into regions of the country and cuts out many jobs.


Steve Eugene Paproski: Order, please. I regret to interrupt the Hon. Member but the 20-minute period is over.


Ian Deans: We will give him an extension if he would like more time.


Abram Ernest Epp: Mr. Chairman, I should like to ask some questions and focus them on th area which the Hon. Member for Kamloops-Shuswap was exploring before. I am pleased to see that the official has returned, and I trust that the Minister of State for Finance has some idea by now of what the total deferred taxes might be. Perhaps I could ask for that particular figure before expanding on it and raising some further questions. Would the Minister of State for Finance have an indication of the total of the deferred taxes?


Barbara Jean McDougall: Mr. Chairman, we are still looking at that. It will arrive before this session draws painfully to a conclusion. Perhaps I might indicate some of the things which have been happening in our economy that I should think-


Abram Ernest Epp: Mr. Chairman, I would prefer to ask some questions, not to hear a speech.


Barbara Jean McDougall: Mr. Chairman, I would have preferred not to have so many speeches, too, but there seems to have been quite a number from the other side. Perhaps I could just point out for the edification of the Hon. Member who used to, as 1 recall, as did many members of the Opposition, talk a lot about jobs, that I do not hear them talking about jobs much any more. I wanted to correct the figure I gave earlier on the number of jobs created because there actually have been 271,000 jobs created. Employment increased by 159,000 in April and May, the largest two-month increase in over 12 years. The seasonally adjusted unemployment rate declined to 10.5 per cent in May from 10.9 per cent in April. The unemployment rate in May was the lowest in three years. Almost 80 per cent of the increase in jobs was in full-time employment. Youth unemployment rose significantly while adult employment grew moderately.
After the painful, painful increase in unemployment this country has suffered for so many years, that is a record this Government can be proud of. Of course, Hon. Members on the other side of the House do not talk much about employment and jobs any more because they know we have a good record in that area and that our measures have worked. We are creating jobs and opportunities for Canadians, and that is a record we can be proud of. Hon. Members now choose to ignore that. They have lost interest in jobs for Canadians all over this country.
June 17, 1985


Abram Ernest Epp: Mr. Chairman, the concerns we feel about creation of employment in order to get this country back to 4 per cent unemployment do not need any lectures from the Minister.
To return to the topic I was raising a moment ago and picking up on what my friend from Kamloops-Shuswap had to say dealing with deferred taxes and corporate tax expenditures, let the record show that a good hour of questioning of the Minister has not given us the total of deferred corporate taxes. I do not doubt that the search through the records and the guesstimation required would produce an astonishing figure. Surely tens of billions of dollars have gone uncollected, have had to be borrowed and added to the national debt because of this situation. The key point is there has not been any change in nine months of this Government. Nor was there much change in the nine months of the previous Conservative Government.
The question I have for the Minister, one which interests every taxpayer in this country, is what the grand total might be of taxes not collected but which have been turned into capital for Canadian companies or distributed to shareholders. If the total were to reach $100 billion, something over half of the national debt, that is money on which interest is being paid by taxpayers now for the enrichment of corporations and wealthy Canadians. This Government and these Ministers, present and absent, do not intend to do a damn thing about it by the appearance of things. There has been little talk about looking at corporate taxes, but it is primarily at where the losses could be pulled in so as to reduce one's tax burden.
The taxpayers of this country have been told this year they are going to pay three times as much tax as the corporations do, about 45 cents out of every dollar Ottawa takes in comes from individuals and only 15 cents from corporations. Taxpayers have been flimflammed by this Government talking about the enormous national debt, but they want to know exactly how much of the wealth of Canada was taken out of their pockets. They want to know exactly what proportion of their taxes is the result of allowing nine corporate family groups to acquire something like half of the stock traded in the TSE 300. They want to know exactly how much this Government and previous Liberal Governments have taken from their pockets in the process of making a handful of Canadians spectacularly wealthy.
It is appalling that a Government which has been in office for nine or ten months does not have any idea of what those figures are. It is surely appalling that a Government which would pride itself on being business-like has no idea what those figures are. Individual taxpayers of Canada, those people we have talked about ad nauseam, as the Government would probably say, have a very great interest in knowing exactly how much of their tax burden is the result of this transfer of wealth. They want to know if these cut-backs by the Government are the result of taxes not collected from the wealthy.
If ordinary Canadians saw that figure, they would be astonished. It is quite possible that $100 billion is an underestimate. The borrowings being undertaken by the Government now
Borrowing Authority Act
move us up toward a debt of $200 billion. If ordinary Canadian taxpayers were to realize that this supposedly business-like Government is in fact a Government from Wall Street and Bay Street and does not give a damn about them and is quite ready to let this game go on, there would be a revolt in this country which would make the pensioners protest over the last few weeks look like just the beginning.
I suggest to the Minister of State for Finance and her colleague the Minister of Finance that it is time we knew what a reasonable estimate of corporate tax expenditures will be. It is time we knew what the deferred taxes totalled. We have a right to know exactly how much of the national debt is money that ordinary Canadians are paying to enrich corporations and their owners, and in particular a small number of the wealthiest Canadians. That is the kind of capitalism that exist in this country today.
I really do not believe it is true for all of them, but if Conservative Members really want to continue with that kind of refined exploitation of our tax system both on the corporate break side and the individual burden side, let them be clear with the public that that is what they want to do. They will discover the extent to which the voters of 1988 or 1989 will reject this Government.
With those comments, I would invite the Minister to give us any kind of firm figure she might have on corporate tax breaks. Is she able to tell me that the total which I have suggested is outrageously high, and that individual Canadians are not paying anything like that total to enrich a few, or is she not? Does she have to confess the ignorance of the Finance Department and the imperative need to get on with the job of gathering information in order to make the national accounts of this country as business-like as they ought to be?


Barbara Jean McDougall: Mr. Chairman, I am really quite surprised at the Hon. Member for indicating for the record how long it was taking to find an answer to the question. Let the record also show that the question was asked at around 6.30 p.m. As we all know, the Department of Finance is a union shop. It takes a little time to get information in the evening.
I might also indicate that the kind-


Ramon John Hnatyshyn: I just phoned your office and it had been closed since three.


Abram Ernest Epp: It was open at five when I came over here.


Barbara Jean McDougall: That late?


Steve Eugene Paproski: Excuse me. I hate to interrupt this conversation. Perhaps the Minister of State for Finance could answer the question.


Barbara Jean McDougall: Along with the kind of muddle-headed thinking we have heard around here is the Hon. Member's indication that only rich people are going to benefit from this

June 17, 1985
Borrowing Authority Act
Budget. This is a point Opposition Members never tire of making, even though it does not bear any resemblance to the truth. The kind of investment we are going to see from this Budget and from our economic policies is going to create the jobs that Members of the Opposition and Members of the NDP have so recently forgotten.
I think I should say for the record, since there has been a great deal bandied about this evening, that this $38 billion was not our deficit. It was the deficit that we discovered when we walked in the door. It belonged totally to the former Government.
I might also say in response to an earlier question that our expenditures on research and development and our commitment to efficiency in the research sector in an attempt to develop private sector partners are all going to be good for Canada and good for our techonological future. We are attracting capital investment. I just came back from a trip to Europe where I found that there was quite an interest in Canada. People with substantial amounts of money are prepared to look at Canada as a place in which to invest because they recognize that the policies of this Government will be helpful to them and of course will be helpful to the Canadians who are looking for new jobs.


Abram Ernest Epp: Mr. Chairman, the Minister did not answer my question; not that I really expected she would have the resources at hand to do so. She began responding to the speech which dealt with the Atomic Energy of Canada Limited, undoubtedly a good topic to consider as well.
The Bill indicates that a sum of money may be required for public works and general purposes. The public works part is the part that interests me. In recession circumstances, when some industries are concerned about the possibility that they may be sliding into depression circumstances, public works are one of the means available to us for maintaining and increasing employment and for increasing economic activity.
As I suggested earlier today, the budget speeches of the early 1930s, the Bennett days, provide some interesting reading. I concede that much has changed over the years and Ministers of Finance are less involved with the details of their accounts than they were in those days. I suppose that is the point I have been making over the past 15 minutes. There was a good deal less moralizing going on in speeches made in those days than is the case these days.
One of the interesting things about the budgets of the 1930s is that when the R. B. Bennett Government first came in, Mr. Bennett recognized the need for a jolt of expenditure so that the Government would not simply be paying out relief costs. Therefore, some public works authorizations were put forward. There had of course been others which the Liberal Government in earlier years had put forward as well.
I think we have a similar situation today. We had a Conservative Government in office which, very early, has denounced the waste and extravagance of its predecessor. It took a little longer to do so in the 1930s. However, in various areas, I find that the concern of my constituents and people
across the country is that the Government is not maintaining levels of expenditures, but rather is cutting back.
My Liberal colleague, the Hon. Member for Gander-Twil-lingate, referred to the Small Craft Harbours branch of the Fisheries and Oceans Department.


Steve Eugene Paproski: The Hon. Member has about one minute left.


Abram Ernest Epp: Thank you. Let me then say that the desire in committee to have increases in the Budget for small craft harbours and the promises given to the shipbuilding industries of the country represent examples of potential for public works and for the encouragement of enterprise. In both areas there appear to be very real disappointments coming for these industries. I would ask the Minister of State for Finance what she can indicate about the new public works this Government has launched, public works which would justify our voting for the borrowing that this Bill is designed to authorize.


Barbara Jean McDougall: Oh, I have been waiting for this all day.


Ian Deans: I can tell that is true. For those who were not listening, the Minister has just said that she has been looking forward to this all day.
I was not going to rise and speak in this debate, as I thought that things were going along reasonably well. However, I heard the Minister say that somehow or other she took some joy from the fact that there are 271,000 people working who otherwise might not have been working. I cannot help but feel a sense of panic in my heart when I hear such a statement. There are still approximately 1.8 million people who are unemployed. For a Minister of the Crown to rise an expect that we should applaud when the Government has created a paltry 271,000 jobs, over and against the enormous need, is enough to make one shudder.
The Minister has failed to address the areas of greatest need, those in the age group of 16 to 24 and those in the age group of 55 to 65. There continues to be an overwhelming number of people who are almost to the point of being institutionally unemployed. That is not being addressed by the Government.
The Government has asked us to allow it to borrow additional funds. To do what? We are not clear on that. The Government says it needs more money. I know the minister will remember the discussion on the Government's proposal to partially deindex old age pensions. We suggested to the Government places where it could go to raise substantial amounts of dollars-into the billions of dollars-in order to offset a number of tax impositions which the Government was prepared to impose. The Government said no. My colleague from Kamloops-Shuswap suggested one area. I see that my colleague from Simcoe North is in the Chamber. As a lawyer and an accountant, he has gone through the analysis quickly and can see the point which we have made.

How can the Government ask the House of Commons to permit it to borrow money to pay for the debt it has accumulated on behalf of extremely wealthy corporations which are not paying taxes? That does not seem to be an unreasonable point to make. Is it not reasonable to expect that the corporate sector, in these difficult times, would perhaps be willing to contribute, if not the amount it owes, at least the interest costs to the balance of society on the money it owes? The Minister is shaking her head. I am not sure whether it is because she has never thought of that before or, perhaps, it is the first time that she has considered it. Who else in society, other than corporations, can come to the Government and ask the Government to borrow money in order to pay what they rightfully owe and then not even pay a cent toward interest charges? It does not take much to see the unfairness of that.
There are a lot of people in the country who have not worked for the past year. They are drawing on savings which they have accumulated over 30 or 40 years. Those people are receiving a bill from the Department of National Revenue which tells them that they owe the Government some tax. If those people asked the Government to defer the tax for a few years, and if they also asked not to pay interest charges, can we imagine the Government's response? This Government and its predecessor, which I might say are cut from much the same cloth-the two political Parties which represent a vested interest in Canada-allow those who have more than they need to not pay taxes. If they should happen to be asked to pay a share, by God, the Government will give them all kinds of loopholes so that they will not have to pay their share. It is not only the corporate sector which gets away with that. Heaven forbid that we should only allow deferred taxes without any payment-


Philip Derek Lewis: Will you change the Ontario Corporation Tax Act?


Steve Eugene Paproski: Order, please.


Ian Deans: Mr. Chairman, I am being asked if I will change the Ontario Corporation Tax Act. That shows the naivety of the Member. He knows that I have no power to change the Ontario Corporation Tax Act.
That provision is not only provided to the corporate sector. I might add that the corporate sector owes many billions of dollars.
I want Tory back-benchers to tell me the truth. How many of them truly believe that it is fair to tax a widow on her pension and to say to the corporate sector that it can defer taxes and that the Government will borrow money in the international money markets to cover what the corporate sector would normally have to pay? The Government does not even ask the corporate sector to pay interest on that money. Do they think that is fair? Is there one Tory who is prepared to stand and say that he thinks a widow should have to pay tax in order to cover the costs which ought to be borne by the corporations, upon whose behalf we borrow money so that they
Borrowing Authority Act
will not have to pay taxes? I do not see Members rising, so I assume that they all agree with me.
It is not only the corporate sector, it is those who benefit from the corporate sector. What has the Government done with those guys? The Government says: "Well, you are not getting enough out of that so we will allow you to accumulate half a million dollars in your lifetime tax-free. However, we cannot do that for everybody. If we are going to do that it can only be for the top 5 per cent of the population." That will cause problems for the Government.
Not only will the Government allow corporations to defer taxes and to not pay interest charges, it will now give an additional bonus to those individuals in the top 5 per cent so that they can accumulate $500,000 in their lifetimes which is tax-free. "But that is a bit awkward", the Tories say, "because we are running kind of short of cash. We are going to have to find a way to make up the shortfall. We'll do away with the indexing on old age pensions. That is how we'll do it", so the top 5 per cent can accumulate this $500,000 and pay no tax but the old age pensioner, by God, they will have to pay for it. That is the Government.
Then it has the nerve, Mr. Chairman, to ask us to let it borrow more money, And while it is borrowing more money it is decrying all of the borrowing which took place before. Here is this Government asking us to give it more and at the same time telling us that the evil in this society is that it has had to borrow so much. So the Government decides that what it will have to do is raise the taxes on ordinary Canadians. So what did it do? It upped the sales tax. But Government was careful when it upped the sales tax because it knew that a sales tax works harder on average income Canadians than it does on those at the upper-income levels. That is typically Tory. That is the kind of thing which one could have anticipated would occur but hoped would not. It is a tradition of the Conservative Party; sock it to those who don't have much. Give it to those who have more than they need. That has been the tradition of the Conservative Party in Canada and of Conservative Parties all around the world. To think, Mr. Chairman, that they would have the nerve to come back and ask to borrow more.


Nelson Andrew Riis: Next they will tax candy for the kids.


Ian Deans: As my colleague just said, the Tories must then begin to find out that that doesn't raise enough. If they deindex old age pensions, and increase by 1 per cent the sales tax, that still does not raise enough to pay for the give-aways. So they say, "We'll increase the tax on candy. And we'd better do it on pet food, too". Then they asked themselves, "What else can do do?"
Members of the Conservative Party sit here on the third floor in the little cabinet room and say to themselves, "We have given to the corporations, we have given 5 per cent to the upper-income level, but there must be some other friends we have missed. By George, we missed the oil companies. What can we do dor them?" So they decide to do away with some of

June 17, 1985
Borrowing Authority Act
the taxes on the oil companies. But if they reduce the tax burden on the oil companies that will reduce the amount of revenue to the Government. So they thought they had better increase the cost of gasoline at the pumps. And they did that.
The Minister of National Health and Welfare has the answer to everything. He walks around almost blind. He stands in his place and defends the indefensible. He is the only person in the caucus of the Tory Party who is still arguing that it is good to deindex pensions. The Prime Minister has not given him the word yet.
If that isn't bad enough, last Friday, and a month ago, he was going around the country saying that because of the high deficit, and because we are in such debt, we must look at new ways of funding health care. He thinks perhaps we should be looking at privatizing the health care system so the Government does not have to pay out as much, and will have more to give to its rich friends. So what has now started is a movement.
We have the Minister of National Health and Welfare who speaks to the medical association, I believe in Alberta, and says he wants it to consider the possibility of moving towards more privatization of the health care scheme in Canada. Because, after all, the Government cannot afford to carry the burden of providing universal health care to the poor, and the rich can afford it so they don't have to worry. Then the Minister has another meeting with the Health Ministers and he says to them that it may be a good idea in trying to bring down the burden of cost to Government to privatize the health care system, find new private ways to provide the same system to people at whatever cost, because it will be private and Government doesn't have to worry about it. The wealthy, of course, can afford it, but the poor will not be able to. And if the wealthy find it difficult, the Government can give them another tax break and tax the poor some more in order to make sure the rich are not inconvenienced in any way. That is what the Government is doing. That is clear. One doesn't have to be a student of Conservative logic to see what it is now doing.
The unfortunate part of it all, I say to your, Mr. Chairman, is that the end result of all of this will be that Government will not bring down the deficit, because it does not have the will to bring down the deficit, because it is afraid to go to where the problem really lies, and that problem really lies in the level and amount of give-aways which this Government and its predecessor Governments have made available to the private corporations.
My grandfather was a Conservative, God rest his soul.


Some Hon. Members:: Oh, oh!


Ian Deans: I must say that when he reached his sixties, he saw the error of his ways. My grandfather was an entrepreneur. He put his own money on the line. He didn't run to the Government and demand assistance. He didn't get anything from the Government. He was one of those free enterprisers that Tories dream about. But under 30 or 40-old years of Conservative administration in Ontario, and an almost equivalent number of years of a similar kind of Liberal
administration in Ottawa, the Government provided that every single person who ran a major corporate system in Canada was able to write off so much of it against the public purse that it wasn't necessary for them to raise their capital themselves. They now do not know how. They do not want to take risks. Why take risks when the Government will bail you out? The government's protestations to the contrary, it is following along in the exact same way. Albeit using somewhat different techniques, as the predecessor Government of the Liberal Party. The results will be identical. That is what I find most disappointing, Mr. Chairman.
I can tell, Mr. Chairman, just from the way you are looking at me that you have recognized the fallacy of the argument of the Government. The one thing it has not been prepared to address when talking of borrowing is what was done with the money. Why did we borrow that money in the long run? We have to try to figure that out. The reason we had to borrow the money over the last four years was because of high interest rates. And it was the Conservative Party which supported the Liberal Party in its quest for high interest rates.


Philip Derek Lewis: Oh, oh!


Ian Deans: I remember, as does the Hon. Member for Simcoe North-we will remember-when the now Minister of Finance went to Montreal and spoke to the Board of Trade there. He said he supported the high interest rate policy of the then Liberal Government. The now Minister of Finance said, "If I were the Minister, I could do nothing more, nothing less than to follow the line established by the Bank of Canada". It was the Minister of Finance when he was the Opposition critic who said that high interest rates were necessary and that the Conservative Party of Canada supported them.
The end result was that a million people lost their jobs and countless hundreds of thousands of people never recovered, tens of thousands of people lost their homes and their businesses, farms went bankrupt in record numbers. But the Conservative Party supported the Liberal Party in allowing those interest rates to continue to rise to the point where no one could afford them. Now the Conservative Government has the gall to come into this House and suggest to us that we should accept its idle rhetoric.
No, Sir. I will tell you right now, Mr. Speaker, it will get its money only because it has the majority which will force it. But the fact is that it has been the mismanagement of the Liberals, supported by the Conservatives over the last 20 years, which allowed the deterioration of the system that has put us in the position we now are in.


Victor Fredrich (Vic) Althouse: Mr. Chairman, I have a number of questions for the Minister. Perhaps she could give us some explanations about the nature of the Borrowing Authority Bill we are discussing tonight.
In the statement the Minister of Finance gave when this Bill was introduced on May 28 he indicated that this $16.2 billion would bring the total borrowing authority for the current fiscal
June 17, 1985

year to $32.2 billion. He compared that to the total borrowing authority Parliament had granted to the two different Governments for 1984-85, which amounted to $31.9 billion. In effect, we are granting an additional $300 million this year. He indicated that while Parliament had granted borrowing authority of $31.9 billion last year, $27.6 billion was actually expended by the Government, leaving $4.3 billion unused as of March 31, 1985.
The request for borrowing authority this year is $300 million higher. Does that mean that $4.6 billion will be left in a fund for unspecified expenditures? Could the Minister tell us what the unspecified expenditures portion of this borrowing authority is likely to be by the end of this fiscal year?


Barbara Jean McDougall: I am not sure that I could estimate at this stage what the unused portion may be by the end of the year. I would indicate that the figures do not appear to be quite correct. I think that perhaps the $2.2 billion of short-term Section 39 borrowing has been included twice in that total, because the figures the Hon. Member was giving were not correct. I would have to check Hansard. Perhaps there was a mistake. I would like to put that on the record.
We will, of course, be trying to control our expenditures as much as possible and not use any further borrowing authority than is necessary. The total amount of borrowing authority will depend on the economic prospects we have, which at the moment we are reasonably pleased about, given the circumstances of the country. It will depend on interest rates which have been trending downward. It will depend on revenue projections. As more people continue to go to work we will have increased revenues. All of this will be reasonably positive in terms of the actual borrowing.


Victor Fredrich (Vic) Althouse: Mr. Chairman, in light of the expected reduction of the deficit the Minister of Finance has been talking about, why is the borrowing authority higher this year than it was last year?


Barbara Jean McDougall: The actual borrowing last year was $39.8 billion. We are anticipating a total of $28 billion this year. Therefore, the amount of borrowing is down.


Victor Fredrich (Vic) Althouse: Mr. Chairman, I am not trying to confuse myself deliberately. I am reading from the statement by the Minister on pages 5132 and 5133 of Hansard. The numbers that he presented are somewhat at odds with the numbers the Hon. Minister of State for Finance is presenting. The Minister's statement seemed to be fairly clear. He said:
With the passage of this Bill, the Government will have a total of $32.2 billion of borrowing authority for the current fiscal year.
In the next paragraph he points out that, in his opinion at least, the borrowing authority for the 1984-85 fiscal year was $31.9 billion.


Barbara Jean McDougall: I think the $2 billion which is in there is part of the reserve. The other is the $2.2 billion that was borrowed under Section 39 in February which, instead of
Borrowing Authority Act
being part of the long-term borrowing program, had to be repaid. That is the difference.


Victor Fredrich (Vic) Althouse: Mr. Chairman, what is the Government's interpretation of the amount of money that it can borrow under Section 39 of the Financial Administration Act? Last year while the Senate was holding up the Borrowing Authority Bill the Government apparently borrowed $2.2 billion. What are the limits, if any, to that borrowing authority? If the borrowing authority which is before the House at the moment turns out to be insufficient, is there any limit to the amount of money that could be borrowed under Section 39 of the Financial Administration Act in order to keep the Government in operation?


Barbara Jean McDougall: Mr. Chairman, there is no limit to the amount that can be borrowed under Section 39. However, it must be repaid within a term of 180 days. That is where the limitation is imposed. However, we are expecting that we will have a much more responsible response this year and that we will not have to use Section 39.


Victor Fredrich (Vic) Althouse: Could the Minister indicate the difference in cost for the 180 day borrowings versus the kind of borrowings that are normally carried out under the borrowing authority as such? While she is at it, perhaps she could tell us what sort of rate the Government is anticipating will be paid during this fiscal year for the borrowings that are necessary to make up the interest on the accumulated deficit that we have.


Barbara Jean McDougall: The interest rate spread changes every day. Between short and long it is normally about 1 per cent. However, you cannot always put everything in the least costly part of the market because that would jack up rates in that part of the market and would change the spread going in the other direction. That is why our debt management program of not using Section 39 is very important to us. We do try to design our debt management in order that the costs are minimized, depending on the rate spread at any given time in different sections of the market.


Victor Fredrich (Vic) Althouse: Mr. Chairman, it is normal for individuals lending money for short terms to take a lower rate on deposits than we do for longer terms. Is that procedure followed with the short-term money which the Government borrows? If so, how did the Minister of Finance arrive at the figure of $15 million as the cost to borrow short-term money, as opposed to long-term money? That is the price tag he laid at the feet of the Senate for holding up the Borrowing Authority Bill and forcing him to go to the short-term market, which is normally a lower priced market, I would think.


Barbara Jean McDougall: Mr. Chairman, there was some deterioration in the interest rate curve at that point, and there was an issue that had to be deferred. I am sure the Hon. Member is aware that while normally the spread widens the further out you go, there have been reverse yield curves more frequently in recent years than in the past. This was particularly true at the

June 17, 1985
Borrowing Authority Act
height of the inflation cycle when nobody wanted to lend for long periods of time. Therefore, we have what is called a reverse yield curve, because everyone wants to keep their money very short.


Victor Fredrich (Vic) Althouse: Mr. Chairman, could the Minister tell us what the accumulate deficit for the country is now? I want to repeat my previous question as well. She indicated in an answer to my friend from Kamloops-Shuswap that the Government is estimating that the cost of interest on debt will amount to $22.6 billion. I am sure she can tell us the accumulated deficit. We know from the Budget what are the expected additions to that. Since she is quite specific about the $22.6 billion figure, I am sure she will be able to answer the question I put previously about expected interest rates?


Barbara Jean McDougall: Of course, much of that is on debt that is already outstanding. Therefore, the estimate is based on that.
I assume the Hon. Member means the accumulated debt rather than the accumulated deficit. Therefore, I believe the accumulated debt is $190. If I have a correction to that figure I will advise the Hon. Member.


Victor Fredrich (Vic) Althouse: I assume that the Government expects to pay approximately in excess of 10 per cent interest or probably in excess of 11 per cent interest, given that it is paying a debt under $200 billion and is expecting to pay approximately $22.6 billion in interest. Therefore, I assume it is a good estimate of what the Government is expecting interest rates to be, which is somewhere in excess of 11 per cent.
Will the Minister tell us if she and her officials have had time to arrive at the number asked for my my friend from Kamloops-Shuswap? Can she tell us the total accumulation of deferred corporate taxes that have been left unpaid and on which no interest is being paid?


Barbara Jean McDougall: Mr. Chairman, I will deal with the first point raised about the average interest rate. The reason that rate is historically quite high is that the deficit doubled over five or six years as interest rates were at their peak. Therefore, the accumulated debt is weighted to the high interest rates that had to be paid during that period when the former Government treated the deficit, its expenditures and revenue so irresponsibly. That constitutes a large part of that cost.
The amount of deferred corporate income taxes is to be found in Corporate Financial Statistics published by Statistics Canada. It is quite readily available during business hours. It is $29.4 billion for 1982, the latest year available.
Let me point out that the so-called interest on unpaid taxes is not relevant or applicable because deferred taxes arise out of the investment a company makes. It concerns capital cost allowances and therefore there is no deferral of taxes without an initial investment. Corporations, as citizens, pay the taxes that are owing. However, not only corporations but individuals can write off their interest costs if they invest money to some extent as well.


Victor Fredrich (Vic) Althouse: The Minister said that the interest rate that is being paid varies, depending on the year that the debt was incurred. Is she saying that there has been no refinancing of those debts that might have been incurred in the 20 per cent range? Is there no way of refinancing those at current rates?
Could she also tell us how far ahead the Government commits these interest rates? Are they not just short-term?


Barbara Jean McDougall: No, they are not just short-term. That is what I meant about the spread between the short and longterm rates and how the debt management program depends to some extent on what those spreads are and what the demand is in the market-place for short-term as opposed to long-term instruments.
When those are issued in the form of a bond, of course, it is a contract to pay on a fixed date and cannot be refinanced when the interest rate structure moves. They are repaid at maturity and I believe that 20 years is the longest normal term for a bond. However, if the Hon. Member looks at the announcements that we make monthly he will see that there are normally three or four maturities which will be anywhere from one year to perhaps 24 years.
Actually, if bonds can be issued in the long end to a greater extent, it is a sign of confidence because the expectation is that interest rates will be stable and people are prepared to go for longer terms. Lately we have seen a willingness in the money markets, among financial institutions, to go somewhat longer on mortgages than they have before. That is a very positive trend.


Don Boudria: Mr. Chairman, I would like to speak briefly on this clause of the Bill. I see that a Conservative Member who was adjusting to the role of being on this side has decided to sit in another place in the Chamber. Perhaps he will want to reconsider and stay on this side permanently, especially after 1 have convinced him that the Government's measures and the way it is spending taxpayers' money is totally inappropriate.
Let me talk about Government expenditures. Perhaps the Minister, who is responsible for this Bill and one of the Ministers responsible for the public purse, can indicate to us why she believes that the Government should get borrowing authority in light of certain facts which I will bring to her attention.
First, I would like to talk briefly about the 57 per cent increase in the Prime Minister's operating Budget. I say this, keeping in mind that this is the same Government that is telling senior citizens of this country that there is not enough to go around. It has been telling senior citizens that they must tighten their belts. I have met with many senior citizens in my riding over the weekend, and they do not feel like tightening their belts any more. As a matter of fact, they are not in a position to tighten their belts. At the same time, we see that the expenditures for the office of the Prime Minister have been increased by 57 per cent. Mr. Chairman, you, being the non-partisan person you are, would understand how outrageous that is.
June 17, 1985

I should like to talk a little about salary increases to certain people. I brought to the attention of the House on a few occasions that the Government rewarded some of its friends and relatives through the mechanism of patronage. As we know, this is very expensive to the public Treasury.
1 should like to refer to two individuals in particular, a gentleman by the name of Lawrence Hannigan, who happens to be a defeated Conservative candidate in the riding of Laval-des-Rapides, and Roy McMurtry, another Tory loser. Both were appointed to very lucrative government jobs at tremendous expense to Canadian taxpayers. Their salary increases alone amount to close to $60,000 per year. Just imagine what would happen if some of our senior citizens had that kind of money. Needless to say they will never have it. However, it would be interesting to indicate how far that $60,000 would go toward restoring the pensions of senior citizens in my riding.
There are roughly 6,000 seniors in my riding. Next year they will each be cut by approximately $100. A very quick multiplication of the figures shows that the salary increases of those two Tory losers alone could restore full indexation to the pensions of all seniors in my riding. I am sure there is not one Tory back-bencher who would not second a motion to cancel those salary increases and give them to the seniors in their ridings.
I detect almost unanimity for that on the part of Hon. Members across the way. Looking at my good friend from Interlake, I can tell that he would be in favour of restoring the benefits to the seniors of his riding. I am sure he does not really want those large salary increases for two Tory losers. After all, he was a Tory winner and he is making less money than the losers. This is almost enough to cause a back-bench revolt in the Conservative ranks. We can see that starting develop at this point. Obviously the Hon. Member for Simcoe North is beginning to become somewhat upset about this issue.
I should like to refer to the economic statement of last fall. On November 8, the Government of Canada issued a document entitled Expenditure and Program Review. As I said, this was delivered on November 8, otherwise known as black Thursday. On black Thursday, the Government decided to effect these very severe, harsh and unfair cut-backs. Not content with doing that at public expense, at the expense of those who could least afford it, Mr. Chairman, do you know what the Government decided to do?


Sergio Marchi: What?


Mr. Prud'homme:: What?


Don Boudria: I am glad the Hon. Member for York West and the Hon. Member for Saint-Denis ask me that question. The Government decided to ship copies of that document to every provincial Premier. One would think it would have relied on Canada Post. After all, it was a very worth-while government endeavour. But that is not what the Government did. It sent by jet messengers with copies of the economic statement.
Borrowing Authority Act
Tory back-benchers were sent as messengers. After all, the Government had to find something for them to do. Tory back-benchers delivered copies of the economic statement personally to every provincial Premier. The total cost was $23,850 for delivering ten copies, and the Government wants the House to give it more money! Why? Why should we give it more money when it has squandered what we already gave it? That is terrible.
[ Translation]
Mr. Speaker, I would like to talk about the Minister of Communications (Mr. Masse). As we all know, the Minister decided to spend taxpayers' money in a rather unusual way. The Minister decided to fly hither and yon on a Government plane, and so what did he do? He asked his friends or rather his family and his staff and they filled the jet and left for the Middle East. They made a few stops and when they got back, they added up the cost of the trip: $57,000 the Minister of Communications spent on a trip to the Middle East. It cost $57,000, Mr. Speaker! That is obviously why everybody now knows the Minister's nickname: the "courant d'air national". Obviously, when you spend that kind of money-
Mr. Speaker, I would also like to say a few words about the cost of renovating ministers' offices. As you know, the ministers all have very large offices here. They say that some ministers have more offices than staff. They have five or six offices and only two or three people working in those offices, here in the Parliament Buildings. The Minister of Public Works (Mr. La Salle) has new carpeting in his office which cost $10,000, Mr. Speaker, and I do not know what-

The Minister of National Health and Welfare, the same Minister who wants to cut the pensions of the seniors in my riding and in your riding, Mr. Chairman, spent $23,327 to redecorate the inside of his office on Parliament Hill. Mr. Chairman, I know that you are saying shame on the Minister, and rightfully so.


Mr. Holtmann:: The Liberals before left the place in a rotten mess. We had to.


Don Boudria: I hear my friend across the way. The Liberals are not the ones who are cutting the pension cheques of senior citizens. It is the Tories who are perpetrating that upon Canadians. The Tories are responsible for that mess.


Some Hon. Members:: Oh, oh!


Don Boudria: They are giving the money of taxpayers to multinational corporations, to themselves and to their friends, and there is none left for our seniors.
I would like the Minister to respond to these questions, and then I will have more to ask.


George Albert Proud: Where is the Minister?


Ramon John Hnatyshyn: Mr. Chairman, the Minister is out of the Chamber for a moment getting a glass of water. If the Hon.

June 17, 1985
Borrowing Authority Act
Member wants to continue, he may do so, as I am making a note of any questions he asks to which she can respond.


Don Boudria: Because of the insistence of the Government House Leader, 1 will ask more questions.


Mr. Towers:: She is back.


Don Boudria: There are more examples of government waste. The Minister of State for Fitness and Amateur Sport, otherwise called the amateur Minister, spent $13,496 to redecorate his Parliament Hill office. Let me tell you, that would buy an awful lot of wallpaper. The Minister of State for Mines is here, and he spent $17,712. Maybe he could tell us what colour the wallpaper is at that price. The people of Canada deserve to know. I see this is getting the Minister a bit excited. Perhaps if I was a Minister who spent $17,000 on wallpaper I would be a little excited when it was brought up in the House.


Ramon John Hnatyshyn: The facts are all wrong.


Don Boudria: I am glad the Government House Leader has indicated the facts are all wrong, because those facts are what I received in response to a question I aksed and it is signed by him.


Ramon John Hnatyshyn: I like to read George Bain.


Don Boudria: These were supplied and signed by the Government House Leader personally.


Ramon John Hnatyshyn: In my own hand.


Don Boudria: He signed this personally and he is now saying that it is wrong.


Ramon John Hnatyshyn: You have your facts wrong.


Don Boudria: Has he inadvertently misled this House? No, I am sure the Government House Leader would never do that. So the $130,000 worth of Government waste I have just described must be true. I would never think the Government House Leader would tell us anything but the entire truth and 1 can see that you are nodding in agreement, Mr. Chairman.
Let me ask the Minister of State for Finance about the cost of limousines. It used to be that one could actually drive up beside the West door of the Parliament Buildings. Now the place, as we know, looks like a used car lot. There is hardly room to drive by because so many limousine drivers are tripping over each other. There are 39 or 40 of them all over the place. Of course we know how badly Ministers need them. It is extreme suffering on their part to do something other than jump into a limousine to go over to the West Block or to the Confederation Building, or wherever their offices are. We know that would be quite strenuous. We also know that in order to supply these limousines the Government had to supplement the existing stock. So the Government bought $173,000 worth of limousines to add to the existing ones. Just in
case the Government House Leader says that information is not exact, it was he again who provided it. 1 ask a lot of Order Paper questions and they do get answered.


Ramon John Hnatyshyn: At least I answer questions.


Don Boudria: Just in case the Minister of State for Finance thinks this is extravagant, which it is, maybe she could comment on why the Government had to lease another $30,000 worth on top of the $173,000 worth which had been bought. I have the list right here, everything from renting a Chrysler New Yorker for a whole year, to leases for one day. I could list them ail for the record if you want to know the details.
On top of this, the Government wants us to give it more money at the same time it is cutting the pension cheques of seniors. Well, Mr. Chairman, my constituents will not go for this. If I voted for that, they would never forgive me, as they will never forgive Tory Members across the way. Some of them may vote for this, but we know most of them will have time to reconsider.
Let us talk about the changing of uniforms. There is a ceremony outside this place known as the Changing of the Guard, but there is now another ceremony in the military known as the changing of the uniform. This means that for the bargain cost of $36 million, all our military uniforms can be colour coded. Do you know of any military person, Mr. Chairman, or does the Minister know of any military person who would not give up trading his or her uniform in order to give their grandfathers or grandmothers their pension cheques? Maybe she could answer that question specifically.


Ramon John Hnatyshyn: George Bain was right.


Don Boudria: I cannot think of one constituent of mine in the military who would not give up trading his or her uniform in order to restore pension benefits to their grandparents. That money would go a long way to restoring those benefits for the people of this country. Perhaps the Minister can tell us what she thinks of the extravagant expenditure on the part of the Minister of National Defence. It is enough to make a Minister want to resign.
Let us talk a little bit about the Shamrock Summit, another bargain deal. It cost the taxpayers of this country close to $1 million, almost half of which went just for television.


Thomas Gordon Towers: You don't know anything about class.


Don Boudria: The Hon. Member says I don't know. I am glad the Hon. Member for Red Deer has woken up to the fact that his Prime Minister wasted that money. I am glad that he is Finally agreeing with us, and I commend him for that.


Thomas Gordon Towers: You don't know anything about class.


Don Boudria: Some $500,000 was spent by the Prime Minister of this country so we could listen to him sing on television. The rest of it was spent on various things, such as the Armed Forces and other things. No doubt the Government House Leader agrees with me that it was an extravagant expenditure.
June 17, 1985


Thomas Scott Fennell: I am sorry to interrupt the Hon. Member but his time is up. Unfortunately he has not left enough time for the Minister to answer his question, so we will let her answer at the end of the remarks of the next Member.


Iain Francis Angus: Mr. Chairman, I would like to ask the Minister if she would react to comments made by Mr. C. R. Bowles, executive vice-president of Great Lakes Forest Products when he appeared before the June 3, 1985 meeting of the Standing Committee on Fisheries and Forestry. Referring to deferred taxes, a subject raised by my colleagues a number of times this evening, Mr. Bowles said this:
Deferred taxes are extremely difficult to describe without using your hands and your feet and all sorts of things, so let me just try to go through it... I dare say everybody, or almost everybody, in this room, is a member of a pension plan. That is a form of tax deferral. In the corporate sector, the biggest one is the accelerated write-off for capital investment in manufacturing and the production of machinery ... So the difference between the accounting charge for taxes and the amount which actually has to be paid in accordance with the law, sits in this never-never land we call deferred income taxes. It is therefore not correct to consider the balance in this account as an amount owing to the taxing authorities.
He summarizes by saying:
The tax act tells us what we have got to pay; the accountants determine what we show on the balance sheet and profit and loss statements or earning statements; the difference between the two is deferred income taxes-that is what we call it-and it is not owed to anybody ... You never pay any of that as such back to the government.
Would the Minister agree with the interpretation of Mr. Bowles of the term "deferred taxes" as it applies to the corporate sector of this country?


Barbara Jean McDougall: Mr. Chairman, 1 probably understand far better than Mr. Bowles how the deferred tax system works. 1 am sure the Hon. Member would agree that our undertaking of a study of corporate taxes, something which seems to be very worrying to Members of the NDP tonight, is a very positive move forward and something that is long overdue.
I would like to point out to the previous Member who questioned me that there are quite a number of points he raised which were of great interest to me. He talked about cars and the decorating expenses. 1 would like the Hon. Member to know that I moved into the office of a former Minister of the former Government and the total inventory of that office consisted of six plants and five tubes of toothpaste. I wonder where the furniture went.


Ramon John Hnatyshyn: As they said in the Pepsodent ads, 1 wonder where the yellow went.


Barbara Jean McDougall: I also discovered when I moved in that the car for the former Minister of State for Finance was nowhere to be found either. Is that not truly amazing? I wonder if the Hon. Member also remembers a certain Hon. Member for Winnipeg-Fort Garry who spent $1 million on his staff.


Ramon John Hnatyshyn: Over a million a year. Wretched excess.
Borrowing Authority Act


Barbara Jean McDougall: I find this selective use of statistics quite fascinating. We all know that the Hon. Member for Glengar-ry-Prescott-Russell is very interested in statistics of all kinds. I know that he is a burrower. I am just amazed that he did not come up with the fact that the inventory of my office was so tiny.


Ramon John Hnatyshyn: I know that he wouldn't knowingly mislead anybody.


Barbara Jean McDougall: I should return to the question at hand. 1 do treat it as a serious one. That is why we have undertaken a review of the corporate income tax structure. We will be examining over the next few months ways in which we think the country can be better served by the corporate tax structure, and this will include the kinds of things that will create jobs as well as things which will create some even-handedness in the tax structure.


Iain Francis Angus: Mr. Chairman, 1 would like to thank the Minister for responding, not to my question, as my question asked for her interpretation of the definition, but for giving me information regarding the study. Once again, Mr. Bowles and others have stated very clearly that as far as their companies are concerned, they have no intention of paying back those so-called deferred taxes. They believe that they are solely within their rights not to do so. Not in terms of policy but in terms of interpretation, I am asking the Minister whether or not the interpretation of the tax Act of Mr. Bowles as it applies to deferred taxes for the corporate sector is correct and that that money does not have to be paid back at this current moment in time.


Barbara Jean McDougall: Mr. Chairman, that is what deferment means, of course. It means that the taxes do not get paid back in a single moment. The taxes are due and payable in the future under some certain circumstances. If corporations continue to invest money, then the deferred taxes continue to be deferred.
I recognize that the Hon. Member is quite exercised about this matter. We are undertaking to review the corporate income tax structure. It is something to which we have committed ourselves.
1 will not comment directly on the remarks of Mr. Bowles. I do not know the context of those remarks, or what the question was to which he was responding, or the point he was trying to make. However, 1 do understand the principle of deferred taxes.


Iain Francis Angus: Mr. Chairman, let us say that a company has accumulated tax deferrals amounting to $100 million. If that company stopped investing capital investment within its plant, would it then begin to pay those deferred taxes back to the Consolidated Revenue Fund of Canada?


Barbara Jean McDougall: Mr. Chairman, the answer to the question is yes. It is a little more complicated than that but ultimately, if a company stops investing, that triggers the taxes payable.

June 17, 1985
Borrowing Authority Act


Michael Morris Cassidy: Mr. Chairman, because the borrowing Bill is now being discussed at committee stage, I have a question I would like to put to the Minister of State for Finance; it is a question that has puzzled me. I was not in the House a year ago when the 1984 Budget was being debated. I do recall, however, from press reports, and from reading Hansard the dire warnings uttered by the Conservative Opposition of the day. In fact, many of the Minister's colleagues in Cabinet were at that time Opposition Members. They warned about the deficit and they preached doom and gloom. They indicated that the situation was far more serious than the Liberal Government of the day had indicated to the public. This was repeated many times prior to the election campaign.
During the election campaign, Conservative Members did two things. They continued to warn the country that the deficit situation was extremely serious, but at the same time they made an extraordinary string of campaign promises, one of which was the promise that a Conservative Government, contrary to the Liberals' 6 and 5 program, would restore full indexing on Old Age Security pensions. That promise was made with the knowledge that it was potentially costly. They knew that money would be required in order to do the decent thing; to continue providing pensions and dignity for old age pensioners. That promise was made in the context of a preparation for Government, and with a transition team in place that was planning that kind of thing.
My question is quite simple. What has changed? One did not need to be in the Ministry of Finance to know what the situation was like. Conservative Members when in Opposition were saying the same thing as the Minister of Finance has said in his Budget, but somehow the policy results are diffeent in the sense that policies were made in full knowledge of the situation, but were subsequently violated and thrown away. How is it that Conservative Members could make those promises knowing that the financial situation would prevent them from doing the decent thing for old age pensioners?


Barbara Jean McDougall: Mr. Chairman, I will review once again for the Hon. Member what he has heard many times in the House. He may not have been here a year ago, but neither was
I.	When planning for Government, one could expect that things are worse than they look. However, one must take power before the actual facts are known and the next stage can be assessed.
As I and other Members have indicated earlier, this is our first Budget and not our last. We have kept many of our commitments. We brought forward the borrowing Bill within two days of the Budget. The Main Estimates contained the lowest year over year increase in 17 years. We have kept our commitment on accountability in the borrowing Bill. We have kept our commitment that the poorest people in our society would be looked after. We have kept our commitment to create jobs and we have kept our commitment to bring down interest rates. I think that the record speaks for itself. Commitments have been kept. The kind of flexibility that will come from control of the deficit and still lower interest rates will
mean that in the future, we will have the flexibility in social policy which everyone in this House wants.


Michael Morris Cassidy: Mr. Chairman, it seems to be that what the Minister is saying indicates that the Progressive Conservatives, when they were campaigning, were either being naive or hypocritical. The Conservatives were being naive if they said that things were worse than they appeared to be at the time they made the promises. They were hypocritical if they proceeded to make promises in the full knowledge that they would have to break them.


Ramon John Hnatyshyn: You were not around.


Michael Morris Cassidy: I was around. I was out on the hustings. As a matter of fact, 1 was aware of people working for Conservative candidates in my riding and elsewhere in Ottawa who were promising pensioners that they would not have to put up with cut-backs if a Conservative Government was in power. Some pensioners were taken in. They are telling me now that that will never happen again. However, at that time they were taken in by a Party which was being either naive or hypocritical.
While complimenting the Minister of State for Finance on her presentation last Friday night at the National Arts Centre-which I thought was fully up to the standards of the other three participants, including Geraldine Ferraro-I felt that she was extremely uncomfortable when she answered a question from the audience with respect to her defence of the pension situation. In fact, I would say that she was close to being inarticulate, which is something the Minister never is. The reason is that even the junior Minister of Finance is being left out to dry. She does not know whether or not her Prime Minister is going to fish or cut bait on this issue, and when it will occur.
I would suggest that the Minister of State for Finance come out right now and say that she recognizes, having met with her constituents and having seen the telegrams and letters, that a grave political mistake has been made by the Government in deindexing pensions. She should say that it should not have been done and that it was wrong for the Government in its first Budget to take that particular step. Why does she not say now that it was wrong and that she will do everything in her power to persuade the Prime Minister to withdraw the deindexing before the House rises for the summer recess on June 28?


Barbara Jean McDougall: Mr. Chairman, if the Hon. Member was confused or took my remarks last Friday night to be anything other than thoughtful, he is making a mistake. Before that group of people I was doing what Members of the NDP do not do. I was going through the whole package of things the Government has done. I spoke of how the Government is looking at Public Service pension plans so that they will not cost the taxpayers more money. I also explained that there would no longer be a full guarantee on MP's pensions as of January 1, 1986. That is something which does not seem to get mentioned in the rhetoric of the Opposition. 1 went on to
June 17, 1985

explain that this was a package of budget items which we had put together very carefully. I explained that it is always very difficult to draw the line. As always, we have attempted to look after the people who are the most in need. That is where our hearts are and that is where our greatest concern is. I am sure the Hon. Member shares that concern.


Michael Morris Cassidy: Mr. Chairman, I would like to be thoughtful for a minute. The concept that indexing everything is undesirable is a valid argument. 1 would accept, for example, if the Government said to those who are contracted by the Government that it would not automatically give them a 3 per cent or 4 per cent increase every year, in line with the rate of inflation.
1 would understand if the Government told them that they would have to fight for every penny. That is certainly argued in terms of labour-management negotiations. However, I found it objectionable to have the same argument apply, with such religious fervour, by Members of the Government, including the President of the Treasury Board and the Minister of Finance, when it comes to people who are no longer able to work an extra hour-and-a-half a week if their income begins to fall. The Government should find a way to provide a better service, which is more efficient and which would cut costs to keep them in line with government ceilings.
Senior citizens are not in the position to fight back. The bulk of them live in poverty or below the poverty line. It seems to me it is desirable for people who retire, who can no longer provide for their own needs by working, that indexing should continue to apply. I think that is a humane and sensible provision. Why is the Government out to punish Public Service employees who have worked 30 years for the Government of Canada? Why is the Government out to punish people who started their working careers for 20 cents or 40 cents a day back in the days of the Great Depression? They are now trembling. They do not know if the purchasing power of their pensions will get them through. Why is the Government picking on the people who are the weakest in society? If the Government wants to preach deindexation, why does it not do it to able-bodied individuals who are in their working years and to corporations and companies which have been ripping off the Government for a very long time?


Barbara Jean McDougall: Mr. Chairman, I think that the programs we have put in place do recognize some of the situations which the Hon. Member has outlined. The budget papers indicate that government Departments will not automatically get an increase for inflation every year. We have been consistent in looking at the whole area of indexing and what it has done to the system over time. I believe there is more consistency in our approach to the policies which we have produced than we have seen from any government for a long time. There is considerable sensitivity, concern and awareness.
We recognize that there is a short-term problem with the elderly poor, in which case those on the GIS are protected. We also recognize that there is a long-term problem in that these things will continue to happen if we do not provide for and encourage the kind of pension recommendations which are
Borrowing Authority Act
included in the Budget, such as pensions for part-time workers, earlier vesting and portability. All those things will help women, who comprise the larger proportion of our elderly poor.
We have very carefully balanced the policies we have outlined in the Budget. We have indicated that we would watch the trends very closely. It is something to which we are very sensitive. When we are in a position to do so, we will have more flexibility in social policy and we will be able to enrich some of the programs.
As I indicated earlier tonight, we have to ensure that the social policy meets the needs of the present and the future rather than the needs of the past. That means that we need flexibility, financial responsibility and fiscal responsibility. If we do not have that, we will come to the point where the funds will simply not be there to deal with the people who have real needs. I believe that people who have lived through the Depression and the wars know how important it is to take responsibility for the future. We are enormously sensitive to senior citizens and to other people who are in need in our society. That is why we indicated in the budget papers that we would watch the situation very closely with a view to enriching the programs as soon as we have the fiscal capacity to do so.


Michael Morris Cassidy: Mr. Chairman, the Minister is avoiding the point, which is that the Government is being sensitive to the needs of the rich people today. It has given them a half a million dollar exemption capital gains tax-


Ramon John Hnatyshyn: You do not know any farmers.


Michael Morris Cassidy: As far as the aged are concerned, the Minister is dead wrong. She said that the Government is being sensitive to the needs of the people on GIS. People on the GIS are suffering a $100 decrease-


Mr. Lanthier:: The NDP is against farmers!


Michael Morris Cassidy: This is a Budget for the rich.


Ramon John Hnatyshyn: Farmers are not rich.


Steve Eugene Paproski: Order, please. What went wrong? The Hon. Member for Ottawa Centre.


Michael Morris Cassidy: Mr. Chairman, you know, as 1 know, that a tax concession to farmers could have been very easily accomplished without benefiting all of the fast buck artists on Bay Street and St. James Street, which is what the Government has done in its Budget with the capital tax exemption. Everyone in this House knows that, Mr. Chairman. There is no issue about that.
To get back to the point I was trying to make, the Minister stated that the Government is protecting the poorest of the pensioners, those who receive the Guaranteed Income Supplement. What she ignores and what she is dissembling about is that people receiving the Guaranteed Income Supplement will also suffer the equivalent of $100 loss in purchasing power

June 17, 1985
Borrowing Authority Act
next year because of deindexation, $200 a year after that, and $300 the year after that, rising to about $700 by the early 1990s. That cut in purchasing power will apply equally to a pensioner with pensions and other investment income amounting to $30,000 a year, to a pensioner whose income gets them just above the threshold for receiving the Guaranteed Income Supplement, and to those 1.3 million pensioners who will receive the Guaranteed Income Supplement.
I cannot understand what sensitivity there is in dealing with the poorest of pensioners in exactly the same way as someone who by any standards would seem to be very comfortably off. People are asking me why the Government has done this? When it can give so much money to the rich people, why is it taking $100 next year and twice that the year after from people who are receiving the Guaranteed Income Supplement who, by definition, are living in poverty?


Barbara Jean McDougall: Mr. Chairman, the Hon. Member well knows that it is not only farmers who are going to benefit. The small business organizations across this country are going to benefit from this Budget. This is a Budget of opportunity. The small business organizations have been asking for this tax measure for years and years. We recognize that we also have to do something about jobs. That is something we have been committed to from the beginning. It is something we have a good record on. It would be nice to have all the money in the world to answer all the problems the very first go-around. It would be nice to be able to do that. But the Government which went before was totally irresponsible, because its answer to every problem was to write a bigger cheque. That is why we are here today discussing these topics.
The worse thing that ever happened to senior citizens in this country was in the middle 1970s when the former Government moved from a surplus to a large deficit and never got off that track. It totally squandered our prosperity. The economic theory is very simple, Mr. Chairman, and it has to do with seven years of feast and seven years of famine. It is a theory which has been around for a long time. If one is not careful in the seven years of feast, then one cannot handle the seven years of famine.
That Party opposite squandered our prosperity, Mr. Chairman. Day after day it just wrote cheques. That was its answer to every problem. There was no discipline, no caring for the future of the country. It dealt only in the present.


George Baker: Mr. Chairman, in view of the comments made by the Minister a few moments ago, I feel that I have to speak for a few moments.
The Minister stated that our problems were caused by the previous administration writing blank cheques. But I can assure you, Mr. Chairman, that this Government does not intend to write any cheques at all, as our critic on environment has pointed out. The former Minister of the Environment on many occasions pointed out that the lay-offs which took place in the Canadian Wildlife Service and with Environment Canada are absolutely unexplainable and cannot be defended by any Government.
But I want to get back to the Minister's sensitivity and concern. What was in the financial statement, the Expenditure and Review Program, is correct when it states that the Government is going to save $30 million because it is going to treat pensions as income, and that it is going to save $60 million through separation payments under Employment and Immigration.
What that means, Mr. Chairman, is that prior to this Government taking office, and prior to March 31, someone who finished their employment after years of working, and who received payments from their employer, did not have those payments taken into account as income for unemployment insurance purposes. Now it is taking into account. In fact, it is spread out over the entire years so that we get to the point where someone who has worked all their life, never drawn unemployment insurance, and always there was that provision there whereby they could draw for a set period of time, has had it discontinued. The Government is going to save $60 million. I will agree with that figure. The Government is going to save $30 million by taking pension income as earnings as of, I believe, January 1. That means, Mr. Chairman, that anyone who retires early and draws a pension early-that is a lot of people in the Armed Forces and the Public Service-will have their pensions taken into account as earnings for unemployment insurance purposes. In other words, Mr. Chairman, they have to pay in but they can't collect. Is that sensitivity and concern, as the Minister of State for Finance claims?
What really concerns me, Mr. Chairman, is this atrocious $200 million figure, which I suppose, Mr. Chairman, in considering this Bill of $18.2 billion is another $200 million which was not taken into account. What the President of the Treasury Board says is that we are going to save $200 million through intensifying interviews under the Unemployment Insurance Act. But there will be no saving of $200 million, and I will tell you why, Mr. Chairman, and I will tell the Minister why.
We can look at all the report from the Auditor General we want and there is always this massive figure of overpayments which should never have been made to recipients who were drawing unemployment insurance. There was never a distinction made as to why they received the overpayment. In other words, according to the law, if the Unemployment Insurance Commission makes a mistake, it is the recipient who has to pay the money. If the employer makes the mistake, the recipient still has to pay back the money. That is a considerable portion of what the Auditor General recognizes as being "overpayments".
The Minister says, "We are going to save $200 million now by intensifying interviews". In other words, Mr. Chairman, if the recipient is telephoned and they are not at home, they can get cut off their unemployment insurance benefits. If it is found that they went for a week looking for a job somewhere and didn't report that change of address to the Unemployment Insurance Commission they can lose their unemployment insurance benefits. If the Commission makes a mistake, as in a lot of these cases, it is the recipient who has to pay it back.
June 17, 1985

The point is, Mr. Chairman, that all of these cases involving the $200 million will be appealed. They will be appealed to the Board and then finally to the federal Tax Court of Canada, because we are going to encourage those people to appeal. The Court will hear their appeal because their reasons will be justified for that appeal. How else are we going to do it, Mr. Chairman? We are going to keep these appeals going for three years because the Act states that anything which is owing over a three-year period is automatically erased by the Unemployment Insurance Commission. I believe that every Member of Parliament now is going to encourage everybody to appeal-


Some Hon. Members:: Question.


George Baker: I am going to continue until nine o'clock. I am not going to sit down.


Some Hon. Members:: Question.


George Baker: I am going to continue until nine o'clock, and then I am going to finish tomorrow morning because of what the Minister said-


Steve Eugene Paproski: Order. It being nine o'clock shall I rise, report progress, and request leave to sit again at the next sitting of the House?


Some Hon. Members:: Agreed.
Progress reported.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the House under Standing Order 45 deemed to have been moved.

Bill Attewell: Mr. Speaker, I rise under Standing Order 45. On June 4 in the House, in the absence of the Minister of National Revenue (Mr. Beatty), I asked his Parliamentary Secretary if Cabinet should not be considering improving Canada Post services before a rate increase is approved and implemented. Clearly the Canadian economy cannot afford to ignore the deteriorating productivity in a Crown corporation, that is the Post Office, that vitally affects every Canadian and the ability of every Canadian business to compete effectivetly in the marketplace.
Canadians want quality service and there is no reason they should not receive it. They are paying for first-class service and are entitled to the best. Canada Post claims that the mail is on time in 86 per cent of cases. This is just not good enough
Adjournment Debate
in the estimation of most Canadians. Normally if a paying customer is dissatisfied with the services of a particular company he has the option of taking his business elsewhere where he can receive the best quality service for his money. Since the post office has a monopoly on first-class mail it is not possible to go elsewhere unless a person can afford the services of private couriers.
Why should Canadians be forced to do this? It is our responsibility to provide postal service to Canadians, and ultimately to provide the best service for their money. The cost of doing business through the post office is not just the cost of stamps, but also the cost of delays, uncertainty, and anxiety. It is not knowing what you are going to get in the mail and when you are going to get it. Canadians seem to be giving up hope of better postal service, Mr. Speaker. They are plain fed up and tired of giving Canada Post the benefit of the doubt. Canadians want a post office that reflects responsibility, dependability, and service consistency and efficiency.
How can a postal rate increase be justified when we are aware of the many horror stories about disgraceful service. 1 am not referring to isolated incidents. The public is now being asked to pay more for postage in an environment where volumes of addressed mail are declining along with the quality of service. The seeming inability of Canada Post to provide consistently good service will hobble its future. Canada Post stands to lose a tremendous volume of business to private courier services.
Surely the Corporation must realize that a price increase during a period of declining service can only accelerate the decline in mail volumes and ultimately result in additional revenue losses, something 1 am sure the Corporation does not want to have happen if it still intends to clear its deficit position by 1987. We must remember that the inefficiencies of Canada Post not only impact negatively on the general public of the country, but also cost the business community, particularly small business which can ill afford to have its time and money wasted and abused by Canada Post.
Not only are small businesses concerned about the two-cent rate increase for first-class mail, but also about the possibility of a larger increase for small packages that are not sent first class. If these rate increases are approved they could force lay-offs and closings among businesses that are unable to make the necessary changes in their operations before the increases come into effect. Indeed, it is no small wonder that small business owners get very upset at the slightest hint of a postal disruption.
It is truly unfortunate that Canada Post all too often appears to be threatening to strike or is suffering from labour trouble. Perhaps it is time to reconsider whether Canada Post should have the right to strike. I believe that it is an essential service. More importantly, should a corporation that is vital to millions of Canadians have the right to disrupt a service that could mean the livelihood of hundreds of thousands of Canadians?

June 17, 1985
Adjournment Debate
It is time to get Canada Post's house in order. It is time to consider what the customers want; that is, what Canadians expect and want for their money.
I commend Canada Post in its attempt to decrease and eventually eliminate its cash flow deficit. It is true that the Corporation has come a long way since its incorporation in 1981, but it is not fair to ask Canadians to carry the burden of its deficit when there is little indication and hope of improved services in the future. They are being asked to pay more for a service that is totally unacceptable.
In summary, I would ask my Cabinet colleagues to seriously consider the proposed Canada Post rate increases, what effect they will have on Canadians and whether they honestly feel Canadians should be asked to pay more for services while there is no evidence of improvement in the basic service. I have had many letters and phone calls to my constituency office about this topic. Not one letter has been complimentary of the post office. They have all been harshly critical of the service and demanding that we not approve a rate increase.
Finally, let me talk about the absenteeism rate at Canada Post. It is nowhere near the level in private enterprise. I believe it is another serious flaw that the management of the corporation should bring into line with normal levels. Perhaps when other efficiencies are put into effect, only then should it come back to the Government to ask for a rate increase.


Mr. G. M. Gurbin (Parliamentary Secretary to Minister of the Environment):: Mr. Speaker, first I want to thank the Hon. Member for Don Valley East (Mr. Attewell) for providing Canada Post with copies of the envelopes that took a great deal of time to get to their destination. I can assure the Hon. Member that upon receipt of these envelopes, an investigation has been launched by Canada Post and the Corporation will determine the causes of the undue delay that occurred in the delivery process.
The Corporation and the Government recognize that perhaps one of the single most important issues for Members of Parliament and many Canadians is the level of service provided by Canada Post. In fact, I believe we could say that this is something that truly unites Canadians. In this, the Corporation achieved initial dramatic increases in the level of service, with speed and reliability levels reaching up to 90 per cent on-time performance in 1983-84.
However, several factors affected its performance in 1984 and earlier this year. One of the major factors is that the Corporation is now processing the largest volumes of mail in the history of the post office. Further, during the prolonged period of labour contract negotiations, many large and small postal users flooded the system to protect themselves from possible disruptions. This made Canada Post's task of providing Canadians with acceptable levels of service particularly difficult.
Since service is Canada Post's business, every effort is being made to restore service performance to previous levels. Recent tests indicate that this has been under way for the past two months and that service performance now stands at an 85 per
cent level. Canada Post Corporation's goal is to reach a 90 per cent on-time service performance level in the next few months. Of course, the Corporation will maintain its policy of both monitoring and publicly releasing its service performance levels on a regular basis.
In a corporation which handles more than 25 million pieces of mail every day; in a corporation which handles almost 7 billion pieces of mail every year, such incidents are bound to happen. If only 1 per cent of the mail does not get to destination on time, we have 250,000 unhappy customers.
Canada Post is conscious of the inconvenience this problem causes its customers and I can assure the Hon. Member for Don Valley East that all efforts are being made by the Corporation to reduce to a minimum these types of incidents, and at the least possible cost of Canadians.


TRANSPORTATION OF DANGEROUS GOODS-RAIL CARRIAGE HAZARD TO TORONTO
Mr. Alan Redway (York East):: Mr. Speaker, on May 24, the Railway Transport Committee of the Canadian Transport Commission rejected a recommendation to reroute trains carrying hazardous materials through the centre of downtown Toronto. That was a shock to me, a shock to my constituents, and a shock to the people of Metropolitan Toronto. That recommendation had been made by a very distinguished committee, the Burton-Post Committee. Burton is a professor at the University of Toronto and is well regarded; Post is actually the Ontario Regional Manager of the Railway Transport Committee itself. These two distinguished gentlemen recommended rerouting out of downtown Toronto trains carrying hazardous material. However, for some astounding reason, the Committee rejected this recommendation.
In addition, both myself and my constituents were shocked because the main line of both CPR and CNR go right through my constituency of York East. It is the same line on which the famous Mississauga train derailment occurred a few years ago. If that train had stayed on the track in Mississauga, that accident would have occurred 30 minutes later in my constituency. All the people in my constituency have been very concerned about this situation ever since that time. They are very concerned about train derailments because something like 1,500 freight cars carrying hazardous materials travel through Metropolitan Toronto every month. Two accidents occur involving those particular freight cars every year. The Mississauga train derailment was one example. Another accident occurred recently in February, 1984. It was an accident in which a so-called empty freight car blew up in the MacMillan Yard in the Scarborough area of Metropolitan Toronto. Since that time there have been a number of very famous train accidents, one occurring in the Barrie area of Ontario and another occurring in the Pembroke area of Ontario. Of course there was the very famous one in India. All those accidents involving trains carrying hazardous materials required a great evacuation of residents living in the surrounding areas.
June 17, 1985

The Commissioner of Roads and Traffic in Metropolitan Toronto indicated that it was impossible to have a similar evacuation in Metropolitan Toronto because of the high density population in that area. A number of suggestions have been made on how to deal with this sort of problem. One was to slow down freight trains to something like 25 miles per hour or 40 kilometres per hour. That has been rejected already by the Railway Transport Committee, because there are so many trains travelling this route it would clog up the line. The Committee indicated that it was impossible to slow them down and clog up the line.
Another suggestion, as I just indicated, was the rerouting of trains. That was rejected because of the cost of $120 million, apparently, to build other facilities to allow for the rerouting of these trains out of Metropolitan Toronto. By the way, these trains travel back and forth, carrying the same goods in and out, without dropping them off at all. It is an incredible situation.
The Toronto Board of Education has arranged for and is now holding evacuation drills in its schools. There are nine such schools in areas adjacent to the direct lines travelling through the Metropolitan Toronto area. There are something like 76,000 students in those schools. They had their first drill on March 5. They are planning another evacuation drill in the fall and expect to carry them out on a regular basis.
Other suggestions have been made about how to deal with the situation. Some of them include ceilings on the numbers of cars on these trains. Right now these trains carry up to 150 separate carloads of hazardous materials at a time.
Another suggestion for the federal Government or the Commission is to prepare some evacuation plans themselves. They have not done anything of that sort.
Another suggestion is to make sure that the cabooseless trains which are proposed to travel back and forth not be allowed to travel in high density metropolitan areas. There has been nothing said about that as yet.
Of course another suggestion is the colour-coding of these cars carrying hazardous material. That at least is apparently going to be introduced when the Transportation of Dangerous Goods Act, proclaimed November 1, 1980, is actually put into effect. There are no regulations promulgated to put it into effect, but I understand those regulations will come in on July 1 of this year. They will finally be some colour-coding so fire-fighters will know what is in those cars when they turn over and cause these potentially hazardous situations.
The final suggestion was for not just a rerouting but a relocation of the actual tracks themselves; put them in an area where there would not be a high density of people and there would not be the same sort of problem situation occurring. Obviously there has been a lot of resistance to that because it will cost a lot of money, and there will be some people wherever the track is relocated. But it is possible because there is a green belt plan around metropolitan Toronto. It would be possible to relocate the track in that area. Approval has to
Adjournment Debate
come from the Cabinet, not from the Canadian Transport Commission or the Railway Transport Committee.
I ask the Parliamentary Secretary this evening if the Government is now prepared, if it is going to reject all of these other suggestions, to finally approve some funding for a relocation of these tracks to solve the problem and make sure the safety of 2.5 million people in metropolitan Toronto is protected, that they are not going to be placed in a situation such as the one which recently occurred in India where they suffered such devastation.


Paul Wyatt Dick: Mr. Speaker, 1 hope to respond to most of the items the Hon. Member has raised.
The question of transportation of dangerous commodities through populated areas, be they large or small, is one of grave concern to the Minister of Transport (Mr. Mazankowski). As you know, it was the present Minister who asked Mr. Justice Samuel Grange to inquire into and report on the derailment at Mississauga in November of 1979. The Minister has followed this issue closely over the intervening years.
As a result of the Grange Commission inquiry, many important steps have been taken to increase the level of safety in the transportation of dangerous commodities through built-up areas. For instance, hot box detectors have been installed, gateway inspections are being performed, a retro-fit program is underway to install roller bearings, tank cars have been equipped with double-shelf couplers, regulations have been promulgated with respect to thermal and bottom fitting protection and new freight safety inspection regulations became effective on November 5, 1984. Hon. Members know that there has been much recent debate in this Chamber with regard to the transportation of dangerous goods and more specifically PCBs. New regulations enforcing standards for the transportation of dangerous goods will come into force July 1, 1985.
As to the case at hand, Mr. Speaker, as already stated by the Minister, the implications of the Burton-Post report recommendations are severe and there has not been a clear consensus as to which of the two, if any, should be implemented. I would like to advise the Hon. Member that the responsible authorities are invited to apply for railway relocation at any time, an option which has yet to be exercised. It must be pointed out at this time, Mr. Speaker, that the CTC has not rejected the recommendations of the Burton-Post report, but rather that in an effort to reach a solution which would prove satisfactory to all interested parties the CTC has invited submissions on safety measures not already addressed in the Burton-Post report. These submissions must be filed by October 1, 1985. I would encourage the interested parties to take advantage of this opportunity and make their views and ideas known.

June 17, 1985
Adjournment Debate


NATIONAL PARKS-PARKS POLICY-MINISTER'S POSITION. (B) REQUEST FOR MINISTERIAL ASSURANCE
Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, as you probably know, on page 5642 of Hansard of June 11, in a question put to the Minister of Environment (Mrs. Blais-Grenier) on Parks Canada, it is shown that 1 did receive a reply to the effect that the Minister committed herself to protecting, improving and beautifying the Parks. Having received that reply, I pressed her further to obtain a commitment that she would not review or change the present policy of Parks Canada, that there will not be any mining, timber cutting or other activities in conflict with Parks Canada policies.
In reply, apart from the fact that she could not resist the temptation of addressing some vilifying comments in my direction, comments which are on the record for anyone to see, she urged me to stop reading newspaper headlines and referred me to statements made before the standing committee of the House. She did this rather than taking a clear stand on whether or not she would make sure that there would be no review or change of the existing Parks Canada policies in which Canadians place so much confidence and have for many decades.
Today, what I see in The Globe and Mail is an article describing an interview with the Minister. This article again puts in jeopardy the attitude of the Government toward the environment, and in this case toward Parks Canada. In the article, it says that the Minister first indicated that she would not consider mining or logging in national parks like Banff or Jasper. Big deal. Of course one does not consider mining or logging in such parks as Banff or Jasper. What kind of a statement is that? It is a well known fact that those two major parks, along with others, represent a very valuable heritage. They are parks in which one would not even dream of let alone contemplate the possibility of mining or logging.
The interview goes on to quote the Minister as saying that it is not anything anyone would wish, but if they are to establish a park in an area where the logging and mining rights are owned by private developers, then there would have to be some compromise. What kind of a park would this be that the Government envisages? Is it a logging park, is it a mining park or is it a logging and mining park? How can one reconcile this kind of statement with the well established practices and policies of Parks Canada, which are to ensure that there are no activities of this kind?
For example, would this kind of proposal lead to the acquisition of South Moresby in those magnificent islands as a national park in which logging would be allowed? I would ask, as would you, Mr. Speaker, what kind of park that would be. Would it be a park in which the land is saved but not the forests? Does that make any sense?
I am amazed at this kind of muddled thinking that is emerging from the Government which does not seem to know the basics about environmental and parks policies. At this rate,
the Government is becoming a menace to the environment. The Prime Minister (Mr. Mulroney) cannot go on saying that the Minister was misquoted. That is like saying that a tape recorder was functioning improperly. We cannot go on like that. The series of statements indicates that something is profoundly wrong and that there is an attitude which poses a threat to the parks. It poses a threat to parks in the same way in which the Government posed a threat to wildlife by the cuts it made last November. On the one hand we have a Government which prides itself on the creation of jobs, but on the other hand it does not hesitate to wipe out existing jobs in wildlife. It still has the nerve to defend that decision, in light of the continuous appeals to restore the Canadian Wildlife Service.
The Government has already made decisions which pose a threat to another very important field which has environmental implications-renewable energy. Renewable energy is very important. It is the path to a conservation approach and to the use of resources which are not finite and environmentally friendly. It has taken years to put renewable energy resources on track. However, the NRC is having to abandon its research, as well as a group of scientists who were involved in soft energy studies. The Budget has imposed a federal sales tax on insulation material, and solar and wind equipment. If all the elements are put together, we see a general trend which is telling Canadians that their future lies only with oil and gas. That is not the road which Canadians should travel. The Government is dismantling many years of careful work, which was launched in the 1970s, particularly in 1977 when the country was hit with the second oil crisis.
We are seeing a threat to the parks policy because of the silly statements of the Minister. There is a threat which has emerged in the wildlife field. There is a threat and an impending serious consequence to the over-all conservation of energy by renewable sources, due to the decisions of the Government.


Gary Michael Gurbin: Mr. Speaker, 1 welcome the opportunity to respond to the Hon. Member for Davenport (Mr. Caccia) on behalf of the Minister of the Environment (Mrs. Blais-Greni-er). I find the logic of the Hon. Member somewhat convoluted.
I think he will know that the parks policy, as it is now written, is a direct consequence of the 1979 Conservative Government when the present Minister of Fisheries and Oceans (Mr. Fraser) approved the policy during his term of office as Minister of the Environment.
When the Hon. Member speaks about parks policy he should be fair enough and logical enough to define the whole policy. He knows that the policy, as it is presently written, which he supported when he was Minister and which continues to be supported without reservation by this Government, does indeed include specific areas in which there is a preservation and conservation attitude.
However, we also have a commitment to support the kinds of activities which will respect the things which have been done
June 17, 1985

by local residents. Such is the case with timber harvesting in Gros Morne National Park in Newfoundland and trapping in Wood Buffalo National Park in Alberta and the Northwest Territories. Those activities were not stopped two years ago, they are still continuing. These are activities which seem reasonable to the local residents. It was agreed at that time when the parks were established that the activities would be permitted because of their importance to the local economy. Nor can we be insensitive to the economic and cultural importance of certain activities such as hunting and fishing to our native peoples. New parks in Canada's North will be established in such a way that the importance of these activities will be fully recognized.
Again, I would point to new parks, Mr. Speaker. We want new parks and we are going to have new parks, but we will have to have some sensitivity toward these things. I cannot believe that the Hon. Member opposite would not share that
Adjournment Debate
similar view if he were in fact still in Government and still Minister of the Environment.
This Government without question is firmly committed to maintaining the natural beauty and integrity of our national parks, parks which are famous worldwide, and deservedly so. Resource extraction will not be permitted within their boundaries. But we cannot turn a blind eye to the economic and cultural importance of certain activities to local residence and native people. I know, Mr. Speaker, that the Minister of the Environment, who is now the Vice-Chairman of an OACD conference and will be going to Helsinki to sigh certain documents on behalf of Canada and the international community, supports that comment and that perspective totally.


The Acting Speaker (Mr. Charest):: The motion to adjourn the House is now deemed to have been adopted. Accordingly, the House stands adjourned until tomorrow at 11 a.m., pursuant to Standing Order 2(1).


[Stage Direction]
The House adjourned at 9.30 p.m.
[Stage Direction]
Tuesday, June 18, 1985