1986-01-28

[Stage Direction]
The House resumed from Monday, January 27, consideration of the motion of Miss Carney that Bill C-85, an Act to amend the Petroleum Incentives Program Act, be read the second time and referred to a legislative committee.
Mr. Russell MacLellan (Cape Breton-The Sydneys):: Mr. Speaker, in opening the debate for the Liberal Party I would like to comment on the address by the Parliamentary Secretary to the Minister of Energy, Mines and Resources (Mr. McDermid). In his opening remarks he said that his Government was elected because the people wanted a change. I think they got it. A good Liberal Government has now been replaced by a Government which makes one devastatingly bad decision after another, which has a very detrimental effect on Canadians and their economic future.


Mr. Gustafson:: What about the 21 per cent interest rates?


Russell Gregoire MacLellan: The Parliamentary Secretary said it was a goal of the Government to do away with the National Energy Program. I would say that it was not only a goal, it was an obsession. Having developed this mania, the first and foremost pillar of the energy policy of this Government is to do away with anything that had any relationship whatsoever with the NEP. The Government did this instead of looking at the programs to determine for itself what would be in the best interests of Canadians.
Another thing of great concern to me is the abandonment of the Foreign Investment Review Agency and the implementation of Investment Canada. I am very concerned about this, particularly now. With the reduction of oil prices we are entering a period where Canadian companies with a high debt load are very, very vulnerable. The Prime Minister (Mr. Mulroney) said in his speech in New York in December of 1984 that Canada is open to investment. I am concerned that what Canada is open to is raids by foreign corporations on Canadian companies. If oil prices continue to decline and stay down, as I think they may, for even a short period of time, then Canadian companies with high debt loads and oil and gas reserves are very vulnerable to foreign multinationals who do not want to do their own exploration because they find it easier
and cheaper to pick up the assets of Canadian companies at bargain-basement prices. Nothing in this Government's philosophy would prohibit that from taking place. This situation has to be watched very closely because if we do not monitor it from the very beginning we could very much regret it later on.
The Parliamentary Secretary also mentioned that the Government was interested in the deregulation of communications. This also is a subject of great concern to me particularly where it affects the CBC which has had its budget severely reduced. The CBC is very much admired throughout the world, and for the last 40 years various Governments have considered it to be part of the cement that binds this country together. I am very concerned that it may be reduced to a remnant of its former self. I am also very concerned about our book publishing industry being placed on the table in our free trade negotiations with the United States. I am concerned as well about those negotiations themselves. The way this Government is developing it, free trade seems to boil down to: What does the United States want? Let us be nice to them. Let us be perceived as being more than friends, as being agreeable. Let us be perceived as not interfering with the wishes of the United States in whatever relationship it wishes to have with Canada. I think that is a rather frightening position to take, particularly when these free trade talks will have such tremendous importance for the future of Canada. If we tie ourselves down to a continental approach to free trade leaving no room for latitude on an international basis, and do away with the trade surplus that we have just because the United States is not happy with it, I think we will be asking for economic disaster in the future.
There is a position which could be taken which is more important and serves Canada's interests much better than does the present one. I am concerned that we are giving the country the appearance of being too agreeable. We are talking free trade with the United States in the belief that that is what they want to talk with us. The indications from Americans are not that they want to talk free trade on a one-on-one, equal-partner basis. We are having difficulty convincing the United States of the importance of some of our industries. I have already mentioned the book publishing industry and other things that we want to keep off the table. We are having trouble convincing them of the importance of our fisheries in Atlantic and western Canada and of the fact that these industries should not be available for countervailing tariffs.


Mr. Malone:: Mr. Speaker, I rise on a point of order. I am most willing to listen to the Hon. Member, but I am hunting

January 28, 1986
Petroleum Incentives Program Act for the relevance of book publishing, fishing, and trade with the Americans to Bill C-85 which deals with PIP grants. If the Member cannot tie those together, perhaps he should conclude that he has concluded his speech and cannot think of anything else to say and is, therefore, doing what he is doing now.


Russell Gregoire MacLellan: Mr. Speaker, I appreciate that the Hon. Member is at least listening to my speech. From the non my comments would go downhill. I am replying to the comments made yesterday by the Parliamentary Secretary. If the Member will give me his continued attention, he will hear some other points which he may consider to be more relevant. I hope he will be generous in that regard.
I am also concerned about the attitude that is being taken in the United States with respect to the import of oil and gas, particularly that imported from Canada. As the Hon. Member who just intervened knows, as do all other Members in the House, the American Government wanted a more reasonable price for natural gas imported into the United States. This was granted and a very reasonable pricing mechanism was set in this regard. We are now hearing disturbing rumours of the possibility of an import tax to apply to oil and gas imported into the United States from Canada. This is all in the context of free trade and I think it is a disturbing environment in which to have these discussions on free trade.
I am also concerned about the comments of our chief negotiator who has mentioned that he favours the inclusion on the table of the sale of water from Canada to the United States. We know that eventually the thing that Americans will want most from Canada will be Canadian water. For the negotiator to say that what the Americans want most is what he wants to give them, does not appear to be good negotiating practice.
I feel that through this Bill the Government is abandoning the whole thrust of off-shore exploration. That is very damaging for frontier development. The Government has said that it is going to be doing away with the Petroleum Incentives Program, but will replace it with an exploration tax grant and that this will be the answer. However, that is certainly not the answer. We have seen that it is not the answer as exploration on all frontier areas, including the off-shore, is declining. It is maintaining a certain level that is not, in itself, alarming, mainly because the petroleum incentive grants will be continued until the end of March of this year and then will be grandfathered to December of 1987.
However, the outlook for the period after March 31 of this year, and particularly after December of 1987, is a concern to areas that have come to depend on off-shore explorations and to Canadians in general who are very concerned about the security of supply of oil and gas. That will be very, very important in the future. We cannot for a minute assume that our conventional resources will be enough to carry us through for very long. Due to the way in which we are selling them, we need to replenish our reserves in order to be able to assure Canadians that there are reserves within the Canadian boundaries that will be there when we need them.
It is shortsighted to ignore the security of supply question. I was pleased to hear the Parliamentary Secretary make mention of his Government's commitment to Canadianization. I do not, however, agree with his statistic that in the last year the Government increased Canadianization from 42 per cent to 47 per cent, more than the former Government did in the previous three years. In the previous three years the former Liberal Government increased Canadianization from 28 per cent to the 42 per cent level.
I am hoping that the Government will not rest on this statistic of 47 per cent, as the Parliamentary Secretary has assured me it will not. I hope the Government will continue to increase the Canadianization of our oil and gas industry. The increase from 42 per cent to 47 per cent is almost entirely the result of Olympia & York's purchase of Gulf Canada and the takeover of Gulf Canada's downstream assets by Petro-Canada in Ontario and western Canada. We now know, of course, that Ultramar has taken over the downstream assets of Gulf Canada in Quebec and Atlantic Canada.
It is very important that we maintain this Canadianization theme. That is not to exclude multinationals, because I feel that the exploration, refining, and marketing of oil and gas in the country owes a great deal to foreign corporations because they have shown us the way.
To a large extent, people who work for Canadian companies at present started in the oil and gas industry with multinational and foreign oil companies. However, we cannot forget about the Canadian aspect as, I think, has been done in this sale. 1 think we are telling Canadians that we will look at the statistics of Canadianization, but unless you are a Canadian company that can beef up the statistics and that is meaningful in the percentage of Canadianization, we really do not have time to be concerned about your problems. I am afraid that that will reflect itself if this new Bill is passed. This Bill is doing away with what was an 80 per cent grant under the Petroleum Incentives Program to Canadian companies that are not paying taxes and giving these same companies a 10 per cent grant, or 40 per cent of the exploration grants which the Government is offering under this proposed legislation.
I believe the effect of this will be to remove small Canadian companies completely from frontier exploration and place them in great difficulty. When one also considers the position in which the Government has placed Canadian companies as a result of the Western Accord, by not leaving any buffer for them in times of declining oil prices, one realizes that these Canadian companies will be hurt very badly.
It is unfortunate that the Government decided that it should remove the new oil reference price, which was of great help to Canadian companies. Now small Canadian companies that have investments and are indebted are on the same footing as the multinationals which have their resources and no debt problems. Furthermore, these multinationals have vast supplies of old oil on which they will be able to declare a windfall profit.
January 28, 1986

It is disturbing to think what this Bill will do for offshore exploration and exploration in the Beaufort. We have seen that the Petroleum Incentives Program does pay dividends. Frontier exploration was going nowhere until the former Liberal Government convinced Petro-Canada that it should be involved in this exploration. At the time Petro-Canada became involved in Hibernia and Venture, those two projects began to take hold. We have seen the reserves that have been delineated in Venture and the very positive results-
Mir. Malone: Mr. Speaker, I rise on a point of order. I am attempting to listen to the Hon. Member and ascertain the point he is making in his speech. He has mentioned that the exploration did not take place in any significant amount until the policy of the last Liberal Government.


The Acting Speaker (Mr. Charest):: Order. Obviously that is a point of debate. I admit that it may be a point, but rather than a point of order, it is a point of debate. All Members will have a chance to participate in the debate.


Russell Gregoire MacLellan: Thank you, Mr. Speaker, for protecting me from that unruly group opposite. Let me return to the very pertinent point I was making concerning Petro-Canada's very important role in developing the offshore exploration and delineating the reserves with respect to Hibernia. We have been encouraged in recent months by the finds in Hibernia, such as Ben Nevis. The most recent find is the Husky Bow Valley discovery. We have also been encouraged by the announced discovery by Gulf in the Beaufort. Therefore, we are finding very significant reserves of oil and gas on the frontiers. What is the policy of the Government with respect to utilizing and developing these discoveries in the near future? I suggest that it is as a result of the Petroleum Incentives Program that we have reserves that can be developed now.
I believe that a great deal more of delineation drilling must be carried out to establish further the size and context of these reserves. This will not happen under the amendment that the Government is making in Bill C-85, and I believe that is unfortunate.
At least through the actions of the former Government with the Petroleum Incentives Program we know that some reserves exist and can be developed in the near future. It is very important that these be developed soon because we are rapidly running out of conventional supplies, particularly in oil. If we do not begin planning to bring on these new supplies we will leave ourselves in a vulnerable position.
Let me explain the serious effects these provisions will have in Nova Scotia. In September, 1984, there were nine rigs operating off the coast of Nova Scotia. After the Government's announcement of these planned amendments to the Petroleum Incentives Program and its eventual replacement with the exploration grants, there was just one rig operating off the coast of Nova Scotia one year later. In September, 1984, there were 3,000 people employed in the offshore of Nova Scotia, but there are only 500 people employed at the present time. That is a very serious reduction in activity in
Petroleum Incentives Program Act
Nova Scotia and we hope that this can be turned around. However, in order for this to happen, it must be done by the multinationals through the format of these amendments.
The multinationals will wait until they feel the time is right to do any further work and, therefore, all of our frontier resources may be left where they are in their present undetermined and insufficient state of delineation. This is a concern to all of us who are worried about our security of supply, the Canadianization of our oil industry and the state of our energy policy in this country.
I believe it is significant to note that the Government has been saying continually that it wants the market to tell it exactly what should be done. I am afraid that the market will do just that, which means nothing will be done in the future in frontier development.
There is a severe contradiction in this case, which is typical of the Government. It relates to the specified portion which the Minister says she will invest between the end of March, 1986 and the grandfathering period for the Petroleum Incentives Program to the end of December, 1987, which allows the Minister to determine how much she will invest in the Petroleum Incentives Program. This gives her great latitude and directly contradicts her statement that she wanted to let the industry know what would be available to them so that everyone would have an equal opportunity.
There are those who say that all oil companies, regardless of their country of origin, should have an equal opportunity. I am not ashamed to say that this Party is not opposed to giving Canadian companies an advantage in this country. Canadian companies, particularly in the formative years, take very great risks because of the difficulty of establishing a foothold in the oil and gas sector. We have seen many of them suffer financial set-backs as a result of the recent recession. Some of them are still in difficulty, and I think it is unfortunate that these companies may not be allowed to regain their feet and participate in a meaningful way in this oil and gas exploration.
I ask the Government to reconsider these amendments and to consider proposals that have been made by other groups such as the Independent Petroleum Association of Canada who have set forth to the Minister their own recommendations for the replacement of or amendments to the Petroleum Incentives Program Act. Its recommendations were not adhered to. But if there should be changes to this program, then the changes presented by the Independent Petroleum Association of Canada are very reasonable and I think they should be examined and re-examined by the Government. I think it is unfortunate that that has not been done.
More consideration must be given to frontier development, to the areas affected and to our energy future. We must have assurance of supply. I am concerned that judging from the way the Government is talking, no special attention will be given to frontier oil exploration and development. I am not only concerned about the frontier but also about the fate of projects like the Husky upgrader. I feel as well that it is very important

January 28, 1986
Petroleum Incentives Program Act
to encourage exploration in the western sedimentary basin in western Canada. I think it is a very important sector for job creation and it will be very important for the economic development of western Canada. But the Government has given billions of dollars to the oil companies through the abandonment of the petroleum revenue gas tax. This will mean billions and billions of dollars lost to the private sector by 1990. One estimate is that by 1990 the Canadian taxpayer will have lost a total revenue source of $12.2 billion and this money will go to the oil and gas industry.
The Minister has said that she is confident that this will flow through to exploration and development, which will create an engine for growth in the energy sector and will be of benefit to all Canadians. We in the Liberal Party would like to be assured that this will happen, but we do not have confidence that either the Minister or this Government really know what they are doing in relation to this ambition. We have not seen any lasting indication other than some platitudes given out by the multinationals and the large players in the oil and gas industry. We have not seen any concrete action being taken. Granted, it will take time for the intentions of the industry to manifest themselves, but we have not seen the intention clearly that the industry, on a continuous basis, will put back into exploration and development what they have been given through the abandonment of the petroleum and gas revenue tax.
One of the great tests will be what this industry is going to do with respect to frontier development, if it is going to continue to explore. Indications are that it is moving away from frontier development. Fortunately, we have these optimistic finds which will, hopefully, keep the attention of the oil and gas sector so that it will continue to explore and develop these very great potentials. The tragedy is that it is almost certain that the small Canadian companies, and perhaps companies other than Petro-Canada, will not be able to participate in exploration and development when the PIP program is finally over.
I think it is very unfortunate for the long term future of our oil and gas industry that the Canadian companies are being shut out from the role they can play and the benefits they can achieve. I ask the Government to reconsider the amendments it is putting forward in Bill C-85. I ask it to consider the need for further exploration of the frontier and the fact that these resources should develop. I ask the Government to assure us that there will be a higher percentage of Canadian participation than is becoming evident at the present time.


Mr. Bill Blaikie (Winnipeg-Birds Hill):: Mr. Speaker, our energy critic is unavoidably absent today so I have the opportunity to say a few words about the Bill to amend the Petroleum Incentives Program Act. This was a controversial program right from the beginning. I remember it well when we were debating it during the debate on the series of Bills which brought in the National Energy Program. It was something that the New Democratic Party opposed at that time on the basis that this was another form of a historical series of giveaways to the energy sector and to the oil companies in
particular, and another form of the energy policy whereby Canadians should pay the shot for exploration, a policy entrenched over the years under successive Liberal Governments.
I believe at one time in the North we were paying 110 cents for every dollar that was spent on exploration. The Canadian taxpayer was taking all the risks, yet it was the companies which actually found some profit from the distribution and sale of that particular resource. So the Petroleum Incentives Program was part and parcel of that approach to energy development, and in that respect it deserved all the criticism it received at that time.
The irony is that that policy has been done away with by a Conservative Government, and one would like to think that is because there has been a change in direction. Well, there has been some change in direction in terms of the rhetoric of the Government about relying more on the market-place, but we still have an energy policy that is based on public risk and private development.
The Hon. Member who spoke before me indicated that the Government, although it is taking away the Petroleum Incentives Program from the energy companies, also gave to the oil companies in the form of the abolition of the PGRT some-to use the Hon. Member's figures-$12.2 billion. So we have not had a change in the over-all approach that the public should make the investment and take the risk, and the private sector, with the exception of Petro-Canada, should take the profit where profit is eventually made, in what I admit is sometimes a very long term process, with great lead times. Nevertheless it is a policy which we in the New Democratic Party find objectionable. We find it so because our view with respect to resource development has always been that if it is the public that has to pay for the exploration and the development and take the risk, then it is the public that should ultimately have the equity, ownership and control of those resources. This seems to me to be, in a strange way, in keeping with the free enterprise philosophy of Hon. Members opposite. Those people who take the risk ought to benefit when, having taken that risk, things turn out well. That has been the argument that has been preferred with respect to why entrepreneurs should have the full benefit of whatever profits come from their particular investment. After all, it was they who took the risk, so they should now reap the benefit, having been willing to take that risk with their money. I make the same argument on behalf of the Canadian public. If it is the money of the Canadian public which is being used to take the risk, if its money is being invested in exploration and development of energy resources, whether it is offshore, in western Canada or wherever it happens to be, it should be the public which reaps the benefit of that risk in terms of ownership, in terms of control and in terms of the ultimate profitability of the resource. For some reason or other that has always been an anathema to the Party which forms the Government now and, in many respects, it was only very partially accepted by the Liberal Party when it was in Government in the form of the National Energy Program.
January 28, 1986

Perhaps Governments have had to sink so much money in one way or another into oil and gas exploration because there is something fundamentally uneconomic about our approach to energy policy. I say "uneconomic", because if we use "economic" in the strict, capitalist sense of the word, and if exploration and development of these resources were so economic, it would not require massive public investment in the first place. This would have been something which the private sector could have done on its own in the expectation that it would have been a worth-while investment. I say that only to pose the question of whether or not we should have been on a different track altogether for some time now. Instead of our response to the fact of dwindling conventional oil reserves being that we had to search madly for every last drop of oil within our territory, regardless of the environmental and social consequences of that particular activity, we could have faced up to the fact that Joe Green was wrong in a different way. Joe Greene, the former Liberal Minister of Energy, told us at one time that we had enough conventional oil to last us for hundreds and hundreds and hundreds of years. That was just before the energy crisis.
We could have faced up to the fact that Joe Greene was wrong by taking a conservationist approach to energy policy. I realize that some things happened. There was the Canadian Home Insulation Program and the program for conversion from oil to gas. There has been a number of conservation programs undertaken by various levels of Government in Canada. However, all these things together are just a drop in the bucket compared with the money which the public has been consistently asked to spend on this other approach, that is, to spend billions and billions and billions of dollars on frontier oil and gas exploration.
I am not maintaining that these resources should never be developed, but I am maintaining that they should be developed by the public, for the public and only when it is possible to do it in a way which does not disrupt the very sensitive environment or ecosphere that we find, for instance, in Arctic Canada. The price we will pay to find that last barrel of oil, if we go about it in the way in which we are now going, will be too high in the final analysis, not just in terms of price per barrel on the market-place or what we may not get back for our investment, but too high in terms of the social and ecological consequences.
1 think also of what could be the consequences of too rapid or too eager development of our offshore resources in Atlantic Canada. Perhaps people who are on site and are involved in it have less reason to worry than someone, 1 admit, speaking from a distance who has not been able to see exactly what is happening. However, I say this as one who worries about these things. It has been one of my nightmares that there should be a blow-out on the East Coast and that terrible damage should be done to our fishery, a renewable resource which, if cared for properly, could go on for thousands and thousands and thousands of years. Yet, we put these renewable and everlasting resources at risk when we try to do things in a hurry because we are not willing to take another and possibly even more
Petroleum Incentives Program Act difficult approach in terms of public opinion, that is, to ask Canadians to accept the reorganization of our energy life so that we can be more conserving of the resources that we have and do not have to be pushed to the wall in the development of as yet unavailable resources. I put before the House this choice, which I think we still have not in the expectation that the Government will suddenly change its mind, but because I think these things have to be put on the record constantly.
In this context, because I have been talking about our whole approach to energy policy and because the Bill is part and parcel of the Government's approach to energy policy, I should like to say a word about the role which I think Petro-Canada could play in our energy policy, if the money, for instance, which was being saved by the cancellation of this particular program were to be used for the appropriate expansion and development of Petro-Canada. I find it increasingly difficult these days to speak about Petro-Canada because not only the Conservative Government but the Liberal Government before it asked Petro-Canada to operate in a way quite similar to any other large corporation. For me, this violates the reason we want a Crown corporation in the first place. Crown corporations have been put in a very difficult position because they have been asked by successive Governments to operate on a commercial basis, going back to the mid-1970s when the Government of that day asked the CNR to operate strictly on a commercial basis. It has not as yet totally done that, but it has made decisions on that basis. Crown corporations by these decisions have been put in a very difficult position. They have been unable to operate in a way that would bring to them the kind of credit which could and would come to a Crown corporation if it were to do what my colleagues and I think Crown corporations should do in any event, that is, to be an actor in the market-place, which is different from the role of other actors in the market-place. Petro-Canada, unlike other Crown corporations, should be an example to others in northern development when it comes to dealing with native people and to a sensitivity to the environment. It should be an example when it comes to sensitivity to employment needs and the needs of communities, workplace safety and health, all these kinds of things. However, I have to report sadly that this is not the case. There has been the odd occasion when Petro-Canada has done something which was a cut above the rest of them, but on many other things I have been furious with Petro-Canada for acting just like every other corporation.
[DOT] (M50)
Petro-Canada has, like everyone else, done away with its full service stations and the jobs that are available to young people. They tore out their full service stations and put up self-serve stations. In my view we have far too many of them. I would have thought that PetroCan, of all Crown corporations, would not have done that, or that it would not have been a Crown corporation that tore up a very traditional location in Winnipeg of a restaurant and gas station and put in a self-serve station.
These actions, as well as those with regard to price, have, over the years, eroded to a certain extent the enthusiasm that

January 28, 1986
Petroleum Incentives Program Act people have had for PetroCan. I want to say to the House, and to Canadians through the House: Do not be discouraged about the possibilities because of what various Crown corporations have been instructed to do by their various Governments. The Crown corporations still have that potential, which was always there and stil is there, to be the kind of economic instrument that the people who originally thought of Crown corporations knew they could be, that is, acting in the public interest and able to do things that other corporations are not able to do, and do them better, in a more socially and ecologically responsible way because they are backed up by the Government and by the people of Canada through their Government. They do not have to be accountable to their short-term profit margins.They do not have to make bad decisions based on what their last quarterly profit margin was. They do not have to lay off people to get a better credit rating because, as it is now, the Government has said to them, "You have to borrow money on the open market now; you cannot come to us any more".
All these bad decisions that Crown corporations make often have their origin in the instructions that they have been given by Governments. That is why these are fundamentally political questions in the final analysis. People are angry. I have complaints about PetroCan not charging less for gas than other companies. Well, it is very difficult for a Crown corporation to operate that way if it has been told by Government that that is not the way it is supposed to operate. In some cases the people like to have it both ways. They want Crown corporations to make money, they do not want them to lose money, but at the same time they want the Crown corporations to give them a break in terms of price. There is that irony there as well.
In any event, I think the larger point is that the relationship between how we understand Crown corporations, how Governments understand them, and the instructions that are given to them. Also, how they behave in the market-place has to be better understood than it is now. Instead what we have from this Government is a mysterious policy. We are not sure whether it is asking PetroCan to behave in certain ways because it is setting it up for privatization. We are not sure exactly what the Government is doing, as is the case with so many other things that the Government does, because there are mixed messages. I suppose only time will tell just exactly what sinister plots lurk in the minds of those who will make the final decisions with respect to the future of PetroCan.
I say to the Government that if it thinks the imagination of Canadians has in any way been diminished over the last several years about what is possible in terms of public ownership in this country in those very, very important sectors of our economy like energy, then it is very sadly mistaken. That imagination may have been dulled somewhat over the years by the bad name that has been given to public ownership by successive Liberal Governments. It is still there and any Government that moves to extinguish it by making a move on PetroCan or any other major Crown corporation in this country will find, to its lamentable surprise, that the Canadian people will not put up with that kind of action.
What we have before us is a very minor amendment. It is not minor in terms of money, but it is minor in terms of changes of approach. To my mind, the Conservative and Liberal approaches to energy development, to my mind, have more similarities than they have differences. It is in the interests of both the Liberal and the Conservative Parties to make out as if they had very serious differences about how energy should be developed in this country. It serves to distract people from the fact that there are a great many more similarities than differences. The more fundamental thing to say is that the approach of both this Government and of its predecessor Government has been very, very similar. I think the extent to which it is different is the extent to which this Government at least says that it wants to rely more on the market-place. It may find that the market-place is not the happy, productive, fruitful context that it maintains it is. When it does that, maybe Canadians will then be at a point once again when they can reconsider their energy future and ask for a Government that would opt for an energy future that is based on conservation and on development of renewable resources, and that is based on a picture of the future that does not just extend into the next decade or into the decade after that, but one which tries to carry out what could be called responsible stewardship, not just for the near future but also for the future that belongs to generations to come.


Mr. Speaker:: Are there questions, comments? On debate, the Hon. Member for Halifax West (Mr. Crosby).


Mr. Crosby:: Excuse me, Mr. Speaker, I have a comment. Is it in order at this point to comment on the speech of the Hon. Member for Winnipeg-Birds Hill (Mr. Blaikie)? I was interested in his remarks concerning-


Mr. Speaker:: Just let me make things clear. The first three speakers, according to the rules, speak for a period of 40 minutes, and now we enter into a period of debate, which I presume the Hon. Member for Halifax West (Mr. Crosby) is doing, a 20-minute speech and a 10-minute question and comment period thereafter. I am saying this because the Hon. Member for Halifax West referred to a comment. I am saying this just to make things clear. The Hon. Member for Halifax West.


Howard Edward Crosby: I do not want to engage in making difficulties. I did rise to make a comment not being aware of the process preceding the delivery of the speech by the Hon. Member for Winnipeg-Birds Hill. I see no other Members rising. If that is the case perhaps I can proceed just by way of making a comment, which was simply in relation to Petro-Canada. The Member for Winnipeg Birds-Hill paid a great deal of attention to the marketing role of Petro-Canada in the Canadian oil industry. I just want to point out to him what we have been saying in the House of Commons for some time, namely that the role of Petro-Canada is an evolving one. It has not been, as far as I know, the subject of any special terms in that role, and what we look at in Canada today in relation to Petro-Canada is simply the evolution of this organization over a period of time under its statute, which was passed in 1974. The company
January 28, 1986

was given certain purposes and objects, and it continues to have those purposes and objects. People should judge Petro-Canada as they see it in the world today.


William Alexander (Bill) Blaikie: Mr. Speaker, the Hon. Member raised the point of the statutory nature of PetroCan. The point we have been trying to make in the last few days is the one that the Leader of the New Democratic Party (Mr. Broadbent) tried to make yesterday in response to the Minister of Energy, Mines and Resources (Miss Carney) who was reading to the House what she called the mandate of PetroCan. It was not so much the mandate of PetroCan but what she had instructed PetroCan to do and how she had instructed it to act as of a certain date.
The fact is that the mandate for PetroCan is in the legislation. If the Government wants to change the mandate of PetroCan, it ought not to do that simply by issuing instructions from the Minister of Energy, Mines and Resources. The Government should return to the House of Commons to change the mandate of PetroCan. That is certainly in keeping with the kinds of things I know Progressive Conservative Members of Parliament have said over the years about Parliament being involved in instructions to Crown corporations so that things do not happen by ministerial decree over and above what Parliament had already decided. The point we have been trying to make these last few days is that if the mandate of PetroCan is to be changed, let it be changed here in the House of Commons and not by ministerial decree.


Mrs. Barbara Sparrow (Calgary South):: Mr. Speaker, I am very pleased to speak this morning in support of Bill C-85, an Act to amend the Petroleum Incentives Program Act. There were three demand-driven programs of the National Energy Program that created uncertainties in estimating and containing costs in the National Energy Program expenditures. They were, the Canadian Home Insulation Program, the Canadian Oil Substitution Program and the Petroleum Incentives Program grants. We have disposed of two of those, and now Bill C-85 disposes of the final one, one which an oil analyst has called a bad dream.
This nation's energy riches should no longer be a source of endless division and regional tension, the results of the National Energy Program. The NEP was not in any sense a national program and was only indirectly an energy program. Its central and urgent goal was to implement a political and regional program designed to keep the Liberal Party in power through the strengthening of that Party's appeal to the voters and/or consumers of central Canada.
During the years between 1973 and 1984, the producing provinces and companies had been required to subsidize directly the central Government and consumers through artificially low prices for crude oil and natural gas to a cumulative total of over $50 billion. The provisions of the National Energy Program, therefore, only further compounded the antagonism of the producing provinces which were suffering the consequences of this unfair treatment. The program was conceived under a
Petroleum Incentives Program Act veil of secrecy, designed to victimize a region and an industry without any discussion with the concerned provinces or the industry.
Three stated objectives of the NEP were, increased Canadian content in the energy industry, oil self-sufficiency by 1990, and increased fairness in revenue sharing. In reality, the publicly stated objectives, each sounding sincere and reasonable, were simply smokescreens for the true but hidden objectives of the program which were more wealth and more power for Ottawa. The Western Accord put a stop to the most vicious raid on the resources of one region to the principal benefit of another region that had occurred in the history of the country.
There can be no doubt that the two big losers as a result of this program have been the consumers and the Canadian exploration firms. Officials in Ottawa decided that they knew better than the market where exploration dollars should be directed. The infamous PIP system, biased in favour of Canadian firms, seduced many of them into unfamiliar and financially dangerous operations. Normal exploration investment criteria were discarded because 80 per cent of the funds came on request from Ottawa.
What has been achieved? No new major fields have been discovered. What has been lost? A great deal has been lost. Billions of precious exploration dollars have been misdirected and we have lost that greatest of all assets in the energy business, time. Investment decisions have been distorted and the future of a number of Canadian firms was placed at a very great risk. The authors of the National Energy Program failed to understand the basic reality of resource investment, which is the law of supply and demand. Even OPEC is now realizing that it cannot escape this discipline for very long.
A few years back, world prices would have resulted in a much larger piece of the revenue pie for Canada. Canadians working amicably together have never failed to make arrangements that serve the nation, and I am proud to say Albertans have always been major players in the attainment of these national purposes. Other countries adjusted more quickly to the real world of energy costs than Canada because of Liberal consumer-shielding policies. As a result, we lost ground in the competitive industrial markets of the world. The price freeze of 1973 was the industry's sentence, and its guillotine was the National Energy Program.
PIP grants were intended to meet not only the Canadianiza-tion and the 1990 self-sufficiency goals but also the need to know goal. Significant savings in PIP expenditures were achieved through the commitment by Alberta to the market development incentive program through which Alberta virtually took over the PIP program in the province itself. PIP was called a lot of things including a massive misdirection of taxpayers' money and a program that actually encouraged companies to drill dry holes.
When in opposition, the present Minister of Energy, Mines and Resources (Miss Carney) asked the then Minister if there were some limits to the hand-outs he was prepared to give to the oil and gas companies. The Auditor General pointed out in his 1983 Report that performance measurement systems,

January 28, 1986
Petroleum Incentives Program Act
although more advanced in the PIP operations, were generally not well developed for evaluating efficiency and developing and making comparisons to the standards. Although an attempt to develop a framework for monitoring the program's impact and effect was undertaken at one point, it was actually never pursued and it cost the federal Treasury an average of $1.6 billion per year, money that was subsidizing activity rather than rewarding success.
This Bill eliminates PIP incentives as of March 31, 1986. From that day forward companies wishing to explore and develop Canada's oil and gas resources will have to do so on the basis of geological and economic factors, not on the basis of Government hand-outs.
We are not abandoning previous commitments. PIP commitments which were in place before the announcement of the Western Accord will be honoured until the end of 1987. This generous grandfathering provision will enable industry to adjust to the new approach. That approach puts the emphasis on opportunities created in the market-place. Politicians and bureaucrats will no longer determine where the industry should be drilling for oil and gas. Once again, those decisions will be in the hands of industry.
The Government of Canada recognizes frontier exploration as a high risk investment which requires additional incentives to help bridge the gap between the termination of PIP and the timing of expected frontier oil and gas developments. Recently, we announced that a new tax base incentive will be introduced by the Minister of Finance (Mr. Wilson). This 25 per cent exploration tax credit will be applicable to exploration expenses in excess of $5 million per well for wells drilled anywhere in Canada. To ensure that the credit assists companies which are currently non-tax paying, it will be refundable at a rate of 40 per cent.
The exploration tax credit was made available beginning December 1 and will terminate December 31, 1990. It is an equitable and cost effective measure to encourage frontier exploration without discriminating against other regions. We anticipate the tax credit will cost taxpayers between $150 million and $250 million annually. PIP cost us some $1.6 billion annually.
In replacing PIP with a tax-base incentive we have fulfilled one of the specific commitments made in the Prince Albert statement of July, 1984. Hon. Members are well aware of the Prince Albert statement. It was a key element in the election platform on which the Progressive Conservative Party won the most resounding electoral victory in the country's history. As the Minister of Energy, Mines and Resources has said, we have achieved virtually all the goals we set for ourselves at Prince Alberta. We promised to use energy as an engine of growth, and we have done so. We promised increased Canadian participation in the energy industry, and we have achieved it. We promised fair treatment of consumers and producers; both groups are now benefiting from our policies. We promised co-operation between the federal and provincial Governments and industry, and we have delivered upon that promise as well. The Atlantic and Western Accords, the new frontier energy policy, and the natural gas markets and pricing agreement are proof that the Prince Albert statement was, in fact, a constructive reaction to the previous Government's destructive National Energy Program. In March we signed the Western Accord with the Provinces of British Columbia, Alberta and Saskatchewan. The agreement radically restructured the operating environment for the energy industry in Canada.
The previous Government was fond of acronyms. We eliminated a long list of them in the Western Accord, ones such as COSC, Canadian ownership special charge; PCC, petroleum compensation charge; and the IORT, the incremental oil revenue tax. They were representative of the burdensome tax regime under which the petroleum industry had been labouring.
As a result of the Western Accord, oil exploration in western Canada is now higher than at any time in our history. The number of wells drilled is up 23 per cent over the the comparable pre-Accord period. Land sales are up an amazing 73 per cent, which means there will be even more exploration in the West next year. The benefits from exploration and production activity do not stop at the Manitoba border. Investment and employment spinoffs will stimulate economic activity in all regions of the country. We are replacing a rigid frontier royalty regime with one that is flexible and profit-sensitive.
The National Energy Program enabled the Government to confiscate 25 per cent of successful oil and gas development in the frontier. This Government does not confiscate property. There will be no Crown share provision in the new regime. Our commitment to 50 per cent Canadianization ownership on frontier production projects is as strong as that of our predecessors; but we will achieve this goal in a more equitable and more realistic fashion.
In summary, our frontier energy policy establishes a profit-sensitive royalty regime. It establishes non-discriminatory and regionally balanced exploration incentives and a stable management regime. Finally, it establishes fair Canadianization requirements.
Oil and gas investment intentions are up by about $2 billion-more than 25 per cent over last year. This investment is creating thousands of new jobs right across the country by stimulating the exploration activity which contributes to our energy security. Foreign investors are looking favourably on Canada once again. Salomon Brothers of New York recently published a ringing endorsement of our new energy policy and investment climate. Canada can benefit from increased foreign investment. Without it, many of our energy projects simply would not proceed. No foreign investment would mean lost opportunities, lost jobs and reduced energy security.
The overhaul of the National Energy Program was one of the five economic initiatives identified by the Progressive Conservatives when we were elected last year. The others were: reduction of the deficit, establishment of a positive investment climate, strengthening of Canada's trade relations, and removal of Government obstacles in the market-place.
January 28, 1986

Important advancements have been made in each of these areas. We reduced spending this year by $4.4 billion and we have identified cuts of some $75 billion from planned expenditures by 1990. The restrictive Foreign Investment Review Agency was replaced by Investment Canada, a body which actively solicits foreign investment. We have initiated discussions on a new trade agreement with the United States. This agreement is vital to our future economic growth. The Pacific Rim has also been identified as a priority area for trade development. We removed Government obstacles in the market-place, not only in the energy industry but in other key sectors such as transportation and communication.
In the second quarter our energy trade balance of payments rose by approximately $400 million over the same period last year. Business investment was up by an annual rate of 11 per cent in the third quarter of 1985. Residential housing investment, an excellent indicator of consumer confidence, rose 63 per cent in the third quarter, one of the largest increases in ten years.
The people of Canada elected the Progressive Conservatives on the basis of our campaign promises. What sets us apart from the previous Government is that we have delivered on those promises in the energy sector, and in other sectors. That is why this country is back on the road to economic recovery.
It has been a pleasure for me to speak in support of Bill C-85 this morning.


The Acting Speaker (Mr. Charest):: Questions or comments?


Mr. Rompkey:: Mr. Speaker, I congratulate the Hon. Member on her speech and the defence she made not only of her Party's policies but of the region she comes from. She said that under the National Energy Program more wealth and power came to Ottawa. The corollary, of course, is that there was less wealth and power in the West. Would she also not agree that a case may be made that wealth and influence was distributed a little more across the country? Would she not agree that because of the NEP we had more drilling offshore? Husky, which is I think threatened under this new policy, was a major player in the Newfoundland offshore. Canadian companies benefited. Canadians got jobs in areas where unemployment is the highest in the country. This would not have happened if the NEP was not in place. She is right when she says more wealth came from the West to Ottawa, but to be fair, would she not agree that wealth was distributed to the Atlantic, jobs were distributed to the Atlantic, and Canadian companies participated in exploration in the Atlantic offshore which would not have been able to do so otherwise?


Barbara Jane (Bobbie) Sparrow: Mr. Speaker, I appreciate my colleague's questions. I would like to address them first in the context of the PGRT which was implemented under the NEP in 19801981. The PGRT was a tax on gross revenues at the well-head and could not be deducted for purposes of corporate taxes. In effect it was double taxation. This unfair taxation forced many
Petroleum Incentives Program Act
of our resource companies to cut back on their exploration budgets. If not half, easily 38 per cent of the drilling rigs in western Canada were forced to move out of the country or else the companies involved simply went broke. It also created extremely high unemployment in western Canada. Alberta's rate of unemployment went up from 3 per cent to 13 per cent to 13.5 per cent, and that is a huge jump. I recognize eastern Canada's problems, but you cannot compare them because we went up from 3 per cent to 13.5 per cent, and that is an increase of more than 450 per cent. All these people out of work meant increased unemployment insurance payments as well as welfare benefits. It was a tremendous burden on our social programs.
My hon. colleague knows that most of the money raised through the PGRT was used to offset the PIP grants. That was extremely costly. It was also discriminatory because the Liberal Government was saying that if you drill in a certain area we are going to supply 80 cents or 90 cents on the dollar. Without good, sound business judgment and good geological surveys, companies were forced into the frontiers and there is very strong evidence to indicate that they drilled dry holes simply for the sake of getting money.
You do not have to be a politician to know that you should spend your dollars wisely. The program we have introduced of gradually reducing the PIP grants and bringing in a 25 per cent tax credit incentive, is going to put the resource companies in a position where they base their drilling programs on good geological surveys and good seismic tapes before they start drilling exploratory wells. We are creating a climate which is far more beneficial for all firms.
I recognize that drilling activity on the East Coast was very strong over the last few years and the companies involved certainly were using the PIP grants. However, a lot of the activity was in areas where they did not have good geological information. I hope that over the next few years the proven reserves in the Venture situation will produce more proven reserves and that we can get some production, because certainly New Brunswick, Nova Scotia, that whole area, needs the jobs. I have to agree with the Hon. Member there. However, I think it was unfair for the Government to be handing out taxpayers' dollars to influence people to drill anywhere they wanted just so they could get tax dollars. The PGRT did put more money into Ottawa's hands and created a lot of animosity out West. The Government did not really consult or communicate with the provinces or the industry. It is most important and to everyone's benefit that we communicate and talk about our concerns and problems, not just the Government and the industry but consumers are winners as well.


Bill Rompkey: Mr. Speaker, the Hon. Member also said that there should be fair treatment for producers and consumers. Is it fair to say, in doing away with the PGRT and the increase in federal taxes on gasoline, that perhaps the burden of taxation has been shifted from producers to consumers? Are consumers, particularly motorists, not paying now a greater share? We just learned a few days ago that the major oil companies' profits have increased greatly over the last year.

January 28, 1986
Petroleum Incentives Program Act yet they are paying less, as my hon. friend has just pointed out, because they are not paying the PGRT. Consumers have seen federal taxes on gasoline go up 58 per cent in one year. I agree with the Hon. Member that there must be fair treatment of producers and consumers right across the country. However, would she agree that there has been some shifting of taxation from producers to consumers?


Barbara Jane (Bobbie) Sparrow: No, I cannot agree with my hon. colleague from Newfoundland. The phasing out of the PGRT is, in one respect, putting more money back into the ground to allow further exploration and development in the resource area. If we allow resource companies the flexibility to invest in Canada, and their investment is up $2 billion over the last year, they will create jobs. People will get off of unemployment insurance and welfare. These jobs are created not just in British Columbia, Alberta and Saskatchewan. A lot of people from eastern Canada live in Alberta, especially Fort McMurray.


Bill Rompkey: Yes, eight thousand.


Barbara Jane (Bobbie) Sparrow: Eight thousand. I am thrilled about that because this country has to work together. That is what the Hon. Member is driving at. We have to look at all regions and their economies. I cannot agree that it has shifted the tax burden. It does allow resource companies the flexibility to go out and invest in the country, create more activity and jobs. We will then have more housing starts and get people off social welfare programs.
The new 25 per cent tax credit will work extremely well. The Government has discussed this with the industry and its provincial counterparts. They have all agreed. So I am sorry but I cannot agree with the Hon. Member concerning the shifting of the burden.


Mr. Mayer:: Mr. Speaker, I have just a brief comment on the exchange between the Hon. Member for Grand Falls-White Bay-Labrador (Mr. Rompkey) and the Hon. Member for Calgary South (Mrs. Sparrow). They have talked about some programs and creating employment in one region or another. We should remember that we do not make good use of our resources and make our country strong by weakening one region as compared to another. There may be concern about jobs that were created in the eastern part of the country as a result of the National Energy Program remaining, but he should remember what the National Energy Program did to western Canada. I have never heard a more graphic illustration of what the National Energy Program meant to western Canada than this: I had an opportunity to talk to a young couple in northern Alberta who were in the energy business. They were digging sump pits and preparing sites for drilling rigs. They were a young couple, presumably in their mid-thirties, starting out with a stake in their country, building a home in a community, and establishing some family ties and roots. They told me that when the National Energy Program came out they went to work the next morning digging sump pits. As a result of the National Energy Program's impact on the
company they were working for, they filled in those same holes that afternoon.
That is what the National Energy Program did to western Canadian drilling activity, and that affected jobs right across the country. We should bear in mind that if we have a resource, it is Canadian and should be thought about as being developed in the Canadian context for the good of all Canadians rather than for the sake of pitting one region against the other.
When one thinks in terms of what happened to the one young couple whom I had an opportunity to visit with in northern Alberta, and of how that related to the whole province and the whole western region, one has an idea of the impact on employment in that part of the country and what it subsequently did to employment in other parts of the country. We should think about this as a natural resource for the benefit of all Canadians, rather than talking about whether one region should have it or someone else should control it. We should develop it in the best interests of us all.


Bill Rompkey: Mr. Speaker, the value of this Parliament was brought home to me again today because, following my friend from Calgary South, I get the opportunity to give a view from the Atlantic region. I thought her speech was a good one and that she certainly defended her particular area, which is what she was sent here to do. She certainly defended the policies of her Party, which is also what she was sent here to do. However, it is for the people of Canada to judge. I think that in any fair debate there must be a balance in order to let them come to that judgment. I would like to try to give a view from Atlantic Canada because its view of PIP and the National Energy Program is quite different.
The Hon. Minister across the way says that it is a Canadian resource which must be treated as such and looked at fairly. It is true that it is a Canadian resource. The problem is that that Canadian resource is in various parts of the country. It is in the West, in the East, and in the Beaufort. We are not talking about weakening one area at the expense of the other, but about the regional disparity that exists in the country. All sections of the country are not equal.
There are 8,000 people from the Atlantic area in Fort MacMurray simply because there are no jobs back home for them to take. I do not think it is a bad thing for Atlantic Canadians to be working in the West. Thank God that the West was able to produce jobs when it did. However, a lot of those people would rather have stayed at home if they could have done so. The greatest export of Atlantic Canada has been some of our best young people. It is not that they do not like western Canada. They have simply had to go there because they had no alternatives. I would rather they had chosen western Canada as an alternative, given options, rather than simply have gone there because they had to. That is the problem in the Atlantic area.
January 28, 1986

I hope that sets the theme for what I want to say. I am talking about an area which, historically in the country since Confederation, has been disadvantaged. We do not like that, but it is a reality. That is the basis upon which I want to make my remarks, Mr. Speaker.
As 1 see it, the scrapping of PIP means a reduction of activity in the off-shore in the Atlantic. That is, indeed, borne out by statements from some people in the oil industry. The Canadian Petroleum Association says it is a step forward for the energy policy in the country. Mr. Jim Hamilton, an oil industry analyst in Calgary, says that the bottom line is that there will be greater activity in the western sedimentary basin. That is our fear. We know what the track record is. We know that under PIP there was activity off-shore. We know that under PIP there were drill rigs out there. We know that under PIP more Newfoundlanders got jobs on the off-shore than ever before. Eighty of them lost their lives on the Ocean Ranger, but more of then went back after the Ocean Ranger sank because they wanted jobs and they wanted to make their contribution in developing the off-shore of Canada.
That activity existed under PIP. We do not know whether it would have existed had PIP not been there because it was there and it did the job. Not only did it put Canadian drill rigs there, it required that every company that wanted to drill off-shore must show a percentage of Canadian materials used and a percentage of Canadians employed in order to get those grants. The grants were not simply to drill. There were strings attached which were peculiarly Canadian. That is what I am afraid will now stop.
I also think the preference for Canadian companies is a concern for oil associations in the Atlantic area. The Association of Atlantic Petroleum Producers is concerned about this very fact as well. In an area where unemployment is the highest in Canada, we see the danger of the reduction of the kind of activity that has given us jobs. The fact is that jobs are now reduced from 3,000 in the Atlantic off-shore in 1984 to about 500.
This is what the Conservative Government has been putting forward as the fundamental plank in its platform. Whenever we ask the Minister of Energy, Mines and Resources (Miss Carney) a question, she says that the Government has signed the Western Accord and the Atlantic Accord and that they are the cornerstone of its economic and job-creation policy for the Atlantic region and for Newfoundland. I am concerned about that from the point of view of exploration activity and further proving of the reserves that are there.
We have complained about the cut-backs in Government programs such as RRAP, CHIP, and COSP, which my hon. friend referred to. It is true that they have cut back CHIP and COSP, which existed not only for conservation and off-oil purposes, but were also creating a lot of jobs for small businesses. The carpenters, electricians, plumbers, pipefitters, and people who install tiles and insulation, were all working with small businesses. The incentive to do that no longer exists and a lot of small businesses have dried up.
Petroleum Incentives Program Act
However, when we complain about the cut-backs in such programs, about lay-offs in the Ministry of Transport and the Department of Fisheries, and about the possible closing down of railways and two heavy water plants in the Atlantic area, the Minister of Energy says that oil is going to be the saviour, that the day is coming when oil will create those jobs in the Atlantic area. When we complain about reductions in social security, about changes in the Unemployment Insurance Program, and about changes in family allowances and the old age pension, they still tell us to wait, that oil is going to be the engine of the economy in Atlantic Canada. They say that oil is going to create those jobs and that people with those jobs are going to pay the taxes which will look after family allowances, old age pensions, and unemployment insurance. Well, is it, Mr. Speaker? We have seen no evidence that that is the case so far.
The fundamental assumption of the Conservative Party is that we must let the private sector do the job and leave business alone. PIP was the direct opposite. It was government intervention to encourage and coax the private sector into exploring in areas where it was not before, into using Canadian materials, and into creating jobs in an area of Canada that was desperate for employment. That was the role of the Petroleum Incentives Program. It was Government intervention in the private sector in order to skew, bias and focus that private sector on an area that needed that attention. Where is the incentive for the private sector to continue that exploration offshore now that the world oil price is dropping?
We fear, as Mr. Hamilton said, that the bottom line is that there will be greater activity in the western sedimentary basin.
I am not attempting to pit one section against the other because I think it is wrong in this country, as my hon. friend has said, that one region should prosper at the expense of another. I simply want to state the case in the area from which I come.
We have been assured that Hibernia is still on target in spite of the fact that the world price is going down. We also know that the Offshore Trade Association of Nova Scotia has pleaded with the Government for special measures for the East Coast. It has said that there must be special measures for the East Coast in view of what the Tory Party has announced. The Offshore Trade Association of Nova Scotia-not the Liberal Party, the New Democratic Party or consumers-said that the new policy will kill exploration off Atlantic Canada. I am a layman and I must take the word of the private sector in Atlantic Canada. It says that this new policy will kill exploration in Atlantic Canada.
The Independent Petroleum Association also wants change. Under the new plan, non-taxable Canadian companies will recoup only 10 per cent of costs, whereas under the National Energy Program it would have been 80 per cent to 90 per cent. I must mention Husky Oil again among these many small Canadian companies because Bob Blair has been a major player in the offshore of the Atlantic. I congratulate him as a

January 28, 1986
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Canadian for the role he has played. I hope he continues the work he has been doing because we need people like him.
We need him in the offshore, but whereas he received 80 per cent or 90 per cent before, he will only get 10 per cent now. Perhaps his company will become non-taxable, but my fear is that those changes which will take place will not be of benefit in the Atlantic area. I fear that many small Canadian companies will not be involved in frontier exploration. Even the Canadian Petroleum Association agrees that there will be less activity in the Atlantic and more activity in the western sedimentary basin.
Many in Atlantic Canada believe that the tendency is for the Government no longer to look after our interests. What is the evidence to support that view?
First, there are the cut-backs in Government programs on which we have historically depended. The Provinces of Newfoundland, New Brunswick, Nova Scotia and Prince Edward Island have been at a disadvantage since they joined Confederation. We lost our traditional trading markets and became a colony of central Canada. Newfoundland was a colony of Britain and we transferred our colonial status from Britain to central Canada. This was not done through any devious means by any Party, but it is simply a reality.
We must recognize that there are disadvantaged areas that need special help. However, that special help through Government support, intervention and assistance has been dropping. The Atlantic area has historically depended on Government programs, but those government programs have been slashed. Naturally, we are hardest hit because when central Canada catches a cold we get pneumonia. That is the reality in this country.
We have been thrown to the private sector, but the private sector in Atlantic Canada is historically weak. We do not have manufacturing. We are a natural resource based economy which exports fish, lumber, pulp and paper, minerals and young people. We do not produce automobiles or manufactured goods. We do not produce value-added foodstuffs. The private sector in the Atlantic provinces has been historically weak, and we are told that companies outside the Atlantic provinces which have been in their present locations for a number of years are heading to the West.
We have seen world prices plummet under the present Government, yet there is no Government policy to protect Canadian consumers. However, there was a made-in-Canada price under the National Energy Program. Now we are at the mercy of the war between OPEC and the North Sea. When the Minister is asked why the multinationals are still making huge profits in light of falling prices, she states that it is necessary to do so in order to carry out exploration and drilling. Yet we are told by the Canadian Petroleum Association and the offshore industry in Atlantic Canada that these activities are moving to the West and there must be special arrangements made for the Atlantic area. How will the Minister focus that exploration and drilling on the offshore?
The Minister says that the high federal taxes on gas are necessary in order to pay for social programs. If that is true, why is the Government cutting unemployment insurance and family allowance? Why is it cutting out programs such as COSP, CHIP and RRAP? Why is the Government laying off civil servants in Fisheries and Transport? The Government is fundamentally affecting the economy of the Atlantic area as a result of such action.
I suggest that PIP is a graphic illustration that we are the victims of a double-whammy in the Atlantic region. Government services, including social security, are being cut back, yet incentives to the private sector are being taken away. There is no focusing of the private sector in that area and, whether or not the Government realizes it, it has cut the Atlantic adrift by its non-interventionist attitude toward the private sector. 1 submit that that is the issue as we debate the Petroleum Incentives Program.
That program graphically illustrates the difference between the policies of the previous Government and the present Government. We knew that we had to give special help to the Atlantic area because of its unique situation. We also knew that that area would be lost without the help of the federal Government. However, the Tories have said that they are withdrawing in order to make room for the private sector which will benefit that area. Where is the evidence of that? The same article from which the Prime Minister (Mr. Mul-roney) quoted that 400,000 new jobs have been created indicated that 8 per cent of those new jobs are in the Atlantic area. While I welcome the fact that there are more jobs in Quebec and Ontario, which is good for Canada, my point is that every federal Government in this country must have a regional development policy. All areas of this country are not equal. While I do not want to set one area against another or see division in this country, I do want fairness and equity. I do not see any evidence of that in this new program. I believe that cut-backs in the Petroleum Incentives Program and the PGRT are symptomatic of the Government's new approach.
We saw the same thing in the late 1950s and early 1960s when Mr. Diefenbaker was Prime Minister. He attempted to do away with a section of the Terms of Union called Term 29 which allowed us equalization payments over a period of time in view of the disadvantage we suffered. People wore black arm bands in Newfoundland as a result of that, and it is pretty close to the time when we have to trot them out again. Quite seriously, if there is not a change or a recognition that there are stronger and weaker sections of the country, particularly within the private sector, if there is no recognition of regional disparity and some attempt to come to grips with it and to devise policy to overcome the problem, then we are not going to have a strong country.
We do not want to be a have-not area. We want to make our contribution. I referred earlier to the 80 people who lost their lives on the Ocean Ranger. Even after that rig sank, young Newfoundlanders went back to the rigs on the offshore with all
January 28, 1986

the dangers attached to them because they wanted to make a contribution not just to themselves, their families and their province, but to this country. What they are asking for is an opportunity to do that.
I say to the Government that it is not going to make that happen by doing away with Government intervention in the economy. This Government, like previous Governments, has to support and protect the livelihood of the people who work and live in the Atlantic area.


Barbara Jane (Bobbie) Sparrow: Mr. Speaker, I would like to congratulate my colleague, the Hon. Member for Grand Falls-White Bay-Labrador (Mr. Rompkey). I certainly agree that eastern Canada does have some problems. I agree with him that we should not pit one region against the other. However, on September 4, 1984, the Conservative Government came into power and faced a massive national debt of some $200 billion. It costs us and the people of Canada $26 billion per year just to service the debt which was left to us by the previous Government. If we do not address this situation-and I want to add that the Government is addressing the situation-we will end up in a disastrous state. For every $3 we raise in revenue, $1 goes to service the debt. If we do not attack this national debt today, in five years it will take $2 out of $3, and we will have to cut down on at least a third, if not 50 per cent, of all of our social programs. So we are taking a look at absolutely every area, every portfolio, and we are simply looking at it from the perspective of the national debt.
The Hon. Member said something about closing the heavy water plants in the East. Was it New Brunswick?


Bill Rompkey: Nova Scotia.


Barbara Jane (Bobbie) Sparrow: Nova Scotia. I am the Chairman of the National Resource Committee. We have had the AECL appear before us and, if I understand my facts, those two heavy water plants had a 12-year supply but there was no market for their commodity. This does not make economic sense. Actually, in all reality, these plants should have been cut back and terminated many, many years ago.
I also wanted to ask my colleague about Canadian exploration and development expense. The Government has in place two expenses. The Canadian exploration expenses are deductible at a rate of 100 per cent. The Canadian development expenses are deductible at a rate of 30 per cent on a declining balance. Of course, this will depend upon the taxable position of each and every company. So there is an opportunity for exploration expenses to be deducted. Development, of course, is when we drill a delineation well into a proven area, and that comes under development expense. However, we have to realize that there are more ways for deductions to take place.
My colleague also made the comment about Canadianiza-tion. He was quite right that PIP grants were based on COR content, or the Canadian ownership rate. But we in the Conservative Party have maintained the 50 per cent Canadian-ization on a production licence. We agree with the Hon. Member that Canadianization within the resource industry is
Petroleum Incentives Program Act most important. I think that doing it on the production licence is perhaps the best way.
I wonder if the Hon. Member would give me his thoughts with regard to the write-off of exploration and development expenses?


Bill Rompkey: Mr. Speaker, with respect to the Hon. Member's first point, which was on the deficit, I agree that it is a problem. I also agree that the Government and Parliament have to address what is becoming a serious problem. However,
I do not think it should become a problem that is out of all proportion to everything else. I do think that we have to attack the reduction of the deficit with fairness and equity. I make the point again that not all areas of this country are equal. When we start cutting Government programs willy-nilly off the top, indiscriminately, it has a more serious effect on areas which have historically depended on those Government programs. That to me makes eminent sense. It certainly is a reality where I come from. If we start to cut all of those programs and if we increase taxes indiscriminately without at the same time having a regional development policy-and that is what I see as fundamentally lacking-we can attack the deficit all we like but we are going to create a great deal of hardship for those people who historically have found it very hard to bear that particular burden.
With respect to the tax breaks which are being given, possibly the Hon. Member is closer to that than I am, but 1 understand that small Canadian companies which before could take advantage of the PIP program may not be able to take advantage of it now. One of the things the Government did was to allow small companies to go to investors and say: "You can get a tax break if you invest in our company". We allowed taxes to flow through to smaller investors to capture that particular pool of investment capital. That is the kind of thing I fear will not happen now. I think the play will be biased more towards the large multinationals and I am not sure that 1 want to put myself in the hands of those large multinationals, because I feel I would be more vulnerable. I would rather be dependent on a smaller Canadian company which takes its fate in its hands and its Canadian dollars and tries to do the job.
The difficulty I see in the change of policy is that it will skew and bias exploration and development away from small Canadian companies towards large multinationals.


The Acting Speaker (Mr. Charest):: Questions?


Some Hon. Members:: Question.


The Acting Speaker (Mr. Charest):: There being no other questions and comments, we will resume debate. Question? Is the House ready for the question?


Some Hon. Members:: Agreed.


The Acting Speaker (Mr. Charest):: The Hon. Member for Sudbury (Mr. Frith) on debate.

January 28, 1986
Petroleum Incentives Program Act


Hon. Douglas C. Frith (Sudbury):: Mr. Speaker, I too would like to join in this debate. I notice I only have three minutes to add my comments to the Bill which is before the House-


Mr. Towers:: Mr. Speaker, I rise on a point of order. Once you have started to put the question, is debate not completed?


The Acting Speaker (Mr. Charest):: I had not yet put the question to the House. I did see the Hon. Member for Sudbury rise before the question had even been put. There seemed to be some hesitancy about whether or not he was going to rise.


Douglas Cockburn Frith: On the same point of order, Mr. Speaker, the reason you saw some hesitancy was that I thought when you said "question" and Hon. Members opposite were saying "question", there was a question to be put to my colleague, the Hon. Member for Grand Falls-White Bay-Labrador (Mr. Rompkey), so I was not clear as to whether or not the question to be put was a question to my colleague or the question on the motion. I am glad that I am able to clarify that for your help and judgment.
I want to indicate that-


Charles James Mayer: Mr. Speaker, I rise on a point of order. I would like a little clarification. It is my understanding that once the Chair rises and begins to put the question, in fact that is the termination of the period allocated for debate. I think if the Chair would like to check the "blues", it will see that the Chair had began to put the question. So regardless of any misunderstanding of Hon. Members across the floor, it would seem to me that once the Speaker rises to put the question, that signals termination of debate.


Bill Rompkey: May I make a contribution to that same point of order, Mr. Speaker? It was my understanding that the Hon. Member opposite was rising to ask a question because I did not think the 10 minutes had expired. Questions had been asked and I had been answering. I was waiting for a question to come from across the way. The clear understanding on this side was that there were further questions to be raised in the question period.


The Acting Speaker (Mr. Charest):: The Chair having determined that the question had not been put to the House and having recognized the Hon. Member for Sudbury for the purpose of resuming debate, things will stand there.
It now being one o'clock I do now leave the Chair until two o'clock p.m.
At 1 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.


Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, no one who watched the television reports of the explosion of the NASA space shuttle earlier today can remain unmoved by this tragic and horrible event.
I and the members of my Party join with the Prime Minister (Mr. Mulroney), as I am sure do all Members of the House and every Canadian, in expressing our shock and dismay to the President of the United States on this terrible accident, and in offering our deepest sympathies to the families and friends of the brave and courageous astronauts. Our hearts go out to them all. Canadians have closely followed the progress of the space shuttle program and have participated with the production of the Canadarm, and even with our own astronaut, Marc Garneau.
With the enormous advances we have made in the area of high technology, it is sometimes easy as human beings to forget the great risks involved and the great personal bravery of those courageous men and women who are exploring the frontiers of space. As we have shared from time to time in the joy of the adventure, so we share in the sorrow of this tragic event.

To the families of the astronauts we offer our sincere condolences at this time of suffering.


Hon. Edward Broadbent (Oshawa):: Mr. Speaker, I join with the Prime Minister (Mr. Mulroney), who spoke earlier to the country outside the Chamber on this important matter, and with the Leader of the Opposition (Mr. Turner) in extending our profoundest sympathies to the Government of the United States and, most directly, to the families of the men and women who were killed today in this unfortunate tragedy.
Indeed it is the case that men and women who are on the frontier of knowledge in this important domain experience extraordinary risks. It is extremely sad that we have encountered the results of those risks today in the loss of such good and decent people whose work will one day benefit us all.


Some Hon. Members:: Hear, hear!



AGRICULTURE


Mr. Don Boudria (Glengarry-Prescott-Russell):: Mr. Speaker, sugar-beet producers in Canada are in a situation of crisis and need immediate help. If the Government does not take the necessary steps immediately, 3,000 jobs will be lost. Those
January 28, 1986

steps are as follows: a stabilization payment for the years 1983 and 1984 which has not taken place yet, and a long-term sugar policy for the country.
The industry is 90 years old in the Province of Quebec and 60 years old in the Province of Alberta. The industry was quite viable until 1982 and satisfied some 10 per cent of the Canadian sugar requirement. It falls under the Agricultural Stabilization Act and therefore there is no logical reason for the Government dragging its feet as it is today in refusing to give the farmers of Alberta, Quebec, and Manitoba what is rightfully theirs in terms of stabilization.
There is a further threat now. The Government of Quebec owns the factory in that province and, unless a long-term sugar policy and payments can be established by the Government, the factory will be sold. In that province some 1,300 people will be out of work immediately unless the Government acts. We see again and again that the Government is prepared to rescue various groups and industries, but it never seems-


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

* *



FEDERAL-PROVINCIAL RELATIONS GOVERNMENT'S POSITION

Mrs. Suzanne Duplessis (Louis-Hebert):: Mr. Speaker, as a Quebecer concerned about the interests of Quebec, I would like to quote in the House from what Jean-Louis Roy had to say in today's Le Devoir, following an interview with the Prime Minister, and I quote:
Mr. Mulroney gave an impressive inventory of the complexities of the Canadian system. He appeared to be firmly resolved, however, to pursue the same goals he set out during the 1984 election campaign;... He appeared to be anxious to maintain his objectives, especially with respect to intergovernmental relations,.. . and to settle the matter of the Constitution Act, 1982, and to do so with regard for Quebec's interests.
Mr. Mulroney justifiably emphasized the changes that had taken place in this area since he formed the Government, as well as his firm determination to find new formulas that would make the traditional, endless bickering a thing of the past.
It is still too early to judge the long-term effects of the reconciliation policy initiated by Mr. Mulroney. In the present circumstances, however, it is clear that it is in the best interests of all concerned. It is fortunate that the Prime Minister of Canada is keeping this policy high on his list of priorities.
And Mr. Roy goes on to say:
The man we met... can make partisan,judgments and earthy comments on his opponents. But he is also capable of dignity, frankness and courage.
"Living together" is a major operation.
And as the Member-


Mr. Speaker:: Order. I am sorry to interrupt the Hon. Member but his time is expired.



VISIBLE MINORITIES


Mr. Ernie Epp (Thunder Bay-Nipigon):: Mr. Speaker, the Government is fumbling the ball in its attempt to redress the great injustices done the Japanese Canadians in the 1940s.
The Government began well. The then Minister of State for Multiculturalism issued a press release on December 15, 1984, which reflected the promises the Prime Minister (Mr. Mulroney) had made as Leader of the Opposition.
Early in 1985, however, the Minister refused to continue the negotiations he had both promised and begun. He also declined to consider the matter of compensation for property losses. His successor now appears to be threatening unilateral action on redress all too reminiscent of the arbitrary action the Government considered a year ago.
We in the New Democratic caucus are convinced that the process of arriving at a substantial redress package is as important as the content of the package. The Government has to begin negotiating with the National Association of Japanese Canadians. The Government has to negotiate compensation for property and other losses being evaluated by Price Waterhouse. The Government has to be sure that its plans to deal with non-monetary aspects of redress are also acceptable to the National Association of Japanese Canadians. It has to deal seriously with the legitimate representatives of the Japanese Canadian community. It cannot hope to arrive at a proper redress for injustices in the past if it refuses serious discussions today with the National Association of Japanese Canadians.
* *
*



NATIVE PEOPLES


Mr. Jack Scowen (Mackenzie):: Mr. Speaker, on June 23 to June 26 the Native Business Summit will take place in Toronto. For most native people, business means small business and all of the problems that attend it. Conference sessions will address financial planning, technological developments in business services, and opportunities for expansion and the development of new markets. Opportunities abound in serving the local communities and the surrounding regional economy.
Special sessions will be held on light manufacturing, retail and wholesale businesses, service industries, tourism, media and entertainment and new technology. Native small business will be reviewed in relation to the need to create linkages within the regional context and to expand on those activities which have a traditional orientation.
Residential and commercial development is a multibillion dollar business in Canada. Native business leaders believe that native people are ideally positioned to play a major role in it. Indian reserve lands in Canada, at 10,000 square miles, represent one of the largest land holdings in the free world. For

January 28, 1986
example, many reserves have prime lands close to major urban centres with potential for both residential and commercial development.
It is estimated that some 50 large-scale resource development projects will impact directly on native communities in the 1980s and 1990s. Many are in the petroleum industry but several others involve the hydroelectric, mining, water control-


Mr. Speaker:: I want to remind the Member his time has expired.



CAPE BRETON DEVELOPMENT CORPORATION


Mr. Dave Dingwall (Cape Breton-East Richmond):: Mr. Speaker, it is all too common for the management of the Cape Breton Development Corporation to blame the work force for problems it has created itself.
In the past few weeks there has been a steady stream of broken promises from the Government and the breaking of faith on the part of management. The Government of Canada has decided that the Donkin Mine will not be developed. The coal preparation plant at Prince Mine has been axed and, worst of all, the Government has turned a blind eye to the plight of the Town of Glace Bay, a community built on coal mines that now finds itself without its economic heart. The Government refuses to consider a coal mine for this community which has an unemployment rate more than five times the national average.
Industrial relations are falling to an all-time low. The present management has taken a giant step backward by instituting a system of having front line supervisors start counselling UMWA coal-miners. These men do not need a paternalistic management; they need one that recognizes the contributions and sacrifices of men who risk their lives every day to extract a resource. If management wants respect, it should start respecting the men who have made the real contribution to the Cape Breton coal industry.



DISARMAMENT


Mr. Lee Clark (Brandon-Souris):: Mr. Speaker, all Canadians, including those in a grade nine class in Virden, Manitoba, with whom I recently met, fervently desire the preservation of world peace. As a result, we applaud any serious proposal, irrespective of its origin, which might lead to fully verifiable nuclear disarmament.
While many Canadians, myself included, believe that the credibility of General Secretary Gorbachev's recent proposal for a nuclear-free world by the year 2000 would be substantially enhanced by an immediate decision to withdraw Soviet invasion forces from Afghanistan, the Gorbachev initiative still deserves serious consideration. Consequently, I and other Canadians welcomed the positive and thoughtful statement which the Secretary of State for External Affairs (Mr. Clark) made in response to the Gorbachev proposal last Thursday. Now, however, I urge both the Prime Minister (Mr. Mul-roney) and the Secretary of State for External Affairs to capitalize upon Canada's significantly improved relationship with the United States to ensure that American officials explore thoroughly this and any other proposal which may lead to fully verifiable nuclear disarmament.
Soviet officials must also be reminded of the need to address the substantial imbalance in conventional arms which is in the Soviet's favour, as that imbalance has led to the establishment of the western European-based nuclear forces as a deterrent. The fear and distrust which have prevailed since the cold war have let to a rapidly escalating arms race. If, as we hope, there is now a mutual will on the part of all world powers to de-escalate that arms race, much of the fear and distrust will disappear.


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



UNEMPLOYMENT INSURANCE


Mr. Fernand Robichaud (Westmorland-Kent):: Mr. Speaker, the Conservative Government's new policy on unemployment insurance for early retirees is unfair and unjustified.
Formerly, an early retiree who met all the criteria was entitled to unemployment insurance, even if he was getting a pension. Now this pension is considered as income, and early retirees are no longer eligible for the full amount of unemployment insurance benefits.
Even worse, these people have not been informed of the new policy. It was adopted by Order in Council, and the Government gave this new measure very little publicity. There was no debate in the House on the subject.
Furthermore, Armed Forces pensioners are also being denied unemployment insurance benefits, despite the fact they contributed to the Unemployment Insurance fund throughout the period they were in the Armed Forces.
Mr. Speaker, I think this new Conservative measure is very unfair to our pensioners, and in my opinion, the Government ought to get rid of this policy.



DISASTERS


Right Hon. Brian Mulroney (Prime Minister):: Mr. Speaker, along with the Leader of the Opposition (Mr. Turner) and the Leader of the New Democratic Party, I earlier had the sad obligation on behalf of the Government and the people of Canada to convey our deep and genuine condolences to the people of the United States and the families of the bereaved as a result of today's tragedy. May I suggest that on behalf of all Hon. Members of the House of Commons, Mr. Speaker, you give leave for us to rise and pay a moment's silent tribute to those affected by the tragedy today.
[Editor's Note: Whereupon the House stood in silence.]



PRESENCE IN GALLERY OF PARLIAMENTARY DELEGATION FROM FINLAND

Mr. Speaker:: Before we commence Question Period, may I indicate to Hon. Members the presence in our gallery today of a parliamentary delegation from Finland, the Transportation and Communications Committee of the Parliament of Finland, headed by Mr. Reino Karpola, Chairman.


Some Hon. Members:: Hear, hear!



ORAL QUESTION PERIOD


John Napier Turner: Mr. Speaker, my question is for the Prime Minister. Yesterday the comments about the deficit of the Minister of Justice, who is a former Minister of Finance, contributed to the continuing fall of the Canadian dollar, which now stands at 70.39 cents as of 1.35 p.m. today, the lowest point in Canadian history. Was the Minister of Justice speaking for the Government and was he expressing the view of the Government that the re-election of the Conservative Party is more important than good government?


Martin Brian Mulroney: Mr. Speaker, obviously that is not what the Minister of Justice said. As a former Minister of Finance he has been totally supportive of the present Minister of Finance in his determination to deal with the deficit whose dimensions have staggered the country,
Oral Questions
given the heritage which was left with us. The position of the Government is that set out by the Minister of Finance and is that which I enunciated to the editorial Board of Le Devoir on Friday, which was printed on Saturday and Monday, and on which we are absolutely unbending and inflexible, that is to say, that we will deal in an ongoing, vigorous, productive and successful way in getting rid of the deficit which is paralysing growth in Canada.


Some Hon. Members:: Hear, hear!


GOVERNMENT POSITION
John Napier Turner: Mr. Speaker, this is not the first time that the Minister of Justice has caused the Prime Minister embarrassment in this fashion. Indeed, before the election he told the country: "If we told you everything we were going to do, you wouldn't elect us". It is that attitude which is causing confusion in the markets today. Since the Minister of Finance and the Minister of Justice are sending out conflicting signals to the world markets, will the Prime Minister ensure that his Government finally speaks with one voice and request of his Ministers that they think before they speak?


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: Mr. Speaker, in regard to the deficit, and the comments before the election, it seems to me that before the election the Right Hon. Leader of the Opposition said that he was going to cut the deficit by 50 per cent in less than seven years. All he has done since he took his seat opposite is try to add to the deficit and to the problem. He was the father of the deficit. He brought it about.


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: I can say that there is no contradiction between the views held by the Minister of Finance and the views held by the Minister of Justice. They are entirely consistent with the views which I set out. 1 know that the Right Hon. Leader of the Opposition will appreciate the seriousness of this since he is not unaware of the implications of deficits, which is what I set out to the editorial board of Le Devoir, and which says that this Government is consistently and unswervingly committed to reducing that deficit in the interests of national economic growth.


Some Hon. Members:: Hear, hear!


REQUEST FOR POLICY STATEMENT
John Napier Turner: Mr. Speaker, that is a recent conversion of the Prime Minister, who stated on CTV just before Christmas that the deficit was not going to be dealt with brusquely and was not necessarily a priority of his Government. Because of the confusion which his Ministers have aroused, would he request the Minister of

January 28, 1986
Oral Questions
Finance to make a statement in this House to set forth clearly and unequivocally what the position of the Government is on the Canadian dollar as it relates to the interest rate structure?


Martin Brian Mulroney: Mr. Speaker, with respect, may I tell my right hon. friend, because I know he will want it corrected, that the statement he attributed to me in regard to CTV is absolutely false. I said no such thing at any time. I know he will want to read the transcript and reflect upon it.


Douglas Cockburn Frith: Another retraction.


Martin Brian Mulroney: There will be a retraction, and it will come from the Right Hon. Leader of the Opposition. We never said that, and we have said the opposite.


Mr. Rossi:: Why don't you blame the press again?


Martin Brian Mulroney: The transcript is there. We have been consistent. I know my right hon. friend believes in fairness. I either said it or I did not. I am telling him I did not say it. He will want to read that transcript and apologize for misleading the House on a very important matter.


MINISTER'S POSITION
Hon. Donald J. Johnston (Saint-Henri-Westmount):: Mr. Speaker, the Minister of Finance is quoted by the wire service as saying that the Government is doing what it can domestically to bolster our currency. This suggests that the Government is going to increase interest rates, which is one thing it can do, or intervene and purchase Canadian dollars. Would the Minister indicate whether he is undertaking to do both those things in order to prevent the dollar from breaking through the 70-cent barrier because of the statements of the Minister of Justice?


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, that is a very broad question. Let me focus on a couple of points. I have made it very clear during the past year, and any time this question has been raised, that the policy of the Government and the Bank of Canada is to try to moderate changes in interest rates and exchange rates. We can only moderate because of the substantial financial requirements of the Government of Canada caused by the huge deficit which we have to deal.
What I was focusing on in that response to the media this morning was that we are going to do what we can here in Canada to stabilize the level of the dollar by following fundamentally sound economic policies. At the heart of that is the following of a much tighter fiscal policy than was the case with the previous Government, to get the deficit down, not as an end in itself, but as a means to an end, because by getting the deficit down we can afford our social and economic programs, our defence commitments, as well as the other things.
[ Translation]


INCREASE IN INTEREST RATES-CONSEQUENCES FOR TAXPAYERS
Donald James Johnston: I have a supplementary, Mr. Speaker. I think my question was quite clear. Will there be an increase in interest rates this week? Is he going to buy Canadian dollars? And if he has to keep the dollar from falling below 70 cents, how much is it going to cost the Canadian taxpayer in terms of interest rates, buying dollars, and so forth? Can he give us an estimate?


Michael Holcombe Wilson: Mr. Speaker, the response to that question is essentially the same as the response to the first question. The Hon. Member knows it is not possible for the Government of Canada or the Bank of Canada to say precisely what interest rates will be or what the level of the Canadian dollar will be. That will be decided in the market-place. We do moderate, as I said in my previous response, movements in interest and exchange rates, both up and down. That has been the policy and it is designed to reintroduce stability in the market-place. That is the continuing policy of this Government.


EXCHANGE VALUE OF DOLLAR-GOVERNMENT POSITION
John Edward Broadbent: Mr. Speaker, my question is directed to the Prime Minister. Today, the Canadian dollar fell to record levels. And today the Minister of Justice indicated there is no consensus in Cabinet on economic policy. That is the exact opposite of what the Minister of Finance said. This confusion is dangerous for the dollar. Where is this Government's sense of direction?


Martin Brian Mulroney: Mr. Speaker, the Hon. Member claims that the Minister of Justice said there was no consensus on a major issue. That is false! The Minister of Justice never said such a thing. There is a very clear consensus in this Government on all major current issues.


LA PRESSE ARTICLE
John Edward Broadbent: Mr. Speaker, the Minister in question is quoted at length in the La Presse article. Has the Prime Minister asked the Minister of Justice if what has been attributed to him about the confusion in the Government is incorrect? Has he got that explanation? If not, on what basis does he make the statement that he just did, that there is coherence in the Government, when the whole country sees nothing but confusion?


Martin Brian Mulroney: Mr. Speaker, my answer is exactly the same. As far as I know, there is no reference to anything the Minister might have said to that effect. On the contrary, the Minister of Justice never made such a statement. So I do not think you should build your argument on this because it is construed out of something that does not exist, which means that the premise of your question is false.


REQUEST FOR PARLIAMENTARY DEBATE
John Edward Broadbent: Mr. Speaker, I hope that the Minister of Justice will get up at the end of Question Period and correct what the Prime Minister says is an error. It was he who had the interview. It was he who was quoted. It is the Government of Canada that is confused.
Would the Prime Minister himself, or the Minister of Finance, undertake to have a debate in this House within the next two days on the over-all economic direction of this confused Government?


Martin Brian Mulroney: Mr. Speaker, I may be wrong, and I will take another look at it, but with regard to the statement just attributed by the Leader of the New Democratic Party to the Minister of Finance-


Some Hon. Members:: The Minister of Justice.


Martin Brian Mulroney: I find no such statement.


Mr. Fulton:: Confused again.


Martin Brian Mulroney: The allegation is absolutely false.


PRICE OF GASOLINE
Russell Gregoire MacLellan: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources. The Minister has said many times that Governments do not set the price of gasoline, that markets do. Perhaps the Minister can explain why the markets are not working and why Petro-Canada's wholesale price for gasoline is 7 cents a litre higher than the New York Harbour wholesale price.


Hon. Pat Carney (Minister of Energy, Mines and Resources):: Mr. Speaker, in view of the Hon. Member's gloom and doom in the past about drilling activity, I thought he was rising to ask me about the new well that Shell is spudding off Sable Island and the other one that will follow later.


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


Pat Carney: He is also, Mr. Speaker, a member of a Party that had a rigid, regulated energy policy which increased the price of gasoline by 80 per cent, from 32 to 50 cents a litre. 1 attempted to explain to him that our energy policy will ensure that consumers do get the benefits of decreases in gasoline prices. I can assure him that I have communicated with industry executives to ensure that consumers get the full and fair benefit of the price declines which are in the system now.


MINISTER'S POSITION
Russell Gregoire MacLellan: Mr. Speaker, it is just the opposite. The policy of the former Liberal Government kept the prices of gasoline down.


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!


Ms. Copps:: Right on!


Mr. Speaker:: Order, please!


Mr. Axworthy:: That shows how smart you guys are.


Sheila Maureen Copps: That's what he gets for telling the truth. The truth hurts.


Mr. Clark (Yellowhead):: Read the McMillan Binch newsletter.


Mr. Speaker:: Order, please. Will the Hon. Member for Lanark-Renfrew-Carleton come to order please? Question, please.


Russell Gregoire MacLellan: Why does the Minister not just admit that Petro-Canada is keeping the price high so it can increase its profits to get the best return possible on its share issue? Why does the Minister not just admit that?


Sheila Maureen Copps: Tell the truth.


Pat Carney: Mr. Speaker, I am so bedazzled by the Member's statement that an increase of $1.20 a gallon on gasoline under the Liberal administration is a decrease in price.


Lloyd Axworthy: It was below world price.


THE ECONOMY
Mr. Ian Deans (Hamilton Mountain):: Mr. Speaker, my question is also directed to the Prime Minister. I am sure he will agree that part of the reason our dollar is suffering so in international money markets is because there is confusion about what exactly the Government's economic policy is, and

January 28, 1986
Oral Questions
the statement attributed to the Minister of Justice adds to that confusion.
Would the Prime Minister not agree that we cannot afford to wait five more weeks for the Budget of the Minister of Finance in order to clear that up? Will he ask the Minister of Finance, or direct him if need be, to make an economic statement now about where the Government is going with regard to the deficit and the dollar?


Charles Joseph Clark: Where is Bob White?


Martin Brian Mulroney: Mr. Speaker, I think the falsity of the affirmation of my hon. friend is clearly established by the OECD report. I know it was inadvertent, because my hon. friend clearly forgot the OECD report which categorized the action of the Government of Canada as being clear, consistent, logical, and destined to bring about great economic progress. I think he would be happy with the fact that the OECD gave Canada what I think can be described as very high reviews as a result of the policy instituted by the Hon. Minister of Finance. They substantially refer to coherence as opposed to any degree of confusion.
Where there is truth by implication in my hon. friend's statement is that the dollar is indeed affected by one substantial thing, the deficit. From the year of Confederation it took us 100 years to accumulate a net debt of $18 billion, and in 15 years the Liberals took that debt from $18 billion to $190 billion and built a further $120 billion into the system. That is the degree of profligacy and waste that has hurt Canada, and we are now working to rebuild.


Some Hon. Members:: Hear, hear!


Ian Deans: It could be falsitude. I am not sure what that means.


NEWSPAPER REPORTS OF COMMENTS ATTRIBUTED TO MINISTER OF JUSTICE
Ian Deans: Mr. Speaker, does the Prime Minister agree with the Minister of Justice, as quoted in an important journal in Quebec today, that it would be politically suicidal for the Government to pursue the cuts necessary to meet the deficit reductions that the Minister of Finance has spoken about and, therefore, that plan of the Minister of Finance should be abandoned?


Martin Brian Mulroney: Mr. Speaker, he never said any such thing and that is a typical socialist trick of distortion and fabrication. People have had it up to their ears with you.


Some Hon. Members:: Hear, hear!


Ian Deans: You look at it.


Martin Brian Mulroney: It is not there.


CONSUMER AFFAIRS
Mr. Jacques Guilbault (Saint-Jacques):: Mr. Speaker, my question is directed to the Prime Minister.
Yesterday, his Minister of Consumer and Corporate Affairs was still refusing to send the O'Farrell Report to the Restrictive Trade Practices Commission which is completing its investigation and, as I heard this morning, intends to report and publish its findings in April.
Could the Prime Minister give the House the assurance that the O'Farrell Report will be sent to the Commission in due time, in other words, now, so that it can consider the report's findings before publishing its own report in April?


Martin Brian Mulroney: Mr. Speaker, the documentation will be submitted in due time, as appropriate.


REASONS FOR DELAY
Jacques Guilbault: Mr. Speaker, what we must realize is that the investigation is drawing to a close, and that the appropriate time is now.
I would therefore ask the Prime Minister whether he could inform the House why his Government is dragging its feet on sending the O'Farrell Report to the Canadian Restrictive Trade Practices Commission. Why are we seeing this attitude which consists in obstructing the activities of a Commission that is conducting an investigation in the interests of Canadian consumers?


Martin Brian Mulroney: Mr. Speaker, I assume the Minister will follow the usual procedure and process, and at the appropriate time, to borrow your expression, the report will be submitted to the parties concerned.


PRICE OF GASOLINE-REQUEST FOR GOVERNMENT INTERVENTION
Mr. John Parry (Kenora-Rainy River):: Mr. Speaker, my question is directed to the Minister of Energy, Mines and Resources.
The National Committee for the Reduction of the Price of Gas which was set up recently in Montreal, has sent a telex to the Prime Minister, asking for an immediate reduction of six cents per litre in the price of gas at the pump. The price of gas
January 28, 1986

Oral Questions


REQUEST FOR GOVERNMENT AID
[Stage Direction]
in Montreal is at least 15 cents more per litre than in neighbouring American states.
When is the Minister going to listen to consumers and order Petro-Canada to take the lead in reducing the price of gas?
Pat Carney: Mr. Speaker, I really fail to understand how the Hon. Member who represents the New Democratic Party could want me to inflict a policy on Petro-Canada that would damage it. It is owned by Canadian taxpayers. Why would we impose self-inflicted wounds on the corporate body of Petro-Canada?
Petro-Canada is not a price leader, it is a price follower. I have assured the Hon. Member that Petro-Canada will pass on the savings on gasoline prices when Petro-Canada receives them.


Hon. Jean Chretien (Saint-Maurice):: Can the Minister give the House the assurance ... Could he offer private groups- and I am thinking of certain Canadian and other groups that are going to send observers, ordinary citizens, to observe the election-the assurance that they will be able to count on the Government's support, so that as private groups, they can at least exercise some pressure on the Government of the Philippines so that these elections will be held under the best possible conditions?


Charles Joseph Clark: Mr. Speaker, if the Hon. Member has a specific group in mind, I may take the option of the Canadian Government taking such action into consideration.


MINISTER'S APPROACH
John Edmund Parry: Mr. Speaker, from Newfoundland to northern Ontario to Vancouver Island, consumers across the country are asking the Government for relief. If the Minister is not prepared to direct Petro-Canada, will she tell the House what she will do for Canadian consumers?


Pat Carney: Mr. Speaker, I have already put in place a system on behalf of the Government which will ensure that savings will be passed on to consumers.


Some Hon. Members:: Hear, hear!


Pat Carney: I have told the House that I am communicating with industry executives to ensure that all of that price decrease is passed on to consumers.


PRICE OF GASOLINE-ROLE OF OIL COMPANIES
Mr. John R. Rodriguez (Nickel Belt):: Mr. Speaker, my question is directed to the Minister of Energy, Mines and Resources. The Minister said yesterday that prices "reflect competition in the market-place" and that the market-place will ensure that Canadian consumers benefit from falling world oil prices.
Is she aware that the Director of Investigation and Research under the Combines Investigation Act reported in July, 1984, that: "The Canadian consumer has been forced to bear the increased prices that result from anti-competitive arrangements in the marketing and refining sectors-" of the oil industry and, if so, will she now instruct Petro-Canada to break the price-fixing monopoly of the big oil companies in this country?


EXTERNAL AFFAIRS
Joseph Jacques Jean Chrétien: Mr. Speaker, my question is directed to the Secretary of State for External Affairs.
Does the Government intend to send observers to the upcoming elections in the Philippines, to give the Western world the assurance that these elections will be held in accordance with standards normal in a democracy?


Charles Joseph Clark: Mr. Speaker, that is not our intention.


Pat Carney: Mr. Speaker, with respect, I suggest that the Hon. Member has just supported my point because the date he mentioned, July, 1984, is when the Liberal Government was in power. I agree that their energy policy was against competition and against the interest of the consumers. That is why I am telling the House that our energy policy is in the interest of consumers.


ROLE OF PETRO-CANADA
John R. Rodriguez: Mr. Speaker, since the Minister agrees with the Director of Investigation, does she not agree further with the Director of Investigation that: "Petro-Canada has a role to play in fostering more competition at the pump"? Will she ensure that such a role is now played by our national oil company so that the consumers can get the benefit of lower oil prices?

January 28, 1986
Oral Questions


Pat Carney: Mr. Speaker, since I have directed Petro-Canada to act as if it were a privately-owned commercial operation that does respond to market pressures, I can assure the Hon. Member that that is in fact what is happening.


ADMINISTRATION OF JUSTICE
Mrs. Pauline Browes (Scarborough Centre):: Mr. Speaker, my question is directed to the Minister of Justice. Canadians are becoming increasingly concerned about the apparent lack of compensation that victims of crime receive. Will the Minister tell the House what measures the Government is proposing to assist those who are tragically affected by crime?


Hon. John C. Crosbie (Minister of Justice and Attorney General of Canada):: Mr. Speaker, the compensation schemes for the victims of crime are primarily matters for provincial Governments. The Government of Canada has a policy under which the costs of compensation for the victims of crime are shared.
We will be bringing in new initiatives in the victims' field in the next several months. We also hope to increase the proportion of the burden of the cost of compensation that the provinces share.
As of now, only one province does not have such a scheme. We will do what we can with the resources left to us by our predecessors to see that the percentage contributed by the federal Government is improved.


VISIBLE MINORITIES
Mr. Sergio Marchi (York West):: Mr. Speaker, my question is directed to the Minister of State (Multiculturalism). It concerns the Japanese Canadian redress. Earlier today my Leader and I met with the National Association of Japanese Canadians and it is not impressed with the Minister's recent pressure and intimidating tactics. Given that it was Canadian citizens whose rights were trampled on, and given that the process needs to include those who were wronged, is the Minister prepared to await the Price Waterhouse report commissioned by the community and then negotiate a package with the National Association as his Government said it would only last year? What is so wrong with this process?


Hon. Otto Jelinek (Minister of State (Fitness and Amateur Sport) and Minister of State (Multiculturalism)):: Mr. Speaker, here is a Hon. Member who is representing the Liberal Party which in the last 43 years-


Mr. Caccia:: Answer the question.


Otto John Jelinek: -has had ample opportunity to deal with this situation and did nothing whatsoever.


Some Hon. Members:: Hear, hear!


Otto John Jelinek: The Hon. Member is not only hypocritical in asking such a question, but inconsistent, because two weeks ago-


Sheila Maureen Copps: Order.


Otto John Jelinek: -he asked: "Why aren't you moving right away?" Now he is saying: "Wait". Can he not make up his mind and stop playing political football with the Japanese Canadians?


Sergio Marchi: Mr. Speaker, Diefenbaker and Clark tried their best to ruin this country but-


Mr. Mazankowski:: Shame!


Sergio Marchi: -we are looking to this present Government.


REQUEST THAT ACTION BE POSTPONED PENDING RECEIPT OF REPORT
Sergio Marchi: Mr. Speaker, I would like to ask this Minister, who knows about skating better than anybody else-


Some Hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. It is difficult for me to know whether the Hon. Member has asked a question if I cannot hear him over the noise from this side. Would the Hon. Member come to a question, please.


Sergio Marchi: Will the Minister stop with the threats, await the report, and negotiate in partnership with the national association so that the two parties and, indeed, all of Canada, can have an agreement of which we can be proud for once and for all? What is he afraid of?


Otto John Jelinek: I can tell the Hon. Member that I am not afraid of him, that's for sure.


Mr. Gauthier:: Skate around the edge.


John Edward Broadbent: What is this, a shoot out at the O K. Corral?


Otto John Jelinek: The Hon. Member knows very well-he is grandstanding again-that I have been discussing this matter with all Japanese Canadian associations, including the National Association of Japanese Canadians. I met with them yesterday, and with Mr. Miki. I think we had a very fruitful discussion.


Jacques Guilbault: So you say.
January 28, 1986


Otto John Jelinek: We are looking forward very soon to a solution or resolution which will bring honour and dignity to the survivors of the wrongs which were attributed to a Canadian Government 43 years ago.


PORNOGRAPHY
Mr. Bill Attewell (Don Valley East):: Mr. Speaker, my question is directed to the Minister of National Revenue. A dreadful type of cancer is eroding the morals and dignity of this country. I am referring to the insidious proliferation of hard-core violent pornography. Over 200 magazines depicting hard-core violent pornography involving women and young children now enter this country.


Sheila Maureen Copps: And he cut back on customs.


Some Hon. Members:: Shush.


Bill Attewell: When are the customs and excise laws going to be tightened to prevent this garbage from coming into the country?


Mr. Keeper:: What about the inspectors?


Hon. Elmer M. MacKay (Minister of National Revenue):: Mr. Speaker, my colleague realizes that our Department administers the customs tariff which prohibits the importation into this country of obscene material.


Cyril Keeper: Without staff.


Elmer MacIntosh MacKay: I can assure my colleague that my officials will be working closely with the officials of the Department of Justice in terms of a legislative response to the Fraser and Badgely Commissions. In the meantime I can assure all Hon. Members that this Government will be vigilant in attempting to keep this sort of material from being imported into the country.


John Edward Broadbent: There are only two inspectors in the whole country.


IMMIGRATION
Mr. Dan Heap (Spadina):: Mr. Speaker, my question is directed to the Minister of State (Immigration). As the Minister is aware, his colleague, the Minister of Regional Industrial Expansion, has discussed and rejected a proposal by the multinational corporation Daewoo to import hundreds of Korean
Oral Questions
workers to work in a textile plant in Quebec or elsewhere in Canada at lower wages than those paid-


Mr. Speaker:: Order. The question, please.


Daniel James Macdonnell Heap: Yes, Mr. Speaker.
Has the Minister previously considered bringing in foreign workers to cut Canadian wages?


Hon. Sinclair Stevens (Minister of Regional Industrial Expansion):: Mr. Speaker, in reply to the Hon. Member for Spadina, who has obviously been misled by a story which appeared in Macleans magazine, the truth is that I have spoken once to an official of Daewoo. They put a proposal into our Department which we, out of hand, told them is unacceptable.


REASONS FOR REJECTING PROPOSAL
Daniel James Macdonnell Heap: Mr. Speaker, my supplementary question is directed to the Minister who answered for the Minister of Employment and Immigration. Was the reason for rejection the proposed cut in salaries, or will the Minister in future be willing to consider a deal that includes bringing in foreign workers to cut Canadian wages?


Sinclair McKnight Stevens: Mr. Speaker, the main thrust of the question is, of course, hypothetical, but let me assure the Hon. Member that there were at least five reasons why we thought the proposal from Daewoo was unacceptable as presented.


John Edward Broadbent: Give us a few.


REGIONAL INDUSTRIAL EXPANSION
David Charles Dingwall: Mr. Speaker, my question is for the Minister of Regional Industrial Expansion. In his absence the Government of Canada has given financial assistance to Clearwater President John Risley to open a two million pound lobster holding and processing facility in Arichat, Cape Breton. Lobster fishermen in that area fear that the proposed lobster pound will destroy many more jobs if in fact the farming operation takes place. Will the Minister undertake to give to those fishermen a written undertaking, and a directive to that particular company, to not carry out a lobster farming operation in that particular facility?


Sinclair McKnight Stevens: Mr. Speaker, once again the Hon. Member is playing catch up. The information he has conveyed to the House is something which has come to our attention and is now under review.

January 28, 1986
Oral Questions


LOBSTER FARMING-REQUEST FOR MINISTERIAL UNDERTAKING
David Charles Dingwall: Mr. Speaker, perhaps the Minister would be in a position today to give a commitment since I have with me petitions from 11 communities in Cape Breton which are all opposed to this farming operation. Would the Minister not do the honourable thing, stand in his place today and give a written undertaking to those fishermen in those communities that there will be no farming operation?


William Alexander (Bill) Blaikie: Get your pen out.


Sinclair McKnight Stevens: Mr. Speaker, I may feel I can do many things, but I do not know how to stand and give a written undertaking.


EXTERNAL AFFAIRS
Ms. Pauline Jewett (New Westminster-Coquitlam):: Mr. Speaker, my question is directed to the Prime Minister who will know that President Reagan has recently initiated plans to provide an additional $100 million in largely military support to the Contras who are fighting to overthrow the legitimately elected Government of Nicaragua. I wonder if the Prime Minister has yet expressed to the President Canada's opposition to this military support for the Contras? If not, will he express our concern about this militarization and outside intervention by the United States when he meets with the President in March?


Charles Joseph Clark: Mr. Speaker, the position of the Government of Canada, as is well known by the United States administration and by others, is that the basic cause of the situation in Nicaragua and throughout Central America is an economic problem. We think it is unfortunate that that problem has been aggravated by the intrusion of a superpower conflict. That is well known.
In addition to expressing our views, the Government of Canada has, in various countries in that region, tried to contribute by economic development assistance to improve the lot of the people who live there. We intend to continue to do that.


CANADIAN POSITION
Pauline Jewett: Mr. Speaker, the question is really whether or not the Government approves the giving of military aid to the Contras and I would like a direct reply to that question.


Charles Joseph Clark: Mr. Speaker, the question is really whether it is the
purpose of the foreign policy of a sovereign country to give lectures to others, or to act within our own capacity to achieve the results we can achieve. We believe it is our business to do our business, and we are doing it.


ENVIRONMENTAL AFFAIRS
Mr. Bob Corbett (Fundy-Royal):: Mr. Speaker, my question is directed to the Minister of the Environment. The United States is investigating the possibilities of storing nuclear wastes in underground storage dumps, most of which are along the Canada-U.S. border. Will the Minister assure the House that he will insist upon full Canadian consultation and agreement before such dumps are constructed?


Hon. Tom McMillan (Minister of the Environment):: Mr. Speaker, yes, I think the position of the Government of Canada is clear. Certainly it has been made clear to American officials. When I met with my counterpart, Lee Thomas, the head of the U.S. Environmental Protection Agency, on October 17, I put Canada's position to him, as did the Minister of Energy, Mines and Resources and the Secretary of State for External Affairs to their respective counterparts. We oppose the location of such plants close to the Canadian border, especially if preparatory field work would be required in this country. That position is clear, and it will remain so.


William Alexander (Bill) Blaikie: They are doing it in Epp's riding.


RAILWAYS
Mr. Brian Tobin (Humber-Port au Port-St. Barbe):: Mr. Speaker, my question is directed to the Minister of Transport. In today's The Globe and Mail, and indeed in Newfoundland's press yesterday, the most senior ranking Conservative of the House of Commons from Newfoundland, the Hon. Member for St. John's East, is quoted as saying that the Government of Newfoundland ought to stop pretending that the railway in Newfoundland has a future and should make a deal with the federal Government to close it down in exchange for highways moneys. Does the view expressed by the Hon. Member for St. John's East indeed reflect the attitude of the Government of the day in respect of the Newfoundland Railway?


Donald Frank Mazankowski: Mr. Speaker, I think it reflects the attitude and the position of the Hon. Member who just posed the question. The Government is discussing the broader issues of transportation in Newfoundland, and certainly the future of the railway is one of the items under consideration.


TIMING OF GOVERNMENT ANNOUNCEMENT
Brian Vincent Tobin: Mr. Speaker, I was quoting the Hon. Member for St. John's East. Does the Minister agree with the comment attributed to the Hon. Member for St. John's West last week who told the Mayor of Bishop's Falls that a definitive decision within two weeks would be announced on the future of the Newfoundland Railway? Could the Minister tell us whether or not in the next 14 days the people of my province can expect an answer in respect of the Government's intentions regarding the Newfoundland Railway and its thousands of employees?


Donald Frank Mazankowski: Mr. Speaker, my understanding is that my colleague indicated that a decision may be coming down within a matter of weeks, not within a matter of two weeks. That is what the Hon. Member informs me. I can assure the House, and indeed the Hon. Member, that if a decision is made he will certainly be notified amply, and I will expect him to respond in kind.


FISHERIES
Mr. Ray Skelly (Comox-Powell River):: Mr. Speaker, my question is directed to the Prime Minister. It concerns the Nova Scotia clam scam. Is the Prime Minister aware that the Minister of National Revenue lobbied the Minister of Fisheries on behalf of Mother Snow's Fine Foods and Dennis Snow to obtain fishing licences, and that Dennis Snow owes thousands of dollars in outstanding judgments to the Ministry of National Revenue? Does the Prime Minister condone this activity on the part of the Minister of National Revenue, or would he ask the Minister to resign for such a blatant conflict of interest?


Hon. Erik Nielsen (Deputy Prime Minister and Minister of National Defence):: Mr. Speaker, the implications contained in the allegations in the preamble to that question are not only wrong but are right next door to being scurrillous. The fact of the matter is that the regional director in Halifax invited applications for an experimental clam fishery to last for four months. Four such applications were received for six licences, two of which were granted by the regional director in a perfectly proper fashion.


APPLICATION FOR DREE GRANT-REQUEST FOR INVESTIGATION
Raymond John Skelly: Mr. Speaker, would the Prime Minister undertake to investigate an application by Mother Snow's Fine Foods for a $900,000-odd DREE grant to fund an interim processing operation in relation to these ill-gotten clam licences? Would he undertake to investigate the grant and cancel it on the basis that the principals are not entitled to that particular licence?
Oral Questions


Erik Nielsen: Mr. Speaker, as the Acting Minister of Fisheries I will take into consideration the almost contemptuous remarks of the hon. gentleman. I know nothing of his allegations, but if they should in any way be even close to the truth, then they will be acted upon. I would not, if I were the Hon. Member and having regard to all of the other allegations which he has made in the past, hold my breath on this one.


PUBLIC SERVICE
Jean-Robert Gauthier: Mr. Speaker, my question is directed to the Right Hon. Prime Minister. It is a fact that collective bargaining in the Public Service has been dragging on for months. Last week we heard that a number of senior executives of Crown corporations and other senior public officials have obtained from the Government salary increases of 3, 5 and 8 per cent and, in some cases, even as much as 40 per cent.
How can the Prime Minister find $475,000 to pay the president of a Crown corporation, when during the last sixteen months the Government has laid off 3,000 public servants, when the Government has a privatization policy that takes jobs from low-income Canadians, and when its human resources management system is a disaster, how can he justify spending this kind of money on the top brass and giving so little to those earning an average wage?


Hon. Robert de Cotret (President of the Treasury Board):: Mr. Speaker, I would like to react to some of the premises of my hon. friend's question. Recently, it was announced that senior executives in the Public Service would receive a 2.3 per cent raise, compared with the average 3.5 per cent negotiated through collective bargaining with our employees. I think that on this level, the principle of equity is being observed, and that the premises of the question are absolutely false.


REQUEST THAT PRIVATIZATION COST BENEFIT STUDIES BE TABLED
Jean-Robert Gauthier: Mr. Speaker, given that there is very little information forthcoming from the Government on questions concerning the negotiations on the salaries of public servants, and given that I take it the Government has made cost studies on the benefits of privatization, for example, will the Minister table in the House those studies on cost benefits which he has? Does he have studies on the social costs to public servants who lose their jobs because of the policies of the Government?

January 28, 1986
Oral Questions


Robert René de Cotret: Mr. Speaker, I think we have been most forthcoming in all the information for which the Hon. Member has asked. I will be more than happy to make available to him any studies which we have bearing on the rate of remuneration and bearing on the cost benefits type of information for which he is asking that we have at our disposal.


ABORIGINAL RIGHTS
James Ross Fulton: Mr. Speaker, my question is directed to the Prime Minister. Could he report to the House today on whether or not he has had any further response from the Premier of British Columbia in relation to the negotiations with the Haida people regarding South Moresby?


Hon. Jake Epp (Minister of National Health and Welfare):: Mr. Speaker, I inform the Hon. Member that the Minister of Indian Affairs and Northern Development, as he knows, has been dealing very directly with this issue. I will convey the question which the Hon. Member asked to the Minister when he has returned.


AGRICULTURE
Don Boudria: Mr. Speaker, my question is directed to the Prime Minister because we cannot obtain answers from the Minister of Agriculture concerning the sugar-beet industry in Canada. This industry is 90 years old. When specifically-on what date-will the agricultural sector involved in the sugar-beet industry be receiving the 1983 and 1984 stabilization cheques? When can farmers expect a long-term sugar policy from the Government?


Hon. John Wise (Minister of Agriculture):: Mr. Speaker, I do not know why the Hon. Member is confused. I do not know whether he was in the House yesterday. I think it was yesterday that a question was posed to me in respect of the future of the sugar-beet industry in Canada. Of course the Government took action earlier to provide stabilization payments to ensure that the 1985 sugar-beet crop was planted.


Don Boudria: I asked about 1983 and 1984.


John Wise: It was to ensure that last year's crop was planted. Of course growers in the Province of Manitoba and in the Province of Quebec took advantage of the program. However, it was not possible to reach an agreement in the Province of Alberta.
Also, in response to a question which I received yesterday from one of the Hon. Member's colleagues, I indicated that to
this point in time the Government has not made a decision in respect of the sugar policy.


SITUATION IN QUEBEC-GOVERNMENT POLICY
Don Boudria: Mr. Speaker, I would like to know specifically with respect to Quebec farmers whether the Minister is aware that Quebec's refinery will shut down if it does not receive assurances from the Federal Government that there will be a long-term sugar policy.
Does this Government want to wipe out 1,000 jobs in Quebec in this sector?


John Wise: Mr. Speaker, the Hon. Member should realize that beets are not just grown in the Province of Quebec, but are also grown in the Province of Alberta and in the Province of Manitoba. We are concerned about this issue and we have spent a great deal of time and effort on it. I want to compliment, indeed everyone in the industry should compliment my colleague, the Minister in charge of the Canadian Wheat Board, who has provided some real leadership.


An Hon. Member:: Where are the cheques?


John Wise: We have not yet reached a decision.


CLERK OF PETITIONS' REPORTS
Mr. Speaker:: I have the honour to inform the House that the petitions presented by Hon. Members on Monday, January 27, 1986, meet the requirements of the Standing Orders as to form.
The petition presented by the Hon. Member for Fraser Valley East (Mr. Belsher) by filing with the Clerk of the House also meets the requirements of the Standing Orders as to form.



POINT OF ORDER


Mr. Speaker:: I should like now to give a ruling with regard to a matter raised by the Hon. Member for Ottawa-Vanier (Mr. Gauthier) on Friday, January 24, 1986. The Member for Ottawa-Vanier asked for clarification on the interpretation of Standing Order 36(1) in relation to the length of speeches at third reading. Having considered the matter and verifying

precedents I am now prepared to rule. Standing Order 36(1) reads as follows:
Unless otherwise provided in these Standing Orders, when the Speaker is in the Chair, no Member, except the Prime Minister and the Leader of the Opposition, or a Minister moving a government order and the Member speaking in reply immediately after such Minister, shall speak for more than twenty minutes at a time in any debate.
In situations where a Minister moves the motion for third reading and speaks first it is quite clear that the Opposition Member replying immediately after the Minister would be entitled to unlimited time. It would appear logical to me to carry this practice further and say that in those instances where the Minister's Parliamentary Secretary makes the first speech on behalf of the Government, he or she should have unlimited time and the Opposition Member replying immediately thereafter should also be entitled to unlimited time. This is the interpretation of the rule that the Chair intends to follow henceforth.



ROUTINE PROCEEDINGS


Mr. Dennis H. Cochrane (Moncton):: Mr. Speaker, I have the honour today to present a number of petitions from the southeastern part of the Province of New Brunswick in which the signatories are expressing their concern with regard to the future of the CN shops in Moncton. They are concerned that the current assessment being conducted by CN with regard to their maintenance capacity may have negative implications for the thousand or so workers working at the CN shops in Moncton. They call this matter to the attention of Parliament and ask us to stop in any way any effort to downgrade the shop in Moncton.


Don Boudria: Mr. Speaker, I have 138 petitions signed by 1944 electors of the riding of Glengarry-Prescott-Russell asking the Prime Minister of Canada (Mr. Mulroney) to give his immediate personal assurance that no agricultural programs will be sacrificed in the free trade negotiations between Canada and the United States of America.


Mr. Jim Manly (Cowichan-Malahat-The Islands):: Mr. Speaker, I have a number of copies of two petitions relating to the Canadian Forces Maritime Experimental and Test Range at Nanoose Bay, British Columbia, pointing out that the use of
Order Paper Questions
this range causes environmental damage, contributes to the nuclear arms race and is of doubtful economic value. One petition calls for all weapons testing at the said test range to be brought to an end, and the second calls for a full public inquiry before the present agreement is renegotiated.


Daniel James Macdonnell Heap: Mr. Speaker, I have petitions from the residents of Spadina who are still protesting and objecting to the deindexation of family allowances and they ask the House of Commons to reinstate full indexation of universal family allowances and to rescind the unfair tax increases.


David Charles Dingwall: Mr. Speaker, I have a number of petitions from the residents in Cape Breton who are opposed to a farming operation of lobsters, which was started with money given to Mr. John Risley of Clearwater. These petitions are from residents in Main-A-Dieu, residents of Isle Madame and Gabarus, and Fourchu, residents of Glace Bay, Cape Breton, residents of Bras d'Or Lakes, residents of Buysborough, residents of Auld's Cove, residents of L'ardoise and Richmond County, residents of Port Morien in Cape Breton. All these residents are opposed to a lobster farming operation in Cape Breton, but 1 want to underline, Mr. Speaker, that they are not opposed to economic development taking place in these areas.


Fernand Robichaud: Mr. Speaker, today it is again my duty to table a petition from people in the Moncton area, expressing their concern about the CN shops in Moncton. There are persistant rumours that the guarantees given by the Minister last summer no longer are guarantees as such.
Mr. Speaker, people are concerned more than ever before.


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


Mr. Speaker:: Shall all questions stand?


Some Hon. Members:: Agreed.

January 28, 1986
Pension Benefits Standards Act, 1985



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Miss Carney that Bill C-85, an Act to amend the Petroleum Incentives Program Act, be read the second time and referred to a legislative committee.
Douglas Cockburn Frith: I would just like to indicate that there is a disposition on our side of the House, if the Government so wishes, to vote on this Bill at the present time.


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


Some Hon. Members:: Question.


Mr. Speaker:: The question is as follows: Miss Carney, seconded by Mr. LaSalle, moved that Bill C-85 be now read the second time and referred to a legislative committee.
Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


An Hon. Member:: On division.


[Stage Direction]
Motion agreed to, Bill read the second time and referred to a legislative committee.

Hon. Ray Hnatyshyn (for the Minister of Finance) moved: that Bill C-90, an Act respecting pension plans organized and administered for the benefit of persons employed in connection with certain federal works, undertakings and businesses, be read the second time and referred to a legislative committee.


Hon. Barbara McDougall (Minister of State (Finance)):: am very pleased indeed and very proud to be moving second reading of Bill C-90, a measure which will bring, I think, long awaited reform to the federal Pension Benefits Standards Act. This legislation, we are very pleased to report, is a landmark in the evolution of Canada's pension system. It and other measures the Government is taking to improve pensions in Canada mark the culmination of a decade of intensive study, debate and deliberation. Over this long period progress towards a consensus on pension reform has been painstaking and it has been frequently contentious. I am very proud to be able to say that the legislation before us today is based on consensus. It is a consensus involving compromise to be sure, but a very genuine consensus. This Government, I believe, has again demonstrated its ability to work together with Canadians to achieve concrete results on a very important matter.
The Bill before us now represents major changes to the minimum standards affecting federally regulated pension plans. This Government has acted decisively to improve pension benefits, a key component of the quality of life of Canadians in their retirement years. Bill C-90 will ensure greater fairness, greater flexibility and greater security for Canadians participating in these plans. More than that, it will provide Canadian workers with opportunities to exercise individual initiative and responsibility in saving for their retirement years.
The Pension Benefits Standards Act sets the basic standards which pension plans provided by Canadian companies operating in Canada, subject to federal jurisdiction, must meet. We are proposing to improve those standards in so many fundamental ways that the existing legislation must be completely and fundamentally rewritten. Since the Act was passed 20 years ago, social standards have changed, the economy has changed and the Charter of Rights and Freedoms has established a new legal touchstone. Bill C-90 reflects those changes.
Before describing the main features of the Bill, I would like to say something about the place of employer-sponsored pension plans in Canada's pension system and the principles that underlie that system. First, we share a collective obligation to ensure that Canada's elderly do not live out their lives in poverty. This is our fundamental and most general social responsibility, a responsibility which the Government accepts as fundamental to human rights and to our social programs in Canada.
Old age security benefits combined with a guaranteed income supplement provide basic security for those over 65. Spouses' allowances help others in need who have not yet reached 65. The Government has recently extended such help to all widows and widowers between the ages of 60 and 64. On this base is built the Canada Pension Plan and its parallel in Quebec, the Quebec Pension Plan. These are compulsory plans to which all Canadians in the paid labour force must belong and they ensure that workers and their spouses can maintain a reasonable standard of living in retirement.
As I am sure you are aware, Mr. Speaker, in December the Government concluded a historic agreement with the provinces which share responsibility for the Canada Pension Plan to put its financing on a firm footing for the future and to adapt the benefits it provides to changing needs and expectations. Legislation to give effect to this agreement will be introduced in the spring.

Furthermore, in addition to the basic mechanisms of the Canada Pension Plan, Canadians must be able to determine, on an individual or collective basis, the additional amount in pension benefits that would meet their needs upon retirement, which means that they must accept responsibility for saving enough money to maintain the standard of living they want for
January 28, 1986

their retirement. Canadians want to be self-reliant and they want to have a choice.
What the Government can do is encourage supplemental retirement savings. As you know, tax provisions to assist retirement savings have been expanded considerably, and according to the new Pension Benefits Standards Act I am discussing today, pension plans offered by employers will have to meet basic standards that set higher and fairer levels than was the case in the past. Consequently, many more Canadians will be eligible for such plans and will want to participate, and more Canadians and their spouses will receive better pensions from the plans to which they contribute at the present time. [English]
I want to emphasize that this legislation sets basic standards in what is essentially a voluntary system, not a compulsory one. Employers are not compelled by this legislation to offer pension plans and employees are not compelled to join them. However, if plans do exist and they exist widely, they must meet certain standards of fairness and adequacy that are the best we can provide. Employers are free to exceed these standards and indeed many do. Unions are free negotiates benefits and indeed many have. The system is a flexible one in which employers, employees and unions can work out specific arrangements which best suit their circumstances and their expectations.
The Government recognizes, of course, that what Canadians deem adequate today will change as society itself changes. For this reason, there may be a need in the years to come to again review this legislation. The changes being proposed now, however, reflect today's realities. They will put an end to the uncertainty of the past several years that has caused many employers to delay reforming their plans and others to delay introducing them. Employers and employees will know where they stand.
The changes being proposed to the Pension Benefits Standards Act reflect extensive consultation with the general public, with employers and labour, with women's groups and pensioners and with the pension industry. Their insights have been most valuable. The changes also reflect lengthy and close consultation with provincial Governments. In Canada this is essential because the.pension system is a shared federal and provincial responsibility.
The federal pensions standards legislation applies directly to some 650 employer-sponsored plans covering 500,000 people. Indirectly, the terms of the legislation will apply to a further
500.000	federal public servants because the Government has undertaken to see, in consultation with the Public Service unions, that the Public Service pensions will generally meet these standards. Provincial legislation applies to more than
14.000	employer-sponsored plans covering some 3.5 million people.
It is important to know that for pension reform, to which we are very committed, to serve the needs of Canadians, both employers and workers, we and the provinces must enact similar pension standards. Fundamental to our efforts has been our view that Canadians, no matter where they live, should
Pension Benefits Standards Act, 1985 have the same opportunities to build pensions for their old age. They must not be deterred from moving freely between provinces because of concerns about their pensions, and companies operating in more than one jurisdiction should not face needless and costly administrative burdens in having to conform to different pension standards.
In view of the importance of having a high degree of uniformity across the country, I am particularly gratified that the Ontario, Quebec and Alberta Governments are planning to implement parallel legislation concurrently with our legislation. Other provinces have indicated that they will consider similar legislation at a later date, hopefully in the very near future. This Government which has taken the lead on this matter will continue to work closely with the provinces as pension reform is translated into reality.
The changes introduced in the legislation before us are timely. Canadian society has altered dramatically in the last 20 years. Women have entered the paid labour force in unprecedented numbers. Traditional family structures and marriage patterns have changed. Career patterns are different and new working arrangements are evolving. At the same time, the Government, employers and employees alike must be concerned about the cost burden imposed by pension plans.
Both employers and employees must judge pension plans to be worth while and cost effective. They must be willing to pay for them. The cause of pension reform will be set back rather than advanced if the cost or administrative burden of plans became such that employers were discouraged from sponsoring plans and workers were discouraged from joining them. A balance is required. We believe and are proud to report that a balance has been achieved. For instance, it is estimated that for employers, the proposals in this legislation will increase the costs of average pension plans by about 8 per cent to 10 per cent. This in turn will increase payroll costs by about half of 1 per cent. We have taken very great care to avoid imposing retroactive costs.
I submit that the proposed changes are fundamental and are far reaching. They will serve Canadians well and they will be affordable.
I would now like to outline to the House what some of these changes are. Current pension standards on vesting, for example, specify that persons do not acquire rights to the part of their pensions contributed by their employers until they reach 45 years of age and have 10 years' service or membership in their pension plan. This is clearly a Draconian standard in today's times. Although many employer-sponsored plans have not been that rigid, the standard nonetheless has deprived many young people, and people who have left the labour force or changed jobs even after considerable time with employers, of a good part of their pension benefits. Employees now will be entitled to vested benefits two years after joining a pension plan. That is an improvement of eight years. They will then be able to leave their jobs if they wish and not jeopardize their pensions.

January 28, 1986
Pension Benefits Standards Act, 1985
As a result, the amount of pension which today's mobile Canadians can accumulate over their working lives will be significantly increased. Because women tend to move in and out of the paid labour force more often than men, the proportion of women benefiting from this change will be particularly high. That is something that I am very pleased to report to the House. Vested benefits will also be locked in. This means that the funds will remain in a pension plan or be transferred to a locked-in RRSP to provide for retirement income as they are intended. This early vesting and locking in will therefore result in more persons having private pension coverage at retirement and many persons having increased pension coverage at retirement.
Portability is another important matter. Pensions will be portable, allowing Canadians who change jobs the option of leaving their pension entitlements with their former employer, transferring them to their new employer, or locking them into an RRSP. This long awaited pension reform will remove an obstacle which has stood in the way of many Canadians wanting to make significant career changes. Also, by encouraging a more mobile labour force, portability will enhance the competitiveness of our economy and of the country's prosperity. People will be more willing to move where there are job opportunities as these open up.
I would now like to turn to minimum employer contributions. For the first time, the new legislation will require that in all circumstances employers pay for at least 50 per cent of the value of pensions earned by their employees. This usually happens now with long-service employees, but not with those who spend shorter periods with an employer. So this change will particularly benefit young workers and mobile workers, many of whom are women. In the case of pension entitlements which employees have earned when they change jobs, the same objective can be met by indexing these deferred entitlements. These amendments also improve access to pension plans since they ensure that more workers will have the opportunity to join plans.
Of major importance are the provisions which will require employers to allow part-time workers to join pension plans currently available only to full-time workers, provided they have earned at least 35 per cent of average wages, or met an equivalent hours-related criterion for two consecutive years. As Hon. Members know, increasing numbers of people, especially women, are taking part-time jobs. For the first time many of them will be able to build up pension plans. Also important is the provision that all full-time workers in any group for which a pension plan exists will now be eligible to join the plan at any time, provided they have at least two years of service. At present, some plans have more restrictive eligibility requirements.
I would now like to deal with another important social issue, that is, flexible retirement. The new standards being proposed in the legislation before us will permit employees more choice in deciding when to retire. Canadians will be able to elect early retirement anytime within a ten-year period before the normal retirement age specified in their pension plan. Should they do
so their pension will be appropriately adjusted to reflect the longer period over which the benefits will be paid. This change is in keeping with evolving patterns of retirement and may be particularly attractive to many working women who are younger than their retired husbands and wish to join them in retirement.
Another area of concern has been information and pension committees. A major thrust of the PBSA amendments is to encourage pension plan members to be more knowledgeable about their plans and to participate in decision making about them if they wish. The amendments will require pension plan sponsors to provide members and their spouses with regular information about the amount of benefits earned, their accumulated contribution and the plan's financial situation. This will help them to plan responsibly and knowledgeably for retirement. As well, representation of plan members will be required on pension committees, if the plan has 50 or more members and if a majority of the members request representation.
I have emphasized two or three times the implications for women because that is what I am most proud of in this legislation. In Canada today pension policy must recognize that working patterns for many women have changed dramatically and will continue to change. At the same time, pension policy must recognize that many women will continue to choose more traditional family roles. It is our responsibility to ensure that the pension needs of both are met.
In describing the changes I have outlined thus far I have mentioned that while they are designed to deal with fundamental shortcomings affecting everyone, several of them will be of particular significance to women because women, on average, change jobs more often and hold more part-time employment than men. There are a number of other changes, however, which are explicitly intended to remedy the failures of present standards to meet women's pension needs.
I would now like to turn to the subject of equal pension benefits. One such change will ensure that women and men who retire under similar circumstances will receive the same monthly pensions. Many plans meet the standard now, but others may have lower periodic benefits paid to women than to men because a woman's life expectancy is longer than a man's. This change is fair because it costs women just as much to live month-by-month as it does men.
I would now like to speak about survivor benefits. The new provisions concerning survivor benefits are of major significance to women. Many women now find themselves totally unprovided for, or inadequately provided for, by their husband's pension plan if he dies. The new standards will require pension plans to offer survivor benefits which will provide surviving spouses with at least 60 per cent of the pension which would have been paid had the retired plan member lived. These benefits will not be ended if the survivor remarries, as has been the case in the past. If the plan member dies before becoming eligible to retire, the full value of the pension that has been earned will be transferred to a locked-in RRSP for the spouse.
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With regard to credit splitting, the new standards will also ensure that women do not lose their share of pensions or pension savings if their marriage breaks down. Pensions already being paid, or the value of pensions earned during marriage, will become part of the family assets to be divided on breakdown of the marriage, according to the provisions of provincial family law legislation.
I now wish to deal with the controversial area of inflation protection. As Hon. Members well know, this is a question which, over the years, has been of persistent concern to the architects of pension reform. Indeed, no other issue has been such a source of disagreement and such an obstacle to reform. The Government recognizes the need to maintain the purchasing power of pensions provided by employer-sponsored pension plans. However, many business groups continue to be opposed to mandatory inflation protection because they do not believe that it is affordable or predictable. There is no provincial consensus on this matter either. Therefore, we must acknowledge that to mandate inflation protection at this time could have serious negative repercussions on the willingness of businesses to establish or to continue pension plans for their employees.
This outcome would not be in the interests of employees and of course we will have to continue to work at it. As well, it has proved impossible to achieve any agreement on what method or formula might be appropriate for providing inflation protection, and we will continue to work at that. However, we cannot delay pension reform solely for want of agreement on mandatory inflation protection when there is agreement in so many areas, and when the need for reform is so great. We have therefore adopted a voluntary approach to inflation protection. I want to stress that the majority of large pension plans already provide inflation adjustments which amount to about 40 per cent of the increase in the Consumer Price Index. We will build on this by encouraging all firms under the jurisdiction of the federal Government, especially Crown corporations, to provide such inflation adjustments both to pensioners and to the pension savings of persons still working. These firms will be required to report regularly on the adjustments they make and the source of funds they use for these purposes. Information on both the inflation adjustments and the sources of funds will be submitted to the Superintendent of Insurance and the resulting statistical information will be made public.
The Government will be closely monitoring the response of pension plans to the voluntary approach. As we gain a clear picture of how well it is working, we will once again be consulting with the provinces, with business, and with other groups which have an interest in effective pension arrangements to determine what further action is necessary and nudge ourselves toward further action if we come to that conclusion. Clearly, there will be a need to review the question of inflation protection on an ongoing basis. That is just what we will be doing.
Pension Benefits Standards Act, 1985
Canadians have been awaiting reform of the pension system for a long time. Much work has been done on this over the years and I know that the Hon. Member for Sudbury (Mr. Frith) has done a lot of work in this area. He is to be congratulated for the work that was done while his Government was in office. However, we on this side of the House are very proud today that a consensus has been reached which reflects the realities and values of the Canada of today. I believe all Canadians will welcome the significant achievement which this Bill represents and will be anxious to see the changes take effect. I am proud to present this Bill on behalf of the Government. I hope all Members will support it wholeheartedly so it can receive speedy passage on behalf of those who are approaching their retirement and those who must plan ahead in the pension fund reform context.
Canadians are eager to see this legislation pass because if it receives speedy passage it can take effect at the beginning of 1987 as proposed. This can only happen if the measures are in place in sufficient time for employees to make the substantial adjustments in their plans which may be required. Again, it is with very great pride that I present this Bill to the House today.


Douglas Cockburn Frith: Mr. Speaker, as the spokesman for my Party on this issue may I say that I, too, am prepared to give this Bill relatively swift passage in order that the legislation go to committee. There are some areas in this legislation with which I have some concern. I think we can make some improvements to the legislation without causing a fundamental problem for the Government. One in particular that I want to mention, while the Minister is still in the House, is this. At the time the all-Party parliamentary task force travelled across the country meeting individuals and other groups, but particularly representatives of religious groups which prohibit membership in private associations, we took their presentations into consideration. The Province of Manitoba took their concerns into account and this wording was placed not only in the Manitoba legislation, but the previous Liberal Minister of Finance, Mr. Lalonde, accepted that wording in the draft Bill we had prepared. I have had representations from the same religious groups. They are very small in number, and I think the Government would do well to listen to what they have to say and amend the legislation to alleviate their problem.
The Minister indicated that this Bill has been a long time coming. I could not agree more. In recent months there have been public opinion polls which indicate that the Canadian public in general is very confused about the role of pension plans in this country, both public and private. That has led to a misunderstanding on the part of most Canadians as to what role pension plans play. The Minister indicated that this legislation is only going to deal with the private pension plans covering areas of federal jurisdiction. As she said, that covers some one million Canadians. My understanding is that a consensus has been reached with the provincial Governments on a pension reform package which will be undertaken in each of the provinces concerned. That of course will cover a great
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Pension Benefits Standards Act, 1985 many more workers. However, we have to use this debate not only for the purposes of this Bill but as an educational tool to explain to Canadians the difference between public and private pension plans. Fundamental to that explanation must be the acceptance by the people of Canada that there is a role to be played in pension planning by Government, by the individual and their employers.
In years past, when one was advocating a pension system, it was based on the premise that Old Age Security would cover 25 per cent of the average industrial wage. The public pension system, known as the Canada Pension Plan outside of Quebec where it is called the Quebec Pension Plan, would cover an additional 25 per cent. In other words, at age 65 Canadian workers would be guaranteed at least 50 per cent of the average industrial wage. It was up to the individual to supplement that through personal savings or a private pension plan. In effect, they would then be able to live in retirement with the standard of living they were accustomed to before they reached the age of retirement. That triad of Government, business and the individual has served Canadians relatively well.
One of the major concerns which led to the creation of the all-Party task force on pension reform was that in the latter part of the 1970s and the early part of the 1980s some 54 per cent of OAS recipients also qualified for the guaranteed Income Supplement. That was considerably higher than most other OECD countries. For that reason the task force was asked to investigate why pension benefits for retired Canadians was so much different than in Europe. I must say that in the North American context, which we must take into consideration because our major trading partner is the U.S., our neigbhour to the south has a worse track record than we do regarding private pension plans. The caveat I want to place on that is that Canadians are much more familiar with the RRSP as a vehicle whereby the average Canadian can plan his retirement income. That is an important consideration when one looks at a snapshot view of the pension system in our country. The point I am making is that the triad I referred to earlier was intended to serve Canadians reasonably well.
The trends that are now impacting on Canadian society had a great deal to do with the type of recommendations that the task force made to the Government of the day, which were accepted by the Government at that time, and have now been accepted by the present Government. I think that speaks well for the committee members on that task force on pension reform. I know, as I think Members opposite know, that when a report of a parliamentary task group is accepted by two different stripes of political philosophy in Government, the task force has done a reasonable job of deciphering the actual needs of the Canadian public with regard to pension systems.
I talked about what kind of trend lines had a degree of impact on the recommendations that the all-Party task force made. The most important one was the assumption of the change in work patterns. Previous to the 1960s when the
Canada Pension Plan was first being thought of, the premise was that most Canadians would enter the workforce at age 18 and exit at age 65. As a result, the maximum pension under the Canada Pension Plan, before the introduction of the changes that will come into effect in the spring of 1986, was based on the premise that one would be in the workforce for 47 years. People now recognize that the odds of young people, who are taking post-secondary education, entering the workforce at age 18 and staying in the workforce in the same place until age 65 are very remote. Due to the way in which the economy is unravelling and due to the post-industrial age, it is evident that young people will have to be retrained several times during their working careers to develop different life skills in order to have a meaningful job in our society.
As a result, we suggested that the system will have to be much more flexible than it was in the past to accommodate that emerging work pattern. That was one of the major reasons which led to our recommendation to make the maximum pension under the public pension plan system payable upon 35 years in the workforce as opposed to 47.
The fact that young people are going to have to go in and out of the workforce in order to be retrained led us to make the recommendations that we did with regard to the need for earlier vesting of pension plans and a more portable pension plan system. I am pleased that the Government has accepted the idea of a two-year vesting period. The locking in of the Registered Retirement Savings Plan can create a vehicle for better portability of the pension system. Therefore, the emerging work patterns had a significant impact on the recommendations of the task force and that is what is being reflected in the legislation before us.
Another major trend that had an impact on the legislation was the emerging family patterns in the country. Only one in every five marriages in the country reflect what we think of as the traditional family structure which existed one generation ago, that of the male being the worker and the wife staying home and raising children. Only 20 per cent of Canadian families now reflect that situation. I read in an article yesterday that that kind of family structure is only represented by 7 per cent of the American population.
One can see that this emerging family pattern had severe impact on the way in which the legislation was drawn up. That was one of the major factors that led to the number of changes in Canadian pensions that affect women. That is to say, upon marriage breakdown pension assets should be divisible, survivors' benefits should be increased, and upon remarriage they should not lose their entitlement to a pension. I see that the Government has accepted those premises in the legislation before us.
In addition, one of the major trend lines that also had an effect on the legislation before us is the concern that all Members of the committee had about the ability of the next generation to sustain the burden of intergenerational pension income. That is a very complicated way of saying that we have some concern about the next generation of Canadians being
January 28, 1986

able to sustain the burden of income for the next generation of elderly.
I would like to speak a bit about the differentiation between a public pension plan system and a private one in the country. Very few Canadians are aware that if you are over the age of 65 today and draw a pension from a public plan, namely from the Canada Pension Plan system, for every dollar you draw you have only paid 17 cents. The other 83 cents will be picked up by the next generation of Canadians.
The burden that is capable of being handled by the next generation has been studied in Europe. Under the present Canada Pension Plan system, my children, in the year 2010 and beyond, will have to pay roughly 9 to 10 per cent of their income to cover the Canada Pension Plan at that time. I do not believe that that is an excessive burden compared to that in most other industrial states which demographically reflected, in 1985, the state that Canada will be in in the year 2010. I speak of the United Kingdom, Germany, and France where the present average age and number of workers supporting the system reflect what the Canadian reality will be in the next generation.
We did, however, have some concern about what impact any changes to the public pension plan system would have on the capability of the next generation to carry that burden. I believe that was taken into account when we recommended that the Canada Pension Plan system not be expanded, because we were not concerned about whether the next generation could sustain that burden. The committee chose not to expand the Canada Pension Plan. We did, however, include homemakers in the Canada Pension Plan. There are some 2 million Canadians in the country, namely the homemakers, who do not have access to a private or a public pension plan system.
As a result, homemakers who have chosen to stay home and raise a family, which has value to Canadian society, find themselves being penalized. That was one of the major reasons that we recommended the inclusion of homemakers in the Canada Pension Plan. In the consensus package which the Minister of State for Finance (Mrs. McDougall) indicated had emerged, the inclusion of homemakers in the public pension plan system is still under review by the provinces. Therefore, one should bear in mind that if the inclusion of homemakers in the Canada Pension Plan does not become a reality in the future, with the exception of some of the technical changes that are going to be made under the Public Service Benefits Act, there will be very little which will significantly improve the lot of women in the country.
If there is a failure to include homemakers in the Canada Pension Plan, I think serious consideration should be made to the Cofurantes model which advocated that there would be an improvement in the first half of the average industrial wage replacement earnings by the public pension plan system. Without that, very little will be done for women in our society who either stay at home and raise a family or are unfortunate enough to work at only very low paying jobs. It comes as no surprise to any of us in the Chamber this afternoon that if you work in a poor-paying job you will have a poor-paying pension
Pension Benefits Standards Act, 1985
because they are earnings-related. For that reason, when we debate the changes to the Canada and Quebec Pension Plans some consideration should be given to that idea in the event that the inclusion of homemakers in the public pension plan system is rejected by the provinces.
I also want to indicate some other areas of concern that I have with respect to the legislation before us. When we look back on the debate that occurred in the country in the seventies and eighties we see that one of the major factors that led to the establishment of the task force on pension reform, besides the dismal record that we had in terms of today's elderly population with regard to the Guaranteed Income Supplement and other things, was the concern about inflation protection. If you were one of the 40 or 45 per cent of males fortunate enough to have access to a private pension plan in the workplace and you did not have any inflation protection on that pension plan, with inflation at 11, 12 and 13 per cent per annum in Canada from 1978 until 1983, if you retired in 1978 on what you thought was going to be a reasonable pension plan, that inflation had a significant impact on your purchasing power over a very short period of time. In other words, many pensioners in this country who retired in 1978 found that the purchasing power of their private pension decreased by half within five years. For that reason, the Government of the day asked the Parliamentary Task Force on Pension Reform to investigate whether or not inflation protection should be included in an over-all private pension plan system in this country.
In the Lalonde Budget of February, 1984, the principle of inflation protection was accepted by the Government with the formula to be the Consumer Price Index minus 2.5 per cent. Although that formula did not reflect a consensus across the country, the principle of inflation protection was accepted by the Conservative Government of Bill Davis in Ontario.
There is a good case to be made that despite the fact we have not been able to reach a consensus on pension reform, it is no reason that the federal Government should not lead by example in this country in areas in which it has responsibility and require those employers to have an inflation protection rider in their pension plan system. I make this point because it is one area which will cause great concern when this Bill goes before committee. I expect many pensioners in this country to appear before the committee and submit their views on the need for inflation protection under the private pension plan systems.
Inherent in this debate as to whether or not the Government should legislate inflation protection is the definition of what is a pension. What is a pension? Is it a reward for years of service to the company or is it a form of deferred wage for employees? If one accepts the view that a pension is a form of deferred wage, I suggest that such an asset belongs to the worker and not to the company. Furthermore, if that is the case, then we are going to fail again in legislation before the House. As the Minister stated, this is the first time in 20 years

January 28, 1986
Pension Benefits Standards Act, 1985
that we have had an opportunity to change the legislation and if we again fail to protect Canadian workers with respect to inflation protection, I do not think we have done our job.
We have yet to determine whether or not a pension belongs to the employer or the employee. Therefore, a number of companies have found that there is a surplus in the pension plans as a result of the actuarial assumptions that were made at the time they introduced the pension plan. They have taken advantage of this and simply asked an insurance company to bid on an annuity that would pay their obligations under the pension plan and then pocket the surplus in the pension plan system. The law allows them to do this and it is perfectly understandable. The surplus in the pension plans which I believe belong to the workers are used by the employers for their own purposes.
I believe there is something fundamentally wrong with that concept of a pension and I had hoped the Government would have reflected in its legislation the definition that the pension belongs to the workers and not to the companies. I believe that definition was agreed to in that committee. I suggest that is a serious flaw in this legislation, but I also recognize that it will be very difficult to deal with because I do not underestimate the cost to the Government in accepting such a proposal.
I agree with the Minister that this is good legislation. I will not strenuously object to this legislation because it will go a long way to ameliorating a situation that has existed for the last 20 to 25 years. However, that does not mean we should not do our job as parliamentarians and ensure that the members on the committee at least understand the concept I am trying to get across that those assets belong to the workers and not the employers. I will be asking the committee to seriously consider this flaw in the Bill when it goes to committee. The pension groups will have an opportunity to explain their views.
I know that many Members of the House have constituents who are CN pensioners. I can assure the House, having investigated the way CN, a Crown corporation, has treated its pensioners, that it leaves a lot to be desired. One reason why the company has been allowed to treat its pensioners in that manner is that the current legislation does not clearly define who has the control of the assets in the pension plan system. Again, we are passing legislation, that I suspect will be the standard for the next 25 years, which is missing the mark on inflation protection and the definition of who owns a pension plan system.
It is also important to recognize some concerns about the definition of "part-time" in this legislation. My friend from the New Democratic Party, the Hon. Member for Beaches (Mr. Young), will speak in more specific terms about this matter but it should be drawn to the attention of Government Members who may be sitting on that committee. The issue of part-time workers is an area of potential concern for us all.
There are rare opportunities for Parliament to reopen legislation. It has been 20 years since we dealt with this legislation and when we deal with amendments to the Canada Pension Plan it will be our first opportunity to significantly change the rules and regulations of the public pension plan system since it
began in 1966. Therefore, I caution Members that when we pass this legislation we must attempt to ensure that it is tailored for the needs of the emerging generation that will be entering the workforce. I am looking particularly at the pages in the House who will be in that workforce in the next several years. Earlier, I spoke of the emerging work patterns in this country. It appears that more people will find themselves in and out of the workforce, seeking retraining as a result of working in industries that will become obsolete.
Another emerging work pattern concerns work sharing or part-time work. This, combined with an apparent decrease in union membership in this country, indicates that the Government should be careful that it brings forward legislation that will ultimately protect the Canadian worker. The participation of Canadian workers in a union has significantly decreased between 1961 and 1981. When one considers the emerging entrepreneur class in this country, the majority of jobs being created are in companies that employ 20 people or less. These employees will be primarily non-unionized and the trend lines indicate that the owners of those enterprises will be women. Furthermore, women who enter the workforce do so on a work-sharing or part-time basis. Therefore, we should be very careful with the definition we use for "part-time" because it will have a significant effect on women entering the workforce. I hope that the committee accepts the recommendations of the task force with respect to the issue of part-time work and workers. We will have ample time to call witnesses on this issue in the committee.
A royal commission on part-time work was commissioned in the latter part of 1982. It reported to Parliament and made many recommendations with respect to benefits. If that emerging work pattern which I have described comes into being, it is important that the benefits that are made available to full-time workers are equally accessible to part-time workers, otherwise I suggest that we would have failed to do our job properly.
When I talk about the need for information disclosure and employee participation, I want to commend the Government because I think that is an excellent part of the legislation. Union workers and all other workers, even those not covered by union contracts, indicated to the all-Party task force on pension reform the need for information dissemination to the workers. I talked earlier about the fact that no legislation defines to whom the pension assets belong, why that is such an important definition and why it has to be ascertained. I believe that for too long a lot of employees have not had access to information about the actual extent of the funds which are kept in pension plans which have been used by employers for other purposes.
I agree that our track record when we were in Government left a lot to be desired in terms of pension reform. I suppose the fact that we failed to act on pension reform until 1984 was due largely to the fact that there was not a consensus in this country as to how we should undertake pension reform. That having been said does not take away from the fact that up
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job creation with the agreement of the employees. However, I am opposed to an employer unilaterally grabbing the money for purposes for which it was not intended without discussion and without seeking the agreement of the people who have a vested interest in that pension fund. I believe that that is absolutely wrong and I do not think even my good friend, the Hon. Member for Scarborough West (Mr. Stackhouse), would disagree with that.


Mr. Stackhouse:: I don't disagree at all.


Mr. Young:: The other problem I have with the Bill is another departure from that which was promised in the budget papers and that is the treatment of part-time workers and their eligibility to participate in private pension plans as covered by Bill C-90. The budget papers seemed to indicate that part-time employees would now be covered by private pension plans. After reading the legislation, I am not as enthusiastic or optimistic as the Minister of State for Finance (Mrs. McDou-gall) seemed to be that that will in fact happen. I will not go through the complicated formulation used in the Bill, but in essence, the Bill indicates that if a part-time employee earns more than $8,000 per year, he will be eligible to participate in a private pension plan.
The latest figures I have on the earnings of part-time employees are out of date, but considering what has happened to the economy and, as I understand it, what has happened to part-time workers, I think the figures 1 am going to use are probably not too far off. In 1981, 72.3 per cent of part-time workers had incomes under $5,000; 19.5 per cent had incomes between $5,000 and $10,000; and only 8 per cent had incomes of over $10,000. As the Hon. Member for Sudbury (Mr. Frith) pointed out earlier, 72 per cent of all part-time workers are women, 40 per cent of part-time workers work less than 15 hours per week and 33 per cent of part-time jobs lasted for less than a full year. If these figures still hold true, and I would hope someone could present figures that are different, I can see that an awful lot of part-time workers will not be eligible to participate in private pension plans because their incomes are too low. I think that that is unfortunate.
Another point I wish to address is with respect to the vesting provisions in the Bill. As I read the budget papers last May, and I have reread them since, I am of the impression that an employee would be eligible for vesting after two years of service. However, if one takes a close look at the Bill before us, one will see that it does not say that. What it says is that the employee will have a vested pension two years after enrolling in the plan. That is totally different from full vesting after two years of employment because, under most plans, an employee is required to work for an employer for one full year before he or she becomes eligible to enrol in the pension plan. Many other plans require that the employee be employed for two full years before he or she can join the pension plan and have a right to the contributions made, which is otherwise known as vesting.
Pension Benefits Standards Act, 1985
With respect to the scenario I envision under the Bill, we are not talking about two years vesting as an employee but really a minimum of three years of employment before becoming eligible for full vesting or, in some cases, even four years. Also, if an employer elects to change this provision under the pension plan, it would totally destroy the principles about which this Bill speaks. It is not inconceivable that an employer could do that because most pension plans are not subject to arbitration under grievance procedures. If, after x years of employment an employer chose to say: "I don't like this full vesting stufF', what he could do is up the period of time whereby one could enter into the plan. This is something which could be avoided. I had hoped that the Bill would have made it more difficult for an employer to do that.
What happens to an employee once he or she leaves the pension plan? If an employee withdraws his or her contributions to the pension plan, then what the budget papers spoke about was the employee being entitled to a rate of return on the contributions equal to what one could expect to receive on a non-chequing savings account. I was not too happy with that provision; and it was also removed from the Bill. What the Bill says is that whoever supervises pension funds will have the right under the Bill to establish what a reasonable rate of return on the contributions will be. That is also somewhat of a disappointment to me since, under many pension plans today, an employee is fortunate if he or she receives a 4 per cent return on contributions made over the years into the pension plan. Even though the provisions in the Budget were not satisfactory, they were better than what is contained in the Bill before us.
I would much rather have seen a proposal which suggested that the rate of return be the same as that on treasury bills. At least in that case there would have been a standard application. However, that is removed. The Bill says that it will now be up to the head honcho in charge of these pension plans and no guarantee will be provided. I would have preferred to see some equitable rate of return guaranteed to the employee. As I understand it, that will not now happen. I see some Members opposite shaking their heads. I will wait and listen with interest to what they have to say on the subject. I wait to be educated on the point. I have gone through the Bill with a fine-tooth comb and that is what it seems to say to me. I certainly hope I am wrong in this respect, since it would pay a disservice to employees who have withdrawn contributions made to a pension plan to be treated less equally than they may be at the present time.
The Government also seems to have back-tracked from its budget promise with respect to pension splitting on marriage breakdown. It did not go as far as I would have liked to see it go. I have argued in the past that pension splitting on marriage breakdown should be mandatory. The Government seemed to indicate that it saw some merit in my argument. However, when it presented the Budget it backtracked from the point. The Government is now saying in this Bill that pension credit splitting should be based on provincial property laws. That satisfies nothing. One of the major problems on marriage

January 28, 1986
Pension Benefits Standards Act, 1985 breakdown is that most women-and it is mostly women who are affected by this lack of mandatory splitting, and the evidence is there to prove it-are in their early forties. By that time most of their family have gone and for one reason or another the marriage no longer works. Invariably, it is the husband who leaves.
The woman, who has not been in the workforce for a number of years because she has been raising a family in a great many cases, has to find a job. She has increasing pressures placed upon her to do so because she has to have an independent income and because she wants to get on with her life. What happens in some cases is that the couple goes into a lawyer's office, the husband's lawyer, who says to the wife: "Look, you really don't want to be bothered getting into a big court hassle about how your husband's pension credits will be split". Invariably, they end up offering her some cash settlement in lieu of a pension promise to be paid from the contributions made by the husband, which were really made on behalf of both of them over the married years.
When the woman reaches the age of 65 she suddenly discovers that she has an inadequate pension income. It is not as though she would receive an adequate pension under the present legislation, but she would have been better off if she had been able to hold on to that portion of the pension credits she had helped contribute toward as a result of her work on behalf of the family. It seems to me that what should have been included in this Bill was a provision making credit splitting mandatory. It should not be a matter of getting some sharp lawyer with a sharp pencil trying to bamboozle the parties. It should be a matter of right and it should be spelled out in the Bill.
Another area about which I feel strongly, and which has been a source of amazement to me over the years, is the one in which an individual becomes disabled in the workplace for whatever reason and applies to the Canada Pension Plan for disability benefits and they are granted. At the same time, the employer may have some sort of disability insurance carried with an insurer. What happens in these cases is that the employer says: "Because you receive a disability benefit under the Canada Pension Plan we do not feel we should duplicate that by providing you with the full benefits promised to you under the plan". What happens is that the employer deducts from the disability insurance the amount the individual receives under the Canada Pension Plan. I feel that the employee has bought this insurance and is fully entitled to any benefits derived therefrom. On that basis alone it is unfair.
What I cannot understand is why Government's have not acted on this point. In effect, we are allowing the Canada Pension Plan to subsidize the insurance industry. That is exactly what is happening. Rather than the insurance industry having to cough up the full amount of disability pension to that recipient, they deduct what the Government gives the individual from the moneys they owe him or her. That is totally unfair and it really is about time that the Government acted and put a stop to it. There are many disabled people out there and they are suffering enough without having to undergo
the strain being imposed upon them. As was pointed out, I was a Member of the all-Party committee which dealt with the problems that disabled people face. It was unanimously concluded that there are costs associated with disabilities which able-bodied people do not have to face. It seems to me that principle should be recognized by both the Government and the insurance industry and the disabled should not have that additional pressure placed on them simply because they are disabled. That is quite apart from the fact that it should never have happened in the first place.
Even though I may have a minute or two left, Mr. Speaker, I have made the main points that I wanted to make. I hope that in committee we will be able to move some amendments to make the Bill stronger, and help the Government live up to the promises it made in the budget statement. In general terms we support what the Government is trying to do in this Bill. That does not mean to say we are totally happy with it and I would be surprised if the Government thought we were. Thank you, Mr. Speaker. I will be very happy to answer any questions which I am sure Tory Members have.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Charest):: Pursuant to Standing Order 46, it is my duty to inform the House that the questions to be raised tonight at the time of adjournment are as follows: The Hon. Member for Thunder Bay-Nipigon (Mr. Epp)- Trade-Canada-United States negotiations (a) Lumber exports, (b) Suggested trade promotion in United States; the Hon. Member for Trinity (Miss Nicholson)-Banks and banking-Canadian Commercial Bank (a) Government's information in March, (b) Range of information; the Hon. Member for Don Valley East (Mr. Attewell)-Finance-Balanced budget initiative.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Hnatyshyn (for the Minister of Finance) that Bill C-90, An
January 28, 1986
[Stage Direction]
because only a half of all workers, and only a third of women workers, belong to any occupational public pension plan. It will have very little effect, if any, on today's older workers. It will not come as any great surprise that I will be arguing that if we are to achieve full universal coverage, which means immediate vesting, full portability and full inflation protection, there is no substitute for the Canadan Pension Plan and the Quebec Pension Plan. If all workers and their spouses are to have adequate retirement incomes, the benefits under these plans will have to be increased. At the present time the CPP and QPP pay about 25 per cent of pre-retirement earnings. This Party calls for a doubling of those benefits of up to 50 per cent of pre-retirement earnings, up to the average industrial wage.
With respect to inflation protection, I would make the argument that a pension which is not protected against inflation is no pension at all. It would not provide any guarantees that a retired worker would have the right to access to an adequate retirement income after age 65, or earlier, if a pension plan had that kind of provision in it. In terms of arguing the support of what the Government should have done-even though I said at the outset that we support this Bill because it does provide a better pension for employees in the federal jurisdiction who have a private pension plan-we are favourably disposed to support anything that provides a better pension for Canadians. That does not mean to say we are not prepared to argue that there is another approach, that in our view it has not been adequately dealt with by this Government. That is vastly improving the public pension system in Canada, primarily the Canada Pension Plan and its counterpart, of course, the Quebec Pension Plan.
I know Members will be interested to listen to the words of "Mr. Pension" himself, the Hon. Stanley Knowles in a debate that took place in the House on November 9, 1964 when the Canada Pension Plan was being considered. What Mr. Knowles said he liked most about the Canada Pension Plan, the two-stage plan which we are now developing for Canadians in their years of retirement, was that we were trying to reach a position of providing pensions that are adequate. He did not suggest that the levels which would be achieved by combining the Canada Pension Plan, at its best, with old age security at its present level were really the last words on adequacy. At least we are talking about pensions of quite a different order from that which seemed to be accepted a few years or decades ago. I hope that having accepted the principle that retirement security should be on the basis of adequacy, we will go on improving that basis, finding ways and means of raising the levels of our pensions so that all Canadians can look forward to retirement in decency and dignity.
The arguments that Mr. Knowles advanced on November 9, 1964, can still be used today in support of improvements being made to the Canada Pension Plan. I am sure that several Members from the Government side will hastily jump to their feet and say "Hold on, just a second". The Minister of Finance (Mr. Wilson) on December 13 announced that he had arrived
Pension Benefits Standards Act, 1985 at some kind of an agreement with his provincial counterparts, as required under the provisions of the plan, and they will propose some amendments to the Canada Pension Plan to improve it somewhat.
These changes, by the way, have been a long time coming. I congratulate the Government for entering into that discussion with the provincial counterparts and getting that kind of an agreement. However, to date we have not seen any legislation that would give effect to the discussions, I would assume successful discussions that took place between the Minister of Finance and his provincial counterparts. We will see what that legislation has to say, of course, and whether it does provide for the improvements that we are led to believe developed. The reason I say that is because the proposals that were made by the Minister of Finance in his Budget of May of last year spoke about the need to improve various provisions under the Pension Benefits Standards Act, particularly as it affected women and a number of other areas. From that date last May you find on close examination of Bill C-90 that there has been a departure from the promises made in the Budget in a number of important respects.
There was a proposal in the Budget that employee representation on pension boards, for example, would be possible and would include the right of a bargaining agent, that is an organizaation which represents employees in a union, for example, to have the right to representation on a pension board. That is taken away in the Bill. All the Bill talks about is an employee who, upon election of a majority of the employees in the group affected, would have the right to be on the pension board, but only for the purposes, as 1 understand the Bill, and I am quite willing to be corrected in that regard, of examining information which may be presented by the fund's auditors. The power of decision-making participating in the decision making has been removed, and yet that was promised in the May Budget.
Therefore, the bargaining agents on behalf of employees will not have that right under this Bill. They did not have the right in the first place, but the Budget gave them the right. The Bill takes it away from them again very quickly, which is really quite a disappointment. It has been an issue in the trade union movement for years that employees should have the right through the bargaining agent to representation on the board that manages their pension fund. It is un fortunate that the Government did not maintain that provision in the Bill.
On the disclosure of information to employees who are enrolled in the pension plan, the Budget papers indicated that employees would have the right to information concerning the funding of a pension plan. With this Bill, the Minister of Finance has backtracked somewhat from the promises made in the Budget papers. The Budget papers specify the financial data would be made available to bargaining agents of plan members. This has been removed from the proposed legislation. Another possible problem arising from that is that the Bill states that the acturial and financial statements may be examined at the Canadian head office or other mutually agreed upon place of the administrator of the plan. The
[Stage Direction]
January 28, 1986
Pension Benefits Standards Act, 1985
administrator of the plan, as I understand it, means the employer.
It does not take too much imagination to see a pension plan member who is employed in a remote area of the country such as in northern Ontario, Newfoundland or B.C., who when planning for retirement may wish to take a look at the assets in the pension fund and how those assets are invested, et cetera, et cetera. I can just imagine Inco, for example, or the Iron Ore Company or some other company saying: "Well, look, that information is certainly provided for under this legislation, however if you want to see that information you will have to go to the company's head office in Toronto", or somewhere else. That would make it virtually impossible for that employee to examine the fund's assets.
To live up to the spirit of what I think Bill C-90 is trying to do, it would seem reasonable for an employer to say: "Look, if you want to examine various areas of your pension fund, surely to goodness we can get the information for you and provide it to you either at the workplace or mail it to your home". We all know that an awful lot of employers-and I do not want to be unfair when I say this-view pension funds as something that belongs to them rather than something that belongs first of all to the workers and to them if they make a contribution to that pension fund. There are two parties involved here and I do not think that any employer has the right to act unilaterally and go over the heads of its employees.
It would seem to me that it would be reasonable to have spelled out in the Bill that if information is to be shared, first it should be shared through the bargaining agent on behalf of the employees and then with the employees themselves on reasonable request. No one would expect an employer to run around day after day providing up-dated information but surely a periodic report of the pension fund itself could be made available on a reasonable basis. I believe the omissions in the Bill leave it open to some abuse and I would like to see that tightened up.
Another issue I feel rather strongly about is the omission from the Bill of what happens to surpluses in pension funds. The House may be interested to know that I placed a question on the Order Paper some time ago asking how many companies had actually applied to withdraw money from pension funds under federal jurisdiction, money which they considered to be surplus to the needs of the fund, and I received a fairly quick response from the Government. In the five-year period covered by 1980, 1981, 1982, 1983 and 1984-information was not available for 1985-the total amount of surplus funds requested was in the area of $58 million, an awful lot of money. In nearly every case, approval was given to withdraw those surplus funds from those pension plans. As I said, theses figures were not available for 1985. I have since placed a further question on the Order Paper requesting that that information be made available to us.
That money is money that employers have unilaterally withdrawn from pension funds. I suppose an argument can be
made for this and I have no strong arguments to be made against it under certain circumstances. In many cases, those funds are being withdrawn to create jobs within the company or the corporation and in many cases this has been done with the acquiescence of the union involved. I have no difficulty with that. Where I do have difficulty is with the employer unilaterally grabbing that money without any agreement from the employees who are covered by that pension plan.
A very blatant case in point of this is the current dispute with Dominion Stores. Dominion Stores grabbed $62 million from its employees' fund claiming that it needs to use it to shut down Dominion Stores. That $62 million is employees' money. Up until about two years ago, those employees paid into that pension fund. Yet Conrad Black has stepped in and grabbed $62 million, is using it to shut down Dominion Stores and is leaving a big question as to whether or not there will be adequate funding in that pension plan to pay the pensions that are owed to employees. At the same time, Conrad Black has the unmitigated gall to lay those workers off in such a way that he can avoid paying them severance pay under provincial legislation.
Mr. Benjamin:: It's called free enterprise.


Neil Young: If that is free enterprise, then they can stuff it because that is legalized theft from those employees. There is no other way it can be described. To do that and then to manipulate the shutdowns of those stores so that the employees can no longer apply for severance pay under provincial legislation is-


Mr. McCrossan:: It's the NDP-Liberal coalition in Ontario.


Neil Young: I could respond to that but it would probably be recorded in Hansard.


Reginald Francis Stackhouse: What protection is the union giving?


Neil Young: Actually, that is an interesting question. According to a report in the Toronto Star of Saturday, January 25, it is clear that the union has challenged first what has happened to those pension funds and also the manipulation involved in laying those employees off. I had a meeting with the employees of one of the Dominion Stores over the weekend and they have some questions that demand answers. There is absolutely no question about that.


Reginald Francis Stackhouse: That's why I put the question to you.


Neil Young: I am all for as much information being given to people as possible and I think they are entitled to that information. If I can assist them in getting that information, I certainly intend to do so.


James Ross Fulton: I wonder if the Prime Minister (Mr. Mulroney) is assisting.


Neil Young: I think I have expressed my sentiments on what happens to surplus funds. I have no disagreement with surplus funds being used for purposes other than pensions if used for
January 28, 1986

Act respecting pension plans organized and administered for the benefit of persons employed in connection with certain federal works, undertakings and businesses, be read the second time and referred to a legislative committee.


Mr. Pierre H. Vincent (Parliamentary Secretary to Minister of Finance):: Mr. Speaker, I am delighted with this opportunity to speak to Bill C-90, respecting the Pension Benefits Standards Act. As you know, Mr. Speaker, and as was pointed out by both Opposition parties, this is the first time in twenty years that this Act is being amended. This legislation affects
500,000	employees in Canada, 500,000 people who will at last be able to take advantage of the benefits arising from these positive amendments to Bill C-90, the Pension Benefits Standards Act.
Perhaps it would be useful to recall briefly the measures that will be amended and that are important, and I am thinking first of all, of the portability of pension plans. As we know, the existing legislation contains no provision allowing an employee who changes employers or decides to start up his own business to transfer his pension plan. Thanks to the new legislation, Mr. Speaker, if the employee changes employers, he will be able to transfer his pension plan to the new employer, and if he decides to start his own business, he can transfer the pension plan he had with his former employer to a pension plan to be set up within his own business. Mr. Speaker, I believe this is a very positive step.
Furthermore, as far as access to the plan is concerned, according to the existing legislation, it is necessary to have been employed by an employer for ten years in order to have access to the plan, while from now on, the 500,000 employees we mentioned earlier will have access to the plan after two years, and this applies to full-time employees. Part-time employees will also have access after two years, provided 35 per cent of average annual pensionable earnings under the terms of the Canada Pension Plan Act corresponds to their income as part-time employees.
Mr. Speaker, I repeat, this is a very positive measure.
Under the existing legislation, when employees lose or leave their jobs, in some cases they cannot recover a single penny of their pension plan contributions. With Bill C-90, Mr. Speaker, the employee will automatically be entitled to at least half the value of his pension plan with the employer. 1 feel this too is a very fair measure that will ensure that employees are able to benefit from the money contributed to their plan.
Mr. Speaker, as far as retirement age is concerned, employees will be entitled to receive their pension benefits ten years before the normally prescribed retirement age. 1 think that in many cases, this measure will be welcomed by employees who want to take early retirement. This was not possible before. Employees could retire, they could stay home, but were not entitled to receive their pension before reaching the prescribed retirement age.
Marriage and Family Life
The same applies to employees who decide to leave before becoming a member of the pension plan. According to the existing legislation, they lose all pension rights. Under the new system, if the employee has no pension, in other words, if the amount contributed is not sufficient to say he has a pension, the employer has an obligation to reimburse contributions paid by the employee, plus interest.
The Hon. Member for Beaches (Mr. Young) said that perhaps the employers will be making money at the expense of their employees under the new legislation. With all due respect for my colleague, Mr. Speaker, 1 would suggest that he is badly mistaken because the employees will have to be reimbursed, with interests.
I would like to refer to another very significant measure concerning the surviving spouse. Under the existing legislation the surviving spouse is not entitled to anything at all, but once Bill C-90 becomes law the employer will be expected to pay the surviving spouse at least 60 per cent of the pension of his or her deceased spouse. In the case of an employee who dies before retirement, the employer will then have to transfer to the spouse's Registred Retirement Savings Plan the amount set aside for that employee who died before retirement age or before retiring.
Mr. Speaker, those measures were long overdue. It has been 20 years since any kind of change or addition has been made to take the current legislation situation into account, so these are important measures which reflect the socio-economic reality and the family patterns in 1986.
Mr. Speaker, marriage breakdowns are another reality of 1986. As we all know, there are now more marriage breakdowns than there were 20 years ago, but nothing has been done about it since then. In any future marriage breakdown, each spouse will get half of the pension. Earlier today the Hon. Member for Beaches said he was against this measure ...


The Acting Speaker (Mr. Charest):: Order, please. 1 regret to interrupt the Parliamentary Secretary, but it being five o'clock the House will now proceed with the consideration of Private Members' Business as listed on today's Order Paper.


PRIVATE MEMBERS' BUSINESS-MOTIONS   SOCIAL SERVICES SUGGESTED COMMUNICATIONS PROGRAM TO AFFIRM IMPORTANCE OF MARRIAGE AND FAMILY LIFE
Reginald Francis Stackhouse: That, in the opinion of this Flouse, the government should consider the advisability of sponsoring, with the Provinces, a communications program,

January 28, 1986
Marriage and Family Life
including the use of television, that will affirm the importance of marriage and family life.
He said: Mr. Speaker, this is only Private Members' Hour and we do not have the stimulus of Government business before us. This is only a motion and will not initiate legislation that will call forth direct action. However, Mr. Speaker, I say to all Members of the House and to all who are joining with us that this Parliament cannot discuss any issue of greater importance to the people of Canada than that of the quality of family life. To support that I quote none other than the Prime Minister (Mr. Mulroney) who said: "Nothing matters more than this. It's the family that counts. That's what makes our society, and that's what makes our country".
Through the ages the family has taken many forms, but in every civilization and by every tradition the family has been the basic institution of society. The tragic irony of these times in which we live is that never have people needed more what the family offers men, women and children, and never has the family been under greater challenge than it faces now. I submit, Mr. Speaker, that Parliament must join all other people and institutions of goodwill in helping the family cope and face that challenge.
We have recently passed amendments to the Divorce Act that were required. They passed without dissent and we can, therefore, conclude that they had at least the goodwill of all Members of the House. They were necessary amendments. However, even though they were a necessary word to issue forth from Parliament Hill, they were, nonetheless, inevitably a negative word. I ask the House today whether we cannot also send forth a positive word. Is the only word that Parliament can offer the country on the subject of marriage and marriage breakdown this necessarily negative word? Can we not offer a "yes" on the quality of family life? The need for it is illustrated by one of those who have written on the subject of divorce and separation by saying that: "This national and local government policy has more often addressed issues of divorce law than it has addressed the needs of families".
I would like to focus attention on the way in which those needs of families demand the attention of Parliament and the Government. I recognize the necessity for providing an opportunity for divorce and the dissolution of marriage. It is necessary, no matter how regrettable, but let us not forget that it demands a high cost, and usually a cost from those who should least have to pay it.
In one recent study entitled The Divorce Revolution the writer points out and supports the conclusion that for most women divorce means a long list of negatives including less financial income, fewer skills with which to cope, lower self esteem, increased anxiety, and greater fear of the future. The author makes this comment after that discussion: "For all its aims at fairness, the current no-fault system of divorce is inflicting a high economic toll upon women and children". Another study, Marriage and Divorce in Canada, compiled in 1983 and funded by the them Government of Canada concluded: "The financial arrangements made by most divorcing families were not usually adequate for dependent children".
I recognize and welcome the way in which our new legislation is at least designed to help the enforcement of court support orders but, at the very best, that benefit will be limited to the payment required by those orders. So very frequently, if the payment is made in full, it is less than is required for the kind of life the family once knew, and perhaps less than the family requires for a decent human existence. I ask Parliament to face the question of whether we are really counting the cost of marriage breakdown. Certainly we must provide legislatively for it, but are we counting all the costs that this breakdown inflicts upon people, particularly women and children?
One of the studies of Family Service Canada has reminded us that the cost goes beyond that which can be reckoned in dollars and cents. It identifies four areas in which children are affected particularly: one, the change of physical domain, not always for the better; two, emotional disturbance; three, reduced academic performance; and, four, a routine disruption which, among children particularly of young age, can be negative. In each of these areas vital to the lives of children very often parents demand that children pay a price no child should have to pay.
What are we going to do about it? We have already passed legislation. Can I point out, Mr. Speaker, that there is open to Parliament, and certainly open to Government, a step that does not require legislation. Laws can achieve only limited results. We cannot and should not say: "Thou shalt stay together", but we can provide, as Governments do all the time, education that aims at encouraging people to remain together, and at affirming the qualities, values, and necessities of family life. We need to do that, particularly now that we have passed the amendments to the Divorce Act that we rightly passed last week. Even though the law does not say to anyone: "Thou shalt be divorced", the fact remains that what is legalized is approved, and what is approved is very often adopted. It has been demonstrated over the years that the liberalization of divorce law has led to the increase of divorce action.
For example, the rate of divorce in this country increased from 6.4 divorces per 100,000 people in 1926 to 222 divorces per 100,000 people in 1975. The divorce rate grew approximately 35 times in those years. I will admit the cogency of what two writers on marriage and divorce law have said, namely, that legislative changes lag behind social reality. I will admit that the amendments we passed last week were an effort at legislative catch-up with social realities. However, let us also admit that legislative changes also shape social realities. We can expect that the amendments we passed, which 1 believe we rightly passed, will lead, not intentionally, but almost inevitably, to an increase in the number of divorces and the rate of divorce in Canada.
Therefore, I submit that we need some educational program that will provide a positive message to the country that Parliament is not simply saying that we will make divorce easier and quicker. We are not saying that. Rather, we are providing, through the amendments which we passed last week, a relief for those who rightly need it. At the same time, we are
January 28, 1986

recognizing the importance of family life and marriage for the wellbeing of society.
We are taking the educational route as our way of saying yes to the family. I am suggesting that on the one hand we have legislated for marriage breakdown; let us now educate for family build-up. This resolution urges that the Government consider, along with the Governments of the provinces, a program of public education that will affirm the family and will make use of television in so doing.
Let us recognize that already both the Government of Canada and the Governments of many of the provinces include within their educational programs certain provisions for educating people on the merits and values of the family. I say that simply to submit that there is no problem of principle in this resolution. The Government is already providing educational programs vis-a-vis the family. This is also true in the provinces. I do not think we have a principle to debate about whether it is in the legitimate scope of a government. It has been established over many years that governments have the right as well as the responsibility to provide educational efforts of this kind. It is a valid dimension of Government responsibility.
The issue that should concern Parliament is whether these existing programs are enough. Are they effective enough to do the job? With all respect to those who have devised those programs, I would have to say that the facts demand the conclusion that they are not enough because we have seen such a rampant increase in marriage breakdown over the past several years.
If we believe that it is in the interest of society as well as individuals concerned that the family be reinforced, then I say we ought to be open to think new thoughts and try new methods of becoming more effective on behalf of the family.
For example, we have seen in recent years how much power there is in the use of television for educational purposes. For several years now the Government has educated us on behalf of physical fitness and has done so with remarkable success. It has used television to arouse public concern for physical fitness and has enlisted support for such efforts as Participation and has done it well because of television. We have seen in recent years an increasing effort by Governments to inculcate the merits of safe driving and to educate us not to drink when we are driving. Governments have used television for this purpose.
Recently we have seen Governments adopt the use of television to persuade us not to smoke cigarettes and contribute to our own illness and the illness of others. Can we in Canada, as others have done elsewhere, use television with all its powers to communicate the value of family life and use this medium of communication to arouse within our people again a concern for the importance of the home and the importance of marriage that contributes so much to the quality of home life?
Fine family educational programs are presently sponsored by our Government. These are sometimes carried on by the Government directly through its departments and sometimes
Marriage and Family Life
they are carried on by agencies that have been funded from Government funds. In discussing this motion, I think we simply need to take another step, a powerful forward step that can mean an increase in the effectiveness of the Government's efforts to reinforce family life.
I have discussed the possibility of this with experts and authorities in the use of television. I have discussed it with television writers and producers who are capable of creating short, dynamic, persuasive messages on the family. 1 am persuaded by what they have submitted to me. I know that any Department of the Government and any committee of the House would find quite instructive and encouraging the kind of program that expert writers and producers have put together and which requires only the necessary funding to communicate throughout the country.
When I use the word funding, I am not thinking in terms of large amounts. For example, one estimate for five spots produced at one time would come to $176,600. If a one-spot message were produced at one time, the estimated cost is $45,400. We are not speaking about extravagant amounts or astronomical figures of the kind we have become almost too familiar with in the House. We are speaking about something well within the power and capacity of the Government and the people of Canada which would not add appreciably to the cost required of the people but would achieve an objective which I am confident the people of this country would endorse.
Such a series need not judge anyone or reflect negatively on anyone who has sought relief from a matrimonial tragedy. It is just the opposite. It has been my experience as an observer and student of society that a remarkably large number of people who suffer a marriage breakdown go on to attempt a second marriage. They do not give up on marriage. We would not be offering simply a message that reinforces those people who enjoy a stable marriage and a stable home, but one for those who have suffered a troubled marriage and a troubled home and are seeking to begin life again.
Surely that is worth the effort of this Parliament. It is worth the effort of this Parliament to provide something that will reinforce those who are trying to carry on or trying to start again. This can be a way by which the House of Commons will say yes to the family and concur with the words of the Prime Minister that it is the family that makes our society and makes our country.


Some Hon. Members:: Hear, hear!


Ms. Margaret Mitchell (Vancouver East):: Mr. Speaker, I am very pleased to speak to the question of the quality of family life. I agree with the Hon. Member who just spoke that this is an extremely important question and a very basic part of the quality of life in our society.
I do not want to be particularly partisan because I do not believe that this is a partisan issue. I am sure everyone in the House supports strengthening family life. However, I feel so deeply about the family allowance program, I cannot help but mention Bill C-70. When the Member quoted the Prime Minister (Mr. Mulroney) saying that nothing is more impor-

January 28, 1986
Marriage and Family Life
tant than family life, indeed Bill C-70 seemed to contradict this when there was no agreement on the part of the Government to withdraw the Bill which will reduce the value of family allowance. However, 1 will put that aside because that is not the debate for this evening.
I believe it is very important that we discuss the whole question of family life and the reasons for family breakdown and divorce. I and my Party also share the Hon. Member's concern about the very high incidence of family breakdown with the stress and unhappiness of the couples that occurs, not to mention the unhappiness that often happens to the children as well.
I know the Hon. Member is very serious about this issue, however I think there are many more questions we must consider besides that of a communications program which would be targeted to expounding the value of marriage and family life and perhaps deal with it in a somewhat superficial way. I am not saying that I am opposed to this idea but I am suggesting that the cause of family breakdown is much deeper and must have more significant remedies.
I now understand, after hearing the Hon. Member speak, that one of his motives for proposing this Bill was to put forward the positive side of family life. We talked much about divorce and the very high incidence of family breakdown when we were debating Bill C-48 and Bill C-49, certainly, the increase in divorce and the desperate situation in which women and children find themselves. We had statistic after statistic showing how much harder it is in economic and social terms on women who are left alone with children.
I think we should look at the many factors which contribute to family stress, the things which happen before a family breakdown. We must look at ways to strengthen families. To do that we must in a very realistic way look at the new type of families in our society. We have a very rapidly changing society where many of the values and taboos which my generation grew up with have changed, and we must open our minds and attitudes to the different values of younger people today. Many of us, perhaps, yearn for the traditional family we see quoted so often in StatsCan; two parents, the man working and the woman looking after two children, one boy and one girl. We know that in reality the norm for Canadian families today is that the two parents work. When we talk about families, we have to include single parent families. Just because there is only one parent raising a family, it does not mean, as we used to believe, that it is a so-called "problem family". I strongly commend many single parents, both mothers and fathers, who are doing a wonderful job of raising children on their own.
We must also look at blended families. We are seeing many remarriages and families coming together in different kinds of arrangements in which, I am sure, there are many stresses involved. We must certainly look at two working parents in most families. I think we must also look at extended families. In my riding, there are many families who come from Asia, and it is the grandparents who take on a lot of the child care
while the two parents work. The aunts and uncles as well often work to try to pay off the mortgage and everyone lives together in one home. We also have communal families where young people choose to live together. So let us keep our minds open when we think of the supports which are needed for families.
There is no question but that there are many serious stresses and family problems. We know that 40 per cent of Canadian marriages end in divorce and single families are the fastest growing type of family. I mentioned the other day that there has been a 50 per cent increase in single parent families over the period between 1971 and 1981.
Another very serious family situation which we have not recognized and are not doing enough research on is the increasing incidence of adolescent pregnancies. It is a tragedy when young teenage girls become pregnant and decide to keep their children. In fact, we have children raising children. One wonders about the life of the new child and what kind of maturity he or she will gain when the mother has no chance to become an adult in the real sense of the word herself. A recent article in the Toronto Star stated that 40,000 teenagers in Canada become pregnant each year, which translates into one pregnant teenager in 11. I want to come back to this subject and talk about a TV program which could be targeted to this group.
We are seeing today many changes in attitude toward marriage. Customs have changed. The whole question of legalizing marriages is something else which is quite different and trial marriages are fairly common. Perhaps, for many people, that is the way to go, although my generation is not used to this custom. Fortunately, young people are no longer under so many taboos and must make their own decisions. However, I am sure all of us would agree that where children are involved, a very secure situation with loving parents certainly is very important.
We need to look at the reasons for marital breakdowns and family problems and at the kind of community support and Government funded programs which will help to ease stress and prevent family breakdown. There is no question that unemployment and underemployment causes stress in many families when the father, who has been the traditional worker, reaches the age of 30 or 40 years and finds himself out of work. There is a tremendous impact on how he feels about himself. This creates stress along with, of course, the family not having enough money. The lack of job security is, I am sure, a major contributor to family stress.
We see many women who have to work and who want to work but who are working at a low rate of pay. They are being forced into part-time jobs and do not have adequate child care. We have a very damaging child care situation where people are forced very often to use babysitters.
Many families are living in poverty or in near poverty conditions. What does this do to a marriage? I would like to quote the Minister responsible for the Status of Women (Mr. McLean) who said in his briefing notes to the Conservative caucus, and I quote:
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until this legislation was introduced, the average worker who did have access to a private pension plan did not have this contributions and the employer's contributions locked in until he had either reached the age of 45 years or had worked for that company for 10 years. One, therefore, can understand that there would be a problem when companies laid off workers.
I think of International Nickel in my home town of Sudbury, which has, over the last several years, a tremendous lay-off and attrition record. At the time the company began laying off its employees, a lot of them had not worked for the company for 10 years and left International Nickel without a dollar in their pockets from the pension system. Because there was a failure to define the ownership of the pension fund, the company had been allowed to use that surplus which was built up in the fund in any way it wished. That has not been addressed in this legislation.
There is no clear-cut definition of pension assets and I believe that is a flaw in this legislation. I believe we should have a full debate in committee as to whether or not we as parliamentarians believe that that sort of situation should be left for the next generation. If we do, then I think it is a disservice not only to Canadian workers but to society as a whole. I say that because if we go on the assumption that my definition of a pension is correct-I firmly believe that a pension belongs to the worker. I view it as a deferred wage- then surpluses which have been built up in pension funds should be used to significantly improve retirement packages so that workers can take advantage of early retirement and leave the jobs for our young.
The Hon. Member opposite will agree that one of the towns in his riding, Port Colborne, suffered a tremendous blow from the lay-offs which occurred at the International Nickel Company in Port Colborne. I am sure he agrees that had there been legislation in place which clearly indicated that the pension fund surplus belonged to the workers, they could have bad significantly improved retirement packages which would have allowed people as young as 54 years and 55 years to take early retirement. That way the jobs in Port Colborne and Sudbury could have been kept for the younger workers. However, that was not the case. Because a lot of the workers were worred about inflation and their ability to make a living from the time they took early retirement until they hit the age of 65, they did not take advantage of the early retirement options which were offered by the company. As a result, the company had no option but to lay off the younger workers. Those younger workers then left Port Colborne and Sudbury and I believe that circumstance had a very deteriorating effect on the local economies of those two towns.
I mention Port Colborne and Sudbury as examples, but that type of situation, I am sure, happens in every community across this country. To a large extent, it reflects a downturn in the economy of our natural resource based industries. I suggest that that pattern has been repeated in Atlantic Canada, northern Quebec, northern Ontario and in parts of British Columbia. I cannot speak for the Prairies but that certainly is
Pension Benefits Standards Act, 1985
the pattern. I wish we could have had legislative tools at our disposal so that we could have improved the track record of those communities and kept the young people there rather than giving them no option but to ship out of those communities to seek employment elsewhere.
I would like to deal now with that part of the legislation which deals with the new Registered Retirement Savings Plan.
I think it is very important that the public understand clearly that there will now be a different kind of Registered Retirement Savings Plan in effect after this legislation goes through. With the existing system, up until the taxation year of 1986, if one belongs to a Registered Retirement Savings Plan in one's place of work, one has access to a $3,500 Registered Retirement Savings Plan. If one has no access to any pension plan system in one's place of work, then a maximum of $5,500 per year is allowed to be put into a pension plan. That is so that these people will have similar benefits when they reach the age of retirement to other Canadians who belong to a defined pension system.
I understand that my colleagues to my left have difficulty with this legislation. Both the Lalonde Budget of 1984 and the Budget of the now Minister of Finance (Mr. Wilson) in 1985, significantly improved the limits under the Registered Retirement Savings Plan systems. It is going to be done in a staged manner so that over the next four or five years people who do not have access to a private pension plan, that is, those who previously had been under the capping rule of $5,500, will have, by yearly increments, their limit increased to somewhere in the neighborhood of $15,400 by the year 1990-91. Some people have asked why we are so generous with those individuals because it will represent a further financial drain resulting, as it will, in higher forgone revenues.
The major reason we accepted this premise was because in our investigation of private pension plan systems, we found roughly 45 per cent to 50 per cent of males in our society have access to a private pension plan at their place of work. In the neighborhood of 30 per cent of Canadian women have access to a defined pension plan at their place of work. When we investigated the actual tax systems of those pension plans, we were astonished to learn that under the legislation that has existed in this country for the last two decades, people who belong to a defined benefit plan-and that includes every one of the table officers and all of the Hansard reporters-receive tax assistance because their pension plans are not taxable. In the year they work, they have to now determine what is the value of that tax assistance. When we look at the public pension plan systems in Ottawa-we investigated this across the country and, frankly, Ottawa is no different from provincial houses-we find that most of the employees belong to a 2 per cent, best five year, defined benefit program. Not all Canadian workers have access to such a rich pension system but the tax legislation reflects the fact that some 500,000 Canadians alone work for the federal Government and there is almost an equal number who work for the provincial Governments. I suspect-and I do not have all the numbers-that when one adds in the people who work for the municipalities

Pension Benefits Standards Act, 1985
we are looking at a large chunk of the Canadian working population.
Let us assume for the purposes of discussion that the table officer in front of me works for the federal Government for 35 years. At the end of that time he will be entitled to 35 years at 2 per cent. Therefore 70 per cent of his base salary will be his pension. The public pension plan system is enriched even further. It guarantees that the best five years of that 35 years will be the maximum pension payable to the person. In other words, we should not underestimate the value of that pension plan. Perhaps the President of the Treasury Board (Mr. de Cotret) will want to argue with some of the numbers, but a significant portion of Canadian workers come under the public pension plan system.


An Hon. Member:: The best six years.


Douglas Cockburn Frith: I stand corrected. It is not the best five years; it is the best six years. There is a large number of people who work for the federal Government and earn between $65,000 and $70,000 per year. Their pensions will be equal to 70 per cent of their best six years. In order to create the necessary pension sum somewhere in the system, we are talking about significant amounts of dollars that are all non-tax deductible.
Everyone who belonged to a defined benefits program was receiving significantly different tax assistance for their pension than those who did not have access to a defined benefits plan at their place of work. Therefore we decided as a committee to adopt the philosophy of a life-time sum for tax assisted purposes. In that way, regardless of whether one worked as a private entrepreneur, for Government or for private industry, everyone would be treated equally under the tax laws. That is why we brought in the definition of a life-time limit for the purposes of tax calculations. Because that is not well understood, many Canadians now object to the fact that the Budget of the Minister of Finance and the Lalonde Budget of February, 1984 will significantly improve access to pensions for those who work as private entrepreneurs. It should be understood that under the proposals affecting RRSPs and defined benefits plans we will all be treated equally.
I see Mr. Speaker signalling that I have two minutes within which to wind up. I do not know why that is. I thought there was a ruling by the previous occupant of the chair that we would have unlimited time. In any event, I will respect Your Honour's ruling because my colleague in the New Democratic Party, the Hon. Member for Beaches also wants to speak on this matter.
Under the proposed legislation RRSPs will be locked in, which we recommended. We also recommended the creation of a new vehicle, a registered pensions account. The problem in respect of RRSPs was that when people thought of those plans, the connotation was that that asset was in fact a deferred savings. However, under legislation, when people drew money from their RRSPs, they were forced to go to insurance companies to purchase annuities. When they purchased annuities and passed away, all the assets did not go into their estates; they went back to the insurance companies. From my experiences during the time I chaired the parliamentary task force on pension reform, many Canadians would like to have a second say with a committee of the House as to whether or not a monopoly should be given to insurance companies. I understand that it is not just insurance companies now, that some banks are allowed access under a different type of fiduciary vehicle for people to draw their moneys from RRSPs. Because we have significantly improved the size of RRSPs-we have gone from a maximum of $5,500 per year to $15,200-that problem will be magnified in years ahead if we do not deal with the monopoly situation as to from whom annuities can be purchased. I hope the committee takes its time and asks various people from the financial community to come forward with different ideas on how to use RRSPs. 1 also hope the Government is flexible and that the committee remembers that just because the Government has put this forward as legislation does not mean that it has to be passed as is. It is one area in which we can do a service to Canadians. I hope the Hon. Member for York-Scarborough (Mr. McCros-san) will be on that committee. It is one area in which we can become involved that could be a significant improvement to the legislation.
In conclusion, this legislation has been a long time coming. It reflects the only consensus on pension reform which has developed in the country in the last 20 years to 25 years. It is long overdue. It will receive passage this year so that it can impact on taxation year 1987. I sincerely hope that Hon. Members opposite remember my concerns in those three areas and that they take them into consideration when the matter is brought back for final reading on the floor of the House. Hopefully the improvements to the public pension plan system will reflect my concerns. Between the two pieces of legislation, it was well worth spending the time which Hon. Members opposite and I spent in 1983.


Neil Young: Mr. Speaker, in general terms we support the proposals set out in Bill C-90. It should be understood that there are a couple of significant changes. The Bill will bring into force the pension provisions presented by the Minister of Finance (Mr. Wilson) in his May 23 Budget.
The Bill sets a minimum standard for pension plans in federally regulated industries-for example, railways, banks, broadcasting, airlines, et cetera-covering some 500,000 workers. It does not apply to federal servants whose pensions are governed by the Public Service Superannuation Act. As I understand it, the Government plans to extend comparable changes to those employees although it has not said when.
As I said, we will be supporting the Bill as it improves the situation of those with private pension plans. However, there are some problems with the legislation, specifically its lack of a provision providing mandatory inflation protection and its failure to prohibit the removal of surpluses by plan sponsors from pension funds.
The legislation does not mean that all retirees and their spouses will enjoy adequate retirement incomes, simply
January 28, 1986

For many wives and mothers, working outside the home is a matter of necessity, not a matter of choice. In many families, both parents must work just to keep the family income above the poverty line. In 1982, almost 10 per cent of all two spouse families were living below the poverty line. If women had not worked outside the home, 15 per cent of those families would have been poor. In other words, 62 per cent more families would be poor if the women did not work outside the home.
Therefore we must have decent child care. We must have support for families. The fathers must be able to share the load at home. There must be the kind of parenting and family relationships so that both parents can share this burden and the home responsibilities do not create additional stress.
I could go on and talk about poverty, I have lots of poverty statistics here, but surely Hon. Members realize that probably more than anything else, lack of adequate income and the worry about poverty is what puts stress on marriages and on relationships, whether or not the couple are married, as well as on their children. It certainly is a major social problem which faces us today when we talk about family life.
According to a consultant for the Canadian Council on Social Development, 630,000 more Canadians will be forced below the poverty line by the May, 1985 Budget. This is something I hope Hon. Members will reconsider, and Bill C-70 did not help in this matter. There is a lack of affordable family housing. The Government, unfortunately, has cut back on social housing. That is something else which creates a great stress on families who live in rented accommodation, or cannot get into a home at a rate they can afford or are overburdened with debts and high mortgage payments.
The stress on children and young people is shown as well in the trends of today's society. We have increasing child abuse. In inreased by 50 per cent in 1985. Yet the Government has not taken action on the Badgely Report which was tabled well over a year ago. In fact, I think it is getting close to two years now. We have already started a child care task force but that is not the answer. What we are going to have to do is put money, planning and negotiations with provincial Governments, into a comprehensive and universal child care system across Canada which is affordable.
An increase in child abuse has also been documented. However, I say to the Hon. Member that I am not suggesting that it is not a good idea to promote family life programs. We know that such programs have been started by family agencies, counselling agencies and family centres such as the one in my riding. We know that they are very effective programs which promote communications, assertiveness when necessary, child development, sharing in parental roles and home tasks, involvement of the children in family meetings and so on. It would be a great idea to have a television program which concentrated on these matters, not just to say: "Isn't family life wonderful", but some real stimulation of thinking and involvement on the part of the viewing audience, as well as related discussion groups in communities.
I have mentioned adolescent parents and the concern about the high incidence of teenage pregnancy. A couple of years ago
Marriage and Family Life
Planned Parenthood designed a television program which was especially targeted to young adolescents, to help provide a positive education in family life, to help them understand themselves and their sexuality, and to help them think about responsible sexual behaviour. Unfortunately-and this was in the Liberal regime, so maybe the Conservatives will have a change of heart in this respect-the federal Government cut funds from Planned Parenthood which were designated for this program. The Conservative Government has cut even more funds from organizations such as Planned Parenthood. We should be increasing funding for these organizations and others. Surely this is a way to put our real intentions where our mouths are. It is not a lot of money, but it very important money which should be given priority when we talk about strengthening families.
I am sure we are beyond the point of moralizing about traditional family marriages in a television program. We want to look at the real life situation of many families undergoing stress. Certainly I strongly support Government sponsored programs which would promote family life education, would encourage pre and post-marital counselling, family planning, child development and a whole range of human relations and would perhaps offer problem solving situations in which families are interested and need. I think television would be a very good adjunct, but of course it should go beyond television as well.
As I said, we must have a very positive program if we are to strengthen families. We must recognize new types of families and egalitarian relationships between couples. We must have economic programs, job programs and retraining programs. There must be many opportunities for men and women and young people so that they will have economic security in the future. We must think of the stress on many parents who are forced into having adult children live at home, still dependent upon them, and the kind of frustration experienced on the part of both the children and the parents, not to mention the economic stress created. We must have affordable housing. We must have income support programs which do not condemn families to the poverty cycle. It is not too late to work toward reindexing fully the family allowances and increasing child tax credits even more. Social assistance programs are abominable. To think that the Prime Minister was talking the other day in Quebec about cutting back on the unemployment insurance program, another program which is certainly not adequate for many families with children.
In closing, I commend the Hon. Member for his aim in advocating programs and Government action to promote family life education and to strengthen families. I urge that it go beyond television programs to many of the other economic and social programs which I have suggested.


Suzanne Fortin-Duplessis: As Members of Parliament, Mr. Speaker, we may be especially aware of the importance of family life.

January 28, 1986
Marriage and Family Life
I am sure that at one time or another, we have all realized just how difficult it is to reconcile the demands of a heavy schedule with the desire to be with our families. We know just how much we need the support, encouragement and understanding of our families to carry out our duties here.
Also, we have all eventually realized how important it is to enhance the quality of the time spent together with our families, no matter the quantity.
For most Canadian men and women, the family is the place where, in an atmosphere of love and confidence, each member can establish the balance between his or her personal needs on the one hand, and on the other the demands of a social position, the pressures resulting from the duty to get an education and earn a living.
We are asking a lot from the family, and in turn it is asking a lot from us, since we have the responsibility to ensure its success and survival. Anything that can hurt the family unit can have tragic consequences for its members.
While striving to strenghten and support the family unit, we must be careful not to idealize it or consider it as too narrow to embrace the life experience of a great many Canadians. It is true that most Canadian families Fit the traditional mold. There is no doubt in my mind that it is through the participation of both the father and mother, to the greatest possible extent, that parents can better bring about the full development of their children. But let us not forget that there are in our country a great many men and women who, as heads of single families, are working very hard to provide their children with a positive family surrounding. These men and women must accept singular challenges and also fight against the remaining stereotypes developed by past generations.
We must also take more into account these other men and women who have the necessary love and understanding to assume the demanding role of step-parents. In short, we are now living in a society where there are many variations of the traditional family, and a narrow vision of the legitimacy and viability of these new families will change nothing to their existence.
In our modern families, there is another dimension which the public has paid too little attention to and which it has not taken enough into account. I refer here to the increasing number of these children who, as adults, are taking care of their parents. This means for a number of them caring for a father or mother in addition to their heavy workloads as housekeepers, breadwinners and parents. For others, it means looking after them in their old age while wanting at the same time to prepare for retirement and feel discharged of the great many demands of life.
I am thinking also of adoption. The time when adopted children were the target of the other childrens' teases and mockeries are gone, hopefully for good. Canadians have shown that they are really able to provide a family environment for
children who have lost their parents. In the last few years, hundreds of orphans and refugee children from other countries and children with special needs or requiring special care have been adopted in Canadian homes. The adoptive parents have thus provided these children with an opportunity to grow and develop which they would have been denied otherwise.
Of course, the family does not live in a constant state of harmony. External and internal pressures can undermine the capacity for adjustment of the best parents and their children.
However, since the public is now aware of problems such as various forms of violence against children, women and the elderly, widespread efforts are being made to prevent such violence, put an end to it and understand its origins and consequences. I believe that, in these difficult times, a lot can be done if we provide the family and its members with the means to use their existing strengths as an entity and as individuals.
We are now witnessing a phenomenal increase in the number of organizations and non-government groups which devote their energies to strengthening all aspects of the family institution. Many of these organizations are rooted in the community and provide a wide range of official and informal services which are perfectly adapted to the needs of the environment. One of the secrets of their success is their ability to work with the families without interfering with its essentially personal relationships.
We accept as normal the requirement to study and train in our professional occupations. Outside the home, our lives are deeply influenced by the knowledge gained by ourselves and others. On the other hand, we can assume without much training or preparation two of the most basic roles in life, those of a spouse and of a parent. For a number of years, the Canadian Government has been financially supporting programs to prepare people for married life and parenthood, that are implemented in the community by qualified non-government groups.
Preparation for married life is in essence an experience designed to help participating couples learn how to live together in marriage. It is aimed at preventing marriage breakdowns. Participating couples learn better to communicate. Each partner learns how to understand his own family background, in order to appreciate the other partner's attitude towards the fact of being married and how he or she defines the role of a partner in marriage. Those courses also deal with other topics that are basic to a stable relationship, such as financial management and the need to have a positive sex relationship. A good marriage preparation course can help couples prevent conflicts or, where applicable, find a satisfactory solution.
Often the courses on parental guidance are provided within a prenatal program including health and social needs. Those courses deal especially with the years during which the child-
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parent relationship develops and the vital association or partnership of both parents in the education and care of children.
Because it is interested in promoting qualified support services, the Government also wants to prevent marriage breakdowns. The increasing number of centres across Canada is an alternative to the adversarial approach too often used in dealing with the issue of divorce and the care of children. Couples considering divorce may avail themselves of the services of a mediator who will help them mitigate the negative impact and frustrations often associated with that decision, and find the best formula for the care and protection of children, and also for parental visits.
In every undertaking of governments and non-government groups alike, the vital question is not the means, because it is both necessary and desirable that there be a diversity of frameworks and services. The capital issue is the message. Are we to assume that a single message or a single set of values will meet the needs of a population with such a varied mosaic of cultures, life experiences and family contacts as we have in Canada? I do not think so. The Government might assume responsibility for emphasizing the value of marriage and family life, or again it could be the numerous non-government bodies already existing. Where does the responsibility lie? A considerable amount of care and sensitivity will have to be exercised if Canadian families are to feel understood, appreciated and encouraged.
A study of Canadian teenagers conducted this year points to the existence of an interesting paradox in the way they view the family. For many teenagers, family will be losing its influence in the future; on the other hand they have-and this is food for thought-high aspirations and expectancies as to their own roles in establishing a family and fulfilling its needs. Essentially, this is a very positive sign, because our youth always have been a strong factor for change and social progress. The forthcoming generation of families perhaps will tap that tremendous source of energy, giving a new meaning and vigour to family life.


Mrs. Monique Landry (Parliamentary Secretary to Minister for International Trade):: Mr. Speaker, this Government sees the family as the very foundation of our society. Article 16 of the Universal Declaration of Human Rights describes the family as a natural and basic element of our society. As such, it provides the best possible milieu for the moral, social and personal development of future generations.
Last year, in the Speech from the Throne, the Government strongly emphasized measures aimed at supporting and strengthening families in Canada. In doing so, we realized that the needs of families today differ considerably from the needs of past generations. The twentieth century has seen changes in all segments of our society. Like all other institutions, the family has undergone a profound transformation.
Marriage and Family Life
Many still see the family in traditional terms, that is, the father as the sole breadwinner and the mother staying at home to raise the children. In 1961, that was still the case in about two-thirds of Canadian families. Today, however, scarcely twenty-five year later, the situation is quite different: only 29 per cent of Canadian families live on the husband's salary alone. This radical change in the manner of earning the family income reflects other changes that are now affecting the social and economic structures of our country. It reflects the fact that for a great many families, two incomes are an economic necessity. In fact, statistics for 1982 show that if women did not work outside the home, 62 per cent more families would be living below the poverty line. The economic reality has brought about one of the major social upheavals in our history, and I am referring to the massive influx of married women on the labour market in the last twenty years.
Mr. Speaker, the role of the woman in the family has, by necessity, changed drastically. Unfortunately, our provisions for social assistance have not kept pace with this development. As a Government, we have a duty to help Canadian society, and Canadian women in particular, to adjust to new realities. The statistics give us a clear picture of these new realities. They show that in 1984, 59 per cent of Canadian mothers with children under sixteen were part of the labour force. Fifteen years ago, only 20 per cent of this group was seeking gainful employment.
Among these statistics, the most revealing are probably those on the number of working mothers with young children. Today, more than half of all women with children under three years of age have paying jobs. This situation clearly shows how important it is to provide assistance to working parents.
Another aspect that must be considered, and that is related to the former, is the changes in the very structure of the Canadian family. Much has been written about the disappearance of the extended family and the fact that parents can no longer depend on relatives to look after their young children, but that is not the only consequence of the so-called nuclear family. It is a fact, families are smaller these days. Couples have children later in life, they have fewer, or they even choose not to have any. This demographic regression has a significant impact on almost all aspects of this country's socio-economic planning.
In my opinion, Mr. Speaker, two main factors prompt women not to have more children or even not to have any. The first one relates to what I said earlier, namely that a great many couples find it necessary to have two incomes to meet the needs of their family. Many Canadians cannot even consider the income loss associated with maternity and the need to stop working to raise children. That is the reason why women's groups have formed a common front with thousands of

January 28, 1986
Marriage and Family Life
Canadian parents who are asking for paid maternity leave and more readily available leave for looking after their children.
The other factor behind our diminishing population is the double responsibility which women must assume-family and professional responsibilities. Studies on that issue have revealed that, on average, working women spend close to four hours a day looking after their children and doing household chores, as compared with six for women who do not work and two for men.
In this day and age when all trends point to fewer working hours, women with children have a work week of 60 to 80 hours because to the working hours for which they are paid they must add the many hours doing house chores for which they are not paid.
Mr. Speaker, we must also consider the ever growing number of women who are the sole family source of income. At least one out of ten single-parent Canadian families is now headed by a woman. Those families are more likely to be struck by proverty. Indeed, a recent National Council on Welfare study has shown that five out of ten single-parent families headed by women are living under the threshold of poverty, against two out of ten such families headed by men.
This situation and other changes in the structure of families give rise to a number of concerns which Governments must consider and about which they have to take immediate remedial action.
High among such concerns is the need to make good quality and reasonably priced child care services readily available to all Canadians. As they know only too well, there is a wide gap between day care applications and the number of services available.
Consequently, many Canadian families are now forced to make inadequate arrangements which they must change regularly for the care of their children.
A task force led by Mrs. Katie Cooke has examined this issue. All the Members of this House are anxious to see the official report of this task force which should be tabled early this year. I am certain that it will contain a substantial research base which the recently created Parliamentary Task Force on Child Care will be able to use.
The Government has also taken action to alleviate the negative effects of marriage breakdown on the means and welfare of women and children.
Bill C-48 now before the House provides for access to information contained in federal data banks on spouses who default on their support payments.
In addition, this legislation would provide for the attachment of federal payments to enforce the support order.
A number of provinces have shown their interest by establishing automatic support order enforcement systems. Manitoba and Quebec already have such systems and other provinces,
such as British Columbia, Alberta and Ontario, have announced their intention to implement them. To promote the creation of such systems, the federal Government has undertaken to pay $1 million of their cost.
The Government is also considering other aspects of family law. Among the issues examined by Status of Women Canada, let me mention the integration of commitments related to private family law and the welfare system and the development of instructions for the judiciary concerning appropriate child support levels.
Another issue which is of major concern to our Government is family violence. For many years, violence against women was a hidden fact and it is only recently that this problem has been revealed. We now know that the problem of battered women exists in all communities, among people of all cultures and all income levels. According to the statistics, one out of ten women is the victim of violence from her husband or partner. This Government takes seriously its commitment announced in the Speech from the Throne to provide additional assistance to the victims of family violence.
We have examined this problem in depth in close co-operation with the provinces and territories. In addition, we support our commitment by providing continuous financing for projects designed to help battered women and support halfway homes.
Mr. Speaker, there are obviously many areas in which this Government has acted efficiently to meet the changing needs of Canadian families.
I am certain that all the Members of this House will agree that we must continue to do what is necessary to guarantee the development of such important institutions as marriage and the family.


Mr. Geoff Scott (Parliamentary Secretary to Secretary of State of Canada):: Mr. Speaker, I would like to speak for a few moments on what I consider to be a very important resolution brought to the attention of the House by the Hon. Member for Scarborough West (Mr. Stackhouse). I would like to congratulate him for the very thoughtful remarks he made when speaking to the motion. As well, I would like to congratulate the Hon. Parliamentary Secretary to the Minister for International Trade (Mrs. Landry) for putting on the record what the Government has been doing up to this point in terms of securing what the Hon. Member for Scarborough West said was the principle of Governments realizing the importance of preserving family life. I do not think that there is any question about the principle of which the Hon. Member spoke.
The motion before us today reflects something very special about our lives as Canadians. We are fortunate to have the ability and will to examine fundamental concepts and relationships that sustain us as a society and to have the energy and resources to act upon what we learn of ourselves. As is often
January 28, 1986

the case in matters closest to the essence of our lives, family life poses intriguing paradoxes for us.
The family is an experience common to us all but we have traditionally been very hesitant to intervene in destructive family situations for fear of interfering with matters of a very personal and private nature. The family is a basic unit of our society and yet we still have much to learn about its dynamics. We should expect that the family as a basic social element will reflect the earliest consequences of social adaptation and change. However, our response as a society to new and different family structures has often been less than supportive. For all the importance we attach to family life, how many of us can truly say that we devote as much energy to our families as we do to our jobs and public activities?
The attention the Canadian family is now receiving thanks to motions and resolutions like the one put forward by the Hon. Member for Scarborough West is no matter of expediency or ideological convenience. The past two decades have been especially hard on the family unit as we once perceived it in its traditional terms. The capabilities of the family for self-reliance and protection have been seriously challenged by the complexity and gravity of today's problems. However, at the same time, families in difficulty have available to them a wide and growing range of support resources offered through Government and an extensive system of voluntary and other services and informal-


The Acting Speaker (Mr. Charest):: Order, please. I am sorry to interrupt the Hon. Member.

I must regretfully interrupt the Hon. Member. The hour provided for the consideration of Private Members' Business has now expired. We shall deal now with the proceedings on adjournment motion.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Abram Ernest Epp: Mr. Speaker, 1 am pleased to have this opportunity to say something more about concerns which were expressed in questions I asked on October 2, 1985. These were questions which reflected concerns expressed by my colleague, the Hon. Member for Skeena (Mr. Adjournment Debate
Fulton), in various context, with respect to the threat to Canadian softwood lumber exports to the United States.
In Question Period on October 2 I focused on two different aspects of the problem. The first had to with the suggestion of the U.S. Ambassador that Canada might consider a voluntary restraint on exports of softwood lumber to the United States. The second dealt with lobbying efforts which were required in the U.S.
My suggestion to the Right Hon. Secretary of State for External Affairs (Mr. Clark) that the call for voluntary restraint on exports represented a suggestion of illegal activity by Canadian softwood lumber exporters was confirmed, in a sense, a few days later by the Parliamentary Secretary to the Secretary of State for External Affairs (Mr. Weiner). He said that his understanding was that the Ambassador had expressed a personal view. He then went on to say that any such action might well have serious anti-trust implications and that these are considerations which he was certain would be taken fully into account by the Canadian industry.
Representatives of the Canadian industry in northwestern Ontario were certainly not in any doubt about these matters when, together with my colleague from Skeena, we met with them a few days before these discussions in the House of Commons. At those meetings we considered the importance of softwood lumber exports to northwestern Ontario. We were impressed and astonished-staggered even-to realize that 80 per cent, and more, of the lumber production of northwestern Ontario went across the border to the United States. We realized then that the threat to these exports resulting from the action of Congressmen in the United States was a threat which could really devastate employment in the industry in northwestern Ontario.
Thus we had the very best of reasons in our communities, in the City of Thunder Bay and in the surrounding towns where the lumber industry is so important, for emphasizing to leaders in industry and in unions to do everything they could to urge the Government of Canada to perform that lobbying effort which only the Government can carry on but which is so imperative.
I was pleased to receive a response from the Right Hon. Secretary of State for External Affairs with respect to the matter which suggested that the Government realized the importance of the matter and that it was, in fact, mobilizing an effort in various parts of the United States to form a coalition. I was also pleased to see later in the fall that success was attending these efforts and that a coalition had been gotten together. It was comprised of people involved in the transportation of the lumber and those who wanted to use it without having to pay the price increases. Those in the southern United States who are prepared to pay a premium for spruce, pine and fir lumber, which they use for framing purposes in house construction as opposed to using southern yellow pine which is simply not as good also, responded to the Canadian Government urging it to act in the U.S. to ensure that protectionism did not triumph.

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Adjournment Debate
In the last few days a conference sponsored by student foresters was held at Lakehead University. It focused in on these matters. There is very great reason to be concerned about what the U.S. Congress may yet do. Informal discussions have been under way in San Diego over the last few days to try to encure that the U.S. Government becomes sensitive to all aspects of the question. However, it seems to me that we face a threat in Congress which could end half a century of reasonably happy trade relations between Canada and the U.S.
In 1935 the Canadian Government was able to sign a freer trade agreement with the U.S. administration. That was a very happy development. Later we saw it develop into the General Agreement on Tariffs and Trade, GATT, which has been so important. What Representative Sam Gibbons is proposing in his Bill would have the effect of devastating the industry. That Bill may yet come to a vote in Congress, and, if it has the kind of support this winter or spring that it seemed to have last summer, it would be veto-proof. This would end an era of happy relations. It would be in complete contradiction of the freer trade developments which the Government has encouraged and which it seeks to pursue with the U.S. Therefore I say to a Government which did not take seriously enough the danger in quotas on fish and pork, that it is absolutely imperative that it respond to this threat and ensure that our softwood lumber industry is not devastated as it could be.


Mr. Chuck Cook (Parliamentary Secretary to Secretary of State for External Affairs):: Mr. Speaker, there are times when Opposition Members do themselves, their ridings and their country no good in what they advocate. The Hon. Member for Thunder Bay-Nipigon (Mr. Epp) must remember that every opponent of Canadian lumber going to the U.S. will listen to his words with care.
With respect to the question of export restraint, there has been no proposal from the U.S. administration that Canada restrain its exports to the U.S. Furthermore, the administration continues to take a firm stand with Congress in rejecting any linkage of the lumber issue with the trade talks. Both the Canadian and U.S. Governments agree completely that the lumber issue should be addressed on its merits.
To that end, in the context of ongoing consultations, Canadian and U.S. officials met in San Diego, as the Hon. Member mentioned, on January 20 to examine and review issues related to our bilateral trade in lumber. Views were exchanged on production and consumption trends, forest management policies in both countries, as well as prospects for increased market opportunities in third countries. It was agreed to schedule another session in this series of discussions to consider questions raised by both sides. Arrangements for the next meeting are in the process of being confirmed. This has been the case from the beginning.
The Canadian Government continues to work very closely and co-operatively with the provinces and Canadian industry.
Therefore, I suggest to the Hon. Member that he had better have another talk with the Hon. Member for Skeena (Mr. Fulton) and realize that he is not serving his country well with this kind of question.


BANKS AND BANKING-CANADIAN COMMERCIAL BANK-GOVERNMENT'S INFORMATION IN MARCH. (B) RANGE OF INFORMATION
Miss Aideen Nicholson (Trinity):: Mr. Speaker, last fall, in the wake of the failure of the Canadian Commercial Bank, I asked many questions of the Minister of State for Finance (Mrs. McDougall). In March, 1985, the Government had taken unprecedented action when it committed millions of dollars in taxpayers' money to bail out this bank. When that same bank went into liquidation so soon afterwards we in the Official Opposition raised again the same questions we had asked in March which the Government had not answered. By then it would have seemed it was more important than ever that we should have some answers to the very reasonable factual questions we were asking.
The fundamental question is: What information did the Government have when it decided to bail out the Canadian Commercial Bank? Despite all the questions asked of the Government in the House and in committee we were given just one response: The Government acted on the best information available. Not only is this an inadequate answer to the many specific questions I have raised on the subject, it is also less than accurate.
On September 26, for example, I asked the Minister of State for Finance if the group negotiating the CCB bail-out had considered the opinions of the bank's external auditors and the minutes of the CCB's internal audit committee. The Minister did not answer the question, and in my supplementary I asked for a specific response which, again, I did not get.
The bank's external auditors, in their appearances before the House of Commons Finance Committee and the Senate Banking Committee in October, said that they were not involved in any aspects of the design or evaluation of the March, 1985, support package. So there is the answer to my question in the testimony of witnesses over a month after I asked it of the Minister in the House.
After saying repeatedly that the whole matter of the banks failures would go to a parliamentary committee for in-depth study, the Prime Minister (Mr. Mulroney) instead appointed a commission of inquiry headed by the eminent Justice Willard Estey. While I look forward to seeing his report, 1 do not see that the existence of a non-parliamentary inquiry justifies the Government in its continued evasion of legitimate questions about the actions it took in bailing out the Canadian Commercial Bank.
Let us not forget that, after taking a purely political decision to bail out the bank without any recourse to facts that might have got in the way of that decision, the Government went on
January 28, 1986

to guarantee the viability of the bank and, once it had failed, decided to appropriate nearly $1 billion of taxpayers' money to reimburse the uninsured depositors. While all this was going on and the Bills were being debated in the House and in committee and questions were being asked, the Government still gave us no answers.
Parliament was asked to approve the original bail-out, which we did, taking on faith the Government's assurances that it was necessary for the stability of the system and that the amount involved was sufficient to ensure the bank's survival. In fact, soon after the Canadian Commercial Bank failed Parliament was asked to approve the bail-out of uninsured depositors, people and organizations whose holdings exceeded the $60,000 ceiling on deposit insurance. Add to this the costs of reimbursing insured depositors, the considerable administrative costs to liquidate the failed institution, the consultants' reports, the Estey commission, the legal fees for Government officials appearing before the commission, and we have, out of that hasty and ill-considered decision last March, a multibillion dollar mistake for which taxpayers are footing the bill.
It would seem from the Government's demeanor in the House and in committee that we are simply expected to approve these expenditures, and that we should do so blindly without getting any information or response to the questions that we have quite reasonably and responsibly been asking. This is not acceptable. The Government has shown a sad lack of accountability and responsibility throughout this entire matter. Canadian taxpayers deserve better and the institution of Parliament deserves better.


Pierre H. Vincent: Mr. Speaker, the allegations made by the Hon. Member for Trinity (Miss Nicholson) are false and unfortunately a little too partisan. The Hon. Member for Trinity constantly raises the issue of the information upon which the Government, together with two provincial governments, the six major chartered banks in Canada and the Canada Deposit Insurance Corporation, based its decision last March to bail out the Commercial Bank of Canada. We have indicated on many occasions to the Hon. Member and her colleagues that the best information available, on almost all subjects dealt with during the Question Periods in the House, were taken into account in the final decision made in this most difficult and complex issue.
As to the specific issue of the relations or communications with the Bank's auditors. I should like to remind the Hon. Member for Trinity that the auditors appeared before the Standing Committee on Finance, Trade and Economic Affairs during the hearings held last Spring to deal with this issue.
At that time, the auditors had had to answer a series of specific questions concerning communications with the Government or its representatives before and during the March
Adjournment Debate
events. I remember, Mr. Speaker, that the auditors had stated they had, in December of last year, completed their examination of the bank accounts as of October 31, 1984. Following that, they had only resumed auditing on March 14, 1985.
This, Mr. Speaker, as you certainly know, is current practice with bank auditors. Once they have completed year-end auditing in a bank, they usually resume their activities in that bank several months after the start of a new fiscal year. Therefore, Mr. Speaker, the auditors may not be completely aware of events between the end of their client's fiscal year and the time when they resume auditing for the new period.
Mr. Speaker, it must also be remembered that to a very large extent, the terms of the package were aimed at the future, since the objective was to solve problems that were imminent but had not yet appeared as of October 31, 1984, nor for that matter on March 14, 1985.
Mr. Speaker, the extent of the contacts last spring between the Government or its representatives and the auditors of the Canadian Commercial Bank is clearly spelled out throughout the Committee proceedings. Furthermore, I am convinced the Estey Commission will also look into those issues. I am sure the Hon. Member will agree that all relevant information was used at the time of establishing the terms of the Canadian Commercial Bank rescue package.


FINANCE-BALANCED BUDGET INITIATIVE
Bill Attewell: Mr. Speaker, a very simple but profound message must get out to all Canadians. It is simply that we must start paying our bills in this country.
On December 18 I asked the Minister of Finance (Mr. Wilson) a question about a balanced budget initiative. I highlighted the fact that on the preceding Friday, December 13, 1985, President Reagan signed an historic public debt statute amendment whereby the United States must achieve a balanced budget by 1991. While the Gramm-Rudman Bill excludes the cost of servicing the debt, it is nonetheless a tough, disciplined measure to bring spending under control in that country.
I plan to introduce a private Member's motion shortly with the same purpose and objective. I say that it is time that Canadians understood that we must begin paying our bills.
Let me share some background on this topic. It took us a full 100 years to accumulate a total debt in this country of approximately $20 billion. In the last 10 years we have seen the annual deficit grow from a mere $2 billion to the height of $36 billion. We have seen our total cumulative debt rise from that $20 billion figure I mentioned to over $200 billion.
In simple round numbers, our country is now taking in roughly $65 billion in tax revenue each year but spending approximately $100 billion. In other words, we are spending $35 billion more than we are taking in. Theoretically, if we did not have to pay interest charges on that debt it would not be a

January 28, 1986
Adjournment Debate
problem. However, we must pay those interest charges and we must reduce that debt.
Let me give some examples to show the very serious trends that have developed over the last decade especially. In 197475, the interest component of our total expenditures amounted to 11 per cent. That left 89 per cent of our expenditures for other forms of Government projects with respect to Health and Welfare and in other areas.
In 1984-85 the interest cost is 22.6 per cent which, of course, reduces the amount available for other social programs to 77.4 per cent. Clearly, the dollars available for these other programs are shrinking. They are getting smaller and smaller because of the ever increasing burden of servicing that awesome debt.
Just last Saturday I held a policy committee meeting in my own riding of Don Valley East. It was chaired by Mrs. Lynn Brebner and Bill Mackness, the Vice President and chief economist of the Bank of Nova Scotia who was with us to lead the discussion. There were almost 70 people at that meeting and by the time we finished the hour of discussion and debate it was clear in the minds of those people just how serious the debt situation and the servicing of it is for our country. I only hope that type of discussion will take place with more and more people across the country so that they can understand the true magnitude of the problem.
The dollar has been declining for several years. There has been a lot of attention paid to that problem in the last couple of weeks. I would submit that one of the reasons for the decline, the underlying reason, can be summed up in one word, "confidence". The major investors of this world are not confident in the way this country has been run. They are not confident with the lack of fiscal accountability. The erosion of confidence started years ago. The National Energy Program was central to the problem of billions of dollars fleeing this country. The foreign investment review agency had a very negative effect on capital and even Canadians began investing abroad.
We are in the midst of a great economic performance. In the western world I suppose our numbers would rank highest of any. Yet in this up cycle we are toting up a deficit of something in the order of $34 billion this year. We should have a surplus this year, if the country had been run correctly for the last 10 years, to pay down the deficits of some tougher earlier years. We just cannot pursue Keynesian deficit expansion because it will inevitably drive up interest rates. There are many examples of countries which have tried that process such as Brazil, Argentina and Mexico. Clearly if wild and reckless spending was the solution, these countries would be enjoying a wonderful economic performance. Instead, their currencies have been debased and devaluated. Their standard of living has plummeted. They are basically insolvent. Mexico, of course, is in very dire straits because of the drop in oil prices and, unfortunately, it may not be able to service the colossal debt it has as a country.
There are many ways in which to tackle this tough problem, but let me name seven. First, we should take a closer look at grants to businesses and other agencies. We cannot keep pouring taxpayers dollars into as many schemes as we have in the past. Huge tax deferral processes have to be looked at more closely. We must downsize the size and cost of the Government, which has grown exponentially over the last decade. I was delighted to see the Government's initiative to have the Nielsen tax force review hundreds of programs of the Government. I know it will produce some savings and get at some of the waste which has been occurring. The major review of the Unemployment Insurance Commission under the leadership of Mr. Forget is an excellent example. Many Canadians feel there have been some abuses and waste in that area. We have started on the process of privatization of Crown corporations and we must move more quickly and on a broader basis to get companies which are not viable and not part of public policy back into the private sector so they can stop bleeding the treasury of the country. The new President of Canada Post, I understand, will be appointed shortly. We are haemorrhaging there. Yesterday we heard that $243 million must be poured into that organization. We also must examine in a co-operative way with the provinces transfer payments which are so costly to the overall treasury.
The equation is very simple. It is a combination of more taxes and less spending. I do not necessarily mean raising taxes, but with a healthier economy, with more confidence in it, businesses will do better and will pay more taxes, as will individuals, so the volume of taxes will rise. We cannot ignore the other part of the equation, and that is spending. Canadians expect us to be tougher in this area. It is not going to be easy. It is a massive communications job. As a matter of fact, according to a recent poll, Canadians highlighted that their first concern was unemployment, that their second concern was hunger in the world and that their third concern was the pursuit of peace. The deficit or the financial problem of the country ranked thirty-sixth, I believe it was. We can see the grave problem in terms of communicating to people what a tough and difficult situation we have ahead of us.
I have confidence that we as a Government will deal with it because to ignore it would be ignoring a tremendous albatross or burden, a burden which will be placed not only upon our children but upon our children's children if we do not turn around this massive, awesome problem.


Pierre H. Vincent: Mr. Speaker, it is indeed a pleasure to hear questions in the House being put to the Government in a positive way, questions that give one something to think about and that are positive.
The Hon. Member for Don Valley-East (Mr. Attewell) has been talking about the budgetary measures taken by the United States. As you know, Mr. Speaker, both in Canada and
January 28, 1986

the United States, the fiscal situation has deteriorated enormously since the beginning of the eighties and continues to be a serious threat to sustained economic growth in both countries.
Because of an increasing perception of the harmful economic impact of uncontrolled budgetary deficits, the U.S. Congress recently passed legislation known as the Gramm-Rudman Bill that will reduce a deficit of more than $200 billion in several stages, in order to obtain a balanced budget by 1991. Starting in 1986, the Bill sets certain ceilings for the budget deficit for each financial year. These levels may not be exceeded, and the main provision of this Bill authorizes the President of the United States to automatically impose spending cuts sufficient to achieve these objectives if the forecasts of the U.S. Congressional Budget Office (CBO) or the Administration for the budget deficit are higher than the ceilings set for each financial year.
Mr. Speaker, in the United states the proposed budgetary measures remain the responsibility of the Members of the Executive. However, the final version of the Budget is determined by Congress.
In recent years, this division of budgetary responsibilities has made it difficult to introduce measures to systematically reduce the deficit. The constraints provided under the Gramm-Rudman Bill are a response to this policy co-ordination problem.
In Canada, Mr. Speaker, the federal Government is in a better position to legislate its fiscal policies. As a result, similar legislation would not necessarily be useful.
Adjournment Debate
Since our Government was elected, our strategy has been to co-ordinate fiscal policy and structural economic policies to create healthy economic growth. The Economic Renewal Program announced in November 1984 clearly established a set of policies aimed at increasing Canada's productivity and bringing about a general improvement in Canada's economic performance.
Mr. Speaker, the May Budget introduced the measures proposed in November 1984, plus a significant number of measures to reduce the constraints created by a rising federal deficit during 1980-84 in this country.
The Budget also established a medium-term strategy for reducing the federal deficit in order to create the requisite conditions for sustained and non-inflationary growth in Canada. Mr. Speaker, once implemented, these measures, will make it possible to reduce our deficit very substantially.
I predict that the next Budget will be another major step towards realizing this objective. Restoring our fiscal balance while maintaining the Government's flexibility to deal with contingencies remains an integral part of the Government's fiscal policy. The means used to achieve these objectives, however, must take into account the Canadian situation and remain acceptable to all Canadians.


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


[Stage Direction]
The House adjourned at 6.30 p.m.
[Stage Direction]

Wednesday, January 29, 1986