1986-01-14

GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Thursday, December 19, consideration of the motion of Mr. Epp (for the Minister of Agriculture):
That, in relation to Bill C-70, an Act to amend the Family Allowances Act, 1973, one sitting day be allotted to the consideration of the report stage of the said Bill and one further sitting day be allotted to the consideration of the Bill at the third reading stage; and
That 15 minutes before the expiry of the time provided for the consideration of government business on the above-mentioned sitting days, 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. John R. Rodriguez (Nickel Belt):: Mr. Speaker, my speech was rudely interrupted by other things before the Christmas holidays and so here I am now concluding what I think were very germane and important thoughts. We are now in 1986. It is a brand new beginning, just the kind of beginning that the Tories should welcome, a tabula rasa wiped clean, a starting all over again.


Mrs. Mailly:: You are not being germane, John.


John R. Rodriguez: We now have the latest Gallup poll which shows the Tories dropping like a stone.


Mr. Nunziata:: And the Liberals are going up.


John R. Rodriguez: They had better look for a new executive. Interest rates are rising and the Tories are dropping in the polls, and one would think they would want to start a new year with a resolution that I am sure certain elements in the Cabinet would like to make, and that is, the withdrawal of Bill C-70. Withdraw it.


Some Hon. Members:: Hear, hear!


John R. Rodriguez: I would like to put that to the House. All those in favour of withdrawing the Bill say yea.


Some Hon. Members:: Yea.


John R. Rodriguez: All those opposed say nay.


Some Hon. Members:: Nay.


John R. Rodriguez: In my opinion, Mr. Speaker, the yeas have it.


Some Hon. Members:: Oh, oh!


John R. Rodriguez: Since we adjourned for the Christmas vacation, thousands and thousands of Canadians have clearly indicated by petition that they reject the partial deindexing of the family allowance. And we must not forget that the whole question of deindexation started with the Liberals in the previous Government. They started us down this rocky slope.


Mr. Frith:: You were doing well until now.


John R. Rodriguez: I know the Liberals are going to get sensitive, but I want the people of Canada to realize that the Tories did not hatch this up all on their own. All their ideas were aborning in the four years previously.


Claudy Mailly: Thank you, John.


John R. Rodriguez: We cannot forget, and as the Tories drop in the polls, the Liberals should be dropping as well.


Mr. Gauthier:: But we are not. You're dropping.


John R. Rodriguez: What are we really doing with this partial deindexation, Mr. Speaker? We are chiseling the children of this country. The Tories finally saw that they could not proceed with the deindexation of the old age pension. Why do they not now see that they should not proceed with the deindexing of the family allowance?


Mr. Hnatyshyn:: Because Bob Rae says so.


John R. Rodriguez: Because the Minister has the cheques already printed and the cheques reflect a cent a day per child. Oh, look at the big-hearted old Santa Clause sitting over there with the white hair, Mr. Speaker. There he is over there taking one cent a day per child. I am not pointing to the House Leader, Mr. Speaker, I want to make that clear; I am pointing to the Minister of National Health and Welfare (Mr. Epp). The Government said that if the economy improved, it would give back the full indexation. To listen to the Government, one would think the economy has improved. It now has a minimum tax, and it should be doing what is fair and just for the people of Canada, that is, fully indexing the family allowance.
I have one last point to make in the couple of seconds I have left, and that is, that the whole section on missing children is fraught with great danger, confusion and complexity. I think,

January 14, 1986
Time Allocation
even on that score alone, the Minister should withdraw the Bill and never let it see light again.


Mr. Speaker:: The two hours provided for the consideration of the motion now before the House under the provisions of Standing Order 84 have expired. Accordingly, under the terms of Standing Order, it is my duty to interrupt the proceedings and put every question necessary to dispose of the motion.
The question is on the motion standing in the name of Mr. Wise.
All those in favour of the motion will please say yea.


Some Hon. Members:: Yea.


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


Some Hon. Members:: Nay.


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


Mr. Speaker:: Call in the Members.


Mr. Speaker:: I declare the motion carried.


BUSINESS OF THE HOUSE
Ramon John Hnatyshyn: Mr. Speaker, I rise on a point of order. There have been consultations between the Opposition House Leaders and myself with respect to the business for today. It was proposed that we carry on consideration now of report stage of Bill C-84, an Act to amend the Income Tax Act.
You will recall, Mr. Speaker, that there was an Order of the House made prior to the Christmas recess which provided for four days of debate on this legislation to complete all stages. On the basis of discussions, it has been agreed that the deliberations today, even though we have not used a whole day on Bill C-84, would constitute one day with respect to the four days contemplated by that Order.
I would ask you, therefore, Mr. Speaker, to put the matter to the House for unanimous consent. I think you will find a disposition to receive it and accept it without debate that we do consider this as one day of the four day debate.


Mr. Speaker:: Do I take it there is consent to the suggestion made by the Government House Leader?


Some Hon. Members:: Agreed.
January 14, 1986


INCOME TAX ACT AND RELATED ACTS
[Stage Direction]
The House proceeded to the consideration of Bill C-84, an Act to amend the Income Tax Act and Related Statutes and to amend the Canada Pension Plan, the Unemployment Insurance Act, 1971, the Financial Administration Act and the Petroleum and Gas Revenue Tax Act, as reported (with amendments) from the Standing Committee on Finance, Trade and Economic Affairs.
Mr. Speaker:: Order, please. As Hon. Members know, there are in the Notice Paper seven report stage motions, for which notice has been given pursuant to Standing Order 81.
Motion No. 1, standing in the name of the Hon. Member for Saint-Henri-Westmount (Mr. Johnston) will be debated and voted on separately.


Ramon John Hnatyshyn: Mr. Speaker, I wanted to address myself with respect to the procedural admissibility of certain matters. Maybe this is the appropriate time.


Mr. Speaker:: I will hear argument if such is the intention at this time. The President of the Privy Council (Mr. Hnatyshyn).


Ramon John Hnatyshyn: Mr. Speaker, I will try to be brief. I want to deal with Motions Nos. 1, 2 and 3 in particular.
Motion No. 1 standing in the name of the Hon. Member for Saint-Henri-Westmount (Mr. Johnston) appears to be attempting to extend to corporations the method of valuation of inventory which is included in the Bill for individual artists and which was agreed to at the second reading stage. This then would expand the scope of the Bill beyond that which the House has agreed to in principle, and therefore it is contrary to our practices as outlined in Citation 773(1) of Beauchesne's Fifth Edition, which reads as follows:
An amendment is out of order if it is irrelevant to the Bill, beyond its scope or governed by or dependent upon amendments already negatived.
Therefore, I would argue that Motion No. 1 is irregular and should not be put to the House.
Motion No. 2 standing in the name of the Hon. Member for Saint-Henri-Westmount appears to be offered at the wrong place in the Bill since it is offered as a subsection of the definition of "Qualified Farmed Property", whereas it appears to be offering a general definition which would apply to the capital gains exemption and is not really relevant to the definition of qualified farm property.
Therefore, it would appear that Motion No. 2 is contrary to our usual practices as outlined in Citation 773(3) of Beauchesne's Fifth Edition, which reads:
An amendment is out of order if it is offered at the wrong place in the Bill-
The substantive question of restricting the capital gains exemption to the proceeds of the sales of Canadian securities is contrary to the principle of the Bill agreed to at the second reading stage, since the capital gains exemption applied to all capital gains from the sale of any assets, and to restrict it to
Income Tax Act, 1986
proceeds of the sales of Canadian securities would be contrary to the principle of providing the exemption to all capital gains.
It seems to me that our practices in such cases are clearly outlined in Citation 773(2) of Beauchesne's Fifth Edition, which reads:
An amendment must not be inconsistent with, or contradictory to, the Bill as so far agreed to by the committee-
With respect to the applicability of this citation to the report stage, I would refer the House to Citation 792.
In addition, the House will be aware of our long-standing practice of not accepting substantive amendments to Bills by means of an amendment to the interpretation clauses of such Bills. This practice is supported in Citation 773(10) of Beauchesne's Fifth Edition.
I submit that Motion No. 2 is irregular for the three reasons I outlined and ought not to be put to the House.
With respect to Motion No. 3, it would seem to be wholly dependent on the adoption of Motion No. 2 which, I believe, I have proved to be irregular.
Therefore, Mr. Speaker, I submit that Citation 773(4)(a) of Beauchesne's Fifth Edition applies in this case. It reads:
An amendment is inadmissible if it refers to, or is not intelligible without, subsequent amendments or schedules, or if it is otherwise incomplete.
For this reason Motion No. 3 ought not to be put to the House. I thank you, Mr. Speaker for your attention to my submission.


Mr. Speaker:: On the same procedural argument, I recognize the Hon. Member for Saint-Henri-Westmount (Mr. Johnston).


Mr. Johnston:: Mr. Speaker, there is only one point raised by the Government House Leader which I think merits debate. I think the other points are easily disposed of. These do not change the incidence of taxation, none of the amendments do. In Motion No. I there is an extension of an exemption provided for in keeping with the principle of the Bill and the deliberations before committee.
With respect to Motion No. 2, there is a typographical error in that the words in paragraph (d) in quotation marks should not be in quotation marks. There will be a subsequent amendment put by one of my colleagues to eliminate that. It does, however, fall in the right place in the Bill which is, as the amendment says, "after line 39 at page 90" and is precisely where that definition should fall. The only issue is that a "(d)" is indicated which would tie it in to the preceding paragraph. That should be eliminated.
I understand that I cannot move that motion since my name is on the main motion. The first speaker following me will do that to have it eliminated.
Again, I do not think, in terms of the principle of the Bill, that these are substantive amendments. They are, if you like, improvements to the proposal put forward by the Government to the principle inherent in this capital gains type of exemp-

January 14, 1986
Income Tax Act, 1986
tion, and I would say that they do not change the incidence of taxation and should be allowed to stand.


Mr. Deans:: Mr. Speaker, I am a little puzzled by the interjections of my friend and colleague, the Government House Leader.
With reference to his initial dealing with Motion No. 1, I would argue that any amendment brought forward at the report stage clearly will bring about the result of changing the Bill in one way or another as it was at the time it was introduced for second reading. You cannot move an amendment to a Bill without the passage of it in one way or another altering the Bill.
Quite clearly, since you cannot move amendments at second reading, the only place amendments could be moved would be in the committee or subsequently at the report stage.
To suggest that an amendment is improper because it would in one way or another alter the Bill which was before the House at second reading, is an argument that surely could never be sustained.


Ramon John Hnatyshyn: That is not what I argued.


Ian Deans: My colleague says it is not what he argued. The problem is that it was intended only that an amendment would be considered out of order at report stage if it altered the principle of the Bill. I would contend and submit that neither of the amendments proposed by the Hon. Member for Saint-Henri-Westmount (Mr. Johnston) alter the principle of the Bill.
Quite frankly, there are many principles in this particular Bill; it is an omnibus Bill. However, it does not alter the principle which pertains to capital gains; it qualifies the principle. I would argue that an amendment is in order if it qualifies the principle, if it says that the principle can be applied but subject to the following. In effect, that is exactly what both the amendments of the Hon. Member for Saint Henri-Westmount do. They say: "Yes, you may do what you are saying you want to do, but it can only be done in the following way and to the following classes of property".
Therefore, I suggest that the argument of the Government House Leader, though imaginative, certainly ought not to stand.
Finally, I would agree that if Motion No. 2 were to be ruled out of order, Motion No. 3 would automatically not be put. However, I do not accept for one minute that Motions Nos. 1 and 2 should not be put to the House. I contend that they are legitimate amendments put in the proper place and follow the proper course set out for dealing with amendments.


Mr. Gray (Windsor West):: Mr. Speaker, if I am not mistaken, this is the first time-and if it is not the first time, it is one of the very few times-that a tax Bill has been dealt with through study in a standing committee and then sent back to the House for report stage and third reading like other
kinds of legislation. If that is the case, I would respectfully submit that the approach of Your Honour to the acceptability of amendments should be one in which you deal with them in a broad, flexible and generous spirit.
The idea that tax Bills would be studied in a standing committee rather than in Committee of the Whole is part of the package of parliamentary reform on which the House has been moving in recent months. It would seem that it would really make meaningless the idea that tax Bills should be given detailed study in a standing committee and then sent back to this Chamber for report stage and third reading, if the idea that amendments could be made to those tax Bills would be interpreted so narrowly that in fact no amendments would ever be receivable.
Therefore, I submit very strongly that in the context of the spirit of parliamentary reform, Mr. Speaker, you should look upon the acceptability of amendments in a broad and generous spirit and not attempt to see whether in some possible or theoretical sense they go against the principle of the Bill. If amendments were not expected to be acceptable at report stage when we are dealing with a tax Bill, then the Standing Orders should have said so. They do not say so and, therefore, that right should not be taken away through parliamentary interpretation. That is my submission.


Mr. Speaker:: Order, please. I will be in some difficulty if we just go on and on with procedural arguments. However, I will recognize the Hon. Member for Mississauga South (Mr. Blen-karn), followed by the Hon. Member for Ottawa-Vanier (Mr. Gauthier), and I will end it there.


Mr. Blenkarn:: Mr. Speaker, in respect of the statement of the Opposition House Leader concerning the reference of this matter to the standing committee, may I say that it is perfectly proper that Bills be referred to the standing committees from time to time. This Bill received the same class of treatment in a standing committee as it would have in a legislative committee.
There is an amendment standing in my name; that is a procedural matter in respect of the Bill. There were amendments put in the standing committee. They were voted on and were passed. There were a number of changes made in the Bill, and the amendments are marked in the Bill for report stage debate.
The argument here is that the particular amendments of the Hon. Member for Saint-Henri-Westmount (Mr. Johnston) materially change the nature of the tax imposed and, therefore, are not proper amendments because they go against the principle of the Bill. The principle of the Bill deals with a number of important tax connotations, but they were voted on when the Bill passed second reading stage. The connotations, to be brief, are as follows: Motion No. 1 deals with capital gains relief for individuals, not capital gains relief for every taxpayer. Consequently, the term "individual" was used rather than the term "person". My friend wants to broaden the Bill to give more people relief. He cannot do that because that changes the principle of the Bill.
January 14, 1986


Donald James Johnston: Mr. Speaker, I rise on a point of order. 1 think the Hon.Member will recognize that the provision has nothing to do with capital gains. It has to do with inventory evaluation, which might change his thinking on the subject.


Mr. Speaker:: Could I interrupt for a second, please? 1 fear that we may be verging into substantive debate. Therefore, I remind the Hon. Member for Mississauga South that I am hearing procedural arguments. In fairness to him, he has stayed as close as possible to that, but at the same time he is making substantive arguments. I ask him to restrict himself to the procedural issues.


Donald Alex Blenkarn: Mr. Speaker, the nub of the argument is that the amendments put to the House in respect of a tax Bill cannot broaden the tax or broaden or change the nature of the tax imposed, without the approval of the Governor in Council or without a notice of ways and means. The fact is that these particular amendments specifically contradict the ways and means motion and specifically change the nature of the tax imposed. Therefore, the particular amendments represented by Motions Nos. 1 to 5 are out of order. For example, the clear indication in the ways and means motion was to eliminate the Registered Home Ownership Savings Plan. This amendment reinstates it. That is an entirely different subject. It is the kind of thing which might have been argued at second reading, but this is a particular ways and means motion which passed the House. The Bill must correspond to the ways and means motion.


Mr. Speaker:: Could I be very clear, please? Is the Hon. Member for Mississauga South also telling me that he is arguing that Motions Nos. 4 and 5 are out of order?


Donald Alex Blenkarn: Yes.


Jean-Robert Gauthier: Mr. Speaker, I want to talk about process; I do not want to talk about the principles of the Bill. I do not agree with the Hon. Member for Mississauga South (Mr. Blenkarn). I think we are talking about details, not about principles.
The amendments in the name of the Hon. Member for Mississauga South are dated January 13, 1986, that is, yesterday. I understood that the rules of the House required 24-hour notice before we could debate such amendments. Could it be explained to those of us on this side why these motions, which were most likely tabled yesterday evening, are debatable today? I am referring to Motion No. 6 and Motion No. 7, standing in the name of the Hon. Member for Mississauga South.


Mr. Speaker:: Perhaps I could answer that. They were received yesterday. That is the normal practice.


Donald Alex Blenkarn: Mr. Speaker, they were not received yesterday. Yesterday was the date on which the House was opened. They were produced and received on December 20, but they were not published until yesterday. As you know, Sir, the House was not sitting on December 23 and December 24, but
Income Tax Act, 1986
the motions were in fact tabled on December 20 and they were printed on the first conceivable time for printing.


Mr. Speaker:: Let me start with Motions Nos. 4 and 5 which are clearly in order. It is simple. Any Member may move to delete a clause. That is how the matter gets on the floor for discussion. Therefore, a motion to delete is clearly in order.
The arguments with regard to Motions Nos. 1, 2 and 3 have been made at a technical level by the President of the Privy Council (Mr. Hnatyshyn). Therefore I think I must reserve to consider those technical implications. I suggest at this point that I will rule Motions Nos. 4 and 5 as being in order for debate, for procedural admissibility at least. These motions to be debated and voted on separately, and Motions Nos. 6 and 7, in the name of the Hon. Member for Mississauga South, will be combined for debate but voted on separately. I will come back to the House, as quickly as I can, with a ruling on Motions Nos. 1, 2 and 3, but I suggest that for the moment we begin with Motion No. 4, standing in the name of the Hon. Member for Saint-Henri-Westmount (Mr. Johnston).


Donald James Johnston: Motion No. 4
That Bill C-84, be amended by deleting Clause 65.
He said: Mr. Speaker, I will address myself then to Motion No. 4, and I trust that in your deliberations on the questions raised you will take into account my other reference to the amendments that will be made with respect to Motions Nos. 2 and 3.
The motion that we have before us for consideration provides that Clause 65 of Bill C-84 be deleted. The intention of Clause 65 is to restrict the indexation in the Act with respect to tax brackets and with respect to exemptions.
In so doing, Mr. Speaker, the provision in the Act that has served Canadians so well since the early 1970s is being done away with at great cost to individual Canadian taxpayers. If we refer back to the Government's own estimate of the amount of additional taxation that this change would bring we find, Mr. Speaker, that in 1985-1986, the current fiscal year, some $80 million will accrue to the public Treasury by virtue of this modification to indexation.
In 1986-1987, the amount is $570 million-half a billion dollars. We do not have the estimates for the years immediately following 1986 and 1987, but we can assume that they will increase at an exponential rate. We see that by the year 1990, 1991, Mr. Speaker, there will be additional revenues to the federal Government in the amount of $4.3 billion, all of this simply through the application of Clause 65 of Bill C-84 which removes indexation. When I say it removes indexation, Mr. Speaker, I mean it provides that there will not be any indexation except when the Consumer Price Index exceeds 3 per cent. That means that the Government will be taxing the first 3 per cent of inflationary income realized by Canadians.
Now I emphasize that point, that it is inflationary income, not real income. In other words, with no real increase in

January 14, 1986
Income Tax Act, 1986
income whatsoever, but with an inflation rate of, say, only 3 per cent, the Government of Canada will, in fact, be reaching into the pockets of Canadians and transferring assets of private individual Canadians to the federal Government in the amount of $4.3 billion in the year 1991. It is inflationary increases only, Mr. Speaker.
I am not sure that any of us in the course of the debate in this House have seized adequately upon that point, but this is going directly into the savings of Canadians because it is a tax, if you like, on imaginary increases because they are not real, they are brought about by inflation. Of course, that is the very reason that this provision was introduced in the first instance. It was to say to Canadian working men and women and others who receive income from property and other sources, "Your basic income will be protected, we will not tax you on imaginary, fictional income, which is the result of the play of inflationary a forces only."
I come back again to that point, that $4.3 billion is being transferred from the private sector-that this Government and its supporters pretend to hold so dear-to the public sector by virtue of this provision in Clause 65. That will be in 19901991. The cumulative impact over many years, of course, is inestimable at this point in time.

There was a second reason for bringing in indexation some twelve years ago I believe it was in 1974 and that was to put restraints on the public sector and oblige the Government to watch its own spending, while recognizing that revenue would be limited by the indexation granted taxpayers. It was to prevent the Government from doing what it is trying to do with Clause 65, in other words, from transferring $4.3 billion and I quoted this amount for one year only, namely 1990-91 from the taxpayers of this country to the federal government.

Mr. Speaker, there were many reasons, as I said, for this kind of indexation, but one of the principal ones was to inhibit, to discourage the Government from spending inflationary dollars transferred to it by the people of Canada by virtue of the Income Tax Act. That is a very important point, Mr. Speaker, especially during this period when the Government tells us about all its spending restraints and how it is going to attack the deficit. One of the best ways of restricting Government spending is to not give Government the money to spend. The whole purpose of indexation was to leave the real purchasing power in the hands of individual Canadian men and women.
[ Translation]
And now we see the exact opposite happening, namely a desire to transfer these inflationary amounts to the federal Government without putting any restrictions on Government spending.
Mr. Speaker, I would like to touch on a second aspect as well. References are often made, especially by our friends on the left, to our 6 and 5 program. It is true we put a ceiling on indexation, but we did not set our starting point at 3 per cent.
We said: if we manage to reduce the rate of inflation to 6 per cent, no one will lose, and that is exactly what happened. The following year, inflation had dropped to 5.8 per cent. So, everyone was protected under this program. The year after, it was something like 4 per cent. So in our case, we always protected the purchasing power of the individual Canadian, because the program was able to bring down the inflation rate. What we have here, however, is an entirely different approach. Here we are told we will have to sacrifice 3 per cent. It is going to cost 3 per cent. There will be no capping at 3 per cent, and only after the first 3 per cent; in other words, only if the rate of inflation becomes disastrous are they going to protect you against the impact of inflation, that is, over and above 3 per cent, but you will be automatically contributing at least 3 per cent of your inflationary income to the federal Government.
Thank you, Mr. Speaker. I await with great interest the comments of our hon. friends opposite.


Hon. Barbara McDougall (Minister of State (Finance)):: Mr. Speaker, I am very happy to respond to the Hon. Member, on the amendments he has proposed to make to what is essentially a very responsible Bill that would change the Income Tax Act and on the unreality with which he has dealt with in respect of the two issues contained in the amendments that are under consideration.
First, the Hon. Member spoke about Clause 65 and the indexation. He mentioned the transfer of funds from individuals to the public sector by this means. From the beginning, our approach to economic responsibility has been that the kind of profligate spending that went on before has led us into a period of enormous difficulty and that we must bring some responsibility back not only to the Government side but on behalf of individual Canadians. The inflationary cycle which was created by the former Government throughout the decade of the 1970s beginning in about 1974 hurt all Canadians. It hurt interest rates and made it difficult for people to buy houses. The former Government simply thought that by indexing Government policies, it could index the issue out of sight and out of the minds of Canadians. That is not the case.
The former Government followed a policy of introducing indexation that indexed revenues down and expenditures up and in a totally irresponsible way created a great wedge that led us into the kind of deficit situation we are in today. This Government has first faced that reality and has asked Canadians to face that reality as well.
As well, the Hon. Member discussed the increase that would transfer from individuals to the public sector without restricting Government expenditures and indicated that one way to deal with Government expenditures was not to give Government the money. That is a principle that was never followed by the former Government as long as it was in office. That too led to a rising deficit because the Government did not pay any
January 14, 1986

attention to the revenue side and simply increased expenditures year after year in a totally irresponsible way.
I find that the amendments proposed by the Hon. Member do not ring true with me and I do not think they will ring true with the people of Canada. The problems were developed over a period of many years while the former Government was in office and while the Hon. Member was in office. This Government is moving in a totally responsible way to bring back into the control of Canada and Canadians the economic future and social programs that we all desire. However, until we get some kind of financial stewardship and responsibility in place, the former Government must continue to bear some of the blame.


Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, I am very pleased to rise to say a few words in response to the Hon. Member for Saint-Henri-Westmount (Mr. Johnston) and the Minister of State for Finance (Mrs. McDougall). I believe we need to look at this particular amendment and Bill in a certain context. Perhaps I can best explain the context in which we should debate this amendment by recognizing that the tax Bill we are amending is a Bill that assists some Canadians and in a sense punishes others. The gap about which Canadians have always been concerned between the rich and the poor will be widened as a result of Bill C-84. That is something about which many of us have been concerned for many years.
The taxing of only half of capital gains is an issue that we debate in the House regularly. The fact that we only tax half of capital gains cost us about $440 million in lost revenue this year. That one provision that we virtually take for granted, which is that we only tax half of capital gains and would not think of taxing all of capital gains is something that we could certainly debate.
There are many other provisions such as ones which 1 could identify. Who will benefit from the provision that was introduced in the Budget which brought the upper limits of Registered Retirement Savings Plans to about $15,000 per year? It will benefit those who have annual incomes of $86,000. One needs that kind of income in order to even qualify for that limit. It is very clear that that provision will assist a number of Canadian families. It is very clear that it is on the Government's agenda to help those people whose incomes are in excess of $86,000 to save for their retirement years. Good grief, how anyone could actually rise to make that argument in a serious way is beyond me.
The Government went on to say that it should only tax half of capital gains to begin with but that a number of people will not be taxed at all. Those who make capital gains by selling jewellery or foreign real estate do not have to pay any taxes at all. However, we have to get that tax money from some place so the Government said that it would do something a bit different. It said it would have people pay taxes on the inflationary value of their incomes.
Amendment No. 4 will restore full indexation to tax brackets and personal exemptions. The Government now has a vested interest in inflation. As long as inflation rises by more
Income Tax Act, 1986
than 3 per cent, the Government makes money. As my hon. friend has already indicated, the Government will make considerable money. In tax year 1985-86, $80 million will accrue to the federal Government as a result of this provision. In 1986-87, that figure rises to $570 million, and it will keep on rising until it reaches $1 billion, $2 billion or $3 billion. The Government is going to tax the inflationary value of incomes and is going to collect billions of dollars as a result.
I find it surprising that a Government which indicates its concern for individuals and for those folks in communities who are struggling hard to build Canada would hit those same individuals with this provision. This year, $570 million will be taken out of the pockets of individual communities and households across the country and dragged down to Ottawa to reduce the deficit or to make up for all of the other hand-outs that are being given to people through this same Bill. When the Governmnent does not tax capital gains of half a million dollars, it has to come up with that money someplace so it is getting it from individual Canadian men and women. That is only one provision of this Bill. We are going to discuss many more of them.
It is totally unfair and unheard of that the Government is going to tell ordinary Canadians that they will have to pay extra in income tax and that it will have to be paid not on the real value but on the inflated value of their incomes. Again, this indicates very clearly the agenda the Government is using. The first 3 per cent of inflation will not be protected now. This tells me very clearly that the Government does not mind having an inflation rate of 3 per cent because it will gain by it. In a few years, the Government will be bringing in billions of dollars as a result of this provision. It sets a very dangerous precedent to have Governments gaining from inflation as this particular provision will enable the Government to do. That is why this amendment has been put forward.
I must say that we as New Democrats will certainly be supporting the amendment put forward by my hon. friend. It is going to cost Canadians hundreds of millions of dollars if the particular motion which we are debating at the moment fails. It is going to cost individual Canadians, and I think that is the critical point. Individual Canadians will have hundreds of millions of dollars taken out of their pockets this tax year and, therefore, will not have that money to spend in the local stores. They will not have that money to take their families out to a restaurant once a week. The money will not be circulating in cities like Moose Jaw. This is just one provision, Mr. Speaker, and unfortunately, we will be asked on a number of occasions to stand up and identify other provisions where the same process is under way.
I really hope that someone in the Government says a bit more than the Minister of State for Finance in terms of being against this particular amendment. How can it be good news for Moose Jaw or Chicoutimi to take hundreds of thousands of dollars out of the pockets of individual Canadians this year as a result of this tax measure and drag it down to Ottawa to

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Income Tax Act, 1986
assist in reducing the deficit or, more important, use the money to counter the vast expenditures on such provisions as the capital gains exemption?
I do hope my colleagues in the Conservative Party will stand up and indicate how it is going to help the small communities of Canada when more and more money is being taken out of their hands for the benefit of Ottawa.


Mr. Felix Holtmann (Selkirk-Interlake):: Mr. Speaker, it gives me a great deal of pleasure to address the folly of the amendments which have been presented and how they will affect our agenda.


Some Hon. Members:: Oh, oh!


Felix Holtmann: I hear the "oh's" and "ooh's" from Hon. Members of the Liberal Party, and that is understandable. But we have to remind the Canadian public again and again about this serious situation with which we were left. That was really the downfall of the former administration. The Liberal administration never once thought or considered what it was going to do with the tremendous debt it was leaving with our children and our children's children. It is incumbent upon the elected Members of the Government to tell the Canadian people how serious the deficit is.
I think the Minister of State for Finance (Mrs. McDougall) put it correctly when she said that the Liberal Government deindexed Government revenues downward and indexed expenditures upward, and the Canadian taxpayers today will have to look somehow after that debt. We have also considered the importance of not creating additional new debt. We have considered ideas and proposals to stop the waste of taxpayers' money, the tremendous waste which was built into the system, and every time we have addressed that issue, the Liberal Party or the New Democratic Party cried foul. Those Hon. Members still have no idea how to raise revenue but they have all kinds of ideas on how to spend it. That is the kind of thinking the Canadian public must be made aware of. If every member of the Official Opposition rose in his place and told the taxpayers of Canada how they wanted to spend their money, I think it would be a long time before they would ever become the Government. I doubt it will happen in my lifetime. The Liberal Government would spend and then it would print. What it was doing was printing money, never giving consideration to where it was going to come from.


Mr. Gormley:: What it didn't print, it borrowed.


Felix Holtmann: In fact, one can look around the City of Ottawa and see where the Liberal Government has spent millions and millions of dollars, which it did not have, on both sides of the river.


An Hon. Member:: Hundreds of millions.


Nelson Andrew Riis: Billions of dollars.


Felix Holtmann: Hundreds of millions of dollars. Did the Liberal Government think about where the money was going
to come from? Did it ever think that it would have to go to the taxpayers of Canada some day and tell them that they were going to have to pay for this? In the last election the Liberals said: "Look at what we have built for your children and your children's children. We hope they make money so that we can tax them". The Liberals never considered the ramifications, and that is why they are where they are today.


Mr. Boudria:: Speaking of where we are, did you look at the public opinion polls?


Felix Holtmann: Today they are feeling pretty high because they went up in the polls a little.


An Hon. Member:: It's temporary.


Felix Holtmann: But we are going to tell the truth in this House.


Don Boudria: Since when?


Felix Holtmann: We protected our banks and the Liberals created a new hype about that being the wrong thing to do. It was wrong to look after people who had invested even their family allowance cheques. The Liberals said: "Don't protect them". Shame on the Liberals for thinking that way.


Nelson Andrew Riis: The banks don't get the family allowance.


Felix Holtmann: The Liberals did not want to protect the small businesses which employ hundreds of people. The Liberals would not protect them if they had their way. This is the folly of the nature of their debate. Finally a Government took over that really thinks about what it is going to do about the deficit, and in a slow and fair manner we are bringing the deficit down. It is painful. It is always painful to pay your bills. And it is more painful for this country to pay its bills with no revenue.
Yes, we have to find revenue. We have to think about revenue before we think about spending. In fact, that is what the whole exercise is all about. Certainly it is painful for people to pay an element of tax beyond the inflation rate, but I would look at the positive side of things. This country is employing more and more people every month. That is the direction in which this Government is going. The goal has to be that we have full employment some day so that we can tax people less and receive more revenue. That is the goal. That is our objective, and members of the Opposition should start thinking about the objective of creating more employment instead of thinking of ways to spend more money. Until then, the Canadian people will never let that Party form another Government.
The Liberals adopted the attitude that spending will drive unemployment right down, and they felt they could get elected on that platform. But we have 400,000 more people employed in just a year and a half, and those Hon. Members should jump up and agree that that is also the direction in which they would like to go.
January 14, 1986


Nelson Andrew Riis: That is most of Manitoba. The best example is Manitoba.


Felix Holtmann: But the Liberals should show how they would do it. We do not need their lip service. Never once since I have been in this House, Mr. Speaker, have I heard a member of the Opposition rise and describe how he could create more employment. All I have heard is: "Why don't you give more money here and more money there? We knew how to print it when we were in power". And the Liberals are prepared to do it all over again. The Canadian people have to be told what the Liberals have in their minds.


Nelson Andrew Riis: Howard Pawley.


Felix Holtmann: Yes, Howard Pawley, you know that gentleman really well.


Some Hon. Members:: Oh, oh!


Felix Holtmann: And you had better get to know him well because he is not going to be around for a long time.


Nelson Andrew Riis: He has the lowest unemployment in Canada.


Felix Holtmann: The Hon. Member mentions Howard Pawley, who is in fact considering selling off a Crown corporation in Manitoba. He is losing $200 million to $300 million a year and is scratching his head asking: "How long can we do that?"


Nelson Andrew Riis: You should stand up and praise him.


Felix Holtmann: He takes the attitude of the Conservatives sometimes. We like Crown corporations, they say. On the one hand, you people over there protect them, then we have a Premier of Manitoba who says we do not know how to run them. It is starting to show. Manitoba taxpayers are sick and tired of paying for that kind of foolishness. This Government recognizes that big Government does not run big companies in the right way. Past experience involving de Havilland will prove that.
It is about time that the Opposition started to realize this Government's objectives and to support them. It supported the concept during the campaign. Opposition Members said we have to change direction. Now they are back in the House saying that, although we are doing so, it is not the right direction. We are having a seesaw battle back and forth on this issue.
The Hon. Member for Kamloops-Shuswap (Mr. Riis) talks about the danger of this Bill taking $4 billion from taxpayers.
I would like him to stand up and say where he will find the revenue to reduce our debt. I would like to know. We put in place a minimum tax for the rich. His leader praised that. He stood up and said that that is the right direction. Everything was positive. However, now the Member says, "Oh, it is not really what we thought it was". In front of the cameras he says it is great but now it is not. His Leader campaigned for that
Income Tax Act, 1986
tax. As a matter of fact, so did the Leader of the Liberal Party. We all remember how he campaigned on that. However, when it was introduced the Liberal Opposition slammed it. Liberal Members said it was no good, too little, too late. We heard the whole exercise.


Mr. Schellenberg:: He had no option.


Felix Holtmann: "We would have done it a little differently", he said. Well, they have not fooled the people of my riding with that kind of rhetoric. They thought it was a good idea. I have countless letters saying it was about time.
This Government is going in the right direction and every Member in this Party will tell the truth about what is happening to our tax revenues.


Some Hon. Members:: More!


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


Mr. Mayer:: Let the record show that even Don Johnston clapped.


The Acting Speaker (Mr. Charest):: Let me remind those Members who are yelling for more that we are debating Motion No. 4 to amend Bill C-84. I understand that everyone is in a good mood coming back as they do from the Christmas break, but the rule of relevancy may creep up at some time. All Members would do well to keep in mind that we are debating specific amendments.


Mr. Raymond Garneau (Laval-des-Rapides):: Mr. Speaker, I wonder where the previous speaker was when the Budget was brought down on May 23 last year. Did he read the Budget Speech? Is he aware of the tax measures it contained? After listening to his speech, I really wonder whether he does know. He stands up and tells us that the reason why we should not adopt Motion No. 4 to delete Clause 65 from Bill C-84, so that income tax tables will continue to be indexed, and that the reason why this Government intended to vote against the motion, was, that it wanted to control the deficit-
How can he tell us today that it is absolutely necessary to tax individuals on the first three per cent of inflation, year after year after year, when that same Budget, that same Government, had enough financial resources, and was certainly not considering the deficit, when it decided to give the oil multinationals $2.5 billion in 1990-91 alone, and when this year, their decision to remove taxes on the oil multinationals will cost the Government twice as much in foregone revenue as the amount they want to raise through partial de-indexing of the income tax tables.


Don Boudria: Shame!


Raymond Garneau: Mr. Speaker, there is a very interesting point to be made here, and that is that the political philosophy of the Government opposite could be expressed as follows: tax the


Mr. Ernie Epp (Thunder Bay-Nipigon):: The motion before us of the Member for Saint-Henri-Westmount (Mr. Johnston) is to strike out of the income tax Bill the provision for deindexing the tax tables which have the direct effect of moving people to higher tax brackets as their incomes move upward because of inflation. They are forced to pay higher taxes, even though the real effect of inflation is to leave them without the pay increases that they need. Their families are left in the same financial position in which they were before. In debating that amendment, which I support whole-heartedly,
I would like to talk about what the effect of the Government's proposal would be on Canadians. I want to think about that in terms of the lives of people across the country, the regard that Conservatives say they pay to the well-being of people, and in the process, to think about what would make this country better off or worse off.
I think the Conservatives would like to have us believe that they are concerned about the well-being of individuals and families across the country. They have done a pretty good job in Opposition of painting themselves as defenders of individual Canadians. I would concede that they had some of their best success in that, as far as taxes are concerned, when they took a task force across the country to demonstrate the shortcomings of the tax system and the way in which taxes are wrung out of individuals and small businesses across the country by officials of Revenue Canada. That achievement before the last election was very useful in suggesting to the Canadian people that the Conservatives really care about their well-being and that of small businesses, and that when the Conservatives came into power things were going to change. They said that they would take the actions required to ensure that Canadians become better off.
The budget proposal that we are debating today will leave Canadian families much worse off than they were before. It will have the effect, by the end of this decade, of taking so much more money out of the pockets of individual Canadians and reducing the means which families have available to maintain themselves that one can only conclude that what the Conservative Opposition said is rank hypocrisy now that we are faced with a complete denial of the expectations the Canadian people had. We are faced with the brute facts of a tax system that is grinding individual Canadians and their families into poverty.
I recognize that my Conservative colleagues in the House have difficulty recognizing that particular reality. They are looking bemused, puzzled, and distressed as 1 say these things, yet they are the realities of the system. They reflect the fact that the Government, in the Budget of last May 23, put forward a variety of proposals designed to increase revenue on the one hand, and, on the other, put forward other measures that were designed to reduce the expenditures of Government.
Those measures together, of course, are the ones that have the effect of reducing the income of a family earning one salary of $35,000 by almost $1,000 in 1986. That reduction of
Income Tax Act, 1986
$964, to be precise, involves a good deal more than just this deindexation. I will say immediately, however, that it assumes that the modification of cost of living indexing will cost this family approximately $115. That, out of a total of $1,000, is more than 10 per cent, and not to be scoffed at as an important feature.
There are other proposals as well. The reduction in federal income tax that was put into effect in the early 1980s, which the Government has decided to abandon, will have the effect of increasing the taxes of this average family by $100. The increase in unemployment insurance premiums will increase the amount taken out of their pockets by Government by $102, and so on and so forth, Mr. Speaker. There are a variety of changes that will reduce the income of this average family in 1986 by almost $1,000 from its total income of $35,000.
It seems to me that that is not the route to prosperity for individuals and families across the country. It leaves one with a sense of betrayal on the part of the Government, given the hopes that Canadians had when they voted for the Conservatives in the summer of 1984 on the basis of their campaigns. These impacts on individuals and families in Canada are, unfortunately, part of a trend that was under way while the Liberals were in Government through the 1970s and into the 1980s. It is part of a trend of shifting the burden of Government to individuals across the country. That is the second aspect of this which deserves to be emphasized.
In the Department of Finance there is certainly a certain strategy of bringing prosperity to Canada by following certain fiscal principles, or at least one must assume that. If the people in the Department of Finance do not have some such understanding, we would want them all to resign their offices and give the opportunity to people who do have a vision of how the country could be returned to prosperity. We know that the Minister of Finance (Mr. Wilson) believes that if he can only bring in more money and reduce his expenditures and the deficit, that will be significant in moving the country toward prosperity. That depends on how it is done. On the one hand, wealthy Canadians are being given a variety of tax opportunities such as the capital gains tax holiday that has been put forth. On the other hand, there are the kinds of reductions of income for the mass of the population across the country. Therefore, it seems we can debate the philosophy that prevails in the Department of Finance. We can question the good sense of the Minister of Finance.
Surely the amount that people can spend is basic to the prosperity of our country. Surely, the disposable income available to people to spend in the shops in the City of Thunder Bay, its surrounding towns and in communities throughout the country is basic to the business well-being of those shop owners.
When the Government reduces that amount by a thousand dollars, it is not cutting into the necessities such as rents which will not fall or mortgages which will likely rise, or the cost of food which is unlikely to decrease significantly. People will
9740

January 14, 1986
Income Tax Act, 1986
have to spend less in those areas that give them comfortable lives and represent small luxuries of life which add to the comfort of their homes and so on. There will be less spending in home furnishing and electronic shops in my community and throughout the country. Those businesses will feel the impact of that reduction.
During the 1950s the tax balance between corporations and individuals was very close. We have seen a gradual shift, begun by the Liberals in years past, to the point where the said reality in 1986 is that the amount that will come from corporations is about 23 per cent of federal Government revenues and the amount that will be raised from individuals is over 77 per cent. The amount of Government revenue coming from individuals is more than three times as much and moving toward four times as much.
That is not a prescription for prosperity. It may fit into someone's plan for improvement in the long run, but we are all dead in the long run, as John Maynard Keynes once said. In the short run we try to leave decent lives. In the short run, the Conservatives have betrayed the hopes of Canadians. They are impoverishing Canadians by taking money out of the pockets of low and middle income Canadians.
I support the amendment before us and call upon Government Members to stand true to their beliefs that they state in their ridings and support the amendments of the Opposition.


Miss Aideen Nicholson (Trinity):: Mr. Speaker, I am pleased to support the amendment moved by my colleague, the Hon. Member for Saint-Henri-Westmount (Mr. Johnston), which would delete Clause 65 from the income tax Bill before us. Clause 65 removes indexation from the personal income tax system, which means that wage earners and salary earners will only be protected from inflation when it is over 3 per cent.
Indexation in the personal income tax system was introduced by a Liberal Government in 1974 and was intended precisely to protect people on fixed income and low and middle income earners from the ravages of inflation. Now the Government is removing that protection. The effect will be that Canadians will pay an additional $80 million in income tax for the year 1985-86, an additional $570 million in 1986-87 and $4.3 billion for 1990 alone. I stress that the 1990 figure is not cumulative.
The Minister of State for Finance (Mrs. McDougall) told us that this step is necessary because of the deficit. We are all concerned about the deficit, but surely there are choices to be made about the measures with which one approaches the deficit. The choice that has been made by the Government is to ask the ordinary Canadian earner to shoulder the burden while the Government is giving tax holidays to corporations, multinationals and the affluent.
The Minister of State for Finance spoke very eloquently of her concern about the deficit and a responsible approach to its reduction. But where was the Government's concern for the deficit this year when, in the very same Budget from which these Bills we are dealing with arose, it chose to give $2 billion by way of a tax gift to the multinational companies? I stress
that it is multinationals because the particular tax holiday arrived at is one that essentially favours the multinationals and not small Canadian companies.
Where was the concern about the deficit when the Government, without adequate information, launched into its ill-fated rescue of the Canadian Commercial Bank, which will cost Canadian taxpayers a minimum of $1 billion?
Where was the concern about the deficit when it chose to give a capital gains tax holiday to the affluent with no requirement that it benefit the Canadian economy in any way? That is a measure to which we will return later in this Bill.
Meanwhile, indexation protection is removed except when the cost of living index exceeds 3 per cent. This is taking place at a time when the Government, through other measures, such as Bill C-80 which we will deal with shortly, is building in inflationary measures.
The removal of this indexation protection hits low and middle income earners hardest. While the wealthy minority is being rewarded by the Government without any requirement for benefit to the Canadian economy, deindexation of the personal income tax system will take a progressively larger tax bite from low and middle income earners who are least able to afford it.
Over the next four years those earning $15,000 a year will have a cumulative tax increase of 36 per cent. Those earning $100,000 a year will have an increase of 4 per cent. Deindexation, coupled with the Budget's other measures to increase sales and excise taxes, puts an inordinately heavy burden on low and middle income earners. They are the very people who would strengthen economic growth through consumer spending were it not for the dampening effect of these proposals.
This is a measure which bears unfairly and too heavily on low and middle-income earners, while other clauses in the Bill give very generous presents to those who can well afford it. I invite the Government to accept my colleague's amendment to eliminate this inequitable proposal and come back with new proposals of real benefit to Canada and Canadians.
[ Translation\


The Acting Speaker (Mr. Charest):: Order. It being one o'clock, I do now leave the Chair until 2 p.m.
At 1 p.m., the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
January 14, 1986


John V. Nunziata: Mr. Speaker, a case has come to my attention that deserves urgent consideration by the Government. On February 16, 1980, 28 year-old Barbara Desgroseilliers of Cornwall was brutally strangled to death. Her husband, Robert Desgroseilliers, and his cousin, Michel Quesnel, were found guilty of the killing and were sentenced to life imprisonment for first degree murder. Mr. Desgroseilliers is serving his sentence in Millhaven Maximum Security Penitentiary. Michel Quesnel was murdered in prison in Joyceville last July.
After the murder, Robert Desgroseilliers applied for and received approximately SI,300 in a lump sum death benefit. He also applied for, and is receiving, survivor's benefits under the Canada Pension Plan. As a result of the murder of his wife, for which he was convicted, he is now receiving $282 per month from the Government of Canada, and $87 of this amount is going to support Mr. Desgroseilliers' daughter.
I call on both the Minister of National Health and Welfare (Mr. Epp) and the Solicitor General (Mr. MacKay) to investigate this outrageous case immediately, and to provide complete details on how it could have been allowed to happen.
Legislation must be introduced as soon as possible to clarify the law so that this situation cannot occur again.
While there is a common law tradition that those convicted of crimes must never be permitted to profit from those crimes, the statute law must be made more specific. Steps should also be taken by the Canada Pension Plan officials to recover all moneys paid to Mr. Desgroseilliers, at the earliest possible opportunity.


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



FINANCE


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I wish to call the attention of the House to a full page advertisement paid for by Wood, Gundy which appears in today's Globe and Mail lauding the $8 billion in corporate takeovers which occurred in 1985. These takeovers were a small fraction of the total merger activity in Canada in 1985, but all the mergers had one thing in common, they were facilitated by our income tax system. Takeover costs are deductible as business expenses. Interest costs of capital are deductible. Even the cost of the full page advertisement is deductible.
We are entitled to ask what the ordinary Canadian people get in return for these tax concessions. Are we getting new
jobs? The answer is no. Are we getting new production capacity? No. Are we getting more efficient plants to help Canadians compete? No. What we are getting are paper transactions which re-arrange share holdings but which do not produce genuine economic growth or new permanent jobs.
If the Conservative Government is serious about employment, then it needs to examine our tax system to see that tax concessions lead to investment and meaningful permanent jobs. We need something more than the part-time jobs the Government has been creating since September, 1984.
The New Democratic Party says meaningful tax reform is a priority for 1986.



ENVIRONMENTAL AFFAIRS


Mr. Joe Reid (St. Catharines):: Mr. Speaker, the recent report by the United States and Canadian acid rain envoys will do what American lobbies, environmentalists, and the several Liberal Governments of this country failed to do in the last decade.
The United States has now officially acknowledged the existence of acid rain, and in the words of Allan Gotlieb, Canadian Ambassador to Washington:
If the President endorses the report, which I expect he will, the Americans will have moved off the dime.
It is now a question of how fast it can be done and what resources can be brought to bear on this matter of international concern. Work can now begin on a timetable with a program of action, before which we did not even have a common starting point.
The Liberal opposition critic harps on a one-year delay. Did he not read Mr. Gotlieb's comment? Was he not part of a Government that failed in the last eight years to get the Americans to move "off the dime"? Was he not a Minister of the Environment with an opportunity, but who failed to follow up on the 1980 memorandum of intent and the 1981 committee recommendations? Is he not a person who knows how hard it is to get any action from the U.S. side on environmental matters? Should he not now make a New Year's resolution to work constructively with the Government in the interests of Canadians who continue to suffer from pollution and acid rain fall-out?

January 14, 1986



EXPORTS-GOVERNMENT'S PERFORMANCE

Mrs. Suzanne Duplessis (Louis-Hebert):: In October, Mr. Speaker, Canadian exports reached a record high of $10.9 billion in seasonally adjusted figures, an increase of 2.1 per cent over September, the third consecutive monthly increase.
In the first ten months of 1985 exports climbed to $100.1 billion, or $7.6 billion more than in the same period in 1984.
Canadian imports declined by 2 per cent in October, down to $8.7 billion in seasonally adjusted figures. That is very close to the level recorded each month since July, the fifth monthly decline last year.
Mr. Speaker, our highest trade balance was achieved with our main trading partner, the United States, namely $18.1 billion over the first ten months of 1985, an increase of nearly $2 billion over the same period in 1984.
Those figures clearly show the effectiveness of our Government's policies and confirm that Canadians can indeed compete with their main trading partner. By giving an overwhelming majority to the new Government in September 1984, the people were saying that they had had enough of the old entrepreneurship-stiffling Liberal policies-


Mr. Speaker:: I regret to interrupt the Hon. Member, but her allotted time has expired.



INDUSTRY


Mr. Jean-Claude Malepart (Montreal-Sainte-Marie):: During the Christmas holiday, Mr. Speaker, Quebecers were taken for a ride. They were conned by these Conservative Members, by these Conservative Ministers, and by the Prime Minister.
As it happened, the Minister of Regional Industrial Expansion (Mr. Stevens) came to Montreal on December 27 to tell Quebecers that his Party, his Government, had agreed to let a foreign company buy the Gulf refinery with the intention of closing it down, thus throwing 450 more workers out on the street and doing away with competition. Yet the same Government had the option of rejecting that deal and giving a chance to Gaz metropolitan, a Quebec and Canadian company which was anxious to buy the refinery so as to protect those jobs and maintain a healthy competition for Quebec consumers.
Mr. Speaker, I think we must commend the Bourassa Government which, in view, of the inaction and incompetence
on the part of this Conservative administration, decided to assume the leadership. In co-operation with the Quebec Minister of Energy, it is now trying to reach a solution with Ultramar so as to maintain those jobs in Montreal East and protect Quebec consumers.
I dare hope that the Quebec Conservative Members, particularly the Ministers, will wake up, put an end to the insulting and humiliating treatment they are getting from their Ontario colleagues and those of the other provinces, and uphold the interests of all Quebecers.



AGRICULTURE


Mr. Gordon Taylor (Bow River):: Mr. Speaker, no Canadian should lose his land because of economic conditions over which he has no control. Yet more than 1,400 families lost their farms during the last three years. This is a tragedy for Canada and an emotional shock for the people involved. There are some 1,700 farm families now threatened with foreclosure by the banks.
In 1979 agriculture was prospering with good crops and compensatory prices, so ambitious farmers borrowed to buy more land in order to widen their base and increase productivity. Then came poor crops and stagnating prices so borrowers could not even pay the interest, let alone the principal. Something must be done to protect these farmers who had no control over prices or weather. A mandatory moratorium is one possible solution.
The Farm Credit Corporation has advanced an even better plan. A company would be set up which could buy out a farmer in financial straits and then rent the farm back to the said farmer. The cash from the sale would reduce the debt burden. The farmer would receive 20 per cent of the sale price in common shares, making him a part owner and, through making a financial recovery, the farmer could buy back his land. This plan will not affect the credit of other farmers and is a free enterprise solution aimed at keeping the good farmers on the land. I commend the FCC and our Minister of Agriculture (Mr. Wise) on this proposal and urge its initiation at the earliest possible time. Canada needs these farmers.



THE ECONOMY


Mr. Rod Murphy (Churchill):: Mr. Speaker, in March, 1985, the federal Government organized an economic conference to which it invited participants from business, labour, voluntary
January 14, 1986

organizations, and different levels of government. Welcoming this as an effective exercise in dialogue the Canadian Labour Congress wished to continue where the first economic conference left off. "Dialogue '86" was organized with invitations going out to the same groups.
"Dialogue '86" is now under way with over 100 national groups participating. I have been attending the conference and important messages are being delivered about the economic concerns that face Canada. Unfortunately the Prime Minister (Mr. Mulroney) and his Government have declined to participate. The Government's final decision was communicated to the organizers at noon on the second day of the conference-a refusal to send even one Cabinet Minister as a formal participant.
Where is the desire for ongoing consultation we've heard the Prime Minister talk about? What about the attempt to build a consensus that the Prime Minister said was so important? There is a growing perception this Government listens only to those who agree with it, and that consultation occurs only with the rich and the powerful. Why is the Government afraid to listen to the Canadian Conference of the Arts? Why is the Government afraid to listen to the Coalition of Provincial Organizations of the Handicapped? Why is the Government afraid to listen to the National Pensioners and Senior Citizens' Federation? Why is the Government afraid to listen to the Federation des Femmes du Quebec? Why is the Government afraid to listen to the Canadian Congress for Learning Opportunities for Women?


Mr. Speaker:: 1 have to advise the Hon. Member his time has expired.



TERRORISM


Mrs. Pauline Browes (Scarborough Centre):: Mr. Speaker, I want to congratulate the Prime Minister (Mr. Mulroney) for demonstrating Canada's resolve to fight international terrorism by joining with the United States in economic sanctions against Libya.
This country cannot stand by while international terrorists spread their reign of blood to all parts of the world.
Can we forget the tragic death of a young security guard when Armenian terrorists attacked the Turkish embassy here in Ottawa last March? Can we forget the death of two Japanese policemen when baggage from a Canadian airliner exploded in the Tokyo Airport last June? Can we forget as yet unexplained circumstances surrounding the Air India disaster which claimed over 300 lives, or the bomb threats in Toronto subways last April?
We do not have to look to Europe or to the Middle East to see the horrifying consequences of international terrorism. The threat is here in Canada as well. That is precisely why we must stand together with our freedom-loving allies and demonstrate
to countries that harbour and encourage this kind of cowardly activity that Canada will not be held hostage.



CROWN CORPORATIONS


Don Boudria: Mr. Speaker, Canadians were informed recently that yet another Tory hack was snorting at the trough for the umpteenth time after a blue ribbon deathbed repentance speech by the Prime Minister (Mr. Mulroney) last December 9. Canadians actually thought that the Prime Minister meant business when he said that there would be scrutiny of lobbying activities and scrutiny of lobbyists.
In December the Minister of Consumer and Corporate Affairs (Mr. Cote) disappointed Canadians when he tabled in the House a discussion paper on the topic rather than the much promised legislation.
Last week Canadians discovered that another promise had been breached concerning lobbyists. On September 6 last the Clerk of the Privy Council, Paul Tellier, had informed the Crown Corporations not to hire paid lobbyists. Now we know that this has been breached by the action of Petro-Canada in hiring Frank Moores as a consultant. PetroCan may pretend that Mr. Moores is a consultant on East Coast energy issues, but all Canadians know he is a well-known Tory hack and lobbyist.
So the message to Crown Corporations, Mr. Speaker, is if you can't hire lobbyists hire a consultant who just happens to be a lobbyist and that will do.



ENVIRONMENTAL AFFAIRS


Mr. Ken James (Sarnia-Lambton):: Mr. Speaker, I would like to read for the record how the divers who were working on the Dow project on the St. Clair River have described in a recent newspaper article what exactly is on the bottom of the river.
Mr. Brian Quigg, one of nine members of the diving team, said that when he first heard about the blob he was expecting to find a monster, and he was scared to go down there. However, he said that "the blob is nothing more than small, shimmering pools of perchlorethylene". Dave Geddes, another diver, said that he had heard it was "a big gigantic slick, but it is just a little ripple staying on the bottom". Chris McGrath of Corunna, one of the divers who investigated the original spill in August, said that "there never was a blob, just little puddles".

January 14, 1986
Oral Questions
I would like to suggest that in the future, when Members of the House feel they have something to say, they make every effort to ensure that their facts are straight and that those facts are presented in a fair descriptive manner. Perhaps the Hon. Member for Essex-Windsor (Mr. Langdon) who talked about a gigantic blob should have donned a diving suit so he could have learned first-hand exactly what he was talking about for a change, and then spread that news.



ORAL QUESTION PERIOD

[Stage Direction]
[ Translation]

Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, my question is directed to the Minister of Consumer and Corporate Affairs and Canada Post.
Yesterday, the Minister and his colleague, the Minister of Energy, Mines and Resources, made contradictory statements about the oil refining capacity in Quebec. One of them should look at a map of the province.
Mr. Speaker, my question is as follows: Does the Minister intend to publish the O'Farrell Report forthwith, and I am referring to the report on the independent study made by the Director of Combines Investigations? Furthermore, is he going to insist that his colleague, the Minister of Energy, Mines and Resources, immediately table evidence supporting these figures so that Canadians will know which of the two Ministers they are supposed to believe?


Hon. Michel Cote (Minister of Consumer and Corporate Affairs and Canada Post):: Mr. Speaker, first of all, I can give my hon. friend the assurance that there is absolutely no question of contradiction or controversy on this side of the House. In fact, we have a director responsible for the Combines Investigation Act who, acting independently and autonomously, has examined the legality of the Gulf-Ultramar transaction. His recommendations and comments have already been made public, which is what I did as soon as I received the report.
1 think it is clear the problem has been quite adequately assessed by the Director.


INQUIRY WHY MINISTER APPROVED SALE OF GULF TO ULTRAMAR
John Napier Turner: Mr. Speaker, my next question is for the Minister of Regional Industrial Expansion.
Yesterday, the Minister said that the purchase of the Gulf refinery by Ultramar would create 4,500 person-years in Quebec. However, a spokesman for Ultramar, a Mr. William Barrie, immediately stated the exact opposite when he said, and I quote: "We do not expect any new jobs."
I would therefore ask the Minister to inform the House exactly why, in the circumstances, he approved the sale of the refinery to Ultramar.


Hon. Sinclair Stevens (Minister of Regional Industrial Expansion):: Mr. Speaker, as the Leader of the Opposition undoubtedly knows, under the legislation empowering Investment Canada to pass this type of transaction we are asked to consider six different criteria. As we weighed the various aspects and evidence that fell under those six criteria, we felt that there was a net benefit to Canada to be gained from the purchase by Ultramar.
I know the Leader of the Opposition hates to refer to jobs being created, but the number of jobs to which he has referred is a figure that comes from the $125 million that Ultramar has agreed to spend. It is estimated that those funds will, in both a direct and indirect sense, create 4,500 person-years of employment over a three-year period. That is the type of jobs to which I was referring yesterday.


GOVERNMENT POSITION ON TRANSACTION
John Napier Turner: Mr. Speaker, under the circumstances I believe I am obliged to ask the Prime Minister a question. The Prime Minister knows that one Minister has resigned over this issue. He was not here yesterday for legitimate reasons, but at that time three Ministers were conducting a three-ring circus of contradiction.


Some Hon. Members:: Oh, oh!


John Napier Turner: The Conservative
Member for Duvernay said the deal "stinks". So would the Prime Minister tell us why his Government agreed to this particular sale and to the closing of the refinery in Montreal?
[ Translation]


Right Hon. Brian Mulroney (Prime Minister):: Mr. Speaker, I agree we should consider the facts when dealing with a problem as serious as the one raised by my hon. friend.
Texaco in Montreal closed its doors in September 1982: 420 jobs lost and total silence on the part of the Liberal Caucus. BP Canada closed its doors nine months later: 190 jobs lost, and total silence on the part of the Liberal Caucus. Esso Canada closed its doors four months after that: 470 jobs lost, and still no reaction from the Liberal Caucus. In the last fifteen months, 137,000 new jobs have been created in Quebec, compared with only 37,000 in 55 months by the hypocrites in the Liberal Party.
January 14, 1986


Jean-Robert Gauthier: Hypocrites is not exactly parliamentary!


An Hon. Member:: He's an expert in the field.


REQUEST FOR PUBLICATION OF O'FARRELL REPORT
Hon. Andre Ouellet (Papineau):: Mr. Speaker, 1 understand that the Prime Minister will not reply directly to the question.
I am going to ask another question to the Minister of Consumer and Corporate Affairs and Canada Post who, I am sure, did not mean to mislead the House when he replied to the question directed to him by the Leader of the Official Opposition.
We have asked him whether he would make public the O'Farrell report. Thanks to our new system, I could listen to and review this morning the press conference which he gave on December 17 and during which, on eight occasions, he promised to make it public.
Why does he not make this report public? Is he afraid of something? Is it because this report is blaming the Conservative Government for needlessly closing this refinery?


Michel Côté: Mr. Speaker, I think I can answer that very simply by saying that on December 17, as soon as I was made aware of the findings and conclusions of the director concerning the legality of the Ultramar-Gulf transaction, 1 immediately made them public. It is in this spirit that my colleague had put this question to me in the House a few days earlier.
So I complied with these requests from the press and the Opposition as soon as I was made aware of these recommendations.


André Ouellet: Mr. Speaker, the Minister was commenting the interim report of the Director of Investigation and, on eight occasions that evening, he promised the journalists who were interviewing him that he would make public the final report within the next few days.
Well, I know that he has now received this report. Is he going to make it public? Yesterday, he told us that the issue of the Gulf-Ultramar deal would be referred to the Restrictive Trade Practices Commission of Canada. Will he have the decency to allow this Commission to hold public hearings? Like those in the case of-


Mr. Speaker:: Order, please. The question is clear for a supplementary, I believe.
[ Translation]


Michel Côté: Mr. Speaker, I feel I answered that question fully yesterday.


Some Hon. Members:: No, no!
Oral Questions


Michel Côté: I said simply that the findings and recommendations of the Director had been or would be sent to the Restrictive Trade Practices Commission of Canada, a quasi-judicial commission over which I have no control, which would determine the impact and make recommendations in early 1986.


REQUEST FOR CLARIFICATION OF QUEBEC OIL REFINING CAPACITY
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, my question is for the Prime Minister. Before Christmas, the Minister of Consumer and Corporate Affairs said that there was a surplus refining capacity in Quebec. Yesterday, the Minister of Energy, Mines and Resources said the exact opposite. Who is right?


Martin Brian Mulroney: Mr. Speaker, I think that the answers which have already been given should satisfy my honourable friend. Here are the facts. In east-end Montreal, there used to be refineries, such as Texaco, which was killed by the Liberal Government, BP, killed by the Liberal Government, and Esso, killed by the Liberal Government. The Liberals caused the loss of 1,100 jobs in east-end Montreal. They remained completely silent. They did not have the guts to rise even once to protest against this. They tried to kill off Petromont. We have invested $69 million to save the Quebec petro-chemical industry and we shall be doing even more during the next few days.


John Edward Broadbent: Once more, the Prime Minister does not reply to the questions.


An Hon. Member:: He never does.


John Edward Broadbent: Today, I have had conversations with officials of the Quebec Government, including the Quebec Energy Minister, and they say that the Minister of Consumer and Corporate Affairs is right. More specifically, the Quebec Government suggests that there is now a shortage of refining capacity in Quebec.


SALE OF GULF REFINERY
John Edward Broadbent: My supplementary is for the Prime Minister. Is he now saying that neither the Quebec Government nor the Minister of Consumer and Corporate Affairs is right?


Martin Brian Mulroney: Mr. Speaker, the replies of the Minister of Consumer and Corporate Affairs are consistent not only with other replies, but in addition, on September 16, 1983, the following headlines could be found in the newspapers: Chretien refuses to promise an intervention in the refinery closings; Energy Minister Jean

January 14, 1986
Oral Questions
Chretien states that refinery closings in Montreal in 1983 are due only to market forces and a decrease in consumption.
That is what happened.


Mr. Chretien:: He says that there is still room.


Martin Brian Mulroney: Nothing contradictory was said by the Minister of Energy, Mines and Resources, who is absent today. I repeat that there is no contradiction in the replies of the two Ministers, and in my opinion, the answer just given by the Minister of Consumer and Corporate Affairs is very clear. However, since this is an important matter, there is something that should be pointed out; in this regard, we also find in the newspaper Le Devoir of March 30, 1983 that "the FTQ asks Chretien to prevent the closure of the BP refinery in Montreal", and he refused. The Liberals said no to Quebecers, no to the refining industry, no to the high technology industry. As for us, we shall work with Quebec to build its economy.


Mr. Speaker:: Order, please. Supplementary. The Hon. Member for Oshawa.


GOVERNMENT POSITION
John Edward Broadbent: Mr. Speaker, the Prime Minister is refusing to deal with a matter which is extremely serious for the people and Government of the Province of Quebec. I can say only that the partisan answers he is giving today to serious questions are an absolute disgrace for a Prime Minister.


Some Hon. Members:: Hear, hear!


John Edward Broadbent: His Minister of Energy said in this House yesterday, and he can check the reference in Hansard, that there is surplus capacity in Quebec now. Another Minister of the Crown said there is a shortage of capacity. The Government of Quebec-


Mr. Speaker:: I do need a supplementary question now.


John Edward Broadbent: The Government of Quebec is also saying there is a shortage of capacity with the shut-down of this refinery. Therefore, will the Prime Minister explain where his Government is getting its information and why it made the incredible decision to shut down this refinery?


Martin Brian Mulroney: Mr. Speaker, we made no such decision to shut down that refinery.


Some Hon. Members:: Oh, oh!


Martin Brian Mulroney: The people who shut down refineries in the Province of Quebec were the Liberals who went "bang, bang, bang", and killed the refining industry in the East End of Montreal. That is what they did.


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!


Jean-Robert Gauthier: Bang, bang, bang!


Mr. Speaker:: Order.


Martin Brian Mulroney: I know it hurts-


Some Hon. Members:: Bang, bang, bang!


Mr. Speaker:: Order, please!


Mr. Rossi:: You're a phoney.


Mr. Axworthy:: What a joke.


Mr.   de Corneille@: Bang, bang, bang.


Mr. Speaker:: Order.


Lloyd Axworthy: Your nose is getting longer.


Mr. Speaker:: Order, please!


Martin Brian Mulroney: I know he does not like it, Mr. Speaker, but when a request was made of this particular Member, who has the temerity to stand up in the House now, with regard-


John Edward Broadbent: Answer the question. I asked the question; he didn't.


Martin Brian Mulroney: I'm getting around to you. It takes me a little time to deal with you.


Some Hon. Members:: Order!


Mr.   de Corneille@: You're a disgrace.


Mr. de Jong:: What a joker.


An Hon. Member:: The people are laughing at you, Brian. Mr. Speaker: Order, please. Order!


John R. Rodriguez: You're at the end of your rope, Brian, and you need a rest.


Mr. Nystrom:: It's time for an election.


Jean-Claude Malépart: Mr. Speaker, considering the Prime Minister's behaviour, I would agree with Mr. Stanley Knowles' statement that Mr. Clark is more intelligent than the Prime Minister.


INDUSTRY
Jean-Claude Malépart: Mr. Speaker, I have a question for the Prime Minister. It is a fact
January 14, 1986

that the Quebec Government has figures that point to an under-capacity in the refining industry. I have figures from Statistics Canada that clearly show the underproduction of refineries in Quebec, and the comments made by your Minister of Consumer-and my question to the Prime Minister is, Mr. Speaker: Why did the Prime Minister not get involved personally in the issue, to protect the interests of Quebecers and allow Gaz Metropolitan to purchase the Gulf refinery in Montreal East? Why?


Martin Brian Mulroney: Mr. Speaker, that is a surprising question, to say the least, from the Hon. Member for Montreal-Sainte-Marie. If you allow me, on another occasion-I will remind you that on March 30, the General Secretary of the Quebec Federation of Labour, referring to the shutdown of three industries in East end Montreal had this to say: The QFL also pressured all Liberal MPs from the Montreal area.


An Hon. Member:: What year was that? What year?


Martin Brian Mulroney: The Secretary General had this to say: We do not understands the silent and passive stance of our Liberal representatives in Ottawa, when Ontario once more stands to come out the big winner in the oil situation. He was referring to you at the time Montreal East was being massacred. For three years you remained silent, and now you have the gall to try and address the issue. Stop that nonsense and blame the Hon. Member for Saint-Maurice. He is responsible for that situation, as the then Minister of Energy, Mines and Resources.


Mr. Speaker:: Order, please! Order from both sides of the Chamber, please. The Hon. Member has a supplementary question.


CONSUMERS' INTERESTS
Jean-Claude Malépart: Mr. Speaker, my supplementary to the Prime Minister is this: If he does not want the refinery's union leaders-


Some Hon. Members:: Question!


Jean-Claude Malépart: If he does not want the union leaders-


Mr. Speaker:: Order, please.


An Hon. Member:: Question! Question!


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


Jean-Claude Malépart: Mr. Speaker, if the Prime Minister does not want the union leaders at the Gulf refinery to go on calling
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him a snake, would he be ready to support the statement made by the Minister of Consumer and Corporate Affairs that it is in the interest of consumers to prevent the Gulf refinery shut down? Is the Prime Minister at least ready to admit that?


Martin Brian Mulroney: It is a
matter of credibility with the employees, Mr. Speaker. The Hon. Member for Montreal-Sainte-Marie, who seems tremendously interested, might tell the House and the Province and the Metropolitan Montreal area why, if it is true-and he will correct me if 1 am wrong-why, when Texaco, BP, Esso shut down and 1,100 jobs were lost in Monteal East, he remained silent, not uttering one word.


Jean-Claude Malépart: Why are you afraid to meet with the workers?


Martin Brian Mulroney: Explain that now. Explain that. Why did you remain silent for four years? This is all we want to know, because if you are sincerely taking the workers' interests at heart, you should have had the courage to rise during those four years, rather than remain silent. Explain to Montrealers why you remained silent for four years!


OIL REFINING CAPACITY IN QUEBEC-QUEBEC GOVERNMENT STATISTICS-GOVERNMENT POSITION
Lorne Edmund Nystrom: Mr. Speaker, my question is also directed to the Prime Minister.
This morning, the Quebec Department of Energy announced that Quebec's oil refining capacity showed a shortfall of
27.000	barrels per day.


An Hon. Member:: Not true!


Lorne Edmund Nystrom: Mr. Speaker, my question is as follows: Does the Prime Minister agree with the Quebec Government's figures?


Martin Brian Mulroney: Mr. Speaker, 1 admit that opinions vary on this particular point. That is why the Minister of Consumer and Corporate Affairs, acting through the appropriate federal commission, intends to publish the requisite documentation at the appropriate time.
The fact is-and since the House is concerned, and rightly so, about the situation in Quebec, I imagine the New Democratic Member will want to congratulate the Government on these statistics-the fact is that, thanks to the creation of
137.000	new jobs, compared to 37,000 in 55 months, the present Government is now creating jobs in Quebec at thirteen times the rate of the previous Government. And that is very good news for the people of Quebec.

January 14, 1986
Oral Questions


REQUEST FOR PUBLICATION OF O'FARRELL REPORT
Lorne Edmund Nystrom: Mr. Speaker, my supplementary question arises out of the Prime Minister's answer. He said that we have a variety of figures, some from different Ministers in his own Cabinet. For that reason, and because of his campaign promise of freedom of information and more open Government, I ask him now to make a commitment to make the O'Farrell Report public. It is a question of credibility for the Prime Minister and his Government.


Some Hon. Members:: Right on.


Martin Brian Mulroney: Mr. Speaker, when an NDPer talks about credibility he should choke on the words.


Some Hon. Members:: Hear, hear!


Some Hon. Members:: Oh, oh!


Martin Brian Mulroney: You supported your sweethearts in the Liberal Party-


John Edward Broadbent: You're an embarrassment.


Martin Brian Mulroney: -who brought in the NEP that crushed, not only western Canada, but the refining industry in eastern Canada. You should be ashamed of yourself for even asking the question.


Some Hon. Members:: Hear, hear!


Douglas Jung: Bye, bye.


Mr. Mazankowski:: Shame.


Lorne Edmund Nystrom: Bye, bye, Brian.


Douglas Jung: Bye, bye, Charlie.


Mr. Speaker:: Order, please!


THE ECONOMY
Raymond Garneau: Mr. Speaker, yesterday I asked the Minister of Finance if it was the policy of the Government to push the interest rate up to protect the value of the Canadian dollar and he said no. While the Minister of Finance was saying no in the House, the Bank of Canada was active in the marketplace pushing the rate of interest up to a point where major banks had to increase their prime rate.
My question is very simple. Who is in charge? Why was the Minister of Finance saying one thing in the House yesterday while his agent, the Bank of Canada, was acting differently?


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, 1 think the Hon. Member does need some lessons in the way the financial markets work.


Some Hon. Members:: Oh, oh!


Mr. Lapierre:: From you?


Carlo Rossi: You won't be the teacher.


Mr. Speaker:: Order!


Jean-Robert Gauthier: How about Northland?


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


Mr. Wilson (Etobicoke Centre):: The Hon. Member is correct. There has been some upward pressure on interest rates over the last little while, as there has been in international markets in other countries. However, the Hon. Member must recognize that he should look at the performance of interest rates in the broad context of the economic performance of the country over the course of the last 16 months, where 450,000 jobs have been created, where interest rates are now about 2.5 percentage points lower than they were in September, 1984, when we came into office. These are things that have demonstrated clearly to Canadians that the economic policies of this Government are working.


Some Hon. Members:: Hear, hear!


SETTING OF INTEREST RATES-GOVERNMENT POSITION
Raymond Garneau: Mr. Speaker, if I understand correctly, when interest rates fall it is the Government's doing, and when they rise, it is other people's fault.
I want to get back to my question because it is a very important one, an issue that may determine the exchange rate of the Canadian dollar in the weeks to come. Is it the policy of this Conservative Government to push up interest rates in order to protect the Canadian dollar? Did the Bank of Canada have the consent of the Minister of Finance when it acted as it did yesterday?


Geoff Wilson: Mr. Speaker, there is no difference at all in the action of the Government of Canada and the policies of the Government of Canada. We are completely consistent in the approach we are taking.
The Hon. Member has been in the financial markets over a number of years. He knows that interest rates will fluctuate. We had a situation about a year ago, in February and March of last year, when interest rates rose. There was a downward pressure on the Canadian dollar at that time but markets reversed themselves and we had a drop in interest rates
January 14, 1986

thereafter. Surely the Hon. Member could look at this in the context of the broad performance of the economic policy of the Government, which, even by his standards, has been very, very good.


INDUSTRY
Mr. Mike Cassidy (Ottawa Centre):: Mr. Speaker, my question is directed to the Minister of Regional Industrial Expansion and concerns contradictory statements regarding the future of Canadair.
Yesterday, the Minister announced he did not expect Canadair to be sold before the month of June. Meanwhile, the President of the Canada Development Investment Corporation announced on television that he was expecting offers to purchase Canadair before the end of March. Who is right? And can the Minister guarantee that the Government will not hold a fire sale for Canadair, as it did in the case of de Havilland?


Sinclair McKnight Stevens: Mr. Speaker, I want to assure the Hon. Member for Ottawa Centre that there will be no fire sale and there has not been any fire sale with respect to de Havilland. The Hon. Member should remember that we indicated we would be willing to discuss the possible sale of Canadair. We have had inquiries. At the present time I must admit to the Hon. Member that no firm deal is being negotiated.
What Mr. Marshall indicated yesterday was the hope that the three people who are now discussing the possibility of making a deal with Canadair might firm up one or more of their bids before the end of March in anticipation of possibly making a deal by June. However, let us end this nonsense about a fire sale with respect to such Crown corporations.


Some Hon. Members:: Hear, hear!


REQUEST FOR COMMITTEE CONSIDERATION BEFORE ANY POSSIBLE SALE
Michael Morris Cassidy: Mr. Speaker, now that the Steering Committee of the Regional Development Committee has ensured that there will be full consideration of the de Havilland sale in the next two weeks, will the Minister ensure that we can be protected against a fire sale of Canadair by promising the House that there will be full consideration by a parliamentary committee of any sale of Canadair before the deal is closed?
Hon. Sinclair Stevens (Minister of Regional Industrial
Expansion): Mr. Speaker, again the Hon. Member was
Oral Questions
anticipating his next question. He did not hear what 1 told him in answer to his first question.
I indicated that at this point we do not have a possible purchaser who has money in hand and is proposing a deal with respect to Canadair. How can I talk in hypothetical terms about referring something that does not exist to any committee of this House?


INSURANCE
Mr. Bill Attewell (Don Valley East):: Mr. Speaker, my question is directed to the Minister of State for Finance. The property and casualty insurance industry is in a state of disarray namely because of the outlandish liability claims being awarded by the courts. Now average Canadians with excellent driving records are asked to bear the burden of high rates.
Before we become the California of the North, what will the federal Government do, along with the provincial Governments, to curb these astronomical settlements-


Mr. Blaikie:: Nationalize the insurance industry.


Bill Attewell: -and stop excessive rate increases for average Canadians?


Rodney Edward Murphy: Go to Manitoba.


Barbara Jean McDougall: Mr. Speaker, given the Hon. Member's background I am sure he knows that the premium increases that we have seen were designed by the companies in order to meet an important solvency consideration. They are in the hands of the provincial Governments because they fall under contract law which is provincial jurisdiction. The court settlements that have been made also fall into provincial jurisdiction.
We are planning to co-operate fully with the task force in Ontario. Our policy is to develop higher standards for property and casualty insurance dealing with solvency and the capital base, which are very much a part of our role.


INDUSTRY
Mr. David Berger (Laurier):: Mr. Speaker, my question is directed to the President of the Treasury Board and relates to Canadair. Last week the leader of the machinists' union and the president of Canadair's survival committee denounced the disclosure of important data to Canadair competitors. Here is my question: Why did you give confidential information to a

January 14, 1986
Oral Questions
Canadair competitor? Why, against the best interests of that company, did you reject the unanimous recommendation of Canadair's board of directors not to release that information?


Sinclair McKnight Stevens: Mr. Speaker, I believe that question was directed to me. Let me assure the Hon. Member that no confidential information was turned over to a possible competitor of Canadair. However, in some ways I wish the Opposition would get their act together.


Some Hon. Members:: Oh, oh!


Sinclair McKnight Stevens: A previous questioner indicated that he did not want a fire sale with respect to Canadair. The next questioner asks why we are giving information to possible purchasers with respect to the sale of Canadair. How else does one sell a Crown corporation unless one gives relevant details concerning its operation? However, let me assure the Hon. Member that no competitively sensitive information was given.


David Berger: We are talking about the Government, through its incompetence, destroying a couple of important Canadian institutions.


Some Hon. Members:: Oh, oh!


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


GULFSTREAM MEMORANDUM
David Berger: Mr. Speaker, on July 23 Gulfstream Aerospace sent a memo to a potential Canadair customer asking it to reconsider its pending purchase of a Challenger. Yet the Government allowed Gulfstream-


Mr. Speaker:: Order. Does the Hon. Member have a question, please?


David Berger: How could the Minister and his Government give sensitive information to Gulfstream when they have the proof in black and white, in a memo from Gulfstream, that it was trying to hurt Canadair? How could you allow that to happen?


Sinclair McKnight Stevens: Mr. Speaker, how soon the Opposition Members forget Maislin, and Consolidated Computers. Speaking about destroying public companies, how quick they forget that it was under their direction that Canadair lost over a billion dollars.
I have indicated that we are trying to secure would-be buyers who would ensure a viability for Canadair and the continued employment of those who are working for Canadair for many years to come-something that the Opposition failed to do when in Government.


THE ECONOMY
Nelson Andrew Riis: Mr. Speaker, my question is for the Minister of Finance. He is well aware that in today's press the banner headlines indicate that interest rates are at 11 per cent now and going up for small businesses and consumers generally. Will the Minister explain whether or not he supports this action taken by the central bank to raise interest rates in response to a slightly devalued dollar? Does he support the central bank's decision to do that?


Geoff Wilson: Mr. Speaker, I have indicated my response to that question in reply to previous questions.
I would encourage the Hon. Member to look at the broad performance of this Government on interest rates over the last year and a half. We are committed to getting interest rates down as low as we possibly can. That is the policy of the Government and that is what we have been able to do in this term of office.
Let me also remind the Hon. Member that we have performed very, very well in terms of job creation, which is also an important part of the record of the Government.
The NDP said it wanted to set a target of 300,000 jobs last year. We created 385,000 jobs. That is performance.


Some Hon. Members:: Hear, hear!


Nelson Andrew Riis: Mr. Speaker, the Minister forgot to mention that most of those jobs are part-time jobs.


Some Hon. Members:: Oh, oh!


Miss MacDonald:: That is wrong.


Nelson Andrew Riis: I am more concerned about the signal that the 11 per cent interest rate sends out at a time when we are trying to develop consumer and investor confidence.


ACTIVITY BY MONEY SPECULATORS
Nelson Andrew Riis: I have a supplementary question, Mr. Speaker. Will the Minister of Finance not agree that the slight devaluation in the Canadian dollar, which prompted this increase in interest rates, was a result of activity by money speculators only?


Geoff Wilson: Mr. Speaker, if the Hon. Member believes that, maybe he should give me some of the information. He should know that there are billions of dollars going through the markets every day, billions of dollars. Some of that is speculative activity, some of it is commercial activity, and some of it is related to delays in decisions by corporate treasurers in their normal trading operations. All of these result in market-place pressures. We are trying to introduce a degree of stability into the market-place,
January 14, 1986

which has been the policy of the Bank of Canada, and the Government of Canada supports that policy.


PUBLIC SERVICE
Mr. Barry Turner (Ottawa-Carleton):: Mr. Speaker, my question is for the President of the Treasury Board. As you know, there is considerable anxiety across the country among the 200,000 plus superannuates from the Public Service, R.C.M.P. and Armed Forces concerning full indexation of their pensions. Is the President of the Treasury Board in a position to tell them what position has been taken concerning this important issue and, if not, when will they know?


Hon. Robert de Cotret (President of the Treasury Board):: Mr. Speaker, as I have often said in this House there were two reports, one requested by the unions and one requested by management, on this issue. The reports have been exchanged by both parties and are under study at the moment.
We will respect our campaign commitment to be fair and equitable in this matter and to maintain benefit levels for our superannuates. I expect to be in a position within a few weeks to make a definitive announcement on the direction we will take with respect to pension benefits.


John Barry Turner: Mr. Speaker, I have a supplementary question.


Mr. Speaker:: The Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy).


AUTOMOTIVE INDUSTRY
Lloyd Axworthy: Mr. Speaker, 1 have a question for the Prime Minister. Yesterday the special task force that was commissioned by the Minister of Employment and Immigration on the automobile industry tabled its report. It indicates there will be a drastic loss of jobs in the automobile industry, upwards of 50,000 by 1990, unless there is a major change in trade policy.
Considering how important the Japanese manufacturers are to our automobile policy, in the Prime Minister's discussions with the Prime Minister of Japan did he raise with him the important impact that Japanese imports into Canada have on our auto industry? Did he propose any new agreement or proposals for the Japanese to ensure the stability and future prosperity of our automobile industry? Did the Prime Minister raise those matters in his discussions?


Martin Brian Mulroney: Yes, Mr. Speaker, I had intensive discussions with the Prime Minister of
Oral Questions
Japan in regard to the automobile industry. 1 spoke about the tremendous contribution this makes to Canada generally and to southern Ontario in particular, how we welcome, under this Government, the attraction of new investment in this area, and how welcomed it is by the people of Ontario and the people of Canada.
We recognize that there are some difficulties as well. I think there was general agreement that if you are going to reduce unemployment, as we are trying to do, the way to do it is by not building walls around Canada but by creating new riches to enhance trade to lower unemployment.
Our obligation is to create jobs for Canadians. That is our objective which we will be reaching with the kind of enhanced trading agreements we are seeking.


PROJECTED LOSS OF JOBS
Lloyd Axworthy: Mr. Speaker, the report commissioned by a Minister of his own Government indicated there would be a loss of 16,000 jobs in the industry under the present practices. What is needed is a straight commitment to have all Japanese manufacturers come under the Auto Pact Agreement. Did the Prime Minister specifically request of the Japanese Prime Minister that Japanese manufacturers agree to come under the Auto Pact Agreement? Does the Canadian Government intend to maintain the quotas presently in place to protect Canadian industry?


Martin Brian Mulroney: Mr. Speaker, my hon. friend is right. The implication of what he said is that all Government policy should be designed to create employment. Earlier today, quite properly, we were talking about employment in Montreal. Yesterday it was indicated that Montreal's unemployment rate last year was the lowest since 1981. This is what we are trying to do in all areas, including the automobile industry. 1 had the pleasure of meeting with a group headed by Bob White and Pat Lavelle-who,
I understand, may be considering other responsibilities-


Some Hon. Members:: Oh, oh!


Martin Brian Mulroney: We had an excellent meeting with Mr. Lavelle and with presidents of automobile companies located in Canada who made the representation to which my hon. friend refers. They are aware that we must be seeking new investment because if there is a tremendous job creation burst in Canada, our concern is spreading it fairly.
Unemployment in Manitoba has now been reduced to 7.2 per cent-


David Orlikow: With an NDP Government.


Martin Brian Mulroney: -the lowest unemployment rate in Canada, with Ontario. We want to make sure that that prosperity spreads to Newfoundland and to British Columbia as well. 1 know that the Hon. Member will welcome what we are trying

January 14, 1986
Oral Questions
to do to attract new investment to British Columbia, western Canada, and the maritime provinces-


Mr. Speaker:: With respect, this is becoming too long.


REFUGEES
Mr. Dan Heap (Spadina):: Mr. Speaker, my question is for the Minister of State for Immigration. The Minister knows that the Supreme Court has ordered that only those who have heard a refugee's claim directly have the right to decide whether that person is a refugee and deserves Canada's protection. Why has the Minister continued to permit members of the Immigration Appeal Board to decide, in some cases, refugee claims which they have not heard?


Hon. Walter McLean (Minister of State (Immigration)):: Mr. Speaker, in terms of the refugee procedures, the Hon. Member knows that the responsibility to hear those claims in the first instance lies with the refugee appeal mechanism and the Immigration Appeal Board's responsibility is to deal with appeals only.


REQUEST FOR JUDICIAL INQUIRY
Daniel James Macdonnell Heap: That was not the question I asked, Mr. Speaker. The Immigration Appeal Board by law is required to hear the complainant. The Minister knows that the Chairman of the Immigration Appeal Board distributed a memo saying that the Board was not to make a decision when it heard the case but to refer it to a meeting with other board members. Will the Minister now order a judicial inquiry into this illegal activity of the Immigration Appeal Board?


Walter Franklin McLean: Mr. Speaker, the Hon. Member is raising an issue brought to public attention by certain dissatisfied lawyers in the Toronto area over the objection, I might say, of the Toronto bar.


Mr. Crosbie:: Lawyer lover.


Walter Franklin McLean: The Hon. Member should know that the chairman of the IAB is meeting with the Toronto Bar later this week and that a number of the issues which were raised have already been resolved. It would not be appropriate at this time for me to intervene in that situation.


REPORTED ABUSES AT TORONTO PORT OF ENTRY
Pauline Browes: Mr. Speaker, my question is also directed to the Minister of State for Immigration. It concerns the recent abuses of refugee claims in the Metropolitan Toronto area which have been highlighting the very serious flaws in Canada's immigration policy.
Could the Minister tell the House what measures he has taken to ensure that this kind of abuse does not happen again?


Walter Franklin McLean: Mr. Speaker, I thank the Hon. Member for her question. The matter of abuse at a number of ports of entry has been brought to my attention, not only by members of the public but by herself and by a number of other Members of the House. The procedures at present jeopardize many bona fide refugees. At the moment we are proceeding to bring legislation before the House in order to deal with the current situation. In the interim, I have appealed to churches, concerned groups, and others to bring the cases of flagrant abuse, particularly those who are counselling fraudulent activity, to the attention of my officials, particularly in the Toronto area.


CLERK OF PETITIONS' REPORTS
Mr. Speaker:: I have the honour to inform the House that the petitions, with the exception of 29, presented by Hon. Members on Friday, December 20, 1985, meet the requirements of the Standing Orders as to form. Certain petitions presented by Hon. Members do not meet the requirements of the Standing Orders as to form.
The petitions presented by the Hon. Member for Brome-Missisquoi (Mrs. Bertrand), by filing with the Clerk of the House on Friday, December 20, 1985, do not meet the requirements of the Standing Orders as to form. The petition presented by the Hon. Member for London West (Mr. Hockin), by filing with the Clerk of the House on Monday, January 13, 1986, also does not meet the requirements of the Standing Orders as to form.



POINTS OF ORDER


John Barry Turner: Mr. Speaker, I rise on a point of order as opposed to a question of privilege, because I do not want to abuse what may or may not be a privilege in the House. In Question Period today I attempted to pose a supplementary question, and I was disallowed. I have discussed this situation very briefly with you, Sir, and I would ask you, in the true spirit of reform of Parliament which is evolving to enhance the role of the private Member, particularly those of us on the Government back-benches, to give more consideration to allowing us to ask supplementary questions in Question Period, in order to allow us to represent more effectively the concerns and issues of our constituents.


Some Hon. Members:: Hear, hear!


Mr. Speaker:: The Hon. Member knows that he is not raising a point of order but is making a point in which, I take
January 14, 1986

it, he believes quite strongly. If the Hon. Member will resume his seat, I suggest that he review the entire history of Question Period.


John Barry Turner: On the same point of order, Mr. Speaker-


Ian Deans: You cannot do that; you do not have a point of order.


John Barry Turner: May I ask the Chair a question?


Ian Deans: No.


Mr. Speaker:: Is the Hon. Member for Ottawa-Carleton (Mr. Turner) raising another point of order?


John Barry Turner: The same point of order, Mr. Speaker, please.


Mr. Speaker:: With respect, there is no point of order. Does the Hon. Member have a different point of order?


John Barry Turner: It will be different, Mr. Speaker. May I please read from Speaker Lamoureux's ruling-


Mr. Speaker:: Order, please. Will the Hon. Member resume his seat? The Hon. Member has had a ruling on the point of order which he raised. If he has a different point of order, I take it he might want to raise it. The Hon. Member for Ottawa-Carleton on a different point of order.


John Barry Turner: Mr. Speaker, if it is not a point of order, would you please instruct me as to what it is?


Mr. Speaker:: It is a representation to me on a matter about which the Hon. Member feels strongly. That is what it is, and I take it at that. The Hon. Member will please resume his seat, unless he has a point of order to raise.


John Barry Turner: I do, Sir.


Mr. Speaker:: The Hon. Member will resume his seat, please.


An Hon. Member:: Sit down, Barry.



RULES REGARDING TELEVISING OF HOUSE OF COMMONS PROCEEDINGS

Ian Deans: Mr. Speaker, I rise on a point of order. I had the opportunity yesterday to review part of the televised proceedings of the afternoon session of the House of Commons. During the course of the presentation by the Hon. Prime Minister of Japan, the television camera took the opportunity to show other than the Prime Minister of Japan making his speech. Rather, from time to time, it showed other Members of the House either in their seats or doing other things.
Point of Order-Mr. Deans
It may well be that that is good television. 1 might even be prepared to concede that that would be more interesting television than the practice which we have agreed we would follow during the televised proceedings of the House of Commons. However unfortunately, perhaps, the rule which we have followed-and I have raised this point before-was one to which all Parties agreed, that only the person who has the floor will appear on the television camera during the broadcast. I am not asking for any retribution. I am simply asking that, if we are to change the rules, I would prefer it to be done by agreement than done unilaterally. If it is the desire of some that the rules should be changed, then some kind of representation ought to be made, either to or through the Speaker, to the appropriate House committee or through the House Leaders in an effort to come to a consensus.


Mr. Speaker:: Order, please. There is, in this representation, a point of order because the agreements with regard to television are agreements of the whole House. Therefore, I would be happy to have yesterday's telecasting reviewed to determine what hapened. I might say to the Hon. Member for Hamilton Mountain (Mr. Deans), who is himself a House Leader, that he may want to discuss with the other House Leaders the entire question of television. I take it from what he has said that he believes there should be some considerations, and I think he knows the appropriate channels.


Mr. Prud'homme:: Mr. Speaker, 1 am sure the House Leaders, being here, would receive very well a suggestion that if there was to be a debate, it could be referred to the appropriate committee, that is, the Standing Committee on Management and Members' Services. We would be more than delighted to receive it as a suggestion to study, to look into it and to report back to the House.


Mr. Speaker:: I welcome the Hon. Member's representation in this case. It is not a point of order.


Herbert Eser (Herb) Gray: Mr. Speaker, in your consideration of the point made by the House Leader of the New Democratic Party, I hope it will not be argued that because the House yesterday was not in regular session, the rules ordinarily applied to the televising of proceedings in the House would not be in force. This would depart from the spirit of the rules, if not their very letter. At the time the Prime Minister of Japan was with us, we were not in session in the sense of the mace being on the table.


Mr. Althouse:: Hansard recorded it.


Herbert Eser (Herb) Gray: I would ask you, Mr. Speaker, to look at that aspect. If that is argued on behalf of what was done yesterday, I would ask that that argument be rejected.


Mr. Speaker:: I thank the Hon. Member for Windsor West (Mr. Gray). I probably would not have thought of that possible representation until he made it. If my memory is correct- and I will check it-the House adopted a House Order yesterday to cover the proceedings of yesterday afternoon in the normal way in which the House is covered. I would therefore

January 14, 1986
Petitions
assume that the rules with regard to televising do apply in yesterday's situation. I thank the Hon. Member.



ROUTINE PROCEEDINGS


Mr. Fernand Robichaud (Westmorland-Kent):: Mr. Speaker, it is my duty to present to the House a petition from residents of Moncton, Riverview and Dorchester. All those people deplore the situation at the CN shops which has remained unchanged during the Christmas holiday. They want the assurance that not a single additional job will be lost at the Moncton shops.


Mr. Sergio Marchi (York West):: Mr. Speaker, I am pleased and honoured to present a number of petitions from Canadians in Toronto who are protesting the sale of the de Havilland Corporation. They petition the Government to reverse its decision with regard to what was a wholly-owned Canadian company which inspired pride in a very key and crucial sector of our economic life. The first petition, Mr. Speaker, was collected by Mr. Antonio Mansillo and it comes from residents right across the Metropolitan Toronto area. The second petition, Mr. Speaker, was collected by Mr. Sante Mio from residents in my riding of York West. I hope that the Government heeds these Canadians demands.


Mr. Steven W. Langdon (Essex-Windsor):: Mr. Speaker, 1 have four petitions to present today. The first comes from Vancouver in British Columbia and is a petition protesting the family allowances deindexation and asking that they not be offset by changes to the child tax credit because then even the poorest families will be worse off by 1990.
The second petition comes from New Brunswick and stresses the cut-backs in child benefits of $600 million by 1990 which will be part of the set of unfair tax changes put into place in the last Budget.
The third petition comes from Nova Scotia and stresses that these reductions in family allowances comes with an increase in RRSP deductions, an increase in hand-outs to the oil companies, and therefore makes our tax system more unequal.

Mr. Speaker, my fourth petition comes from the Province of Quebec, from the cities of Terrebonne, LaSalle, Saint-Jerome and Montreal. These petitioners also protest against lower family allowances and urge the Government to change its policies.


Mr. Howard McCurdy (Windsor-Walkerville):: Mr. Speaker, I have a number of petitions, the first of which protests the government decision to have pension benefits deducted from unemployment insurance benefits, thus effectively removing a significant benefit from workers and creating a disincentive for early retirement plans, and asking for the immediate withdrawal of that action.


Howard Douglas McCurdy: The second petition is from New Brunswick and it protests the intention to deindex family allowances and requests the reinstatement of full indexation of the universal family allowance and the recission of the unfair tax increase.
I have another petition of a similar nature from Vancouver protesting the intent to deindex the family allowances and protesting other measures with respect to childhood benefits, the unfair tax changes and asking that those tax changes be withdrawn.
Another petition is from Nova Scotia from citizens there exercising their anxious right to petition the Parliament of Canada in protestation against the changes in the family allowances and asking that that action be rescinded as well as those with respect to taxation.
Finally, I have a petition from the Province of Quebec, from citizens there exercising their anxious right to protest the changes in family allowances, specifically their deindexation, asking that that action be withdrawn and that the tax changes affecting low and middle-income people be rescinded.


Mr. John Parry (Kenora-Rainy River):: Thank you, Mr. Speaker. It is my privilege today to present two petitions signed by residents of my riding. The first protests the action by the Government in cutting back family allowances and in instituting tax increases which will further increase the burden on ordinary families in Canada. This petition is signed by residents of Red Lake, Madsen and Balmertown.


John Edmund Parry: The second petition is from residents of Dryden, Eagle River, Wabigoon, Oxdrift, Minnitaki and Vermilion Bay. These petitioners seek Parliament's assistance in representation in dissuading the United
January 14, 1986

States Congress from taking protectionist action which would cost thousands of jobs in Canada's forest sector.


Abram Ernest Epp: Mr. Speaker, it is an honour to present petitions from residents of three different provinces of Canada, residents of the community of Langley in British Columbia, Saint Hubert and other parts of the Province of Quebec and Moncton and other communities in New Brunswick; also from Halifax and other parts of Nova Scotia. All protest the decision of the Government to deindex the universal family allowances. We point out that the consequence of the variety of changes the Government has proposed will be to reduce even the poorest families to worse straits by 1990. They call upon the House of Commons to restore full indexation of the family allowance.


Mr. Gus Mitges (Grey-Simcoe):: Mr. Speaker, it is my duty to present a petition on behalf of some concerned citizens from the City of Owen Sound and surrounding areas in the riding of Grey-Simcoe who are opposed to the reduction of the indexation of family allowances. The petitioners believe that children are everyone's responsibility and that the principle of full indexation should be maintained.


Mr. Dennis H. Cochrane (Moncton):: Mr. Speaker, I have the honour and privilege to present to this House several petitions signed by residents of the federal constituency of Moncton as well as of Westfall and Kent expressing their concern for the future of the CN shops in Moncton.


Ian Deans: Mr. Speaker, I have the privilege to present a petition signed by a number of residents of Hamilton who ask the Parliament to ensure that all retired employees keep their pension benefits and receive their unemployment insurance benefit without deduction of pension income.


Mr. Stan J. Hovdebo (Prince Albert):: Mr. Speaker, it is my honour and duty to present a number of petitions from a number of provinces, the first one from Montreal, Quebec; the second one from New Brunswick in the area of Moncton; the third one from Vancouver, British Columbia; and the final one from Nova Scotia.
All of these petitioners humbly pray and call upon the House of Commons to reinstate the full indexation fo the universal family allowances and to rescind unfair tax increases.
Petitions


Mr. Cyril Keeper (Winnipeg North Centre):: Mr. Speaker, I have four petitions concerning family allowances. The undersigned state that the deindexation of family allowances and the public disengagement in the area of child benefits are an unfair attack against families with children and especially single parent families.
Mr. Speaker, this petition comes from the Province of Quebec.

1 have another petition with regard to the same subject of family allowances calling upon the Government to restore full indexation of family allowances. The same kind of petition as the one from the Province of Quebec, but this one is from the Province of New Brunswick. I have another petition calling upon the Government to restore full indexation of family allowances from the Province of Nova Scotia. Finally, I have a petition from the Province of British Columbia. So we have petitioners here from all across Canada calling upon the Government to restore full indexation of family allowances.


Ms. Margaret Mitchell (Vancouver East):: Mr. Speaker, I also have a few of the very many petitions that have come in over the Christmas break. The first one is from Burnaby, British Columbia, and it calls on the House of Commons to reinstate full indexation of universal family allowances.
The second one is from a number of people from New Brunswick, and it also calls on the House of Commons to reinstate full indexation of family allowances and to rescind the unfair tax increases.
The next one, which is in French says:

The undersigned humbly ask the Government to re-establish full indexation of family allowances and rescind the unfair tax increases.
And as in duty bound your petitioners will ever pray.
The next petition is on the same subject and is from Kemptville and Wolfville, Nova Scotia. 1 have another one, which is also in French, from Round Hill, Nova Scotia. The final petitions are from Truro, Cambridge and Dartmouth, Nova Scotia on the same subject of the reindexation of family allowances.


Mr. Neil Young (Beaches):: Mr. Speaker, it is my duty and privilege to present several petitions. The first one concerns the reduction in family allowance benefits and it was forwarded to me by an organization from Kitchener called Help Stamp Out Poverty Everywhere. The petitioners state that in the opinion of your petitioners, the recent federal budget policy to deindex family allowances is clearly an attack on the working poor and poor alike and as a result they strongly urge the Government of Canada to restore full indexation of family allowances.

January 14, 1986
Petitions


Neil Young: Mr. Speaker, on the different matter of unemployment insurance and pensioners, I have a petition signed by a number of individuals from the Hamilton-Beamsville area who ask Parliament to examine the Government's intent to deduct pension income from unemployment insurance benefits and ask that those pensioners be treated fairly because of the number of years of service that they have given to Canada.


Victor Fredrich (Vic) Althouse: Mr. Speaker, I have a number of petitions to present. The first is from points in my riding including Nokomis, Dafoe, Wynyard, Englefeld, Watson and Jansen. They are petitioning the House of Commons to reinstate full indexation of universal family allowance and to rescind the unfair tax increases to which the petitioners allude in their petition.
As well, I have petitions from the Province of New Brunswick which point out that accelerating cut-backs in child benefits, which will reach $600 million annually by 1990, placed on top of sales tax increases, excise tax increases and stiff income tax increases are unfair and place an extraordinary burden on middle and low-income households, and therefore the House should be called upon to reinstate full indexation of universal family allowances and to rescind the unfair tax increases. I have similar petitions from the Province of British Columbia, the Province of Nova Scotia and the Province of Quebec.


Nelson Andrew Riis: Mr. Speaker, I have two copies of a petition from Saskatchewan and British Columbia bringing to the Government's attention the very difficult times the Government's budget and its decision to deindex family allowance is creating for the families of Canada. The petitioners ask the Government to reinstate full indexation of universal family allowance and to rescind a number of the unfair tax increases in the last Budget.


Nelson Andrew Riis: Mr. Speaker, 1 have another petition that I would like to present on behalf of a number of residents of Canada who are asking that all retired employees keep their pension benefits and receive their unemployment insurance benefits without deduction of pension income. In other words, they are concerned about the situation that was introduced on January 1.


John R. Rodriguez: Mr. Speaker, 1 have the responsibility and privilege of presenting petitions on two different subjects. The first one is on the planned deindexation of family allowances. I have petitions signed by residents of
New Brunswick, Nova Scotia, British Columbia and Quebec. The petitioners call upon Parliament to withdraw the legislation that is before Parliament that will in effect create a great deal of hardship on families with children and particularly single-parent mothers. In fact the cut-back is a tax increase and it is inequitable and unbearable in light of the vast billions of dollars of hand-outs that are made to the very wealthy in Canada.


John R. Rodriguez: Mr. Speaker, the other petition 1 have is signed by residents of Hamilton, Ontario, and calls upon Parliament to withdraw the change in the unemployment insurance program whereby pension income will be used as earned income in calculating unemployment insurance.


BUSINESS OF THE HOUSE
Ramon John Hnatyshyn: Mr. Speaker, there have been consultations between the House Leaders. I think you will find that there has been a disposition made to accept by unanimous consent and have passed without debate the following motion:
That the Ninth Report of the Standing Committee on Public Accounts, presented in the House on Tuesday, December 17, 1985, be concurred in.


Mr. Speaker:: Is there unanimous consent for the introduction of that motion?


Jean-Robert Gauthier: Mr. Speaker, I am sorry. Could I have 30 seconds to inquire into the matter before I give my consent since the House Leader is not present?


Mr. Speaker:: I take it that the 30-second consultation is now complete. There now being unanimous consent for the introduction of the motion, shall the motion carry?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

Ramon John Hnatyshyn: Mr. Speaker, this motion has also received consent and deals with the time limit with respect to the response of the Government to the report of the Subcommittee of the Standing Committee on Justice and Legal Affairs on Equality Rights. I will explain the purpose of it in advance. Because the House is not sitting during the mid-term break of the week of February 17, there has been a disposition made by the House Leaders to extend the time available for the presentation of the response of the
January 14, 1986

Government until the week following the recess. Therefore, I think you will find a disposition to have this accepted without debate and by unanimous consent.
The motion reads as follows:
That, notwithstanding the provisions of Standing Order 70(16), the comprehensive response requested, in relation to the report of the Subcommittee of the Standing Committee on Justice and Legal Affairs on Equality Rights, presented to the House on Friday, October 25, 1985, shall be laid upon the Table not later than Tuesday, February 25, 1986.


Mr. Speaker:: Is there the consent of the House to introduce the motion?


Jean-Robert Gauthier: Mr. Speaker, my guardian angel has sent me a little note which reads: "Okay", and it is signed JY, who, as we all know, is Jerry Yanover.


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


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Doug Lewis (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, the following questions will be answered today: Nos. 458, 470, 482 and 488.


Mr. Corbett: How much money does the Government spend annually on literature and advertising to discourage smoking?


Hon. Jake Epp (Minister of National Health and Welfare):: It is estimated that in fiscal year 1985/86, National Health and Welfare will spend $1.6 million on literature and advertising to discourage smoking. Of this total amount, $1.2 million will be spent on advertising with the balance being spent on related educational and informational materials.


Mrs. Sparrow: What quantity of pornographic material and hate literature was seized at border points (a) from April 3, 1985 to date (6) for the comparable time in 1984?


Hon. Elmer M. MacKay (Minister of National Revenue):: The Department of National Revenue, Customs and Excise, conducted a retrieval of data respecting seizures of pornographic material and hate literature. However, such data is currently retrievable only for the period ending August 31, 1985.
Order Paper Questions
Customs interdictions of prohibited material are considered "detentions" as opposed to "seizures".
(a) From April 3, 1985 to August 31, 1985, a total of 10 seizures of pornographic material and hate literature and approximately 1,700 detentions were effected.
(b) During the same period in 1984, a total of 23 seizures and approximately 1,700 detentions were effected.
"Seizures" of material relate to material which is not properly declared by the importer at the time of entry and is considered to be smuggled, misdescribed or enclosed in another package. "Detentions" of material relate to material which is properly declared by the importer at the time of entry and is determined to be prohibited. In such instances, the material is either voluntarily re-exported by the importer or detained by Customs for disposition.
In addition, a significant amount of material is submitted in advance of importation to Customs for review and for an opinion regarding its admissibility into Canada. From April 3, 1984 to October 15, 1984, 1,365 items were submitted for review and from April 3, 1985 to October 15, 1985, 2,139 items were submitted.


Ms. McDonald: How much federal tax revenues have been lost by Revenue Canada through tax deductions for advertising and other promotional measures on the part of tobacco manufacturing companies?


Elmer MacIntosh MacKay: Statistics are not captured by Revenue Canada on expenses incurred by various industry groups.


Mr. Rodriguez: 1.	In each of the past four years, how many persons were employed by the Department of Employment and Immigration to investigate unemployment insurance cheating and how much money was recovered?
2.	How many persons were convicted of fraud for improper collection of unemployment insurance?
3.	(a) How many individual cases were there of unemployment insurance overpayments (6) how many were caused by administrative error on the part of the Department?


Flora Isabel MacDonald: January 14, 1986
Order for Return
1.	(a) 1981 - 857.33 person/years
1982	- 916. person/years
1983	- 965.56 person/years
1984	- 927.94 person/years
Overpayments Established	Penalties	Fines1981	$40,392,494	$ 4,356,013	$1,717,6451982	53,385,322	6,557,403	2,200,5681983	82,028,298	10,199,757	2,915,7501984	87,925,791	12,586,537	2,749,931
N.B. C.E.I.C. is unable to segregate the amounts of money recovered in respect of unemployment insurance cheating. However, it should be noted that historically Employment and Immigration Canada collects approximately 95 per cent of all overpayments established in the U1 program.
2. 1981 -7,835
1982-	6,673
1983-	6,619
1984-	5,449


Some Hon. Members:: Agreed,


Ms. McDonald: 1.	Have any of the 31 recommendations of the sub-committee on the taxation of artists and writers been implemented and, if so, which ones and by what action?
2.	Have changes been made to the Department of Employment and Immigration's programs to enable artists to benefit from them and, if so, what are they and were artists and arts organizations notified of the changes?
3.	Under the capital cost allowance (a) what amount per year was permitted as tax deductions for investments in films (b) how many films produced under the tax incentive were exhibited and how many won awards?
Return tabled.
3.	(a) 1982-83
1983-	84
1984-	85
1985-	86 (to Sept.
not available 745,647 766,146 363,232 30)
(b) Not available. However, the Commission does maintain a Comprehensive Tracking System, certified by the Auditor General, which categorizes errors by ten broad definitions, as follows:



GOVERNMENT ORDERS


[Stage Direction]
1.	Unreported earnings
2.	Clerical errors
3.	Employment data incorrect
4.	Record of employment errors not followed-up
5.	Regional computer centre processing errors
6.	Incorrect agent decisions
7.	Inadequate fact finding
8.	Adjustment to benefits incorrect
9.	Interview program deficiency
10.	Miscellaneous errors
The House resumed consideration of Bill C-84, an Act to amend the Income Tax Act and related statutes and to amend the Canada Pension Plan, the Unemployment Insurance Act, 1971, the Financial Administration Act and the Petroleum and Gas Revenue Tax Act, as reported (with amendments) from the Standing Committee on Finance, Trade and Economic Affairs; and Motion No. 4 (Mr. Johnston) (p. 9733).
These errors are expressed in terms of the most-likely dollar value of overpayments in relation to the total benefit payout. Latest figures, at March 31, 1985, indicate a most-likely dollar value of $2.68 of overpayment per $100 of benefits paid during the preceding year.
Mr. Speaker:: The questions as enumerated by the Parliamentary Secretary have been answered.


Philip Derek Lewis: I would ask that the remaining questions be allowed to stand.


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


Some Hon. Members:: Agreed.


QUESTION PASSED AS ORDER FOR RETURN
Philip Derek Lewis: Mr. Speaker, if Question No. 428 could be made an Order for Return, this return would be tabled immediately.


Mr. Speaker:: Is it the pleasure of the House that Question No. 428 be deemed to have been made an Order for Return?


Mr. Speaker:: Order, please. I have now had the opportunity to review the arguments that were made this morning by Hon. Members in relation to Motions Nos. 1, 2 and 3. The President of the Privy Council (Mr. Hnatyshyn) has argued that Motion No. 1, in attempting to substitute the word "person" for the word "individual", would enlarge the scope of Clause 5 since the word "person" could be interpreted to mean "corporation". The objective of Clause 5 is fairly narrow in dealing with the value of inventory of artistic endeavour. The word "individual" as defined in Section 248(1) of the Income Tax Act means a person other than a corporation, while the word "person" is defined to include bodies corporate or political. Therefore, 1 find the argument of the President of the Privy Council to be convincing in that the amendment is more than what was envisaged at second reading. Therefore, Motion No. 1 is out of order and will not be put to the House.
Motions Nos. 2 and 3 are interrelated. Motion No. 2 adds a definition to Clause 58 and particularly at Section 110.6 that is linked to the definition of Canadian securities found in Subsection 39(6). I therefore have some difficulty in accepting the argument that it is an amendment to an interpretation clause. The effect of these amendments would therefore restrict the scope of capital gains exemptions. I refer Hon. Members to Citation 527 of Beauchesne's Fifth Edition:
January 14, 1986

So long as an existing tax is not increased, any modification of the proposed reduction may be introduced in the committee on the bill, and is regarded as a question not for increasing the charge upon the people but for determining to what extent such charge shall be reduced.
Therefore, I must rule Motions Nos. 2 and 3 in order. They shall be debated together and voted on separately.
Continuing debate on Motion No. 4, at the expiry of which I would assume we would go to Motion No. 2.


Mr. Keith Penner (Cochrane-Superior):: Mr. Speaker, I would like to comment briefly on the amendment standing in the name of my hon. friend and colleague from Saint-Henri-Westmount who seeks in Motion No. 4 to deal with a clause in Bill C-84 which has a very profound and serious effect upon the income tax system of this country. It is an effect which my constituents are going to feel increasingly over the years. What Clause 65 in Bill C-84 does is to partly end a very important and prominent feature of the Canadian income tax system, namely, the system of indexation.
Members of Parliament who have been in this Chamber for a while will certainly recall, as I do, that it was no less a distinguished Parliamentarian than the Hon. Robert Stanfield who first proposed in this House that we ought to have a system of taxation which was fully indexed. He proposed that the tax brackets and levels of exemption ought to be adjusted each year in accordance with the increases in the Consumer Price Index. Mr. Stanfield made that proposal to the House at a time when those who were engaged in public policy thinking were obsessed with the problems of inflation. They looked around our society and saw that there were many individuals who benefited from inflation. Certainly, those people who had made significant loans in order to purchase houses, apartments and land at, say, 6 per cent, were the beneficiaries of inflation. However, they were in the minority. The majority of people who were just able to make ends meet, who day by day made their payments on their homes and cars, and who had to struggle to get increases in wages to match even the Consumer Price Index, were in trouble. They were devastated by inflation. Therefore, there was a lot of thinking going on as to what we could do as a Government and as a Parliament to deal with the economic problem which was causing such severe problems for so many.
I do not suggest for a moment that it was Mr. Stanfield who, in his own mind, developed the idea of having an indexation provision in our tax system. However, he took what public policy thinkers had developed and brought it here into the precincts of Parliament. I am proud to say that it was my present Leader, the Right Hon. Member for Vancouver Quadra (Mr. Turner), then the Minister of Finance, who took up this idea of indexing the income tax system and who engaged in a very extensive and significant national debate. He went around the country arguing much in the way of, I suppose, a devil's advocate, that to put an index system into our tax structure would cause very serious problems for the Government. He argued that it was not that useful an idea from the point of view of the Government protecting its
Income Tax Act, 1986
revenue position. However, the then Minister of Finance came back from that national debate convinced that this was something which ought to be in our income tax system because it was fair, just and equitable. Therefore in a Budget which was introduced at that time we had a fully indexed tax system brought into effect. In fact, we gave leadership in the free world in having a fair tax system.
We now had a taxation system, with an index system built into it, which ensured as far as possible that the effective rates of tax at any level of income measured in terms of constant purchasing power would not change as a result of changes in the purchasing power of the dollar. Second, it avoided an automatic erosion of the real value of the various personal exemptions due to inflation.
I look upon indexation of the tax system to mean very simply that the Government cannot live off the avails of inflation. It cannot benefit from the effects of inflation which devastates so many of the people we in this House represent. Indexing meant that the Government, if it needed more dollars for justifiable reasons, had to add to its revenue in a very direct way. It had to put it into a Budget. It had to say there was going to be a tax increase, it had to indicate what the money was going to be used for and it had to bring that to Parliament.
Indexation prevents the effective rates of taxation from just increasing automatically. It prevents the value of personal exemptions from declining automatically every year into the indefinite future so long as inflation at any level continues. What does Bill C-84 do? It is true that Bill C-84 does not bring an end to the indexation system in its entirety. What it does is to end the first 3 per cent of the indexation system. What we have now is 3 per cent per annum added on to the tax burden of our citizens. At first blush, that does not seem too serious in a single Budget in a single year, especially at a time when we have a very large national deficit. However, think for a moment, Mr. Speaker, of what this means over a longer period of time. What does 3 per cent per annum over a period of, let us say, 10 years mean? Let us take a married taxpayer who does not have dependent children. That person has personal exemptions in 1985 terms of $7,700. In 10 years that will be eroded by 26 per cent. He will then have a personal exemption of only $5,730. In a 20 year period, those exemptions are eroded in value by 45 per cent and he will only have an exemption of $4,225.
Right now, as you know, Mr. Speaker, the top rate is about 50 per cent. That top rate kicks in at just over $62,000. As a result of Bill C-84, in a 10 year period of time, the top rate of taxation is going to begin to take effect at the much lower level of close to $46,000. In 20 years the top rate of taxation will begin to take effect at $33,000. I am sure Hon. Members must be wondering why the Minister of Finance (Mr. Wilson) would want to bring in with Clause 65 of Bill C-84 a partial ending of the indexation system in our tax structure. Why did he do it? Obviously he needed a large quantity of dollars, something in excess of $600 million, in order to pay for another benefit which is going to be given out as a result of the

January 14, 1986
Income Tax Act, 1986
Budget, namely, a one half million dollar gift of a capital gains exemption introduced gradually over a period of time. That $635 million will almost pay for that gift in the first year. In order for the Government to make a very generous gift to its rich friends it is now going to dip into the pockets of people who cannot afford to have their personal exemptions decreased or their tax levels increased. They cannot afford to give those dollars to people who have extra dollars to invest in order to try and make a capital gain.
This Budget takes from those who are struggling to get by and gives to those who have all of their needs met and probably most of their wants as well. My constituents cannot afford their share of this $635 million. They cannot afford it.


The Acting Speaker (Mr. Charest):: The time allotted to the Hon. Member has now expired.


Douglas Cockburn Frith: Mr. Speaker, I welcome this opportunity to add my words to the debate on this clause of Bill C-84. My hon. colleague from Cochrane-Superior has I think outlined very well this afternoon the reasons why the Government of the day in the mid-1970s decided to accept the recommendations made by the then Leader of the Official Opposition, Mr. Standfield, to introduce the concept of indexing personal exemptions and the income tax system. Before 1 begin to talk about the impact these measures will have on family income, I want to talk a bit about what the Conservative Party had to say in 1980-81 when it thought the Liberal Government was going to introduce the type of legislation which has been introduced on the floor of this House today. Regarding the deindexation of personal exemptions and the income tax system, the Conservatives indicated that the lower your income was, the harder you were going to get hit. At least they recognized the fact that the hardest hit would be low and middle-income Canadians. They were well aware of the impact it would have. They said it would mean a massive tax increase for all Canadians. Therefore, it seems rather strange that Conservative back-bench MPs have been silent this morning and this afternoon concerning the impact this Bill will have on their own constituency.
The Conservatives went on to say at that time that deindexation would raise a lot of money fast. This morning my colleague, the Hon. Member for Saint-Henri-Westmount (Mr. Johnston) indicated that in 1990-91 alone some $4.3 billion will find its way into the Government's Consolidated Revenue Fund solely on the basis of the Government's vested interest in inflation over the next four or five years. That is why they said that indexation was their idea in the first place and there was no reason for the Liberal Government to remove it from the tax system, and why they felt every Canadian should speak up and write their individual Members of Parliament. My, how five short years changes the tune of the Conservative Party. In essence they have just ripped up the plans they had in 1980 to oppose the principle of deindexation and now sit quietly by while a Bill is introduced on the floor of the House of Commons which will do the exact opposite of what their Party
stood for in 1980-81. I suggest that is typical of the actions of this Government since it took office in September of 1984. Government Members have betrayed the trust given to them in the election of 1984, and I happen to believe that the Gallup poll is now beginning to reflect the degree of cynicism the Canadian people have regarding the Mulroney Government and the plans it has in a number of key areas.
I talked a little bit about the impact these measures would have on specific family income levels. 1 raised this issue at the time we talked about the plans to deindex family allowances. I admitted at that time that those plans were very small but the reason we, the Liberal Party, opposed those plans was the same reason we opposed the plan to deindex personal exemptions in the income tax system. In effect that will take this country in the direction of a very perverse social policy. As a direct result of this action the gap between the poor and rich in this country will widen. In fact, as I have pointed out, a family which earns $15,000 a year will pay an additional $1,879 in taxes over the next five years. StatsCan's definition of a middle-income family is one earning $35,000 a year and they will pay an additioanl $3,450 in taxes. The strange thing is that a family which earns $80,000 a year will pay only an additional $1,125 in taxes over that same time period. In other words, the family earning $15,000 will pay approximately 65 per cent more in taxes than the family earning $80,000. Every social policy group in this country which advises the Government has indicated that the Government is wrong in its attempt to introduce these measures for deindexation. It will be in effect a social policy of Robin Hood in reverse where the poor get poorer and the rich get richer.
I find the silence from the Government side quite deafening. We were elected as Members of Parliament in September of 1984 to represent our constituents' interests. Yet, again strangely, I see Members here from Mississauga, Quebec and western Canada who have nothing to say. They want us to rush this through so they have even given up speaking on the Bill. I suppose to some extent the Hon. Member for Saint-Henri-Westmount was correct this morning when he said that if he were bringing in legislation of this type, he would be very silent if he were part of a team of Government back-benchers who were going to advocate this kind of social policy on the floor of the House of Commons. I often wonder what happens in the national caucus of the Conservative Party. I know when we were in Government we had a very healthy exchange of views in caucus so that this kind of legislation which is so damaging to our constituents would never see the light of day. Yet time after time we find as a result of the May 23 Budget a number of income tax measures which will adversely affect our social policy for decades to come.
Before I conclude, I would like to talk a bit about the fact of the Government having a vested interest in inflation once the personal exemption system and the income tax system is deindexed. In the mid-1970s, when we were experiencing much higher levels of inflation, there was an excellent case to be made for the Government of the day accepting the principle
January 14, 1986

of indexing the income tax system and the persona! exemption system. As 1 have indicated, the Member for Cochrane-Superior (Mr. Penner) outlined the effect that that will have on the average income tax paid by middle-income and lower-income Canadians. It will be a very negative effect. It is a backward step for the present Government to destroy a principle that was accepted by all political parties in the mid-1970s simply because of a drop in the annual inflation in the country.
As the critic for national health and welfare, I happen to believe that the social policy direction indicated by the May 23 Budget and exemplified by Bill C-84, is a step in the wrong direction. 1 appeal to the back-bench members of the Conservative Party to stand up and voice their concerns by voting with us, the Opposition, on some of the amendments which we have put forward on Bill C-84.


Donald Alex Blenkarn: Mr. Speaker, it is about time the House and the Opposition realized that the best social policy for the country is jobs. We have given jobs in great numbers.


Some Hon. Members:: Hear, hear!


Donald Alex Blenkarn: Another social policy that we have is to pay our bills and reduce the deficit. We are reducing the deficit and this is one of the very few measures in this statute that increases taxation. Yes, it increases taxation across the board if there is some inflation. It reduces th e exemptions that people have-


Douglas Cockburn Frith: It widens the gap.


Donald Alex Blenkarn: He says that it widens the gap. It widens the gap, all right, in the reduction of the deficit. That is the gap we are going to close. We are going to get it a long way down and we need the co-operation of the Opposition rather than stupid, foolish, and ridiculous suggestions about social policy. Our social policy is working in spades. It is working in my constituency where the problem today is not "jobs, jobs, jobs", it's "people, people, people" to fill them.


Douglas Cockburn Frith: Just forget about Atlantic Canada, northern Ontario, and New Brunswick.


Donald Alex Blenkarn: The problem with the Opposition is that when it was their turn in Government they were quite prepared to hack away at social policy objectives by using a reduction in indexation through their six and five program. Now we have inflation down to 4 per cent and it is perhaps going below that.


Mr. Foster:: Who got it down?


Carlo Rossi: Not you, Don. You didn't get it down.


Donald Alex Blenkarn: One of the major problems with indexing is that it feeds itself. It validates the inflation. There is a provision in this Bill which reduced indexation with respect to tax allowances and the tax rate by expecting people to absorb the first 3 per cent of any inflation that takes place. We expect
Income Tax Act, 1986
citizens to absorb some of the costs of inflation because, unless we do so, inflation protection measures continue to feed the inflation that we want to reduce.
It is important for the House to realize that the Government cannot continue to index everything and expect to balance the Budget. One of the major causes of the serious shortage of revenue as against expenditures which exists in our budgetary process has been the result of the indexation that has been extended to all of our social programs and our tax system. Before indexation was brought in on a broad scale to cover pensions, and every other form of benefit, allowance, or charge of the Government, generally speaking Governments were very close to balancing their budgets. Since then our deficit has grown year after year, and often more in good years than in bad years.
Speaking in round figures, for every dollar we spend we only bring in 65 cents in taxes. The other 35 cents must either be borrowed, printed, or somehow taken away from pension reserves. That policy cannot go on. However, that is the social policy advocated by the Member for Sudbury (Mr. Frith). His social policy is that it is all right to borrow, and that it is all right to pledge the future of your children, that of their children, and that of their children's children, as long as we have it today.
That is not our policy. Our policy is to attack the root of inflation by refusing to validate it. Our policy is to collect more revenue to reduce our shortfall. I am sorry that means more taxes in some senses. That is the purpose of this section and that is why it is in the Bill. I do not think anyone in the House really wants to pay more taxes. No one wants to pay more taxes, but we as Canadians, as a responsible Party, and a responsible Government, tell ourselves that we have to pay our way. In that sense, the amendment is irresponsible because it says: "Sir, I want more cake, I want more, more, more, and I don't want to pay for it". I am surprised that the Member for Saint-Henri-Westmount (Mr. Johnston) brought that position to the House. I would understand it from his Party, but not from him.
Inflation feeds on itself. Indexation validates inflation. It may be necessary for the Government to take one step further and abolish all forms of indexing, because we cannot forever increase payments to people and reduce taxes to people because the cost of living continues to go up. When we do that the cost of living is just passed on and the next year's cost of living goes up. We saw how that worked when we had a provision whereby liquor and tobacco taxes were indexed to the cost of living. We imposed taxes, the price of the articles went up, and that justified a further increase in taxes. Therefore, we imposed more taxes, the price of the article went up, and that justified further increases in taxes.
Here it works exactly the opposite. When the price goes up, we reduce the tax. We have less money to pay Government expenditures, but because we are also going to index benefits, as the price of things go up we increase benefits. Again, our deficit is smaller, our tax revenue goes down, and our expenditures go up. Of course we have this massive, built-in, perma-

January 14. 1986
Income Tax Act, 1986
nent deficit. It is time the House got down to brass tacks and got rid of that deficit. We cannot get rid of it unless we are prepared to pay the cost, part of which is this clause which must remain in the Bill.


The Acting Speaker (Mr. Charest):: Resuming debate. The Hon. Member for Ottawa-Vanier (Mr. Gauthier) has the floor.


Jean-Robert Gauthier: Mr. Speaker, I am pleased to take part in this debate on motion no. 4 which was moved by my colleague the Hon. Member for Saint-Hen-ri-Westmount (Mr. Johnston) for the purpose of amending bill C-84 by deleting Clause 65.
Mr. Speaker, the purpose of this clause is to abolish or change the indexation of the income tax tables, so that Canadian taxpayers would have to assume the first 3 per cent in inflation, and to fill the coffers of the state to the benefit of the Government.
It was rather amusing to hear the Hon. Member for Mississauga South (Mr. Blenkarn) blathering earlier that indexation should be abolished. 1 should simply like to read to him the statement published by his Party in an ad which was published in the newspapers and which read as follows:

"Inflation, the less your income, the harder you get hit". 1 continue to cite this great message from the Progressive Conservative Party of Canada. It says: "Deindexing is a scheme to guarantee that you will pay higher federal income taxes year after year". It says: "Deindexing would take away the protection you now have against inflation".
The Hon. Member for Mississauga South (Mr. Blenkarn) just said to abolish all indexing. I take it that he wants to abolish the indexing of family allowances, the income tax tables and senior citizens' income. He does not give a damn about the poor or the moderate income groups. He says that they should pay and assume the costs of the inflationary spirals for which they are not responsible.
Let me go on to read from this article because I believe it reveals the two-timing attitude in which some of the Members across the way speak from both sides of their mouth. It goes on to say: "While deindexing would impose the greatest economic hardships on people living on low incomes, it would mean higher and higher taxes for all Canadians living on any income, taxes that would increase as inflation continues to spiral upward". It says that the Progressive Conservative Party of Canada is providing, in their own words: "the opposition to a possible deindexing". It says: "Indexing was our idea in the first place and we are determined that you should continue to receive this fundamental protection against inflation".
This is another day and another year, and probably another Party. They have made a complete 180 degree turn and oppose
indexing and any projects or social programs which may have indexing clauses that allow people to maintain their purchasing power. Indeed, indexing of the income tax tables allows moderate income people and all Canadians not to get more, but not lose as a result of economic factors which are not of their making.
In past years we experienced 10 per cent, 11 per cent and sometimes higher inflation rates. God knows that if we did not have indexing of the income tax tables many more Canadians would have been asked to assume the most expensive cost of Governments. We protected those with low and moderate incomes against-
[ Translation]
-the ravages of inflation.
Mr. Speaker, I know that the indexation issue disturbs our Conservative friends and distracts them from their national plan to have all Canadians pay, no matter what their income. To clearly demonstrate the consequences of deindexing income tax tables, I should like to quote from a study which was carried out by our research services and which explains the scope of deindexation: "To show clearly the impact which a reduced indexation of personnel exemptions would have, suffice it to say that if inflation remained at 3 per cent or more over the next few years and if no other change were made to the legislation, the $7,700 granted in 1985 as personal exemptions to married taxpayers without dependent children would only represent, in terms of purchasing power, $5,730 in 10 years and only $4,225 in 20 years, which would mean a reduction of over 26 per cent and 45 per cent respectively."
Mr. Speaker, the study goes on to say that on the basis of the same assumptions, the taxable income currently subject to the highest tax rate, that is $62,160, will only be $45,838 ten years from now, and $33,802 in 20 years.
Mr. Speaker, this shows quite clearly that once again, it is the middle class, the low-income people, who will be shouldering the burden, and not only the Government expenses, which, God knows, are subject to criticism. We were told earlier that the Government knew how to pay its debts. We saw what they could do in the case of banks, we saw what they could do with the one billion Canadian dollars they were forced to spend in order to reimburse the uninsured depositors of the Canadian Commercial Bank.

Following the Budget last year, an interesting document was leaked and given to us. The first and most expensive item in terms of budgetary measures was the modified indexing of the personal income tax tables. It states that the modified indexation of personal income tax tables for 1985-86 will bring $80 million to the Government; in 1986-87 it will bring $570 million and in 1990-91 it will bring $4.36 billion in income to the Government which Canadians would otherwise have been able to spend as consumers in order to look after their needs.
January 14, 1986

The statements by Members of the Progressive Conservative Party that this was their idea in 1972-73 is absolutely ludicrous. It was the Liberal Government in 1974 that provided indexing on the income tax tables. It was a progressive measure at that time and it still is progressive. There are enough regressive tax measures in this country that we should have at least one progressive measure to allow all people to pay according to their means, according to a progressive tax table that should be indexed to the cost of living. It does not make sense to say as the Government does that those who make less money should pay as much or more than those who may pay a minimum tax. We will have an opportunity to address that issue later.
I want to conclude by saying that it appears to me that the silence on the Government side is due to their embarrassment. I understand that it is embarrassing to be in contradiction with one's own Party policy. The Conservatives cannot have it both ways. They cannot say that indexation was their idea, only to say a few years later that it is atrocious to continue with the indexing of the income tax tables and propose to modify it so that the first 3 per cent of inflation will not be covered. With that, I hope the Government is defeated on that motion, although I doubt it very much.


Mr. Edouard Desrosiers (Hochelaga-Maisonneuve):: Mr. Speaker, it is with great pleasure that I rise on Amendment No. 4 to Bill C-84. As we know, Mr. Speaker, people can juggle with figures. Members opposite call us all sorts of names, but one should not forget that the child benefit, family allowance and tax credit programs provide greater assistance to low-income families-that is the truth-while reducing benefits now being enjoyed by high-income families. This is why Bill C-84 is very important. It should be realized that the legislation as a whole is designed to favour the less privileged families in Canada, the less privileges people, the families in need.
I find it hard to understand that the Opposition cannot grasp that situation.
We all know who is responsible for everything that is happening to Canadian taxpayers. We must not forget that the national debt exceeds $200 billion, Mr. Speaker. The Conservative Party was not always in power. This situation was created by the Liberal Party.
Today, naturally, we have to look at the whole issue and protect the Canadian taxpayers, who are always the ones to pay. Bill C-84 creates a perfect balance. We finally have a Government which will take care of the needs of low-income families and penalize a little bit families with high incomes. In my opinion, it is normal in our society for everyone to do his share and to provide some assistance to the most needy, those who have the most problems.
Mr. Speaker, Bill C-84 includes many excellent provisions. For instance, there are truly valuable provisions for the artists. Of course, this is not the time to speak about them, but I shall have another opportunity to do so.
Income Tax Act, 1986
I simply want to tell the Canadian taxpayers who are watching us that the Conservative Government' wants to protect and help them, especially those with low incomes. That is the reason for Bill C-84.


The Acting Speaker (Mr. Charest):: Resuming debate. The Hon. Member for Laurier (Mr. Berger).


David Berger: Mr. Speaker, this Bill is only one thing, it is about increased taxes. That is what the Budget is all about, no matter how the Government seeks to disguise its plan. What it is doing is imposing a massive tax increase on Canadian taxpayers.	'
Continuing what my colleagues have said, I would like to outline the effect of some of these tax increases on individual taxpayers. The important point that must be stressed, and I heard the Hon. Member for Mississauga South (Mr. Blen-karn) and the Hon. Member for Hochelaga-Maisonneuve (Mr. Desrosiers) speaking, is that if taxes have to be increased to pay our way as the Conservatives are so fond of saying, let it be so. What I and my colleagues in the Liberal Party object to and what millions of Canadians object to is that taxes are being increased unfairly. A greater burden is being placed upon the poor in our society.

If the Hon. Member says that everyone should do his share,
I agree with him. But that is not what this Bill provides. The poor will pay more than their share. When we look at all the budgetary measures, we realize that the wealthiest in our society are doing very nicely. That is what is unfair about this budget and it is this injustice which we oppose.

A study was published late last year by the National AntiPoverty Organization which was presented to the Minister of Finance (Mr. Wilson). What was its conclusion? It stated that federal tax increases announced in the Budget will take twice as much from the poorest Canadian as they do from the most affluent. Is it fair for a Government to impose tax increases which take twice as much from the poorest Canadians as they do from the most affluent?
We all remember, Mr. Speaker, the Prime Minister (Mr. Mulroney) talking about a bank president earning $500,000 a year. The Prime Minister cited him as an example of those who do not need family allowance in the famous debate over family allowances several months after the election in the fall of 1984.
What does the National Anti-Poverty Association have to say about this famous bank president? It says the tax increases announced in the May budget have a much greater impact on the bank teller than they do on the bank president. I would ask my colleague opposite, the Member from Mississauga South,

January 14, 1986
Income Tax Act, 1986
who is the chairman of the Finance Committee of this House whether he believes it is fair and just for a bank teller to pay much more as a result of the increases in taxes than the bank president.
The National Anti-Poverty Organization goes further:
The regressive nature of these taxes means that they hit hardest at those who can least afford to pay increased taxes.
That is what we are objecting to.

Mr. Speaker, the budget reveals the true face of the Mul-roney Government. It is a retrograde and antisocial budget in which the Government backs down on its promise not to reduce social expenditures. It is a budget which is more harmful to the poor than to the rich. Poor and middle-income families will have to pay more taxes, more commodity taxes, and the tax rates will no longer be fully indexed to the cost of living.

We are debating Clause 65 at the present time. It provides for the deindexation of tax brackets relating to personal exemptions and to the child tax credit. Let me deal first with the tax brackets and the personal exemptions, Mr. Speaker. Taxpayers will pay higher taxes simply because of inflationary increases in income. Any person who has worked for a number of years knows that every year he or she asks for a cost of living adjustment. If the cost of living goes up by 5 per cent, people want a cost of living adjustment of 5 per cent in order to keep pace with inflation, in order to preserve their purchasing power.
Under the provisions of the Income Tax Act presently in force and introduced by the Right Hon. Leader of the Opposition (Mr. Turner) when he was Minister of Finance in 1974, the Income Tax Act permits such an increase to take inflation into account without taxing the taxpayer for such an increase which only allows him to keep pace with inflation.
The Conservative Government is saying to taxpayers that the first 3 per cent of that inflationary increase will no longer be compensated for by the Government. Taxpayers will now have to pay for that 3 per cent increase out of their pockets. The Government will pay only for increases exceeding 3 per cent. All taxpayers who see their salaries adjusted simply to keep pace with inflation will have to pay additional taxes, even though they are no further ahead and even though their incomes have not increased in real terms.
The other provision to which I referred earlier deals with the child tax credit. Clause 65 also provides for the income base of $23,500 per year as the threshold amount of family income beyond which the child tax credit is reduced. This base will be adjusted each year for increases in the Consumer Price Index beyond 3 per cent. The poorest families in our society, many of which are single-parent families, receive the child tax credit. They will have money taken out of their pockets because of the provision in Clause 5. It means that $23,500 in 1986 will not be worth the same in 1987 if inflation rises this year by 4 per
cent or 5 per cent. The people who receive the child tax credit will, nonetheless, be affected by the threshold change as a result of the provision in Clause 65. Again the Government is making them assume the first 3 per cent increase in the rate of inflation.
There is a number of other provisions which I will have the pleasure of dealing with during the course of debate on these amendments. I thank the House for the opportunity to express my views on the effect of the deindexation of the income tax
system.


Geoff Wilson: Mr. Speaker, probably enough has been said. In fact, it seems that almost everything which could possibly be said about Bill C-84 has already been enunciated time and time again in the House. Nonetheless, I respect very much the abilities and experience of the Hon. Member for Saint-Henri-Westmount (Mr. Johnston) who put forward Motion No. 4 relating to Clause 65 of the Bill. I note with some astonishment, however, that he proposes simply to do away with the partial deindexation of personal exemptions and tax brackets. I find that surprising. With his abilities he should know better; clearly he is playing politics at this point in time with an issue of such gravity. I feel that it will take a long time for the people of Canada to forgive him. It was his administration which put Canadians into a deficit position. I almost hesitate to repeat it, but it deserves repeating. The deficit is in the area of $35 billion to $48 billion annually, and we have a cumulative deficit of some $200 billion. On an annual basis, this works out to overspending by the federal Government to the tune of some $1,400 per person for every man, woman and child in the country. The simple question to put forward would be: How long can this continue? How long can this sort of wanton or profligate spending continue? It put Canadians at the point of no return, at which point they tossed out the Government which created the situation and put in place the Progressive Conservative Government with a clear mandate to do something about it.
Now we have the spectacle where we attempt in a meaningful way, with the least amount of pain as possible, to deal with the jaws of inflation. When dealing with indexation matters, if we index exemptions we are in fact cutting back on revenue. When we index expenditures, we increase the outlay. At the same time we widen the jaws and the deficit continues to increase. This is something which simply cannot continue.
At this point in time one out of every revenue dollar gathered by the federal Government is going to service the debt, that is, to pay interest on the cumulative national debt. By the mid-1990s, if the rate of growth in the deficit continues unabated, we will be in a position where 100 cents out of every tax revenue dollar generated will have to go to pay interest on the national debt and interest on Government securities, treasury bills, Canada Savings Bonds and so on. That is simply an untenable position. By the mid-1990s there would be no money left for any purpose other than debt servicing. There would be no money left for transfer payments to the provinces, for medical care, to assist with education or to provide defence
January 14, 1986

and other services to which Canadians have become accustomed. Unless very serious steps are taken to deal with the deficit, every Canadian will suffer. We in this generation will pay the price but, even worse, so will generations to come.
I should like to ask a common sense question of members of the Liberal Party and of the New Democratic Party: How long can we continue to spend money which we do not have? Obviously, from some of the remarks, it is of no concern to them. It has not been of any concern to them over the last 15 years. Apparently they continue to treat it as some sort of joke. It is not a joke. Responsible steps should be taken. The only way to deal with the problem in the short run would be either to borrow more funds or to print money. In other words, we would either have inflation through the printing of money and the debasing of our currency or we will have the problem down the road of being unable to service the national debt. My main motivation in coming to Parliament-and it was that of many others-was to face the deficit and to try to grapple with it in a meaningful way. I am disappointed, in fact appalled, to have found the slap-happy, casual attitude displayed to the deficit by members of the opposition Parties.
Bill C-84 was a reasonable approach to dealing with the deficit problem-a modest increase in taxes, some juggling around, nothing too severe. Yet, all we hear at this point is criticism from the opposition Parties which have their heads in the sand. Over the years the marriage between the two of them has created a deficit of impossible dimensions. Now, when a Government comes along which is prepared to take some reasonable and meaningful steps, what do we hear from them? We hear nothing but more whining and complaining. It is time for some reasonable response on the part of the Opposition. We should hear from them. In fact, we should have a vote in the House right now. Perhaps the opposition Parties would like to respond at this point, get their heads out of the sand and face up to the common sense approach. With the kind of deficit we have in the country, we have to take in more revenue, spend less and work toward balancing the books.


Don Boudria: Mr. Speaker, I was truly astonished to hear the speech of the Hon. Member for Swift Current-Maple Creek (Mr. Wilson). It was unbelievable. I am sure that Conservative Members across the way will agree that the Conservative Party is a different one than you and I used to know, Mr. Speaker. Do you remember the Conservative Party? Being the non-partisan person you are, Mr. Speaker, you will recall when the Conservative Party placed an advertisement in Canadian newspapers which indicated the following:
You ve heard a lot about the Constitution lately, but how much have you heard about deindexing?
Actually that was the title of the advertisement which appeared in the early 1980s. It went on to indicate:
The Constitution is big news now. So big, that you probably haven't heard all that much about the Budget the Liberals are going to bring down soon.


Mr. Brisco:: What about six and five, Boudria?
Income Tax Act, 1986


Don Boudria: Listen to this and you may learn something. In that Budget there could be something called deindexing. Well, no longer do we need to speculate about deindexing. It's here. It has arrived. It arrived on the Tory bus, not the Liberal machine. The Big Blue Machine brought us the much dreaded, the much feared deindexing that we heard so much about not that long ago.
It was worth buying full page ads in weekly newspapers across the country to incite fear among the people of Canada when the Tories were in opposition, but now that they are in Government deindexing is a sound and reasonable approach. Yet when they were in opposition it was bad. This morning the Minister of State for Finance (Mrs. McDougall) said to us- not that eloquently, but said to us in any case-that in her view we should have been deindexing. She repudiated Tory policies of decades which wanted indexation. What happened to the Minister of State for Finance? Has she not read speeches by previous Leaders of the Conservative Party? What has happened to that Minister, repudiating Tory policies right, left and centre? No progressiveness in that Conservative, Mr. Speaker. She may have been elected as a Progressive Conservative, but she is obviously of the regressive preservative persuasion, and that is what has happened. Let us look at that.


An Hon. Member:: Better than-


Don Boudria: Let us look at that-I will ignore the unparliamentary language that is used by some members of the Conservative Party. I am concerned with issues and people, not unparliamentary language by some of those nasty Tories making remarks in the House at this point.
The bells rung in this building a few years ago over a Bill. How long did they ring? Days and days they rang over a so-called omnibus Bill. An omnibus Bill, Mr. Speaker, for you and I, is a large Bill like this Bill C-84. Look how large it is, hundreds and hundreds of clauses and subclauses. How long have we debated this omnibus Bill? About 10 hours. I am sure that the Secretary of State (Mr. Bouchard) has read this Bill from one end to the other. He will understand how complex it is and he will want the House of Commons to have the benefit of a thorough debate on this very vital and important issue to Canadians, this issue that his Party has fought for so eloquently in the past when it was afraid of deindexing. Yes, Tories were afraid in the past but the fear has gone. That lust for power, that craving for money that Tories have now has created this kind of attitude on their part. Why do they want that money, Mr. Speaker?


An Hon. Member:: To pay the Bills.


Don Boudria: It is to give to the poor people? Surely not. Is it to use for useful purposes? Well, that is to be questioned. Let me give instances of how this money will be wasted, squandered by the Government.
Let me bring to the attention of the House the revenues, the direct tax on persons, and I take this from an official secret Government document that was leaked to the Opposition.

January 14, 1986
Adjournment Motion
There is no denying that this was a secret document, the Government has already acknowledged that.


An Hon. Member:: Who denied it?


Don Boudria: This document claims that the Government will by this measure reduce the revenues in the year 1986-87 by $600 million by removing capital gains tax; by removing that it will lose $600 million. It will lose $920 million by the elimination of the Petroleum and Gas Revenue Tax. Those are the moneys that it will lose in the year 1986-87, the year we are starting very soon, they year that we are almost in for tax purposes.
In terms of expenditures, what will it use that money for? Well, let us look at some of the Government uses of those moneys. Is it going to spend more on agriculture? No, it is going to spend $50 million less according to the same document. Well, who will it go to? It is not going to the farmers. Will it go to other areas such as improving transport? No, it will reduce $50 million there as well. Where are the increases? Let us look very carefully at this document and we will find the increases in spending of this Tory Government, this Government that you and I are starting to get so fed up with, and that Canadian people by the millions are now rejecting. This Government is squandering that money. It is reducing revenues by eliminating taxes to the rich and is not giving that money to those who need it. That's the story of the Conservative Party, that is why it has lost the confidence of the people of Canada. That is why a greater number of Canadians would now favour someone other than the Tories to be running the affairs of the nation.
As a matter of fact, the majority of Canadians would now prefer that the Liberals were in charge. That fall of power, Mr. Speaker, that fall of favour by the Tories is going to continue because this Government has lost touch-it never had it in my view-with the aspirations of the people. Now, of course, that places the Liberal Party not as the Official Opposition, but the official government in waiting of Her Majesty.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Charest):: It is my duty, pursuant to Standing Order 46, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: The Hon. Member for Don Valley East (Mr. Attewell)- Social Affairs-Abuse of the elderly; the Hon. Member for Winnipeg-Birds Hill (Mr. Blaikie)-Environmental Affairs
(a)	Canada-United States discussions (b) Canadian position;
the Hon. Member for Algoma (Mr. Foster)-Farm Credit Corporation-Moratorium on foreclosures.



GOVERNMENT ORDERS

[Stage Direction]
[ Translation]

[Stage Direction]
The House resumed consideration of Bill C-84, an Act to amend the Income Tax Act and Related Statutes and to amend the Canada Pension Plan, the Unemployment Insurance Act, 1971, the Financial Administration Act and Petroleum and Gas Revenue Tax, as reported, (with amendments) from the Standing Committee on Finance, Trade and Economic Affairs; and Motion No. 4 (Mr. Johnston) (p. 9733).
Mr. Alain Tardif (Richmond-Wolfe):: Mr. Speaker, I also welcome this opportunity to take part in the debate on Bill C-84. I was interested a while ago in what the Hon. Member for Hochelaga-Maisonneuve (Mr. Desrosiers) had to say, namely that the ultimate purpose of Bill C-84 was to provide for a fair and balanced tax system. I find it incredible to hear such words being used about a measure that has such a direct and brutal impact on those Canadians who unfortunately are not in a position to cope with life's financial problems. This is nothing new, Mr. Speaker, because in the nearly eighteen months we have been here, to my knowledge the vast majority if not all of the Government's proposals have always been aimed at getting money, which in the circumstances is a praiseworthy and valid endeavour as such.
The deficit being what it is, I believe we have a collective responsibility to consider ways of identifying solutions that will help improve the economic situation. Everybody is aware of this, on your side as well as ours, but, and that is where the official Opposition comes into play, the Government's way of achieving these objectives certainly does not meet the criteria for what could be considered acceptable in the present situation. The fact is that almost every single Government initiative is aimed at taking money from people who do not have the resources to cope with these increases.
On the weekend and at the beginning of this week, it was announced that the Prime Minister and his Cabinet, in an act of altruism, had refused a salary increase. So far, so good. As far as the symbolism of the thing goes, it is all very admirable, except that the news item, Mr. Speaker, mentioned the salary the Prime Minister and members of his Cabinet would be getting. The head of the family who is watching this on TV and who has two or three or four dependent children and earns
January 14, 1986

a salary of $15,000, $16,000 or $17,000 is not particularly impressed because, like many people in Canada he needs every single cent he earns to make ends meet. Those are the people who need support, who need help, who need a breather, some kind of break so as to be able to come to grips with their financial problems.
Under the present circumstances, wealthier people, people who are better off could assume their real responsibilities and make a greater contribution than the Government expects from them to bring down the deficit. Even though the Bill affects people who are well off, high income people, it does not really amount to much because, the situation being what it is, those people who are rich and fairly well off could think in terms of the community and of their fellow citizens and lower their standard of living to a certain extent. This would make it possible to maintain, sustain and guarantee a certain balance within our Canadian society, for those people have untold opportunities to lighten their tax burden. Just as an example, I think that capital gains is a good illustration. Supposing that the measures contained in Bill C-84 affect a hypothetical case or file, it would be possible to collect an additional amount of $2,000 or $3,000 from a taxpayer; yet, over the next two or three years that same taxpayer will be able to make a profit of $30,000, $35,000 or $40,000 as a result of the capital gains incentive offered by the Government.
In my opinion, Mr. Speaker, people who earn $20,000 or less are not in a position-in the short, medium or long term- to benefit directly or indirectly from the measure which allows Canadian taxpayers to deduct their capital gains up to a fantastic amount. The only people who stand to gain anything at all are those who are rich and well off, those who have jobs and make profits, those who are therefore quite capable of coping with just about any financial difficulty. Mr. Speaker, low wage earners have no such opportunity, they cannot claim such tax exemptions, and they are the victims of the system which, given the hard times we are going through, should help them but instead saddles them with so many direct and indirect taxes and surtaxes.
Mr. Speaker, we have to realize that the rich are badly outnumbered by the poor. Although there are legions of poorer people, the way this Government behaves shows that their lobbying does not really weigh much in the balance. What amazes me is that it does not seem to register that those taxpayers, average Canadians, are consumers, they create jobs and keep the economy going. The minute their ability to pay is substantially reduced, it means that they have precious little left to spend. Inevitably this will result in a sluggish economy.
As far as I am concerned, I just cannot let the Government go ahead with this initiative without expressing the indignation of the vast majority of my constituents who, for the past 18 months, have been shocked by the Government's obstinacy to reduce the deficit on the backs of those who cannot afford it, who are unable to pay a little more than what they are paying already and which is already too much.
Income Tax Act, 1986
These taxpayers are aware, as you are and as we all are, that our country is faced with an enormous debt and that we must strive collectively to improve the financial situation. But what they feel and unfortunately cannot always express, and it is our responsibility as the Opposition to speak out on their behalf, because you are totally unaware of it, what they want to say is this: Get the money from those who are able to pay. Leave us alone for a few years, so that we can breath. We are experiencing difficulties and we cannot sacrifice ourselves more than we have already been doing in the last few years.
Mr. Speaker, the reason I chose to take part in this debate is to denounce once more this absolutely unacceptable and intolerable decision of the Government to get the money from the low-income earners and to leave alone the affluent, the rich, in the hope that they might invest.
This is an approach which I find totally unacceptable under the circumstances, and I say to you: Go on like this and the Canadian people will soon show you, through opinion polls, what they think of this approach and this type of administration.


Maurice Brydon Foster: Mr. Speaker, I am glad to have a chance to speak on Bill C-84, the income tax Bill, and particularly the deindexation of the income tax scales. The impact of that decision made by the Government will be very disadvantageous, particularly for young Canadians and lower income Canadians.
The entire Budget was a very regressive document. Not only did it deindex the family allowance benefits and old age pension benefits but it deindexed the income tax scales. According to the projections of the Department of Finance for 1985-86, the increase in income tax collected due to this deindexation will amount to some $80 million. By the first full fiscal year in which the provision will be in effect, that figure will be $570 million. By fiscal year 1990-91, the income tax collected will be increased each year by $4.36 billion. That is a massive tax increase.
That massive tax increase can be compared with the publicly advertised position of the Conservative Party in 1980. The Government has really broken faith with the commitments it made at that time. In 1980, the Conservative Party put out an advertisement which read: "You've heard a lot about the Constitution lately but how much have you heard about deindexing of the income tax scale?" This ad which was placed in the public media at that time indicated that a person earning $15,000 per year would in fact pay some $217 more per year in income tax because of the deindexation. Now, five years later, the Conservatives are bringing in the exact legislation which they spent their Party's money opposing in 1980. The advertisement goes on to say that the Progressive Conservative Party of Canada is providing the opposition. Well, it

January 14, 1986
Income Tax Act, 1986
is not providing any opposition to this regressive tax measure today.
If one looks at other parts of the Budget, one can see that the Government has really broken faith with the people. The Budget of last May 23 provided a $500,000 lifetime capital gains tax exemption for farmers, but on December 4 the Government introduced a minimum alternative tax which will mean that a farmer who is planning to retire and wants to sell his farm suddenly is faced with the fact that his capital gain is subject to a 25 per cent or 27 per cent minimum tax depending on the provincial tax scale. What was given in the Budget on May 23 is taken away on December 4. We have seen that happen in many aspects of the Budget.
On November 8, 1984, the Minister of Finance (Mr. Wilson) gave his economic statement. The Government provided the farmers with a reduction in the excise tax on farm fuel. Not only the excise tax of three cents per litre but also the petroleum compensation charge of 1.8 cents a litre were provided in the economic statement on black Thursday, November, 8, 1984. On May 1, the Government removed the pretroleum compensation charge and the exemption and farmers started to pay an additional 1.8 cents per litre for gasoline. On September 1, an additional 2 cents per litre was provided for. That effectively took away 3.8 cents of the tax exemption which the Conservative Party campaigned so vigorously on, and that was done within the space of nine or ten months.
On January 1, the Government imposed a 1 per cent sales tax on everything everyone in this country buys, but especially on farm fuels and equipment. That will cost the agricultural industry some $70 million this year in farm input costs. If we look at the situation in agriculture today, we find that one of its great problems is high input costs. Therefore we have an industry which is suffering great uncertainty now being charged this additional tax of some $70 million per year and this is being a done at a time when it certainly cannot be afforded.
If one looks at the projections of the Budget of last May 23, we see that those projections show that the personal income tax surcharge runs only for two years whereas the deindexation of the income tax scale will run on indefinitely. It becomes greater and greater each year because it is cumulative. If one looks at the special taxation on banks, one sees that it also will last only a couple of years and then it is done away with. The reduction in taxes with respect to the Petroleum Gas Revenue Tax is being taken away and those funds will be transferred from the ordinary working Canadian to the large multinational oil companies at a time when ordinary working Canadians can ill afford it.
The idea of deindexation of the income tax scales will be very harmful to low income Canadians. Indexation was brought in by the Leader of the Liberal Party (Mr. Turner) when he was the Minister of Finance. It was an idea which at that time was endorsed by the Hon. Robert Stanfield, the then Leader of the Progressive Conservative Party, and it was
something which the Party during 1980 said should be protected. What Hon. Members of the Conservative Party should do here this afternoon is stand in their place in support of the stand their Party took in 1980 and demand that the indexation of the income tax scales be retained. In their own advertisements the Tories say that a person who earns $15,000 will pay $217 a year more with deindexation. A person earning $25,000 will pay $426 a year more in tax and a person earning $35,000 will pay $547 a year more in tax. It is very apparent that this decision to deindex the personal income tax scales is going to be extremely harmful to average and low income Canadians and I certainly hope that the Government will reconsider this matter and decide that it is not in the best interests of Canadians over the long haul, and, therefore, withdraw this provision and accept the amendment which has been put forward by our finance critic.


Herbert Eser (Herb) Gray: Mr. Speaker, the thrust of the subject matter of the amendment is with respect to the deindexing of the personal income tax. It is just one of the many bad proposals in the Budget of last May. The idea of indexing came forward in the first place in order to make sure that the income tax system operated fairly, especially for lower and middle income Canadians. The objective of the concept was to make sure that people did not pay higher taxes simply because of the upward movement in the cost of living. Because of the support and promotion of the idea by the Conservatives when they were in opposition, it is really reprehensible that one of the very first things they do once in office is to begin to erode this fundamental concept of ensuring the fairness of our tax system for middle and lower income Canadians. Look at the results of this unfair proposal along with the other unfair proposals in the Budget of last May with respect to increasing personal income taxes. Over the next five years those earning $15,000 a year will have a 36 per cent tax increase. Those earning $30,000-
[DOT] (WOO)


The Acting Speaker (Mr. Charest):: Order, please. 1 am very sorry to interrupt the Hon. Member for Windsor West (Mr. Gray).

Order, please! It being 5 p.m., the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.


Herbert Eser (Herb) Gray: Mr. Speaker, I presume that you take it that I call it five o'clock so that 1 will have the floor the next time this measure is before the House.


The Acting Speaker (Mr. Charest):: Yes, 1 presume the Hon. Member for Windsor West (Mr. Gray) will be able to continue from where he left off when we resume debate on this amendment.
January 14, 1986


PRIVATE MEMBERS' BUSINESS-PUBLIC BILLS   PUBLIC PENSIONS REPORTING ACT MEASURE TO ENACT
Mr. W. Paul McCrossan (York-Scarborough) moved: that Bill C-255, an Act to impose reporting requirements with respect to public pension plans and to amend certain Acts in consequence thereof, be read the second time and referred to a legislative Committee.
He said: Mr. Speaker, it is a pleasure to rise today to introduce Bill C-255, the Public Pensions Reporting Act.
As Members will be aware, last year the all-Party committee on the Reform of the House chaired by the Hon. Member for St. John's East (Mr. McGrath) brought forth recommendations to strengthen the role of the Private Member. The Committee recommended that starting in the new year some Private Members' legislation be allowed to come to a vote. Members will be aware that today is the first Private Members' Hour in the new year. This Bill is non-partisan in nature and ensures that all Members of Parliament as well as the public have available to them timely information concerning the extent of the public pension commitments made by the Government. 1 hope that today we can launch a new era in parliamentary practice whereby Private Members' Bills are passed on second reading to be studied in committee and indeed subsequently allowed to come back into the House for final consideration.
This Bill is admittedly long and apparently complex for a Private Member's Bill, but in reality the concepts are simple. The Bill is designed as a "freedom of information" Bill for Members of Parliament concerning the cost of Government pension promises. There are three aspects to the Bill. The first ensures that at least every three years, estimates of the costs of Government pension plans are calculated. The plans subject to the Act include all Government plans affecting members of the public, such as the CPP, OAS, Guaranteed Income Supplement, and spouses benefits. In addition, all plans affecting Government employees are covered such as the Public Service Superannuation Act, the Armed Forces Superannuation Act, the RCMP Superannuation Act, as well as the Members' and Judges' plans. The second aspect of the Bill is to set a time limit for preparation of these reports. The time provided is 18 months. A third provision of the Bill requires that these reports be tabled in the House by the Minister of Finance (Mr. Wilson) within 30 days of receipt.
Why is such a bill needed? Pension plans are long term commitments. Often it is very inexpensive to promise benefits today that will not be paid for 20, 30 or 40 years in the future. Members of Parliament and the public have an obligation to ensure that the promises we make can be met, and this requires that we know the anticipated costs well in advance. The concepts in this Bill are not new. Since 1980 the Auditor General has been qualifying his opinion on Canada's audited
Public Pensions Reporting Act
financial statements when he certifies the public accounts of Canada. In his reservations concerning the financial obligations of Canada, he notes that billions of dollars relating to incurred pension promises have not been recorded. He summarizes by saying: "In my opinion, all these financial obligations should be appropriately recorded and reported in the financial statements to provide a more complete disclosure of liabilities." Similarly, in last year's Report of the Auditor General to the House of Commons, he devoted an entire chapter to the effect that Members of Parliament and the public do not have adequate information concerning the estimated costs of the OAS and CPP programs. Sections 2.5 and 2.6 of his report read:

We are concerned that Members of Parliament do not have adequate information to assess and understand fully both long and short-term financial implications of public pension programs. Given the magnitude of the costs, an increasing elderly population, and the complexity of other factors affecting these programs, it is reasonable to assume that there should be quantification and a periodic review of long-term financial implications-
We are also concerned that the quality of information provided to Parliament through the Estimates and annual reports has deteriorated, with the result that there is, in our opinion, insufficient information for Members of Parliament to assess the financial performance of the programs.

Of course it is not just the Auditor General who has been pointing out the need for this information to be in the hands of Members of Parliament. The Parliamentary Task Force on Pension Reform, chaired by the Hon. Member for Sudbury (Mr. Frith), faced the same problem in 1983 of inadequate data in trying to come up with recommendations for a new national pension benefit system for Canada. Recommendation 2.2 of the report reads: "The task force recommends that the Minister of Finance table in the House of Commons every five years, in conjunction with the regular review of CPP contribution rates proposed in recommendation 4.1, a comprehensive set of cost projections for the public pension system and other major programs such as health care that represent significant transfers of resources to the elderly in order to promote public debate about the extent and sustainability of current commitments."
Similarly, Section 7.1 of the report concerning pension plans for Government employees have recommended that "public sector occupational plans should be governed by the same general rules as other occupational pension plans. They should reflect a full and true costing of all promised benefits, and these costs should be fully disclosed to employees and to the public."
Currently there are a variety of reporting practices. For the CPP, reports are prepared every five years and filed on a reasonably timely basis. However, for the benefits provided under the OAS Act, there is no reporting to Parliament whatever of the anticipated future costs of the program. Similarly, practices vary with respect to the public sector occupational funds. For the Public Service, RCMP, and Armed Forces plans, there is a requirement that the plans be valued every five years. In practice, the Government actuary

January 14, 1986
Public Pensions Reporting Act
prepares the reports every three years. However, there is no stipulated time frame in which these reports must be tabled in the House.
At the end of last October, the Minister of Finance tabled several reports concerning these plans. These were the 1979 and 1984 report on the RCMP plan, and the 1980 report on the Public Service Superannuation Act. Similarly, in November the Minister of Finance tabled the 1982 report for Members of Parliament. Surely Members of Parliament are entitled to more timely information than data which is six years old. Finally, there is no requirement whatsoever that valuation reports concerning pensions be tabled under the Judges' Act. This posed a problem for the recent Lang Commission on judges compensation and as part of that report, the Commission had to ask the Government's chief actuary to estimate sample costs for judges' pensions.
I am sure that all Members of Parliament have an interest in ensuring that the promises we make to our employees and to the public of Canada are going to be met and that the promises we make can be afforded. However, there are frequently articles in the press which point out that Canada is about to experience the most dramatic age shift ever seen in a western industrialized country. In 1965, when the CPP was introduced, Canada was the youngest country demographically in the Western World with both heavy immigration and high birth rates. Since the days of the baby boom we have had the sharpest fall in birth rates and Canada is now expected to become the oldest country demographically the world has ever seen by the year 2015. We have 30 years to plan for one of the greatest challenges ever to face any country. This Bill will ensure that Members of Parliament have the information necessary to do the appropriate planning in the eighties so that we can fulfil the moral commitments we make to today's workers when they retire in the next century.


Douglas Cockburn Frith: Mr. Speaker, I would like to preface my remarks this afternoon by indicating that my Party supports the basic principles enunciated in the Bill moved by the Hon. Member for York-Scarborough (Mr. McCrossan). At the beginning of my remarks I would like to recall, for the record, some of the recommendations that were made by the parliamentary task force on pension reform. One of the major ones involved the Canada and Quebec Pension Plans. We recommended the introduction of a requirement for a regular comprehensive accounting by the federal and provincial governments of the purposes for which CPP funds are allocated and of the benefits, financial and economic, anticipated from these investments.
You may have been shown by some of your own constituents, Mr. Speaker, a new system by which the Canada Pension Plan actuarial basis, from which individuals will derive their Canada Pension Plan funds when they reach the age of 65, is being updated. That was the beginning of the process whereby one would hope that the Government, utilizing the information that is being requested in this Bill, can educate the Canadian
public as to the need to understand the way in which retirement systems operate in our country. The Member for York-Scarborough has said it very well. There is a degree of uncertainty and, I believe, ignorance about the way in which public pension plans operate in the country.
I know that this Bill encompasses more than simply the public pension plan. The Member is, in addition, talking about the need to have a regular accounting procedure for the pensions that are payable to people involved in the armed services and the RCMP, Members of Parliament and the Senate, judges, and members of the Public Service Alliance. 1 highly recommend that those reports be made to the House of Commons on a regular basis so that Members of Parliament, who will have to deal with the problems that will be created by the doubling of the population over the age of 65 in the foreseeable future, will have the tools at hand in order to have a good public policy debate in the country. I do not think there would by any Member of Parliament who would advocate that ignorance is a substitute for policy or policy debate in the nation. Therefore, I highly recommend that area.
I am going to conclude my remarks because I know that my colleague from Ottawa-Vanier wants to make some remarks as well. Many people in his constituency will be affected by this Private Member's Bill. There was a Gallup poll released some 10 days ago which indicated an amazing degree of ignorance about the way in which public pension plans operate in the country. It indicated that far too large a percentage of our people do not understand the basic fundamentals of a pension plan system, both in the private and public sectors.
I think that inherent in the need for a public policy debate in the country must be a sufficient knowledge level. I would like to read one paragraph concerning the financing of the Canada and Quebec Pension Plans from my own report, Mr. Speaker. It is at the introduction and states:
The Canada and Quebec Pension Plans are not bankrupt. They are not in serious financial difficulty. Fears that they will be unable to meet pension commitments in the year 2001 or 2031 are unfounded. The claim of young Canadians on future C/QPP benefit payments is not in jeopardy.
That is so necessary to reiterate because there is a fundamental difference in the ways in which we require private pension plans and public pension plans to be funded in the country, and for very good reasons. I know that the Member for York-Scarborough is well aware of them as he appeared before my committee as a witness and is now here in the House of Commons as a Member of Parliament, i highly recommend that the Private Member's Bill be given due consideration and submitted to the committee. I commend the Member for bringing forward this suggestion.


Neil Young: Mr. Speaker, at the outset I would like to indicate that my Party has no difficulty with this Bill and, in fact, is quite supportive of it. Bill C-255, put forward by the Hon. Member for York-Scarborough (Mr. McCrossan), is really all about information and about giving adequate information to, not only Members of Parliament, but the people who will be beneficiaries of the various pension plans which are in existence across the country. I, personally,
January 14, 1986

do not see that this particular Bill will require too much debate because the arguments put forward in it make it self-evident that that information is required. It is not only self-evident from the Member's Bill, but from many contributions that have been made over past years on the need for this information.
Both the Hon. Member for Sudbury (Mr. Frith) and the Hon. Member for York-Scarborough referred to the report "Better Pensions for Canadians" that was put forward by the Committee on Pension Reform and tabled in the House in the last Parliament. Part of the report reads:
Plan sponsors could be required to make substantially more information available to pension plan members and their spouses. Employers could be required to provide data each year concerning the employee's accrued benefits and the financial status of the plan. Plan administrators could be required to make information available on the extent to which the fund covers pension liabilities, lists of assets, actuarial balance sheets, the present value of benefits earned to date and the like.
That, essentially, is the thrust of what this Bill would do if the House of Commons agrees to refer it to a committee where it can be thoroughly examined and before which Canadians can appear as witnesses to give testimony to the need for such legislation.
At the outset I said that this Bill was about information. I would like to go a bit beyond what the Bill talks about to a couple of other areas. The Hon. Member for Sudbury referred to a press report put out by Steve Kerstetter of Canadian Press a couple of weeks ago. It dealt with the lack of understanding that Canadians have of the pension system in the country. If you examine the pension system, you will find it is not surprising that that is the case. For many years our pension system has grown up as a hodgepodge of bits and pieces that senior citizens, upon retirement, can lay claim to. The need for pension reform has been debated at some length in the House and across the country ever since I came here in 1980.
On the question of information the Canadian Press story dealt with an internal poll that was commissioned by the present Government on the attitudes of Canadians toward their pension system. That poll, I rather suspect, led to some measures that were contained in the Budget affecting pensioners which we all know about. Certainly pensioners made their arguments to the Government in a very clear way. What the Government was trying to do to old age pensioners was totally mistaken or misinformed and they were not going to have any part of it.
I think that those elements in the May 23 Budget arose from that poll. It would have been very useful to Members of the House to have that information before them in order to do the job that we were elected to do in this place, that is, to look after the best interests of all Canadians including taxpayers and pensioners. I would not be interested, for example, if the information that we are talking about in this Bill were used to attack the principle of pensions. However, I do not think that is the intent of this Bill.
I think it would be extremely useful, not only to today's senior citizens, but to all those individuals who are looking forward to retirement over the next several years, to fully
Public Pensions Reporting Act
understand how a pension system is structured. I would think that they may very well want to use the information that we are arguing for today in the House of Commons to seek even better pensions for Canadians who have given their lives to this country and who have every right to expect a decent, adequate standard of living upon retirement.
While we are talking about how much pensions cost and whether the country can afford them, perhaps we should go a bit further and obtain information that was not given to Members of Parliament such as the amount of taxes that are not collected through the tax expenditure account. For example, I would like to know how many Canadians are not paying their fair share of taxes each fiscal year and not sharing the wealth in the country so that we can do the proper thing for retired citizens and making sure that they do have an adequate system.
1 am not one of those who agrees with some of the arguments we have heard in the House that our social services have become so expensive that they are unmanageable and we can no longer afford to deliver adequate social services to people who need that benefit which stems from the Parliament of Canada. I think the arguments we have heard in support of that are very woolly-headed and very often are devious to the point that they are advanced in order to save individuals who are not paying their fair share of taxes from accepting their responsibility to the elderly in this country.
I would like to see more information provided to the House on our total tax expenditure account so that we can examine that in relation to what we are paying for the old age pension, the Canada Pension Plan or some of the other benefits for which people have worked very hard over the years.
I do not intend to take too much time in this debate because I am anxious to see this Bill referred to a committee, as I hope it will be, where I will have more to say about the information we require. 1 simply want to congratulate the Hon. Member for York-Scarborough for giving us an opportunity to say a few words in the House about this matter.
[ Translation]


Jean-Robert Gauthier: Mr. Speaker, I am very happy to take part in this debate on Bill C-255 which basically aims at providing Members of Parliament and Canadians generally with the information they need to examine and evaluate our most important social program, namely the Canadian pension system, including the pensions paid to retired members of the Armed Forces, Members of Parliament, judges, federal public servants, members of the RCMP, and so on.
Mr. Speaker, I am especially happy about this debate since I have spent many years, at least ten, trying to obtain some figures from the Government and information about the amounts involved in the pension plans of public servants, members of the Armed Forces and the RCMP.
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January 14, 1986
Public Pensions Reporting Act
I would like to congratulate the Hon. Member for York-Scarborough (Mr. McCrossan). As he himself has admitted, his Bill is complex, but it is relatively easy to understand if we consider that it includes three major elements, which basically ask the government to provide, through the Department of Finance and the Actuary of Canada, the information required to evaluate public pension funds.
I do not want to go over the three major parts of this Bill, but I think that it would be useful to remember them because the committee will certainly have the opportunity to examine this question further. Section 3 requires that the Chief Actuary of the Department of Insurance review certain public pension plans at least every three years. The second important clause, Section 4, requires the Chief Actuary to file with the Minister of Finance a cost certificate established in accordance with the review provided by Section 3 within 18 months after the review date.
And the third aspect, Clause 5, requires that the Chief Actuary of Canada, who comes under the Minister of Finance, and I quote:
This clause would require the Chief Actuary of the Department of Insurance to file a valuation report with the Minister of Finance at the same time as he files a cost certificate and to follow the standards of the Canadian Institute of Actuaries in preparing the report.
Mr. Speaker, I do not want to dwell on the matter, but I will remind you that since May, 1985, I have had a series of questions, 18 of them, on pages 20, 21 and 22 of the Order Paper as important such I as what is the cost, what is the estimated balance of the Armed Forces Pension Fund Account . .. Those are questions which I thought were essential to anyone who wanted to understand the whole issue of public pension funding. I am still waiting for the answers.
But on the other hand, in his answer to one of my questions, the President of the Treasury Board (Mr. de Cotret) said that of course they signed an agreement with the unions under which the Public Service Pension Fund could be managed jointly by a council of twelve appointed members representing both the unions and the employer.
Mr. Speaker, I find it quite acceptable and normal that this Government, which has signed an agreement with its employees, should now share with those employees and Members in this House the basic information that will help assess the costs of those plans.
I therefore find it totally acceptable that the Government should accept the Bill tonight, send it to committee, provide us with the information needed, answer questions on the Order Paper and follow through on its promise to co-operate and manage pension funds jointly with the public servants.
Mr. Speaker, I believe this is a most commendable Private Member's Bill, which seems basically to meet the right to information we feel is essential to good management.
As the Hon. Member for Beaches (Mr. Young) suggested earlier, a simple information proposal that should be forthcoming ... And I remember that in 1977, when we discussed the
famous Government measure to de-index federal civil servants' pensions, I then opposed that measure, not only because I felt it was unfair, but because the information available was totally inadequate and often non-existent. Governments always seemed reluctant to share their figures with us.

In conclusion, if information is required to deal with the pension question, I think that information is fundamental in order to assess some of the impact and judge the assumptions that are made. We all understand that these are difficult questions with which to deal. Sometimes the actuaries will say that our assumptions are difficult to come to grips with because they are basically dealing with interest rates in the years to come, inflation rates in the years to come and the increase in the salary envelope in the years to come. The actuaries seem to come to grips with these unknown figures well.
I do not know anyone in the House, except perhaps the Member who introduced the Bill, who could logically and rationally argue how one can accurately state what the inflation rate, interest rates or the salary envelope will be in the next three years. However, that is not for me to argue here. I am not competent to make actuarial presumptions and projections of that nature but I think we should congratulate the Hon. Member for York-Scarborough (Mr. McCrossan) for bringing forward a Bill which answers many of my questions. It will give us information which we require to be able to pass good judgment on these pension plans. Again, I congratulate him and hope that the Government accepts the Bill and passes it with-

-as we say in French, with celerity, and that we will go to committee, Mr. Speaker, and consider this Bill which to my mind is very important.


Mrs. Gabrielle Bertrand (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, I welcome this opportunity to take part in the debate on Bill C-255, since it concerns a subject this Government takes very seriously, and I am referring to disclosure of information.
Although a large number of public pension plans are mentioned in this Bill, I want to restrict my comments to its impact on the universal Old Age Security and Canada Pension Plan program, which is a compulsory contributory program.
First of all, regarding the Canada Pension Plan, the proposed changes in present reporting requirements would reduce the time between actuarial reports from five to three years and provide that such reports estimate for every third year of a period of not less than thirty years, the annual cost of contributions to the Canada Pension Plan as a percentage of the total contributory earnings.
In accordance with the present legislation, the Department of Insurance prepares, at least once every five years, a report
January 14, 1986

based on an actuarial audit of the application of the Act and the state of the Canada Pension Plan account.
Obviously, requests for detailed information covering a period of thirty years are far less demanding than the present requests and would be no problem at all for the Actuarial Branch of the Department of Insurance.
Mr. Speaker, this Bill comes at the right time. Its proposals concerning the need for examining public plans at regular and frequent intervals are entirely in accordance with a recent agreement concluded by federal and provincial finance Ministers.
As announced by the Minister of Finance (Mr. Wilson), the Canada Pension Plan's financing will in future be examined every five years, to ensure that the Plan remains on a solid financial basis and that the planned series of premium increases will have the expected results.
There can be no doubt as to the importance of regular reporting. Both legislators and the public must have an understanding of the long term cost of the Plan if they are to assess fully the impact of any changes that may be proposed in the Plan's financing or premium levels. And even if some might challenge the need for filing an actuarial report on the Canada Pension Plan every three years instead of every five as is the case today, I certainly do not question the purpose of the proposals contained in this Bill.
Mr. Speaker, the Hon. Member's proposals about the need for preparing an actuarial report every three years on the Old Age Security Act are in line with the recommendations made in the past, including those of the Auditor General of Canada.
For instance, in his report for the financial year ending on March 31, 1985, the Auditor General deplored the fact that we as Members of Parliament did not have sufficient information at our disposal to be able to evaluate and fully understand the financial repercussions, both short and long term, of public pension programs. He pointed out in particular that the longterm costs of those programs are not regularly evaluated, except in the case of the Canada Pension Plan. In addition, despite earlier recommendations by parliamentary committees, we still have no mechanism to make a regular assessment of the long-term financial effects and commitments of those programs.
I can assure the House that those recommendations have been given every consideration and will be examined very closely. In fact, the Department of Finance, the Department of National Health and Welfare, the Department of Insurance and the Office of the Comptroller General are currently holding consultations as a result of the comments of the Auditor General. No effort is being spared to study this question and define the appropriate powers. However, given the professional background of the Hon. Member for York-Scar-borough (Mr. McCrossan), I am sure he is aware of the prob-
Public Pensions Reporting Act
lems to be solved before we can proceed with actuarial evaluations of the old age security pension program.
This program features three separate benefits: the basic old age security pension and the two benefits subject to a means test, namely the guaranteed income supplement and the spouse's allowance.
The basic benefit is paid to all persons 65 years of age and over who meet the necessary residency requirements. As many studies have already been carried out concerning the aging process in Canada, we can predict, with a fair measure of accuracy, the number of people who will be over 65 years of age in the distant future. Even if changes in the fertility rate have no effect on projections, factors such as changes in mortality rate and future immigration policies will have an impact on the cost of the basic old age security pension and should be assessed; even with such reservations, the projections could prove useful.
As far as the old age security program is concerned, the real difficulties resulting from the proposals in this Bill arise when we consider the benefits requiring a means test. First of all, there is a guaranteed income supplement for low-income pensioners, and the spouse allowance, for spouses between the age of 60 and 64 of low-income pensioners, as well as low-income widows and widowers in this age group.
I say difficulties because it would be really difficult to assess the long term costs of the two elements in the old age security program which require a means test. It would be difficult, but not impossible.
What Hon. Members should know is that it will take some time to determine the variables necessary to establish the long term costs of these benefits.
I should like to emphasize a number of the most important factors involved, so that you may better see the kind of variables required. To determine the future cost of benefits requiring a means test, we must obviously be able to assess the income of people 60 years of age and over in the future.
Today, most guaranteed income supplement recipients are women who, when they retire after having spent the greater part of their adult lives working at home, find themselves with little or no income other than the basic old age security pension. On the other hand, if we consider the rates of participation in the labour force over the past 20 years, we realize that things have changed. More and more married women are on the labour market. We can foresee therefore that a much greater number of women than today will collect superannuation benefits under the Canada Pension Plan or private pension plans. However, important studies will have to be carried out to determine for instance the average career salary of women.

January 14, 1986
Public Pensions Reporting Act
Another important variable to be determined is the Canadian's future rate of saving. For instance, on the basis of information now available, we must determine how future tax incentives will affect the tendency of Canadians to save for their retirement. Also, we will have to determine how the proposal contained in the 1985 Budget (to provide a lifetime ceiling for income tax deductible registered pension plan contributions) could affect the long-term use of this retirement saving instrument by the average Canadian. Unfortunately, the data now available are mostly cross section. In other words, these are data which reflect actual situations at a given time. They are of a very limited usefulness when we try to establish lifetime savings table or carry out cumulative studies.
1 know that research work is being carried out in that area. Statistics Canada is looking at various longitudinal data which will help check and compile a number of trends that will give us a better idea of the long-term savings and consumer patterns. However, a certain period of time may be needed before reliable data can be gathered.
Besides the lack of data, another difficulty must be overcome to cope with the proposals contained in the legislation concerning the Old Age Security program. Private pensions are a most important aspect of our retirement income system-the extent to which future retirees benefit will impact directly on the cost of the Guaranteed Income Supplement program.
However, the regulating of private pension funds does not come under the jurisdiction of the federal Government alone. Actually, the Provinces are responsible for the majority of such plans. It is therefore difficult to foresee what changes will be made in that respect, and what the effects will be on private-source income that will be available to pensioners.
For instance, Bill C-90, an Act to amend the Pension Benefit Standards Act, was tabled for first reading on December 17, 1985. It contains various amendments aimed at improving the protection afforded by private pensions to people working in a number of areas under federal jurisdiction. Although we hope the Provinces will pass similar measures, we cannot be sure of it at this point.
In view of those difficulties, I am sure Hon. Members will recognize it would be a very complex task for a 35- or a 40-year-old today to say on which private pension he or she will be able to rely at age 65. We cannot therefore know what amount that person will be entitled to 30 years down the road under the Guaranteed Income Supplement program.
To sum up, Mr. Speaker, I would like to repeat that even though we have a rather precise idea of the sources of income of people now 65 or over, it is not easy to say whether those who will reach that age in the future will have the same sources available or whether these will account for the same percentage of income as is now the case.
From a purely mathematical standpoint, of course, we could take what we now know of present pensioner's finances and project that into the future. However, the reliability of conclusions that could be derived from such an exercise should raise serious doubts.
Mr. Speaker, if we are to adopt the principles stated in Bill C-255, let us make sure we have enough time available so that estimates now being prepared concerning the Old Age Security program can be of some use. Otherwise, Mr. Speaker, they might turn out to be of no use whatsoever to the legislators, or dangerously misleading, which would be quite contrary to the intent of the Bill.
In conclusion, I would like to extend my sincere thanks to the Hon. Member for having brought this question before the House. It is of the utmost importance that Members of our Parliament should have the best possible information available when they make decisions that can impact on the welfare of present and future generations.


Bill Attewell: Mr. Speaker, 1 rise to speak in support of Bill C-255. 1 applaud the initiative of the Hon. Member for York-Scarborough (Mr. McCrossan) with regard to the Bill. I had the privilege of seconding it when it was first presented to the House on December 2, 1985.
In simple terms, the Bill requires periodic actuarial valuations of six Acts including the Members of Parliament Retiring Allowances Act, the Public Service Superannuation Act and four others, as well as the Old Age Security Act and the Canada Pension Plan. In a way this is a breakthrough for Government. It is a first. It has never been done before. It is high time that we took on this type of accountability as a Government and shared the facts with Canadians. We simply want the same standards of control and accountability applied to the federal Government of Canada as are applied in the private sector.
Some previous Governments have refused this information for decades. However, in recent years, as a matter of fact in the last five years, the Auditor General of Canada has said that he has had insufficient information concerning the employee pensions of the Government of Canada. In line with our pledge for a more fiscally responsible Government, we have a Bill, thank to the Hon. Member for York-Scarborough, to share the facts and to share the truth about the six plans as well as the two other major pension plans so that we know how viable they are. If contributions need to be increased, so be it. If pay-outs have to be modified rather than increase the premiums in order that the plans be actuarially sound, so be it. However, let us not continue to not divulge this information and thereby not be accountable for future generations to come. We would not want to burden them or to have a surprise some year hence, perhaps in a decade or two, where that generation of workers and taxpayers are burdened with some huge, unfunded liability. In other words, we have an accountability
January 14, 1986

and a responsibility to move this Bill forward for further conscientious debate. As some previous speakers have indicated, it will not be easy; it is a difficult, complex task. We are honoured to have had the Hon. Member for York-Scarbor-ough leading this discussion. As I understand it, he is the first actuary ever elected to the House of Commons. It is fitting that he was the one who initiated the particular Bill.
As complex as it might be, I heartily endorse the initiative to get on with it so that the people of Canada will share the facts about the health of the various plans and share in the solutions where there may be shortfalls. Above all, it speaks to the accountability which Canadians expect from the Government. The Government has to be as accountable and as responsible as possible in the running of its fiscal affairs. In the long run, that not only means looking after the contribution of the stewards to these plans but hopefully eliminating any liability which might befall the taxpayers of the country if they were not properly looked after.
In closing, 1 applaud the Hon. Member and look forward to further contributions to this vital piece of legislation.
[ Translation]


Mr. Pierre H. Vincent (Parliamentary Secretary to Minister of Finance):: Mr. Speaker, I would like to tell the House about the position taken by the Government following the tabling for first reading of Bill C-255 by the Hon. Member for York-Scarborough (Mr. McCrossan) on December 2. This private Bill would require the Minister of Finance to table in Parliament triennial actuarial valuations of pension plans established under the Canadian Forces Superannuation Act, the Judges Act, the Members of Parliament Retiring Allowances Act, the Public Service Superannuation Act, the Royal Canadian Mounted Police Superannuation Act and the Supplementary Retirement Benefits Act.
Moreover, the Bill would require an actuarial valuation of the Canada Pension Plan every three years instead of every five years as is now the case.
It would also require a detailed estimate of benefits payable under the Old Age Security Act.
Mr. Speaker, the Government views as valid the concept of more periodic actuarial valuations of all public pension plans. Indeed, this corresponds to recommendations already made by the Auditor General, and as mentioned earlier, by the Special Parliamentary Committee on Pension Reform.
The tabling of such reports will allow Parliament and the general public to have a better overview of the long term liabilities of the Government related to public pension plans under its jurisdiction.
Mr. Speaker, such standards would also be consistent with the standards set by the Government for private pension plans. The Government therefore agrees to refer this Bill to a parliamentary committee for further study, and having said so, Mr. Speaker, I shall ask for a vote.
Adjournment Debate


The Acting Speaker (Mr. Charest):: Order. The question? Very well.

Is the House ready for the question?


Some Hon. Members:: Question.


The Acting Speaker (Mr. Charest):: Mr. McCrossan, seconded by Mr. Brisco, moves that Bill C-255, an Act to impose reporting requirements with respect to public pension plans and to amend certain Acts in consequence thereof, be read the second time and referred to a legislative committee. Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, Bill read the second time and referred to a legislative committee.
The Acting Speaker (Mr. Charest):: Accordingly the Bill stands referred to a legislative committee. I think all Hon. Members would agree to calling it six o'clock.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Bill Attewell: Mr. Speaker, on December 3 1 rose in the House to ask the Minister of National Health and Welfare (Mr. Epp) about the Government's plans concerning the issue of abuse of the elderly. I mentioned at that time that I had attended a symposium in October which was set up as a special task force in the City of North York by Mayor Lastman to look into this vital problem. It has been operating for about a year under the chairmanship of Doctor Jerry Cooper and is co-ordinated by his wife Eleanor.
As you well know Canada's population is changing. As one of the speakers a little earlier in the day mentioned, at one point in time Canada had the youngest average population in the world. Now, within a decade or two, according to forecasts, we will have one of the higher average ages of population in the world.
It is very important that men and women get involved in looking at the abuse of the elderly. I know Mayor Lastman, who I have mentioned, originally had the foresight to set up a similar task force years ago on child abuse, when not many people thought there was a problem in this area. Thanks to that initiative it was looked into. There were indeed many

January 14, 1986
Adjournment Debate
problems in that area, and they were able to get on with some practical solutions.
The same thing will happen in this particular area where indeed there are different forms of abuse of the elderly. I think they fall into three categories: neglect, financial and physical. Neglect can take the form of overabuse of drugs, underabuse of drugs, patients in nursing homes being left unattended for many, many hours-people who need to be changed in bed or rolled over from one side to the other but left for hours without proper care. Loneliness is another factor that can be harsh and cruel if some measures are not taken to lessen this problem. I mentioned the financial aspect. That is a problem facing a number of seniors, and it can be the result of powers of attorney being taken from elderly people by relatives, although not really meant to be the case. It can also be the result of a loss of control of pension cheques or other funds, control that has in one way or another been taken from the elderly. We have all read of too many cases where the elderly have been victims of financial scams involving someone impersonating a police officer trying to catch some embezzler and being asked to take a certain amount of cash out of the bank. In this way some elderly citizens have lost their entire life savings.
This is such an important area I hope the federal Government will play an important role in research and analysis, but also in moving forward with practical action.
I commend the task force set up in North York for its approach. Two specific actions have been proposed by this task force. The one that we are very excited about is what they call a "brown bag approach". Seniors in North York will be asked to attend meetings at some of the community centres, beginning January 28. A number of pharmacists will be available at these locations. The seniors will be asked to literally put their pills and drugs into a brown paper bag and consult with one of these pharmacists who will in a very helpful and constructive way examine these drugs.
As we well know, some people may take a certain pill to help them sleep, and another pill for a different reason; they may be taking a number of pills. They perhaps visited different pharmacists and could be getting conflicting advice. Perhaps pharmacist did not know about all the other pills the person was taking.
I applaud this approach, I think it is most useful and that it will help many seniors in a practical way. We hope this will be done on an ongoing basis. I know Mrs. Eleanor Cooper, who is helping on this, plans to contact some of the people later; in other words, do a bit of a post-test analysis to see how the whole project might be improved still further.
As to the subject I mentioned, there are two practical approaches. One concerns tackling the problem of loneliness, and we know how difficult that can be, those of us who have known a number of seniors over the years and who have visited senior citizens homes. I have at least six or eight in my own riding that I visit from time to time.
The interesting project that is starting here is really a pen pal approach. Mrs. Cooper has matched a number of Canadian seniors in the Florida area with Canadian seniors here who have similar interests, starting a pen pal program. That one project, I would submit, could go a long way towards people establishing some pals they can write to, and perhaps visit from time to time. Rather than analysing things, ad infinitum, here's an approach that we think will bring some cheer and sunshine into some lives. I applaud that approach as well.
Lastly, just to touch on other things that are happening- this touches on the subject of loneliness as well-there are some interesting developments in England whereby they are trying to decrease the number of seniors who are literally forced to go to nursing homes. Many can remain in their own homes and be properly looked after by a nurse or a volunteer worker dropping in on them two or three times a day. In this way they are much happier. Not many seniors want to willingly leave their homes, their roots are there and they have many beautiful memories. I know we are trying similar things in Canada. Not only is this great for the seniors, but it is also a lot less costly to the public and to the taxpayers.
In closing, we intend to again contact the Hon. Minister of Health and Welfare on this issue. He has already said he wants to keep abreast of developments. We will keep him posted and we earnestly hope for his support and indulgence as we move towards real and happy solutions to this vital problem.


Gabrielle Bertrand: Mr. Speaker, it is only quite recently that Government policies have begun to take abuse of the elderly into account. In the past, it was not generally believed that such a thing could happen. Admittedly, we have difficulty in recognizing and understanding such a phenomenon. However, in such cases, we must not close our eyes because we do not want to see.
The same happened for child abuse, which came to the notice of the public in the sixties when many people denied that it could be true, and the same also happened for battered women in the seventies. During the eighties, we have learned that abuse against the elderly is another very serious dimension of the problem of family violence.
Such abuse can take various forms. Abuse may include physical assault, shoving, and serious neglect, including failure to provide food, proper hygiene and medical care.
Psychological and social abuse may include exposure to isolation and withdrawal from society, lack of attention, verbal or emotional abuse and intimidation. Abuse may also occur in the area of financial resources if there is a withdrawal of financial support.
The kind of life led by the elderly may give us some clues to the reasons for this national tragedy which is now a major problem. We do not have a clear picture of the extent of the abuse inflicted on the elderly, but a major study carried out
January 14, 1986

recently in Manitoba leads us to believe that an incredible 57,200 Canadians are suffering from abuse.
One-tenth of these people live in institutions, while two-thirds are living with relatives as part of the family.
Since many elderly persons are either unable to live on their own or lack the resources to do so, they remain in the family setting and end up having to depend on family members for the care they need. Even in the best of situations, this can create tensions for all concerned, and the situation may become explosive. Although it is a fact that abuse of the elderly can occur in institutions, those who are studying this question have attached particular importance to abuse in the family setting, where there is greater resistence to admitting the facts, and shame or fear of retaliation is a major factor. The elderly may believe there is no one to whom they can turn to help them with their problems or take care of their interests. There are a number of ways to remedy this, and with the financial support and expertise of the Government of Canada, provincial authorities and non-governmental organizations are becoming increasingly involved in finding ways to deal with this problem.
Through shared cost health programs, funds are available to community services to enable elderly people to stay at home for a longer time and thus avoid premature institutionalization, or else to give a respite to relatives who take care of them. Such services include for instance home care, meals on wheels, day care services for adults, and rest services designed for those who care for the elderly. Other programs-New Horizons, to name one-make it possible to benefit as much as possible from the ability and opportunities of senior citizens to lead a normal life by promoting social gatherings and a wide variety of community activities.
Thanks to the various departmental research and pilot programs, it is possible to give a positive response with respect to projects concerning all aspects of prevention or elimination of abuse of the elderly, and to projects aimed at finding practical ways to come up with worthwhile suggestions at the community level, including education and training.
Our Government is committed to implementing prevention, protection and treatment measures with respect to any kind of abuse of a person by another.


ENVIRONMENTAL AFFAIRS-CANADA-UNITED STATES DISCUSSIONS. (B) CANADIAN POSITION
[Stage Direction]
Mir. Bill Blaikie (Winnipeg-Birds Hill): Mr. Speaker, 1 would like to take this opportunity to follow up on a question I asked of the Minister of the Environment (Mr. McMillan) yesterday with respect to the report on acid rain issued recently by the two special envoys, Mr. Davis for the Prime Minister of Canada (Mr. Mulroney) and Mr. Lewis for the President of the United States.
Adjournment Debate
I asked the Minister of the Environment to express an opinion about the report and to go beyond the report by reaffirming what I and many others believe to be the Canadian position which was, in my view, abandoned by the report. That position is that action needs to be taken now with respect to acid rain emissions on the American side of the border. I was not altogether happy with the answer given by the Minister of the Environment and I would like to tell the House why I think the envoy process has been such a disappointment.
At one point, I along with other members of the Special Committee on Acid Rain of the House had hoped what we might see a report coming forward from Messrs. Davis and Lewis that would do two things: recognize that acid rain is a serious trans-boundary pollution problem, something which the report did do, and call for some action on the part of the United States with respect to acid rain entering Canada from that country.
At one point, there was a rumour that Mr. Lewis might be recommending a $1-billion action program. That did not sound like what was needed. In fact, it fell far short of what was needed, but at that time I felt it would be at least a start, a significant step forward in that it was action. Instead, we have a recommendation that there be a five-year period in which voluntary research is entered into regarding the development of new technologies for controlling acid rain. There is no guarantee that this research will in fact take place because it will require, to a significant degree, the co-operation of American industries that are involved in the emission of acid rain. There is no telling what the attitude of those industries will be. It has not been positive to date and there is no reason to expect that it will suddenly change as a result of the report.
I think the Canadian Government is trying to make much out of little. That is understandable as it has to make the best of a bad situation. However, the fact is that the Canadian position has been further undermined. It was undermined at the Shamrock Summit when the Prime Minister, with a great deal of fanfare, said that acid rain was a number one problem and he was going to get something done about it. Instead, a year's study was agreed to, in this case through the envoy process. Now we have suffered another setback with the recommendation, which was agreed to by the Canadian envoy, that American polluters basically have another five years to think about it. This is totally unacceptable when we know there are technologies to control acid rain. Those technologies are available now.
If Mr. Davis could not get Mr. Lewis to say that action through the use of those technologies should begin now, he should at least have had the decency to issue a separate report. Mr. Davis had the option to issue a separate report. I know that from discussions we had with Mr. Lewis and Mr. Davis. He could well have issued a separate report and not have appeared to have given away the Canadian position that action is needed right now.
[Stage Direction]
January 14, 1986
Adjournment Debate
That is why 1 am very disappointed in the process. I admit I was critical of it to begin with, but I still held out the hope that somehow, in a mysterious way, some good might come out of what was basically, in my view, a bad idea. But that has not been the case as far as 1 am concerned.
I read in The Toronto Star the other day that the Government is considering delaying the introduction of the new emissions standards for Canadian automobiles. These emissions standards would bring us up to the same standards which apply in the United States of America. In this case, it is not a further undermining of the Canadian position, it is an undermining of Canada's ability to ask the United States to act with respect to its acid rain.
I hope the Parliamentary Secretary, who will be responding for the Minister, will take this opportunity to say that the report with respect to the Government contemplating a delay in the implemention of the new emission standards is a false report and that things will be proceeding on time.
I think it is important for us to realize that the envoys' report does not represent the kind of progress which some people opposite say it does. The Hon. Member for St. Catharines (Mr. Reid) earlier today, I believe, said that this is the first time an American administration had ever admitted that acid rain is a transboundary pollution problem. That is not true, Mr. Speaker. There was a memorandum of intent in 1980 which recognized that fact. What we are talking about is progress within the context of the Reagan administration. Canada's ambassador to Washington, Mr. Gottlieb, said that we finally moved the Americans off the dime. We finally moved the Reagan administration off the dime if Mr. Reagan accepts the report, and even if he accepts the report he still will be comfortable in his position that no action need be taken because the report he will be accepting recommends no action.
So I say that the envoy process has been a failure, Mr. Speaker. I am sorry to see the Government trying to exaggerate it. I think it would be better off to say: "It didn't work so let's try something else". It should not try to kid the Canadian people, the environmental community and all of us who are concerned about acid rain by trying to make much of what has turned out to be very, very little.
Mr. G. M. Gurbin (Parliamentary Secretary to Minister of the Environment):: Mr. Speaker, first I would like to clarify the Canadian position for the Hon. Member for Winnipeg-Birds Hill (Mr. Blaikie). 1 believe there could be no better testimony of the Canadian position than the action the Government has taken, as identified in March of last year. Subsequently, arrangements have been made with the provinces. Not all of them are finally complete but in Ontario, for example, things have really been done in a substantive way to meet our target of reducing the reductions by 50 per cent by 1994. We made a commitment and it was kept.
To answer the specific question regarding vehicle emissions, there is no substantive change in position. I can tell him that
clearly. The one thing which was brought out recently in the news had to do with model years and how that might affect the introduction, if you like, of the emission controls. They were to be established in 1987 for the 1988 model year. However, the automobile manufacturers were concerned that those 1987 vehicles would be left with the emission controls which were not up to the standard we had intended. This would have happened because production of most 1988 models will start in September of 1987. Therefore, there may be a change in that date by several months to allow the manufacturer to finish with that model year. Therefore, there is no substantive change.


William Alexander (Bill) Blaikie: But all 1988 models will have to-


Gary Michael Gurbin: Exactly. Now, to come quickly to the envoy situation, I guess all of us would have preferred an absolutely final agreement. I think what the Prime Minister (Mr. Mul-roney) had to say does says it best. He is quoted as advocating the need to develop a bilateral accord on acid rain. What we have with our envoy report is-yes, the 50 per cent that the Hon. Member talked about-a clear identification by the American administration of a real problem. I would have to argue with him as to whether or not there is any substance to it in terms of SI billion or $5 billion. That, I think even he will admit, remains to be seen.
If this approach is agreed to there is the question of how industry will embrace it. If the American administration contributes $2.5 billion in the short term, and I do not know the exact time frame, that will represent a fairly substantial addressing of the problem. It will certainly not all involve research. It involves development of technology, just as our smelters here are developing technology, and INCO is an example of that. Apparently many American industrialists are at the stage now where they must make decisions on new plants and revitalization of their industry. They will take advantage of this program and they have asked for that type of support. There is a substantial dollar figure attached to this at a time of great restraint in both the U.S. and Canada.
Finally, I guess all of us could stand here and say this is less than we wanted. However, we have done our homework here in Canada. We have at the very minimum a significant step in being able to approach the final stage of a bilateral accord which will fully address the acid rain problem in Canada.


FARM CREDIT CORPORATION-MORATORIUM ON FORECLOSURES
Maurice Brydon Foster: Mr. Speaker, on September 23 I put this question to the Minister of Agriculture (Mr. Wise):
Last week he announced he was placing a moratorium on the foreclosures of farms by the Farm Credit Corporation which are running at approximately 14 per week. We have learned today that the American dollar will be devalued which will further depress commodity prices. Would the Minister tell the House when he is going to bring in assistance to farmers in order to arrest the situation of foreclosures on farms? Introducing a moratorium does not really help the farmers. I wonder if the Minister could make that clear.
-Ml
*
January 14, 1986

Sad to say, Mr. Speaker, since that time the Minister has really taken no action. There has been no decision to bring in a new policy on farm credit assistance. 1 learned a couple of days ago that as of December 1, 1985 the arrears with the Farm Credit Corporation has skyrocketed to $277 million, an increase of 48 per cent since 1984. As of january 1 the arrears with the Farm Credit Corporation have skyrocketed to $310 million, up 50 per cent since 1984.
We have a very serious situation in the country with regard to farm foreclosures and farm bankruptcies. The Government put a moratorium on foreclosures. While that may have a short-term benefit to individuals, it does not solve the problem for them. On July 10 the Minister promised that he would bring in farmer-creditor arrangements legislation which would allow the bankruptcy court to make adjustments for farmers facing serious financial difficulties. Since last July he has also been talking about bringing a new Farm Credit Corporation assistance for farmers facing serious financial difficulties. There were some 640 foreclosures which should have been acted on in September of 1985. There are probably a thousand today, yet there is no action by the Government.
The Parliamentary Secretary to the Minister of the Environment (Mr. Gurbin) is from the farming area in Bruce-Grey County which has suffered with the serious devaluation of farm lands and has probably seen more bankruptcies and farm foreclosures than any other district in Ontario. I hope that on behalf of the Minister of Agriculture he will be able to say tonight that the Government is going to implement a program, perhaps one like that recommended by the Finance Committee of the House of Commons. It put a unanimous report before the House recommending that money be loaned at 8 per cent interest on a targeted basis to our youngest and most productive farmers, many of whom are facing farm foreclosures. Otherwise, people will just say that the Government has no commitment to agriculture and is not prepared to do anything for the 23 per cent of farmers who are facing serious financial difficulty and the 11 per cent who are facing modest to serious stress at this time.
Announcing a moratorium is fine, but there must be financial assistance to help those farmers facing the serious financial crisis which is affecting 39,000 of our farmers. Many of them are our youngest, most productive, and most technologically advanced farmers who will most likely be the best
Adjournment Debate
farmers in the years ahead if the Government is able to assist them on some reasonable and practical basis. They still have a chance to be viable in spite of the low commodity prices, falling land values, and everything else that farmers are facing today.
I hope that the Parliamentary Secretary, who is personally very aware of this problem in his own riding, will be able to make an announcement tonight on behalf of the Government.


Gary Michael Gurbin: Mr. Speaker, 1 appreciate very much the tone of the Hon. Member for Algoma (Mr. Foster), as contrasted to that on some other occasions when we have had the same type of discussions in the House. He quite correctly identified the fact that in most, if not all, parts of our country we are seeing the effects of continued poor economic conditions for agriculture. Due to the commodity prices and too high interest rates the pressures on the farm community have been so great that there are large numbers of farmers in trouble. The exact figures are very debatable, but there is no argument that it is a significant proportion and that it will require different measures than we have seen to date.
With regard to the specific question of the farm bankruptcy moratorium, perhaps it would have been better had it been possible to put a moratorium across the board. The Minister of Agriculture (Mr. Wise) had only the capacity to hold Farm Credit Corporation foreclosures. He did that because it was the only immediate means at his disposal to deal with those serious cases. It has assisted some 670 farmers who would otherwise have been placed in a bankruptcy situation. This will stay in place until we have those final solutions.
Furthermore, there have been some spin-off effects where other lending institutions have examined the situation more closely and I believe withheld some actions which might have occurred. That is a peripheral benefit. Unfortunately, we have not had the full co-operation of the provinces, although one province has introduced legislation to stop all other foreclosures until we have those two solutions.
We would agree entirely with the Hon. Member for Algoma that the two specific requirements are changes to the bankruptcy legislation and changes within the Farm Credit Corpo-

January 14, 1986
Adjournment Debate
ration to deal with long-term financing and help reorganize those situations into a viable entity. Both those pieces of legislation are under very active consideration and we hope to be able to make an announcement for the Hon. Member for Algoma. However, he knows full well that I would not do that at this time.


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


[Stage Direction]
The House adjourned at 6.22 p.m.
[Stage Direction]

Wednesday, January 15, 1986