1986-01-17

Ms. Sheila Copps (Hamilton East):: Mr. Speaker, they should have called it the "great Canadian lottery rip-off' but instead it is labelled "your official Canadian lottery form". What is it? It is an invitation to participate in the official Canadian Government lottery and win up to $50 million in cash. It is described as just like playing keno in Las Vegas, and is the lure to rip off thousands of Americans who have been purchasing these tickets from at least four Canadian mail order companies at mark-ups of almost up to 400 per cent.
In fact this official form has so flooded the market that, on a recent visit that I made to the State of Florida, three of my husband's relatives had received this unsolicited pitch in the mail. Not only was there a promise of million dollar winners, the so-called official guarantee said that one in four had a chance to win.
We know that the Ontario Government is already acting to prohibit mail order sales outside the province. However, we also know that at least one agent buys his tickets outside the province anyway so that the action of the Ontario Government alone will not stop this rip-off.
1 ask the federal Government to launch an immediate investigation into mail fraud and false advertising, and further ask the Minister of Justice (Mr. Crosbie) to include in his Criminal Code amendments a provision to ensure this fly-bynight operation is illegal across Canada.
The Government talks about our great friendship with the United States. Now is the chance to put this claim into practice by preventing the wholesale rip-off of our American neighbours and consumers.


SOCIAL SECURITY
Ms. Margaret Mitchell (Vancouver East):: Mr. Speaker, only one day of debate is left before the Government will impose on Canadians Bill C-70, an Act to reduce the deficit at
the expense of the poor and children. Closure was imposed on a debate and the Government has reduced indexation of January family allowance cheques even before the legislation has passed.
It sought advice from the public and from experts, and then ignored it. This farcical consultation process has alienated organizations representing most Canadians, including women s organizations, poor people's organizations, social policy groups, labour, church groups and many more. Experts stated unanimously that deindexation of the family allowance below the rate of inflation will be harmful to children, families, and the poor. The Conservative Government has ignored their testimony and their research.
Now New Brunswick has added its voice to the growing list of protestors. A spokesperson states:
We view this proposed cut-back as one further piece of evidence of the disregard and contempt that the federal Government holds toward this Maritime province, especially in view of the following facts: 35 per cent of New Brunswick's children live in poverty; 43 per cent of rural children live in poverty and 47 per cent of the 64,000 people on social assistance are children. What good will the federal Government's cut-backs to child benefits do for these children?
Petitions continue to flow from all parts of Canada-


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


COMMUNICATIONS
Mrs. Claudy Mailly (Gatineau):: Mr. Speaker, four months ago, I presented a petition signed by some 10,000 residents of the Outaouais region who were asking this House to urge Bell Canada to eliminate long distance charges in my constituency. At the time, some people told me that the parliamentary process would prove useless.
Mr. Speaker, I am happy to announce to the House that I have received a letter from Bell Canada saying that long distance charges will be abolished in the municipalities of Thurso and Buckingham. I am especially happy for Thurso which is celebrating its centennial this year, as I shall now be able to improve communications within the municipality in this very important year.
There is still some work to be done for the municipality of Gatineau where the community of interests reaches only 46

January 17, 1986
per cent while regulations provide that it should be 50 per cent for long distance charges to be eliminated.
I therefore ask all my constituents of Gatineau to communicate with their municipality at least once a month so that we may achieve this 50 per cent and eliminate long distance charges throughout the beautiful federal constituency of Gatineau.


CANADA POST CORPORATION
Mr. Joe Reid (St. Catharines):: Mail service is a line of communication binding our peoples together. It is the lifeblood of commerce and industry. That is why we want, need, and deserve a model, first-class postal service and we on this side of the House will not be happy until we have one.
The importance of the system is no more evident than it is at Christmas, and this year postal workers and retirees brought Christmas to many homes throughout southwestern Ontario.
Sixty thousand letters addressed to Santa Claus were answered. Schools in St. Catharines, for instance, competed for window space, resulting in a cheerful, colorful atmosphere to work in and to visit.
Many offices placed Christmas trees in their lobbies to have customers and employees contribute gifts for distribution by the Salvation Army and associated charities.
Literally hundreds of post office employees were involved in this voluntary effort at a time when the Post Office was handling a higher than usual volume of mail and, for the most part, pleasantly and on time.
Now if we could have that attitude and commitment to service through the 365 days of the year, we would all be proud to sing out: "Canada Post: It's Ours".


TERRORISM
Mr. John Nunziata (York South-Weston):: Mr. Speaker, the current security alert at Ottawa, Toronto, and Montreal airports is an unfortunate fact of life in today's climate of international terrorism. No country is immune from the insanity of terrorism, not even Canada. Each country must develop its own master plan or strategic response to every aspect of the terrorist menace, from security searches and precautions through to informing the public of the specific nature of a threat.
The manner in which information on the airport threats was supplied to the public in the last 36 hours leaves a lot to be desired. Even though the stepped-up security was obvious at the airports in question, information to the public was coming
out piecemeal at best. Fear, uncertainty, and rumours thrive in this sort of an atmosphere to the detriment of airport workers, the travelling public, and concerned citizens.
I would submit, Mr. Speaker, that the public has a right to know the level of risk involved where a terrorist threat is present, and the Government has a duty to furnish prompt information to the public. The Government should be more forthright so that Canadians have enough information to be able to make up their own minds on whether to travel by air or to stay home.


INCREASED DRILLING ACTIVITY-BEAUFORT SEA OIL DISCOVERY
Mr. Bill Tupper (Nepean-Carleton):: Mr. Speaker, drilling for minerals and fossil fuels in Canada reached a record high in recent months. Currently there is not a diamond drill available for hire east of the Manitoba border, thanks to the flow-through share initiatives put in place by the Government.
In addition, some 11,720 oil or gas wells were drilled in the four western provinces in 1985.
Quietly, a few days ago, perhaps the most dramatic drilling news in recent years was announced when the test results on the Amauligak 1-65 well in the Beaufort Sea became known. The flow rates and calculated production capability are among the highest recorded in Canada. Oil flowed at rates of more than 7,000 barrels per day from two intervals, with calculated production capacity at one of the intervals at almost 35,000 barrels per day.
The result of the 1-65 well indicated the Amauligak structure contains at least 400 million barrels of oil, and reserves could be as high as 900 million barrels. With total reserves in the near and offshore in the Beaufort now reaching a billion barrels, production is a real possibility. By comparison, reserves in Hibernia are estimated to be between 500 million and 800 million barrels.
This means that we are closer to energy self-sufficiency. It means new jobs. It means new wealth. It is another dimension to our national sovereignty. The Government has created an encouraging economic environment for risk ventures. The oil industry-


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


PUBLIC WORKS
Mr. Cyril Keeper (Winnipeg North Centre):: Mr. Speaker, the Minister of Public Works (Mr. La Salle) intends to continue with the lay-offs of some 270 cleaners who work in post offices across Canada. Many of these people are longterm employees close to retirement; a couple of dozen are within a year of retirement. Many of them are disabled. Only six of these people have found alternative work, and not one of them has been retrained.
The fact is that these employees will be replaced by a private contractor, so the Government will still have to pay for the service. The Public Works policy of contracting out is based upon outdated information. It will cost almost as much in welfare, unemployment insurance and forgone income taxes to keep these people unemployed.
How can the Minister justify these particular lay-offs? Even if the Minister's own standards of behaviour condone the laying-off of people and their replacement by others, does he not realize that most Canadians disagree with his actions? In fact, 61 per cent of Canadians polled on this issue find his actions unacceptable, and only a small minority support his actions. Does the Minister think that he is some little northern Ronald Reagan taking on a great and powerful union and crushing them. Wake up, Mr. Minister. These are some of the lowest paid people doing essential work. Most Canadians find the Minister's actions repugnant, wasteful, and unacceptable.


THE ECONOMY
Mr. Richard Grise (Chambly):: According to a recent survey carried out by the Conseil du patronat du Quebec, Mr. Speaker, business people are anticipating a continuation of the economic recovery the beginning of which coincided with the election of a Progressive Conservative Government in Ottawa. In the province of Quebec, Mr. Speaker, 73 per cent of all businessmen and women interviewed stated that they were optimistic as to the economic future in their province. Moreover, Mr. Speaker, three of every four persons surveyed expressed the opinion that the current political climate was good; 73 per cent of them felt that this climate, likely to favour investment and job creation, would continue to improve over the next few months.
Mr. Speaker, there is no doubt that the new climate of consultation and co-operation with the provinces, including Quebec, has contributed to this very positive assessment of the economic outlook for Quebec. Also, the leadership demonstrated by our Government in the area of job creation and economic expertise could only contribute to this most positive assessment of our economic outlook. Mr. Speaker, such optimism
Oral Questions
contrasts dramatically with the despair and dismay which liberal policies used to arouse not only among business people, but also among Canadians generally.


VISIBLE MINORITIES
Mr. Sergio Marchi (York West):: Mr. Speaker, during yesterday's Question Period the Government demonstrated the regressive and "look at the past" attitude which has shamefully characterized its handling of the Japanese Canadian redress issue.
During his days as Opposition Leader and throughout the 1984 campaign, the Prime Minister (Mr. Mulroney) spoke of the need to settle this issue quickly. However, once in office, not only did his commitments quickly dissolve, but he refused to meet or acknowledge the National Association of Japanese Canadians. To make matters worse, his former Multicultural-ism Minister abruptly cut off talks with the association and attempted to proceed unilaterally. Now the present Minister refuses to honour his promise to negotiate, preferring instead to play up the differences which exist in any national issue. All these manoeuvres border on moral dishonesty.
We often criticize the United States on the question of minority rights. However, on the issue of redress 1 urge the Prime Minister to weigh the steps being launched in the U.S., to recall the promises he made, to consider his failure to live up to these expectations, and then to ask himself if his actions have been fair, honorable, and courageous.
This matter requires more sensitivity and seriousness rather than simply issuing a Prime Minister's Office press release stating that Mila Mulroney will be visiting the ethnocultural communities. We need action, and we need it now.



ORAL QUESTION PERIOD


Right Hon. John N. Turner (Leader of the Opposition):: My
question is for the Minister of Finance. He knows now that his colleague, the Minister of State for Finance, has been publicly embarrassed over a crisis rapidly developing in our insurance industry across the country. She has now reluctantly agreed today to a meeting with the Ontario Minister of Consumer and Commercial Relations on the issue. Since my colleague, the Member of Parliament for Saint Leonard-Anjou, raised this matter on November 4 in this House, both the Minister of State for Finance and the Minister of Consumer and Corpo-

January 17, 1986
Oral Questions
rate Affairs have maintained that this issue was primarily provincial.
The Minister of Finance knows, having responsibility for this, that over two-thirds of the insurance companies registered in Ontario are federally licensed. Will he take personal cognizance of this matter, and respond to what is becoming a crisis in terms of liability and coverage?


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, the Minister of State for Finance stated very clearly that this was a matter of some concern to her and something that she was following very closely. She also drew the distinction between the responsibilities of the province, which is in the area of contract law, which the Leader of the Opposition, who is a lawyer, does understand, I am sure, and the role of the federal Government which is involved with solvency and the capital basis of these companies.
It is on that basis that she is meeting with the Minister of Consumer and Corporate Affairs in the Province of Ontario today, not reluctantly as the Hon. Member tried to imply with his question, but because she is demonstrating through this meeting her very real concern for the problem.


REQUEST FOR COMBINES INVESTIGATION
John Napier Turner: would like to put a supplementary to the Prime Minister. The Prime Minister will know that his Minister of Consumer and Corporate Affairs was wrong when he said he did not have the power to investigate rising and escalating insurance rates. He should know that under Section 8 of the Combines Investigation Act the Minister does have that power. Will he undertake that the Government, through that Minister, will launch an inquiry immediately into the escalating insurance rates and the failure and inability of many small businesses to get any coverage at all?


Some Hon. Members:: Hear, hear!


Geoff Wilson: Mr. Speaker, we are quite concerned, as the Minister of State for Finance has said on a number of occasions, about how this problem has developed, but the thrust of the Leader of the Opposition's question is that this is simply a Canadian problem. It is a world-wide problem that must be dealt with within the international context as well. It is also a North American problem in that there is not enough distinction, in our judgment, between what is happening in the United States and what is happening in Canada. This is something that is being reviewed carefully by the Minister, and that will be one of the subjects of her meeting with the Ontario Minister today.


MINISTER'S POSITION
John Napier Turner: The
Government has been way behind this issue. Since November 4 until yesterday the Minister of State for Finance completely insisted that this was a provincial problem. The Minister of
Finance now says it is a national and international problem. He is finally coming to grips with the situation. Hundreds of small businesses, little league hockey teams, and day care centres are facing increases and escalation of rates by 500 per cent, 600 per cent, and up to 1,000 per cent. Will the Minister undertake to get his act together and get on top of this issue?


Geoff Wilson: This selfrighteous indignation by the Leader of the Opposition does not fool anyone. The Minister of State for Finance has indicated very clearly her concern and her desire to deal with this issue. That is what she has said in the House.


An Hon. Member:: She doesn't understand it.


Mr. Wilson (Etobicoke Centre):: The Hon. Member doesn't know enough about understanding to be able to make that comment.


Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: The issue before us which the Right Hon. Member is addressing is the jurisdictions of the provinces and the federal Government. He would be the first to be jumping out of his seat if we had transgressed by moving into the provincial side. That is why we are taking care in the handling of this issue.


POSSIBILITY OF INSURANCE PROTECTION FOR YOUNG HOCKEY PLAYERS
Mr. Alfonso Gagliano (Saint-Leonard-Anjou):: Mr. Speaker, my question is also directed to the Minister of Finance. Quite simply: Since the Minister of State for Fitness and Amateur Sport is taking steps to try and obtain insurance coverage for the Canadian ski team, could the Minister of Finance inform the House today whether he can get insurance coverage for the boys and girls who play hockey in our arenas across Canada and who have no insurance? Can you do something about this?


Geoff Wilson: Mr. Speaker, I appreciate very much the concern the Hon. Member expresses and this is a concern that we on this side of the House share. However, this is something that has to be dealt with very carefully, recognizing, as I indicated in my previous response, the jurisdiction of the provincial Governments working with the federal Government in the area in which the federal Government has jurisdiction. As the Minister of State for Amateur Sport as well as the Minister of State for Finance have indicated in the House, we are working to try to deal with this problem as it affects these community groups to which the Hon. Member has referred.
January 17, 1986


POSSIBILITY OF OBTAINING INSURANCE FOR DAY CARE CENTRES
Alfonso Gagliano: Mr. Speaker, my supplementary is directed to the Minister of National Health and Welfare. Thousands of day-care centres are facing the same situation as our boys and girls who play hockey. Could the Minister, in his capacity as Minister of National Health and Welfare, intervene in this matter and try and get insurance coverage for our nursery schools and day-care centres which have no insurance coverage and are very important to mothers with children?


Hon. Jake Epp (Minister of National Health and Welfare):: Mr. Speaker, the concern that the Hon. Member expresses is a valid one. The point that the Minister of Finance has made and the activities undertaken by my colleagues in the Cabinet are, I believe, sufficient evidence of the seriousness with which the Government takes this issue and the work that is being done on it.


CROWN CORPORATIONS
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, I have a question for the Prime Minister. The Prime Minister is aware that before Christmas the business of the House had actually ground to a halt because of the Government's refusal to do a complete analysis of the de Havilland deal. He is also aware that at the last moment the Government did promise the opportunity for a complete analysis of all the details. As a result, business continued with co-operation between all Parties. Does the Government of Canada still stand by that deal?


Hon. Ray Hnatyshyn (President of the Privy Council):: Mr. Speaker, since I was involved in the discussions with respect to the de Havilland matter and also negotiated with the House Leader of the NDP with respect to this matter, let me say this. My colleague, the Minister of Regional Industrial Expansion, said in the last week of the sitting of the House that he was quite prepared to meet with the committee to provide documentation and answer all questions. That commitment was made and has been carried out. The Minister appeared last night and subjected himself to questioning. He produced documents well in advance of the committee hearing.
I understand that the Steering Committee is meeting again later on this day and will, after hearing the Minister, look at what further hearings are appropriate. I think the Leader of the New Democratic Party should possibly wait to see what happens with respect to that meeting before pursuing the matter further.
Oral Questions HEARING OF WITNESSES


John Edward Broadbent: Mr. Speaker, the details of that committee meeting and the de Havilland issue itself are of very great importance. However, the question I am asking goes beyond that. It affects all the other business of the House in terms of the commitment made by the Government before Christmas.
Since, as a means of implementing the commitment to what the Minister himself called a full discussion, there was a unanimous agreement on the part of all parties represented on the Steering Committee to hear 14 witnesses regarding the de Havilland case and since the majority, the Conservative members, unanimously voted against the proposal in the full committee, led by a motion moved by the Chairman of the Conservative caucus, my question is directed to the Prime Minister. Does the Prime Minister believe that a motion that curtails the hearing of people opposed to the deal is consistent with the Government's promise?


Mr. Speaker:: Order, please. May 1 ask the Hon. Member to rephrase his question, please? I think he is now asking a question with regard to committee procedure. He knows he cannot do that.


John Edward Broadbent: Mr. Speaker, 1 appreciate the rule on that point. I hope Your Honour appreciates the implications, beyond the details of this committee, for the workings of this House.
Does the Prime Minister believe, consistent with the commitment made by the Government, which was entered into in order to obtain co-operation for the discussion of all Bills-not just the de Havilland matter-that it is essential to hear views, in committe, which are opposed to the Government's own decision? Yes or no. That is the question.


Right Hon. Brian Mulroney (Prime Minister):: Mr. Speaker, I suppose the undertaking to which my hon. friend refers is the statement made on December 19, 1985, as reported at page 9617 of Hansard. It was a statement made by the Minister of Regional Industrial Expansion in which he said:
1 am sure that the Hon. Member, and other Hon. Members, will probably be pleased to hear that I certainly have no objection, and neither do my colleagues ... to this matter being considered at the appropriate time by a comittee of this House, at which time the information, other than that which may have some commercial sensitivity, can be put before a committee for full discussion.
There is nothing which has transpired which is inconsistent with that in any way.


Some Hon. Members:: Hear, hear!


John Edward Broadbent: A complete reversal! You are not going to see any business done in this House. Do you understand that? Do you understand that business will grind to a halt? You watch-just watch.


Mr. Speaker:: Order, please.


Martin Brian Mulroney: Socialist blackmail. It's pathetic.


John Edward Broadbent: You watch.

January 17, 1986
Oral Questions


An Hon. Member:: Get him a towel.


Mr. Gauthier:: Look at the order.


Mr. Speaker:: Order, please. The Hon. Member for York Centre (Mr. Kaplan).


LIST OF POSSIBLE WITNESSES
Hon. Bob Kaplan (York Centre):: Mr. Speaker, my question is on the same subject and it is also directed to the Prime Minister. Members of the Government, the President of the Treasury Board, and the Minister of Regional Industrial Expansion have insisted day after day that the deal is a good one, that it will stand scrutiny, and that it deserves support.


Some Hon. Members:: Hear, hear!


Robert Phillip Kaplan: At the same, whipped by the Chairman of Caucus, they cancelled a list of outside objective witnesses who should be heard and to which the all-party steering committee had formerly agreed.


Some Hon. Members:: Question.


Robert Phillip Kaplan: If the deal is a good one, will the Prime Minister encourage members of his caucus to support the reinstatement of that list at 12.30 today?


Mr. Speaker:: The question clearly deals with matters which are before the committee.


Some Hon. Members:: No.


John Edward Broadbent: It is the position of the Prime Minister we want to hear.


Mr. Speaker:: Order, please. May I invite the Hon. Member for York Centre to phrase his concern separately from a reference to the committee?


Robert Phillip Kaplan: How can the Prime Minister seriously expect the people of Canada to believe that this deal is really a good one if he will not let the Members of Parliament look at it?


Ramon John Hnatyshyn: Mr. Speaker, the premise in the Hon. Member's question is simply incorrect. We are going further than any previous Government would have gone with respect to this type of transaction. The Minister is prepared to appear before the committee. I took the advice, and was quite prepared, notwithstanding the fact that committees cease to exist at the end of every year and have to be restructured, to extend-


John V. Nunziata: We want a full disclosure.


Mr. Riis:: What are you hiding? What are you afraid of?


Jean-Robert Gauthier: What are you afraid of?


Ramon John Hnatyshyn: -the committee over until this year so that it could in fact deal with this matter-


Sheila Maureen Copps: Parliamentary reform, ha, ha!


Some Hon. Members:: Shush!


Ramon John Hnatyshyn: -and hear from the Minister and look at all the documents.


Nelson Andrew Riis: It is the witnesses. What are you afraid of?


Ramon John Hnatyshyn: The steering committee will meet to consider witnesses to be brought before the committee.


John Edward Broadbent: They already did.


Ramon John Hnatyshyn: We are happy with this deal. It is good for Canada. We are quite happy to have witnesses come and comment on it. We are not afraid of the deal; we are happy with it.


Some Hon. Members:: Hear, hear!


COMMITTEE HEARINGS INQUIRY
Robert Phillip Kaplan: Mr. Speaker, I ask this: Given the commitment to open government, will the Government not encourage the standing committee and its members to hold full hearings and not just see the documents which the Minister is willing to reveal and question him for a limited period of two hours?


Ramon John Hnatyshyn: Mr. Speaker, all I can say is that our members appear as Private Members on these committees.


Some Hon. Members:: Oh, oh!


John Edward Broadbent: Come on, who are you kidding?


Ramon John Hnatyshyn: They are not under any direction-


Some Hon. Members:: Oh, oh!


Ramon John Hnatyshyn: Obviously, the Opposition give directions as to the way in which their members are going to operate. We do not operate that way on our side. We are proud of our Private Members' judgment and integrity with respect to the committee system in this House.


John Napier Turner: Big deal.


Ramon John Hnatyshyn: The Hon. Member should do his job, go to the Steering Committee and consider and put forward suggestions to the whole committee-


Robert Phillip Kaplan: I already did that. It's been cancelled.


Ramon John Hnatyshyn: It is not up to the Steering Committee to decide these matters. Let the Steering Committee make recommendations to the whole committee-


John Edward Broadbent: They did.

January 17, 1986


Ramon John Hnatyshyn: The whole committee dealt with that. All I am saying is let them go back to the Steering Committee, come up with their suggestions, and I am sure the Committee will give it the proper attention.


HEARING OF VARIOUS WITNESSES
Mr. Mike Cassidy (Ottawa Centre):: Mr. Speaker, this is a very serious matter which, of course, touches on the integrity of the Government, its credibility, and its ability to deliver on promises made during negotiations between the Parties.
My question is directed to the Prime Minister. On December 19 the Deputy Prime Minister said in response to my question, when I sought an assurance that we would have an opportunity to question the various parties involved and look at the documents before the deal was made, and I quote from Hansard at page 9618:
Mr. Speaker, if that is the wish of the House, and if the Hon. Member would like me to sign today's "blues" for him, I would be happy to do that.
Is the Government prepared to deliver on that commitment to hear the various parties involved, including parties who may be critical of the deal?


Hon. Erik Nielsen (Deputy Prime Minister and Minister of National Defence):: Mr. Speaker, what the Hon. Member conveniently left out of that lengthy preamble to his question was my answer to the first question he put to me on that day. He asked if we would undertake "to permit a committee", give it a mandate and look at the deal-meaning the de Havilland deal-"early in January, and possibly before the House returns", and so on. My answer was:
-I see no inconsistency with his willingness-
That is the Minister of Regional Industrial Expansion.
-to inform a committee of the House and the statements which have been made by the President of the Treasury Board. He now tells us-
That is the Minister of Regional Industrial Expansion.
-that the closing may well be delayed until the end of January. Assuming our return here on January 13, there is that period of time between January 13 and the end of January to hold committee hearings. I can see no reason why those-
That is, committee hearings.
-cannot be arranged through the usual machinery of Parliament.
Why do the opposition Members not follow the suggestion of the Government House Leader and allow that usual machinery of Parliament to operate-


John Edward Broadbent: We did, and you broke it.


Nelson Andrew Riis: What are you afraid of?


Erik Nielsen: -by sending the matter to the Steering Committee to bring back a report to the full committee?


GOVERNMENT COMMITMENT
Michael Morris Cassidy: Mr. Speaker, my supplementary question is directed to the Prime Minister. It
Oral Questions
has been 45 days now since we requested full hearings on the de Havilland affair. Is the Government prepared to honour the commitment made by the Deputy Prime Minister on December 19 when he assured me that the various parties concerned with de Havilland, including some who might be critical, would be heard by a committee of this House? Will you honour that commitment, yes or no?


Erik Nielsen: Mr. Speaker, what the hon. gentleman has said in the preamble to his question, purporting to quote what I said on December 19, is utterly and wholly false.


Some Hon. Members:: Oh, oh!


Michael Morris Cassidy: It's right here in Hansard.


An Hon. Member:: Read it.


Erik Nielsen: What I have said I have just read from Hansard at page 9618, and it is there for all with any intelligence to read-


Mr. Hovdebo:: What are you afraid of?


Erik Nielsen: -and that even includes the Hon. Member-


Michael Morris Cassidy: What are you afraid of, Erik? What are you hiding? What kind of cover-up is this?


Mr. Speaker:: Order, please.


Erik Nielsen: I am prepared, as the House Leader has said, to allow the usual machinery of Parliament to work. All the Opposition has to do-


Michael Morris Cassidy: You sabotaged it.


Erik Nielsen: -is to get that Steering Committee to report to the full committee as requested-


Michael Morris Cassidy: We did. You sabotaged it.


Erik Nielsen: -and it will happen. The commitment is there.


MINISTER'S POSITION
Hon. Herb Gray (Windsor West):: Mr. Speaker, my question is directed to the Government House Leader-I should say, the Deputy Prime Minister.


Mr. Penner:: The same thing.


Herbert Eser (Herb) Gray: Perhaps that is the same thing the way things are going in the House.


Jean-Robert Gauthier: That's for sure.


Herbert Eser (Herb) Gray: With respect to page 9618 of Hansard, in addition to what he read from that page, did the Deputy Prime Minister not also say, with reference to the request for full committee hearings:

Oral Questions
Mr. Speaker, if that is the wish of the House, and if the Hon. Member would like me to sign today's "blues" for him, I would be happy to do that.
Did he not say that as well? And why does he not stick to that and make sure we have full hearings on this important issue? What is he trying to hide?


Erik Nielsen: I really can't see an issue here.


Some Hon. Members:: Oh, oh!


Erik Nielsen: What we said, we are doing. The Minister for Regional Industrial Expansion has said he will come to the committee. He said he will tell committee members the entire details of the deal, with the exception of those details which might be commercially sensitive. And even those Hon. Members opposite would understand that kind of limitation. Why don't they allow the usual parliamentary machinery to work-


Michael Morris Cassidy: We did.


Jean-Robert Gauthier: Why don't you back-track now?


Erik Nielsen: - instead of raising these spurious issues on the floor of the House of Commons merely to create a political issue for themselves?


Michael Morris Cassidy: They are not spurious.


Erik Nielsen: Why don't the House Leaders get to work? That is what 1 suggested on December 19, that the House Leaders get together-


Some Hon. Members:: Oh, oh!


Erik Nielsen: -and get the machinery of Parliament working.


Some Hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. Could questions and answers both be heard?


DECEMBER EXCHANGE
Herbert Eser (Herb) Gray: Mr. Speaker, the Hon. Member for Ottawa Centre asked on December 19 if we could "have a commitment given here in the House today that a committee of the House of Commons will, in fact, examine the Boeing purchase of de Havilland before the deal is made final?" He was not talking about just hearing from the Minister of Regional Industrial Expansion. Does the Deputy Prime Minister not recall that he replied, and I quote:
Mr. Speaker, if that is the wish of the House-
So if we are speaking of "spurious" words, why does he not withdraw his spurious words and live up to his commitment on behalf of the Government? Again, I ask him why he is trying to squelch full discussion of this deal by Members of Parliament? What is he afraid of?


Some Hon. Members:: Hear, hear!


B. Keith Penner: Bravo!


Erik Nielsen: Mr. Speaker, I really cannot understand why the Opposition is continually distorting-


John Edward Broadbent: That's one of your troubles. You don't understand.


Erik Nielsen: It is a crock of rhubarb that we are in trouble. Here they tell us that we are not co-operating, that we are hiding something from the committee-[DOT]


Mr. Fulton:: You've been drinking too much sterilized water, Erik.


Erik Nielsen: -and the Minister of Regional Industrial Expansion spent three hours last night before that committee trying to inform committee members what the deal is all about. And the Opposition is objecting because-


Michael Morris Cassidy: You're covering up.


Erik Nielsen: -we are appearing before the committee and telling them all about it.


STEERING COMMITTEE RECOMMENDATION
Mr. Ian Deans (Hamilton Mountain):: My question is also directed to the Deputy Prime Minister. We took the advice of the Deputy Prime Minister and we did in fact meet and we reached an agreement to pass certain legislation as a result of a commitment made by the Minister of Regional Industrial Expansion. Does the Deputy Prime Minister think it reasonable that when a Steering Committee recommends-unanimously recommends, as I understand it-that a list of witnesses should be heard by the committee, that the Conservative Members should come together as one force to defeat that recommendation?


Ramon John Hnatyshyn: Mr. Speaker, I think there are some very glaring errors in the preamble to the question put by the Hon. Member.


John Edward Broadbent: Oh?


Ramon John Hnatyshyn: First, he presumes somehow that there is no responsibility on the part of the committee to consider its own agenda. Clearly, a Steering Committee is not there to determine an agenda but rather to present it to a committee.


Ms. Jewett:: Oh, what a line.


John Edward Broadbent: How phoney.


Ramon John Hnatyshyn: All I say to the Hon. Member is that this process is ongoing, and if the Hon. Member wants to allow his Members to come forward to the Steering Committee in order to discuss a list of witnesses, he is going to find out that this process can work. But it is not for him to draw a conclusion because he thinks that somehow his list is not the one which is
January 17, 1986

acceptable, that it should be completely wrong. If members of the committee decide there should be a list which is reasonable, and allows the matter to be fully discussed-


Mr. Speaker:: Order, please.


Ramon John Hnatyshyn: -it is up to the committee. It's not a matter of concern to this House.


Mr. Speaker:: Order, please. I will listen to a supplementary question but we are getting very close-and the Hon. Member knows it-to questions relating to committee procedure. I ask the Hon. Member to stay away from that subject, please.


Ian Deans: Mr. Speaker, 1 have no intention of asking anything about committee procedure.


GOVERNMENT COMMITMENT
Ian Deans: Is the Government prepared to live up to the commitment which was made by the Deputy Prime Minister, subsequent to a commitment made by the Minister of Regional Industrial Expansion, in an effort made prior to the December recess which resulted in my committing us to pass certain legislation in advance of the Christmas break? Is the Government now prepared to live up to the commitment it made then to allow a proper hearing of all of the necessary withnesses in order to look into the de Havilland deal?


Ramon John Hnatyshyn: Mr. Speaker, there has never been any question but that we will live up to our commitments. We always do, and intend to do so in this case. I would suggest to the Hon. Member that he allow the process to work rather than drawing red herrings into this particular issue.


Michael Morris Cassidy: You didn't do it last night.


REQUEST THAT O'FARRELL REPORT BE MADE PUBLIC
Mr. Jean-Claude Malepart (Montreal-Sainte-Marie):: Mr. Speaker, my question is directed to the Right Hon. Prime Minister.
Mr. Prime Minister, this morning, an American study contradicted the federal Government according to whom Quebec would have to import gasoline.
Another study, published by Statistics Canada, claims that Quebec has a lack of refining capacity.
I have here a third study by the Quebec Department of Energy which clearly indicates there is a shortage of refinery capacity in Quebec.
Oral Questions
Will the Prime Minister undertake to make the O'Farrell Report public?


Martin Brian Mulroney: Mr. Speaker, as I said in reply to a question by a New Democratic Party Member a few days ago, there is a host of reports on this kind of issue, and sometimes their conclusions do not coincide. That is not unusual.
I also mentioned that the Minister would produce the data he has at the appropriate time.


SALE OF GULF REFINERY-PRIME MINISTER'S POSITION
Jean-Claude Malépart: Mr. Speaker, does the Prime Minister agree that the O'Farrell Report will be an important consideration in the Lavalin-Ultramar transaction, since the important thing is not only to save jobs in Quebec but to save the Quebec consumer as well?
Furthermore, doesn't the Prime Minister believe it is important to publish the O'Farrell Report and the statistics of the Department of Energy, Mines and Resources, so that Canadians will know what the real figures are and Ultramar can sell the entire Gulf refinery to Lavalin Inc.?


Martin Brian Mulroney: Mr. Speaker, despite the fact that Montreal East has had three refineries close down while the party it supported was in power, we see our responsibility as follows: First of all, to provide for as many jobs as possible, and second, to ensure that Quebecers will continue to pay competitive prices. And we are succeeding, at least we hope so, in both areas.
As far as the transaction itself is concerned, since this is a matter initiated by the private sector, we cannot give any guarantees, but we are very busy working with the parties concerned in order to save as many jobs as possible.


REFINING CAPACITY IN QUEBEC-GOVERNMENT POSITION
Mr. Dan Heap (Spadina):: Mr. Speaker, I wish to direct my question to the Right Hon. the Prime Minister.
Is the Prime Minister aware that a recent study done by Oil Buyers Guide-an independent North American organization-reveals that, without the Gulf refinery, Quebec's daily shortage of refined products will amount to 56,000 barrels?
What does the Prime Minister intend to do to prevent Quebecers from being ripped off as a result of such undercapacity while a refinery is standing idle?


Martin Brian Mulroney: Obviously, Mr. Speaker, that is the same question. I give him the same assurance: the Canadian Government will protect the interests of Quebec consumers at all times.

January 17, 1986
Oral Questions


REQUEST FOR COMBINES INVESTIGATION
Daniel James Macdonnell Heap: Mr. Speaker, this is the sixth report that shows about a fifty thousand barrel per day deficit. There is O'Farrell, the Minister of Consumer and Corporate Affairs, Statistics Canada, the Quebec Government, Gaz metropolitan, and now the Oil Buyer's Guide. Will the Prime Minister take action under the Canadian Combines Investigation Act to protect the jobs of the people of Montreal and the oil supply of the people of Quebec?


Martin Brian Mulroney: Mr. Speaker, my hon. friend will know that in response to a question from one of his colleagues in the last number of days I responded to that fully and have given those assurances.


AGRICULTURE
Geoff Wilson: Mr. Speaker, my question is directed to the Minister of Agriculture. This morning details of the $150 million Prairie Crop Disaster Assistance Program were released. The application form seems to suggest that a producer must enrol in crop insurance in the future. Is the undertaking to join crop insurance a condition precedent to receiving pay-out under this plan and, if so, why?


Hon. John Wise (Minister of Agriculture):: Mr. Speaker, I appreciate the Hon. Member's question. Due to the importance of maintaining and promoting crop insurance all across the country, I hoped as Minister of Agriculture to be in a position to make that conditional. Indeed, there have been representations by provinces, farmers and farm organizations that I take that action. However, I am advised that indeed I do not have the legal authority to make it necessary.


REGIONAL ECONOMIC DEVELOPMENT
Hon. Jean Chretien (Saint-Maurice):: Mr. Speaker, I would like to direct my question to the chairman of the Committee on Regional Economic Expansion, the Hon. Member for Laval.
I would like to ask him whether he or his committee members have been in touch with Ministers or parliamentary secretaries in an attempt to force the committee to reverse the decision and disregard the commitment to hear witnesses today.


Mr. Guy Ricard (Laval):: I am only chairing the committee.
I am not participating in two discussions about committee strategy, Mr. Speaker.


INQUIRY WHETHER REPRESENTATION MADE TO COMMITTEE CHAIRMAN ON APPEARANCE OF WITNESSES
Joseph Jacques Jean Chrétien: Mr. Speaker, here is my question to the committee chairman: I want to know whether Ministers or parliamentary secretaries have made representations to the committee chairman with a view to putting off the appearance of witnesses?


Mr. Speaker:: Order, please. The Hon. Member may have a question for the Government about the Government's action, but that question goes beyond the procedural questions that are appropriate for a chairman. The Hon. Member may wish to put a question to the Government along the same lines, if he wishes.


Joseph Jacques Jean Chrétien: Mr. Speaker, we have the right to ask questions. The chairman of the Conservative caucus arrived with a four-page text-


Mr. Speaker:: Order. I have tried to signal to the Hon. Member how he may wish to put his question. However, if he does not wish to-


Joseph Jacques Jean Chrétien: Mr. Speaker, I would like to ask his question-


Some Hon. Members:: Sit down.


Mr. Speaker:: Order. Under the circumstances I think I must move on. The Hon. Member for Prince Albert.


AGRICULTURE
Stanley J. Hovdebo: Mr. Speaker, my question is directed to the Minister of Agriculture. The Minister will be aware that the United States is spending $2 billion in giving away one bushel of wheat for each two or three bushels bought by certain countries. The European Economic Community has a similar program.
Will the Minister tell the House what the Government is doing to counter these unfair subsidy practices that have been put in place by the United States and the EEC?


John Wise: Mr. Speaker, the Hon. Member will know that the U.S. Secretary of
January 17, 1986

Agriculture visited us yesterday. My colleague, the Minister in charge of the Canadian Wheat Board, and I had a very productive and useful meeting with the Secretary of Agriculture. Indeed, we were very pleased and encouraged to some degree that changes in the Farm Bill would indicate there would be very significant acreage reductions. This would have a very significant impact on the volumes of grain produced by the United States.
In addition, there is a very important component in the U.S. farm Bill which will revert a fair amount of crop land back into grasslands. Of course this will have the end result of reducing volumes. It is somewhat premature to identify the impact of this.


UNITED STATES FARM COMMODITY SUBSIDIES
Stanley J. Hovdebo: Mr. Speaker, my question concerned the past incentive programs but I would like to follow up on that response because the United States is putting $52 billion into farm commodity subsidies during the next three years. This will contribute to the collapse of commodity prices all over the world.


Mr. Speaker:: Order, please. A supplementary question.


Stanley J. Hovdebo: What effect will this have on Canadian grain prices and what does the Government intend to do about that $52 billion that is being poured into the U.S. farm market as subsidies?


John Wise: Mr. Speaker, I am sure that the Hon. Member will recognize we regard this very seriously. Naturally, I assume he would accept the fact that we cannot compete against the U.S. Treasury. However, we must recognize that the mid to long-term goal of the U.S. program is to reduce the excess stock in the international market-place. I think we should at least applaud the U.S. direction rather than what the EEC is trying to do.


THE ECONOMY
[Stage Direction]
Oral Questions
Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: We have-


Ian Deans: Now you know why you don't get supplementary questions.


Mr. Andre:: Question Period is to ask questions, jerk.


Michael Holcombe Wilson: If I might respond to the Hon. Member, our most recent expenditure projections indicate we should come in just under the level we set. However, the revenue projection will be somewhat on the low side primarily because of a shortfall in corporate revenues. However, we expect that the main impact on the deficit because of changes we made in the May Budget will be felt in the fourth quarter of the fiscal year, which we are in right now. So there is every indication we will be very close to the projection I set out in the May Budget.


CORPORATIONS
Hon. Andre Ouellet (Papineau):: Mr. Speaker, in the absence of the Minister of Consumer and Corporate Affairs, my question is directed to the Prime Minister. I have here a copy of the submission presented by the Director of Investigations before the Restrictive Trade Practices Commission of Canada on that part of the transaction concerning Petro-Canada's purchase of Gulfs Western Canada assets. It was made public during the public hearings. Will the Prime Minister assure us that, with respect to the other part of the transaction concerning Gulfs assets, the one coveted by Ultramar, the same openness will preside? Will the Director of Investigations have an opportunity to give evidence publicly before the Restrictive Trade Practices Commission of Canada? Will his report be made public at that time before the Commission?


GOVERNMENT'S DEFICIT TARGET
Mr. Tom Hockin (London West):: Mr. Speaker, my question is directed to the Minister of Finance and is prompted by press reports that the Government has somehow been knocked off its deficit reduction target because of a recent rise in interest rates and widespread concern about the dollar. Is the Government going to be able to meet its deficit target as outlined by the Minister last May?


Some Hon. Members:: Thank him for the question.


Geoff Wilson: Thank you very much, Mr. Speaker. It is nice to get a substantive question.


Martin Brian Mulroney: I have not considered the issue, but I will be pleased to do so and see what was done in similar circumstances in the past under other governments. I will be pleased to look at the issue on the basis of that, as to the requirements, and I will report to my hon. friend.


RESTRICTIVE TRADE PRACTICES COMMISSION-REQUEST THAT HEARINGS BE HELD IN PUBLIC
André Ouellet: I have a supplementary, Mr. Speaker. I can assure the Prime Minister that normally hearings are public, and I think the Prime Minister-I am

Oral Questions
asking him the question-if he wants to be sure that his is an open government, will take it upon himself to ensure that the hearings held by the Restrictive Trade Practices Commission of Canada are public.


Martin Brian Mulroney: Of course, I gladly accept my hon. friend's comments. I do not have his seniority in this House, although we are approximately of the same age, but I remember, for instance, that when I was Leader of the Opposition, I asked the Liberal Government for a parliamentary investigation into the whole aerospace issue in Canada, including Canadair and de Havilland, and the answer was no.


PUBLIC SERVICE
Ms. Lynn McDonald (Broadview-Greenwood):: Mr. Speaker, my question is directed to the President of the Treasury Board. It concerns the Government's very misguided policy of not requiring a clean air environment for its own employees in the workplace. Would the Minister not agree that this is a very misguided policy which ought now to be changed? Specifically, will he undertake not to appeal the decision in the Peter Wilson case where a tribunal ruled that employees have the right to clean air in the workplace?


An Hon. Member:: A one-issue lady.


Hon. Robert de Cotret (President of the Treasury Board):: Mr. Speaker, I must point out to my hon. colleague that we have indeed come to an agreement with the unions to ensure that all employees will be able to work in a healthy environment. Certain issues raised by a decision made by an administrative board seem to go much further in some of their implications. We find these conclusions questionable, but I can assure my honourable colleague that this Government and the Treasury Board want all our employees to work in a healthy environment.


REQUEST FOR LEGISLATION
Lynn McDonald: Mr. Speaker, my supplementary question is directed to the Minister of Health. Would he not agree that instead of making pious declarations, as the Minister just did on this subject, it is time to bring in legislation which we need to provide guarantees so that all employees under federal jurisdiction will have clean air in the workplace?


Arthur Jacob (Jake) Epp: Mr. Speaker, this Government has not restricted itself to the kind of statements the Hon. Member has made. For example,
January 17, 1986
as of January 1 of this year my own Department has moved in that direction largely because of the co-operation of the employees of the Department. There are other Departments looking at this issue. I think the method the President of the Treasury Board is using, namely, co-operation with the unions and workers involved in moving toward what is a very laudable objective, makes more sense than passing edicts and other such measures.


SCIENCE AND TECHNOLOGY
Mr. David Berger (Laurier):: Mr. Speaker, my question is directed to the Minister of Science and Technology. It concerns the budget of the Natural Sciences and Engineering Research Council. This week the Minister asked Canadians to be patient, while the Council says that the budget cuts will be more dramatic than anyone in the scientific community anticipated. Now that our worst fears have been confirmed, will the Minister end the anxiety for thousands of researchers and students who count on that Council for their livelihood and careers, and announce his plans immediately?


Hon. Frank Oberle (Minister of State for Science and Technology):: Mr. Speaker, I would very much like to announce the plan immediately because 1 am so full of excitement and enthusiasm about it.


Mr. Johnston:: We can see that.


Frank Oberle: The problem is that the science community has also requested that we bring greater consistency and predictability to Government commitments. That has caused a little bit of a delay which is, incidentally, not as long as any of the delays experienced in previous years which were caused by the former Government.


David Berger: Mr. Speaker, the Minister says a little bit of a delay. This Government has been in office for 17 long months and we still do not have a science policy for this country.


Some Hon. Members:: Oh, oh!


Miss MacDonald:: You were there 16 years.


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


GOVERNMENT POLICY
David Berger: Where is the message of continuity and support for the existing scientists, some of whom are already leaving this country, and for the young people who may no longer be considering a career in research because of the Government's policies? How much longer do they have to wait?


January 17, 1986


Frank Oberle: Mr. Speaker, I am seized with two problems. One is to arrive at a formula which will suit us for the rest of the fiscal year. The second is then to get back to the track we established in 1979, namely, working out a five-year program and a strategy which was squandered by the Hon. Member's Government which caused one year's delay. That I will be able to announce in due course.


FINANCE
Donald James Johnston: Mr. Speaker, The New York Times reported yesterday that Canada and Italy have asked to join the Group of Five. A spokesman for the Group of Five, speaking in Paris, said that the applications will probably not be accepted. The quote is:
We want members with real governments.
Does the Minister of Finance regard this as an insurmountable obstacle to Canada obtaining membership in that exclusive club?


Geoff Wilson: First, Mr. Speaker, we have not asked to attend the meeting. We have indicated to our colleagues in the G-Five some of our concerns around the issues that we expect they will be discussing this weekend. I should say to the Hon. Member that this meeting is the normal routine meeting that is an agenda-setting device for the intercommittee and development committee meetings to be held in two or three months time.
The way the Hon. Member has expressed the question displays his lack of understanding of what the G-Five is all about. The G-Five represent the five largest countries in the world which have easily the largest percentage of trade, easily the largest percentage of exchange reserves, and easily the largest involvement in the International Monetary Fund. It is for that reason they are represented on this committee.


NEW YORK TIMES REPORT
Donald James Johnston: Mr. Speaker, I will be happy to make the report available to the Minister of Finance because, clearly, he is not aware of it. I think it is an insult to the Government of Canada, even though we may happen to share that view ourselves.
Will he undertake to look at the reasons given? It may be from what we see that we could never become members of that club, which is where we should be.


Geoff Wilson: 1 am not sure, Mr. Speaker, whether that was a question or a statement.


An Hon. Member:: It was a question.
Petitions


Michael Holcombe Wilson: If it was a question, I did not see the question mark.


Donald James Johnston: Did you hear it?


Michael Holcombe Wilson: I am hearing all these bleatings from Hon. Members as to why we are not there. The G-Five was formed in 1972, I believe, when the Leader of the Opposition was the Finance Minister.


John Napier Turner: I used to get invited, Michael.


Some Hon. Members:: Oh, oh!


Michael Holcombe Wilson: That is why we are not
there.


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. I have no question mark that Question Period is now over.


CLERK OF PETITIONS' REPORT(S)
Mr. Speaker:: I have the honour to inform the House that the petitions, with the exception of 18, presented by Hon. Members on Thursday, January 16, 1986, meet the requirements of the Standing Orders as to form.
Certain petitions presented by Hon. Members do not meet the requirements of the Standing Orders as to form.
The petitions presented by the Hon. Member for Oxford (Mr. Halliday) and the Hon. Member for Prince George-Peace River (Mr. Oberle) by filing with the Clerk of the House also meet the requirements of the Standing Orders as to form.



ROUTINE PROCEEDINGS


Mr. Vic Althouse (Humboldt-Lake Centre):: Mr. Speaker, I have petitions to present from many towns in my riding from Lestock, Dysart, Bruno, Southey, Earl Grey, Craven, Lanigan, Young, the Humboldt area as well as Wynyard. All of the petitioners wish to bring to the attention of the House the problem being created by the deindexation of universal family allowance, the public commitment to change child benefits, and to increase taxes, which place an unfair burden on middle

January 17, 1986
Petitions
and low-income households. They call upon the House of Commons to reinstate full indexation of universal family allowance and to rescind the unfair tax increases.


Mr. Les Benjamin (Regina West):: Mr. Speaker, I have four petitions all on the same subject from Dartmouth, Nova Scotia; Toronto, Ontario; Surrey and White Rock, B.C.; and Saskatoon, Saskatchewan in which the petitioners pray and call upon the House of Commons to reinstate full indexation of universal family allowances and to rescind the unfair tax increases.


Pauline Jewett: Mr. Speaker, I have a petition from a considerable number of residents of Gibsons, B.C., a second petition from a large number of residents of Nelson, B.C. and the third is from a number of Canadians living in Halifax, Nova Scotia. In each of these petitions, the petitioners request that the House of Commons reinstate full indexation of family allowances and rescind the unfair tax increases in the Government's May Budget.


Mr. Howard McCurdy (Windsor-Walkerville):: Mr. Speaker, I have a number of petitions on the same subject from Nova Scotia, British Columbia and from Ontario from Canadian citizens who persist in the futile perception that if they ask the Government to act on their behalf it will listen to them. They ask that the deindexation of family allowance be withdrawn and the unfair tax legislation also be withdrawn.


Nelson Andrew Riis: Mr. Speaker, I have a petition on behalf of a number of residents from St. Catharines who ask the Government to consider that the deindexation of family allowance and the massive cut-backs in the public commitment to child benefits are really an unfair attack on women and families with children, especially single parent mothers.
I have another petition from Dartmouth, Nova Scotia; Sackville, New Brunswick; and Castlegar, B.C. on the same topic asking the Government to reinstate full indexation of universal family allowance.


Margaret Anne Mitchell: Mr. Speaker, in the dying days of debate on Bill C-70, I have a number of petitions also on this very important subject affecting children, families and particularly single parent mothers with young children who are very often poor. They are asking the Government to reinstate full indexation of universal family allowance and to rescind other budget measures such as unfair tax increases that affect families.
The first petition is from my own riding of Vancouver East. I have received many, many petitions from residents of that community. This is from the Grandview part of Vancouver East. I also have a petition from downtown residents from Vancouver Centre as well as Vancouver East who represent a very low income community concerned about this issue.
I have another petition from Vancouver Kingsway on the same subject asking for full indexation of family allowance.
I have another one from residents living in Langley and Richmond, B.C., both Conservative ridings, asking for the Government to change its position and to reindex family allowance. I have another petition from New Westminster and Surrey on the same subject, and one from the Conservative riding that includes White Rock, B.C. The petitioners are asking the Government to reconsider and fully index family allowance to the cost of living, and to do it now.


Stanley J. Hovdebo: Mr. Speaker, it is my honour and duty to present four petitions, one from the Regina area of Saskatchewan. Some people from Prince Albert have also signed it. I have petitions from Nova Scotia, Ontario and from Gibsons, B.C. All of these petitioners request the House of Commons to reinstate the indexation of universal family allowance and to rescind unfair tax increases.


Mr. Ron Stewart (Parliamentary Secretary to Minister of Public Works):: Mr. Speaker, would you be so kind as to call Starred Question No. 472?


Ms. McDonald: 1.	Is the cost of the construction of the National Museum of Man and the National Gallery expected to exceed the guidelines set in 1983 and, if so, by what amount?
2.	Will the architectural firms and major engineering contractors receive professional fees in connection with these projects in excess of those contracted before July 1985 by the National Museums Construction Corporation and, if so, for what reason?
3.	Will all new contracts or amendments to contracts resulting from a new allocation of funds be made public?


John B. Stewart: Mr. Speaker, it is with pleasure on behalf of the Minister of Public Works that 1 answer Starred Question No. 472 as follows;
(1)	Yes. In 1983, the cost of construction of the two museums was estimated to be $191,145,000; $810,000 of this amount was to come from the private sector. However, since the previous Government had not, prior to the initial allocation of funds in September, 1981, undertaken a detailed analysis of the design and construction problems inherent in the projects, the cost of completion is now estimated to be $261,800,000- $133,100,000 for the National Gallery and $128,700,000 for the National Museum of Man.
Accordingly, since the preliminary study was incomplete and the projected funds fell short, after an exhaustive study, the Conservative Government announced on October 23 an increase to $69.6 million to the total of the project due to the fact that the original funding was insufficient by this amount. This amount had been omitted in the initial study in 1981.
January 17, 1986

(2)	Yes. The contracts with the architects and engineering professionals call for adjustments to be made on a percentage basis related to the estimated value of construction. The precise amounts of the adjustments are not yet known and are presently under discussion with the respective consultant organizations.
(3)	No. It is not normal to make public details of contractual agreements without the consent of the private sector participants concerned. Therefore, the Conservative Government has taken every possible measure to ensure that no additional funds will have to be allocated to these projects.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Question answered orally is indicated by an asterisk.)
Mr. Doug Lewis (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, I should like to advise the House that Question No. 469 will be answered today.


Mrs. Cossitt: Does the Department of National Defence still operate stores on armed forces bases which sell civilian goods and, if so (a) where are they located (b) are the staff paid by the Department and, if not, by whom (c) are there any plans to close down any stores and, if so, which ones?


Mr. Robert Wenman (Parliamentary Secretary to Minister of National Defence):: 1. Yes.
(a)	The Canadian Forces Exchange System (CANEX) outlets are located on Canadian Forces bases and stations across Canada, Europe and in Bermuda.
(b)	CANEX, with non-public funds generated by the system, pays all its own employees except for normally one or two military members per base or station, who are paid by the Department and are assigned as basic management staff for CANEX operations.
(c)	Store closures are planned at Cadin/Pinetree Line stations which are being phased out over the next few years, as announced by the Minister in the House on March 13, 1985. [English]


Mr. Speaker:: The question as enumerated by the Parliamentary Secretary has been answered.


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


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


Some Hon. Members:: Agreed.
Income Tax Act, 1986


Philip Derek Lewis: Mr. Speaker, if Question No. 468 could be made an Order for Return, the return would be tabled immediately.


Mr. Speaker:: Is it the pleasure of the House that Question No. 468 be deemed to have been made an Order for Return?


Some Hon. Members:: Agreed.


Mrs. Cossitt: What is the rate of pay, at the present time, for (a) privates (b) non-commissioned officers (c) warrant officers (d) commissioned officers including the Commander of the Armed Forces?
Return tabled.



GOVERNMENT ORDERS


Ramon John Hnatyshyn: that Bill C-84, an Act to amend the Income Tax Act and related statutes and to amend the Canada Pension Plan, the Unemployment Insurance Act, 1971, the Financial Administration Act and the Petroleum and Gas Revenue Tax Act, be read the third time and passed.


Mr. Pierre H. Vincent (Parliamentary Secretary to Minister of Finance):: Mr. Speaker, I am pleased to speak today on Bill C-84, an Act to amend the Income Tax Act and several related statutes. These include the Canada Pension Plan, the Unemployment Insurance Act, 1971, the Financial Administration Act and the Petroleum and Gas Revenue Act.
The Bill contains measures proposed in two notices of ways and means motions tabled in the House earlier this year, one being a general way and means motion tabled on May 23 and the other being a detailed notice of ways and means motion tabled on November 21.
The Bill represents a substantial and integral component of the Government's program to secure durable economic renewal for Canadians. Hon. Member will recall that we established the broad framework for that strategy in November, 1984. Since then we have moved clearly and consistently to develop and to implement specific initiatives which are the building blocks for durable economic growth.

January 17, 1986
Income Tax Act, 1986

This Bill is an important component of the program developed by this Government to ensure a lasting economic renewal for all Canadians. Hon. Members will recall that we outlined that strategy in November 1984. Since then, we have acted clearly and continuously to develop and implement special measures which have contributed to a lasting economic renewal.

The renewal strategy is designed to create steady and sustained improvement in the basic conditions for economic growth.
The Bill proposes to continue our strategy for far-reaching and wide-ranging economic renewal. Therefore, it is appropriate to review briefly the corner-stones of that strategy. First, the Government is determined to reduce the federal deficit and bring the growth of the public debt under control. A second corner-stone of the renewal strategy is the direct encouragement of private initiative as the key to productive growth and job creation. Third, we are improving the efficiency and effectiveness of Government by cutting waste, by removing obstacles to economic growth and by making better use of scarce and precious resources. We are ensuring that Government assumes a less instrusive place in the lives of Canadians.
Finally, we are bringing about all these vital changes in a manner which is as fair as humanly possible. In acting to improve the climate in which our private sector in Canada can excel, we are building on the basic senses of compassion, tolerance and justice, which are the essence and the character of our Canadian society.
The Bill we are considering today is firmly and squarely based on these corner-stones of the economic renewal strategy. The Bill will implement many significant measures which the Minister of Finance (Mr. Wilson) introduced in the Government's first full Budget. These measures have attracted widespread support and are eagerly awaited by Canadians. [Translation]
Mr. Speaker, this Bill contains very important amendments to the Income Tax Act. If I may, I would like to mention some of them.
First, there is the $500,000 capital gains exemption. As I have already said in this House, this amendment will change the attitude of Canadians as far as savings and investment are concerned and help the whole business sector, especially small businessmen.
Mr. Speaker, when I speak about small businessmen, this includes the farmers. They own small businesses, and after meeting farmers in my constituency, whether they are from Yamachiche, Saint-Barnabe, Saint-Severe or Pointe-du-Lac, I know that they are impatient for the Budget to come into effect, especially the $500,000 lifetime capital gains exemption.
Mr. Speaker, a second important point is the provisions that investments in pension plans and RRSPs may now be used for small businesses.
Mr. Speaker, as you know, this Bill will allow all those who have RRSPs or RRSFs to use this money to purchase equity in our small businesses, which will help these businesses to expand and provide a new source of capital, which is essential to develop our economy and create more jobs.
A third part of Bill C-84 concerns the income-splitting provisions which used to provide a means to avoid paying taxes for members of the same family. We all know that, very often, there were interest-free loans between members of a same family and the person who had no income at that time declared interest income on which very little or no taxes were payable. Bill C-84 eliminates this loophole.
Mr. Speaker, it is unfortunate that the Opposition has not pointed out that this is a good thing. We have not heard about it from the other side and I think that if the Oppostion had been honest, they would have applauded this initiative.
The fourth change concerns the administration of the taxation system. Seizures and all search activities carried out under the previous system by the Department of Revenue, which had been mentioned frequently under the former Government, have been eliminated.
A fifth measure proposed in the Budget was the risk capital fund for workers. Individuals who invest in risk capital funds constituted by workers will now be entitled to a tax credit amounting to 20 per cent of the cost of purchase. This is another very useful measure which unfortunately has not been mentioned very often by the Opposition.
Mr. Speaker, the sixth point concerns research and development. Tax credits for small businesses up to $2 million will provide a 100 per cent refund instead of 40 per cent as is the case now.
All those are positive measures, Mr. Speaker. 1 could go on for a long time, but I think that, after reading Bill C-84, it is easy to see that this legislation is of vital importance for the Canadian economy and for all Canadians.
In conclusion, this Bill provides for a new direction for the Canadian income tax system, new measures such as the $500,000 lifetime personal capital gains exemption to encourage Canadians to invest their savings in productivity of Canadian activity and to take business risks.
This Bill improves the fairness of the tax system by removing some of the ways in which unintended advantage may be taken of the tax system and increases the effectiveness of government programs by reducing the base for investment tax credit where other grants or assistance have been received for expenditures made.
January 17, 1986

This Bill increases the fairness of the tax system by introducing change of control rules to prevent unacceptable sales of unused tax credits. These changes are long overdue. We know that Canadians share our desire to improve the economy and are willing to share the burdens so that we will all share the triumphs.
This is a major Bill. It is in some areas complex, but such complexity is unavoidable where measures such as those contained in this Bill affect the fundamental principles of our tax system. The new direction this Bill provides, and the benefits that Canadians will gain more than justify the changes. Mr. Speaker, 1 recommend Bill C-84 to this House, and I look forward to the speedy passage of these measures.


Mr. Speaker:: In the context 1 think we will waive the technical issue of a question and comment period. Therefore, 1 give the floor now to the Right Hon. Leader of the Opposition (Mr. Turner).


John Napier Turner: The
Parliamentary Secretary has just urged a speedy passage. The House Leader has taken care of that by imposing closure on the Bill. 1 cannot remember, in major pieces of legislation reflecting what is at the core of the Government's economic philosophy of budget where closure has been applied in this type of case, where the debate has been limited in the House of Commons, and where the committee hearings have been restrained to one week's hearings.
That gets to the issue that troubled the House earlier today in Question Period when the Government-in return for getting an agreement on how this Bill was to be treated, among others-made an undertaking before Christmas to open up committee hearings on the de Havilland affair.
True, Your Honour referred to those matters as being committee proceedings, but the issue related to an order of the House which limited the time available for debate, of course, reinforced unilaterally by the Government using the hammer of closure.
It is with no disrespect to the Parliamentary Secretary that I suggest to him and to the Government that on the third reading of a budget Bill reflecting the economic policy of the Government the Minister of Finance (Mr. Wilson) should be in the House, and so should the Minister of State for Finance (Mrs. McDougall). I had the honour of holding that portfolio, the Ministry of Finance, for four years and I always made it a practice as Minister to attend to Bills personally in the House of Commons, not always during the report stage, but certainly during the second reading and third reading stages of a major piece of legislation. I consider it to be a continuing affront to the House, and I say that with respect, Your Honour, that Ministers are disregarding that courtesy and not attending the House when their legislation is being considered.
I want to congratulate our financial critic, the Member of Parliament for Saint-Henri-Westmount (Mr. Johnston), ably supported by the Member of Parliament for Laval-des-Rapides (Mr. Garneau) and the Member of Parliament for Trinity (Miss Nicholson) who have had the custody on our
Income Tax Act, 1986
side for the disposition of this Bill and for the critique of the Bill. I want to state what I stated during the budget debate. We have grave concerns about the tenor, tone and substance of this Bill. We thinks it reflects a Budget that is unfair. We think it reflects a Budget that is sneaky. We think it reflects a Budget that is unnecessarily taking money out of the economy, particularly the domestic economy, to the detriment of Canadian owned small business. This Government enjoys the largest majority in Canadian history. It has also presented to the Canadian people in this Budget the largest tax increase in Canadian history. Instead of the Minister of Finance having the courage and the guts to stand up on budget afternoon and say to Canadians, "I am raising your taxes", he did it in a sneaky, clandestine and hidden fashion. Most of the tax increase is done at the sales tax level and at the deindexing level.
I had the honour in 1972, unanimously supported by the Conservative Party at the time, of indexing our taxes, that is to say I indexed the brackets and the deductions to reflect the erosion of inflation on the income of Canadians. I did it with the unanimous support of the country and of the Leader of the Opposition at the time, Mr. Robert Stanfield. We did it because we felt it unfair that Canadians should be taxed at higher rates because of the inter-reaction of inflation against the progressive tax system. They may have received salary increases, but when you balanced that against inflation there was no real increase at all. There might have been a nominal increase in their salary or their wage rate, but no real increase at all. Yet by moving them into higher tax brackets the Ministry of Finance took that money from them.
Because of this hidden tax we have not only a sneakiness in the system, because the Minister did not have the guts to say he was going to tax Canadians by an increase of 3 per cent per year, per year, he just deindexed the system by 3 per cent per year, per year, but the way that the deindexing is going to work will have very unfair consequences. Not only is it hidden, but it will hit the lowest income earners hardest.
I recite figures that my colleague, the Member of Parliament for Laval-des-Rapides got from an official document from the Department of Finance which was never denied by the Minister as not being legitimate. We get these figures over a period of four consecutive years cumulative. A man or a woman in this country earning $15,000 a year will have a cumulative tax increase in four years of 36 per cent. A man or a woman earning $30,000 a year will have a cumulative four-year increase of only 11 per cent, compared to that 36 per cent. If you earn $100,000 a year in this country over that four-year period, your cumulative tax increase will be 4 per cent. If you happen to earn $200,000, that cumulative tax increase over the same period of time will only be 2 per cent- $15,000 a year, a 36 per cent increase, $200,000 a year, a 2 per cent increase. Now, that is not fair and it is not perceived by the Canadian people to be fair. When you take that and couple it with the capital gains tax exemption of $500,000 over a lifetime, reduced at the maximum rate to a $125,000 cash

January 17, 1986
Income Tax Act, 1986
bonanza, you have inequity taken, I believe, to a Dranconian degree.
The average family is taxed about $450 to $500 a year more. Over a period of four years, there is a cumulative tax increase of 30 per cent to 36 per cent. Yet when you add back that capital gains tax exemption to the wealthier, the man or woman earning $200,000 a year will be 4 per cent or 5 per cent ahead. Only 4 per cent of the earners in this country invest in a way that will make them eligible for that tax bonanza.
So I am saying that we have had here a real revelation of a Tory philosophy. After nine months of cosmetic politics, of a meeting with the President of the United States on St. Patrick's Day, and on Valentine's Day a meeting with the provincial premiers in Regina, then a national economic conference, and all the cosmetics and photo opportunities that the Prime Minister (Mr. Mulroney) loves so well, he finally came up with a Budget. It has been the longest period of time in modern Canadian history between an election and a Budget. All the deductions, all the tax brackets are being deindexed by 3 per cent a year, and that will mean, in gross terms, by 1989 a hidden tax increase over what we have now of $11.5 billion. The Minister of Finance did not have the courage, the guts, the frankness or the forthrightness to stand up in this House before Your Honour and admit that.
Mr. Speaker, when the Government tried to de-index Old Age Security pensions, the Minister of Finance (Mr. Wilson) had the audacity to claim before the House that he had the support of our Canadian senior citizens. He was badly mistaken. Finally, after thousands and thousands of petitions and signatures were tabled in the House, after public meetings were held across this country, 2.5 million pensioners protested because they felt deceived and betrayed by the Prime Minister (Mr. Mulroney) and the Government of Canada, and because the Prime Minister had made a commitment in Sherbrooke, during the election campaign, when he said to all our senior citizens: I am protecting you against inflation and I will never withdraw that protection. In the Budget, that protection was reduced by three per cent annually. Finally, justice prevailed thanks to the people of Canada, the unions, and even businessmen and women, and all the organizations.
We were frankly disgusted, and that is putting it mildly, at the lack of understanding and the insensitivity of this Government.
This Government, which had shown itself to be entirely devoid of compassion, fortunately was not able to execute its plan. Nevertheless, this Bill, as I said before, is widening the gap between rich and poor in Canada.

Let me outline for Your Honour, the House and the country the impact on the disposable income of families of all the
budget measures, most of which are contained in this Bill. I am talking now about the immediate effect of the budget measures, not the cumulative effect that I recited earlier. A family with an income of $15,000 per year will have $634 less in disposable income as a result of the budget measures. That is 9.8 per cent less. A family with an income of $20,000 per year will have a disposable income of $808 less as a result of this Budget or 8.5 per cent less. A family earning $30,000 per year will have $1,089 or 7.9 per cent less. A family earning $40,000 per year will have a disposable income of $359 or 1.9 per cent less.
Because of the cumulative effect of this Budget, a family earning up to $75,000 per year will have a disposable income of $1,269 or 3.3 per cent more. The disposable income of a family earning $100,000 per year will increase by $2,054 or 3.9 per cent. A family earning $200,000 per year will have $4,519 or 4.2 per cent more. Is that fair? Is that what the Minister of Finance and the Prime Minister consider to be a fair sharing of the burden of getting the public finances under control? If that is so, I think they have been blindly misled and I believe the people of the country will have a reckoning sooner than they think.
My colleague, the Hon. Member for Saint-Henri-West-mount, spoke eloquently on the $500,000 capital gains tax exemption. As you know, Mr. Speaker, we presented two amendments to the House on that issue. Sixty-three per cent of that benefit will go to 4 per cent of the taxpayers of the country. The rather feeble rationale that the Minsiter of Finance attempted to give for this measure was that it would encourage investment and jobs, but there is nothing in the measure before the House to limit that bonanza to Canadian-owned businesses. There is nothing in the measure to limit it to companies registered or listed on Canadian stock exchanges. It is wide open.
The capital gains tax exemption can be benefited from whether one invests in a condominium in Florida, an apartment building in Hong Kong or European art. There is nothing to relate the exemption to Canadian production, jobs and growth, and that was the reason my colleague, the Hon. Member for Saint-Henri-Westmount, introduced an amendment designed to give a tax break on Canadian investments only. I might say that although members of the NDP voted against that particular amendment, they introduced it in committee. They thought it made good sense then and it does make good sense now.
I do not agree with the capital gains tax exemption at all. I do not think it should have been introduced in this Budget. I do not think the Government can give a bonanza of $125,000 to the rich and wealthy and those fortunate enough to be able to invest in assets while taxing the average Canadian family the way it has been taxed under this Budget. However, if there is going to be a tax exemption, it should at least be limited to Canadian investments, companies and businesses.
The only excuse that the Minister gave for not limiting this tax exemption to Canadian investments was that it would make the tax system too complex. As my colleague, the Hon.
January 17, 1986

Member for Laval-des-Rapides, pointed out, even those who would benefit from this cash bonanza, reinforced by tax lawyers and tax accountants, recognize that the way this exemption has been constructed, when combined with the minimum tax proposal, it will lever investment in favour of offshore and American markets rather than the Canadian market. What these measures do to tax dividends means that it is now more useful for those with surplus funds to invest in the American market and benefit from a lower tax rate than qualify for Canadian dividends from Canadian companies. The Minister has a hopeless situation on his hands. He is encouraging investment outside the country by the interlocking of these two measures.
When talking about a complex income tax system let me point out that those who live in Quebec have to deal with four tax codes. There is the Quebec tax code, the federal Income Tax Act which this Bill is purportedly amending, the new minimum tax code, and the capital gains tax exemption code. It is impossible for the average person to understand how this system was put together. The Minister has not simplified or reformed the system. He has added layer upon layer of complexity, which will only discourage investment and, as I have said, encourage those with the power to invest to go beyond our shores.

In the House and in committee, my colleagues have already mentioned the fact that this Bill also puts an end to the Registered Home Ownership Savings Plan. For eleven years, more than 2.5 million Canadians have been using this plan to help buy their first home. Many young couples have taken advantage of this mechanism to acquire their own home as soon as they started a family. To them it meant recognition of the fact that Canadians and especially young Canadians see owning their own homes as a right. Today, however, the obstacles facing young people in this respect are almost insurmountable, and despite our efforts and a number of amendments that were tabled in the House, the Government has withdrawn the RHOSP. To quote my colleague from Mont-real-Sainte-Marie (Mr. Malepart), this Government is very "mal runne", and I could not agree more.

When the Minister introduced the Budget, he said that he wanted to get the deficit under control. A set up question was asked of him this morning so that he could try to indicate to the country that he was on his own target. We will see. Whatever he has done, he has done on the backs of the unemployed and on the backs of middle-class families.
Both in response to the question this morning and in response to the question I put to the Minister on Tuesday when I asked where the Canadian dollar is going and if the Minister will admit that higher interest rates are being provoked by the Governor of the Bank of Canada in order to stabilize or prop up our dollar, the Minister was trying to patch things up. In response to my question, he was forced to tell me to wait for his February Budget. That was a recognition by the Minister
Income Tax Act, 1986
that the real reason the dollar is falling and has been in speculative trouble is that there has been a lack of confidence on world markets that this country is being properly run. The Minister was forced to say that in the House on Tuesday, and he had a set up question asked of him to try to indicate to the markets that he was on target today. That displays an anxiety on the part of the Minister who is trying to reassure the markets so that the Bank of Canada will not have to inject more funds into the system in order to prop up a falling currency.
We believe that the tax Bill before the House also reflects lousy economics. It takes billions of dollars out of the economy. It reflects a Government that is relying primarily on the export thrust to maintain the health of the Canadian economy. Most of the purchasing power that will be drawn out by this Budget, $11.5 billion in four years, will be to the detriment of small Canadian independent businesses.
When the people of this country voted for this Government, they voted for change. They wanted a new direction. They have not received it. All they have received is incompetence. However, in the Bill which is before us they have received worse than that. In this Bill they see a demonstration of a lack of sensitivity and a demonstration of unfairness. They see a demonstration of the lack of courage of the Minister of Finance and of the Prime Minister who have failed to come clean with respect to the hidden tax increases which are really represented in the Budget.
In terms of the sales tax increases and deindexation of the system, the Canadian people are being hit harder in this Budget than they have been in any Budget tabled in the history of the country. They have been hit in such a way that they will not know what they are being hit with until it creeps up and hits them like a rabbit punch on the back of the neck.
We believe the Budget portrays an insensitivity which does not deserve the confidence of the House. We will not be able to hold it up or stop it. We have been able to say that the Budget reflects an old-fashioned Tory philosophy which says, as the Minister has said: "Sure, you want to encourage those who succeed". However, it certainly does not protect those who are struggling in the country. It does not protect those with families, those who are trying to get above the poverty line, and those who are trying to get ahead. It does not protect those who are trying to build up capital. The Budget reflects old-fashioned market forces which put heat on ordinary Canadians and leave all the scope with those who are able to take care of themselves.
We urge the House not to support this measure. We have done what we could within the limited time given to us under the rules. We have been restrained in what I believe to be a very undemocratic way by the use of closure on a tax Bill. After all, the fundamental role of Parliament is to review the tax system. The fundamental role of Parliament is to review spending. These roles have come down from Westminster. They came about as a result of the early fights between the

January 17, 1986
Income Tax Act, 1986
nobles and the king, fights between the British aristocracy and the Crown, and, eventually, fights between the people and the aristocracy. What Parliament could always refuse was spending. What it could always refuse was the imposition of taxes. There is nothing more important to our system than that there be proper debate and proper scrutiny of these types of measures. Yet, the debate on this measure was restrained. It was curtailed at both the committee stage and before the House.
We oppose this measure. We are revolted by it. We think that it is wrong, unfair and sneaky. We leave it in the hands of the country until we next have an opportunity to deal with it.


Some Hon. Members:: Hear, hear!


Nelson Andrew Riis: Mr. Speaker, I understand that, of necessity, the Minister of Public Works (Mr. La Salle) has to leave Parliament Hill shortly after one o'clock and that he wishes to have an opportunity to speak before that time. If that is the case, then I am certainly prepared to relinquish my place in the speaking order to allow him an opportunity to speak.


Some Hon. Members:: Hear, hear!


Mr. Speaker:: I will take that as a very kind parliamentary courtesy. I recognize the Minister of Public Works (Mr. La Salle) on debate. When we return after lunch, we will hear from the Hon. Member for Kamloops-Shuswap (Mr. Riis) on debate. We will treat the Minister's speech as the next Conservative speech in the round of speeches.


Hon. Roch La Salle (Minister of Public Works):: Mr. Speaker, I listened with interest to the remarks of the Leader of the Opposition (Mr. Turner). Obviously this legislation will have a significant impact on all Canadians. Mr. Speaker, I sat on Opposition benches long enough to know that it is a lot easier to make unflattering remarks about a Government which is accountable and assumes its responsibilities. Still I entertain some reservations about the comments of the Leader of the Opposition, for his credibility can be challenged since he too assumed major responsibilities as Minister of Finance in the Government which Canadians turfed right out over twelve months ago.
I vividly recall that the present Leader of the Opposition once decided to return to the private sector rather than stand up for his Party and his Government, as he should have done-


An Hon. Member:: You too decided to join the Union nationale.


Roch La Salle: Yes, to continue to serve the Quebec voters for whom I have always had consideration and respect.
At least I had the courage to offer my modest contribution to the people of Quebec, I had that kind of courage, unlike the present Leader of the Opposition who chose-as was his right, and I am not criticizing his decision-to look after his own
interests and leave Canadians at the mercy of a Government which was already running out of breath, the same Government to which we owe our current difficulties.
Mr. Speaker, there has to be a limit to such attacks in the House, intended as they are to make Canadians believe that everything we do is wrong, and sometimes in terms which border on demagoguery.
Mr. Speaker, there is no doubt that changes have to be made, and that is what we are doing because we know where we are going, we know what we want, and we know what Canadians expect from us.
Mr. Speaker, would anybody in his right mind miss this opportunity to remind Canadians that the present Leader of the Opposition heads the Party which is trying to tell us how to improve the management of public affairs and which, as it happened, was in office for the past 15 years when 100,000 more Canadians swelled the ranks of the unemployed year in and year out, at least 1.5 million of them all told? That within our first 15 or 18 months in office we successfully reversed this vicious trend so harmful to Canadians? The judgment rendered by Canadians 15 or 16 months ago already was unmistakable: they simply had had enough of a Government which was driving Canada into bankruptcy. Thank God, our economic performance in recent years indicates quite clearly that things are a lot better than they used to be.
Most business people endowed with a good business sense- some Hon. Members opposite know business very well, much better than I do, Mr. Speaker-realize that the economic performance of this Government is quite encouraging and would deserve much better support than it has received so far.
But Canadians should be aware that Members of the Opposition have a part to play, but only to the extent that the interests if their own constituents are well served.
Mr. Speaker, they will interrupt us, level all sorts of accusations against us and use all means at their disposal to try to hinder the normal operation of Parliament. And they will refuse to help the Government which, through its measures, is trying to restore an economic climate likely to attract investments. But we are on the right track, Mr. Speaker, and well on the way to achieving this objective of a new economic outlook for Canadians. We have a lot of catching up to do. While trying to solve almost hopeless problems, we are being asked to work miracles.
Mr. Speaker, it is not easy to turn the country around and off the direction which was leading Canada to bankruptcy. But we came up with changes and economic policies more than a year ago, and we are glad we did, for we have put an end to this disastrous habit of creating 100,000 new unemployed each year. Instead, as we had hoped and encouraged it to do, the private sector has created between 400,000 and 500,000 new jobs in Canada this year.
January 17, 1986

In Quebec, a province of which I am very fond for readily understandable reasons, we have also managed to put an end to this tragedy and to create over 100,000 jobs. Members of the Opposition will say that it is not enough. They will add that a very serious problem exists in Montreal East.
Mr. Speaker, it is a fact that the previous government's ill-advised policies and lack of long term strategy for Montreal East as well as the rest of Canada have created enormous difficulties, but we have already shown our determination and we have already achieved results which, in the eyes of most businessmen and people of good faith, deserve consideration. And we intend to continue, Mr. Speaker.
The Leader of the Opposition says that the purpose of all our efforts is to help the rich, Mr. Speaker. It is a fact that we have come up with incentives to convince those who can invest to invest even more. I think it makes sense to help them invest more for the purpose of creating new jobs. That is the whole idea. Members opposite know it. Do not think that I am not well aware of the problems experienced by those who are unemployed or on welfare. But it must be realized that they are not in a position to generate new investments tomorrow morning. We must therefore look to people who can. And they are not all millionaires, Mr. Speaker. Quite the contrary. Members opposite are quick to blame the elimination of the capital gains tax, implying again that this action will benefit only a handful of millionaires. But nothing could be farther from the truth. Canadians by the millions will benefit from this action. We need only ask farmers, a class of Canadian citizens which I hold in very high esteem. Farmers are businessmen. Go and ask them whether they feel that this action is not quite in order and encouraging for them. But they are not millionaires. That is not true.
Again, there is a consequence which we have seen and which all members in good faith could see if they wanted. That measure will thus enable farmers to pass their farms on to their children at much less cost, due to the fact that we are allowing them very legitimate profits by way of the proposal called the capital gains tax repeal, Mr. Speaker.
The Leader of the Opposition has also said we lacked interest and respect for mothers because we propose changes to the family allowances. Anyone who is honest and who correctly understands the proposal put forward by my colleague, the Minister of National Health and Welfare (Mr. Epp), will see it is aimed at something that any man and woman in his or her right mind would support, and that is helping the most in need, Mr. Speaker. And by rationalizing the child tax credit and the dependent child benefit and family allowances, we are indeed increasing our assistance to mothers or families most in need, those whose income is considered low.
Mr. Speaker, it is clear in all those instances that this new concept permeating our Government is aimed indeed above all
Income Tax Act, 1986
at reviving the Canadian economy, which in my view is the first responsibility of a Government, restoring hope to those young Canadians who were facing unbelievable despair because of an unemployment rate that was so prejudicial to the whole Canadian nation.
Therefore, during the past fifteen months, Mr. Speaker, interest rates have come down in a way that is both significant and encouraging for the construction industry. Thousands of jobs have been created in the construction industry, and also jobs related to the building of thousands of new homes. The inflation rate has been maintained at a much more encouraging level than that experienced over the last five or ten years. Economic growth has taken place and surprisingly, at a still higher rate than was experienced in the United States. Business confidence also increased, and this is important when we want to give the private sector all due credit in that economic renewal. And we do have confidence in the private sector. However, and I was forgetting this, they are blaming us because of this legislation repealing tax credits, capital gains tax, because we had made no provision for dictating to Canadians where they should invest those capital gains.
Contrary to what that Government did for so many years, we will not dictate to Canadians how they will live, not even in their kitchens. We have confidence in Canadians, and in forthcoming measures all those who can invest will also find incentives to invest those gains within the Canadian economy. We do not believe that Canadians will hastily send abroad the savings or gains they may have realized within our Canadian economy that is equally respectful of all Canadians, in order to favour foreign economies. Quite the opposite, Mr. Speaker, we do a lot of thinking. Our first reaction is to trust the Canadian people as a whole.
Today we appreciate the competence Canadians are showing and already, Mr. Speaker, we are assured that those Canadians who have the means will invest their money in Canadian industries because also of the benefits we will offer them. Why? We always have in mind creating jobs in all areas as sophisticated as those of new technology.
That is the goal of the Government we represent, for which 1 think I have every reason to ask the support of all Hon. Members, to recapture the wealth which the previous Government woefully squandered. And to redistribute fairly to all Canadians the money they pay in taxes, we must rebuild the wealth we have lost, and we have a wonderful opportunity to do so by means of measures which also convey the interest of all those investors who also wish to contribute to the building of this country in all generosity and fairness to our whole nation. I am therefore unimpressed by the attack that was launched today by the Leader of the Opposition who stooped so low as to comment only in negative terms on our economic performance which is envied by many countries around the world.

January 17, 1986
Income Tax Act, 1986
I owe thanks, of course, to the Minister of Finance (Mr. Wilson), my colleagues in the Cabinet and all Members of our party who accepted and approved the sort of measures we are proposing. True, Mr. Speaker, we still have a lot to do. But we have nonetheless succeeded, in a short time, in clearing the atmosphere with the provinces. We have also assured them that they will play a greater role in the momentous decisions the Canadian Government will have to take. The Members opposite will go on voicing their pessimistic views and will do all they can to have Canadians believe we are on the wrong track. However, the facts speak for themselves. Canadians will see through the rhetoric, they will understand the meaning of this opposition, the reasons behind this negative attitude and this desire to misinform the public.
These people, Mr. Speaker-and Canadians must be aware of it-do not want us to achieve this urgent economic recovery which is already under way. These people, and the Leader of the Official Opposition in particular, know perfectly well that if we succeed, even in limited way, they will never regain power with the limited team they have. They are missing the opportunity to abide by their commitments to the voters, Mr. Speaker. It is disheartening for all Canadians, Mr. Speaker, to see that these people refuse to assume their fundamental responsability: representing the legitimate interests of their constituents, which in this case means ensuring economic recovery, a quick recovery in all parts of Canada, not only in Quebec, through investment and hard work. To this end, Mr. Speaker, we are forced to ask Canadians to make sacrifices, we must ask them to help pay for a $200 billion national debt, incurred by our friends opposite. We wonder whether Canadians agreed with this approach that created an artificial economy which, today, has become a terrible burden for the entire country, and to what extent the present Leader of the Opposition and Opposition Members are responsible.
Mr. Speaker, in concluding, I hope Canadians will understand that the kind of vision we have demonstrated so far, and this Government's new orientation, are in the best interests of all the people in this country.


Mr. Speaker:: Order, please.


Donald James Johnston: Point of order, Mr. Speaker.


Mr. Speaker:: Is the Hon. Member raising a point of order?


Some Hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. Will the Minister and others please stop this. Order, please.
The Hon. Member is raising a point of order?


Donald James Johnston: It is a question on a point of order, Mr. Speaker. I presume that the Minister will be here at two o'clock to answer questions? Are we not entitled to pose questions?


Mr. Speaker:: That is not a point of order.


Jean-Robert Gauthier: Sure it is.


Mr. Speaker:: Order, please. Having had the courtesy extended to him to allow the Minister to speak, it seems to me appropriate that he should show the same courtesy to the Chair.


Nelson Andrew Riis: Point of order.


Mr. Speaker:: If someone has a point or order to raise, it will be appropriate to raise it at two o'clock.
It being one o'clock, I do now leave the chair until two o'clock this day.
At 1 p.m., the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
Mr. Speaker:: I should advise the House that it has been our practice at second or third reading stage to grant the first speaker for the New Democratic Party a longer time to speak than the normal 20-minute period, if necessary. Is there unanimous consent to grant the Hon. Member for Kamloops-Shus-wap (Mr. Riis) more time if he needs it?


Some Hon. Members:: Agreed.


Mr. Nelson A. Riss@Kamloops-Shuswap: Mr. Speaker, I appreciate my colleague's generosity. I do not expect to need the extra time.
In his very flamboyant speech before lunch the Minister of Public Works (Mr. La Salle) went on for some time about a topic which I think most of us feel quite strongly about, that is, the criticism so many of us levelled at the previous Liberal Government for not creating the jobs this country needed at the time. I recall that the Progressive Conservative Opposition was equally outraged over the fact that unemployment levels were so high and things were so difficult. The amount of job creation taking place was abysmally small. However, the implication which flowed from what the Minister said, as well as from what the Prime Minister (Mr. Mulroney), the Minister of Finance (Mr. Wilson) and others have said, is that more jobs have been created in the last 14 months than, presumably, in the previous 14 months under the Liberal Government. Goodness knows I do not want to be an apologist for the previous Liberal Government, but I want to put this very clearly on the record. In the 14 months which have passed since the election, there were indeed 415,000 new jobs added to the Canadian workforce. However, in the 14 months previous to the last election, under the Liberal Government, there were 416,000 jobs added to the workforce. If you are going to be technical about it, the Liberals were actually creating more jobs. I just wanted to set those facts out so that people do not think that somehow things have changed. We all agree that
January 17, 1986

the Liberals made an abysmal attempt at job creation, but it turns out that the Tories have been even worse.


Some Hon. Members:: Shame!


Nelson Andrew Riis: Indeed, shame on both sides for not creating enough jobs during very difficult times.
In my short remarks this afternoon regarding Bill C-84, an Act which introduces a number of changes to Canada's tax system, 1 want to talk about poverty in Canada. It is fair to say that during the 1970s, poverty in Canada was on the decline. On an annual basis, the number of people defined by Statistics Canada as having an income below the poverty level was actually going down year by year. Unfortunately, during the 1980s, this process was reversed and the number of poor is getting larger and larger. In 1984, some 4.3 million people in Canada were living below the poverty line as defined by the Government. In the next four years, the Canada Council on Social Development indicates that, as a result of many of the measures introduced in the last Budget by the Conservative Government, the number living in poverty will actually increase by 630,000. What that means is that the gap between the haves and the have-nots, the rich and the poor, is actually getting wider. More and more people are entering the poverty ranks than ever before, and it is now escalating at a rate which quite frankly is unprecedented since the 1930s.
One would then assume that the Government would take action to reverse this trend. That would be the only reasonable assumption to make. However, we have seen in the last Budget and in the tax measures we are discussing today quite the contrary. The average Canadians citizen will be much worse off as a result of these tax changes and the wealthier will actually be better off. To be more precise, let us consider an average family consisting of a mother, father and two children and assume that one of the spouses earns the income for that family. As a result of the increased taxes in this Budget, that family earning an annual income of $15,000 will actually lose $2,270 over the next five years. In other words, such a family will be much poorer in the next fives years as a result of this Budget.
[DOT] (MIO)
If this family has an income of $35,000, it will also lose the considerable amount of $4,216 over the next five years as a result of increased taxes. However, the situation changes with upper-income earners. Those earning an income of over $80,000 will gain $5,662 in the next five years as a result of tax changes. The rich are getting richer and the middle class and poor of Canada are becoming poorer as a result of the provisions to change the tax system of Canada that we are discussing today.
There are serious problems with some of the provisions we are debating today. For example, there is the change to capital gains legislation. We have always been concerned that those people who derive their income from capital gains are only taxed on half while the other half of their income from capital gains is tax free. The Government is making the situation
Income Tax Act, 1986
worse by allowing those who derive their income or part of their income from capital gains an exemption from capital gains tax on a lifetime accumulation of $500,000.
An individual who earns an income from capital gains will not have to pay income tax this year on $20,000. This increases yearly until it accumulates to $500,000. However, ordinary wage earners pay taxes at source as they always have, with very few deductions, loopholes or tax exemptions at their disposal. The heavier burden is being placed on the backs of working people in this country while those whose income is derived from capital gains will not pay any tax on a major portion of that income. Statistics show that only 4 per cent of Canadians declare capital gains on their income tax. This major provision, which is meant to revolutionize investment in Canada, will only benefit 4 per cent of Canadians.
Another provision for tax changes is the increase in the ceilings for RRSPs. The Government is saying that the amount people may set aside tax free at the end of the year for their retirement will be increased to $15,000 a year. However, what must one's income be to be eligible for this increase in exemption? It must be $86,000 a year. How many Canadians have incomes in excess of $86,000 so they may benefit from this provision? Furthermore, do these Canadians need help to provide for their retirement at a cost to Canadian taxpayers, at the cost of deficit increase, and at the cost of social programs? We cannot emphasize enough that the provisions of this Budget and its tax changes are only assisting a handful of upper income Canadians at the expense of ordinary Canadians.
The same can be said with respect to provisions affecting the corporate tax. The legislation assists the larger corporations rather than small and medium sized business. Even today, thanks to previous Liberal Governments, middle and small businesses actually have a higher effective tax rate than larger corporations. The corporate tax changes we are discussing are biased heavily in favour of large corporations at the expense of the small and medium sized business sector.
I received many petitions in the mail today from the constituency of Kamloops-Shuswap. My constituents have been complaining about the increase in gasoline sales tax. They believed that they would see a decrease in the price of gas at the pumps as a result of the decreasing price of oil on the world markets. However, on January 1 the tax on gasoline went up for everyone in the country. There is no doubt that this discriminates against certain Canadians, particularly those who live in regions of Canada where goods and foodstuffs must be transported long distances, and those Canadians must travel farther as opposed to Canadians in central Canada. It is essentially a tax on distance, which is a bias against western Canadians in such a case.
The Government has decided to increase sales tax at this sensitive time in our recovery. The Minister tells us that the Government will derive some $1.6 billion this year and next year from the increased sales tax and excise tax on gasoline which will proportionately have a more severe impact on lower income families. That $1.6 billion will come from the pockets,
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purses and wallets of low and middle income Canadians in order to compensate for massive tax breaks given to upper income earners and the larger corporate sector in many cases. This is a redistribution of income from the bottom to the top- a Robin Hood in reverse approach to taxation.
There is a trend in our tax system. The first Government Member who spoke stated that the Government was taking a new and clear direction. It is not so much a new direction, but I agree that it is perhaps an acceleration to a clear direction toward a tax system of consumption. It is a tax on disposable income with no tax or a deferral of tax on savings, interest and investments. We are moving to an era of tax on consumption, which is definitely biased in favour of those who obtain their income through capital gains from the stock markets, investments and savings. The savings and investments of those with large disposable incomes are untouched by the tax man.


Mr. Fennell:: It goes to create jobs.


Nelson Andrew Riis: The Hon. Member for Ontario (Mr. Fennell) says that it creates jobs. The Hon. Member believes that it will create jobs and I question whether it will create jobs, yet there is no way to know who is right. There is no accountability in our tax system. 1 challenge any Hon. Member to indicate how we can know whether these tax expenditures give us what we expect in return. Since there is no accountability, it is impossible to say whether or not taxing capital gains this year will cost $440 million in lost taxes.


Thomas Scott Fennell: You know that is not true.


Nelson Andrew Riis: I am just taking this from the book given to me by the Minister of Finance. He says that it will cost $440 million this year. What will we get in return? If the Minister could guarantee that a loss of $440 million to the Treasury of the country will result in massive job creation or even a considerable amount of productivity, I would not be so concerned. However, there is absolutely no evidence that this will happen because there is no accountability in the tax system. It is wrong to add more loopholes year after year without knowing what we are getting in return for that lost revenue.
I know Mr. Speaker, you are asking yourself how much in lost revenue we are talking about, Mr. Speaker. What is our tax system costing the people of Canada? The Auditor General does now know. He looks carefully at the books and says: "This is costing us a great deal of money. All of these tax exemptions, loopholes, are costing us a lot of money, somewhere between $30 billion and $50 billion a year". Think of it, Mr. Speaker. The Auditor General cannot determine what it costs because there is no accountability.
I remember Mr. Lalonde, the Liberal Finance Minister, introduced what was called a scientific research and development tax credit in 1983. He said that it would result in all sorts of research and development. It was going to cost the taxpayers about $100 million to accomplish all of this research and development in new scientific experimentation and the
like. After some analysis was done and a good deal of prodding by Opposition Members, it was found that it was costing us, at that time, at least $1.5 billion and increasing, approaching $2 billion. Only a few months earlier Mr. Lalonde had said it would cost about $100 million.
There was no accountability. Goodness knows if Opposition Members had not been doing their work and created enough pressure to expose this boondoggle, I cannot imagine what would be going on. Individuals were putting together shell companies and collecting from the federal Government $10 million, $15 million and in some cases as much as $42 million in cash and not doing anything with it. It was very fraudulant in some cases, but obviously it was a tax exemption that was a total mistake which had not been thought through carefully at all.
It is for these reasons that we decided as the New Democratic Party to carry out a probe of our tax system. We are calling it Tax Probe 86. A number of members of the NDP caucus will be travelling across the country talking to knowledgeable people in the various areas of the economy, the forest industry, the agricultural industry, the small business sector, women's and various social groups, tax experts, tax lawyers and advisers in an attempt to identify which of the tax expenditures up to perhaps $50 billion-of lost revenue-is giving us something in return.
We need to establish some accountability for our present tax system. Is our tax system fair? I do not think anybody would say it is fair today, but how can we make our system more fair, more accountable, more effective and more efficient? That is the mandate that we are taking upon ourselves as a result of our initiative called Tax Probe 86.
I suppose if there is one thing we must do, it is to take tax reform and place it more on the public policy agenda and perhaps try to place it on the political agenda of the country.
I remember that in 1984 during the federal election campaign the NDP suggested that we should have a minimum tax. Some people in Canada are making incomes of $400,000 and $600,000 plus, and many are not paying income tax, not even a cent. We felt that that was wrong. We felt that it was indicative of an unfair tax system. Ronald Reagan in the United States moved to change that. We felt that Canada should do the same. The Liberals agreed, and even the Prime Minister agreed during the debates in the 1984 election. The Government did introduce a minimum tax, but it is a disaster, Mr. Speaker.
The minimum tax makes the tax system much more complex. Here is a Government that was going to simplify the tax system, yet one of its first changes was to make the tax system much more complicated. There is much more red tape for small business. The Government needs to hire an additional number of people for Revenue Canada to read these doubled up tax forms. The Government is increasing the bureaucracy of Revenue Canada.
Consider what the Government is doing. It is saying that all of those exemptions that upper income earners have used over

the years can be parlayed over the next seven years. It is like exemption or loop-hole averaging. If you cannot use the exemption this year, use it next year or the following year. Financial writers and tax experts writing in the various learned journals are pulling out their hair and saying that this is going to cause an absolute financial adviser's nightmare. What are the implications of rolling over all of these exemptions year after year and parlaying them?
In an effort to introduce a minimum tax, the Government has created more and more fuzz, with more complexity. It is changing the tax system more than ever into an network of impossible passages which the average taxpayer must attempt to manipulate.
Bill C-84 is a reflection of the Government's last Budget introduced a few months ago. It reflects an attempt by the Government to improve the situation of Canada as perceived by the Minister of Finance. He gave a speech to the Canadian Economic Association in Montreal in May, 1985, and said at that time, "No matter how we define the term, Canada has an acute shortage of rich people". The Minister has done his best, using the tax system, to assist more and more people to become richer. One could argue in an academic debate about the merits of doing that, but not at the expense of ordinary Canadians, not at the expense of small business, farmers and fishermen. But that is exactly what Bill C-84 does. It provides tax breaks and, in some cases, almost a financial bonanza for a handful of upper income earners and large corporations. For the average Canadian it imposes additional tax burdens at a time when that is exactly the wrong initiative to be taking. We should be encouraging people to use their disposable incomes to assist and invest in local business, to purchase needed goods and services in local communities helping the small business sector to expand, develop and create jobs. To take disposable income out of the pockets and wallets of ordinary Canadians to pay off the bank bail-outs and to pay for the huge new exemptions being given to a handful of upper income Canadians is wrong. That is the reason we are going to oppose this legislation when we vote.


Mr. Deputy Speaker:: Are there any questions and comments? If not, we will resume debate. The Hon. Member for Trinity (Miss Nicholson).


Miss Aideen Nicholson (Trinity):: Mr. Speaker, the Official Opposition has said, since the Budget was brought down that it is an unfair Budget. We have also felt constrained to use the very harsh word sneaky about it. That is not a word one would use lightly. Unfortunately, it is a word that is appropriate for the process with which we are dealing.
When I talk first about the unfairness of the Budget, I refer primarily to the deindexation of the personal income tax system on the one hand, and the capital gains tax exemption on the other.
Deindexing the personal tax system will quietly rob thousands of low and middle income earners whereas the $500,000 capital gains tax exemption is an up-front, no strings gift to a wealthy minority. Personal tax deindexation is targeted and
Income Tax Act, 1986
calculated to strip billions of dollars from low and middle income individuals and families, whereas the capital gains exemption is completely open-ended, not guaranteed to benefit Canada in any way, except to fatten the wallets of the well-to-do.
This measure could have been targeted in ways which would make it more acceptable.lt could have been targeted to owners of family farms or to owners of family businesses. It could have been targeted, as the amendment of the Hon. Member for Saint-Henri-Westmount (Mr. Johnston) would have done, to Canadian businesses. None of that was done. We have an open-ended system from which people can benefit even if their gains come from art, jewellery, boats, condominiums in Florida or racehorses in Kentucky. There is no requirement that people benefiting from this should invest a dime in any Canadian business or do anything for the Canadian economy.
Whereas the personal tax deindexation will simply extract more tax from those least able to pay, the capital gains exemption will put more money into the pockets and bank accounts of those with the highest incomes. In fact, 64 per cent of the benefits of this program will go to 4 per cent of Canadians, those with the highest incomes. Because the personal tax deindexation, like the sales and excise tax increases, is broadly based with a cumulative effect, its negative effect is not readily apparent. This is why we have felt obliged to use the harsh word "sneaky".
The Minister finally introduced his Budget. As our Leader pointed out earlier today, it was the longest interval in Canadian history between an election and the introduction of a Budget. However, when the Minister finally introduced his Budget following, we were told, extensive consultations, he did not say that he was introducing an across the board tax increase of 3 per cent. What was quietly slid in was the deindexation of the personal tax exemption. Deindexation means that the Government is proposing to do away with the indexation of personal tax exemptions except when the Consumer Price Index exceeds 3 per cent. When the CPI exceeds 3 per cent, the Government will still be taxing that first 3 per cent. As the Hon. Member for Saint-Henri-Westmount explained, the effect is to transfer the assets of Canadians over to the Government in large amounts. The actions of the Government have belied the rhetoric about fiscal responsibility. It will amass $4.3 billion in 1990-91 through this measure. When we ask why the Government is leaning so heavily on low and middle-income earners for tax revenues, we are told that it is important to reduce the deficit and that fiscal responsibility must be brought to bear. We are all concerned about the deficit, but when we look at the large amounts in our deficits, we find that the two worrisome amounts are the payments to service the national debt and the expenditures on unemployment insurance. Clearly any responsible attempt to reduce the deficit must be primarily based upon job creation, because if people are employed, not only do they not need to draw unemployment insurance, but they are able to pay more tax, they are able to purchase more, and they are able to stimulate

January 17, 1986
Income Tax Act, 1986
the economy and continue the consumer-led recovery we are just starting to see.
However, in the Budget do we see anything that will encourage job creation? No. In the capital gains exemption we see a measure which will cost the Government billions of dollars in foregone revenue with no guarantee whatever of any return. Surely it is inconsistent for the Government to tax low and middle-income earners within an inch of their lives, while at the same time it gives lavish and unsolicited tax breaks to those at the higher income levels. For the Government to hand out a tax give-away of this magnitude without any requirement for benefit to the Canadian economy is not only inconsistent but is foolish.
Millions of Canadians have been told by the Government that it cannot afford to give them protection from inflation and that they must help pay to bring down the deficit. Then the Government offers a $500,000 capital gains exemption, a tax bonanza for the few who are wealthy enough to take advantage of it, and we are told to have faith that this money will find its way into the Canadian economy and will create jobs. However, people with $15,000 incomes will be paying 36 per cent more in taxes over the next four years. When we add in all the measures in the Budget-higher sales taxes, new sales taxes and reduced inflation protection-they will certainly pay, but it is not at all clear where these tax revenues will be applied.
What will the Government do with all the money it is taking out of the pockets of middle-income Canadians? Perhaps this tax revenue will replace the billions of dollars the Government is giving away to the multinational oil companies, amounting to $2.5 billion in 1990-91. We have heard great statements of faith from the Government that investment in the oil patch will create jobs, but it has not explained how.
Perhaps the Government will apply these consumer tax revenues to the almost billion dollar tax exemption it gave to Olympia & York, or maybe the Government will use this taxpayers' money to make up for some of its ill-advised investment as a result of the two bank failures which will cost Canadian taxpayers somewhere in the order of $2 billion.
The point is that in none of these multimillion dollar giveaways did the Government appear to have deficit reduction or fiscal responsibility in mind.
We are not fooled and taxpayers are not fooled by a Government which says that it must have tax on pet food, even if it is for a guide-dog for a blind person, in order to help reduce the deficit, and that it must reduce protection from inflation for the poor and middle-income earners to help reduce the deficit, when it proceeds to give away millions of dollars to large corporations and to the wealthy without any guarantee of benefit to the economy. There is no question that such measures are not only unfair and inconsistent but, 1 would suggest, they are not even sensible. All this money which is being taken out of the domestic economy could be used to help our domestic situation. Low and middle-income earners do not stash away money in savings. They spend their money on the necessities of life; they keep the economy going.
As the Government blindly plans to reduce domestic demand, what is its plan to replace it? Does it think that it can be replaced with exports? What kind of faith is it operating on, and why is it not telling us what is its plan? We suspect that the Government does not have one.
Investment outside Canada is being encouraged by another measure which is not specifically described in Bill C-84 but which remains to be dealt with by regulation under this Bill, that is, the new proposal to allow a larger proportion of investment funds to be invested outside Canada. The plan, as announced in the budget papers, is that for every dollar that a pension fund invests in small business in Canada it will be allowed to invest $3 outside the country. This plan has not been particularly well accepted by pension fund managers. Pension fund managers tend to be cautious in investments, and rightly so.
Because of the very nature of small business, which is entrepreneurial risk taking, there will be problems in finding small business in which to invest that meets the prudent standards of investment by pension funds. Nevertheless, the Government claims that it is helping to provide money for small business. We are told in the budget papers-again it remains to be done by regulation-that pension funds can set up small business investment corporations to this end.
The pension fund managers are not enthusiastic. We had a recommendation before the Finance Committee which objected to the linking of these two objectives. The pension fund managers pointed out that they were in favour of investing in small business when it is prudent, that, in fact, they do this to a large extent, but that they could not see the amounts proposed by the Government as being viable or practical. While they would like some freedom in some cases to invest outside of Canada, they did not want this particular linkage.
Even now there is pension money earmarked for venture capital investment, but it is sitting in short-term securities waiting for the right opportunities, because the right opportunities are not easy to find, that is, right in terms of being a good investment opportunity, but also one that meets the particular requirements for caution and prudence that are involved in dealing with pension funds. The fear among trustees, of course, is always that if they lose money because of a risky investment they could be sued, I think rightly so because people's pension funds, their retirement security, are particularly important to them and not something that can be replaced. If you make a bad investment when you are young, hopefully you can recover it somewhere else, but if a bad investment has taken away your retirement security when you are 70, you are really left in a very vulnerable position. This is why pension fund managers have been-and I hope will continue to be-extremely cautious about investments.
The Government has told us that there could be $10 billion for small busienss as a result of this measure, but what we are hearing from the industry is that at least 95 per cent of all pension fund assets will remain in traditional asset classes.
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Again we have a measure that the Government put forward apparently without thought, without adequate consultation, and with a lot of smoke and mirrors. It declared it was doing splendid things for small business, but in fact it is not doing so. What it could have done for small business was to have left purchasing power in the hands of low and middle-income Canadians.
This Bill, together with other measures, the sales tax and so on, will result in $11.5 billion being pulled out of the domestic economy. That is a lot of purchasing power which could have done a lot to stimulate demand for small business.
We see before us a Bill that seems to be based on poor economics, one that gives advantages to the wealthy but attacks the lower middle-income earner. It is a Bill that cobbles on a minimum tax in an attempt to show some concern for fairness, but cobbles it on to a complex measure in a way that increases the complexity. It is a sad Bill, it does nothing for Canada, and the only comfort is that since the Minister is, we hear, going to bring in a new Budget soon, perhaps in fact some of these measures here will be cancelled out then.
[ Translation]


Mr. Deputy Speaker:: Questions and comments.
The Hon. Member for Megantic-Compton-Stanstead (Mr. Gerin).


Mr. Gerin:: Mr. Speaker, I heard a comment that reducing the deficit should be based on job creation.
Would the Hon. Member mind expressing her satisfaction with the Conservative Government for having created 450,000 jobs since it came to power and could she explain what caused these jobs to be created? Perhaps she could mention the policies of the Conservative Government and also explain why the previous Liberal Government created one-fifth as many jobs in five years.


Aideen Nicholson: We are dealing with a Conservative Government's Bill C-84 and I can understand that the Hon. Member, who is a concerned Member, is embarrassed by this Bill and would like to shift the emphasis somewhere else. If I were in his place, so would I.


François Gérin: Mr. Speaker, the Hon. Member's answer is that they have no answer ... They are absolutely incompetent and cannot do otherwise but admit to the fact.
Certainly, to reduce the deficit we must create jobs. You heard the Prime Minister (Mr. Mulroney) saying yesterday, as he did all week, that 450,000 new jobs were created across Canada, including Quebec. That is a fact. And don't tell me there is no connection with the Bill now before the House
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which proposes to implement budgetary measures drafted early last year. The jobs are there, you must admit that.
It is no sin to recognize one's mistakes. In fact, the previous Liberal Government ought to apologize to the Canadian people for accumulating a deficit so large that today we have to spend nearly $30 billion on interests payments alone. And if instead of paying this amount every year we had the $30 billion to spend more on the elderly and our families, just imagine what that would represent. I say this because I get the impression the Liberals have never bothered to look at it this way.
For instance, we know that in 1986-87, servicing the public debt is expected to cost us $28,865 billion. Family allowances are expected to cost $2.5 billion. Old Age Security, including the Guaranteed Income Supplement and the Spouse's Allowance, will cost $12,985 billion this year.
You could take all the family allowances and all the old age security pensions in Canada and multiply them by two, and this would only add up to the interest payments on the debt, the Liberal debt. That is a fact, and you ought to realize that.
Take away this responsability, remove this requirement to pay interest on the debt, and we will then be able to triple old age security pensions and guaranteed income supplements, and triple spouse's allowances and family allowances as well.
I heard the Leader of the Official Opposition (Mr. Turner) say in his speech earlier today that he wanted to remove the $500,000 capital gains tax exemption. What about Canadian farmers? Not a single Liberal member has mentioned Canadian farmers, who are now in trouble, thanks to the Liberals. None of them mentioned the $500,000 exemption. Canadian farmers will be thrilled to hear you want to get rid of the exemption. You did not mention, for instance, the people who used it this year because they are entitled to use the full amount of the exemption as of the date on which the Budget was brought down. In my riding, I am going to send them all a letter explaining that the Liberals are asking to have this exemption removed, which would put severe financial pressure on our farmers.
How come the Leader of the Opposition, your leader-for a while anyway-did not say a word about farmers in his remarks? How come no Member of the Official Opposition even mentioned the provisions benefiting agricultural producers? Not one of them did. They simply could not care less. They drove the country and its agricultural producers right into the ground, but today they wash their hands of it. It is unfair, absolutely unfair.
The small business bonds-


Jean-Robert Gauthier: On a point of order, Mr. Speaker.


Mr. Deputy Speaker:: The Hon. Member for Ottawa-Vanier (Mr. Gauthier) on a point of order.

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Jean-Robert Gauthier: Mr. Speaker, the Hon. Member is entitled to make comments, but he asked several questions. Might we not at least have the decency to give the Hon. Member for Trinity (Miss Nicholson) an opportunity to respond within the 10-minute period allocated for questions and comments?
Should the Hon. Member seek the floor later on, he will have our undivided attention.


Mr. Deputy Speaker:: At the beginning there was a period for questions and comments. The Hon. Member for Megantic-Compton-Stanstead (Mr. Gerin) asked a question and the Hon. Member for Trinity (Miss Nicholson) answered. Then I asked if there were further comments and questions, but nobody rose. Therefore we continued with the debate and the Hon. Member is now speaking to the Bill.


François Gérin: The small business bonds ... Not one of you talked about the benefits to Canadian farmers. We are extending this program for another two years precisely to give an opportunity to Canadian producers. Close to $700 million in small business bonds were issued under this program. Sixty per cent of loans outstanding were made to farmers and the rest to small businesses, whether incorporated or not. Are you after them?
In short the Government ... We can all appreciate today that the financial plan introduced in May 1985 has already paid handsome dividends to the Canadian people and to Canadian agricultural producers. If the number of jobs created since then in Quebec and the rest of Canada is any indication, as is the satisfaction expressed by Canadian agricultural producers, the Government is restoring in Canada the kind of economy we need to honour the commitments made by the previous administration, with the resulting deficit which, in other circles, might be described as criminal.
Mr. Speaker, this capital gain provision will cost $550 million for 1985. This capital gain provision will cost $700 million to the public treasury in 1986, and a lot of that money will go to Quebec and other Canadian agricultural producers.
As to the two-year extension of the small business bonds, it will also cost some $7 million, 60 per cent of which will benefit Canadian producers. These are positive measures and, next Wednesday, Canadian dairy producers will probably hear about the new long-term dairy policy for Canada. I am anxious to hear what the Liberals, who were unable to do anything about it during their last four-year term, will have to say about it. Mr. Speaker, those are the reasons why I support the Budget.


Nelson Andrew Riis: Mr. Speaker, I listened with interest to the speech of the Hon. Member and I have two questions for him. The Hon. Member mentioned the jobs that were created in the first mumber of months that the Tory Government was in office. When his Leader was at Meach Lake in the early part of the month, he said that the creation of 415,000 jobs since the
Conservative Government took office in September 1984, its first 14 months, is probably a record. Of course, he used the word "probably" because in the last 14 months of the Liberal regime, 416,000 jobs were created. In actuality, the Liberals created more jobs in the same length of time.
Would the Hon. Member have a comment to make in terms of the Government's record on job creation? Second, could he elaborate for us on how the capital gains provision in the Budget will result in expansion in Canada's farm communities?


François Gérin: I suggest my hon. colleague should forget about the last month and remember the last five years of the Liberal administration to see just how many jobs it created. On the basis of his question, I wonder if the Liberal and NDP Members are still bedfellows or whether they are trying to get together again. However, we only have to look at the last five years. If we consider the period between 1980 up to September 4, 1984, we realize that the Liberals created altogether fewer than 100,000 jobs. Such was the performance of the Liberal administration. On the other hand, I support several of your remarks. At the time, you blamed severely the Liberal Party for allowing the deficit to grow unchecked and I felt at the time that you were right to criticize it. The Liberals are responsible for not creating jobs and allowing the situation to deteriorate. That is why we are making every effort to try and curb the deficit.
I feel therefore that our performance over the past 15 months compares favorably with that of the Liberals during their 20 years in office. If they had been allowed to continue five more years, I wonder what would have happened to Canada. It would be alltogether bankrupt. That is the main point. My first concern, when I decided to get involved in politics, was to try and give Canada a financial direction which made sense. The situation was getting out of hand.
It is true, and I am dealing here with your second comment, that to help the economy recover from the frightening carelessness which characterized the last years of the Liberal administration, we shall have to take other steps, and the idea of the Conservative Government is to encourage the private sector. We feel that the private sector is more in a position to create jobs. By allowing the private sector to play its part, a less cumbersome and centralized Government apparatus than the one created by the Liberals should normally give Canada a richer and enormously more promising economy, which would make it possible for the Government to share the wealth with the needy and less affluent in Canada. That is the reason why we should be allowed to continue governing Canada for a number of terms, so that we may eventually have the money we need to implement the programs suggested by the other two socialist parties in this House.
January 17, 1986


Mr. Deputy Speaker:: Questions and comments. The Hon. Member for Ottawa-Vanier (Mr. Gauthier).


Jean-Robert Gauthier: Mr. Speaker, I want to ask a simple Friday afternoon question. Far be it from me to guarantee that the Government party will be able to stay in power very long. If it were up to me, that party would be out of a job tomorrow. However, the Hon. Member may dream if he wants to.
I would like to remind him that, in his speech today, the Leader of my party said that he is against the $500,000 exemption which allows some people to make foreign investments and have capital gains that will not create any jobs in Canada but can still be used to obtain a tax rebate. We find this completely unjustifiable. Indeed, the amendment against which the Hon. Member voted on Wednesday, the day before yesterday, would have guaranteed that these $500,000 in capital gains were invested in Canada and that people were not allowed to make profits on race horses, condominiums in Miami, or any other foreign investment. The Hon. Member must admit that this proposal made sense. The Right Hon. Leader of the Liberal Party never said that the farmers could not transfer ownership of their farms or assets to their children without paying any taxes. This was provided in the Liberal program, and I would like the Hon. Member to be more honest.


Mr. Dick:: You did not do it in the 22 years you were in power.
[ Translation]


Jean-Robert Gauthier: I beg your pardon?


François Gérin: I am glad to see that the spokesman of the Liberal Party is beginning to recognize that certain provisions of the legislation are valid and useful, and I would like the Leader of the Opposition to be informed that, within the Liberal Party itself, there are those who agree with some of the things proposed by the Conservative Government. If the Leader of the Opposition knows the names of Canadians who take the money from capital gains-


Jean-Robert Gauthier: Income tax information is not made public.


François Gérin: -to invest elsewhere, he is perhaps better informed than I am, because contrary to the Leader of the Opposition and other Liberal Members, I do not have an office in Bay Street.


Jean-Robert Gauthier: Me neither!


François Gérin: I live among small farmers who are trying to survive. They want this $500,000 exemption and I shall do everything in my power to ensure that it will continue to be available to these farmers and small businesses. I do not think that a company like Power Corporation would need a $500,000
Income Tax Act, 1986
capital gains exemption. The Hon. Members should think about it. Where I come from, it is the small businesses which, instead of selling their assets and putting their savings in a nest egg, are selling their shares and buying something else and creating economic activity because they are encouraged by the new economic possibilities provided by the Conservative Government. That is what has brought about the creation of
450,000	new jobs. If you do not believe it, you should begin by looking at what you did to place us in such an impossible situation. You should be glad to see that all the economic indicators now say that we were right.


Victor Fredrich (Vic) Althouse: Mr. Speaker, the Hon. Member mentioned in his speech, and in his response as well, that he is looking for a financial plan which makes sense. I assume he is portraying this particular Budget and this particular Bill as such a plan. Because I have trouble making sense out of the theory which is behind the current Government, which is a theory similar to that put forward by the Liberals, can the Hon. Member explain why his Government is saying that tax breaks should be given to large income earners, corporations and invididuals, which will act as investment incentives, and then because the Government is short of tax revenue it must borrow money which these same people provide to the Government, with interest? The Government then ends up with not only a deficit and forgone tax revenues from these wealthy Canadians, but it rewards these parties by providing a very good interest rate. Why do we not just collect the tax from them in the first instance and avoid running up these big deficits? Why do we persist in exacerbating a wrong decision?


François Gérin: Mr. Speaker, I think my colleague is referring to what is forthcoming, that is a minimum income tax. We said we would have a minimum income tax. So the Conservative Government is the first Government to provide for a minimum tax on incomes exceeding $50,000. The first Government to do so. And you the socialists over there, I am very anxious to hear your reaction. The first Government to so. And you the socialists to do so is a Conservative Government. How can you say we are protecting the rich? We are imposing a minimum income. We are the first Government to do so. This is a fine example, and I tell you: Think it over during the weekend.


Mr. Deputy Speaker:: The time allotted for questions and comments is over. The Hon. Member for Essex-Windsor (Mr. Langdon) on debate.


Mr. Steven W. Langdon (Essex-Windsor):: Mr. Speaker, I wish to be fair in this debate.


Paul Wyatt Dick: You never have been before, why start now?

January 17, 1986
Income Tax Act, 1986


Steven W. Langdon: I concede that it has been difficult to stick to this commitment, faced with the foolish economic policies of the Government. However, in this case, I want to start my remarks with a sense of fairness which recognizes that the problems are difficult.
The problems which face our country are difficult, as are the problems which face the United States. In fact, the problems which face the entire western world are difficult, in terms of trying to come to grips with a series of extremely large deficits which affect most countries. These are difficult times in terms of a series of interest rate changes which are almost out of the control of the national jurisdiction of our governments. The problems are difficult because there faces us a series of competitive moves by large corporations which, frankly, look to governments for tax breaks and benefits of every possible kind.
All of this is being played off against the backdrop of a liquidity crisis, a crisis which threatens the bankruptcy of not just those Canadian banks which bit the dust in this past year but a whole set of banks which recognize that the large loans they made to Third World and other countries have left them in a very exposed position. It is not an easy time to be a Finance Minister at the start of 1986. In that respect I offer my sympathy to our present Minister of Finance (Mr. Wilson). However, it is especially difficult to be a Finance Minister at the beginning of 1986 when, in addition to these basic given problems, we are carrying on with a set of ideological blinkers which make it impossible for us to try to tackle the reality of the challenge which faces us.
That is what faces this Government now. Because of the massive set of promises which it made across the country in its irresponsible search for political power, there is a whole host of expenditure commitments to which this Government is now committed. Because of the close relationship with the corporate sector, which has always characterized the Conservative Party, there is a complete tying of hands as far as trying to do something about the revenue side of the picture. Frankly, Mr. Speaker, we get Budgets which are abortions, which do not respond to the realities of the problems which face the country and which do not look for savings in areas where it is legitimate to search and which ignore the possibilities of getting increased revenue from corporate sources in ways which are absolutely basic, straightforward and fair. The consequence of these ideological blinders is that this Government finds itself not fairly putting new burdens on the corporate sector but instead, unfairly giving new give-aways to that corporate sector. It is unfairly giving new gifts and new benefits which do not have as their objective an attempt to increase the efficiency and effectiveness of the operation of the private sector.
We have a Government composed of members who cannot even be good Conservatives because of the bankruptcy of the campaign they ran for power. There is a counter-approach to that which this Government is following. It is a responsible
approach. It is an approach which we as a Party have advocated in this House of Commons. It is an approach which our finance critic has specifically outlined and which we in the action group put forward last April. It is an approach which clearly could take us back to a sense of fiscal responsibility and economic seriousness. It recognizes, first, that a tremendous number of the tax breaks we give are a total waste, not just in terms of their unfairness but in terms of the fact that they give to the rich who do not need the money and who will spend it elsewhere in the world. They are tax breaks which are totally without any economic rationale and which do not face the structural problems which confront this country in 1986. Those are the tax breaks which this Government should eliminate in its next Budget.
I can name some of those tax breaks. A company can borrow money from one of our large banks and can take over another company with absolutely no benefit to the country, to the workers or to the community. It can then write off the interest which it has to pay on the large loan it has taken to pay for this takeover as a tax benefit, which means that the very people who are suffering in many cases from these takeovers are paying out of their tax dollar for the tax break which is allowing them to be victimized. To put it bluntly, the Darcy McKeoughs of this world are paying for their own funeral. I will not shed many tears for Darcy McKeough but I ask what sense it makes in our society to have a tax break like that set in place? What sense does it make to put into effect, as did the past Liberal Government, the scientific research tax credit which has turned into the scientific tax research discredit? It discredits the whole notion of tax benefits for the corporate sector. What possible sense can tax breaks like that make? What possible sense can it make to have a series of benefits set up in the tax system for the large scale corporate sector without a single set of guarantees on the part of the companies which enjoy those tax breaks that they will in fact make a contribution to this country through those tax breaks?
On the other hand, what possible benefit can it be to this country to put a new tax into place on poor and middle income Canadians which will require them to take money out of their pockets which would normally go to small businesses, which in turn would create jobs in their community? Instead, that money goes to make up for these corporate tax breaks. What sort of logic from the point of view of either fairness or some kind of economic sense of effectiveness can be achieved by this sort of tax system? The answer is very clear; none.
We have seen study after study of our tax system which all say in effect that Canada is the greatest mugs game the corporate sector of this world has. It is the greatest poaching ground for fast buck artists from all over the world to come streaming into this country and take advantage of our people. I talked this week with a reporter from the Calgary Herald about the scientific research tax credit. He said that that tax credit has been something which his research shows has been taken advantage of by over 200 American and other foreign entrepreneurs who have come into this country to set up shell companies in order to take advantage of our tax system. It is
January 17, 1986

quite possible that they will no longer be able to take full advantage of our tax system because at least we managed to grab the horse's tail as it ran out of the empty barn, but even so, there is still the major question as to whether or not we are going to be able to get these people. According to sources of the reporter at the Calgary Herald the Minister of National Revenue has decided to search after these scam companies with just income tax personnel and only under the Income Tax Act. That means that there can be no subpoenas issued outside of this country. There can be no use of the RCMP to do an investigation outside of this country. These fast buck artists who have come in and exploited our country's tax system can quite possibly get off scot-free. There is no logic to that whatsoever. Not to me, not to anyone in this House of whatever Party, not to anyone in the country regardless of the Party they support.
We have to somehow get things right. We have to turn it around. We have to put the tax burden where it belongs, on people and companies who have the capacity to pay. Those of us who have the capacity to pay are not going to be upset about that. My good supporter in the Windsor area, William Tupperman, who owns a great set of furniture stores throughout that part of southwestern Ontario, has no compunction about paying a fair share of taxes. The professionals who vote for us in Amherstburg have no problem with paying fair taxes. What outrages them, what makes them fiercely angry, is to see people earning exactly the same amount of money as they are and taking advantage of loophole after loophole after loophole while escaping their fair share of taxes. This Budget, with its $500,000 capital gains scam, makes it even worse. That is a scam without any control or regulation. It is not even like a MURB. Despite the fact that a MURB might be unfair and open only to certain professional groups, it at least had to be for something here in this country which would create a physical asset in which people could live. However, in the case of this exemption it is quite possible for capital gains to be created on yachts in Florida, jewellery purchased in Mexico, skins collected from Africa and commodity dealings in Chicago, all of which have absolutely no connection with the real economy of this country. These kinds of capital gains are totally useless to the Canadian people and our economy. Yet we have here, prancing happily and smiling gaily, the Minister of Finance (Mr. Wilson) saying that this is something which will help Canada. It is going to help the rich and, by doing so, delegitimatize even further our tax system.
I suspect that each of us in this House knows of small business people desperately in need of help. These people will create dozens of jobs if they get that help. They are the ones who should be getting help from this Government, not just because of fairness but because if we continue these tax boondoggles and scams it will be simply unbelievable when Members of the Conservative Party stand up and talk about deficit reduction. The Canadian people will see deficit reduction as simply a way to hide the fact that they are hurting the poor and helping the rich.
Income Tax Act, 1986
This has to change. If it is not that Government that makes the change, I tell you it will be this Party that will make the change.


Some Hon. Members:: Oh, oh!


Steven W. Langdon: People in this country are furious. They are so upset about the tax system and its lack of fairness that they are willing-I pity my friend from Kamloops-Shuswap who may have to be the next Minister of Finance-to give us a chance to fight for tax fairness. I look forward to the first Budget from my colleague from Kamloops-Shuswap. He will for the first time give us a Budget aimed at fairness, financial responsibility and equity for the future of this country and for good.


Mr. Deputy Speaker:: Are there questions or comments? If not, we will resume debate.


Alfonso Gagliano: Mr. Speaker, several months-


An Hon. Member:: Will you be talking about insurance?


Alfonso Gagliano: We will deal with insurance on Monday. Several months have gone by since the 1985 Budget, and being the critic for the Liberal Party in matters relating to small-and medium-sized businesses, I found it essential to prepare a detailed analysis of the impact on Canadian economic growth of the major proposals put forward by the Conservative Government.
The Government has focused its economic strategies on the creation of so-called favourable climates, rather than initiatives directly impacting this country's economic life. The Government discharges its responsibilities by suggesting that the capital gains tax exemption and the releasing for investment of the money held in RRSPs and other pension funds would have a positive, moving effect on the whole Canadian economy.
Mr. Speaker, since May last two banks have failed. There has been the insurance crisis, and we should be looking at the last statistical report to see how this Government is collecting our taxes. We have seen an increase of nearly half a billion dollars and it was not individuals but mainly companies that had the opportunity to re-establish their income tax payments.
It is imperative in my view that we make a thorough analysis of those measures because they are the cornerstone of the 1985 Budget and they shed a good light on the future economic trends of this Government.
The Budget provides that individuals will be entitled to a lifetime capital gains tax exemption of $500,000. Already, 50 per cent of capital gains were not taxable. This measure, therefore, is introducing a $250,000 tax exemptions.
The Minister of Finance figures that the $500,000 tax exemption on capital gains will result for the federal treasury

invest in small businesses, inview of the fact that the RRSPs and the Registered Retirement Savings Funds account together for a capital pool of some $40 billion. In this document, the PC Government claims that since a total of $160 billion is now accumulated in pension funds, up to $11 billion could be invested in small businesses. An objective analysis of these two investment vehicles will show that the figures put forward by the PC Government are clearly unrealistic and even fallacious.
The Budget would like to encourage RRSP contributors to invest up to 50 per cent of their funds in shares of private Canadian corporations. RRSP contributors, however, must have no connection with the firms in which they would like to invest or with their owners. They can invest directly in small businesses, but not in small businesses belonging to themselves, their relatives or business relations. The provisions concerning arm-length investments are extremely rigid and restricting.
Mr. Speaker, how can anyone suggest that a Canadian investor will be willing to invest in a small business which relies only on the owner himself? There are no board members. The investor cannot rely on five-year financial statements, but only on the ability of one person.
That is the reality; that is what a small business represents.
Mr. Speaker, instead of helping such people by saying "Go and get some capital, use your own pension fund and take 50 per cent to invest", the Government says; "No, you cannot touch it." The Government is willing to trust investors and to say: "There is no limit as far as capital gains are concerned; you can even sell a property in Florida or Italy without paying any capital gains tax." However, when it comes to small businesses, it is not the same story. The Government has to put a stop to it because everyone could take advantage of this provision. Such is the climate of confidence which this Conservative Government is trying to create.
The studies on the creation of businesses in Canada and the United States clearly show that the major sources of financing for small businesses are the businessman himself, his family, his friends and his business relations. Indeed, that is quite normal and understandable. Access to small businesses is always very limited for the investor. Very often, the investor can only rely on his own evaluation of the integrity of the businessman based on his background and on the business contacts the investor has already had with him.
By systematically eliminating the possibility for the businessman himself, his family and business relations to invest in a company, the Government is flying in the face of a basic concept in the development of small businesses.
Income Tax Act, 1986
In addition, it must be pointed out that the benefits related to the investment of RRSP funds in small businesses are considerably reduced and probably eliminated by the capital gains exemption.
The capital gains produced by an RRSP are fully taxable. Even though the taxes due are different in the case of an RRSP, it would be surprising if an investor chose to pay taxes later rather than take advantage of the lifetime capital gains exemption. This exemption will therefore incite the average investor to invest in instruments which will provide nontaxable capital gains, that is gains from other sources than RRSPs. Such an investor will have every advantage in limiting his investments in RRSPs and instruments which will produce an assured annual income in the form of interests or dividends rather than capital gains.
Mr. Speaker, not only are we far from the $20 billion in investments forecast, but in practice, we shall probably see a major outflow of funds since investments in businesseswill no longer be attractive for investors in RRSPs.
Once again, the Conservative Government has chosen to put the emphasis on a program doomed to failure, but with effects that are rather counterproductive because of a bad overall economic strategy.
Mr. Speaker, I am happy that my colleague who spoke a few moments ago has come back. He referred to capital gains for farmers. We have nothing against that. We are for it. And even where small businesses are concerned, we have nothing against the extension of capital gains-


Some Hon. Members:: Hear, hear!


Alfonso Gagliano: Wait, you will learn something.
Conservatives are like that. Just like in the Muppet Show. One gets up and all the others applaud without knowing why. Wait, you will see what I mean.
We are not against the exemption for capital gains, providing they are invested in the job-generating economic sector. You want to reduce the deficit, but you are giving money away with the other hand, without making sure that jobs are created. That is what it is all about!
If the capital gains exemption is to create jobs, why not have restrictions requiring re-investment in Canadian business to create jobs? But no, you give it to all and sundry. That is the Conservative philosophy you were attempting to describe earlier. Well, here it is: What you give to the rich you take from the poor.


Mr. Deputy Speaker:: Order! Questions and comments? I now recognize the Hon. Member for Megantic-Compton-Stanstead (Mr. Gerin).


François Gérin: Mr. Speaker, it is better to be deaf than to have to listen to such nonsense.

January 17, 1986
Income Tax Act, 1986


Mr. Deputy Speaker:: Order. We are resuming debate. I recognize the Hon. Member for Richelieu (Mr. Plamondon).


Mr. Louis Plamondon (Richelieu):: Mr. Speaker, thank you for giving me an opportunity to speak to what I see as the most important matter facing this country today, and I refer to the rebuilding of our economy, a process we started as soon as we came to power in September 1984. All economic indicators show that what we have done up to now has been positive, and thanks to the removal of bandaid policies, all Canadians can already look to a better and, especially, far more satisfying future for our young people.
Mr. Speaker, Bill C-84, an Act to Amend the Income Tax Act, which is part of a series of Bills to enact the tax measures and other proposals announced in the May Budget, this Bill is one of the key instruments of the concept of rebuilding an economy devastated as a result of the irresponsibility of the previous Government. This Bill contains measures inspired by the principles of social justice and equity for all.
Mr. Speaker, this Bill contains draconian measures that will affect people with high incomes and our large financial institutions. It contains measures that the New-Liberal-Democratic Government of the past was always afraid to take, since despite their socialistic vocabulary, they served the interests of the far Right.
Mr. Speaker, this Bill shows, whatever the Official Opposition's irresponsible rhetoric may conclude, that our Government is acting in the interests of the needy and the middle class in this country. It is acting in an almost revolutionary spirit, as revolutionary as the actions, if not the words, of the previous government were reactionary and synonymous with stagnation.
Mr. Speaker, at this point, for the benefit of Canadians, I want to recapitulate what Bill C-84 has to offer this country.
First of all, the capital gains tax exemption. The Budget is proposing an important measure aimed at promoting risktaking and investment in small and large businesses, and to help farmers-my colleague mentioned this point earlier-by offering a cumulative capital gains exemption of up to $500,000 during the lifetime of the taxpayer. This change will be an incentive to Canadians to set up new businesses and help small businesses expand.
The second element of this Bill which has hardly been mentioned in the debate until now is the labour-sponsored venture capital fund whose model was first established in Quebec with the co-operation of the union led by Mr. Laberge. Incidentally, the Thibault plant in my riding was able to use a $750,000 investment from that fund-three-quarters of a million dollars-to create 70 jobs and expand its operations, it now has 190 workers on the payroll. Most of those funds came from company workers. A new tax credit has been proposed to encourage long-term investment by individuals in laboursponsored venture capital organizations set up within a province to maintain or create jobs and stimulate the economy.
The proposed federal tax credit applies to shares purchased by individuals after May 23, 1985. It will be equal to either 20 per cent of the cost of the shares, or the amount required to bring the combined federal and provincial credits to 40 per cent of the shares, whichever is less. That is a new initiative which will enable workers to earn a share of company profits.
Then there are investments, pensions plans and other retirement income plans in small businesses.
The Bill proposes a number of other measures to help small-and medium-sized businesses obtain investment capital through pension funds. First of all, RRSPs and other similar plans will be allowed to buy shares of Canadian-controlled private corporations that are at arm's length from the plan beneficiary.
Second, registered pension plans will be allowed to set up special corporations for tax-exempted investments in small businesses in order to encourage the purchase of shares of small businesses.
Third, pension funds and other deferred income plans will have more flexibility to invest in these limited partnership corporations specializing in small business investments due to the fact that these investments will no longer be consolidated with foreign assets in the computation of the total portfolio-limiting ceiling.
Fourth, pension plans will be authorized to invest three dollars in foreign businesses for every dollar they invest in small Canadian businesses. This way, they will be able to diversify their portfolios easily and create a great many jobs.
The Bill refers also to housing funds. The Budgets proposes to exempt from tax a number of benefits, including low-cost or no-interest loans which employees may obtain from their employers when they must relocate to keep their jobs or take up new positions. This measure will favour workers' mobility and will reflect the fact that housing loans represent for employers a good way to compensate their staff who must move to an area where the cost of living is higher.
This reform Budget deals also with research and development. The tax credits obtained by a small business on the first $2 million spent in research and development current expense will be reimbursed fully, instead of just 40 per cent as is the case now. Other changes will help eliminate the restrictions applicable to the research and development activities which open entitlement to fiscal incentives.
The Budget proposes to make fully refundable the credit accrued to small Canadian-controlled private corporations in respect of current research and development expenditures. The refundable part of the credit unused by these companies is now limited to 40 per cent, as I said earlier. Under the present

provisions, the balance of the unused tax credit may be carried over a maximum of seven years. The new proposal will enable a taxpayer to use all of the earned credit, either to reduce his income tax or to get a refund. That provision will have no expiry date and will apply to eligible expenses incurred after May 23, 1985, as for the other provisions.
Let me now refer to the small business bond, another initiative proposed in this legislation. The bond program will enable farmers and small businesses facing financial difficulty to secure loans at reduced interest rates. The Budget proposed to extend the program for another two years, and to extend it to that type of bonds that will be issued before the end of 1987. The initial expiry date was to be the end of 1985. Another budget proposal would allow farmers and small businesses still tied up with loans obtained under the SMB and the previous small business development bond program, which was in force in 1980 and in 1981, to refinance their loans when falling due if they are facing financial difficulties at the time of refinancing.
Let me also refer to the investment tax credit. That special tax credit, amounting to 50 per cent of manufacturing investments in designated areas, which was introduced in 1980 for a five-year period, was due to expire at the end of 1985. The Budget proposed to extend that special credit until December 1986. It was further proposed that expenses in respect of projects that are not completed by the end of 1986 also provide entitlement to that tax credit. Buildings under construction at the end of 1986 and machinery and equipment ordered in writing before 1986 also will provide entitlement to the credit.
Let me now refer to family support. There has been much talk about it, often in a negative way. But the positive sides are much greater. The child benefit system-that is the family allowances, the child tax credit and the dependent child deductions-is undergoing various changes to provide greater help to lower income families, while reducing benefits now received by higher income families.
The child tax credit, of which my colleague for Champlain (Mr. Champagne) spoke so eloquently yesterday, will increase by $70 in the 1986 taxation year and by $35 in 1987 and 1988. The level of income over which the child tax credit will begin to decrease will be brought down from $26,330 to $23,500.
There is also a point about which little has been said, namely the help provided for the handicapped. In 1985, a $2,590 deduction from taxable income is provided for the handicapped, who are now defined as people suffering from blindness at some time during the year or people who must stay in bed or in a wheel-chair for a considerable part of the day.
Approximately 185,000 people should benefit from this extended definition compared with the 65,000 who now claim such a deduction.
Income Tax Act, 1986
Let us talk about the investment tax credit. Bill C-84 reduces the credit when the taxpayer receives a refund or investment assistance from the public sector or other taxpayers, restricts the possibility of using investment tax credits when there is a change of control, and redefines the classes of share issues which can be used to transfer to outside share investor the unused investment tax credits.
Let us talk about the approach to income generally. The rules governing the distribution of income among members of a same family will be made more stringent to prevent tax avoidance through low interest loans.
Mr. Speaker, I am enthusiastic about all these proposals contained in Bill C-84 and I must say that, in my opinion, our Government is acting as a responsible Government, as a Government which has the interests of Canadians at heart, as a Government which keeps its election promises and which will see to it that our Canadian economy is renewed and continues to develop as all known economic indicators show is now happening.


Mr. Deputy Speaker:: Are there any questions or comments? [English]


Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, it is fascinating to follow the intervention of a Progressive Conservative Member of Parliament, because one wonders why no reference was made by him to some aspects of Bill C-84 about which his constituents should hear from him and about which I suspect his constituents would be very interested in being kept informed. Why, for instance, was there no reference by that Hon. Member to that aspect of the Bill which eliminates the Registered Home Ownership Savings Plan? In his riding and in the ridings of each so-called Progressive Conservative Member of Parliament there are young people who would like to know why the present Government has decided to abolish, through this Bill flowing from the Budget, that very important program. There are young Canadians who want to save in order to buy houses. The Liberal Government instituted the program to facilitate the savings of young couples and to facilitate their ability to purchase houses. Why was this measure abolished, and why was there no mention in the speeches made by preceding Members of the Progressive Conservative Party? I see it is four o'clock.


Mr. Deputy Speaker:: I regret to interrupt the speech of the Hon. Member. The Hon. Member will have the floor the next time this matter is debated in the House. It being four o'clock the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.

January 17, 1986
Criminal Code


PRIVATE MEMBERS' BUSINESS-PUBLIC BILLS   CRIMINAL CODE AMENDMENT RESPECTING LEGAL COUNSEL FOR UNBORN CHILD
Mr. Lawrence I. O'Neil (Cape Breton Highlands-Canso) moved: that Bill C-254, an Act to amend the Criminal Code (legal counsel for unborn child) be read the second time and referred to a legislative committee.
He said: Mr. Speaker, I am honoured to speak to Bill C-254, an Act to amend the Criminal Code to provide legal counsel for unborn children. It is regrettable that we must debate this Bill and that existing provisions of the Criminal Code are being abused and ignored. At present Section 251 of the Criminal Code purports to protect the unborn children in this country. It purports to balance competing rights. Just what does Section 251 of the Criminal Code require? Section 251 of the Criminal Code requires that before the life of an unborn child can be terminated legally in this coumtry, people appointed by the Board of the medical institution must evaluate an application put forward by a Canadian who wishes to terminate the pregnancy or the life of the unborn Canadian.
The process requires that these medical people decide whether the health or life of the mother is jeopardized by continuing the pregnancy. That is what Section 251 of the Criminal Code requires of the medical profession in this country. Section 251 requires this because in this country it is not legal to terminate the lives of unborn children on one's sole desire without any grounds whatsoever. The Code requires the doctors to make a decision based on medical evidence.
It sounds very good, but in practice we have a situation in hospitals from the east coast to the west coast where doctors gather routinely for perhaps one half hour or an hour each week and over this period of time, these medical people decide whether the lives of 60 or perhaps 100 unborn Canadians should be terminated.


Some Hon. Members:: Shame!


Lawrence I. O'Neil: The unborn child will be very fortunate if his case or her case is given more than 60 seconds of consideration by the people in this country who have the responsibility to decide whether that life shall end or shall continue. That is the practice, and in my view that is illegal. The practice is outside the spirit and the legal requirements of the Criminal Code. We have a situation in this country where many people have decided to turn a blind eye to the strict requirements of the Criminal Code and to allow this flagrant abuse of the rights of unborn children to continue. The question is what can be done about this abuse? Many would say that we should repeal Section 251 altogether, and perhaps that is not a bad idea in some cases. Another idea is to make an amendment to the Criminal Code which is consistent with the spirit and the design of that Section which was designed to provide a judicial
or quasi-judicial environment in which the rights of the unborn child would be protected. It is obvious that at the present time when these hearings occur that there is no spokesperson for the unborn Canadian, that the process has become one of rubber-stamping.
It is for this reason that I have introduced Bill C-254, an Act to amend the Criminal Code, that would require the presence of legal counsel for unborn children, legal counsel who would work to ensure that the rights and representations of the unborn Canadian are made. When I advance this concept I am not advancing something which is revolutionary. Section 251, as I said earlier, is a recognition of the rights of unborn Canadians. Abortion is illegal in this country, in general terms, and legal only in certain exceptional cases, because we as a society have recognized the rights of unborn children to continue.
This is consistent with the rights of unborn Canadians as protected by the Canadian Bill of Rights, which in Part 1(a) states that "(a) the right of the individual to life, liberty, security of the person and enjoyment of property, and the right not to be deprived thereof except by due process of law;" must be protected in Canada.
That is a guiding principle of our society, and a guiding principle of our judiciary system. In this case is being flagrantly abused. Similarly, Section 197 of the Criminal Code is very interesting because it imposes a legal duty on everyone as a parent, foster parent, guardian or head of a family to provide the necessities of life for a child under the age of 16 years. An unborn child is a child, by definition, and it is under 16 years of age. There are very similar sections in the Criminal Code in which we recognize the rights of unborn Canadians.
There are protections in an area of law known as tort law whereby an unborn child can sue, for example, after birth for injuries and wrongs that were inflicted upon it prior to its birth. These protections are well recognized in our body of law. Therefore, when I advocate that the unborn child has in fact certain rights that must be protected, I am simply outlining what is part of our body of common and codified law today.
The unborn child has certain rights and protection with respect to the inheritance of property. Those are well recognized and outlined in various court judgments. 1 found it quite interesting two years ago to read in The Globe and Mail a front page story in which a Family Court Judge acting under child welfare legislation held that a foetus deserved the shield of the law. That was a decision by a Family Court Judge in Kenora. He ruled that a foetus, or an unborn child, was abused because its mother refused to stop her excessive drinking during the pregnancy and the unborn child was in need of protection under child welfare law.
It is well recognized that an unborn child is something special in our society and has life. We live in an era when the knowledge of unborn life, the biological reality is becoming even more known to all Canadians. It is being taught at elementary and high school levels and the biological details of life are well known and widely accepted. I have here an issue of Newsweek magazine of January 11, 1982. The cover story is
January 17, 1986

"How Life Begins Biology's New Frontier". In this article, which is in a popular magazine, the author's outline states biological information which is revolutionary in our day. For example it portrays that at three weeks the heart of an unborn child beats and the brain begins to develop. At four weeks limb buds appear. At five weeks the brain has divided into three parts and limbs to grow. This is just some indication of the biological reality. It is for that reason that we are in a better position than any of our predecessors to express an informed view on this question of life. There are those who say that this is not life and that we must treat the unborn child as if he or she were nothing more than a fingernail.
As I sat in the Chamber yesterday, I found it quite interesting to hear from other Members their views on the value of children on our society and on the value of family life. I will repeat for Hon. Members who are here today and for the record some quite interesting comments that were made yesterday. I am reading from page 9855 of Hansard:
They have refused to listen despite the sense that any civilized society has that children are a common concern, a common responsibility and a responsibility which all of us in society have to defend.
That, Mr. Speaker, is a position which I wholeheartedly endorse. It goes on:
Any society deserves to give such children full respect-
Mr. Speaker, this debate deals with justice... We want a society where the children are the pride of their country.
1 agree. Those comments were made by the Hon. Member for Essex-Windsor (Mr. Langdon), a member of the New Democratic Party, just yesterday in this Chamber. As well, I would like to turn to some comments made by the Hon. Member for Mount Royal (Mrs. Finestone), a member of the Liberal Party. She had this to say on the debate that took place yesterday in the Chamber, as reported at page 9859 of Hansard-.
The family allowance confirms the value of child rearing to society at large. It is the sole, consistent economic recognition of the contribution of all mothers in our society.
I agree with that, but the recognition of the value of the child must begin with the life of the child. It is widely accepted today that life begins well before birth and that what happens at birth is that the child emerges into a new context. It is well recognized that the rights of unborn Canadians do exist quite apart from the abortion issue.
I know some of my colleagues would like to register their support for this initiative. In conclusion, I would like to say that what I have presented to the House today is an opportunity to ensure that the widespread practices in hospitals across the country, the widespread violations of the Criminal Code, come to an end. I am asking the House to bring the law in line with the biological reality as we know it.
I have reviewed for the House the protections granted by Section 251 of the Criminal Code, the so-called abortion Section. That Section of the Criminal Code sets up a regime designed to protect the rights of unborn children. Our law
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makers and enforcers have allowed society to turn a blind eye to the abuse that is taking place. These offences that are occurring across the country in our hospitals are criminal offences and it is time that we moved to ensure that the practices in this country reflects the law in this country.


Mr. Jim Jepson (London East):: Mr. Speaker, first 1 would like to congratulate the Hon. Member for Cape Breton High-lands-Canso (Mr. O'Neil) for sponsoring a very good piece of legislation. Bill C-254 was, I am sure, inspired by a sense of indignation at the widespread increase in the abortion rate. Our discussion today will provide another chapter to the long history of the abortion debate in this House.
This Bill represents a great opportunity for agreement within the House. It will have the effect of guaranteeing the presence of legal representation for the unborn child at the therapeutic abortion committee that would pass judgment on the mother's intention to have an abortion. This is not a new idea. Under our legal system, people accused of crimes have always enjoyed a fundamental right to the advice and counsel of a lawyer to support their defence when standing for trial. This is one of the basic elements of the principles of fundamental justice that are enshrined in our Constitution.
Although the right to counsel is a fundamental right, its application is somewhat inconsistent. In Canada, this right has never been withheld from an accused person. However, thousands of unborn children who are not accused but innocent are tried, sentenced and executed every day without the right to counsel.
In my mind, there is no greater contradiction within our system of justice than that, while civil libertarians are doing everything to extend the rights of criminals, the rights of totally innocent Canadians are so neglected. I still cannot understand why some people uphold the death penalty for innocent, unborn children while proclaiming that they stand for the sanctity of life.
Extending the right to counsel to unborn children is the type of proposal the House should support unanimously. In doing so, we would not be guilty of so many of the so-called offences that prevent action on the question of abortion. We would not be legislating morality. The effect of this Bill would be to improve the quality of whatever decision is made by a mother, her doctor and the therapeutic abortion committee.
Decisions are made by weighing information and choosing between alternatives. This Bill would allow the unborn child's legal counsel to present to the committee information about the child's interests. What is to be gained by excluding certain information pertaining to a child's best interests from a decision relating to the pregnancy? The only reason that could exist for not wanting that information presented is the fear that it might influence the mother, perhaps even traumatically, so that she would change her mind. However, is that not the best possible reason for gathering information before a decision is made? This information is so important precisely because it might make a woman think twice about an abortion and it might save the life of her child.

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Even radical pro-choice people should be happy when a woman decides not to have an abortion but to keep her baby. They often seem to think that every decision to have an abortion was the best possible choice. I would be delighted to hear someone who is pro-choice say just once that in one case the person had heard about, the decision to have an abortion was a mistake. 1 think this would be a breakthrough.
It would be my hope that the legal counsel acting on behalf of the unborn child present at the therapeutic abortion committee could at least make the case that the unborn child has a right to life. He would be able to describe, depending upon the stage of pregnancy, the development of hands, feet, a face, hair or fingernails. He might describe the movements of the child, its weight and the fact that its heart had already started to beat. He might bring up the point about the thousands of Canadian families that would welcome the baby with love into their own homes, bearing in mind that in Ontario, there is a five-year waiting periof for those who wish to adopt. He might suggest to the mother the joy she would receive from keeping the baby herself.
Finally, legal counsel for the baby might indicate what would happen to the child if the decision to have an abortion were followed through with. He might describe how the baby's body is cut to pieces by a sharp scraper when the D and C technique is used or how it is pulled apart by a powerful suction tube during a suction abortion. As well, there is the hypernatremic abortion in which the baby is poisoned, its skin is burned by a powerful salt solution and some days later, after suffering, expelled. The legal counsel might inform the mother for the first time that the child was facing a painful and lingering death. I think a mother would want to know that and should know that. I also think that there is a good chance that it would change her mind about having an abortion.
A woman does not always have access to all of this information and particularly to the good things about childbirth and the bad things about abortion. The idea of extending civil and human rights to unborn children is not a new one. In fact, apart from the right to life and to the due process of law, unborn children, in many legal respects, are fully recognized as persons.
The question of when life begins, I believe, is at conception. Medical science can identify when each process that is essential to life, such as the functioning of the heart and other organs, begins. However, there is a necessity to incorporate some definition of life into a society's system of laws. In order to charge someone with murder one has to spell out exactly what the life is that one is accused of ending. If everyone agreed that life began at conception, then people such as Dr. Henry Morgentaler could be found guilty of murder.
In our system of laws there are many indications that our society fully recognizes unborn children as legal persons, fully entitled to the protection we all enjoy under the Charter of Rights and Freedoms. Common law relating to property generally recognizes the unborn child as a person. A child can be
the benefactor of an estate left to him or her in a will. Counsel acting on behalf of an unborn child can petition the courts for inclusion of the unborn child in a will that leaves an estate to other children in the family. This even holds if those other children are identified explicitly by name and the unborn child is not mentioned.
There is an implicit common law contract recognized in the right of an infant to the necessities of life. Similar protection is extended to an unborn child, if the mother has an intention to continue with her pregnancy.
Our legal system also provides in other ways for unborn children. They are given the status of persons and can be eligible for benefits under workers' compensation and accident benefits legislation. This indicates to me that not only does society recognize the fact that unborn children have their own interests, but that we also have an interest in the welfare of unborn children.
Unborn children also have rights to receive compensation for criminal injuries. If a pregnant women is injured through violence or negligence on the part of someone else, and the unborn child suffers as well, then they have an equally well grounded legal entitlement. The contradiction of this arrangement is the fact that if a child dies before it is born, then its rights as a person cannot be represented or defended.
Unborn children, then, are protected by most rights except for the right to life itself, which is the most fundamentally important one as far as our society is concerned. Even the Criminal Code sections related to abortion seem to recognize that the unborn child is valued by society. Under our laws abortion is an indictable criminal offence for both the mother and the doctor, if they do not follow the required procedure with a therapeutic abortion committee. Unfortunately, the law also provides two massive loopholes. One is the role of therapeutic abortion committees, which provide nothing more than a rubber-stamping process, in a great many instances. The other loophole is being tragically exploited in Ontario. Dr. Morgentaler is allowed to continued the operation of his abortion clinic in outright defiance of the law because it is not being enforced. This is something upon which 1 strongly urge the Government of Ontario to take proper action.
However, it is important to note that one can receive an abortion by going around the law. The law itself still forbids abortions in most cases. This is because the law recognizes that unborn children are entitled to protection of the law to the same extent as the rest of Canadians. It is for exactly this reason that I ask the House today to take the step which would guarantee the right to counsel for unborn children. It is not a big step, but it is a step in the right direction. If we do not take this step it is because we have fallen into a trap which has been seen again and again throughout history. 1 am speaking of the exploitation of the weak by the powerful. The extent to which we are civilized and human is the measure by which the weak enjoy the protection of our society.
One opponent of abortion described the problem like this:
Slavery, witch-hunts, and wars have all been justified by their perpetrators on the ground that they thought their victims to be less than fully human.
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Abortion has claimed more lives than slavery, witch-hunts, and wars put together. In Canada, over the last 15 years, there have been close to one million deaths due to abortion. If one were to add up the deaths caused by drowning, car accidents, and warfare over the last 50 years, one would see that the figure comes to about one-third of that for abortions.
I find it ironic that in a day and age when we spend billions of dollars on medical research to save lives at the same time we allow the killing of healthy baby boys and girls. We have hospitals which on one floor are exercising all the medical research and expertise possible to save lives while on another floor of the same hospital hundreds and thousands of unborn children are being killed. It is time our society lived up to its responsibility and that we as legislators acted in the name of justice and human dignity instead of expedience, opportunism and convenience.
The Bill before us today is an example of the type of Bill which I think all Members of the House can and should support. It is unique in the respect that it represents some substantial progress regarding the tragedy our country faces over the abortion issue. I hope that we will all consider giving this Bill our full support today.


Margaret Anne Mitchell: Mr. Speaker, I do not know that I can say that I am pleased to be standing today in my place to take part in this debate since it seems to me that every two or three weeks we seem to be debating the same issue. It is a very important question. However, it is a question on which I believe it would be hard for this House to reach a consensus. As well, I believe there is really no full consensus on the issue in Canada today.
In preparation for the debate today I looked not only at the Bill but at the explanatory note. I read Section 251 of the Criminal Code as it stands at the present time. I wish to read part of that section into the record for those who may not be aware of it. Section 251(1) states:
Every one who, with intent to procure the miscarriage of a female person, whether or not she is pregnant, uses any means for the purpose of carrying out his intention is guilty of an indictable offence and is liable to imprisonment for life.
Section 251(2) states:
Every female person who, being pregnant, with intent to procure her own miscarriage, uses any means or permits any means to be used for the purpose of carrying out her intentions is guilty of an indictable offence and is liable to imprisonment for two years.
The section goes on to qualify what some of the terms mean and it then states certain exceptions, such as the case of a therapeutic abortion committee at an accredited or approved hospital.
It seems to me that one whole section has been left out. I say this with not a great deal of seriousness. However, it does point out something which I am sure male Members of the House might like to consider. If the Bill is referred to a committee I wonder if the Member who proposed the Bill would consider another amendment to the Criminal Code which would state the following:
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Every person who impregnates a woman with male sperm causing her to be pregnant against her will is guilty of an indictable offence and is liable to imprisonment for life.
It seems to me that makes just as much sense as some of the things we already have in the Criminal Code. Perhaps this kind of amendment would cause people to consider, first, who causes unwanted pregnancies. That brings us to the question before us today; who causes the unwanted pregnancies? It is pretty evident that without the male sperm there would be no pregnancy, therefore, the man in each case has a very major responsibility. Second, who makes the very difficult and painful decision as what should or should not be done about an unwanted pregnancy? I think the answer is perfectly clear, certainly to the women in this House. It is the woman who is going to have to deal with this very painful decision and no one can tell me that any woman faced with an unwanted pregnancy will not face a very, very painful decision, particularly if she decides that she has no alternative but to consider abortion.
Finally, who is faced with the responsibility of rearing a child if the pregnancy is continued and who often is left alone without resources to rear that child? There again, we know that it is the woman who is responsible for this and we have a lot of statistics to show that most of those women do not have adequate finances. I believe some of the witnesses to the divorce Bill hearings would substantiate the fact that these women do not have adequate support and certainly increasing numbers of women are left alone with the responsibility of their children with no support whatsoever. I would say, particularly to the male Members of this House, that it is indeed a very serious and difficult emotional question which faces women who have been made pregnant and who are forced to consider what they should do in the case of an unwanted pregnancy.
We in this House have very different points of view-and it is easy to get very uptight about this. I do myself-so it is very important that we look at the various areas on which perhaps we can agree. The whole question of abortion is fraught with emotion on all sides. We know this. I would hope we can learn somehow to respect our different points of view and perhaps not discuss it when we know there is absolutely no potential for reasonable communication. I also hope that we can agree that no woman really wants an abortion and those women who are driven to seek one usually do so because they have little or no alternative. I do not think any feminist group advocates abortion as a method of birth control. That argument is passe. I do not know of any feminists, including myself, who feel that abortion is a positive thing. It is not. No one really favours abortion. However, women, particularly young women, poor women and women under a lot of stress, really have no other alternative when they are left in a pregnant state. They are unable to care for their child and they have no other alternative. It is a desperate situation in which a woman finds herself and so very often they are alone. I do not feel we give enough consideration to this point.

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I also hope that we in this House can agree that it would be far better to put our efforts into prevention. Surely we can work together on that even though we might have different philosophies about the whole question of choice of abortion. 1 would hope we could somehow work together to develop programs and to work with the Ministers responsible so that we could have far more research into adequate methods of contraception. I feel we should have much greater research into contraception as it applies to men. I feel this whole area has been neglected. We know there are many, many cases where the pill and other methods of contraception have had very negative side effects. We must find more effective methods of contraception. I hope that all of us in this House agree that it is far better, far more humane and far more important to prevent unwanted pregnancies than for a woman to be faced with the situation of having to consider an abortion.
Men have a great responsibility in this area and they are not assuming their responsibility. I would say that many of the supporters of this Bill which is before the House are probably not doing their part to ensure that we are putting all of our efforts into prevention. I hope that we can agree to put much more research into contraceptive methods as well as, of course, education, particularly for young people. Many parents need help because they are not comfortable discussing matters of sexuality, family planning and birth control methods. I hope as well that we can agree that despite our very different and strong emotional and personal views on the question of abortion that we, as Members of Parliament do not have the right to use our position as elected Members of Parliament to introduce laws which would arbitrarily impose our views on others. We must be very careful in the way we exercise the power we have. It is not up to me to force a woman to have an abortion or to say she cannot have an abortion when she is pregnant. It is not up to me to say. It is not up to me to bring in laws which are going to force a woman to go to a back street abortionist because we are restricting access to a safe medical procedure. It is up to the woman. It is an individual matter. It is not up to us to tell that woman and her doctor what should be done in an individual case.
Professor Charles Kelbey, a law professor, I believe, said in an article in Newsweek that when highly emotionally charged issues have to be resolved in law, it is far better to come down on the side of freedom than on the side of prohibition. Therefore, I would say to my colleagues that I respect their vies. I know many of their views are different from mine and mine are different from theirs and I believe we must respect each other's views. We surely have no right to impose our views on another person. I think the whole question of choice is important. It is not pro-abortion to be in favour of choice. None of us, I hope, are pro-abortion. We in this Party cannot support this Bill. It would appear that the intent is to further complicate procedures and make it more difficult for women to have access to safe medical abortions. Access to abortions is already far too restricted. I am not going to get into the whole question of when life begins because I believe that is something which will always be a personal and philosophical view and we could
argue forever and not agree on that. 1 agree with my friend that the present law is not being carried out because access to abortion is far too restricted. There are very few hospitals in maritime, northern or rural communities, for example, where women have any choice at all. The present law requires, as we know, that a woman present her case before a therapeutic abortion committee of at least three doctors in an accredited or approved hospital. I know in my province of British Columbia, there are a number of hospitals which no longer have therapeutic committees. This is making it more difficult for women. My doctor tells me that many women from Victoria, for example, have no access and are going to the U.S. as a result. That is the only choice they have.
I have no facts to substantiate this but I would hazard a guess that the fact there is no access to abortions is not stopping unwanted pregnancies. What are women doing? 1 am sure they are taking illegal steps to have abortions. Is that what Members want? Do they want women to die? That seems to me to be the final outcome of this kind of restrictive philosophy which does not leave the matter to individual choice.
Approximately 75 per cent of our hospitals do not have therapeutic abortion committees and therefore do not offer the service to their surrounding areas. I received letters last year from the Canadian Medical Association which feels there should be some reconsideration of the concept of a committee because it gets very complex. They feel it should be really more of a medical decision. However, there should be therapeutic abortion committees in accredited hospitals and they should be available in all regions of Canada. It does not make sense to have this provision in our law and then not have the service available in certain communities.
With all due respect to my friend who brings this Bill forward, I wonder if he is aware of some of the following facts. First, making abortions more difficult to obtain will not cut back on the number of women who are seeking and obtaining abortions. It will not stop them. The only thing that will stop unwanted pregnancies and abortions is prevention. Let's get together and start working on more prevention.
Another fact is that if there is no access to abortions, these women will simply go back to obtaining unsafe abortions where they may die or be maimed for life. That is what the situation used to be like. If they are wealthy, of course, the wives and perhaps the daughters or partners of Members of Parliament and people with that kind of a salary, what are they going to do? They are probably going to go across the line to states which have easy access to abortions, or they are going to go to private medical care of some kind. What if you are a poor woman or adolescent girl? There are girls 14, 15 and 16 pregnant now and if we carry through with this philosophy we will be forcing them to go ahead and have babies. This will be destructive to both the child and the young mothers.
I deplore the fact that this is happening just as much as other Members. However, the fact is that in countries where
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abortions are illegal, women continue to need and get abortions. There have been unwanted pregnancies throughout history. We have heard stories of women who used a hot bath and a bottle of gin to get rid of an unwanted pregnancy. It is going to happen no matter what policy we have concerning access to abortion. What we need is prevention. I ask Members, regardless of their views on our present Criminal Code, to give much more emphasis to prevention. That is what we need.
What of women who live far from centres where these services are available? If they cannot afford to travel or to have other children in the family looked after while they are gone, or whatever the reason is, they simply become prime targets for back room butchers or unsafe abortion methods. There are long delays which are difficult for both the woman and her doctor because they do not have adequate access and as a result the pregnancy often goes on too long.
I have many, many other points I would like to make and I am sure that since this matter keeps coming up again and again I will have further opportunities to make them. However, I implore my fellow Members to think about this. It is very tempting, because of our gut emotions, to polarize this situation. I feel as strongly as anyone about this issue, but I wish we could work together on the positive things that we can agree on. Let us really work together to try and make sure that there is adequate family planning, information and services available. Instead of cutting back on planned parenthood we should be supporting the Minister of National Health and Welfare (Mr. Epp) in obtaining more money for more adequate research and programs which are targeted to young adolescents to help them deal with their sexuality and avoid situations which will ruin their lives. We should have family planning in every community. I would certainly hope that we could all work together on all methods of family planning.
I was in Nairobi, Kenya, this summer, along with some other Members and the Minister responsible for the Status of Women (Mr. McLean). I can tell the House that the number one issue in Third World countries is that of over-population and family planning. We have to deal with this constructively, both internationally and here at home.


Mr. John Reimer (Kitchener):: Mr. Speaker, I would like to begin by commending the Hon. Member for Cape Breton Highlands-Canso (Mr. O'Neil) for the Bill he has placed before us today. It was a new concept for me when I first read it, yet I think it has real merit. I would like to see the Bill go to committee so that we could discuss it more fully. We could call witnesses and fully deal with this concept and the issue of abortion itself. I would also commend the Hon. Member for London East (Mr. Jepson) for his comments. I think they were very well expressed and well taken.
The Hon. Member for Vancouver East (Ms. Mitchell) said that she did not like the fact every three or four weeks she had to get up to respond to something like this, to in essence say no to the request being made by a Member. The fact that it is coming up so often is very significant. I encourage the Hon. Member to do what she would do on many other topics. If we constantly raise the question, say, of pensions or family allow-
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ances, she would certainly like us to look at that very seriously. Well, here is an issue which keeps coming up. Let us address it equally seriously and make sure we can take this Bill to committee and fully investigate all the facts surrounding the Bill. I ask for a little consistency from the Member in the way in which she addresses this Bill. Rather than complaining that the issue keeps coming up so often, let us deal with the fact that it does and start addressing it properly.
As I said, this Bill represents a novel concept where we would have someone present at an abortion committee hearing who would speak for the unborn. That is an excellent concept. I am not sure how it would work in our abortion clinics across the land. It is my understanding that abortion clinics do not have these therapeutic committees, but that is something we could deal with in our committee. I still believe we should take it to committee to be explored. It is an excellent concept which we should examine.
If I recall correctly, the Member for Vancouver East said that we should not force on others our morality and views about some of the issues which we as individuals hold very dear. While I can understand some of her argument, I have studied this topic at length. I was a member of a hospital board for several years in Kitchener-Waterloo. I recall that when we studied this topic at the Kitchener-Waterloo hospital board we spent over a year using the medical expertise that was available to us. In spite of the fact that we were only carrying out about 40 per cent to 50 per cent of the abortion requests coming to the hospital, and therefore taking quite a narrow application of the law, we found that our therapeutic abortion committee was approving abortions for 66 different reasons under the present law. I suggest that it was far too liberal an interpretation of the law.
We must take seriously the argument not to force our morality on others. Therefore, when it comes to the topic of abortion I suggest that we should be as thorough and objective as possible. Rather than talking about the side issues that surround this topic, and becoming involved in all the emotions that come into play, let us address the central issue: Are we dealing with a human being who should have the full protection of the law or are we not? If we are dealing with a human being, let us ensure that they have the full protection of the law. If not, let us withdraw this section from the Criminal Code and let people simply do what they wish. We must be as objective as we can.
I am particularly interested in the fact that in 1975 in West Germany the Lower House was asked to deal with that country's abortion law. Its practice is quite similar to ours today. It was cognizant of the fact that from 1933 to 1945 Germany had denied human rights to a certain segment of its population. It wanted to be very careful that it was truly a full democratic state in the true sense of the word, giving full protection of the law to all its citizens, including the unborn if that foetus was considered a person. Therefore, the question was given to the Supreme Court which called in 133 world

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experts, including geneticists, obstetricians and gynaecologists. They were asked to address this question of whether or not a foetus is a human being and therefore should be accorded the full and equal protection of the law. After two weeks of considering this question this group brought in a unanimous recommendation. In answer to the question: "When does the foetus gain the civil right to life?", they answered:
Life, in the sense of historical existence of a human individual, exists according to definite biological-physiological knowledge, in any case, from the fourteenth day after conception.
The reason they chose the fourteenth day after conception is that it is possible for the cells to divide into twins or triplets up to that point.
Their statement is remarkable because it was unanimous and specific in stating that life exists from the fourteenth day because the cells could divide into twins or triplets before that time. We should also note that this recognition of life is even before the woman knows that she is pregnant. Therefore, according to these 133 world experts, we are dealing with a human being.
I submit that if that is the evidence and we are trying to be as objective as we can, as we must, then our actions should begin to follow the facts. We would be required to do so in economic policy and we are surely required to do so in all of our social policy. Let us begin being honest about abortion policy. The abortion statistics in this country today are a travesty of justice. It is a pure refusal of people to address the facts because they do not want to be bothered. They have already made up their mind.
The House will know that Dr. Morgentaler opened a clinic in Toronto. This was challenged in the courts and he was acquitted. The Government of Ontario appealed and the acquittal was overturned. Now he is permitted to continue with his clinic in spite of that. The existence of the clinic is against the law which specifically states that abortions much be dealt with by a therapeutic abortion committee in the hospitals. Even Grade 3 children could understand that. However, we sit here in our comfortable seats and ignore that fact as if it does not matter. It is a sad commentary on Members and a sad commentary on our society.
Let us begin to be objective. This Bill asks that we at least have someone present to speak for that child. Surely that is a minimum request. This Bill is attempting to have us think and become objective again in order to be truly supportive of the weaker in our society who need the full protection of the law. The strong will look after themselves. The rich will look after themselves. Let us begin defending those who cannot defend themselves.
I urge Members to seriously think about what we are doing and pass this Bill to committee so that we can have an objective, fair and calm discussion, not addressing all the side issues but the real issue about the protection of the unborn.


Mr. John Oostrom (Willowdale):: Mr. Speaker, 1 also welcome the opportunity to speak to this Bill introduced by my seatmate, the Hon. Member for Cape Breton Highlands-Can-so (Mr. O'Neil). The Bill before us today proposes that the unborn child be represented by legal counsel for the purposes of the therapeutic abortion committee meetings pursuant to the provisions of the Criminal Code. This would be a fundamental and welcome change to the present procedures and I would also like to see this Bill go to committee.
Today we are focusing our attention once again on a very important moral issue. In 1969, the Criminal Code was amended to provide that an abortion could lawfully be performed by a qualified medical practitioner in an accredited or approved hospital if the therapeutic abortion committee of the hospital has issued a certificate stating that in its opinion the continuation of the pregnancy would or would be likely to endanger the woman's life or health. However, the life and health of the mother are very rarely, if ever, endangered.
Many doctors are signing death warrants instead and many so-called doctors, such as Dr. Morgentaler mentioned by the Hon. Member for Kitchener (Mr. Reimer), are performing abortions in non-approved locations. This situation should be investigated. Furthermore, in some provinces the federal law is not obeyed at all. In some locations the abortions are outnumbering the live births.
In 1979, the federal Government appointed the committee on the operation of the abortion law to conduct a fact-finding study to determine whether the procedure provided in the Criminal Code for obtaining therapeutic abortions was operating equitably across Canada. This group, under the chairmanship of Robin Badgley of the University of Toronto included as other members of the committee, Dr. Marian G. Powell of the Toronto General Hospital and Montreal lawyer, Madame Denise Fortin-Caron. The committee was not asked to consider the merits of the abortion law itself or to make recommendations but I believe this should have been done at the time.
Earlier, I spoke to a Bill similar to this one. With modern technology such as imaging created by ultrasound vibrations, new medical evidence has emerged and has proven that life exists since conception.


Mr. Speaker:: Order, please. The hour provided for the consideration of Private Members' Business has now expired. It being five o'clock, this House stands adjourned until Monday next, pursuant to Standing Order 3(1).


[Stage Direction]
The House adjourned at 5 p.m.
[Stage Direction]

Monday, January 20, 1986