1986-03-05

STATEMENTS PURSUANT TO S.O. 21


Mr. Raymond Garneau (Laval-des-Rapides):: Mr. Speaker, the sugar-beet producers are in great trouble. Today is March 5 and Canadian farmers are wondering if they will be able to grow a crop this year. This lack of action on the part of the Government is affecting farmers particularly in Alberta, Manitoba, and Quebec, and nothing has yet been done to reassure the hundreds and hundreds of Canadian producers.
[ Translation]
Mr. Speaker, in Quebec this will have a very definite impact, because if the Government does not announce very shortly the kind of policy it intends to introduce for the benefit of sugar-beet producers, we can expect farmers to stop growing this crop, and then the Government of Quebec will be in a very tough spot with the Saint-Hilaire sugar refinery.
I would therefore ask the Minister of Agriculture (Mr. Wise) and the Conservative Government not to wait until all sugar-beet refineries are shut down to announce the sugar policy they have been promising us for more than ten months.
Mr. Speaker, this is an urgent matter, and action will have to be taken very shortly.


IMMIGRATION
Mr. Ernie Epp (Thunder Bay-Nipigon):: Mr. Speaker, the needs of immigrant women continue to demand action by the Government. These women often face a series of barriers to meaningful employment. They may be preoccupied with family responsibilities and immersed in the language and culture of their community. They are often unfamiliar with both of the official languages, but can find little language instruction. They have few of the skills being sought in the labour market and face severe competition from those desperate for any job they can find.
To be an immigrant women is often to be a member of the target group of visible minorities as well as women. Such a coincidence does not assure them of action by the Government. The Government aims to spend more on human resource development, but it has not increased funding to organizations which want to assist in improving the employability of such special groups.
Government appears unconcerned about the inadequacies of the employment equity Bill, and the affirmative action staff within Treasury Board faces lay-off. Immigrant women provide-


Mr. Speaker:: Order, please. Sixty seconds, please.


HOUSING
Mr. Bill Vankoughnet (Hastings-Frontenac-Lennox and Addington):: Mr. Speaker, the Rural and Native Housing Program is designed to assist low-income people to purchase a home. The program is funded 75 per cent-25 per cent by the federal and provincial Governments respectively.
The administration of the program in the past has left a lot to be desired. At no time has the Minister or his officials sought opinions from local authorities. As a result of this grave lack of sensitivity, many people are now angry, frustrated, and hostile toward the program and the people involved. I can understand this frustration which many hard-working Canadians feel. They pay the full price of a house, including interest rates on conventional mortgage payments, while others receive subsidies for above-average housing.
Such animosity could be avoided if more local consultation and participation were encouraged in the selection process. I urge the Government and the Minister to consult with Members of Parliament and to seek municipal and local opinions before implementing any further projects under the Rural and Native Housing Program.

March 5, 1986


INTERNATIONAL WOMEN'S WEEK
Mrs. Lise Bourgault (Argenteuil-Papineau):: Mr. Speaker, during International Women's Week, let us rejoice in the progress made by Canadian women towards economic equality, since that memorable day when for the first time in North America, New York garment workers rose up against the unfair practices they were subjected to at work.
At the last Conference of Federal and Provincial First Ministers, it was agreed to develop a strategy that would help women achieve economic equality. In this strategy, professional training and development were identified as activities that were particularly important to women.
Across Canada, the Ministers responsible for the status of women have committed themselves to developing an intergovernmental plan with the same objective in mind.
Mr. Speaker, on International Women's Day, I would urge my colleagues to continue to support our efforts to achieve equality and economic security for women.


FISHERIES
Mr. Fernand Robichaud (Westmorland-Kent):: Mr. Speaker, in 1984, the Government promised to build a new fisheries building in Shippegan, New Brunswick. When the Hon. Member for Vancouver South (Mr. Fraser) was Minister of Fisheries and Oceans, he also made a commitment to have the laboratory built.
In fact, tenders were made and the necessary funding totalling $1.7 million had been released. The Minister had also informed the Chamber of Commerce of Shippegan that the project would start in May 1986.
However, when the Deputy Prime Minister took over the Fisheries Department, he soon put a stop to the project.
Mr. Speaker, the Minister should immediately proceed with construction on this laboratory which is vital to the fisheries industry in New Brunswick.
Mr. Speaker, I think this is just another example of how this Government has decided to ignore the Atlantic region and the fisheries industry.


MESSAGE FROM BAHA'I UNIVERSAL HOUSE OF JUSTICE
Mr. Bill Blaikie (Winnipeg-Birds Hill):: Mr. Speaker, on October 24, 1985, the Universal House of Justice, the supreme governing body of the Baha'i faith, addressed a statement to the people of the world on the theme of peace. I have a copy of the message which was presented to me by the Baha'i community of East St. Paul, Manitoba. I recommend it to Hon. Members of the House who are concerned about the peace issues, and I should like to quote from it briefly:
Whether peace is to be reached only after unimaginable horrors precipitated by humanity's stubborn clinging to old patterns of behaviour, or is to be embraced now by an act of consultative will, is the choice before all who inhabit the earth.
* [DOT] *


REGIONAL ECONOMIC DEVELOPMENT
Mr. Pat Binns (Cardigan):: Mr. Speaker, Atlantic Canada is now the place to do business. The Government is providing greater opportunity to the Atlantic region than at any time since John Diefenbaker. The newly announced Atlantic Enterprise Program will guarantee term loans up to 85 per cent of their value, and will provide an interest write-down of 6 per cent for new and expanding operations. Business ventures in areas such as tourism, manufacturing, and processing, related service sectors, and primary industries, will qualify.
Another new program is the Atlantic Opportunities Program administered through the Department of Supply and Services. It will create 20,000 man-years of employment. It will increase Atlantic purchasing by 40 per cent and spend $600 million over the next four years to achieve this goal.
Regional development incentives also continue. In my riding of Cardigan, 50 per cent investment tax credits are available this year to manufacturers, and will continue at 40 per cent.
It is time to take ideas off the shelf. It is time to put them into action. Atlantic Canada is going to boom again, thanks to the Mulroney Government which is creating a new spirit of enterprise. We now have the program to match the opportunities. I urge the business community to respond to the challenge.


Mr. Speaker:: Sixty seconds, please.
March 5, 1986



Mr. Andre Plourde (Kamouraska-Riviere-du-Loup):: Mr. Speaker, as the Member for Kamouraska-Riviere-du-Loup, I want to say I am proud to be on the Conservative team.
Our Minister of Finance (Mr. Wilson) and our Minister of Regional Industrial Expansion (Mr. Stevens) have recognized the economic potential of the region east of Quebec.
The Atlantic Enterprise Program was received with great enthusiasm by all economic partners in the riding of Kamouraska-Riviere-du-Loup, eastern Quebec and the Atlantic
region.
Thanks to this program, regional development initiatives which until now had been frozen will finally be able to come to fruition. It is a sensible initiative that was necessary, since this region had been neglected under the Liberal Government. Programs had been set up where the emphasis was on bureaucracy rather than economic impact.
The Atlantic Enterprise Program will provide job opportunities for my constituents in the very near future.
The Conservative Government deserves praise for acting previous Liberal Government.


THE BUDGET
Mr. Jean-Guy Guilbault (Drummond):: Mr. Speaker, the future of low-income Canadians is of great concern to this Government.
Further to our commitment to direct social programs to those who need it the most, in the Budget brought down by the Minister of Finance (Mr. Wilson) the Government is proposing to pay in advance a substantial portion of the child tax credit, to assist Canadian families on low incomes and to reduce the need for tax discounting.
From now on, prepayments amounting to $300 per child will be paid in November 1986 to families with incomes of $15,000 or less in 1985.
This new prepayment system will reduce the waiting period for eligible families by several months. About one million families will benefit from the system.
This measure is in addition to recent changes in legislation which limit the percentage of tax refunds that may be taken by discounters. Now the poor, single mothers and welfare recipients will no longer have to resort to their services.


Ms. Sheila Copps (Hamilton East):: Mr. Speaker, International Youth Year is over, and the champagne is flat!


Some Hon. Members:: Oh, oh!


Sheila Maureen Copps: We know we have about 700,000 unemployed young people in Canada, and Mr. Wilson's Budget contains not a single word about the problems of the young unemployed.
Mr. Speaker, I would like to ask the Prime Minister (Mr. Mulroney) where the Minister of State (Youth) (Mrs. Champagne) is at this time? Is she here in the House? Is she in her riding? Is she speaking for youth? Obviously she is not, because we know that her Budget has been at least cut in half. This Government which promised so much to unemployed youth has done nothing about jobs in Canada.
I ask the Minister of Finance (Mr. Wilson) to create jobs for young people. I ask the Prime Minister to request the resignation of the Minister of State (Youth), because she is not fighting for our young people. She is only fighting for her limousine and her bureaucracy.


PORNOGRAPHY
Mrs. Jennifer Cossitt (Leeds-Grenville):: Mr. Speaker, as Members of this House will know, the struggle to impose workable restrictions upon the importation, distribution, and sale of pornographic material in Canada has been a difficult one, not least because of the question of freedom of speech under the Charter of Rights and the absence of acceptable definitions of what is and is not obscene, offensive, and dangerous to the community. Meanwhile, this material continues to pervade our country.
I,	therefore, urge the Government of Canada to consider introducing an immediate increase in the federal sales and excise tax applicable to such offensive material to a rate of not less than 2,000 per cent of the average retail price of such publications. If people want or need such forms of stimulation and degradation, they can at least be prepared to pay for them.


CANADIAN JOBS STRATEGY
Mr. John Parry (Kenora-Rainy River):: Mr. Speaker, a number of Indian bands and native organizations within my riding have expressed concern about the strict and, at times.

March 5, 1986
Oral Questions
counter-productive guidelines for job development projects under the Canadian Jobs Strategy. Specifically, these guidelines require the project participants must have been jobless for at least 24 of the last 30 weeks. This means that in seasonal and high unemployment economies some well qualified unemployed may be denied the chance to compete for new jobs.
In two cases, the Big Trout Lake training program and the Wawatay television training program, flexibility is a necessity to recruit the best possible candidates for these ventures.
I realize that guidelines offer valuable consistency and fairness to a program, but they should not retard or limit any group's potential for success. I ask the Minister to consider exempting these organizations from guidelines and to review similar concerns as they may be brought to her attention. In the interest of successful job creation, this suggestion is worthy of positive consideration and prompt action.



ORAL QUESTION PERIOD


Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, my question is for the Minister of Finance. The largest cut in the federal Budget is that of $6 billion in the regional development envelope for 1987. That is the envelope which helps create jobs and opportunities in the less wealthy regions of the country.
Why are the areas of the country with the worst economic problems being asked to bear the majority of the regional burdens imposed by the Budget?


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker I hate to point it out again, but the Leader of the Opposition is wrong.


Mr. Crosbie:: As usual.


Michael Holcombe Wilson: I think he should get new researchers if he is not going to do the work himself. In 1985-86 the amount was $12,465 billion. This is on page 31, Mr. Speaker. In 1986-87 the figure will go down to $11,080 billion. I think that is a reduction of about $380 million.
The cause of that reduction is the elimination of unnecessary subsidies to business which are primarily focused on the more well-off regions of the country. We did everything we could possibly do to avoid cutting spending in the worse off areas of the country. I am sure the Hon. Member realizes that through the Atlantic Enterprise Program we have put a greater focus on Atlantic Canada because of the high unemployment rates there.


GOVERNMENT POLICY ON DISADVANTAGED REGIONS
John Napier Turner: Mr. Speaker, the figures I was quoting were the 1984-85 figures of the previous Government which projected $14.7 billion for 1987. That has been reduced by the present Government to $9.8 billion. Those are the facts which I happened to look up myself, Mr. Speaker.
[ Translation]
Why must the poorest regions of our country bear the brunt of deficit reduction? If the Minister is unable to treat taxpayers and individuals with fairness, why does he not extend fair treatment at least to the many poor regions of Canada?


Michael Holcombe Wilson: Mr. Speaker, the philosophy and policy of the Government are to provide funds to those who are greatest in need. That is the philosophy which flows through the management of our economic and regional development programs. We have removed subsidies which are no longer necessary in the better-off parts of the country and directed the savings to those parts of the country which need them most, such as Atlantic Canada. The Atlantic Enterprise Program is the best example I can give of what we have done in the Budget to reinforce that philosophy.


John Napier Turner: Mr. Speaker, I will have an opportunity to deal with that later in the afternoon.


PRINCIPLE OF REGIONAL EQUALITY
John Napier Turner: Mr. Speaker, the Canadian Constitution now provides for regional equality as part of the substance of our Confederation. Why is he abandoning the principle of equal opportunity for our regions in the recent Budget?


Michael Holcombe Wilson: Mr. Speaker, it is quite clear that the Leader of the Opposition was not able to adjust the questions which he prepared before he came into Question Period. The responses to his first two questions clearly indicate that we have done no such thing. We have not abandoned any emphasis on regional development. Far from that, we have increased it through the Atlantic Enterprise Program as well as through the benefits which we are providing to those in northern Canada.


Ms. Mitchell:: What about British Columbia?


THE BUDGET
Raymond Garneau: Since the Budget speech, Mr. Speaker, several facts have contradicted
March 5, 1986

the figures of the Minister of Finance, thus affecting his credibility with respect to revenues and particularly the deficit. Here is my question, Mr. Speaker: How can the Minister of Finance explain that, on pages 27 and 28 of his Budget documents, he expects a real investment growth of 7 per cent, that is plus inflation, 11 per cent, whereas Statistics Canada figures released this morning show that the growth in business investments is forecast at only 2.5 per cent in current dollars? How does he explain this decline from 11 to 2.5 per cent in only a few days?


Michael Holcombe Wilson: Mr. Speaker, I would just ask the Hon. Member to think back to about a year ago. Investment intentions were about four percentage points below what the actual result will be. Right now the Conference Board is saying that business confidence is 20 percentage points higher than it was last year. That tells me that business investment activity will be at a record high this year.


INQUIRY WHY STATISTICS CANADA FIGURES WERE NOT USED
Raymond Garneau: Mr. Speaker, if the Minister of Finance has no confidence in Statistics Canada figures, he should abolish the agency. Otherwise, why did he not take into account this survey made among 25,000 businesses which indicate that their investment will grow by only 2.5 per cent in current dollars? Why did he not use those figures which come from a Government agency?


Michael Holcombe Wilson: Mr. Speaker, I think the answer I gave to the first question is the answer I would give to the second question. Judgment is required.


Raymond Garneau: You are right and StatsCan is wrong.


Michael Holcombe Wilson: The StatsCan numbers are from a narrow survey of investment intentions. Last year the same survey underestimated the growth in the economy and I think it is going to happen again.


FINANCE
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, my question is directed to the Minister of Finance. The average family, knowing that they are going to pay some $1,300 in increased taxes as a result of the present Budget, the previous Budget, and the budget statement in the fall of 1984, are fed up. We learned this morning that because of the Government's incompetence the Minister had to borrow $2.5 billion last
Oral Questions
month. That was the largest amount borrowed in a month, in the history of this country. Can the Minister tell the average Canadian how much it will cost him or her for this increased borrowing by the Government of Canada?


Michael Holcombe Wilson: Mr. Speaker, the Hon. Member knows we discussed the $1,300 figure yesterday. I pointed out in three precise areas where his figures were all wet, as they normally are. We will probably talk about that again later today.
As far as the use of exchange reserves is concerned, let me draw to his attention that drawing down reserves in U.S. dollars to buy Canadian dollars just shifts the money from our U.S. dollar account to our Canadian dollar account where it will be used to finance Government purchases of goods and services in Canada. There is no loss of money so far as the Canadian taxpayer is concerned.


John Edward Broadbent: Mr. Speaker, I will deal with the Minister's challenge to the figures later when I speak in debate.


Mr. Hnatyshyn:: Don't empty the House, Ed.


John Edward Broadbent: I would simply point out that he blamed Marc Lalonde for the 1 per cent federal sales tax increase. I say to him that he had an option. He did not have to impose that tax. However, I will deal with it later.


Ramon John Hnatyshyn: Make up your own lines.


COST TO TAXPAYERS
John Edward Broadbent: Mr. Speaker, the Minister made a decision to build up our reserves by borrowing $2.5 billion in Europe, Japan, and elsewhere. Is he now saying that that borrowing will not cost us a cent?


Michael Holcombe Wilson: Mr. Speaker, funds have to be borrowed to finance a deficit which, fortunately, is going down under this Government but which was built up in previous years to record high levels. Those deficits have to be financed. They can be financed by borrowing U.S. dollars, or yen, as was the case. They are then converted into Canadian dollars which are used to finance the purchase of goods and services by the Government of Canada. There is just a shift of those resources from one account to another, and no loss of money.


EXCHANGE VALUE OF DOLLAR
John Edward Broadbent: Mr. Speaker, again the Minister did not answer the question. There is a shifting of funds from one account to another but when the Government of Canada, like the people of Canada or anywhere else, borrows money, it has to be paid for, and the people of Canada understand that.


Some Hon. Members:: Right!


Mr. Epp (Provencher):: That is right. Finally!

March 5, 1986
Oral Questions


John Edward Broadbent: Yes.


Some Hon. Members:: Hear, hear!


Mr. Speaker:: Order. Question, please.


John Edward Broadbent: I ask the Minister in a straightforward fashion again, considering that since the Budget has come down there has been nothing but negative pressure on the Canadian dollar, and considering that he probably guessed that in advance and he was building up his reserves, will he come clean with the people of Canada and tell them how much it will cost for the $2.5 billion dollars that he borrowed last month, which is the largest increase in the reserves in one month ever in the history of Canada?


Michael Holcombe Wilson: Mr. Speaker, the basic truth has finally come through to the Leader of the New Democratic Party. When we have a deficit we have to pay, and it costs money to borrow that money. That is a fundamental truth, and that is a fundamental reason why we are trying to get the deficit down.


Some Hon. Members:: Oh, oh!


An Hon. Member:: How much?


Michael Holcombe Wilson: He says I did not answer the last question. I did answer the last question and I will explain it to him again, slowly.


John Edward Broadbent: Stick around for the debate.


An Hon. Member:: It couldn't get much slower.


Michael Holcombe Wilson: Moneys are borrowed in either U.S. dollars, Deutschmarks, Swiss francs, or yen, or Canadian dollars, got that?


John Edward Broadbent: That's very good; one B, very good.


THE BUDGET
Hon. Donald J. Johnston (Saint-Henri-Westmount):: Mr. Speaker, the Minister has put the dollar on a life-support system because the Budget is wrong on oil prices, it is wrong on interest rates, and we learned this morning that it is also wrong on investment intentions. Will he agree, that being the case, that his growth number is wrong, his revenue numbers have to be wrong, his deficit projection has to be wrong? Will he bring us realistic projections based on the real world and not on the world as he would like it to be?


Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: Mr. Speaker, 1 guess the Liberal Party must know quite a bit about life-support systems.


Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: We have discussed these questions about estimates that are in the Budget, and projections. My hon. colleague from Mississauga South tried to get the question out yesterday, but it was quite clear from his question that the projections that we are using in this Budget are conservative projections. The 9.5 per cent level of interest rates I think is going to be proven to be right on the mark. I do point out to the Hon. Member that, as I indicated, the dollar has been strong these last couple of days.


Mr. Speaker:: Order, please. This is getting too long.


CRUDE OIL PRICE PROJECTION
Donald James Johnston: Mr. Speaker, I am going to have to go elsewhere for some answers.
I want to go to the Minister of Energy, Mines and Resources for my supplementary question. She knows West Texas oil has slipped below $12 a barrel. Would she rise in her place and tell us whether she has advised the Minister of Finance that his $22.50 price is nuts, and that, in fact, oil prices are going to be much lower and his revenues may be reduced as much as $1 billion?


Michael Holcombe Wilson: Mr. Speaker, I have the Conference Board of Canada indicating that its projections of oil prices are not that far off our projections. I have talked to a number of oil companies which have also indicated their projections for the price of oil are not that far off ours.


Mr. Riis:: Name them!


Michael Holcombe Wilson: As I indicated, the bottom line that he is referring to is the impact on the deficit. The impact on the deficit of lower oil prices is balanced by a healthier economy because of lower interest rates, lower inflation, better growth in the country, and better growth in our trading partners. The net effect and the bottom line are slightly positive to the federal Government.


IMPACT OF TAX INCREASES
Mr. Ian Deans (Hamilton Mountain):: Mr. Speaker, my question is also for the Minister of Finance. The Minister refuses to deal with the cost to the Canadian public of the borrowing that has just taken place in the last month. He said that the $1,305 figure is wrong. Will he produce for the House the figures showing the impact of not only the income tax increase but three sales taxes, three gasoline taxes, two alcohol and tobacco taxes, UI premium increases, and sundry other taxes and fee increases which have taken place since he took office in September of 1984?
March 5, 1986

[DOT] (M30)


Michael Holcombe Wilson: Mr. Speaker, I have told the Hon. Member that it is important that we share the load of these tax increases so that the load of reducing the deficit is not borne just by those Canadians who are disadvantaged, or by those Canadians who live in the less advantaged regions of the country.
However, I would point out to him that personal disposable income in 1985 rose by 8 per cent, and it is forecast to rise by 6.3 per cent in 1986, and again by 5 per cent in 1987.


John Edward Broadbent: Now answer the question.


Michael Holcombe Wilson: All of these include the impact of those taxes.


IMPACT ON AVERAGE FAMILY
Ian Deans: Mr. Speaker, let me try to put the question to the Minister as simply as I can. I will do it slowly. Is it possible for the Minister to produce for the House the impact figures of all the tax increases on the average Canadian family, introduced by the Government since it took office, in order to show that our figure of $1,305 is somehow in error?


Michael Holcombe Wilson: Mr. Speaker, if I can share a phone conversation that I had with the Leader of the New Democratic Party-


Ian Deans: Why don't you tell me the number?


Michael Holcombe Wilson: -he has included in his $1,300 figure the effects of the sales tax increase brought about by the Liberal Party in the 1983 Budget, I believe.


Ian Deans: Which you implemented.


John Edward Broadbent: You brought it in. What are you talking about?


Michael Holcombe Wilson: As well, there are the unemployment insurance premiums which, by legislation, we are bound to bring in, plus the petroleum compensation charge which we have eliminated but was required under the legislation.


John Edward Broadbent: No, it was not.


Michael Holcombe Wilson: That is the reason why I believe about $450 of that figure of the NDP was fictitious.


Mr. Speaker:: Order, please.
Oral Questions ENERGY


CRUDE OIL PRICE PROJECTIONS
Mr. Russell MacLellan (Cape Breton-The Sydneys):: Mr. Speaker, my question is directed to the Minister of Finance. In his Budget document entitled Towards a Sustained Expansion: Canada's Economic Prospects, 1986-1991, he says on page 23 that his budget forecasts are based on a crude price for 1986 of $22.50 a barrel, yet in the same document at page 20 at table 4, he says that the 1986 price for crude oil will be $23.88 a barrel. Why is there this discrepancy in the Minister's own budget documents?


Michael Holcombe Wilson: Mr. Speaker, I am not sure I would agree with those figures because the Party that the Hon. Member represents sometimes misuses figures. I will check the figures and give the Hon. Member a response.


MINISTER'S POSITION
Russell Gregoire MacLellan: Mr. Speaker, there is a definite contradiction and the Minister does not know what figure he is using. In any event, both of them are out of line. Will the Minister admit this and acknowledge that it is time to get back to the drawing board?


Michael Holcombe Wilson: Mr. Speaker, I think the drawing board has produced a masterpiece.


Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: I can see from the look on their faces that the Members opposite agree. I have answered that question before.


FINANCE
Mr. Neil Young (Beaches):: Mr. Speaker, my question is directed to the Minister of Finance. Why will the Minister of Finance simply not come clean with the Canadian people and table in the House the total impact of the tax increases he has imposed on the Canadian people since his Government was elected?


Michael Holcombe Wilson: Mr. Speaker, these figures are set out clearly in the various documents that have been presented in the House and I encourage the Hon. Member to read them himself.


CALCULATION OF TAX INCREASES
Neil Young: Mr. Speaker, does the Minister of Finance agree with the calculations made by my Party that the total tax impact of the Minister's three Budgets on the Canadian people is $1,300 for the average Canadian family?

March 5, 1986
Oral Questions


Michael Holcombe Wilson: No, Mr. Speaker, for the third time, 1 believe. There are three parts of that calculation with which I do not agree. You can lay them on the back of the previous Government or you can attribute them to the fact that legislation required them, but do not blame them on me-


Some Hon. Members:: Oh, oh!


Michael Holcombe Wilson: -because legislation dictates what we must do.
I have said that there are increases in taxation of some $800, which I make no bones about. Those increases are there for a specific reason, so that those parts of the country that can least afford it do not get hit by higher spending cuts-


Mr. Speaker:: Order, please.


REGIONAL ECONOMIC DEVELOPMENT
Mr. Dave Dingwall (Cape Breton-East Richmond):: Mr. Speaker, my question is directed to the Minister of Finance. He will know that British Columbia, Atlantic Canada, and parts of Quebec and Ontario have exceptionally high levels of unemployment. Will he explain to the House the fairness in gutting the regional economic development envelope, thereby depriving Canadians in those regions of jobs, industry of assistance, and communities of some sense of stability and optimism? Why has he taken this ruthless action toward the poor regions of the country?


Michael Holcombe Wilson: Mr. Speaker, the Hon. Member should be very pleased with the Atlantic Enterprise Program which is an initiative in this Budget.
However, I have answered the precise question which the Hon. Member asks. We have not done what he has said. We have weeded out from the regional economic development budget those subsidies to business which are no longer effective or doing the job that was originally intended for them. We are trying to clean up the mess that was left in place by the previous Government.


REQUEST FOR EXPLANATION OF CUT-BACKS
David Charles Dingwall: Mr. Speaker, does the Minister not realize that cuts of 12.4 per cent for DRIE, 9.8 per cent for Transport, 11 per cent for Fisheries and Oceans, and 42 per cent in Energy, Mines and Resources will be such a devastating blow to many of those poorer regions of the country that they will fall even farther below the poverty line? Will he explain those cut-backs?


Michael Holcombe Wilson: Mr. Speaker, employment has gone up in Atlantic Canada and it will go up further. Surely the Hon. Member is not saying that he wants
the Government to keep pumping money into southwestern Ontario, where we have practically full employment, at the same time as we are running up interest rates to the extent that all parts of the country will suffer. We are following a fiscal and industrial policy that makes sense, and that is a nice change.


UNEMPLOYMENT INSURANCE
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, I am holding a copy of a questionnaire and manual that was used in a poll of unemployment insurance recipients by the private firm of Peat Marwick. This is a poll commissioned by the Minister's Department at a cost of $187,000. Will the Minister admit in the House that she did not authorize her officials to give Peat Marwick the names and telephone numbers of 1985 U.I. recipients? Will she also apologize to those recipients whose names were disclosed in violation of Section 114 of the Unemployment Insurance Act dealing with confidential information?


Hon. Flora MacDonald (Minister of Employment and Immigration):: Mr. Speaker, I can assure the Hon. Member that I was not aware of the precise design of that particular survey. However, I want him to know that research work goes on in the Department all the time. Surveys of unemployment insurance exhaustees were done in 1982 and 1984. I am, nevertheless, concerned about whether or not there is any breach of privacy and I have immediately asked that this matter be investigated. In that regard I will certainly take the advice of the Privacy Commissioner.


REQUEST FOR CONFIDENTIALITY ASSURANCE
Lorne Edmund Nystrom: Mr. Speaker, since this is a clear violation of Section 114 of the Act, being without the authorization of the Minister, will she give us and, more important, U.I. recipients, the assurance that this kind of breach of confidentiality will never occur again in that Department?


Flora Isabel MacDonald: Mr. Speaker, as I have informed the Hon. Member, I am indeed determining whether or not there has been a breach of confidentiality. I do not want to see that happen any more than he does. That is why I have said I will accept the advice of the Privacy Commissioner in this regard. As soon as I have that advice, I will get back to him and other Members.
March 5, 1986


COLLECTION OF BENEFITS BY BRICKLAYERS
Mr. Andrew Witer (Parkdale-High Park):: Mr. Speaker, my question is directed to the Minister of Employment and Immigration. Reports in recent days have indicated that some 1,400 Metro-Toronto bricklayers are collecting unemployment insurance benefits while builders have set up an emergency manpower committee to help find qualified bricklayers to meet the demands of the current housing boom. Are these reports true and, if so, what action does the Minister intend to take to ensure that the unemployment insurance system is not abused and that only those who are genuinely unable to find work receive benefits?


Flora Isabel MacDonald: Mr. Speaker, I want to assure the Hon. Member that I believe that if there is work available and if people can find work in their field, then they should not be drawing unemployment insurance benefits. However, I also want to advise the Hon. Member that we do have agreements with hiring halls. They advise us whether or not there are people who are unemployed in a particular field.
Regarding the Toronto situation, I have asked departmental officials to find out immediately whether or not contractors are giving work to the hiring halls, whether or not the hiring halls are referring that work to bricklayers, and whether or not the bricklayers are accepting the work offers that are made. As soon as I have that information, I will be able to take appropriate action.


DEPARTMENT'S ARRANGEMENTS WITH HIRING HALLS
Mr. Bob Pennock (Etobicoke North):: Mr. Speaker, my question is directed to the same Minister. Regarding the hiring halls, can the Minister tell the House why the bricklayers' and other hiring halls have these special privileges to by-pass the unemployment centres in reporting, and just how many unions or organizations have these special privileges?


Flora Isabel MacDonald: Mr. Speaker, it has long been a practice of the Department of Employment and Immigration in working with the labour force to have arrangements with hiring halls across the country. That has been in effect for some time. We have found it to be of very beneficial assistance in making sure that proper flows of work are channelled through the hiring halls. I would hope to see that practice continue.


EQUALITY RIGHTS
Mrs. Sheila Finestone (Mount Royal):: Mr. Speaker, my question is directed to the Minister of Justice. As a result of the new equality law, the Minister has announced the elimination of mandatory age of retirement for public servants but not
Oral Questions
for the tens of thousands of workers in the federally regulated private sector. Could the Minister tell us why these workers do not benefit right now from non-discrimination based on age?


John Carnell Crosbie: Mr. Speaker, apparently the Hon. Member simply refuses to read the details of this report. In the report we indicate that the same rules are going to apply to the private sector, but to give it time to adjust its affairs and labour contracts and to make arrangements, there will be a transitional period. Exactly the same principle will apply. The Public Service can act more quickly because the President of the Treasury Board has already been taking steps that can be put into immediate effect. The private sector has not had that advantage. If the hon. lady will read on, she will discover just what is going on.


INDUSTRY STANDARD
Sheila Finestone: Mr. Speaker, 1 can assure the Minister that I know exactly how to read his document and that his document is certainly not clear. I would like to know what kind of fairness and equality can bank clerks, airline stewardesses, and rail workers expect from the Government when decisions for retirement are not going to be based on their performance ability but on their age, and normal age of retirement is an industry standard.


John Carnell Crosbie: Mr. Speaker, I refer to page 9 of this historic document tabled yesterday which indicates the following:
However, since abolishing mandatory retirement will have an impact on labour relations in the private sector, the Government will consult with private sector employers and employee organizations before taking any action,-
The previous Government did not consult with anyone about anything. We consult first, and then we act.


Some Hon. Members:: Hear, hear!


FINANCE IMPOSITION OF TAXES
Mr. Steven W. Langdon (Essex-Windsor):: Mr. Speaker, I have listened with great care and much amazement to the answers given by the Minister of Finance today with respect to the oil compensation fund tax and the sales tax increase that came into effect in October, 1984. My question is very simple. Who was it who put these taxes into effect, the Minister or Darth Vader?


Some Hon. Members:: Oh, oh!


Arthur Jacob (Jake) Epp: Darth Vader from Star Wars. He's the guy who has taken over from them.


John Napier Turner: He's working for you.

March 5, 1986
Oral Questions Mr. Speaker: Order, please.


John Edward Broadbent: Do you have to think about it, Michael?


Mr. Speaker:: Order, please.


Michael Holcombe Wilson: He is a
Member of the New Democratic Party. Mr. Speaker, Marc Lalonde put in a sales tax increase. 1 believe it was Allan MacEachen who put in the petroleum compensation charge, and the unemployment insurance premiums have been around for a long, long time.


Some Hon. Members:: Hear, hear!


THE BUDGET
Steven W. Langdon: Mr. Speaker, clearly it might have been R2D2 who reached out beyond the grave here.


Steven W. Langdon: I have a serious question to ask the Minister. In view of the attacks on every assumption on which the Budget was based, is the Minister now prepared to withdraw this Budget and start all over again?


Michael Holcombe Wilson: Mr. Speaker, I guess the Hon. Member is out in that other world with Darth Vader.


Some Hon. Members:: Hear hear!


Michael Holcombe Wilson: The simple answer-


An Hon. Member:: He's spaced out.


Michael Holcombe Wilson: Yes, he is spaced out. The simple answer is that I stand by the bottom line of those projections. The 9.5 per cent interest rate will, I think, prove to be quite realistic. The bottom line on the oil price assumptions, as I have said I think seven times already, is that as the oil price goes down there are two offsetting-


Mr. Speaker:: Order, please. Order. I think the Minister has had enough time to answer that.


REQUEST FOR EXPLANATION OF PROGRAM CONCERNING PROMOTION OF WOMEN
Mrs. Lucie Pepin (Outremont):: Mr. Speaker, my question is directed to the Secretary of State.
Last week's Budget provided for cuts in departmental spending. Mr. Speaker, I wish the Minister would give us the assurance that the Women's Program in the Department of the Secretary of State will not be abolished, as some people fear will be the case.


Hon. Benoit Bouchard (Secretary of State of Canada):: Mr. Speaker, at the present time we are analyzing the Budget cuts and when this has been done, we will be able to inform the House and Canadians how my Department's budgets have been able to respond to these cuts.


REDUCTION OF BUDGET FOR PROMOTION OF WOMEN PROGRAM-GOVERNMENT INTENTIONS
Lucie Pépin: Mr. Speaker, the Minister has cut at least twelve per cent from the Women's Program for 1986-87, allowing for inflation.
Could the Minister inform the House how far he is prepared to go? How much is he prepared to concede to the Minister of Finance, to reduce the budget for the Women's Program even further?


Benoît Bouchard: Mr. Speaker, I can give the Hon. Member no assurance other than the fact that usually I am not the one who concedes anything to the Minister of Finance. The Minister of Finance makes the concessions.


FINANCE
Margaret Anne Mitchell: Mr. Speaker, my question is directed to the Minister of Finance. Low and middle-income families are paying very dearly for the lack of confidence in the Government's economic policies. Is it fair that an average family will pay an extra $100 for food as a result of the falling dollar and this will be put on top of the extra tax burden as well as slashes to services for these same families?


Michael Holcombe Wilson: Mr. Speaker, 1 think it is a well know fact that, if the NDP policies had been followed by the Government, the falling dollar would have been dropping through the floor. That is why we have taken action in the Budget to steady the dollar.
I would say to the Hon. Member that low-income families are benefiting from the increase in the child tax credit, the acceleration of the payment of the child tax credit, the low-income refundable sales tax credit, and the $100 million that we are redirecting to help those Canadians who are on welfare find work and become more accustomed to the workforce. These are things that are real benefits-
March 5, 1986


Mr. Speaker:: Order, please. I know the Minister can be briefer than that.


SOCIAL SECURITY
Margaret Anne Mitchell: Mr. Speaker, in view of the extra burden of higher taxes which the Minister is imposing upon families, the higher food costs resulting from his economic policies-and of course these are increasing the cost of living for all families with children-will the Minister take steps to reindex the family allowance and the child tax credit to the real cost of family living?


Michael Holcombe Wilson: Mr. Speaker, the Hon. Member has never really understood what we were doing with the changes in the family benefits. There are three elements of the family benefits package. The child tax exemption, which is a benefit to upper-income Canadians, was reduced. The child tax credit, which is a benefit to lower-income Canadians, was increased. We have also modified the indexation of the family benefit. However, the net effect of those three changes is to help low-income Canadians and to take that money away from upper-income Canadians. Surely that is good social policy.


FORESTRY
Mr. Marc Ferland (Portneuf):: Mr. Speaker, my question is directed to the Minister of State (Forestry).
The experts say that the lumber industry had a very good year in 1985, the result of an impressive 18.5 per cent increase in construction starts.
Could the Minister inform the House whether the Opposition is right when it sees negotiations to improve our trade with the United States as a threat to the industry?


Hon. Gerald S. Merrithew (Minister of State (Forestry)):: Mr. Speaker, I appreciate very much the continued interest and concern of the Hon. Member, and indeed of other Hon. Members, in the forest products trade issue. Of course the fact of the matter is that lumber presently trades freely between Canada and the United States, to the extent where we have now captured about a third of its market. Naturally that might be expected to create and spur protectionist sentiments, which it has, despite the fact that Canada has not provided any subsidies. That has been proven by two United States studies.
Oral Questions
It is my view that freer enhanced trade with the United States will serve to offset or ameliorate these-


Mr. Speaker:: Order, please.


ENVIRONMENTAL AFFAIRS
Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, my question is directed to the Minister of the Environment. From the 1986-87 Environment Canada Estimates we learn with shock that the Minister has changed the policy on acid rain. Until now the Government wanted to reduce acid rain causing emissions. In this year's Estimates, instead, we learn that the Government wants to reduce the effects of acid rain on the environment.


Mr. Speaker:: Order, please. This is several statements. A question, please.


Mr. Caccia:: Why has this backward step been taken on the eve of the summit meeting in Washington between the Prime Minister and President Reagan?


Hon. Tom McMillan (Minister of the Environment):: Mr. Speaker, with all due respect to the Hon. Member for Davenport, he does not know what he is talking about.


Some Hon. Members:: Oh, oh!


Charles L. Caccia: Read your own Estimates.


Thomas Michael McMillan: This Government has done more on the acid rain issue in 18 months in office than the Liberal Party did in 18 years in Government.


Some Hon. Members:: Hear, hear!


MAPLE TREES
Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, rather than this junk, perhaps the Minister of the Environment will give us a serious answer. As a result of the policy change in his own Estimates, does he intend to equip every maple tree in the country with an acid rain umbrella?


Thomas Michael McMillan: Mr. Speaker, is the Hon. Member not aware of the fact that the Government has set aside $300 million for acid rain abatement, $150 million of which will be directly related to the abatement of acid rain through companies? Does he not realize that we have signed a general agreement with all eastern Canadian provinces to reduce by 50 per cent acid rain causing emissions by 1994, based upon 1980 figures? Does he not realize that I am about to sign individual agreements with Ontario, Quebec, and other relevant provinces? During the time when he was Minister of the Environment, he was not able to get one agreement, let alone seven.

March 5, 1986
Oral Questions


LOCATIONS OF UNITED STATES RADIOACTIVE DUMP SITES
William Alexander (Bill) Blaikie: Mr. Speaker, my question is directed to the Right Hon. Prime Minister. It also concerns the summit. The Prime Minister will be aware of the concern of the Manitoba Government that the question of potential radioactive dump sites near the Canada-U.S. border be on the agenda of the meeting between him and the President of the United States. Could he tell us whether he has been successful in getting that on the agenda and will be raising it with President Reagan?


Right Hon. Brian Mulroney (Prime Minister):: Mr. Speaker, we shall be discussing all subjects of mutual interest, including that one.


NIAGARA RIVER POLLUTION
William Alexander (Bill) Blaikie: Mr. Speaker, my supplementary question is directed to the Prime Minister. Has he also made attempts, as he indicated some weeks ago, to have the whole question of the Niagara River clean-up put on the agenda of the summit?
[ Translation]


Martin Brian Mulroney: Mr. Speaker, I mentioned that we were going to discuss all important matters with a bilateral dimension, and that of course includes the matter raised by my hon. friend.


INCOME TAX TAXES PAID BY INDIVIDUALS
Mr. Alfonso Gagliano (Saint-Leonard-Anjou):: Mr. Speaker, my question is for the Minister of Finance. The Financial Post of this week illustrates how changes in his new Budget hurt small businesses and middle-class families. Could he explain why a taxpayer with a $40,000 income will pay $812 more in 1987, and a taxpayer with a $150,000 income will pay $5,470 less in 1987?


Michael Holcombe Wilson: Mr. Speaker, I have a press release from John Bulloch who speaks for many small-businessmen across the country. He says that there are very profound long-term changes in the Budget of which he is very supportive. Also he says that the Government's fiscal plan has been working and will pay dividends, and is leading to Canada being the leader in growth and job creation in the industrialized world. He goes on to say that the changes we are seeing in the tax system from the last two Budgets are rewarding small business rather than established large businesses. We stand for small business in this Party.
[ Translation]


INQUIRY WHY GOVERNMENT REDUCED TAXES ON LARGE CORPORATIONS AND IMPOSED SURTAX ON SMALL BUSINESSES
Alfonso Gagliano: 1 have a supplementary, Mr. Speaker. Why did the Minister of Finance reduce taxes on large corporations and levy a surtax of three per cent on small business?


Michael Holcombe Wilson: Mr. Speaker, the Hon. Member has neglected to point out that we have eliminated the 12.5 per cent dividend distributions tax for small businesses, which will save them money as well as a major amount of tax complexity. It is a very major step forward as far as the Government is concerned, as part of its broad program, to help small businesses from coast to coast.


CANADIAN WHEAT BOARD
Mr. Stan J. Hovdebo (Prince Albert):: Mr. Speaker, my question is directed to the Minister of Agriculture. He will recall that some time ago in the House he suggested that Canadians applaud U.S. farm policy, even as it was driving down the price of grain to Canadian farmers. Will the Government in the next few days announce lower initial prices for grain sold by Canadian farmers, even as the Minister of Finance is increasing the taxes on farm input costs?


Hon. John Wise (Minister of Agriculture):: Mr. Speaker, I think it is important to set the record straight. In no way, at no time, did I ever applaud the U.S. farm policy. I had a comment on the U.S. Farm Bill; indeed, I had a comment in respect of two or three aspects of it.
Turning to the second part of the Hon. Member's question, the Minister in charge of the Canadian Wheat Board is absent today on official business. I will take notice of the question, and I am sure the Minister of State for the Canadian Wheat Board will get back to the Hon. Member for Prince Albert.


PARITY PRICING
Stanley J. Hovdebo: Mr. Speaker, in order to alleviate the lower prices for farm commodities, will the Minister and his colleagues introduce legislation similar to that on parity pricing and the motion introduced by the Hon. Member for Yorkton-Melville, and bring it into the House so that we will have some security for farm prices in the future?


John Wise: Mr. Speaker, l am informed by my colleague that indeed the Minister of State for the Canadian Wheat Board responded at least in part to the question. The Hon. Member should know that the Government did not stonewall and disregard the issue of parity prices. Indeed, we accepted the motion put forward by his
March 5, 1986

colleague, and it has now been referred to the standing committee. Personally, I much prefer the motion which was put forward by the Hon. Member for Swift Current-Maple Creek.


Mr. Speaker:: Order, please.


UNEMPLOYMENT INSURANCE
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine East):: Mr. Speaker, my question is directed to the Minister of Employment and Immigration. In answer to an earlier question the Minister did not say whether she or anyone in her office authorized the release of that confidential information about unemployment insurance recipients to Peat Marwick. Will she clearly answer that question?


Flora Isabel MacDonald: Mr. Speaker, I mentioned earlier that the Department carries out surveys all the time, as it did when the former Government was in office. Certainly my office is aware that surveys are carried out. It did not know the particular research design of this survey.


Mr. Gauthier:: Did you authorize it?


ROLE AND KNOWLEDGE OF OFFICIALS
William Warren Allmand: Mr. Speaker, did the officials know that the law states clearly that that type of release must be made only by the Minister? Did the officials in her Department know that? Does the Minister not have any control over the people in her Department?


Flora Isabel MacDonald: Mr. Speaker, as I mentioned earlier, I am having this whole matter investigated. I will be pleased to give the information to that Member and to other Members when the investigation is completed.


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


Mr. Thomas Suluk (Nunatsiaq):: Mr. Speaker, this question of privilege concerns the question of privilege raised by my colleague, the Hon. Member for Bourassa (Mr. Rossi). Sometimes extracurricular language used in the heat of debate is not appropriate and later regretted by all sides. Representing a
Privilege-Mr. Rossi
homogeneous cultural group which is, nonetheless, a minority in Canada, I am well aware of this special problem.
I would be the last person to do or say anything intentionally that could be interpreted in any way detrimental to other groups. I regret that the time of the House has been taken up by this incident, and as far as I am concerned this matter is closed. Thank you.


Some Hon. Members:: Hear, hear!


Mr. Speaker:: Order, please! The Hon. Member for Hamilton Mountain (Mr. Deans) is rising on a point of order. The Hon. Member for Windsor West (Mr. Gray) raises the same question of privilege?


Mr. Gray (Windsor West):: Mr. Speaker, from what I heard the Member say, I heard no clear apology or a withdrawal of the remark.


Mr. Speaker:: Order, please. Order, please.


Herbert Eser (Herb) Gray: To be acceptable-


Mr. Speaker:: Order, please. Order, please. The matter has been raised on a question of privilege, which is not a matter of privilege, by the Hon. Member for Bourassa (Mr. Rossi). Clearly I can say to the Member now that it was not a question of privilege. I took it, and I think the Deputy Speaker at the time took it, as a question of order relating to language and has reserved on the matter. I have yet to come back on the matter.
It is difficult for the Hon. Member for Windsor West (Mr. Gray) to argue before the Chair has ruled in any way whether an action by another Member is required.


Mr. Guilbault (Saint-Jacques):: Why let him speak then?


Mr. Speaker:: Order. Because the Hon. Member rose on a question of privilege as did the Member for Bourassa. The Chair cannot tell in advance until he has heard something whether there is a question of privilege here. I, therefore, can say to the Hon. Member for Nunatsiaq (Mr. Suluk) that he has not raised a question of privilege with the Chair. Order, please.


Mr. Rossi:: Can I defend myself, Mr. Speaker?


Mr. Speaker:: No. Order, please. Order, please.
The Hon. Member for Bourassa raised a question of privilege. I am saying to him now, as I am saying to the Hon. Member for Nunatsiaq, that neither of them have questions of privilege.
The Hon. Member for Bourassa, if he wishes to check the record, will find that the Deputy Speaker gave him substantially more time on this matter than was just given the Hon. Member for Nunatsiaq.
Order, please. The Hon. Member for Bourassa may want to check the "blues". Therefore, the Chair still has a question on which it will be coming back to the House.

March 5, 1986
Petitions


POINT OF ORDER
Ian Deans: Mr. Speaker, I rise on a point of order. It is my understanding that, as a result of a fire, which took place this morning in the South Block, staff and Members who occupy those premises have been evacuated and that the building is not being occupied largely as a result of residue from asbestos being in the air.
Would you be kind enough, Mr. Speaker, to check with the appropriate persons to determine whether it is true that the security guards are being required to remain in that building without adequate breathing protection? If that be the case, could you ensure that protection be sought for them immediately, or see that they are removed to the outside of the building?


Mr. Speaker:: May I say to the Hon. Member that my understanding of the facts is at variance with his. I can assure him that nothing would be done which would put any of our employees in jeopardy. My understanding is that the issue is smoke, not asbestos, but I will check the matter.
I may say to all our Members, since the matter has been raised, that arrangements have been made so that all committees may carry on this afternoon even though that building is not available.



ROUTINE PROCEEDINGS


Mr. Speaker:: May I again advise the House that I require of all Members who are rising that they are prepared to certify to me today that the petitions they are presenting have been certified. Yesterday when I made that point, the Hon. Member who rose immediately presented a petition which had not been certified. The Hon. Member for Peterborough (Mr. Domm).


Mr. Bill Domm (Parliamentary Secretary to Minister of Consumer and Corporate Affairs and Canada Post):: Mr. Speaker I am pleased to present the attached 675 signatures which were collected by the United Electrical Radio and Machine Shop Workers of America in Peterborough. The petitioners in the federal riding of Peterborough urge the Government to take the necessary steps to cause gasoline prices in Canada to fall in line with the drop in the world price of crude oil.


Mr. Speaker:: That is certified.


Jean-Robert Gauthier: Mr. Speaker, I have a point of order. Maybe I could ask for some direction here. Many members of the Liberal Party have come to me with petitions that people signed prior to the new rule coming in. They have asked me how they can proceed with these petitions that do not meet the requirements of the new rules. I would like to have your assistance in helping to answer these questions because I have several dozen.


Mr. Speaker:: Let me simply say that some Members have come to me with that matter. The Chair is a little hamstrung on the matter since the Chair must live with the rules as they exist. I suggest the Hon. Member may have a matter he wishes to raise with his House Leader and through his House Leader with other House Leaders.
If the Hon. Member wishes to seek something by unanimous consent, he is free to do so, but he is asking what freedom the Chair has on the matter. The Chair, as far as I can tell, having examined the rules, does not have any flexibility or freedom in the matter.


Mr. Prud'homme:: Mr. Speaker-


Mr. Speaker:: Order. Order, please. Can I suggest, as I indicated a minute ago, that the proper procedure is that this be treated as a matter between House Leaders.


George Albert Proud: Not necessarily, Mr. Speaker.


Mr. Speaker:: Order, please.


George Albert Proud: I rise on a point of order, Mr. Speaker.


Mr. Speaker:: The Hon. Member for Saint-Denis (Mr. Prud'homme) on a point of order.


George Albert Proud: Mr. Speaker, I usually do take your direction as an indication of what we should do. Members sometimes sort out problems even before the House Leaders meet. If unanimous consent could be given right away today, that matter would be solved and we would dispose of all these old petitions and we could start applying the new rules.


Mr. Speaker:: The Hon. Member is seeking the unanimous consent of the House for what? That is my dilemma. I think Hon. Members know that. I think the way to leave this is for discussion among House Leaders. The Chair needs an Order of the House to know what to do.


Mr. Derek Blackburn (Brant):: Mr. Speaker, 1 have two petitions here from residents in my constituency. Both of these petitions have been certified as being in order. The operative words here are that these petitioners call upon Parliament to require the Government of the Province of Ontario to remove any restrictions which may have been placed on the police force of Metropolitan Toronto in regard to the laying of charges under Section 251 of the Criminal Code against the operators of the premises known as the Morgantaler Clinic.
March 5, 1986


Mr. Barry Turner (Ottawa-Carleton):: Mr. Speaker, I will indicate to you that these petitions have been signed as appropriate. I am pleased to present four petitions today. The first is signed by 82 persons, the second by 53, the third by 69 and the fourth by 57, all of whom live within my riding, some within the national capital region. They are very much opposed to the National Capital Commission's proposal to turn the Mile Circle into an embassy row.


Abram Ernest Epp: Mr. Speaker, I certify that this petition has been found acceptable. It is my duty to present a petition on behalf of constituents who are of the opinion that the operation within the City of Toronto of the Morgentaler clinic is an affront to law-abiding citizens. They call on the Parliament of Canada to require the Government of Ontario to remove any restrictions which may have been placed on the police force of Metropolitan Toronto in dealing with this.



NUCLEAR WEAPONS FREE ZONE ACT


Mr. Jim Fulton (Skeena) moved: for leave to introduce Bill C-264 an Act to declare Canada a Nuclear Weapons Free Zone.


Mr. Speaker:: Is it the pleasure of the House that the Hon. Member shall have leave to introduce the Bill?


Some Hon. Members:: Agreed.


James Ross Fulton: Mr. Speaker, I will be introducing several Bills today. This first one, an Act to declare Canada a Nuclear Weapons Free Zone is quite self-explanatory in its title alone.


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


John Barry Turner: for leave to introduce Bill C-265, an Act to amend the Canada Elections Act (sale of liquor).


Mr. Speaker:: Is it the pleasure of the House that the Hon. Member shall have leave to introduce the Bill?


Some Hon. Members:: Agreed.
Introduction of Bills


John Barry Turner: Mr. Speaker, I am pleased to introduced my first Private Member's Bill today. It is, as you said, an Act to amend the Canada Elections Act repealing Section 67 which prohibits the sale of alcoholic beverages during federal elections and federal by-elections. Canada's Chief Electoral Officer, the Canadian Restaurant and Food Association, and many small businesses will be very pleased as this will have a positive effect as well on our tourism industry. At the same time, it will expand the federal Treasury. I call upon the House to ensure that this Bill is agreed to by all sides quickly.


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


James Ross Fulton: for leave to introduce Bill C-266 an Act to protect and enhance the quality of drinking water in Canada.


Mr. Speaker:: Is it the pleasure of the House that the Hon. Member shall have leave to introduce the Bill?


Some Hon. Members:: Agreed.


James Ross Fulton: Mr. Speaker, this is a very important Bill and I am sure all Members of the House will want to have it passed very quickly in light of the problems we are facing with many of our drinking water systems across the country. The title is quite clear and I urge all Members to read the Bill. As you will see, Mr. Speaker, it is a nice short one.


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


James Ross Fulton: for leave to introduce Bill C-267 an Act respecting political freedom for federal Government employees.


Mr. Speaker:: Is it the pleasure of the House that the Hon. Member shall have leave to introduce the Bill?


Some Hon. Members:: Agreed.


James Ross Fulton: Mr. Speaker, the title of the Bill indicates my intent in introducing it. I hope all Members of the House will support this Bill in the very near future as I think public servants in Canada should long ago had this kind of political freedom.


[Stage Direction]
Motion agreed to, Bill read the first time and ordered to be printed.
[Stage Direction]
March 5, 1986
11210____________________________________
Introduction of Bills NUCLEAR LIABILITY ACT

James Ross Fulton: for leave to introduce Bill C-268 an Act to amend the Nuclear Liability Act (limitation period).


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


Some Hon. Members:: Agreed.


James Ross Fulton: Mr. Speaker, the title of the Bill is again somewhat self-explanatory. It is very important that the present limitations with regard to nuclear liability be dramatically changed. As we are observing in both Canada and the United States, the nuclear industry is slipping downhill pretty quickly. The entire issue of liability and the long-term storage of nuclear waste and how it is transported to the repositories should be dealt with by Parliament in the very near future.


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


James Ross Fulton: for leave to introduce Bill C-269 an Act to amend the Criminal Code (gun control).


Mr. Speaker:: Is it the pleasure of the House that the Hon. Member shall have leave to introduce the Bill?


Some Hon. Members:: Agreed.


James Ross Fulton: Mr. Speaker, I am quite confident that most Members of the House will soon be supporting this very wise piece of legislation which was overlooked by both the Liberals and the Conservatives, and perhaps even by a few New Democrats. There are some very serious problems with regard to search and seizure without warrant and also the accessibility of fire arm acquisition certificates in rural Canada. These are major oversights of which I am sure you are well aware, Mr. Speaker, which need to be remedied very soon for safe, honest gun handlers in Canada.


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

James Ross Fulton: for leave to introduce Bill C-270 an Act respecting the International Land Boundary between Canada and the State of Alaska.


Mr. Speaker:: Is it the pleasure of the House that the Hon. Member shall have leave to introduce the Bill?


Some Hon. Members:: Agreed.


James Ross Fulton: Mr. Speaker, I will try to keep my remarks very brief on this very important issue. I am sure you are aware that President Reagan and George Shultz have appointed Edward Derwinski as the chief negotiator on the Alaska-B.C. boundary. This goes back to 1903. I will not bore you with all of the details, other than to say that we lost an enormous chunk of our country in 1903, no thanks to the Brits who appointed Lord Alberton. Of course, the Americans took a very strong position on this.
It is important that we get this Bill passed very quickly. I am sure you have not forgotten that only 18 months ago the United States offered a piece of British Columbia for sale through the Secretary of the Interior.


Mr. Speaker:: Order, please. The Hon. Member should know that the length of time taken to read the summary should not exceed the length of time it would take to read the Bill.


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


Mr. John R. Rodriguez (Nickel Belt) moved: for leave to introduce Bill C-271, an Act to amend the Bankruptcy Act (priority of claims).


Mr. Speaker:: Is it the pleasure of the House that the Hon. Member shall have leave to introduce the Bill?


Some Hon. Members:: Agreed.


John R. Rodriguez: Mr. Speaker, the purpose of this Bill is to ensure that when an employer goes bankrupt, the employees are placed first on the priority list to protect their salaries and pensions up to $9,000 in preference to all other creditors.


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


William Henry (Bill) Domm: for leave to introduce Bill C-272, an Act to amend the Criminal Code (capital punishment).


Mr. Speaker:: Is it the pleasure of the House that the Hon. Member shall have leave to introduce the Bill?
March 5, 1986


William Henry (Bill) Domm: Mr. Speaker, it gives me pleasure to present this Bill for first reading. The Bill amends the Criminal Code regarding capital punishment. The Bill will be debated at the appropriate time, but its purpose is to impose the death penalty in all cases of first degree murder and, for the first time, incorporates acts of terrorism such as sabotage, hijacking and hostage taking, effectively making them subject to capital punishment as well.


Mr. Speaker:: Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


Mr. Speaker:: Order. Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


Mr. Speaker:: All those in favour please say yea.


Some Hon. Members:: Yea.


Mr. Speaker:: All those opposed please say nay.
Order Paper Questions


Some Hon. Members:: Nay.


Mr. Speaker:: In my opinion the yeas have it. Carried on division.


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

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Doug Lewis (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, questions Nos. 429 and 494 will be answered today.


Mr. Caccia: As a result of the cuts to the budget of the Department of the Environment made on November 13, 1984, what were the (a) titles (b) Environment Canada regions, in which studies were abandoned, truncated or not implemented?


Thomas Michael McMillan: Environment Canada studies affected as a result of the budgetary reductions made on November 13, 1984
(a) Study	(b) Region(s)* Affected
(i)	Canadian Wildlife Service studies related to:
Surveillance of toxic substances in wildlife on the Great Lakes (partially reinstated)
Monitoring contaminants in bird populations within the St. Lawrence Valley (abandoned)
Monitoring effects of agricultural herbicides and pesticides on prairie slough habitats and waterfowl (abandoned) Research on wildlife parasites and pathogens (abandoned)
Effects of forestry practices on wildlife (abandoned)
Research on transboundary wildlife populations-George River (truncated)
Impact of energy projects on wildlife habitat (abandoned)
Impact of industrial development on shorebirds of the Fraser River Delta (abandoned)
(ii)	Parks Canada-Canadian Wildlife Service studies related to:
Wildlife Research in National Parks:
Pine Marten reintroduction in Atlantic region national parks (truncated)
Fish management program (truncated)
Report on the Riding Mountain large mammals systems study (not implemented) Aquatic surveys and investigations (not implemented)
Waterton Lakes Biosphere Range study (abandoned)
Kootenay Bighorn Sheep study (truncated)
Ontario
Quebec
Western & Northern National Capital Region Atlantic, Ontario Western & Northern Pacific & Yukon Atlantic, Quebec Atlantic
Pacific & Yukon
Atlantic
Atlantic
Western & Northern Western & Northern Western & Northern Pacific & Yukon
(iii)	Environmental Protection Service:
Studies of federal and provincial landfill sites under the Waste Disposal Sites Program (studies of provincial sites	Atlantic, Western
abandoned; studies of federal sites will continue as required)	&. Northern
* The regions given above correspond to Environment Canada's administrative regions of Atlantic (Newfoundland, New Brunswick, Nova Scotia, Prince Edward Island), Quebec, Ontario, Western & Northern (Manitoba, Saskatchewan, Alberta, Northwest Territories), Pacific and Yukon (British Columbia, Yukon Territory) and also include the National Capital Region.

March 5, 1986
Order Paper Questions


Mr. Dingwall: 1.	Did the 1983 task force on the Canadian motor vehicle and automotive parts industry recommend to the Government to pursue a trade policy that would require all vehicle manufacturers in the Canadian market to make binding commitments comparable to those now made by the vehicle manufacturers operating under the Canada/U.S. automotive trade agreement and, if so (a) was this done and (i) if so, on what date (b) if not, for what reasons?
2.	Did the Government introduce a technology licensing program in the automotive parts industry and, if so (a) on what date (b) what does it cover?
3.	Does the Government provide incentives to encourage joint ventures that transfer foreign technological capabilities to Canadian automotive parts manufacturers and, if so (a) what are they (b) how do they work?
4.	Have incentives been created to encourage the development and expansion of the number of technological personnel in the independent Canadian parts industry and, if so (a) what are they (b) how do they work (c) on what date were they implemented?
5.	Did the Government, with or without the co-operation of the industry, conduct an analysis of the opportunities for expanded auto parts production in Canada and was a report made and, if so (a) what was the title of the report (b) on what date was it released?
6.	Did the Government follow the recommendations to shift the federal sales tax to the wholesale level and, if so, on what date?
7.	Did the Government reduce the general rate of tax to 8 per cent from 9 per cent as recommended by the task force and, if so, on what date?
8.	Has the preferential tariff rates extended to developing countries been limited to two-thirds of the most favoured nation tariff rate for automotive goods and, if so, on what date?
9.	Was the Industry, Labour Adjustment Program expanded and extended to the automotive sector for a period of five years and (a) if so, on what date (b) if not, for how long?
10.	Did the Government undertake to determine human resource aspects of changing conditions in the automotive industry and was a report made and, if so (a) what was the title of the report (b) on what date was or will it be released?
11.	Did the Government establish an automotive council and, if so (a) on what date (b) who are its members (c) what are their names, addresses and remunerations (d) how often has it met?


Mrs. Monique B. Tardif (Parliamentary Secretary to Minister of Regional Industrial Expansion):: 1. Yes. (a) No. (b)
The Government prefers to continue to encourage companies to voluntarily invest in Canada and work towards the achievement of auto pact status rather than impose a mandatory Canadian content regime.
2.	Since the publication of the task force report the Government has pursued, in collaboration with Automotive Parts Manufacturers' Association, a vigorous action program to seek joint venture and licensing opportunities with foreign producers. High level business missions have been dispatched to West Germany (September 1984), France (July, 1985), Japan (June, 1983, October, 1983, November, 1985), and Korea (November, 1985). So far, the results of these missions have been most encouraging and a number of joint venture and technology transfer agreements have been established.
3.	Yes. Under the Promotional Projects Program (PPP), incentives are provided to encourage Canadian companies to pursue industrial co-operation opportunities with foreign manufacturers. Canadian companies can also apply under the Industrial and Regional Development Program (IRDP) for capital and R&D assistance. Most Canadians parts companies
are aware of these programs and are taking advantage of them.
4.	On September 5, 1985, the Canadian Government implemented two labour training programs, the Skill Shortage Program and the Skill Investment Program, for the manufacturing sector at large. The Canadian parts industry has already started to take advantage of these programs. Details of the program are available from the Canada Employment and Immigration Commission.
5.	The Government is presently conducting a review of opportunities for expanded parts production in Canada.
6.	In the February, 1984 federal Budget, the Government followed the recommendation of the task force and shifted the application of the manufacturers sales tax to the wholesale level, effective March 1, 1984.
7.	No.
8.	Yes, effective May, 1985 for automotive parts and January 1, 1987 for motor vehicles.
9.	The Industry and Labour Adjustment Program (ILAP) was not extended beyond its legislated March, 1984 termination date, but additional support for the parts sector was announced in January, 1984 when $15 million was added to the ILAP budget, bringing total funding for the sector to almost $40 million.
10.	In conjunction with the motor vehicle and automotive parts industries, the United Automotive Workers, the provinces of Ontario and Quebec, the Canada Employment and Immigration Commission carried out a human resource study to evaluate the impacts of market changes and technological development on the human resource dimension of the automotive industry. The study was submitted to CEIC on January 13, 1986 and will be made public in February, 1986.
11.	This recommendation was accepted in principle. The constitution of the automotive council is currently under review.


Philip Derek Lewis: I suggest, Mr. Speaker, that the remaining questions be allowed to stand.


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


Some Hon. Members:: Agreed.


Philip Derek Lewis: Mr. Speaker, I ask that all notices of motions for the production of papers be allowed to stand.
March 5, 1986


Mr. Speaker:: Shall all notices of motions stand?


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Tuesday, March 4, consideration of the motion of Mr. Wilson (Etobicoke Centre) that this House approves in general the budgetary policy of the Government; and the amendment of Mr. Johnston (p. 11006).
John Edward Broadbent: Mr. Speaker, I want to begin by thanking the Hon. Member for Renfrew-Nipissing-Pembroke (Mr. Hopkins) as well as representatives from all Parties for taking the necessary steps to enable me to speak at this particular time. That is an example of the civilized behaviour we can all indulge in from time to time, and it is singularly appropriate in this House.
Having said that, I would now like to speak about the Budget, a very uncivilized act as Canadians have well understood since it was announced by the Minister of Finance (Mr. Wilson) last week. I want to begin by making the point that in my judgment Canadians are neither altruistic nor selfish. The ordinary people of this land, much as the ordinary people of any country in the world, have a sense of decency and fairness about them. Certainly it is the case in Canada that, in approaching an annual Budget, the average Canadian does not expect charity. The average person does not expect a handout. However, the average person does expect a sense of fairness. There is no question about that at all.
We in the NDP, under the chairmanship of our finance critic, had a task force on taxation travel to most parts of this country in recent weeks. We heard the voice of Canadians, men and women from all over the land. If there was one thing that came through loud and clear it was that the Budget ought to be fair. This same opinion was clearly to be seen in a Gallup poll question answered in recent weeks, when well in excess of 80 per cent of Canadians expressed their view that the prevailing characteristic of a Budget, and I repeat, should not be charity or something special for them either as individuals or for their region of Canada, but they overwhelmingly felt that a sense of fairness should prevail.
In particular, we know Canadians, wherever they may live, saw the Budget as being anything but fair and they hoped that the Minister and his cabinet colleagues would have seen the light and brought in a Budget last week to redress the unfairness of the past. Well, that Budget has to be seen as one of the most unfair Budgets with which this Parliament has ever had to deal. The Conservatives imposed a tax increase on Canadians in the fall of 1984. They imposed another big tax increase
The Budget-Hon. E. Broadbent
on the average family in the spring of 1985. Again in the winter of 1986 the Conservatives zapped the average Canadian. It is time this Government got off the backs of the ordinary people of this country.
I will not take a lot of time in enunciating the details, but the NDP, consistent with the social democratic traditions of this country, or indeed anywhere else, has taken the view that you not only criticize but you provide an alternative. Before the Minister brought in his Budget, the NDP finance critic, on behalf of my colleagues, outlined in considerable detail an alternative approach which ought to have been taken in 1986. It was an approach which would have dealt with the deficit and with maintaining essential programs, but overwhelmingly in its impact it would have dealt with Canadians' desire for fairness.
In the letter our finance critic sent to the Minister he specially showed how certain personal tax exemptions were not only unfair but counter-productive economically and ought to be removed. After analysis of a number of tax expenditures which provide not millions but millions of dollars to corporations, some of which are counter-productive economically, he proposed the removal of a number of them. Finally, he made certain suggestions about regulatory change. I want to underline that the net effect, had he listened to what we had to say, was an alternative way of raising $3.2 billion.
I am underlining, before I deal with the Government's approach to the question of fairness, our seriousness about providing an alternative and our recognition that there are certain serious structural problems to be faced by the Government of Canada. We offered an option to the Minister but did he listen to these proposals? Did he listen to the concerns expressed by the people of Canada since the last Budget? Not at all. Instead of closing key loopholes for the rich in Canada, instead of taking certain action to remove some of the tax expenditure programs made available for 15 years, the Minister went ahead and zapped the average family with another $350 tax increase. That brings the total to an amount in excess of $1,300 in tax increases since the Conservatives came to office in the fall of 1984. This is the largest tax grab in the history of Canada since World War II from a Government which promised to move in the other direction. It promised to give ordinary Canadians a break and I say it is time it started to live up to its promises.
We in the NDP have, since the Budget came down, attempted to make the case for fairness. We have tried to point out just how unfair and unreasonable this $1,300 burden is. Along with my colleagues, I detailed a complete list of how we reached the $1,300 figure. When I was away from the House last Friday the Minister challenged our figures. He said they were wrong. I came back on Monday and sent him another detailed breakdown. I received no comment in the first 24 hours so I sent a note asking him if they are wrong what is wrong. I got back the note that I have before me. It was followed by a telephone conversation as well with the Minister of Finance. 1 want to share this information with the House and with the people of Canada.

March 5, 1986
The Budget-Hon. E. Broadbent
The bottom line from the Minister of Finance is not that he is challenging our figures of $1,305, the bottom line is he is saying the Liberals made him do it. I want to say to the Minister of Finance, he had an option. Neither the Liberals nor the Devil made him do it, he had a choice and he should have given the fairness the people of Canada wanted.
The first point the Minister of Finance made about challenging our figures is that he said the petroleum compensation fund charge was one he had to bring in. 1 have checked and there is no statutory requirement for that at all. There is nothing in the legislation that says that the Minister of Finance had to increase the price of petroleum in line with the legislation he inherited. It was a Government decision, it was a policy decision. Had he wanted additional revenue, and that was not even a requirement, he could have done it by a fairer method than levying a flat tax with an increase. He could have done it out of general revenue. That, at least, would have been fairer. The key point I want to make is that he was not required by law to do it. He did it and it was a Conservative choice.
The second point the Minister made in reply, confirmed in a telephone conservation last night, and I quote: "The UI change was less than what people expected". Would you please note that? That was his first point. The change they made in increasing charges on ordinary Canadians, unemployment insurance costs, was less than people expected. He elaborated on that by saying "based in part on statute". I agree with the Minister in what he says there. About half the unemployment insurance increases since the Conservatives came to power were the result of automatic changes built into the unemployment insurance legislation. That was a small part of it. In addition, they jacked up the rates paid by men and women working all across Canada well beyond what was required.
The third point is the gem, and that concerns the very regressive federal sales tax increase. The first one was enforced when the Conservatives came to power in the fall of 1984. Canadians will recall, and I am sure all the Conservatives in the House will recall very vividly the election campaign when not only the Minister of Finance, then in opposition, but the Prime Minister (Mr. Mulroney), then Leader of the Opposition, said that this tax that Marc Lalonde had announced when he was Minister of Finance, scheduled to come in the fall of 1984, was a regressive tax. It was unfair to ordinary Canadians, and it would be a stab in the back of the economy. It would have a recessionary impact. They said all that before the election. They said it was bad and they campaigned against it. When they came into office, in fact about the first financial decision they made was to zap Canadians with this federal sales tax increase which they had campaigned against.
The Minister of Finance said to me in this note: "The 1 per cent sales tax charge was proposed by Marc Lalonde". Well, isn't that touching? Canadians will be reassured to know that. All that Marc Lalonde has to do is propose something to be done and the Minister of Finance will do it. The Liberals made him do it. He promised the Canadian people in the campaign
he would not do it and after he got the majority he should have kept that promise instead of implementing a regressive Liberal measure.
There is the sum total of the Minister of Finance's reply. The people of Canada should note he has not challenged our figures. He has not said that $1,305 is wrong. In fact, we left out some taxes of which we have since become aware. The real tax bill is in excess of $1,305. All the Minister of Finance is trying to do is to pass the buck elsewhere. I say to the Minister what he said on budget night, stealing from Harry Truman, in this case the buck stops on his desk. He is the responsible Minister.

Mr. Speaker, we must also consider the impact of the Budget on poor people, middle-income Canadians and the rich. The 3 per cent surtax applies to one and all, rich or poor. It is an unfair treatment because taxpayers' incomes vary widely and each one should contribute according to his or her ability to pay.
The compensation measures are inadequate. For instance, the sales tax credit refund does not compensate at all for the huge tax increase which low and average income Canadians must pay. In 1987, the tax load of the average family will be heavier still, whereas a rich family-with a $100,000 income for example-will benefit from a reduction of more than $300. That is the kind of justice we get from the Government of Brian Mulroney and Michael Wilson. It is the exact opposite of justice.
Mr. Speaker, the Conservatives go even further. According to an article that appeared in the Montreal Gazette last Saturday, the Government has prepared a strategy for eliminating the surtax on the income of the average taxpayer in 1988.
Why should average Canadian men and women have to wait until 1988 for a reduction, when the rich can get rid of their surtax in 1987?
The Conservatives are going to wait for an election year to give the average taxpayer a present and butter him up. If the Conservatives can afford to eliminate the surtax on the rich in 1987, why not eliminate the surtax for everyone?
Mr. Speaker, that is Conservative justice: benefits for the rich first, and maybe later for the rest of us. That is what is happening.


John Edmund Parry: Right on!


John Edward Broadbent: The third aspect of the question of fairness that I want to discuss in my comments this afternoon is the division of responsibility for taxes in Canada that exists, or ought to exist, between corporations in our land and individuals. In the New Democratic Party we believe in a strong and viable creative private sector. We want corporations to provide jobs for men and women. We want them to be innovative and expanding in
March 5, 1986

terms of markets around the world. In the New Democratic Party we say that when corporations are making money and profits they have the same obligation to pay their share of taxes as all other Canadians. That is the fundamental point.
If you look at what has happened in our country since 1950 the statistics are alarming in their signifigance. In 1950, just five years after the Second World War, there was a distribution of fifty-fifty between individuals in Canada and corporations in terms of the tax burden. In the last 35 years the share of the tax burden paid by individuals, ordinary families all over our land, has been continually going up and the share paid by corporations, which are making profits, has been continually going down. Before this Budget was brought in the last statistics that we had showed that the share of taxes paid by corporations in our country had dropped to 20 per cent and that paid by individuals had increased to 80 per cent. That, in anyone's terms, ought to be seen as an unfair distribution of tax burden.
During virtually the whole period since he has had the responsibility as Minister, the Minister of Finance has said in reply to questions from many of my colleagues that he would be looking at the corporate tax structure. During last year he would nod his head, smile and tell Hon. Members that they had interesting suggestions to which he would give serious consideration. I remember when he said: "The Hon. Member for Oshawa (Mr. Broadbent) will be happy when he sees the Budget. He will see the reforms he is talking about and the corporations will begin to pay their share". What is the reality? We cannot be facetious about it because there are many millions living in poverty in this rich land of ours. We also know that many families living in poverty continue to pay taxes.
I believe Members on all sides of the House know that if we had a sense of fairness and a serious desire for reform of the personal and corporate tax system, no person living in poverty should be paying taxes at all in Canada. This can be accomplished. It has been done in Scandinavia and many other countries in the world. It is time that it took place in Canada as well.
The question of sharing the tax burden does not involve simple cold, analytical and technical points, it is a subject that has a direct bearing on the life and experience of our citizens.
Many of us hoped to see progress when we listened to the Minister of Finance talk about serious corporate tax reform during the past year. Instead, we saw some trickery, a slight upward shift of the tax burden on corporations for the coming year. Furthermore, in 1987, individuals will pay $5.5 billion more in fiscal year 1987-88 while corporations will actually get a tax reduction. The net effect is that for the first time in Canadian history, individuals in Canada will be paying more than 81 per cent of the tax burden while corporations will drop below 20 per cent. That is unfair, it is a shame and a disgrace. The people of Canada will not put up with it much longer.
The Budget-Hon. E. Broadbent
Having regard to the effect of the Budget on unemployment, the projections show virtually no change at all for the next two years. There will still be a million unemployed. As to the effect of the Budget on farmers, some of our Members have already indicated that they get nothing from the Budget except a fund to encourage them to move off the farm. Regarding the effects of this on youth, we see the abolition of a Department which ought to be doing something for youth.
When one considers the effects of the Budget on the average family, no matter from what part of the country, there is only one conclusion that can be reached. It is that the Conservative Party has no sense of fairness. Those in need are forgotten, while those who have get more, and the majority in the middle will have to pay the bill. That is the sum of Conservative justice which just is the opposite to the idea of justice and fairness held by ordinary Canadians.
I want to serve notice on the Government that the New Democratic Party shares the sense of shock and dismay of the ordinary family about this Budget. I see that a Conservative Member is laughing. I hope he goes back to his riding to sit down with an average family there and explain why they should be paying $1,300 more while the rich person pays less and corporations get a tax break.
While Conservatives may laugh about the most horrendous tax increase in modern history, and while they may remain indifferent in their concern for the average family, we are not indifferent and we will be travelling throughout the country in the next week to speak to Canadians in different parts of our land to deliver the message that there is one Party in the House of Commons that cares about their concerns in tax matters, the New Democratic Party, and we will do everything we can to stop these regressive tax measures from becoming law.


Mr. Deputy Speaker:: For questions or comments, the Hon. Member for Chicoutimi (Mr. Harvey).


Mr. Harvey:: Mr. Speaker, we cannot leave unchallenged an intervention such as this.
The Leader of the New Democratic Party (Mr. Broadbent) should normally convey truth and objectivity. I suggest we have just seen the best evidence of... and if we were to give awards for raving and demagoguery, he would certainly be our first choice.
They will take every opportunity to rave about fundamental principles and start rhetorical debates. They will try to bring us back to the eternal conflict between the haves and the have-nots. Thank Heaven, Mr. Speaker, with our second Budget, we will be able to raise between $3 and $4 billion over the next two years to finance our most progressive programs, especially in the area of employment. We are not going to get this money from the poor or the disadvantaged; for the first time, we are going to get it from the affluent who can most afford it. It is the first time that the federal Government levies

March 5, 1986
The Budget-Hon. B. McDougall a minimum tax on the rich. It is also the first time that a federal government tries to close some tax loopholes.
Mr. Speaker, I think that the Liberal party and the New Democratic Party are the only two groups in Canada which are still interested in this debate. What really matters and what interests Canadians is the Government's will to achieve national reconciliation and encourage the economic recovery. That is what Canadians are interested in.
I have no question to direct to the Leader of the New Democratic Party, for as far as I am concerned, this debate has come to a close and I think everything is fine, Mr. Speaker.


Hon. Barbara McDougall (Minister of State (Finance)):: Mr. Speaker, I am pleased to rise today to discuss the Budget presented by my colleague, the Minister of Finance (Mr. Wilson). I certainly cannot let the allegations of the Hon. Member for Oshawa (Mr. Broadbent) go unchallenged.
He commenced his remarks by speaking of the need for a civilized Budget. The word "civilized" also means responsibility. This Government has been responsible.
The Hon. Member also stated in the House that every Canadian knows that when you borrow money you have to pay for it. Canadians and the Government recognize that the debt in this country has been rising at 20 per cent to 25 per cent per year for the last decade and that we must pay for that debt. We have always told the Canadian taxpayers that everyone would have to help clear this burden of debt. We have asked Canadians for their help as we accept our responsibility in clearing this debt.
The Hon. Member suggests that our Budget builds up a burden on the backs of ordinary Canadians. We did not place the burden on the backs of ordinary Canadians, we are trying to remove that burden which was placed there by the former Government. We have talked openly with Canadians about how we should do that and we have asked Canadians to pay some of the share of that. However, we have done it in a way that is fair and balanced and in a way that by the end of this decade will mean that Canada is a better place to live for ordinary Canadians and their children.
Members of the NDP make much of fairness. My colleague, the Minister of Finance and the Government have contributed more to fairness than any Government in my lifetime. Let me talk about some of the things we have done.
First, we have closed a lot of tax loopholes. My colleague, the Minister of Finance, has mentioned that many times in the House, but I believe that Members on the other side are not listening and are failing to applaud us for measures that we have introduced which they obviously think are good ideas. We are closing those loopholes, eliminating the special scientific and research tax credit, closing the loophole for limited partnerships, closing the loophole for income splitting in highincome families, imposing the minimum tax and cutting the dividend tax credit and the carve-outs. We have taken all those measures consistently over the last year and a half through two Budgets and an economic statement. All those measures are fairness measures. They are measures that Canadians applaud and measures that help ordinary Canadians. There is no question about that.
Let us go on to some of the specific things we have done in this Budget in the way of fairness. Yes, we did raise the federal sales tax but the Minister has taken the initiative in the Budget for a review of that tax in what we have always agreed is a less than perfect system. In the meantime, we have introduced an offset for low-income Canadians which is a new measure in this tax field, an indication that we want to help the people who are most in need. If Canadians are fair, and I believe they are, that is another measure that we think they will applaud.
In the last Budget my hon. colleague introduced the child tax credit, something else that helps low-income Canadians, and this year he has made that tax credit for children and families refundable earlier in the year so that Canadians do not have to wait until income tax time to claim that credit. That means that Canadians do not have to turn to discounters in the way they did before. In addition, we have tightened up the rules on discounters to the benefit of ordinary Canadians.
Let me just tell the House what some of these things mean to the ordinary Canadians to whom the Hon. Member was referring. A woman in Vancouver, talking about the prepayment of the child tax credit, said that for her it means she can buy her child some Christmas presents instead of just a snowsuit or a pair of boots. She said she could buy her some toys or some books. The Executive Director of the Canadian Council on Social Development said about the refundable sales tax credit that it is an important initiative. The President of the Union of Senior Citizens of Ontario said that from the point of view of a senior he could not be anything but pleased.
I know a lot of ordinary Canadians and those are the kinds of comments on this Budget that I am hearing. Those are the kinds of comments that are encouraging us in our view that balance and fairness is enormously important and that we have met that objective in our Budget.
Let us deal for a moment with the Hon. Member's suggestion that taxes have increased $1,300 per year for an ordinary family. I am somewhat bemused by this calculation that members of the NDP have been waving around in the House today. In order to be paying that increase in taxes one would have to be making $50,000 to $70,000 per year. I would be very interested in knowing if that is the view of Members of the NDP of the average income in Canada. They have also ignored a number of things in making that calculation. They have ignored the fact that the surtax in 1986 is only on for half a year. They have over-estimated the sales tax increase. They have ignored the April starting date of the last sales tax increase. They have ignored the broadening of the sales tax base. They have assumed that the $200 increase in oil costs results totally and exclusively from the Budget. The effect of
March 5, 1986

the normal wage growth on unemployment insurance premiums has been counted as a tax increase.
I know a little bit about numbers and how to make them say an awful lot of things. What I know is that this Government has told Canadians the truth. We have not tried to manipulate the numbers in a way that would mislead average and ordinary Canadians. Our objective is to make this country a better place for ordinary Canadians. We want people to be able to buy houses, to rent houses and to have jobs. Those are the measures that have been incorporated in our economic agenda and in two Budgets.
Let me throw in some other numbers if we are talking about numbers. Taxes in this Budget are up by perhaps 50 cents per day for average Canadians. Let us make an adjustment. Let us suppose they are a little higher than that. The purpose of a balanced Budget is to bring down interest rates. Excuse me, Mr. Speaker. This is the Ottawa winter cold. I have been aggressively spreading it all over the country.


Mr. Keeper:: It's those tax increases.


John Napier Turner: Choking on the Budget.


Barbara Jean McDougall: Those tax increases are going to help us bring down interest rates. Let us talk about the ability to buy a house and about mortgage rates. Mortgage rates on a five-year mortgage have already come down during our administration by two and a quarter points. That means on a $50,000 mortgage a saving to the average family of $3 per day. That is before taking into account the very real possibility that by getting control of our deficit this year and reducing our debt burden again, we will be able to bring down interest and mortgage rates even further. That is what we are talking about when we talk about fiscal responsibility, when we talk about civilized behaviour, when we talk about fairness and when we talk about balance. Those are the things that Canadians care about. Those are the things that we are introducing.
Corporate tax revenues have been spread across a broader base. By closing all those loopholes, corporations will be paying more tax, not less. Corporate taxes, as Canadians know, go up and down with profits. They are a little hard to predict, but I can tell the House that as a result of this Budget corporations will be paying more tax, not less. There is a balance between corporate and personal tax revenues.
I do not believe that this Budget or our economic policy can be described as a disaster as the Hon. Member suggested. There are 580,000 people working in Canada who were not working in September 1984. That is the best help we can give to Canadians. That is what we want to do for Canadians and their children. We want them to be able to work, to buy homes, to educate their children and to have a secure old age. If that is not a fair Budget, I do not know what is.


Some Hon. Members:: Hear, hear!


Mr. Deputy Speaker:: If there are no questions or comments, we shall continue debate.
The Budget-Right Hon. J. N. Turner


John Napier Turner: Mr. Speaker, I am sorry the Minister is suffering from a cold, but even if she had been in better voice and better health, she would have undoubtedly choked on that Budget before she finished the speech.
I am pleased to take part in this debate on the second Budget put forward by this Government. Our Party has already put forward excellent speakers including our critic, the Hon. Member for Saint-Henri-Westmount (Mr. Johnston), and the Hon. Member for Trinity (Miss Nicholson). They made excellent contributions, and I congratulate them sincerely.
I suspect that we will not hear the Prime Minister (Mr. Mulroney) speak in the House on this Budget, for the second time in a row. He will be out trying to sell a lousy product across the country. I cannot remember a Prime Minister not participating in a budget speech.


Mr. Friesen:: Oh, come on, John.


John Napier Turner: I cannot remember a Prime Minister not participating in a budget speech. Although I appreciate the courtesy of a few Ministers being here, I want to say that I had the honour of bringing down five successive Budgets in Canada.


Some Hon. Members:: Oh, oh!


Jean-Robert Gauthier: And they were successful Budgets, too.


John Napier Turner: I will deal with that subject in a minute, but I remained in the House every minute of the budget debate to listen to what Hon. Members on all sides of the House had to say about it. We are living in an electronic age, but there has to be some courtesy in this place. We are elected by the people of Canada. There is nothing more important for Parliament than the spending of money and the raising of money. The Minister should be here, and we should have a fuller House and a fuller Minister to listen to what we have to say. They were very few Members present to listen to the Hon. Member for Oshawa (Mr. Broadbent) and there are very few Members and Ministers here to listen to the Leader of the Opposition respond to the Budget.
The Prime Minister will be travelling the country with the Minister attempting to convince Canadians that the Budget is fair. He will find, as most Canadians are coming to realize, that the Budget is not fair. We will take this Budget as the second phase of the Budget last May. Phase one was the Budget of last May and phase two is the Budget of February. Together those two Budgets constitute the greatest, cumulative, hidden, regressive tax increase in Canadian history. They attack the average Canadian family earning between $15,000 and $40,000 in a brutal fashion. We have reached the stage, as the Hon. Member for Saint-Henri-Westmount put it, where the person between 35 years and 55 years old finds himself or herself in a position, with the added burden of tax slapped upon him or her, that it is impossible to improve one's state of

March 5, 1986
The Budget-Right Hon. J. N. Turner
life or that it is impossible to maintain a standard of living because the cash flow available to the average Canadian has been absolutely crippled under the two Budgets taken together.
Yes, the public debt is important, but the numbers given and ordained for the Budget-and the figure arrived at was $29.8 billion or $29.5 billion, depending upon which part of the Minister's document one reads-were not determined by the Minister. Those numbers were determined by Wall Street. They were determined by the international market. They were determined by his business friends here, in the United States and abroad who had lost confidence in the Prime Minister and the Government.
My colleagues and I put questions to the Minister of Finance (Mr. Wilson) when the dollar started to fall three or four weeks ago. We asked the following questions: What will the Minister do? What is the Minister's policy? What is the Government's policy? Is it to sustain the dollar at the expense of interest rates, or is it to allow the dollar to follow market forces? The Minister would not tell us, and day after day the confusion on the markets compounded. It was not a bunch of speculators in Chicago; it was people across the country and around the world who could not determine the direction of the Government. The Minister was finally forced to say in response to one of my questions about a week or so before the Budget: "Hold on, wait for the Budget. Everything is going to be all right. We will stabilize the dollar when the Budget is brought down".
This was a Budget determined by outside, external forces. It is the first time in the history of the country that a Minister of Finance has been forced to tailor the economic structure and to fashion the fiscal stance of the country by forces over which he had no control. The Government delivered a Budget to Canadians which was not prepared for Canadians; it was supposed to please foreign masters.
Despite the tough talk of the Minister of Finance and the Prime Minister, despite the two Budgets which attacked lower and middle-income Canadians, the Government really cannot show that it has reduced the deficit at all. The Canadian Press, in a story published today in many Canadian newspapers, showed what I tried to demonstrate in the House on several occasions. The deficit inherited by the Government was $32 billion. The deficit is now 29.5 billion. We rather doubt those figures because we do not believe the assumptions upon which the revenues and expenditures are projected. It was $32 billion 18 months ago and it is $29.5 billion now. That is not much of a record, that is not much of an achievement, but, as I said, the numbers were determined by forces outside the Minister's control. This is not a Budget for Main Street, Canada; this is a Budget for Wall Street, U.S.A.
The Minister has undertaken an unprecedented selling job around the world. I can remember the days when the Minister of Finance would rise in the House, table his Budget, table the ways and means motions and basically allow for the Budget to speak for itself. We have become more public relations oriented since those days. I suppose I started the practice of the morning breakfast after the Budget with the financial correspondents and then the lunch with members of the Press Gallery, but I did not feel I had to traipse across the country to sell the Budget. My God, I did not have to send my Deputy Minister to Los Angeles, to Chicago or to New York. The Minister will probably be sending his Deputy Minister first class, with a bunch of officials, to Europe next week to see what they can do to calm down the markets.


Mr. Gustafson:: You didn't dare.


John Napier Turner: I heard the interjection of the Hon. Member opposite. We did not have to worry about a dollar hovering on the brink of 69-70 cents. We had a dollar at $1.02, $1.03 and $1.04, and nobody told us what type of Budget to bring down.


Some Hon. Members:: Hear, hear!


John Napier Turner: As I said in the House yesterday, the Minister is on a string, being manipulated; a puppet, a marionette-
[ Translation]
-a puppet, Mr. Speaker, a puppet of the international markets. This is not a Budget for Canadians. This is a Budget to please international finance and international business. And even international business is not satisfied. Since the Budget, the dollar has fallen again, and the Minister has failed to gain the confidence of the markets. Businessmen look at the figures and they feel that the Minister's figures and projections are not valid.

They looked at the numbers carefully in Toronto, Vancouver, Montreal and Edmonton; they looked at the numbers in New York; they looked at the numbers in London, England and they found that the numbers were not realistic. For example, the world price for oil was projected to be $22.50 U.S. per barrel this year, and the price this morning is under $12 U.S. per barrel. Maybe the Minister has some inside information from Shiek Yamani or from Saudi Arabia about which we know nothing. My colleagues tried to elicit information from the Minister of Finance this afternoon and from his colleague, the Minister of Energy, Mines and Resources (Miss Carney). The difference between $12 U.S. and $22.50 U.S. per barrel in terms of revenue projections is over $1 billion. On that assumption alone the Budget is out by $1 billion.
The Hon. Member for Cape Breton-The Syndneys (Mr. MacLellan) pointed out very carefully this afternoon in Question Period that it would be bad enough if the Minister's projections were merely wrong, but the Minister's own document disagrees with itself. On page 20 of Towards A Sustained Expansion: Canada's Economic Prospects 1986-1991 released with the Budget, the Saudi Arabian price for light crude oil is given for calendar year 1986 as $23.88 U.S. If we turn ahead three pages in the same document, we see that the price will be $22.50 U.S. over the remainder of 1986. The Minister has repeatedly stated in the House that the $22.50 projection is for fiscal 1986-87 which has not yet started.
March 5, 1986

Yesterday he said that he would stick by the $22.50. Will he also stick by the $23.88? Is one the calendar year and one the fiscal year? How does he reconcile them? Whom do we believe? Do we believe the Minister or his own budget document? It is small wonder that when the Canadian business community looks at the budget documents it wonders.
Let me talk about another projection, Mr. Speaker. Interest rate projections are not realistic either. It is 9.5 per cent against today's rate of 12 per cent or 13 per cent depending upon what term of obligations you are looking at. For every 1 per cent difference in the interest rates there is an expenditure increase of $ 1 billion. For every percentage variation of 1 per cent there is a projected error of $1 billion.
The cuts in expenditures are an illusion. The numbers for the deficit reduction are not credible. Wall Street is not satisfied because the Minister, instead of cutting expenditures, is raising taxes. The business community has come to this conclusion here and abroad. The deficit was not reduced by cuts in spending but by putting the burden primarily on the backs of ordinary Canadians with higher and higher taxes. The story in the February Budget is the same as what we heard in May.
The Minister even gets low marks from President Reagan's advisor on Government spending cuts. Peter Grace was in Toronto the other day and said he was surprised that the Budget goes at the deficit through tax hikes and not through expenditure reductions.
The pressure on the Canadian dollar continues. There has been a massive intervention by the Bank of Canada. The Department of Finance figures released earlier today show that a record $2.6 was borrowed last month to add to its dollar defence funds to build up international reserves. Of that money, $1.3 billion was paid by the Bank of Canada in purchasing Canadian dollars to defend the level of the dollar. That is the largest borrowing in a single month in Canadian history and the largest intervention in a single month in Canadian history.
The debt of the Canadian Reserve Fund has now been pushed to $4,265 billion, almost as much as the money held in the fund. I can remember when the Minister of Finance (Mr. Wilson) stated to Mr. Lalonde when he was Minister of Finance that we had a dangerous situation when borrowing against the fund was only half the level of the fund. Now we have total borrowing on our reserve equal to the amount of the reserves. That is a very fragile, vulnerable situation. [Translation]
Mr. Speaker, if you add the figures for increases in personal income tax from the May Budget to the figures released on February 26, we see that in less than nine months, the Minister of Finance and the Prime Minister have managed to saddle us with an additional tax burden of $12.5 billion in personal income tax alone. For the next three years, the Minister of Finance has increased direct and indirect taxes by
The Budget-Right Hon. J. N. Turner $24 billion. During the same period, corporations will be subject to an increase of only $1 billion. Over the next three years, the individual taxpayer pays $24 billion and corporations only $1 billion. Is that justice?
The average family will suffer, and those who are rich enough to have money to invest will be eligible for the capital gains tax exemption. They will receive a lifetime exemption of $500,000, which means $125,000 in cash. The tax burden is not fairly distributed. The rich continue to benefit from the capital gains tax exemption, while low and middle income families remain the favorite prey of the Conservatives.

We have gone through the cumulative effect of both budgets, the May Budget and the February Budget, over four years, based on the Department of Finance documents of the personal tax increases, the sales tax increases and the capital gains exemptions; in other words, the works.
If you have a family of four, one income earner, earning $15,000 a year your percentage cumulative tax increase in four years is 23 per cent. If you earn $35,000 your four year cumulative tax increase is 13 per cent. If you earn $50,000 a year that total four year tax increase is 8 per cent. What about a person earning $100,000 a year? That person has a 1 per cent increase. What about a person earning $200,000 a year? That person has a 1 per cent increase. So if you earn $15,000 a year, your total increase is 23 per cent out of those two Budgets while a person earning $200,000 has only a 1 per cent increase. Everybody in this Parliament-everybody-should know that that is not fairness, that it will not sell. Canadians do not like it. That is not the way to share the burden of the public debt. You do not do it like that.


Some Hon. Members:: Hear, hear!


John Napier Turner: Let me give you more figures for the record, Mr. Speaker. We want to illustrate why this Budget is not fair.
A single parent with two children earning $15,000 a year will pay $248 more in taxes in 1986 as a result of both budgets. The same single parent earning $20,000 a year will pay $418 more in 1986. A retired single person, most of whom are women, earning $10,000 will pay $160 more in taxes in 1986. The same person earning $20,000 a year will pay $336 more in 1986.
Yesterday's issue of The Financial Post, March 4, 1986, includes some best case investment income assumptions.


Mr. Malone:: Read the whole paper.


John Napier Turner: An individual with an income of $40,000, based on a salary of $35,000 plus $4,000 in dividends, plus interest of $1,000, faces a tax increase from 1985 to 1987 of 9.4 per cent. An individual with an income of $150,000, that is to say based on a salary of $100,000, $15,000 in dividends, $5,000 in interest and $30,000 in capital gains in the same period has an over-all tax decrease of 1.4 per cent.

March 5, 1986
The Budget-Right Hon. J. N. Turner
What if you earn $40,000? you are up there with a 9.4 per cent increase. But what if you earn $150,000 a year? You have a decrease of 1.4 per cent. That is equity? That is justice? That is fairness, Mr. Speaker?
There is one rule of salesmanship; if you are going to sell something, get yourself a good product. This Budget is a lousy product. It is an unfair product. It will not sell. I do not care whether the Prime Minister gets on a bicycle and rides from one end of this country to the other, it will not sell.
Take the application of the federal surtax, Sir. If you earn $40,000 a year, the surtax goes up 89 per cent. It goes from $103 in 1986 to $195 in 1987. That is an increase of $92 or 89 per cent. But let us take a look at the person who earns $150,000 a year. His surtax goes down 62 per cent, from $2,451 in 1986 to $941 tax in 1987. The person with an income of $150,000 by reason of the re-organization of that surtax, gets an additional cash flow of $1,500. that is not going to sell, Mr. Speaker, not when people understand what is really in the Budget, not if the people of Canada listen to what is being said about the Budget and examine it.
Let us take a look at the sales tax. My colleague in the House of Commons, the Hon. Member for Oshawa, dealt quite fully with the sales tax earlier this afternoon. It has gone up 3 percentage points since the Conservatives took power, from 9 per cent to 12 per cent. In the last Budget the Government broadened the base of the sales tax to include anything that moves. Health care products, medicine, soap, shampoo, candy and pet food were included. I tell you, Mr. Speaker, every increase in the sales tax with that broadened base is worth $1 billion; a hit against the Canadian taxpayer. That is the most regressive tax of all. It hits hardest on the low-income families, it is a consumption tax. Those with less disposable income bear the burden of that tax.
The $50 sales tax rebate is practically a gimmick. It is meant to try to convince low-income Canadians that the Government is excluding them from this tax. But it does not come close to being a reimbursement for the increase in the gasoline tax, cigarette tax, alcohol tax, the tax on refrigerators and televisions, the increase in the sales tax on those commodities which are necessary to furnish a home. The bottom line is that low-income Canadians pay more, and a lot more.
It does not take a genius to raise taxes. But it sure takes guts to get at the expenditure side, to make hard choices and to eliminate some of the programs which go to help the rich and powerful. It sure takes a little more courage than what is being shown by the Prime Minister and the Minister of Finance in this Budget. They have been touring the country telling Canadians that there is fairness enshrined in these two Budgets. I think I have illustrated here in the House of Commons that the figures show that this is not a budget of equity. It is not a Budget of fairness.

The Budget is not fair. The burden placed on Canadian taxpayers is not an equitable one.
Mr. Speaker, here in the House I have often spoken about the crisis situation in which our young people find themselves. We are about to lose half a generation. When the last Budget was brought down in May, we on this side of the House protected our pensioners. Now, in the Opposition we have a duty to protect our families and the entire middle class. I am talking about people between the ages of 35 and 55, earning between $15,000 and $40,000 a year. These families are being hammered and they are being ignored, Mr. Speaker. It has become almost impossible to maintain a reasonable standard of living. It is impossible to improve the quality of one's life.
It does not take a genius to increase taxes, and the Conservatives have proved this once again.

We were obliged to protect our senior citizens from the last Budget. We are going to have to fight to protect the average Canadian family from this Budget. People between the ages of 35 years and 55 years who earn between $15,000 and $40,000 are the ones who will be hit right between the eyes. It is becoming impossible for the average Canadian family to maintain a reasonable standard of living. It is becoming impossible to improve one's quality of life in the face of this attack by the Government.
For the second time in two Budgets-and I raised these questions earlier in the House-the Conservative Government has abandoned the philosophy of regional equality. Spending in the economic and regional development envelope will be cut from a level of $14.7 billion, determined in 1984-85, to a level of $9.8 billion by 1987-88. That is a reduction of 38 per cent. This is from a Prime Minister who said he was in favour of regional equality. The Government brought in a new wave of deception when it announced the Atlantic Enterprise Program. It pretended to encourage the launching and expansion of businesses in Atlantic Canada and the Gaspe with Government loan guarantees, but let us look at the fine print. Only big corporations will be eligible because the minimum eligible loan is $250,000. The Program neglects those who really need the help. Only rich friends of the Tory Government need apply.

And speaking of the people of the Gaspe, why aren't the people on the North Shore eligible, or the people in the Saguenay-Lac-Saint-Jean area? Or the people from Abitibi? There is something wrong here.

We took the time to examine several areas of our economy in several important communities which have not even been mentioned in the Budget. With respect to fishermen, in November of 1984 the Minister of Finance cut $40 million from the Fisheries Budget. In May of 1985 another $25 million was cut from the Fisheries Budget. We now have
March 5, 1986

increased fees on weather reports and dockage, and of course in this Budget the sales tax has been increased again. The price of fuel for fishermen has increased once more. There was not a word about mining or forestry. There was not a word about the major industries in my province of British Columbia.
Except for minor fine tuning on flow-through shares, the Budget virtually ignores the resource sector. Where are those promised tax changes to encourage exploration and development in the mining sector? Where is the proposed increase in funding for the Canada Wildlife Service? Where is the forestry internship program which was promised by the Government?
I see the Minister of State for Science and Technology (Mr. Oberle) here. I have known him a long time. He represents the centre of the interior forest industry in British Columbia. He must feel sick. He must feel at the least very disturbed. I think if I were he I would say to my constituents: "I'm busy learning my new portfolio here", and I would stay away from Prince George for a while until after the Budget settles down.
There is no reference in the Budget to the oil and gas industry. The Minister of Energy, Mines and Resources knows-she is sitting here and I am grateful for that-that the price this morning was $12 U.S. per barrel. She knows that a lot of projects will now be halted and a lot of development will be curtailed, abandoned, suspended. A lot of the supporting industries-the drilling industry, for example-will be in real trouble. Even more, she knows that our objective for self-sufficiency is being put in peril and jeopardy. I would hope that before long she will rise in this House and give us her recent thinking as to how the oil and gas industry should meet-in terms of those jobs she promised us-the current situation of $12 a barrel U.S.
We had commodity board loans introduced in the Budget. That is an interesting concept. The problem is that very few farmers will qualify. First, they must already have a Farm Credit Corporation mortgage and, second, they must be judged to be in trouble. It does not help if their loan is at a bank. But the Minister says he will give farmers help if they want to get out of farming. For the second Budget in a row, the only farmers who really get a break are those who want to sell out. If they want to stay on the land, neither Budget is of much help to them. The new Budget gives them resettlement expenses, job training. It has the same effect as the capital gains exemption. In other words: "Get off the farm and we will give you a little help, but if you stay on the farm, you are in real trouble".
Cuts to agriculture total $502 million from 1985-86 to 1990-91. The farmers are also hit by another 1 per cent tax increase in farm fuels. We are still waiting for those agribonds. The Prime Minister was involved in the Prince Albert Charter. I still do not think he knows what an agri-bond is, but he said he was going to give a long term, low interest bond to farmers. That was going to be a dandy.
We are still waiting for a sugar policy. The sugar-beet producers right now are meeting Members of Parliament because that industry in Alberta, in Manitoba and Quebec will
The Budget-Right Hon. J. N. Turner not survive unless the Government comes up with a national sugar policy.
The Edmonton Journal calls this Budget an anti-Alberta Budget because of the neglect of the Minister of Finance for agriculture and energy.

I regret that the Minister of Communications (Mr. Masse) should be absent, for he is the new hero who will defend our cultural identity.
Of course he must be proud about the $75 million promised for culture. And apparently all the artists, all the authors, and all the men and women who contribute to give us a genuine Canadian culture are satisfied. But they have a very short memory. Did our artists forget? Did our authors forget?
If we can rely on the Minister's November 1984 statement-$121 million-the cut-back now amounts to a difference of $50 million.
So our artists are still $50 million short.

Given the ideological bent of this Government, one might say that its left hand giveth and its right hand taketh away, with a vengeance unseen since Biblical times. The Government announced $300 million for Research and Development but has drastically cut Research Council budgets, as was pointed out by my colleague, the Hon. Member for Saint Henri-West-mount. We have the spectre of a value-added tax. The Minister and the Government are still contemplating what they call a business transfer tax or a value-added tax. There will be constitutional difficulties.
The Minister said he was looking for ways to increase the revenue base. Then he was politically cynical enough to say to journalists at, I guess, the off-the-record post-budget briefing, that, yes, he contemplated enlarging the tax base, converting it into a business transfer tax, probably the widest net that could ever be cast against Canadian taxpayers, and then a year before the election he could remove the personal surtax of 3 per cent and look good to Canadian taxpayers. He would give them a secret, invisible, slow-moving business transfer tax but immediately remove the 3 per cent surtax. If I ever saw political cynicism, that is it. We will be looking at the discussion paper very carefully indeed when the Minister brings it forward.
With regard to social problems, on page 12 of the Budget Speech the Minister says that in his next Budget he intends to propose further measures to reform our system of social expenditures and related tax provisions.


An Hon. Member:: Oh, oh!


John Napier Turner: Oh, oh! We are going to be watching that one carefully. Here is the sacred trust up for grabs again.
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March 5, 1986
The Budget-Right Hon. J. TV. Turner
The next issue is foreign aid. Canada's partnership in the development of many of the less-developed nations is placed in jeopardy in this Budget. In an astounding about-face from previous commitments, the Minister has cut the aid budget by $1.5 billion over five years. The target date of 1990 to reach .06 per cent of the GNP in foreign aid has been put back five years to 1995. I believe this is a serious betrayal of Canadians who feel we have a moral duty to come to the aid of those countries where people are starving. We have a duty to share, even under the pressure of budget control, with the less-favoured nations of the world who need food and clothing. Frankly, there are thousands and thousands of Canadians who are revolted by the fact that the Government has turned its back on some of the less-favoured areas of the world.
What has the Government done about job creation for youth? The word "youth" or the words "young people" were not even used in the Budget. They were not even mentioned, not a single time.
[ Translation]
And in the estimates, the next day, the Minister of State (Youth) (Mrs. Champagne) was eliminated, the Minister of State (Youth) is now invisible, silent, anonymous, a ghost Minister, a Minister striken right off the estimates-


Jean-Robert Gauthier: That's it! No budget!


John Napier Turner: It is the new way to
reshuffle the Cabinet, Mr. Speaker. Sensational! There is no need to sack the Minister, she gets no money! That is very subtle indeed, and I must warn my friends in the departments, the other Ministers, to be very careful! Perhaps there will be supplementary estimates, and i say this to my friend from Prince George-Peace River (Mr. Oberle) whom I know very well. Beware lest you wake up one morning with no money, no office, no civil servants, no limousine! A ghost Minister, the Minister of State (Youth)!

Yet the Senate study, endorsed by Senators of both Parties unanimously, reminded us that there are 700,000 unemployed youth. This is potentially a lost generation. What has the Government's response been? Cutting education transfers to the provinces. Denying young people the opportunity for training. Cancelling our First Chance Program. Transferring the problem to provincial Governments. Another broken promise, another dream denied. We are all going to pay a very heavy price for that.
Rather than take positive action about unemployment, the Prime Minister (Mr. Mulroney) loves to boast about job creation. He says 580,000 jobs have been created since his Government took power. Obviously he sent the script to all his Ministers because you can ask a question about the price of coconuts and still get the answer: 580,000 new jobs. They get up and all you hear is the whirring and flapping of the flippers from the trained seals. Boy, do they read out the script.


Mr. Siddon:: You don't like the message.


John Napier Turner: I do not blame the Prime Minister for not being here to try to defend the Budget. He is spending most of the time on the road trying to rake over old coals and attack my record as Minister of Finance and me personally.


Miss Carney:: That is not hard to do.


John Napier Turner: I do not think too many people will buy it. I would love to entice the Minister of Energy, Mines and Resources (Miss Carney) into a little debate, but the truth is that this Government has not yet matched my record from 1972 to 1974.


Some Hon. Members:: Oh, oh!


John Napier Turner: I hate to have to put this on the record but the sleazy attacks of the Prime Minister force me to do it. In that period of time, when I was Minister of Finance under Mr. Trudeau, we produced 631,000 jobs.


Some Hon. Members:: Hear, hear!


John Napier Turner: We can all play this game. That was done from a smaller labour force base. The unemployment rate averaged about 5 per cent or 6 per cent. Regional unemployment was substantially lower. The Prime Minister likes to give the impression that unemployment problems are solved. Yet the Minister of Finance (Mr. Wilson), in his document, abandoned the target of 7 per cent to 7.5 per cent as full employment. As my colleague, the Hon. Member for Notre-Dame-de-Grace-Lachine East (Mr. Allmand), has pointed out, the target is now 9 per cent. All that litany we have had recited day after day in this House overlooks the fact that regional unemployment is high. In Quebec it is 11.5 per cent; in British Columbia, 12.9 per cent; in the Atlantic provinces, 15.4 per cent. As the Hon. Member pointed out, too many new jobs are now part-time jobs. Too many people are unemployed for longer and longer periods. The number of people unemployed for more than one year and no longer eligible for unemployment insurance has doubled since the end of the recession. Unemployment among our young people hovers around 15.9 per cent.
I rejoice with the Prime Minister that many Canadians have found new jobs, but surely he has to realize, as do all Canadians, that we have a long way to go. We have a long way to go to bring those figures down and reach a stage where anyone in this country who wants to work and is legitimately seeking work can find a job, that is full-time employment, and we should not be boasting about anything short of it.
The Minister of Energy, Mines and Resources has almost enticed me to go at another one of the Prime Minister's statements.


Pat Carney: Go ahead.


John Napier Turner: I would like to correct another impression. The Prime Minister said in Kitchener that I inherited a surplus and left the deficit. I want to tell him that
March 5, 1986

I inherited a deficit, brought in the last two surpluses in Canadian history, and subsequently, yes indeed, I left a deficit and l am going to give you the figures. In 1972, the deficit was $556 million. In 1973, the surplus was $387 million. These are the national account figures and even the Minister of Finance will be able to find those. In 1974, the surplus was $1,109 billion. In 1975, the deficit was $3,805 billion. Take those four years and average them out-


Thomas Edward Siddon: Take the last year.


John Napier Turner: I will explain the last year in a minute. The average deficit when I was Minister of Finance was $725 million. Boy, I bet the Minister of Finance would just drool for those numbers.


Pat Carney: Shameful. What about the other Liberal Ministers?


John Napier Turner: I hear the Minister of Fisheries and Oceans (Mr. Siddon), I guess it is. It is a kind of rotating Ministry and it is pretty hard to keep up.


Mr. Penner:: Not much going on in fisheries anyway.


John Napier Turner: The oil crisis came upon us in 1974-75. I was Minister of Finance under Mr. Trudeau at the time. When I stood up on budget night I said we were making a deliberate move on the side of preserving employment and growth and the inflationary aspect of the oil crisis had to be combatted. That is why we moved the deficit forward. We were the only country in the world who maintained an employment record in the midst of that crisis.


Thomas Edward Siddon: And the deficit never stopped moving forward.


John Napier Turner: I want to give the House another figure. During my period in office as Minister of Finance the public debt of Canada finished up at $25 billion. The percentage of the public debt as related to the Gross National Product went down from 21.6 per cent to 17.5 per cent during my tenure as Minister of Finance. At the moment the percentage of debt as related to to the Gross National Product is 47.3 per cent, and the Minister of Finance predicts that by 1990-91 it is going to rise to 56 per cent of GNP. I left it at 17.5 per cent.
We can play all sorts of games and the Prime Minister can have fun in Kitchener, but I would like him to come into the House and play those sorts of games against us. The Prime Minister said in Halifax that he is going to slap a paternity suit on me for being the father of the deficit. I want to tell him that the paternity suit will not fly because the facts fly in the face of it, and the facts do not bear it out. The Prime Minister is led by his new communication advisers and his pollsters, because this is a Government by Fox and a Government by Gregg. Fox and Gregg ought to be sitting in here because they are the ones who are really pulling the strings. What the Prime
The Budget-Right Hon. J. N. Turner Minister has been told is to repeat something long enough and often enough and he may convince some people.


An Hon. Member:: The big lie.


John Napier Turner: I have to stand up here in the forum of the nation before you, Mr. Speaker, although it is distasteful for me to have to blow my own horn to a certain extent in comparison with this Minister. I am obliged to do so to bring the Prime Minister back to some semblance of truth.


Some Hon. Members:: Hear, hear!


John Napier Turner: The Minister says that the buck stops here. Well, he did not know about Darth Vader. The Prime Minister leaned over to the Deputy Prime Minister (Mr. Nielsen) and said: "Who is Darth?"
The Prime Minister does not know who originated the phrase "The buck stops here". It was Harry Truman. Harry Truman had a plaque on his desk which said: "The buck stops here". As President of the United States, he said: "I take responsibility for what 1 am doing". He did not go around the country blaming the problems of the world on Herbert Hoover or Franklin D. Roosevelt. He took responsibility for what he was doing. This Minister of Finance and this Prime Minister go wallowing across the country, go slithering across the country, cry-babies, blaming former administrations for the way they are handling the affairs of the country. The buck stops here. They are trying to pass the buck. As a matter of fact, talking about the buck, we do not know where it is going to go from day to day. It is just hovering at 70 cents. They cannot get hold of it.
My colleague, the Hon. Member for Gander-Twillingate (Mr. Baker), came up with some very interesting analysis based on the Minister of Finance's own figures. With these figures he shows us that the net public debt in 1986-87 will be $262.8 billion dollars, up $63.7 billion over 1984-85. My hon. colleague says that that means that 24 per cent of the total public debt of the country has been incurred by this Government in the 16 or 17 months for which it has had control of the country. It has already attributed to us 25 per cent of the total public debt.


B. Keith Penner: How do you explain that, Tom? God, I'd be ashamed of myself.


John Napier Turner: The day after the Budget the dollar started to float a bit. We have not seen those figures because, fortunately for the Minister, the month of February ended and we have only the February figures on the intervention, but we can imagine what the Governor of the Bank had to be saying: "Has anybody got a dime? Can we get a little more leverage in our reserves? Can we intervene a little more?" The Minister was so disturbed by the initial reaction to his Budget that he had to call up his friends on the Business Council on National Issues and say: "Can you write me a letter? I need somebody who agrees with this Budget and I had a bad night". On budget night when he was on television he said to those average Canadian families: "Boy, I need some

March 5, 1986
The Budget-Right Hon. J. N. Turner
friends". The Business Council on National Issues is made up of the presidents and chief executive officers of the largest corporations of this country. I do not know how it worked, but Tom D'Aquino might have said: "Mike, why don't you draft a letter and I will sign it?" So they got their letter. The Minister loves to get up and read letters of support from the big-hitters, because the big-hitters started to get worried that the dollar was going down and the Budget had not been favourably received, and they had to support the Minister of Finance.
Before I wind up, there are some other quotations I would like to read to the House. Frank Garritty of the Canadian Teachers Federation said of the Budget-
-will inhibit sustained economic growth and hit hardest at the average wage earner-
Marjorie Cohen of the National Action Committee on the Status of Women said the Budget indicates that-
-an unacceptably high level of unemployment is considered normal.
Jim McCambly, President of Canadian Federation of Labour, said:
-some tax loopholes for the rich were reduced a tiny bit, but the working stiffs still get it right through the nose.
Sally Hall, President of the Consumers Association of Canada, said:
This is the exact opposite of what the Government should be doing to get consumer spending going again.
Patrick Johnston of the National Anti-Poverty Organization said:
I am not convinced that simply because there were no major cuts in social programs (in this Budget) we will not be faced with them a year from now.
Allan Sinclair of the Council of Forest Industries of British Columbia had this to say about the Budget:
For our industry, the net impact is negative.
Ontario Treasurer, Robert Nixon, said:
The increase in consumer taxes is bound to have a bad effect in the province.
Even the Chamber of Commerce-wouldn't you believe these boys could give the Government a passing grade?


Mr. Marchi:: He did not write a letter.


John Napier Turner: He did not write a letter, that is for sure. The Chamber of Commerce was lukewarm. Here is what its Director, Tony Amery, said:
He is looking at a tax solution as opposed to an expenditure solution and that is something that concerns us.
There is one other quote I would like to read: It says:
We have no intention of raising income taxes... we have to reduce government spending.
Who was that, Mr. Speaker? That was the Minister of Finance.


B. Keith Penner: That's Mike.


John Napier Turner: That is the Minister of Finance during the election campaign on City-TV, August 28, 1984 at 11 p.m.
I had better quote the Prime Minister. He would feel left out.


Jean-Robert Gauthier: He's never here anyway.


John Napier Turner: Maybe somebody will point it out to him tomorrow morning. 1 would also like to remind the House of a commitment made by the Prime Minister when he was the Leader of the Opposition. In a speech in Vancouver on August 24, 1984 he said:
We will reform the personal income tax system to make it more fair, more progressive and more productive... We are committed to the goal of fair taxation.
A goal of fair taxation-what a definition of fairness! The rich get their capital gains exemption. The corporate sector gets a reduced percentage of total taxation. The average Canadian family really gets it in the teeth. Now the Prime Minister, his Ministers and all of them over there, they are on the road and they have a prepared text. We have to work for our stuff, don't we? We have to do our own work and our own research, but they have it all wrapped up beautifully, all marked for them. Their chiefs of staff-these commissars that the Prime Minister puts in every Minister's office-mark the notes for them so the Minister sees the key spots. That Kitchener meeting was a dandy, that Halifax meeting was a dandy, but if they get out there with the real people, they are going to find that no matter how hard they try they are not going to be able to sell a lousy product.
Thank you for your indulgence, Mr. Speaker, and thanks to those few members of the Ministry here for their attention. I do not believe this Government is seriously attacking the deficit. If it were, it would have a strategy. The only strategy for getting at the public debt of this country is fairness. Raising revenues must be done in a fair way. Cutting expenditures must be done in a fair way, because over the long run the public debt of the country will not be brought under control unless Canadians from every walk of life, no matter where they live in the country, what income range or what opportunities they have, believe that the burden of cutting the deficit and gaining control over the public expenditures of this country is being shared fairly. If the process is not seen to be fair- on the basis of the figures I have brought before Your Honour, it is shockingly unfair-there will be more resistance by taxpayers. Some newspapers suggest a tax revolt, but there certainly will be resistance. There will be a growing underground economy because people who are not being treated fairly and do not feel they are being treated fairly will not respond to the urgings of the Government.
The Budget, taken together with the last Budget, is in fact counterproductive because of its unfairness. People will not co-operate in trying to make it work because they do not believe the burden is being shared fairly.
Good fiscal management means understanding, and in order to bring the public purse under control it is necessary to be fair at every stage of the process.
March 5, 1986

Our argument to the House, the Minister, the Prime Minister and the country is that the Budget is not fair and Canadians will not accept it. We in the Liberal Party do not accept it. It is an enormous betrayal of trust of Canadians, and I undertake to Canadians that we will fight this measure and the Budget at every step, in every legitimate way the House of Commons permits us, even under the reformed rules.


Some Hon. Members:: Hear, hear!


Mr. Redway:: Mr. Speaker, I rise on a point of order. I am sure that rather than hiding behind the rules which prohibit the asking of questions and making of comments at this time, the right hon. gentleman and his colleagues would certainly consent to giving unanimous consent to the House for questions and comments at this time.


Jean-Robert Gauthier: Mr. Speaker, I rise on the same point of order. If the Prime Minister (Mr. Mulroney) will come and do the same thing for us, we will accept.


Mr. Deputy Speaker:: There is no unanimous consent.


Alan Redway: It sounds like unanimous consent.


Jean-Robert Gauthier: If you get the Prime Minister here.


Mr. Deputy Speaker:: There is no unanimous consent. The Hon. Minister of State for Science and Technology (Mr. Oberle) on debate.


Hon. Frank Oberle (Minister of State for Science and Technology):: Mr. Speaker, I am grateful for the opportunity to join the debate on the 1986 Budget. Naturally, I am tempted to engage with the right hon. gentleman who just spoke in the intellectual acrobatics which we have just witnessed. He referred to me as a friend a couple of times in his speech and I return the compliment. I have known him for some time and he is not a bad guy when one meets him in private.
As a matter of fact, he and I were once stranded at a fishing hole and he fell in.


John Napier Turner: If it had not been for my fish and my box of matches-


Frank Oberle: It would have been a close call, Mr. Speaker. I want to say to him: "John, you just fell in again". The Right Hon. Member stated this afternoon that: "We play all kinds of games around here".
Let me suggest to him that we on this side of the House are finished playing games with the lives of Canadians.
I could talk about the record of the right hon. gentleman when he was Minister of Finance for 43 months, I believe. He increased the public debt from $18 billion to $36 billion.


John Napier Turner: That is wrong, Frank. You have the wrong numbers.
The Budget-Mr. Oberle


Frank Oberle: He is the architect and father of the legacy that this Government inherited in September, 1984.
Let me spend some time dealing with the Budget and the Government's policy on science and technology. The Budget introduced a wide ranging agenda for economic growth, economic renewal and job creation. It pointed out that research and development and the advancement of science may be one of the keys that we will need to unlock the future for Canadians and achieve the goals that we have set for ourselves.
In fact, Canada's role in the 21st century may well be determined by what we do today and in the next five to ten years in the area of science and research and development.
There are serious obstacles in our way. We have a $225 billion debt today on which we are paying interest every year. Just as we are confronted with an urgent need to catch up with other nations that have gained an edge on us in some very important strategic technologies, we are strapped to a legacy of the past that has compelled us to impose upon ourselves a fiscal discipline to which we are committed.
Canadians can be proud of our past record of achievement. We have never spent as much as some of the more advanced industrial nations in research and development because of other priorities, yet we excelled in some select areas. It is a source of pride for Canadians to have been the third nation to enter into space and to be the first nation to have its own communication satellite. That was a priority for us because it was answering a need for Canadians to communicated with each other. Those of us who represent ridings in the North were shut out from the mainstream life in Canada and its culture because television came to the North 10 years after its introduction in the south. The Anik satellites brought the North into the Canadian mainstream.
Our aerospace industry, communications industry and nuclear industry have excelled. Our nuclear reactors are a source of pride to Canadians because they are still among the most efficient in the world. We have excelled in those areas where our efforts were directed toward our needs and built on our natural strenghts.
However, we have fallen behind in those areas where we have ignored our natural strenghts. In the year that the former Government was in power, we developed a trade deficit in high-tech goods of $12 billion. In those areas where we developed a lead, 75 per cent of all the high-tech components manufactured in this country are exported in highly competitive markets. In fact, we are getting a better return on our high-tech trade than any other country in the world. However, at the same time we are importing 75 per cent of all high-tech components that go into our traditional industries, our resource industries. We are, Sir, the biggest wood-converting country in the world. We have the strongest mining sector and the finest agricultural sector in the world. Yet, 75 per cent of all the high tech components which go into these industries are imported from Sweden, the United States, Finland and Germany. We import whole sawmill systems from Germany, a country which has about as much timber as we have on Lyell Island. It has a fraction of the timber that we have in our

March 5, 1986
The Budget-Mr. Oberle
national parks. We have a $12 billion deficit in trade because we have neglected to focus on our natural strength.
I suspect one of the reasons for this is that we did not have a national science policy. We had no leadership. We were competing with Japan and Germany, the countries which took the lead. Just as the former Government was preoccupied with developing a new, artificial culture for Canada, so was it obsessed with a new industrial image. Forestry, mining, and agriculture had become unsophisticated rural occupations which a country in search of a modern industrial image should move away from. Instead of building on our natural strength, the Government led it ebb away. As a result, our resource industries are in serious difficulties.
There are 350 cities and towns in Canada, most of which are in the mid Canada corridor and in the north, which depend entirely on either the mining sector or the forestry sector, or both of these industries. Ninety-five per cent of all the freight that is hauled on our railways is made up of wheat, lumber, forest products, and minerals.
It is not that the former Government was not aware of these problems, but it had other priorities which kept intervening. In fact, from time to time it did attempt solutions. I must give credit for that. These solutions were usually attempted about a year and a half or two years before an election. The thing about science and technology is that it does not pay dividends in three years. Results are not achieved, particularly in basic research, between two elections. To be committed to science and technology you must have a vision and you must plan into the next century. These people could never do that and, instead, introduced artificial solutions for the backlog that had been created.
One such policy was the infamous scientific research tax credit. There was a tax expenditure through that program of about $3.5 billion. Estimates which I have indicate that between $1.5 billion and $2 billion was not used for research and development at all. It went into innovative bookkeeping and innovative tax manipulation rather than industrial innovation. I would like you to imagine for just a moment what I, as the Minister of Science and Technology, could do today with $2 billion.
The previous Government had another obsession. It thought it could advance the cause of science in the country by building world-class buildings across the country. There is a building in the City of Montreal which cost in excess of $60 million. It is a fascinating building which takes up two city blocks. The architect should get a world-class prize. However, no one developed a program to go into the building. They built the building and called it a world-class buyer technology building. The National Research Council is taking possession of the building in June and no one has given any thought to how one operates a world-class buyer technology centre. As important as that strategic technology is, there has been no plan formulated. Now I must design a plan to fit the building,
and I will do so, and it will become a world-class buyer technology centre.
There is another building in Winnipeg, the spiral staircase in which costs more than the mechanical room. That is a $30 million building, another world-class effort. However, it has done very little to address the urgent need in Winnipeg for the development of an industrial technology centre. I now have a building and must develop a program to fit it, which I will do. I recently announced it in Winnipeg, and I am receiving enthusiastic response because people were becoming a little confused about the policy of the former Government. The cause of science and technology is not advanced with brick and mortar. It is advanced with people and knowledge, and that has been ignored.


Some Hon. Members:: Hear, hear!


Frank Oberle: We must first learn to spend smarter, because we do not have the resources in the first year to correct all the sins of 20 years of deliberate neglect in this area. We must set new goals which will inspire young Canadians particularly, and Canadian scientists generally, which will take us into the 21st century. It became clear to me when I assumed my portfolio that the Government will not be able to do this alone. We find ourselves in an urgent crisis which will require the combined efforts of Government, industry, universities, and the science community. I want to enable the cutting torch genius, the welder, and the farmer who is not connected to any of these institutions, but has an idea, to get his idea across and have his prototype built.
We must modify our in-house effort. We do quite a bit of in-house research and development. The National Research Council is an instrument of excellent work and progress, but we must modify our in-house efforts, at least in the short term, to ensure that the technology which is sitting on the shelf in government labs is quickly diffused, transferred to the marketplace, and will end up in marketable products. We must extend the safety net for the people who work there and, perhaps, second some of the brilliant people to industry.
I want to speak a little about what we have done as our first effort to bring about a change and set us off in a new direction. In connection with the Budget I announced a new five-year program to deal with the area of university research which makes up 18 to 20 per cent of our total effort. We are increasing funding for the Natural Sciences and Engineering Research Council, the Medical Research Council, and the Social Sciences and Humanities Research Council by $1,054 billion over a five-year period. The spending levels will increase by $311 billion by 1990-91 over the 1985-86 level. That is precisely the amount we are spending this year in the Natural Sciences and Engineering Research Council. It will receive additional funds of $555 million.
My critics tell me that that program will not work and that it will not catch up with inflation. I wonder where they learned their arithmetic. They are playing games, and we are sick and tired of it. We will no longer play games with the Canadian people. We will be judged on our record. The targets which the
March 5, 1986

Minister of Finance (Mr. Wilson) predicted when we came to power in September of 1984 have all been met. The targets we have set in this Budget will again be met next year when we bring in another Budget. The targets I have set for research and development will be met and scientists will once again be inspired. There is now stability in spending. One may sign a five-year contract with a researcher at a university and he will know that he will have the funds to work with for five years. The skeptics will be proven wrong once again. With our efforts in research and development, Canada will once again be strong.


Alan Redway: Mr. Speaker, I have been very impressed with the commitment of the Budget and the Minister to research and development and the $1 billion that has been committed to research and development at the universities over the next five years. The Minister is aware, however, as are all of us, that no matter how much we spend on research and development and even if we spend our entire Gross National Product on it, we could only produce a very small part of the total technology that is developed around the world. It seems to me that it is important as well to develop a policy of ensuring that our industries utilize the technology that has been developed, whether it has been developed here in Canada or in other parts of the world.
I wonder if the Minister would care to comment on what plans and policies the Government may have designed to ensure that there is this technology transfer and that our industries utilize technology and innovations that are developed not only here but right around the world to the benefit of Canadians so that we will increase our productivity and will be able to increase the standard of living of all Canadians.


Frank Oberle: Mr. Speaker, as my hon. friend knows, there are a number of very serious obstacles which stand in the way of industry doing what we all know it must do. There are a number of things that we can do about this. For instance, one of these obstacles is the Patent Act. There will be no development of new intellectual capital if there is not at least some protection in the Patent Act. We have inherited an antiquated Act and we will in a very short time correct that.
industry in Canada spends roughly one-third of what industry in other industrial nations spends on research and development. There again, Government is at fault. I have already talked about one obstacle. We have never given industry the proper incentives. We now have several very mature industrial sectors in Canada and they have to learn to do more research and development. Accordingly, we have designed our incentives structure, and federal and provincial agreements have very heavy science and technology components to them. The university funding program that I have announced contains a matching formula. There are $700 million in incremental funds that will go into R and D over the next five years. Half of that will have to come from the private sector. In other words, the university researcher will sell his talents and skills
The Budget-Mr. Oberle
to a private company and if he gets a dollar, as he will from the private sector, that dollar will be matched.
Things are not all bad. I see that my critic is present in the House. He says that industry will do it. It would not do it for the former Government, and I do not blame it. I come from industry and I know how difficult it was for a company to plan ahead with the budgetary acrobatics that were going on for the last 20 years.
Industry in Canada spends roughly $2.5 billion on research and development right now. The $350 million that I am asking it to spend over the next five years is roughly 5 per cent of what it is spending now. I am saying that industry will respond with great generosity. In fact, it will exceed by far what we are attempting here.
In the first year, I am asking industry to spend 1.4 per cent of the $2.5 billion which it already spent on university research. The skeptics will be proven wrong. Industry will respond with great enthusiasm, and I think that through these kinds of measures we will be able to turn the ship around and set it off in the right direction.


Mr. Berger:: Mr. Speaker, I am just astounded that this Minister and members of the Conservative Party can propagate the myth that they are doing some great thing here and that they can claim that they are spending $1 billion when they have just put up $300 million for the three granting councils.
I have here a news release from the Canadian Association of University Teachers and the Association of Universities and Colleges of Canada which take issue with the claim that the Government is increasing funding to the three federal research councils by $300 million over the next five years. They say that funding levels will in fact decline in real terms. Even Gordon McNabb, quite a respected individual and President of the Natural Sciences and Engineering Research Council, says that when we start to dissect the Budget in terms of spending power, it is modest.
I suppose the first question I would ask the Minister is why is he not at least being honest about this. Why is he not saying that he has broken his commitment or that, because of the financial situation in Canada, the Government has decided that it cannot afford to keep the commitment at the present time? Why is he trying to pretend that there is a substantial increase there when that is not indeed the case?
As well, there are tremendous problems with his proposal to match funds that are contributed from the private sector. There is a danger of diverting funds that are currently being spent by industry with universities or with other research agencies. For example, in medical research, it is possible that a company that currently gives money to the Ontario Cancer Institute, for argument's sake, might decide to spend the money on the Medical Research Council so that the Government will pay another dollar for every dollar it pays. There is a danger that funds will be diverted through this Government formula which may distort current spending. In that respect, I would say that even Douglas Wright, President of the Univer-

March 5, 1986
The Budget-Mr. Oberle
sity of Waterloo, has had reservations about this matching formula. He feels that this money should not have been channelled through the council. He says that it is unnecessary to have Government and bureaucratic interference in university-industry contacts, that it should be a bilateral relationship.
1 would ask the Minister if he knows or if his Department has taken a look at the experience of the Quebec Government. Several years ago, that Government tried to institute the same kind of formula. It set up and office and tried to get matching grants from industry. That office closed down after a year and a half because it found that this formula just did not work.


Frank Oberle: Mr. Speaker, I listened to the speech the Hon. Member made yesterday. He laments the fact that we should be spending three times our present levels of funding. We have to start somewhere. The funding levels that we inherited for the Natural Sciences and Engineering Research Council were roughly $288 million. If that was a third of what we should have spent, I agree with the Hon. Member, but that is the legacy we inherited. We had to start from that level. As Mr. McNabb would be the first to admit, even if we had $2 billion, we do not have the highly qualified personnel to do the research, nor do the universities have the money to provide the infrastructure or the overhead. It will take time to correct the sins of that Party which the Hon. Member supports.
1 should like to refer to the comments of Mr. McNabb when he said: "I have to express a considerable degree of satisfaction given the circumstances surrounding this Budget". 1 also have a quotation from Dr. Wright, a renowned person in the country. Incidentally, he is the head of a university which gets most of its funding from the private sector because it knows that that is where the future lies. He said: "R and D was singled out for an increase in resources when others were cut. The Government should be complimented for heeding the call from universities and others". The Liberals are playing selective games. We are finished with playing games. In his speech the Hon. Member said: "I know there were delays on most occasions. The spending increases came toward the end of the year and that caused certain problems". I guess it caused certain problems. Has the Hon. Member ever run anything-a business, a Government or a Department? How can we encourage scientists to remain in Canada when we say that they can have $3,000 but that the funds might run out in July, September or February? How can they plan? The money I have announced in connection with the Budget is all in the Budget; it is all there. I can now call in a professor or a president of a university and say: "This is the money you will have to spend over the next five years".
I am not ruling out that some of the assumptions in the Budget in terms of economic growth may well be exceeded. I am not ruling out that 1 may want to select certain priorities and call in the president of the council and give him another $50 million for this year or $150 million for next year. What we have put in the Budget will be spent. It is there for everyone to see and for everyone to plan. The critical element
which we introduced in 1979 was the five-year concept which the previous administration destroyed. We are re-establishing stability, but we had to start from where the Liberals left off. It was not very good, I am the First to admit, but it will increase very dramatically.


Cyril Keeper: Mr. Speaker, I welcome the opportunity to enter into the debate because the budget proposals before us are very important to all Canadians, particularly Canadian families. To get right down to it, the Budget is unfair to ordinary Canadian families. In the time available to me, I intend to outline exactly why I feel that this is the case.
The Budget hits hard at ordinary Canadians. The Government does not seem to have learned from the last Budget. In the present Budget it has increased the taxes of an average family by about $350 per year as a result of the increases in personal income taxes and in sales taxes including the tax on gasoline. The Government promised Canadians that they would have lower gas prices. Instead, we are getting increased gas taxes at a time when those prices should be coming down dramatically. The increase in taxes, which amounts to $350 per year, is on top of a $1,000 increase in taxes with which Canadian families were hit in 1985 as a result of the Budget and the Economic Statement of the same Government. It is tragic that the Government feels that it has the revenue to continue the once in a lifetime capital gains exemption but at the same time feels compelled to increase the taxes of ordinary Canadians by $350 on top of the $1,000 to which I already referred, for a total increase of $1,350. That is a heavy burden for ordinary Canadians. Earlier today the Minister of Finance (Mr. Wilson) tried to explain it away. For example, he said that the sales tax increase when the Conservatives first came into power was proposed by Marc Lalonde, the former Liberal Minister of Finance. Of course the Conservative Minister of Finance had the option of refusing to implement that sales tax increase, but he chose to increase it, so it is his responsibility.
It is not only in the area of taxes that Canadian families are being hit. Let us look at the services delivered by the federal Government. The Budget cuts services which are important to those same ordinary Canadian families and communities across the country. There is a cut of some $2.05 billion from regional industrial expansion, a reduction in money going to the poor areas in order to promote their economic development so that they can share in our wealth production. I think of the northern areas of Manitoba which are dependent upon federal dollars to stimulate economic activity. The Budget hits hard at those areas. Since the Government is cutting back on regional industrial expansion moneys, it will not be in a position to take any new initiatives in terms of economic development in areas which are in desperate need. For example, I am thinking of our inner cities. Part of my riding of Winnipeg North Centre is an area which has a very low-income population and a very high unemployment rate in comparison with the rest of the community. Inner cities could benefit from regional industrial expansion activities. We should recognize that the core areas of cities are in need of economic activity and development which
March 5, 1986

would add to the quality of life and provide employment. When the Government is cutting back on activity in this area, there is no way that it would be in a position to recognize the needs of people in the core areas of our cities.
Also the Government had the gall to cut back on employment funds. The cuts in the Budget aimed at employment amount to $1.78 billion. The Government promised jobs, jobs, jobs. On a daily basis it stands in the House and claims credit for the creation of employment. At a time when there are well over a million people unemployed-and the long-term projections indicate that unemployment will remain high-how can the Government cut back on employment creation efforts? Our young people are in desperate need of jobs. Yet this Budget has the impact of continuing to deny young people the opportunity to contribute to society by cutting back in the area of employment. It is ironic that a Government which claims concern about our young people has done away with the Department which had the responsibility for taking action in this area.
The Government has cut in other areas as well. It cut $502 million from agriculture. For most people in urban ridings, that may not sound very relevant, but a good portion of our economy is tied up in the agricultural sector. People in agriculture need the assistance of their federal Government in order to be able to keep their farms going in order to produce the food which we all need. So this cut-back is going to hurt the agricultural industry and our farm families.
The Government has also cut back in the area of health and welfare to the extent of 4.82 billion. That is an enormous sum of money. At the same time, we have heard over the last few weeks reports by Canadians on the need for day care. It is time we recognized that day care must be made available to all Canadian families. It is time we recognized that our present system, which only allows the poorest in our society to receive a subsidy, is inadequate. It is time we altered that system and made day care available to all families on the basis that it is a service to which all Canadians are entitled. Since increasing numbers of families have both parents working, it is necessary that we provide for adequate service for the children. We must invest in our children so they can turn out to be the kind of responsible adults we all expect them to be. But how can we take any initiative in this area? How can we respond to appeals for more action in the area of day care when the Government is cutting back on expenditures in the health and welfare area?
The Government has also cut back on the transport area. That is quite ironic because when the Conservatives ran for office, they made it clear that they were going to re-establish certain rail passenger lines which VIA, under the Liberal Government, had cut back. This Government now, after having re-established some of those lines, is in the process of cutting back in that same area. Members of the Conservative Party used this concern as part of their election platform, but now they are in office they themselves have begun the process
The Budget-Mr. Keeper
which will undermine the passenger rail service. The Government has cut back transport by $3.61 billion. It has not only moved to raise taxes on ordinary Canadians but it has also cut back on essential services in regional industrial expansion, employment, agriculture, health and welfare and transport.
The Conservatives do not seem to recognize the unfairness of the tax system. I would like to illustrate that briefly. As a result of this Budget, individual taxes will increase almost four times faster than corporate taxes in 1986. That is, individual taxes will rise by $1.1 billion while corporate taxes will rise by only $380 million. It is clearly unfair for the Conservatives to continue the same pattern which has existed over the last 20 years, which is to shift the burden of taxation from corporations to individuals, and to do it in such a way that the taxes on individuals will not only rise faster than those of corporations but throughout this year taxes will rise four times faster for individuals than for corporations. To illustrate this further, by the year 1990, individual taxes will increase more than ten times faster than corporate taxes. That is, the increase in taxes for individuals will be $2.9 billion as compared to an increase in taxes on corporations of $295 million.
Clearly, the tax system which is being imposed on Canadians by the Government is not only heavy and burdensome but is also unfair. The Budget has failed to addressed the most crucial issues facing Canadians today, and that is, the question of jobs. The Government has set targets for the reduction of the deficit up to the year 1990 but it has chosen not to set targets when it comes to unemployment. If the Government considered unemployment to be a serious problem, we would expect it to set targets. It would tell us how it was going to bring down unemployment and by how much each year, just as it has done with the deficit. But it has chosen not to do this. I has chosen not to take unemployment seriously. Even where it does forecast unemployment rates, it projects a very modest decline of .6 per cent in unemployment for this year and next. This is on top of the fact that it has cut the job-creation budget by $200 million. The Government has very little, if any, concern in the area of employment. At the same time it has chosen to raise the taxes for ordinary Canadians in a way that is clearly unfair, while cutting their services.

Mr. Speaker, this Budget has raised personal income tax. This Budget has increased the tax load or ordinary average income families. This Budget has boosted the tax rate of average families by $350 a year, and this comes on top of the $1,000 increase imposed by the Government last year. So the Conservative Government's total additional tax grab from the average family amounts to $1,350 a year. It is a huge tax increase, a very heavy tax burden for the average family.
Mr. Speaker, this tax increase was announced while at the same time the Government did maintain the lifetime capital gains tax exemption. The conclusion is that the Government made the tax load of ordinary families still heavier and handed a gift to high income people. Mr. Speaker, in one fell swoop

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The Budget-Mr. Keeper
the Government increased the tax load of ordinary families and reduced services which affect all Canadians.
The Government has slashed off more than $2 billion from regional industrial expansion services. The Government cut down employment expenditures by $1.78 billion, yet more than one million Canadians are without work.


John Edmund Parry: What a shame!


Cyril Keeper: Indeed, Mr. Speaker, what a shame, as my colleague just said.
Mr. Speaker, not satisfied with cut-backs in employment services, the Government also reduced services in agriculture, health and social welfare.
Mr. Speaker, this $4.82 billion cut in the Health and Welfare budget is particularly significant. At a time when we need to improve day care services in Canada, the Government is reducing its spending in a sector that is supposed to cover those services.
Mr. Speaker, the Government has also reduced its spending on transportation. Here cuts will total $3.61 billion. It is rather strange, because a Government that promised to boost passenger transportation services is now heading off in another direction by asking for cuts in this area.
Mr. Speaker, I intend to prove that this Conservative Budget is unfair. The Budget has added to the inequity in our tax system. For instance, this year personal income tax will increase almost four times as much as corporate taxes. Taxes for individual Canadians will increase $1.1 billion, compared this with an increase of $380 million for corporations. And between now and 1990, personal income taxes will increase ten times as fast as corporate taxes.
Mr. Speaker, these statistics show that the tax system introduced by this Government is unfair and that the new tax increases have compounded the inequities of the tax system.
Another thing 1 want to say, Mr. Speaker, is that the Government did not have the courage to come to grips with a critical problem affecting the whole country, and 1 mean unemployment. The Government set its sight on the deficit reduction, but apparently a reduction in the unemployment rate is simply out of range.
At the same time the Government cut about $200 million off the budget allocated to the Canadian Jobs Strategy program.
Mr. Speaker, the Government did make a forecast concerning the employment level, but it also indicated that the decrease in the number of jobless would be minimal.
Mr. Speaker, this Budget is unfair because it increases the tax load of ordinary families while at the same time granting tax exemptions to big companies.


An Hon. Member:: Some exemptions!


Cyril Keeper: Mr. Speaker, how can the Government increase the tax load of ordinary families and still maintain the lifetime capital gains tax exemption? How can the Government boost personal income taxes ten times faster than corporate taxes?
Mr. Speaker, it is unfair and the Government must withdraw the Budget and take a new approach to set our economy back on track. Time has come to have a fair tax system in this country, and that must be the priority of the Government.


Mr. Deputy Speaker:: It being 5.45 o'clock p.m., it is my duty, pursuant to Standing Order 84(7), to interrupt the proceedings and put forthwith the question necessary to dispose of the amendment now before the House.
Accordingly, the question is on the amendment. Mr. Johnston, seconded by Mr. Turner (Vancouver Quadra), moved:
That the motion be amended by deleting all the words after the word "that" and substituting the following therefor:
this House condemns the Government for presenting a Budget that imposes
outrageous and unfair tax increases for ordinary Canadians that deliberately
widen the gap between them and the rich and poor and between the 'have' and
'have not' regions of this country.
Is it the pleasure of the House to adopt the amendment?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


Mr. Deputy Speaker:: All those in favour of the amendment will please say yea.


Some Hon. Members:: Yea.


Mr. Deputy Speaker:: All those opposed will please say nay.


Some Hon. Members:: Nay.


Mr. Deputy Speaker:: In my opinion the nays have it.
And more than five Members having risen.


Mr. Deputy Speaker:: Call in the Members.


Mr. Deputy Speaker:: I declare the amendment lost.
It being 6.13 o'clock this House stands adjourned until tomorrow at 11 a.m. pursuant to Standing Order 3(1).


[Stage Direction]
The House adjourned at 6.13 p.m.
[Stage Direction]

Thursday, March 6, 1986