1986-06-19

Mr. Don Blenkarn (Mississauga South):: Mr. Speaker, I have the honour to present in both official languages the fourth report of the Standing Committee on Finance and Economic Affairs. This report deals with simplification of the Income Tax Act and makes extensive recommendations concerning how Budgets should be prepared and how tax measures should be contemplated so that when presented in a Budget they are drafted simply. It is the view of the committee that simplification of the tax system ought to be a primary concern, while promoting equity and economic growth. The committee has recommended that the Minister of National Revenue (Mr. MacKay) use a questionnaire type tax reporting form on a trial basis for 1986.
The committee also makes extensive recommendations with respect to how the current Income Tax Act ought to be rewritten to make it readable. You will know, as do others in this House, that it is virtually impossible for Members of Parliament to understand the Income Tax Act. Indeed, senior tax practitioners have indicated they cannot understand the Act themselves. It is with that view that the committee makes this report.


CUSTOMS TARIFF-PRESENTATION OF REPORT OF LEGISLATIVE COMMITTEE
Mr. Gordon Taylor (Bow River):: Mr. Speaker, as Chairman, I have the honour to present the report of the legislative committee in both official languages on Bill C- 111, an Act to amend the Customs Tariff Act and to amend an Act to amend the Customs Tariff Act.


PETITIONS
Mrs. Pauline Browes (Scarborough Centre):: Mr. Speaker, I would like to present a petition on behalf of more than 25 constituents resident at 121 Trudelle Street who wish to
express concern about their postal service. They call upon the Minister responsible for Canada Post to take steps to ensure that mail delivery to that building be improved and, in particular, they request that it be delivered earlier in the day.


Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, in the continuing saga of tabling petitions concerning the closure of the Rideau Hall grounds by order of the National Capital Commission, I would like to table another six petitions which ask that the authorities reconsider this decision and allow residents and tourists to visit the grounds at Rideau Hall. They recognize that security concerns must be looked after, but the public of Canada should be allowed to enjoy the 120 acre park. The modus vivendi, that is the security measures should be installed appropriately so that the public can be allowed to visit these grounds.


Mr. Alex Kindy (Calgary East):: Mr. Speaker, on behalf of my constitutents in Calgary East I have the honour to present a petition asking Parliament to direct Canada Post Corporation to construct and operate a new postal station in the northeast sector of the City of Calgary in order that 80,000 residents of that area need not continue to face extreme overcrowding, lengthy travel requirements and poor service.


Mr. Speaker:: There is a request to revert to tabling of committee reports. Is there unanimous consent?


Some Hon. Members:: Agreed.



PRIVATE MEMBERS' BUSINESS


Mr. Bill Kempling (Burlington):: Mr. Speaker, I have the honour to present the third and fourth reports of the Standing Committee on Private Members' Business in both official languages. The third report deals with the proposals of the Standing Committee in order to rectify problems relating to Private Members' Business hours. The fourth report deals with the selection of votable items pertaining to the second draw which took place on June 10, 1986. I note that pursuant to Standing Order 36(1 )(b) the fourth report is deemed adopted when laid upon the Table.
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June 19, 1986
Introduction of Bills


WESTERN GRAIN STABILIZATION ACT
Hon. Ray Hnatyshyn (for the Minister of Agriculture) moved: for leave to introduce Bill C-l 19, an Act to amend the Western Grain Stabilization Act.


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


Some Hon. Members:: Agreed.


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

Ramon John Hnatyshyn: for leave to introduce Bill C-120, an Act to amend the Prairie Grain Advance Payments Act.


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


Some Hon. Members:: Agreed.


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

Ramon John Hnatyshyn: for leave to introduce Bill C-l21, an Act to amend the Judges Act and other Acts in relation to judicial matters.


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


Some Hon. Members:: Agreed.


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

Hon. Don Mazankowski (Minister of Transport) moved: for leave to introduce Bill C-l22, an Act to exempte certain shipping conference practices from the provisions of the Combines Investigation Act and to repeal the Shipping Conferences Exemption Act, 1979.


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


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, Bill read the first time and ordered to be printed.
Mr. Guiibault (Saint-Jacques):: Mr. Speaker, with respect to all these Bills the Government has just tabled, I should like to ask the President of the Privy Council (Mr. Hnatyshyn) whether he expects the House to adopt them all before the summer recess, for it seems to me we have only a few days left and it is a little bit late to introduce such major Bills.


Ramon John Hnatyshyn: The
question of the agenda for the House of Commons is a matter of ongoing discussions between the House Leaders. We have discussed what Bills are doable, as it were, before the end of this session. If he checks with his House Leader he will see that that matter has already been discussed and answered to his House Leader's satisfaction.


COMMITTEES OF THE HOUSE
Ramon John Hnatyshyn: Mr. Speaker, there are three items that have been a matter of discussion between the parties. I think you will find a disposition to have the following draft orders introduced by unanimous consent and passed unanimously without debate. They have to do essentially with respect to committees. The first order relates to the Standing Committee on Transport:
That, in relation to its permanent Order of Reference on the Annual Report of the St. Lawrence Seaway Authority, dated September 9, 1985, and pursuant to Standing Order 96(2), the Standing Committee on Transport or a sub-committee thereof be empowered to adjourn from place to place inside and outside Canada and that, when deemed necessary, the appropriate staff accompany the Committee or sub-committee and members of the Committee as the case may be.


Mr. Speaker:: The House has heard the terms of the motion. That motion takes unanimous consent for introduction.


Jean-Robert Gauthier: Mr. Speaker, as a matter of information, is there any time limit to this motion? Is it an unlimited motion
June 19, 1986

that can be used by the committee to travel anywhere in the world?


Ramon John Hnatyshyn: As an administrative matter the agenda has been presented not only to the Board of Internal Economy of the House of Commons, but to the House Leaders. The liaison committee has allocated sufficient funds to allow for the travel. So all bases have been touched with respect to this particular travel.


Mr. Orlikow:: Mr. Speaker, I accept the statement of the Minister that this has been discussed by the House Leader, and if our House Leader has agreed then it is acceptable to us.


Mr. Speaker:: The House has heared the terms of the order. Is unanimous consent granted for the introduction of the motion?


Some Hon. Members:: Agreed.


Mr. Speaker:: That being so, shall the order carry?


Some Hon. Members:: Agreed.


Mr. Speaker:: Carried and so ordered.


ENERGY, MINES AND RESOURCES-POWER TO TRAVEL
Ramon John Hnatyshyn: Another order, Sir, again subject to discussions with all parties, including House Leaders, who have consented, and the appropriate budget has been approved by the Board of Internal Economy and the chairman of the liaison committee. I think you will find a disposition to receive the following order unanimously and to pass unanimously without debate. It states as follows:
That, notwithstanding any Standing or Special Order of this House, the Standing Committee on Energy, Mines and Resources or Members of the Committee be empowered to travel to Calgary, Alberta, Norman Wells, Inuvik, Tulctoyaktuk, Yellowknife, Northwest Territories, Fort McMurray and Cold Lake, Alberta, from August 11, 1986 until August 14, 1986 and that the appropriate staff accompany the Committee as it deems fit.


Mr. Speaker:: The House has heard the terms of the motion. Is there unanimous consent necessary for its introduction?


Some Hon. Members:: Agreed.


Mr. Speaker:: There being such consent shall the motion carry?


Some Hon. Members:: Carried.


Mr. Speaker:: Carried and so ordered.


CANADA'S INTERNATIONAL RELATIONS-POWER TO TRAVEL
Ramon John Hnatyshyn: The
final order has to do with the Special Joint Committee on Canada's International Relations. Again, this matter has been
Motions
discussed between the parties and the House Leaders and consent is forthcoming all around. I would ask this matter be received unanimously and passed unanimously without debate. It reads as follows:
That, notwithstanding the Order of the House made on Tuesday, May 27, 1986, the Special Joint Committee on Canada's International Relations be empowered to present its report not later than Thursday, June 26, 1987; and
That a message be sent to the Senate to request that the Senate unite with this House for the above purpose.


Mr. Speaker:: The House has heard the terms of the motion. Is there unanimous consent necessary for its introduction?


Some Hon. Members:: Agreed.


Mr. Speaker:: There being such consent shall the motion carry?


Some Hon. Members:: Carried.


Mr. Speaker:: Carried and so ordered.


FEDERAL-PROVINCIAL FISCAL ARRANGEMENTS AND FEDERAL POST-SECONDARY EDUCATION AND HEALTH CONTRIBUTIONS ACT ALLOCATION OF TIME TO CONSIDER THIRD READING OF BILL C-
[Stage Direction]
On the Order: Government Notices of Motions:
June 17, 1986-The Minister of Finance:
That, further to the notice given on Tuesday, June 17, 1986, by the Minister of National Revenue and pursuant to the provisions of Standing Order 117 in relation to Bill C-96, An Act to amend the Federal-Provincial Fiscal Arrangements and Federal Post-Secondary Education and Health Contributions Act, one sitting day shall be allotted to the third reading stage of the said Bill; and
That fifteen minutes before the expiry of the time provided for the consideration of government business on the above-mentioned sitting day, any proceedings then before the House shall be interrupted, if necessary, for the purpose of this Order and, in turn, every question necessary to dispose of the said stage of the said Bill shall be put forthwith and successively, without further debate or amendment.
Mr. Speaker:: Before proceeding with motions there is a matter standing under Government Notices of Motion on the Order Paper which would normally be transferred. It is the motion under Government Notices of Motion with regard to June 17, 1986, the Minister of Finance. The House has already adopted an order with regard to time allocation. The Chair will either transfer that motion or accept it as being withdrawn.
Pursuant to the Standing Order, this Government Notice of Motion stands transferred to and ordered for consideration under Government Orders later this day or at the next sitting of the House.

June 19, 1986
Committee Reports


PRICING OF DOMESTIC WHEAT AND ITS PRODUCTS
[Stage Direction]
Mr. Lome Nystrom (Yorkton-Melville) moves that the first report of the Special Committee on the Pricing of Domestic Wheat and its Products, presented to the House on Thursday, June 5, 1986, be concurred in.
He said: Mr. Speaker, I rise today to move a motion of concurrence in a special report of the House prepared by seven Members of Parliament. It is probably somewhat rare that an opposition Member would move concurrence in a report of a committee on which the Government has a majority. However,
I think the price of wheat in this country is an issue on which we all must agree and one on which we must act quickly if the farmers are going to stay on the land.
While the recommendations of the seven members of the committee were essentially unanimous, of course individual members had some differences. The committee was composed of the Hon. Member for Huron-Bruce (Mr. Cardiff), the Hon. Member for Algoma (Mr. Foster), the Hon. Member for Moose Jaw (Mr. Gottselig), the Hon. Member for Swift Current-Maple Creek (Mr. Wilson), the Hon. Member for Gatineau (Mrs. Mailly), the Hon. Member for Crowfoot (Mr. Malone) and myself. The committee worked well and it was obvious during our hearings in six different cities that there is a real crisis in agriculture today. The western farmer has not faced such a crisis since the 1930s. In fact, farm income for western Canadian farmers is at approximately the same level as in 1933, in 1933 constant dollars.
I am pleased that the Minister of State for Canadian Wheat Board (Mr. Mayer) is in the House today. I am calling on him to agree with the recommendations in this report and implement what the Members of three Parties are recommending on behalf of western farmers.
We are faced with a real crisis. The price of wheat is at approximately the 1933 levels, and one can imagine what that means by considering if one's income in another walk of life was at the same level in 1933, in terms of constant dollars. That is why many thousands of farmers are either going bankrupt or facing serious financial difficulties. They will be unable to make ends meet unless we do something.
This special committee was mandated to the narrow study of two-price wheat in this country and to examine, to a very limited extent, the question of parity pricing. I think all of us on the committee realize that we cannot solve the farm problem simply by considering two-price wheat. Two-price wheat represents only 9 per cent of our wheat production in Canada. Another 10 per cent or 11 per cent of wheat production is in feed grains and some 80 per cent of our wheat production is exported to other countries around the world.
I am talking about the problems as they face western Canadian farmers because about 95 per cent of the wheat
produced in Canada is by farmers in the Wheat Board region in western Canada; another 4 per cent is produced in the Province of Ontario; and, the remaining 1 per cent is produced primarily in Quebec, with some in Atlantic Canada. Therefore, this is basically a western Canadian problem.
The solution to that problem is not a domestic wheat price increase. The solution is to bring back some sanity and order to international trade. Presently, there is a tremendous trade war between the Europeans and the Americans, both of whom are massively subsidizing their farmers in the export of grain around the world. We state in our report that the United States is spending some $53 billion American in their agriculture for the next three years in order to subsidize the American grain producers. Some $1 billion of that is being used to subsidize American wheat exports around the world. That $53 billion American is the equivalent of $75 billion Canadian being spent by the United States for subsidies in the next three years, or $25 billion Canadian each year to subsidize the American farmers. How can we compete when the Americans are subsidizing their farmers by some $25 billion Canadian each year?
The U.S. Farm Bill is providing tremendous subsidies for the export of grain. For example, the Americans are selling wheat to Algeria for $104 a tonne, with a subsidy of $54 a tonne. In other words, they are giving one free bushel of wheat for every two bushels they sell to Algeria, as is the case with Morocco. The Americans are after our barley markets in Saudi Arabia and may be after our wheat markets in Syria and other parts of the world. The Americans are fighting against the Europeans, particularly the French, in places like Algeria, Morocco and Egypt. However, if the French are displaced from those markets, the Europeans will go elsewhere and fight for some of our traditional markets.
The real victims of this trade war between the Europeans and the Americans are the Canadian farmers, the Argentinian farmers and Australian farmers. There are only five great grain exporters in the world: Europe, the United States, Australia, Canada and Argentina. That is the current situation.
In addition, as a result of a drop by 19 per cent in world prices for better quality grains, the initial price of wheat went down. The initial price of barley dropped by some 27 per cent this year. Therefore, farm income will decline very rapidly in Canada.
The U.S. loan rate is $2.40 a bushel, which is in effect the price of wheat in the world. We hear much speculation from the Office of Majority Leader Senator Robert Dole and the Office of Mr. Lyng, the U.S. Secretary of Agriculture, that the loan rate in the United States could drop from $2.40 U.S. a bushel to $2.10 U.S. a bushel. The prices would then be lower than those in the 1930s. If that happens and we do not respond, tens of thousands of farmers will go under and we will see the disappearance of many towns and villages and a rural way of life that is so important to this country.
June 19, 1986
[Stage Direction]
I believe that all Parties in this House agree that if one segment of our society is in trouble, through no fault of its own, whether it is farmers, fishermen, loggers or anyone else, it is incumbent on the nation as a whole to come to the support of that segment of our society. The farmers in western Canada are in serious trouble, through no fault of their own but because of a trade war, world prices and the increased production of grains in countries like China and India that are becoming increasingly self-sufficient. Consequently, our western Canadian farmers are in trouble.
Some may ask if they could improve their efficiency. As the Hon. Member for Crowfoot, the Chairman of our committee said, the western Canadian farmers is the most efficient farmer in the world with the possible exception of the corn producers in the State of Iowa. Our farmers produce food very cheaply for the people of this country. In fact, we have the second cheapest food in the world in terms of the percentage of our disposable income that is spent on food. We spend about half as much on our food as we did in 1947, which proves that our farmers are not at fault for high prices. Our farmers are very efficient and extremely productive.
Our committee made nine recommendations which I believe should be taken very seriously by the House. I ask the Minister of Agriculture (Mr. Wise), the Minister of State for Canadian Wheat Board and the Prime Minister (Mr. Mulroney) to accept these recommendations.
The first recommendation is that we retain the present two-price system for wheat. That two-price system has been in place since 1967, when it was brought in to protect consumers. This two-price system meant that when the world price of wheat went high Canadian consumers would not have to pay as much for bread. On the other hand, if the price of wheat in the world was very low, the Canadian price would be somewhat higher so that the farmers would have a better deal and be able to survive on the farm.
What has happened in the 19 years we have had a two-price wheat system? Our committee reports that the consumers have benefited from the two-price wheat system by some $469.5 million because the Canadian price was lower. What about the farmer? On the other side, the two-price wheat system has helped the farmer by only $3.1 million, because only for short periods of time was the Canadian price higher than the world price, so the farmer benefited by $3.1 million and the consumer, when the Canadian price was lower, benefited by some $469 million. Up until now, the two-price wheat system in this country has meant that bread has been lower in price than it might have been; it has meant that the price of Shreddies for everyone in this country has been a little bit lower than it might have been because the farmer, in effect, has helped the consumer keep the price down.
[DOT] (U30)
What we are asking in the report is that the consumer now help the farmer by allowing us to increase the price of wheat from $7 a bushel to $10 a bushel for domestic purposes. With
Committee Reports
an increase of $7 to $10 a bushel, which is an increase of $3 a bushel which will go directly to the farmer, the wheat content will increase by 4.5 cents in a 16 ounce loaf of bread. An increase of 4.5 cents in a 16 ounce loaf of bread is not very much for the consumer to pay to help keep farmers on the land and to ensure that people in my riding, in Swift Current- Maple Creek, and other ridings do not go bankrupt because of the trade war between the United States and Europe.
Wheat for $10 a bushel is only part of the solution, because that concerns only 9 per cent of our production in Canada. However, with such an increase, there would be an extra $220 million in the pockets of western Canadian farmers which would help those farmers in my riding and in other ridings stay on the land. It will help to keep our farm food production system very efficient.
I appeal to the urban consumers represented by urban Members of Parliament in this House by saying that if the farmers are forced off the land and if we have fewer farmers and large corporate farms, the price of food will rise in this country and the people who will suffer in the long run will be the consumers, through an expensive food policy. If the price of food is to be kept down in Canada, we should keep the family farmer operating, and the price of food will be reasonable.
Therefore, I would ask the Minister of State for the Canadian Wheat Board (Mr. Mayer), who is in the House today, to agree to the position we took in committee and increase the price of domestic wheat from $7 a bushel to $10 a bushel.
In my few remaining minutes, I want to mention that recommendation No. 3 is that when export prices improve again the Canadian Wheat Board should review the $10 a bushel wheat price; in other words, if the price of wheat rises internationally from $3 or $3.50 to $5 or $6, we can review the domestic price with a view to dropping it so the consumer will once again get a break in the price of wheat-based products.
To me, recommendation No. 4 is the most important, and that is that the Government should consider a deficiency payment or combination of deficiency payments and stabilization payments for western Canadian farmers. As I said before, domestic wheat is only about 9 per cent of our production. Another 80 per cent is exported; another 10 per cent or 11 per cent goes into feed grains. With the world price of wheat being so low, I believe the farmers of this country must receive a deficiency payment from the federal Government if they are to survive. Our committee, with five Conservative Members of Parliament, unanimously states that the Government should consider a deficiency payment to the farmers of western Canada.
One might ask what the amount should be. In the United States, the farmers are receiving the equivalent of $25 billion Canadian a year. There are more farmers there and it is a bigger economy. However, what the organizations that represent farmers are stating in this country is that the farmers
[Stage Direction]
June 19, 1986
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Committee Reports
of Canada should receive $1.5 billion to $2 billion in deficiency payments. I argue that if we can afford to spend, as the Government did last year, $1 billion in bailing out the banks and bank depositors because two banks in Canada collapsed, then surely to goodness we can spend $1.5 billion or $2 billion on a deficiency payment to keep western Canadian farmers in business and on the land. If the farmer is on the land, he or she will be productive, will pay taxes, make a contribution to our society and create jobs.
When the farmer is better off, we are all better off. I know that my friend from Alberta, the Hon. Member for Red Deer (Mr. Towers) would agree with that. When the farmers are better off, they will be spending money, creating jobs in the towns and cities of Canada for the young people of Canada. When the farmers get another $2 or $3, they spend $5 or $6. When the farmers spend money they stimulate the economy. It is a Canadian-owned enterprise. The federal Government now must come, on behalf of Canadians as a whole, to the benefit of the farmers, and provide a deficiency payment to ensure that farmers stay on the land. In my opinion, that is the most important recommendation we make in the report.
We also make other recommendations by saying, for example, that we must protect the historical production patterns in terms of wheat production in this country. We must also look at mechanisms to protect our wheat-based industries if the higher domestic wheat price makes them less competitive.
We are also saying, as recommendation No. 7, that the Department of Consumer and Corporate Affairs should very closely monitor the price of wheat-based products to ensure that there is not undue price escalation, and if the Department identifies unreasonable pricing to the consumer, a public inquiry into the pricing practices of the entire system should be pursued. Many times, the middleman, be it the miller, the processor, the retailer or the wholesaler, will add two or three cents, or five or six cents, or seven or eight cents to the price of a loaf of bread when the price of wheat increases. I maintain that these are unjustifiable price increases. We made a recommendation that the Department of Consumer and Corporate Affairs closely monitor the price of wheat-based products to ensure that that does not occur.
Another very important recommendation we make is that the Government consider the possibility of a refundable low income tax credit for low income consumers. Bread is a basic staple of life. Low-income people eat lots of bread. If the price of bread increases by 4.5 cents or 5 cents or 6 cents or 7 cents a loaf, then there should be a refundable tax credit so low-income people, even if they do not pay taxes, can file an income tax form and receive a tax credit back from the Government, or $100 or $200 from the Government, whatever we calculate the increase in the price of bread to be for the average low-income family.
Finally, I refer to the ninth recommendation, which is that we lead the way as a country, as one of the five great exporting nations of the world, to ensure that this issue becomes one at
GATT and to make sure that we negotiate a meaningful grains agreement by which the price of wheat will be based on the cost of production so that the farmer will receive his just return and so that consumer nations on the other side will not be charged excessive prices at certain times in the international wheat cycle.
I close by making an appeal to the Government of Canada to accept the recommendations of the committee. Parliament was generous enough to recognize that there was a problem. A committee was struck from all three Parties. Several tens of thousands of dollars were spent in going around this country and studying the situation. We have now made a recommendation, coming from all three Parties, for an increase in the price of domestic wheat from $7 a bushel to $10 a bushel and for a deficiency payment for western Canadian farmers. I appeal to the Minister in charge of the Wheat Board, the Minister of Agriculture and the Prime Minister to accept the recommendations that are made in this report.
[Stage Direction]
Mr. Speaker, the situation in Canada is quite dramatic. The average family income in western Canada is about the same as it was in 1930-50 years ago. I hope the Government of Canada will accept the recommendation of the special committee of the House and raise the price of a domestic wheat bushel from $7 to $10, a $3 increase for western Canada families.
Secondly, Mr. Speaker, I hope the Government of Canada will act on our recommendation to consider the advisability of awarding a compensatory payment to western Canada farmers. Mr. Speaker, I know that residents of Montreal, Quebec City, Vancouver and Toronto are prepared to pay a fair price for bread, so a $3 increase for a bushel of wheat means that a 16-ounce loaf of bread will cost 4.5 cents more as a result of rising wheat prices in this country.
We live in a democratic country, and I hope the Government will accept our recommendations. If it does not, then a great many farmers will go bankrupt, a great many farmers will disappear. Here is a chance to do something about that. What we are saying is that part of the solution must come from the consumers in terms of paying higher prices for wheat-based products such as bread, cereal and pasta. It is the minority part of the solution which comes to the tune of about $220 million. I believe, and the committee did not set a figure on this, that we need a deficiency payment whereby the majority of the money to solve the western Canadian problem in the short term must come from the taxpayers. If we do not do that, farmers will disappear, we will lose traditional wheat markets, and once the international trade war is over our farmers will not have those markets.
I stop my comments here. I make an appeal to Ministers to accept the recommendations which have been made by
June 19, 1986
[Stage Direction]
members of the Conservative Party, by myself and by the Hon. Member for Algoma. If we do this then we can at least keep our farmers on the land for a little while longer, at least until the international grain situation improves, and until we find the real solution to the problem of western Canadian farmers in the international arena.
The Acting Speaker (Mr. Charest):: Are there questions or comments? The Hon. Member for Swift Current-Maple Creek (Mr. Wilson).


Mr. Wilson (Swift Current-Maple Creek):: Mr. Speaker, I would like to make a comment and ask a question of the Hon. Member for Yorkton-Melville (Mr. Nystrom). In carrying out his duties on the committee, along with myself and four other Conservative colleagues and the Hon. Member for Algoma (Mr. Foster), he did a service to the country in hearing the interests of the producers, the processors, the consumers and those who can be affected by an increase in the domestic wheat price which, in turn, will manifest itself in some modest increase in the price of wheat-based products. The Hon. Member very passionately and properly explained the problems facing Canadian agriculture, in particular the grain sector at the present time, owing to the disastrous effects on world prices as a result of the trade war which is escalating between the European Economic Community and the United States.
This is a situation in which the United States guarantees its producers $4.38 U.S. per bushel, while flooding the world market at the same time with wheat at $2.40 U.S. per bushel. In fact, the American situation is exacerbated by the export bonus programs which are in place with the result that for every two or three bushels of wheat sold under contract an additional bushel can be thrown in free of charge. There are a number of export enhancement and credit programs which are leading the Americans toward infiltrating and getting into grain markets which were traditionally Canadian.
In a rare spirit of unanimity the committee has put forward a number of recommendations. I was concerned that the Liberal member of the committee dissented, insofar as the two-price wheat system is concerned. He preferred not to see an increase in the price of domestic wheat from $7 to $10 per bushel. His answer was the typical Liberal answer. He suggests that the entire solution to the problems facing Canadian farmers is for the Government to come to their rescue. I think the rest of the committee recognized that the two-price wheat proposal is only part of the solution. Members of the committee agreed that once that proposal is implemented the Treasury may indeed have to supplement the two-price benefit. However, I was concerned that all in all the solution put forward by the Hon. Member for Algoma was simply to raid the government Treasury again, to futher mortgage tomorrow in order to pay for today's programs. After all, that is what has placed this country in the economic difficulties in which it finds itself; that is, a national debt of $235 billion, interest charges which consume one out of every three
Committee Reports
government revenue dollars and one out of every four government expenditure dollars. The level of expenditure on interest on the national debt, if left without taking any reponsible action, any restraint, would result in interest charges consuming the entire federal revenues by the year 2000, with the result that there would be no moneys left for any of the social programs to which Canadians have become accustomed.
Be that as it may, I want to congratulate the Hon. Member for Yorkton-Melville, in particular, for his recognition of the fact that the consumers in this country should shoulder some of the burden, that the burden of these low world prices should be shared not just by the producer and not just by Government but by-


The Acting Speaker (Mr. Charest):: Order, please. I am sorry to interrupt the Hon. Member for Swift Current-Maple Creek, but the Chair wants to assure itself that it is clearly understood that this is a period for questions and comments and that if the Hon. Member has a question that he put it. After all, it is a short period of only 10 minutes.


Geoff Wilson: Mr. Speaker, thank you for reminding me of that. This is a subject in which I am most interested. That was my comment.
Can the Hon. Member for Yorkton-Melville confirm my understanding that he feels it is right and proper that the consumers of Canada should shoulder some modest increase in the price of wheat-based products in order to help out a very productive sector of agriculture in this difficult time?


Mr. Nystrom:: Mr. Speaker, I concur with that analysis. I was somewhat surprised that the Hon. Member for Algoma did not agree with increasing the price of wheat from $7 to $10 per bushel. However, he can speak for himself later on.
I agree that the consumer should pay part of the package in terms of helping western Canadian farmers. As I said before, the two-price wheat proposal has worked to the benefit of the consumer to the tune of $469.5 million since 1967, and to the benefit of the farmer by only $3.1 million. The time has come for the consumer to help the farmer. I think farmers, like everyone else in our society, want to get their money out of the market-place. They do not want subsidies or charity. They do not want hand-outs. They want a fair deal from the marketplace in this country, and in the world. The big problem is the world problem. The domestic wheat problem is only 9 per cent of the problem; but it can be part of the solution. The big solution has to be the international one. However, for the time being, I think the consumers of Canada will have to contribute an extra couple of hundred million dollars to the farmers to help them stay on the land.
I remind Hon. Members that when business people put up prices they do that because they want to increase their profits or expand their plants, or whatever. One reason for the price of a car going up is that the wages for people who make the cars go up and so on. I do not quarrel with the fact that we have well paid auto workers. I want them to be well paid. I am a

June 19, 1986
Committee Reports
very strong supporter of the new Canadian auto workers union.
I hope that they will continue to make good wages so that they can have good standards of living. Of course, when their wages go up the price of a car goes up a bit. So when the wages of a farmer go up, through an increase in the price of a bushel of wheat from $7 to $10, then it is only natural that the price of bread will go up. In a 16-ounce loaf of bread the wheat content on a $3-per-bushel increase amounts to only 4.5 cents. It is only 4.5 cents per loaf for a 16-ounce loaf of bread which we eat in Yorkton. I ask, is 4.5 cents too much to pay to help some farmers stay on the land?
For those reasons I agree with my colleague from Swift Current-Maple Creek (Mr. Wilson). I think you can see yourself, Mr. Speaker, that we have agreement here from different sides of the House, from different Parties, different regions and different ideologies. All we need now is for the Government to agree, then we can all go home happy for the summer.


Mr. Towers:: Mr. Speaker, the Hon. Member referred to a $1-billion bail-out of the banks in his remarks. Is the Hon. Member aware that if that exchange of money had not taken place there would have been a great many little people, including farmers, and throughout Alberta, hurt very badly, one to the tune of $325,000? That would have put him out of business completely if the federal Government had not bailed out the banks. As far as the residents of the City of Red Deer are concerned, that so-called bail-out of the banks was worth $50 a citizen to each and every person who lives in the City of Red Deer. Kanata, Ontario, was found in the same position. It was really not a bail-out of the banks; it was a bail-out for a lot of little people across Canada. Does the Hon. Member recognize that?


Lorne Edmund Nystrom: Mr. Speaker, of course I could and I checked my rhetoric very closely. I think I referred to both the banks and the depositors; if I did not, that is what I meant to say. Of course much of the money went to international banks that had deposits in the two banks that went under. As well, there were many depositors including people in my riding who had money in those banks.
The point I was trying to make is that if we can make a decision over a weekend to spend $1 billion to help those people in trouble, surely to goodness we can do the same thing for the farmers of western Canada. We could make a tremendous economic contribution to Canada. I think the Hon. Member would probably agree with that.


Mr. Maurice Foster (Algoma):: Mr. Speaker, I am happy to have a chance to say a few words on the motion for concurrence in the report on the domestic price of wheat moved by the Hon. Member for Yorkton-Melville (Mr. Nystrom). The committee did a lot of very important work examining the feasibility and benefits of increasing the domestic price of wheat and the impact that would have on agriculture.
At the present time, the domestic price of wheat is about $7. The posted price at Thunder Bay of No. 1 Northern Wheat is something very close to that. However, come July 1 we expect that the international price of wheat will drop. In fact, the initial price posted by the Wheat Board is $3.54. We can see that in the coming crop year, agriculture in western Canada and in the wheat growing areas of eastern Canada is going to face a tremendous drop in income. That was the message we heard most strongly in the West as well as throughout the country.
Agriculture is facing the most serious challenge it has faced since the 1930s. In fact, the price of wheat that we expect in the coming crop year will in real dollars approach the level it was in 1933. It was very appropriate therefore that this committee examine the question of a domestic price of wheat.
A domestic wheat-pricing mechanism has been used throughout the years to provide subsidies to consumers, amounting to something like $469 million. Very little of that has gone to the farmers. Perhaps something in the order of $2 million or $3 million has gone to the farmers, and that information is all contained in the report.
The key issue is that the downturn we will see in wheat prices, as posted by the Minister of State for the Canadian Wheat Board (Mr. Mayer), of 20 per cent in gross revenues will have a devastating effect on the agricultural community. 1 do not think anyone can really appreciate how devastating it will be. If the commodity price goes down by 20 per cent, land values will probably go down by 10 per cent. A young farmer who is highly leveraged will not only see his income decrease, but will see his equity decrease as well. The situation is very grim.
I suppose the most distressing part of the situation for Canadian wheat growers is that American commodity producers are receiving deficiency payments which lift their prices from something like $3.50 to about $6.10 per bushel. The European Economic Community farmers in France, Germany and the U.K. are benefiting from similar kinds of support programs. The impact of the world downturn in wheat prices will not be felt as much by them as it will be by Canadian farmers. In fact, one analysis in a Chase Econometrics study which I read suggests that net farm incomes will drop as much as 20 per cent this year across the entire country. We are facing a very difficult problem.
I was quite pleased to note that in eastern cities, most consumer and retail groups seem to be very conscious of what is happening in Canada, particularly to western grain farmers who produce 96 per cent of the wheat, as well as other wheat growers in eastern Canada. These groups seem to be sympathetic to and concerned about this problem.
Let me refer to a couple of recommendations made in the report. One is that Canada continue to pursue in a very active way having agriculture commodity pricing and marketing put on the agenda at the general agreement on tariffs and trade
June 19, 1986

meeting which will be held in Uruguay this fall. Unfortunately, when the Group of 7 heads of Government met in Japan, wheat was not one of the commodities recommended to go to GATT. The seven leaders talked about services, foreign investment and intellectual rights being referred to GATT for negotiation, but bringing farm commodity prices under the general provisions of the GATT arrangement was not recommended. I was pleased to have read a press report yesterday indicating that the European Economic Community is pressing for agriculture commodities to be brought under the GATT.
The committee also heard a lot of testimony indicating that profit levels in the milling industry in particular are very high. We were not able to substantiate that, but a report that was often referred to by witnesses indicated that the profit levels in the milling industry in Canada approached $21 per tonne compared to some $3.50 per tonne in the United States. The committee was concerned about, but was not able to authenticate that charge. It recommended in the report that the Consumer and Corporate Affairs Department do a careful investigation of the milling industry and, if indications of price gouging are found, that a full public inquiry be established by the Government to look into that, and supposedly take action in that regard.
The committee enumerated two solutions for dealing with the farm income problem. One was to increase the domestic price of wheat from $7 to $10. If the Government decides to do that, it will generate some $220 million worth of benefits for farmers. Unfortunately, the total impact on Canadians could be as high as $675 million, because in some sectors the value added is not 100 per cent but is up to 200 per cent. If the domestic price of wheat is increased by $3 per bushel, a 24-ounce loaf of bread will contain 6.5 cents more wheat, but the consumer price will be 13.5 cents higher per loaf. In other commodities the increase would triple rather than double.
Increasing the domestic price of wheat will generate approximately $220 million for Canadian agriculture, but at the same time we will have to pay almost twice that to the millers, the bakers, the distributors and the retail stores. In fact, some groups indicated that when the price of domestic wheat rose by only $1 back in the early spring, it should have resulted in an increase of about 2.2 cents per 24-ounce loaf of bread. Additional costs in the price of grain would double that to around 4.5 cents. In some markets, such as those of the corner stores or smaller towns which do not have the highly competitive situation that exists in supermarkets, the increase was actually in the order of 10 cents or almost double what we were generally told would be the market activity. Although we found that the increase for a 24-ounce loaf was 13.5 cents, in many markets it could have been much higher than that. That solution is one solution, but I personally favour a direct deficiency payment, about which I will talk later this morning.
The repercussions or resulting impacts of the domestic price increase are almost as worrisome as the fact that farmers only
Committee Reports
receive about a third of the additional costs, while the millers, bakers, and distributors receive two-thirds. If we increase the domestic price by $3, in order to protect our baking industry we would have to provide tariff protection. In many markets we would see wheat-based products flowing into Canada, and I assume we would have to provide tariff protection of at least 13 per cent, 15 per cent, or 20 per cent. At a time when the Government is attempting to negotiate a free trade agreement,
I just cannot imagine that it would want to impose a tariff on wheat-based products coming into Canada. However, if the Government does not do that, certainly the pasta industry, the bread industry, and many other baked products industries will have a very difficult time, because the projections for wheat prices this year indicate a possible $6 per bushel difference. If the world price goes down by approximately $4, and our domestic price is $10, we will be looking at a $6 differential and obviously a tariff would be required.
The committee made another recommendation which it thought would be necessary if the domestic price were increased by $3 per bushel. It recommended a refundable tax credit for low-income families. The committee staff has estimated that to cost about $115 million. Therefore, it equals more than half the value which farmers would realize from the $3 increase. That detracts from the desirability of the $3 per bushel increase.
Another concern registered by the committee was that if we increased the domestic price by $3, we would have a drastic change in marketing and production. We have already seen some change this year. For example, last year Ontario produced some 220,000 bushels of hard spring wheat, and this year the projection is that it will be 3 million bushels. Likewise, soft winter wheats have been traditionally produced in Ontario. I am sure southern Alberta, which produces about 33 per cent, would look with great desire upon producing more soft winter wheats because of the differential in price that may go as high as $6 per bushel. I think the committee recognized that, and that if the Government were to use this mechanism it would have to put in place some method of market controls so there would not be drastic distortions.
Also the committee recommended that this should be a short-term proposition. Let us look at the world situation. If the world market price rises, we should lower the domestic price once farmers are receiving an adequate return on their cost of production.
The recommendation which I favour is one that has less repercussion; that is, to move to a straight deficiency payment. The Liberal caucus and the Liberal Party have recommended a payment of some $30 per tonne to reinstate, essentially, the 1985-86 crop year initial prices. We estimated that on the wheat portion this would cost $660 million. I think that amount reconciles with the $750 million or $800 million figures discussed in committee which would be required to reestablish 1985-86 initial prices for western grain. Of course, consumers will pay. If the world price drops to $4, there will be a $3 advantage for which consumers will pay.

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Introduction of Bills
When we look at the prospect of a $3 increase, which delivers only $220 million to farmers, it seems to me that a straight deficiency payment would provide three times that amount or some $660 million. That would be much more adequate for wheat production. We would not have to get into the problem of imposing tariffs. We would not have to get into the problems of production and marketing controls among various wheat producing portions of the country. We would not have to get into the question of a refundable tax credit. We would not have to worry about rebates being provided by the Canadian Wheat Board to wheat-based product manufacturers who market their products in the United States. All in all, we would put in place a fairer system, because it would be distributed to all producers, not just those in the No. 1 and No. 2 wheat pools, as would be the case with a strict benefit through the domestic wheat price system.
I hope the Minister of State for Canadian Wheat Board will be able to announce today a deficiency payment of adequate size. I recommend to him that it be at least $30 per tonne, based upon No. 1 wheat. At least we would then come to grips, in an initial way, with the kind of Herculean demand or problem facing the Canadian wheat producing industry which will have a devastating impact upon western agriculture, especially in this coming year. There will be a smaller impact upon wheat producers in eastern Canada as well. However, since 96 per cent of wheat production is in the West, the impact of the anticipated low prices will be very serious. I hope the Minister will be able to make that announcement today or in the very near future, because we are only five weeks or six away from the start of the new crop year.


WESTERN GRAIN STABILIZATION ACT-BILL C-119 MEASURE TO AMEND
Mr. Doug Lewis (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, I rise on a point of order. During the Introduction of Bills, there was, unfortunately, some administrative confusion on our side. We purported to move four Bills but physically had only three. I have discussed this matter with the Deputy opposition House Leader and with representatives of the New Democratic Party. I think that if you were to put this motion to the House, Mr. Speaker, you would find unanimous agreement to withdraw the Western Grain Stabilization Act Bill?


The Acting Speaker (Mr. Charest):: Is there unanimous agreement to withdraw the Western Grain Stabilization Act?


Some Hon. Members:: Agreed.
[Editor's Note: Earlier proceeding declared null and void.]


PRICING OF DOMESTIC WHEAT AND ITS PRODUCTS
[Stage Direction]
The House resumed consideration of the motion of Mr. Nystrom:
That the first report of the Special Committee on the Pricing of Domestic Wheat presented to the House on Thursday, June 5, 1986, be concurred in.
The Acting Speaker (Mr. Charest):: Questions or comments?


Geoff Wilson: Mr. Speaker, I would like to make a brief comment and then ask a question of the Hon. Member for Algoma (Mr. Foster). I personally want to commend him for his excellent work on the Special Committee on the Pricing of Domestic Wheat. I was pleased to note that he correctly identified and elaborated on the problems faced by Canadian agriculture and the difficulties in which the Canadian farmer finds himself.
I am concerned though that the Hon. Member dissented to the report which was agreed upon by the rest of the committee. He called for a straight deficiency payment as the sole answer. If I understand the Member correctly, he feels the Canadian consumer, despite the history of the two price wheat system, ought not to shoulder at least some of the burden through perhaps a modest price increase in wheat-based products. The Hon. Member suggests that the answer to this and presumably all other problems is for Government as always to raid the treasury, to borrow more money, to increase the national debt and the interest charges that go with it. Yet this policy and attitude has clearly placed Canada and Canadians in a rather severe economic situation.
I heard earlier the Hon. Member for Yorkton-Melville (Mr. Nystrom) state that the benefit of the proposed increase in the domestic wheat price from $7 to $10 a bushel would be something in the order $220 million to Canadian wheat producers. I ask the Hon. Member for Algoma to remember that, according to records of Agriculture Canada and Statistics Canada, the total farm debt outstanding in 1984 was something in the order of $21 billion. A 1 per cent increase in interest rates then could manifest itself in a $210 million additional expense to Canadian agriculture by way of interest costs. Similarly, if deficit reduction measures are successful and lower interest rates result, then there could be a resulting decrease in interest costs. That is surely what responsible deficit reduction measures should be trying to attain.
I know the Hon. Member's concern for agriculture and I know that he would not want to see the Government get into a Catch-22 situation where by rushing forward with payments out of the treasury we would compound the problem by increasing the national debt, and increasing interest costs. This would put upward pressure on interest rates, which in turn would cause the farmers more grief than they already have. I know that calling for a straight deficiency or a stabilization payment has appeal. It is awfully easy and it is simple, but I suggest to Hon. Members that it is also very seductive and
June 19, 1986

highly dangerous. I suggest to the Hon. Member for Algoma, considering the problem and the history of the two-price wheat system, which has helped the consumer in the past, that perhaps now in this time of difficulty for Canadian wheat producers turnabout is fair play and the consumer should bear some part in the solution to this problem. It may well be that the situation will call for deficiency payments as recommended by the committee. Surely the Hon. Member cannot expect the treasury to bear the entire burden of this and every other problem facing our society. Would he elaborate on that please, Mr. Speaker?


Maurice Brydon Foster: Mr. Speaker, it occurs to me that if the domestic price of wheat is maintained at $7, as I would suggest, and the world price drops to $4, consumers will be paying some $220 million in the months ahead-if those projections occur. The net benefit of the $3 increase is $220 million whereas the actual over-all cost to the country is up to $675 million and there is a disproportionate benefit to the millers, bakers, distributors and retailers. On top of that, Mr. Speaker, there is a benefit of $220 million to the farmers, yet at the same time the Government is putting in place a low income refundable tax credit that will cost $115 million, which is more than half of the benefit to the farmers, plus all these other problems of putting in place a tariff and production and marketing controls. As a result, the net benefit to the farmer is low, yet you create all these distortions.
It seems that what we want to do is to deliver in the most efficient way possible as many dollars as possible to the farmer. By raising the domestic price of wheat is one way, and maybe the Government will decide to do it that way. The amount of money paid out to manufacturers, distributors and retailers together, along with the low-income refundable tax credit, will cost something like $785 million, yet the farmer gets only $220 million. That does not seem like a very efficient way to me.
The Prime Minister (Mr. Mulroney) and the Minister for International Trade (Mr. Kelleher) I assume have to look at the repercussions of imposing a tariff. You do not put on tariffs like that in a minute, but you would have to so to protect the bakery manufacturers. In places like Vancouver, the Washington State manufacturers already have 20 per cent of the market. The pasta people say they will be wiped out because everybody will be shipping Durum wheat to Italy where it will be processed. The European Economic Community will put on variable levies and then there will be the reconciliation benefits as the pasta comes back out. This does not seem to me to be very efficient, when we are trying to provide a substantial benefit to farmers.
I think there was general agreement in the committee that we need to provide a substantial benefit to the farmers. If we go the domestic price increase route then we have a very substantial cost. It provides only about one-third of what is generally discussed as being needed as a basic deficiency payment, and then you have to provide a deficiency payment as well. The distortions and the net benefit to the farmer are so
Committee Reports
low compared to the straight deficiency payment that it does not seem to me to be a good thing.


Geoff Wilson: Is the
Hon. Member for Gatineau (Mrs. Mailly) asking a question, Mr. Speaker? I will concede to her if that is the case.

The Hon. the Government Deputy Whip.


Mrs. Mailly:: Mr. Speaker, I have a question for my colleague. According to him, it was better to give wheat producers a support payment to help them get through this crisis. As I recall, during the debates of the committee on which I sat we came to the conclusion that the kind of financial assistance the producers need at this time would amount to about $700 million. Chances are we would have to borrow that amount to help them, so if the Government were to go ahead this would only make our debt that much heavier. Otherwise, without a loan, it would have to let the deficit grow, and we know the deficit has an impact on interest rates. Experts have even told us that if interest rates were to go up by 1 per cent, the wheat producers for instance, the very people the committee recommended for help, would have to pay $210 million more as a result of this additional 1 per cent interest. So I wonder whether my colleague would agree that this solution did entail an element of risk?


Maurice Brydon Foster: Mr. Speaker, I find it interesting that people believe the money used to fund agriculture is borrowed money. How do we know that the borrowed money is not that used to pay for the Prime Minister's trips to New York and France? We cannot identify what the borrowed moneys are used for. In our own minds we decide what our tax money is going to be used for, but in fact it all goes into the Consolidated Revenue Fund.
The problem facing agriculture is a lot more grave than those facing the two banks that went broke last year, yet, the Government was able to make a decision on that. I do not believe this expenditure is any less deserving than the expenditures we make in other fields of government activity. This is an enormous industry which faces very serious problems. I do not believe we can solve the problem with anything less than a deficiency payment, because the percentage of wheat used for domestic purposes represents less than 10 per cent of the total production. We hope that the issue of trade between the United States and the European Economic Community will be resolved, but if it is not surely we are not going to walk away from the farmers.


Claudy Mailly: Mr. Speaker, in the course of this debate, I noticed some of our fellow citizens in the visitors' gallery and I want to welcome them to their Parliament and their National Capital. I was delighted to see they

June 19, 1986
Committee Reports
were here for this debate. Although not as spectacular as question period, which will start at two o'clock, the subject of this debate has a far greater impact and is far more important to them personally than the proceedings that will start at two o'clock this afternoon.
That is because, Mr. Speaker, this report and the work done by the committee that examined the pricing of domestic wheat, are a perfect example of the principles that should guide this Parliament, our Government and all Members of this House. I am referring to the co-operation and support one part of the country should show another that is experiencing a crisis.
It is true that wheat is consumed across this country, Mr. Speaker, but it is produced, it is mainly grown in Western Canada, and to a lesser extent in Ontario, while less than 1 per cent of our wheat is grown in the other provinces, including Quebec. Mr. Speaker, our wheat growers are in trouble, but the problems they are facing are not of their own making. It is not because wheat growers in Western Canada are not productive enough or made the wrong decisions or did not work hard enough or were not smart enough to cope with and prevent the crisis they are facing today.
No, it is because the world price paid for their wheat has dropped dramatically and probably will drop even more until it reaches a level where they can no longer continue their operations and make a profit as well.
Our special committee, on which I sat as vice-chairman, made its recommendations in this report with a view to protecting Canada's rural economy and our agri-food industry. Although most of our wheat is grown in the West, it is sold to the processors who are located in Central and Eastern Canada. In other words, Mr. Speaker, the jobs in the agri-food industry are in the latter two areas.
Therefore, the purpose of today's debate is to explain to our colleagues in the House and to our fellow citizens that, when examining the pricing of domestic wheat, the special committee was also concerned about the agri-food industry and the consumer. And that, as was explained by the Hon. Member for Algoma (Mr. Foster), is because any increase in the domestic price of wheat automatically increases the price of products that contain wheat.
It was our duty to ensure that any solution we proposed to deal with the wheat grower's problems would not harm our agri-food industry, our processors, our manufacturers of wheat-based products and especially the consumer, and there again, especially those Canadians on low incomes who are far more dependent on such products. I am thinking for instance of the various kinds of pasta that make up a large part of the diet of those Canadians who unfortunately are not as well off as many of us in this country.
The challenge to be met by our committee was: to provide an emergency solution for a whole industry that is mainly concentrated in one part of this country, while protecting another industry that is mainly located in another part of the country.
In our report we have tried to deal with this problem. We had to use a mechanism that was already in place, since we did not have time to set up other mechanisms that, as the Hon. Member for Algoma (Mr. Foster) said, and rightly so, might have resolved the problem on an ad hoc basis, without the need for setting up all kinds of controls and monitoring agencies and quota systems to cope with any over-reaction from processors who will have to absorb any increases in the production price and the price of the primary ingredient of their food products.
The existing mechanism was the double price system for wheat, including a domestic price, which the Government of Canada has been able to control over a number of decades. The system has been in existence since 1967, Mr. Speaker. Initially, it was aimed at helping producers who were faced with prices that were far too low on the international market. The two-price system for wheat was also developed and maintained, to help consumers and prevent major increases in the prices of certain food products, such as bread, pasta and other wheat-based products.

This is why, after making an in-depth assessment of the need to retain this two-price system to ensure the survival of wheat producers, especially in Western Canada, but also in part of Ontario, the members of the Committee did decide to maintain this system because it could be used immediately for the 1986-87 crop year which will begin on August 1 in Western Canada.
Second, we were well aware of the fact that the crisis facing Western wheat producers is the result of external factors, namely the enormous subsidies which farmers in Common Market countries in Europe receive from their Governments to sell their wheat at a more than competitive price, which creates inequities on the world market.
The United States, which are also major wheat producers, reacted by introducing a protectionist bill to keep up with the enormous subsidies which exist in Common Market producing countries.
Our wheat exports have given us in the past a standard of living which would not have been possible in Western Canada, or indeed in other regions, but unfortunately, our country relies a lot on exports, much more than other producing countries. We are therefore facing a crisis because our producers rely on the world market to purchase 80 per cent of their production.
As for the remaining 20 per cent, Mr. Speaker, 10 per cent are for human consumption and it is this part of the production that we have had to examine.
When we look at the recommendations contained in this report, we find that it recommends an increase from $7 to $10 a bushel in the domestic price of wheat. What is really unfortunate, Mr. Speaker, is that the $3 a bushel increase will bring only about $180 million at the most, of relief to the
June 19, 1986

wheat producers for whom the crisis means a shortfall in their income of maybe $700 million compared with last year.
The initial price of wheat announced by the the Canadian Wheat Board will mean a shortfall of this magnitude for wheat producers. In our opinion, if we were to avoid causing too much upheaval in the agro-food industry and hitting the consumers too hard, and if we wanted to add controls and safeguards for the consumers, such as when we ask for the assistance of the Department of Consumer and Corporate Affairs or suggest a tax credit for the disadvantaged, the maximum increase permissible would bring up the price to $10.
Accordingly, where do we get the difference in losses between the $180 million at the most that can be derived from a serious and responsible increase, and the $700-odd million needed to have them back in a situation similar to that of last year? This is why we also recommended that an extra payment be added to the increase in the price of domestic wheat.
Earlier, my colleague for Algoma (Mr. Foster), in answer to my questions in which I suggested that if we had covered that loss of revenue simply by an added payment, without changing the domestic price for wheat, replied that perhaps hundreds of millions would have to be found. But, finally, could he explain where those hundreds of millions would come from, which would have to be added up to the national debt... Could we over-burden the agro-food industry or the farming industry with an increased interest charge that would result from increasing the deficit in order to allow a full added payment without changing the domestic wheat price? We would not know where those additional funds would come from and they could as well be attributed he said ... for instance, to the expenditures incurred by the Prime Minister's Office. I would suggest to him, Mr. Speaker, that the Prime Minister's Office can only spend within the budget that was approved in the Estimates, and this has nothing to do with the national debt. Moreover, he referred to the western banks which were in difficulty and which the Government chose to help because their depositors were in a critical situation. He said that if the Government had $1 billion to spend helping the Banks, why would it not have $1 billion to help wheat producers?
That argument does not hold, Mr. Speaker, because the Government did not help those banks. What the Government did, and indeed it was a critical situation, it helped depositors, small municipalities, people with small savings, even unions, farmers' unions, even farmers. My colleague for Red Deer (Mr. Towers) gave instances of farmers in his constituency, in his municipality, where everybody would have lost $50 because of the debt the municipality would have been left with had not the Government of Canada helped those depositors. It is therefore twisted logic to suggest that the Government is able to find funds when it wants to. This is not the way things work. And, anyway, perhaps it is because of the approach to the national debt which the previous administration had, and which was supported by the Hon. Member for Algoma that at one time we found ourselves with those interest rates between
Committee Reports
22 and 25 per cent that sent our western wheat producers belly-up and which may have sent farmers in his own Ontario constituency belly-up too. Because whenever interest rates increase by one point under the pressure of a growing deficit, an extra $210 million must be paid by wheat producers. And as we very well know for those producers, especially the younger ones with the most productive farms, loans are absolutely essential to remain on top of things, to get the equipment needed for large farms to remain viable, and 22 per cent interest rates are an unacceptable burden to anyone. Not only to wheat producers or farmers generally, but also to homeowners. Just how many of them have lost their properties when interest rates were sky-high during the 1982 crisis?
Mr. Speaker, having considered all these challenges and problems, the Committee has come up with the recommendations which appear in its report.
I, for one, believed that it was really an emergency response to recommend a price increase for wheat from $7 to $10 a bushel. I was personally quite concerned about the consumers, especially the least affluent of them, having to assume an excessive increase. That is why we have this recommendation that the Department of Consumer and Corporate Affairs be empowered to control the increase passed on to consumers.
It is for that reason also, Mr. Speaker, that, as indicated in the Minutes of Proceedings, it was I who moved a motion that the two price wheat policy be temporarily maintained and that it be used to help producers in a crisis situation. However, I had suggested a more modest increase.
Mr. Speaker, in a democratic system, the voice of the majority should prevail whether we agree or not with a proposal. That is why I find that, generally speaking, this report, with its control measures, the monitoring power granted to the Department of Consumer and Corporate Affairs, a recommendation to the Government of the day to negotiate a better treaty to support the world price for wheat and make our producers more competitive-was a responsible approach.
That is why I have accepted that my motion calling for a price increase to $8 on January 1, and to $9 next August, be defeated. Mr. Speaker, I have been persuaded that wheat producers needed these $180 million right away, at the end of crop year 1986-87, and that thanks to our monitoring and control measures, we could effectively protect consumers.
In concluding, Mr. Speaker, I would like to suggest that the Government of Canada, my Government, might seriously consider a proposition I made: instead of increasing domestic wheat prices it should impose a business transfer tax on the entire wheat processing industry and set these funds aside for the agri-food sector. This would make it possible to help producers through critical periods, and consumers would pay only for the portion going to the producers.
These are my closing words, Mr. Speaker. I strongly urge the Government to give serious consideration to this mechanism I am proposing, for I think it would be widely accepted

June 19, 1986
Committee Reports
by consumers and their associations. I think we should review the two-price system for wheat because, very useful though it may have been in the past, it is no longer adequate to cope with the kind of crises we can expect as a result of all these world market fluctuations.


Geoff Wilson: Mr. Speaker, I would like to congratulate my colleague, the Hon. Member for Gatineau (Mrs. Mailly) who participated throughout in the hearings of the special committee on the pricing of wheat, and who, I think, brought to the committee a very welcome, useful and somewhat different perspective.
She will recall the suggestion by one of our colleagues, the Hon. Member for Wetaskiwin (Mr. Shellenberger), that consideration be given to the imposition of some sort of a levy or tariff at or near the point of retail sale on wheat based products, with the idea that that levy could be captured intact and somehow a mechanism be devised to return the entire benefit of that levy back to the producer of the particular commodity. In this particular case it is wheat.
Certainly at first blush the suggestion by our colleague has considerable merit. I know that it was raised from time to time during the hearings and I wonder if the Hon. Member would care to give her reaction and comment to that proposal.
[Translation\


Claudy Mailly: Mr. Speaker, I am pleased to comment on this. Yes, it was a rather imaginative suggestion from our colleague.

As my colleague from Swift Current-Maple Creek (Mr. Wilson) knows there were a few drawbacks to the suggestions made by our colleague. One of them was that the emergency was staring us in the face. We had to have some help for our wheat producers for the 1st of August. The tariff or tax that our colleague was suggesting, although it did have some equity features and various other aspects which would have solved a lot of the problems, could not be put in place immediately.
Therefore, it was very difficult for us to want to rely on such a recommendation when we did not know exactly how this mechanism was going to work. That was one of the drawbacks.
A second drawback was the fact that it would be a tax on food. We do not have a tax on food in this country, and there is something a little abhorrent about taxing food. We find that having to pay a tax when we go to a restaurant is not very pleasing, but to put it on food, and particularly on bread and pasta, which is consumed in the major part by the poorer people in our society, was something we were uneasy with.
There was also a third drawback, and that was when we consulted some of the Finance Department officials about it. They pointed out to us the difficulty of implementing such a tax or a tariff because of the fact that it would be based on the wheat content in the products. There would not be a tax on the
wheat itself, it would be on the product that was derived from the wheat. Therefore, how would you define which product would be taxed and which product would not? That was one problem.
Another problem was that it would be at the retail level. Since bread is sold in hundreds and hundreds of small stores, the idea of every one of these little family corner stores having to amend and modify its cash register in order to have to collect this tax on some items, and maybe not on others, presented some difficulties.
It did have advantages. As a matter of fact, in our report we mention that we realize that using the domestic price of wheat to help the wheat producers was an emergency situation, and we should look at other ways of generating some funds so that we can help producers when they are in a crisis situation.
One of the things that was suggested was that we look at various mechanisms which would permit the raising of funds from the middle people, the manufacturers, and make sure that, whatever the price of wheat is, the benefits of any increase that would go towards the price of wheat would be given to the producer.
Therefore, I think that if the Government of Canada accepts our report it will be looking at the mechanism that was suggested by our colleague and would then be able to see whether we can overcome the drawbacks that I have mentioned.


Mr. Stan J. Hovdebo (Prince Albert):: Mr. Speaker, I appreciate the opportunity to speak on this concurrence motion. The committee faced a difficult task in looking into the problems of the two-price system for domestic wheat. It became obvious that the question of increasing the price of domestic wheat was more complex than originally thought and needed to be considered very carefully.
While it is the Government's responsibility to decide whether it will accept these recommendations, particularly the two-price recommendation of $10 per bushel for domestic wheat, it should recognize a number of valuable points raised in the report.
First, the report may have increased the awareness of other parts of Canada, other than the wheat-producing areas of the Prairies and Ontario, about the problem facing grain producers and the need for more cash flow in farming generally.
The recommendation of $10 per bushel was clearly recognized as not being a solution, but simply a means of adding a little extra to the coffers of the wheat producers.
Since this recommendation somewhat ignores the total problem of cash flow, the committee went on to suggest that while this may help, there will still be a deficiency for grain producers as far as cash flow is concerned.
Since we use only some 10 per cent of the wheat we produce, this recommendation would add some 35 per cent to the price
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of perhaps 1 or 2 per cent of the total grain produced. This does not represent a bail-out of farmers across the country.
The report also recommends deficiency payments for grain producers which may ultimately be the most effective and worth-while of all the recommendations. The report recognizes the effect that increasing the price of domestic wheat may have on low income consumers and suggests that the Government should protect them from large increases, if it accepts the recommendation.
The report also warned against the danger of increasing the cost of wheat products which may have to compete against imported products and recommended that the Government ensure that this did not happen.
It is obvious that the committee did a very thorough job in not only looking at the problem of cash flow, which was its particular mandate, but looking at other problems which arose as part of the whole approach.
The greatest value of this report, apart from its recommendations which are now before the Government, is possibly the fact that it will make the rest of the country aware of the need to do something about the cash flow of grain producers so they may continue to operate even with the current low price for grain?
The Government will have to consider several alternatives to inceasing the domestic price of wheat. One of the alternatives suggested in the report is deficiency payments. Some action has already been taken with respect to the cost of production, an area in which the Government can possibly do more if it decides to increase domestic payments. The Government has taken steps with respect to the price of farm fuel and has removed the federal tax on both diesel and regular fuel to the point where the tax is only a fraction of a cent per litre. Fertilizer is a major cost to wheat farmers, and while its price has decreased somewhat, it is only because the farmers have not bought as much fertilizer. The price of fertilizer has not even been affected by the reduction in the world price of oil. This is an area in which the Government could take action.
The Government has not taken steps to reduce the input costs to farmers, such as the cost of chemicals, and therefore reduce the requirement for large deficiency payments. If the cost of production can be reduced by a few dollars per acre, the requirement for bringing deficiency payments up to the cost of production will not be so great.
I hope the Government is prepared to produce its debt review structure for which we have been waiting. Such a mechanism would not particularly increase the income of farmers, but it would help them to remain in business. We hope this debt review structure will have the authority to force creditors to recognize that there is a problem and farmers must be given the opportunity to recuperate from the disasters of the low price of grain.
The farmers are carrying a $28 billion debt and, much like the situation faced by the Government, much of their cash
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flow is used to service the interest on that $28 billion debt. Maybe that is a good place for the Government to start. Maybe we should be eliminating, as far as possible during these times of low commodities, the cost of servicing that debt.
The Government has also taken some action, at least, in freezing the cost of transportation, which has become another major factor over the last few years, in delivering grain to the world market. But most of all, I suppose what the Government must do, as the Secretary of State for External Affairs (Mr. Clark) expressed it a few weeks ago, is to try to break the cycle of subsidies that are being paid in other countries and to put the structure of the sale of farm products, particularly grain, much closer to the cost of production level than is presently happening, with the U.S. and the European Common Market subsidizing as much as 70 per cent of the cost of production.
I must also express my concern that the Government has not consistently placed before the agricultural community a policy which indicates that it is really serious about making it possible for the farmers to stay on their farms. In fact, just last week, the Deputy Minister suggested that the main policy approach of the Government of Canada must be the elimination-although I am sure he did not use that word-of 20 per cent of the farmers during the next few years, and to help ease the pain of getting those farmers off the land. It would be interesting to know if this is the basic policy that the Government is accepting, that it has moved away from the protection of the family farm and is now finding methods of getting 20 per cent or more of the farmers off the land, into the transition program and, consequently, no longer producing. However, I would point out to the Government in this case that, farmers being what they are, eliminating a certain portion of the farmers from the structure will not solve the problem, because the farmers who take over the land will produce grain on the same land and if they cannot receive cost of production, they will not survive very long. We will still be facing exactly the same problem as we do now in the pricing of grain.
As in the past, we again call on the Government, even as it considers these recommendations and makes decisions as to how they will be implemented,to take a global look at agriculture and the possibility of establishing some kind of parity pricing, which would mean that in all of the agricultural areas, all of the commodity producers could look forward to a price which would at least give them the cost of production. In cases of emergency, that cost of production does not need to be much higher than exactly the basis of the input plus the cost of the land, in some kind of a capacity so that a large portion of the farmers can survive.
The Farm Credit Corporation told us just yesterday that it feels that 22 per cent of farmers across the country are in some kind of financial difficulty and that as many as 6,000 people to whom it has lent money are no longer able to make any payments on their debt and that 2,000 of them are beyond saving. That situation is growing. If it is that bad now, it will

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be worse by the fall. In the grain-producing part of the country, with prices going down on August 1, we can expect a fairly major increase in the percentage of farmers who will be looking someplace else to make a living.
Although I am not wildly supportive of increasing the price of domestic wheat to $10,1 think that if it is the only direction we can go, then we must accept it, with all the problems that are there; but there are other ways of doing it, and I hope that the Government will look at them. The main one, also a recommendation of the committee, is that the Government recognize the need for deficiency payments to increase the cash flow. There should be recognition that a very small portion of our total grain production would be affected by increasing the domestic price of wheat and, consequently, going through the process of protecting the low-income consumer and ensuring that our wheat products are still competitive in the world against the exports that we will have to face, may make it much easier for the Government to say, "Let us establish a deficiency payment level, put that in place, and not worry about the domestic price of wheat". In the process, not only would the wheat producers be helped a little bit, but it would help all grain producers quite a lot. That would be a solution recognized by the committee, but it would not have the real, inherent problems with which the Government would have to deal if it were to accept the recommendation of two-price wheat or the domestic wheat price at $10 a bushel.
I hope that the Government takes a good look at the report and then recognizes that there are other ways of dealing with the problem, ways which are less difficult and more likely to solve the numerous problems faced by farmers, not only those in the grain area, but also those involving most of the commodities that are today much lower in price than the cost of production.


Geoff Wilson: Mr. Speaker, I would just like to direct a question to the Hon. Member for Prince Albert (Mr. Hovdebo). The Hon. Member was not part of the committee on the pricing of domestic wheat, but I know him to be a farmer and certainly to understand the problems of agriculture. While he recognizes the limitations inherent in any suggestion of raising the price of domestic wheat, he does appear to support that notion in principle and also, I think, finds favour with the fourth recommendation the committee made, that is, the unanimous recommendation that the Government give consideration to a deficiency and/or stabilization payment for the crop year beginning August 1, 1986.
One of our colleagues in the House, the Hon. Member for Wetaskiwin (Mr. Schellenberger), has in the past brought forward a suggestion that consideration be given to some sort of tariff or levy on groceries, in essence, that stem from agricultural production. He suggested that such a levy be placed at or near the point of retail sale with the idea that if that levy could be captured and returned back to the producer, to the grower of the produce, in this case wheat, it might be a more efficient and better way to deliver a benefit from the
consumer back to the producer. It is true that some people might call that a tax or a levy on food, but there are many, many other taxes and levies which impact on the cost of food all through the chain. Is the Hon. Member aware of this suggestion made by the Hon. Member for Wetaskiwin concerning the notion of a tariff or a levy? Does it find any favour with him?


Stanley J. Hovdebo: Mr. Speaker, I thank the Hon. Member for his question. I have to agree with the Hon. Member for Gatineau (Mrs. Mailly) who spoke on this subject earlier. I, too, have a natural abhorrence to adding a tax on to the products which come from wheat, and that it is what it would be seen to be. In fact, it would be a continuous reminder, possibly a negative one, that we have a real problem in buying and using our own grain. I would rather suggest that a recommendation be made along the lines of the statement made by the Minister of State for the Canadian Wheat Board (Mr. Mayer) in committee not long ago. He suggested that there must be some way of putting up the domestic price of wheat while not having it multiply as it goes through the chain. From my reading of the report I know that the committee looked at that possibility. It seems to me that the mechanics of keeping the price down as it goes through the chain from miller to processor to baker and to retailer would be easier to accomplish than the collection of tax would be, although it would require a structure which some people would find abhorrent.
My short answer to the Hon. Member's question is that I can see the value in such a system in terms of getting the extra money into the operation. However, I think it would be doing something which all of us have avoided doing as much as possible for the last many years.


Geoff Wilson: Mr. Speaker, I am pleased to join in this debate concerning the report of the Special Committee on the Pricing of Domestic Wheat and Its Products. This is a committee which was formed as a result of a Private Member's Motion moved on December 13 of last year to the effect that a committee be appointed to prepare and bring in a Bill with the objective of providing higher returns for wheat producers from wheat sales for human consumption in the domestic market-place while avoiding undue hardship to processors, consumers and other wheat users.
In moving such a motion last December I made reference to the farm income crisis facing Saskatchewan and Canadian agriculture, with particular reference to the grain farmer. Some 80 per cent of the Canadian wheat crop is marketed internationally, which accounts for much of Canada's favourable balance of trade in agriculture. The remaining 20 per cent of Canadian production is used domestically, with approximately half of it going toward animal feed and the other half finding its way into wheat-based products for human consumption. Unfortunately, record world wheat crops have increased
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carry-over stocks, depressed prices and lowered expected volume. I would like to give some background with particular reference to my Province of Saskatchewan where there are some 66,000 farmers.
The average farm size is about 1,000 acres. The average capital investment is $480 per acre. In 1984 the average net income per farm was $15,000. For the year 1985, according to figures provided by the Saskatchewan Wheat Pool, after deducting operating expenses and depreciation, the average realized net income for each one of those farms was something in the order of $5,500. From that sum of $5,500 the farm family has to find room to make payments on the principal on loans, to meet all of its other expenses, including living expenses, food, clothing, utilities and so on. This sum of $5,500 represents the farmer's labour, as well as his return on a capital investment of some $500,000. Since those comments were put forward last December, the situation has deteriorated considerably.
The initial price of wheat announced for the forthcoming crop year, 1986-87, which commences August 1, is 81 cents per bushel less than last year. It was against that backdrop that the Special Committee on the Pricing of Domestic Wheat and Its Products was finally formed in the month of March, with a mandate to conduct hearings on the domestic wheat price and also on parity pricing.
The committee was heartened, I believe, by the announcement of the Prime Minister (Mr. Mulroney) that the range under which domestic wheat would be priced would be increased from the existing $5 to $7 range per bushel to a range of between a minimum of $6 and a maximum of $11 per bushel. In doing this I believe that the Prime Minister signalled to wheat producers and to committee members that he was prepared to take a serious look at the domestic wheat pricing situation. The seven-member committee heard representations and received presentations from interested groups representing all of the players: the consumers, the processors and the wheat growers. These hearings were conducted in cities across the country and here in Ottawa.
Basically, three alternatives presented themselves to the committee. The first was simply to maintain the current domestic wheat price of $7 per bushel. I believe that that was found to be unacceptable because Canadian wheat producers, while perhaps being the most efficient in the world, cannot fight the combined treasuries of western Europe and the United States which are subsidizing their producers to the hilt.
It is not accpetable to suggest that increased returns to farmers should come entirely out of the federal Treasury. It should come as a surprise to no one that there was a minority, a partial minority, opinion put forward by the Liberal member of the committee. His suggestion was simply that Government make payments directly to the farmers out of the federal Treasury. I am not surprised at that because, after all, deficits are nothing new to members of that Party. Deficit-financing was, and appears to remain, that Party's answer to everything. It seems to think that we should mortgage tomorrow to pay for
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today's programs. It says: never pay today what you can refinance tomorrow, and continue to roll the debt over and let someone else worry about it down the road.
The idea of making a deficiency or a subsidy payment directly to farmers out of the federal Treasury is an interesting one. It is easy and it is simple. I said earlier that it is rather seductive and dangerous because the federal deficit today, with the combined excesses of the past, comes to some $235 billion. The carrying charges on that deficit are in the area of $25 billion to $28 billion per year. Thus, one out of every four government expenditure dollars goes to service that debt, and one out of every three revenue dollars gathered by Government today pays interest on the debt. In fact, without the interest charges on the national debt the Government is very close to balancing the books, even in the face of historically low wheat and oil prices.
To his credit the member of the New Democratic Party who sat on the committee recognized that the consumer is part of the equation and ought to bear some of the impact of the effect of the world grain subsidy wars on Canadian producers along with the farmers and the Government. He recognizes that the problem with borrowing to finance all that is required to assist agriculture at this time puts the Government and indeed all of us in a classic catch-22 situation. Each time the Government resorts to the Treasury or borrows more money, upward pressure is put on interest rates. Interest rates, of course, are the price of money and reflect the supply and demand. They tend to move upwards when there is demand for it. If the Government borrows more, there is a crowding out effect and the competition for money increases, with the result that interest rates rise.
I should point out that back in 1984, Canadian farm debt in the aggregate was estimated to be some $21 billion. No doubt that figure has increased since that time. A 1 per cent increase in the interest rate on a debt of $21 billion plus comes to something in the order of $210 million. That sum is roughly equivalent to the amount of benefit to grain producers that an increase in the domestic wheat price of $3 would provide. In other words, a 1 per cent interest rate increase across the board would pretty well cancel out the benefit of an increase in the domestic wheat price from $7 to $10. Clearly it is unacceptable to resort to the Treasury as the entire answer.
The second alternative with which the committee was faced was to increase the domestic wheat price. Increasing the domestic wheat price is, I believe, a vote of confidence in the concept of two-price wheat, a concept which has been in effect in Canada for many years. The basic premise of it is that a price range is set within which domestic wheat can fluctuate up and down depending on conditions and circumstances. When world wheat prices are high, the domestic wheat price would be fixed at or near the bottom of the range so as to protect Canadian consumers against unusually high prices. Conversely, when world wheat prices are low, as it appears

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they will be for the foreseeable future and particularly for the crop year commencing August 1, the domestic wheat price should be fixed at or near the top of the range so as to provide some measure of assistance to Candian grain farmers who face unreasonable foreign subsidization.
While the negative impact on prices of wheat-based products was observed by the committee, the advantages to an increase in the domestic wheat price far outweigh any down side. The two-price wheat system is well known, is established and has worked reasonably well in the past. Second, it produces a transfer of funds to the wheat producer at the lowest possible administrative cost. Third, and very important, it provides flexibility to respond within a stated range to changes in world price conditions. The domestic wheat price can move up and down in inverse relationship to the world price. Fourth, as I mentioned earlier, the announcement made by the Prime Minister gives some hope to producers that the Government is cognizant of the problems they face and that within the limitations inherent in the two-price wheat system, some adjustments can be made.
The third alternative facing the committee was to consider replacing the two-price wheat policy. The committee listened to many points of view and heard some suggestions that the Government should fund the entire program. Some suggested that the Government should get rid of the two-price system altogether leaving us with just one price, the world price. The committee heard suggestions that the Government should consider some sort of levy or tariff at the point of sale, and indeed, at first blush, the suggestion of a tariff or levy on agricultural-based products at or near the point of retail sale does have some appeal. Such a system could theoretically minimize the impact of a wheat price increase being built on over and over again in the food-chain between the farm gate and the supermarket shelf.
How nice it would be if it were possible to capture a levy at a point of sale and return it intact to the farm sector. Unfortunately, as has been pointed out earlier in debate, there are a number of pitfalls which attach to the food levy concept. First and most compelling is the notion that this would be construed as a food tax. I think that notion has been found to be distasteful to the majority of Canadians. Second, and this is an important factor as well, the administrative mechanism required to put forward such a program promises to be exremely expensive. We were advised informally that such a mechanism might cost something in the order of $100 million to establish and run. Clearly Canada does not need another bureaucracy which could so dissipate the benefits of any such levy or tariff.
At present, there is certainly no mechanism in place nor any intention to impose a system whereby a tariff or levy could be imposed on the sale of agricultural-based products at or near retail sale. Such a mechanism would require a considerable lead time to establish and certainly would not be available to respond to the problems of today even if the philosophy or principle behind it found favour with the committee and the
House. The symbolism involved in a levy on food is, I think, such that it would certainly require all-Party consent before such a levy would be put forward. Clearly I think there is no suggestion of that and indeed no enthusiasm from any source concerning it.
We have been considering all of the alternatives and emphasizing the one constant theme that we heard throughout the hearings, which is the inadequate return to wheat producers. This theme was repeated time and time again, not only by farmers and farm groups but also by consumers, processors and other wheat users. It became obvious that the committee must find a way to lend assistance to this sector of Canadian agriculture. The subsidization of the Common Agricultural Policy of the European Economic Community is now being met head-on by the Americans who are determined to retain their traditional market shares. In fact, the Americans are entering into markets which had been traditionally Canadian. It is essential that all means of enhancing and improving returns to wheat producers be retained. Therefore, the committee made a series of recommendations.
The first recommendation was that the current two-price wheat policy be retained. The second was that the domestic wheat price be increased to $10 per bushel. This, incidentally, should manifest itself, if adopted, in an increase of approximately 25 cents per bushel across the Canadian Wheat Board area and something in excess of that in the Ontario area. It was also suggested that if this is implemented, it should certainly be reviewed and monitored from time to time. This is important because it should be understood that this recommendation is of an interim nature. If Canadian grain farmers were receiving $6 per bushel today, there would be no need for a domestic wheat price increase or for a domestic wheat policy because all involved in the process would be most pleased.
The fourth recommendation, and the important one put forward by the committee, was that the Government give consideration to a deficiency or stabilization payment for the forthcoming crop year. In dealing with this recommendation, it is important to note that some farmers may be beyond help. Rightly or wrongly, some farmers bought assets at the wrong time and may have outbid others for land and cannot now expect the prudent ones to save them.
This recommendation is not a cure-all and it is certainly not a panacea. The Government cannot and indeed ought not try to devise schemes to prevent all farm failures. Some farmers will fail as will some small business people and some professionals. The Government is not in a position to guarantee everyone's success or to put forward a freedom from failure policy.
Considering the compelling situation facing Canadian agriculture, I believe that the Government must make a reasoned and measured response in the face of these difficult world conditions to assist Canadian agriculture to survive over the next several years and to give efficient young operators a fighting chance to succeed in the future.

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In my travels I detected that producers do not expect miracles. They do not expect Government to cure all their problems, problems which they recognize are not the making of the Government or the making of Canadian agriculture. I also detect that producers would be satisfied if their returns for the forthcoming crop year, for the 1986-87 crop year, were equal to what they will receive for the current crop year, the 1985-86 crop year. That would be my personal suggestion to the House.
In saying this, I recognize that at this time it is simply too soon to determine what support would be necessary because world wheat stocks, while they are large, could certainly disappear in a hurry, and that has happened in the past. To make an early panic payment for political expediency would not serve the country well. If in fact part way through the next crop year prices have materially improved, the need for Government involvement would certainly be lessened or in fact could disappear.
The point is that we are talking about a crop year which has not yet begun, the crop year that will begin on August 1. In the meantime, farmers can rest assured that the Government understands the problems of agriculture and is indeed sympathetic to them.
Concerns were raised with the committee about possible change in production patterns motivated by the increase in the domestic wheat price. Therefore, the committee suggests that the Minister of State for Canadian Wheat Board (Mr. Mayer) try to ensure that the two-price wheat policy continue to reflect historic market share. In other words, if 95 per cent has previously gone to the Canadian Wheat Board area and 5 per cent elsewhere, then the benefits should continue to be so allocated regardless of any changes in regional volume.
I note, Mr. Speaker, that you are signalling that my time is almost up. I should like to conclude by saying that the establishment of the two-price wheat committee is consistent with a long line of initiatives which have been put forward by the Government, by the Minister of Agriculture (Mr. Wise) and by the Minister of State for Canadian Wheat Board. It must be noted that the recommendation to increase the price of wheat domestically from $7 to $10 per bushel is a partial response. If conditions continue and unfold as projected, clearly that increase in domestic wheat price, if it comes about, will not be enough. If these future forecasts prove correct, clearly more action is necessary-consequently, the fourth recommendation concerning the deficiency or stabilization payment. Indeed, we have commitments from the involved Ministers that the Government will continue its support of agriculture.
The report of the Special Committee on the Pricing of Domestic Wheat means many things. Should Government act on it, it will mean more for the farmer, as I mentioned earlier. It will mean marginally higher prices to the consumers of wheat-based products. I trust they will recognize that this is an
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interim and urgent measure designed as a response to the crisis in which Canadian farmers find themselves. The report noted that the pricing regime intended to prevent undue increases to consumers. There was a stated intention to prevent regional dislocation. Also the report recognizes that the two-price wheat system is not an entire answer but rather part of the solution, and certainly the Government Treasury is not the entire answer. As well, the report emphasizes the importance of trade negotiations both through GATT and through the pursuit of an international grain agreement.
Finally, I should like to say that I think it represents a bit of a triumph in terms of parliamentary process and parliamentary reform, in that a Private Member can put forward a motion with some expectation that something may come of it. In terms of that process, we have been able to follow a Private Member's Bill which in turn has manifested itself in a special committee, which in turn has been constituted to travel the country and has been in a position to formulate a report to the House. That process indicates that Private Members can have meaningful input, input which can and does influence government policy.
I see that my time has come to an end. I thank the House for providing me with that time.


Mr. Boyer:: Mr. Speaker, I listened very attentively to the Hon. Member for Swift Current-Maple Creek (Mr. Wilson). It will not surprise any of us that in a very masterful way, of which he is capable, he has presented to the House the considerations presented before the parliamentary committee which produced the report on the pricing of domestic wheat. I was particularly interested in listening to what he had to say on the subject of alternatives which were considered by the committee, in light of the fact that the recommendation is an increase from $7 to $10 per bushel in the price of domestic wheat.
The Hon. Member indicated that this recommendation was a partial response, thinking in terms of the global situation and what the Americans and the Common Market are up to. It is also a partial response in terms of the domestic situation. My abiding concern with the recommendation is that it is a 10 per cent solution for a 100 per cent problem. The amount of wheat being produced in Canada which goes on to the domestic market is but a small fraction of the total production. Therefore, this increase to $10 per bushel in the domestic wheat price will only have a limited and partial effect.
The Government is committed to ensuring that wheat producers or farmers are able to carry on and obtain some return for a fundamentally important activity. The wheat farmers are one of at least four groups in the chain. As well there are the processors, the retailers, and the consumers.
I have read in the report the concerns outlined by the processors about a counter-productive step being taken if we go to a $10 per bushel price. I have also heard talk that the high domestic price would result in significant price increases to consumers, increased imports, and a decline in the entire

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sector, ultimately resulting in a small and less stable domestic market for Canadian agricultural production
The situation affecting producers is one in which I have particular interest. The Hon. Member for Swift Current-Maple Creek spoke of the producers or farmers in his locale. In Etobicoke-Lakeshore, for example, we have Christie bakeries. Everyone knows "Mr. Christie, you bake good cookies . Christie Brown & Co., which makes cookies and crackers, is the largest cookie and cracker manufacturer in Canada. The President of the company, Mr. R. J. Verdun, indicated the following:
I appreciate the plight of the wheat farmer. I don't appreciate the logic of undercutting the competitiveness of Canadian producers which can't be in the farmers' long-term best interest in lieu of simply providing temporary deficiency payments to farmers.
I have also spoken at length with the plant manager at Christie Brown which has 800 employees and is looking at significant lay-offs because of biscuits and cookies which are being produced with lower-priced American and European wheat flour. Manufacturers abroad are able to produce products which are coming into Canada at a much lower price, and our market is very seriously challenged.
Morrison Lamothe Inc. is one of many such companies in my riding. Its president, Mrs. Grete Hale, pointed out the following:
We are in the specialty bakery business and the present retail prices of our products will have to rise by 10 per cent to 13 per cent.
That is, given the proposal to go to S10 per bushel. She continued:
Such substantial increase as it occurs in such instance will cause a decline in consumption because of higher cost to the consumer and eventually a reduction of employment.


Geoff Wilson: Mr. Speaker, I rise on a point of order. I am becoming concerned that I may not have a chance to respond to the excellent points being raised by the Hon. Member.


The Acting Speaker (Mr. Charest):: So is the Chair. Perhaps the Hon. Member for Etobicoke-Lakeshore (Mr. Boyer) would like to wind up.


Patrick Boyer: Mr. Speaker, I would like to come to a quick conclusion. I have heard at great length from Local 426 of the Bakery, Confection and Tobacco Workers International Union. In short, theirs is a concern that was clearly described in the committee report.
In the Hon. Member's view, does the recommendation adequately respond to the concern of the processors, the bakers, those who work in the bakeries, because the processors do represent one important part of the chain? Does the Hon. Member not agree that what is very important ultimately is fairness throughout the chain?


Geoff Wilson: Mr. Speaker, I am pleased to be able to respond to the position put so eloquently by my colleague, the Hon. Member for Etobicoke- Lakeshore (Mr. Boyer) who represents, I am sure, the consumer and the processing end of the equation. It is very important that we hear from someone with that sort of constituency in the debate today. Too often there is the possibility that we hear from one side only. Thus far we have heard from those who are most sympathetic to the position of the grain farmer.
Indeed, there is a good deal of truth to what my colleague has put forward. This is a partial solution. Indeed, it is a 10 per cent solution. Clearly, as the quote from the Christie representative indicates, there is a general recognition across Canada of the plight of the grain farmer against an impossible back-drop of international price subsidization. There is a world wheat war going on and the Canadian producer finds himself on the sidelines watching. In fairness, we cannot stand by and watch that happen.
Through the workings of the two price wheat system, from time to time there have been benefits passing from the Canadian wheat producer to the consumer through that system. I am suggesting to the Hon. Member that that turnabout is fair play. This is a time I believe in our history when the producer is up against it and, therefore, it is quite right and proper that there be a transfer, if you like, from the consumer to the producer through the two-price wheat system.
I also recogize the concerns which the Hon. Member expresses with regard to the processors. One of the great regrets I personally had in participating in the domestic wheat hearings was the compressed amount of time and the inability to be able to question in depth the representatives of the processors. We were told that in addition to the wheat flour cost component in bread, the bakers, for example, would want to add another 60 per cent on top of that to the ultimate pricing of bread. They stated that this was for such things as returned products, production waste, selling commissions, discounts and so on. As I mentioned, it is regrettable that the time available to the committee did not permit closer examination of these claims and the opportunity to question industry representatives thereon. In any event, accepting their figures and current pricing methods, it appears that an increase in the domestic wheat price as suggested could manifest itself into an increase on a 16 ounce loaf of bread of perhaps 7 cents and on a 24 ounce loaf of bread of perhaps 10 cents. Similar mark-up activities would take place on other wheat-based products.
The committee was aware of the problems expressed, and it is a case of trying to work out a fair and equitable solution for all Canadians. I have every confidence that the Ministers involved and the Cabinet will accept the report, examine it and come forward with the appropriate recommendation. I note that the Hon. Minister of State for the Canadian Wheat Board is in the House. I believe he wishes in the remaining time available to respond on debate. I am, therefore, prepared to concede the floor to him.
June 19, 1986


Thomas Gordon Towers: Mr. Speaker, I rise on a point of order. Would it be possible to ask one short question?


The Acting Speaker (Mr. Charest):: Yes, if there is unanimous consent. Is there unanimous consent for the Hon. Parliamentary Secretary to the Solicitor General (Mr. Towers) to ask a short question?


Some Hon. Members:: Agreed.


Thomas Gordon Towers: Mr. Speaker, I congratulate the Hon. Member for Swift Current-Maple Creek (Mr. Wilson) for the effort he has put forth. During the hearing, was there any discussion that the actual amount of flour going into a loaf of bread would mean an increase in the cost of the loaf of bread of only 4.5 cents if the bushel of wheat were raised by $3? Most of the processors say the price will increase 15 per cent, when in actual fact it will be less than 4 per cent as far as the extra cost of the flour is concerned.


Geoff Wilson: Mr. Speaker, in response to the question put by the Hon. Member for Red Deer (Mr. Towers), I think I can tell him that for each $1 per bushel increase in the domestic wheat price, the impact on the wheat flour component in a loaf of bread is 1.5 cents on a 16 ounze loaf, but bread in Canada is packaged in different ways. In western Canada it is generally, I am told, in 16 ounce loaves. In the east, it is 24 ounce loaves. For each $1 increase per bushel in the domestic wheat price you would see a 1.5 cent increase in the wheat flour component on a 16 ounce loaf and a 2.25 cent increase in the pricing of a 24 ounce loaf. If you are talking about an increase from $7 to S10 a bushel, this could manifest itself in about a 4.5 cent increase in the wheat flour component of a 16 ounce loaf of bread and about 6.75 cents or 7 cents in the pricing of a 24 ounce loaf.
In addition to that, the processors indicated there were other items such as selling commissions, returns, discounts, production waste and other things. I, for one, would be interested in pursuing that further to learn more about how these things are structured and why they would have to increase proportionately with any increase in the domestic wheat price.


The Acting Speaker (Mr. Charest):: Debate.


Hon. Charles Mayer (Minister of State (Canadian Wheat Board)):: Mr. Speaker, first I want to pay tribute to the committee. As everybody knows, the committee did a very good job. On reading its report and seeing the work that went into it and the information provided, you cannot help but congratulate the Members who served, especially when you consider the amount of time the committee was given to perform its task. Let me mention the members of the committee: the Hon. Member for Crowfoot (Mr. Malone), Chairman; the Hon. Member for Gatineau (Mrs. Mailly), Vice-Chairman; the Hon. Member for Huron-Bruce (Mr. Cardiff); the Hon. Member for Moose Jaw (Mr. Gottselig); the Hon. Member for Yorkton-Melville (Mr. Nystrom); and the Hon.
Committee Reports
Member for Swift Current-Maple Creek (Mr. Wilson). They all deserve some thanks and gratitude.
It is interesting to note that the Hon. Member who just spoke pointed out that this was an interesting committee and report. It effectively made use of one of the new House rules for the first time that allows a private Member to bring forward a motion, have it proceed, with the potential that it could end up as a Bill to influence what goes on. There have been some changes in the House in the way the place operates. When you see the results, it is a step in the right direction in having this place function and perform in the way the people who sent us here expect it and in many ways have a right to expect it.
In my remarks I would like to do two or three things if time permits. The first is to give some perspective on Canada's position as a wheat producer. About 500 million tonnes of wheat are produced in the world every year. Of that, Canada produces between 4 and 5 per cent. Our production over the last number of years has varied between 20 million and 25 million tonnes. That is not a lot of wheat when you think about it. We like to think that western Canada is the bread basket, but those figures put that in a different perspective. The amount of wheat that we trade is much more significant. About 100 million tonnes of wheat are traded in the world every year. Of that amount, Canada contributes up to 20 per cent. We are, therefore, much more significant in terms of trade than in terms of total production. That is one of the reasons we find ourselves in considerable difficulty with regard to prices.
Due to our soil, climate and efficiency, I believe that Canadian producers are as efficient as producers anywhere in the world. We are not being hurt because we are inefficient but because of circumstances outside of normal market forces.
I am referring to the subsidies in the European Economic Community and, to a lesser extent and more recently, in the United States. As an illustration, Europe used to be a major customer of Canadian wheat growers in particular. In the last 20 years Europe has moved from being a major customer of ours to being a major competitor. In fact, two years ago the European community exported more wheat than did Canada. That is very interesting to note.
In 1984-85, Canada exported 16.9 million tonnes and the European Economic Community exported 18.5 million tonnes. Europe has become a major exporter of wheat almost totally through subsidies. The subsidy on a tonne of wheat moving out of the European community on to international markets is now around $120. Our initial prices are now $160 a tonne and will move to $130 on August 1. That says something about the subsidies which we face on international wheat markets.
We do not think that we, as a country, have much business telling the European community what to do internally. What they do and how they pay their producers is their business. However, we think it is legitimate for us to be interested in the

June 19, 1986
subsidies they provide as they move on to international markets. We are very concerned about the subsidies the Europeans are providing because they very much affect our producers and the international markets on which our producers have to compete.
The Americans are also very concerned. They feel they have lost their world market share because of the Europeans and their subsidies. At the beginning of this year the Americans stepped in with the U.S. Farm Bill. The Americans have lowered prices in order to get back the world market share they believe they have lost. From our point of view that is a questionable assumption on their part. We do not think they have lost nearly as much market share as they say they have. They believe that through large subsidies on the international markets, which have the effect of lowering prices, they can regain some of the market share they have lost. We do not think that will work. We think that there is more to being a good supplier than simply having a low price. You must have consistency of supply.
Canada has a very good reputation internationally. We have never embargoed any country on grain sales. That has resulted in Canada gaining the reputation of being a reliable supplier. We have very good quality grain. We have a first-class inspection and grading service in the Canada Grain Commission, which serves us very well internationally and allows us to maintain our reputation. We also have a selling system in the form of the Canadian Wheat Board which serves us very well in times like this. We presently have long-term agreements with the Soviet Union, Brazil and Egypt. There is no country which has longer term agreements than does Canada. That speaks to our reputation and our ability to continue to sell.
We do not think the Americans will get back their market share by simply lowering prices. The Americans are very concerned about their balance of payments and the fact that they are consistently running very large deficits. They want to sell more grain to reduce that. However, they will not rectify the situation by selling the same amount of grain at a lower price. In fact, that will make things worse.
We think that a couple of the assumptions which underlie the U.S. Farm Bill are fallacious. They assume that by reducing price they will increase demand. That is not borne out by fact. The BICEP program in the United States has been in effect for over a year. The record shows that prices have gone down, but the Americans have not increased their market share.
We also question the assumption that if you reduce prices to producers they will produce less, thereby addressing the oversupply problem. In many cases the normal reaction to lower prices is to produce more. If you are getting less for your commodity one way in which to maintain cash flow is to increase the amount sold. That is what is in fact happening in many cases. Since we believe the assumptions underlying the U.S. Farm Bill are fallacious, we question how it will be effective in getting back market share.
The irony in this situation of lower grain prices is that the two areas of the world that have increased production more than Canada, Argentina or Australia are the United States and Europe. Yet, it is those producers who will be shielded more from world prices than will other producers. We have done studies on the amount of subsidies provided. In Canada, government subsidies on a tonne of wheat are roughly $35 Canadian a tonne. In the United States they are approximately $95 Canadian a tonne, and in the European community they are about $103 Canadian a tonne.
If the Americans believe that the U.S. Farm Bill will effectively lower supply, they should be lowering prices to their own producers, which they are not doing. As indicated by the figures I just quoted, the American producer will receive approximately $95 per tonne of wheat in the coming crop year while Canadian farmers will receive approximately $35 a tonne, a ratio of about three to one. One can see that it will be very difficult for Canadian producers to be shielded from the low prices which were caused largely by the Europeans and the Americans.
I would like to conclude by referring briefly to the recommendation in which the committee asks that the Government refer to mechanisms to ensure that the two-price wheat policy continues to reflect historical regional market share of all wheat types utilized domestically for human consumption. I believe there are ways to deal with that, as I believe there are ways to deal with the recommendations-


Mr. Speaker:: Order, please. I am afraid it is two o'clock.



STATEMENTS PURSUANT TO S.O. 21


Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, the Minister of the Environment (Mr. MacMillan) should stop dilly-dallying and immediately withdraw the De'Longhi heaters from the market. He should also strengthen the inspection of products entering Canada to protect the consumer and prevent this from happening again. This matter has been dragging on for too long.
On May 6 the Minister issued a warning about oil-filled heaters manufactured by De'Longhi containing PCBs in concentrations as high as 800 parts per million. On May 6 the public was warned to disconnect the units and place them in a secure area until further notice. Details of the product withdrawal were to be announced as soon as a plan was finalized. Six weeks later Canadians are still waiting for a plan of action. While these heaters are sitting around, their
June 19, 1986

withdrawal, whenever announced, will be conducted on a voluntary basis.
The company concerned has clearly broken the law by importing 38,000 units containing PCBs.



TRIBUTE TO PAGE STAFF

Mr. John Nunziata (York South-Weston):: Mr. Speaker, late last night I had the pleasure of joining our House of Commons pages at their farewell dinner. The evening was filled with fun, laughter, and some touching moments as the pages reflected on their year working with us here in the Chamber.
These 40 outstanding individuals have come to Ottawa from every part of Canada to work as pages. They have demonstrated their exceptional abilities and eagerness in all capacities, and always responded swiftly and efficiently to our requests. They have served us in a courteous and friendly manner no matter our mood, and we have never heard them complain about any task they were asked to do. Their attention, initiative, and resourcefulness have proved invaluable to all Members of Parliament.
On behalf of the Liberal Party and every Member of Parliament of whatever Party, I would like to thank the pages for all the effort and dedication they have shown us this year. They are certainly appreciated and we are sorry to see them leave. I wish them all the best of luck in their future endeavours.



NORTHERN AFFAIRS


Mr. Thomas Suluk (Nunatsiaq):: Mr. Speaker, the residents of Arctic Bay in the High Arctic are getting a raw deal in the annual resupply by ships such as the ice-breakers Lady Franklin and M/V Arctic. These ships are prematurely breaking the traditional transportation routes of the Inuit across the sea ice and jeopardizing the narwhal hunts and tourist initiatives of that community.
I call on the Minister of Transport (Mr. Mazankowski) and the Minister of Indian Affairs and Northern Development (Mr. Crombie) to consult with Arctic Bay and Crosbie Shippers of Montreal to seek a more equitable timetable for the annual resupply to avoid conflict with the community's traditional and economic activities.



PUBLIC SERVICE


Mr. W. R. Bud Jardine (Northumberland-Miramichi):: Mr. Speaker, federal blue-collar workers employed in Atlantic Canada will receive wage parity beginning in August, 1987. The federal Government has shown sensitivity towards general labourers and trades employees by treating them equally in each of the Atlantic provinces. The original two-zone scheme was devised more than 20 years ago to pay higher wages to workers in areas with higher costs of living. Moncton and Halifax comprised one zone, and the other comprised the remainder of the Maritimes. The two existing pay zones in the three maritime provinces will finally be incorporated into one, eliminating current wage differences. This problem, which had long been outstanding, has now been resolved.
Much has been said from time to time about the lack of attention the Government has shown to Atlantic Canada. This fair and progressive action by the federal Government demonstrates who is in support of and behind Atlantic Canada. It is indeed the Government of Canada.



PRESENTATION OF BOOK OF PRAYERS TO LIBRARY OF PARLIAMENT

Mr. Mike Cassidy (Ottawa Centre):: Mr. Speaker, later today I will be presenting to the Library of Parliament a beautifully produced book of sacred text and prayers prepared in May at a conference at St. Paul University here in Ottawa on the quest for peace in our day. The participants have all signed the book and are presenting it to Parliament as a token of their aim, which was to see how different religious faiths could be used as a basis to bring people together in the cause of peace.
The calligraphy is by Quinn Redekop, aged 14, the son of one of the members of the worship committee. The book contains text and prayers from 16 religious traditions, many of them non-Christian, and is a testimony to the seeking by many Canadians and other people around the world of international peace.



SMALL BUSINESS


Mr. Jack Scowen (Mackenzie):: Mr. Speaker, on June 13, in Hudson Bay, Saskatchewan, I had the pleasure, along with the Hon. Neal Hardy and president/owner Edward Budnick, of

June 19, 1986
participating in a sod-turning ceremony celebrating the start of a $3.5 million plant to process silica sand, which is used in a multitude of products from toothpaste and glass, to computer chips and tiles. The Minister of State for Small Businesses (Mr. Bissonnette) provided $375,000 from his office and this will create 25 permanent jobs.
This silica sand deposit has been known for 40 years. Others have tried to develop the area. However, the most significant part of the day was to learn how Mr. Budnick, while not being paid anything for a road be built for another company, persisted, hounded, badgered and begged for over 10 years to get the lease on the property so he could bring the project to where it is today. This is an example of the type of people in my constituency. We will thus add another unique industry to a unique constituency.



PORNOGRAPHY


Mrs. Lucie Pepin (Outremont):: Mr. Speaker, I should like to tell you about the many reactions we have seen these past few days concerning the Bill on pornography. The least we can say about this Bill is that it did not create a general consensus. The major criticism against Bill C-l 14 is that the general definition of pornography includes normal sexual acts, bestiality, and any other sexual act. There is something unrealistic about putting everything in the same basket!
I am not the only who feels this way, Mr. Speaker, even Dalton Camp agrees with me.

He really believes that the Minister of Justice has gone too far. In The Toronto Star he says that the section depicting various modes of intercourse is broadened to include other sexual activity. That could include Roy Rogers kissing his horse. Even the editorial board of The Globe and Mail agrees with me. According to it, the heart of the pornographic Bill is a puritanical throwback which makes a mockery of the legislation. Does the Minister need to hear more about it?



INTERNATIONAL YEAR OF CANADIAN MUSIC


Mr. Bob Pennock (Etobicoke North):: Mr. Speaker, 1986 is the International Year of Canadian Music, an occasion on which Canadians have much to celebrate. For over 300 years music has been composed and performed in this country. Around the world Canada is renowned for the vitality and
diversity of its composers. Our music is recognized for its exceptional quality. This year the Canadian Music Centre, in conjunction with the federal Government, established a secretariat to promote and co-ordinate a year of concerts, conferences, recordings, and anniversary celebrations.
As part of the celebrations the National Arts Centre is presenting a week long festival of contemporary music this week, featuring works by major Canadian composers. Entitled "Now Music", the festival is the most extensive presentation of contemporary work yet undertaken by the NAC Orchestra. I hope all Members will join with me in paying tribute to Canadian composers during the International Year of Canadian Music.



PHARMACEUTICAL INDUSTRY


Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, the people of Canada have known for some time that the Conservative Government plans to do away with generic drugs. As late as last month the Minister of Consumer and Corporate Affairs (Mr. Cote) promised a Bill within two weeks or, at the most, two months, to reduce the availability of generic drugs to Canadians. However, today's Toronto Star tells us the Bill will not be tabled until the fall at the very earliest. What do these delays mean?
Certainly the Government continues to ignore representations of consumers, seniors, labour and public interest groups who have said their members cannot afford to have generics taken away. Instead, generic drugs are now a part of the free trade talks to be simply bargained away. This may be an improvement over the give-aways to the U.S. in the form of repeal of the Foreign Investment Review Act and the National Energy Program, but it is certainly not in the best interests of Canadian consumers. The reality for all Canadians is that if the Government goes ahead with restrictions on generics, the policy and the labels on the bottles should clearly read "Made in U.S.A.".

[ Translation]



EMPLOYMENT


Mrs. Suzanne Duplessis (Louis-Hebert):: Mr. Speaker, the Minister of State (Youth) (Mrs. Champagne) recently announced that $16 million will be earmarked for job creation under the Innovations program. In 1986, this program is designed to provide financial assistance for projects which
June 19, 1986

advocate new and creative solutions to labour market problems.
Since it usually takes two or three years to assess projects launched under this program, the Government will allocate about $50 million to this sector over the next two or three years.
Such initiatives attest to the Government's commitment to create employment opportunities for young people. If the private sector, young people and the Government make concerted efforts and pool their resources, we will find a solution to the problems of young Canadians.



HUMAN RIGHTS


Mr. Andrew Witer (Parkdale-High Park):: Mr. Speaker, in June of 1941 the Soviet Government began a callous policy of mass deportations from the countries of Estonia, Latvia, and Lithuania. To date more than 760,000 people have been deported from those countries.
An ecumenical service was recently sponsored by the Baltic Federation of Toronto to commemorate this tragic event. This service also reminds us of the present Soviet policy of suppression and intimidation against the Catholic Church in those countries.
In 1983 the Soviets arrested two leading priests of the Catholic Church, Reverend Alfonsas Svarinskas and Reverend Sigitas Tamkevicius, founding members of the Catholic Committee for the Defence of Believers' Rights. They were then sentenced to ten-year prison terms.
Widespread protests and 123,000 signatures on a petition by Lithuanians have demanded their release. I urge my colleagues and the Secretary of State for External Affairs (Mr. Clark) to add their voices to these pleas and to pressure this oppressive regime to restore the basic human right of freedom of religious belief.


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



CANADIAN NATIONAL RAILWAYS


Mr. Fernand Robichaud (Westmorland-Kent):: Mr. Speaker, CN has delivered a severe blow to the Atlantic region. It has announced that it intends to sell its railway shops
in Moncton. This decision will mean the loss of at least 600 jobs in a region of high unemployment.
Last summer the Minister of Transport (Mr. Mazankowski) gave a strong commitment, that he would not support any massive lay-off at the shops. The Minister is not keeping his word. He is not honouring his commitment and he is allowing a Crown Corporation to take 900 people off its payroll in Atlantic Canada.
The people of my area feel very disillusioned with the Minister and the Government. They feel they have been treated unfairly by CN and by the Minister of Transport.



THE ECONOMY


Mr. Gilles Bernier (Beauce):: Mr. Speaker, the half-yearly report on the OECD economic outlook indicates that Canada's real economic growth rate this year will be 3.75 per cent, the highest level among all major industrialized nations and third highest among the 24 OECD member countries. Canada's employment growth rate this year will be better than that of all major countries. For this we must be thankful to Canadian businessmen and businesswomen who have been working with our Government to achieve such an outstanding economic performance. Come to Quebec and the Beauce area this summer to see for yourself what ordinary people can do when they are prepared to take risks and are stimulated by a strong spirit of entrepreneurship. The Beauce area, the kingdom of small business in Canada, welcomes you. In Beauce, we are people like-



CANADA POST CORPORATION


Mr. John Parry (Kenora-Rainy River):: Mr. Speaker, I would like to draw to the attention of this House the treatment being accorded residents of rural routes by Canada Post and the Government of Canada.
The method being utilized by Canada Post trying to close rural routes is deceptive. Modest and temporary requests for adjustments are ignored.
While the Government may not be responsible for the methods being used by Canada Post, it must assume the ultimate blame for the elimination of rural routes by having demanded Canada Post be totally self-sufficient by 1987-88.

June 19, 1986
Oral Questions
The Government's cynicism is flagrant. The Prime Minister (Mr. Mulroney) and his Cabinet spend freely for their own wants, for example: the largest Cabinet in history, a monstrous staff, presidential amenities, oversized delegations such as four Tourism Canada officials attending a mid-March American Society of Association Executives Convention in Orlando taking five star accommodations rather than four star, unnecessary major airport upgradings in the Prime Minister's riding, bank bail-outs, Senate appointments, patronage trough-wallowing and high-priced home movies, while postal customers in remote areas-


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



REGIONAL DEVELOPMENT


Mr. Gerald Comeau (South West Nova):: Mr. Speaker, I would like to bring to your attention some of the signs of strength demonstrated by the Nova Scotia economy since September, 1984.
The May inflation rate was 3.5 per cent, below the national average of 4.1 per cent. Total exports in April, 1986, were up 30 per cent compared to April, 1985. Total value of building permits in 1985 were up by 18.9 per cent compared to 1984. Total housing starts in 1985 rose by 51 per cent, to their highest level in eight years. Retail sales have increased by 14.5 per cent since the election. Realized net farm income is estimated to have increased by 7.5 per cent in 1985.
With these kinds of results Nova Scotians can finally look forward to the future with optimism.



PRESENCE IN GALLERY OF BRITISH COLUMBIA MINISTER OF LANDS, PARKS AND HOUSING

Mr. Speaker:: I wish to draw to the attention of Members the presence in the gallery of the Hon. Jack Kempf, Minister of Lands, Parks and Housing for the Province of British Columbia.


Some Hon. Members:: Hear, hear!



ORAL QUESTION PERIOD


Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, in the absence of the Prime Minister I would like to direct my question to the Secretary of State for External Affairs on trade. There is more chaos today on the trade front, just when we were beginning to think that the Prime Minister was back to his original position on a comprehensive free trade pact.
The Americans indicate to us that financial services are not going to be on the table. Since financial services are not going to be on the table, do we have a comprehensive negotiation or not? If it is going to be sectoral, as perhaps the Americans themselves are now starting to recognize, why can we not take our cultural industries and the Automobile Pact off the table as the Americans want to take off the financial services?


Right Hon. Joe Clark (Secretary of State for External Affairs):: Mr. Speaker, they will be comprehensive negotiations. They will not be sectoral negotiations. The United States will decide what it wants to put on the table, and we will decide what we want to put on the table. We are not discussing cultural industries and cultural policy in the context of trade negotiation. We have no intention to discuss the question of an Auto Pact which, in our view, works well for Canada, and there is no need to change something that works well.
These matters have been repeated innumerable times in the House of Commons. I presume that the Right Hon. Leader of the Opposition keeps repeating questions because he cannot find a consistent policy of his own to follow.
[ Translation]


FREE TRADE-EXTENT OF NEGOTIATOR'S MANDATE
John Napier Turner: Mr. Speaker, once again I may observe this afternoon that our policy represents the unanimous position of our caucus.
Mr. Speaker, I shall repeat my question: Last night, an interesting confrontation between Mr. Reisman and Mr. Murphy on television confused the issue even further. Mr. Reisman claimed that our social programs were not on the table and Mr. Murphy said they were.
Could the Secretary of State please explain the situation? Does Mr. Reisman have a specific mandate? Perhaps he could table that mandate here in the House, so that we will know what is going on and whether Mr. Reisman has received clear instructions, so as not to add to the general confusion every evening.


Charles Joseph Clark: Mr. Speaker, it will be interesting for the House of
June 19, 1986

Commons to see today's unanimous policy, and tomorrow there will be another unanimous policy from the Liberal Party!
As far as the Government's policy is concerned, Mr. Reisman has a mandate, and I am not going to tell the United States about it in my answer to the Right Hon. Leader of the Opposition here in the House.


CANADIAN NEGOTIATOR'S INSTRUCTIONS
John Napier Turner: Putting it very simply for the Secretary of State of External Affairs and to circumscribe some of his new-found enthusiasm and eloquence in the House, are there matters beyond the scope of Mr. Reisman, as chief negotiator for our country, to negotiate? If Mr. Reisman has been told by the Secretary of State of External Affairs and by the Prime Minister that there are matters beyond his power to negotiate, would the Secretary of State let the people of Canada know so we can have precision as to the scope of the negotiations?


Charles Joseph Clark: Mr. Speaker, if I may repeat my response to the Leader of the Opposition's first question, the question of cultural matters is not a matter of negotiation in a trade negotiation. We see no reason to change an Auto Pact which is working well. The social programs of Canada are not at question in a trade negotiation.
These matters have all been repeated several times. They are well known to the country. I look forward to the occasion when the Right Hon. Leader of the Opposition, in fact, finds a unanimous policy that will last longer than one day, so he can stop repeating questions to me in the House.


UNITED STATES POSITION
Hon. Lloyd Axworthy (Winnipeg-Fort Garry):: Mr. Speaker, my question is directed to the Secretary of State. He has just stated that matters such as the social programs and Auto Pact are not to be discussed. Yet Peter Murphy, the U.S. negotiator, said yesterday that the United States has the right to study the impact of Canadian social programs and the Auto Pact. When will the Secretary of State or the Prime Minister contact Mr. Murphy's boss, the President of the United States, and tell him that they do not have the right to study these matters and that we get the negotiations off on a proper footing so that we both understand what we are talking about?
Right Hon. Joe Clark (Secretary of State for External
Affairs): Mr. Speaker, the Official Opposition should at least become consistent in its outrage. The Leader of the Opposition is outraged that the United States would determine what they want to discuss. Now the Member for Winnipeg-Fort Garry pretends outrage that we would determine what we want to
Oral Questions
discuss. We will decide what Canada discusses at the table. What the Americans might put on the table is their business. What we might put on or take off the table is our business.


FINANCIAL SERVICES
Lloyd Axworthy: Mr. Speaker, we are outraged about the dialogue of the deaf that is going on, where you are both talking about totally separate things. You do not do something that is as historically important as this and talk about two different agendas and two different items.
If Mr. Murphy is saying that the Government of the United States has a right to study everything, why are we acquiescing in the Government of the United States pulling financial services from the agenda?


Charles Joseph Clark: Mr. Speaker, now the Member for Winnipeg

Fort Garry is consistent with his Leader and inconsistent with himself.


APARTHEID
Mr. Howard McCurdy (Windsor-Walkerville):: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. Yesterday we received the report of Albert Hart on the activities of Canadian corporations in South Africa operating under the voluntary Code of Conduct. The Minister indicated that the Canadian people could judge for themselves the behaviour of those companies under that code. The more important question is what the Government thinks of a situation in which five companies are paying wages which are below the minimum level for living in South Africa?


Charles Joseph Clark: Mr. Speaker, I thank the Hon. Member for his question. He will know that it was as a result of an initiative by this Government that, for the first time, the responses to that Code of Conduct were made public and are now a matter of public scrutiny and debate. As far as I am concerned, I do not approve of those practices by the Canadian companies. I would hope that those practices will change.
The reason we put the facts in public view is so that the pressure of public opinion, which is clearly effective in a country like ours, will be joined with the pressure and advice of the Government of Canada in trying to encourage a change on the part of those companies in what we consider to be a continuation of the Candian fight against apartheid.

June 19, 1986
Oral Questions


APPLICATION OF SOUTH AFRICAN LAWS TO CANADIAN COMPANIES
Howard Douglas McCurdy: Mr. Speaker, as the Secretary of State knows, some of the companies in violation of the voluntary Code of Conduct are required, pursuant to South African segregationist laws, to segregate black workers from white workers at on-site accommodations. What advice would he offer to those companies which are faced with this inconsistency between the Code of Conduct and South African racist laws?


Charles Joseph Clark: Mr. Speaker, we would urge Canadian companies to follow Canadian standards and the Canadian Code of Conduct. If they are seeking information as to how they can do that in a way that is consistent with South African law, we certainly are prepared to aid them in resolving that particular problem. However, we believe that there is a Canadian standard that is very clearly at variance with the practice of the Government of South Africa. We think that the practice of the Government of South Africa, in following an apartheid regime, is abhorrent, and we want to see Canadian practice conform to our standards, not South African standards.


REQUEST FOR MANDATORY APPLICATION OF CODE OF CONDUCT
Howard Douglas McCurdy: Mr. Speaker, if a Code of Conduct can be expected to work effectively, would it not make a good deal more sense to make it mandatory and require those corporations which do not adhere to the Code of Conduct to remove themselves from South Africa?


Charles Joseph Clark: Mr. Speaker, that is clearly an option. The point I made to the Hon. Member earlier is that the step that the Government has taken is to have moved the question of compliance into the public domain so that the country and Parliament are in a position to exert influence upon those Canadian companies now. That is my preferred option. There is another.


REQUEST THAT GOVERNMENT HOLD DISCUSSIONS WITH COMPANIES
Jacques Guilbault: Mr. Speaker, Canadians were certainly ashamed to learn that five of our companies were breaking the Code of Conduct and treating blacks like cheap labour. I am glad that the Secretary of State for External Affairs and the Government, for that matter, are not happy with the situation. We have yet to hear what concrete steps the Government is willing to take to bring this exploitation to an end. Is the Government at least willing to meet with the companies and persuade them to respect this voluntary Code of Conduct? If they do not want to do that, will the Government make it mandatory?


Charles Joseph Clark: Mr. Speaker, I think the publication of this Code of Conduct is supported by all Parties in the House, although it was not the practice of former Governments to require that publication. The Hon. Member has asked me whether I am prepared to meet with the representatives of the Canadian private sector that are active in South Africa. I have met with them. We did that early in the evolution of our process. We are prepared to meet with them again.
The point I want to make is that we have now secured a situation where these facts are in the public domain. I believe that the companies in question are, among other things, subject to public opinion. I hope that public opinion will be strong and clear.


Jacques Guilbault: Mr. Speaker, personally, I think these Canadian companies should withdraw altogether from South Africa, just like the U.S. House of Representatives said in its motion last night.


INQUIRY WHEN GOVERNMENT WILL TAKE ACTION
Jacques Guilbault: However, Mr. Speaker, I would like to ask the Secretary of State for External Affairs when he is going to show he has some backbone and stop waiting for public opinion in Canada to have some impact on these companies. When is the Government going to take concrete action instead of waiting for these companies to make up their minds to follow a voluntary code?


Charles Joseph Clark: Mr. Speaker, under the Liberal Government, the companies concerned were not required to publish a record of their performance. Under the Liberals, they could hide those details. But that is history, and now companies must provide disclosure.
I hope there will be a strong reaction from the public, because our present option is the one we prefer. But I repeat that there is another option.


STERNSON COMPANY'S FAILURE TO REPORT
Mr. Derek Blackburn (Brant):: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. Two of those companies mentioned in the report are located in my constituency. They are Massey-Ferguson, or Massey Combines as it is now known, and Sternson Ltd. Sternson Ltd. has not even taken the opportunity to report. What specific action will the Secretary of State take against Sternson Ltd. to make certain that it reports immediately on its financial undertakings in South Africa?


Charles Joseph Clark: Mr. Speaker, I am prepared to work very closely with the Hon. Member, as the Member of Parliament for the region, to try to encourage that company not only to report,
June 19, 1986

but to encourage that company and others to comply. In my judgment we now have a situation where there is a way by which the facts can become known. That did not exist before. Other options are open to us, such as the option of resorting to forced action by the Government of Canada. I would very much prefer to have public opinion work and achieve a change that way. I believe this is a multi-partisan matter and I would welcome the co-operation of the Hon. Member in achieving that goal.


MASSEY-FERGUSON CORPORATION
Derek Nigel Ernest Blackburn: Mr. Speaker, has the Secretary of State already contacted Massey-Ferguson, which is a multinational corporation, and, if so, what has he told Massey-Ferguson with respect to paying substandard wages in a country that is already notorious for paying very low wages to its black population?


Charles Joseph Clark: Mr. Speaker, 1 have not contacted Massey-Ferguson or the other companies since I tabled the report in the House yesterday. What the Government has done that is new, is take steps that cause the information to come into the public domain so that Members of Parliament, the public, and others who are interested, are in a position to act. I hope they will act.
I hope there will be change. 1 repeat the point: if there is not change as a result of that kind of action, there are other options for the Government to consider.


NATIONAL RESEARCH COUNCIL
Mr. David Berger (Laurier):: Mr. Speaker, my question is directed to the Minister of State for Science and Technology. I have in my hand a Government document in which the VicePresident of the National Research Council states that industrial research funds will be transferred to the space program, to be managed by the space program, as an activity separate from industrial research. In the document the Acting President of the National Research Council confirms the accuracy of this assessment.
Given this evidence, I would ask the Minister to correct the impression that he left with the House earlier this week, to level with Canadians, and admit that the industrial research program has indeed been cut and that some 2,000 small Canadian firms will lose vital research support.


Hon. Frank Oberle (Minister of State for Science and Technology):: Mr. Speaker, I do not know from what document the Hon. Member is reading, but let me tell him that the industrial research program is designed to build a basis on which we can expand our economy with future-oriented jobs.
Oral Questions
This is what the space program is designed to do, to create 100,000 new, future-oriented jobs, and $5 billion worth of industrial spin-off to private firms and small firms. That is what the program is designed to do.
The Hon. Member now tells us that he and his Party wish us to walk away from space. Well, this is not what is going to happen.


MINISTER'S POSITION
David Berger: Mr. Speaker, when will the Minister admit that the effect of this decision will be to cut research funds from some 2,000 small Canadian companies over the next five years? When will the Minister be able to report to the House the truth about this question? When will he provide Parliament and the Canadian people with information that we can believe?


Frank Oberle: Mr. Speaker, if the Hon. Member chooses to believe what he hears on the streets, I will never be able to satisfy him. I told him what the program is about and what happened, and if he chooses to seek information that is less factual than what he hears from me, I am sorry, but I cannot help him.


MEDICAL CARE
Mr. Ian Deans (Hamilton Mountain):: Mr. Speaker, my question is directed to the Minister of National Health and Welfare. Will the Minister ask the College of Physicians and Surgeons in the Province of Ontario to investigate a statement made by Dr. Shelley McLean on The National two evenings ago? She said: "If one patient dies now, we may be preventing a hundred patients from dying in five years".


Some Hon. Members:: Shame.


Ian Deans: She made the comment in response to questions about the closing of the emergency section of the hospital in Cornwall.


An Hon. Member:: Moral blackmail.


Hon. Jake Epp (Minister of National Health and Welfare):: Mr. Speaker, what the Hon. Member raises is a most serious issue. I want to say to him that I know he recognizes-I am not trying to push responsibilities from one level of jurisdiction to the other-that Ontario has the responsibility of maintaining health care in the Province of Ontario. I called the Minister of Health for Ontario, roughly at noon today. He was not in, but I spoke with a member of his staff and requested an

June 19, 1986
Oral Questions
update to see whether or not the services in Ontario were being provided and to see that people were not being put at risk.
I have publicly said that I would hope the disagreement between the Government of Ontario and the doctors could be resolved; not only amicably. I have great difficulty when people s lives and health are being put at risk because two groups are in conflict with each other.


REQUEST FOR SUSPENSION OF DOCTOR
Ian Deans: Mr. Speaker, I would like to ask a supplementary question. Would the Minister agree that this statement is in violation of that doctor's Hippocratic oath and ask that she be suspended from practising in the Province of Ontario until such time as an investigation is conducted into this matter?


Some Hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. I am not aware that the Minister has any ministerial responsibility involving the licensing of doctors. That is my dilemma.


Mr. Benjamin:: He didn't say that, he didn't ask that.


Ian Deans: I asked the Minister to ask the College of Physicians and Surgeons.


Leslie Gordon Benjamin: He just asked the Minister to make representations.


Mr. Speaker:: Order, please. The Hon. Member for Westmorland-Kent.


CANADIAN NATIONAL RAILWAYS
Fernand Robichaud: Mr. Speaker, my question is directed to the Minister of Transport. On January 15 of this year, the Minister clearly stated in this House, as reported at page 9791 of Hansard, that the CN shops in Moncton were not for sale. Why is the Minister now allowing CN to proceed with the sale of the CN shops?


Donald Frank Mazankowski: Mr. Speaker, the answer to which the Hon. Member refers is somewhat selective, in the quotation that he is using. What I did say at that time was that CN shops were not for sale but that Canadian General Electric had expressed an interest in establishing a locomotive manufacturing facility in Canada and, within the context of the rationalization of the shops, that that was being considered; and, to be perfectly technical, at that time the shops were not for sale, and a proposition was not ratified-


Donald Frank Mazankowski: Mr. Speaker, a proposition to enter into the negotiations was not ratified by the Board of CNR until last Sunday.


Fernand Robichaud: So much for a first promise.


POSSIBLE LAY-OFFS-MINISTER'S POSITION
Fernand Robichaud: Mr. Speaker, why has the Minister now broken a second promise, the promise that he would not support massive lay-offs? How can he allow the loss of 600 jobs in an area with 15 per cent unemployment?


Some Hon. Members:: Shame!


Donald Frank Mazankowski: Mr. Speaker, when the Hon. Member uses those figures he is simply distorting the facts. I would encourage him to stop and to cease and desist from doing that, because he has no licence to disseminate fear and apprehension in the minds of the workers.


Some Hon. Members:: Oh, oh!


Donald Frank Mazankowski: Furthermore, Mr. Speaker-


Mr. Speaker:: Order. The Minister is coming close, very close, to unparliamentary language.


Donald Frank Mazankowski: Furthermore, Mr. Speaker, I say to the Hon. Member, and I know that this is a very sensitive subject, that he is doing a great disservice to the people of Moncton, particularly the workers. It is quite apparent that the Hon. Member-


Some Hon. Members:: Order.


Donald Frank Mazankowski: -is opposed to the establishment of a new locomotive manufacturing facility in Moncton.


CANADA-UNITED STATES NEGOTIATIONS-FINANCIAL SERVICES
Mr. Steven W. Langdon (Essex-Windsor):: Mr. Speaker, I want to ask a question of the Minister of State for External Affairs, if I may. While Mr. Reisman and Mr. Murphy continue to argue publicly about what sectors are to be discussed, the United States has unilaterally pulled the financial sectors off the bargaining table. I want to ask the Minister if the Government does not see that this kind of contrast points out the great inequalities in bargaining between the two countries and shows the dangers that we face if we continue down this course.


Some Hon. members:: Oh, oh!

June 19, 1986


Charles Joseph Clark: Mr. Speaker, I can only assume that a distinguished former university professor knows better than that. The facts remain as they have always been, that the Government of Canada can decide what it wants to put on the table and keep on the table, and the Government of the United States decides what it wants to put on the table and keep on the table. Nothing has changed.


SOCIAL POLICY
Steven W. Langdon: In that case, Mr. Speaker, if the Minister is prepared to talk-so, talk. Let me ask him if in fact he will act right now, unilaterally, and say, "Despite Mr. Murphy's comments yesterday, we are not prepared at any time, or in any way, to talk about social policy in the course of these free trade talks".


Charles Joseph Clark: Mr. Speaker, if the Hon. Member thinks that was tough talk, "he ain't seen nothing yet".


Some Hon. Members:: Hear, hear!


Some Hon. Members:: Oh, oh!


Charles Joseph Clark: I do not know what passes for tough talk in the New Democratic Party.
Look, Mr. Speaker, the question of social programs is not an issue in discussion on trade. The question of cultural programs is not an issue in discussions of trade. The question of the Auto Pact is not something we propose to raise or have result in a change in the system that we think is working perfectly well. That, by my calculation, is the one million two hundred and thirty-seventh time I have given that answer in the House of Commons, and I would hope that the New Democratic Party would get in touch quickly, by telephone, with the CLC to get some new questions.


Some Hon. Members:: Oh, oh!


Mr. Speaker:: Order.


CAPE BRETON DEVELOPMENT CORPORATION
Mr. Lawrence I. O'Neil (Cape Breton Highlands-Canso):: Mr. Speaker, my question is for the Acting Minister of Regional Industrial Expansion. Can the Minister tell us whether he intends to respond to certain concerns expressed on behalf of miners employed by the Cape Breton Development Corporation?
Oral Questions


Donald Frank Mazankowski: Mr. Speaker, first, I want to acknowledge the tremendous work that the Hon. Member has done-


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!


Mr. Speaker:: The Hon. Minister will finish his answer, please.


Donald Frank Mazankowski: -as well as his support and his advice.
As I indicated yesterday to the House we will be treating this matter very seriously. We have had a number of discussions. I personally discussed the issue with Premier Buchanan of Nova Scotia this morning. We have discussed it with union leaders. We have discussed it with the Chairman of the Board of Devco. Arrangements are now being made to organize a meeting between senior officials of DRIE and representatives of those who are engaged in the sit-in. Hopefully we will be able to resolve the outstanding issues referred to in the protests of the sit-in miners.


REQUEST FOR MINISTERIAL UNDERTAKING
Mr. Dave Dingwall (Cape Breton-East Richmond):: Mr. Speaker, I wish to take this opportunity to congratulate the Acting Minister of Regional Industrial Expansion for taking such positive action with regard to this most serious situation. However, I ask him in all sincerity whether he can give an undertaking to the House that before the end of June substantive answers will be given to the United Mine Workers of America with regard to the high unemployment at the Cape Breton Development Corporation, as well as the future direction that that corporation will take? Can he give us that undertaking?


Donald Frank Mazankowski: Mr. Speaker, I am not sure that I can give the Hon. Member the undertaking with respect to the time-frame. However, I can give him the undertaking that we will sit down and discuss all the outstanding issues to which the miners have referred.


CROWN CORPORATIONS
Michael Morris Cassidy: Mr. Speaker, my question is directed to the Acting Minister of Regional Industrial Expansion and concerns the sale of Canadair. When is the Government going to select one of the purchase offers for Canadair? And could the Minister give the House the assurance that, considering the precedent set by de Havilland, a parliamentary committee will examine the sale and have a

June 19, 1986
Oral Questions
chance to communicate its conclusions to the House, before the sale is finalized?


Donald Frank Mazankowski: Mr. Speaker, this matter is still in the hands of the CDIC. I have not received its recommendations, and so I am not able to give the Hon. Member the undertaking to which he has referred.


REQUEST FOR PARLIAMENTARY REVIEW
Michael Morris Cassidy: Mr. Speaker, there are very serious concerns about jobs and about ownership in this particular area. Is the Minister aware of the very serious pledge made by his predecessor who said: "We want to assure all Canadians that the divestiture will be administered responsibly with an opportunity for appropriate parliamentary review"? Will the Government guarantee that that review will take place by a committee and that it will be able to report back to Parliament before the sale is finalized in the fall?


Donald Frank Mazankowski: Mr. Speaker, I undertook to meet with representatives of the unions yesterday. We had a very good meeting and a very good discussion. I think they went away satisfied. The Hon. Member should recall the fear and the apprehension that he spread in this House with respect to the potential takeover of de Havilland. I think history speaks for itself-de Havilland is flying high.


Some Hon. Members:: Hear, hear!


GOVERNMENT EXPENDITURES
Mr. Don Boudria (Glengarry-Prescott-Russell):: Mr. Speaker, my question is for the Deputy Prime Minister. It pertains to the Prime Minister's extravagant spending of taxpayers' money for his own personal glorification. Will the Deputy Prime Minister explain to unemployed Canadians who can barely afford the necessities of life why the Prime Minister of Canada spent taxpayers' money to the tune of $2,483.21 per minute so that the American people could have the opportunity-


Mr. Speaker:: Order, please. The Hon. Member, I think, can conclude his question.


Ms. Copps:: This is his question.


Don Boudria: Will the Deputy Prime Minister tell the people of Canada why the Prime Minister spent that kind of money for his greatness to be seen on television by United States citizens?


An Hon. Member:: That's out of order.


Ramon John Hnatyshyn: He used Taiwanese film.


Charles Joseph Clark: Mr. Speaker, I presume the Hon. Member is talking about the gathering of videotape for a-


Mr. Ouellet:: If you don't know the answer then sit down.


Charles Joseph Clark: I am getting coached in the House of Commons by the Hon. Member for Papineau.


André Ouellet: Indeed. Sit down!


Charles Joseph Clark: He often helps me with my French, and that I don't mind.

The situation is very clear, Mr. Speaker.


Jacques Guilbault: We know that. What is the answer?


Charles Joseph Clark: I will explain it, if I am given a chance by the Opposition. The answer is that, starting with the Trudeau Government in earlier years, there has been the practice-


David Charles Dingwall: He was Prime Minister longer than you.


Charles Joseph Clark: -of gathering material that can then be made available for communication, for distribution, to television stations in the United States to increase the profile of Canada in that country. That process, when it is followed, is a particle of the cost that would be-


Mr. Speaker:: Order, please. The Hon. Minister knows that this is long, too. Supplementary question.


Mr. Marchi:: That's a hell of a particle!


INQUIRY CONCERNING DURATION OF PRACTICE
Don Boudria: I have a supplementary, Mr. Speaker. Could the Secretary of State for External Affairs inform Canadians how long they will have to put up with this kind of extravagance, just so Americans will have a chance to the Prime Minister's face on television?


Charles Joseph Clark: Mr. Speaker, it is not an extravagance. In fact, if Canada had opted for one of the other media, such as newspaper advertising, the cost would have been much higher.

The facts here are that videotapes were taken of a very significant, newsworthy event involving Canada and the United States.
June 19, 1986


Some Hon. Members:: Oh, oh!


Charles Joseph Clark: The judgment on its newsworthiness was made by the some 1,400 American television stations that used the footage, therefore bringing attention to Canada, therefore helping Canada to increase a consciousness of Canada, the kind of consciousness that is very necessary if we want to resist countervail actions on our timber, if we want to prevent the kinds of actions that were taken on shakes and shingles, if we want to maintain a strong Canadian-


Some Hon. Members:: Hear, hear!


Derek Nigel Ernest Blackburn: Joe for President!


REGIONAL INDUSTRIAL EXPANSION
Mr. Bill Attewell (Don Valley East):: Mr. Speaker, my question is for the Secretary of State for External Affairs. I was concerned to read an article in The Globe and Mail today which suggests that the Government is reconsidering the Thyssen proposal to build a plant in Cape Breton to build armoured personnel carriers, including tanks, for export to countries in the Middle East. Is the Government actively reconsidering that proposal by Thyssen?


Charles Joseph Clark: Mr. Speaker, no.


AGRICULTURE
Lorne Edmund Nystrom: Mr. Speaker, my question is for the Minister of State for the Canadian Wheat Board or for the Secretary of State for External Affairs. I regret to inform the House of some bad news. The United States has just targeted Israel under its export enhancement program for the sale of 200,000 tons of barley. That represents our annual sale to Israel. I wish to ask either of the Ministers whether or not the Government is now considering any special action in order to counteract this American initiative on a country-by-country basis? As Hon. Members know, this will totally devastate our grain producers in western Canada.


Charles James Mayer: Mr. Speaker, we have been aware of the BICEP program. It has been in effect since June of 1985. The success that the Americans have had in terms of increasing the sale has not been effective. Hon. Members should know that this type of thing will not devastate western Canada in terms of
Oral Questions
sales. The big problem is with respect to prices. The Hon. Member should know that we are selling wheat at the same record clip that we have been for the last two years. Sales are there. The big problem we have is with prices.


Mr. de Jong:: That's not going to sell back home, Charlie.


Charles James Mayer: We have discussed that many times in the House.


CANADIAN POSITION
Lorne Edmund Nystrom: Mr. Speaker, is the Minister aware that the United States has just targeted Israel for 200,000 tons of barley per year, a traditional Canadian market, and that it is now talking about increasing its sales to Saudi Arabia from 100,000 tons to one million tons per year? Is the Minister aware of that? If he is aware of it can we expect any concrete action to counteract it on a country-by-country basis? It is an important question.


Charles James Mayer: Mr. Speaker, the one correct statement which the Hon. Member has made is that it is an important question. We are aware of that. The Hon. Member should know that Canada has taken the lead in raising the agricultural trade subsidy issue internationally. The Prime Minister raised it in Tokyo. We have to give him credit for that. We managed to convince the major exporting countries to hold a meeting recently on the West Coast. I think there were some results there. We are aware that in addressing it we should address it in what I think is the best forum possible and that is the international forum. With everyone's co-operation, we will be able to address it globally at the next GATT round.


TRANSPORT
André Ouellet: Mr. Speaker, in the absence of the Prime Minister I will direct my question to the Minister of Transport.
Does the Minister of Transport know that yesterday all participants in the Montreal economic summit, without exception, voiced their opposition to Bill C-75 and, considering all these views against clause 4, is the Minister now prepared to delete that clause from Bill C-75 for the time being?


Donald Frank Mazankowski: Mr. Speaker, I think the Hon. Member knows that a number of safeguards have been put into this particular clause, a clause which I know has generated some controversy but one which I
14700

June 19, 1986
Oral Questions
believe is now considered to be fair. The imposition of the charges would not take place before January 1, 1988. There is a consultative mechanism and an appeal process. There are many safeguards, and I think the Hon. Member would agree that this is the first time there have been such safeguards in the imposition of these kinds of enabling charges.


METHOD OF PAYMENT
André Ouellet: Obviously, Mr. Speaker, all those who are against this law are not satisfied with the verbal-let alone the legislative-commitments of the Minister.
Could the Minister assure all the interested parties that he will include in clause 4 of the Bill a guarantee to the effect that payments will not begin before 1988, that they will not exceed $20 million a year, and that they will end in 1990, as he is alleged to have promised the Quebec Minister of Transport?


Donald Frank Mazankowski: Mr. Speaker, those conditions are clearly on the record. As I have said, there is a consultative process and there is a 90-day provision for Gazetteing. There are appeal mechanisms, and we are requesting a modest return of something like $20 million. After all, the cost recovery on the Coast Guard services right now is something between 3 per cent and 5 per cent and we want to increase that to a minuscule 7 per cent. That certainly is not very much considering the services provided. I think all industries recognize that there has to be some provision for cost recovery, and I would hope that when they understand the kind of protective mechanisms we have put in place, they will find this Bill acceptable.


REQUEST FOR BAN ON CIGARETTE ADVERTISING
Ms. Lynn McDonald (Broadview-Greenwood):: Mr. Speaker, my question is for the Minister of National Health and Welfare who will know that the Canadian Cancer Society and other organizations today held a press conference revealing some new information about public knowledge, or indeed the lack of public knowledge, of the connection between lung cancer and tobacco smoking. Will the Minister accede to the very urgent demand of the Canadian Cancer Society and other organizations for a ban on cigarette advertising? Will he accede to the demand not just for self-regulation, not just for three-inch warnings instead of one-inch warnings, not just skaters instead of skiers, not just for bluewater canoeists rather than whitewater canoeists, but for a real ban?


Arthur Jacob (Jake) Epp: Mr. Speaker, I am aware that the press conference was held. I
think one correction should be made, not to the Hon. Member's question but to the press release which leaves the impression that I might have had a meeting with the organizations. That was not the case but I am aware of the press release. This is not a new position taken by these organizations. I have said to the Hon. Member a number of times, as I have also said in public, that the Government is looking actively at what response it should make. I have also told the Hon. Member and the organizations that held the press conference today that I will take one more look at what the tobacco manufacturers' council will say at the end of the month.


MINISTER'S POSITION
Lynn McDonald: Mr. Speaker, since he has played the numbers game before on the grounds that this advertising ban would not be effective enough, I wonder if the Minister could tell us how many lives he would consider it worth saving. If 10 per cent of those 35,000 lives could be saved, would that be worth it? If only 1 per cent, or 350 lives, could be saved, would that be worth a ban on advertising? Indeed, if one life could be saved by a ban on advertising, would that be worth it?


Arthur Jacob (Jake) Epp: Mr. Speaker, there are 30,000 deaths related to smoking each year. My job as Minister of National Health and Welfare is to try to prevent all of those deaths.


FOOD AND DRUGS
Mr. Blaine A. Thacker (Lethbridge-Foothills):: Mr. Speaker, my question is also directed to the Minister of National Health and Welfare. The Minister is aware that the Canadian beef industry is suffering from a dramatic decline in demand and he will also be aware that his Department has, for over 15 years, published misinformation that has been used by home economists, health care professionals, and the media. Will the Minister inform the House what actions he is prepared to take to correct this misinformation?


Arthur Jacob (Jake) Epp: Mr. Speaker, I do not agree that the Department might have been publishing misinformation. There have been various studies done outside the Department as well relative to beef. I can tell the Hon. Member that with what has been happening in the beef industry, with the reduction in fat in cuts that are now being sold, from the point of view of the Department of Health beef is not only a safe product but it is a good product, and one that the Department and other health professionals are promoting for use by Canadians.
June 19, 1986


MEDICAL CARE
Jean-Robert Gauthier: Mr. Speaker, my question is directed to the Minister of National Health and Welfare. Is the Minister aware that the Canadian Medical Association has put out a memo to all doctors and hospitals outside Ontario asking them to support the Ontario medical strike and asking them also to bill patients directly and not through the provincial program, OHIP? If he is aware of that, what has he done to make sure that Canadians, and Ontarians in particular, have universal access to hospitals and medical care?


Arthur Jacob (Jake) Epp: Mr. Speaker, in an earlier question I was asked what action I had taken and I said I had phoned the office of the Minister of Health in Ontario to-


John V. Nunziata: It's the Canadian Medical Association.


Arthur Jacob (Jake) Epp: Would you let me answer, please? I said that I had phoned the Minister's office, because it is under provincial jurisdiction, to ensure that access and portability be maintained under the Canada Health Act. I have received a report from the Government of Ontario indicating that there is no evidence from the Minister's point of view that access or portability has been denied. I have also indicated that the Ontario Government, under OHIP, will recognize and accept OHIP payments for residents of Ontario outside Ontario since that is within the legal requirements of the Canada Health Act. I have been assured by the Province of Ontario that it will honour all those bills.


INQUIRY IF OTHER PROVINCES WILL RECOGNIZE ONTARIO'S HEALTH INSURANCE PLAN
Jean-Robert Gauthier: Mr. Speaker, the Minister did not answer my question.
I should like to know whether the Minister can assure all Ontarians who will be travelling throughout Canada this summer, as tourists or otherwise, that they will be able to obtain medical care in hospitals and be attended by physicians in case of accident or serious illness, without prejudice to their ability to pay? Will all provinces other than Ontario recognize Ontario's health insurance plan?


Arthur Jacob (Jake) Epp: Mr. Speaker, I have every assurance that Ontario residents who are travelling are being given that service under the Canada Health Act, and specificially the portability clauses. I also want to indicate to the Hon. Member that doctors outside Ontario may sign or fill out the interprovincial benefits form which will allow them to get paid by OHIP. If that is not done and if there is a direct payment by an Ontario resident, OHIP
Point of Order-Right Hon. J. Clark
will also cover that. I have every assurance today from the work I have done, and the assurances I have received from the Province of Ontario, that Ontario residents outside Ontario are being protected.


FIREARMS
Simon Leendert de Jong: Mr. Speaker, my question is directed to the Minister of National Revenue. The Minister is aware of my concern and the concern of various police and customs officers about the number of weapons being imported by wholesale gun dealers. The concern is that customs officers have no training to determine whether automatic weapons have been properly modified to make them legal in Canada. Can the Minister inform us what action the Government is taking to ensure that illegal automatic weapons are not entering the country?


Hon. Elmer M. MacKay (Minister of National Revenue):: Mr. Speaker, first let me thank my hon. colleague for the interest he has shown in this subject. I appreciated the observations he made at a meeting we had not long ago. He knows that our Department is very diligent in making sure that all regulatory requirements that govern the importation of prohibited weapons are followed, and when our Department lacks the necessary expertise to match the type of weapons with the consignment or to make sure that these weapons are permanently converted for semi-automatic use, we obtain the services of firearms experts, usually the local police, to help us in this regard. We go on to seize any prohibited weapons that are located and, if necessary, we are prepared to make arrests.


INSPECTION TRAINING PROGRAM REQUESTED
Simon Leendert de Jong: Mr. Speaker, is the Minister prepared to endorse a program of training individuals to enable them to inspect firearms better, and to designate four or five major centres through which large commercial shipments of guns must be processed?


Elmer MacIntosh MacKay: Mr. Speaker, that is an interesting suggestion. I certainly give my colleague the undertaking to consider it seriously.


POINT OF ORDER
[Stage Direction]
Right Hon. Joe Clark (Secretary of State for External
Affairs): Mr. Speaker, during Question Period I inadvertently
[Stage Direction]
June 19, 1986
gave the wrong figure to the House regarding United States stations which used or expressed interest in using the satellite feed publicizing Canada. A full 600 United States television stations used that feed. That amounts to a fraction of the cost of one advertisement in any U.S. daily newspaper.

Fernand Robichaud: Mr. Speaker, pursuant to Standing Order 29,1 informed you today of my intention to ask the House for an emergency debate on a situation that I consider to be extremely serious. The subject of debate would be the decision by the Crown Corporation, Canadian National, to sell its railway shops at Moncton.

This CN decision to close its main shops in Moncton was taken unilaterally and without any input from Members of the House. It means that over 600 jobs will be lost. During the past year more than 1,000 workers have lived in insecurity and uncertainty. In September, 1985, 225 workers were laid off. On Tuesday, another 450 were told that they would have to retire early, be transferred, or lose their jobs.

The CN shops at Moncton are one of the major employers in New Brunswick. Considering the fact that the province's unemployment rate is 14.6 per cent, the second highest in Canada, it would be irresponsible to approve such a decision.

Yesterday the Legislative Assembly of New Brunswick passed a unanimous motion expressing its opposition to the announced major reduction in employment at the CN shops in Moncton. The Legislative Assembly urged the Government of Canada to honour its duty with regard to regional development, in particular in the Moncton region.
Since this decision places in jeopardy the jobs of 1,022 workers of a Crown corporation in a region of extremely high unemployment, I feel it is of crucial importance that Members of Parliament be given the opportunity to debate this decision immediately.
Therefore, I respectfully request an adjournment of the House for an emergency debate on this important issue.


Some Hon. Members:: Hear, hear!


Mr. Speaker:: The Chair received in proper form the application of the Hon. Member and of course has, as he would expect, examined carefully the application.
Without doubt the matter is a serious one, but the Chair must determine whether in fact the application conforms with the provisions of Standing Order 29. The Chair must advise the Member that the terms of Standing Order 29 have not been met and I must, therefore, decide not to accept the application.


Leslie Gordon Benjamin: Mr. Speaker, I rise on a point of order. I admit my ignorance, but are interventions allowed before Your Honour hands down a decision?


Mr. Speaker:: No.


Leslie Gordon Benjamin: That is too bad.


Mr. Speaker:: The Hon. Member will know what I mean when I say that they are not allowed, but sometimes people do around here intervene. In fact, the Hon. Member will know that the Chair must receive an application in writing at least an hour in advance. What happens is that the Member is obligated by the rules to read into the record only the application which has been presented to the Speaker in writing, and that is the basis upon which the Speaker makes his ruling.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Philip Derek Lewis: Mr. Speaker, the following question will be answered today: No. 505.


Mr. Nunziata: 1.	(a) In (0 1984 (ii) 1985, how many inmates in federal penitentiaries were found to be in possession of illegal drugs (6) in how many case were the drugs discovered after a return from (i) escorted (ii) unescorted temporary absence?
2.	In how many cases was the inmate charged (a) under the Criminal Code (b) with flagrant or serious misconduct under Section 39 of the Penitentiary Service Regulations (c) with an intermediary offense under Section 39 (d) with minor misconduct under Section 39?
3.	In each case in part 2, how many inmates (a) were found guilty as charged (b) had the charges dropped (c) had a portion of their earned remission revoked?


Hon. Perrin Beatty (Solicitor General of Canada):: In so far
as the Correctional Service of Canada is concerned:
1.	(a) 592 inmates, (ii) 379 inmates, (b) (i), (ii) The Correctional Service of Canada does not keep records in a manner which would permit the production of the requested information without considerable expenditure in personnel resources.
2.	(a) (b) (c) (d) Please see answer to part 1 (b) (i) (ii).
3.	(a) (b) (c) Please see answer to part 1 (b) (i) (ii).
June 19, 1986


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


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


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Monday, June 16, consideration of the motion of Mr. Wilson (Etobicoke Centre) that Bill C-96, an Act to amend the Federal-Provincial Fiscal Arranage-ments and Federal Post-Secondary Education and Health Contributions Act, 1977, be read the third time and passed; and the amendment of Ms. Copps (p. 14483).
Nelson Andrew Riis: Mr. Speaker, it is a pleasure to participate today at third reading stage of Bill C-96 which is entitled:
An Act to amend the Federal-Provincial Fiscal Arrangements and Federal Post-Secondary Education and Health Contributions Act, 1977.
People might get the impression from that title that the Government of Canada plans to support post-secondary education and health care beyond the levels at which they are normally supported. Of course, that is quite contrary to the reality of the situation. The Bill should actually be entitled "The Government now makes drastic cuts to post-secondary education in Canada and incredibly drastic cuts to the health care system of Canada". That would be a more realistic name; it would actually describe the reality of Bill C-96.
I want to state very clearly that as far as the New Democratic Party is concerned, we oppose Bill C-96. We have opposed the Bill since the Government first thought of drafting it. We have opposed it at every step of the way. We have opposed it at second reading and in committee. One of the reasons we opposed the Bill in committee was that the legislative committee, in its wisdom, asked 18 different groups to appear before it. Those groups represented the postsecondary educational system across the country, the Canadian health care system, and consumer groups. They were people with considerable expertise in the fields of health care and post-secondary education. The position taken by each of these 18 witnesses was virtually the same, stop the Bill; do not proceed with the Bill to make cuts to post-secondary educational and health funding.
Federal-Provincial Fiscal Arrangements Act
It is in that spirit that members of the New Democratic Party raised the issues at public meetings in their constituencies. We held a number of public meetings and attended public gatherings. For myself, I discussed Bill C-96 both formally and informally with representatives of the faculties of the three universities in British Columbia and with student organizations from the colleges, technical institutes, vocational schools, and universities in British Columbia. I heard representations from the faculties of the two colleges in my constituency, Cariboo College and Okanagan College which has a campus in Salmon Arm. I discussed the matter also with student groups which represented those two colleges.
Beyond that, the matter was raised on a number of occasions with people interested in proceeding to studies at the postsecondary level from secondary schools in British Columbia. I also discussed the matter with their parents. In many cases today parents must find about $6,000 per year to send a son or daughter from the interior of B.C. to one of its post-secondary institutions. In many cases to find $6,000 to send a member of one's family, or perhaps a number of members of one's family, to pursue studies at a university, college, technical institute, vocational school, or business school of one kind or another is not an easy task. In some cases it makes it impossible for people to pursue their interest at the post-secondary level.
I want to indicate my concern, being especially interested in the Bill as a Member from British Columbia. British Columbia has experienced the realities of a harsh, extreme conservative Government, the Social Credit Government, for many years. We have seen what that Government has done to the educational system both at the public school level as well as at the post-secondray school level. We have seen what that administration has done to health care in British Columbia. It has been devastating, Mr. Speaker. I have yet to hear an expert, someone who has recognized credentials in health care or postsecondary education that has not condemned what the Government of British Columbia has done in these two areas. I have listened to countless reports. I have read countless articles in professional and laymen's journals on health care and postsecondary education denouncing what the Government in British Columbia did to post-secondary institutions and health care throughout the province.
You will recall in 1977, Mr. Speaker, when the decision was made to change the funding formula for post-secondary education and health care. In 1977 there was funding on a 5050 basis. For every dollar a province spent in health care or post-secondary education the federal Government essentially matched that dollar. If $500 million was spent in a certain province in those two areas, the federal Government granted $500 million to that particular province.
In 1977 the decision was made to change the formula. What we heard was: "all hon. gentleman and ladies, we no longer need to go through all of the bookkeeping of this matching dollar for dollar, and that based on population growth and on

June 19, 1986
Federal-Provincial Fiscal Arrangements Act
growth in the economy, that is how payments to the provinces from the Government will be reflected." There was the assumption that with this kind of block funding, as it is termed, there would still be a matching of 50-50. If the federal Government increased its funds to the provinces, naturally the provinces would increase their contribution to assist and develop the health care system and post-secondary education system that Canadians needed and deserved. That has not happened.
If we just look at some recent statistics, for example 198283, the funding intended for universities in British Columbia from the federal Government was $206 million. In 1984 that amount was increased to $236 million, an increase of about $30 million over two years. That was money intended for universities only. The assumption was that the Government in British Columbia would match that increase and pass it along to the universities. I am sad to say that that was not the case. The total provided by the province to the three universities actually fell in that interval from $316 million to $299 million.
While federal grants to universities across the country were actually increasing year by year as a result of the formula determined in 1977, some provinces, including British Columbia, were reneging in their contributions. Today we find, as many many groups have now brought to our attention as parliamentarians, that the federal Government pays totally for all post-secondary education in B.C.. In other words, if you look at all of the money spent in the Province of British Columbia on post-secondary education, you will find that that is equal to the amount of money which the federal Government contributes alone. We can say that in spite of the fact that education and health care is a provincial responsibility by the Constitution of Canada, the federal Government finds itself in a situation where it is providing all of the funding to postsecondary education and most of the funding to health care in the Province of B.C. The same thing exists in other provinces, but not to the same degree. British Columbia is the worst offender.
This is not the only difficulty that we have in the Province of British Columbia. As far as young people participating in education beyond the secondary school level, going to colleges, universities, technical schools or institutes of one kind or another, are concerned, we have the lowest rate of anywhere in Canada. Fewer people per capita in the Province of B.C. go on to post-secondary studies than in any other area of Canada. Considering the complexity of the world as we know it, the rapidly changing world and workforce, the fact that British Columbians are not being trained and educated as are people in other provinces at the post-secondary level causes many of us much concern.
British Columbia also has the notoriety of being the only province that has an all debt student aid program in Canada. When you look at the various aid programs provinces have for students, B.C. is the worst of all in Canada. Not only do we have fewer students participating in post-secondary institutions, we have less support system to enable them to do so. For
an average person it costs $6,000 on an annual basis to send an individual on to further education and training.
Bill C-96 reduces the amount of money that traditionally would go to our post-secondary education and health care systems by $5.6 billion over the next five years. That is a cut of $5,600 million over the next five years. British Columbia alone will have a cut of $650 million. What alternatives does that leave a province like British Columbia? It can increase its deficit by $650 million. That is one thing; simply pass this incredible debt burden along to the province and the people of British Columbia and put them further and further into debt. Another alternative is to increase taxes at the provincial level in British Columbia to make up the $650 million shortfall. Or we can cut services. Any of these options causes all kinds of problems. The last alternative is likely the one the Social Credit Government of B.C. will follow. The provincial Government is anti-education, anti-intellectual and in many cases anti-people. Consequently the first reaction of that Government will be to cut services. As a Member of Parliament from British Columbia, that alarms me considerably.
Over the last few years we have seen the public school education system destroyed in British Columbia. I could recount untold examples of the reduced levels of educational opportunities young people in B.C. are now experiencing. For example, science is a rapidly changing field, yet there are many classrooms where four and five students have to share a textbook published 15 or 20 years ago which does not reflect the realities of the scientific world today. There are considerable needs for young people with special learning problems, yet learning assistance teachers and various support groups and classes have all been cut from the budgets. At the other end of the spectrum where you have groups of gifted and talented students who should be nurtured and encouraged into new and creative areas to develop their talents to the maximum, programs of that kind have essentially disappeared. We could go on and on, Mr. Speaker. We have literally seen the life snuffed out of our educational system.
Similarly with health care. When you go into our emergency wards the first thing you see is a big sign on the door saying you have to pay a fee to have a broken arm or a racked up shoulder attended to. You have to come up and pay a user fee to get into a hospital in British Columbia. I cannot imagine the intolerable situation further cuts will create right across Canada but especially in the Province of B.C. where people have already been so hard pressed in the area of education.
With regard to operating grants for universities in my province, in 1972 the provincial government expenditure was about 6 per cent. The last figures we have are for 1980-84. At that time the expenditure was down to just over 3 per cent. Over that period of time we saw a decrease in support for our universities. At the same time student enrolments are skyrocketing. I have all sorts of graphs and charts which indicate that while enrolments are going up, while the number of patients in
June 19, 1986

hospitals are increasing due to our aging population and while costs are going up as a result of inflation year after year, the operating grants to hospitals, universities and colleges are decreasing. This is very serious.
I have raised this matter in public meetings in my constituency, as I am sure have other Parliamentarians. I can honestly say that the public is shocked when told that the Government of Canada believes it is now appropriate to reduce expenditures on post-secondary education and health care. People simply do not believe that. They believe I have my facts wrong, that I must not be telling the reality of the situation. I then produce a copy of Bill C-96 which shows that the traditional contributions to the provinces are being reduced by S5.6 billion over the next five years. In the Province of British Columbia people are shaking their heads in disbelief at the provincial government reducing opportunities for our human resources to be educated and trained to maximize talents and expertise. Now they find that the Government in Ottawa plans to do the same thing with grants for post-secondary education and health care. They find that unbelievable.
I would like to say in conclusion that this move by the Government is, in a sense, very biased against certain Canadians. It contains a geographic as well as an income bias. Those people who come from middle and low-income families will find it even more difficult to pursue post-secondary education and obtain appropriate health care. If you live in an area of Canada which does not have a post-secondary education institution nearby to enable you to commute from home, the additional cost will be prohibitive. It is now an impossibility for growing numbers, particularly those in the outlying regions of Canada, to pursue their studies. For that reason I encourage the Government at the eleventh hour to reconsider Bill C-96 and stop it in its tracks before it goes any further.


The Acting Speaker (Mr. Paproski):: Are there any questions or comments? There being no questions or comments, I will recognize the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy) on debate.


Mr. Nickerson:: Mr. Speaker, I rise on a point of order. I was under the assumption that you would normally go from one side of the House to the other. There are several government speakers this afternoon and perhaps you would be kind enough to recognize-


Jean-Robert Gauthier: That's not a point of order.


The Acting Speaker (Mr. Paproski):: I do not consider that to be a point of order. I did not see the Hon. Member rising. He has to be pretty fast on his feet if he wants me to recognize him.


Dave Nickerson: It's just that I am so far away.


The Acting Speaker (Mr. Paproski):: Order, please. I would be delighted to listen to the Hon. Member for Western Arctic (Mr. Nickerson). I have recognized the Hon. Member for Winnipeg-Fort Garry. If the Hon. Member wants to speak
Federal-Provincial Fiscal Arrangements Act
after the Hon. Member for Winnipeg-Fort Garry has spoken,
I would be glad to recognize him.


Jacques Guilbault: And we will be pleased to listen to him.


Lloyd Axworthy: Mr. Speaker, that just proves the assertion we have made all along, that members of the Government simply are not quick enough to keep up with the Opposition.
The debate we are engaged in is probably the most important debate that has been conductd in this House all year. It goes to very vital issues which affect the lives of everyone: the quality of our education and the quality of our health care. It is very important that in this debate everyone attempt to deal with the issues in a clear and cohesive way, and with the proper information.
I want to draw the attention of the House to comments made by a Conservative Member of Parliament from the Province of Manitoba, the Member for St. Boniface (Mr. Duguay). In committee hearings on Bill C-96, which took place on Monday, June 9, the Member for St. Boniface was accusing the Government of Manitoba, which appeared that day, of engaging in the worst and biggest piece of disinformation since the days of Tokyo Rose, a person who I presume was in operation before the Member for St. Boniface was within range of conscious hearing.
I make the case that if the Member for St. Boniface was a little more interested in serving the interests of the people of Manitoba and less in acting as a flack for the Minister of Finance (Mr. Wilson), he would not have engaged in a very serious and inexcusable development of information that was not accurate, thereby twisting and distorting the case which was being made.
The Member for St. Boniface was trying to make the case that the present provisions of Bill C-96 were more than generous, that they would be of great help and assistance to those people who want quality health care and education in the Province of Manitoba, and that it was one of the most fair and equitable measures which could be instituted. He cited some figures which indicated that during the period from 1979 to 1985 there was only a 7 per cent increase in funding under the Established Programs Financing and a 50 per cent increase in inflation. Those are not the facts. That is simply not the case. In fact, for that period of time the funding under the Established Programs Financing increased 106 per cent and the rate of inflation was only 80 per cent. There was a net 26 per cent increase in federal funding for education and health care. This totally and completely refutes the facts alleged by the Member for St. Boniface.
Why are members of the Government so intent on distorting? The reason is in part that they know that this Bill is a clear contradiction of a commitment which was made by the presesnt Prime Minister (Mr. Mulroney) in August of 1983 when he promised all the provinces a fair share of funding for

June 19, 1986
Federal-Provincial Fiscal Arrangements Act
health and education. On August 24, 1983, the Prime Minister spoke in the Crocodile Room of the Peter Pan Motel. We see that the Prime Minister has substantially up-graded the places in which he stays. It is a big jump from the Peter Pan Motel in New Glasgow to the Pierre Hotel in New York.
In the Crocodile Room of the Peter Pan Motel the Prime Minister declared, with all the wonderful sincerity to which Canadians have become accustomed, that the Government would restore the federal share of health and education to a minimum of 50 per cent and that in some places such as New Brunswick and British Columbia it would be more than 50 per cent. Those brave words are now being camouflaged by the statements of the Members opposite as they realize that the real intent of this Bill is to substantially reduce the federal share in these programs.


Jacques Guilbault: Crocodile tears.


Lloyd Axworthy: My colleague reminds me that from the Crocodile Room to crocodile tears is now the basic formula for Conservative Members of Parliament. What a difference two years makes, and what a difference two years will make in the future.
I would like to speak about what this debate means to the individuals involved. The net result of EPF cut-backs for the Province of Manitoba by the year 1990-91 will be a loss of $89 million. You could take the figure even higher if the Government had committed itself to the principle of the Peter Pan Motel statement and the shortfall would be $300 million.
What that $89 million means for university students is a doubling of tuition fees from $989 to $2,000 a year. Put yourself in the place of a family who wants their child to go to university. Think of the difference it will make. What will it mean for a lot of modest income families who have already been hit by an excessive number of tax increases in the Government's Budgets? What it really means is a large number of students will not be able to attend university in Manitoba. That is all it means. They simply will not be able to go.
Let me give you another figure to put this thing in perspective. The proposed shortfall in funding amounts to the entire operating budget of Manitoba's community colleges. Once again the province is faced with either raising taxes substantially or cutting back on the opportunities for people to receive training in community colleges.
The Hon. Member for St. Boniface (Mr. Duguay) has been a prime spokesman for the Conservatives, telling us what awful things the Liberals did when in Government. I tell you that when it came to community colleges, the federal Government assisted the Province of Manitoba. We assisted in substantially expanding Red River Community College to the extent of 1,200 seats. We brought in a new business management program for the University of Manitoba. We helped build a
brand new technical vocational high school which is available to students of all ages on a 24-hour basis, six days a week. We assisted in developing the Keewatin community college and developed a new program at the University of Brandon so they could reach out to native people around the province. We expanded opportunities for community college education. The present Government is reducing those opportunities. That is the difference between the two Governments. We believed in education as an investment. We believed in giving people the opportunity to develop new skills to meet new challenges in the workplace. We did not undertake programs which would cut back on those opportunities.
Let us talk for a moment about health care in the Province of Manitoba. The shortfall resulting from this new Act will equal the total of all doctors' fees paid in the province. We know what a difficult problem it is for the provinces to negotiate acceptable fees for doctors. We see this incredible tragedy occuring in Ontario. Yet here we can equate the cutbacks to the total of all doctors' fees. Another figure is even more dramatic. The shortfall under this legislation amounts to the full operating cost of 78 of 80 hospitals in the Province of Manitoba. However you calculate it, it amounts to complicity by 210 members of the Conservative caucus from one end of the country to another in an act of severe surgery on our health care system. There is simply no way we will be able to maintain the quality of service we require.
I must appeal to Conservative Members of Parliament who know better. They have been involved in education and in health care and know what the requirements are. I appeal to their best judgment. Why do they allow those sort of crazy characters in the Department of Finance to get away with this? We have heard so much from Conservatives about how the market dictates and we have seen the results. The fields of energy and trade are in total chaos. The economic structure of this country is dissolving. Why do they allow the public sector to withdraw from those areas which clearly have to be supported by public funds?
I think what they are gambling on is that somehow the provinces will be unable to withstand the political pressure in their own jurisdictions and will have to maintain the quality of service. Do you know what that means for an average Manitoba family by the year 1990-91, about four years away? It means an additional tax load of $1,200. This is not acceptable. The Government says we all have to share in the sacrifice involved in bringing the deficit down. We all have to share in the great national goal of getting our fiscal house in order. Yet how can they argue that the burden is being shared equally when the top 3 per cent or 4 per cent of income earners get a grab-bag of tax benefits such as the $500,000 capital gains exemption? That is sheer discrimination. That is not sharing the burden equally.
We go back to that famous phrase of the Minister of Finance. He said what we have to do is encourage people to get richer and that will help the economy grow. Look at the price we have to pay. Look at the anguish created.
June 19, 1986

The Government says that the most important economic initiative it has put forward is the free trade proposals. The Prime Minister says he is going to fight an election on making Canada more competitive and productive. We are going to do battle with those Americans under the free trade system. He is asking us to undertake a great leap of faith, but he then ties anchors to our feet.
How do you become more productive when you cut back on education? How do you get more researchers, better managers, more productive industries when you cut back on universities and community colleges? How can you tell Canadians to go out and take on the world and become smarter and brighter when you cut back on research programs? We heard today in the House that $60 million is being cut from small business research programs. How do you expect Canada to meet new competition if you bring the barriers down and force us to go out and compete with the U.S. or the Japanese or the Europeans who put far more money into their educational programs, not to mention research and development? Yet we are cutting back. What an incredible contradiction. It makes you wonder who formulates public policy.
We have the Department of Finance sort of shrinking our ability to educate and train people and do research. We have the Prime Minister on television on Monday night saying that this is Canada's chance to grow and prosper. We are talking about the charge of the light brigade in this House. We have a bunch of people who think that somehow it is romantic to run into a total and complete wall of fire, and destroy the country while we are doing it. There is nothing attractive about that. If that is the kind of risk the Prime Minister is putting on the table, then I suggest he read the history of British generals and see how many times they made mistakes, because that is what he is asking us to do.
I am here today to say that in Manitoba, a province of a million people, a productive, a useful province, look what the Government is going to do to it. It is going to squeeze it dry and force people to leave. It is going to force it to cut back on the very institutions that have given vitality to our province. We are not big and rich in resources. We do not have the kind of economic dynamics of southern Ontario, and we rely on our wits and the skills of our people to survive. We take great pride in our institutions.
In my constituency we have one of the best universities in the country, the University of Manitoba. It has supplied everything from the ambassador of Washington to half the scriptwriters in Hollywood. This will all come to an end soon, because this Government is going to turn off the tap.
In the Province of Manitoba we know we must move and change our economy. We must shift into a higher phase of high technology to allow our resource sectors and our agricultural sector to become more productive.
Federal-Provincial Fiscal Arrangements Act
In the meantime the Government wiped out the National Research Centre that was going to Winnipeg.


Mr. Dick:: You had too much.


Lloyd Axworthy: They say we had too much. What a stupid statement to make. How can they say that a province can have too much research. How can they be so silly, as that Conservative Member, that somehow by getting even, by having some kind of political revenge movement you are going to cut back on the ability of a province to help its farmers and manufacturers become more productive? That shows the kind of peevish, small mindedness of this Government, when its whole attitude is that it would rather wreak some degree of momentary political satisfaction, and sacrifice an opportunity for an important region of this country to keep up with the modern demands of a new age.
It is no wonder this Government is falling into disfavour. It is no wonder that the Prime Minister in the Province of Manitoba has an approval rating of 22 per cent, the lowest record of any Prime Minister in this country in that province. It is no wonder when the Government is cutting back on the hospitals, the research centres, and the community colleges simply to show how tough they can be. I will tell you, it will not take long for the people of Manitoba and the people of Canada to show them just how wrong they are. The clock is ticking and the time is running out.
The point of the debate today is that in the meantime a lot of hurt can be done. A lot of students will not be able to go back to school. A lot of people will not get the kind of health care that they require, or the outreach programs in the inner City of Winnipeg and the northern communities of our province. The people will not have the kind of health care they require simply because a smug, self-righteous group is saying it wants to cut back on Government expenditures. It is going to share the burden. There is no sharing of a burden, the Government is simply shifting the burden to those least able to pay and those regions least able to support those programs. As long as we can we will oppose the intent of this legislation and make an appeal to the people of this country to give a clear message to the Conservative Members of Parliament, that they have gone too far.


Mr. Ricard:: Mr. Speaker, I listened with great interest to what the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy) had to say. In fact, last week, I had a chance to visit the beautiful city of Winnipeg. I noticed that in his speech, the Hon. Member said that we were hardly interested in education and were cutting back on education. I wish he would explain something for me. I visited the Canadian Research Institute, an impressive $35 million building that is completely empty and that was supposed to be used by the National Research Centre. I would like to know why the National Research Centre decided against occupying this building in July 1984, a month or two before the election.

June 19, 1986
Federal-Provincial Fiscal Arrangements Act [English]


Lloyd Axworthy: Mr. Speaker, I thank the Hon. Member for the question. The answer is very simple. In the first economic statement put forward by the present Minister of Finance the Government of Canada cut back its allocation to the NRC. It was as simple as that. The NRC had been given a grant to put up a building, to buy the equipment and put in the staff, to make that a major centre for industrial technology in Canada. We were going to become a world class centre.


Paul Wyatt Dick: Why didn't you people fill it? It was empty when you people were there?


Lloyd Axworthy: Once again we have one of these stupid comments from a Conservative Member. The fact of the matter is that we made the decision to locate the NRC centre there, we provided the funding, the construction was started, the staff were moving, and at the very time the Government made its decision in the economic statement staff were on their way from around Canada to go to Winnipeg. Everything was planned. Everything was going into place. Everything was going to happen-


The Acting Speaker (Mr. Charest):: Order, please. Does the Hon. Member for Lanark-Renfrew-Carleton (Mr. Dick) have a question or a comment?


Guy Ricard: I don't think the Hon. Member understood my question. I mentioned the National Research Centre's decision not to move into the building in July 1984. If I remember correctly, we were elected in September 1984. I wonder how the present Minister of Finance (Mr. Wilson) could have planned a Budget to prevent staff and equipment from entering the building, since the NRC's decision was made in June 1984. Your Government built the Institute. If that is how the Liberal Party was spending or spreading money around at the time, I wish the Hon. Member would explain why a building that cost $35 million is empty.


Lloyd Axworthy: Mr. Speaker, let me explain something about the geography of Manitoba. It gets very cold in the winter and you do not move into a building that has not yet been built. The building had not been completed until 1985. The decision to build the NRC was made in 1984. The funding was allocated, planning was underway, the construction was started and the hole was dug. In June of 1984 all you had on that site was a big hole and some basic mouldings going in. The building was not completed until 1985.
When the present Government was elected in September of 1984, in its economic statement of, I believe it was in November, the Government eliminated the funding that would have allowed the building to be filled. Now they are racing around trying to find some replacement for it. You cannot fill a building that has not yet been completed. All the planning had been done and the NRC was ready to go, until such time as
this Government withdrew, cut its budget and said it would not go ahead with the NRC in Winnipeg. That is why a lot of people in Winnipeg will never forgive this Government; it took away their future.


Mr. Ravis:: Mr. Speaker, as a western Canadian I think that the pie should be shared equally across the country. When the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy) was a Minister in the previous Government, it seems to me that there was something in the neighbourhood of $700 million to $800 million poured into his riding. As a westerner from Saskatoon, where we did not have any Liberal Members at the time, I wondered why all this extravagance was taking place in one particular constituency and one city and was not being shared throughout the country.
We now have empty coffers and are forced to pull back. I think that is the prudent step to take when one has overspent. The Hon. Member believes that it was realistic to overspend and cause an imbalance in those days. Why should he stand up now and be so self-righteous and criticize us for trying to be prudent with government spending?


Lloyd Axworthy: Mr. Speaker, first, the Hon. Member has his figures wrong. The fact is that a number of important federal investments were made in the Province of Saskatchewan. For example, there was the major decision to move the Hydrology Institute to the City of Saskatoon to provide that city with a very important research facility. If the Hydrology Institute went to Saskatoon because of a Liberal decision, we equally felt that Winnipeg should be designated as a centre of industrial technology, as part of a national research plan. There was no attempt to concentrate on one region or the other. We were attempting to develop an industrial strategy for western Canada.


Donald Paul Ravis: What about the other $700 million?


Lloyd Axworthy: The Member throws figures around, but the figures are not accurate. The fact is that we signed industrial agreements in every province. Furthermore, we left a lot in the regional industrial fund so that Members opposite could make the same kind of claims after they came to Government, as a result of a program that we put into place.
We were also building major highways in western Canada. We undertook the $640 million modernization of the railway system that has been a very important catalyst in giving western Canada not only a modern transportation system but in helping it to industrialize.
Members opposite keep coming back to the point that they are trying to be prudent. What is prudent about giving a special deal to 3 per cent or 4 per cent of the wealthiest Canadians on a capital gains tax write-off, while at the same time charging average families in Manitoba and every other province an extra $1,200? That is not being prudent, that is being unfair. That is the difference.
June 19, 1986

The Government says that it wants to trim its sails. We were doing the same thing and we had a deficit reduction plan that was on the same track.


Some Hon. Members:: Oh, oh!


Lloyd Axworthy: They laugh. The fact of the matter is that our formula was working as well as theirs.


Paul Wyatt Dick: You did not convince the Canadian people.


Lloyd Axworthy: It was just as important because we set the ground work for ecomomic recovery in this country. We brought the inflation rate down to 4 per cent or 5 per cent. That began to happen under our Government because of our initiatives. The fact is that the Conservatives can take advantage of it, but they should be on their knees every day thanking God and the Liberals for helping to create economic recovery in this country.


Some Hon. Members:: Oh, oh!


Paul Wyatt Dick: Do you think anyone believes you?


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


Paul Wyatt Dick: If the Liberal Party was doing such a magnificent job in lowering inflation and reducing the deficit, why did the Canadian people not believe the Liberals when they tried to sell their great plan in the summer of 1984? They kicked you out and elected the biggest majority in history.


Lloyd Axworthy: If the Hon. Member is going to use that as an indicator, I would simply ask him, if he is doing such a wonderful job, why has the percentage of popular support for his Party fallen from 58 per cent to 37 per cent in two years? That has been the most precipitous drop in public opinion of any Government in the history of Canada. If the Member is typical of most Tories, who simply gauge the effectiveness of their policies by public opinion polls, I suggest he should be far more concerned about what his Government is doing and should vote against this legislation. It is legislation like this that has provided that major drop in support of his Government after only two years.


Mr. Kaplan:: The Hon. Member referred to the construction of the National Reseach Council in Winnipeg. What were the Conservatives saying about that during the last election campaign, while construction was still going on? Did they indicate that they would shut it down if they were elected, or did they indicate that they would do something for science? We know what the Conservatives ultimately did for science.


Lloyd Axworthy: Mr. Speaker, that is an interesting question which perhaps relates to the previous question. The Conservatives made many promises. However, the closing down of the NRC was never mentioned. In fact, several Conservative candidates with whom I debated, with some success at the time, were saying that they supported that initiative. They
Federal-Provincial Fiscal Arrangements Act
thought it was wonderful that a city in western Canada would be given the opportunity to move into a new high-technology age. They endorsed the concept that all the regions of Canada should share equally in the development of new high-technology-
When that decision was made in November, 1984 it came as a tremendous shock to the people of that province. They realized that our chance to move into a new age of high-technology was stopped suddenly and dramatically short by a short-sighted Government.


The Acting Speaker (Mr. Paproski):: The period for questions and comments has terminated. Debate.


Dave Nickerson: Mr. Speaker, I am pleased that you were able to recognize me. I understand that it might cause considerable eye strain to see from one end of the room to the other, being so far away.
The subject of Bill C-96 is not only worthy of debate, it is worthy of prolonged debate. On the one hand it concerns the very heart of social expenditures in Canada, expenditures on health and education, while on the other hand it goes to the way Canada ought to arrange its national finances. Therefore, the subject matter has been worthy of prolonged debate, and the Government has seen to it that there has been adequate opportunity for that debate. The time comes when constructive criticism degenerates into mindless opposition. That is what we have seen happen over the last few days. For that reason, it was necessary, by means of time allocation, to put the Opposition out of its misery, so to speak.
We have witnessed peculiar spectacles in the House over the last couple of days. We have seen a contest between the Hon. Member for Humber-Port au Port-St. Barbe (Mr. Tobin) and the Hon. Member for York South-Weston (Mr. Nun-ziata) as to who could use up the most parliamentary time and do a better job at preventing Parliament from doing the legitimate job for which it was elected. I believe that one Member spoke for two and a half hours while the other spoke for some three hours, saying absolutely nothing during the whole period. As parliamentarians, we cannot countenance that type of negative activity.
I am pleased to have the opportunity to speak on behalf of the Government this afternoon and to set the record straight. I will deal with the truth, which I know is a rather alien concept for some Members opposite. However, that is what I intend to do this afternoon, because we have heard much from the other side and not nearly enough from the Government side.
The intent of Bill C-96 is to preserve the integrity of the system of health and education funding in Canada. When one considers the financial mess left by the previous Government, it will become evident that it put the whole social system in jeopardy. Were we to continue along the same road as the previous Government, making expenditures that were much greater than revenues, building up a greater debt and having to devote a much greater proportion of revenues to interest

June 19, 1986
Federal-Provincial Fiscal Arrangements Act
payments and amortization on that debt, thereby allowing even less to be spent in these important social areas, the long term effects would have been obvious.
The Government, when it came into office on September 17, 1974, had to put in place a system, a plan, over a series of years, because it has taken a long time, many years of Liberal Government, to get into this mess, and we cannot get out of it overnight. We know that it will take several years. We had to put into effect a plan that would preserve necessary social expenditures on the one hand, and put our financial house in order on the other. That was done. It was announced on three major occasions, with the economic statement in 1984 and with the Budgets in 1985 and then again in 1986. Most of the elements of the plan are now in place. If we look at the projections, we will see that by about 1990-1992, the trend will have been altered. We will then be back on a sound financial track.
What the Bill does is ensure enhanced payments to the provinces for health care and for higher education. It is not cutting back at all. This is a red herring that has been dragged into the debate by Hon. Members opposite. Nothing could be further from the truth, because what we do with the Bill is ensure that payments will continue to increase to the provinces. Payments will remain at the 50 per cent level, the magic figure that we have worked on for so long in this country. We will not, I repeat, be cutting back. In fact, transfer payments under EPF from the federal Government to the provincial Governments will increase at the rate of about $1 billion a year over the next five or six years. At present, the transfer of payments amounts to $16.7 billion a year. If we look forward to the 1990-91 fical year, by that time they will have increased to $20.7 billion a year. I defy anyone on the other side to explain how that might be a decrease. To my way of thinking, it is an increase of $4 billion a year in transfers to the provinces.
In the time period to which I have just referred, the total aggregate transfers from the federal Government to the provincial Governments will be some $90 billion, and that will be an increase of $25 billion over the amount of moneys transferred in the previous five-year period, a very significant increase in the amounts of money that will be made available to the provinces and territories of this nation.
Other Hon. Members have taken the opportunity to describe the real or imagined effects on the provinces from whence they hail. I, would like to do something similar with respect to the area of Canada which I have the honour to represent in the House.
The transfers under EPF to the Northwest Territories, in 1985-86, amount to $31.6 million. It is not as big as the amounts considered when one speaks of the Province of Ontario or the Province of Quebec, but it is a very significant amount of money. In the 1986-87 fiscal year, this amount will be increased to some $34 million. Here again, we have an
increase of $2.5 million, a significant percentage increase. This is important; maybe relatively even more important to the area that I represent than it is to other parts of the country.
We have made great progress in the last 30 years or so in the field of health care. It was not that long ago that major killers in the area I represent were diseases like tuberculosis and pneumonia. Nowadays, very few people, if any, die of these diseases. The expectation of living to a ripe old age has been increased substantially. The infant mortality rates have decreased equally substantially. This has been due to the hard and diligent work of people in the employ of the Department of National Health and Welfare, the Health Department of the Territorial Government and, indeed, medical practitioners in the private sector. However, this has not been done without money. Anyone who has lived in that part of the country will know the importance of federal dollars that have gone into the area to help pay for these greatly appreciated increases in the level of health care in the territories. It is the same when we come to education.
In many areas, formal education is only a generation old; two generations at the most. We have a long way to go. Those moneys used for the purposes of higher education will be of inestimable benefit to the people of my area. We know it is something on which we must concentrate. The manner of life has significantly changed and will continue to change. Our young people must have the advantages of a full and proper education at the highest level if they are to be able to take advantage of the new opportunities as they occur.
Indeed, the financial provisions of the Bill go out of their way to assist those lower income areas of Canada. For the 1985-86 fiscal year, there is to be a supplementary equalization for those low-income provinces and territories, in the amount of some $285 million. That demonstrates that the Government of Canada remains generous, as generous as it possibly can be, with those areas of the country that are probably unable to afford all these benefits out of their own pockets. It is part and parcel of the Canadian home, where we help those who are least able to help themselves. However, the Government must bring expenditures more into line with revenues. This was the mandate given by the people of Canada to the new Government in 1984, because they realized, under the old system, that we were on the road to ruin.
If we look at the financial plan we find that by the year 1990-1991 the passage of this Bill will result in a saving of some $2 billion a year, and the aggregate saving between now and then, a five-year period, will be in the region of about $5.5 billion. I should note that projected expenditures of the Government of Canada in that year, 1990-91, by a combination of incentives, will be reduced by about $27 billion. The reduction of $2 billion in EPF transfers is, to my way of thinking, quite reasonable to expect. I think there will easily be compensation by increases in efficiency, greater efficiency in the provision of necessary services in the health and educational fields to Canadians. I do not think that it will bring about any unnecessary hardships on the citizenry of Canada.
June 19, 1986

In conclusion, I believe that this is realistic and necessary legislation. It combines fiscal responsibility on the one hand with a real commitment by the Government to ensure high quality and high quality education for all Canadians on the other.


The Acting Speaker (Mr. Paproski):: Are there questions or comments? The Hon. Member for Outremont (Mrs. Pepin).


Lucie Pépin: Mr. Speaker, after listening to my colleague bragging about the merits of Bill C-96 I would like to ask him how the provinces can be expected to administer health services after being deprived of millions of dollars? Can he explain to me how they will manage to make these budget cutbacks? By reducing the number of hospital beds? Or by closing down certain departments or clinics? Or emergency services? In addition, will they have to reduce services to the elderly? Or will they cut down on cancer research?
Earlier I was listening to my colleague who said that tuberculosis is on the decline, that we have fewer cases in Canada. I should simply point out to him that the number of tuberculosis cases in Canada has been increasing this past year.
Speaking of health, one of my colleagues who was a director of a major hospital in Montreal told me that, given the new AIDS cases, hospitals have limited accommodation because these cases cost a lot of money. When budgets are slashed, hospitals must limit the number of such patients.
I would like to know whether my colleague can answer these questions. Would he answer this: How does he think hospitals will be able to take in more patients and administer with that much less money-$8 million in this case?


Dave Nickerson: Mr. Speaker, there we have it again. The Hon. Member continues to refer to budget cuts. In fact, that is not the case. For the province of the Hon. Member, the Province of Quebec, in 1985-86 the payment will be $4.09 billion. The following year, in 1986-87, the amount will be $4.33 billion. That is an increase of about one-quarter of one billion dollars. I would imagine that, especially with the Liberal Government in Quebec, which the hon. lady seems to favour so much, the province will be able to use that additional one-quarter of one billion dollars for many good and useful purposes. My suspicion is that it will not be forced to cut out hospital beds. Rather, with that amount of new money it could very well bring into being even more hospital beds than are in place now, if it does not choose to divert the money to some other purpose.
With respect to the question of medical research, it should be noted that in addition to EPF transfers the federal Government spends something in the order of $1.5 billion annually in other health-related fields. That is direct spending. Some of
Federal-Provincial Fiscal Arrangements Act
that money would go to medical research. There are also granting institutions funded by the Government that put money into that very good and valuable purpose. I think that the fears which the Hon. Member brings to the floor of the House of Commons are completely unfounded.


Lucie Pépin: Mr. Speaker, my colleague mentioned the Government of Quebec, so I will refer him to the statement made by Mr. Gerard-D. Levesque about the financial cutbacks advocated in Bill C-96. In my opinion, the Province of Quebec does not feel particularly pampered, nor is it particularly pleased with what is being proposed in Bill C-96. I think that Mr. Levesque reacted publicly and said to the federal Government that before making such drastic cut-backs-he does not think you are doing them a favour-the federal Government might be well advised to clean up its own act, tend to its own garden as it were, and then cut down federal expenditures so as to be able to make more equitable equalization payments to the provinces. That is in response to what he said about the Government of Quebec.
This may surprise the Hon. Member, but once more, when we are speaking about education, I would really like to know how these cut-backs will be made. There are certainly departments in universities which will have to restrict the number of registrations and universities which will have to close.
As far as research is concerned, there is cancer research in the field of medicine, as well as architectural research and high technology, which is now very important in our universities. There have been major cut-backs in these areas which everyone has deplored.
Could you explain once again how the universities will apply these cut-backs in your opinion?


Dave Nickerson: Mr. Speaker, the question is the same except with the word "education" substituted for "medical services". My reply is exactly the same with the interchange of those two concepts.
We are not cutting back expenditures; we are increasing them. I am not surprised that the provinces are saying that they would like more. One who has been part and parcel of a municipal Government knows that when the province comes along and says: "You will only receive a certain amount of assistance to fund a new sewer project", it is a natural reaction to say that more is needed. So of course the provinces are saying that they would like more. However, when they come to think about it, when they realize the financial situation of the provinces and of Canada as a whole, they must come to the realization-any sane and reasonable person would-that what the Government is doing in this Bill is the fairest and most honest for all concerned.


Robert Phillip Kaplan: Mr. Speaker, I would like to ask a question of the Hon. Member. I listened with interest to his remarks.

June 19, 1986
Adjournment Motion
Coming from the region of Canada from which he does, the most one would have expected from him in the way of support of this Bill is that he would have remained silent in his seat. However, for him to stand up and take the position that what is being proposed in this Bill is good for the people who sent him to speak for them here in this place is an amazing proposition.
When he was answering my colleague's question he took the position that there would be no cuts because, after all, every year the provinces would receive more under the new formula than they would have received before. He said that, naturally, they would like still more, but that is just human nature. I have some news for the Hon. Member. We are not talking about the simple fact of human nature; we are talking about the existing agreement which was cut back by the present Government. When we look at the "might have been" we are talking about what his part of Canada might have received if the present Government had allowed the old arrangement to continue into the future, instead of cutting back that arrangement established by the Liberal Government. When one looks at that and compares it to what has been imposed upon Yukon, the Northwest Territories and the other provinces by the new Government, then these are cuts. These are multi-billion dollar cuts when added up over a five-year period.
The people he represents are not as stupid as he hopes. The Governments are not asking to be given more than they would otherwise receive, on the basis of human nature. What they are saying is that they have done their planning on the basis of a federal Government which believed in medicare and which got the provinces to enter the medicare system by promising it generous support forever. That Government is now falling back on the Constitution and what it considers to be hard times, although when one looks at some of the other items on which this Government has money for it is hard to say that the Government is facing the realities of hard times.
Because his constituents know this, I want to ask the Hon. Member this question. Is the real situation not that there are small increases in the forecasts provided for medicare, and these increases are far less than the increases which would have prevailed if the existing agreement had been continued into the future? Is that not the real situation?


Dave Nickerson: Mr. Speaker, by that question, the Hon. Member displays his ignorance of financing systems that have been put in place for the Northwest Territories. He should have known that the system there is much different than it is in most parts of Canada. In fact, most transfers of funds from the federal Government to the territorial Government take place, not by virtue of EPF or CAP but rather under a system of operating capital subventions from the Department of Indian Affairs and Northern Development. That is where it is carried in the federal Budget.
The new Government did what the territories wanted for many years but were never able to negotiate previously, and
that is to put into effect the system of formula financing. This system ensures that the Territories receive on an escalating basis those moneys they need for the very important purposes of health and education. In fact, what is happening in the Territories is that each year an ever increasing amount of transfers is taking place, and that will happen until the Territories have their own form of revenue, presumably by way of royalties from natural resources.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Paproski):: It is my duty, pursuant to Standing Order 66, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: The Hon. Member for Swift Current-Maple Creek (Mr. Wilson)-Finance-Transfer of family farms-Tax inquiry; the Hon. Member for Broadview-Greenwood (Ms.McDo-nald)-Trade-Imposition of tariff on imported books- Request for withdrawal, (b) Government policy; the Hon. Member for Argenteuil-Papineau (Mrs. Bourgault)- National Revenue-Control of charitable organizations.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Wilson (Etobicoke Centre) that Bill C-96, an Act to amend the Federal-Provincial Fiscal Arrangements and Federal PostSecondary Education and Health Contributions Act, 1977, be read the third time and passed; and the amendment of Ms. Copps (p. 14483).
Mr. Frith:: Mr. Speaker, I rise on a point of order. Have the 10 minutes of questions and comments expired?


The Acting Speaker (Mr. Paproski):: There were more than 10 minutes.


Royce Herbert Frith: My apologies.


Steven W. Langdon: Mr. Speaker, the Hon. Member will be able to make his comments after my speech.
June 19, 1986



It is remarkable to think how many people in Canada miss the marvellous goings-on that take place in the House of Commons on quiet afternoons like this one. It is an experience which few people want to miss to see the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy) praying for the Conservative Party to get on its knees to thank the Liberal Party for the great prosperity which was left to it when it took office. Perhaps it is an even more shocking experience for Canadians to listen to the Hon. Member for Western Arctic (Mr. Nickerson) talk about the mandate given the Conservative Party when it reached power. Of course, the mandate with which it reached power was a mandate directly and completely contrary to what the Government is now planning to do with respect to this piece of legislation.
For those who have been trying to make sense of what is taking place here today, for the last 45 minutes or an hour there has been a debate between a very black pot and a very black kettle, each attempting to point out how dark and dingy the other is. We are talking about a reduction which has gradually taken place since 1977 in the level of support provided by the federal Government to the provincial Governments.
Looking at the percentages of support the federal Government provided to the provinces in 1977-78, the federal share of health and post-secondary, education financing was 48.7 per cent, almost 50 per cent. At that time, the Liberal Party began to reduce systematically the amount of money which was to be made available for the provinces to provide these basic services to Canadians. By 1982-83 the figure had fallen to 42.6 per cent, reflecting the elimination of a revenue guarantee which provinces had enjoyed in the past. By 1985-86 the Figure was much the same when the Conservative Party took power. Then the Conservative Party, with a mandate to return to the percentages of 1977, instead followed precisely in the footsteps of the Liberal Party before it by cutting back yet further the amount of direct Financial assistance provided to the provinces for these basic services.
According to the stastistics, by 1988-89, 39 per cent of the cost of health and post-secondary education will be covered by federal expenditures. By 1990-91 only 36 per cent will be covered. In other words, we started off in 1977 with about half of these crucial expenditures covered by the federal Government and we will end up in 1990-91 with just over one-third of them being covered.
The Hon. Member for Western Arctic can make the case that this is not a cut and the Hon. Member for Winnipeg- Fort Garry can make the case that this is all the fault of the Conservatives, but the actual fact of which the people of Canada should be aware is that this has been a systematic attack, first by the Liberals and then by the Conservatives, on the capacity of the provinces to provide for health and postsecondary education services.
Federal-Provincial Fiscal Arrangements Act
Perhaps money spent on health and post-secondary education is looked upon by some Hon. Members as wasted money, as money that goes down the drain. That seems in fact to be the philosophy that has been followed in the attempt to cut back support by the other two Parties in the House. In fact, such expenditures are anything but wasted. They are anything but an attempt to lose possibilities for Canada. Above all it is an investment just like any company makes; only in this case it is an investment by a country in the skills and abilities of its people. In the case of health, it is an investment in the workforce, students, and retired people who will be better off. As a consequence of this investment, they will be able to contribute better to the country. In the case of post-secondary education, it is even more clear-cut. We are talking about an investment in the institutions and agencies which provide people with the skill and ability to make a contribution to society and to be competitive in the future international economy.
These cut-backs have taken place systematically from 1977. They are in fact counter-productive to the future of Canada. They are ripping away at the very basis of our future. They are, to use an old English cliche, very much pound foolish and penny wise. They are attempting to cut back in areas where cut-backs will have devastating effects upon the future of our young people and upon the future of our workforce, indeed upon the future of our entire population.
At this point I should like to talk about mandates. The Conservative Party of Canada fought cut-backs when it was in opposition. It said that cut-backs would have a damaging effect upon the country. For instance, the PC campaign handbook for the 1984 election specifically indicated the PC position in respect of post-secondary education. In part it read:
We would return to the 1977 funding formula though we cannot compensate the provinces for their six and five funding losses.
Perhaps it was nice of the Conservatives to admit that they would not compensate the provinces for past losses, but at least there should have been honesty. They should have said to Canadians that if they were given a mandate to do it, they intended to cut back even further than the Liberal cut-backs of the past.
Every Canadian has suffered and will suffer as a result of the cut-backs. I could take you, Mr. Speaker, through province by province to give examples of the kinds of cut-backs which have occurred in hospitals and universities. In fact, ordinary Canadians are bearing the burden for what has taken place. However, it is particularly striking to see the consequences of the effort of the Conservatives to accelerate cut-backs and to take cut-backs yet one step further. I should like to quote from a letter which one of our representatives received from Robert Bourassa, the Premier of Quebec.

You probably know-
-Mr. Bourassa was saying-

June 19, 1986
Federal-Provincial Fiscal Arrangements Act
-that the Quebec Finance Minister, Mr. Gerard D. Levesque, announced in his budget speech on May 1, 1986, that our Government has had to imposes surtax on business. This surtax will compensate for the shortfall in revenue of the Quebec Treasury caused, on the one hand, by the $66 million payment which Quebec did not receive under the equalization program, and on the other hand, by the $82 million reduction for 1986-87 in transfer payments for health care and post-secondary education. The Quebec Government has promised to reconsider this surtax imposed because of federal cut-backs if the federal Government keeps its commitment regarding equalization, withdraws its Bill C-96 and initiates negotiations with the provinces immediately.
Mr. Speaker, this Government told Canadians that there would have to be discussions and negotiations with all the provinces before such changes were made. However, the Government did not keep its promise. It decided to do the opposite. This Government decided to do exactly what the Liberal Government had done before. This Government decided to make cut-backs, and even though the Members opposite pretend that they are not cut-backs, it has been shown that they are indeed cut-backs and that will be very hard on all Canadians.

It is with sadness that we see this kind of back stabbing of the Canadian people, this elimination of investment which is so crucial to our future health care and post-secondary educational facilities.
Surely it is possible, somehow in this Parliament, to have us come to our senses. These expenditures must be made. We should see them as investments in the future of Canada and cease this bloodthirsty attack on the tremendous needs of people across the country in terms of their future and the future of the country in respect of post-secondary education and health.


Royce Herbert Frith: Mr. Speaker, I have a very short question. Would the Hon. Member explain his idea of how the six and five program applied to the delivery of health care when it was instituted in 1982?


Steven W. Langdon: Mr. Speaker, I was quoting from the Conservative campaign handbook at that stage. I assume that under the six and five program there were attempts to reduce government expenditure, and as part of that reduction in government expenditure there was damage done to the amount of funding which was supposed to be available for postsecondary education and for health care. I made that reference because the key part of the commitment in the PC campaign handbook was to provide full funding from the past, but that mandate has not been respected. Indeed, the Conservatives have gone in the opposite direction. The Conservative Government has followed the course of the previous Government rather than respecting the promises which were made to the Canadian people.


Royce Herbert Frith: Mr. Speaker, would the Hon. Member admit to the House so it is a matter of record that when the six and five program was introduced it specifically precluded health care?
Health care was not affected by the six and five programs. I want that clear for the record, Mr. Speaker.


The Acting Speaker (Mr. Paproski):: The Hon. Member for Champlain (Mr. Champagne). Excuse me, but did the Hon. Member for Essex-Windsor (Mr. Langdon) have any further comment?


Steven W. Langdon: Yes, Mr. Speaker, I would like to make a comment. I would prefer anything that I say to be put on the record by me rather than by the Hon. Member for Sudbury (Mr. Frith), much as I respect him. I think, however, that the six and five program, while it may not have cut back health care funding, did have an impact with respect to postsecondary education. If the former Minister had been following my speech closely, he might have noted that I was quoting from the PC campaign handbook with respect to postsecondary education.
[ Translation]


Mr. Champagne (Champlain):: Mr. Speaker, I listened carefully to the Hon. Member's speech, and I was astonished when he informed the House that the Progressive Conservative Government had failed to consult the provinces before it decided to introduce this Bill. I wonder whether he realizes that in November 1984, January 1985, May 1985, September, November, December 1985, we had discussions with the provincial Ministers of Finance on this matter. When he says that we never consulted with the provinces, I wish he would explain why we met with the provincial Ministers of Finance, and perhaps he would care to withdraw what he said and say: Mr. Speaker, I made a mistake, it is true the Progressive Conservative Government consulted with the Ministers of Finance before bringing this Bill before Parliament.


Steven W. Langdon: Mr. Speaker, we have here a typical case of Conservative consultation. It is consultation that consists in making announcements and decisions and letting the provinces know about them. If it is true there is sufficient consultation, why did the Quebec Premier, in his letter, and that is the letter I quoted in this debate, why did he indicate that it was necessary to negotiate with the provinces? Why would he make such a suggestion if there is so much consultation on a decision that is a very difficult one for Canadians to accept?


Bill Attewell: Mr. Speaker, I am pleased to again speak on Bill C-96.1 would like to give a little background before getting into the specifics of the Bill, because it is misleading and unfair not to do that. You cannot take this one Bill out of context without looking at the Government's record and looking at the broad range of initiatives on which we are moving ahead.
Let me go back to November, 1984 when the Minister of Finance (Mr. Wilson) made a statement of financial direction, further confirmed by the May, 1985 budget, that financial transfers to the provinces would be included in deficit reduction measures so as to spread expenditure restraint as broadly
June 19, 1986

and as fairly as possible. That announcement was made over 20 months ago.
Bill C-96 moderates the growth of the Established Programs Financing transfers as part of the general effort to restore stability to federal finances. Transfer payments, as many Members have said, are not being cut. They are still growing at a faster rate than other government program expenditures at about 5 per cent a year, as opposed to 2.9 per cent for discretionary spending. Even with the reduced rate of growth, EPF transfers will rise faster than inflation and faster than other government program expenditures. Transfer payments this year are expected to total $27 billion, $20 billion in cash transfers and $7 billion in tax points. EPF is the largest component of transfer payments. This year EPF is a $15.3 billion program contributing to the cost of health care and post-secondary education. That is approximately $508 per capita plus $42 per capita to finance extended health care services such as nursing homes. In the next five year period, EPF transfers will total $90 billion. That compares to the previous five years when total expenditures were $65 billion. It is an increase of $25 billion. To put it in another perspective, it is an increase of almost 40 per cent over the period we are discussing. As a result of slowing the rate of growth of transfer payments by 2 percentage points, some $2 billion will be saved in the 1990-1991 fiscal year.
Members will recall that there was an extensive consultation process on this important topic. The provincial Premiers met with our Prime Minister (Mr. Mulroney) in Halifax. The final decision made by the Government was for a 5 per cent increase. That, as I have pointed out, is something in the order of 66 per cent over a 3 per cent level. It is a very general rate and is indicative of the Government's care and sensitivity to these two important topics of health care and post secondary education.
This change is part of the fiscal strategy to change transfer payments to reduce the deficit by some $20 billion in 19901991, and to cut $75 billion from the projected level of the national debt by the end of the decade.
Let us keep in mind that federal assistance for health care and post-secondary education has increased from $1.1 billion in 1967-68 to some $15.8 billion in the 1985-86 period, an average compound increase over that period of about 16 per cent. Growth of EPF cash and tax transfers will continue to be linked to the growth of the Canadian economy. The need for a firm and stable financial foundation to be maintained in order to ensure the high quality of health care and post-secondary institutions must be stressed. That is very central to the thinking of the Government. I will continue because we cannot pull out only one project and talk exclusively of it without knowing the background and without being honest about the realities of the fiscal situation in the country.
At the time of the November 8 statement by the Minister of Finance (Mr. Wilson), the national debt was rising much
Federal-Provincial Fiscal Arrangements Act
faster than the economy was growing. The net public debt increased from 16.6 per cent of GNP in 1974-75 to some 45 per cent in 1984-85. As was stated, a status quo policy would result in net public debt rising to 63 per cent of GNP by 199091 and debt charges would rise to account for three-quarters of the deficit. Mounting debt burden and service pose a serious threat to the long-run growth of the economy. Those are some highlights from the statement the Minister made only weeks after we became the Government.
In the May 1985 Budget the federal Government proposed limiting the growth of transfer payments to provinces to effect savings of $2 billion by 1990-91. By 1990-91, cash transfers in respect to equalization in health care and post-secondary education are expected to represent about the same share of total federal program expenditures as they do today, which is 18 to 19 per cent. The May 1985 Budget was to reduce this year's deficit by $4.4 billion. It took 100 years to accumulate a debt of $18 billion, but it took the previous Government only approximately 15 years to create a staggering, awesome debt in the country of approximately $200 billion.
I would like to mention some highlights of the February 1986, Budget. Spending on non-statutory programs was predicted to decline by $500 million. That was the first decline in 20 years in that sector of our spending. Over the next five years, non-statutory programs are expected to grow by 2.7 per cent a year. The February 1986 Budget would reduce the deficit to under $30 billion and by the end of the decade it is expected to be cut by $22 billion. By that time our national debt will no longer be growing faster than the economy. By 1990, the deficit will be $26 billion less than it would have been had the Government not taken this responsible action and reversed the wild and irresponsible spending of the previous Government. By 1990, the cumulative effect of the deficit reduction measures will be to cut the projected growth of the national debt by approximately $97.5 billion.
I would like to touch on another initiative which the Government has taken to stop the leaks and the irresponsible spending of taxpayers' dollars. I would like to talk about the scientific research tax credits. There was an article in The Globe and Mail yesterday about Bell Canada which took advantage of an $85 million tax credit on some partnership units in a papermill in a same-day tax flip. The treasurer of that organization readily admitted that they had no plans to keep that investment. They had it for only hours but enjoyed a $85 million tax break. As announced in the last Budget, the Minister of Finance has shut that program down.
When scientific research tax credits were announced by the previous Government, a budget of approximately $200 million was allocated to it. Since the controls which should have been on that program were poorly thought out, it will end up costing Canadian taxpayers well over $2 billion, 10 times its original budget. We will also be eliminating tax shelters in recreational vehicles and yachts. We halted income splitting through interest-free loans between family members. We stopped the so-called "carve out transactions" in the oil and gas sectors.

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We prevented the use of trust to distribute investment income tax free. Those are only a few of the measures that the Government took in its most recent Budget to show the fiscal responsibility and integrity which Canadians expect of the Government.
I do not intend to go off on a tangent, but I would like to refer to a topic which I intend to address next week when my Private Members' Motion will be debated. I am going to be following through on the thrust of the Gramm-Rudman-Hollings Bill in the United States which President Reagan signed into law last December. It essentially compels that Government to achieve a balanced Budget over a five-year period, with some exceptions. My motion is rather open-ended. I want it to go to committee so that the members of the committee and, subsequently, the House can decide if legislative steps need to be taken to bring our House completely into order in terms of fiscal responsibility.
I am looking forward to some discussion on that Private Members' Motion next week because I think it is vitally important. It is a crucial subject for Canadians. There is a growing awareness of how critically important this is to the country. We are not only throwing numbers around. This relates to the fiscal health of the country and our ability to increase social programs as we want to do. Due to the bizarre spending and giving away of taxpayers' dollars for well over a decade, the Government's ability to manoeuvre and improve certain programs has been impaired.
The reality is that almost 40 cents of every tax dollar must go to service the debt which was left to the Government to tackle. We are tackling it in a responsible way. We are not turning our back on it. We have had to consider hundreds of programs which were started in past years.
I want to commend all those who were involved in the Nielsen task force which went on for approximately 18 months. It studied 989 different projects within the Government. Dozens of men and women from the private sector devoted their time to come to Ottawa week after week to take a fresh look at these programs to discover how we could eliminate waste, utilize better ideas, and use tax dollars in a more efficient and prudent way. Many of us were very pleased when the report was tabled in the House. We were pleased with the process.
The report has been allocated to the respective committees and I am very hopeful that hundreds of millions of taxpayers' dollars will be saved in the coming months and years. Never before in recent decades has any Government undertaken such a comprehensive look at how tax dollars are treated and how they should be treated. The approach taken was very comprehensive and I am expecting tremendous results from it.
Another illustration of how comprehensive our progress has been is what has happened on the job creation front. We had to create a strategy of how to control spending while creating economic growth. The record there stands for itself. With regard to job creation alone, almost 600,000 new jobs have
been created and almost 300,000 of those were for women. Youth unemployment has dropped from 18.4 per cent to 15.4 per cent since the Government was elected. Almost 60,000 jobs were created for the youth of the country.
There are other very responsible steps being taken on different social programs. Our system of unemployment insurance has not had a serious study in years and years. Now, thanks to the Minister responsible, the Forget Commission has toured the country and listened to dozens and dozens of witnesses. I am sure we are going to see a caring and sensitive approach to making improvements there.
Contrary to what the Opposition would have Canadians believe, this is a caring Government. We care so much that we want to get our financial house in order so that we can provide programs for the needy, the elderly and our youth. We are doing that while not turning our back on our responsibility to restore fiscal integrity to the Government. You cannot go on for decade after decade ignoring your revenue while spending so much. We had a Government which realized that its revenue was $65 billion but still put in place plans to spend $100 billion.
Let me repeat that Bill C-96 does not cut funding. It reduces the rate of growth of that funding by some 2 per cent a year while still increasing transfer payments by some $25 billion over five years, an increase of almost 40 per cent. Let me repeat and underscore the fact that deficit reduction is vital to the health of our economy. When interest rates and inflation fall, as they both have, it is due to better economic conditions. That has a very important impact on our health care and postsecondary education systems. They both benefit tremendously. No one cares as much as we do about the need for health care and post-secondary education systems second to none in the world.
As well, let me remind everyone that the job outlook some two years ago was pretty bleak for the youth of this country. However, thanks to the restored confidence the people of Canada have in this Progressive Conservative Government, the outlook for our youth after they get a post-secondary education is extremely bright. Our record can be examined in minute detail. It will show our sensitivity, how much we really care about all the people of this great country, our youth, the elderly, and the taxpayers.
Let me just touch on that point as well. We are one of the most highly taxed countries in the world. One of the last things the Minister of Finance (Mr. Wilson) wanted to do in his Budgets was to impose further taxes. However, given what we inherited, there was very little choice. Canadians will examine the situation in total, not in isolation like the Opposition. They are going to be with us. Not without some reluctance, of course, but Canadians will respect our approach. It is for those reasons that I am very proud to be part of a Government which is turning this country around and restoring fiscal responsibility so that the outlook for Canadians in the future
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will be a lot brighter than it would have been under the previous Government.


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


Robert Phillip Kaplan: Mr. Speaker, I am sure the Hon. Member will admit that during the last election campaign there was no suggestion that the federal Government would cut back its commitment to post-secondary education, research and medicare in the way it has. What the Government said it was going to do was to bring the Budget back into what the Conservatives considered a more proper balance and cut out the tremendous billions of dollars, as the Prime Minister (Mr. Mulroney) put it, of waste and extravagance in the Liberal Government. When I look at what the Government had to do to make savings in the Budget, the most important programs in the country being cut, I am reminded me of that promise. What happened to that promise? What has the Government done about that?


Bill Attewell: Mr. Speaker, let us talk about what was promised in the last election. The key promise was change. Change from fiscal irresponsibility. We certainly delivered on that. I do not know where the Liberal Government thought the money would come from but it certainly burdened the future of this country for I do not know how many years.
Canadians wanted change, and let me speak primarily about fiscal change. They wanted to restore the confidence of foreign investors in Canada. They wanted to restore the confidence of Canadian investors. The Hon. Member will know, if he checks the record, how much capital left this country. Investors did not want to be bothered coming here after they looked at things like FIRA and that agency's red tape and negative attitude. We inherited that situation and I think we brought about a tremendous amount of change. The Minister of Finance's latest Budget predicts a deficit under $30 billion. Discretionary spending has seen a reduction for the first time in 20 years. Money does not grow on trees and the taxpayers know that. They have been burdened unnecessarily because of excessive spending for 15 to 20 years. They want change and we have a very responsible Government and extremely able Minister of Finance who are going to bring about change.
I think Canadians have a growing understanding of what really happened over the last 15 years. I touched on the Nielsen task force report concerning some 900 programs which had never been looked at by the previous Government other than in a patchwork way. I could go on and on about the changes this Government has instituted, including a number of social programs, such as the Young Offenders Act, which the Hon. Member had a lot to do with at one time, some changes to that, and pornography, on which I think some very effective legislation is coming down.
We were asked for changes for the good, changes for confidence building in this country, and now capital is starting
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to be returned. People are looking on the brighter side of what just might happen down the road for this country in job creation and a better outlook with the responsible action, words and deeds of this particular Government.


Robert Phillip Kaplan: Mr. Speaker, I remember the last election campaign well, too, and I think the Canadian people were promised a change. I wanted to go beyond that because they were not promised the changes that have been delivered. They were promised that this Conservative Government had discovered billions of dollars of waste and extravagance and that the Government was going to be able to save the Canadian taxpayer's money by rooting all that out.
What 1 want to put to the Hon. Member is that Hon. Members in the Government did not find billions of dollars of waste and extravagance, but that to bring the budget down they have cut programs that impact on the provincial level of Government, and that they are using the same theory they used to get elected.
Members of the Conservative Government told the Canadian people that there was waste and extravagance in the spending of the former Government. I am going to speak in a few minutes on some of the waste and extravagance of the present Government which exceeds anything I have ever heard of in my career as a Member of Parliament. They did not find the waste and extravagance. What they have done is to say that there is waste and extravagance in the provincial programs. The Government is going to cut medicare and postsecondary education because the provinces are wasting money, the hospitals are wasting money, and post-secondary educational institutions are wasting money, so there will not be any reduction in quality, but there is going to be an elimination of waste and extravagance at the provincial level by the restraint that the federal Government is imposing on them.
I want to ask him whether he thinks that that kind of a line, which is the only possible interpretation of the events, has any credibility at all with the Canadian people. Is that not the reason this Government is taking such a pounding in public opinion?


Bill Attewell: Mr. Speaker, I am very pleased to respond to a few of the points my hon. colleague has made. With all due respect, he has a very selective memory. Let me just start with two or three points. First of all, something that has been created over some 15 years is not about to be changed overnight if we are going to approach things in a balanced and caring way as we work out a way out of this. He has not brought up what this Government did in the privatization area. Thanks to the privatization program of the Minister, de Havilland now is more viable than it has been in decades thanks to Boeing's world-wide sales network. Hansard will show the kicking and screaming and wailing that went on about that. Now there will not be a drain on the federal Treasury that there had been before.
We are tackling other institutions as well under the Minister responsible for the Post Office. That is an organization that

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has needed fiscal monitoring. The Minister in the last Budget has directed Canada Post to come up with operating plans that would show a break-even within two years or so. I could go on and on about other programs.
I want to stress again that after we inherited something like we did from the previous Government I am really quite impressed with the remarkable progress we have made in some 20 months or so, if one starts to enumerate all the achievements.
If you want to have a selective memory, if you want to turn a blind eye to what I think are tremendous achievements, you can do that, but you are not going to fool Canadians. They are going to be looking at our record in a total way. They will look at the promises on fiscal responsibility on which we had to deliver, and I can tell you they will be behind us 100 per cent because of the courage that we have had to tackle these issues, and not just in a cold, calculating way but in a balanced way that cares about the lives of average Canadians. We have done that, whether it is the sales tax credit in the last Budget, or looking at the child tax credit where some $300 per child will be paid in advance to help families so they will not have to go to loan discounters.
There is a host of things that are on the social and caring side as well. I think the Hon. Member for York Centre (Mr. Kaplan) is being a little too selective in the points he is tackling. He has some things in his own backyard. It does not happen in politics, but he might even just compliment the Government on ensuring the long and healthy life of de Havilland. I think it has some 5800 employees. I think I said several months ago that not only will those jobs be retained, I think you are going to see hundreds, if not thousands of new jobs created as the months and years unfold thanks to a privatization process where it is no longer bleeding this Government.


The Acting Speaker (Mr. Charest):: Order, order.


Robert Phillip Kaplan: Mr. Speaker, I had intended to use almost all of my 20 minutes, but I have just had a discussion with my very good friend opposite, the Member from Mississauga, and I am quite content and have agreed to limit myself to a very few remarks to give him the opportunity to speak in this debate as well.
I cannot resist, in beginning my remarks, commenting for a moment on the situation at de Havilland. I want to assure Members of the House, as the Member for the area that houses the de Havilland plant, that I am very happy to see the increase in employment at de Havilland. I am very happy to see the increased sales of planes that are occurring. I have never doubted that Boeing was a good company and that it could provide to the company a discipline in management that was lacking or that could have been improved on, if I can put it that way. That is not my grievance about the deal that was made to give that company to the Boeing Corporation.
My grievance is twofold. First, an opportunity was lost to develop a truly Canadian company which, even if we had followed the promises that the Conservatives made during the election campaign, could have been offered as the model that the Government used in its election campaign. Its model was the British National Aerospace Corporation. A certain proportion of the shares would go to the Canadian people, a certain proportion to suppliers and employees, and a certain proportion to some Canadian corporations that are knowledgeable in that industry.
That was what the Government said it would do during the election campaign. I would have been content to have seen that done rather than to put it into the hands of an American company and to tie its fate to decision-making at the highest level in another country. That is one of my regrets about it.
The other regret I have about it comes precisely to the point made by the Member for Don Valley East (Mr. Attewell), and that is the terms of the agreement. Of course I am glad to see the jobs there, and I am glad to see the planes being made, but wait until the Government gets the bills that it agreed with Boeing it will pay. Wait until the insurance commitment cheques start being demanded. Wait until the financing arrangements are made that the Government agreed Boeing could have for foreign sales, financing arrangements which were more generous than the ones that were available to de Havilland when it was operating as a Crown Corporation trying to make sales abroad.


An Hon. Member:: They were losing hundreds of millions of dollars a year.


Robert Phillip Kaplan: No, for the last two years it had not been losing hundreds of millions of dollars. It did lose hundreds of millions. I cannot rewrite history, it did. But at the moment when it was moving into a period when the books were showing small losses and coming profits, that was when it was given to an American company and that was when agreements were made to subsidize and support the activities of the company to a very high degree. As I say, I am happy with what I see and am not complaining about that aspect of the Government's Budget.
We do not operate the way they do in the United States. We have a system of responsible Government in which the Government is entitled to get its Budget intact. With its majority, it is entitled to everything it puts in the Budget.
It is not like the United States where the President must propose his ideas to Congress, negotiate with them and convince them to support his idea. In our system, the Government-especially with its large majority-has the confidence of the House and gets its Budget. If the Government had stuck to its guns on deindexing the old age pensions for senior citizens, it would have been able to inflict that on the Canadian people. That is its right under our system of Government.
June 19, 1986

However, we on this side of the House also have some rights. We are exercising those rights today, one of which is to show the Canadian people that this Budget is opposite to what the Government promised it would do. The Conservatives did not say that they would reduce the Budget by cutting back on medicare, reducing medical research or cutting back the budget of the National Research Council, as my hon. colleague, the Member for Laurier (Mr. Berger) showed today.
The Government did not promise that it would balance the budget by cutting back on medicare, after encouraging the provinces to go into medicare a decade ago on the basis that the Government would support them.
The Government said it would balance the budget by finding the waste and extravagance of the Liberal Government. After two years of looking for waste and extravagance in the former Liberal Government, it seems the Conservatives are stuck with passing the buck to the provinces by cutting back programs which are among the most popular, necessary and just programs that we have in Canada. The Government had to resort to that action in its attempt to meet those budget promises.
As far as waste and extravagance is concerned, I would like to know-[DOT]

How can a boy from Baie-Comeau pay $1,200 a night for hotel accommodation in New York? And how can he pay half a million dollars for a one-week stay in Paris? That is what I would like to know


Mr. Cote (Lac-Saint-Jean):: Stupid!


The Acting Speaker (Mr. Charest):: Order, please.


Robert Phillip Kaplan: Not only that, but how can he do that after promising during the election campaign that he would run a thrifty Government?

He gave the Canadian people the impression that his background prepared him for restraint and that that was the colour he would put on the Government. We have seen the patronage appointments by the Government, we have seen its style of living, and the waste, extravagance and luxurious way in which it operates. If the Budget is going to be cut, it will be cut on the backs of someone else.


The Acting Speaker (Mr. Charest):: Questions or comments. The Hon. Member for Lac-Saint-Jean (Mr. Cote).


Clément M. Côté: Mr. Speaker, I would like to ask the Hon. Member-if all the documents pertaining to access to information on the previous Government had not disappeared- would have the nerve and courage to table the expenditures of the former Government, of the old gang of mandarins, right before our television viewers and the people
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in the galleries. Would the Hon. Member have the courage to do that?


Robert Phillip Kaplan: Mr. Speaker-


Clément M. Côté: Everybody knows about your expenses!


Robert Phillip Kaplan: -if I may have the floor-


Clément M. Côté: We know, and everybody knows!


Robert Phillip Kaplan: Mr. Speaker, I am very pleased to try to answer. I do not know the figures myself, but the Conservative Government did promise to do away with such excessive expenses. I have no idea whether that was the case, I do not have the bills of the former Government.
But the one thing I do know is that this Government has them. It has those bills. And when it has them, it makes them public. Since Government Members have not tabled the comparable figures of the previous Government, the figures they must have because bills of this kind do not vanish, I say that since there are no such bills which the Government could make public, I come to the only possible conclusion that their expenses are much higher than those of the former Government, otherwise they would have made them public. That is my own conclusion.


Mr. Lanthier:: Mr. Speaker, I would like to give a few figures about transport. Since the election of this Government in 1984, the use of airplanes has decreased by 22 per cent compared with the last year under the Liberal Government, which represent a savings of $2.5 million since 1984. If the Hon. Member wants figures, I can give him some.
I also have comparative figures on the hours of use. In 12 and a half months, the Liberals used an average of 2.65 hours in flying time a month, while the Progressive Conservative party has used 205 hours of flying time a month in 19 and a half months. If the former Minister and sad new Member wants figures, I can give them to him. The average number of flights each month for the previous Government was 54 and it is 42 for the new Government.
I therefore find it hard to understand how these people can say that there has been an increase in expenditures when it has been proven statistically and openly in the public accounts that the previous Liberal Government used Government airplanes shamefully and that, with our desire for change, we have reduced expenditures by 22 per cent since our election.
I would like the Hon. Member to comment these facts. [English]


Robert Phillip Kaplan: Mr. Speaker, I may have a different understanding of the subject than the Member opposite, but I never considered the use of government airplanes as an extravagance. I think that the government airplanes are there for

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Ministers to use when there are good reasons for which they cannot use ordinary flights.
When we talk about the former Government, I can recall that every Minister had to be in the House for every vote because we would not have the majority to carry the votes. In circumstances like that, government airplanes were there to serve the Ministers and permit us to get back to the House in time to vote, yet be able to travel around the country as we were expected.
As I say, unless the airplane is given to the Minister to use-


An Hon. Member:: You can say that without laughing.


Robert Phillip Kaplan: I do say so and I am not laughing about it. I do not believe that using a Government airplane for proper purposes is an extravagance. I believe that the airplanes are for the use of Ministers when they cannot handle their public affairs properly with commercial airplanes.
I do not believe the figures used by the Member opposite prove anything that he wants to suggest. The cost of hotels and the amount of entertainment bills are the figures that have just come out about the Government. It is that kind of figure which should be given, not how much time the Minister spent flying in government airplanes.


Mr. Rossi:: Mr. Speaker, I listened very carefully to the comments of the Hon. Member for LaSalle (Mr. Lanthier) and the Hon. Member for Lac-Saint-Jean (Mr. C6te) and I can tell you that the Hon. Member for Lac-Saint-Jean did not dare to quote figures because he does not have any.
As for the comments of the Hon. Member for LaSalle, I can tell that he has been absent for a long time because he does not have the latest figures, which include an amount of $800,000 for the Prime Minister. I challenge you to say that these $800,000 are included in your figures. You are quoting old statistics and you know it. The same figures have been quoted in this House for eight months. The Conservatives have fewer-


The Acting Speaker (Mr. Charest):: Order, please. Order, please.


Carlo Rossi: You are leaving! Give us figures.


Clément M. Côté: I am coming back!


Carlo Rossi: The $800,000 of Mulroney are not included.


The Acting Speaker (Mr. Charest):: Order, please! Order!


Carlo Rossi: You have no figures. You are always speaking through your hat.


The Acting Speaker (Mr. Charest):: Order, please! Order!


Carlo Rossi: Give us some figures! You do not have any! Why do you not speak?


The Acting Speaker (Mr. Charest):: Order, please. The period for questions and comments has expired.


Donald Alex Blenkarn: Mr. Speaker, this Bill involves one of the fiscal arrangements between the federal Government and the provinces. There are extensive fiscal arrangements between the federal Government and the provinces. Indeed-


Carlo Rossi: Lanthier, tu paries a travers ton chapeau!


Donald Alex Blenkarn: Mr. Speaker, does Your Honour think I could possibly have order in this House? Do we have to put up with the kind of yelling and screaming that is going on here?


The Acting Speaker (Mr. Charest):: Order, order. As all Hon. Members know-


Donald Alex Blenkarn: Mr. Speaker, it would be nice if we could have a little bit of decorum in this Chamber.
Mr. Speaker, there are several fiscal arrangements between the federal Government and the provinces. This Bill deals with one of those fiscal arrangements. However, before we go into the whole question of whether this is a terrible, bloodthirsty attack on the moneys that the provinces have to fulfil their constitutional requirements, let us go, for a moment, over the various fiscal arrangements, because they are very substantial.
First, there is equalization, a situation in which the federal Government uses the resources of the country and equalizes those resources among the provinces to ensure that all provinces have equal fiscal capacities, as far as is possible, to perform their constitutional requirements; and there is no change in equalization.
The second arrangement is called the Canada Assistance Plan, one in which the federal Government shares equally, dollar for dollar, with provincial Governments on social assistance programs.
Then there are the tax collection agreements whereby the federal Government acts as a fiscal agent for the provinces to collect taxes for them without any charge whatsoever to the provinces, no charge back at all. The Government collects the money for them and remits it to them without charge as part of the fiscal arrangements of the country.
Then there are tax sharing agreements, and tax agreements whereby the federal Government pays taxes to the provinces for provincial sales tax, for example, those various arrangements that make this country work when there are two taxing authorities. There are a number of other arrangements whereby the federal Government, for example, does things in provincial areas that are really transfers to the provinces for their responsibilities. For example, in post-secondary education, we run a Coast Guard college. We run universities under the Department of National Defence. We make grants to
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universities for natural science and engineering, to research councils, to the Social Sciences and Humanities Research Council, and to the Medical Research Council. We make capital grants for a whole series of matters that are within the jurisdiction of the provinces, and those matters are all transfers. In the year 1980-81, which is really the last year for which I have figures, those grants amounted to well over $2 billion.
We are now told that the change in this Act is a bloodthirsty attack on the provinces, "a bloodthirsty attack". What kind of a bloodthirsty attack is it? It is a reduction in the total amount of a transfer by a portion of the anticipated increase in Gross National Product, by reducing any real increase of GNP by 2 per cent, provided that does not affect inflation. So, if there is inflation, and we do not have any growth at all, the provinces get all the inflation and all the growth in the economy, except for 2 per cent. Now, this is a "bloodthirsty attack", yet.
Well, Sir, I want to demonstrate today that, far from a bloodthirsty attack, it is a very sensible Bill, a very conservative Bill, one that would indicate that the Government really understands the needs, the requirements, of the provincial Governments.
In 1981, there was a full study by a special parliamentary committee which issued a report called Fiscal Federalism in Canada, and it was tabled in August of that year. The report analysed all of the fiscal arrangements between the provinces and the federal Government, and the federal Government's capacity to make payments and the provincial Governments' capacity to raise revenue at that time. The task force report concluded that there did not exist, at that time, any long-term structural mismatch between the federal Government and the provinces and that the current arrangements were appropriate. But that was before we had a Government that ran up, in a four-year period, the national debt of this country of over $120 billion, and that was before we had to use 27 per cent of the revenue collected in this country to pay interest, and that was before we had a massive recession, brought about in part by a national energy problem and in part by the Budget of November of 1981 that just tore the country apart, ripped apart its economy, and ripped apart the receipts of the Government. That was before we had a situation in which deficits, had we not turned the corner when we took over in 1984, would have exceeded well over $40 billion in that year. There is now a situation of financial mismatch.
I point out that the provincial Governments are all able, on a national accounts basis, to balance their books without going to outside markets to borrow money. They have all borrowed the money they need from provincial pension plans and from the Canada Pension Plan and they are not required to go out in the market, like the federal Government is, to beg and borrow and issue T bill accounts and do whatever is necessary to squeeze from the markets every last nickel and dime. Indeed, the deficit of the Province of Ontario are down. The deficit of the Province of Quebec is down. The deficit of every province in the country, in fact, is down this year, with the exception of
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the Province of Alberta. And I really cry for it! It does not even have a retail sales tax. It has the fiscal capacity to be without debt and it has a Heritage Fund. So it continues to put money into its Heritage Fund, that is why it shows a bookkeeping deficit. Well, is that not just terrible?


Mr. Rompkey:: And they vote for you guys. God knows why, but they do.


Donald Alex Blenkarn: So what we have is a situation that started in 1981. Since then, the fiscal situation of the country has dramatically changed. We now have a fiscal mismatch that we did not have in 1981. In 1981, we were looking at the history prior to 1980, really, in terms of the financial activity and records that we could examine. We are now looking at the records and projections we must examine that result from an unconscionable burden of debt foisted on this country by the previous Government, and that the Liberals should filibuster the Bill without realizing the fiscal imbalance they created by their past activities indicates their lack of competence and the reason they are in opposition.
Let us get down to exactly what we are really talking about. This year, the reduction in the possible increase in EPF transfers to all provinces is $318 million. Next year, it will be $681 million. The total transfer this year is $16,729 billion. Next year it will be $17.7 billion. That amounts to an increase of $1 billion. And we hear members of the Opposition saying that this is ripping apart Confederation and destroying things.
Let us go back to look at their financial position. When we took power we had to do some things that we did not want to do. We did not want to increase taxes. But we had to be responsible because of the debts imposed on this country by past mismanagement. One of the things we had to do was to change the indexation on personal exemptions and on transfers for help for children. Those were tax increases which are progressive. In effect, if there is inflation, and there is, they increase revenue and reduce allowances from taxable income.
The provinces use the federal government tax base on which to raise their revenues. Almost all of the provinces collect 54 per cent of the federal government tax revenue collected. So if the federal Government collects one dollar of federal tax, then the average province collects 54 cents in provincial tax. The effect of the changes on personal income tax in the May 1985 Budget for the year 1985-86 was to increase provincial revenue by $80 million. For the year 1986-87, their revenues will be increased by $250 million as a result of that one fiscal measure alone.
I would like to go on. We have made some changes with respect to business taxes. We just eliminated the scientific research tax credit. That will increase provincial revenues drastically, since no longer will they be sharing in that tax credit type promotion. We have also changed the inventory allowance. No longer will corporations be entitled to automatic inventory allowances from taxable income. No longer will

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Federal-Provincial Fiscal Arrangements Act
corporations in most of the country, save for Atlantic Canada of course, be entitled to investment tax credits, which again change the corporate tax base and tax amount. This year we have changed the gross-up with respect to dividends. In effect, if one collects dividends one is likely to pay more income tax on those dividends than were paid previously.
Next year the effect of these tax changes will result in at least $200 million a year more going to provincial revenues. However, we are not finished. We have been called the gougers and we have been called a terrible Government because we expect to pay our bills. We have increased sales taxes. When we took over we allowed a 1 per cent sales tax increase to go through. We increased that again last year by 1 per cent and again this year by 1 per cent. That amounts to three full percentage points of federal sales tax on manufactured goods.


Nelson Andrew Riis: A regressive tax.


Donald Alex Blenkarn: What does that do? What will happen to provincial sales taxes? Sales taxes provincially are charged at the retail level. If the manufacturers tax goes up then the provincial tax goes up. It goes up not only by the increase in the federal tax but by the profits and overhead on the federal tax. Their sales tax increases have been literally phenomenal as a result of this federal change. I do not have the exact figures in that regard. However, I want to tell Hon. Members how it works.
In effect, the federal Government has taken all the heat from the Opposition for increasing taxes.


Nelson Andrew Riis: You did it!


Donald Alex Blenkarn: The result of those tax increases has been to increase dramatically the revenues of the provinces. The $318 million which the provinces will lose in EPF this year has been more than made up; and the $600 million they will lose next year will be more than made up. If we were to carry on with the EPF transfer the way it is set out without this Bill, we would have been looking after the provinces with two hands instead of one. Surely to goodness it is the obligation of this Government to understand where we are going financially. It is important that we use those tax increases which we impose on the people of the country to handle the financial problems that were incurred as a result of the past 15 years of mismanagement and misallocation of resources.


Nelson Andrew Riis: What about the bank bail-out?


Donald Alex Blenkarn: Yes, the bank bail-out. It was not a bank that was bailed out. Indeed, the chartered banks of this country bailed the Government of Canada out.


Nelson Andrew Riis: Tell that to the Bank of America, to Wells Fargo and to the Bank of Hong Kong.


Donald Alex Blenkarn: And what do we do? We handled the credit unions in the provinces and looked after their accounts, their pension plans and their farmers. Members of the New
Democratic Party would not have us do that. I would like to see them handle it. The fact of the matter is that for the first time in a decade and a half-


Nelson Andrew Riis: You bailed out a bank.


Donald Alex Blenkarn: -a Minister of Finance came in and said he would have a certain deficit, a deficit of $34 billion, and he has a deficit that will be less than that. For the first time in the history of this country the President of the Treasury Board has given a set of Estimates in which every Estimate has come in less than he said it would.


Nelson Andrew Riis: And a special remission to Dome, and to Gulf.


Donald Alex Blenkarn: The increase in the cost of carrying the ordinary expenses of Departments was frozen last year. Until 1990 it will be increased by one two-tenths of 1 per cent every year.
We have fiscal responsibility on this side of the House. We will make this country grow again. We will be out of deficit. With a little bit of luck we will be out of deficit completely and be able to start paying back that horrendous legacy that Trudeau left us by 1990.
We have to demand some sense of responsibility from the Opposition.


Mr. Gurbin:: Don't expect it.


Donald Alex Blenkarn: My friend says that I should not expect it. That is true. The opposition Parties together were responsible for spending, spending and spending that which the country could not create. We now have to pay the burden caused by that overspending. Part of the burden has to be shared around the country.


Nelson Andrew Riis: How about Blais-Grenier's trip to Europe? Europe on $5,000 a day. How do you explain that?


Donald Alex Blenkarn: Part of that burden will have to be shared by provincial Governments. We have compensated them for that cost by allowing for increases in their revenue. Those increases in revenue are more than satisfactory.
I would like to give Hon. Members a few illustrations in this regard. The Province of Manitoba was here crying before the Finance Committee. I noticed that no other province was foolish enough to come in to cry.


Nelson Andrew Riis: Name the provinces that support this Bill.


Donald Alex Blenkarn: The Province of Manitoba, this year, has a 10.3 per cent increase in revenue, and that is truly phenomenal. That province may lose $13 million in EPF transfers, but the transfers from the federal Government are up $39.4 million in total.


Bill Rompkey: But it's not going into education.
June 19, 1986


Donald Alex Blenkarn: And this weeping and wailing and gnashing of teeth goes on. What money the provinces borrow, they borrow for 3.5 per cent less than what they paid when the former Government was in office. They have massive new employment and a booming economy. Here they were weeping, wailing and crying about a $13 million contribution to a massive problem that was created by an alliance between the New Democratic Party and the Liberal Party as evidenced by the opposition to this Bill and the lack of fiscal understanding.


Lucie Pépin: Mr. Speaker, I have a comment and a question for my colleague. I heard him mention earlier that the provinces now had reason to complain about equalization, and that he knew of no province that was forced to levy taxes because of federal equalization payments. I suggest the answer to that was provided in the Budget speech made by the Quebec Finance Minsiter, in which he said that transfers to provinces were not the cause of the federal deficit; that the federal Government was transferring its deficit to provinces; that the federal Government had brushed aside any true negotiation with the provinces; that the federal Government is making inconsistent fiscal decisions when cutting down its funding of health care and post-secondary education while introducing progressive exemption of capital gains and phasing out the oil and gas revenue tax in the producing provinces.
Also, the Quebec Government was forced to introduce a surtax on corporate income tax, to raise employer contributions to health services and to increase capital gains tax in order to compensate for federal cuts in EPF funding and the revenue losses under the equalization program because of the federal Government's failure to ensure a minimum 95 per cent of entitlement flowing from the 1984-85 Budget.


Carlo Rossi: They will be losing $2.3 billion in the next five years.


Lucie Pépin: They will therefore be losing $2 billion in the next five years. So, when I hear my honourable colleague say that the previous administration had also been very irresponsible in its financial management and that, thanks to this new Conservative wave, the Government will be able to save millions of dollars, I wonder if the purpose of this Conservative Government is not to create two classes of citizens, bailing out banks at the expense of low income citizens. I should like my honourable colleague to tell me if we are witnessing the creation of two classes of citizens by eliminating the rich; then we would be left only with poor people. Is that one of the purposes of this Conservative Government? I will add simply that he may think he is knowledgeable about this, but the Quebec Government is absolutely against Bill C-96, for it must overburden Quebecers with taxes because of unfair equalization payments.
Federal-Provincial Fiscal Arrangements Act


Donald Alex Blenkarn: Mr. Speaker, let us talk about oil and gas taxes before we talk about anything else. I suppose my hon. friend would have us increase taxes through the PGRT, the IORT and others that nearly destroyed the oil industry in western Canada, and would destroy it even further now that oil prices are falling and there is a virtual mad depression out there. That is the kind of economic nonsense we hear from members of the Liberal Party.
Let us understand what happens to provincial finances. We increased taxes at the refinery gate at the federal level. Provincial sales taxes are calculated on the basis of the price after payment of federal taxes. Therefore, the provincial Governments have dramatically increased their revenues from all sources including oil and gas, and not because they have had to do anything wrong. All they did was charge a percentage tax and if the base is lower, they collect less but if the base is higher they will collect more. The effect of the federal taxing system has been to increase provincial revenues.
With respect to income tax in the Province of Quebec, I very much appreciate that the Province of Quebec is different from the other provinces in Canada in that Quebec looks after its own personal income tax and its own corporate income tax. The figures I gave this afternoon represent the situation that exists in the other nine provinces. The other provinces collect a percentage of the federal personal income taxes and the federal Government does the tax collection for them. In the Province of Quebec, there are separate tax rates contained in a separate tax Act and citizens of the Province of Quebec must file separate tax returns. The consequence is that instead of benefiting from federal tax increases, the Province of Quebec has had to impose the same kind of tax increases, the same increase in the federal tax system that was reflected in the automatic increase in provincial revenues for the other provinces.
As far as the debt situation of the Province of Quebec is concerned, I think the Hon. Member knows that the deficit of the Province of Quebec is down in excess of $350 million this year. That is a rather dramatic change in fiscal position which occurred even though this is the first year of a new Government since an election has just taken place.
If the Hon. Member analyses the matter very closely, she will know that the amount of change is rather inconsequential. If it had been larger, the provincial Treasurer, as I am sure she will appreciate, would have come before the legislative committee to make active presentations here in Ottawa. While I appreciate that provincial Treasurers like to make good solid speeches and blame Ottawa, which is the easiest thing to do, the facts are the following: the economy is a lot stronger today than it was, interest rates are down dramatically and provincial revenues are up dramatically.


John Napier Turner: Mr. Speaker, I would like to address a question to the Hon. Member for Mississauga

June 19, 1986
Environmental Affairs
South (Mr. Blenkarn). As usual, he tells the whole truth. This is something we have not seen for years from Members of the Opposition. He is tying in the need to reduce the deficit to our fiscal responsibilities.
What he has not mentioned and what I wish to ask him about is that the Canadian Federation of Independent Business led by Mr. Bulloch and the Business Council on National Issues led by Mr. D'Aquino have both been saying consistently and constantly for over a year now that the federal Government is not going far enough to reduce the deficit of Canada. How does the Hon. Member for Mississauga South react to those comments from those very distinguished businessmen who represent the interests of hundreds of thousands of companies and workers across Canada?


Donald Alex Blenkarn: Mr. Speaker, of course, this Bill does not deal with the federal responsibility to reduce the deficit faster or to increase taxes imposed. There is no question about it, though, that there is a heavy demand from many people in Canada for us to get after the deficit. Let it not be said that this Bill is an effort to pass the deficit on to the backs of the provinces because it is not.
What I had hoped to point out this afternoon was the effect of the federal tax changes which automatically enrich provincial revenues. That automatic enrichment of provincial revenues should mean that the provinces can well afford, because of the change in the fiscal arrangement of revenue collection, to handle these reductions in the increases of federal transfers. If we do not do what is proposed in this Bill, the fiscal position of the federal Government will be even worse. We would be collecting the taxes and passing them on to the provinces even though the effect of tax increases would be to increase provincial revenues in any event.


The Acting Speaker (Mr. Charest):: Order, please! It being six o'clock p.m., pursuant to an order made Wednesday, June 18, 1986 the House will now proceed to consideration of Private Members' Business as listed on today's Order Paper.



PRIVATE MEMBERS' BUSINESS-MOTIONS   ENVIRONMENTAL AFFAIRS

[Stage Direction]
RESEARCH INTO TOXIC CHEMICALS Hon. Chas. L. Caccia (Davenport) moved:
That, in the opinion of this House, the Government should consider the advisability of protecting the health of Canadians, present and future generations:
(1)	by renewal of funds for research into toxic chemicals.
(2)	by telling Canadians of progress made in the removal of toxic wastes from the American side of the Niagara River.
(3)	by providing for the upgrading of waste water treatment facilities and
generally raising the profile of toxic chemicals in all areas of health research
and preventive policy making.
He said: Mr. Speaker, I am putting forward this motion because we in the Liberal Party have regretfully come to the conclusion that the Government is abandoning, and in some way has abandoned, its responsiblity to protect the health of Canadians in relation to toxic chemicals. The Government has been in a retreat since November, 1984. It has been inconclusive and inept in matters related to toxic chemicals in particular. It has shrouded itself in secrecy in not letting Canadians know what is the content of certain understandings. It has been repressive, and in particular I am referring to the Minister of the Environment (Mr. McMillan) and his relations with the scientists in his own Department and the scientific documents they may produce or make public.
I should like to back up these statements with some specific facts. Before doing so, and in the limited time available, I say to the House that if the Government is in retreat, it is because it has decided to trade the health of Canadians for the sake of reducing the deficit. It has reduced the investments which were planned to expand toxicology research across Canada.
The Government has been inconclusive and inept. On the eve of negotiations with environmental authorities in Washington, it gave away Canada's position by revealing that there was a disagreement between Ottawa and Queen's Park, Ontario. It has shrouded itself in secrecy in that it decided not to publish a document about an understanding or proposal which was brought to Ottawa last October by the Washington counterpart to our Minister of the Environment. It has been repressive in relation to the freedom of expression of opinion by scientists in Environment Canada.
Here are the facts in chronological sequence. In November, 1984, the Government shelved the Guelph Toxicology Centre, the $8.5 million which was meant to set up a centre for excellence in the study of toxicological matters. This would have provided an opportunity for scientists already trained for that purpose. Also it would have provided an opportunity for young scientists who are still to be trained and are looking forward to an opportunity to develop a career in that specific and very important Field.
In November, 1984, the Government also eliminated the environmental secretariat and related research which was carried out by the National Research Council. It cut Canadian Wildlife Services by some $3.8 million and the capacity for assessment of and response to environmental threats in Environment Canada by $12.2 million and 25 person-years.
In March, 1985, the Government did not renew the annual $2.5 million for research on toxic chemicals in the Niagara River. In May of that year, the then Minister of the Environment met with Lee Thomas, the head of the United States Environmental Protection Agency in Washington. She returned to Canada, promising an American plan for full and speedy action on the Niagara River to clean up toxic dumps.
June 19, 1986
[Stage Direction]
On May 31, 1985, the same Minister committed the federal Government to playing a lead role in the development of options for the destruction of PCBs at the national level. Since that time we have not heard a word about it.
In October, 1985, Lee Thomas came to Ottawa with some kind of plan for the clean-up of the Niagara River. There was no statement by the Minister at the time. The report itself was kept under wraps in Ottawa, while it was released for public consumption and debate south of the border.
In December, 1985, the Royal Society of Canada and its U.S. counterpart produced a substantial report on the pervasive presence of toxic chemicals in the Great Lakes. Again there was no government response nor action to follow up on this important work.
From November, 1985 to March, 1986 there was the St. Clair River saga, a monument to the Minister of the Environment and his grandstanding, indecisiveness, and fear of being contradicted by his own departmental officials. He belittled his departmental scientists. He distanced himself from them. When he could not cope with the real facts of life, he declared that the whole mess was a provincial matter.
In May, 1986, the Minister of the Environment went again to Washington, nearly a year from the day his predecessor promised a speedy and comprehensive plan to clean up the Niagara River. Not only did he return, pretending that he had made a great achievement, but he returned without any consideration having been given to excavation and destruction of toxic chemicals, to which the Minister claimed to be formally committed when it suited the occasion.
I should like to refer to the most serious part of the developments in May of this year. As a negotiator, the Minister gave away a disagreement between himself and the Ontario Minister of the Environment, thus letting Washington clearly understand that insofar as the U.S. position was concerned, it could drive a wedge between Ottawa and Toronto and settle for the lower of the two positions, namely, the position of the Government of Canada, unfortunately.
This sequence of activities confirms the sad conclusion that the Government is strong on promises and very shaky on delivery. Until now we have not seen any results which are worth speaking or writing home about. The Minister's actions last May actually resulted in a delay of another year. There was not a single ounce of reduction in toxic waste. However, he managed to describe the event as a step forward. The press release which he issued at that time listed accomplishments in the same manner as his predecessor listed them a year before, namely, a recognition of the problem as being serious and the need for a plan of action with timetables and targets.
The Minister has been treading water for a year on the Niagara River issue. Because of his eagerness to be friends with Washington, he will continue to tread water for another year. We still have not seen the agreement which was signed by the Minister of the Environment in Washington on May 14, 1986. Meanwhile, the health of some five million Canadians
Environmental Affairs
continues to be at risk. The Government has shown an inability to do anything about it.
Part of the motion before the House this evening deals with the lack of response of the Government to the pressing need for an upgrading of waste water treatment facilities, a matter which is of serious importance particularly in the Great Lakes and in the St. Clair River. We in the Opposition cannot understand why the Government is not introducing policies to deal with these particular problems. It should be assisting with the installation of updated and environmentally friendly technology, strong on the prevention side, at industrial plants. Such a program would help the companies do exactly that. It should assist also with the installation of sewers which would separate contaminated from clean water and would ensure that the water is only discharged after proper treatment. It should assist with the replacement of current mechanical monitoring techniques, which belong to ancient times, with computerized technology.
The more we look at the record of the Government over the past 21 months, the more we see a series of promises which are not backed up by substantial, tangible results. It is time for the Government to account for itself in environmental matters related to toxic chemicals.
I am anxious to hear what the Parliamentary Secretary has to say in defence of what looks like not just a shaky record but a real sham.
Gary Michael Gurbin: Mr. Speaker, the Hon. Member for Davenport (Mr. Caccia), the Liberal critic for the Environment, suffers most of all from inaccuracy. He has a great deal of selective reporting, selective amnesia and really a regrettable attitude in understanding what is really going on. The more he gets away from any real responsibility and any real information, the worse his speeches become.
Over $700 million in expenditures and over 10,000 people in Environment Canada are, for the first time since 1979, led by a Minister who is able to understand the problem and to deal with the real issues.


Mr. Caccia:: He didn't begin in 1979.


Gary Michael Gurbin: I am going to give specifics-


Charles L. Caccia: It is high time you did.


Gary Michael Gurbin: -that will identify the selective discrepancy in the comments made by the Liberal critic for the Environment. The Member talks about research into a number of areas relating to toxicology. One of the very first things this Government did was to make a long-term commitment, the kind of commitment necessary in research, to acid rain. Eighteen million dollars a year for five years is guaranteed. It is on the table, it is a commitment of the Government and it has been for over a year now. Second, we set up the wildlife

June 19, 1986
Environmental Affairs
toxicology fund. We needed more funds in research. Last year we spent over $500,000-


Charles L. Caccia: You cut $4 million and came back with $1.5 million.


Gary Michael Gurbin: Last year we set up $500,000, doubled because of the industry's component. This year it is over $700,000 already, doubled again by industry. There is $1.4 million in new money, new funds for new projects into wildlife toxicology research.
The Member across the way says something like "the world is falling apart. Funds have been cut here and there." In the two years, 1984-85 up to 1986-87 with moneys committed, if we look specifically at the research budget for Great Lakes programs, we have no diminution of scientists. There were 90 and there are still 90. The Member is inaccurate and wrong if he says otherwise. We have 253 person-years, increasing to 274 person-years. We have $15.95 million, increasing to $19.2 million, an increase of 20 per cent in two years, year over year.


Charles L. Caccia: He does not know his facts.


Gary Michael Gurbin: I wish the Member could have done as well when he was the Minister.


Charles L. Caccia: You lost $7.5 million over two years.


Gary Michael Gurbin: On the toxic programs to which we are committed as a federal Government, not the kinds of programs the Member for Davenport is talking about, those things that were fitted in or created to make it look good for somebody at a point in time, the budget has been nearly doubled. Our effort, our expenditures and our person years on toxic programs specifically have been doubled from 45 people to 75 people and from $2.7 million to $4.8 million. Those are specific figures and those are the facts, Mr. Speaker.
The other thing that slips by very quickly is the understanding of what is ongoing and what is being supported by the Government, particularly when we start talking about the toxicology research and the efforts initiated, made and being carried on-


Charles L. Caccia: The Guelph Toxicology Centre, for instance.


Gary Michael Gurbin: As an example, there are programs in British Columbia at the University of Victoria in aquatic toxicology and at the cancer research centre in human toxicology. At Simon Fraser University they are dealing with environmental and industrial toxicology. The University of Western Ontario is involved in pharmacology and toxicology. Carleton University is involved with regulatory toxicology. The Institute for the Research on Asbestos is involved with programs, the University of Montreal is involved in drug and occupational toxicology and Memorial University is dealing with environmental toxicology. We have other centres, namely the University of Saskatchewan Toxicology Research Centre and the Centre de
Recherches en Toxicologies du Quebec which is dealing with human toxicology.


Charles L. Caccia: What the Member-


Mr. Fretz:: Why don't you listen?


Gary Michael Gurbin: I am going to stop, Mr. Speaker. I could go on with lists of things to which we are continuing and increasing our support. What about the Medical Research Council? It got $150 million. That medical research council did not know where its next dollar was coming from when the Member opposite and his Government were in charge. That Council did not know what was coming next year or the year after. It was seriously hampered in its efforts to make a valuable contribution on behalf of Canadians-


Charles L. Caccia: You are skating on thin ice.


Gary Michael Gurbin: -in the areas of toxicology and research.


The Acting Speaker (Mr. Charest):: Order.


Gary Michael Gurbin: Next we come to the Americans.


Charles L. Caccia: Talk to us about the Niagara River, not the Americans.


Gary Michael Gurbin: This is where this Member is right out to lunch, Mr. Speaker.


Charles L. Caccia: Talk about the Niagara River.


The Acting Speaker (Mr. Charest):: Order, order. Order, please.


Gary Michael Gurbin: I will change my tone if the Member opposite-


Charles L. Caccia: You are being ridiculous.


The Acting Speaker (Mr. Charest):: Order, please.


Charles L. Caccia: Talk to us about the Niagara River and how you botched it up. That is what you should be talking about.


The Acting Speaker (Mr. Charest):: Order, please. The Hon. Member for Davenport (Mr. Caccia) should know that Members from all sides of the House get equal time. If things keep going the way they are going now, the Parliamentary Secretary will have to speak longer because he keeps being interrupted. I do not think it would necessarily be the wish-


Charles L. Caccia: If you are-


The Acting Speaker (Mr. Charest):: Order, please. Please do not interrupt the Speaker. I am sure that would not necessarily be the wish of the Hon. Member for Davenport. If Members will bear with us, the period for speeches is approximately 10 minutes. After that we move on to other speakers.


Nelson Andrew Riis: Maximum 10 minutes.
June 19, 1986


The Acting Speaker (Mr. Charest):: The Hon. Parliamentary Secretary.


Gary Michael Gurbin: Mr. Speaker, I sat and listened to the Hon. Member, which I often have to do. I would appreciate the same respect from him as I give him. He may not like what I am saying because it is the truth.


Charles L. Caccia: You're on thin ice again.


Gary Michael Gurbin: I have not enjoyed many of his comments.
This gets to the nub of things. I would be interested to see the Hon. Member for Davenport put his credibility on the line by telling us how much toxin there is in the Niagara River. Nobody knows. The beloved Niagara River Toxic Committee Report, an excellent report does not indicate that. The estimates range between one million and nine million tonnes. This Member would have us as a Government commit ourselves to reducing one-half of one million tonnes a year loading, which is roughly what the report said, when there is probably more like nine million tonnes a year. It makes no sense to try to go forward on the basis of what has been suggested without knowing from where we start and what needs to be accomplished.


Charles L. Caccia: Studies.


Gary Michael Gurbin: We need no more studies, Mr. Speaker. What we need to establish with credibility is the exact loadings in the river so we can determine what has to be done and specifically where the responsibilities are.


Nelson Andrew Riis: That is a study.


Gary Michael Gurbin: There are many examples. I am running out of time because of the interruptions, Mr. Speaker. I regret that because there are many other specifics.
Just let me finish off on the subject of the Niagara River. What has eluded Governments before and will continue to elude anyone who came at it from the point of view that we can sit here, dictate and try to fabricate some grand plan or scheme ourselves and not enter into constructive agreements necessary to do something-


Charles L. Caccia: Why don't you come up with a proposal?


Gary Michael Gurbin: We have a proposal and an objective on which we have been able to reach agreement with the Americans. Within one year from today we will know how much toxic material is going into the Niagara River and how much is coming out. We can subtract and find out then-


Charles L. Caccia: You have plenty of studies telling you that already.


Gary Michael Gurbin: -what needs to be done, in what specific areas and where the responsibilities lie. We can then set specific targets and goals for the individual components of the problem. We have established clearly that with the United
Environmental Affairs
States we will be able to achieve the real reductions which we need. We think that 50 per cent by 1995 is a reasonable objective. Quite likely we will be able to achieve even better. If the Hon. Member wants to get into a discussion with his friends in Ontario, he will have to do that with them. That is not our purpose here. We are here to co-operate with all governments and to try to get something done.


Charles L. Caccia: Exactly.


Gary Michael Gurbin: We won't do that by putting headlines in the press. That is not the way to get the job done.


Charles L. Caccia: You are putting the headlines in. Your Minister put the headlines in.


The Acting Speaker (Mr. Charest):: Order.


Gary Michael Gurbin: The Hon. Member's final point was about waste water treatment and he raised the profile of toxic chemicals. I would like to put something on the record other than the rhetoric which preceded my comments. We have issued a State of the Environment report. It is as full an explanation and documentation of specific information as has ever been made available to Canadians at any time in history. This is the first time this has been accomplished. There is no restriction on any of the information available.
That is an example of our efforts to ensure that we put out accurate information to which people can refer with confidence because it is accurate and has scientific credibility. We have made available to the public all information available to us which we have confidence in. We are committed to doing that and we will continue to do that. We will not editorialize without confidence in the facts and figures. Whenever there is scientifically credible information available, it will be forthcoming.
The Member talked about separation of sewers, which is a long-term problem. For the first time leadership is being shown at the federal level in dealing with the whole range of water problems in Canada.


Charles L. Caccia: Oh, come on.


Gary Michael Gurbin: This was never done before and it is high time it was done.


Charles L. Caccia: It has been done for decades.


Gary Michael Gurbin: The Cabinet of Canada has given the Minister of the Environment (Mr. McMillan) responsibility for all matters dealing with water. We are in the process of developing a national water policy which has eluded former Governments. This has clearly placed the responsibility for looking after all matters related to water including purity, quality and a number of other issues. This is the first time this has been done and it is high time. It shows leadership-

June 19, 1986
Environmental Affairs


Charles L. Caccia: You can say that seriously, can you?


Gary Michael Gurbin: -which was sadly lacking in former Governments in which the Hon. Member participated.
1 conclude, regrettably, by adding one more small comment. The only thing I can find that was accomplished during the period of time that the Hon. Member had responsibility for the environment was a regulation which came into effect three years after it was first gazetted. It, in fact, did precious little by way of real action to enhance and improve the environment of Canada. That is a regrettable record for anyone.


Nelson Andrew Riis: Mr. Speaker, I would like to congratulate my colleague, the Member Hon. for Davenport (Mr. Caccia), for bringing this issue on to the floor of the House of Commons. I listened with interest to the report of the Parliamentary Secretary to the Minister of the Environment (Mr. Gurbin) on the action taken by the Government to deal with toxic chemicals and wastes.
I am one of many Parliamentarians who are very proud of Environment Canada, and particularly its officials with their expertise and outstanding talents and abilities. We are proud of the contributions they make and the way in which they call a spade a spade. Many of the scientists and other people in Environment Canada call it right on. I want to give them credit for that. A certain amount of confusion enters my mind due to the comments of the Parliamentary Secretary. He was expounding on all of the wonderful things the federal Government is doing to meet the concerns of the toxic chemical and toxic waste emergency which is developing.
I have in my hand Environment Canada's report card on what Canada is doing in terms of environmental programs. This report card was issued only a few days ago. It breaks down the various sections of the environment: acid rain, toxic waste, water quality, wildlife, forest conservation and so on. It rates each one of these areas in terms of government action. Just for clarification, this is Environment Canada's evaluation of the state of affairs of certain environmental areas of the country.
After having listened to the Parliamentary Secretary to the Minister of the Environment, I am perplexed when I look at this because Environment Canada gives Canada an "F" for failure on toxic waste. It says that there are poor disposal practices and that urgent action-not studies-is required to identify health risks, set standards, and implement control measures. This is now emerging as Canada's number one environmental problem. Environment Canada gives its Government an "F" for what it has done and what it is doing.


Mr. McDermid:: That reflects on the previous Minister, too.


Nelson Andrew Riis: This is dated May, 1986. We are perhaps talking about past administrations, but we are certainly talking about the present administration which has been in place for nearly two years. It should be introducing all sorts of measures. People might ask what sorts of action we could take. I would
like to suggest a few which my colleague, the Hon. Member for Winnipeg-Birds Hill (Mr. Blaikie), has articulated in this House on a number of occasions and in letters to the Minister of the Environment. He has suggested, for example, passage of the Canada Safe Drinking Water Act. We have a lot of drinking water. Why not have an Act which provides for the taking of safe measures? That includes support for the upgrading of waste water treatment facilities.
I was an alderman for many years in the City of Kamloops. I remember applying through CMHC for funds from the federal Government to help construct facilities to treat sewage to help improve the quality of drinking water. I can recall that literally hundreds and hundreds of millions of dollars were spent by the federal Government to assist municipalities to develop that type of infrastructure. There is no longer any money available to help the hard-pressed municipalities of Canada to upgrade the treatment of their water.


Charles L. Caccia: Are you listening, Gurbin?


Nelson Andrew Riis: The Member for Winnipeg-Birds Hill suggested the passage of an environmental bill of rights. I believe that Canadians can expect certain rights with regard to the quality of the environment. There is a toxic nightmare beginning to occur in this country as a result of inaction by the Government as the build up of toxic chemicals and toxic waste takes on deadly proportions.
My friend from Winnipeg-Birds Hill suggested the implementation of the recommendations of the Law Reform Commission calling for stiffer penalties for polluters. He suggests the speedy introduction of tough amendments to the Environmental Contaminants Act. He suggests the establishment of a super fund for the complete removal and destruction of toxic wastes stored in Canadian dump sites. Note the words "complete removal" rather than, as this Minister is suggesting, a slow bleeding off over the years of a limited number of toxic chemicals.
The Member goes on to suggest increased Government funding for toxicology research, including the complete restoration of programs such as the Herring Gull Egg Program and the Guelph Toxicology Research Centre which were cancelled a year ago. He also suggests increased Government funding for upgrading municipal water treatment facilities and, of course, waste water treatment facilities as well.
These are positive suggestions from members of the Opposition. These are things that the Government could act on. What has the Government done? Adjacent to my own constituency in Lone Butte, British Columbia, Bradbury Industries plans to build a plant to produce Pentachlorophenol and Tetrachlorophenol, otherwise known as PCP and TTCP, both of which contain dioxins. The Bradbury plant poses a very serious health risk to the local population and those who will ultimately be using those chemicals.
June 19, 1986

I suggest that if the Government is as serious as it says it is, here is a good opportunity to take the initiative and provide leadership. It can say we are going to do what Sweden has done and the United States is about to do and ban the use of PCBs. Why wait? All the evidence I have ever seen indicates very clearly that these are not an appropriate chemical to use. There are simply too many hazards associated with them. Doing that would remove the concerns the people of Lone Butte have because this type of highly toxic chemical is being manufactured and produced in their vicinity.
The Parliamentary Secretary seems to have slipped a little bit in his recollection about what has been going on over the last little while, particularly concerning the Niagara River. I want to remind him that last fall the EPA administrator, Mr. Lee Thomas, presented an action plan to the Minister of the Environment (Mr. McMillan) concerning how the U.S. proposed to deal with the discharge of toxic chemicals into the Niagara River. That action plan was totally unacceptable because it did not envision the actual excavation of the most toxic dumpsites along the river, but merely proposed to somehow contain and extract them over a period of up to 50 years.
At that time the Minister expressed his disappointment with the original plan. I recall him saying it was like holding jello in a sieve, or something of that nature. However, he seems to have changed his tune. Although he continues to favour excavation over extraction, on May 14 he apparently endorsed a revised EPA plan which continues to advocate extraction over excavation for the most deadly of the dumpsites such as Love Canal, Hyde Park, 102nd Street, and the S site. Furthermore, the Minister has not managed to secure any timetable for this plan. Instead, Canadian and American experts will complete by July 1, 1987, a technical documentation of the pollution control measures needed to reduce the direct discharge into the river, including timetables and targets for clean-up.
The best the Minister could offer was a possible 50 per cent reduction of certain chemicals by 1995. That is unacceptable. It is an example of a country caving in to U.S. pressure. It is an example of a Minister of the Environment who simply does not have the courage of his convictions. If what he says is true, it is certainly not being presented in any kind of legislative or funding initiative.
We are very, very concerned about what appears to be going on or not going on. Therefore I want to say a special thank you to my friend from Davenport for enabling us to put on the record of the House of Commons the track record of this Government in dealing with toxic waste. The report card of Environment Canada itself gives the Government of Canada a nice big failure.


Mrs. Gabrielle Bertrand (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, the
Environmental Affairs
Hon. Member for Davenport (Mr. Caccia) moved a motion this evening, urging the Government to consider the advisability of protecting the health of Canadians, present and future generations, in three ways. Actually, our Government is in favour of increasing toxicological research on toxic chemicals. The need for intensifying toxicological research and the superior quality of training received by toxicologists in Canada have been recognized for years by the universities, governments and industry. As one of the biggest employers of toxicologists in this country, the Department of National Health and Welfare firmly supports this view, and I think it is encouraging that both the Government and the universities have responded to this need. In fact, over the last ten years, toxicological research and training in Canada has expanded considerably.
Today, we have a number of multidisciplinary research programs in toxicology at several universities and institutes in Canada.
As my hon. friend mentioned earlier, we have the University of Victoria (aquatic toxicology), the Cancer Research Centre of British Columbia (human toxicology), Simon Fraser University (environmental and industrial toxicology), the University of Western Ontario (pharmacology and toxicology), research on asbestos, the University of Montreal (drug and occupational toxicology), Memorial University (environmental toxicology). Three more centres are emerging, and I am referring to the Research Centre at the University of Saskatchewan for agricultural toxicology, the Guelph-Toronto Toxicology Centre, again, environmental toxicology, and the Quebec Toxicology Research Centre, for human toxicology.
Most programs in Canadian centres receive federal funds in the form of grants, contributions or service contracts. The Department of National Health and Welfare finances toxicological research under the national program for research and development on health matters. Last year, the Medical Research Council of Canada set aside more than $150 million for financing this type of research and medical training, especially in medical toxicology.
The Natural Sciences and Engineering Research Council of Canada is conducting a program of strategic funding for mesological toxicology. In 1981, the National Research Council set up a new associate committee on toxicology in order to help further development of this discipline in Canada.
Notwithstanding last year's budgetary restrictions, the Department of the Secretary of State, through its Minister and as part of its program for specialisation centres, made a startup contribution of $2 million to the Saskatchewan Research Centre.
These details are given to put into perspective the financing problems caused by recent cutbacks. I hope Canadians are now convinced that toxicology is alive and well in Canada and that it is expanding. We realize more should be done, and the Department of National Health and Welfare will be seeking other ways to respond to this need. For instance, it will be

June 19, 1986
Environmental Affairs
necessary to rely more often on the results of toxicological research conducted in other countries.
In this context, Canada supports the OECD's efforts to harmonize the various countries chemical regulatory programs. It supports also its objective of reciprocal acceptability of toxicological data between various trading partners.
We also refer more frequently to the criteria description emanating from international organizations such as the International Program for the Safety of Chemical Substances, a joint program of the World Health Organization, the United Nations Environmental Program, the International Labour Organization, and the International Cancer Research Centre.
As for the Hon. Member's second recommendation dealing with the toxic wastes in the Niagara River, the pollution of this river from individual, industrial and municipal discharge of pollutants and by from nearby the drainage into the river of toxic wastes dumpsites, is a source of major concern. The Hon. Tom McMillan, the Minister of Environment, could say a lot more to the House about this.
The Department of National Health and Welfare is mainly preoccupied with the possible contamination of drinking water as well as fish which could be eaten by the population.
There are 29 individual sources of industrial and municipal waste on the American side of the Niaraga River, and 61 major toxic waste dumpsites on that side of the river, within a three-mile wide stretch of land along the river. Individual sources identified in the United States are responsible for 89 per cent of the total pollution load, estimated at 1,400 kilograms per day.
An important responsibility for evaluating the quality of the water in the Great Lakes and to determine the impact of that water on human health lies with the Great Lakes regional office of the International Joint Commission and its committees responsible for scientific matters and water quality, as well as various standing committees and study groups. Under the Great Lakes Water Quality Agreement, officials from National Health and Welfare Canada sit on those committees and advise the International Joint Commission on the potential health hazard due to from chemicals in the Great Lakes basin.
The Government of Canada is attempting to reach agreements with other countries, including the United States, in order to reduce the discharge of potentially harmful chemicals or to clean up pollution sources. Most synthetic organic chemicals found in the Niagara River, and consequently in Lake Ontario and even the St. Lawrence River come from former dumps in the State of New York. We want to make sure that this federal Government, through meetings with the Governments of the United States and the State of New York, and through our embassy in Washington, the International Joint Commission and the joint Canada-U-S Committee on Toxic Chemicals in the Niagara River, will urge the United States and the State of New York to help Canada keep the Niagara River clean.
In a way, our concerns are shared by the American officials. In the State of New York, there is a licencing program for pollution control and waste disposal systems. That program is based either on U.S. national technological standards or on mandatory State standards on the quality of water, whichever are more stringent. In October 1984, American officials on the Committee on Toxic Chemicals in the Niagara River agreed on the need for binational management of toxic discharges into the Lake Ontario basin, but they also expressed the view that a first step would be to review the whole matter of the sources of toxic matters which are discharged in Lake Ontario.
The 1978 Great Lakes Water Quality Agreement assigns numerical values to selected contaminants which persist in the environment. The program of the State of New York to control limited sources on the American side of the border has now been implemented and licencing systems are now in effect or about to come into effect. Evaluation of this program shows that, when the authorized final limits are reached, dumpings of contaminants in the river will be reduced.
The action taken until now to clean up the Niagara River has resulted in a major and certified decrease of certain persistent chemicals which flow into Lake Ontario from the river, compared with the record high load of polluants reached between the mid-sixties and early seventies. Based on existing control programs, it is expected that the dumping of residual toxic products in the river will continue to decrese. The longterm monitoring program which has been recommended will enable us to determine whether this in fact happens, and it will be used as a starting point to consider possible changes to our monitoring strategies.
Major corrective action has already been taken, especially on the Love Canal location, to prevent the migration of dangerous waste material by infiltration. The Government is determined to sign agreements and to cooperate with the United States to reduce pollution in the Niagara River and Lake Ontario.
As for the improvement of sewage treatment facilities, the Hon. Tom McMillan, Minister of the Environment, plays a major role at the federal level. However, this activity comes mostly under the jurisdiction of the provinces.
And I can tell you that in Quebec the Government pays for 90 per cent of all municipal water purification projects and the municipalities pay only the remaining 10 per cent.
With respect to raising the profile of toxic chemicals in all areas of health research and of the preventive decision-making process, the Department of National Health and Welfare has established programs designed to keep the Canadian public informed about the nature and extent of hazards inherent in exposure to toxic chemicals. Allow me to give a few examples of the main activities under this ongoing program.
First, the staff of the Health Protection Branch closely monitors the programs of-
June 19, 1986


The Acting Speaker (Mr. Charest):: Order, please. I am sorry, but the 10-minute period had expired. Debate. The Parliamentary Secretary to the Minister of State (Mines) (Mr. Fretz).


Claude Girvin (Girve) Fretz: Mr. Speaker, I too am pleased to take part in the debate today and to respond to the motion of the Hon. Member for Davenport (Mr. Caccia). I am pleased to speak to this Member's motion and his request that the federal Government consider the advisability of protecting the health of Canadians, present and future generations, by providing for the upgrading of waste water treatment facilities. I heartily agree with him that is an important issue to bring before us today.
I want to address one of the comments made by the Hon. Member for Kamloops-Shuswap (Mr. Riis) who, in reference to the state of the environment report, stated that the report gave the Department of Environment an F on toxics. There was a full release of this information. Never did this Department, the Minister or the Parliamentary Secretary ever attempt to hide that report. We accept and we recognize the terrible record that is here before us. There has been no claim by this Department that we have been perfect, unlike the apparent hypocrisy of the former Minister of the Environment. Never have we made that statement. We did not hide the report. We did not attempt to keep it from the public, the caucus or Opposition Members.
I will tell you why in two words; we care. The Government, the caucus members on this side, care about the environment. We care about Canadians and we care about the future. We care about our children and our grandchildren. That is why we are willing to share that information. That is why we are willing to be right up front and let everyone see the record that is there that, indeed, is less than perfect.
As Hon. Members may be aware, on March 6, 1986 the Minister of the Environment (Mr. McMillan) signed an agreement with the Hon. Jim Bradley, Minister of the Environment for Ontario, which renewed the commitment of funds by both Governments for Great Lakes research and clean-up. This is a tremendous step forward. The $82.1 million agreement respecting Great Lakes water quality is a six-year pact which provides additional money for upgrading sewage treatment plants and for phosphorous control programs as well as for surveillance and monitoring.
Under this agreement, the federal Government has committed $9.7 million to Ontario alone and to area municipalities it will contribute an additional $50.4 million to upgrade existing sewage treatment facilities or build new ones. No one knows better than I how important that is.
My riding abuts the Niagara River, adjacent to Lake Erie. My constituents draw their water downstream from Lake Erie.
Environmental Affairs
The residents of Niagara Falls draw their water further on down Lake Ontario. No one, least of all the Hon. Member for Davenport has to tell me the importance of having clean water at our disposal.
Canada and Ontario have a long history of co-operative agreements to control water pollution, which dates back to 1971, when the federal and Ontario Governments signed the Great Lakes Water Quality Agreement. This most recent pact not only reaffirms but re-establishes the commitment of both Governments to continue to share the cost of pollution control on the Great Lakes.
Another aspect of the upgrading of waste water treatment facilities, and a very important one I might add, is the research into the development of improved technology for the treatment of waste water. Treatment plants, be they industrial or municipal, are facing even more complex problems. As the contaminants in our waste water are becoming more difficult and costly to remove, alternative, innovative and cost-effective solutions must be found.
I had the opportunity recently to visit Environment Canada's waste water technology centre in Burlington, Ontario. I was impressed with the equipment and the expertise there. Departmental scientists are developing and demonstrating innovative processes to deal with waste water produced by both industrial processes and municipalities. Let me cite an example, Mr. Speaker, because I can tell by the animated look on your face that you are interested in this subject. If the waste water from industrial processes can be cleaned up before it is sent to municipal sewers, the sewage treatment plant does not have to be as complex or as costly.
The major theme of the waste water technology centre's current municipal waste water program is that if municipal waste treatment processes can be modified, and wastes can be reused or treated more efficiently by using less energy, the end result will be cost reductions and a cleaner environment. I note that a difficult problem to solve in regional Niagara is finding places to put the sludge. We are working on that, along with Regional Niagara.
Work is under way at the centre on a number of projects to improve municipal waste water treatment technology. For example, on-line monitoring equipment and computer control are being evaluated at a full-scale sewage treatment plant. This technology may provide more reliable control over the discharge of pollutants, while at the same time reducing operating costs and making more efficient use of the treatment plant. We are most interested in doing whatever we can to reduce costs and bring today's high deficits under control.
In another project, the feasibility of converting sewage sludge to oil and a coal-like material is being demonstrated. In many urban areas, sludge disposal is a serious environmental and economic problem. In these and other projects, the
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June 19, 1986
Federal-Provincial Fiscal Arrangements Act
centre's staff not only work with industry, but with municipalities, provincial agencies, universities, consultants and other federal Government departments-along with the Parliamentary Secretary and the Hon. Minister of the Environment who are doing such a fine job throughout the country-to develop innovative solutions to waste water treatment problems.
Let me address another aspect of the upgrading of waste water treatment facilities, namely the larger issue of sewage infrastructure. It comes down to the two words that I used initially, and what were they? We care. It is because as Conservatives, we care. What is it?


Some Hon. Members:: We care.


Claude Girvin (Girve) Fretz: That is right. The issue of sewage infrastructure includes the repair and replacement of aging sewage treatment systems and the separation of storm sewers from sanitary sewers. That is an important consideration in Fort Erie. Crystal Beach is part of that municipality because we have regional Government. The separation of storm sewers and sanitary sewers involved a tremendous cost factor and created many problems for us in Crystal Beach. When the storm water got into the sewage pipes, it created many problems as well as that extra cost. Other aspects to this sewage infrastructure include upgrading treatment processes, from primary to secondary treatment, for example, and building new sewage treatment plants so that more Canadians have access to sewage treatment.
I see that I only have four minutes left, Mr. Speaker. Environment Canada, in collaboration with the Quebec Department of the Environment, developed a co-operative arrangement for a technology exchange to deal with waste water. I will try to finish quickly, Mr. Speaker, but it will be difficult because I have much to say.
I want the House to remember these four points involved in the co-operative arrangement. First, it involves joint planning of technology development projects and technology transfer; second, co-ordination of effort and resources allocated to technology development and transfer; third, joint programs for technology development and transfer; and fourth, creation of a joint committee to implement the technology transfer.
In conclusion, I have presented for Hon. Members, particularly the Hon. Member for Davenport who has listened so attentively, the extent of the Government's activities related to this issue and have emphasized the fact that important and significant events have already occurred to ensure that health of Canadians will not be compromised by insufficient waste water treatment. Why? Because we care.


The Acting Speaker (Mr. Charest):: Debate. The Hon. Member for Guelph (Mr. Winegard).


Charles L. Caccia: Back up your words with facts. If you do that, we will take you seriously.


An Hon. Member:: Come on over, Charlie.


Mr. William C. Winegard (Guelph):: Mr. Speaker, if they keep this up, they will use all of my three minutes. I want to speak to this issue as well.
I believe that the Bill proposed by the Hon. Member for Davenport (Mr. Caccia) is one of the most important Private Members' Bills we have seen introduced this session.


Charles L. Caccia: Do not kill it, then.


William C. Winegard: They will not let me speak, Mr. Speaker. I do not think it matters which Government is in power in the next few years, although I hope it is us, because all governments will have to deal with major environmental problems.
In some cases these problems have been sprung upon us, while we have brought other problems upon ourselves. Let us consider PCBs for example. When oils containing PCBs began to be used many years ago, no one really knew the risk. These oils were poured on our roads without regard for the consequences which we know only too well now. I believe all Governments have been in a reactive mode for many years, which is clearly unacceptable. Governments must become more active in this area and I believe that has happened. I hope Members of the House appreciate the efforts of the Minister of the Environment (Mr. McMillan) and the Parliamentary Secretary to the Minister of the Environment (Mr. Gurbin) in coming to grips with this issue.
We believe that environmental protection requires a twopronged approach. We must clean up existing problems, of which there are many, and we must prevent future problems. Since you are cutting me off, Mr. Speaker, let me conclude by sayng that you may be assured that we will look after the future.


The Acting Speaker (Mr. Charest):: Order, please. The hour provided for consideration of Private Members' Business has expired. Pursuant to Standing Order 42(1), this item will be dropped from the Order Paper.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Wilson (Etobicoke Centre) that Bill C-96, an Act to amend the Federal-Provincial Fiscal Arrangements Act and Federal Post-Secondary Education and Health Contributions Act, 1977, be read the third time and passed; and the amendment of Ms. Copps (Hamilton East) (p. 14483).
June 19, 1986
Lucie Pépin: Mr. Speaker, I welcome this opportunity to take part in the debate on Bill C-96 concerning fiscal arrangements between the federal Government and the provinces and federal contribution for postsecondary education and health care.
First of all, I would like to point out that although the reductions in equalization payments provided under Bill C-96 were announced in the May 1985 Budget, the Conservative Government did not say when these reductions would be introduced nor what amounts were involved.
That is why I think we should take a closer look at what happened between the May 1985 Budget and the announcement that equalization payments would be reduced, made at the First Minister's Conference in Halifax, in November 1985.
The House will recall that last summer and last fall, there was talk of reducing the deficit, and many observers seriously wondered whether the Conservative Government would be able to do so.
At the time there were several bank failures, and there was the decision made by the Conservatives to pay compensation for unisured deposits, which means deposits over and above $600,000. We criticized that decision because it meant defending the assets of the rich at the expense of the average depositor. The Liberal Party's position on the subject has not changed.
Another measure announced in the May 1985 Budget was also pretty questionable, and I am referring to the capital gains tax exemption. This measure will cost the federal Tresury $1.25 billion between now and 1991. This measure reflects a social choice that is not the Liberal Pary's choice.
Mr. Speaker, my point is that the choices made by the Conservative Government are not always intelligent choices, And that is whay is the matter with Bill C-96.
This Bill will reduce payments to the provinces for postsecondary education and health services during the next six years. This means that the federal Government will save about $8 billion at the expense of students and patients. These reductions are also being made at the expense of our technological future and scientific progress, because ti si a well-known fact that to remain competitive with other western countries in technology, science and the human sciences, we must not cut back but continue to re-invest.
Also, when one considers the significant cuts that will be affecting the provinces, when one considers also certain services that we would like to establish, like child care for instance, one realizes that right now the first answer is: Sorry, the federal Government is not transferring the necessary funding, there is no way we can provide for those services.
However, if we look closer, we find that in Canada one child out of five is poor. We have 43 per cent of mothers with children below age 3 who work full-time. Also, 46 per cent of mothers with children below age six are working full-time, because of precarious economic circumstances. Only 29 per
Federal-Provincial Fiscal Arrangements Act
cent of families in Canada live on one salary. In 42 per cent of families, couples with children, both parents have to work for otherwise they would live below the poverty level.
At present there is a 15 per cent ratio of conventional families, while in 52 per cent of single parent families women are the breadwinners.
Now, if we consider introducing child care, which in my view should be a priority with the Government of Canada, and if we have that kind of budgetary cutbacks, the provinces will certainly refuse to get involved in that.
I do not believe child care is merely a women's concern. Child care is the concern of society, of the family, of the couple and at present the birth rate is 1.6 and will decline to 1.4 within a year or two. And when we look at the increase in the number of senior citizens, providing those essential services to our children would be simply a quid pro quo, because they will have to support us when we become seniors.
When we held hearings across Canada, we had presentations from numerous parent groups. They were not only women, fathers were there too telling us about the need for such services. There was a submission from someone in Vancouver who compared child care to automobile parking lots. Of course, at first we were all startled, because we did not see the connection. But they made the point that we have cars, which are very important to us. We take good care of our cars because they cost quite a lot of money. Also, if you have problems with your car, you bring it to a serviceman, there being no point in taking it to the service-station around the corner because we want our cars to be kept in good condition. When you go to work, it is understood that there are parkings for your car. If you rent an apartment or buy a condominium downtown, it is understood in the lease or purchase agreement that you will also have a parking space. If we compare parking spaces for cars and facilities for children, we find that our priorities are very different in these two cases. If you have a problem with your car, you just call the office and say: I am having car problems. You will be told: Fine, go to the garage, you can come in one hour late, there is no problem. When you get to the office, you will be told: Is your car fixed? Do not worry, I had the same problem last time. However, let a woman phone and say: I have a problem because my child is sick and the sitter has not arrived. She will be told very nicely that it had better be the last time because, otherwise, she will have to look for another job.
I think that this shows what our priorities are and what they should be.
If Bill C-96, which deals with equalization, is adopted, the federal Government will obviously lead the way, but it will be very difficult to apply this Bill in practice.
In addition, Mr. Speaker, if we think about the cut-backs provided by Bill C-96, we find that some Canadian universities will have to reduce their budgets drastically, which will check the progress of both students and teachers. In the province of Quebec, for instance, I know that there have been major

June 19, 1986
Federal-Provincial Fiscal Arrangements Act
budgetary cutbacks, resulting in subscriptions to specialized magazines not being renewed, so that students are not even aware of new developments in their own areas of expertise. Some teaching positions have been eliminated, and then hiring was frozen. A whole generation of scholars do not find employment in the current university system, while the students enrollment continues to grow.
The new reductions imposed by Bill C-96 are, in my opinion, outright unacceptable, because they were supposed to take effect on April 1, 1987, and not on April 1, 1986.
The brief submitted by the Association of Canadian Community Colleges to the Senate Standing Committee on National Finance emphasized the importance of investing wisely to maintain or even improve Canada's competitiveness in the academic field.
I remind the House that there are currently over two million Canadian men and women who attend community colleges and who are certainly privileged, as far as postsecondary education in Canada is concerned.
Community colleges certainly do not agree with universities when the time comes to talk about financing, for they all seek the lion's share; however, if there is one point on which they all agree, it is about the need to continue investing in postsecondary education. It is urgent to invest in hi-tech industries to meet international competition head on.
Mr. Speaker, Bill C-96 runs in the face of the Conservatives' election promises. As a matter of fact, at a meeting of the Quebec Conservative caucus held on July 1984, the following proposal was adopted: To respect the federal obligation to finance health care in the provinces pursuant to established programs financing and, on an equal basis, provide the provinces with additional funds to establish or improve such programs as are recognized by a national conference of Ministers of Health and health care professionals as being the most likely to improve the general health of Canadians and reduce the costs of the system in the long term.
Throughout the election campaign the Progressive Conservative Party did not hesitate to criticize the 6-and-5 program, yet today not only does it reduce federal transfer payments but it does so one year ahead of time.
I would like to say how Quebec Finance Minister Gerard D. Levesque reacted to the reduction in equalization payments. He stated that most provinces had acted with much discipline and moderation with respect to the control of expenditures, and he urged Ottawa to look in its own backyard and see to what extent it might cut down its own expenditures.
I would also like to tell the House how some pressure groups have reacted. Earlier I mentioned the Association of Canadian Community Colleges, I will now refer to the Canadian Association of University Teachers, the Canadian Medical Society, and the Canadian Chamber of Commerce.
Dr. Donald Savage, President of the Canadian Association of University Teachers, said that the consequence of Bill C-96 will be poorer quality education and a decline in laboratories and libraries. He said that Queens University library is rated eighty-fifth among North American universities and McGill is fifty-ninth. He thinks that the consequence is that good people are beginning to leave.

Furthermore, according to Dr. Savage, such a measure would mean cut backs 20 times the reductions imposed by the Liberals and opposed by the Conservatives at the time.
I heard one of my colleagues say that the present Government had created a number of jobs since September 1984. He even mentioned the figure of 600,000 jobs. I would like to elaborate on this figure. When they mention creating 600,000 jobs, I would like to point out that most of these jobs are parttime jobs that do not provide social benefits in proportion to the number of hours worked. The Hon. Member also pointed out that many jobs were created for women.
I agree some jobs were created for women, but today, the Minister of Employment and Immigration (Miss MacDonald) is in trouble because the programs set up specifically for women in non-traditional occupations were cut as of April 1986, without prior notice. As a result, all women who were hired several months before and were expecting to get training were sent home. There was also a special program for women working in the home who wanted to re-enter the labour market. All these programs were cut, and today, a women who has worked at home for years no longer has a chance to train for a new career.
I therefore think that those are two important problems which the Conservative Government has been unable to solve. When we look at Bill C-62 on equity employment, we realize that those are fine words, but it is quite difficult to implement such a bill,since there is no penalty for those who will ignore the legislation. I should like to be more specific since we are now talking about the number of jobs created by the Conservative Government, but the statistics should be more complete and more acurate.

According to the Canadian Medical Association, this federal funding change will result in an ever-increasing two-tiered health care system, one for those living in rich provinces and another one for those living in provinces with a lower fiscal capacity.
Furthermore, the President of the Canadian Chamber of Commerce, Mr. Roger Hamel, urged the federal Government to spend more on universities. He said that the business community is increasingly concerned that the squeeze on postsecondary education funding will make it impossible for
June 19, 1986

universities to meet the demand for research and development, or even to provide adequate basic instruction for students.
As we can see, Mr. Speaker, there were such protests against Bill C-96 that I sincerely believe that the Tory Government would be well advised to amend it.
I also heard a while ago one of my Conservative colleagues tell us how the Liberal Government had been inconsistent and had burdened Canada with a terrible financial problem. On the other hand, the Conservative Government is supposed to solve all the problems. Let it be so, but on the other hand they always compare with what is being done in the United States. I hope that we will not become the second United States and do everything they have done because now their poverty rate has really gone up.
It has also been stated that over 40 per cent of Americans cannot get medical care because they do not have the required funds. The same thing should not happen in Canada.
I would like to say once again that I am against this Bill. I think that it is an altogether unacceptable measure following which postsecondary institutions as well as health care institutions in Canada will lose $8 billion. In Quebec alone, $2 billion are wiped out. I am convinced that Canadians will remember this at the next election.


The Acting Speaker (Mr. Ricard):: Questions or comments. The Hon. Member for Glengarry-Prescott-Russell (Mr. Boudria).


Don Boudria: Mr. Speaker, I have a question for my honourable colleague. As she knows, over the past year, the Government has made several expenditures which some of us have very seriously and rightfully questioned, and I am sure you will agree with me, Mr. Speaker. For instance, Canadian taxpayers, through their taxes, had to sink approximately $2 billion in what is commonly referred to as the banking bail out fiasco. We have learned also these past few days that nearly $1 million has been spent in travelling expenses for three little trips made by our Prime Minister. We have even learned today that nearly $40,000 was spent on a few minute long television program, so that Americans can have the great privilege to see our Prime Minister's mug on their TV screen. Could she tell us if, in her opinion-


Claude Lanthier: Mr. Speaker, I rise on a point of order.


The Acting Speaker (Mr. Ricard):: The Hon. Member for LaSalle (Mr. Lanthier) rises on a point of order.


Claude Lanthier: Mr. Speaker, do you really feel that it is proper for a Member of the House to use such an,expression when dealing with the Prime Minister of Canada. Whatever its political stripe I think the Prime Minister of Canada deserves to be shown a certain amount of respect. In this connection, I
Federal-Provincial Fiscal Arrangements Act
think that we should follow the example of the Americans who, whatever their party affiliation, always address their head of state as "Mr. President". I therefore rise on a point of order to ask the Hon. Member to show a little more respect to the Prime Minister of Canada.


The Acting Speaker (Mr. Ricard):: The Hon. Member's point is well taken. I therefore ask the Hon. Member for Glengarry-Prescott-Russell (Mr. Boudria) to mind his words when he refers to the Prime Minister. The Hon. Member has the floor.


Don Boudria: Thank you, Mr. Speaker. Following my honourable colleague's admonition, I will refer from now on to the Prime Minister (Mr. Mulroney), as he has just suggested, as the President of Canada. I have noted his parallel with the President of the United States.
We can therefore assume, from what we have just heard, that the Prime Minister of Canada is not only the head of the Government, but that he should be recognized from now on as a head of state.
The Hon. Member for LaSalle-Ville Emard seems to think that he is a head of state. In my book, Mr. Speaker, he is only the Government leader, and it is my Queen who is my head of state and nobody else.
However, I will drop this matter to ask my colleague the Hon. Member for Outremont (Mrs. Pepin), who has just made an excellent speech in the House, whether she feels these expenditures-wasted, in my opinion-which the Government can make are sensible and reasonable, considering that we no longer have any money, as evidenced by the bill we are dealing with tonight in the House, that we are lacking the necessary funds, because of these extravagant expenditures, to do the job. I should like her comments on this.


Lucie Pépin: Mr. Speaker, looking back on the 1984 election campaign, I recall clearly well that the Prime Minister (Mr. Mulroney) who was the Leader of the Opposition at the time, railed against Liberal patronage throughout his campaign. The lesson must be twice as hard to swallow today as the Conservative Party appears to be twice as bad as we were. In fact, when they talk about budget cuts and they say that we should listen with very great care, when we know that women's programs... When we know that funds for the shelters for battered women have been cut, when we know that groups of women are still waiting to know if their program is going to be continued and we read in the papers about the rather shameful Government spendings, we are left with some serious questions.
If the Government wants to be believed and indeed trusted, 1 think it is time that they start putting their action where their mouth is, that they start doing what they say because people are now trusting this Government less and less. They tell us to do something while the Government act in a different way.
Therefore I think that there must be ways of increasing the Government's credibility.

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We also heard promises respecting women. We were told that women would be a priority when the Conservatives came into power. But just as far as appointments, are concerned,the figure of 20 per cent is hardly reached. Recently, two press releases were issued by the Prime Minister's Office: one was about the appointment of a ten-member board of directors in the sports field, and each and everyone of those appointees were men. So, one woman. On the same day, another press release told of the appointments of 17 people on some other, board of directors, and that time we were lucky: there was one woman among those 17 people. At that rate, I am afraid it will be rather difficult to meet the objectives of the Conservative Government, and I believe that if it wants to increase its credibility, it is going to have to act differently, especially with respect to expenditures.


Gabrielle Bertrand: Mr. Speaker, 1 want to protest against a statement made a few minutes ago by the Hon. Member for Outremont (Mrs. Pepin), who said that the program for women rejoining the labour market developed by the Minister of Employment and Immigration (Miss MacDonald) was a failure and a fiasco and that no money has been allocated under this program.


Lucie Pépin: I said that the program was in difficulty.


Gabrielle Bertrand: A few days ago, I announced in my constituency three programs for women rejoining the-


Lucie Pépin: In your Conservative constituency.


Gabrielle Bertrand: -labour market, for an amount of $412,000, and this was the fifth such project. This is a program for which the Hon. Member for Outremont has asked to help women rejoin the labour market, and there was no such program before this year. Under the previous Government, there was no opportunity for these women to join or rejoin the labour market.
This is what I wanted to say, Mr. Speaker.


Lucie Pépin: Mr. Speaker, I said earlier that employment programs in the Department of Employment and Immigration were in jeopardy. I am willing to admit that I am glad the Hon. Member for Brome-Missisquoi allocated some money to training programs for women. However, if you look at the entire Montreal area, there are programs there which had been in existence for years and were working well, but are now in trouble for lack of funds.
I should ask the Hon. Member for Brome-Missisquoi to- I can give her the names of those groups, they are well known, but their programs were cut in April, without notice.
This is important. If she wants to look after women, she should check immediately and press for changes.


The Acting Speaker (Mr. Charest):: The Hon. Member for LaSalle (Mr. Lanthier) for a question or a comment, but it should be brief, there are barely two minutes left.


Claude Lanthier: Mr. Speaker, since it was alleged that few women had been appointed, I would like the Hon. Member for Outremont to compare, honestly and objectively, our record since we took office with a mission to introduce change, and the record of the previous Liberal Government. She can take whatever criteria she likes, whether it be the last year or the last five years. I would very much like to see an honest comparison between the appointments we made since our election in 1984 and the ones made before.


Lucie Pépin: First of all, I would like to remind my colleague that the Liberal Government was responsible for appointing the first woman Speaker of the Senate, the first woman Speaker of the House, the first woman Governor General. The Conservative Governement-


Mr. Blais:: The 200 billion deficit-


Lucie Pépin: We are talking about appointments, sir. The Conservative Government dismissed Mrs. Betty Hewes, who chaired the Canadian National, not because she was not efficient, but because she was a Liberal.


Pierre Blais: She said so herself.


Lucie Pépin: I told the Prime Minister then that he had replaced Mrs. Hewes by a man, that I was willing to admit that a Conservative government could appoint Conservatives but that it could not replace a woman by a man, as his Government had done.
I think it is an insult to all Conservative women who are told they are not capable enough to hold that position. And I hope the women who belong to the Progressive Conservative Party will let the Government know that no more such appointments should be made.


The Acting Speaker (Mr. Charest):: Debate. The Hon. Member for Vancouver-Kingsway (Mr. Waddell).


Mr. Ian Waddell (Vancouver-Kingsway):: Mr. Speaker, I am grateful to the Hon. Member for Champlain (Mr. Champagne) for allowing me to speak now. I appreciate that.
Since the Hon. Member has talked about women and positions for them, I want to say that I am waiting for the day a woman will become Prime Minister of Canada. I am waiting for Mila. Perhaps it is Mila I am waiting for.

As I said, I would like to thank the Hon. Member for Champlain (Mr. Champagne) for allowing me to make a few remarks on this Bill. I have to go to committee later tonight along with the Hon. Member who is from Calgary.
I want to make a few remarks because this Bill affects my home Province of British Columbia a great deal and it affects British Columbia at the worst possible time. I am told that there will be a cut-back of about $5.6 billion over the next five years in the distribution of money to provincial Governments throughout Canada. The Province of British Columbia will
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lose $650 million over the next five years. This province has already suffered a lot from provincial cut-backs imposed by the Bennett Social Credit Government. British Columbia has already cut back education to quite a drastic degree. This will mean even more cut-backs for education. We must remember that this is at a time when the province is suffering, as are other provinces in western Canada, because of uneven economic growth in Canada and certain external forces which we find difficult to control.
Most economic institutes have predicted great growth in the next few years for central Canada. Informetrica and various other economic institutes have predicted a movement of people and money to central Canada, to Ontario and Quebec. I do not begrudge them that growth; I envy it, especially when it does not mean growth in the western and in the Atlantic provinces. We out West right now are getting a triple whammy.
In Saskatchewan the prices of wheat have reached historic lows. Farmers are in real difficulty. The Hon. Member for Regina West (Mr. Benjamin) and the Hon. Member for Yorkton-Melville (Mr. Nystrom) have pointed out the difficulties in Saskatchewan many times. As for the Province of Alberta, Your Honour knows that the bottom has fallen out of oil prices. They have dropped from about $28 U.S. per barrel three months or four months ago to $12 U.S. per barrel. That is a dramatic drop. I see Hon. Members from Alberta in the House. They could tell us, as they already have, that the Alberta economy is in trouble.
I should like to return to my Province of British Columbia. Those who have listened to Question Period will know that the Americans have placed a 35 per cent duty upon the shake and shingle industry. In fact, that has almost closed down the entire industry. It has put some 4,000 people directly involved in that industry out of work, some of whom are my constituents. It is even more difficult when the Government cuts back $650 million in payments to the Province of British Columbia. This is why I say it is a bad time to do so.
Why is the Government doing it? I suppose it is to save money because it has to deal with its deficit. Yes, it must deal with its deficit, but I cannot help but wonder if there are other ways to deal with its deficit. One way of dealing with a deficit is to collect more money in taxes and to give less money away in tax write-offs and so on. Today's newspaper contains a story about Dome Petroleum, a huge oil company which is in financial difficulty. There is talk of selling Dome Petroleum. One of its biggest assets, next to its producing properties which are all mortgaged to the hilt by the banks, is a $2.3 billion tax credit. In other words, it could be a tax deduction but Dome cannot take advantage of it because it is not making any money. What will Dome do with it? It will probably sell it along with the company to another company which would not have to pay $2.3 billion in taxes to the federal Government.
The Hon. Member for Kamloops-Shuswap (Mr. Riis) has headed a New Democratic Party tax probe. That group has
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travelled the country and has tried to consult with ordinary Canadians. I should like to refer to the message which that probe has been receiving, as I have attended some of its hearings. I know my friend has spoken on the matter in the House and will be reporting on it at greater length shortly. However, the message has been that the Canadian tax system is not a fair one. Most Canadians get their taxes taken right off the top of their cheques. Other Canadians, especially certain companies and so on, are not paying any taxes at all. Some rich people making a fortune are in fact not paying taxes at the same level as ordinary Canadians.


Nelson Andrew Riis: Or at all.


Ian Gardiner Waddell: Or at all. That is an area at which the federal Government could look to get more money rather than cut back on funds to the provinces which will result in cut-backs to education.
I have heard many Liberal Members quote the Chief Justice of Canada. I hesitate to quote him because I do not really think he should be brought into politics. However, he made an extraordinary speech. It came from the heart, as it comes the heart of almost every Canadian who thinks about things, that the last place we want a cut-back is in the area of education. We do not want to cut back education because if there is anything the modern world teaches us, it is that education is key to a real economic future, so that Canadians can cease to be hewers of wood and drawers of water. We have one of the best educated populations in the world, and we do not want a cut-back in that area.
Another area at which the Government could look to get money is that of the oil companies. I have sat on the Standing Committee on Energy, Mines and Resources for a number of years. From 1980-and it will be phased out at the end of next year-the Government has given the oil companies $7.3 billion in PIP grants. I know the Conservative Government has cut that out, but the oil companies were given $7.3 billion to drill a lot of holes. I ask Hon. Members to think what could have been done with that amount of money in terms of health care and education.
There are 70 foodbanks in Greater Vancouver. Can Your Honour believe that we have foodbanks in western Canadian cities? We do not have enough money to go around and some people cannot afford to buy food. Just the other day the Quebec Government announced that it was cutting back on payments to welfare recipients.

-how much money is it? I think it is $160 a month for those who are not married, who live alone, but now policemen are going after those poor people who may have a little bit more money.

In Quebec they are chasing after single welfare recipients who are receiving $160 per month. However, it seems strange that federally we hardly police the PIP grants which provided

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$7.3 billion, with some of the most incredible rip-offs one could imagine.
Some of the priorities we have in Canada are strange to me. We have not learned. In the area of energy, we are returning to the old system. We are dying to develop Hibernia off Newfoundland at a time when the world price of oil is terribly low. We are preparing to make terrific deals-that is what the Minister of Energy, Mines and Resources (Miss Carney) will be doing over the next few days-with Mobil, a large American company from New York, so that it can develop Hibernia sometime in the future. In that event federal politicians can make good on their political promises in Atlantic Canada and can say: "We have an Atlantic Accord". We are prepared to give away the shop in terms of making deals.
We are back to the old system of tax credits in the offshore, where billions of dollars will not be paid in taxes to the federal Treasury. The oil companies are experts in that system; they were involved in it before. I call the new energy program "Back to the Future". We are going back to the old rip-off system, which is supposedly our future energy policy.
This debate is not about energy nor about the taxation system. However, these items are involved, especially if we ask ourselves where the Government will get the money.
I should like to look at what it means to British Columbia to lose $650 million over five years. The B.C. Government has a number of choices. First, it can increase taxes. Second, it can increase its deficit. Its deficit is already inflated because of borrowings for the northeast coal megaproject which has turned partly sour; because of Expo; and because of highway and other projects. It can increase its deficit, but it has very little room in which to work. Third, it can make further cuts in education and health. Those of us who are from British Columbia cannot figure out where further cuts can be made.
Professors are already leaving UBC and Simon Fraser and going to the United States and eastern Canada as a result of better job offers. Our colleges are already cutting back. Here is a province sitting on the edge of the Asia Pacific market which will be the fastest growing market in the latter half of the twentieth century. That is where the action is and yet we are stagnating, which is crazy. The only way that we can get into the Asia Pacific market is to use our heads. We have to have an educated young population to supply engineering services and forestry services when the forests are developed in Malaysia and Indonesia. Hydro technology will be needed. The geothermal and geophysical technology for oil and gas exploration in China will be needed. In my view, the 21st century will belong to China, and we are on the edge of that great market. The last thing we should be doing is cutting back on education. We should be adding funds instead. That is why there is a lot of flak and opposition to this Bill.
I would hope that the Government, even at this late stage could see the light and say, no, we are not going to stop
transfering money like this to the provinces. We will find the money some other way in some fair taxes levied on the oil companies and the big companies that have the money. We can do it. We do not have to have this cut-back. With some renewed economic growth in central Canada, there should be more money flowing into the federal Treasury. It should be unnecessary to cut back grants to the provinces. Look at what is happening in western Canada. Look at the Alberta budget and its deficit from the other day. Look at what is happening with the shake and shingle industry in British Columbia. In a few weeks we could lose our entire forest industry or cripple it with countervailing duties on Canadian lumber, which will cost about $1 billion. Forestry is the biggest industry in British Columbia. Look at what is happening in Saskatchewan with low prices for farm goods causing farmers to go bankrupt. The Government is going to put an incredible squeeze on the provincial Governments. Some deserve it in many ways because they have spent money foolishly. Nevertheless you cannot punish people for foolish provincial Governments.
The Government of British Columbia brought in restraint at the worst possible time, at a time when there was a lack of demand and when the economy was falling. Suddenly the Bennett Government brought in restraint and it crippled the economy. British Columbia has not recovered. This is a double whammy. The Government is going to Bennettize us with the Bill. I thank my friend across the way for letting me make those few remarks from my point of view about the far west of Canada sitting on the Pacific Rim.


Blaine Allen Thacker: Mr. Speaker, I have been following the debate. Would my friend opposite explain one aspect that I cannot seem to get my mind around? Members over there seem to think there have been cuts. Surely we should be analysing this matter from the perspective of costs. I can remember that with high inflation the costs of these institutions was going up by 17 per cent. The previous administration cut the grants to 6 per cent and then to 5 per cent. That seemed to me to be a real cut in actual cost increases each year. With inflation now at 4 per cent, while we are cutting a donation from 7 per cent, 8 per cent or 9 per cent to 5 per cent, we are still transferring more from the federal taxpayers' pocket to the provincial taxpayers than the actual increases in the costs of the institutions. It seems to me that there is not a cut-back. These provinces are getting 1 per cent more than their cost increases. Surely that is an increase in actual fact.


Ian Gardiner Waddell: Mr. Speaker, it is an arguable point on the figures. I will check the debate on it. I am informed that we are still going to lose money. The figure I got for British Columbia was $650 million over five years. We need that money. You can say what you like about inflation, and we are glad inflation has gone down, but nevertheless it seems that we will lose $650 million over five years. Any way you have it, I am told we lose that amount, and that will hurt.


Blaine Allen Thacker: Mr. Speaker, it is only an increase because the rate of increase is based on a delayed factor which has all of
June 19, 1986

the high inflation part of it. Therefore, the actual transfer would be higher than the real cost of inflation because of past inflation. The province is going to get $650 million less than the formula would have generated, but actual costs are only going up by 4 per cent. We are going to give the provinces 5 per cent instead of 7 per cent, 8 per cent or 9 per cent which the formula would generate. This whole debate has been kind of off base, Mr. Speaker. Members have been talking about what might have been, whereas we should be looking at the actual costs that institutions are facing.


Ian Gardiner Waddell: Mr. Speaker, I am told that there has been agreement to get that money. There is a need for money and new investment. I would think the Government would want to have more money going into western Canada. I would think the Hon. Member from western Canada would want to push for that particularly. I was in Lethbridge not too long ago. I know that even that prosperous community of good people is going to suffer from the downturn in the oil economy. I would think that the Member might want to stand up and push for more money for western Canada rather than justify this Government cut-back.


The Acting Speaker (Mr. Charest):: Questions and comments. The Hon. Member for Champlain (Mr. Champagne). Resuming debate?


Michel Champagne: Yes, Mr. Speaker. First of all, I have some regrets about letting my hon. friend from British Columbia take the floor, because I thought that of course the Hon. Member was going to vote with us on this motion and would say: At last, this Government has acted responsibly and lived up to the desire for change expressed in the federal election in September 1984. But it wasn't so bad after all, Mr. Speaker, because the Hon. Member at least admitted that the deficit had to be reduced, and that it was high time, after the last 20 years, that a Government acted responsibly. In fact, I appreciate the frankness with which the Hon. Member from Vancouver expressed his views in the House. I think his performance deserves applause Mr. Speaker, I really do.
Mr. Speaker, this is the second time I am speaking to Bill C-96 which concerns transfer payments to the provinces. Mentioning the fact may be somewhat redundant, but I felt I had to because sitting in the House today, I realized that the Opposition parties, the New Democrats and the Liberals, were trying once again to twist the facts, so much so that I heard the Hon. Member for Essex-Windsor (Mr. Langdon) talking about $67 million in equalization payments for Quebec and that the Quebec Government would have to increase corporate taxes, and that from a New Democrat, Mr. Speaker! A New Democrat who says that the Quebec Government will have to tax corporations. I said to myself: Now I've heard everything! I would like to explain to the Hon. Member that equalization payments and transfer payments are two totally different things, two economic concepts that have nothing in common
Federal-Provincial Fiscal Arrangements Act
except for the fact that they are both paid to the provinces. Equalization, Mr. Speaker, is based on the ability to raise taxes, while transfer payments to the provinces are money the federal Government gives for specific sectors, in this case, health and education.
The Hon. Member for Essex-Windsor (Mr. Langdon) was talking about a sum of $67 million which the Government of Quebec has to get back, but he is not referring to the federal government, he is indeed referring to a provincial government. There again, Mr. Speaker, the Hon. Member for Essex-Windsor is mistaken. Because we are here in the House of Commons, we are dealing with the Government of Canada, and we have to discuss the national policies put forward.
The Hon. Member for Essex-Windsor talks about a sum of $67 million. But we are talking about equalization and transfer payments of $4,091 billion for the fiscal year 1985-1986.
I heard also the Liberal member for York Centre (Mr. Kaplan) talking about election promises and the extravagant expenses the Progressive Conservative Government is allegedly making since it came to power.
Surely, Mr. Speaker, the Hon. Member for York Centre could not say things like that with a straight face. I am sure he was not aware of what he was saying, and it was showing in his remarks that the session is drawing to a close. For if he had been the least consistent, Mr. Speaker, he would have had the decency to recognize that in their last 20 years the Liberals have got this country into a $200 billion debt, that on the economic level they have created disastrous situations. Just think of the inflation rate which was varying between 12 per cent and 15 per cent during recent years. Just think of the interest rates which had risen above 20 per cent. How many Canadian families, how many Canadian contractors, how many young Canadian students had to struggle with economic difficulties because of 20 per cent interest rates? The bankruptcies we have seen over the last years, Mr. Speaker, the slowing down of the Canadian economy-
The Hon. Member for Outremont (Mrs. Pepin) was saying a few minutes ago that we were comparing ourselves to the Americans. Mr. Speaker, you know that as far as net income is concerned, I prefer to compare my situation to that of the Americans rather than that of other countries like Zimbabwe. But that is the kind of comparisons the Liberals could make when we took over in September of 1984, because they were getting the Canadian people into debt, they were creating debt burden for the next generations to pay, without any consideration for their own election campaign commitments, Mr. Speaker. Because the Liberals had been showering us with electoral promises. For example, in 1981, they promised pensions for widows and widowers from 60 to 64 years of age but they didn't follow through. It's the same thing with the long term dairy policy, Mr. Speaker, and what about the interest rates they had promised to lower in the case of the

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Farm Credit Corporation. They didn't do anything, Mr. Speaker.
In light of that, do you really believe that the Canadian people will trust what the Liberal Party and the NDP are telling us today?
Mr. Speaker, I think that they got to be kidding. Yet, they were in power for 20 years and they were so blatantly arrogant that they decided on everything unilaterally.
This is why they cannot understand that today we had at least six meetings with the provinces, with the Ministers of Finance of each province, precisely to discuss the economic situation, to talk about transfer payments, and to tell them: Considering the two very specific parameters which the Minister of Finance (Mr. Wilson) and the Minister of State (Finance) (Mrs. McDougall) simply had to keep in mind-deficit reduction and fair redistribution to the provinces-we had to explain to the ten Canadian provinces that we had to slow down the rate of increase. Mr. Speaker, the Opposition equates slowing down the rate of increase with cutting down, but to the Progressive Conservative Government it means continuing to give more.
On a proportional basis we can see that when the Liberals were in office the transfer payments to the provinces increased by 7 or 8 per cent each year when the inflation rate ranged from 12 to 15 per cent. In 1986 our transfer payments to the provinces go up 5 per cent, which is 2 per cent more that any other increase allowed, and the average rate of inflation is about 4.5 per cent.
Mr. Speaker, in terms of purchasing power, inflation rate and transfer payments, I think that Canadians will realize that the Progressive Conservative Government is more generous than the Liberals ever were.
And their arrogance, Mr. Speaker-to get back to what I was saying about the Hon. Member for York Centre (Mr. Kaplan)- was such that I can understand why, in an editorial in Le Devoir, Solange Chaput Rolland would talk about the Liberals, seething with anger. If I may, Mr. Speaker, I would like to quote one sentence which shows just how arrogant the Liberals could be.
Hurt by the insults received and thrown across the floor of the National Assembly during the referendun debate which your ex-colleague Jean Chretien proudly claims to have won almost single-handedly, I had referred to the "fraternal rent" between Pequistes and Quebec Liberals. But we Quebec nationalists enamoured of Canada did not forget that, since 1976, the worst foes were not the friends of Mr. Levesques but those of Mr. Trudeau
Mr. Speaker, this is the opinion that Quebecers and Canadians in general have of the Liberals. They believe that the Liberals did not respect the provinces in recent years. The previous Government never tried to sit down with the provinces to negotiate, to look at economic facts and to discuss the future of our young people in relation with post-secondary education or to speak about health programs.
Mr. Speaker, I cannot understand how the Liberal Members who were part of the former Government could tell our
Quebec Premier, Mr. Bourassa, that he is a hot dog eater. I cannot accept this. It is an insult for Quebec and it is certainly not the little meeting that was held last weekend in Saint-Hyacinthe that can make us forget their 20 disastrous years in Quebec. I can assure you, Mr. Speaker, that Quebecers will still remember at the next federal election. You can count on us to remind them.
We have to face the facts. I can see the Hon. Member for Outremont who has come to hear what I have to say about the Liberal Party. I would like to tell you, Mr. Speaker, that we have to face the facts and that this includes a deficit of $200 billion.
Yet, contrary to what the Liberals and New Democrats are saying, Bill C-96 is first of all a progressive bill which aims at preserving transfer payments to the provinces in the short, medium and long term. Mr. Speaker, this is important because we have to treat all the provinces fairly. However, we must not exert excessive pressure on the budget of the Minister of Finance (Mr. Wilson). It is no secret, Mr. Speaker, that the Progressive Conservative Government has been able to reduce the deficit in its first two budgets. This was an electoral promise. I do not understand why the Members opposite say that we do not keep our election promises. We said in 1984 that we would reduce the deficit left to us by the Liberals. We said that we would provide a healthy administration of the public Treasury. The Members opposite are shocked by an amount of about $820,000, or let us say $1 million. They are shocked about $1 million and try to make the Canadian public forget that they are responsible for $200 billion.
Mr. Speaker, I feel the Hon. Member for Sainte-Marie (Mr. Malepart) and the Hon. Member for Outremont (Mrs. Pepin) who has just dealt with Bill C-96, must be laughing at the Canadian people, at the taxpayers and the most needy when they say that this Government is not giving a break to women, that it is harsh on senior citizens and callous toward our young people. Mr. Speaker, when we examine the economic record of the previous Government, we realize that they do not know what they are talking about. If they were still in power, we would be faced this year with a $39 billion deficit. They would be responsible now for a global deficit of between $230 and $240 billion, and something is sure, Mr. Speaker: They would not have addressed the problems. When we came to power in 1984, we said that we would put the economy back on track, give back to Canadians a taste for life and respect each of the ten provinces, including their respective duly elected Governments. And that is what we have done since September 4, 1984, Mr. Speaker. We have had six Finance Minister conferences on the subject of transfer payments. We have held constitutional meetings. We have shown a certain openmindedness concerning the patriation of the Constitution and Quebec's is joining the other Canadian provinces. We have had discussions with each province when the time came to make our transfer payments, because we wanted to see where we were going. We have discussed free trade with the provinces. Yet, Mr. Speaker, Liberal and NPD Members cannot
June 19, 1986

understand that. If they cannot understand that, it is because they have never bothered to seek the advice of the Canadian provinces, to respect the Canadian people who have elected them.
And today, because they are sitting in the Opposition and getting what they deserve, Mr. Speaker, they claim that Canadians will forget in five minutes or within four years all the economic prejudice they have caused them. No, Mr. Speaker. That is not possible, and we will be there to tell them so two or two and a half years down the road, and you may rest assured, Mr. Speaker, that we will be doing a clean and fair job and when Canadians are called upon to judge this Government's economic performance, the four years in Government during which we will have put the economy back on the tracks, sent hundreds of thousands of Canadians back to work, regained our rightful place on the international scene, lead this country recognized as an economically strong nation, a country that is open to the future, because we will have left our Canadian youth with something good for the years to come, because we will have looked after social programs, health programs, because we will have ensured fairness to the provinces, because we will have negotiated with each one of them what is the best for them, rather than what we think is the best for them.
Then, Mr. Speaker, Canadians will be in a position to judge us on our record rather than on promises as the Liberals used to be so good at; Canadians then will judge our sterling performance and, finally, Mr. Speaker, they will say how much they appreciate what this Progressive Conservative Government has done to build a strong Canada, a just Canada, a fair Canada.
This is why, Mr. Speaker, looking at the whole issue, looking at the reason why we must move forward on a legislation such as Bill C-96, it is in order to make the Canadian people understand, and as a matter of fact Canadians do understand quite well. The problem in this House is with the two Opposition parties, they are slow at understanding. They find it difficult to understand, Mr. Speaker, that we are not here to waste time as they used to do when they were in power. We are here, Mr. Speaker, to put Canada back to work, and this is why we must approve a piece of legislation like Bill C-96, this is why I have risen a second time on this legislation to support the Minister of State (Finance) (Mrs. McDougall), to support the Minister of Finance (Mr. Wilson), to tell the Canadian people that, contrary to what the Liberals and the New Democrates are suggesting, the federal Government is not reducing transfer payments, but is rather providing a sensible increase, an increase it can afford, and this is what differentiates a responsible Government such as this one from an irresponsible Government as the Liberal had.


The Acting Speaker (Mr. Charest):: Questions or comments. The Hon. Member for Outremont (Mrs. Pepin).
Federal-Provincial Fiscal Arrangements Act
Mlrs. Pepin: Mr. Speaker, I heard my colleague mention that Canadians would acknowledge that the Tory Government is fair and has improved financial conditions. I should like to ask him a question. When we look at the last Budget, at the way taxes are distributed, I feel that as far as equity is concerned low-income people are taxed more than the rich. Taxes have increased by 23 per cent for people earning between $15,000 and $20,000 and by 1 per cent for people earning between $100,000 and $200,000. Is that the equity to which my Tory colleague was referring a while ago?
Will Canadians remember that fact? If we look at the Budget, the low wage earners have been taxed and the price of drugs has gone up. Now, if somebody says that senior citizens with low incomes will remember the equity of the Tory Government, I fail to see whether my colleague is reffering to that matter.


Michel Champagne: Mr. Speaker, the Hon. Member for Outremont (Mrs. Pepin) should have consulted with her other colleagues, especially the former Minister of Finance from Quebec. She would have realized that our Government is much fairer than hers ever was on the subject of income tax. Do you remember, Mr. Speaker, that under the Liberals, people in the highest income brackets were not paying income tax? They do now, with our minimum tax system. Is the Hon. Member for Outremont trying to tell us that in the good old days, when the Liberals were in power, it was perfectly normal to give the rich a free ride and to make the poor foot the bill, because that is exactly what they did, Mr. Speaker? And today, she tells us our Budget isn't fair because we are making the rich pay. Mr. Speaker, the Hon. Member for Outremont is not being very consistent, and I may remind her that this Budget is doing the most for low-income families. They get the most out of this Budget because we are going to make advance payments, something the Liberals did not do. The child tax credit has been increased. Did the Liberals ever do that? And increased over and above the annual inflation rate, which is a net gain for low-income families, Mr. Speaker! Is the Hon. Member for Outremont trying to tell us that her Government had any consideration for the needy? Mr. Speaker, in 1981, the Liberals promised an allowance for widows and widowers between the ages of 60 and 64, but it took a duly elected Progressive Conservative Government to implement this measure. The Hon. Member for Outremont should listen to what I'm saying, because it's the truth, it's a fact.
Mr. Speaker, when we consider all the measures that have been taken in the social sphere since the Conservatives came to power, and we look at the cost-benefit balance, we see an economic climate that has improved as a result of a strong and durable recovery. Thousands of workers have gone back to their jobs, unlike what the Hon. Member for Outremont was saying when she commented that most of these jobs are parttime jobs. I don't know where she got her information, but according to mine, 83 per cent of the jobs created were permanent jobs. Mr. Speaker, we got rid of programs that had

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students painting fences all summer long. We are putting them in jobs to match the kind of training they have received and prepare them for a career. The Liberals didn't do that Mr. Speaker. Since the Hon. Member for Outremont seemed unhappy about what is being done for women, if we look at the former Liberal programs, it is hard to find a program aimed at getting women back into the labour market. Mr. Speaker, how do we know the Hon. Member for Outremont is someone who defends the status of women? When the Liberal Government was in power, I don't remember hearing the Hon. Member for Outremont expressing her indignation at having a Government that felt no responsibility towards women. Today, we are introducing programs that are adapted to the situation of women on the labour market. I don't see why the Hon. Member for Outremont is so upset. She should rise in the House and applaud a Government that is responsible and that is serious about its responsibilities, unlike the former Liberal Government.


The Acting Speaker (Mr. Charest):: A supplementary question. The Hon. Member for Outremont (Mrs. Pepin).


Lucie Pépin: I should like to set the record straight for the Hon. Member for Champlain. The Liberal Government was one of the few administrations which ever passed legislation concerning women. If Canada is so far ahead in the field of legislation concerning women, it is due to the then Liberal Government. With respect to programs designed to integrate women into the labour force, I am sorry but they do not date back only to 1984, those programs were established long before that. You may very well say that you never heard me protest loudly when the Liberals were in office, but I was not a Government Member to begin with. Read your papers and your newspaper clippings, you will see that I was then among the first to criticize the Liberal Government when it did not treat women properly. That is why today I feel quite justified to criticize you, for I did criticize the Liberal Government when it was not doing its job
I can also tell you that when you said that the Liberal Government had been a bad administrator, that the social programs were terrible-What was the first thing the Conservative Government wanted to do after the Prime Minister (Mr. Mulroney) was quoted in the press as having said that the old age pensions were a sacred trust? You wanted to slash them! You did reduce family allowances! And now, as a result of your last Budget, in 1990 a family with two children and earning $15,000 a year will pay 23 per cent more in taxes. Taxes will go up only 13 per cent for a family with an annual income of $35,000, 8 per cent for those earning $50,000 a year, and 1 per cent for those earning $100,000 a year. This is the result of your Budget. Do not try to tell me that we did not do our job with our social programs. The first thing that your Government did after the election was to take an axe to them.
I am sorry.


Michel Champagne: I shall be very brief, Mr. Speaker. We now see that someone who, before joining a
political party, might be able to make fair and well-founded assessments, after joining a political party such as the Liberal Party, like the Hon. Member for Outremont (Mrs. Pepin) has done, can forget completely what this person always fought for before.
However, I shall remind her, Mr. Speaker-


Lucie Pépin: I shall criticize you. I shall still criticize you.


Michel Champagne: -if she will just listen to me, Mr. Speaker, I shall remind her-


Lucie Pépin: I shall criticize the federal Government because you are not doing your job.


Michel Champagne: -that the federal Progressive Conservative Government wanted to reform old age pensions to help those who need it the most. Indeed, Mr. Speaker, we never thought that someone like Pierre Elliott Trudeau should receive the same pension as the neediest person in a senior citizens' home. However, Mr. Speaker, the Liberals have never understood or accepted this-


Lucie Pépin: It is not the Liberals, but the senior citizens themselves.


Michel Champagne: -and the worst thing is, Mr. Speaker, that they have led the Canadian population to believe that we wanted to punish the neediest even though it was the Liberals who had done so.


Lucie Pépin: You did not keep your promises.


Mr. Hamelin:: Thank you, Mr. Speaker, for letting me make this brief comment and ask a question to the Hon. Member who has made a truly passionate speech.
However, I would like to come back to the language used by the Hon. Member. I could say that I lost $1 million last week. I lost $1 million and I therefore have a shortfall of $1 million. It is true, because I bought a lottery ticket and did not win. I have therefore lost $1 million.
When the Members opposite say that there have been cutbacks in provincial transfer payments, I would like to tell them that, if the provinces had hoped to receive several million dollars and if they will in fact receive less, this is not a cutback, as my colleague has said, but an increase which, while perhaps not being as substantial as the provinces had hoped, will still be an increase. It is not like a lottery, where I lost and my million dollars is forever gone.
I would like to return to an aspect referred to by my colleague concerning the inflation rate as it relates to those transfer payments to the provinces. I would like him to amplify on that. In the sense that those transfer payments are increased by 5 per cent when the inflation rate now is only 4 per cent, while under the Liberals we had interest rates around 24 per cent and inflation rates around 10 to 12 per cent.
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Could he explain that to us and to the people of Canada in a concrete way, so that people may understand the language of the truth, the Conservative language?


The Acting Speaker (Mr. Charest):: The Hon. Member for Champlain (Mr. Champagne) very briefly-


Michel Champagne: Very briefly, Mr. Speaker, you know that if we took the time needed to explain, and anyway it has been explained. I believe our Ministers did that very aptly for the benefit of the Canadian people. But what 1 would like to remind my colleague for Charlevoix (Mr. Hamelin) of is this: During the last five years of Liberal rule, transfer payments to the provinces added up to $65 billion.
Over the next five Conservative years, transfers will come up to $90 billion. When they talk about cuts, I ask whether they can figure out the difference between 90 and 65. That difference is an extra $25 billion. This is a Conservative reality. This is a reality that will prevail in each province. This is an increae, but a rational increase, a responsible increase granted by a Government that no longer wants to unduly burden the Canadian people with additional indebtedness.


Mr. Murray Dorin (Edmonton West):: Mr. Speaker, I am pleased to have an opportunity tonight to join in when one is nearing the end of a long debate on Bill C-96, an Act to amend the Fiscal Arrangements and Federal Post-Secondary and Health Contributions Act, 1977.
The Bill itself is very short. Although it is typical bureau-cratese, governmentese, legalese, five or six pages long, the concept it attempts to achieve is simple, but really quite important. This Bill seeks to reduce the rate of growth of transfer payments in the aforementioned areas consistent with the Government's broad fiscal objectives.
While the title of the Bill speaks of post-secondary education and health, the objective of the Bill is, in reality, to address something quite different. First of all, I should remind all Members of the House that the commitment to this Government to health and post-secondary education remains as strong as ever. The EPF transfers continue to represent close to half of the provincial government expenditures in these areas, and it is our commitment to the maintenance of such programs as health care and post-secondary education that has brought this Bill before us today.
I want to speak today on behalf of this Bill, present a case for it, and respond to some of the very irresponsible and, I believe, incorrect arguments that have been put forward by some Members in the Opposition. I said that this Bill is really a part of the Government's over-all fiscal plan and, I think, therefore, it is important to outline briefly how the Bill fits into that plan.
Let us consider our number one economic problem-the public debt, the root cause of high unemployment, high
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interest rates and lack of Government fiscal flexibility. Some Members of the Opposition do not accept this. They suggest that we can continue to run huge deficits, borrow more and more to finance our expenditures, without considering the impact that this has on us, both now and in the future. This simply is not responsible.
The Minister of Finance (Mr. Wilson) in his Economic Statement of November, 1984, outlined the problem quite clearly. He stated that many Canadians have taken on heavy debt loads in the form of a personal mortgage or a personal loan, but they have done so in the belief that their incomes would rise more rapidly than their debts and the cost of carrying that debt. However, if our debts and interest payments continue year after year to grow faster than our incomes, we know we have a problem. If they continue to grow and reach a point where we have to start borrowing money just to pay the interest on our debts, we know we have a serious problem. This is the situation that the Government finds itself in today after the years of economic mismanagement and lack of responsibility of previous Governments.
Huge Government borrowing crowds out private sector investment and puts upward pressure on interest rates. The higher the rates, the more borrowing the Government will be forced to do in the future. It is a vicious circle, a dangerous treadmill that is crushing the vitality of the economy.
In his speech before the Investment Dealers Association in Quebec following his May 1985 Budget, the Minister of Finance elaborated on the problem when he said that as a nation we must improve the health and performance of our economy if we are to be able to continue to afford the social and economic programs that we have grown to enjoy and expect. The Budget aims first and foremost at improving that economic performance. In future Budgets we can make adjustments to Government programs as the financial position of the economy and the Government permits.
Investment can be described as a decision to forgo some immediate expenditure today in the confidence that the investment will build a stronger and more productive life in the future. There are not many investment decisions that are taken solely as a result of cold calculation. Confidence in the future is, in many cases, the deciding factor. That is why our Government set out to rebuild the confidence that Canadians have in this country, their Government and themselves. Part of the rebuilding process is to demonstrate to ourselves that we can control our national debt. But this means that we must all participate in that effort.
Let us consider what alternatives we have in responding to this problem and why this Bill today must be one of them. The Government's current expenditures, as Members will know, are just over $100 billion per year. As I said, one quarter of this, some $27 billion this year, goes for interest alone on that debt. The only real tool we have in reducing this is to try to reduce interest rates which, in turn, means trying to control

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expenditures. Of the remaining amount, approximately $69 billion is transfer payments made in accordance with existing legislation, and approximately $37.5 billion is expenditures on which Parliament is asked to vote.
It is these voted expenditures over which the Government has the most direct control. For the second year in a row, the rate of growth in these expenditures has been zero. That is the first time since the end of the Korean war that there has been such a low rate of growth for two years in a row.
Virtually all departments and agencies of Government have had budget reductions. For non-defence departments and agencies, total expenditures have been reduced by $400 million, to $14 billion. That is a 3 per cent reduction. Payments to Crown corporations have been reduced 8 per cent, which is some $366 million. Subsidies have been reduced by $1 billion, which is a 31 per cent reduction.
Let me give some examples of what this means. For instance, 15,000 positions are being eliminated from the Public Service by the end of the decade, including 5,000 in 1986-87. Diplomatic posts have been closed in foreign countries and programs, such as the Canadian Home Insulation Program, the Petroleum Incentives Program, the Petroleum Compensation Program, Katimavik and the Shipbuilding Industry Assistance Program have been eliminated. Subsidies to Via Rail, Canada Mortgage and Housing, CN Marine and CBC have been reduced. Crown corporations, including de Havil-land, Northern Transportation and Canada Development Corporation, have been sold while Canagrex and others have been wound up. The salaries for senior public servants and equivalent political staff have been frozen until April, 1987.
The new President of Canada Post has been asked to submit a plan to make the Post Office self-sufficient by the end of 1986-87. The rate of growth of official development assistance spending wil be reduced by $83 million in 1986-87 and $205 million in 1987-88.
In other words, discretionary expenditures, those on which Parliament votes and the Government has direct control, excepting defence and foreign aid, are declining by an average of 4.2 per cent this year. This is a demonstration of the Government's commitment to increase efficiency and expenditure reduction.
However, this is not enough. We cannot make significant savings without examining transfer payments and social programs, which represent nearly one-half of total federal Government spending. Members of the House will recall the debate on Old Age Security benefits, which are currently almost $14 billion per year in total. Demonstrating its responsiveness to public input concerning senior citizens in this country, the Government has chosen to maintain these intact. Family allowances account for another $2.5 billion. Earlier this year, Parliament passed a Bill limiting the indexation of family allowances to inflation in excess of 3 per cent. As well, all Members of the House are aware of changes that have been
made in the Unemployment Insurance Program and the fact that it is being currently reviewed by the Forget Commission.
This brings us to federal expenditures that we are discussing today in Bill C-96, which are transfer payments to other levels of Government. This year, those payments will amount to roughly $20 billion or 20 per cent of direct federal Government spending, and an additional $7 billion in tax transfers.
In his May, 1985 Budget speech, the Minister of Finance announced his intention in this area. He said, as reported at page 5020 of Hansard on May 23, 1985:
To spread the burden of expenditure reduction fairly, the government will also be seeking to limit the rate of growth of transfers to provinces to yield annual savings of $2 billion by the end of the decade. There will be no absolute reduction in federal transfers.
Even after this adjustment, federal transfers to provincial governments will grow signficantly over the balance of this decade. In 1990-91, they would represent about the same share of total program expenditures as they do today.
Following the Budget, the Minister consulted with provincial colleagues on how best to achieve this goal.
On December 13, 1985, at the First Ministers Conference in Halifax, the option selected was to amend the formula for the calculation of Established Programs Financing increments to a three year moving average of increases in nominal GNP less 2 per cent. This Bill implements that decision. Beginning April 1, 1986, EPF transfers will continue to grow as they do now, that is, according to the GNP and population, but at 2 percentage points less.
I should point out that Established Programs Financing is one of three major federal transfer programs to provinces and municipalities. Total transfers amount to approximately $27 billion, of which $20 billion will be in cash and an additional $7 billion in the form of tax transfers, whereby the federal Government reduces its tax rates so provincial governments may increase theirs by corresponding amounts. Of these transfers, EPF is the largest with $9 billion in cash and $6.3 billion in tax transfers, for a total of $15.3 billion. Equalization in the form of cash grants amounts to an additional $5 billion.
The fundamental goal of the equalization program is to ensure that provincial governments have the capacity to provide their residents with reasonably comparable levels of service at reasonably comparable levels of taxation. Furthermore, under the Canada Assistance Plan, the federal Government provides an additional $3.9 billion in cash and $400 million in tax transfers for a total of $4.3 billion. The Canada Assistance Plan is a cost-sharing program in which the federal Government shares 50 per cent of the cost incurred by provinces and municipalities to provide financial assistance and welfare service programs. There are a number of additional transfers amounting to some $2.3 billion in transfers, representing various other forms of cost-sharing arrangements.
Let me outline briefly the history of Established Programs Financing and what has happened over the past 10 years. The federal Government has been contributing to the financing of provincial hospital insurance programs since 1958. Federal transfers to provincial Governments for post-secondary
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education were introduced in 1967. The jointly financed medical care insurance program was established in 1968. Until 1977, transfer payments for these programs were made under cost-sharing arrangements. Federal transfers were based on provincial Government expenditures, on medical care hospital insurance and on operating costs of post-secondary education institutions. The federal share was roughly 50 per cent overall, with variations from province to province, depending on the specific sharing form for each program.
In 1977, the financial arrangements for these estalished programs were changed so that the federal share was no longer determined by provincial expenditures, rather it was determined by federal per capita transfers for health and postsecondary education in a base year, escalated by the rate of growth of the Gross National Product per capita and each province's population. Thus, the current EPF arrangements involve a block fund which provinces allocate to their health and post-secondary education programs as they see fit.
The Bill providing for these payments was introduced by the Hon. Donald Macdonald, Minister of Finance at the time. During the negotiations, Mr. Macdonald stated that the federal Government believed it was essential that equalization payments grow at a rate within the ability of taxpayers to finance.
In a speech introducing the Bill in the House, he stated, "Much of the discussion and debate over the past year and a half stemmed from obvious differences in opinion. We at the federal level believe that the national Government must preserve enough fiscal resources to redistribute income to persons and regions, to stabilize the economy and to continue to help finance the services Canadians in all parts of the country need and deserve". I would suggest that those statements by Mr. Macdonald, a Liberal Minister of Finance 10 years ago, are even more true today.
I have some budgetary information comparing the Fiscal positions of the provincial Governments with that of the federal Government. For the most recent year available, 1985, the provinces and territories, in total, had gross general revenue of $93.3 billion and gross general expenditure of $95.8 billion, for a net deficit of $2.5 billion. Total combined expenditures of the provinces then were almost exactly equal to those of the federal Government. If, however, we consider the $20 billion that is directly transferred to the provinces, we can see that in fact the provincial government expenditures are substantially larger than those of the federal Government.
We are often led to believe that the provinces are the poor cousins of the federal Government; but while, in fact, their numbers are individually less, their total fiscal impact and expenditures are substantially greater. In view of this, and in view of the tenacity with which the federal Government is not only controlling but also reducing the levels of government expenditure, it would seem only reasonable that all partners in Canadian society be asked to contribute.
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Hon. Members of the House must understand that we are not talking about cuts here. As I pointed out, they will continue to grow at a substantial rate. Additionally, the provinces will derive significant revenue increases in future years due to the measures contained in the last two federal Budgets and as tax revenues rise along with a healthy and growing economy.
I know that even members of the Opposition are beginning to recognize the seriousness of the deficit. I note that the Hon. Member for Cochrane-Superior (Mr. Penner) is in the House. It was only a month or so ago that he, a member of the Liberal Party, spoke of the seriousness of the deficit and the serious financial situation of the federal Government. He suggested that the Liberal Party should consider redefining the principle of universality in order to save money on costly social programs. With the adoption of this new policy position by the Liberal Party, I am sure its members will be eager to support the Bill.
In conclusion, I would like to say that to date, we have had considerable success in reducing the deficit and slowing the rate of increase of the national debt. However, there is much work left to be done. The deficit remains the greatest threat to our economic recovery, to job creation and to investor and consumer confidence. The deficit remains a serious problem and one we must address with every means at our disposal. Bill C-96 is one more measure that the Government is taking to deal with the problem, and it deserves the support of all Hon. Members.


Some Hon. Members:: Hear, hear!


The Acting Speaker (Mr. Charest):: Questions or comments. The Hon. Member for Outremont (Mrs. Pepin).


Lucie Pépin: Mr. Speaker, I would like to ask my Conservative colleague whether he agrees with what the Minsiter of Finance (Mr. Wilson) had to say on March 23, 1982, when he was finance critic: "The only sign it shows of cutting spending is shifting the burden of the established programs funding on to the provincial governments. The provinces are now moving into a deficity position, a position which will make it more difficult for them to finance this shift in spending. This is true particularly in Ontario and in the eastern provinces which do not have the substantial energy revenues of most of the western provinces. That is not co-operative federalism. That is predatory federalism, and it will not and cannot work in this country.
This is what the Minister of Finance stated in 1982. He went on:
"Taking the action of unilaterally cutting the financing, which the government is now proposing, and then having some discussions with the provinces, surely puts the cart before the horse. We should be reversing this procedure." Such were the remarks the Minister of Finance was directing at the Liberal Government at the time he was the Official Opposition's

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Finance critic. Now, the Conservative Government is doing exactly the opposite of what he was saying in 1982. So I am asking my honourable colleague this: Does he agree with what the Minister of Finance said at the time?


Murray Dorin: Mr. Speaker, I would simply like to point out a few things to the Hon. Member in response to her question. The first is that during the period since 1982, we have seen federal budget deficits in the neighbourhood of $30 billion, $35 billion, $37 billion a year. We have seen the budget deficit grow to such an extent that, quite frankly, I am not sure that looking back to what the situation was in 1982 will give us much help in deciding what to do today. Notwithstanding that, however, I want to remind the Hon. Member, as I pointed out in my speech, that the Minister of Finance indicated, at least beginning in his first Budget in May of 1985, his intention to consider that area. He went on to discuss with the provinces how best to achieve the goal, and a decision was reached with the provinces that if this must be one of the tools to meet the goal of deficit reduction, then the means that was the most fair to all concerned was the formula that was derived on December 13, 1985, in Halifax.


The Acting Speaker (Mr. Charest):: Questions or comments. The Hon. Member for Outremont (Mrs. Pepin).


Lucie Pépin: Mr. Speaker, I want to repeat my question, because I believe the Hon. Member has failed to answer it. At the time, the Federal Government had made a unilateral decision concerning equalization payments and had imposed it on the provinces; Mr. Wilson, then the Finance critic of the Official Opposition, had claimed that taking the action of unilaterally cutting the financing, as the Government was then proposing, and then having some discussions with the provinces, was putting the carts before the horse. He suggested that the government should have reversed this procedure. My question, therefore, is this: Do you agree with what the Minister of Finance (Mr. Wilson) said at the time? How could you justify that he was right saying what he was saying at the time when he is now doing the opposite of what he was saying then? To reduce the deficit, he is now cutting back in health care and education programs, while trying to bail out banks, for instance. How do you explain that?


Murray Dorin: Mr. Speaker, perhaps I should try to explain it, in another way, one more time. The Minister of Finance, in advance of his first Budget in May of 1985, conducted extensive consultation with the provinces; in fact, not just with the provinces but also with representatives of business and labour, all sectors of the economy and all interested groups. He conducted those consultations in putting together what was his first Budget. In that Budget, he included some specific measures over which the federal Government had direct control, and he indicated his desire to make adjustments to some areas where there were influences of the provinces.
Between the two Budgets, the tax measures and the measures to improve the health of the economy in general will result in millions of dollars in net provincial gains to provincial Governments. I might just point out a couple of ways in which that will happen. First, any increase in personal taxes- because the provinces levy their share of tax as a percentage of the federal tax-will automatically increase provincial revenues. In addition, the sales taxes of the federal Government will cause the provincial sales tax to increase because, again, they are a percentage of the final selling price. Therefore, I believe that in examining the Bill, we must consider the total fiscal impact, the total contribution that will be made to the provinces by the federal Government, not just through the Bill, but through all other Bills and all other fiscal measures that the Minister has included in his two Budgets.


Maurice Brydon Foster: Mr. Speaker, I would just like to ask the Hon. Member for Edmonton West (Mr. Dorin) about the EPF funding Bill, Bill C-96, because it certainly is clear that this represents a tremendous cut-back in funding for hospitals. I have a presentation that was made by the Province of Manitoba, and I understand that New Brunswick made similar representations.
Clearly, all provincial Governments are being slammed by this Bill. The presentation to which I have referred points out that the federal Government has money for other things. For instance, it points out that the Government has been able to provide funding of $1 billion for bank bail-outs; $2 billion in capital gains and other tax breaks favouring the wealthy; more than $1.6 billion in corporation income tax tax reductions; and $3.5 billion to increase defence spending by 35 per cent to $12.6 billion by 1990-91.
In this presentation the impacts of Bill C-96 are looked into. It is pointed out in some detail that by 1990-91 the federal share of EPF will have dropped to 36 per cent from the current level of 43 per cent, which represents a reduction of 7 per cent. This is not a contribution to someone off in another land. It is funding for provincial Governments which have relatively smaller tax bases than does the federal Government.
I am interested to know if the Hon. Member feels that a cutback of 7 per cent in the EPF is justified during that four-year period, especially for provinces such as Alberta which is facing cut-backs in terms of the amount of revenues it is receiving? The Province of Alberta would have had about 80 per cent of the exploration and development in the petroleum industry this year. Yet that exploration and development has been cut back from $11 billion to $6 billion, which represents a $5 billion reduction. Of that $6 billion amount, about half of it has been expended. Some $3 billion was expended in the first three months of the year. That leaves only $3 billion for oil and gas exploration in the last nine months of the year.
Provinces such as Alberta are facing tremendous cut-backs in terms of revenues. I believe it faces a deficit of $2 billion or $2.5 billion. If the yardstick of $1 billion worth of oil and gas
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exploration generates some 30,000 jobs, then that province is probably looking at the loss of 100,000 jobs. People who are not working do not pay taxes. So provinces such as Alberta will face special hardships during the next couple of years.
1 am interested to know if the Hon. Member who has spoken in favour of Bill C-96 feels that it is fair to provinces such as Alberta to suffer a 7 per cent reduction in the EPF from the federal Government during the next three or four years?


Murray Dorin: Mr. Speaker, I know I have but a few minutes in which to respond to the Hon. Member's question. First, I take exception with the 7 per cent reduction figure which the Hon. Member has put forward. In fact, there is no reduction at all.
I am glad the Hon. Member has raised the issue of the very serious economic problems we face in the Province of Alberta, because they are serious. People are losing their jobs and their homes. I am glad to know that when we bring forward measures to try to deal with those problems, he will be supportive of our efforts.
The Hon. Member mentioned the question of banks and bank bail-outs. I would like to remind the Hon. Member that it was not the banks that were bailed out-they are long gone. It is the people who were reimbursed, the depositors of those banks who, for the most part, were municipalities, hospital boards, credit unions, people who if they had not been reimbursed would have had to go bankrupt themselves. That would have put more people out of work. Other sources of revenue would have had to be found to replace those revenues. Property taxes and other taxes would have had to be raised.
I know the Hon. Member will recognize that the federal Government took its responsibility seriously at a time when the economic recovery in Alberta was critical. It was felt that a blow of $1 billion to the economy simply could not have been withstood. That points out that in order to maintain any ability on the part of the federal Government to respond to fiscal situations, situations of economic disasters or crop failures, it must maintain an element of fiscal soundness in order to have the ability to respond. If we reach a point at which we no longer have the ability to use our revenue base, either to respond to serious economic problems or to serious social problems such as health care, education, research and development, then that would be a situation we would not want to leave to our followers.
1 believe it is important for the Government to take these measures now to prevent that from happening. That is why this Bill has been brought forward. I believe I have made my case, and I do not have to repeat it.


Mr. Keith Penner (Cochrane-Superior):: Mr. Speaker, let me begin by saying to the Hon. Member for Edmonton West (Mr. Dorin) that if he thinks we are debating tonight some sort of anti-deficit measure, then he has failed to comprehend the nature of Bill C-96. In no way is this Bill an anti-deficit measure. That has been pointed out by spokespersons from the Hon. Member's own Party. What this measure does is take
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some of the federal deficit and transfer it to the provinces. From my point of view, that is no way to solve the problem. The Hon. Member has made his argument on a rather faulty premise.
My concerns with Bill C-96 are not some ideas which have been hatched over here in the Opposition. An overwhelming amount of evidence very clearly indicates that the passage and implementation of Bill C-96 is bound to have a deleterious effect on the financing, the availability and quality of health care for Canadians. That idea was not hatched on this side of the House. That is the testimony that has been received by Parliament. We on this side of the House would be irresponsible if we did not repeat that again and again. We must convince the Government that to take a Bill such as this, which undermines the health care system in Canada, is a measure that deserves every bit of opposition that can be mustered.
It is the poorest provinces in the country, those with less than the national average fiscal capacity, those provinces which are less capable of compensating for the reduced level of federal support from their own revenues, which will suffer the most. I think certain Members of Parliament from Atlantic Canada ought to be particularly concerned with Bill C-96. Much of the testimony on the negative side with respect to Bill C-96 came from that region of the country.
This proposed reduction, or this reduced level of increased financing-it is almost a double entendre-is an agreement to increase financing. That agreement has been broken. It has been broken unilaterally by the federal Government. This reduction comes at a time when demographics clearly show that we are facing an aging population and a concomitant increase in demand for health care services.
Is the Government seriously saying to the country that we cannot afford the costs of new medical technology? Is the Government really saying that we can continue to live with outdated hospital facilities and that they cannot be replaced? Is the Government saying to Canadians that new services made possible by medical research are beyond our means? That is the message I get from Bill C-96 and it is a message that I do not like.
Bill C-96 clearly contradicts what the Minister of National Health and Welfare (Mr. Epp) has been saying in other forums and in other parts of the country. For example, on June 17 of this year, the Minister of Health, speaking in Vancouver to the Canadian Public Health Association, said: "I took office with a commitment to health promotion". I suggest that without delay, the Minister of Health issue an erratum saying: "I wanted to work for the promotion of health when I accepted this portfolio". We would have difficulty disputing that. He is a man who is well meaning. His erratum could go on to say: "I wanted to but the Minister of Finance (Mr. Wilson) forced Bill C-96 upon me and I am no longer able to promote a better health care system in Canada".

June 19, 1986
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When we pass Bill C-96, we had better realize that we are going to deliver to the health care system of Canada a severe body blow. When the Minister of Health spoke out in Vancouver, he knew full well what the effects of Bill C-96 would be. If he knew that he was undermining the health care system by refusing to transfer significant sums of money to be used in that system, what then did he say when he spoke to a group of people who are concerned about health care?
After Bill C-96 becomes law, we are going to have a poorer system of health care but the Minister of Health said that his number one goal is to strengthen self-care practices among Canadians. He said that the first and most frequent form of health care is the care that people provide for themselves. I suggest that that is the kind of health care we will have in a post-Bill C-96 world. Canadians had better learn self-care practices and had better learn how to become their own physicians. The Minister said in Vancouver that his policy is to strengthen the motivation, the skill and the confidence of people to care for themselves. That is the brave new world of health care after Bill C-96. Canadians have to look after themselves because there will be fewer people in the health care field, facilities will be poorer and technology will be out of date.
The Minister said that Canadians have to take care of themselves but he has another goal. The other goal is self-help or mutual support. That is the answer to the problems which will be created by Bill C-96. He is telling Canadians to get active in the self-help movement. I do not know exactly what this means. I suppose it means that if a Canadian is facing one of life's crises, if he is sick, dying or incapacitated in one way or another, he cannot look to the health care system for help so he will look around to see if there is someone who will hold his hand for a while. If he cannot find anyone like that, I suppose the only other choice is to hold his own hand.
No, Mr. Speaker, I am distressed that Parliament, in the name of fighting the deficit, would attack one of the best health care systems in the world. We can afford to have the best health care system in the world. Any measures taken by Parliament to undermine that health care system must, I think, be vigorously opposed.
For my second point, I would like to say that I am not for a moment suggesting that the Established Programs Financing agreement that now exists is perfect in every respect. When it opens up for renegotiation, I think there are some changes that could be introduced. However, we should not break into the program in the middle of it and unilaterally change it. We should wait until the agreement comes to an end and then make some changes at that time.
There is one area, for example, which I would like to reexamine at the time the agreement comes open. We know that the poorest quality of health care in Canada is delivered to the Indian people of Canada. Every time this is pointed out, the federal Government indicates that there is truth in that but it does not have enough money available to provide quality
health care to Indian people who live in remote communities in the far-flung regions of Canada.
One of the problems with EPF is that the provinces receive money through that transfer program on behalf of native people. In other words, native people are included in the demographic calculations. The provinces receive money based on the number of Indian or native people who reside within those provinces and yet they deliver few if any at all health care services to native people.
If the Government were saying to me that since Bill C-96 provides for less money to flow to the provinces, those withheld funds would be used to build a first-class health care system for Indian people, that would mute much of my opposition. That would certainly pull the rug out from under me to a certain extent, would it not, Mr. Speaker? However, I have not heard a single Minister or Member of Parliament from the other side tell me that with the withheld EPF funds, the Government will build a better health care system for native people. That argument has never been used to justify Bill C-96.
For my third point, I would like to say a word about how the legislation that is now at third reading stage with the guillotine on and closure imposed will affect education. Hon. Members will note I did not say post-secondary education, I said education. I said that because we heard testimony with respect to Bill C-96, particularly from the Canadian Teachers' Federation, showing that by increasing the competition for resources at the provincial level, the proposed cut-backs will inevitably have adverse spill-over or domino effects on the funding of elementary and secondary education. While some of us may have thought that Bill C-96 would adversely affect our post-secondary institutions, we now know that it will go beyond that.
It is serious enough that the Bill affects post-secondary education. Our post-secondary educational system is beginning to crumble. Did you know, Mr. Speaker, that there is no longer a world-class university in Canada?


Frank Oberle: When did we ever have one?


B. Keith Penner: My hon. friend asked when we ever had one. Does he not believe that the University of Toronto or McGill were at one time world-class universities? Now they are not. Bill C-96 will add to that crumbling effect. Not only will Bill C-96 affect our universities and colleges, it will affect the entire educational system everywhere.
I should like to quote from the brief of the Canadian Teachers' Federation in respect of the direct effects on postsecondary education. They indicated the following to Parliament:
The universities and other post-secondary institutions of this country are an important part of the educational pyramid of which elementary and secondary education forms the base. Adequately funded post-secondary institutions are absolutely vital to Canada's social, economic and cultural development.
June 19, 1986

To cut back on the national commitment to the funding of post-secondary education will short change future generations of young people whose education will suffer as a result. On a broader plane, Canada's ability to survive and prosper in more and more competitive world markets will be impaired. At a time when the universities and other post-secondary institutions have already been severely squeezed by provincial budgetary restraints and growth in enrolments, it seems socially regressive and economically short-sighted to cut back on the federal commitment to funding of post-secondary education.
I see Your Honour signalling that my time is up. In conclusion, Bill C-96 is a fatal error of the Government. It is attacking the health care system in which Canadians have taken such great pride. It is attacking the post-secondary educational system which has already been suffering and needs direct assistance and support as it has never needed them before.
We have no way of stopping Bill C-96. It is under the guillotine; it is under closure. I believe the effects of the Bill will be around for a long time, and I believe the effects of this piece of legislation will come back to haunt and to plague members of the Party opposite who supported it and in fact even went so far as to bring in a closure motion to get it passed.


The Acting Speaker (Mr. Ricard):: Questions or comments. On debate, the Hon. Member for Guelph (Mr. Winegard).


William C. Winegard: Mr. Speaker, the debate today has been an interesting one. It is not a debate which everyone in the House really wanted to see take place-


Leslie Gordon Benjamin: On a point of order, Mr. Speaker-


The Acting Speaker (Mr. Ricard):: Does the Hon. Member want to raise a point of order?


Leslie Gordon Benjamin: 1 rise on a slight point of order. I think if Your Honour checks your list, you might have missed something.


The Acting Speaker (Mr. Ricard):: I do not think that is a point of order. I do not have a list of the opposition speakers in front of me, so it is very difficult for me to recognize anyone who did not point out to the Chair that he wanted to speak.


Leslie Gordon Benjamin: Mr. Speaker, I am sorry, but I am talking about the list of the numbers used by the Chair, not a list sent by any Party. 1 invite the Chair to reconsider who it recognizes next. In fact, when you called for speakers on debate, I was standing up.


Mr. Prud'homme:: I could move a motion calling for the Hon. Member for Regina-West (Mr. Benjamin) to be now heard, if you wish, but I will not do so officially.


The Acting Speaker (Mr. Ricard):: Since the last speaker was a member of the Liberal Party, I think the next speaker may be somebody from the Government side.
Federal-Provincial Fiscal Arrangements Act


Leslie Gordon Benjamin: You just had two from over there.


The Acting Speaker (Mr. Ricard):: I will be in a position to recognize the Hon. Member right after the Hon. Member for Guelph (Mr. Winegard), if that is what you want.


Maurice Brydon Foster: No only do they want closure; they want to put up every speaker.


The Acting Speaker (Mr. Ricard):: Order, please. The Hon. Member for Guelph has the floor.


William C. Winegard: Mr. Speaker, this has been an interesting debate. As I said earlier, it is not a debate which anyone in the House really wanted to see take place, but sooner or later it had to come. The Government is committed to returning the country to fiscal reality, a fiscal reality which has evaded all Governments of Canada for over 20 years.
Let us look at the Bill before us. Does it cut transfers to the provinces? The answer to that question is a clear no. It slows the rate of growth, and that has been admitted many times on the floor of the House today. It slows it to 5 per cent per year in a period when the Consumer Price Index is increasing at about 4 per cent per year. Is that so terrible?
Is it so terrible to ask the provinces to hold the line as we are trying to hold the line? Is it so difficult or is it so heartless to say that the federal Government of Canada will continue to pay one-half of all insured health care costs? Is it so heartless to say that the federal Government will continue to pay one-half of all operating costs of post-secondary institutions?
Let us look at some of the figures for just a moment and challenge some of the things which have been said by my colleagues to my left, particularly in respect of post-secondary education. It is true now, and it will continue to be true, that the federal Government pays over 50 per cent of all operating costs of colleges and universities in the country. When we consider that students pay 15 per cent, the provinces have been paying 35 per cent. In some instances they have not even been paying that so the federal Government has been paying substantially more than 50 per cent.
We should tell the people the facts. Do they know the split in university and post-secondary spending? I do not think so. From what we heard today, one would think that changing the rate of the EPF would destroy the post-secondary system. What utter nonsense!
Do the people know what happened to funding in universities over the last few years? Do they know that most of the provinces have not put in the money which has been transferred ? Do they know the amount of money which has been transferred every year under EPF and the percentage increases?
Members of the House know that the provinces have not been using that money for post-secondary education. The figures are available. We can ask the Association of Universities and Colleges of Canada what have been the federal

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transfers and what have been the percentages of increases to the universities. My riding is in the heart of southern Ontario.


George Albert Proud: It is rich.


William C. Winegard: Rich is right. It is rich in spirit, rich in morality, and rich because the people work hard. Let me look at Ontario because that is what interests me first. In 1985-86 federal transfers were $5,636 billion. In 1986-87 federal transfers will be $6 billion. That is an approximate $400 million increase in one year; $364 million to be precise. That is not too bad. I do not think that amount is too low, considering where the CPI is now. There is no doubt at all that it was not what they expected. I am not sure any of us will have our expectations fulfilled for the next several years. That is what is wrong. Alice must come out of the Wonderland sometime, Sir. It is time. What is the reality that all Canadians must face? They have to face an operating budget in Canada of over $100 billion, one-third of which each year we cannot pay.
There was no sign of change in sight when we came here two years ago. The answer to everything was: "Increase your spending and increase the deficit". A philosophy: "If it has to be done, let government do it." There was disdain for private enterprise; no plans to reduce interest rates; no plans to increase the number of jobs except, of course, through government action and government spending. There was no thought for the long-term future of Canada, only thought for short term political gain. There was no thought for the economic health of our country, for the future of our young and for the future of the aged. That is the legacy of the past. Someone had to say "enough" and thank goodness the Minister of Finance (Mr. Wilson) with the full backing of the Prime Minister (Mr. Mulroney) has had the courage to ignore short-term politics, to look ahead to see the horizon and to say Canada needs and wants a fiscal plan, a plan for all Canadians. We do not need to drift forever aimlessly in a sea of Liberal mortgages on our future. Every program must be examined. None are sacrosanct.
Statutory programs will grow at the rate of at the most 3.8 per cent a year for the remainder of this decade. Non-statutory programs will grow at the rate of 2.7 per cent a year, if that, all in a period of 4 per cent inflation. If we look at the EPF, it will increase 5 per cent a year. That is what the hullaballoo is about here today. Surely that indicates a desire to help the provinces.
We have heard from some of our opposition colleagues during this debate, a debate which I remind you, Sir, has had well over 130 speakers. That is hardly muzzling Parliament. They have said that unless one continues to spend at the same rate as in the past, that everything will collapse. They have joked about our attempt to find national consensus, a national purpose again. They have said the opportunity for the young will be lost, that students will stay out of post-secondary institutions and that health care will suffer. I understand these
comments. I understand the well meaning but in my opinion it is a misguided mentality that promotes such concepts. I do not agree one bit because I have more faith in Canadians.
I have more faith in our post-secondary educational institutions than some of my colleagues apparently. The institutions will find new and better ways to do things. They are finding ways to do things differently even now. They will rationlize. They are saying to the provinces: "Give us our share of the funds that you are receiving from the federal Government. You have not been doing this for years. Do it now". They are saying to the provinces: "Tell us now what you will give us over the next five years. The federal Government has told you. You now tell us, please." If the provinces would do so, the institutions would know how to respond.
Managers can manage if they know what their income is going to be. They can be innovative, and the post-secondary institutions have proven that time and time again. The health care system can manage. It will find priorities if the system knows what the future is.
There are ways of delivering health care that are different from those we have now. There are many experiments going on in the world. Some of those experiments are proving that good health care can be provided at less cost than we have now. We have said that we can afford, and I agree with my hon. colleague who said that we can afford, the best health care system. I think we can. However, my concern is that that does not mean the existing health care system, nor does it mean the existing post-secondary educational system. You do not obtain the best by extrapolating the past. The old ways required enormous sums of money. Why, Mr. Speaker? Because this country, like many others, has relied on tertiary health care for years. In other words, you do not do anything until it is time to put people in the hospital.
It is the hospitals, the technology and the testing that is costing us so much. It is not the doctors-and I say that to my colleagues on the far left-who cost the system so much money, it is the other end of the health care spectrum. We all know that. We all know too that even the professionals know. They know that you cannot extrapolate the health care costs of this country. There have to be some changes. Those changes will be found. It is the financial pressure which they are going to feel. There is no question about that, but some of that financial pressure can be turned to useful and innovative purposes.
I am not one who believes that you follow slavelessly the past to find the future. I believe you look for something different, ways to challenge the system, ways to make it better. You do not make it better by building more. You make it better by change. I have no hesitation in telling my colleagues in the health care system, and I know some of them well, or my colleagues in the post-secondary institutions that I know they can do it. It will be their contribution in getting this country out of the morass that we are now in. I know they will respond to the challenge as they have always responded because they are Canadians.
June 19, 1986


Leslie Gordon Benjamin: Mr. Speaker, I want to join in this debate, and I have to confess to the House in case some of my hon. colleagues did not have the privilege of hearing me before, that this is my fourth time. I attempted on the previous three occasions to try, at least with my limited capacity of humour, to humour them into doing the right thing, to try to live up to their own words and their own commitments.
There is a longstanding phrase going back many decades and centuries that says: "A man is as good as his word." Today we would say "A person is as good as their word." Of course, that expression implies that if you give your word, whether you are an individual, a corporation, a political party, or a government, you must be as good as your word. I refer to the words and the word of the Party of the Government in power and the word of the present Prime Minister (Mr. Mulroney) when he was Leader of the Official Opposition. They gave their word in the media and in their own literature that the Conservative Party would return to the 1977 funding formula for post-secondary education and health care. No one in the country of any political persuasion disagreed with that.
The outfit that started all this was the Liberal Party when it was in power. The Liberals were the ones who wrecked the 1977 formula. I am glad they are having death-bed repentances. I appreciate the remarks of my colleagues to my immediate right. They are nice enough to admit in a roundabout way that they were wrong then. They have repented.
The Conservatives and members of my Party fought tooth and nail in the Chamber to maintain the 1977 funding formula. The Conservative Official Opposition of that day screamed about it and the same Conservative Party is now compounding the felony. That proves what we have said for many years in this place, that there ain't no difference. They both take money from the rich and votes from the poor and then promise to protect them from each other. If you are not as good as your word, whether you are an individual or a government, you are not good. If a government is not prepared to stand by its word, it is not a good government.
The decreases in the increases in the amount of moneys the provinces can expect to receive to serve their citizens properly again makes it apparent that this Government, like the previous Government, knows the price of everything and the value of nothing.
I listened with horror to the pronouncements of the previous speaker, the Hon. Member for Edmonton West (Mr. Dorin). He presented himself well. From my perspective he looks like he is about 21, but he sounded like he is 91. These are the new R.B. Bennetts and Charlie Dunnings of this world out of the 1920s and dirty thirties.
I want to call as a witness one who is not a member or supporter of my Party or of the Official Opposition. He is a member and supporter of long standing of the governing Party.
Federal-Provincial Fiscal Arrangements Act
He is an honoured and respected citizen of this nation in many ways. I speak of the Hon. Mr. Justice Emmett Hall. He was speaking about funding for health care and secondary education and this drive for privatization, the move away from the responsibility of the nation and the citizenry as a whole. He said:
With privatization will come drastically increased costs particularly in the hospital field.
Canada now allocates 8.4 per cent of the GNP to all forms of health care. In the United States where privatization flourishes, it is 10.9 per cent for vastly inferior coverage.
That was not some raving socialist talking, that was Mr. Justice Emmett Hall. In this area the Government cries and pleads about the deficit. We have proposed several options that would result in no increase in the deficit. The nation would more equitably share in the funding required under the 50-50 formula for health care and education.
The Government is bringing in a minimum tax which the Prime Minister and my Leader agreed to during the last election campaign. If he and the Minister of Finance (Mr. Wilson) would add 1 per cent or even half of 1 per cent to that minimum tax, they will have all the funding they need to maintain and implement the 50-50 formula.
We have proposed another alternative which would not increase the deficit. The Government could charge only 3 per cent interest on deferred corporation taxes which now amount to approximately $35 billion on the books of the nation. It would collect $1 billion in interest, which would more than maintain the 50-50 formula. Once such a tax were imposed, you would be surprised at how fast corporations would pay their deferred corporation taxes. Otherwise none of it will be collected. My colleague, the Member for Kamloops-Shuswap (Mr. Riis) proposed three or four other options to maintain the level that the Conservtive Party, the Liberal Party, and my Party all agreed to-a 50-50 sharing.
I look upon my friend, the Member for Prince George- Bulkley Valley (Mr. McCuish) as a man of his word. I expect him to insist that the Government to which he belongs lives up to its word. If its word is no good, the Government is no good. You are only as good as your word.
Aside from the decreases in the increases, it is apparent that the Government concerns itself little with the quality of services offered to the public or with the capacity of the provinces to improve and enlarge the hospital, university and medicare programs they presently have. Goodness knows, there is a lot more still to be done. The Government wants more done with less and calls that productivity. When you hinder universities, hospitals and medical care plans in their attempts to increase, improve and enlarge upon the services they can provide, that is not an increase in productivity.
Two people came to my office today about social housing. I asked what that had to do with medicare and secondary education. They said we have a lot of people who need to have

June 19, 1986
Federal-Provincial Fiscal Arrangements Act
some level of social housing so they can be around to take advantage of secondary education opportunities, whether it is universities, federated Indian colleges, or community colleges. They said we do not have enough places to put these people. They wanted to know what the federal government policy was. They met with an official from the Minister's office this afternoon who blamed it on the provinces. When they met with the provinces, the provinces blamed it on the federal Government. It is called the old runaround.
More seriously, one of the contributing factors to the abhorrent spectacle we see in this province right now of doctors on strike is partly attributable to niggardly treatment by the federal Government starting in 1977 and continued by the present Government, and partly due to niggardly treatment by the provinces. I was on the scene in 1962 in Saskatchewan, and there is nothing new about what is going on in Ontario now. They lost then and they are going to lose now. I understand their arguments and I do not agree with them. However, for any Government, provincial or federal, or for any association like the Ontario Medical Association, to resort to methods which put people's lives at stake has to be and is an obscenity in a civilized society.
The Minister of Finance can bring in a Bill tomorrow which will take up one of the options we have offered. We will agree to put it through all stages in one day. It will have no effect on the deficit. It will maintain the 50-50 formula and earmark the taxes specifically for health care and secondary education. They could not be used for anything else. Of course, there is either evidence or suspicion that some provinces have been less than straightforward and honest about how they spend the money they get now. That tells me there is something wrong with the federal Government's auditing process. The Government has no one to blame but itself if some provinces did something else with the money. To let them get away with that is the fault of the federal administration and no one else.
The social costs of decisions made by this Government and by both private and public corporations return upon the provinces and the federal Government in other ways. I have only to illustrate the situation in Moncton. After listening to the management and officers of CN for three hours, I can tell you that a few years down the road the social costs, whether they be welfare or health treatment or secondary education or anything else, are going to fall on the backs of the municipalities in and around Moncton, the Province of New Brunswick, and federal taxpayers. The regime now in place, started by the Liberals and enlarged upon by the Conservatives, is a betrayal of what this Parliament did in the middle 1960s.
At that point we established a program which set an example for the world of how a nation of people working together can treat one another fairly and equitably no matter where they live or what their station in life is. I will not try and humour my friends on the Government side any longer. I am damned sick and tired of this. I put it to them point blank: Be as good as your word. If you are not going to stand by your word as a Party, or the word of your Prime Minister, you are
not deserving of any kind of charity or civilized treatment. You have lowered the standards of these programs because of your hysteria about a deficit. What you do not understand is that to keep people healthy and educated is not an expense, it is an investment. A healthy, well-educated and trained population will work, earn money and pay taxes. The Government will get more back in taxes at all levels than the original cost. That has been proven time and time again.
Retaining the 50-50 formula is not an expense or an increase in the deficit, it is an investment in our nation and its people. It is an investment that will pay off repeatedly. Surely to God this Parliament will be bigger than what this Bill says. Surely this Parliament and the Government will say we are men and women of our word. We are a Party of our word. We will live up to our word. If they do that, they will have the support of all sides of this House and of the people of Canada.
It is now time to tell Members opposite to get off their backsides and live up to their word. If they do not like a national compulsory health care plan, why not say so? Why not have the courage of your secret convictions and say so? Why do you say from one side of your mouth that we will return to the 1977 formula and from the other side say the opposite? Surely any self-respecting Progressive Conservative will say to himself: "I am not going to hold still for that." Fellows like Tommy Douglas, John Diefenbaker, Lester Pearson and Mr. Justice Emmett Hall, and scores of other people like them, brought about the 50-50 sharing among all the people of Canada. Surely we cannot let what they did go for nothing.
I hope this Government will reconsider, and if not today, in the last dying days of this session of Parliament. Other Governments have learned from their bitter experience. I want to be kind to my friends opposite. I hope they will change their minds or they are going to go through the same kind of bitter experience, and I plan on being here to see it happen.


David Charles Dingwall: Mr. Speaker, there are a number of comments one would want to make with regard to the remarks that have been made by my colleague from Regina West. Quite properly the Hon. Member has referred with great sincerity to the phrase integrity, in keeping one's word. We have seen in the First Ministers' Conference which was held in Halifax there was a clear consensus by the First Ministers of the day that there ought not to be reductions in the Established Programs Financing.
The premiers held that position because they believed the Prime Minister (Mr. Mulroney). They believed the Government would not at any time reduce the moneys for the fiscal year 1986-87. We have an example here of the Government breaking its word. It is equivalent to what the Government has done on on another matter with regard to workers in Moncton, New Brunswick in breaking an undertaking that they had given to the workers with regard to the CN shops; another example of breaking one's word. I find that to be totally
June 19, 1986

unacceptable for any party, any Government, to conduct the affairs of the nation when on one hand it says one thing and on the other it does something else.
My question to my colleague from Regina West, does he agree with me that it is high time for those who sit opposite to us to stand in their places and to represent their constituents in a forthright and honest way and change the legislation that is now before us to the way it ought to have been, the way they have promised it? Is there not an obligation upon the Government of the day to live up to the promises it has made to the people of Canada, and they ought to deliver forthwith in this chamber tonight?


Leslie Gordon Benjamin: In a short response to my hon. friend, I agree with the question he just put, and I respond also by saying to him that the very thing that is occurring in Moncton today was started under a Liberal Government when they ordered Canadian National Railways to start showing a profit or else. There would be no more capital investment. It was Conservatives who screamed bloody murder about Moncton. Who is carrying out what the Liberals started? The Conservatives.


The Acting Speaker (Mr. Charest):: Order, please! It being 9.45 p.m., under an order adopted on Wednesday, June 18, 1986, pursuant to Standing Order 117, it is my duty to interrupt the proceedings and put forthwith every question necessary to dispose of the third reading stage of the Bill.
The Hon. Member for Charlevoix (Mr. Hamelin) rises on a point of order.


Charles-André Hamelin: Mr. Speaker, I could hardly hear you. Could you repeat what you have just said?


The Acting Speaker (Mr. Charest):: Order. The Hon. Member for Charlevoix is right. It is a common occurrence in the life of a Speaker that members have difficulty hearing him. However, I will stop short of repeating myself, something that is done quite often in this place.
Before putting the question, I shall simply tell Hon. Members that, contrary to the announcement that was made, there will be no proceedings on the adjournment motion. Tonight's vote was not taken into account. So, I want those concerned to know there will be no adjournment debate.
Therefore, the question is on the amendment of Ms. Copps:
That the motion be amended by deleting all the words after the word "That" and substituting the following therefor:
"Bill C-96, An Act to amend the Federal-Provincial Fiscal Arrangements and Federal Post-Secondary Education and Flealth Contributions Act, 1977, be not now read a third time but that it be read a third time this day six months hence."
Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.
Federal-Provincial Fiscal Arrangements Act


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


Some Hon. Members:: Yea.


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


Some Hon. Members:: Nay.


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


The Acting Speaker (Mr. Charest):: Call in the Members. [English]


The Acting Speaker (Mir. Charest):: I declare the amendment defeated.


Leslie Gordon Benjamin: Mr. Speaker, I rise on a point of order. On my one and only opportunity as leader-


Some Hon. Members:: Hear, hear!


Leslie Gordon Benjamin: I get more applause from that side than I do from this side. I think, Mr. Speaker, you would find a propensity on behalf of all of us-


Some Hon. Members:: Oh, oh!


Ramon John Hnatyshyn: After Crosbie's Bill, that's against the law.


Leslie Gordon Benjamin: I think, Sir, if you were to ask the House, you would find that there is a propensity to agree that the vote presently cast will count on the main motion in reverse, and that is for the benefit of all the goof-offs who are not here tonight.


The Acting Speaker (Mr. Charest):: Order. It being one of the Chair's only opportunities to be in the chair during a vote-


Some Hon. Members:: Hear, hear!


The Acting Speaker (Mr. Charest):: Rising from your seats won't help any of you. I take it there is the unanimous consent of the House to apply the same vote in a reverse fashion on the main motion?


Some Hon. Members:: Agreed.


Mr. Cooper:: Mr. Speaker, could you just make sure that the Hon. Member for Peace River is included on the second vote?


The Acting Speaker (Mr. Charest):: Therefore, I will put the question to the House. Shall I dispense with the ringing of the bells?


Some Hon. Members:: Dispense.


The Acting Speaker (Mr. Charest):: We will apply the vote in the reverse manner including the vote of the Hon. Member for Peace River (Mr. Cooper).


Some Hon. Members:: Agreed.
Wilson
(Swift Current-Maple Creek) Winegard Wise-89.


The Acting Speaker (Mr. Charest):: I declare the motion carried.
Bill read the third time and passed.


The Acting Speaker (Mr. Charest):: It being after 10 p.m., the House stands adjourned until tomorrow at 11 a.m. pursuant to Standing Order 3(1).


[Stage Direction]
The House adjourned at 10.15 p.m.
[Stage Direction]

Friday, June 20, 1986