1986-03-11

Mr. Deans:: Point of order, Mr. Speaker. I know the Minister is going to table his documents but I would like to ask him if he could assure the House that there is no duplication, other than the necessary duplication to guarantee that each of the documents will be presented in both official languages, that each document stands on its own merits, and that there are no more documents in that pile than are required to meet the requirements of tabling in each language.


Hon. Erik Nielsen (Deputy Prime Minister and Minister of National Defence):: Oh they of little faith.
Pursuant to the provisions of Standing Order 67(2), I have the honour to lay upon the Table, in both official languages, copies of study team reports of the task force on program review.


Some Hon. Members:: Hear, hear!


Ian Deans: Mr. Speaker, I asked for that assurance for a reason. As you know, Sir, it is not appropriate to have a demonstration in the House of Commons. 1 sought assurance from the Deputy Prime Minister (Mr. Nielsen) that each document was a single document in either French or English, and that there was no duplication for the purposes of demonstrating in the House of Commons, for whatever purpose. The Deputy Prime Minister did not assure me of that, I noted. I looked at the documents and there are in fact duplicates.


Erik Nielsen: That is absolutely false, Sir. The tabling is strictly in accordance with the requirements of the Standing Orders of the House of Commons. Absolutely.


Ian Deans: Why didn't you say so?


Mr. Wilson (Etobicoke Centre):: Read them all, Ian.


Some Hon. Members:: Hear, hear!


Ian Deans: You take a look at the French Transport report.


TASK FORCE ON PROGRAM REVIEW
Erik Nielsen: Mr. Speaker, it is my pleasure to have tabled today the reports of the study teams of the task force on program review. The volumes that I have tabled represent the combined efforts of 221 individual Canadians who have reviewed nearly 1,000 programs and services in the federal Government. Perhaps that is some explanation for the hon. gentleman.
Over half of the men and women who were involved in the work of the study teams were recruited from the private sector. These men and women came from Victoria to St. John's, left their jobs and their families to serve their country without remuneration, each for three months. Among those who so served were senior executives of major corporations and small businesses, labour leaders, city administrators, and provincial deputies. I want to take this opportunity to formally recognize the debt of gratitude the Government and the country owe these outstanding Canadians.


Some Hon. Members:: Hear, hear!


Erik Nielsen: Like the review itself, the output of these individuals is unique in the annals of Canadian public administration. Never before has there been such a broad representation from outside Government in such a wide-ranging examination. The release of the work of these mixed study teams is a public acknowledgement of their extraordinarily valuable contribution. Each study team reviewed the array of programs within their area of examination and prepared assessment notes on each program, presenting options for improvement and reform. In addition, the study teams prepared thematic overviews to describe their over-all assessment of program groupings. These study team reports were then referred to the Private Sector Advisory Committee comprising 12 representatives of labour, business, and professional organizations. The organizations themselves selected the representatives of their respective organizations to serve on that Committee. I would like to acknowledge these individuals and their sponsoring organizations for their outstanding leadership during the past year.
This private sector advisory committee met every Monday throughout the year-long course of program review and acted as a further review mechanism to the work coming to it from the 19 individual study teams. The study team reports I have just tabled today are the final product of this process of consultation and co-operation. Philip Aspinall, Chairman of

March 11, 1986
Statements by Ministers
the Private Sector Advisory Committee, and Darcy McKeough, the Private Sector Liaison Advisor, will be meeting the media shortly to describe in more detail the work of the study teams. I would, however, like to take a few minutes to highlight some of the major observations of this work.
The Government of Canada has for decades been functioning in a twilight of partial information, overlapping responsibilities, and organizational inefficiencies. This condition has allowed structural distortions to creep into our economy and our society. Canadians deserve to know more about the myriad of programs and services they pay for. After a little over a year of careful examination by mixed teams of private and public-sector analysts, we know much more than any Government has ever known before.
This Government is not the first to discover the necessity for a wide-ranging, unfettered and objective analysis of the federal public administration. Over the years a number of studies, including the Glassco Commission and the Lambert Commission, described this situation. Several years ago the Auditor-General concluded that the management of Government was "out of control". During the summer election campaign of 1984, the Right Hon. Leader of the Opposition (Mr. Turner), who was then Prime Minister, recognized the dimensions of the problem when he said:
There is a lot of space to reduce and cut expenditures and duplications: programs which are no longer in force, which are no longer pertinent, wastages in public administration.
[ Translation]
What is unique in this case is that a party newly in power took advantage of this opportunity to open the doors and conduct an independent analysis in co-operation with the private sector. In other words, to welcome new ideas. And today, by publishing the conclusions of the study teams, we are opening those doors even wider.
A central conclusion of the study teams, and one with potentially profound implications, is the degree to which there has developed a vast array of government programs that are designed to subsidize activity rather than results, effort rather than success. Few who take the time and spend the effort to read the study team reports could dispute the observation that we have become a nation of what I call program junkies. In the absence of a full comprehension of the extent, nature and content of government programs, past Governments have felt little reluctance to use subsidies as a blanket solution to many problems of society. Therefore, government spending, including tax expenditures, has been expanding with the inexorable growth of a rolling snowball.
As I have said, the implications are profound, for the analysis I have just described reflects how dependent on government Canadians have become. The elements of this conclusion were evident from the first study team report, when those examining business services and subsidies observed that
the Government has been "giving with both hands". However, it was important to await the observations of all the study teams before coming to any over-all conclusion.
My decision as chairman of the task force was not to pre-empt or to prejudice the work of study teams by releasing reports throughout the year. For this reason, I felt it was desirable that the reports be published together.
The study team reports and their options represent the first orderly step toward cabinet discussion. They do not represent government policy nor are they decisions of the Government. The reports provide the basis for discussion of the wide array of programs which exist throughout government and provide a valuable tool in the decision-making process.
Having said that, it is obvious from announcements already made throughout the past year that the business of governing has proceeded responsibly, while the review has been underway.
The decisions that have already flowed from the process of program review are of the following nature.
Decisions have been made on programs and services where the focus is primarily on the internal administration of federal Departments and agencies. Examples are in the area of regulatory reform, real property management and veterans' programs. In addition, a limited number of decisions have been made with implications for the provinces. These were in areas largely where we had confidence from our continuing federal-provincial consultations that the provincial Governments concurred with our direction. Examples include the Canada Assistance Plan and housing programs and devolution to the provinces in small cases under DRIE's Industrial and Regional Development Program.
On behalf of the Prime Minister, I have given written assurance to the provinces that no unilateral decisions will be taken by the federal Government and that advance consultation will occur before federal programs are revamped in ways that affect the provinces-especially where provincial Governments share program costs.
It should be noted that in making decisions the federal Government has not, and will not, be bound just to the options put forward by the study teams. A close reading of these reports will show that independent study teams, working within their individual terms of reference and examining the same programs, can come to different and sometimes contradictory conclusions. This only confirms the autonomy of individual study teams.
While the Government will be taking the options presented by these mixed study teams into account, it must and will make its decisions from a perspective that is broader than that of any individual study team.
Finally, the Government is referring these reports to the respective Standing Committees so that their analyses and their options can be assessed in the light of open public discussion. This Government is committed to parliamentary reform and determined that parliamentarians become meaningfully involved in the broader reforms to public policy.
March 11, 1986

The process of program review and the reports I have tabled today are steps in the reform of public administration in Canada. Parliamentary reform relates to the way decisions are made by elected officials. We must join these reform initiatives to policy-making in Canada.
Sir, the Government has been asking Canadians to join our commitment to the reform of Government as part of the mandate for economic renewal given to us by the people of Canada in September, 1984. The tabling of these documents shows beyond any reasonable doubt that this Government remains committed to policies of economic renewal in a climate of openness and public dialogue. We are committed to improving the management of Government and providing better service to the public.


Some Hon. Members:: Hear, hear!


Mr. Speaker:: Order, please.


Mr. George Baker (Gander-Twillingate):: Mr. Speaker, first of all we want to congratulate the participants who worked on these reports, a great many of them voluntarily, and we appreciate the amount of time that they have spent composing these reports for consideration by the Government of Canada and by this House. We are sure that the good things in the reports will be ignored by the Government, and certainly the cuts that have been suggested will certainly be implemented by the Government of Canada. This Government is more interested in figures than it is people. This Government is more interested in cuts. They have an obsession with cuts and reducing services to Canadians.
Perhaps the first thing that one will note in looking at some of these reports is that the Government of Canada really did not wait for these studies to be done. If one just peruses some of the reports, for example, the one on housing he will find that it deals with the RRAP program. One section deals with the Canadian Oil Substitution Program. Another section deals with the Home Heating Oil Subsidy Program and exemptions for CHIP grants in Prince Edward Island and Nova Scotia. Canadians and Members of the House know that these programs have been terminated since these study groups began.
We can look at another report on the environment. We see sections dealing with national parks and the weather services. There is a magnificent section dealing with the wildlife conservation programs, including migratory birds conservation, wildlife research and conservation and wildlife interpretation. After this study group began to study these programs the Government decimated the Canadian Wildlife Service.
We can go on to look at another report on major surveys, including the Surveys and Mapping Branch, the Canadian hydrographic service and oceanographic data. The list goes on. We know what the Government has done since these study groups began their work. We know about the charges it has implemented that make it practically impossible for people in the fishery to even buy charts.
Statements by Ministers
Let us go on to look at job creation, training and employment services. That is an interesting report which studies Canada Works. We all know that Canada Works is no longer in existence. This report studied Katimavik and many other programs which have been dealt with by the Government since the study groups began their work. Yet the Minister stands up in the House to say that the Government will not unilaterally make any changes in the Government until this report has been studied by the Standing Committees of the House and reported to the Canadian people.
We are also concerned about what interpretation the Government will give to the positive conclusions that were arrived at because of a sincere concern on the part of the participants in these study groups. We need only to go back to when the Minister presented his reports from the study teams in May, 1985 to understand the basis for our concern. In that report of the various study groups we can see some constructive comments under targeting of scientific research and development through the National Research Council, but we know what the Government of Canada did to the National Research Council following the presentation of that report.
When we look at the employment services section of that report that was presented last May and look under "job placement", we know that the Government cut out the mobility grants that were available to Canadians in order to move from one part of the country to the other. The Government took the main representations of those study groups on training, job creation and employment programs at face value and reorganized the direct job creation delivery of programs in this country. But did the Government consult with those who were affected-the unemployed? No. It commissioned some fine studies to be conducted by very educated people from the universities, the trade schools and the unions as well as private enterprise. It then discontinued the direct job creation programs for the poor man with a family and only eight weeks of work in a year. Those individuals are not allowed to work under direct job-creation programs of the Government because of the interpretation given to the recommendations of that particular study group.
According to the Government's largest employment program, a person who has trained in the occupation of a job being advertised cannot be referred to that job. For instance, an unemployed carpenter is not allowed to be referred to a carpentry job in his community. A person who has just finished a carpentry course in trade school is not allowed to be referred to that job. The Government has proven that grave errors are made when the people affected by these reports are not consulted.
In conclusion, we want to congratulate the people who formulated these reports. We look forward to examining the reports and holding the Government accountable for its actions. The Government should not proceed with any further changes to our system until there has been full consultation, not only in this chamber but with the people in our society who are affected by those changes.

March 11, 1986
Statements by Ministers


Mr. Mike Cassidy (Ottawa Centre):: Mr. Speaker, in commenting on the Task Force reports which we received about an hour ago, I was tempted to bring all the documents with me and ask whether there is an agenda for action by the Conservative Government, or whether it intends to pick and choose which of those recommendations it finds most to its favour. In fact, when I look through the document, I begin to see that this is simply a continuation of what we have seen from the Government in its First 18 months in office. The values of Bay Street and Wall Street prevail in the Government's budgetary policy as well as in the Nielsen Task Force review which has been brought forward today.
It is quite clear that the unfairness that led to a $1,300 increase in taxes on the average family between the November, 1984 statement, the May, 1985 Budget and the most recent Budget is to continue. When it comes to spending review, or program review as the Government calls it, it intends to take away essential services to ordinary Canadians while leaving the services to the business and corporate sector essentially untouched, unexamined and in fact uncut.
In effect, the other shoe has dropped. We see that the unfairness of the tax policy is being matched by the unfairness in terms of spending policy. The Government began the Nielsen Task Force by saying that the goal was to eliminate waste and inefficiency in Government. What we are in fact seeing is that the Government intends to eliminate services that are extremely important to average Canadians.
In order to conduct this review the Government spent much money and invited 221 experts from different walks of public and private life to meet every week. The Deputy Primer Minister (Mr. Nielsen) has given his praise for their work. Rather than suggesting that the Government is grossly inefficient or wasteful, that study group suggested a number of areas to be cut and chopped. The sections of the report that I have read indicate that the group frequently agrees with the priorities, prejudices and biases of the Progressive Conservative Government. Perhaps they were chosen to conduct this review for precisely that reason.
The House Leader feels somewhat aggrieved by that, but I do not remember, from my experience in the Ontario Legislature, that Darcy McKeough was particularly concerned about the needs of ordinary Ontarians. Yet he has played a key role in sifting through the recommendations of the various study groups.


Mr. Hnatyshyn:: What about the CLC?


Michael Morris Cassidy: There was one member of the review committee and he was there to try to prevent some of the worst things from happening. If you put one trade unionist with eleven people on the main review committee and you have 200 people from the private sector, you end up with the introduction that we see.
The first substantive recommendation in this report deals with the question of universality. It says that as far as the Task Force is concerned it found universality everywhere it looked and it is determined to stamp that out. It intends to take away
universality. We debated the principle of universality in 1984 and 1985. Those debates took place because ordinary Canadians were very concerned about the fact that the Government was backing away from universal programs that were essential to the average Canadian family. The Prime Minister (Mr. Mulroney) stood in his place to say that universality was a sacred trust. The sacred trust means, obviously, it was to be defended for at least 12 months before the program review came in. Now we have this new attack on universality which appears will mark this Government up until the next election.
We are told that study team after study team focused on universal subsidy programs and then built a case to abolish them. I am not sure whether or not what is in this report is Government policy. We are told it is not. But yesterday I received a phone call from the Public Service Staff Relations Board and was told that 15 workers in one particular section had been given pink slips and were told they were being fired because of the Nielsen Task Force. The task force report is not Government policy until the Government decides to make a move, and it would appear it does not particularly want to have a process of public review over a series of recommendations which, to put it mildly, vary a great deal in terms of quality.
The documents point to the lack of control over tax expenditures as a major weakness in Government financial accountability. I welcome that admission. The documents confirm the estimates of the Auditor General of between $30 billion to $50 billion in tax expenditure taking place every year, and that this is an area of Government expenditure which is essentially not under control. Neither the Liberals nor the Progressive Conservatives have shown themselves to be accountable in this particular area.
My hopes with the introduction of the document were that perhaps the review would deal substantively with the question of tax expenditures. My hopes have been dashed, however, as I look at what has been done in terms of tax expenditures to business. When we get down to the specific recommendations, we Find that the task force has copped out when it comes to dealing with major tax expenditures to business and to the wealthy. The largest tax expenditure that I can see in this particular document is the accelerated depreciation which is given to business. In spite of all of the resources of the task force, it was unable to come up with an estimate of the value of that particular tax expenditure more recent than 1981. If that tax expenditure was worth about $3 billion in 1981, one has to assume that in 1986-87 it will be worth between $5 billion and $6 billion. How does the task force deal with that major expenditure? Did it really go into it in order to see whether it was justified or whether there were better ways of spending the public funds of the taxpayers? No, it did not. It stated that while it was most difficult for the Department of Finance to evaluate, its impression, based on discussions with the Department of Finance, is that it believes that the objectives of the system of tax expenditures for accelerated depreciation are reasonably satisFied.
March 11, 1986


Mr. Rodriguez:: Spoken like a bunch of corporate giants.


Michael Morris Cassidy: That is right, Mr. Speaker. What it did when it assessed various programs of tax expenditures to the corporate sector was to adopt the principle of revenue neutrality. Even if it thought that in certain cases some reductions in tax expenditures should be made, rather than saying, "Let us ensure that the money goes into the hands of the taxpayers and is used for other purposes", it said, "But if we take those tax expenditures away, we should reduce the over-all tax rate so business in general is not left to be suffering at all".
That is particularly objectionable, given the statistics which indicate that the corporate sector in Canada now takes more from Government in terms of grants and tax expenditures than it pays in corporation taxes. In 1983-which are the latest figures we were able to get, lacking the ample resources available to the Nielsen Task Force-corporations paid about $7 billion in taxes and received $12 billion in tax subsidies and grants. That is a far cry from the ordinary family who were seeing their taxes go up by $1,300 per annum as a consequence of the tax measures of the Government, and the taxpayers know damn well they are paying a lot more than they are receiving from the Government.
There is something wrong with a task force which spends as much time in minuscule considerations of cuts in the patent office, recommendations which have already been demonstrated to be unworkable, to be based on faulty information and to be totally unsustainable and justifiable, as it does on a program which now costs $5 billion or $6 billion in terms of tax expenditures through the process of accelerated depreciation.
I want to suggest that even a cursory glance at these documents suggest that they are widely varying in quality and in terms of the degree to which the very study teams accepted what they were told by the Government, the degree to which they accepted the line they received from the Government. The quality is enormously variable; the prejudices, however, are consistent. Those prejudices, I want to reiterate.

Those prejudices come from St. James Street, from Bay Street and from Wall Street in New York. It means that instead of a study of Government spending that focuses on the interests of the average Canadian family, of the people on Main Street, Canada, we have a study containing 21 papers, all of which reflect this Government's bias towards the corporate sector, the big companies and the rich in our society who ignore the needs of the average family and small business people in this country.

I would like to give an example of the prejudices found in this particular report. Universality is the first target. If we accept the task force, I suspect there will be no more universal programs. The task force recommends the elimination of most non-profit and co-operative housing programs. It recommends that employable people now receiving welfare be moved over to unemployment insurance, apparently to save tax dollars.
Statements by Ministers
And when the unemployment insurance benefits run out 1 suppose they will have to take their tin cup to Sparks Street or to Bay Street and hope that they can survive on that. The task force proposes that the Government withdraw from native health services. In the area of regional development it proposes to eliminate the subsidies for marine transportation even where that is vital to keeping our country together. It proposes that subsidies in grain movement will go to farmers, not the railways, something which was fought bitterly in this House over the course of the two or three years before 1984. Despite the promises made during the election campaign by the Progressive Conservative Party, the task force recommends an end to all farm fuel tax rebates. It is recommending that one of the important programs for the maintenance of cash flow for farmers, the Prairie Grain Advance Payments program, be cancelled. It is proposing to eliminate all socio-economic considerations for the fisheries as well as the federal role in habitat protection in western Canada. It is proposing to reduce expenditures in person years in fisheries by 20 per cent in two years. It is proposing what is said to be aggressive cost recovery on coastguards, harbours and so on, which I suspect would lead to our coasts becoming depopulated because no one would be able to afford to use the harbours.
One would assume that perhaps the task force would recommend means of increasing employment, but one does not increase employment by terminating Katimavik, as the task force recommended, which has led now to the tragic events taking place outside of the Senate. The founder of Katimavik is now engaging in a hunger strike. The task force is proposing that training spending be cut to 95 per cent of 1985 levels. It suggests that future guaranteed training levels be eliminated, that critical trades skills training be cut in half, and that the basic adult literacy program be eliminated. These are just a few of the recommendations of the Nielsen Task Force. It is proposing that the Canada Council be made a flagship for grants and, as a consequence, that other programs of support for cultural activities be cut, and is proposing to freeze the capital budget of the CBC. It is considering the elimination of the National Film Board because "it is a threat to the private film sector in Canada". It proposes to cut women's programs to the levels of 1983-1984.
It is proposing to look at the whole system of exemptions on sales tax and to raise the sales tax on building materials, bicycles, non-prescription drugs, clothing and a number of other items. That is again a somewhat mindless approach. [Translation]
-once more, I suggest that this list may be satisfactory to the people on Bay Street, on St. James Street and on Wall Street, but it will not satisfy the people on Main Street. It will certainly not satisfy the people on average incomes, the middle income families in Canada.

This is a shopping list for Bay Street at the expense of Main
Street. In conclusion, I do welcome the fact that the Government intends to refer this matter to the various standing

March 11, 1986
Petitions
committees. In those standing committees-and I see that my time has expired-we will not stand for a set of cuts which cut universality, something which hurts ordinary people and which is directed at average Canadians. It is about time that the privileges given to large corporations and to the rich and powerful are taken away, not the services to ordinary Canadians.


Some Hon. Members:: Hear, hear!


INTERPARLIAMENTARY DELEGATION
Mr. Joe Reid (St. Catharines):: Mr. Speaker, pursuant to Standing Order 101, I have the honour to present to the House the first report of the Canadian NATO Parliamentary Association.
It was my privilege, again, to attend a meeting in Washington, D.C., of the Sub-committee on Out-of-Area Challenges to the Alliance of the Political Committee of the North Atlantic Assembly. As it appears in the report, the greatest of these challenges still continues to be southwest Asia, including the Middle East Basin.
[Editor's Note: For above report, see today's Votes and Proceedings.]


PETITIONS
Mr. Gordon Taylor (Bow River):: Mr. Speaker, because the Alberta Hail and Crop Insurance and PFAA used the whole County of Vulcan, comprised of some 493,000 acres, the pay-out of the funds provided by the federal Government under the Prairie Crop Drought Assistance Program was among the lowest even though the crops were among the worst. Therefore, some 287 farmers, about 70 per cent of the farmers in the county, are petitioning Parliament and the Minister of Agriculture (Mr. Wise) to rearrange the boundaries and put divisions one, two and three, where the crops have been virtually nil for three years, into one designated area and thus make payment where the need is the greatest. In duty bound your petitioners will ever pray.


The Acting Speaker (Mr. Charest):: Does the Hon. Member for Bow River (Mr. Taylor) assure the House that the petition is certified according to the new rules?


Gordon Edward Taylor: Yes.



CRIMINAL CODE


Mr. Bob Hicks (Scarborough East) moved: for lease to introduce Bill C-281, an Act to amend the Criminal Code (capital punishment).


The Acting Speaker (Mr. Charest):: Shall the Hon. Member have leave to introduce the Bill?


Some Hon. Members:: Agreed.


Robert Nelson David Hicks: Mr. Speaker, the purpose of this Bill is to allow a judge when passing sentence on a person who has been convicted of first degree murder the option of sentencing that person to either life imprisonment or to death. The intent here is to place in the hands of each judge an option that he or she may exercise after hearing the individual evidence and taking into account any recommendations from the jury.
In addition, in the case where the death sentence is imposed, death shall be by means of an intravenous injection of sodium thiopentol.


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


Ramon John Hnatyshyn: Mr. Speaker, there have been discussions between the Parties with respect to the reference of the various reports which have been tabled by the Deputy Prime Minister (Mr. Nielsen) earlier this day. I think Your Honour will find a disposition to accept by unanimous consent and without debate the following order:
That, notwithstanding any Standing or Special Order of this House, the Reports of the Study Teams of the Task Force on Program Review, laid upon the Table earlier this day, be referred to the several Standing Committees as follows:
Since the list is rather long and there is a detailed allocation of the reports to the committees, if it is agreeable to the House, Mr. Speaker, I would ask that the list be printed in Hansard as if it had been read.


The Acting Speaker (Mr. Charest):: The House has heard the terms of the motion. Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.
[Editor's Note: List referred to above is as follows:]
To the Standing Committee on Aboriginal Affairs and Northern Development Report on Indians and Natives To the Standing Committee on Agriculture Report on Agriculture
March 11, 1986
[Stage Direction]
To the Standing Committee on Communications and Culture Report on Culture and Communications To the Standing Committee on Energy, Mines and Resources Report on Natural Resources To the Standing Committee on Environment and Forestry Report on Environment
To the Standing Committee on Government Operations Report on Procurement Report on Regulatory Programs Report on Regulatory Agencies Report on Real Property
To the Standing Committee on Justice and Solicitor General Report on the Justice System
To the Standing Committee on Labour, Employment and Immigration Report on Citizenship, Labour and Immigration Report on Housing
Report on Job Creation, Training and Employment Services To the Standing Committee on National Health and Welfare Report on Canada Assistance Plan Report on Health and Sports
To the Standing Committee on Regional Industrial Expansion Report on Services and Subsidies to Business To the Standing Committee on Research, Science and Technology Report on Major Surveys Report on Education and Research To the Standing Committee on Transport Report on Transportation To the Standing Committee on Veterans Affairs Report on Veterans' Programs

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Mel Gass (Parliamentary Secretary to Minister of Fisheries and Oceans):: Mr. Speaker, the following questions will be answered today: Nos. 510 and 511.


Mr. de Jong: |. In (a) 1980 (b) 1981 (?) 1982 (d) 1983 (?) 1984, how many corporations currently active in Canada have failed to remit taxes owing and in what amounts?
2.	For the 1985 taxation year, what is the estimated amount of taxes that will be owed?
3.	(a) How many corporations, no longer active in Canada, still owe taxes to the Government and in what amounts (b) how many are (i) foreign (ii) American owned?
4.	What is the breakdown of the taxes owed by corporate size and size of debt?
5.	(a) How many corporations have been deferring taxes for the years referred to in Part 1 and what is the breakdown by (i) amounts deferred (ii) corporate size (b) what is the current amount of deferred taxes?
6.	How long a period have taxes been owed by corporations?
7.	For the same years, what was the amount of taxes in dispute?
Order Paper Questions


Hon. Elmer M. MacKay (Minister of National Revenue):: 1.
The Department does not maintain a listing of corporations currently active in Canada. We are able to provide the following statistics with respect to corporations that owed income tax as at the fiscal year ends in question.
Year ending March 31	Number	Dollars Outstanding (000,000,)1981	51,578	$ 6231982	95,781	8701983	88,197	9371984	81,457	1,0551985	87,713	1,2432. The Department estimates that as at March 31, 1986 corporation taxes outstanding will be $1.2 billion.	3. This information is not captured by the Department.	4. The statistical	information obtained	for collection purposes does not link size of debt and corporate size. We provide the following breakdown of taxes owed by corporations as at	March 31, 1985.	Dollars OutstandingDollar Range	Number	(000,000.)Current Debt-All ranges	58,025	$ 277Overdue Debt- Under $5,000	18,824	34$5,000-550,000	9,449	138Over $50,000	1,415	794Total	87,713	$1,2435.	Information concerning deferred income taxes is not assembled since it is not useful for the management of the collections function.6.	The Department's aging of accounts receivable classifies old accounts in an "over two years" category. A particular account could involve reassessments to several taxation years. Accordingly, extensive analysis of individual accounts would be required to produce the requested information. It was agreed that the response in 1. above provides sufficient information.7.	The following reflects the dollar value of the accounts outstanding on which appeals had been filed, as at the respective fiscal year ends.Year Ending	Dollars OutstandingMarch 31	(000,000,)1981	$3501982	3641983	3021984	4881985	565
March 11, 1986
Canadian Arsenals Limited TAXES OWED BY INDIVIDUALS


Mr. de Jong: In (a) 1980 (b) 1981 (c) 1982 (rf) 1983 (a) 1984, what was the amount of tax owed by individual tax filers and what is the breakdown by income groups?


Elmer MacIntosh MacKay: Statistical information concerning taxes outstanding on the basis of income groupings is not captured by the Department. The following information is provided on the amounts owed by individuals for the years requested.
Year ending March 31	Numbers	Dollars Outstanding (000,000,)1981	793,836	$1,0151982	808,772	1,2251983	799,547	1,3721984	876,329	1,6801985	862,947	1,701


Melbourne Alexander Gass: Mr. Speaker, 1 ask that the remaining questions be allowed to stand.


The Acting Speaker (Mr. Charest):: The question as enumerated by the Parliamentary Secretary have been answered. Shall the remaining questions stand?


Some Hon. Members:: Agreed.


The Acting Speaker (Mr. Charest):: I wish to inform the House that because of the ministerial statement Government Orders will be extended by 35 minutes beginning at one o'clock p.m.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Monday, March 10, consideration of the motion of Mr. Mclnnes that Bill C-87, an Act to authorize the divestiture of Canadian Arsenals Limited and to amend other Acts in consequence thereof, be read the second time and referred to a legislative committee.
Mr. Roland de Corneille (Eglinton-Lawrence):: Mr. Speaker, it is my privilege to speak to Bill C-87, which is entitled "an Act to authorize the divestiture of Canadian Arsenals Limited and to amend other Acts in consequence thereof'. The long and short of this particular Bill is that the Government is asking the House of Commons to authorize it to sell a Crown corporation, Canadians Arsenals Limited, and to place that company into private hands.
Taken within the context of the way the Government is behaving with respect to all social, cultural and trade policies, this is one more piece of evidence which convinces us that the Government is again being irresponsible and amoral-in fact, in this case it convinces us that this is an immoral Government. We are told that the purchaser is the SNC group of Montreal, Quebec, which has operations in that province. I hasten to say that I have absolutely nothing of a negative nature to say about SNC. This is not a question of whether or not we are concerned and in favour of this particular company buying Canadian Arsenals Limited over and above some other company. Indeed, I was pleased to read in the release made by the Minister of Supply and Services (Mr. Mclnnes) that 500 of the 4,000 employees of that company own the plant and the corporation. In that sense it is an enlightened company, if that number of employees are shareholders in it. I hope no one will regard my comments with respect to what the Government is doing in selling this corporation off as being in any way aimed at SNC.
My Liberal colleagues have expressed in their speeches so far in the House-and I trust they will in the future-their objections to the sale and a number of technical factors involved with it. For example, they are concerned about the sale price. We are told that the report commissioned on behalf of the Government by Arthur Andersen states that the value of the company is between $80 million and $98 million. Some of my colleagues have been asking whether or not this sale price of $92 million is an adequate price. They point out that, after all, the assets were alleged to be worth $126 million in 1984. Apparently business is booming at Canadian Arsenals Limited. Its profit levels have gone up constantly year after year. My colleagues are wondering if this sale price is a good one or if this is another fire sale like de Havilland. They also say that they cannot really know. We in Parliament are being asked, as in the case of de Havilland, to give our support to something without having the facts at hand.
A Government that came to office claiming that it was going to enforce freedom of information is apparently unwilling to disclose to these representatives of the Canadian people in the House of Commons the figures and the report from Arthur Anderson. Apparently we are asked to simply proceed on faith, as we were asked to do so in the $1 billion giveaway to the banks and in the de Havilland case.
Of course, the Government realized later on that people of Canada really do not approve of these hidden, secretive methods of selling off things that belong to the Canadian people, or giving away money without giving the Canadian people and opportunity to have access to it. One would think that the Government would have learned. It has had to back off time after time and finally give in and give to the people of Canada the information they have demanded. That was true with the banks, and especially true with de Havilland. There are objections from my colleagues that they are not in a position to be able to make a competent judgment on behalf of their con-
March 11, 1986

stituents and the Canadian people with regard to the value of this particular sale.
Some of my colleagues have pointed out that there is also a problem in that this may create a monopoly situation. They feel that the Government is providing a company an opportunity to have monopoly access to the Canadian Government for the selling of ammunition. They feel that this sale to the Canadian Government could then be boosted to whatever price the company might wish. There is no clear explanation as to how this might be avoided if this company is put into the hands of a private-sector firm.
As well, some of my colleagues are concerned about the fact that the Public Service Alliance, despite all the claims of the Tories that they are going to consult, has not been consulted. The Tories have again made a mockery of this statement in presenting the Nielsen report. They say they consult the Canadian people when they in fact act first and consult afterward.
My colleagues point out that the Public Service Alliance indicates that the workers at Canadian Arsenals Limited were not consulted. Despite the comments of the NDP indicating that there was no concern given by the Government to the pensions of the workers at Canadian Arsenals Limited, I was glad to see that the Minister of Supply and Services (Mr. Mclnnes) had indeed taken some steps to protect the interests of the workers at least by way of pensions, and I commend him for that effort.
While there has been Government secrecy, a lack of consultation and the fact that once again the Government is selling out a profitable Crown corporation which belongs to the taxpayers at fire sale prices, I have other reservations about this particular sale. I have additional objections to this sale on the grounds that all this in any case fits into a most regrettable over-all Tory approach, which is that the only way to measure what we do is to get money for it. Making money and saving money are the considerations of the Government first, second and last. The consequence of this kind of approach to governing is to destroy life, to destroy the quality of life or to destroy our environment for the sake of a fast buck. I suggest that this Government's over-all approach to young people, senior citizens and those groups that are aggrieved, including the poor, is that it cares about statistics, not people. It cares about statistics instead of people.
In selling off the ammunition company to the private sector, the Government is encouraging this company to compete for contracts abroad. That is my indictment of this deal. This company will be put into the private sector and there is nothing to keep us from seeing this organization fall into the hands of some organization other than SNC, an organization that will sell ammunition for profit. In fact, the Government admits this and boasts about it. The Government points out that this new consortium will be better able to compete in the international markets. After all, SNC only makes small ammunition but will now be able to get into the business of large ammunition and in fact create a much larger complex which can compete more effectively on the international mar-
Canadian Arsenals Limited
kets. That is a tragic confession on the part of the Government. Is that not just what we would expect of the Tories? They do not mind Canada being a merchant of death if it will turn a buck.
This is the case not only for this one sale. On the contrary, this fits into the Conservatives' total philosophy. The Minister of Supply and Services was selling off for a fast buck a Canadian Crown corporation to a non-Canadian company. We saw this approach in the case of de Havilland. But the most shocking and callous example of all was the recent announcement by the Minister of Regional Industrial Expansion (Mr. Stevens) that he would solve the economic problems of Cape Breton by bringing to Cape Breton an ammunitions plant. Is that the way to solve the economic problems on a long-term basis? An ammunitions plant in Cape Breton will have to do whatever it can to turn a buck. Of course, if it is in Cape Breton, it is able to sell from Canada in a way that it cannot sell from its own country.
Which company was this that the Minister for Regional Industrial Expansion suggested would set up a plant in Cape Breton to help Cape Bretoners with their economic problems? It was suggested that the company that would come to Cape Breton to make machines of war would be the Thissen Company. Thissen is the name of the father, if you will, of the Nazi war machine. Thissen was the man who originally put Hitler into business and who financed his campaign and armed his bully thugs. Thissen was the man who set up the armaments machine of the Nazi Wehrmacht. That was Thissen. Imagine suggesting that a company with that name could come to Cape Breton to set up an armaments plant in order to be merchants of war and sell to whomever will buy. It is disgusting. It is a revolting thought. It is insensitive and it is criminal.
Is the way to solve the economic problems of Canadian people to make us merchants of war?
It is the Minister of Regional Industrial Expansion who suggested this solution to the problems of Cape Breton. 1 am concerned that this can be done without the blinking of an eye, without some concern on the part of the Government which did not deny this but is rather considering this as a way to solve our problems
Is it not true that for decades Canada has built its reputation upon being a country of peace? Is it not true that we have indicated repeatedly that we would not be merchants of war or merchants of death? Is it not true that Canada has indicated that it would not sell armaments throughout the world to countries which use them to destroy one another, to kill one another? Is it not true that we do not want to be contributors to more bloodshed in the Middle East, Africa and Asia?
Canada is not in the business of selling armaments in order to make our living in the world. We can find better and more constructive ways, by setting up companies which deal in the fields of environmental, medical, biochemical, and biomedical research. We have enough brains in Canada to concentrate on things that build rather than on things that destroy.

March 11, 1986
Canadian Arsenals Limited
I have a concern about the sale of Canadian Arsenals Limited. It is one small, miniscule part of a total approach in a program which is insensitive about matters of war and peace, and about how Canada images itself in the world. Canada plays its role to bring about peace in a world weary of war, where millions of people are starving, suffering and dying. Do we need to become involved in the munitions business and send out weapons for people to kill one another? Is that what Canada is to become? I do not care which administration would do it or did it. I do not care what Party label is on it. I am saying that it is not good now. We should not approve of this kind of approach to solving our economic problems. It is better that the company remain in the hands of the Government and not become part of an arsenal of machinery or of an industrial military complex.
When Dwight D. Eisenhower became President of the United States, he confessed that he was concerned that the United States was doomed and had been sold out to the industrial military complex which was calling the shots for him in the White House. He expressed dismay and concern. We do not want to build our economy on any kind of industrial military complex. Perhaps the Tories emulate and look with great satisfaction at how the United States has built up a $2.5 trillion deficit, mainly on defence, mainly on the largest machinery of war ever created in the history of the human race. That is what the Americans base their budget on, going to defence, as they call it. Is that how we will build up the Canadian economy? Are we envious of the Americans? Do we want to get into the business with them? Are we so hungry for profits that that is the direction in which we have to turn? I do not think a single Canadian would say yes to that.
The people of Prince Edward Island are concerned that Litton Systems might come there; that is becoming a problem in that province. Canadians do not feel that they want to make money from the blood on the faces of other men. That has been a Canadian sense of pride throughout our history. We have only gone to war to destroy oppression. We have not fed the machines of war and we have not profited from it. I am sure that those whose sons died in the last war to put down Hitler will not appreciate the fact that we are considering bringing Thissen into Canada to sell munitions and to profit. That company was founded by the men who backed and put Hitler into power.
Canada should be perceived as a messenger of peace. Therefore I believe that we should reconsider all steps, not only the one which we are considering now, which is a little one in the over-all issue. I plead with the Conservative Government to re-examine its priorities. Above all it should give support to the Secretary of State for External Affairs (Mr. Clark). If he is to go throughout the world saying that Canada stands for peace, we should not be making Canada appear to be a merchant of war.


Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, I want to say a few words on Bill C-87, an Act to sell Canadian Arsenals Limited to the private sector. Some people may ask the following questions. What is Canadian Arsenals Limited,
how important is it, and why should it not be sold to the private sector? We have heard a few speeches in the House outlining the whole theory of why we should be selling arms at all, and why we should be privatizing a somewhat important Canadian Crown corporation which will now probably go out to peddle arms around the world. I find that to be morally repugnant. It is the main reason I oppose the sale of the particular Crown corporation to the private sector.
The reason the Government is selling this particular Crown corporation is nothing short of its dogmatic commitment to the ideology of privatization.


Mrs. McDougall:: Oh, oh!


Lorne Edmund Nystrom: The Minister of State for Finance (Mrs. McDougall) can rise to contradict those comments with good arguments. I invite her to do so. Canadian Arsenals is a very profitable Crown corporation. It has a lot of money. It has a lot of guaranteed contracts. From a business point of view, it is a sound business corporation which has made a lot of dough. Why get rid of it? Why not keep the corporation and use its profits to reduce the deficit? It does not make any sense whatsoever to sell it.
Canadian Arsenals Limited was founded back in 1945. It is owned 100 per cent by the people of the country through the federal Government of Canada. It manufactures medium and large calibre ammunition. Its main customer for 90 per cent of its production is the Department of National Defence. The Government is selling a Crown corporation which sells 90 per cent of its products to the Government itself. I ask whether that makes any sense. It is an industry which is located entirely in the Province of Quebec. It has two plants. One is located in St. Augustin just outside Quebec City. The second is in Le Gardeur just outside Montreal. As I said, the company has been very profitable. Ninety per cent of its production is sold to the federal Government of Canada and 10 per cent of its production is exported. It has many contracts. However, the Government of Canada wants to sell it. I really wonder why, other than its dogmatic commitment to the ideology of privatization. We can see what that has done for Margaret Thatcher in Britain.
The employees of the company are organized by the Public Service Alliance of Canada. It is my understanding that the union was not consulted on the sale at all. Its workers are concerned about their pension benefits. There is no guarantee about jobs or job security. Suddenly the Minister announced that the company would be sold, and that was it.
I should like to refer to a press release issued on December 2, 1985 by the President of the Treasury Board (Mr. de Cotret) who is also in charge of the privatization task force. He said: "Currently the government of Canada purchases 90 per cent of Canadian Arsenals Limited's production. This Crown corporation, CAL, has been impeded in exploring opportunities to diversify". The Minister is saying that because it is a Crown corporation it has not had the chance to diversify as it might be able to do in the private sector. He went on to say: "The Government is confident that once the company is
March 11, 1986

privatized, CAL will produce additional markets in product diversification. Indeed, through this sale, the Canadian ammunition industry should become internationally competitive, making possible increased sales to our NATO partners".
One of the purposes of the sale is to try to make Canadian Arsenals Limited a merchant of war peddling arms around the world. 1 ask Conservative Members of Parliament whether or not this is really what they want. Here we have a Cabinet Minister saying that if we sell this company it will pursue additional markets around the world. It will diversify its products, selling to God knows whom, Mr. Speaker, in different parts of the world. I say to you, Sir, that this country has had a very proud record of not being a merchant of war and it has had a very proud record of not creating jobs through producing bombs, rifles and ammunition. That has been neither our history nor our tradition. Going back 50 or 60 years, it was not our tradition. It was not our tradition in the Pearson years, the Diefenbaker years, the Trudeau years or in the Clark era.
Why do we have this change in policy? Why is the new Prime Minister (Mr. Mulroney) privatizing a very profitable company? One of the major purposes being to diversify and pursue international markets so as to peddle guns. That is not good enough. I wish for once that some of the backbench Conservative Members of Parliament would get up and say what they feel and think, and say no to the Prime Minister who is trying to change Canadian foreign policy in this very important way. Why is he doing it?
SNC Defence Products of Montreal is a private company that produces ammunition. Is the Government selling CAL to SNC in Montreal because that company contributes money to the Conservative Party for electoral purposes?


Mr. Thacker:: That is silly.


Lorne Edmund Nystrom: There we have a Member of Parliament from Alberta saying silly. I just happen to have here a copy of an article from The Toronto Sun. If the Member thinks this is foolish, he should get up and respond in a few minutes time. The Toronto Sun for Dec. 4, 1985 writes that SNC contributed $1,000 directly into the campaign funds of the Minister of Industry in his fight for re-election in his Toronto area riding in 1984. So we have a $1,000 contribution to the Minister's campaign fund.
Further, La Presse reports on February 19, 1986 that SNC contributed in excess of $10,000 to the Tory campaign in 1984. I ask my friend from Alberta whether it is silly to wonder why the sale of this private Crown corporation is going to SNC when it contributes money to the Tory campaign caucus. Here we have a private manufacturer of ammunition contributing to the Conservative Party. That same Conservative Party is privatizing Canadian Arsenals and selling it to SNC. Is there a bit of hanky-panky going on behind the scenes and that is why the Government is privatizing this company? I wonder.
Canadian Arsenals Limited
SNC has sold ammunition to the rebels in Nicaragua in the past. If it did that in the past, and if we in this House allow the privatization of Canadian Arsenals, then there is nothing to say that that company will not sell more ammunition to the rebels in Nicaragua who are trying to unseat the Sandanista Government. It is against the foreign policy of this country, as stated many times by the Minister for External Relations (Mrs. Vezina), to export arms of any sort to a trouble spot like that in the world.
Are we in this House being complicit in escalating a war in Nicaragua because we are selling Canadian Arsenals to the private sector? That is one question I would like to have answered by Conservative Members. I do know that there are some progressive Members in the Conservative Party who are concerned about President Reagan's push to fund the anti-Sandanista contras in Nicaragua with $100 million for arms and military equipment and who are concerned about the possibility of another Vietnam in Central America. Yet here we have a Canadian Conservative Government selling Canadian Arsenals Limited to a private firm that has sold ammunition to the rebels in Nicaragua. I think that is a very important moral question that Conservative Members of Parliament had better answer before we allow this Bill to become law.
I also mentioned that CAL has been very profitable in the last few years. It has made millions of dollars. Its projected sales and profits for the next few years will be about 20 per cent per year. I ask again, why sell a company that is so profitable? Why sell a company that does 90 per cent of its business with the Canadian Government? Why privatize a company of that sort, Mr. Speaker? It is one of Canada's most successful Canadian Crown corporations. I thought it was good business to keep things that are doing well. I thought the private enterprise philosophy said that if things are going well and you are making a profit, you keep it and reinvest the profits, but divest something that is not doing too well. So I ask why sell it?


Mr. Della Noce:: Free enterprise.


Lorne Edmund Nystrom: The Hon. Member from Montreal says: it is free enterprise. But free enterprise for whom, Mr. Speaker? Is it free enterprise for war merchants?

Free enterprise for whom?
As I said before, 90 per cent of its market is guaranteed by the Department of National Defence. Why sell? Its sales are expected to double. It is Canada's third most profitable company, so why sell it unless you want to enhance the profits of some members of a private company that contributed to the Conservative Party? I see the Member from Camrose or Battle River. He is so excited that he is jumping to his feet. He is embarrassed by the sale of Canadian Arsenals. I will not go on too long because I know he wants to participate. He, being a red Tory, is embarrassed-


Some Hon. Members:: Oh, oh!

March 11, 1986
Canadian Arsenals Limited


Lorne Edmund Nystrom: -by this kind of blatant privatization to thicken the pocketbooks of contributors of the Conservative Party in the City of Montreal. I know that the successor to Jack Horner in this House must be repulsed by that very idea.


Mr. Robinson:: Stand up and be counted, Arnold.


Lorne Edmund Nystrom: If the Member did not have a Prime Minister who would keep a tight reign on him he would be up in this House making a very eloquent plea that we should not be going ahead with this deal, in the tradition of John Diefenbaker who would never have done this kind of thing. John Diefenbaker would never have sold Canadian Arsenals to a company selling ammunition to Nicaragua and the rebels, escalating a war in a far-away land. I know that a red Tory like the Member from Central Alberta is very unhappy about this type of deal. I wish he would use his seniority and his muscle to teach the Prime Minister a few facts of Canadian life and tell him of some of the important things surrounding the history of our country and what it has stood for over the years.
I appeal to Members of the Conservative Party to not let the country become a merchant of death or a merchant of war. If this company is privatized and sold to SNC in the Province of Quebec, as the President of the Treasury Board said, the company will then pursue additional markets, diversify its products and sell internationally. But what is this company going to sell? Ammunition and guns. It is not selling food products or machinery and technology to the Third World countries to help them become self sufficient. The company is selling guns, just like President Reagan in the United States who is trying to sell guns to the rebels in Nicaragua. Thank goodness that members of the Congress and members of the Senate in the United States are saying no to Ronald Reagan.


An Hon. Member:: That is dirty.


Lorne Edmund Nystrom: A Member of the Conservative Party says that is dirty. Of course, it is dirty work that Ronald Reagan is trying to do in Nicaragua. I agree. But the American Congress and the Senate will not let Ronald Reagan get away with it. Let us not do by the back door some of the President's dirty work in Canada by selling this Crown corporation to the private sector that will produce arms for Central America. It is a question of morality. It is something we should not be doing as a country.
It is also a question of good economic sense. Why sell a very profitable Crown corporation to the private sector? Why sell to the private sector a corporation which is doing very well? Please get up and respond to that. If something works well, the Conservative Party wants to get rid of it and load more and more debt on the shoulders of the people of Canada. If something is not going very well, they do not seem to have any response whatsoever. This is the same Conservative Party that puts tax after tax after tax on the farmers in my constituency. The same Conservative Party that in the Budget of a week or so ago got rid of the investment tax credit for farmers. That means a tax increase of $50 million a year for Saskatchewan
farmer, and some $150 million a year for all farmers, including those in Ontario who produce tobacco. If you increase the tax load of farmers by 50 per cent you are putting a lot of them out of business. At the same time they will line the pockets of their wealthy friends in Quebec, Ontario and elsewhere by selling them a very successful Canadian Crown corporation with a guaranteed 20 per cent return per year, and increased sales each and every year. It makes no sense whatsoever.
All we hear from this Government is taxes, taxes, taxes. Since the Conservatives took power in September, 1984, the average family in my riding has seen its federal taxes go up by $1,304 a year. The sales tax went up by 1 per cent in the last Budget, 1 per cent in the previous Budget, and 1 per cent in the financial statement of November, 1984. There was a 3 per cent increase in income taxes as well. The ordinary people in this country get taxes, taxes, taxes. The wealthy people of this country get all kinds of tax breaks so they can line their pockets with extra money.
This is very important legislation. I wish Conservative Members of Parliament would get up on their feet and talk about it. It is the kind of legislation that previous Conservative Prime Ministers would never have thought of introducing. There is no way the Right Hon. Member for Yellowhead (Mr. Clark), if he were still Leader of the Conservative Party, would introduce legislation to privatize one of the most successful Crown corporations in this country, particularly when, once it is privatized, it will become a merchant of death exporting weapons around the world. There is no way under the sun that the Right Hon. Member would ever do that. There is no way that John Diefenbaker would have done that.
What we have now is a new Republican Party. Sort of the Republican Party North. What Ronald Reagan says in Washington, Brian Mulroney will do in Ottawa. This Bill is testimony to that fact. I know that a lot of Members of the Conservative Party are very upset about it. That is why we see a nosedive in the polls like we have never seen before for any Government in the history of Canada. Never before have we seen a party fall, over about eight or nine months, from 60 per cent to 36 per cent. It is a free fall.

It is a free fall, Mr. Speaker.

We have never seen that in the history of Canada, federally or provincially. We have never, never seen a party fall so quickly from public favour. With this kind of legislation that free fall is probably only half finished. Come the next election campaign there will be very few Members of the conservative Party left when Canadians mark their ballots.


The Acting Speaker (Mr. Charest):: Questions and comments?
March 11, 1986



Questions and comments. The Hon. Member for Lac-Saint-Jean (Mr. Cote).


Mr. Cote (Lac-Saint-Jean):: Mr. Speaker, about the question asked by Hon. Member for Yorkton-Melville (Mr. Nystrom): Why sell Canadian Arsenals ... Why in his brilliant speech that lasted nearly twenty minutes, did we get all this rhetoric about the sale of Canadian Arsenals? For twenty minutes he trotted out all kinds of frightening, ridiculous and idiotic scenarios, something at which the Socialists are experts. Why, after 40 years, sell a company the Canadian Government no longer needs?
Forty years ago, in 1945, the situation was different. Munitions for defence had to be purchased on the market. Now, 40 years later, the situation has changed.
The Canadian Government is role is to administer the affairs of Canadians and not to operate commercial enterprises. We are not a capitalist institution but a Government institution that administers the business of this country.
The Hon. Member said earlier that the present Government of Ontario also consists of both Socialists and Liberals, who recently sold the Inter Urban Transport Company, also a profitable enterprise, to Lavalin.
However, ten years ago in Toronto they had a problem. The city of Toronto needed interurban transportation equipment. In ten years they developed a technology and built up profitable enterprise that today can be used not just by the city of Toronto but by all of Canada and perhaps all of North America.
Now that is what sensible Governments try to do, while the Socialists, supported by the Liberals, continue to spout their rhetoric and try to interfere, whenever a Government makes a sensible decision. Yes, it is a sensible decision to sell Canadian Arsenals to the private sector because it will help to diversify and create more companies. The raison d'etre of any enterprise should be, first of all, to make a profit, and to make a profit, one must increase sales, produce more, diversify and be competitive.
That is what private enterprise will do with Canadian Arsenals Limited. It will certainly not use it to produce food.
Mr. Speaker, I am amazed anyone would have Canadians believe that the company that purchased Canadian Arsenals Limited will peddle munitions and arms, emphasizing the situation in Nicaragua and elsewhere.
Mr. Speaker, I ask the Hon. Member for Yorkton-Melville why he rose in the House to play the demagogue on such an important Bill, unless he is doing it for the sale of publicity. All he can think of at the present time is the opinion polls. I wonder if he has any other valid reasons, and whether these
Canadian Arsenals Limited
include the interests of middle-income Canadians or, as he keeps saying: "Ordinary Canadians, ordinary Canadians".
Mr. Speaker, for the Conservative Party there is only one kind of Canadian, the real Canadians. As I said the other day, the "extraordinary Canadians" are on the other side of the House. They are the socialists. There are not many of them, and there are very few Canadians in this country who listen to what they have to say.


Lorne Edmund Nystrom: Mr. Speaker, the Hon. Member from Quebec asked me a question: Why sell the company-


An Hon. Member:: Why this demagocic approach to the sale?


Lorne Edmund Nystrom: -why sell the company to the private sector, Mr. Speaker?
First of all, the company has been quite profitable and made a lot of money in this country, and that is why I want to keep it for the people of Canada and for the Government of Canada. That is one good reason for us to keep the company.
Second, Mr. Speaker, the Conservative Party is now in the process of changing a Conservative tradition and a Canadian tradition. Up until now, Mr. Speaker, the Conservative Party and the Government of Canada under any Prime Minister- Pearson, Trudeau, Diefenbaker or Clark-have followed the same policy and, traditionally, making munitions has never been geared to profits. It is a very important principle and the present Government is about to change it. Until now we have decided to keep the industry in the public sector because it happens to be a sector where profits are not required, Mr. Speaker, and it has been a Progressive Conservative Party's tradition.
Third, Mr. Speaker, is the significance of public enterprise. The Hon. Member said we are socialists, that we want everything to be state-controlled, and so forth. Well, Mr. Speaker, let us not forget that the Progressive Conservative Party has always been a staunch defender of public enterprise. I vividly recall the policy of John Diefenbaker, and before him came Sir John Macdonald. The Progressive Conservative Party has always been a strong advocate of public enterprise, a time-honoured legagy, Mr. Speaker.
It was the Progressive Conservative Party that set up Radio-Canada, the CBC, not the Liberal Party. It was also the Progressive Conservative Party that established the Canadian Wheat Board, which is another major public enterprise in this country. We owe it to the Progressive Conservative Party. It was also the Progressive Conservative Party that created the Canadian National Railways, Mr. Speaker, not the Liberal Party.

March 11, 1986
Canadian Arsenals Limited
The great Conservative tradition concerning public enterprise exists as well at the provincial level. Two Alberta Conservative Members sit in front of me, and they know that Mr. Lougheed nationalized a number of companies in their province. I remember very well the case of PWA, Mr. Lougheed's airline. He nationalized it, along with many other Alberta companies. The Conservative tradition in Alberta is to have a lot of state-controlled enterprises. Perhaps Mr. Lougheed is a Red Tory, but still it is a major Conservative tradition.
It was the same thing under Mr. Davis in Ontario. It was Mr. Davis and his Progressive Conservative Party who nationalized Suncor, a major oil company. I would suggest that the neophyte Conservative Member from Quebec has no understanding at all of his Party's tradition and roots. The Party of the Prime Minister (Mr. Mulroney) is not at all the same as Mr. Diefenbaker's Party, Mr. Speaker. This Party has changed its views and policies, it is not the same political Party. As I said in English, we now have the Republican Party of the North. It is a Party like Mr. Reagan's Republican Party, or a Conservative Party like Mrs. Tatcher's Conservative Party in England. It is not the same political Party.
That explains the current drastic drop in the popularity of the Progressive Conservative Party throughout Canada. It is the Party of corporate power, the Party of wealthy people, not the Party of ordinary Canadian men and women.


The Acting Speaker (Mr. Charest):: The Hon. Member for Lac-Saint-Jean (Mr. Cote) on a very short supplementary.


Clément M. Côté: Yes, very short. Mr. Speaker, you do not have to be a genius to realize that, when the situation calls for it because the private sector is unable to provide the services required by the Canadian public, the state must take over. Naturally, we were completely in agreement when the Canadian Government created the Canadian National Railways, Air Canada, the CBC or the Canadian Wheat Board, which you mentioned, and when the CBC established in our own region of Saguenay-Lac-Saint-Jean the first French-speaking radio station outside major centres. But the situation has changed. In the small region that we represent, there are now nine radio stations. Since the private sector can replace public corporations and do the job better and more economically, a responsible Government like the Conservative Government must accept to transfer to the private sector not only the lame ducks among the Crown corporations, but also the profitable ones to make them even more profitable and beneficial for Canadians and for the Government, because a corporation which is sold when it is on the brink of bankruptcy will not be profitable for anyone, but if it increases the number of jobs it offers and its revenue, it will benefit all Canadians, and not only extraordinary Canadians.


The Acting Speaker (Mr. Charest):: Very, very quickly.


Lorne Edmund Nystrom: Yes, Mr. Speaker. The Hon. Member says that the Conservative Party established the CBC, the Canadian Wheat Board, Air Canada and so on because it was important at the time to create such corporations-


Clément M. Côté: It was the Government.


Lorne Edmund Nystrom: Yes, the Government established these corporations. However, Mr. Speaker, I think that the same is true for Canadian Arsenals Limited. It is also an important corporation as it deals in defence production, such as guns and ammunition. This is very important and it is important to keep this here in Canada. We traditionally have in this country a policy-

We have a tradition in this country when it comes to production of arms and the sale of arms that we have is done by a public corporation. We do not export arms to other countries around the world. It is a long-standing Conservative tradition, a long-standing tradition of our Party and the Liberal Party. It is a standing tradition that was talked about many, many times by former Conservative Prime Ministers. Yet we have a Government today that wants to change that and become more and more like Ronald Reagan and the Republican Party by privatizing this very important munitions company; privatize it and sell it to a company that has already sold arms to the rebels in Nicaragua. Do we want to become that kind of a merchant of war? I say no. I say the Conservative Party tradition has not stood for that. If the Member from Yellow-head was still leader of the Party he would not be doing this. Now we have a head of the Conservative Party that does not have these long-standing Conservative traditions and a real commitment to this country, like we had with John Diefen-baker and Joe Clark and so many other Conservative leaders.


The Acting Speaker (Mr. Charest):: Order, order. Period of time for questions and comments has expired. The Hon. Member from Crowfoot on a point of order?


Mr. Malone:: Mr. Speaker, I hesitated to interrupt the Hon. Member on what is obviously his maiden speech. Surely he has been around here long enough to know that the use of first names of Members of Parliament and leaders of parties is against parliamentary tradition. He has repeatedly done so. Any speech that tries to focus on what is a historical tradition when he cannot follow them ought to be a speech that is not listened to.


The Acting Speaker (Mr. Charest):: Resuming debate.
[ Translation]
Debate. The Hon. Member for Montreal-Sainte-Marie (Mr. Malepart) has the floor.


Mr. Jean-Claude Malepart (Montreal-Sainte-Marie):: Mr. Speaker, I am pleased to take part in this debate. As has been the case for most of the bills it has introduced so far, this Bill is an opportunity for the Government to hide facts and distort the truth. As most everybody must be aware by now, the purpose of Bill C-87 is to authorize the divestiture of Canadian Arsenals Ltd. This Crown corporation was set up in 1945. At the present time, it is providing 750 jobs at its Le Gardeur de Repentigny plant, in the Montreal area, and 50 jobs at its
March 11, 1986

Saint-Augustin plant, near Quebec City. Unfortunately, as usual, the two elected Members representing these areas are keeping quiet, and both are of the Progressive Conservative Party persuasion.
Why, as members of the Liberal Party, do we oppose this Bill?
It is not so much because we are altogether against the Government selling Crown corporations, but because we feel it is doing it the wrong way. First of all, this is a profitable operation. Why is the Government so eager to sell right now this profitable operation? Also, there has been no consultations between the Government and the employees. That is the second mistake the Government is making while trying to sell this corporation. Finally, a study of this corporation was carried out by Mr. Andersen. Unfortunately, the Government refuses to make public both the study and Mr. Andersen's report. Why is the Government refusing to make them public? What is it trying to hide? Also this matter is whose responsibility? That of the Minister of Supply and Services (Mr. Mclnnes). And everybody is aware that the Minister of Supply and Services was involved in the census-connected patronage and jiggery-pokery. How could the House trust that Minister when all Hon. Members were deceived by him; yet, this individual would like us to take his word for it without seeing the report?
Mr. Speaker, I suggest that no Canadian who is listening to us now could understand it if, as Members of the Official Opposition, we accepted this deal without seeing the report, while taking the word of this Minister who has misled the Canadian public before.
The company is not going bankrupt, as I indicated, and it has a $200 million backlog of orders. Why proceed in secret with that deal? As we know, this is not the first deal made since September 4 by this truth-hiding Tory Government. We experienced that in Montreal in the Gulf-Ultramar case, and we will refer to that later this afternoon. With respect to issues in east-end Montreal, we had lies and lies and lies. We could also refer to matters such as I indicated earlier concerning the survey. We could mention the Pratt & Whitney issue which Ministers came to announce, while withholding the truth concerning job creation outside of Montreal. We saw that in the Hyundai plant location, another lie to Quebecers. They hid the truth, all the time knowing the company headquarters would be located in Ontario and parts would be manufactured outside. But they let the people believe that everything would be located in Quebec.
Mr. Speaker, our Tory Members are naive. They are not accomplices, they are naive people. They had themselves manipulated by the Ministers and people in the Prime Minister's Office. Let them pass the Bill, if they have no conscience, but they would like us in Opposition to blindly accept that deal
Canadian Arsenals Limited
without having seen Mr. Andersen's report. In a conversation which my colleague who is critic for the Department for Supply and Services had, he was told by the Minister: "If you want to see his report, come to my office, I will show it to you." Why do it in secret? Why act that way? When one has nothing to hide, one opens up the books. When one is accused, one opens up the books still wider. Why does the Government ... I would like a Tory Member in this House to tell me why his Government will not let out Mr. Andersen's report. Why will the Tory government, the Minister of Supply and Services not make that report available to Conservative Members?
Mr. Speaker, that deal does not involve a company manufacturing candy, or chocolate bars, or foodstuff. That company manufactures ammunition. This in my view calls for a very close scrutiny. What may happen to an ammunition company tht is sold to an individual or to a company, to a corporation? With all the conflicts raging throughout the world, as we know, those people have just one mandate and it is to make profits. If there are opportunities to sell arms and ammunition to foreign countries, those people will only see profits to be made. When the company was a Crown corporation, the government was using it to meet its own needs.
Mr. Speaker, Canada is not a warring nation. In Canada we speak of peace. Who will trust us if, when we speak of peace and extend our hand, we hide a knife behind our back? Who can trust a country, a Prime Minister acting in such a way? One of the reasons why I question that deal is that the Minister of Supply and Services, as we know now, will not disclose that famous report.
Once again, I want to ask the Conservative Members of this House: Why can't they see this report?
Mr. Speaker, you will recall that in the Saguenay-Lac-Saint-Jean area, there was a controversy about the F-18 tests and the shooring range, which clearly shows that the people of Quebec and the people of Canada are against war and violence. In this case, the Government's attitude to the sale of a Crown corporation, a major corporation involved in the manufacture of munitions, is about the same as if it were selling a chocolate factory.
Mr. Speaker, several Conservative Members protested earlier when the previous speaker, the Hon. Member from the New Democratic Party, mentioned the matter of contributing to the Tory campaign fund.
Mr. Speaker, this afternoon I will mention another case, namely what happened to Gulf in Montreal East in connection with the campaign fund, and the financing of certain companies and certain decisions that have been made since September 4.
Mr. Speaker, again I want to ask the Conservative Members
in this House: Why sell off this company so quickly? It is a
profitable enterprise. It is a company that manufactures muni-

March 11, 1986
Canadian Arsenals Limited
tions. What guarantee do we have that this company will not sell munitions and arms to foreign countries that are presently engaged in armed conflict? What guarantee do we have that this company will strictly meet the needs of the Canadian Government? If we do have that guarantee, why sell the company, since it is a profitable concern? Is there any Conservative Member who can tell me why the Minister refuses to publish the report by Mr. Andersen who made a study of this enteeprise? Can any Conservative Member tell me whether this company has no more orders or is in difficulty and therefore needs the private sector? Why didn't the Government consider a joint venture, in order to monitor the company to a certain extent, considering the specific nature of this enterprise?
We saw what happened when the sale of de Havilland was negotiated. This time, however, we have a company that manufactures munitions, and that is a very important point.
I realize that Conservative Members, as great capitalists and defenders of the rich, are delighted to see one of their gang getting richer. But it should not be done at the expense of the people of Canada, and I repeat, this is a company that sells munitions, which is a very serious matter.
As I said before, the people in the Saguenay-Lac-Saint-Jean area are protesting. I have yet to hear a single Conservative Member in this House say he is against this transaction, I have yet to hear a single Conservative Member truly speak on behalf of his constituents.
Mr. Speaker, we have seen what the Government did in the Budget. We have seen what this Government has done about its spending, and the devious way in which it managed to get rid of its Minister of State (Youth) (Mrs. Champagne), by cutting the funds she was allocated to help our youth. We have seen, I repeat, the behaviour of the Minister of Supply and Services (Mr. Mclnnes) who is responsible for this transaction. The Minister wrote to all Liberal members guaranteeing there would be a single representative for the Census... He failed to keep his word, and today, you expect me to trust this person who deceived me personally, in writing, who deceived the entire Canadian population, and who is now saying: You can't see the Andersen Report, but trust me! Come to my office, I will show you . . . That is rank hypocrisy! It is rank hypocrisy to treat Canadians this way. It is about time that certain Conservative Members wake up and see the light. I repeat, I, for one, and we in the Liberal Party are not systematically opposed to the privatization of sale of Crown corporations, but we simply do not accept the way it is being done. We would like-and I suspect all Conservative Members wish they could have the same figures-to have all the information the Minister had to make a decision.
It was the same thing in the case of de Havilland and Pratt & Whitney when he made the announcement. How do you explain that the Hon. Member for Longueuil (Mr. Leblanc) had full access to the files while the other Members from the
same region did not? Why this smokescreened and dishonest approach? Why are they always trying to hoodwink people?
When you look at poll results in Quebec, there has to be a reason why the gap between Conservatives and New Democrats has narrowed down to one percentage point. Stop wondering, you are responsible for your own downfall, what with all those mistakes and scandals. Much the same thing can be said about the letter which a Conservative Member from the Quebec City area sent to all local contractors to tell them their names would not appear on a list unless they had contributed to the 1984 election campaign chest and, second, played ball and joined the Brian Mulroney club. What a shame! It is a disgrace, and after the many recent incidents you expect the Official Opposition-and the Member for Lac-Saint-Jean (Mr. Cote) will surely ask the question-to adopt this Bill sight unseen, as it were? Well, I do not owe anything to anybody. I am here to represent constituents, not to defend the Government. Considering the double-dealing that has been going on we simply cannot accept the refusal to table the Andersen report. If the Minister is so sure he is right, why not table the report? If he choses not to, it is because the report does not quite reflect his own views.
It was the same thing in the case of Gulf, when the Minister referred to the O'Farrell report. He lost face and the report was hidden, shelved or burned just so he would not hear anymore about it for a whole month.


The Acting Speaker (Mr. Charest):: The Hon. Member for Champlain (Mr. Champagne) on a point of order.


Mr. Champagne:: Although his speech seems to be well on its way, Mr. Speaker, I should like the Hon. Member to deal at least with the Bill which is now before the House and not with the Gulf Corporation issue. That is over and done with. The Hon. Member should refrain from considerations which are beside the point and stick to the issue of the Canadian Arsenals Limited divestiture.


Jean-Claude Malépart: It's a fact that we are concerned about this Bill, Mr. Speaker, but because of the way the Government has dealt with other issues, I am compelled to say: I can no longer trust the Government. Just like the Canadian people as a whole are saying "niet", I can no longer trust this Conservative Government and I will have to double check and ask twice as many questions.
And why do we have to do this today? It is because of its previous decisions concerning the Gulf issue. A number of Progressive Conservative members were royally conned by the Government on this issue, just like in the Domtar and Montreal East affairs. Why? Is there a single Hon. Member... Perhaps the Hon. Member for Champlain (Mr. Champagne) could enlighten me: Why were there no consultations of the employees by the Government? Just consultations. It was not
March 11, 1986

necessary to make the decision for the corporations, but the Government could at least have consulted them. Why did it choose to ignore them completely? It seems to me that the lives of 750 workers in Montreal East and 50 workers in the Quebec City area are important. It seems to me also that it would have been quite natural for someone from the Minister's office-not necessarily the Minister himself-to meet them and say: The current situation is such and such, and you should not be concerned about losing your job. But the Government has provided no job security whatsoever. Surely the Hon. Member for Lac-Saint-Jean and the Hon. Member for Champlain both agree with me that the employees should have been consulted. Before the Government decides to sell any such corporation, Hon. Members and employees alike would appreciate being consulted. I suggest that when the Government wants to privatize a corporation such as the Canadian Arsenals Limited, the de Havilland or Canadair corporations, it is of paramount importance that it be done in consultation with the employees. I am not suggesting that it should deal only with the union representatives. If it wanted to, it could easily organize a meeting of the 750 employees inside the plant to consult them and advise them of the Government's decision.
I think that the Government should rely on the intelligence of these workers. They are qualified and competent people. Perhaps they could have advised the Minister on the best way to protect these 750 jobs in the Montreal and Quebec City areas. I suggest that would be important. Let us consider this decision as a whole, Mr. Speaker, Government Members and Opposition Members will certainly agree with me that in the case of some decisions that had been made previously, no sooner had the banks failed that the Prime Minister said: We must find money to compensate the rich people with over $60,000 in investments. Two or three people made that decision, most Hon. Members being unaware of what was going on. But when the time comes to help ordinary citizens like these employees, it's a different ball game, Mr. Speaker, it is the dictatorial aspect that is surfacing.
Mr. Speaker, if we want to know what has happened since September 4, we have only to look at the adjournment motion which the Government proposed last Friday. It was certainly the first time in history that a Government defeated its own motion, Mr. Speaker. They vote with their eyes closed. However, I must congratulate the Hon. Member for La Prairie (Mr. Jourdenais) for having kept his head. He did not act like a sheep or like a follower by saying to his leader: Yes, I am rising against our motion. He said: One moment, I shall not act like a buffoon; if you want to do so, go ahead, but I shall remain seated; I do not want to be part of this. Since September 4, there has been mistake after mistake, Mr. Speaker. Do you know the latest joke in all Canadians homes? The people are betting on which Minister or Member will be the next one to make a mistake. It has replaced Loto Quebec and Loto Canada. We shall have to start a lottery. It would work better
Canadian Arsenals Limited
than the hockey lottery, Mr. Speaker. Do you think that we are going to accept to support this-


An Hon. Member:: Blindly!


Jean-Claude Malépart: Yes, blindly. Mr. Speaker, I would like at least one Member opposite to have the courage to say: I am familiar with the Andersen Report and we do not want to table it because it tells the truth and we want to do the opposite of what it recommends. Or else, he could say: Yes, I know about the Andersen Report; it tells the truth and we are going to publish it, and I am promising right now that I shall put pressure on the Minister to publish it. If the Conservative Members accept such a deal without being familiar with all the studies which have been made, they will remain blind followers for quite awhile. We saw a lot of them last Friday, but thank God, a few saved your honour.


An Hon. Member:: Not many.


Jean-Claude Malépart: The same thing will happen again. Is there one Conservative Member who will rise and say that the 750 employees of Le Gardeur should have been consulted? The Government made a mistake in not consulting the workers. It is essential that the Government go and see these people.
Mr. Speaker, I began my speech at 12:40 p.m. and I see that it is nearly 1 o'clock. I am anxious to see a Conservative Member rise after the Oral Question Period and say: I am going to see the workers and we are going to have the Andersen Report. If not, I am not asking him to vote against the motion, but he should simply stay away from the House when we vote.


The Acting Speaker (Mr. Charest):: Order, please. I am sorry but the time alloted to the Hon. Member has now expired. Questions or comments. The Hon. Member for Lac-Saint-Jean (Mr. Cote).


Clément M. Côté: Mr. Speaker, I have a question for the Hon. Member for Montreal-Sainte-Marie (Mr. Male-part). Why did you, the Member for Montreal-Sainte-Marie, remain on your seat for 10 years? Why did you not open your mouth in this House during those 10 years? Did you have velcro on your lips? You like to say that some Members on this side have velcro lips. Is it because the Hon. Member for Montreal-Sainte-Marie had "Krazy Glue" on his seat? Or is it because the Hon. Member was wearing new suits? Or is it that the Hon. Member had new dentures? During those 10 years, there must have been issues discussed in this House and proposals moved by the Liberal Party. If not-


Mr. Blais:: Two-hundred billion.


Clément M. Côté: If there were none, how is it we
are now faced with a debt exceeding $200 billion? There

March 11, 1986
Canadian Arsenals Limited
certainly were some. The Hon. Member for Montreal-Sainte-Marie certainly has seen some of them. Therefore, I ask the Hon. Member for Montreal-Sainte-Marie, how it ever was that during those ten years, no reference was ever made to single-parent families? How come you never fought for farm producers, Mr. Member for Montreal-Sainte-Marie? How can you explain, Mr. Member for Montreal-Sainte-Marie, when your Government, your party voted billions for the F-18, and you referred earlier to the F-18's in the Saguenay-Lac-Saint-Jean area, how can you explain that having voted those billions for F-18's and we had to foot the bill-all Canadians, not only ordinary people, but all true Canadians-the price had more than doubled? How is it you never spoke on that? Why then when there were votes for investments in Canadian Forces Base Bagotville, in the area you referred to earlier, you never rose? How come there was that question of a Firing range, as you mentioned earlier, during a period of ten years? And he never did anything. You never had the courage to rise, you and your Party, to speak up, to make a stand!
Mr. Member from Montreal-Sainte-Marie, on September 4, 1984, Canadians had enough. If you have a chance, please read Le Devoir of March 11, about who actually owns the Liberal Party of Canada. Mr. Speaker, earlier he had the courage, if I may use that word, to announce that after the oral question period, he would rise to speak on political party fundings. But that kind of courage, he owes it to Conservative Members. Who but a Conservative Member has first referred to party funding? Who else but our Prime Minister spoke of healthier political practices? That is a bunch of questions we are asking you, Mr. Member from Montreal-Sainte-Marie. What did you do concerning .. .Before this afternoon, except for putting your feet in your mouth, as you do on occasion, what have you done about political party funding during those ten years you had that velcro over your mouth and that "krazy glue" on your seat?


Jean-Claude Malépart: Mr. Speaker, with respect to the Hon. Member for Lac-Saint-Jean (Mr. Cote) and those who applauded, the Hon. Members for Duvernay (Mr. Della Noce), for LaSalle (Mr. Lanthier), for Bellechasse (Mr. Blais), six months ago, we accepted that those people did lack experience. But they and the Hon. Member for Lac-Saint-Jean have just demonstrated that now, after close to two years, what they are showing is incompetence and ignorance.
Mr. Speaker, I would first tell the Hon. Member for Lac-Saint-Jean that I have not been sitting in this House for the past ten years. As far as political party funding is concerned, I was in Quebec City, this is where the quest for democracy in funding started. Do you therefore see the depth of the ineptitude you are now showing? Do you see, Mr. Speaker, how stupid one can be? In the beginning, during the first six months, we knew he was looking for the toilets, for the doors to
the clothes closets, but now he has shown just how incompetent and ignorant he is.
As for the time I sat here before being a Member in Quebec City, I can tell the Hon. Member for Lac-Saint-Jean or the less than important Member for LaSalle that I was re-elected, because my constituents trusted me. But on their side, any ninny could have been elected. He will learn this, Mr. Speaker, that when there is an overwhelming majority, the winners are those who are re-elected.
Now, I will tell the Hon. Member for Lac-Saint-Jean what the Quebec Liberal team has done. My colleagues, namely Claude Tessier and Jean-Guy Dubois demonstrated on the Hill with the factory owners and the workers of the footwear industry to obtain quotas from the Government. However, not a single Tory Member was brave enough to do likewise.
Mr. Speaker, concerning the Crow rate policy, it is thanks to the Quebec Liberal Members that the policy was amended.
I realize why the Member for Lac-Saint-Jean is not familiar with the Tory tradition, because in Quebec so many former Liberals or Creditistes turned Tories at the last election because they had the chance of being elected. Now the Hon. Member for Lac-Saint-Jean is one of those who has often changed his political subvervience.
Mr. Speaker, the Hon. Member has just clearly shown that and I think that I have answered many of his questions but he himself has not answered the basic question about this Bill. Is he ready to vote without having seen the report which is now in the Minister's hands? And why is he ready to vote without being aware of all the consequences?


Clément M. Côté: Mr. Speaker, on behalf of all Canadians, I would like to thank the Hon. Member for Montreal-Sainte-Marie (Mr. Malepart). For a year and a half now, Canadians have been wondering about the Hon. Member, but he just gave us the answer. He said it all. He talked of intelligence, knowledge and abilities. He talked like he used to in 1976, in Quebec City, where it all began. He just gave us proof that he left his intelligence, knowledge and abilities in Quebec City ... he did not bring them with him to Ottawa. As a matter of fact, since he came to Ottawa, Mr. Speaker, he never mentioned the financing of political parties, and neither has his Party.
He said he talked about it in Quebec! That Bill was introduced and passed by the Parti Quebecois. So ...
On behalf of Canadians, I thank the Hon. Member for Montreal-Sainte-Marie. Now we know that you left your intelligence and abilities in Quebec City, and that for 10 years you have been collecting your pay doing nothing but sitting in your chair, something conservative Members will not do and would refuse to accept.


The Acting Speaker (Mr. Charest):: Order! The Hon. Member for Saint-Jacques on a point of order.
March 11, 1986


Mr. Guilbault (Saint-Jacques):: Mr. Speaker, if I am not
mistaken, the subject now under discussion is privatization and I will read the title-


Mr. Gauthier:: -because you did not know that.


Jacques Guilbault: -is Canadian Arsenals Limited.
A while ago the Hon. Member for Champlain rose on a point of order because my colleague had mentioned a few other initiatives of this Government. He has now launched an abusive tirade against my colleague from Montreal-Saint-Marie (Mr. Malepart) and I do not see how it relates to Canadian Arsenals Limited.
I would merely ask you, Mr. Speaker, as much as possible to try and ask the Hon. Member who is speaking to be relevant.


The Acting Speaker (Mr. Charest):: Order. The Hon. Member for Champlain (Mr. Champagne) on the same point of order.


Andrée  Champagne: Mr. Speaker, I am in total agreement with my colleague for Saint-Jacques (Mr. Guilbault) on his point of order.
However, my colleague for Lac-Saint-Jean was responding to the allegations made by the Hon. Member for Montreal-Sainte-Marie (Mr. Malepart). Had we not strayed from the legislation, as the Hon. Member for Saint-Jacques has just commented on, most probably and certainly we would not have heard from the Hon. Member for Lac-Saint-Jean, such disgraceful comments as made by the Hon. Member for Mont-real-Sainte-Marie made.
Hence since a point of order was raised, if the Chair lets the Hon. Member for Montreal-Sainte-Marie carry on with his examples, then in my view the Hon. Member from the other side of the House should be allowed to answer along the same lines as the Hon. Member who had the floor.


The Acting Speaker (Mr. Charest):: Order, please. I recognize the Hon. Member for Lac-Saint-Jean, also on a point of order.


Clément M. Côté: Mr. Speaker, it is improper to refer to the presence or absence of Members and I do not intend to do so. However, when a Member is away from the House and cannot hear the debates, if he was unable to see them on television when he was in the lobby, I think that it is very wrong for him to come back to the House and try to bring other Members to order.
Mr. Speaker, if the Hon. Member for Saint-Jacques (Mr. Guilbault) indeed heard-


The Acting Speaker (Mr. Charest):: Order, please! Order,
please! For the last time, I hope, a point of order from the
Hon. Member for Montreal-Sainte-Marie (Mr. Malepart).
Canadian Arsenals Limited


Jean-Claude Malépart: Mr. Speaker, with your permission, it is only fair that I defend myself since I was attacked two or three times.
As concerns the law on the financing of political parties, I would like to point out that it was the Liberal Party which proposed amendments to this law in 1976.


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


BUSINESS OF THE HOUSE
Ramon John Hnatyshyn: Mr. Speaker, I rise on a point of order to simply advise the House with respect to Business of the House. I had contacted the opposition House Leaders at the outset of today's proceedings and I now confirm to the House that tomorrow will be an allotted Opposition day and we will continue on Thursday with Government business.


Jean-Robert Gauthier: Mr. Speaker, on that same point of order, I thank the Minister for that advice and notice. I would like to ask him if on Thursday we will be proceeding with the same legislation that is before us today, or if he had in mind anything specific for Thursday.


Ramon John Hnatyshyn: Mr. Speaker, it would be our intention to continue with the legislation in the order in which I had indicated last Thursday. We will continue to monitor the situation and hopefully make progress.




[Stage Direction]
The House resumed consideration of the motion of Mr. Mclnnes that Bill C-87, an Act to authorize the divestiture of Canadian Arsenals Limited and to amend other Acts in consequence thereof, be read the second time and referred to a legislative committee.
Mr. Jim Manly (Cowichan-Malahat-The Islands):: Mr. Speaker, I welcome the opportunity to make a few comments on Bill C-87, an Act to provide for the divestiture of Canadian Arsenals Limited. We are talking about a Crown corporation which is 100 per cent owned by the federal Government. It was formed in 1945 to ease the transition from a wartime to a peacetime economy. Ninety per cent of its sales are to the

March 11, 1986
Canadian Arsenals Limited
federal Government through the Department of National Defence. Canadian Arsenals Limited makes medium and large-calibre ammunition. It had profits of some $11.3 million last year. Yet this company is being offered for sale for some $92.2 million.
We in this Party are asking what reason the Government is giving for this sale. We are not able to perceive any reason except an ideological reason. There is a blind adherence to an ideology that all Crown corporations are somehow wrong. If there is one thing that Conservatives dislike more than Crown corporations that lose money, it is Crown corporations that make money. Here we are talking about a Crown corporation that makes money. Last year the Financial Post ranked Canadian Arsenals Limited as number three in Canada in terms of its five-year profit growth. It is a profitable company with which we are dealing; yet the company is going to be sold by the present Government for some $92.2 million.
I would like to point out to Hon. Members that the sale of Canadian Arsenals Limited is not the only example of the Government being led blindly down the privatization path by its adherence to an ideology that has no real connection with the reality of the Canadian economy. The privatization program is not one that is helping the different regions of Canada. I am sure this is true for the region affected by the sale of Canadian Arsenals Limited. Certainly it is true on Vancouver Island. There is the proposed privatization both of the Esquimalt drydock and of Teleglobe which has facilities on Vancouver Island.
I would like to illustrate what I mean by dealing with some of the factors involved in the privatization of the drydock at Esquimalt. That facility has a replacement value of some $56.3 million, and since 1978 the federal Government has invested some $30 million in the Esquimalt drydock to make sure that it is an up-to-date, modern facility able to handle virtually any ship on the Pacific coast. It is in fact one of the largest drydocks on the entire Pacific coast, both in Canada and the United States. It is an important facility and an important part of the greater Victoria economy.
The Government's plan for privatizing the drydock has three steps. First the Government will attempt to sell it to a Canadian company. If that is not successful, it will put it out for international tender, and if that is not successful it will then be sold for scrap. What studies have been made about the importance of this facility to the over-all economy of Victoria?
I would like to remind Hon. Members opposite that according to the unemployment statistics that came down last week, Victoria has the highest unemployment rate of any major metropolitan centre in Canada. In fact, the unemployment rate is 16.1 per cent. For Vancouver Island as a whole the unemployment rate is 16.2 per cent.
I would like to know what studies have been done with regard to the impact privatization will have on unemployment. Since the Conservative Government was elected in September 1984, the City of greater Victoria has lost 10,000 jobs. Yet the Hon. Member for Victoria (Mr. McKinnon) and the Hon. Member for Esquimalt-Saanich (Mr. Crofton) are Conservative Members. Their ridings have lost 10,000 jobs and we are concerned about that. I expect privatization will make the situation even worse.
We have not seen any attempt by the Government to make the drydock in Esquimalt pay its way. The current rates for work being done in the drydock are badly out of date. They were set in 1971 and they have not been raised since that time. It is no wonder the drydock is losing money. We can presume that any buyer that attempts to operate that drydock will raise the rates.
We can look at the philosophy of privatization as it affects Teleglobe which has a facility at Lake Cowichan in my riding, a facility that employs 19 people. This is another corporation that is making money, just like Canadian Arsenals Limited. The employees of Teleglobe have the same basic concerns as the employees of Canadian Arsenals. They are concerned about job security and their pension rights. They have no guarantee as to what will happen to them. They have not been involved in any kind of meaningful discussion one way or another. The same kind of situation is being faced by the employees of Teleglobe as is being faced by the employees of Canadian Arsenals Limited.
It seems that the policy of privatization being followed by the Conservative Government is almost exactly the same as the policy of privatization that was followed by the Bennett Government in British Columbia, a policy that has resulted in disastrously high unemployment rates and a disastrous economy in general. It is a policy that is tied in with the attempt to starve our economy to health in the belief that if we cut back enough somehow the economy will start blooming and blossoming. That has not worked. There is no recognition of the Government's basic responsibility for the health of the economy. There is no recognition that the Government can be on the side of the people to help provide better lives for them. Instead, there is just a blind adherence to an ideology of privatizing any Crown corporations that exist.
Canadian Arsenals Limited as a Crown corporation selling to the Department of National Defence saves taxpayers money. It helps keep our deficit down. I would like to ask government Members what studies they have done indicating that privatization of Canadian Arsenals Limited will in any way serve the public interest. Is it going to serve the public interest by reducing the cost to the Government for munitions? Is it going to serve the public interest by creating job guarantees? How is the privatization of Canadian Arsenals Limited going to serve the public interest in any way? It will serve the private interest of SNC, the purchaser.
It is interesting to note that SNC gave $1,000 to the campaign fund of the Minister of Regional Industrial Expansion (Mr. Stevens) and $10,000 to the 1984 Tory campaign fund. It is very solidly in support of the conservative Party, and the Conservative Party likes to look after its friends in situations such as this. However, I suggest that the Conservative Party and the Conservative Government have a responsibility
March 11, 1986

to Canadian people. We have not seen anything in connection with Canadian Arsenals Limited which suggests that they have even conducted basic studies as to the value to Canadians of privatization. The SNC group operates world-wide, but mainly in Canada and the developing world. Since it is the group which owns the company that provides small calibre ammunition to the federal Government, we are concerned that it will have a monopoly on munitions sales in Canada. We are also concerned about what will happen in terms of munition sales in other parts of the world, particularly in the Third World.
It is interesting to note that in the press release of December 2, 1985, the Minister said that the Government was confident that once the company was privatized, CAL would pursue additional markets and product diversification. Also he indicated that through the sale the Canadian ammunition industry should become internationally competitive, making possible increased sales to our NATO partners. We are concerned that it will not only make possible increased sales to NATO members but indeed, increased sales to Third World countries which should not be putting money into munitions; for that matter, neither should NATO countries. Certainly we are concerned about the idea of a Canadian company becoming involved in the merchandizing of death through armaments.
Also it is interesting that IVI, the only manufacturer of small calibre ammunition in Canada, a subsidiary of SNC, has been found to be supplying arms to the Contras, the rebels in Nicaragua, which follows the whole philosophy of Ronald Reagan trying to destabilize the situation. We have received appeals from all countries in Central America and in South America that there must be a withdrawal of interest by other countries so that the people of Central America can solve their own problems. Here we have a Canadian company selling arms to the Contras, making a handsome profit and trying to destabilize the entire situation. We do not want to see this continual merchandizing of death. We are concerned that it is something that will happen as a result of the privatization of CAL and the sale to the SNC group.
Our Party has some basic concerns about the rights of employees and how they will be affected by the sale. It is interesting that in the same press release of December 2 the Minister indicated that the interests of CAL employees were of paramount importance to the Government in conducting the sale. In particular, SNC must as a condition of the sale, sign a reciprocal transfer agreement to ensure the portability of the pension rights of CAL employees. In addition SNC has agreed to observe the terms of the collective agreement recently ratified by CAL employees.
The interests of CAL employees have not been taken into account in any kind of adequate way by this agreement. They were not consulted prior to the sale being drawn up. They have been unable to look at the agreements to see whether the promises in the press release were present in the agreement. There is no satisfactory agreement with the employees on their pension rights; for example, the question of indexation for
Canadian Arsenals Limited
which they, along with other federal public servants, have paid to guarantee indexation. There has been no agreement on the indexing provision. No information has been made available to the employees as to whether the early retirement provision of their pension plan will still be in effect after the sale. The present plan allows for early retirement at age 55 years, but they do not know what is happening to it. They do not know what is happening to their job security. As I said earlier, there was no consultation prior to the sale.
Since there is a lack of participation on the part of Conservative Members in this debate, we have come to the conclusion that there is no reason for the sale except ideology. It is not in the public interest to proceed with the sale. It is very definitely not in the interests of those employees who are presently working for Canadian Arsenals Limited.
The whole question of private profit should be taken away from the manufacture of munitions rather than putting it back in. Basically that is what the Government is doing by privatizing Canadian Arsenals Limited and by making it available to the SNC group so that it can make a handsome profit. If we are to live in a world where there are conditions of national security which have to be met, let us make sure that we meet those conditions on the best terms possible for all concerned rather than make national security some kind of financial bonanza for one more corporation.
Reference was made this morning and this afternoon to the warning of the late President Eisenhower about the military industrial complex. By privatizing Canadian Arsenals Limited we are encouraging the development of a military industrial complex in Canada. I do not think it is something that should be encouraged. When we look at the whole question of privatization, perhaps there should be a simple test which the Government could apply; that is, that unless there is adequate reason for privatizing it should be left in the public domain. The reverse of that is also true. There should not simply be nationalization for purely ideological reasons. There should be sound reasons on both sides of the debate. If industries are to be nationalized, brought into the public domain, it should be done for very concrete reasons. By the same token, if Crown corporations are to be privatized, it should be done for some very basic, empirical, pragmatic reasons. We do not see those empirical, pragmatic reasons in this particular situation. Instead we see a blind adherence to an ideology that Crown corporations have little or no place in the fabric of Canadian life.
From my own vantage point as a Member from Vancouver Island, I say that privatization will have an adverse impact upon the economy of that region. I am concerned that it will also have an adverse effect on the people of Quebec, the province in which Canadian Arsenals Limited operates. There seems to be a policy on the part of the Government of raising taxes, taking more and more money from individual taxpayers. This means that moneys are taken out of local communities, such as those on Vancouver Island, to be used for whatever purpose by the Government here in Ottawa. However we are not receiving programs which feed money back into the local

March 11, 1986
Canadian Arsenals Limited
economies. In fact, quite the reverse. We are drawing money away from the local economy which will have a strangling effect on it. We have seen nothing in the way of job creation. We have seen the loss of some $16,000 jobs on Vancouver Island since September 1984 when the Government was first elected.
Along with this policy of raising taxes and doing nothing about job creation in areas where it is most needed we have a policy of privatization, of selling off our resources and not letting the Canadian people or the House of Commons know what is involved, of keeping employees in the dark about conditions under which their jobs are being sold out from under them. Privatization is being kept very private. It should be a matter of public information.
Finally there should be tighter controls on the production of munitions in Canada. We do not want to see this simply proliferate in a way that will allow all kinds of private corporations to get involved, not only in producing munitions and selling them at a profit to the Canadian Government, but producing munitions and selling them to Third World countries. If we have legitimate reasons for national security, then it makes sense for us to keep control of the production of our own munitions. It should be done only for purposes of national security, not for purposes of profit.
On this basis, I would like to oppose this Bill. I urge all Members to think very carefully before they rise in support of it.


Mr. Foster:: Mr. Speaker, I was interested in the speech made by the Hon. Member for Cowichan-Malahat-The Islands (Mr. Manly). He covered many of the points of concern to members in all caucuses.
With regard to Bill C-87, does the Hon. Member believe that keeping the Arthur Andersen report private is really in the best interests of a reformed House of Commons where Members are making decisions in the light of all information? Does the Hon. Member really believe that the Government is doing itself a service and doing Parliament a service by keeping that report private? It deals with profitability and the long-term plans of the corporation. This Crown corporation is reported to have some $200 million in backlog of orders and it is reported to be increasing its sales of armaments and munitions during the next five years. What is the profitability from the Government's point of view? Will the corporation taxes it will pay in the private sector equal the profits which now directly accrue to the Crown?
It seems to me the report on other matters relating to how the new company will be handling its labour relations would be very valuable, as would details of whether employees will be able to transfer their credits and the rights they now have under the Public Service Act, for example pensions and so on.
I think the other point which the Hon. Member made, also
very important, is how well the Government will be able to
control the sales of the company. Will we suddenly be sending
armaments and munitions into world hot spots, such as the Middle East or other dictatorial dominated nations? I would like to hear the Hon. Member's comments in this regard.


The Acting Speaker (Mr. Charest):: I am sorry to have to interrupt the Hon. Member for Cowichan-Malahat-The Islands (Mr. Manly). When we resume Orders of the Day, the Hon. Member will be able to continue.
It being 1.35 p.m., I do now leave the Chair until two o'clock this afternoon.
At 1.35 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.

Roland de Corneille: Mr. Speaker, the youth of Canada are being brutally neglected by the Government. Programs such as Katimavik gave hope to many idealistic youth, unemployed youth, or youth in transition, who worked for $1 a day and served this country, its municipalities and people, in this award-winning program. Katimavik has now been brutally cast aside, bringing sorrow and disappointment to thousands.
Senator Jacques Hebert, in the face of overwhelming evidence based on the Senate task force report on youth, knows that too many young people have no work and no hope of work. He has seen the Tories cut funding for education, job training, and youth employment. The Tory Budget completely neglects youth and has rendered its own Ministry of Youth powerless. Senator Hebert is desperate. He has gone on a hunger strike. How sad it is that the Government should cause this man to feel the need to take such action on behalf of the despairing youth of Canada.


CANCELLATION OF KATIMAVIK PROGRAM
Mr. Howard McCurdy (Windsor-Walkerville):: Mr. Speaker, it should come as no surprise that it was Erik "the hatchet man" Nielsen who eliminated Katimavik. In killing Katimavik the Government failed thousands of young Canadians and hundreds of communities. The Government has failed to see the tangible benefits of assuring all youth a future. The
March 11, 1986

Government has also failed to understand the very real plight of a lost generation of youth. The Government has failed to grasp the intense vision which compels Senator Hebert to dramatize his concern. The Government has failed to provide an effective advocate or program for the youth. Instead, it has produced a Tory recruitment agency.
Mr. Nielsen said this morning that the study team reports do not constitute Government policy. The recommendations contained in the 21 volumes will be referred to standing committees for study. If that, in fact, was his intention, why did Mr. Nielsen kill Katimavik?


Mr. Speaker:: Order, please. I must remind Members that reference to Members by name is out of order.


THE CENSUS
Mr. Andre Plourde (Kamouraska-Riviere-du-Loup):: Mr. Speaker, I wish to express amazement at a remark made in the House by the Official Opposition with respect to census commissioners. Yesterday, Mr. Speaker, the Liberals accused us of political patronage in the selection of census commissioners. Opposition Members have a short memory. Since 1963 the Liberals have had the last word on the appointment of census commissioners, over 20 years to build up their system and dictate their political preferences. I wonder whether they are so lily-white. Before any kind of examination, the official responsible for selecting the commissioners in my riding made it quite clear to our representative that appointments would be made among those who had experience in the 1981 census. For the opposition, one has to be a Liberal to make the grade. Mr. Speaker, I have to say that my commissioners in Kamouraska-Riviere-du-Loup are just as intelligent if not more, than Liberal applicants.


ROYAL CANADIAN LEGION
Joseph Lloyd Reid: Mr. Speaker, this year marks the Diamond Jubilee of the Royal Canadian Legion. It was on a rather bleak day in 1926 when Sir Percy Lake, President of the Legion, told the delegates gathered in Vancouver that the future for those who served in the Great War was very difficult indeed. Their first proposal for pensions was practically ignored. The membership was then 11,000. Today this organization, founded on the principles of remembrance, just rights, loyalty and comradeship, has over 1,800 branches. Membership now totals 600,000 people, roughly the size of Winnipeg.
I am certain that Members of this House would like to pay tribute to this great organization as it celebrates 60 years of service to Canada and Canadians, service which has continued in times of peace and war.


CANADA POST CORPORATION
Mr. Alfonso Gagliano (Saint-Leonard-Anjou):: Thanks to the Conservative Government, Mr. Speaker, we have two classes of citizens: those who have home mail delivery and those who have not. In the riding of Saint-Leonard-Anjou some families do not have home delivery, yet others, practically next door neighbours, do. Until yesterday we Canadians were proud of the fact that this Government service was universal, but the situation has changed since the advent of the Conservatives. Why should somebody who buys a new house not be entitled to home mail delivery, whereas somebody else who bought a house two years ago does have that right? It is unfair, Mr. Speaker.


VISIBLE MINORITIES
Mr. Ernie Epp (Thunder Bay-Nipigon):: Mr. Speaker, the Multiculturalism Minister's failure to follow the Prime Minister's (Mr. Mulroney) lead on Japanese-Canadian redress, weekly becomes more outrageous and tragic. The Minister does not recognize that the Canadian Government in 19421943 uprooted and dispossessed people who had not been charged with any seditious activity and whose only offence was their Japanese origin. The Minister does not appreciate that there has never been proper compensation for these property losses.
The Minister refuses to negotiate a proper redress and speaks recklessly of the millions that he thinks it might cost. Mr. Speaker, the Minister's skirmishing against the Japanese-Canadian community is repugnant to Canadians. Other Canadians, such as those of Ukrainian origin who came to Canada before 1914 from Austro-Hungary, suffered unjustified internment during wartime.
But these communities recognize that dispossession of the Japanese-Canadian community is a unique precedent the Parliament of Canada must cancel.
Only a properly negotiated redress can do that.


Mr. Speaker:: Order Sixty seconds.

March 11, 1986


TASK FORCE ON PROGRAM REVIEW
Mr. Dave Nickerson (Western Arctic):: Mr. Speaker, the tabling this morning of the reports of the Task Force on Program Review chaired by the Deputy Prime Minister (Mr. Nielsen) is of a significance which cannot be overstated.
It is part of the process of reforming the public administration of Canada which got out of control over years of mismanagement and because of the practice of setting up a plethora of programs to deal with every real or imagined problem.
The options outlined in the report will provide the Cabinet with sensible alternatives so the Government can in future be conducted in an efficient, humane, and cost-effective manner which Canada deserves. The thanks of this House and the nation are due to the many Canadians who served so ably on the Task Force on Program Review.


AVIATION INDUSTRY
Mr. Nic Leblanc (Longueuil):: As you know, Mr. Speaker, the Longueuil riding has a major industrial vocation and is at the heart of Canada's aerospace industry.
Among the corporations in my riding which are directly involved in this industry, there is the Pratt & Whitney corporation which employs over 7,500 workers. The Pratt & Whitney corporation manufactures airplane motors and exports 85 per cent of its production. It contributes very significantly to the economic development of our country.
Our Government recognized recently the importance of the aerospace industry in Canada and the impact it has on our economy by creating 1,000 new jobs in the fine riding of Longueuil.
Mr. Speaker, it is thanks to the kind co-operation which I obtained from the Minister of Regional Industrial Expansion (Mr. Stevens) that this project has become a reality.


PUBLIC SERVICE
Mr. Dave Dingwall (Cape Breton-East Richmond):: Mr. Speaker, it is incredible to think that, in a nation based on the solid foundation of equality, the federal Government chooses to discriminate against segments of its own work force. I am referring to the system of pay zones designed more than 20 years ago to determine the salaries of selected public servants. The idea was to pay public servants salaries reflective of the regions in which they worked.
There are over 14,000 members of the Union of National Defence Employees who are subject to this form of economic discrimination. There are tens of thousands of other employees in Public Works, Agriculture, Transport, Environment, and other Departments, in similar circumstances. If the Government of Canada can establish universal pay scales for the RCMP, the Armed Forces, Canada Post and, yes, Members of Parliament, no matter what region we may represent, then these dedicated Public Servants deserve no less.


HUMAN RIGHTS
Mr. Alan Redway (York East):: Today I want to bring to the attention of the House another case of children trapped behind the Iron Curtain. Ziya Ismailoff, who works in my riding, and his wife, came to Canada from Bulgaria in 1984 to escape religious and political persecution. Their sons, nine and 11 years of age respectively, are being held as "deposits" to ensure the parents return. Bulgarian law prohibits removing children from the country.
Recently one of the Ismailoff children sent his parents a paper airplane with a message, "I want to fly to Canada. I want to fly to you".
I call upon the Secretary of State for External Affairs (Mr. Clark) to do everything in his power to see that the Ismailoff family, and the many others like them, are reunited here in Canada.


ETHNIC AFFAIRS
Mr. Sergio Marchi (York West):: Mr. Speaker, representatives of Canada's Baltic community have expressed grave concern over the scheduled March 12 airing of the one-hour program Highway to Heaven on CTV. Rightfully so. The episode depicts a fictitious family named "Baltic" as neo-Nazis terrorizing a concentration camp survivor.
This depiction on national television of a neo-Nazi, who carries as his surname the name of an ethnic group, can only bring lasting damage to the promotion of racial tolerance and sensititivy. It is absolutely contrary to the multicultural fabric of Canadian society to allow such indirect bias, wherein an entire group of citizens is, by implication, maligned.
I therefore join with other concerned citizens and call upon the CTV at the very least either to delete or dub over this offensive reference. The possible defamation of 100,000 Canadians who take pride in their Baltic heritage can and must be averted.
March 11, 1986


TERRORISM
Mr. Bill Attewell (Don Valley East):: Mr. Speaker, many weeks ago the North American Students' Network Canada arranged for today to be an anti-terrorist lobby day here in Ottawa. The group of approximately 200 students are led by Naomi Noyek, chairperson of the Anti-Terrorism Day, and Dan Ronen.
These students are to be commended. Their honest concern and actions typify the worries and frustrations of most Canadians that Canada not become a haven for terrorists or other suicidal killers who are determined to bring their conflicts from their own country to our soil.
Several incidents during the past year have made it shockingly clear that we in Canada are not immune or insulated from these savage, brutal activities. Accordingly, all Canadians will be supportive and proud of yesterday's announcement by the solicitor General (Mr. Beatty) that a permanent special emergency response team will be formed to counter terrorism in Canada.
*
* *


AGRICULTURE
Mr. George Henderson (Egmont):: Mr. Speaker, the Canadian Rural Transition Program announced in last month's Budget is a bleak indication of the government's farming philosophy.
The Government wants to help farmers get off the land. It is issuing the golden handshake to the small independent farmers by offering them job counselling and retraining. I will not deny that Canadian farmers are facing a serious financial crisis, but training them to be computer programmers or pipe fitters does not solve the problem. The country needs an innovative strategy designed to foster growth and prosperity on the family farm. Family farms are the backbone of many rural communities. Those people have spent their lives working the land to produce cheap food for Canadians. What are they being offered in return? Encouragement to close the farm gate!
Farmers do not want job counselling and retraining. They need a bold, aggressive approach to keep them on the farm. The Government must meet this current crisis head on. It must not take the easy way out and turn its back on Canadian farmers.


GOVERNMENT EXPENDITURES
Ms. Sheila Copps (Hamilton East):: We have just received the findings of the Nielsen task force report, Mr. Speaker, and for the first time in their lives, Hon. Members were unable to receive bilingual copies.


An Hon. Member:: Shame!


Sheila Maureen Copps: Having sent a request, I have been provided with a copy in English only.
Mr. Speaker, I sit in the House as a Canadian Member, and not as a French or English Member. And I suggest all Canadians have the right to know what is going to happen with Mr. Nielsen's cuts. I want to find out in both French and English what is going to happen with the cuts to the Canada Employment Centers.
As an elected representative, Mr. Speaker, I think I have the right to read, both in French and in English, the findings of the task force which will result in programs being cut, especially those for young Canadians.


PRICE OF GASOLINE
Maurice Brydon Foster: Mr. Speaker, during the last two months crude oil prices have fallen from $25 U.S. a barrel to $12 U.S. a barrel. The Minister of Energy, Mines and Resources (Miss Carney) said that prices would come down during this period. She was right. Prices have come down at the pumps, but only in the United States, not in Canada. The price of gasoline in Sault Ste. Marie, Michigan, at 31 cents a litre, is 20 cents a litre lower than the price in Sault Ste. Marie, Canada, at 51 cents.
Constituents of mine filled their gas tanks last weekend in Sault Ste Marie, Michigan, and saved $18 on a single tank of gas. today the Minister of Energy, Mines and Resources says that she is losing patience with the oil firms about gasoline prices. Canadians are totally frustrated and fed up with the oil companies, the Minister, and high oil prices.
If the Minister will simply tell Petro-Canada to charge fair prices for gasoline, Canadians will have them from all oil companies within 24 hours. Canadians want the Government to act on oil prices now.

March 11, 1986
Oral Questions



ORAL QUESTION PERIOD


Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, my question is directed to the Prime Minister. There are 700,000 young Canadians without a job and rapidly losing hope. The Prime Minister's Government has been destroying youth training programs and has recently gutted the Youth Ministry. In light of the recent vivid demonstration of commitment on the part of Senator Hebert and others, will the Prime Minister give us some cause for hope that he will be announcing some new programs for the young people of the country? Will he give them some indication that they have a future in Canada?
[DOT] (MIS)


Right Hon. Brian Mulroney (Prime Minister):: Mr. Speaker, I have already indicated to the House that, indeed, there would be further programs announced on an ongoing basis, particularly in regard to the role of the Minister of State for Youth. As the financing from the previous year winds down, at the end of the fiscal year, or at about that time, I have already indicated that there would be new indications put forward.
I should indicate that under the terms of the legislation the Minister of State-any Minister of State-is technically and legally a Minister of State to assist a given Minister. So the role of the Minister of State for Youth is not only to put forward various programs but to be the effective advocate on behalf of youth, and this Minister has done this throughout the entire Government. For example, in one Department, the Department of Employment and Immigration, $700 million has been set aside for youth, and 37 per cent of the entire Budget is devoted to youth. Some 219,000 young people will benefit from programs in the portfolio-


Mr. Speaker:: Order. The answer is too long.


YOUTH PROGRAMS-GOVERNMENT POSITION
John Napier Turner: Mr. Speaker, the Prime Minister is trying to protect his Minister's reputation. Senator Hebert, however, has made a brave gesture.
Could the Prime Minister, in turn, give him some indication that he may reinstate a number of programs or set up new programs for youth, in order to meet commitments he made to the youth of this country during the election campaign?


Martin Brian Mulroney: Mr. Speaker, 1 have already indicated to the House that for us, youth
unemployment is one of the major problems we have in this
country. It goes way beyond the partisan considerations of any political group. These are our children, the children of all Members of this House and all Canadians. That is why we worked so hard that the unemployment rate among young people between the ages of 15 to 24, which on September 4, 1984, was 18.4 per cent, is now 16.4 per cent, a drop of 2 per cent in 16 months. Fifty thousand new jobs were created for young people in 18 months. It is not enough, but we are going to work through other programs and new initiatives in order to bring about a substantial reduction in unemployment among the youth of Canada.


SENATE COMMITTEE REPORT
John Napier Turner: Mr. Speaker, a mere recital of statistics does not help our young people who are despairing of finding work. Indeed, if the Prime Minister wants to deal purely in statistics, the last numbers show that unemployment for young people between the ages of 15 and 24 went up in the last month. The Minister of Finance recognizes that.
I have from the other place a unanimous report of the Senate, with 26 recommendations which can go, I believe, a long way to restoring hope for our young people. Will the Prime Minister give us a firm indication that he intends to bring in some new programs which will meet a very vital problem? Unless he does, we risk losing half a generation.


Martin Brian Mulroney: Mr. Speaker, I agree with the sentiments expressed by my right hon. friend. Indeed, it is imperative and incumbent upon all Governments to deal in a straightforward and effective way with the problem of youth unemployment which became a tremendous tragedy between 1980 and 1984, with a net loss to the economy of 285,000 jobs for young people between the ages of 15 and 24 years. Youth unemployment between 1980 and 1984 escalated from 12.9 per cent to 18.4 per cent. That is where the tragedy is involved.
However, in response to my right hon. friend, 1 can assure him that, yes, I will be delighted to look at that program, and any other suggestion that will create jobs for-


Mr. Speaker:: Order, please. I must interrupt. It is becoming rather long.


CREDIBILITY OF MINISTER OF STATE (YOUTH)
Hon. Jean Lapierre (Shefford):: Mr. Speaker, my question is directed to the Minister of State (Youth). I would like to ask the Minister whether in all sincerity she can, at this very moment, claim to speak for youth this Government, or if, after her attempt to manipulate and organize the youth of this
March 11, 1986

country, she thinks she has no credibility among Canadian youth to speak on their behalf. Where is her legitimacy?


Martin Brian Mulroney: The Minister is not only a spokesperson but a credible and very, very effective Minister in this Government and for Canadians.


PRIME MINISTER'S POSITION
Jean-C. Lapierre: 1 understand. The Prime Minister was not about to let the Minister put her foot in it again, which is why he answered for the Minister, but I would ask the Prime Minister: Could he, in all honesty and integrity, claim before this House that the Minister speaks on behalf of young Canadians, when she has tried to take advantage of them, manipulate them and certainly organize them for partisan, unworthy and unacceptable purposes?


Martin Brian Mulroney: That is a very biased and partisan remark which is unworthy of the Hon. member who himself has been a Minister. He knows perfectly well that the Minister has worked very hard for the youth of this country, and with results. The New Democrats are snickering. Job creation makes the New Democrats snicker. The fact is that the youth unemployment rate dropped two per cent since the Minister was appointed. And that is the result of hard work.


TASK FORCE ON PROGRAM REVIEW
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, my question is for the Deputy Prime Minister. The Minister knows today, since he commented in the House, that his Task Force on Program Review of the Government has now reported. The alleged task of the task force was to make recommendations on improving efficiency in government programs and agencies. If that were all that were involved everyone would be delighted. Will the Deputy Prime Minister acknowledge that the large majority of cuts recommended by this task force have nothing to do with efficiency but, instead, consist of cuts affecting services to people in every region of Canada?


Erik Nielsen: Mr. Speaker, 1 will acknowledge no such thing. What the Leader of the New Democratic Party is trying to distort is the fact that what was tabled today were study team reports by mixed private and public sector study teams, headed by a private sector advisory committee upon which three national labour organizations were represented. Those study teams have presented options to the Government as a first step in the orderly process of the decision-making process. What is more, they have been referred to the standing commit-
Oral Questions
tees of the House for a full airing and invitation of broad public discussion.


Some Hon. Members:: Hear, hear!


COMMITTEE REFERRALS
John Edward Broadbent: Mr. Speaker, of course the Deputy Prime Minister did not answer the question.


Some Hon. Members:: Oh, oh!


John Edward Broadbent: I say that with seriousness. I hope he will listen to the second question and answer it.
Considering that, among other things, this task force recommends that the Government abandon farmers, native people, the poorer regions of Canada, and all those dependent upon public housing, will the Deputy Prime Minister acknowledge that in referring this set of packages to the committees the dice are loaded and that what is really being referred to the committees is a Conservative agenda for an uncaring Canada? That is what he is about.


Some Hon. Members:: Hear, hear!


Erik Nielsen: Mr. Speaker, I counted six false representations in the preamble to the Hon. Member's question. The hon. gentleman would like to arouse, for partisan purposes, the fears attached to those false representations. However, the fact remains that these are study team reports produced for the examination of parliamentarians and parliamentary committees. They do not set forth recommendations; they set forth options. The hon. gentleman may have some of his own and I am waiting with bated breath to hear what are his suggestions and those of his party members.


Some Hon. Members:: Hear, hear!


TASK FORCE OPTIONS
John Edward Broadbent: Mr. Speaker, is the Deputy Prime Minister saying that the task force does not recommend a series of cuts and an abolition of a number of programs providing economic and social services that affect farmers, Atlantic Canadians, native people, and women? Is he telling the House that the task force does not make those recommendations? If he is not saying that, will he admit that the second question is right, and that what the Government is proposing is a very uncaring, insensitive Government for the people of Canada?


Erik Nielsen: Mr. Speaker, the gentleman continues to distort. I said clearly this morning, and I am sorry he was absent when I tabled the report-


John Edward Broadbent: I read it with care.
11414

March 11, 1986
Oral Questions


Erik Nielsen: If he read it, he would have noticed that in the introduction to each and every volume of the reports that have been tabled, there is the statement that the reports were setting forth options identified by the study teams, and that those options did not represent Government policy and were not decisions of Government but that all of them were referred to the parliamentary process for review. I repeat that if the hon. gentleman and members of the Official Opposition will take advantage of the opportunity, they will be advancing their options at the committee stage.


FUNDING OF MINISTRY
Sheila Maureen Copps: Mr. Speaker, my question is for the Minister of State for Youth. In her reprofile of spending for youth, the Minister misled the House. In fact the actual spending cuts, projecting for inflation, are not $100 million but $150 million, at a time when youth unemployment is rising. How can the Minister justify her own $1 million budget until April Fool's Day at a time when she has sat silently and allowed programs like Katimavik to be cut?


Andrée  Champagne: Mr. Speaker, our efforts on behalf of the young goes on full time: jobs are created, more and more young people avail themselves of training programs. Our work goes on as usual.


CANADA EMPLOYMENT CENTRES
Sheila Maureen Copps: Mr. Speaker, my supplementary question is for the Prime Minister. If the Minister of State for Youth has been so effective in lobbying on behalf of youth, why is it that the Nielsen task force is suggesting that within two years there could be a potential closure of every Canada Employment Centre in the country?


Erik Nielsen: Mr. Speaker, as I repeated to the Leader of the New Democratic Party in answer to his three questions, what we are dealing with are reports of study teams which have presented options for all Members of the House to consider in the committee process.
I might take this opportunity to point out the very positive accomplishments already achieved by the Government as a result of the task force work. One example is the consolidation of real property services. Under the previous administration, there were literally billions of dollars-


Sheila Maureen Copps: We are talking about jobs for young people.


Mr. Speaker:: Order, please.


GOVERNMENT EXPENDITURES
Michael Morris Cassidy: Mr. Speaker, my question is directed to the Deputy Prime Minister. In view of the fact that the report submitted by his task force estimates at some $36 billion, the amount of tax expenditures, that those expenditures have increased much faster than general Government expenditures, and that the Government knows neither the costs nor the benefits of those tax expenditures, will the Deputy Prime Minister explain why his task force has done nothing to reduce those billions of dollars of tax expenditures, particularly those intended for big corporations? Instead, they chose to aim the greater part of their cuts at services to the average Canadians.


Michael Holcombe Wilson: Mr. Speaker, 1 am really quite surprised at what the Hon. Member has just said. Obviously he did not read the Budget. Obviously he did not read the May Budget. Obviously he has not been paying attention in the House.
We have eliminated the largest number of tax expenditures of any Government in recent history, and I can enumerate these. They include the scientific research tax credit, the limited partnerships, as was recognized by his own Party's finance critic, the bump of which the O&Y Company took advantage, the use of trusts, the income splitting, the financing of yachts and the financing of motels. I have a long list of these, and I wish the Hon. Member would read the documents before he wastes the time of the House with questions like that.


Some Hon. Members:: Hear, hear!


CORPORATE INCOME TAX
Michael Morris Cassidy: Mr. Speaker, my supplementary question is directed to the Deputy Prime Minister. If he is talking about options, will he explain why options were not provided with respect to the cutting of major tax expenditures which benefit corporations? Can he justify the task force which says that it does not suggest significant changes relative to the four corporate income tax expenditure items covered by the overview? Why are those options not being made available to the committees of the House and to the people of Canada?


Michael Holcombe Wilson: Mr. Speaker, two major corporate tax expenditures were eliminated in the last Budget-the investment tax credit, 7 per cent and 10 per cent, plus the inventory valuation allowance. Those are two examples of the continuing and ongoing effort which the Government has made to weed out of the tax system all tax expenditures we can that are no longer effective. I have
March 11, 1986

referred the Hon. Member and his colleagues to the booklet we put out last year which enumerates all these tax expenditures, and I am still waiting for their recommendations on what ones we should be removing.


John Edward Broadbent: You got your letter before the Budget.


Mr. Speaker:: The Hon. Member for Eglinton-Lawrence.


John Edward Broadbent: Just don't lie in the House of Commons.


Some Hon. Members:: Oh, oh!


Mr. Speaker:: Order, please!


John Edward Broadbent: 1 will stand up and say it if you want.


Mr. Speaker:: Order, please. 1 heard that. I must ask the Hon. Member for Oshawa to withdraw that, please. 1 simply ask him to withdraw that.


John Edward Broadbent: Mr. Speaker, I withdraw my comment about the untruth of what he just said.


Mr. Speaker:: Thank you.


EDUCATION
Roland de Corneille: Mr. Speaker, my question is directed to the Prime Minister. Ontario university presidents are criticizing the Government and have united to say that the underfunding which is taking place will seriously undermine our post-secondary educational institutions. The president of the University of Waterloo, Douglas Wright, is participating in a strike to demonstrate this concern. Could the Prime Minister explain how he can allow the deficit to be fought on the backs of our post-secondary educational institutions which guarantee the future of our country and of our youth?


Hon. Jake Epp (Minister of National Health and Welfare):: Mr. Speaker, if the Hon Member takes a look at the Budget and at the legislation now before the House, he will see that the growth in Established Programs Financing, both for health and for post-secondary education, is ahead of inflation. There is also protection in the Bill for inflation plus. If he looks realistically at the legacy left in terms of the amount of money which is now paid from the public coffers for debt financing, I think he will have to admit that it is a fair offer in view of the circumstances which we all face.


Roland de Corneille: Let him tell that to the presidents of the
universities and to the youth.
Oral Questions FEDERAL SHARE OF FUNDING


Roland de Corneille: Mr. Speaker, would the Prime Minister kindly answer my question? Is he really prepared to ignore the fact that universities are sinking into oblivion as buildings and equipment fall apart, as students are jammed into classrooms which cannot hold them, and as professors and other staff are demoralized? Or will he hear the desperate cry of our young people?


Mr. Clark (Yellowhead):: What is David Peterson doing?


Arthur Jacob (Jake) Epp: Mr. Speaker, I refer the hon. gentleman to the A1 Johnson report, for instance, in terms of what the federal Government was paying relative to what the provinces were paying for post-secondary education. I have already indicated what the Minister of Finance has done in terms of the Budget and Established Programs Financing. Why does the Hon. Member not go to his Liberal counterparts in Queen's Park and say: "You pay your share too"?


Some Hon. Members:: Hear, hear!


FISHERIES
John R. Rodriguez: Mr. Speaker, in the absence of the Minister of Fisheries and Oceans, I sould like to direct my question to the Prime Minister who represented Atlantic Canada at one time. The Nielsen task force recommends drastically cutting services to Atlantic Canada, in particular the Fisheries, all in the name of efficiency, at the same time as it is raising costs. Will the Prime Minister agree that these recommendations have little to do with efficiency and everything to do with Tory ideology?


Erik Nielsen: Mr. Speaker, the hon. gentleman must be hard of hearing. I have said several times today that these are correctly identified as study team reports which consist of analyses and options put forward by study teams for consideration in the decision-making process. The reports have been referred to the standing committees where those options, as well as those of the hon. gentleman and others, will be fully exposed to the public light of day for the first time in the history of Government in our country. I would hope that he would ensure that his input is there.


GOVERNMENT POSITION
John R. Rodriguez: Mr. Speaker, what the House and, more important, the people of Atlantic Canada want to know is where the Government stands in respect of these particular recommendations. Will the Government go on record now and distance itself from this drastic and Draconian measure?

March 11, 1986
Oral Questions


Erik Nielsen: Mr. Speaker, I do not know to which measure the Hon. Member is referring.


John R. Rodriguez: All of them.


Erik Nielsen: All right, the hon. gentleman says "All of them". Obviously he places no credibility whatsoever in the consultation process.


John R. Rodriguez: All the cuts.


Erik Nielsen: Two hundred people have devoted themselves for over a year to present these options for consideration by parliamentarians-


Lorne Edmund Nystrom: Not the farmers.


John R. Rodriguez: Not the fishermen.


Erik Nielsen: -and he wants to throw them all in the garbage bin. That is his idea of democracy and his idea of the consultation process; it is not ours.


RESEARCH AND DEVELOPMENT
Mr. David Berger (Laurier):: Mr. Speaker, my question is directed to the Minister of Finance. I have received a letter from a women whose son will soon complete his post-doctorate in physical chemistry. She fears that he will have to join his brother and three former classmates in the United States because Canada will not look after our young scientists. Everywhere he applies he receives the same answer-no vacancy due to lack of funds. By inadequately funding research, as the Minister did in the Budget, what is he saying to this mother and to a whole generation of young Canadian scientists?


Michael Holcombe Wilson: Mr. Speaker, I am saying to that mother and the whole generation of young scientists that there is a tremendous future in Canada because of the funding provided in the Budget of a couple of weeks ago, which could amount to a total of $1 billion over the course of the next five years. That is in addition to the research and development measures which we took in the last Budget. The Government is committed to encouraging research and development. The facts are very clear, that that is where we stand.


POSSIBILITY OF BRAIN DRAIN-GOVERNMENT POSITION
David Berger: Mr. Speaker, ACFAS, the Association canadienne-frangaise pour l'avancement des sciences, says the scienctific community has been swindled by the Minister. My question to the Minister is this: What will he do to prevent a brain drain that will drive young Canadians
away from this country, that will drive out research and future jobs?


Michael Holcombe Wilson: Mr. Speaker, the Hon. Member neglects to say that the budget left to the Government showed a distinctive downturn which took place in the current fiscal year. We have restored that downturn. More than that, we have increased the budgets from there in a very innovative way which will bring the research community more closely together with the industrial community, so that the research efforts will be much more co-ordinated as between research laboratories and the market-place. That is what makes effective research and development.


PORT OF CHURCHILL-USE FOR EXPORTING PURPOSES
Mr. Les Benjamin (Regina West):: Mr. Speaker, I have a question for my honourable, honest, and trustworthy friend, the Minister of Transport.


Some Hon. Members:: Hear, hear!


Mr. Blackburn (Brant):: Wait for it.


John Napier Turner: That is the high-water mark.


Leslie Gordon Benjamin: The Minister and his Party, in the Prince Albert statement and subsequently in the federal election campaign, promised and guaranteed to expand and improve the use of the Port of Churchill for grain transportation, and the Deputy Prime Minister is referring all these reports to the standing committees. In order to save the time of the standing committees, will the Minister now repudiate the recommendation of this bunch of boneheads to exclude Churchill from the grain transportation system! Will he repudiate that now, so that the committee does not have to deal with it?


Hon. Don Mazankowski (Minister of Transport):: Mr. Speaker, as the Deputy Prime Minister indicated in his comments this morning, the recommendations which have been presented are simply recommendations and do not represent government policy.


Leslie Gordon Benjamin: Then repudiate it.


Donald Frank Mazankowski: Nor are they decisions of the Government. They provide a basis for discussion.


Leslie Gordon Benjamin: What is there to discuss?


Donald Frank Mazankowski: I would think the Hon. Member should be aware of the 23 projects under the ERDA subagreements that were fulfilled to enhance the Port of Churchill, which was an undertaking by the previous Government. Of course, Mr. March 11, 1986

Speaker, I would not want to preclude the Hon. Member's participation in the standing committee because he may have further advice to offer.


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


Leslie Gordon Benjamin: Of course, Mr. Speaker. We are going to be on this for weeks.


VIA RAIL
Leslie Gordon Benjamin: Mr. Speaker, I am just trying to help the Minister to be a man of his word. In order not to allow the Deputy Prime Minister and the Transport Committee to make a liar out of him, will the Minister now guarantee that there will be no postponements, as recommended, that this item will not be referred to the standing committee, that there will be no postponements on the provision of capital investment for locomotives and transportation equipment for VIA Rail?


Mr. Speaker:: Order, please.


Ramon John Hnatyshyn: Who wrote that question?


Donald Frank Mazankowski: Mr. Speaker, the Hon. Member knows the discussions with respect to the acquisition of new rail passenger cars are ongoing between VIA and the TransConsortium of Bombardier and UTDC. Those discussions are continuing.


ROYAL CANADIAN MOUNTED POLICE
Bill Attewell: Mr. Speaker, my question is for the Solicitor General. During the past year it has become agonizingly clear that diabolical, suicidal terrorists have considered Canada a relatively safe haven. However, all Canadians will welcome the anti-terrorist initiative the Solicitor General announced yesterday. My question, Mr. Speaker, which I am getting to, is since the RCMP already has emergency response teams across Canada, will they be dismantled when the new unit-


Mr. Speaker:: Order, please. Does the Member have a question? I am sorry, I just heard the preamble again.


Bill Attewell: Shall I repeat the question, Mr. Speaker?


Some Hon. Members:: No.


Some Hon. Members:: Oh, oh!


Mr. Speaker:: The Minister, I think, is ready to answer.
Oral Questions


Hon. Perrin Beatty (Solicitor General of Canada):: I think I heard the question, Mr. Speaker. It was whether or not we would be dismantling our emergency response teams. The answer is no.
This new team will differ from conventional emergency response teams because of the degree of training. Conventional emergency response teams are made up of police officers who are assigned other responsibilities and who train one day a month. This new special emergency response team will be in constant training. It will be permanently assembled and it will be ready to be dispatched at the sign of any emergency.


Some Hon. Members:: Hear, hear!


PORNOGRAPHY
Mr. John Nunziata (York South-Weston):: Mr. Speaker, my question is directed to the Minister who is replacing the Minister of Communications. It concerns dial-a-porn. As the Minister knows, the problem of youth as consumers of pornography is a disturbing one, and nowhere is it more evident than in the growing abuse of the 1-900 telephone system for dial-a-porn operations originating from the United States. Why is the Government allowing the Canadian telephone system to be used to import and spread pornography to the young of Canada?


Hon. Frank Oberle (Minister of State for Science and Technology):: Mr. Speaker, I am aware of the Minister's interest in this question. I will take notice of it and he will respond to the House in due course.


Mr. Speaker:: The Hon. Member for Vancouver East.


John V. Nunziata: Mr. Speaker, 1 have a supplementary for the Minister of Justice.


Mr. Speaker:: Order, please. The Hon. Member for Vancouver East.


STATUS OF WOMEN
Ms. Margaret Mitchell (Vancouver East):: My question is for the Prime Minister who promised women equality.
The culture and communications study team, which involved only male consultants from the private sector, has recommended a $9 million cut to the Secretary of State Women's Program which funds rural, native, and immigrant women's programs, as well as helping women's centres, transition houses, and advocacy programs.

March 11, 1986
Oral Questions
Will the Prime Minister assure women, who were not consulted in this process and do not agree with the assumptions of this committee, that there will be no cuts to women's programs that are designed to help women achieve greater equality and protection from violence?


Erik Nielsen: Again, Mr. Speaker, I point out that this is a study team report, the one to which the Hon. Member is referring. It will be going to committee where it will have full input. In the meantime I can assure the Hon. Member that there was the broadest possible consultation, including that with womens' groups, not only by that study team but by others as well.


Mr. Speaker:: A short supplementary, please.


CITIZENSHIP, LABOUR AND IMMIGRATION STUDY TEAM
Margaret Anne Mitchell: Mr. Speaker, will the Prime Minister support the recommendations of the citizenship, labour and immigration task force-another task force-which came up with exactly the opposite conclusions, questioning the credibility of this whole exercise? It stated that any cuts to Secretary of State women's programs would be inappropriate given the Government's commitment to longterm action for women. What kind of a study is this when we have no input by women?


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


Erik Nielsen: Mr. Speaker, if the Hon. Member was here this morning when I tabled this study team report, not a task force report, she would have heard me say that many of the options outlined by one study team were contradictory to options that were identified by another, or even a third. That will be found throughout the work, which only goes to emphasize the independent, autonomous nature of the objective process through which the study teams produced their reports for our consideration.


REPAYMENT OF STUDENT LOAN
Hon. Lloyd Axworthy (Winnipeg-Fort Garry):: Mr. Speaker, in the absence of the Secretary of State I would like to direct my question to the Minister of State for Youth concerning a serious problem faced by many of the people she is supposed to represent.
A constituent of mine, a young woman with a small child, for the last few months has been harassed by a collection agency on behalf of the Secretary of State's Department, for the collection of a student loan that she made, even though she has repeatedly tried to negotiate a long-term payment schedule with the bank and the collection agency.
This is not an isolated case, Mr. Speaker.


Mr. Crosbie:: Order, please.


Mr. Speaker:: Order, please.


Lloyd Axworthy: I would like to ask the question of the Minister of State for Youth.


Mr. Speaker:: Order, please. Order.


Ramon John Hnatyshyn: Is this a policy statement or an individual question?


Mr. Speaker:: Order, please.


Ramon John Hnatyshyn: It is not order.


Mr. Speaker:: Order. Just a question, please.


Lloyd Axworthy: I would like to ask the Minister of State for Youth whether she is aware of these harassment techniques that are now taking place, and will she make representations to her colleague, the Secretary of State, not only to investigate this case but what it appears to be a general pattern of harassment of those who are benefiting from student loans?


Andrée  Champagne: Mr. Speaker, I am not aware of this being a policy in any way. I will take the question as notice and bring it to the attention of the Secretary of State-


An Hon. Member:: We have lost two years.


Mr. Speaker:: Order, please.


Sheila Maureen Copps: It is-


Mr. Speaker:: Order, please. The Hon. Member for Hamilton East and others, and on this side too, today. The House is getting noisy.


Leslie Gordon Benjamin: And it is going to get worse.


Mr. Speaker:: A short supplementary, please.


STUDENT LOAN PROGRAM
Lloyd Axworthy: I have a supplementary question for the Minister of State for Youth. In view of the fact there is an escalating number of defaults and an increasing debt load carried by those who have student loans, will the Minister, on behalf of her constituency, undertake to represent to her cabinet colleagues that there be a major review of the Canada Student Loan Program to determine whether the actions of the banks and collection agencies are really fair-


Mr. Speaker:: Order, please.


Andrée  Champagne: Mr. Speaker, the Canada Student Loan Program is being looked
into very seriously to make things as easy as possible for young
March 11, 1986

people who have to borrow money to continue their studies. During the course of that study, I am sure the Hon. Member's concern will be looked after.


AGRICULTURE
Lorne Edmund Nystrom: Mr. Speaker, my question is for the Minister of Agriculture. Considering the task force recommends cancelling the interest-free cash advance program for prairie farmers, a program brought in by the Diefenbaker Government years ago, will the Minister repudiate the recommendations to cancel cash advance programs that are so important to the prairie farmers? Indeed, it is an assault on prairie farmers.


Hon. John Wise (Minister of Agriculture):: Mr. Speaker, I have been listening to questions and answers on this subject throughout the Question Period. I cannot understand why members of the Opposition are not getting the message from the Deputy Prime Minister.


John Edward Broadbent: We got the message.


John Wise: The message is very clear-


John Edward Broadbent: It is a loaded dice.


John Wise: It is a joint report, private and public, involving provincial input, on a whole variety of programs. I am certain Hon. Members across the way should recognize that these are options, and they should recognize and accept the fact that these are not government policies.


An Hon. Member:: They are slow learners.


Mr. Speaker:: Order, please.


COMMITTEE REFERRALS
Lorne Edmund Nystrom: My supplementary question, Mr. Speaker, is for the Prime Minister. In light of that answer and others, will the Prime Minister now agree not to refer to committee any recommendations from this task force report that are contrary to promises made by the Conservative Party in the 1984 election campaign? Will he agree to that?


John Edward Broadbent: Let's hear that one, Erik.


Mr. Speaker:: Order, please.


Ramon John Hnatyshyn: You guys are absolutely incredible.


Mr. Speaker:: Order, please.


Leslie Gordon Benjamin: Poor Gary Philmon, he is a dead duck.
Oral Questions


Mr. Speaker:: Order, please.


Erik Nielsen: Mr. Speaker, try as they might to distort the facts, they are not going to succeed. What we are dealing with are study team reports which require a little maturity, more than that displayed by the Hon. Member for Nickel Belt, to deal with. What the NDP is saying is: "To heck with the study teams; burn before reading. We don't want any discussion at all."


Michael Holcombe Wilson: No change.


Erik Nielsen: Surely that is not a mature approach to the decision-making process in which we invite them to be involved.


Some Hon. Members:: Hear, hear!


Mr. Speaker:: Order, please.


CORPORATE AFFAIRS
Joseph Lloyd Reid: Mr. Speaker, my question is directed to the Minister of Consumer and Corporate Affairs. He will know from recent press reports that the private sector has put pension funds in jeopardy and pensioners themselves at risk. What action is being taken to secure pension plan funds against unilateral action by the parties concerned, particularly third party claims against pension funds in the event of a bankruptcy?


Hon. Michel Cote (Minister of Consumer and Corporate Affairs and Canada Post):: Mr. Speaker, I thank the Hon. Member for his question. As he probably knows, the Advisory Committee on Revision of the Bankruptcy Act tabled its recommendations earlier this year. Consultation will take place this spring. I can assure him that his point will be a very important part of these discussions as well.


CANCELLATION OF KATIMAVIK PROGRAM
Mr. Keith Penner (Cochrane-Superior):: Mr. Speaker, my question is directed to the Minister of State for Youth. Is she aware that Katimavik, among its many activities, works with senior citizens? For example, there is a project involving the North Centennial Manor in Kapuskasing, Ontario. Does she really think it is right that a worth-while experience of giving and learning for Canada's youth should be eliminated?


Andrée  Champagne: Mr. Speaker, while going across the country this year talking with young people, yes, they said they are prepared to do voluntary

March 11, 1986
Oral Questions
work. They want to work with the older generation. They are prepared to do it, Sir, without it costing the Government up to $20 million a year. That is what they will be doing, Sir.


REQUEST THAT PROGRAM BE REINSTATED
B. Keith Penner: Mr. Speaker, my supplementary is directed to the Prime Minister. Will he agree to reconsider this action very carefully and, having done so, restore Katimavik to its full level of funding so that our youth can continue to benefit from this program, as well as those whom they serve?


Martin Brian Mulroney: Mr. Speaker, the decision to end Katimavik was just one of many painful decisions the Government was forced to make as we struggled to restore fiscal sanity to the country. I have acknowledged that previous Governments had the option to introduce programs like Katimavik. That is a fundamental right of any Government. It is also the right of any subsequent Government, having received a mandate from the people, to implement other programs on behalf of youth. That is what we have done. In the process we brought the youth unemployment rate down from 18.4 per cent on the day we were elected, to 16.4 per cent today. We have not done enough, but we are going the right way and we are going to do an awful lot more.

[ Translation]


AGRICULTURE
Svend Johannes Robinson: Mr. Speaker, I have a question for the Minister of Agriculture. Because of the policies of the Tory Government, one Quebec farmer out of every five is now facing bankruptcy.
Can the Minister of Agriculture assure Quebec farmers that the disastrous recommendations made by the Nielsen Task Force, which will result in an almost complete elimination of farm subsidy programs, will not be accepted by his Government?


John Wise: Mr. Speaker, that is really the same question we have been getting throughout Question Period. Again, these are strictly options, not government policy. Let me just give them a couple of examples. If they read what the task force said with reference to dairy policy, did we accept it or reject it? We rejected it. Indeed, for the first time in a long time, we delivered a dairy policy for this country.


Some Hon. Members:: Hear, hear!


John Wise: That is one example.
[ Translation]


ABSENCE OF FARMERS FROM NIELSEN TASK FORCE
Svend Johannes Robinson: Mr. Speaker, the Minister is ready to reject some recommendations, and I am now asking on behalf of all Quebec farmers, why not reject all those disastrous recommendations, and why did the Task Force not include a single Quebec farmer?


John Wise: Mr. Speaker, they have some difficulty defining the difference between options and recommendations. I am not so sure whether they got the last example or not, and if they did not, let me give them another example. They should look to see the recommendation of the task force regarding feed freight assistance. Did we accept it or did we reject it? We rejected it. Just take the time and trouble to see what policy we are working on at the moment.


SHIPBUILDING
Dave Nickerson: Mr. Speaker, my question is directed to the Minister of Transport whose many virtues have already been extolled by the Hon. Member for Regina West. What progress has been made toward the construction of a Polar Class 8 icebreaker, and when will the keel be laid?


Derek Nigel Ernest Blackburn: 2010.


Donald Frank Mazankowski: Mr. Speaker, discussions are ongoing. An interdepartmental committee has been established and I have been mandated, along with the Associate Minister of National Defence, to bring recommendations to Cabinet some time within the next month or so to meet the very worthy proposition to which the Hon. Member has referred.


PRICE OF GASOLINE
Mr. Russell MacLellan (Cape Breton-The Sydneys):: Mr. Speaker, my question is directed to the Minister of Energy. She has admitted she is getting impatient with high gasoline prices. It is nice to see that she has faced reality along with the rest of Canadians. Since she has not imposed a deadline for gasoline price reductions, and since the companies are not rushing forward to reduce their prices, why is she so sure prices will decline now?
Hon. Pat Carney (Minister of Energy, Mines and
Resources): Mr. Speaker, I suggest it was the former Liberal
March 11, 1986

Government which did not face reality when it brought in the NEP which caused so much damage. In response to the question, we put in place a competitive system and under that system gasoline prices will fall.


ANTICIPATED PRICE REDUCTIONS
Russell Gregoire MacLellan: Mr. Speaker, time has passed the Minister by in all senses regarding her predictions. Will she tell us if prices will be falling in a substantial way, or exactly how much can consumers expect to save at the pump?
Hon. Pat Carney (Minister of Energy, Mines and
Resources): Mr. Speaker, no Government has ever been so wrong in the forecasting of oil prices as the former Liberal Government. That Government forecast prices would rise to $70 a barrel. I am quite prepared to wait and see how the situation unfolds.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Mclnnes that Bill C-87, an Act to authorize the divestiture of Canadian Arsenals Limited and to amend other acts in consequence thereof be read the second time and referred to a legislative committee.
James Douglas Manly: Mr. Speaker, I will speak briefly in response to the question that was asked before the lunch break. I was asked a question about the Arthur Andersen Report about the value of Canadian Arsenals Limited, and certainly we, in our Party, would want to have that report released when this Bill goes to the legislative committee, as I expect it will. Our representative on that committee will be pressing to have the Arthur Andersen Report tabled. We believe that this is important not only for the information of Members of Parliament, but also for the employees of Canadian Arsenals Limited and also for the general public. Thank you very much.


Mr. Speaker:: Questions and comments. Resuming debate? Question?


Michael Morris Cassidy: This might be a slightly transparent means of getting the point on the record, but I would like to ask my hon. friend, the Hon. Member for Cowichan-Malahat-The Islands (Mr. Manly), whether he would agree with me that it would be desirable for the Government, in addition to tabling the Andersen Report when the committee meets, also to undertake to table the actuarial report on the pension plan and the
Canadian Arsenals Limited
consequences of the privatization, and also any other documents or studies which may have been prepared in connection with this particular sale following the precedent that was set previously when the Government proceeded on the de Havil-land affair and made those documents available to the committee that was studying it. Would my hon. friend agree that that was a good idea and recommend that to the Parliamentary Secretary and to his Minister?


James Douglas Manly: Absolutely. As I mentioned in my few remarks on Bill C-87, one of the problems that the employees of Canadian Arsenals face is that while the Government has said in a press release that their pensions are being protected, they have not been able to see any of the documents relating to this. This matter has to be clarified by tabling all relevant information so it will be available to the legislative committee that is studying it, and, above all, so it will be available to the people who are most affected, and that is the employees.


Mr. Speaker:: Questions, comments? Resuming debate.


Jean-Robert Gauthier: Mr. Speaker, I would like to speak in this debate on Bill C-87, a Bill to authorize the divestiture of Canadian Arsenals Limited and to amend other Acts in consequence thereof. We have, as you know, debated this question now for some three days and I would like to put on the record some of the reasons why we feel so strongly, and our prerequisite to supporting the motion that this Bill be now sent to a committee for further study and consideration, clause by clause. The Member for Glengarry-Prescott-Russell (Mr. Boudria), you will recall, in his speech to us at the opening of this debate speaking as the Official Opposition spokesperson on February 24, 1986, referred to unanswered questions in regard to the value of Canadian Arsenals Limited and the cost efficiencies the Government is looking for in privatizing this company. 1 can quote from page 10866 of Hansard my colleague, the Hon. Member for Gien-garry-Prescott-Russell, said:
The first thing we should know is that, although the Minister has assured us that there has been an agreement with the employees and that the employees were seemingly satisfied with the way this whole sale will take place-
He went on to say:
-this does not at all reflect the conversations I have had with the people from the Public Service Alliance of Canada.
That is a most essential point, and I think any employer such as the Government of Canada should tell us openly that he has consulted with the employees and assured them that the cross-over from a public to a private company will be done in the most efficient and care-taking manner.
I do not want to talk about the several subjects which this entails, such as job guarantees and career opportunities, but there is one point which I find to be very interesting and which should be raised again today, and that is, the question of pensions. These people have for years been working for a Crown corporation covered under the Public Service Staff Relations Act, I take it, and under the Public Service pension plan. That pension plan, of course, as we all know, has been indexed to the cost of living and these people have contributed

March 11, 1986
Canadian Arsenals Limited
to the public pension fund and, therefore, should be assured that this plan will be transferred to their new employer when the effective transfer is made to the new owner.
We do not have that guarantee. We do not have much information dealing with the pension arrangements. We will be looking forward in committee to getting from the Minister some of the answers to these questions.
In his opening remarks also, after speaking about this Bill, my colleague from Glengarry-Prescott-Russell referred to a letter which was received by him from the Minister of Supply and Services (Mr. Mclnnes) dated January 20, 1986, which has been quoted in this House several times. I just want to read a couple of paragraphs from that letter because they are germane to the point I am trying to make. It reads:
Dear Don, further to my Legislative Assistant's discussion with you last week, 1 must once again advise you that I cannot provide you with a copy of the Arthur Andersen Report. However, I can confirm that the Arthur Andersen Company carried out a valuation study of C.A.L.-
That is, Canadian Arsenals Limited. It goes on to say:
-prior to commencement of the bidding and negotiation process and estimated that the value range for C.A.L. was $80 to $98 million.
We have been asking the Government for a copy of the Arthur Anderson Report. I dare say that every speaker, at least from the Official Opposition, has asked for a copy of the Anderson Report, but we have been continuously told, "No, we cannot give it to you". I can tell the Government now, and I think I can speak for my Party at least, that if it will table that document, if it will give us the undertaking that it will table this document in committee, we will at this time give our concurrence to this Bill being referred to committee for clause by clause study. Until that commitment is given to us I cannot assure anybody that we will not continue to press the Government for information, to press for the facts, to ask the Government to come clean on this issue, to come and tell us, and the Canadian people, why the privatization of CAL is of value to the Canadian public. We want to know why the Government is selling off a winner. It is a public company that has recently been profitable, making some $10 million. Indeed, the Government is transferring to the private sector a company which is solid and making a profit.
Mr. Speaker, I think that it would be useful for me to go over the background before speaking about the two or three major points which I want to raise this afternoon. The corporation being discussed this afternoon, Canadian Arsenals Limited produces medium and large caliber ammunition. We know that it has a plant at Le Gardeur, near Montreal, which employs 750 workers, and another in Saint-Augustin, near Quebec, with 50 workers. I repeat that 90 per cent of the production of Canadian Arsenals Limited is sold to the Department of National Defence and 10 per cent is exported.
During the sixties, the Government of the time decided to
divest itself of part of the production aspect of Canadian
Arsenals Limited and to keep only a smaller operation specialized in the production of medium and large caliber ammunition.
Mr. Speaker, it seems to us that the selling of Canadian Arsenals Limited to SNC is strangely similar to the de Havil-land-Boeing deal, at least to the extent that the Government is once again refusing to provide information which would allow us to judge for ourselves whether this virtual monopoly that SNC will be given will benefit Canadians. You will recall, Mr. Speaker, that the selling of de Havilland to an American company had been the subject of an intense debate in the House last winter when the Government sold this Canadian company specialized in aeronautics for $90 million without giving Members of Parliament and the Canadian public access to the reports providing information on its value or the reasons of the Government for transfering it to the private sector.
Hon. Members will recall that, after exerting a lot of pressure on this Government, we succeeded in getting a committee of the House be established to review the transaction, the costs, the financial and social benefits and the costs in aeronautical and scientific research which would probably be involved in this transaction, and this committee had quite interesting meetings where the Government presented reports which helped us to understand better the selling of de Havilland to Boeing. However, Mr. Speaker, even before the committee presented its report, the Government had already signed and closed the deal with Boeing.
Mr. Speaker, the fact that this Government did not wait for the committee to conclude its examination before selling de Havilland gives an indication of the position of this Government as regards public transactions. This is why we are reluctant this time to give it a free hand and to say that we trust it to do the right thing. The Minister tells my colleague for Glengarry-Prescott-Russell (Mr. Boudria), in a little aside at the bottom of his letter:

I can show you a copy of the report in my office, if you so wish. Please call. [Translation]
That is very generous of him. Mr. Speaker, we are asking for a copy of the report by Arthur Andersen and Company for all Canadians, not just for a select group of Members who would be allowed to see the documents at the Minister's discretion. Mr. Speaker, what about open Government? What about this new reform policy that is supposed to give Members access to documentation that will help them acquire a better understanding of the subject and make better decisions, so they can be better Members of Parliament and better politicians? Oh no, they tell us: This is a confidential document for the Minister's eyes only.
Mr. Speaker, once again, we insist on being given this document, we want the Minister to understand our reasons, to stop playing for time and refusing this perfectly normal
March 11, 1986

request, and to release the Andersen paper so that we can all understand and analyze with him the advantages and disadvantages of this transaction.
Mr. Speaker, I think it would be useful to go back and examine the whole issue of privatization. If we consider this Government's policy, which consists in divestiture of certain Crown corporations by selling them to the private sector, we can ask ourselves: Has this Government, before proceeding with privatization, conducted market studies and ordered a cost-benefit analysis and has it done what every employer and company owner ought to do, which is to ensure that the same will benefit taxpayers? Hon. Members will recall that I raised this matter in connection with public servants and the Government's habit of always trying to privatize certain services in order to cut the establishment of the Public Service.
In a question to the Minister responsible for the Treasury Board, I asked the Minister whether he was prepared to publish cost-benefit studies he had in his possession, so that we could understand what the Government's policy was on privatization. Mr. Speaker, in an answer I received on February 27 of this year from the Parliamentary Secretary during a debate here in the House, I learned something which I think should be interesting for anyone who wants to understand why the Government is going to privatize. I shall, if I may, read one paragraph from the Parliamentary Secretary's speech, which explains at page 11052, and I quote:
With respect to privatization, the Government has established a ministerial task force to co-ordinate the possible sale of Crown corporations or other equity holdings.
I repeat: "the possible sale of Crown corporations or other equity holdings."
A privatization secretariat has been set up in support of the task force. The ministerial task force has developed a systematic process for the review of each individual privatization initiative to ensure that all issues be fully identified in advance and that divestiture proceed in a business-like manner.
I think that is pretty clear. And that is why we are asking to have the systematic examination include the Arthur Andersen report which focuses on the economic consequences of this sale. Mr. Speaker, we want proof that this $92 million sale is backed by valid reasons, has definite merits and that it is certain beyond a shadow of a doubt that Canada will benefit by this transaction.
And I continue to quote from the reply the Parliamentary Secretary made on February 27, to a question which I had directed to him concerning privatization:
In the initial stage, the Minister who is responsible for a particular corporation will present his or her recommendations to the task force on the whole range of issues concerning possible privatization, including the continued public policy role of the corporation, alternate means of delivering the same policy, potential impact on employees, service to the public and preliminary financial consideration. The task force will then decide whether or not to proceed with a further study of the corporation.
Canadian Arsenals Limited
Mr. Speaker, nobody could have said it better. Those are exactly the points which we have been trying to make during the three days of this debate on Bill C-87. For instance, we have asked: What are the "potential impact on employees"? This is apparently one of the criteria of privatization. Could we not obtain this information from the Minister or his Parliamentary Secretary?
Second point: "service to the public and preliminary financial considerations". Well, I suppose that the Arthur Andersen Report deals with that, because this report was requested by the Minister even before he asked for bids.


An Hon. Member:: What is in this report?


Jean-Robert Gauthier: I wonder what is in this report. Why will they not provide us with a copy of it? The task force needs to know about these criteria.
I will keep on reading the Parliamentary Secretary's reply, because there is a lot of substance in it. It is not often that he provides us with a good reply, but he must have made a big effort that time because his reply was well written. I continue:
The purpose of the next study phase would be the proposal, again by the responsible Minister-
In this case, the Minister of Supply and Services.
-of resolutions to the outstanding policy issues, including impact on employees and more detailed financial and cost benefit analyses. I would stress that this work will be done by the line department in consultation with the privatization secretariat-
I could continue like this, Mr. Speaker, but you are signalling that my time is almost up. I therefore refer people who are interested to the House of Commons Debates of February 27, 1986, page 11052, where they can read the rest of the Parliamentary Secretary's reply concerning privatization.
Since you are indicating to me that my time has expired, Mr. Speaker, I should like to ask the Parliamentary Secretary to state publicly whether the Government is planning to make public the Arthur Andersen report and assure us that his report will be provided to the committee members. 1 think I can assure the House that my party will go ahead and refer this Bill to the committee for study and consideration.


Mr. Bradley:: Mr. Speaker, my good friend, the Hon. Member for Ottawa-Vanier (Mr. Gauthier), has raised numerous points in his presentation to which I paid very close attention and which I feel are very pertinent. Many points were raised as well by my good friend, the Hon. Member for Prince Albert (Mr. Hovdebo). In fact, many points were raised during the whole of the debate which I feel have been valuable to us.
We advised all bidders that the Government was concerned
about the employees. SNC has assured us that it will honour
the contracts until new contracts are struck and that it will,

March 11, 1986
Canadian Arsenals Limited
with the Government, enter into reciprocal pension transfer agreements to ensure portability of pension rights. In spite of this, my hon. friends opposite have raised many matters. The Hon. Member for Ottawa-Vanier and the Hon. Member for Prince Albert have both stated that they would be prepared to let this Bill go to committee if we released the Andersen Report in committee, and we are very interested in getting this Bill into committee so we can go over the fine details and points.
The Minister made the offer to the spokesmen of the Opposition to read the Andersen Report in the Minister's office because the Andersen Report was still the property of Arthur Andersen and Associates and could not at that time be made public. The policy of the Government usually is for the committee to request the report and the Government to make it available at that time. However, because of some of the concerns expressed by the Opposition and because of the insistence on the public announcement of this report's availability, I am prepared to make an exception in this case and, rather than wait for the committee to request the report, if both opposition Parties are willing to let the Bill go to committee at this time, I am willing to give my word and the word of my Minister that the Arthur Andersen Report will be part of the briefing report for Members on that committee.


Jean-Robert Gauthier: Mr. Speaker, I think that is a great initiative on the part of the Parliamentary Secretary. 1 want to congratulate him for the work he has done in trying to help us all come to grips with this situation. I also want to thank him for giving his word and the word of his Minister that this report will be tabled. I take it that he can tell me today that the entire report will be tabled, not just extracts from it. If that is so, I want to thank him and the Minister again and tell them that we will be active in committee in trying to make a good deal for Canadians on the sale of Canadian Arsenals Limited.


Mr. Angus:: Mr. Speaker, I would also like to thank the Parliamentary Secretary for agreeing to provide the report which has been requested. I noticed that when my colleague was asking whether the report was to be tabled in its entirety, the Parliamentary Secretary nodded his head. I wonder if we could get a verbal comment for the record.


T.A. Bud Bradley: Mr. Speaker, I will certainly do everything in my power in committee to provide committee members with whatever materials they request. I can assure the opposition at this time that the Arthur Andersen report in its entirety will be tabled.


The Acting Speaker (Mr. Charest):: Is the House ready for the question?


Some Hon. Members:: Question.


The Acting Speaker (Mr. Charest):: The question is as follows: Mr. Mclnnes, seconded by Mr. Cote (Langelier), moves that Bill C-87, an Act to authorize the divestiture of Canadian Arsenals Limited and to amend other 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 said motion?


Some Hon. Members:: Agreed.


An Hon. Member:: On division.


The Acting Speaker (Mr. Charest):: Carried on division.


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

[Stage Direction]
The House resumed, from Friday, March 7, consideration of the motion of Mrs. McDougall that Bill C-99, an Act to provide borrowing authority, be read the second time and referred to a legislative committee.
Jean-Robert Gauthier: Given a chance to find my notes, Mr. Speaker, I certainly will take this opportunity to comment on this very important piece of legislation.
Bill C-99, an Act to provide borrowing authority, seeks parliamentary approval for the expenditure of some $22 billion. As I read here, I think that is what it is, twenty-two billion six hundred million dollars, as may be required for public works and general purposes.
Mr. Speaker, since we all know that the Government borrows money, perhaps it might be useful now and then to ask why the Government wants to borrow $22.6 billion. It is a rather impressive and astronomical amount, as my colleague would say. But what we have to understand is that $22.6 billion is the same as 22,600 million dollars. That is a lot of money!
I would like to comment on such borrowing authority in light of the credibility of the Government's projections pertaining to interest rates, oil prices, investments, and the interest costs of those loans, for I think it is imperative to discuss this in the House since it is a public question, a question of interests to be paid by all Canadians. I would like to talk about the debt structure and, finally, the interest rates.
Mr. Speaker, after tabling his Budget on February 26, 1986 the Minister of Finance (Mr. Wilson) introduced a Bill asking the House for authority to borrow, as I just said, an amount not exceeding $22.6 billion for the fiscal year 1986-87, namely the fiscal year beginning next April 1 and ending March 31, 1987. That is the fiscal year of the Government. This amount
March 11, 1986

represents the financial requirements of the Government, meaning that exchange operations are excluded, as provided in the 1986-87 fiscal plan. What we have to keep in mind is that it is based on the new accounting practices now in use. Indeed as of this year the Auditor General asked that the accounting methods be changed-and I acknowledge this may be beneficial-and in its Budget the Government has adopted such new accounting methods.
As it happens, Mr. Speaker, I think that the first question has to do with the credibility of the Government's premises because, in our judgment, the premises on which the Government estimates are based have no credibility.
The information now available makes it seem like a real possibility that the deficit will be much higher than forecast. We question for instance the projections related to interest rates, oil prices and investments.
Let us speak first about the interest rates. For 1986, the Government foresees an average interest rate of 9.5 per cent for 90-day bills. However, as we all know, the interest rate was 11.4 per cent as of yesterday, March 10. I do not have today's rate because it is impossible to be always up to date, but yesterday, the rate was at 11.4 per cent, and according to the figures of the Government, every 1 per cent of difference in the interest rate means a difference of about $1 billion in the deficit. I repeat that each upward or downward variation of 1 per cent has a $ 1 billion impact on the deficit. In other words, if the average interest rate for the entire year were 10.5 per cent, for instance, the deficit would be $1 billion over the deficit forecast by the Government. The Conference Board, which is not-


Jean-C. Lapierre: A two-bit organization?


Jean-Robert Gauthier: It is not just a two-bit organization, but while it does not refuse to examine minor problems, it is concerned mostly with problems which affect the Canadian economy, and for 1986, this organization has forecast interest rates of 10.4 per cent, that is 1 per cent higher than what the Minister forecast. If we look at the projections of experts like those at the Conference Board, we immediately see that the Government will miss the mark in its projections and will probably take a bad fall as concerns the deficit by exceeding by $1 billion the amount forecast.
Let us now talk about the oil prices. The Government forecasts average oil prices of $22.50 U.S. a barrel until the end of 1986. The spot price, which is the price of oil on the European spot market where oil is sold, is about $12 U.S., or approximately $10.50 under the figure announced in the Budget.


Jean-C. Lapierre: Another mistake.


Jean-Robert Gauthier: Mr. Speaker, the Economic Council of Canada-this is another serious organization, an economic advisory
Borrowing Authority Act
council to the Government-used an average price of $19 U.S. for its economic forecasts. The Conference Board, on the other hand, used a price of $18 U.S. for the second half of 1986, and $21 U.S. for the last part of 1987. Now, for each reduction of one dollar in the price of oil from the estimated price, there is a loss to the Federal Government of $110 million in corporate income tax and gasoline and oil taxes. We can therefore see here net losses, because the forecasts as stated by the Minister of Finance are not accurate. He is wrong in our view on interest rates, and he is wrong on the price of gas and oil.
He stated in his Budget speech that these were the best figures available when the Budget was sent to print.


An Hon. Member:: They did not look very far.


Jean-Robert Gauthier: We told him, Mr. Speaker: If that is true, it is up to you to give new figures, to feed new data into your computer and print out more accurate figures, rather than carrying on with that false theory based on a totally inaccurate assumption.
As far as investments are concerned, the Minister of Finance did forecast in his Budget a growth rate of about 7 per cent for investments in 1986. The most recent survey made by Statistics Canada concerning business investment intentions shows that Canadian business think they will be investing only 2.5 per cent more this year than last. And God knows how important business investment intentions are!
Furthermore, the Minister of Finance estimates that investments in new plants and equipment will be 6 per cent, while Statistics Canada forecasts a 1.9 per cent decline in actual figures, when price increases are taken into account. If Statistics Canada's forecasts were to prove right, the economic growth rate would be lower than the one predicted by the Minister of Finance. And for each reduction of one percentage point in actual economic growth, the deficit once more increases by $1 billion. An error of one per cent in investments expands into a $1 billion increase in the deficit. They were wrong in interest, so an extra $1 billion can be added easily. They were wrong on the price of oil, and there again it is $110 million for each dollar reduction in that price. And we also note, on investment projections, quite a serious error that is supported by agencies as important as Statistics Canada and the Conference Board. So we have here an extra $1 billion increase in the deficit.
Mr. Speaker, this means it is vital for us that the Government review its figures, that it put all the economics back into its computer in order to give Canadians the real answer and the hard facts, which is that those computations are wrong and the data are totally inaccurate.
Let us now look at interest charges, Mr. Speaker, because there is always a cost for money that is borrowed. Interest is like a rent on money, we pay money to someone when that person lends us funds, in the way of interest, or to make it

March 11, 1986
Borrowing Authority Act
simpler as a price for money. It is rather difficult admittedly to figure out interest payments on Government borrowings. This is based of course on the rate of interest charged, on the term of the loan and on the currency in which that debt is designated. This is quite important. Those are the figures which the economists are constantly throwing at us and we are told with great fanfare every Thursday, I believe, what the Bank of Canada interest rate will be during the week. The banks look at it and say: "Well this is good or not so good. We will set the prime rate according to that rate". Then it is increased or reduced. I admit that it is difficult to judge. It is like the Canadian dollar, it depends on the mood of those who have the power to set the bank interest rate and the Canadian dollar rate the following morning.
Mr. Speaker, it is expected that on average the Government will pay 10 per cent. I feel that 10 per cent is a rather realistic average rate on a $22.6 billion loan so that we will only pay interest on that amount for 1986. It is a rather huge sum we have to pay for borrowing money.
Mr. Speaker, such an estimate seems to be rather accurate since the Government says that in 1984-85 on a net debt of $199 billion, they paid in interest alone something like $18 billion or 9.05 per cent.
Mr. Speaker, you will recall that for 1990-91, a paper tabled following, not the last budget but the previous one, included all kinds of projections on the impact of budget measures on national accounts. We had then learned that for 1990-91, the Government, according to an intermediate scenario, would pay $31 billion net in interest on a $360 billion debt, that being 8.61 per cent.
Unless such a scenario should become unfavourable, it is not $31 billion but $36 billion in interest that will have to be paid in 1990-91 on that debt which should amount to close to $400 billion, always on the basis of projections for the forthcoming five years.
Mr. Speaker, I should like to deal with another matter before I resume my seat and it is the structure of our debt, because it concerns many people and much has been written about the structure of our debt and deficit.
Mr. Speaker, the Canadian debt is made up of a large number of items with a great variety of maturities and other characteristics. However, it is possible to break down that debt into a Canadian dollar component and a foreign currency component.
Mr. Speaker, I have in front of me a table showing that on December 31, 1985, 5.2 per cent of the Canadian Government debt was in the form of foreign currencies.
Since the Government had to borrow heavily on foreign
markets to support the Canadian dollar, that percentage will
most likely increase throughout 1986.
We know that around Christmas time the demand for US dollars rose sharply, causing the Canadian dollar to catch a cold and drop to 69 cents. It recovered slightly in January, but with the presentation of the famous Budget on February 26 last, it caught another cold and has a bad case of influenza now, and we are left wondering if it will indeed recover. It was back to 71.5 cents, I think, yesterday, not quite back to its pre-budget level, but getting there gradually. Presumably, the Minister was not able to satisfy foreigners and currency speculators that the Government was serious about its Budget and really meant to strengthen the position of the Canadian dollar on the exchange markets.
Mr. Speaker, when the Government borrows money on foreign markets, interests has to be paid. Those interest payments mean that we have that much less to run our economy. Those funds leave Canada and help foreigners become richer. I am referring in particular, Mr. Speaker, to developing countries such as African countries, but I am also thinking of one country which depends heavily on its oil exports to be able to pay just the interest on its debt, Mexico.
Mr. Speaker, the national debt of Mexico is positively huge. It think it is in order of $100 billion. Interest on that debt is paid from the sale of Mexican oil to foreign countries. When the price of oil goes down, you can easily imagine what kind of problems arise... The problem of Mexico is that they are unable to meet their interest payment commitments and are therefore urged by their creditors to take some form of action.
In Canada, 5.2 per cent of our debt is with foreign countries. Compared to Mexico or other African or even European countries, our fiscal situation is good largely because the Canadian government has been able to finance its borrowings in Canada and that insurance companies, pension funds and Canadian people are buying Canada Savings Bonds, have confidence in the Canadian Government and say: Yes, we went through difficult times in the 80s; true, we had a world recession, oil prices have gone up and the Canadian dollar has taken a beating, interest rates have increased, but all that is not due to the federal Government. Some international concerns had an impact and we recognize it. But we trust you and we will lend you money. And therefore, today in Canada, most of the national debt is held by Canadian people, pension funds and public agencies.
Mr. Speaker, I wish to conclude by saying that the Government's strategy for this Budget was very simple. It was aimed at restoring confidence among world financial circles. They failed miserably. Their numbers were wrong, their datas on crucial matters such as interest rates and, as I said, oil prices as well as investment plans of Canadian companies, were wrong. They were totally wrong. We are simply asking them ... and we do not blame them for being wrong, we recognize as well that it can happen under difficult international circumstances when the oil price decreases by $ 10, $ 12
March 11, 1986

and SI3 within a few months, without Canada being responsible. We are aware of that fact.
In 1972, we have been through a similar situation with prices going up. I remember when I was first elected in 1972, Mr. Speaker, oil sold for $3 per barrel. And with the OPEC crisis, as it is called, the price of a barrel jumped to $36 within a few years. We had to adjust, we had to give a new direction to our economy. Of course, the deficit increased substantially and the Canadian people will have to pay for it. I am aware of it as well. But that problem, essentially, was not due to Canadians but to external forces.
Mr. Speaker, you are indicating to me that my time has expired, which I regret because I wanted to deal with other matters. However, I will come back eventually to this topic whenever I have the opportunity to do so.


The Acting Speaker (Mr. Charest):: The Hon. Member for Levis (Mr. Fontaine) for questions or comments.


Mr. Fontaine:: Mr. Speaker, I listed with interest to the representations of the Hon. Member for Ottawa-Vanier (Mr. Gauthier). He referred to the Economic Council of Canada in support of his representations. He has great faith in that body. He describes it as quite trustworthy, and I agree with him one hundred per cent.
Today he is basing his arguments on the Economic Council of Canada which he calls reliable. I would like to ask him why, when his party was in office, he did not rise in the House to recommend that his Government cut tax expenditures which were then and still are considered as not productive by the Economic Council of Canada. Why did he not stand up and recommend a reduction in tax expenditures?


Jean-Robert Gauthier: Mr. Speaker, I want to thank the Hon. Member for his question, and if he has time,-I don't know whether he will bother to take the time,-he should look at Hansard for the years 1972, 1973, 1974, 1975, and I could go on. I think I am one of those people who are somewhat critically inclined, and who on occasion are not afraid to say what they think. I was often accused of being a rebel, which I was not. I thought it was perfectly normal to fulfil one's role as a Member of the House. I know that the Hon. Member for Levis (Mr. Fontaine) does his job as he thinks right, and 1 feel he is certainly interested in his work because we often see him speaking in the House, and he is interested in debate. I have been doing this for nearly thirteen years, and I think that if he speaks again in this debate and has a specific question about pensions or budgets, I have some experience in those areas, and perhaps I could give him a more specific answer. If the Hon. Member does consult Hansard, I think he will realize that I was often even critical of my own Government.
Borrowing Authority Act


Mr. Lanthier:: Mr. Speaker, I have a few comments and several questions for the Hon. Member who just spoke to the Bill before the House today, the borrowing authority legislation. I believe he gave us his critique in three parts. First, he discussed the Estimates. Second, he questioned interest rates. Third, he commented on the actual structure of the debt.
First of all, I may remind the House that an article appeared recently in the press, quoting another journalist from the Globe and Mail, and I shall quote, Mr. Speaker, to avoid being called to order and accused of using unparliamentary language. The journalist, Marcel Adam, was repeating comments made by Jeffrey Simpson of the Globe and Mail. He said-and showed in his criticism of the Wilson Budget-that again the Liberal Opposition has proven in a depressing way that intellectual inconsistency, hypocrisy and political expediency are the hallmark of Members on the Opposition benches.
Mr. Speaker, I think that is an accurate summary of the gist of the Opposition criticisms, as we can see in a brief retrospective of the three points made by the Hon. Member who criticized this Bill. With respect to forecasts, remember not so long ago when the new Progressive Conservative Government tabled its first Budget. Mr. Wilson had made various forecasts based on advice and his own competent judgment. As far as I know, this is the first time we have a Minister of Finance who happens to be an economist and who can indeed understand the feedback he gets from his department officials and tell them about the policy of the Party.
That is why you may have noticed in the course of the debates that he is always quite prepared to defend his own policies, not those of a rearguard of public servants who used to tell previous governments which way to jump.
Speaking of forecasts, Mr. Speaker, I can recall that some newspapermen shouted "wrong facts, Turner". I can recall the New Democratic party predicting that the first Wilson Budget would cost 200,000 jobs in the first year. Some 585,000 jobs have been created in Canada since then, so they were way off the mark by about 800,000 jobs. And I can recall that a former bank president, now Member for Laval (Mr. Garneau), had bragged about his own competence and predicted that interest rates would skyrocket as a result of that Budget. Well, down they went.
Remember the Hon. Member for Saint-Henri-Westmount (Mr. Johnston) who had stated at the time that inflation would soar the following year as a result of that Budget. We all know that his theories fizzled right out, for inflation remained quite stable. Yet at the time, the Minister of Finance, ably supported by his Minister of State (Finance), had admitted that perhaps there just might be the odd fluctuation in interest rates, inflation and unemployment, but that such fluctuations would be minimal as compared with major changes in those rates. And Heaven knows that they have been right ever since that their figures were true within a cent or a tenth of a percentage point. So when Members opposite, whether "libe-

March 11, 1986
Borrowing Authority Act
reux" or "nouveaux PD" as I call them, suggested today that we are making a mistake, I wondered whether it is not some kind of endorsement which Canadians appreciate. I think that the Globe and Mail has just provided us with these data. If only Members opposite would open their eyes and consider both the estimates and interest rates, they would realize that long-term interest rates are down presently on the money market. All financial interests, banking institutions, trust and insurance companies know that rates on long-term annuities are low. That is exactly the option the Minister of Finance has chosen.
As to the debt structure, they stumbled again over accidents; they tried to base their argument on one-twentieth of the debt with impact on foreign markets with which we must trade. Mr. Speaker, this is fighting over trifles. I should like Hon. Members opposite to try again in a more responsible way and taking into account that the Canadian people no longer believe in the Opposition's fantasies.


Jean-Robert Gauthier: Mr. Speaker, I thought that the Hon. Member for LaSalle (Mr. Lanthier) was going to make a speech, because he seemed on his way to talk all afternoon.
However, I should like to point out to him two things: first of all, he will find in Hansard for Friday, March 7, on page 11310, the reply to Mr. Jeffrey Simpson who was kind enough to tell us about Mr. Adam's report. At that time, I was directing a question on this to the Minister of Justice (Mr. Crosbie) who had dealt with the Budget. And I was saying to the Minister that he had probably lunched recently with Mr. Simpson, because it is the Conservative Government's policy to have lunch with newspapermen in order to provide them with the Government's propaganda and convince them to spread the good word. I was asking the Minister whether Mr. Jeffrey Simpson had lunch or dinner with him since he was now propagating the policy of the Government even though the Conservatives always used to say that the journalists kept spreading false ?. However, when a few articles are favourable to the Government Members, they take very good care of them and quote them in the House. It is not the first, but rather the second or third time that a Government Member mentions this article. It is an article by a public relations specialist. For Heaven's sake, do not start to suggest that this attitude is general and that all the reporters are on your side!
Second, as concerns the difference between the Canadian and American interest rates, I think that the Hon. Member for LaSalle is an honest man and that he will recognize that such a difference is excessive. There is a difference of 4 points between the Canadian and the American rates. I think that the Hon. Member will agree that it is not really to the advantage of Canada to have such a wide gap, even a gap of 5 points as of March 6, 1986, according to my figures. I believe that it is to the disadvantage of the Canadian economy to have such an inflated interest rate, and I use the word "inflated" intentionally, because there is no justification for the discount rate of
the Federal Reserve Bank of New York, which has always been 1 or perhaps 3 points lower than the Canadian rate, being 5 or 6 points higher as it is now. I deplore this abnormality, and in my opinion, the Hon. Member for LaSalle is intelligent enough to recognize that actual interest rates in Canada are now unjustifiably high from an economic point of view.


The Acting Speaker (Mr. Charest):: The period for questions and comments is now over.



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 Thunder Bay-Nipigon (Mr. Epp)- shipbuilding-Placement of CN marine ferry order. (b) Lauzon Shipyard; the Hon. Member for Montreal-Sainte-Marie (Mr. Malepart)-The Budget-Family income standards. (b) Request for clarification of tax credit; the Hon. Member for York (Mr. Redway)-The economy-Exchange value of dollar.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mrs. McDougall that Bill C-99, an Act to provide borrowing authority, be read the second time and referred to a legislative committee.
Mr. David Orlikow (Winnipeg North):: Mr. Speaker, when we discuss this borrowing authority Bill, we cannot discuss it in isolation. We have to think about it and assess it in conjunction with the Budget and in conjunction with the task force report on program review tabled today by the Deputy Prime Minister (Mr. Nielsen).
The borrowing Bill asks Parliament to approve the borrowing of some billions of dollars. I say that the amount asked for by the Government is not sufficient. It is not sufficient because the revenue projections in the Budget were all wrong.
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In case Members feel that I am saying this for purely political, partisan reasons, let me put on the record the views of Don Braid, The Edmonton Journal's political columnist, in a column he wrote and which appeared in The Gazette in Montreal on Thursday, March 6, 1986. Let me remind Members that Don Braid is no flaming radical. He was a very vigorous critic of the former Liberal Government and of its National Energy Program. Let me quote a couple of paragraphs from what Mr. Braid said about the Budget presented by the Minister of Finance (Mr. Wilson). He said:
By estimating the price of oil at $22.50 U.S. per barrel for the rest of 1986, and projecting revenue from that figure, Wilson has underestimated his deficit by about $2 billion.
He goes on to indicate why that is, and his estimate of what this meant reads:
The federal Tories seemed stunned by hostile reaction to their Budget in the West, and especially Alberta, but there's no mystery about it.
Most westerners had expected realism in this Budget. Instead, they were handed a grade-school blunder that suggests Finance Minister Michael Wilson can't count. And he made his mistake in an area where westerners tend to be very discerning, oil prices.
He concludes his article with the following:
Wilson made the worst kind of budget mistake: He ignored economic reality in order to make his document look good. The whole budget is now suspect not just to everyone familiar with the oil industry, but to the world financial community.
Wilson may be forced to revise it within months, with yet more devastating results for Canada's image in foreign markets. The mistake is so serious that this minister should find a new line of work.
That is from a very conservative columnist.
The Budget and the borrowing Bill are wrong because if we need to borrow, we should only do so after we have established a tax system that is fair.
Some of my colleagues have talked about the unfairness of the corporate tax system. I want to talk about the unfairness of the personal income tax system which is permitted and encouraged by the Conservative Government.
Let me quote to illustrate what I mean from The Financial Post, March 8, 1986. This is the current issue. Nobody could accuse The Financial Post of being hostile to the business community or to middle and upper-income Canadians. In the March 8 issue of The Financial Post there is a box headed "The Tax Hit". It gives illustrations of how the new income tax proposals will affect three Canadians, one with a $40,000 income, one with a $60,000 income and a third with a $ 150,000 income. The table shows what these people paid in income tax in 1984 and 1985 and what they will pay in 1986 and 1987.
Let me summarize the facts. A Canadian with a wife and two children with a gross income of $40,000 would have paid $9,145 in income tax in 1984. In 1987, he will pay $9,957, an increase in income tax of $800 in round figures. A person with a $60,000 income would have paid $14,909 in income tax in 1984. In 1987, he or she would pay $13,708, a reduction in income tax of $1,200. A person with a $150,000 income would have paid $53,448 in income tax in 1984, and in 1987 he will
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pay, thanks to the Conservative Minister of Finance, $47,978, a reduction of $5,470.


Derek Nigel Ernest Blackburn: That is Tory fairness.


David Orlikow: That is the Tory idea of fairness and it is one which Members of my Party simply cannot accept.


Mr. MacDougall:: What about the Grits in the 1980s?


David Orlikow: The Hon. Member on the government side is interjecting. I will be very happy to take his questions when I have completed my remarks.
This Budget breaks with the Conservative promise, the promise of the Prime Minister (Mr. Mulroney) when he was Leader of the Official Opposition that he would create jobs, jobs, jobs.
The Conservatives talk about the jobs they have created. If you look at the Budget Papers, Mr. Speaker, you will see that they themselves say that the target for the end of 1987, 18 or more months from now, is for 9 per cent unemployment, a reduction in 3 years of just 2.5 per cent. Is that good enough when regions like Newfoundland, parts of eastern Quebec and parts of British Columbia, hard hit by the recession, have an unemployment rate of not 9 per cent but twice that or 2.5 times that? I say that this is simply not acceptable.
We have 400,000 young people without jobs. They are becoming a lost generation. We have older workers and discouraged workers who have very few prospects for work. They now find that any benefits, to which they were entitled by the way of unemployment insurance, will not be there because of the new regulations concerning severance pay and pensions et cetera.
That is why the Government's economic policy as outlined in the Budget and in the borrowing Bill is so dangerous. It is terribly complacent. This is a Government that has been in office for less than two years. I cannot remember when 1 heard remarks in this Chamber as mean, as cruel and as unthinking as the remarks made by the Hon. Member for Winnipeg-Assiniboine (Mr. McKenzie) on February 27 when he said:
In Canada today, there are more than ever job openings and opportunities right across the country, except for a few pockets. There are "help wanted'' signs all over the place. Newspapers carry special supplements for "help wanted" ads.
Where does that Member live? He lives in the city, part of which he represents and part of which I represent. A few days ago an announcement was made by a company that it was going to hire people. One hundred and fifty people lined up the night before and stayed in line all night because they had not been able to find jobs. That situation is happening all over the country. In my own City of Winnipeg, which has one of the lowest unemployment rates in the country and which has had low unemployment rates for the last couple of years-


Derek Nigel Ernest Blackburn: Thanks to the NDP Government.


David Orlikow: -we have several dozen voluntary agencies
which are handing out food baskets. We have an agency
feeding people.

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Mr. Gustafson:: Thanks to the NDP Government.


David Orlikow: That is a disgrace, Mr. Speaker. I put it on the record because I want to be honest. What is happening in my province, and I am ashamed of it, is happening in every other province in this country, and much worse as well, and I will come to that in a minute.
But where has this Member from Winnipeg-Assiniboine been? 1 know he represents the most affluent part of the City of Winnipeg. Surely he cannot be so blind as to imply, as he did in those remarks, that anybody who wants a job can find a job. That is just not true and he should have known that. I think it was the same day he made those remarks that the CBC's The Journal devoted 35 minutes or more of its program to what is happening in British Columbia. There you see the new reality: a Social Credit Government which is concerned only about restraint and keeping the deficit down. The Journal told us that in addition to the fact that one in six people in British Columbia are living below the poverty line, there is a new class which includes 4,000 unemployed teachers and 16,000 persons with university degrees who cannot find jobs. 1 ask Members on the Government side to do some simple arithmetic. How much money did it cost the people of Canada to educate those people? Surely we and they would be much better off if they were working and paying taxes and not drawing unemployment insurance or welfare. Surely it is a tragic failure for this country when these trained people cannot find jobs and use their skills. Some of these people have used up their unemployment insurance benefits and their savings and are now drawing welfare. Some of these people were interviewed while getting food baskets from food banks established by charitable organizations. What a commentary on this country! That is the reality in British Columbia. That province was the first to implement a program of restraint, but the situation is now much worse there than it was in 1981. The unemployment rate then in B.C. was 6.7 per cent and now it is almost twice that level.
Five or six weeks ago I was in Saint John, New Brunswick and Halifax, Nova Scotia. I visited one of those agencies in each city which has been established to help those in need by people who care. I urge all Members of Parliament, regardless of Party, to visit these places. There is one in almost every city in Canada. I visited Romero House in Saint John, New Brunswick. When it started four years ago it was serving 20 to 30 people a day. Now it is serving a hot meal to 200 people a day, seven days a week. It hands out food baskets and is making plans to establish three other places in other parts of the city who will be doing the same thing. Romero House was organized by a very concerned and caring woman, namely, Mrs. Carol McNulty. She is supported by individuals, service clubs and church groups. Some farmers give produce and some stores give the goods they have been unable to sell. It costs about $3,000 a month to operate. The group gets no money from government sources. What interested me was that they do not want money from government sources. They are doing
what they are doing because the need is there. They believe it is a disgrace that in a country as wealthy as Canada hundreds and thousands of people have to depend on charity.
The next day I went to Halifax and visited Hope Cottage. It was started in 1970 by a Catholic priest. It is now feeding 300 people a day. I was told that in the beginning it served older people, 55 and over, and street people. Now, 60 per cent of the people who come there are under 35. A large number are in the age bracket of 16 to 19. Many come from small towns. They have little education, they sleep and eat wherever they can. We have had news reports about people in many cities who have no place to sleep except in an alley or under bridges. We all know what that means in Canada in the winter. Hope Cottage provides meals, a place to stay, and clothing. They counsel people and are trying to make the public and Government aware of the seriousness of the problem.
I also visited Adsum House, which is very close to Hope Cottage, where they try to help homeless women, and the North End Community Clinic which is trying to organize improvements in the health services for poor people. These are the realities which this Budget and this borrowing Bill completely ignore.
I talked about British Columbia and the three years during which that province followed the kind of restraint program which this Government is imposing on the people of Canada. Surely we can learn a lesson from British Columbia. The idea of restraint which the Conservative Members of this Parliament are proposing is exactly the same kind of idea which was proposed and implemented in British Columbia. It did not work there and it is not going to succeed here. This is why it did not work.
Public sector lay-offs, and that is what we are getting here, and wage restraints, did not give the consumer in British Columbia any confidence in the Government so as to spend money and increase demand. Those Government employees who lost their jobs were not absorbed into the private sector labour force. This obviously did not reflect investor confidence in these measures. The Government did not save money by laying people off. In fact, it had to pay out money in the form of welfare and other benefits. The British Columbia Government's ideological agenda blocked any significant recovery of the economy at a time when the rest of Canada was starting to emerge from the recession of 1981-83. Wages were capped, cutting demand, massive unemployment was accepted by that Government, and it is going to be accepted by this Government. Low paid and unorganized labour was encouraged to grow at the expense of higher paid workers, and education and social services were cut back. That is precisely what this Conservative Government is proposing. This Government is proposing to bring the B.C. model to Canada as a whole. It was wrong in British Columbia and it is going to be just as wrong in the rest of the country. It is for those reasons that we oppose this borrowing Bill.


Roland de Corneille: Mr. Speaker, I have here in my hand Bill C-99, an Act to provide borrowing authority, which we are debating at this time. It is
March 11, 1986

interesting that in three short paragraphs, on one single page, this Government is asking for permission to borrow $22.6 billion. Why? To carry out, we are told, the policies of this Government which have been put forward over the last year and a half. As I consider this Bill, I have to ask: Do these policies, clearly laid out by two Tory Budgets, two sets of Estimates and an Economic Statement, meet the needs of the people of my riding or, for that matter, the people of Canada as a whole? Do these policies really fulfil the aspirations of our people? I do not think I need to refer to opinion polls to come to my own conclusion and that my answer on behalf of the constituents to whom I speak, is an emphatic no. I am inclined to tell the Government that I do not really wish to see it borrow this money until it shows that it cares more about people and less about statistics, until it is prepared to care more about the average man and less about the wealthy.
The names I am using now are fictitious, of course, but the people and the stories they have are not. Ruth Jones in my riding is a single mother with two children. She is working as a secretary. She wants to take her BA at night school. She applied, but she cannot get in. Apparently we are finding that the universities are not able to take a person like her into evening courses because the seats are taken.
Joe Smith wants to help his son Jim to fulfil his dream to become a computer science graduate. Jim applies, he cannot get in. There are only 40 students who get in while the department receives 700 applications. Ruth Jones, the single mother secretary who wanted to improve her education, finds that her income is stuck, stuck forever with no hope for advancement, she feels. Joe Smith will never become a computer scientist. The university he applied to has no room for him because it does not have the money to fund any more seats in this course. Government cut-backs for post-secondary education have caused the university to be unable to serve people like Joe Smith.
These are real people. This is what the future of postsecondary education in this country is like. These people are illustrative of the impact of the cut-backs by the Tories to post-secondary education. They want to borrow money to fulfil their policies, but their policies are to cut back on post-secondary education. This is the reality of the full cut as a result of Tory incompetence and shortsightedness.
The federal Government has announced and now has brought in Bill C-96, which will change the formula by which transfers of support by this Government for post-secondary education will take place. It is reducing the formula for these transfers by 2 per cent per year. This will result in a cumulative cut to post-secondary education by 1990-1991 of aproxi-mately $2 billion, $2 billion out of an education system that has been trying to fight a war on behalf of the youth of our country who cannot find jobs and have been returning to the post-secondary educational system in droves in the hopes that they can advance their education sufficiently to qualify themselves to get those jobs which they need to have to carve out
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for themselves a future. This avenue is now being closed to them as well, no jobs and now no studying.
Faced with increased costs, the unviersities have also faced declining budgets. As David L. Johnson, President of the 79-member Association of Universities and Colleges of Canada, the AUCC, stated, "No government can make the claim of fiscal responsibility if it puts at risk the very institutions on which Canadians depend for their future.
Post-secondary education is but one example of how this Government's latest Budget is one of doom and despair for the youth of this country. At a time when youth unemployment is running at 15.9 per cent, where are the opportunities for jobs for young people? How can they train adequately for the future when budgets to colleges, CEGEPs and universities are cut; when federally paid for seats for university training programs and colleges are by 40 per cent; when colleges and university employment offices are cut back and closed down; when job-training programs in 1987-1988 will be cut by another $100 million on top of the $200 million cut for 1986-87 unveiled in last May's Budget?
The Senate committee report on youth released just this month urged the Government to act to prevent some 700,000 young people from becoming a lost generation. It was a study made by the Members of the Senate of both Parties, and it was agreed upon unanimously. So after this recommendation from the Senate committee on youth, what does this Government do? It cuts funds to post-secondary education contrary to the recommendations. It cuts funds for retraining programs, funds for job-creation, it cuts out the First Chance program, it cuts out Katimavik, a youth program whose obvious success is evident in that there have been some 20,000 graduates, a program which at the time it was cut was receiving some 500 applications a week. It was a program which provided services by youth at a salary of $1 a day to the elderly, to the handicapped and to such worth-while projects as reforestation and environmental and community improvement. It is amazing. This is a United Nations prize-winning program. This is program which has been endorsed by the municipalities of Canada. A resolution has been passed by the organization of the municipalities across Canada pleading for its reinstitution.
A 20-year-old, for example, on his own and jobless costs Canadian taxpayers from $3,000 to $9,000 for nine months. The person contributes nothing to society. Katimavik, on the other hand, costs $9,450 for the same period and gives the young person dignity, self-worth and a unique and toughening learning experience in real life classrooms.
Katimavik is cut because the Secretary of State says he wants new programs to create "permanent jobs for young people". Where are these programs? Today we have had the admission that there is no program at the present time to replace Katimavik. Katimavik is a program that develops citizenship, a community spirit, resourcefulness and the ability to solve problems and to learn. Also it gives young people the chance to go across the country, to learn the other official language, and in fact to have an experience in jobs, in working with others. It is a program that is famous internationally.

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The Government has said it has changed priorities. It claims it wants permanent jobs for our youth. So of all things it cuts Katimavik, promises a new program, and barely three weeks later the Minister of Finance (Mr. Wilson) brings down a Budget that kills the hope of training and retraining by 40 per cent and job-creation programs by $100 million. It kills the hopes of our young people by blasting and stunting all responsible expectations that our youth might have had for some conscience from this Government and concern and caring for our youth. No, this Tory Government has dumped all over our youth. The corporations get tax cuts. The millionaires get bailed out in their bank investments. There is money for that in the Tory Budgets. The rich get capital gains as presents to the tune of $500 million, which ends up as a cash bonanza of $125,000, but the youth are sacrificed on the battlefield to fight the deficit in the Tory war supposedly against the deficit. I find it absolutely tragic that these are the values of this Government. Where is its concern for young people? Where is its program for young people?
The Government is borrowing money for a bankrupt policy that does not invest in the future, the basis of which is the youth of our country.
Today I asked the Prime Minister (Mr. Mulroney) a question which he referred to the Minister of National Health and Welfare (Mr. Epp). The purpose of my question was to point out that university presidents are unamimous in their opposition to the policy of the Government and are united in saying that under-funding for universities will seriously undermine the future of post-secondary education.
I pointed out that the President of the University of Waterloo, Douglas Wright, is participating in a strike on the campus to demonstrate this concern. I asked the Prime Minister how he could allow this under-funding to take place on the back of post-secondary educational institutions which are so fundamental to Canada's future and the future of young people.
I did not receive an answer from the Prime Minister so I asked, as a supplementary question, if he was prepared to face the fact that universities are sinking into oblivion as buildings and equipment deteriorate, students are being stacked in the classrooms by the hundreds, and staff are being demoralized to the point where some are leaving the country. I asked him if he did not hear the cries from the universities and acknowledge that there was a crisis. He did not answer my question. Again, the Minister of National Health and Welfare was left to tell me that perhaps the Province of Ontario should do something. He does not say that to all of the provinces because the Ministers of Finance, except for the Province of British Columbia perhaps, and all of the Ministers of Education have told the Minister that the Government's policy is short-sighted in this respect.
What happens to the youth of our country who manage to get an education and find a job? Those who wish to get married, buy a house and raise a family face grave obstacles. Let us consider our youth and family life in this country. First,
many of our youth do not get full-time jobs and, if they do, many of them are low-paying jobs that have been created by corporations by laying off older employees in order to take advantage of Government programs. Why, in a country like ours, should we have youth filled with doom and despair? They may not have much hope because they are finding it difficult to save money in their junior jobs with junior salaries.
The fact is that the Government's latest Budget is eroding their pocket-books even further. Last year, the Conservative Budget removed 3 per cent of inflation protection from the tax tables during a year of 4 per cent inflation. The average Canadian has not seen the impact of this reduction. Canadians do not yet realize what has hit them because they have not received the message that their tax tables have been manipulated with a 3 per cent cut in inflation protection. There is another 3 per cent cut in this year's Budget, and that 3 per cent inflation protection will be removed by the Government every year thereafter. Such a cut affects the young and the old.
The Government also imposed a 3 per cent surcharge. When the Government came to office it renewed the 1 per cent sales tax, imposed another 1 per cent sales tax in its Budget the following year and has slapped on another 1 per cent this year. The sales tax has risen from 9 per cent to 12 per cent and has reduced the purchasing power of young people by 3 per cent.
The Government has also slapped an 11 per cent tax on health care items that were not previously taxed. These include health care items and some medicines used particularly by elderly people. The Government is imposing a wide range of new taxes on Canadians.
We have read that gas prices will decrease as a result of falling world oil prices. We see that these prices have fallen in other countries, but not in Canada. In fact, the Tories have added to the price of gasoline with this sales tax increase of 3 per cent.
During the world-wide recession, the Liberal Government recognized that young people needed help in purchasing a home. We introduced the RHOSP plan which allowed young people to put up to $10,000 in a special bank account that could be spent, tax free, on housing and furnishings. The purpose of this program was to give young people an incentive to build their own home and start a family.
Of course, the Conservatives immediately cancelled the RHOSP program. The successive 1 per cent federal tax increases introduced by the Government jack up the price of houses by 3 per cent. Furthermore, they raise the price of all other goods Canadians require for their home and families. It is tragic that the Government is sapping the ability of Canada to compete in the world. It is crushing our young people and their ability to contribute to the economic, cultural and moral growth of Canada. The state of our universities and colleges leaves young people without hope.
I want to deal with the voluntary sector, including the charitable organizations and community organizations. This sector has proven to be one of the largest and most intensive job creation sectors in Canada. It is an intensive labour market
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which provides services to Canadians cheaply, which no Government can duplicate. Yet this voluntary sector in which our young people may find jobs has been ignored by the Government in terms of the fifty-fifty plan for organizations. While the Government may have had reason not to address this sector in its first Budget, due to time constraints, nothing has been done in the latest Budget for the volunteer sector or the charitable sector in this country. That is reprehensible.
[ Translation]


Mr. Hamelin:: Mr. Speaker, I probably agree with the objectives and the concerns of the previous speaker, but obviously, I cannot support the means he is suggesting.
During this debate on our borrowing authority, many speakers this afternoon have criticized the statistics and forecasts used by the Minister of Finance (Mr. Wilson) in his Budget to establish our borrowing requirements and the projections for the coming year.
However, I would like to say that, since I am a newcomer in this House and must therefore read a lot, I have made a few quick checks this afternoon to see what have been the forecasts, the ideas and the projections on the occasion of past budgets. On November 12, 1981, for instance, the then Minister of Finance, the Hon. Mr. MacEachen, stated: "This Budget has three themes: restraint, equity and economic renewal" And he stated, on page 12721 of Hansard: "The first is the need for restraint on the part of the Government and on the part of all Canadians. For our part, I believe we must reduce our deficit and our borrowing requirements substantially". This is what he was saying at the time. And that Hon. Minister came forth with a deficit projection of $10.5 billion for 1982-83. This was based of course on indicators, on his own perceptions, on the advice of his advisors around him, on his own vision of Canada, on his confidence in the economy. And by pure coincidence, a totally, absolutely pure coincidence, at the end of the year concerned, Mr. Speaker, we found ourselves with a $24.7 billion deficit. With that kind of instrument, with that kind of margin, with that range of variation, excuse me, Mr. Speaker, but almost any moron can be Minister of Finance.


Jean-Claude Malépart: This is why they took on Wilson.


Charles-André Hamelin: Listen, with that range of variation, 10.5 to 24.7, anybody can be Minister of Finance and make all kinds of predictions.
We have Mr. Lalonde in 1984-85 who predicted a $29.6 billion deficit and we found ourselves with $36.9 billion. That was an improvement. Yes, things are improving with a $10 billion margin. How horrendous! Billions of dollars!
Well, I think we had forecasts last year, my dear colleague,
from the Minister of Finance (Mr. Wilson), and they were
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borne out. For the first time in 20 years, we had a Minister of Finance whose predictions-


Jean-Claude Malépart: Mr. Speaker, may I ask our colleague whether he knows the difference between a question and a comment, and to please tell us where he is leading to.


Charles-André Hamelin: I feel I have no lesson to learn, especially from the Hon. Member from Montreal-Sainte-Marie, as to the difference between a question and a comment.


Jean-Claude Malépart: Just prove it.


Charles-André Hamelin: In the first place, most often questions by the Hon. Member from Montreal-Sainte-Marie are controversial comments dealing with almost every subject and having little to do with the facts.
Therefore, before asking my question, and it is coming . . .


An Hon. Member:: Spit it out!


Charles-André Hamelin: I will spit it out when 1 feel like it, my friend!
And rest assured, my dear colleagues-I am speaking to both of you-you are lucky our Parliamentary system does not allow having more frequent exchanges between the two of us in this House, because we would enjoy ourselves, I am sure.
As I said, Mr. Speaker, and this is why I want to ask a question, they criticize our estimates which for the first time in 20 years have proved to be real, realistic and valid. 1 am sharing the more humane concerns of the previous speaker who referred to his concerns with respect to youth, etc. Do you not believe, my dear colleague, that because of those estimates which proved to be accurate in the past, probably in the months and years to come there will be much more funds available for the objectives which we would both like to attain in the matter of education and employment for young people?


Roland de Corneille: Mr. Speaker, first, I must admit that I had not commented on the accuracy of the budget predictions. I would like to suggest to the Hon. Member that he has recalled a period-at which time the Budget was brought down by the Hon. Allan MacEachen-which immediately preceded a world-wide recession. I would suggest that not only the Government of the day, but every Government in the world, had miscalculated in their budgets because of the world-wide recession. What 1 think would be tragic is if the Minister of Finance (Mr. Wilson) were a good predictor and prognosticator. We would then be in a horrifying situation because it would mean that the level of unemployment for youth will continue to be unacceptably high, if that is his prediction. It would mean that the universities are going to be starved to an unacceptable level in terms of education. It would mean, according to the presidents of the Research Councils, that grants which will be given for research will no more than cover inflation. It would mean that the Canadian

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university system is literally going to go down the drain, if this Government's predictions are right.


Jean-Claude Malépart: Mr. Speaker, I should like to make a brief comment on the Hon. Member's speech and ask him a question.
In the first place, I would like to remind my colleague and this House that some of the Quebec Members have been quoting from favourable reports in newspapers, but they forget to quote from well-known and qualified reporters such as Mr. Alain Dubuc of La Presse who stated on February 27: "Wilson has missed the mark." I think that some of the Tory Members should also read the comments of an editor of La Presse, Frederic Wagniere, who said on February 27: "A too severe budget." And also Jean Pelletier in the Journal de Montreal who wrote: "The taxpayers will foot the bill." They are all columnists writing on economic issues and it is worth noting that Alain Dubuc clearly shows how Mr. Wilson's Budget will cost at least $500 per Canadian family in new taxes and that the Canadian taxpayers will be losing 3 per cent of their purchasing power. However what is still more shocking and this is the question which I would like to ask the Hon. Member. Does he remember that to save their income some of our senior citizens, our parents, mothers, grandparents, had to come on the Hill and Mrs. Denis dared to jeer at the Prime Minister? Does he remember that sick people had to make representations in our ridings and to the Prime Minister's Office so that he would remove the 10 per cent tax? Does he remember that mothers came on the Hill to make their views known to the Prime Minister and the Tory Members? I would like to know from the Hon. Member what he thinks of all these means that the public has to resort to in order to be heard. Now it is the young people, and a Senator has to go on a hunger strike to make the Government aware of their plight. What is the point of view of the Hon. Member on the activities that the public must initiate to be heard by the Government?


The Acting Speaker (Mr. Malone):: The time for questions and comments is now over. Debate.


James Douglas Manly: Mr. Speaker, I am glad to have the opportunity to make a few comments on Bill C-99, which would give the Government authority to borrow some $22.6 billion so that it can carry out its program. Our problem with this Bill is that we do not like the Government's program because it fails completely to address the real needs of Canada at the present time. As presented in the Budget two weeks ago what we have is a program which increases taxes, cuts government programs and does absolutely nothing with respect to jobs. It has an emphasis on the deficit, which is misplaced because by its actions in throttling the economy the deficit will not go down as hoped.
I wish to emphasize in the few minutes I have this afternoon the absolute need for jobs and the absolute need for the Government to address this situation. 1 wish to focus my remarks on British Columbia, and Vancouver Island in particular, because I think the situation there stands out in very stark contrast to the situation in the rest of the country.
The situation in British Columbia makes me ask where the 19 Progressive Conservative Members of Parliament were when the Budget was being drawn up. I must also ask where the three members of Cabinet from British Columbia were when it was being prepared. Why is there not something in the Budget which would help to deal with the problems in British Columbia? There is nothing. Since the Conservative Government was elected in 1984 the City of Victoria has lost 10,000 jobs. Some 16,000 jobs have been lost on Vancouver Island. In February, our youth unemployment stood at 22.1 per cent. When we look at the figures for long-term unemployment in British Columbia we see a very desperate situation. Some 65,000 of the unemployed in British Columbia have been unemployed for six months or more. This represents 31.4 per cent of all the unemployed in British Columiba. That is the highest percentage in all of Canada. When we look at the unemployment who have been unemployed for over one year we see the same story. Some 29,000 British Columbians have been unemployed for a year or more. This represents 14.2 per cent of all unemployed British Columbians. Again, this is the highest average in all of Canada, some 40 per cent higher than the national average with respect to people who have been unemployed for longer than one year.
We must combine these statistics, which have to be looked at in terms of real human beings and the suffering which they are experiencing, with the lack of programs introduced by the federal Government. Last year the Government trumpetted a great deal about the federal-provincial forestry agreement. This agreement was to see some $300 million of federal-provincial funds for British Columbia forests over the next five years. However, foresters in that province say that in order to address adequately the situation in British Columbia, which is at a crisis point, there should be at least twice that amount of money. Certainly in terms of employment needs it should be twice that amount of money. However, there is nothing in the Budget to help our forests.
With respect to fisheries, the Minister promised in February that if the users could ante-up with one-third of the money, about $100 million, the federal Government would put in $200 million to establish a $300 million salmonoid enhancement program for the next five years. The fact is that user groups, particularly commercial fishermen, are completely unable to meet the request for $100 million at the present time. Anyone who has followed the situation on the West Coast, and certainly all Members from British Columbia should have done so, knows that British Columbians have gone through a number of very difficult years. There have been poor catches and not great prices, high interest rates and high gas and oil prices. Last year was a good year and British Columbians were just
March 11, 1986

beginning to catch their breath. The Government is now trying to blackmail them with the idea that there will be a salmonoid enhancement program only if they come up with this $100 million user fee. As one British Columbian said, it is like throwing an anchor to a drowning man. Instead of putting money into British Columbia to help it recover from the recession, what we have seen from the Government in its November, 1984 Economic Statement, last May's Budget and the present Budget, has been a series of unfair taxes loaded on low and middle-income people.
These taxes total some $1,300 for the average family. This money is being taken not only from individuals but from every family. It is being taken away from their communities such as the communities of Duncan, Sooke, Colwood, Chemainus and Ladysmith. This is money which comes to Ottawa for whatever purposes the Government wishes to put it to.
This money is being removed from local communities where it could circulate and do some good toward helping sustain a large and fragile economy. It is being removed from local communities which will have an even more depressing effect on the province. One of the most unsettling facts about this situation is the unfairness of it all. The fact is that wealthy income earners will be paying lower taxes because of the reduction of the surtax at the end of this year while all other Canadians will be hit with a 3 per cent surtax on their income tax.
Since the Conservatives came to power we have seen three increases in the federal sales tax of one percentage point apiece. This directly hits low-income people. In the Budget we saw some help for Atlantic Canada, which I know is not enough. I know that Atlantic Canada has very serious longterm problems. However, Atlantic Canada received more help than did British Columbia. British Columbia received nothing. At least Atlantic Canadians received the $1 billion Atlantic Enterprise Program and the tax credit program. However, there is nothing such as that for British Columbia.
In considering the situation of women and children we see nothing. The last word the Government had for women and children came when it cut the indexing with respect to family allowances. That was this Government's response to the needs of women and children. Instead of moving quickly to address what the Prime Minister (Mr. Mulroney) recognized as a serious situation in the election campaign, that is, the need for adequate and affordable day care for all Canadians coast to coast, the Government has chosen to appoint a parliamentary committee which will tour Canada and hear submissions. We do not need more submissions. What we need is a system of affordable and quality day care for our children. In this respect the Cooke Report was recently tabled. The Government could act on this report instead of waiting to receive another which will be tabled some time in the future. When this report is tabled I am sure the Government will take its time to consider it. In fact, it will stall even further. When will we receive some action on day care?
In looking at the cut-backs to the Established Programs
Financing we see that it has led responsible medical people to
Gulf Refinery
say that this could result in a second class system of medicare for some of Canada's poorer provinces. The Government cut the Katimavik program. This was a program which allowed some young people to participate in helping to get to know their country and to get to know one another. It provided some opportunity for service and training for our young people.
I am particularly concerned about the cuts in our goals for development assistance. Here I am speaking of commitments which Canadians made to the needy people of the world. In 1984, shortly after the Secretary of State for External Affairs (Mr. Clark) was appointed, he stood up in the United Nations and promised that we would reach the goal of 0.7 per cent of our Gross National Product for official development assistance by 1990. The Economic Statement of November, 1984 postponed that goal to the year 1995. It was outlined in the statement that we would reach 0.6 per cent of GNP for development assistance by 1990. Then, last month's Budget put the goal back yet again. We will not reach 0.7 per cent until the 21st century. The needy people of the world look to Canada for assistance. We have turned our backs on them.
I see that my time has expired, Mr. Speaker. I look forward to finishing my remarks on another day.


The Acting Speaker (Mr. Charest):: Order! It being five o'clock, the House will now proceed to the consideration of Private Member's Business, as listed on today's Order Paper.


PRIVATE MEMBERS' BUSINESS-MOTIONS   MONTREAL EAST GULF REFINERY
Jean-Claude Malépart: That, in the opinion of this House, the Government should consider the advisability of intervening in the matter of the Gulf refinery of Montreal East in order to save the hundreds of jobs which are threatened and to protect Quebec consumers, thus respecting the unanimous resolution of the National Assembly of Quebec.
Mr. Speaker, now that you have read the motion, which I will read again, we will have a chance to measure the intellectual honesty of our Conservative colleagues and this Government, and to get to the truth of a matter that has caused so much ink to flow.
Mr. Speaker, the motion is as follows:
That, in the opinion of this House, the Government should consider the advisability of intervening in the matter of the Gulf refinery of Montreal East in order to save the hundreds of jobs which are threatened and to protect Quebec consumers, thus respecting the unanimous resolution of the National Assembly of Quebec.

March 11, 1986
Gulf Refinery
Mr. Speaker, this matter goes back to the summer of 1984, and we are still discussing it today. The Hon. Member for Champlain (Mr. Champagne) is wrong when he says it started under the Liberals. He is wrong, Mr. Speaker, and I hope he will listen carefully, because his credibility is at stake.
Mr. Speaker, during the summer of Olympia & York, Petro Canada and the federal Government proceeded with the purchase of the assets of Gulf. Early in September, thanks to the efforts of a number of Conservative members, Olympia & York was persuaded to postpone closing the refinery for two months. I take my hat off to those Members, and they are the Hon. Member for Mercier (Ms. Jacques) first of all, and then to some extent the Hon. Member for Duvernay (Mr. Della Noce) and the Hon. Member for Terrebonne (Mr. Toupin)!
Mr. Speaker, matters got worse, and today, we have reached the point where the refinery is closed down, 450 employees have lost their jobs, and a Conservative Minister has resigned. A number of Conservative Members have lost all credibility with the public on this matter.
To me, the credibility of Conservative Members is not the main thing. That is their problem, not mine and not that of the people of Canada. What is still at stake today is the credibility of the Prime Minister, and also the interests of Quebec consumers and 450 employees of the Gulf refinery in Montreal East.
I know that those people are watching us, and I hasten to commend the representatives of the Gulf refinery workers for all their work and efforts to save jobs in Montreal East and soften the blow against Quebec consumers.
Mr. Speaker, those workers had confidence in all Members of all political persuasions, at both federal and provincial levels, but they wake up today and they are out of a job. Still, they know who is telling the truth in this matter.
What happened? How is it that we in the Liberal Party, the Official Opposition, are involved in this case which took place in the riding of a Conservative Member, the Member for Mercier?
For starters, it all began after the announced closing of four Montreal East companies, and those people called on us to support them on the picket line. I knew full well that as a plant worker I would never have accepted a politician showing up at the plant gate just to have his picture taken, shake a few hands and drive back home. So I agreed, along with my colleagues- the Hon. Member for Saint-Denis (Mr. Prud'homme), the Hon. Member for Saint-Leonard-Anjou (Mr. Gagliano) and the Hon. Member for Shefford (Mr. Lapierre)-on the condition that we would regroup as the Eastern Townships residents had done, set up a survival committee made up of people from all political parties, and make an honest effort to save as many jobs as possible.
So it was to deal with the Gulf issue, the Canadian Steel Wheel issue, the Vickers issue, the Daoust issue, the Parisette and Bombardier issues that all employee representatives, all elected representatives at the three levels of government, no matter their political stripes, got together under one blanket organization, the Comite de survie de Test de Montreal. And even the Hon. Member for Duvernay (Mr. Della Noce) who is not directly connected with this area attended the first meeting.
Mr. Speaker, I must congratulate all provincial candidates, men and women, who took part during their election campaign without ever trying to make political gains.
But newspaper reports will indicate that the three or four Conservative Members included were the only committee members who were in disagreement. It was not a Liberal candidate haggling with the PQ candidate, but the Hon. Member for Montreal-Mercier (Ms. Jacques) who quarrelled with the Hon. Member for Terrebonne (Mr. Toupin) and the Hon. Member for Duvernay (Mr. Della Noce). The only people who made nuisances of themselves during the Montreal East battle were the three Conservative Members who constantly argued and tried to destroy one another. What happened here in the House? They are the same Conservative Members who brought in Gaz Metropolitan. The Quebec caucus of the Progressive Conservative Party, as its chairperson can bear witness here, supported this initiative. But what happened is that everybody let down the Hon. Member for Terrebonne in this issue.
How did we learn about the sale on December 3, the day after the provincial election? How did we learn about the transaction? What happened at the consumer level? Let us forget for a while about jobs and let us think about the interests of consumers.
On January 18, Mr. Speaker, the Minister of Consumer and Corporate Affairs and Canada Post (Mr. Cote), a Quebec Minister of the Crown, a Conservative Minister.. . Ottawa could repudiate the sale of Gulf to Ultramar. This goes against the interests of Quebec consumers. The Minister made the following statement on the 17th, at a press conference which 1 was attending. After questions asked by the journalists on the other side, the Minister promises seven or eight times to make the report public the next Friday. What happens that Friday, Mr. Speaker? The Minister remained silent. The Minister of Energy, Mines and Resources (Miss Carney) has shut him up. Another little Quebecer has just been told to keep quiet.
At the same time, Mr. Speaker, Ultramar is threatening to close its refinery. Shell Canada is threatening to close its refinery in Montreal East and the Quebec National Assembly agrees unanimously to a motion on December 18, if you recall, immediately after the election. To my knowledge, the Liberals and PQ Members are not that friendly. These people unanimously asked that the Canadian Government and the Prime Minister, who prides himself on being the little guy from Baie
March 11, 1986

Comeau and who has been named citizen for life of West-mount, wait 90 days before agreeing to the transaction.
It is quite unusual to have a motion passed unanimously in the National Assembly after an election campaign. What happened then, Mr. Speaker? During the Christmas adjournment, on December 19 our own adjournment was around December 21-Minister Cote made a statement which clearly showed that the consumers would be penalized in Quebec. We have to remember that it is following the signature of six or seven Liberal Members that the Minister was forced to intervene. What happened then, Mr. Speaker? On December 27, in Montreal, while everyone was enjoying the holidays, the Minister of Regional Industrial Expansion, believing that no one would notice, that the Opposition Members would be gone, that the Conservative Members would all be away, that the Gulf Refinery employees would be unable to do anything, the Minister, who is unilingual, went alone to Quebec to announce that he had accepted the deal between Olympia & York and the British company Ultramar.
Mr. Speaker, it is important to remember that Olympia & York had obtained tax shelters of nearly $1 billion to purchase this refinery and protect the assets of Western Canada when refineries and service stations were sold to Petro-Canada. However, the Gulf Company had been left out.
Mr. Speaker, the reason given by the Minister, if market conditions so required, he had the gall, although his colleague in a press conference had suggested that this went against the interests of Quebec consumers, but the Minister of Consumer Affairs did not attend that press conference. In his press release, the Minister said that.
What do we have now after having looked at all that? There are Conservative Members who joined in good faith. They even said that the Hon. Member for Duvernay (Mr. Della Noce) has the feeling he has been manipulated. Mr. Speaker, I am convinced the Hon. Members for Duvernay, for Montreal-Mercier (Mrs. Jacques), for Terrebonne (Mr. Toupin), were involved in good faith like all other Members, but unfortunately they have been misled. Just like the Minister of Consumer and Corporate Affairs. I attended the press conference; he looked very happy. After that he winked at me, it was almost in the bag. But after that there was no more of him to be seen.
But we do have the O'Farrell Report, Mr. Speaker. The O'Farrell Report was made public, and it is in there in black and white that Quebec consumers are penalized by the Gulf Refinery shutdown in east-end Montreal. It is here, we managed to lay our hands on it because, as you remember, in this House, when the Opposition Members directed the question to the Minister of Energy, Mines and Resources (Mrs. Carney), she openly gave the not so important Minister of Consumer and Corporate Affairs a good dressing down. She made it quite clear in the House that she was the Minister of
Gulf Refinery
Energy, Mines and Resources and that her figures were right, meaning: "Listen kid, you sit down and keep quiet there".
Here, Mr. Speaker, we managed to lay our hands on that famous Energy, Mines and Resources report from the Minister, not to name her, that Minister who hails from Western Canada and who knows very little about east-end Montreal. Quebec, what is that? She does not know yet. And I have conclusions. In her view, Quebec never will be short of gas, not to worry, there is plenty of it in Ontario. Such are her own Findings, Mr. Speaker, or rather the findings in her report. And to realize that Quebec Conservative Members will be conned again!
When we read the famous report from the Department of Energy, Mines and Resources, we notice that the figures are the same as those in the telegram which Mr. Woodroffe, the Ultramar representative, had sent to the Minister of Regional Economic Expansion (Mr. Stevens) on September 25. As it happens, the Ultramar figures are the same as those quoted by the Minister of Energy, Mines and Resources (Miss Carney). Isn't that funny? It is quite a coincidence. As I said a moment ago, I made a check on Ultramar and Gaz Metropolitain, and I Find out that Ultramar had given $3,000 in Baie-Comeau, a mere $3,000, and Gaz Metropolitain gave nothing.
I have some other interesting Figures here, Mr. Speaker. Coincidentally, Ultramar had contributed another $2,100 to the riding represented by the Minister of Finance. It is always useful. One has to admit that the Ultramar people were right on. Olympia & York, in the riding represented by the Minister of Indian Affairs and Northern Development (Mr. Crombie). They know the right people.
I wish a Conservative Member could tell me why, on December 20, following the motion adopted unanimously by the Quebec National Assembly and calling for a 90-day moratorium, the Government acted secretly and without advising anybody, as it had done from the start? Why?
I remember that the Minister of Regional Economic Expansion, accompanied by a few petty Hon. Members, a few groupies, announced on the 27th that, as Judas, he had sold Gulf to Ultramar for the purpose of closing it. The Minister thought that it was over. But three days later, the people had banded together and formed a common front. A common front made up of employee representatives, Members, both Liberal and Conservative, of the House of Commons-the Hon. Member for Terrebonne (Mr. Toupin) was there-as well as Liberal Members of the provincial assembly, and various representatives from the petro-chemical industry.
At one point, Mr. Speaker, a Minister came in because there was a Member present in the hall who was against the common front. To tell the truth, the Hon. Member for Duvernay (Mr. Della Noce) was sitting on the other side of the fence. The Hon. Member for Rosemont (Mrs. Blais-Grenier), who was a Minister at the time, came into the hall and signed

March 11, 1986
Gulf Refinery
the petition to indicate her support. That's when the Hon. Member for Duvernay signed the petition too, in front of the cameras.
Mr. Speaker, I see that my time is about to expire. I think there is an ultimate chance, and the Gulf employees, I am sure, are listening to us at this moment. The motion is clear. As Conservative Members, you have the chance... The Quebec Government is still taking steps to possibly save the whole or part of the refinery. You made a mistake when you gave the preference to a British firm over a Quebec firm; therefore you should find a solution to this problem. You must exert pressure on the Ultramar owners to compel them to sell to the Lavalin company, the SNC Group or anybody else, but in co-operation with the Quebec Government, to start the whole refinery going again, or at least to save the petro-chemi-cal facilities, in order to keep these jobs in Montreal East and protect Quebec consumers.
To conclude, Mr. Speaker, let me say that this is the last chance for Members of the Conservative Party. I hope that no one will accept to do the arm twisting job.


Lorne Edmund Nystrom: Mr. Speaker, 1 second the motion by the Hon. Member for Montreal-Sainte-Marie (Mr. Malepart), and I want to say that a few weeks ago I was in Montreal East with the Hon. Member, and I know it is perhaps unusual in the House to say anything good about a Member of another party, but I want to say that we have here a good Member who has worked hard for his constituents in Montreal East. He has worked very hard. Of course he worked hard because he is an active Member of this House, and although he is a Liberal, I want to say he is a good Member of this House.
There were also many members from the provincial legislature. One was Louise Harel, a member of the Parti quebecois whom I know very well. She is the provincial member for the riding of Maisonneuve, and she is also very actively involved in the problems of Montreal East.
Mr. Speaker, the issue involving Gulf and Ultramar is a very important one, and it is perhaps one of the reasons why the Conservative party has lost so many points in the polls. I think everybody knows the Conservative Party experienced a free fall in Quebec. According to the SORECOM polls, taken two or three weeks ago, the Liberal Party got 47 per cent of the vote, the Conservative Party 27 per cent and the New Democratic Party, 26 per cent. The Conservative party has nearly become the third party in Quebec.
The poll organizer in Winnipeg said exactly the same thing three or four days ago. He said the NDP now had 25 per cent of the vote in Quebec, the Conservative Party 27 per cent and the Liberal Party, 44 per cent.
One of the reasons for the swift free fall in Quebec, even with 58 Conservative Members from that province in the House, is the fact that the Conservative Party closed down the refinery in Montreal East. This is no joke. This is not a laughing matter. Maybe the Hon. Member from Quebec should go to Montreal East and talk to the workers and talk to the people. Everybody down there knows perfectly well it was the Conservative Party with its decision regarding Investment Canada that closed down the Gulf refinery in Montreal.
Mr. Speaker, Ultramar bought the Gulf refinery in Montreal to close it down and get more customers for its refinery in Quebec city. That is the only reason Ultramar purchased the refinery in Montreal East. Otherwise it would not have turned down offers to purchase the Montreal East refinery, by parties such as Gaz Metropolitain, which would have increased competition on the Quebec market.
I know it was a Conservative Member from Montreal East, the Member for Montreal-Mercier (Ms Jacques) who said just before Christmas that Gaz Metropolitain might be a prospective buyer.
However, Mr. Speaker, when the sale of Gulf by Ultramar was examined by Investment Canada, Ultramar threatened to close down its refinery in Quebec City if the Government tried to keep the Gulf refinery open.
Mr. Speaker, it was the pressure of the big multinationals, and unfortunately, the Government listened to the multinationals and not to the people of Quebec.
The same threats were made publicly by Shell Canada which also has a refinery in Montreal. Shell Canada was doing exactly the same thing as Ultramar, the British Corporation, had done.
Mr. Speaker, there is also the matter of undercapacity in Quebec. Now that Gulf has shut down, the Province of Quebec has only three refineries left-Ultramar, Gulf and Petro-Canada. Those companies will now be in a position to boost their refining capacity from 75 to 100 per cent, and their profits will increase accordingly. The companies will also be able to sell all their products to their own retailers, which might signal the demise of independent retailers. That is an important issue because in Quebec as elsewhere in Canada there are quite a few independent retailers whose main problem is to remain competitive, Mr. Speaker.
Everybody, including the Minister of Consumer and Corporate Affairs (Mr. Cote), the Minister of Energy of Quebec and independent retailers, they all agree that Quebec refining capacity will no longer be able to meet the needs of Quebecers.
At long last the O'Farrell report was finally made public, and it states that Quebec's refining undercapacity will lead to price controls by those three companies-Petro-Canada, Gulf and Ultramar-as well as excessive prices for Quebec consumers. Mr. Speaker, the current situation is such that crude oil prices are tumbling throughout the world. As I recall, a barrel
March 11, 1986

of oil cost $38 three months ago, but according to this morning's Globe and Mail a barrel of oil is selling for only $14 or $15, a drop of $23 or $24 a barrel.
But the main question is this, Mr. Speaker: Why did the Conservative Government give in to the oil industry and ask for the Gulf shutdown? Why did the Government wait for the major company, Ultramar? Secondly, Mr. Speaker, why did the Government not take action to protect the interests of Gulf workers and Quebec consumers? And thirdly, Mr. Speaker, why did the Government imitate the Liberal Party which, a few years ago, closed down three refineries in Montreal? Indeed, Mr. Speaker, the Conservative Party and this Government are not the only ones who closed a refinery in Montreal. When Mr. Trudeau was Prime Minister, the Liberal Party closed not one or two but three refineries in that great Canadian city.
Mr. Speaker, the Combine Investigation Bureau should carry out a new inquiry in order to determine whether or not the oil industry is responsible for the Gulf refinery shutdown. Shell and Ultramar together threatened the Government which gave in to pressure.
Mr. Speaker, it is a question of great importance for the Quebec people. It is a question of employment, of "jobs" for many people in Montreal East. It is also an important question on the national level, due to the fact that we now have in the country many, in fact too many foreign businesses, and a lot of foreign control in our economy. This Montreal refinery could be sold to Canadian interests, to a Quebec buyer, such as Gaz Metropolitan. Yet, in spite of the situation, the government and the Minister for Industry have decided to sell this large corporation to a British firm. Mr. Speaker, I know that Quebec people do not agree at all with this decision. I know that because, three or four months ago, I met with many Quebecers, as I said before when I was in the East end of Montreal, with Mrs. Louise Harel, the Member for Montreal-Sainte-Marie, and 50 other people.


An Hon. Member:: Federal Liberals!


Lorne Edmund Nystrom: Yes, federal Liberal Members and also provincial Liberal MNAs. I know there are also, Mr. Speaker, federal Conservative Members who do not agree with their Minister, or with their Prime Minister with regard to this refinery.
There is the Minister who resigned on that issue, the Hon. Member for Rosemont (Mrs. Blais-Grenier). We know, Mr. Speaker, that she has principles and she followed her conscience. I hope that more Conservative Members from Quebec will do the same, because a recent poll is giving only a 25, 26 or 27 per cent support to the Parti quebecois, the Conservative Party, and after the next elections there won't be any Conservative Member left in Quebec, because the Party broke its electoral promises. They broke the promises they made to the Quebec people.
Gulf Refinery


Mrs. Monique B. Tardif (Parliamentary Secretary to Minister of Regional Industrial Expansion):: Mr. Speaker-


Jean-Claude Malépart: On a point of order, Mr. Speaker. From a procedural point of view, I would like to know whether the fact that Conservative Members will speak up to 6 o'clock, means that they are against the Motion and that they are abandoning the Gulf refinery.


The Acting Speaker (Mr. Kempling):: That is not a point of order.


Monique Bernatchez Tardif: I am greateful for this opportunity to speak about a subject which we consider very important. As all the Hon. Members are aware, the Federal Government is committed to the creation of a new economic environment in Canada in which, and this is the crucial point, industry and commerce will be able to develop in every region in Canada. One of the troubling facts about a competitive market is that, sometimes, decisions have to be made which will mean plants closing and jobs lost. In such cases, we call upon the Governments to use all available resources to solve the problems.
The Government of Canada has stopped governing the country with ad hoc short term policies. The Progressive Conservative Government is governing the country in a much longer term perspective.
The Hon. Member for Montreal-Sainte-Marie (Mr. Male-part) gave us a history lesson a while ago. I would like to do the same. If we look at what happened in December 1985, Ultramar and Gulf Canada announced that, on January 8, 1986, Ultramar would acquire the capital assets of the refinery and the marketing operations of Gulf Canada located in Quebec and the Atlantic region. It was then decided to close the Gulf refinery in Montreal. Ultramar took over the facilities with the intentions of using them as a terminal for oil products.
The decision to close the Montreal refinery was taken following an evaluation of the refining capacity in Quebec. Closing the Gulf refinery will allow the Ultramar refinery in Quebec City to remain viable.
Mr. Speaker, such are the facts which led to this transaction during 14 months between February 1983 and May 1984. Under the former Liberal Government, nine refineries were closed in Canada, including three in Montreal. This brought about the lay-off of 1,870 employees, including 1,080 in Montreal. As the President of the Treasury Board (Mr. de Cotret) pointed out last January 13 when he replied to the Hon. Member for Montreal-Sainte-Marie and asked him what he did when Esso, BP and Texaco were closed and 1,080 jobs were lost in Montreal East, he should explain his own behaviour then. He did nothing. Where was he when the then

March 11, 1986
Gulf Refinery
Government announced that it was all over for the petrochemical industry and Petromont?
As for us, within a few weeks, we injected $15 million in Petromont and we have just injected $55.8 million in this company to guarantee a viable petrochemical industry in Montreal. That is progress. That is building on solid bases. For about 10 years, oil demand has gone down considerably in Quebec. The market share of natural gas has nearly doubled since 1980, when it was about 8 per cent, as it has now reached 15 per cent. The share of electricity has also increased substantially, from 27 per cent in 1980 to 38 per cent in 1985.1 do not know whether the Hon. Member for Montreal-Sainte-Marie (Mr. Malepart) recalls the target set by the Quebec Government in its 1978 energy policy, which was a 41 per cent share of the market for electricity and a 15 to 20 per cent share for gas by 1990. The Government has therefore nearly succeeded in meeting its objective, and it has done so five years before the original target date. That increase in the market share of competing energies resulted in a similar decrease in oil sales, which used to account for more than 70 per cent of energy consumption in Quebec in the early 70's. In 1980, that proportion was reduced to a little over 60 per cent, and, finally, in 1985, oil only accounted for about 45 per cent of energy consumption in Quebec. The unavoidable result of that lower consumption was a refining over-capacity for oil products. Selling the Gulf Corporation facilities is one of the steps in the industry redeployment required because of those structural market changes. The selling of the Gulf assets in Quebec and in the Atlantic area remains a private transaction between buyer and seller, over which the Government has no control. The significant decrease experienced in oil consumption is the major factor in the decision to shut down refineries. The market shift from heavier products to lighter ones and the capital investments required to update plant and equipment also have been contributing factors to the shut-downs which affect all regions in Canada. The reduction in the Quebec production, which at times may seem disproportionate, was caused by the relatively fast decline in demand for oil products. 1 noted that my hon. colleague is concerned about the possibly negative impact of that shut-down on Quebec consumers. I want to reassure this House that Quebec's security with respect to supplies of oil products is not predicated upon its self-sufficiency in the area of refining capacities. I would like to give the House an example. Some provinces like Newfoundland, Prince Edward Island and Manitoba, have no refineries. The State of New York, with 15 million people, has no capacity in that area other than a small asphalt plant. The security of supplies is no major concern in those areas, and this is because they do not feel they need to have refining facilities of their own capable of coping with their internal needs. Quebec market forces in 1985 have been boosted by deregulation, which gave Quebec easier access to products from international sources, at competitive prices. The Hon. Member also referred earlier to the O'Farrell Report, about which he made
a great fuss. As is often the case in his comments, he was looking at only part of the question. And indeed he does that very often in this House. If we had a look at what the report states, and especially what the author wrote, and I quote: This document is not the report of an inquiry under the Act. It was rather a brief of a consultative nature which had been submitted to the Minister.
Such is the O'Farrell Report. It contains not recommendations but assumptions, scenarios based on a market that includes Quebec, Eastern Ontario and the Northwestern United States. The under-capacity to which it referred must be viewed from that angle, as a market that covers part of the North American continent rather than a market limited to the Province of Quebec.
We should certainly not be mixing apples and oranges. I think that is quite clear in fact for anyone who has appraised himself of the contents of that document.
As far as safe supply is concerned, as I said earlier, Mr. Speaker, this is what Mr. O'Farrell has to say: "It is an irrelevant question in the context of a competition oriented policy".
I wish Hon. Members would use this report as it was intended to be, and not for the kind of partisan debate that never allows us to take a good look at what is in the files.
Turning to the Department of Energy, Mines and Resources, Mr. Speaker, there was a recent survey of the refining capacity and the internal demand in Quebec. That survey concluded that there was an over-capacity in 1985, when Gulf was still operating. Although the Gulf refinery was closed in January 1986, there is still an over-capacity.
That survey was completed, Mr. Speaker, and is presently being studied along with four other studies by the Restrictive Trade Practices Commission.
Let us now turn to the investments made by those refineries specifically in Quebec. Some $500 million were invested in the last five years in refining and marketing projects. Other investments amounting now to $215 million will be made in the years to come by Shell and Ultramar. The purpose of such investments is to enlarge the capacity in Quebec and therefore the operating range of the refineries.
Mr. Speaker, I would like to remind Hon. Members in this House that last fall we asked the Minister of Energy, Mines and Resources (Mrs. Carney) to postpone by two months the closing of the Gulf refinery in order to encourage possible buyers to come forward. That request was accepted and officials from the Department of Energy, Mines and Resources and the Departmental of Regional Industrial Expansion gathered the information and analysed the economic projections of offer and demand in order to assist potential bidders needing that information.

Earlier on, my colleague for Montreal-Saint-Marie (Mr. Malepart) mentioned the figures given by some companies. Of course it was in the interest of the Government that potential bidders have access to the basic information in order to be able to bid for Gulf, and to try and co-operate with every effort made by Members of Parliament and Departmental staff to make such bids possible.
Throughout the negotiating process and until the final date, interested parties discussed a possible purchase of the Montreal refinery without reaching a conclusion. However, there is still an interest in buying the petro-chemical facilities within the refinery, and Ultramar will study any commercially feasible proposal. The final date for the submission of bids was even postponed to June 1 1986.
I am sure that if my Hon. colleague had read today's papers, he would at least have learned that that final date for bids was postponed until June 1986.
However, Mr. Speaker, the oil industry in Quebec remains extremely active and the Government spares no effort to support it.
For instance, Petromont received a grant of $55 million from the federal Government in order to upgrade its facilities, and this grant is to be matched by the Quebec government.
Among the other investments made over the last two years in the petrochemical industry in Quebec, Petro-Canada built in Montreal a cracking unit using the new CANMET process. The total cost of this project is $135 million, and it created 30 jobs. I would also like to say that much of the equipment needed for this plant was manufactured by the Vickers Company in Montreal; this is obviously of interest to the workers of Montreal... Petro-Canada is also building a catalytic cracking unit for a total cost of $60 million which will make it possible to keep the present jobs in the Montreal facilities of the company. This unit, just like the CANMET plant, was opened in November 1985.
Shell also announced last December an investment of $80 million in its Montreal facilities in order to replace the catalytic cracking unit and maintain the number of jobs at the present level. Perhaps it is also worth mentioning that the Ultramar Company completed in 1983 its new facilities in Saint-Romuald, near Quebec City, at a cost of $310 million. This investment created some 80 new jobs.
Mr. Speaker, any job loss certainly worries this Government. We are particularly concerned about the future economic situation of the Montreal area. This is why we have formed a Cabinet committee to find ways for this area to continue leading the economic development of Canada, and particularly that of the Province of Quebec.
To conclude, Mr. Speaker, I wish to quote Mr. Claude Piche, Executive Commissioner of the Commission d'initiative et des developpements economiques de Montreal who said: "According to the press, the East end of Montreal is an area of
Gulf Refinery
desolation. In fact, the City of Montreal has also successfully contributed to industrial development projects between June 1984 and December 1985. More than 4,000 jobs have been created or maintained in East end Montreal, over a period of just 18 months." And I am still quoting: "Go and ask the 900 employees of MacDonald Tobacco if they are pleased with the $50 million investment at the corner of Iberville and Ontario Streets. Go and ask the employees of Johnson and Johnson if they are pleased with the $32 million investment on Pie IX Boulevard."
Mr. Speaker, through DRIE alone, since September 1, 1984, we have helped create some 17,000 direct jobs in Quebec. Contributions for the Montreal area were close to $279 million. These figures reflect the creation of 8,000 jobs, most of which are in the small business sector.
Mr. Speaker, I wish Opposition Members were not so negative in their comments. They should ask some companies like Balcan Plastics, Cari-All Inc., Industries Genetic and Tye-Sil, what they think of the assistance they received from our Government in East end Montreal. We are going to inject some $10 million to create even more jobs.
Finally, Mr. Speaker... instead of shouting, my hon. colleague might help our Government to create even more jobs for the Montreal area.


Vincent Della Noce: Mr. Speaker, I would like as well to comment briefly on-


Mr. Prud'homme:: This is not a Government notice or motion. I understand clearly that the Government has a powerful majority. That is the decision of Canadians. However, it is customary to let someone on this side speak on a motion that is presented by a Member of this side, to the best of my knowledge. I would hope that the Chair would be advised accordingly. I do not want to push further, except that I think I should be recognized.


The Acting Speaker (Mr. Kempling):: I recognize the hon. gentleman's intervention. If I recognize him, there will have been three Opposition Members speaking on the motion. I say, if I recognize the Hon. Member I will have recognized three Opposition Members on the motion. Therefore, I will recognize the Hon. Member for Duvernay.


Vincent Della Noce: Thank you, Mr. Speaker. Your discretion is right. I want to speak on this motion because my name was mentioned often and I think it is only proper that I be allowed to speak.

Mr. Speaker, we have often heard about the Gulf transaction and my colleague for Montreal-Sainte-Marie (Mr. Malepart) made a lot of noise about it in Montreal and in all the surrounding areas. When I took over the Gulf file, it was

March 11, 1986
Gulf Refinery
simply to request from my Minister a two month extension which was granted immediately. Things were going well. Suddenly, the Hon. Member for Montreal-Sainte-Marie appeared in the picture and all Opposition Members tried to get some publicity for themselves out of this issue.


An Hon. Member:: A lot of publicity.


Vincent Della Noce: A lot of publicity and maybe even too much at times.


An Hon. Member:: On the back of workers.


Vincent Della Noce: Now were those particular workers not the victims? Yes, Mr. Speaker, workers found themselvess in a dead end just like me. Recently, I wrote an article on the Gulf deal for my fellow citizens and in particular for the residents of Montreal, which was entitled: The Gulf transaction brought to an end, hoping that someday someone would understand the truth. I also wrote an article on the Gulf issue of which I have a copy here, where I asked: Who speaks the truth? 1 can bet my salary that few people know the truth about the Gulf transaction and I have no time to explain it today in ten minutes.
But let us start, like my colleague from Montreal-Sainte-Marie did earlier, by some background on this case. Two groups were interested in the purchase of the Gulf refinery. One was Ultramar and the other, Gaz Metropolitain with which, we, as Members from Quebec, have made many deals. After a meeting in early January, officials of that company had told us they wanted to put an offer on the refinery. The first question I asked was whether they had the money for it. They said yes. 1 then asked whether they needed some Government support. They said no. 1 thought: it's in the bag. But later on, what happened was that that Chairman had forgotten a minor detail, to ask the executive the authorization for that purchase, which I think was never granted.
With regard to that Gulf deal, I believe that we have been manipulated by some supposed buyers because in my opinion, Conservative Members have worked a lot harder than those supposed buyers who did not exist. Ultramar was a potential buyer from the start with 120 nice million Canadian dollars. But there was no other buyer. Later on, we had offers for $80 million. Another one put an offer on December 26, but bids were supposed to arrive before December 2nd. As a former businessman, I understood one thing. When you want to buy something, put an offer on it, then put the money. Since there was no money, there was no offer.
But I can tell you that we, the Quebec Conservative Members of Parliament and caucus, at the request of Gulf workers and Gaz Metropolitain, succeeded in obtaining a short extension of two months to allow the possible buyer, which was supposed to be Gaz Metropolitain, to file a serious bid before December 2, 1985. However, the president of Gaz Metropolitain, Mr. Martin, who had promised before a Conservative
caucus that he would file a $120 million bid without any Government assistance, did admit in a press conference on last February 20 that it was because his bid was lower than the Ultramar one, $80 million instead of $120 million, that he had lost the battle. Yes, he lost the battle because he did not put enough money. When he was assessing his bid, he thought it would be more or less equal to the Ultramar one. This was not so. What did Mr. Martin say afterwards? Let me quote the story: "Recognizing the industry is a select club, Mr. Martin eventually indicated, in another press conference, that Gaz Metropolitain would own a refinery if it had filed a $120 million bid." That is what I have always claimed. The Hon. Member for Duvernay had claimed that all along. That is why he was not exactly sitting on the same side as my Hon. colleague for Montreal-Sainte-Marie who has a talent for gathering opposition people. Imagine, even the NDP was involved in that. That was good for public opinion polls. Imagine what happens when the NDP gets involved in that! A union leader-


Jean-Claude Malépart: On a point of order, Mr. Speaker. The Hon. Member is accusing me of gathering people together but it seems to me that a Member of Parliament has a right to work with all Canadians in a non-partisan way, without looking at political stripes. We are here to defend the interests of people. I do not see why my colleague blames me for speaking to people who are New Democrats, Pequistes, Liberals or Tories.


The Acting Speaker (Mr. Kempling):: This is not a point of order.


Vincent Della Noce: Quite the opposite. I commend him. But the Hon. Member is making a serious mistake. He only calls on unions. There are interesting people, people from the city who said: Why do you look at only one side of the coin? Because it served your purpose. You were looking at only one side of the coin. We never had Gaz Metropolitain! He forgot to invite the owner, who was supposed to be the buyer. He forgot to invite Ultramar. That is disgusting! It is awful what he did! He had everybody worked up. My friend and colleague for Saint-Denis (Mr. Prud'homme) enjoyed coming to see that fight. He even took my colleague's coat.


George Albert Proud: On a point of order, Mr. Speaker. This time, Mr. Speaker, you certainly have followed the debate very closely. 1 very much enjoy debates, but my colleague has dragged me into one in which I had no opportunity to speak in the first place. And I think it is against the rules for the Hon. Member to impute intentions I do not have. You very well known that I have a point of order on that he referred to my enjoying being there. I went because it was my duty as a Quebecer, I went because it was my duty as a citizen supporting the wish of the National Assembly.
March 11, 1986


The Acting Speaker (Mr. Kempling):: Order, please. The Hon. Member is engaging in debate. That is not a point of order.
[ Translation]


Vincent Della Noce: Mr. Speaker, I have no doubt the Hon. Member was there to answer the call of duty, but he also came in at the last minute. He came to put out the fire that perhaps some of his colleagues had lit and thrown gas on, but never did the man from Gaz Metropolitan come to say: True, I wanted to buy, true, I offered $120 million. Tell the truth, you never tell the truth!


Jean-Claude Malépart: Mr. Speaker, on a point of order. If we all stop speaking, the motion will be accepted. If my colleague goes on speaking, it is because he wants to talk the motion out. He is against the Gulf company. Truth hurts!


George Albert Proud: It is not six o'clock yet.


The Acting Speaker (Mr. Kempling):: From where I stand, the hour provided-


George Albert Proud: It is not six o'clock.


The Acting Speaker (Mr. Kempling):: -for consideration of Private Members' Business has now expired.


George Albert Proud: Mr. Speaker, I rise on a point of order. I respectfully submit to you that there is at least two minutes left on that clock and two minutes left on that clock. Let them kill the Bill and we will know what to do afterward. You cannot cut the debate because the other Member wants to speak.


Mr. Cadieux:: Mr. Speaker, I rise on a point of order. My colleague from Duvernay (Mr. Della Noce) has still some time left and he should be entitled to continue and I hope that he will no longer be interrupted needlessly.


The Acting Speaker (Mr. Kempling):: The Chair will be indulgent and allow the debate to continue for one minute. The Hon. Member for Duvernay.


Vincent Della Noce: Mr. Speaker, if they keep interrupting me, and 1 know they like to do so, 1 will not have enough time to complete my comments and I will probably be accused of talking out the motion.


Jean-Claude Malépart: It is true!


Vincent Della Noce: This is not the reason why I am speaking. I want to tell the truth, because Liberals do not.


Jean-Claude Malépart: No, it is to talk out the motion!
Adjournment Debate


Vincent Della Noce: This is why I will tell you the truth. Three refineries have been closed within two years. It did not only happened yesterday. It happened with the O'Farrell Report which is the worst lie ever told anywhere.


George Albert Proud: You must be happy now, you talked out the motion!


The Acting Speaker (Mr. Kempling):: The hour provided for the consideration of Private Members' Business has now expired.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the House under Standing Order 66 is deemed to have been moved.

Abram Ernest Epp: Mr. Speaker, I appreciate the opportunity to say something more about the state of the shipbuilding industry and specifically about the contract from CN Marine for the construction of a second passenger and vehicle ferry to be constructed at a Canadian yard, which subject has been before the House on a number of occasions over the past months. Last Thursday there was a demonstration on this Hill in Ottawa by more than 600 workers from the Versatile Davie Shipyard in Lauzon, Quebec. These workers came to Ottawa in 16 buses and were greeted here by some of the more foul weather this city has produced during the winter. The weather all too sadly reflected the kinds of economic circumstances in which their industry finds itself.
Hundreds of these workers had been at work not many months ago on the construction of the motor vessel Caribou. It is a vessel which represents a most important addition to the fleet of CN Marine. With the vessel now very near completion, and with most of the workers on unemployment insurance, the yard which normally employs 1,600 workers has presently something over 100 employees at work. The workers from Versatile Davie in Lauzon wait in a desperate anxiety for a decision to be made by CN Marine on the purchase of another vessel like the Caribou which they would dearly love to build at their yard on the St. Lawrence.
The nature of my question can be focused if we look at a statement made by the Minister of Transport (Mr. Mazan-kowski) in November of 1984. In response to a question

March 11, 1986
Adjournment Debate
regarding ferry service on the Atlantic coast he said, and I quote from Hansard at page 217:
There will be a rationalization of the Gulf ferry services and the coastal ferry services. As a matter of fact, there will be an additional three new vessels on the Gulf service and one new vessel on the Newfoundland-Labrador coastal service. These vessels will be of the latest state of the art; they will be faster, they will be larger, and they will provide more flexibility and more reliable service. Not only that, this will have a tremendous impact upon the shipbuilding industry and, therefore, will create jobs.
Clearly, the Minister of Transport, who was described by my colleague from Regina this afternoon as an honest and honourable Member of Parliament and Minister, promised something about which so many of us who are concerned about the industry-and pre-eminently, the workers at Versatile Davie in Lauzon-have been looking for, a decision by the Government.
The question has been raised in the House a number of times. I put it to the Minister of Transport on October 29, 1985. At that time I decried the delay which was occurring. The Minister at that time asked: "Should we be dictating to the board?" Well, I think there is reason to dictate to the board. The Hon. Member for Levis (Mr. Fontaine) spoke to this matter a couple of days later last October. The Minister again suggested that they were respecting the board's concerns.
On November 5, 1 spoke on this very same Adjournment Debate and expressed the necessity for the Government to make a decision on this matter. The months passed. I think ruefully of the fact that last June, I pressed the Minister of Regional Industrial Expansion (Mr. Stevens) on the matter of policy for the shipbuilding industry. I asked him if we were going to have to wait months and months for a decision about an industry which finds itself in circumstances more depressed than those in the 1930s.
The Minister served up: "No, Mr. Speaker". It is going on eight-and-a-half months since then and the Government has done absolutely nothing of a new sort. There have been no new initiatives taken. There may be matters in the wind such as the matter of the Polar 8 ice-breaker, which is still under consideration by the Government in spite of the promise given last September. Yet we continue to wait.
It seems to me that there is a very good case to be made for instructing CN Marine to get on with it and to place the contract. If we have to spend the money on the purchase of a vessel abroad, which appears to be the alternative, that will cost us in terms of foreign exchange. It will bring in some duty to the Government, if they duty is not remitted. However, it will cost us in terms of foreign exchange and place an additional pressure on the dollar. What we have in Canada at Lauzon are workers who are surely costing the better part of $20 million in terms of unemployment insurance on an annual basis. When we consider paying that type of money in unemployment insurance and consider the construction of a vessel which will cost us no more than $120 million or so, it seems to me that we have every reason to get on with it, make a
decision, place the order and put the workers back to the jobs they like so well-construction of vessels on the St. Lawrence.


Monique Bernatchez Tardif: Mr. Speaker, I understand the concerns of my colleague from Thunder Bay-Nipi-gon (Mr. Epp) regarding a situation that currently prevails in Canadian shipyards. In fact, my hon. colleague has stressed those concerns on several occasions in this House.
I would like to remind him that in a reply he was given by the Minister of Regional Industrial Expansion (Mr. Stevens) on March 6 of this year, the Minister indicated that the Canadian Government was the main purchasing agent for work at shipyards. To help the Hon. Member appreciate what this means, I would like to point out that today, 90 per cent of shipbuilding contracts in our yards are Government contracts. Furthermore, 60 per cent of the work in repair shops is carried out on Government ships. The Canadian Coast Guard's current construction program includes 18 ships, while the total contract is worth over $465.2 million.
Contracts from Ports Canada and CN Marine for the construction of new ships total $143 million.
Transport Canada and a number of Crown corporations may allocate further amounts for other contracts.
As for the new ferry, I think it was said several times in the House that the matter will be submitted to Cabinet within the next few weeks, and so that an answer to the Hon. Member's question may be forthcoming.


THE BUDGET-FAMILY INCOME STANDARDS. (B) REQUEST FOR CLARIFICATION OF TAX CREDIT
Jean-Claude Malépart: Mr. Speaker, I wish the previous debate could have finished on a more positive note, but I have the impression that on the Gulf issue, all Conservative Members including the Hon. Member for Duvernay (Mr. Della Noce) were determined to talk the motion out and let all those jobs be lost.
Mr. Speaker, my question concerns an announcement made by the Minister of Finance (Mr. Wilson) regarding prepayment of the child tax credit. In light of a question I had asked the Minister of Finance, I must say in all honesty that perhaps he did not quite hear me, or he misunderstood my question, or again perhaps I did not express myself clearly, but the answer was not good enough.
Mr. Speaker, so as to be sure to get a clear and specific answer, I will repeat my question. It has to do with the prepayment of the child tax credit. The Minister of Finance is patting himself on the back and trying to make us believe that he has helped poor families in that respect. In Canada there are 538,000 people or families who receive the child tax credit. The upper limit set by the Minister of Finance, by the
March 11, 1986

Conservative Government, is $23,500. Unfortunately, Mr. Speaker-and this is the question I asked the Minister-he has decided that only those families with a maximum income of $15,000 will be eligible for the $300 child tax credit prepayment, a highly commendable measure which the Liberals and community groups had suggested to the Minister last year. This is not a Conservative invention, they simply cannot come up with constructive measures. But here again, as in the case of the spouse's allowance for the elderly, this Government is wont to discriminate.
What 1 was asking the Minister, and I did not get an answer then, but I trust that someone will give me one now, was why
538,000	Canadian families will not be entitled to the prepayment of the child tax credit according to the statement published by the Minister. There will be a prepayment to prevent people from going to the loan sharks and tax discounters, but in the case of a family with four or five children and an income of $16,000, since it often happens that both spouses work, why did the Government decide that such families will be at the mercy of the tax discounters? If it has a social philosophy, why did the Government not say: Last year, we decided that the maximum family income for the child tax credit would be $23,500. Why is the $300 prepayment not being sent to all these families? It would have been quite simple. Why discriminate on the basis of income?
We must also remember that this same Government lowered the ceiling for the child tax credit last year.
Mr. Speaker, the Government has done the same for the sales tax refund. However, as concerns the child tax credit, this would not cost the Government anything as it is already earmarked.
I trust that the one who replies will give me an answer this time. Let him tell us that, for the Conservatives, someone with a family income of $15,500 is now a wealthy person in Canada and that such a person will have to go to the tax discounters, the loan sharks, the friends of the Conservative Party.
Mr. Speaker, I wonder whether the Hon. Member, as Parliamentary Secretary to the Minister of Finance or the Minister of National Health and Welfare ... We haven't heard from him in a long time. Normally, it would be the Minister of National Health and Welfare (Mr. Epp), better known now in Canada as the Minister of social injustice, who should have made sure that no one in Canada is penalized and that all taxpayers who receive the full child-tax credit get an early payment of $300 to ensure that these needy families . .. Also, this cheque should have been mailed in September and not in November, because it is when children are returning to school that their parents need the money.
Mr. Speaker, I dare hope I will get a favourable reply to this
question.
Adjournment Debate


Mr. Girve Fretz (Parliamentary Secretary to Minister of State (Mines)):: Mr. Speaker, in answer to the Hon. Member for Montreal-Sainte-Marie (Mr. Malepart), the child tax credit and the sales tax credit are two separate programs with different purposes. The child tax credit threshold of $23,500 in 1986 approximates the low-income cutoff point of a couple with three children in an intermediate size city. The average child tax credit family has 1.8 children, so the threshold is really quite generous. For exemple, for a couple with two children in an intermediate size city, the threshold is approximately $3,000 above the low-income cutoff point in 1986.
In the May 25, 1985, Budget, the threshold was reduced from $26,300 to $23,500 for the 1986 tax year and the credit value was substantially increased to $454 per child. The threshold will be indexed to the extent that inflation exceeds 3 per cent in order to help preserve its real value.
About 2.5 million families benefit from the child tax credit. The refundable sales tax credit will benefit over four million families and individuals, or about 40 per cent of all Canadian households. The federal sales tax credit is intended to protect the lowest income Canadians from the effect of the 1 per cent increase in the federal sales tax. It will benefit many child tax credit families as well.
For example, the couple with two children and a net income of up to $18,000 will receive benefits. Obviously the Government cannot afford to give such a broad-based credit to every Canadian. Given limited resources, it was decided that a substantial credit to lower income families was a better use of public resources than a lower credit for a larger number of families. The credit will cost $330 million in 1986, which demonstrates the Government's real concern for low-income Canadians.


THE ECONOMY-EXCHANGE VALUE OF DOLLAR
Alan Redway: Mr. Speaker, you will remember as well as I do the frightening and astronomical interest rates of 1981. At that time mortgage rates were in excess of 20 per cent. It was those frightening and astronomical interest rates which brought on what has now been called the great recession of the 1980s. It was those interest rates which brought on record personal, corporate and farm bankruptcies. It was those interest rates which brought on unemployment that reached almost to 13 per cent of our entire workforce.
Despite the devastation which those interest rates wrought on our economy, and despite the havoc which they wreaked on the lives of individual ordinary Canadians, the Government of the day told us that it was impossible to bring down those interest rates because American interest rates were high. We were told that we could not bring down our interest rates below the American interest rates. Also, the Government of the day told us that if we did, we would have capital fleeing
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March II, 1986
Adjournment Debate
the country. We would have the dollar falling, we would have inflation rising, and we would have runaway inflation. In fact, the then Government said that our economy would be wrecked. Well, the economy was wrecked, not because of the falling dollar and the inflation situation, but because of those very high interest rates about which you, Mr. Speaker, and I and every Canadian was most concerned and crying for relief from.
Fortunately when the Conservative Government took office, we followed what I consider to be a low interest rate policy, either by good luck or good management. I choose to think that it has been through deliberate good management that interest rates have continued to fall with one or two modest exceptions. Sometimes, I must admit, when I hear comments from the Governor of the Bank of Canada, I shudder and think perhaps it is good luck rather than good management. However, by and large, I am sure that it is because of good management that interest rates have been falling.
As I indicated, there have been one or two exceptions. One of those exceptions occurred just last month when suddenly, as a result of our falling exchange rate, the Bank of Canada raised its lending rate, raised interest rates in Canada in order to do what was described as "burn the speculators" and to try to steady our Canadian dollar.
The result of our general over-all policy of falling interest rates had been good for the Canadian economy. We have seen unemployment fall. We have seen bankruptcies fall. We have seen the Gross National Product go up. We have seen housing starts go up. We have seen all economic indicators go up. Be that as it may, however, Canadian interest rates have continued to be above American interest rates. In spite of the rising economy and all other good indicators, we have seen the Canadian dollar continue to fall. However, with that falling dollar we have not seen the cost of living go up, we have not seen runaway inflation, and we have not seen the economy in a state of complete collapse, the way the former Government predicted. In fact, we have seen just the opposite. Be all that as it may, we still have an interest rate which is substantially above American interest rates. At the moment our prime rates are some 4 per cent above the American prime rate. Do we need an interest rate that high to keep our dollar steady and to support it? I do not think so, Mr. Speaker, and neither does the former adviser to the Minister of Finance (Mr. Wilson), Mr. William Mackness, who has recently been quoted inthe press as saying:
-the Government made a "major policy error" by going into the Budget with Canadian interest rates substantially higher than those in the United States.
Such a wide variation in interest rates is a source of instability in the Canadian dollar itself.
When interest rates are so far apart, you have to know something is seriously wrong. It's a little like someone trying to sell you a bond with a 25 per cent interest rate-you become suspicious of the product.
Mr. Mackness said that just a few days ago.
High interest rates obviously have not until recently been
doing anything for the Canadian dollar. In fact, it continued to
fall, which as been hurting our economy. The spread between the American interest rates and our own has had a serious effect on our economy. We must have low interest rates if we are to have a growing Gross National Product and if we are to have falling unemployment so that we can protect our social safety network.
Other countries have been dropping their interest rates lately. I hope that tonight the Parliamentary Secretary will tell us that at long last the Minister of Finance recognizes that our interest rates are too high in comparison with the American's and that they will start to come down. I trust the Parliamentary Secretary will tell us that this very Thursday.


Claude Girvin (Girve) Fretz: Mr. Speaker, the Hon. Member for York East (Mr. Redway) raises a very important and interesting issue.
I would like to begin by suggesting that it is possible to have both lower interest rates and a stronger dollar. Indeed, the two go hand in hand.


Some Hon. Members:: Hear, hear!


Claude Girvin (Girve) Fretz: I believe that the policies which best promote this result, on a sustainable basis, are those designed to encourage non-inflationary growth. I think that is important. On the fiscal side, this involves the policy of sound financial management, including progressive reductions in the budget deficit, as emphasized in last month's Budget.
I am sure the Hon. Member is aware that there cannot be misgivings in financial markets about our commitment to a sound currency if we are to achieve lower interest rates and the foundation for the dollar is to be a firm one. That is why the authorities had to move in a forceful way recently to stem speculative excesses in the foreign exchange market. If these had been allowed to gather additional momentum, they could have spilled over into even stronger pressures on interest rates. I am sure the Hon. Member would agree with me on that.
While it is unfortunate, the route to sustainably lower interest rates inevitably involves some temporary reversals. 1 am convinced that to have attempted to avoid increases in interest rates through monetary means when the dollar was under strong downward pressure would have been self-defeating. The confidence of Canadian and foreign investors alike would have been undermined, in my estimation. The downward pressure on the dollar would have intensified, a strong risk of reversing the progress that has been made against inflation would have been run, and, ultimately, higher rather than lower Canadian interest rates would have resulted.
By acting as they did, Mr. Speaker, the authorities have paved the way for eventual interest rate declines, and I am sure you are going to see that happen.
The Canadian economy has performed, and I think the Hon. Member will agree with me, extremely well over the past 18 months. I can see the Hon. Member nodding his head. In 1985 our growth rate exceeded those of the United States and
March 11, 1986

Europe. That is important. Our prospects for this year continue to be favourable. The economic policies of this Government are providing the framework to ensure the recovery is not only sustained, but supported by low interest rates and a sound currency.
Adjournment Debate


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


[Stage Direction]
The House adjourned at 6.26 p.m.
[Stage Direction]

Wednesday, March 12, 1986