1986-12-16

Mr. Speaker:: On November 26 the Hon. Member for Etobicoke North (Mr. Pennock) rose on a question of privilege relating to the investigative independence of standing committees. The Hon. Member couched his remarks in the context of the global implications for all committees. He referred to an incident between the Auditor General and the Standing Committee on Communications and Culture. Had the Hon. Member attempted to complain of the particular incident, I am afraid that the Chair would have had to quickly rule him out of order. It is a long standing principle that the Speaker does not intervene in matters which ought to be dealt with by the standing committees.

However, I allowed the Hon. Member for Etobicoke North (Mr. Pennock) to proceed because the Chair takes seriously any questions with a reference to the new Standing Orders adopted on February 14, 1986.
I think we must consider the problems arising from the application of the new Standing Orders if we are to make this experiment a success, and the Chair has an ongoing commitment to participating in the process as much as possible.

The specific issues raised by the Hon. Member for Etobicoke North are obviously well within the reach of the Standing Committee on Communications and Culture. I might add that the complaint referred to by the Hon. Member seems to be related to the new dynamics that are evolving in the relationship between the new standing committees and those departments and agencies that fall within their expanded mandates.
Time and experience will contribute to the education of the Canadian public, and of witnesses as to the new powers of the committees.

The matter is indeed a serious one, and I want to thank the Hon. Member for bringing it to the attention of the House, but for the time being, the Chair can find nothing that infringes on the privileges of Members or the prerogatives of the House.

In closing, may I say to the House that parliamentary reform is still an exploratory exercise, and some day it may well be up to the House to guarantee the authority of the Standing Committees, but it is firstly up to the standing committees to define their mandates, establish their independence, and publicize their expectations. When and if a standing committee reports back to the House that its work is being impeded, the Chair will not hesitate to intervene.
I wish to thank the Hon. Member for his intervention.




Mr. Speaker:: I am now ready to rule on the question of privilege raised on November 18 by the Hon. Member for Hamilton East (Ms. Copps), regarding the proceedings of the Standing Committee on Human Rights. The Hon. Member criticized the Committee's decision to reduce the number of witnesses proposed by its sub-committee. Instead of calling the sixteen witnesses proposed by the sub-committee, the Standing Committee decided that each Member could ask only one person appointed to the Canadian Human Rights Tribunal to appear before the Committee.

I have carefully considered the complaint raised by the Hon. Member, and the submissions which were made by Hon. Members on both sides of the argument. The discussion which took place clearly underlined the fact that a matter had been raised which was of great concern to the House. A number of procedures under which we are currently operating were only recently introduced on a provisional basis. Those relating to the powers of committees are of particular significance, and it is quite normal that Hon. Members would wish to air their concerns and clarify issues which could have far-reaching implications.
The Hon. Deputy Prime Minsiter (Mr. Mazankowski) in his contribution to the discussion reminded the House of the practice whereby the House cannot officially take notice of any committee proceedings except by way of a report from the committee concerned. He also referred to a relevant citation

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Tabling of Documents
from Beauchesne's Fifth Edition. Citation 117(7) states as follows:
The opinion of the Speaker cannot be sought in the House about any matter arising or likely to arise in a committee.
Further confirmation is to be found in Citation 569(3) which states:
The Speaker has ruled on many occasions that it is not competent for him to exercise procedural control over the committees. Committees are and must remain masters of their own procedure.
Citation 608 goes on to state:
Procedural difficulties which arise in committees ought to be settled in the committee and not in the House.

The foregoing clearly indicates that the Chair cannot rule on a problem that arises in committee, unless it was reported by the committee to the House. It is also clear that a committee meeting that gives rise to a dispute does not constitute a valid question of privilege.

Having said that, I would immediately add that a question of such importance as that raised by the Hon. Member for Hamilton East is not one to be lightly dismissed. Her complaint arises from our political process and the political system under which we operate. Briefly stated, the power of decision is given to the majority. For protection the minority looks to the rules of procedure. The House is the master of its own procedure and can change it, including the procedure relating to the conduct of committees. I quote again from Beauchesne at Citation 569(2):
Committees receive their authority from the House itself and that authority of the House overrides that of any committee.
Thus, if Hon. Members are not satisfied with the present operation of Standing Order 104, or any other rules relating to committees, they should seek their remedies by way of procedural reform. I might add that that applies to Hon. Members on both sides of the House.

I therefore must rule that the question raised by the Hon. Member is not a question of privilege, but I do think the matter she raised deserves to be brought to the attention of the House.



ROUTINE PROCEEDINGS


Mr. Speaker:: It is my duty, pursuant to Section 9 of the Representation Act, 1985, Chapter 8 of the Statutes of
Canada, 1986, to lay upon the table a certified copy of the 1986 report of the Electoral Boundaries Commission for the Province of Nova Scotia.
Pursuant to the Act, this report stands referred to the Standing Committee on Elections, Privileges and Procedure.


COMMITTEES OF THE HOUSE
Mrs. Barbara Sparrow (Calgary South):: Mr. Speaker, I have the honour to present, in both official languages, the second report of the Standing Committee on Energy, Mines and Resources.
The report evaluates the recommendations presented by the task force on program review in the "minerals" chapter of its volume on natural resources.
Your committee, Mr. Speaker, held public hearings with the Minister of State for Forestry and Mines (Mr. Merrithew) and his officials, with the study team leader for the natural resources volume, and with mineral industry representatives in preparing the report.
To complete the process of review, Mr. Speaker, your committee intends to convene a panel discussion early in 1987 which will bring together the interested parties for a direct exchange of opinions.


ABORIGINAL AFFAIRS AND NORTHERN DEVELOPMENT-FIRST REPORT OF STANDING COMMITTEE
Mr. Thomas Suluk (Nunatsiaq):: Mr. Speaker, I have the honour to present, in both official languages, the first report of the Standing Committee on Aboriginal Affairs and Northern Development to which, pursuant to Standing Order 99(2), the committee requests a comprehensive response.
[Editor's note: See today's Votes and Proceedings.]


PETITIONS
Mr. Iain Angus (Thunder Bay-Atikokan):: Mr. Speaker, I have three petitions to present today from my constituents. All of them have been duly certified by the Clerk of Petitions as conforming to Standing Order 106.
The first petition indicates that those who have signed it believe that the patent drug legislation will unfairly hurt Canadians whose health needs require the purchase of prescription drugs on a continuing basis.
December 16, 1986

The second one indicaes that the proposed Patent Act changes are another example of Canadian government concessions to the United States, at the expense of average Canadians, in the free trade negotiations.
Finally, in the third one the petitioners humbly pray and call upon Parliament to reject the proposals which will increase prescription drug prices for Canadians.


Mr. Stan J. Hovdebo (Prince Albert):: Mr. Speaker, it is my honour and duty to present, on behalf of my constituents in the communities of Candle Lake and Weldon, Saskatchewan, a petition which suggests that the proposal of the federal Government to change the Patent Act will increase the prices of drugs.
The undersigned humbly pray and call upon Parliament to reject proposals which will increase prescription drug prices for Canadians.


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I have the honour to present a petition, which has been duly certified pursuant to Standing Order 106, on behalf of residents of Winnipeg. They say that the proposed changes to the Patent Act will unfairly hurt Canadians whose health needs require the purchase of prescription drugs on an ongoing basis.
Therefore, they humbly pray and call upon Parliament to reject proposals which will increase prescription drug prices for Canadians.


Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, it is my pleasure to present a petition today on behalf of a number of Canadians who ask the Government to reconsider its plan to change the Patent Act whereby prescription drug prices will increase significantly and therefore particularly hit those people who are sick, elderly, and disabled; in other words, people who should not be punished by the Government as a result of such punitive legislation. They ask the Government to reconsider its intent to introduce these proposals in Parliament.



INTERNATIONAL PEACE AND GOODWILL DAY


Mr. Bill Vankoughnet (Hastings-Frontenac-Lennox and Addington) moved: for leave to introduce Bill C-238, an Act respecting International Peace and Goodwill Day.


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


Some Hon. Members:: Agreed.


William John Vankoughnet: Mr. Speaker, as we approach the Christmas season our thoughts turn to the ideal of peace and harmony throughout the world. As we prepare to celebrate the
Order Paper Questions
birth of the Prince of Peace, we are reminded that peace and goodwill among nations is a goal toward which we should strive.
I am pleased to present to the House a Bill respecting International Peace and Goodwill Day. The purpose of the Bill is to change the name presently associated with December 26 from "Boxing Day" to International Peace and Goodwill Day, in honour of all Canadians and Canada's commitment to world peace.


Some Hon. Members:: Hear, hear!


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

['Agreed.\nExcise Tax Act']
Hon. Robert de Cotret (President of the Treasury Board) moved: for leave to introduce Bill C-33, an Act to amend the Public Service Superannuation Act, the Canadian Forces Superannuation Act, the Royal Canadian Mounted Police Superannuation Act and the Supplementary Retirement Benefits Act.


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


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, Bill read the first time and ordered to be printed.
['Agreed.']
Mr. Speaker:: When shall the Bill be read the second time? At the next sitting of the House?


Some Hon. Members:: Agreed.



Mr. Doug Lewis (Parliamentary Secretary to Deputy Prime Minister and President of the Privy Council):: Mr. Speaker, I ask that all questions be allowed to stand.


Mr. Speaker:: Is it agreed?


Some Hon. Members:: Agreed.
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GOVERNMENT ORDERS

[Stage Direction]
December 16, 1986

Hon. Tom Hockin (Minister of State (Finance)) moved: that Bill C-14, an Act to amend the Excise Tax Act and the Excise Act, be read the third time and passed.
He said: Mr. Speaker, I will speak briefly, but first I would like to take this opportunity to thank Hon. Members of this Chamber for their assistance and consideration during the discussion and examination of Bill C-14.
This piece of legislation contains the necessary legislative authority to implement the sales and excise tax changes announced in the February, 1986 budget and the enrichments to the fuel tax rebate program for farmers announced by the Prime Minister (Mr. Mulroney) in April, 1986. It provides authority for changes in the rates of federal sales taxes and excise taxes on alcohol and tobacco products which are intended to raise revenue in order to reduce the deficit.
The deficit affects us all and it threatens us all. Deficit reduction measures must be shared as broadly as possible. The Bill before you, Mr. Speaker, seeks to achieve this objective by spreading the tax increases broadly and fairly. To ensure that all Canadians will contribute in an equitable manner, a new refundable sales tax credit of $50 per adult and $25 per child will be available for lower income Canadians to help offset the 1 percentage point increase in the sales tax rates implemented by this Bill.
During consideration of this Bill by the Legislative Committee, concerns were raised about the adequacy of this new tax credit. This is an important issue and I respect Members raising it. I would like to take an opportunity to address it very briefly. First, let us not forget that this refundable sales tax credit represents a unique and important initiative and clearly demonstrates the Government's concern for low income Canadians. It is the first time in our history that the federal Government has provided an income tested refundable tax credit for low income Canadian families whether or not they have children.
In designing the credit, foremost in the Government's concern was to protect those who could least afford to absorb the increase in the federal sales tax. Given the Government's limited resources, and we all know they are limited, it was impossible to design a credit that would offset the increased tax burden exactly by family size and income level. I believe that the $15,000 income threshold beyond which benefits are gradually reduced achieves an ideal balance in terms of maximizing the size of the credit and the number of beneficiaries, within an acceptable fiscal framework, while ensuring that Canadians in the lowest income brackets are fully protected against the increase in the federal sales tax. Indeed, this credit overcompensates individuals earning less than $15,000 annually.
The measures in this Bill to enrich the fuel tax rebate program are of particular benefit to farmers. First, a one year extension of the over-all fuel tax rebate program will provide additional benefits amounting to $120 million in 1987 for all primary producers, including farmers. In addition, farmers will be entitled to an additional 2.5 cents a litre rebate to relieve them fully of the sales and excise taxes on gasoline and diesel fuel. This will be further increased to 3.5 cents on January 1, 1987 to conincide with a 1 cent increase in the excise tax currently scheduled for that date. These enrichments for farmers will provide additional assistance totalling $165 million. Over 200,000 Canadian farmers will benefit under this program. These measures clearly reflect the Government's concern for the economic situation confronting farmers.
In the coming year the net impact of these changes will be to reduce the deficit by approximately $1 billion. It should be noted, however, that for every $1 that taxes have been increased to reduce the deficit, expenditures have been cut by $3. Let me emphasize that, Mr. Speaker; for every $1 that taxes have been increased to reduce the deficit, federal Government expenditures have been cut by $3. Our policies to wrestle the deficit and manage the Government better are part of a comprehensive set of actions to deal with a wide range of economic and fiscal needs.
In conclusion, together, the tax changes and expenditure cuts are an important and fair way of restoring fiscal order to this country. All Canadians will benefit from the successful achievement of these goals.


Mr. Don Boudria (Glengarry-Prescott-Russell):: Mr. Speaker, I am pleased to have the opportunity to participate in this debate. While we have been debating this Bill for some days now in the House of Commons, Members of this House still have some grave reservations about the effect of Bill C-14. We have raised those concerns in the House in the past and this morning I will try to summarize some of the issues that my colleagues and I have brought to your attention during the last few weeks, Mr. Speaker. This is not a very voluminous piece of legislation. It has only 15 pages or so, but the consequences of the Bill are very serious to the people upon whom we are called to represent in this House.

Mr. Speaker, if and when this Bill is passed, there will be an increase in the federal sales tax on manufactured goods; increases in the price of wine, tobacco, beer, and spirits; and increases in the Air Transportation Tax and the Telecommunication Programming Services Tax. There is also the fuel tax question and other increases that will have a disastrous effect on the tourist industry, as, I am sure my hon. friend from Westmorland-Kent (Mr. Robichaud) will agree. Finally, there are the sales and excise taxes on motor fuel that will be refundable to diplomats, the collection of income tax in Canada, the fuel tax rebate for farmers, and the impact of measures related to sales tax and excise tax on the federal
December 16, 1986

Government's revenues, all of which deserve consideration this morning.

We must remember that the Minister of State for Finance (Mr. Hockin) has just told us that the Bill is designed to spread the burden fairly among Canadians, or words to that effect, if I can paraphrase what the Minister said. If one looks closely at the effect of this Bill, Mr. Speaker, you will notice that it does not do that at all, and I ask the Minister to address it in the future.
He said that his Bill is fair. I ask him about a one earner couple with two children whose income is $15,000 a year. This couple will have a tax increase of 1.7 per cent or will pay an extra $255 in tax increases as a result of the February, 1986 Budget, the November, 1984 Economic Statement and the May, 1985 Budget. The combination of the three Conservative budgetary documents will create that situation. I ask the Minister what is fair about imposing that kind of an extra burden on a family of four earning $15,000 a year? That family does not have one extra cent to give to the Government, much less $255 more in taxes.
I draw to your attention the fact that a one income couple with two children, with a total family income of $50,000 a year, will be asked to pay 1.2 per cent more in taxes. It is a 1.7 per cent increase for the first family and 1.2 per cent for the second family. That hardly sounds fair. Yet the Minister tells us this is fair legislation.

Mr. Speaker, take for instance an elderly couple with an annual income of $27,000, which has to spend 1.9 per cent more because of the measures contained in three Budgets: the economic statement of November 1984, the 1985 Budget and the 1986 Budget, which all add up to an increase of 1.9 per cent in expenses for an elderly couple with an annual income of $27,000.
Mr. Speaker, I don't think that is what we call justice. [English]
I hear a Conservative Member saying "Not bad when they get an increase at the same time". He may think it is fair that low-income people are asked to pay a greater percentage in taxes than those who earn a great deal more. I do not think it is fair at all.
If the Government was asking Canadians equally to sacrifice, and it was at least fair for all, it would not be all that hard to swallow. If the Government followed its own prescription it would be even easier. Yet the Government is telling ordinary Canadians that times are tough and they are going to have to cut down on expenditures and expectations. They are going to have to cut down on what they receive, and give the Government more in taxes. If the Government said that and practised what it preached it would not be quite as bad.
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Mr. Foster:: But it does not.


Don Boudria: As the Hon. Member for Algoma (Mr. Foster) just said so eloquently, it does not.
I want to bring to your attention an article by Southam News yesterday. It talks about the spending of the Prime Minister (Mr. Mulroney). He will never be accused of not having style and we have the bills to prove it. He may not have class but he has style. He may not have substance but style he has a lot of. He has so much style that his expenditures are 800 per cent more than his predecessor.


Maurice Brydon Foster: Eight hundred per cent?


Don Boudria: Yes, 800 per cent, as unbelievable as that may seem. If you think that was spread over one or two or three decades or something like that, wrong again. It happened immediately after his Government took over. Right away the Government plunged nose first into the trough and started to partake of the-


Mr. Gormley:: Point of order, Mr. Speaker. I was wondering if the House has rules of relevance and if they apply in this particular debate?


Mr. Speaker:: The Hon. Member has raised a point which I think has concerned Speakers for many years. While a certain amount of latitude is allowed, I am sure the Hon. Member speaking will bring his remarks back to the Bill before us. Perhaps he can accommodate other Members in that regard.


Don Boudria: Mr. Speaker, I will attempt to accommodate your wishes and be as relevant as possible. I am sure you recognize that I am discussing budgetary expenditures and we are talking about a budget Bill.


John Kenneth Gormley: Excise tax.


Don Boudria: I say to the Hon. Member for The Batt-lefords-Meadow Lake (Mr. Gormley) that the same money the people of Canada are being forced to give to the Government through this Bill will be squandered by the Prime Minister and the rest of his cronies. It is my duty to bring it to the attention of the House even if the Hon. Member is extremely embarrassed by it. He obviously is because he stood up to try and find a way to cut off the debate when we are trying to hold the Prime Minister and the rest of those folks across the way accountable to the House of Commons.
We are talking about what the Government is asking the people of Canada to do. It is asking them to fork over more of their hard-earned dollars to the Government. In order to put that in context, it is important that I quote from a not so famous book entitled Where I Stand. It was written by the current Prime Minister whose name I shall not use in order to accommodate the wish of the House that we not use personal names, which suits me fine in this case anyway.
On page 44 of the book the author talks about Government waste and maladministration. He did not find that acceptable.

December 16, 1986
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Remember, that was only one-eighth of the waste we have now. He said:
How can a Government call on a nation to restrain itself and to be more realistic in its collective demands upon our economy when its own record is an unbroken string of fiscal excess? Canadians may be many things but stupid we are not. We simply will not buy leadership that so blatantly has one code of conduct for itself and quite a different one for the rest of us.
Do you know who said that? I just told you a minute ago. It is the author of the book Where 1 Stand who said that to the people of Canada. Although I do not recommend buying the book, I am sure people can go to a library and view it for a moment. It would probably be cheaper. They could then see where the Prime Minister stood at the time he was Leader of the Opposition, at the time he wrote this book, at the time he so sanctimoniously told the people of Canada that the preceding Government was not as accountable as it could be to the people of Canada. Probably no Government is as accountable as it should be. We are not suggesting that any previous Government ever was. The author of the book Where I Stand talks about the fiscal excess of the previous Government. That excess has been increased eight times in two years. When something which is unacceptable is multiplied eight times, it is eight times more unacceptable.
It is important that we hold the Government accountable for its fiscal excess. We must hold the Government accountable when it asks the House for money, as it is through this Bill. It is asking for more money with which to administer the Government. Collectively we must learn what the Government is going to do with this money and only then decide whether the Government should have it.
A Member across the way indicated a while ago that my remarks were not entirely relevant to the debate. I believe that when the Government asks for more money it is relevant to point out how it administered the money we previously gave it. If our children ask us for an excessive amount of money, it is normal to ask how they spent the money we already gave them. That is what I am doing today. I am asking the Government what it did with the money we gave it before. Members of Parliament give the Government its money. We give the Government the money of our constituents. No Government has any money of its own. Governments administer the money of the people. Therefore it is important to hold the Government accountable for what I consider to be fiscal excess.
I will quote again from the article to which I referred previously. It continues:
Mulroney was put up in a S3,400-a-night suite in the Plaza-Athenee Hotel in Paris this February. Trudeau paid $1,250 for his room in the Ritz when he last visited Paris on a peace mission in 1983.
In one and a half years the cost of accommodating a Prime Minister in Paris tripled. The article continues:
Mulroney's entourage of 24 spent more than $11,000 for limousines to get around New York-
There are so many limousines in New York that one trips all over them. You can hire them as cabs anywhere on the street.
Why was it necessary to charter enough limousines for 24 people at a cost of $11,000 for a couple of days? Some may think that compared with the past that is all right. However, the article continues:
Trudeau's party of 11 ran up just over $2,000 in limousine bills-in January, 1984.


Mr. Holtmann:: Trudeau used to ski all over the place. We were sending him skiing. Do you remember that?


Don Boudria: In a year and a half the cost rose from $2,000 to $11,000. If Conservative Members had not been so sanctimonious in their criticisms of the previous Government, perhaps they would have a small point.


Felix Holtmann: We have lots of them.


Don Boudria: They make noise across the way.


Felix Holtmann: Yeah, we do.


Don Boudria: It is not very credible noise, but noise nevertheless. However, that will not stop me from holding the Government accountable. It will not stop me from doing my job and duty, which is to hold the Government accountable even if Members dislike it.
The Prime Minister can almost make the Member for Rosemount (Mrs. Blais-Grenier) look like a bargain when she travels. The Prime Minister is probably the only person who could make her look like a good deal. Nevertheless, he does.
I will give you some other examples of excesses. The article continues:
Mulroney was accompanied by a valet in New York and Asia, at a cost of more than $4,300 for hotels, meals and incidentals. The official records do not show a valet for Trudeau, even on the 17-day Asia tour.
The Prime Minister and the Minister of Finance (Mr. Wilson) are telling the people of Canada that it is too bad but they will have to give the Government more funds for its administration. They tell people receiving unemployment insurance benefits that they cannot draw UIC while receiving a pension. The Government calls that double-dipping and says it is unfair because money is scarce. Why is money not scarce when it is time for the Prime Minister to partake of the public coffers for his own benefit?
Canadians do not expect the Government to travel to other countries and to receive foreign guests in an inappropriate manner. They do not want the Government to bring President Reagan to McDonalds for lunch or to have him improperly escorted. However, the Shamrock Summit-with the emphasis on the word "sham"-in Quebec City cost $2.6 million. It cost $1 million for security and $185,000 to rent le Grand Theatre so that we could hear the Prime Minister and the President sing to us. I do not think that was worth $185,000, not to mention the $.5 million it cost for the CBC to ensure that we could hear and see it. After having heard some of the sour notes, I think it would have been a bad deal had it been free. Nevertheless, we are footing the Bill for it.
December 16, 1986

Canadians are asked to pay for such fiscal excess. The tax increases which the Government wishes to levy are unfair. There is no good reason for levying these taxes because the Government has an unbroken string of fiscal excess.

Mr. Speaker, Canadians are sick and tired of all this. It is hardly a coincidence that public opinion polls clearly show the Prime Minister's popularity and that of his Government has sagged considerably. Look at the Port-Cartier affair: $41 million completely wasted, Mr. Speaker. And why, I ask Hon. Members opposite: Why do they waste money like this?
The Minister of Supply and Services (Mrs. Vezina) sitting opposite is responsible for awarding certain contracts, but in the case of Port-Cartier, it was her predecessor. Yesterday we realized he did not do a very good job, because in the process, it seems to have been a conflict of interest, so that the contractor had to be released.
And the wasteful spending goes on: $41 million spent for no good reason. A penitentiary is being built in a part of the country where it isn't needed, at any rate not for prisoners. It may be needed as a stimulus for regional development, but there is certainly no justification for building a prison. Perhaps for building another Government building, but certainly not for building a prison, because we don't need one. Furthermore, we have to consider the cost of bringing prisoners to this institution when it is completed. How much will that cost? Imagine, the cost of putting the guards on the plane and taking these people down there, with their legal advisers, to Port-Cartier.
And finally the other point which people have a tendency to forget, Mr. Speaker, is that the inmate may be in jail, but his wife and children are not. Most prisoners will come from the Montreal area, so the families of prisoners will have no choice but to board a bus, pay $210 for return fares to Port-Cartier, and sit for 34 hours on that bus just to go and visit a family member.
I do not know whether I understood correctly, I do not know whether the Minister did say they live in Baie-Comeau, but I hope this is not what she said about prisoners' families, because they are quite free to live where they want. The fact is that most of them do not live there, quite a number come from the Montreal area.
So this will be just another burden which the prisoner's family will have to bear, again simply because the Prime Minister (Mr. Mulroney) chose to feather his own nest at taxpayers' expense. He thought he would do well to unveil his very own monument in his riding. Why? Because he might lose his own seat.
If that is not the explanation, Mr. Speaker, there has to be a more logical one but we have yet to find out what it is. So I am forced to conclude that such is the explanation.
The Prime Minister took a look around and said to himself: I am going to lose my seat, I have to do something about it. It
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may be ill-advised but, never mind, something has to be done. So we will simply raid the public treasury, there is lots of money there and somebody else will pay for this. Like the people I was talking about a moment ago, those who can least afford to pay still more taxes just so the Prime Minister can put up this $68 million monument in his riding-$41 million more than the original estimate.
It does not matter that part of the prison has already been built in Drummondville. It does not matter that the main facilities are there and only an additional wing would be needed. It does not matter that the land is already available in Drummondville. No matter that the prison was to be located in Drummondville. He wanted it in Port-Cartier, so he is going to have it built in Port-Cartier. So what if it doesn't make sense, in fact it makes no sense at all, and creates more problems than it solves, as I said earlier. It means additional costs for the Government and for the taxpayer. It creates all kinds of problems for the inmates' families, and the location is not suitable for rehabilitation, but so what?
Mr. Speaker, the Prime Minister decided to go ahead just the same. This is another example of the fiscal excesses of this Government 1 was referring to earlier. But Canadians will remember, and they are not about to forget. This Government was elected with the biggest majority ever given a political party in the House of Commons. The Prime Minister obtained the confidence of Canadians. He made long speeches during the election campaign. He talked to Canadians about patronage. He talked to Canadians about all kinds of things, and he said he was going to clean up the mess. And what did he do?
Mr. Speaker, as I see it, this Government has betrayed the Canadian people.
The Government has betrayed the Canadian people. It was given the largest majority on record. The public opinion polls clearly show that the Government has lost the trust it had been given. I am not being partisan about this issue, the people of Canada have spoken about this and are clearly demonstrating today that they do not trust the Government. They do not even trust the Prime Minister. The Government has lost the confidence of the Canadian people.


An Hon. Member:: That is your opinion.


Don Boudria: A conservative Member to my side says that it is my opinion. That may be so. In any event, it is nice to hear from the Conservative book-ends occasionally, those Members who sit on this side of the House. They are the surfers, who come in with the tide and go out with the ebb-tide. It is nice to hear an occasional bit of noise from some of these Members who otherwise are silent. Those Members give new meaning to the expression "silent majority". The silent majority is here in the House of Commons. Very little is said-


An Hon. Member:: Especially right now.

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Don Boudria: -by them to hold the Government accountable. One Member says: "Especially right now". I do not apologize for holding the Government accountable, especially to a Member who just walked out of the House and will not likely participate in this debate. It is not the duty of one Member of Parliament-


Mrs. McDougall:: Mr. Speaker, I rise on a point of order. It is my understanding that there should be no reference to a Member's presence or absence during the debate.


Don Boudria: Mr. Speaker, I did not name the Member in question. Of course, I could if you insisted. However, I shall refrain from doing so because of my respect for the Chair and the rules of the House.
It is not just the role of the Opposition to hold the Government accountable, it is the role of the House. In view of the way in which government Members debate, it is not only our role, it is our solemn duty to hold the Government accountable. It is clear that the Government cannot hold itself accountable, as has been proven in the past and continues to be proven day after day in the House.
I suggest that the Government had better become responsible soon because the people of Canada have had enough of the way it is running the country. They have had enough of the examples it has set for others but refuses to follow itself. Frankly, if the Government refuses to take that advice seriously it will pay for it in the next election.


Mr. Simon de Jong (Regina East):: Mr. Speaker, I wish to add a few remarks to this debate on Bill C-14. It has been debated on other occasions, both in committee and in the House, but I think it is worth some further comment before the House moves on to other business.
I am sure most Members are aware that Bill C-14 increases the sales and excise taxes that the Government charges on numerous manufactured goods and other items such as alcohol and tobacco. It is one of a series of tax increases that the Conservative Government has imposed since it was elected in 1984.
Many Canadians may not be aware that the Conservative Government has increasingly relied on increases in sales and excise taxes as a means of gaining more revenue than previously had been the case. The total taxes that the average Canadian family pays the Government will have increased by some $1,230 since the 1984 election of the Conservative Government. Of that amount, the average Canadian family will pay $385 more in increased income tax which constitutes around 31 per cent of the increase in taxes. They will be paying $845 more in sales and excise tax and that constitutes some 69 per cent of their taxes.
The thing about sales taxes, of course, is that they are hidden. One does not see them when they are included in the sale price. When a person buys manufactured goods, the 12
per cent the federal Government charges, and in some cases it might be a little less, is hidden in that price so that the consumer never knows how much he is actually paying in taxes. The Government is nickel and diming the taxpayers.
The Conservative Government has increased the number of items which are applicable for sales tax. It has expanded the federal sales tax in previous Budgets to include things such as vitamins, some non-prescription drugs, candy bars, softdrinks and a whole host of items which were never taxed previously. This Government, as I mentioned before, is relying more and more on the sales tax as a way of increasing public revenue. It does that because the Canadian taxpayer is not aware he or she is paying these new taxes.
Let us look at the taxes the Government has imposed since being elected in 1984. It has increased taxes through sales and excise taxes by some $6.7 billion. Personal income taxes have increased by some $3.3 billion and corporate taxes have increased by $1.4 billion. Again, these figures illustrate the Government's dependence upon increases in sales and excise taxes as a major revenue grab from the taxpayers' pockets.
We object to the increases in sales and excise taxes for several reasons. First, it is not progressive. It does not mean that the tax load is carried by those who are in a better position to pay the tax. It means people who are the least capable of carrying the tax load are penalized. The regressive nature of the tax can be seen when one looks at the various income groups and understands what the increases in sales and excise taxes since 1984 mean to them.
It is true that a family earning $15,000 a year or less will receive a rebate of $150, which is $50 for every adult 18 years of age and over and $25 a year for every child. That means an average family of four will get back $150. Of course, the $150 does not cover the total increase in sales and excise taxes the family will have to pay. It will be worse off. The family earning $10,000 a year or less will in fact pay an increase in taxes of some 0.2 per cent. A family earning $15,000 a year will pay a net increase of 0.4 per cent in new taxes. Even the very, very poor who will receive a tax rebate of $150 will still see the amount of money it pays in taxes increase because of the Conservative Budget. However, the people who get hit the hardest are the working poor, for example, the family of four which earns some $20,000 a year. That income is still well below the poverty line for many families living in larger centres. The couple earning a net family income of $20,000 per year with two children will pay an extra $269 per year in extra taxes through the sales and excise taxes. That is a 1.3 per cent increase in taxes going out of the family income.
We can look as well at the well-to-do families and find that that family pays a smaller percentage of the family income in sales and excise taxes. For example, for a family with a total income of $100,000 a year, the net cost as a percentage of family income going to tax is only 0.9 per cent. Therefore, a family with $20,000 in income pays 1.3 per cent of the family income in this new tax whereas the family earning $100,000 a
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year only sees 0.9 per cent of its family income going to this new tax.
The sales tax is regressive. It is not fair. It taxes those who are the least capable of affording these taxes. It is not a tax based one's ability to pay. These taxes penalize people, not in accordance with their means to pay but regardless of their means to pay.
At this Christmas time of year one must wonder how some families can afford Christmas gifts, Christmas trees and the extra food their children expect and hope for. I do not believe the Government and those people in the Department of Finance have any idea of how millions of Canadians live. They do not realize the economic hardship which exists and the difficulties which are faced day in and day out as these people try to make ends meet. I do not believe the Government, and those people in Finance who devise these master schemes for raising more money, have any idea what it is like for a wage earner who has been laid off and is now existing on employment insurance. He has children to feed, clothe and house. They do not understand the careful planning and budgeting these people must do and the difficult decisions they must make day-in and day-out as to where to spend their money. There is an amazing amount of preoccupation in the budgeting of their meagre incomes. The Government and the Department of Finance have no notion what millions of Canadians experience day-in and day-out.
When we see the type of legislation such as C-14, legislation that increases the tax load on these people, we can only conclude that not only are these measures unfair but that they are indecent. They are uncaring and bereft of any understanding and compassion for those who have to struggle on a daily basis in order to survive. It is not just a few lazy bums who have difficulty budgeting. There are millions of Canadians who find themselves in such circumstances.
The number of people who will be eligible for the $150 tax rebate is 3.4 million. These are families of four with incomes of less than $15,000 per year. These 3.4 million families will receive some redress in the form of the $150 tax rebate. However, they, too, will be paying more in taxes than they were paying before because of the sales and excise tax measures.
One can think of the millions of people who are earning between $18,000 and $22,000 per year who are trying to raise children and who will not be eligible for any rebate at all. Instead, they will be paying hundreds of dollars more in taxes because of the sales and excise tax. They will experience tremendous difficulties, particularly in the Christmas season.
When one considers the totality of the budgetary items that the Government has introduced since its election one finds that the Government has hit the poor and the middle income earners more than it has hit anyone else. To its list of taxpayers it has added hundreds and thousands of people who were so
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poor before that they were not paying taxes. However, they will now be paying income tax because of the various measures introduced by the Government.
When we consider the statistics, and we will have more to say about this when Bill C-23 comes forward for debate, we will show that those with low and middle incomes are the ones who are taking the brunt of the Government's revenue grab. We will show that high income earners will be paying less than they have been paying in the past because of the various tax measures and loopholes that the Government has afforded the well-to-do. We will also show that the corporate sector, those who have been doing quite well, will continue with the tax holidays they received under the previous Liberal Government and under the present Conservative Government. The inequities and unfairness in our tax system would make an honest person blush. Unfortunately, we do not have a Government that knows how to blush.
One must question the economic wisdom of taxing consumption as opposed to income. Not only is it unfair because it hits the poor more than it hits the well-to-do, but it relies increasingly on tax on consumption rather than income. We know that economic recovery means that people have dollars in their pockets which they are able to spend on goods and services, which in turn creates jobs. If taxes on consumption are increased then spending is discouraged. If spending is discouraged, then surely the demand for goods and services is discouraged which, in turn, loses jobs. I am not certain that the Government and the people in the Department of Finance fully appreciate what they are doing when they increase the sales and excise taxes. Nor are they aware of the effect it will have on inflation, consumer spending and employment. I do not think the Government fully understands the economic implications of these tax measures.
The last point I wish to make concerns the over-all justification for increasing these taxes which Conservatives offer in the House. Earlier this morning we heard the Minister of State for Finance (Mr. Hockin) justify, in essence, the increase in taxes on the basis of fighting the deficit. In essence, the Government is telling the Canadian people, we are sorry but we have to increase your taxes because we have to knock the deficit down. I for one do not disagree with reducing the deficit. I think the deficit has to be reduced. It is obscene that we have so much owing, that so much of our revenue that is collected every year has to go to pay off the interest on the deficit.
Where I disagree with the Government is in its understanding of the cause of the deficit and the measures taken to fight it. The reason for the deficit is that the Government and the previous Liberal Government allowed so many tax loopholes that the well-to-do and, in particular, the large and prosperous corporations have not had to pay their fair share in taxes. The tax loss has been tremendous-in fact, it is horrendous. Billions of dollars have been lost. Taxes which should have been collected have not been collected because of various loopholes.

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Excise Tax Act
I have used the following example in the House before. However, I will use it again because often when one repeats a point over and over again it eventually sinks in. I wish to illustrate the point that those who should have been paying have not been paying with the following example. A female teller with the Royal Bank of Canada will have paid more in actual dollars and cents in taxes in the year 1982 than the Royal Bank of Canada paid in 1982. In fact, the Royal Bank of Canada made over $300 million in profits and it did not pay one cent in tax. In fact, it received a tax credit of some $6 million. It is no wonder we have the deficit that we do. It is no wonder that the kid who pumps gas for Shell paid more dollars and cents in taxes in 1982 than did Shell Oil, even though Shell Oil made millions of dollars in profits in 1982. It is no wonder we have the deficit.
We in the New Democratic Party claim that if we are going to fight the deficit it must not be done on the backs of the working poor. It is criminal to charge an extra $200 or $300 to the person earning $20,000 who is trying to raise a family. Let the Royal Bank of Canada, Imperial Oil, and Shell Canada start paying their fair share. Perhaps then we can begin to reduce the deficit and bring some economic and fiscal responsibility and morality to this country.


Stanley J. Hovdebo: Mr. Speaker, I only wish to make a few comments and will not take the full 20 minutes. The Minister of Finance (Mr. Wilson) in the House on several occasions has promised fiscal changes and reforms to make a more progressive and a fairer taxation system for ordinary Canadians. If we were to comment on the actions of the Government in the last two years, it would be found that instead of fair tax system, there is a tax system which bears more heavily on the lower and middle income people than it did before.
During the first two years of the Conservative Government, instead of introducing the fairer tax system it implemented a tax system which is much less fair than the previous one. There were many problems in the tax system before this Government came to power, but it has not done anything to improve the system. For example, the changes that this Government has brought in since September of 1984 have increased taxes by $1,300 for the average Canadian family. It has increased taxes for the ordinary Canadian by adding heavily to excise and sales taxes, instead of using personal taxes. That is a regressive tax, and it is exactly the opposite to what the Government said it would do.
In the November, 1984 Economic Statement the increase in sales and excise taxes added another $350 per year for the average family. In the May, 1985 Budget the Government again imposed a 1 per cent sales tax which cost the ordinary Canadian an average of $325 per year. Finally, in February, 1986 another $170 was added, not necessarily in income tax, but in taxes paid by the ordinary Canadian. Adding all those
taxes up totals an increase of $845 per year. All this has been done in two years.
During the same period income tax increases, which are supposedly more progressive and equitable for families whose financial circumstances can vary considerably, have totalled only $385 per year, compared to $845 added by excise and sales taxes. In the last two years 69 per cent of the tax increases were covered by excise and sales taxes, and only 31 per cent by income taxes. In other words, this Government is opting for unfair and regressive tax, and not for fair taxes which will even out the structure of the tax system.
The Government has been stating that it will close the loopholes and cut personal income taxes so that the middle or lower income people will receive a better break. Most of the low income people, and many of the middle income people, do not have any loopholes. So plugging those loopholes will not help them at all. The cuts that the Government has put in place have not been in the lower tax areas, they have been in the marginal and the upper tax areas. Instead of benefiting the poorer people, the taxes that have been put in place are benefiting only the rich.
It is important to keep reminding the Government that its direction is exactly opposite to what it promised when it was elected. It is exactly opposite to what it says every time the Minister of Finance stands in the House and proclaims that he is making changes in taxes. It is rather sad to realize that most of the taxes that have been put before the House are not up front for everybody to see. In a sense this Government is not being honest, because it is hiding the taxes. The Government is not being accountable for the taxes it is putting on.
This Bill levies a series of taxes which are almost under the table type of taxes. People do not recognize that they are paying them, and consequently the Government does not have to take the political heat for putting these taxes in place. When most people pay excise and sales taxes they are unaware that they are paying a tax. Consequently, they do not react to them in the same way that they would to income taxes, which are much more progressive.
So we have a Government that opts for regressive taxes for its own benefit, even while it stands in the House and suggests that what it intends to do is make a fairer and better tax system which will not tax the lower and lower middle income people, but will increase taxes on the corporations and the higher income people.
I suggest that even as this Bill goes through the Government is using the cowardly approach. It is not dealing with fair taxation, but it is allowing its political hopes for the future to be based on the type of taxation which people will not recognize, not know that they are paying. If you have a very low income, you pay an inordinate amount of that income in taxation through sales and excise taxes. You may not pay very much in income tax if you have a very low income, but if you have a high income you pay a very small part of that income in sales and excise taxes. That is why these types of taxes should
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be avoided, and we should be looking at a fair taxation system which has a more equitable effect on all Canadians.


Nelson Andrew Riis: Mr. Speaker, I am quite delighted to have an opportunity today to make some comments on Bill C-14, an Act to amend the Excise Tax Act and the Excise Act. Some very important points must be put on record.
At the outset I indicate that because of the time of year we all make efforts to expedite and facilitate the business of the House. This is probably the last speech we will make on the particular Bill. I say that so people can make their plans for Bill C-23, the back-up Bill. Unfortunately it is another tax Bill on top of the Bill which we are debating at the moment. It will see more increases in taxation.
It is important for Canadians to know that since the Conservatives formed the Government of Canada, starting in September, 1984, they have introduced an incredible number of new taxes. The ordinary Canadian family is now taxed significantly greater than it was prior to the election of the Conservative Government. As a matter of fact, if we add tax increases experienced by the ordinary Canadian family, in addition to already being overburdened with taxation, the Conservative taxes amount to $1,350 per family. That is an increase on top of the other taxes the family already pays.
For the purpose of this example, we are assuming that the average Canadian family is a family of four, including two dependent children, with a combined income of $35,000. I realize that in many parts of Canada that is not a typical family income. However, when we look statistically across Canada and include the more prosperous areas and the regions of Canada, we come up with an average family income of about $35,000.
There has been a variety of new taxes such as increased taxes on construction materials for home building and such goods, increased taxes on manufactured items, increased gasoline taxes, increased sales taxes on a variety of items, increased taxes on commodities, and increased taxes on alcoholic beverages, cable and pay television services, tobacco products, and so on. It averages, as I said, $1,350 per Canadian family. I call them Conservative taxes because they are taxes imposed by the Conservative Government. It is important for Canadians to know those facts.
My recollection of the last federal election campaign was that the Prime Minister (Mr. Mulroney), who was then the Leader of the Conservative Party, indicated that they should get Government off the backs of Canadians; that was the theme on various Canadian streets. Many people assumed that to mean that taxes would be lessened, that the burden of taxes on their backs would be lessened. They thought that that meant a reduction in taxes paid at the gas pumps, in stores and shops, and in the factories of Canada. However, that was not the case. As a result of various economic statements and
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Budgets introduced by the Conservative Government, we have actually seen an increase in taxes.
As a matter of fact, the biggest surprise occurred just yesterday when the Minister responsible for regulations tabled a 637 page report in the House. It contained proposed new rules on everything from the quality of orange juice concentrate to Canadian content on country music radio stations. They talk about the need to get the Government off the backs of Canadian citizens, yet they bring in 637 pages of federal rules on everything. As a matter of fact, the report itself weighs 1.5 kilograms. It is a massive document which shows that we are regulated in every aspect of our lives.
If I refer to my speech notes on Bill C-14, it looks like there will be more and more taxes. Surely to goodness there is an end. Surely to goodness they cannot keep increasing taxes.
I should like to refer to the May, 1985 Budget of the Minister of Finance. In that one statement alone he increased the federal sales tax by 1 per cent. He increased the tax on gasoline by two cents per litre effective September 3, 1985 and by one cent per litre effective January 1, 1986. He also said that there would be a new tax of two cents per litre on diesel and aviation fuels. He broadened the federal sales tax to include candies, soft drinks, pet foods, certain kinds of health foods, certain kinds of energy conservation equipment, and the like. Then he went on to say that the excise tax on tobacco would be increased by 52 per cent and that the excise tax on alcohol would be increased by 2 per cent. That was just in the May, 1985 Budget.
I should now like to refer to the November, 1984 Economic Statement. Again the Government announced another 1 per cent federal sales tax increase and an increase in the petroleum compensation charge. Most recently, in the February, 1986 Budget, it announced another 1 per cent federal sales tax increase for April 1, 1986, an excise tax increase on tobacco of another 6 per cent, and an excise tax increase on alcohol of 4 per cent. It goes on and on. There are literally pages and pages of increased taxes. Surely there is a limit.
A few months ago the Minister of Finance stood in his place and said that the tax system had to be changed, that it had to be improved. Many Canadians thought that that meant reduced amounts of taxes or that the tax system would be made simpler, or whatever. However, that is not the case. The Minister of Finance now wants to introduce a new set of tax regulations called the business transfer tax where everything will be taxed in every business transfer. This means that if one goes to a lawyer to write up a will for the benefit of one's children, spouse, other members of the family or friends, if one picks up one's laundry or if one goes out bowling for the evening, one will be paying new federal taxes.
I think Canadians have been pushed to the absolute brink by expecting them to pay a new set of taxes enthusiastically. I suspect a tax revolt is in the offing. When the Minister of Finance tables the details of the business transfer tax, people will realize that they will pay hundreds of dollars in increased

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Excise Tax Act
taxes on areas which were not taxed in the past. They will say, we have had it. Enough is enough. We are mad as hell. We will not take it any more. We will not continue to pay taxes.
We see this reaction against unfair Canadian tax laws every day-the underground economy. Many billions of dollars in transactions go untaxed every year because people have lost faith in the tax system. They have lost faith in the ability of the Government to introduce a fair tax. Transactions involving billions of dollars take place underground. They are never reported and thereby people avoid paying tax to various jurisdictions. The barter system takes place and cash is passed under the table. I suspect Members of Parliament would have to admit that they are aware of the underground economies in neighbourhoods and communities. It is in the forefront. People ask, why should I pay taxes to the Conservative Government in Ottawa which does not even tax thousands of profitable corporations?
According to my last recollection, if we add up the number of profitable corporations in Canada which do not even pay a single cent in federal income tax, it totals almost 80,000. That is almost inconceivable to an average person working in an office, a mine, a mill, or a small business. Such persons pay taxes on every paycheque. They can look at their paycheques and see what they are paying in personal income taxes. They see that they are paying thousands of dollars every year, yet they know about these 80,000 large corporations.
I should like to be specific and refer to some of them. They include the Bank of Montreal, the Royal Bank of Canada, General Motors, Nova Corporation, Hudson's Bay Company, and Shell Oil. I could list 80,000 of those corporations that make profits year after year after year. Sometimes they make in excess of hundreds of millions of dollars of profits. In 1983 the Royal Bank of Canada made in excess of $300 million in profits and did not pay a single cent in income tax. That was the same year the Bank of Montreal made just about $300 million in profits and it did not pay a single cent in income tax. The Hudson's Bay Company that year I think made just under $100 million in profits and did not pay one single cent in income tax.
Canadians say that is unfair and unjust. It is not right and consequently Canadians are getting more and more reluctant to pay what the Government says is "your fair share" knowing that all of these other large corporations have paid zip for many years. That says nothing about the many wealthy individuals who obtain incomes from a variety of investment sources and are able to manipulate the way they conduct their financial affairs in order to pay no income tax year after year after year.
The Government said it brought in a minimum tax and I should remember that. I do remember that, Mr. Speaker. I also remember receiving in the mail an example of a letter that went out from one of the largest accounting firms in Canada saying, here are six differrent routes you can use in your
financial affairs to avoid paying even the minimum tax. Already the creative accountants, tax lawyers and tax accountants have found ways and means of getting around the so-called minimum tax.
It is a very sad situation when we find once again that the Government is coming to Parliament saying, we must pass this Bill to collect even more taxes from Canadians. What kind of a Bill is this, Mr. Speaker? It is a Bill that will result in increased federal sales and excise taxes. If you look at what has happened in Canada since the Conservatives took over Government, sales and excise taxes have increased $6.7 billion in terms of adding money to the federal coffers. That money has been taken out of the hands, the wallets, purses and pocket-books of Canadian citizens through sales and excise taxes.
I know, Mr. Speaker, that you are the kind of fellow who would probably ask, I wonder what else has been collected? How does that compare to personal and corporate taxes?" If you look at corporate income taxes, it does not even begin to come close to the $6.7 billion which has come from sales and excise taxes. Corporate taxes increased by only $1.4 billion. What about personal taxes? They went up $3.3 billion. We all know when you talk about sales tax that it is in a sense a hidden tax. People pay gasoline taxes at the gas pumps. When you look at sales and excise taxes and combine them with the increase in personal income tax the money collected totals nearly $10 billion more.
These are Conservative taxes that now add up to $10 billion more taken out of the small communities, towns and cities for use by the federal Government for some highly questionable things. I suppose someone has to pay the extra $41 million so we can build a prison in the Prime Minister's constituency. That is where this money goes. That is why people are outraged at being manipulated and used in such an exploitive way.
On the other hand, I suppose a lot of people will say that is all right and fine, surely we have to raise money to conduct the affairs of Canada. Indeed, we do. But should we collect it from sales and excise taxes or should we collect it through a progressive tax system of personal and corporate taxes?
As New Democrats we oppose Bill C-14 because we feel that sales taxes and excise taxes are the wrong way to raise revenues, for a variety of reasons. Let me mention two or three. First, these are hidden, sneaky, sleazy, underhanded under the table type of taxes. No one knows he or she is paying them. When you buy a product manufactured in Canada and you know there are significant increases in manufacturers' sales tax, those increases are not shown in the price of that product. People do not know to what extent the federal Government is gouging them in this under-the-table, sneaky fashion. They assume this is the price of the product of the developers, manufacturers, retailers or wholesalers. But this sneaky tax is also being added, and once again in Bill C-14 the federal Government is increasing it. We do not like it because it is not an honest tax in the sense that it is not up front for
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everyone to see. The federal Government uses this method because it can keep the tax under the table and out of the view of Canadian citizens. We say that is wrong. It is not democratic and it is not forthright. It is sneaky as far as the Government is concerned.
Second, we do not like this tax because it is very regressive. When the very wealthy Canadian buys his or her snow tires he or she might have to pay an extra sales tax now of let us say $5. They do not even notice the $5 as an increase in the cost of a set of snow tires. But when a person from a very poor family goes in to buy that set of snow tires, which you must have in Canada, that person pays the same $5 extra in sales tax but it hurts. The poor family notices the significant erosion of the money at his disposal when he has to pay an extra $5, $10 or $12 through sales taxes. When that person buys his gasoline at the pump it costs an extra $2 or $3 because of increased gasoline taxes. That really hurts the family on a limited income, for example, the veteran on a veteran's pension, the senior citizen on a fixed income, a working family with a very low annual income. But it does not hurt the upper income earner. It does not hurt the person who is obtaining his or her income from investments in the $150,000 to $200,000 salary range. Those people do not notice it. Not only is it a sneaky tax because you cannot see it, it is unfair in that it hurts the low-income earner much more than it hurts the upper-income earner. A millionaire certainly does not worry much about paying sales tax, but the poor family certainly does.
Third, we oppose this type of unfair hidden tax because it is a toll on the consumer and, therefore, it retards the possibility of economic development and expansion in economic areas and job creation. When you take $6, $7, $8 or $9 billion out of the small towns, cities and rural areas of Canada through the taxation system, those dollars are not in those communities to circulate. Those dollars are not being spent at the local barber shop, the local service station or at the local shop down the road. Those dollars are dragged to Ottawa to be spent on priorities that the Government of Canada might have in building new embassies, in some cases, or deciding where to build prisons and that type of thing. Those dollars are not circulating time and time again throughout the year in these small communities. What does that do to the small shop owner, the small business person running a store or a small factory? It means that growth does not take place at the same rate. The consumer has less disposable income.
The most recent quarterly economic review published by the Department of Finance shows that during April and May of this year the disposable income of Canadians fell by 2 per cent. The Conference Board says that our ability to buy is becoming less and less. The National Council on Welfare goes on at some length in its report indicating that it is the middle and low-income Canadians who have less and less disposable income, a situation which harms the economy. Our type of economy requires people to buy services and goods and when they stop or they do not do it at the same rate it slows the economy. That is why in many cases we have such a sluggish
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economic recovery, if there is an economic recovery occurring at all in some regions.
Given that it retards growth and is a hidden, regressive tax, we feel Bill C-14 should not go ahead. What should go ahead is a commitment by the Government to begin a thorough and complete tax reform. It should make our tax system fair, just and equitable. It should collect a reasonable amount of the tax burden from the corporate sector and get away from the imposition of sales or excise taxes which by definition are unfair, unjust and, quite frankly, un-Canadian.


Mr. Deputy Speaker:: Questions or comments? Debate.


Mr. Ernie Epp (Thunder Bay-Nipigon):: Mr. Speaker, I appreciate the opportunity to say a few words about Bill C-14 which has the effect of increasing the sales tax. My friend from Kamloops-Shuswap made a number of important and significant points-


Philip Derek Lewis: Name one.


Abram Ernest Epp: And I want to underscore those observations from my experience in the last election campaign. He observed that the reaction of the Canadian people to this tax increase from the Conservative Government was likely to be a tax revolt. The irony is that the tax revolt in the U.S. has worked to the advantage of conservatively-minded political parties. They have used it to reduce government services and social programs.
The curious thing about the federal Conservative Government is that on the one hand pressure has been put on various programs, as exemplified in the spring of 1985 by its attempt to deindex Old Age Security and the carrying through in the fall with deindexation of family allowances. On the other hand, there has not been a corresponding reduction in taxation. On the contrary, taxpayers receive less from the Government than they expected to receive.
It seems particularly appropriate in these few days before Christmas to think about what that means. This is one of the most important times for department stores and shopkeepers of all sizes. If they do not do very well in December, they are probably not going to survive for very long. The consequences of recent tax increases have been to reduce the amount of business that can be done. My friend has already pointed out that disposable income actually fell earlier this year. That is an indication of the impact these taxes are having.
We have a Government made up of a party which makes a big deal about the importance of small business. That party believes itself to be a defender of families and individuals. Members across the way said all these things, but once they were in power what did they do? They started carrying out these raids on the pocket-books of families and the poor. Instead of enhancing their lives, the Mulroney Government has been grinding them down through its use of the tax system.

December 16, 1986


Mr. MacDougall:: Point of order, Mr. Speaker. My hon. friend has slipped by referring to the Prime Minister (Mr. Mulroney) by his name.


Abram Ernest Epp: Yes, it is the Conservative Government led by the Right Hon. Member for Manicouagan (Mr. Mulroney). We all know his name. We will all remember it in the next election campaign. He made promises in 1984 which had people hoping there would be more and more jobs and things would get better.


Some Hon. Members:: They are!


Abram Ernest Epp: As I said, personal disposable income is falling. Whatever people in the Metropolitan Toronto area may be thinking, in vast regions of the country unemployment remains high. People are afraid of what the Government will do with the Forget Commission report. There is no belief across the provinces of Atlantic Canada, through much of la belle province-


An Hon. Member:: Come and see us!


Abram Ernest Epp: -across northern Ontario, the west and into British Columbia that things will improve in the next number of months. That has a great deal to do with a Government which is behaving in so many ways as if it is in the midst of a depression. There is no depression, of course, in the Prime Minister's personal entourage. There is all kinds of squandering going on which outrages the people who have to pay for it, the taxpayers. The expectations of Canadians are not that there is going to be a better life for them in the next few months.


Philip Derek Lewis: Where have you been travelling these days?


Abram Ernest Epp: A large part of that attitude is because of the tax policies the Government has followed. The Government feels what we have to do is tax consumption, and in ways I do not understand. It seems to believe people should be discouraged from spending money. We have to guard investment capital very carefully. We have to provide all kinds of tax incentives to the wealthy. We dangle a $500,000 capital gains tax holiday before the middle-class to try and get them on side. I am always struck at how Conservative Members get busy with their papers when we talk about these things. There is hardly one looking at me and I always find that interesting, too.


Philip Derek Lewis: I am bored to tears listening to you.


Mr. Mayer:: You do not even have any of your own Members listening to you. Everyone is bored and I cannot blame them.


Abram Ernest Epp: What the Government is doing is creating one of the basic problems of our economy. How can we expect to have people working and producing if people cannot buy?


Philip Derek Lewis: We are now going to get a lecture on productivity from the NDP.


Abram Ernest Epp: How can we expect factories to be working and wholesale and retail trade carried on when consumers are being discouraged through taxation from spending what they would like to spend? How can we expect prosperity for producers generally when we do not have prosperity among consumers? I do not comprehend that kind of short-sightedness.


Charles James Mayer: You do not comprehend; you said it. That is the first thing you said that makes sense.


Abram Ernest Epp: It makes things easy for the wealthy. It makes things seem better in the short run for those in charge of large corporations. Sure, it is nice to have tax breaks which encourage them to invest. However, if you cannot run a factory at capacity now why bother making an investment to add to your facility? There is the heart of the difficulty. We would not have to worry about protecting investment if consumer demand was at a high level.
The NDP, by speaking in defense of the consumer, is also speaking in defense of business of all kinds and sizes. We speak in support of production in the factories and in support of international trade. By being opposed to tax increases which reduce consumer demand we are doing the opposite of what the Government is doing, which is to create a kind of depression situation. The Government is mouldering and insisting that the Canadian people live in that way.
I see it is one o'clock and I will take my seat.


Mr. Deputy Speaker:: It being one o'clock I do now leave the chair until two o'clock this day.
At 1 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.


Mr. Dave Dingwall (Cape Breton-East Richmond):: Mr. Speaker, I rise today to urge the Government of Canada to acknowledge its moral responsibility to the retired workers of the Dominion Coal Company of Canada. These individuals worked for the coal mining company which has since become the Cape Breton Development Corporation. These men provided many years of fine service to this company but have never received any sort of pension income after their retirement.
December 16, 1986

As a consequence of this, Mr. Speaker, a great many of my constituents are living well below the poverty line of $12,500 for a couple living in a small town. That figure comes from the National Council of Welfare. Some people may think that this could not happen in a country like Canada. However, if we take the time to look at the specific case of one miner, we see that a man who has worked in the mines for 35 years must support himself and his elderly wife on no more than $637.96 a month. This amounts to less than $7,700 a year and, tragically, is well below the poverty line.
A Government's compassion is measured by the way it supports and assists the poor and the weak. If the Government has an ounce of compassion, it will acknowledge immediately that it has a moral responsibility to provide assistance to the former employees of the Dominion Coal Company of Canada and allow them to live out the rest of their lives in quiet dignity. I urge the Government and the Cape Breton Development Corporation to move on this matter forthwith.



THE ECONOMY


Mr. Jim Manly (Cowichan-Malahat-The Islands):: Mr. Speaker, at this time of year we celebrate the message of peace on earth, good will among all people. Some fishermen on both the Atlantic and the Pacific coasts have worked to put this message into practice. In Newfoundland, where many fishermen have not had a good year, some of them have raised money to send fishing equipment and medical supplies to fishermen in Nicaragua. In British Columbia the United Fishermen and Allied Workers Union recently held their annual sale of herring. Fifty per cent of the receipts will go to their orphans fund and the rest will be divided among a number of worth-while projects, including building and supplying a fiberglass boat for Nicaragua.
Although international arms dealers continue to play the role of Herod in the slaughter of innocents, it is good to see examples of ordinary people like fishermen who make gifts to help create peace and solidarity among all people.


Some Hon. Members:: Hear, hear!



PARTICIPATION OF YOUTH IN ECONOMIC PROGRESS

Mr. Marcel R. Tremblay (Quebec East):: As Member of Parliament for Quebec East, I want to publicly commend the Quebec university students who distinguished themselves at the Institute of Chartered Accountants final examination and especially Guylaine Bellavance and Remo Santarossa from Laval University who ranked second and seventh for all of Canada.
I should also mention that of the first ten candidates, five are from the Province of Quebec. That astounding success goes to prove the interest of Quebecers in the world of business and economic education.
In the 60's, we had in Quebec the "Revolution tranquille", We are now undergoing an economic revolution. Indeed, the Province of Quebec is in the enviable position of generating the highest number of administration and accountancy graduates of any province.
The result of that interest shown by Quebec students in business is the Quebec laureates. We, Quebecers, are very proud of their success, and I would like to congratulate students from all our Quebec universities. Bravo, keep up the good work!



EXTERNAL AFFAIRS


Mr. Gabriel Fontaine (Levis):: Mr. Speaker, this Government has appointed Mr. Jean Drapeau as Ambassador and Permanent Delegate to the United Nations' Educational, Scientific and Cultural Organization.


Mr. Heap:: Shame!


Gabriel Fontaine: Mr. Jean Drapeau, a great Montrealer, a great Quebecer and a great Canadian, was Mayor of Montreal over the last three decades.
It is an honor for Montrealers that their first citizen, whom they appreciated and loved for 30 years, has now become Canadian Ambassador to UNESCO.
The man who in such a masterly way focused world attention on the City of Montreal during the 1967 World Exhibition and the 1976 Olympic Games no doubt will succeed in setting a Canadian imprint on UNESCO, and certainly will help give that organization a wider international represen-tativity and a rejuvenated mandate.

December 16, 1986



CANADIAN NATIONAL RAILWAYS


Mr. Russell MacLellan (Cape Breton-The Sydneys):: Mr. Speaker, the Minister of Transport (Mr. Crosbie) said that he is not going to intervene with Canadian National to try to get Canadian National to take a human approach to Atlantic Canada. We are well aware of the conditions of the shops in Moncton. Another very serious situation is the further lay-offs in Sydney where nine carmen and one coach cleaner have been recently laid off, cutting in half the CN workforce of carmen in that city. This is at a time when the people of Cape Breton are looking forward to further industrial and economic opportunities.
We want consistency from the Government, not a reduction in the infrastructure or a reduction in the transportation picture, but its enhancement so that the attractiveness of the area will be increased and the economic opportunities will be more forthcoming.
I ask the Elouse to urge the Minister of Transport to forget this Draconian attitude, to stop punishing the world for not having won the Tory leadership, and start acting like a human being.



THE ECONOMY


Mr. Jean-Guy Guilbault (Drummond):: Mr. Speaker, the Conservative Government's economic recovery program is translating into economic growth. For example, for the first time in many years, a financial institution is offering a ten year mortgage, certainly the kind of financing which is likely to please first-time home buyers. This allows taxpayers seeking maximum security through unvarying capital and interest amortization monthly payments to avoid falling victims to skyrocketing interest rates.
At the same time, the Minister responsible for the Canadian Mortgage and Housing Corporation announced the implementation of a new mortgage securities program. This program will have a three way impact: first, the availability of mortgage funds will be increased on the market; second, interest rates will remain at a reasonable level or go down; moreover, this will encourage longer term mortgage loans.
Our Government intends to continue its action plan which, need I mention it, has restored economic stability and growth in Canada.



NEW DEMOCRATIC PARTY


Hon. Edward Broadbent (Oshawa):: Mr. Speaker, 1 am delighted to welcome the Hon. Member for Terrebonne (Mr. Toupin) in the New Democratic Party.


Some Hon. Members:: Hear, hear!


John Edward Broadbent: Following several months of serious thinking and for reasons of principle, he has decided to join the New Democratic Party. He will speak out loud and clear on behalf of Quebec men and women and all the unemployed seeking work, while promoting social reform and justice.


Some Hon. Members:: Hear, hear!


Some Hon. Members:: Welcome!


John Edward Broadbent: I conclude by saying that I welcome him to the great cause of great Canadians like Tommy Douglas and Robert Cliche.


Some Hon. Members:: Hear, hear!


Some Hon. Members:: More, more!


Mr. Speaker:: I am sure all Hon. Members would want the Chair to draw to their attention the old rule about congratulatory messages. However, the Chair is mindful that this was a spontaneous demonstration and, as a consequence, once again exercises some benevolence which perhaps should come out of the time of one of the honourable Parties in the Chamber.


Some Hon. Members:: Oh, oh!



FORESTRY


Mr. Guy St. Julien (Abitibi):: For the very first time in the whole history of the Abitibi-Temiscamingue region, Mr. Speaker, the federal Government has officially opened in Val-d'Or a new office of the Canadian Forestry Service. That is a significant presence in a forest region of world-wide reputation. Hon. Gerald Merrithew, the Minister of State (Forestry and Mines), has emphasized the close co-operation with the Quebec Department of Energy and Resources which will make it possible to achieve the goals under the Canada-Quebec agreement on forestry development which should yield an average of some $6 million per year in this North Western Quebec region.

*

December 16, 1986

Office Director Jacques Cloutier and his staff will have the responsibility of supporting and facilitating the execution of forestry activities undertaken by Indian bands.
Mr. Speaker, it will be easier from now on to bring continuing assistance to Employment and Immigration Canada for the various job-creation programs in the forest industry.
The Val-d'Or Office will facilitate the scientific research activities which have made the reputation of the Canada Forestry Service for over 50 years.



NATIONAL RESEARCH COUNCIL


Mr. David Berger (Laurier):: Mr. Speaker, have you ever gone to the doctor knowing that he or she was not allowed to tell you you were sick, even if you were? This is what the Government did with the task force examining the cuts at the National Research Coucil.
The task force was appointed on November 7 but its terms of reference were announced only last week. The task force has been put on a short leash. It is asked to advise whether cuts endanger the health or safety of Canadians, or impair the ability of the NRC to implement its five-year plan. The task force is not authorized to question the initial decision to cut some $20 million from the budget of the NRC. It has not been asked to evaluate the basic value of the research, or to state what Canada stands to lose from these cuts if they do not affect NRC's five-year plan.
The terms of reference should be broadened. Canadians deserve a full inquiry, not a whitewash, into the Government's miserable policies.



AMENDMENTS TO JAPAN'S BUILDING CODE-FORECAST OF INCREASED LUMBER SALES FROM BRITISH COLUMBIA

Mr. Gerry St. Germain (Mission-Port Moody):: Mr. Speaker, the fate of the forest industry in British Columbia seems to be constantly in jeopardy these days and no one is more concerned for its well-being than our Prime Minister (Mr. Mulroney) and ,Members of this Government. Today in The Globe and Mail it is reported that the Japanese Minister of Construction has recommended amendments to Japan's building code to allow the construction of three-storey single family wooden homes.
This recommendation comes in the wake of the Prime Minister's visit to Japan and his efforts to secure a commitment to this very change. It is estimated that this building code change will result in an increase in sales of 2x4's to Japan from British Columbia by 25 per cent. Last year these sales were valued at $75 million.
It is clear that the Prime Minister's trip to Japan will be worth every penny to the people in the lumber industry in British Columbia, and to all of Canada.



NUCLEAR ARMAMENTS


Mr. Bill Blaikie (Winnipeg-Birds Hill):: Mr. Speaker, at this time of year it is common to hear wishes of peace on earth, good will to all people. I am pleased to say I have received a great many letters from students at John Gunn Junior High in my riding. They have written to me and to the Prime Minister (Mr. Mulroney) with respect to their concern about the future of the world.
I would like to read a few lines from a letter which was sent to the Prime Minister from a student at John Gunn Junior High:
I am writing this letter because I am concerned over what nuclear war would do to my future and the future of the world.
I am scared about what nuclear arms will do to me, my family and my friends. I want to live a full life but with this threat of a nuclear war hanging over my head, I wonder if I will.
She goes on to say to the Prime Minister:
What I expect of you is to take this letter very seriously. I am only a teenager, you are an adult, and I have the right to live a full life such as you and generations before us have. I will not accept nuclear war ever. You have a responsibility to listen to me and understand that I want to live.
Canada right now, I understand, does not have nuclear weapons on its soil. This is step in the right direction, but why are we supporting the Americans for their nuclear weapons, and allowing them to fly the cruise missile over Canada?
That is from a student in my riding.



CANADA POST CORPORATION


Mr. Alex Kindy (Calgary East):: Mr. Speaker, the installation of community mailboxes has created havoc across the country.


Some Hon. Members:: Hear, hear!

December 16, 1986
Oral Questions


Alex Kindy: It is just one more of those incompetent decisions of Canada Post. Mr. Speaker, do you remember the super-automated sorting plants that were supposed to help us get our mail the next day? We are still waiting for that mail to arrive in 24 hours. Now we are told that the supermailboxes will do for us-so the advertisement says-almost anything. And it's supposed to be fun, by the way.
Then Canada Post came up with another project, the closing down of 1,700 rural post offices. What a farce! I suggest that before implementing all these exotic ideas Canada Post should look for basics, and consider effecting more efficient management practices by setting higher productivity levels and by providing a more sound postal delivery system to all Canadians.




Mrs. Sheila Finestone (Mount Royal):: Mr. Speaker, magazines owned and controlled by Canadians, unlike regional and local newspapers, are primarily a national as opposed to a local medium. Their focus is from a Canadian perspective. They entertain, educate, stimulate, record heritage, and express Canadian national identity. Postal subsidies for Canadian magazines have been in place for more than 70 years. The retention of special postal rates for magazines has been supported by the O'Leary Commission, the Davey special committee, and the Applebaum-Hebert Commission.
A 1984 study done for the Department of Communications emphasized the importance of concessionary postal rates. The report warned that, if it were decided to end the subsidy, the amount and rate of increase necessary to do so would likely threaten the survival of the Canadian industry.
The vitality of a strong domestic periodical industry is important to Canadian producers of goods and services. They reach, in a cost-effective way through advertising, Canadian consumers. The postal subsidy program is key to publishers, to advertisers, the Canadian economy. It should not be phased out.



LIVESTOCK


Mr. Lee Clark (Brandon-Souris):: Mr. Speaker, over the next four years the Brandon Research Station will receive over $164,000 from the federal Government to finance the search for a vaccine to control swine pneumonia. This disease is becoming more and more of a problem for hog producers all
across Canada. An effective vaccine will save producers a considerable amount of money.
The people who do agricultural research in Canada are the unsung heroes of the agricultural sector. Projects such as the one I have just mentioned may not sound many glamorous to Members of the House and they do not make very headlines, but researchers help our producers become more efficient. All of their work helps make Canada more competitive in the international market-place.
On behalf of the House I would like to commend all of those involved in agricultural research in Canada, and the federal Government for its continued commitment to this sector.



ORAL QUESTION PERIOD


Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, my question is for the Right Hon. Prime Minister. On the news last night the Auditor General was asked about the management contract for the construction of the prison in Port-Cartier in the Prime Minister's riding. The reporter asked: "You're saying it was fixed?" The Auditor General of Canada replied: "Yes."
Is it the view of the Prime Minister that neither he nor his Government is responsible for the awarding and procedures, in an improper way, of this contract and the acceleration of it to meet electoral purposes in his riding?


Robert René de Cotret: Mr. Speaker, I believe I made it very clear yesterday, both in my statement and during Question Period, that there were allegations of a conflict of interest raised in the House. At that point I announced an investigation into that conflict of interest. In fact, I reported that there was found to be a conflict of interest. I announced the sanctions that we had undertaken to deal with that conflict of interest. So I think the matter is very clear. There was a conflict of interest. We dealt with it in a manner which I feel is appropriate.


REQUEST FOR EXPLANATION OF MINISTER'S POSITION
John Napier Turner: Mr. Speaker, if the Minister insists on answering, how can he explain the fact that the Auditor General himself maintains that the awarding of the contract was accelerated, and how will he explain his own words to the effect that he had a tight schedule?
How can he explain all that to justify the position he has just taken?

December 16, 1986


Robert René de Cotret: Mr. Speaker, the position I have just taken is quite simple. Someone suggested in the House that there had been a conflict of interest. As a result of an inquiry into all facts in this case it was decided that indeed there had been a conflict of interest. So yesterday we announced measures to deal with this conflict.
I fail to see any inconsistency between my answer and the statements of the Auditor General.


PRIME MINISTER'S POSITION
John Napier Turner: My
question is again directed to the Prime Minister. The Prime Minister and his Government are spending an additional $41 million of the taxpayers' money to construct that prison in his riding, and to accelerate the construction for political purposes. After the improprieties in the awarding of the management contract, and the Auditor General's review of the entire procedure, will the Prime Minister admit that he and his Government were wrong from start to finish in this whole matter?


Right Hon. Brian Mulroney (Prime Minister):: Mr. Speaker, I am advised that the dollar information that is being used by my right hon. friend is in serious error.


John Napier Turner: Those were the Auditor General's figures.


Martin Brian Mulroney: No, they were not the Auditor General's figures. That is the figure that the Leader of the Opposition has been throwing around, and it is quite wrong. We will try to deal with that in an objective manner.
In regard to the question as to whether the decision was the proper one, the Government believes that it was. We followed criteria that were set out almost word for word by the Solicitor General of the previous Liberal Government who indicated that when a ministry has a project that is required, and in this case we did require the institution, we took account of the economic conditions in the part of Canada where it was needed in deciding precisely where it would go. I do not think that there is anything to apologize for there. I think that all Departments should do that.
What the former Solicitor General was saying was that the Government in making these determinations, as his Government did in regard to the prison in Renous, should take into consideration economic regional disparity. This Government did precisely that, and the decision was a sound one.
[ Translation]



Mr. Jacques Guilbault (Saint-Jacques):: Mr. Speaker, my question is directed to the Prime Minister.
Oral Questions
In a letter which the Auditor General addressed to you yesterday, along with an update on recommendation 7.95 of his report concerning the Port-Cartier prison, he pointed out that his annual report is referred to the Standing Committee on Public Accounts. He concluded by saying: "Should the committee so desire I will be pleased to appear before the committee to review all facts related to paragraph 7.95."
Here is what I want to ask the Prime Minister. Can he assure the House that he will not bring pressure to bear on the Conservative majority members of the committee in an attempt to prevent the Auditor General from giving testimony before the committee with respect to this specific issue?


Martin Brian Mulroney: Mr. Speaker, it is a totally pejorative allegation concerning all Members of this House. Of course the Auditor General is the servant of the House. He will always be received with respect and courtesy.


POSSIBILITY OF AUDITOR GENERAL APPEARING BEFORE COMMITTEE
Jacques Guilbault: Mr. Speaker, I have a reason for asking this. I quote from a press release:

Prime Minister Brian Mulroney's office telephoned the Chairman of the Commons Committee on Justice today apparently for a progress report on the Committee's hearing on the Port-Cartier prison.

I have a supplementary, this time concerning Hon. Members and committee witnesses. Since the Auditor General has graciously offered to appear, may I ask the chairperson of the Committee on Public Accounts whether she would be prepared to invite him to appear before the committee?


Miss Aideen Nicholson (Trinity):: Mr. Speaker-


Mr. Speaker:: The Hon. Member for Kamloops-Shuswap.


Mr. Gauthier:: She is the Chairman of the committee.


Mr. Speaker:: Order, please. The Hon. Member has asked a question and it has not been answered. There is no rule that says that the Minister or-


John Napier Turner: The committee Chairman-


Mr. Speaker:: The Hon. Member for Kamloops-Shuswap.


Some Hon. Members:: Oh, oh!


Jean-Robert Gauthier: Koester, tell him.


Some Hon. Members:: Order, order!

December 16, 1986
Oral Questions


Mr. Speaker:: Order, please. If Hon. Members have a grievance to raise, they can raise it after Question Period. The Chair has made a ruling. The Hon. Member for Kamloops- Shuswap.


CITIZENSHIP COURTS
Nelson Andrew Riis: Mr. Speaker, my question is directed to the Minister of Justice. He will be aware of some very serious allegations in media reports today about a citizenship court judge who allegedly was counselling new Canadians to vote Conservative and to support the Conservative Party. In other words, he was making some very partisan comments as part of his ongoing discussions with new Canadians. Has the Minister of Justice looked into the situation? Has he suspended the citizenship court judge pending an investigation into these allegations?


Hon. David Crombie (Secretary of State of Canada):: Perhaps I could assist, Mr. Speaker. I had an opportunity to read the allegations in the newspaper this morning. I took the action of causing an investigation to be started. That investigation began this morning. I hope to make a statement by the end of the week.


MINISTER'S POSITION
Nelson Andrew Riis: Mr. Speaker, my supplementary question is for the Minister of Justice. It concerns the very serious nature of these allegations and the pall which they throw over the entire citizenship system in Canada. Has the Minister of Justice examined the situation in adequate depth to ensure that very clear directives have gone out and are understood by all judges involved in citizenship procedures, that they are in non-partisan positions and any comments they make ought to be non-partisan in content?


David Edward Crombie: Mr. Speaker, indeed the Hon. Member is quite correct. Allegations concerning unacceptable conduct in which such judges would involve themselves are extremely serious. There is no question about that. This is why I called for an investigation this morning. I will be able to make a statement by the end of the week. I might say in respect of any further confirmation of attitudes by judges that an investigation has also been undertaken this morning.


SCRUTINY OF APPOINTEES
Nelson Andrew Riis: Mr. Speaker, I appreciate the Minister's response to the questions, but I should like to direct my last supplementary question to the Minister of Justice. Since these appointments are very important, in that a citizenship court is the first opportunity
for new Canadians to be exposed to the Canadian judicial system, it is very important that they be non-partisan. To ensure that this type of partisan comment is never repeated, to ensure that the process is as clean as possible, and to ensure that such questions never have to be asked again in the House of Commons, would the Minister of Justice indicate that, whenever appointments are made, appropriate scrutiny by an appropriate committee will be given some priority?


Hon. Ray Hnatyshyn (Minister of Justice and Attorney General of Canada):: Mr. Speaker, Hon. Members will know that as Minister of Justice I do not have responsibility for appointments of citizenship court judges. While they are citizenship court judges, they are not judges under Section 96 of the Constitution. I think my colleague, the Secretary of State, who has been answering in respect of the matter, has dealt with it very fulsomely and very forthcomingly. I think Hon. Members should applaud the approach being taken to ensure that we have the highest standard of citizenship court judges in the country.


STATEMENTS ATTRIBUTED TO CITIZENSHIP COURT JUDGE
Mr. John Nunziata (York South-Weston):: Mr. Speaker, my question is directed to the Prime Minister. It also concerns the unconscionable conduct of a citizenship court judge who was appointed by the Prime Minister and is active in the Conservative Party. During the course of a citizenship interview with Mr. A1 Roberts of Oakville, the judge referred to the Gandhi family of India as "a bunch of communist bastards". As well he urged Mr. Roberts to vote for the Conservative Party. Will the Prime Minister immediately remove this judge from office?


David Edward Crombie: Mr. Speaker, I have already indicated to the House that the allegations are extremely serious. This is why, when I read them this morning, I caused the investigation to be started. That investigation will take only a day or two. I want to ensure, before we take any action which is commensurate with any wrongdoing, that the investigation is properly done. It will take a day or two, and this is why I indicated I will make a public statement on the matter no later than Friday.


ALLEGED CRITICISM OF CANADIAN BROADCASTING CORPORATION
John V. Nunziata: Mr. Speaker, I have concluded my investigation. There are a number of-


Some Hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. The Chair has heard the questions on this particular subject and I have been listening very carefully because Hon. Members are getting very close to breaking one of our rules, and that is an attack on a judge. There may be some argument whether this judge is of a high enough court, but I think the rule intends that personal attacks
December 16, 1986

be not made on the court of the judge. The questions asked I have felt have been in order, but I would ask the Elon. Member for York South-Weston to be very careful.


John V. Nunziata: Mr. Speaker, Conservative Members may consider this funny, but we in the Opposition-


Some Hon. Members:: No.


Some Hon. Members:: Oh, oh!


John V. Nunziata: -consider it to be very serious.
If I may continue, Mr. Speaker, there are a number of documented cases. During the course of another citizenship hearing with Mr. Stephen Wadhams, a CBC producer, the same judge in question criticized the CBC for ruining the country, and further on in his interview-


Mr. Speaker:: Order, please. The Chair does not view the matter that is being raised as anything else except very serious. I would ask the Hon. Member to put his question to which the Minister can reply.


John V. Nunziata: During the course of an interview with Mr. Stephen Wadhams, a CBC producer, it is alleged that the same judge-


Nelson Andrew Riis: Question.


Some Hon. Members:: Question.


Mr. Speaker:: Order. The Chair is in this position. The Hon. Member has raised a matter which is of very serious importance and apparently, by the answers of the Minister, is being treated that way. This is not the place to get into an extensive discussion of allegations about anyone, especially one who is a judge. The Minister has replied that an investigation is taking place. I would ask that the Hon. Member think over carefully just exactly how he wishes to ask a question and perhaps rise tomorrow. The Hon. Member for Nickel Belt.


Some Hon. Members:: Right on.


Some Hon. Members:: Hear, hear!


John Edward Broadbent: Bravo.


EXTERNAL AFFAIRS
Mr. John R. Rodriguez (Nickel Belt):: Mr. Speaker, my question is for the Secretary of State for External Affairs. It has to do with the announcement by his Department of the closing of the Canadian Embassy in Helsinki, Finland. There are over 50,000 Canadians of Finn origin in Canada, some 6,500 alone live in the Nickel Belt area. These Canadians have made a significant contribution to Canadian life. Further,
Oral Questions
Helsinki serves as an important listening post between East and West.
Can the Minister explain to all Canadians the rationale for the decision to close this very important and vital link with Finland?


Right Hon. Joe Clark (Secretary of State for External Affairs):: Mr. Speaker, I certainly share the view of the Hon. Member, and I think it is shared by all in the House, that Canadians of Finnish origin have made and continue to make an outstanding contribution to Canada. That is not the question at issue when the Government has to come to terms with the legacy of deficit that was left us by the former Government-


Some Hon. Members:: Oh, oh!


Mr. Blackburn (Brant):: Throw that old record out.


Mr. Waddell:: Take it from the prison money.


Charles Joseph Clark: -and has to come to some difficult decisions about how the policy of restraint will be applied. We have done that carefully and we have done it with a certainty that services that Canadians expect will be capable of being performed through other arrangements, and that the relations between Canada and Finland will remain at their present excellent state.


REQUEST FOR RECONSIDERATION OF DECISION
Abram Ernest Epp: Mr. Speaker, my question is for the Secretary of State for External Affairs. Will he reconsider this short-sighted and unfortunate decision which has shocked thousands of my constituents in Thunder Bay, constituents of Finnish Canadian origin who love Canada but who expect to have the services of an embassy when they visit Finland and enjoy the country from which they and their ancestors came? Will the Minister reconsider the decision?


Charles Joseph Clark: Mr. Speaker, the short answer to that is no. May I also say while I am on my feet that I appreciated the endorsement of the difficult decisions we had to take by the spokesman for the New Democratic Party, the Hon. Member for Windsor-Walkerville, last night on CBC television.


Some Hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. Hon. Members will recall that a few minutes ago the Hon. Member for Saint-Jacques asked a question of a committee Chairman. The Chair must say that I did not see the committee Chairman rising. I am now informed that indeed she was. The Hon. Parliamentary Secretary to the Deputy Prime Minister has spoken to me about this and I think it would be appropriate if I recognized the Hon. Member for Saint-Jacques to let him put his question to the Chairman of the committee.


Some Hon. Members:: Hear, hear!
2158

December 16, 1986
Oral Questions


PUBLIC ACCOUNTS
Jacques Guilbault: In all fairness I must thank you, Mr. Speaker.
The supplementary question I wanted to direct to the chairperson of the Committee on Public Accounts is as follows. Since the Auditor General has graciously offered to appear before the committee to elaborate on recommendation 7.95 of his report, would the committee chairperson be prepared to invite the Auditor General now and accept his offer?


Aideen Nicholson: Mr. Speaker, Members will know that the Public Accounts Committee has a standing reference of the Auditor General's Report so that the authority of the committee is there to deal with any part of the Auditor General's Report. The Auditor General's letter has been circulated to Members so that they can decide on an appearance as they look at competing agenda items. I will be bound by the recommendations of the Members.


Some Hon. Members:: Hear, hear!


REQUEST FOR MINISTER'S DISMISSAL
Mr. Svend J. Robinson (Burnaby):: Mr. Speaker, my question is for the Prime Minister. Canadians learned from the Auditor General recently that in October, 1985, Correctional Services Canada misled Treasury Board on the contract for Port-Cartier. Yesterday we learned that the Correction Services Canada awarded a management contract in clear breach of conflict of interest guidelines. In view of the history of incompetence, of porkbarreling, of the waste of taxpayers' money, and the corruption in the awarding of contracts in this matter, will the Prime Minister not take the appropriate step and fire the Minister responsible for this sorry mess, the Solicitor General of Canada? Will he not accept responsibility for this?


Robert René de Cotret: Mr. Speaker, I would like to emphasize the very misleading preamble to this question. I do not recall any submission to Treasury Board which was misleading. There is a mention of a draft submission that never reached Treasury Board, and to the best of my knowledge no misleading Treasury Board submission was ever dealt with by Treasury Board.


Svend Johannes Robinson: Mr. Speaker, the Auditor General's report at paragraph 7.98 clearly states that there was a misleading submission.


COMMITTEE HEARINGS
Svend Johannes Robinson: Mr. Speaker, my supplementary question in the absence of the chairperson of the Standing Committee on Justice and the Solicitor General
is for the Prime Minister. Can the Prime Minister confirm that this morning one of his officials, an official of the Prime Minister's Office, contacted the chairperson of the Standing Committee on Justice and Legal Affairs during our hearings on Port-Cartier? Will he explain just what on earth his official was doing in trying to interfere with an independent committee studying a serious issue? Why was he trying to muscle the chairperson of that committee on this question?


Hon. Don Mazankowski (Deputy Prime Minister and President of the Privy Council):: Mr. Speaker, the Hon. Member's assertion is blatantly false. I placed a call to the chairman. I had not realized he was in committee at the time. Because he was I saw him afterwards, and I do not think there is anything wrong with meeting one of my colleagues, particularly a chairman.


PRESENCE IN GALLERY OF DELEGATION FROM SUPREME SOVIET OF THE UNION SOVIET SOCIALIST REPUBLICS
Mr. Speaker:: I wish to draw to the attention of Hon. Members the presence in our gallery of a delegation from the Supreme Soviet of the Union of Soviet Socialist Republics led by Viktor Grigoryevich Afanasiev, a Member of the Commission on Foreign Affairs.


Some Hon. Members:: Hear, hear!


IMMIGRATION
Gerry St. Germain: Mr. Speaker, my question is directed to the Minister of State for Immigration on an issue which is still very disturbing to the people of British Columbia. As I understand it, the option of appealing the recent decision of the Immigration Appeal Board in Vancouver to the Federal Court of Canada is a feasible alternative. In light of that, what I must know from the Minister today is when-I repeat, when-will he make a commitment to pursue this necessary appeal?


Hon. Gerry Weiner (Minister of State (Immigration)):: Mr. Speaker, the former Liberal Government allowed this person to enter Canada in 1981, or well before September 4, 1984. Now we will do everything we can to get him out. We will appeal now.


Some Hon. Members:: Hear, hear!
December 16, 1986


PUBLIC SERVICE
Hon. Bob Kaplan (York Centre):: Mr. Speaker, I want to direct a question again to the Prime Minister about the Robert Shea affair which I raised yesterday. At that time the Prime Minister claimed there was no proof in writing that the Government had tried to find work for his friend Robert Shea with the Chase Manhattan Bank in a consulting contract for Cape Breton Island. 1 now have a copy of a document produced by the Government and tabled before the Parker Commission. Is it his position that this document is a forgery and was not produced within the Department of Regional Industrial Expansion? I am referring to the document which has the signature line of John D. McLure.


Martin Brian Mulroney: Mr. Speaker, I have no idea what the hon. gentleman is referring to. I have not been given a copy of that except that I-


Jacques Guilbault: It was not signed yesterday. Did you know yesterday?


Martin Brian Mulroney: -except that I did read yesterday that Mr. McLure denied signing that particular document.


REQUEST FOR INVESTIGATION OF DOCUMENT
Robert Phillip Kaplan: Mr. Speaker, I am aware of the denial-


Some Hon. Members:: Oh, oh!


Martin Brian Mulroney: Why didn't you mention it?


Robert Phillip Kaplan: -but it was produced by the Prime Minister's Government and tabled before a Royal Commission.


Charles Joseph Clark: You are taking lessons from Nunziata.


Robert Phillip Kaplan: It contains an allegation-


Some Hon. Members:: Question!


Robert Phillip Kaplan: -that the official was asked to find work for a friend of the Prime Minister. This document having been produced, is the Prime Minister prepared to inquire into it and find out why that language appears there? That is the least you should do when a document produced for a Royal Commission contains a statement like that. Get to the bottom of it.


Martin Brian Mulroney: Mr. Speaker, even for the hon. gentleman this is a new height of convoluted logic. He produces a document containing an allegation which he now admits has been denied by the alleged signatory. If you want to know anything about Mr. Shea whom I referred to yesterday, why not ask the Hon. Member
Oral Questions
for Notre-Dame-de-Grace-Lachine East because he was a friend and classmate of Mr. Shea and speaks highly of him?


Mr. Speaker:: Order, please. The Hon. Prime Minister will refrain from using the word "you".


SOCIAL AFFAIRS
Ms. Margaret Mitchell (Vancouver East):: Mr. Speaker, my question is directed to the Minister of National Revenue. Bureaucratic bungling will cost thousands of low-income people who moved last year their child tax credit. It was promised for Christmas and they are counting on it for Christmas. What will the Minister do to cut the red tape which could mean it will take two to three months to get replacement cheques to families who have changed their addresses and who are desperately counting on this money for Christmas?


Hon. Elmer M. MacKay (Minister of National Revenue):: appreciate the understandable concern expressed by my colleague and I can assure her that we have taken whatever steps are feasible to make alternative arrangements to send out cheques to people whose addresses have been advertently or inadvertently supplied incorrectly. The best thing taxpayers can do under the circumstances, if they wish to expedite the process, is to contact their District Office immediately and give their correct address. We will do our best to get the cheques out as soon as possible.


REQUEST THAT PROCESS BE EXPEDITED
Margaret Anne Mitchell: Mr. Speaker, the information I have is that it will take at least eight weeks after it has gone through his Department and then to Supply and Services. That is impossible. Why can the Minister not simplify the procedure and arrange to cancel cheques sent to the wrong addresses and issue replacement cheques if applicants sign an affidavit? Make it simple and get it out for Christmas.


Elmer MacIntosh MacKay: We will do whatever is possible to simplify the procedures. There have to be certain minimum safeguards. However, in any area where we can expedite the process it will be done.


IMMIGRATION
Mr. Benno Friesen (Surrey-White Rock-North Delta):: Mr. Speaker, my question is supplementary to that asked by

December 16, 1986
Oral Questions
the Hon. Member for Mission-Port Moody of the Minister of State for Immigration. Since the Immigration Appeal Board concerned was appointed with long tenure and has put Canadian citizens at risk, would the Minister see whether or not it is subject to prosecution for doing so?


Gérard (Gerry) Weiner: Mr. Speaker, clearly what I said is that we will appeal the decision of the IAB to the Federal Court under Section 28. It would certainly be inappropriate to comment any further as the matter will go before the Federal Court.


GOVERNMENT EXPENDITURES
Don Boudria: Mr. Speaker, my question is directed to the Prime Minister and pertains to his foreign travel expenditures which cost the taxpayers an incredible 800 per cent more than similar travels by Prime Minister Trudeau. Can he explain to this House and Canadian taxpayers why he needs to travel with as many as 78 maids, butlers, and so on, costing as much as $50,000 per night, when former Prime Minister Trudeau travelled with one-third as many people, for one-tenth the cost?


Mr. McDermid:: And was about one-fifteenth as effective.


Ramon John Hnatyshyn: That was on a canoe trip.


Charles Joseph Clark: Mr. Speaker, I think even the Hon. Member will understand that the allegations in the preamble to his question are false. Let me come to the so-called news story on which he has based his allegations. They had to do with a comparison between the so-called peace mission undertaken by the former Prime Minister, Mr. Trudeau, and attendance at international summits, one of la Francophonie and one the International Economic Summit, by the present Prime Minister. Even the Hon. Member will know that the number of people involved for a small specific mission such as the peace mission of Mr. Trudeau is a much smaller number than that required by any Prime Minister attending any international summit.


Some Hon. Members:: Hear, hear!


Don Boudria: Mr. Speaker, I never thought I would see the day when the travel expenditures of the former Minister of the Environment would sound like a bargain to Canadian taxpayers.


ALLEGED WASTEFUL SPENDING-PRIME MINISTER'S POSITION
Don Boudria: I should like to direct my supplementary question to the Prime Minister. What concrete steps is he contemplating to put an
end to this orgy of wasteful spending? Moreover, is he prepared to make a statement right away in this House to apologize to the Canadian people and indicate his resolve to do better from now on? Is he prepared to make such a commitment today, yes or no?
Right Hon. Joe Clark (Secretary of State for External
Affairs): Mr. Speaker, I would not want to repeat the question asked by one of my colleagues concerning the trip which the Hon. Member has made to Taiwan, but I do want to indicate that it is quite essential-and accepted as such by Canadians-that the Prime Minister of Canada should play a significant role at the Economic Summit and at the Sommet de la Francophonie. It is an accepted fact by all well-informed Canadians that the previous Liberal Government was not even able to achieve a Francophone summit. This Government has, and I think it is a major contribution to the future of this country.


AIRPORTS
Mr. Mike Cassidy (Ottawa Centre):: Mr. Speaker, I have a question for the Minister of State (Transport).
Can the Minister explain why, according to his announcement last week, the administration of the new Montreal International Airport will remain under federal control? Why did the Government decide to establish a local advisory committee with no administrative powers? Why will this advisory committee represent only the private sector with no participation from the municipal and labour sectors or from consumers?


Hon. Andre Bissonnette (Minister of State (Transport)):: Mr. Speaker, as usual, many allegations have been made, but there is very little basis for these questions.
I announced last week that there would be an advisory council during the first transition stage of the airports. As concerns the second transition stage, we are considering privatizing certain Canadian airports, as we did for ports, to provide for local administration, which would be more effective than the present system.


INQUIRY WHETHER COMMUNITY WILL PARTICIPATE IN ADMINISTRATION OF AIRPORT AT MIRABEL AND AT DORVAL
Michael Morris Cassidy: Mr. Speaker, last week when I was in Montreal, I was asked how long this transition period would last. In addition, is it true that the basic decisions will be made before the community can take part in the administration of the Mirabel and Dorval airports?


André Bissonnette: Mr. Speaker, I must tell the House that I was going to meet

1wi

December 16, 1986

Mayor Dore from Montreal this morning as well as the Chambre de Commerce and the Board of Trade to discuss certain matters. Three times already, the day before the meeting at five o'clock, that is last evening at five o'clock, the Montreal Board of Trade cancelled the meeting which was going to be held to discuss certain points at the suggestion of some people.
The federal Government is open to discussion and I have already made myself very open to discussion in the Mirabel-Dorval issue because we want to involve as many people as possible to provide for a better administration.


EXTERNAL AFFAIRS
Hon. Donald J. Johnston (Saint-Henri-Westmount):: Mr. Speaker, my question is directed to the Secretary of State for External Affairs who has just taken a stab at defending the indefensible. Does he not find it somewhat paradoxical that while he is shutting embassies and consulates the Prime Minister is squandering money on foreign travel, sometimes at the rate of $50,000 per night? This is money from the Minister's budget. Will the Minister make representations to the Prime Minister to at least reduce this obscene level of expenditure in order that the Minister will have money to provide the kind of professional representation abroad which Canadians expect?


Charles Joseph Clark: Mr. Speaker, I think the Member's colleagues found a question in that long statement. I did not. If the Member can pose one, I will try to answer it.


Donald James Johnston: Mr. Speaker, I do not want to repeat my first question since I have a supplementary question. However, in a line, he should get back some of the money that is being squandered by the Prime Minister's Office.


ANNOUNCED CLOSURE OF EMBASSY IN FINLAND
Donald James Johnston: Mr. Speaker, my supplementary question is with regard to the closing of our embassy in Helsinki, which I gather will take place. Could the Secretary of State please explain what alternative arrangements could possibly be made to substitute for the presence of our embassy in Helsinki, Finland, a country with which we have great common interests, including Finnish-Canadians, consular services and, of course, a common community of interests as northern neighbours?
Oral Questions


Charles Joseph Clark: Mr. Speaker, I appreciate the interest of the Member and all Members of the House in this issue. Had the Government been left with a financial situation-


Some Hon. Members:: Oh, oh!


Charles Joseph Clark: -less serious than the one left to it by the former Liberal Government, it would be possible for us to consider having a far more extensive diplomatic presence in the world. We are faced with the reality of having to practise restraint. We have had to make some difficult decisions. I can guarantee the Hon. Member that Canada's interests and relations with Finland will be well respected and adequately served through alternate arrangements which will be made.


CANADIAN WHEAT BOARD
Maurice Brydon Foster: Mr. Speaker, my question is directed to the Minister responsible for the Canadian Wheat Board. Seventy representatives of prairie wheat producers are in Ottawa for today and tomorrow to attend meetings with regard to the final payments for No. 1 and No. 2 wheat from the last crop year.
Is the Government prepared to give these producers the final payment for the last crop year in order that they will receive the money which the Wheat Board has realized from the sale of their No. 1 and No. 2 wheat?


Charles James Mayer: Mr. Speaker, the Hon. Member has raised this question in the House before, and he has raised it with me in committee. The Wheat Board is now in the process of doing the final calculations. It is my information that the final figures on the situation of the pool of money to be paid to wheat growers will not be available until around January 15. At that time we will know exactly the situation and will be able to deal with it. Until that time, the Hon. Member's question is basically hypothetical.


GOVERNMENT POSITION
Maurice Brydon Foster: Mr. Speaker, clearly the producers want to receive the full payment due to them. If the Government made an error in setting the initial price for low grades of wheat, does the Minister believe it is fair that producers of No. 1 and No. 2 wheat should have to pay for that error? If the Minister would answer that question, the producers would know what course of action the Government will take when the final payment is due.

December 16, 1986
Oral Questions


Charles James Mayer: Mr. Speaker, we are quite aware that the wheat producers are here for today and tomorrow. We welcome them. Various caucus members from all sides of the House are meeting with them. My colleague, the Minister of Agriculture, and myself will be meeting with them tomorrow morning. We are very interested in hearing their position and are prepared to listen to any proposals they want to make and to have a full discussion on what those proposals will mean for future pooling periods.


CANADIAN ARMED FORCES
Derek Nigel Ernest Blackburn: Mr. Speaker, my questions are for the Minister of National Defence. His Department has recommended that women and homosexuals not be given equal opportunity in the Armed Forces as our Charter of Rights and Freedoms guarantees. Why does his Government discriminate against women while in Denmark, which conducted its own trials and tests, women are allowed to volunteer for combat units?


Hon. Perrin Beatty (Minister of National Defence):: Mr. Speaker, I was very interested in the decision taken very recently in Denmark. Two weeks ago when I was in Brussels at the NATO Defence Ministers' meeting I had an opportunity to speak with my Danish colleague. He has undertaken to send me material related to the Danish experiments. I understand that the summary document, which has been in the press in recent days, is calling for studies to be done by Canada precisely to determine what new opportunities there could be for women within the Canadian Armed Forces.


EQUALITY OF WOMEN
Derek Nigel Ernest Blackburn: Mr. Speaker, my supplementary question is a simple one. Why should Canadians have to provide more positive evidence to the Minister to get the protection guaranteed by the Charter of Rights and Freedoms and our Constitution? Should the Minister not introduce legislation with the notwithstanding clause if he wants to treat women like second class citizens?


Henry Perrin Beatty: Indeed, Mr. Speaker, if it were the policy of the Government to treat women as second class citizens, the course advocated by the Hon. Member is the one we would have to follow. That is not our intention. We want to have full equality for women within the Canadian Armed Forces and elsewhere. That is the commitment we have made.
I am pleased to be able to say that since March of this year we have opened 7,500 new positions to women within the
Canadian Armed Forces. I have opened 14 new occupations since becoming Minister.


REVENUE CANADA
Mr. Alan Redway (York East):: Mr. Speaker, my question is for the Minister of National Revenue. According to press reports of last weekend, changes are under way in the district taxation office in Toronto where the microfiche records of 16 million Canadians disappeared about a month ago. Will the Minister advise the House whether he has received a report on the incident from the RCMP, what disciplinary action he has taken, and what other action he intends to take to ensure that something of this sort never happens again?


Elmer MacIntosh MacKay: Mr. Speaker, as my colleague perhaps now knows, an employee of Revenue Canada has been charged with several criminal offences, including breach of public trust. I can also advise the House that accountable individuals in this chain of events have been disciplined, reprimanded, or transferred, and appropriate steps have been taken to strengthen the microfiche procedure, as he has requested.
I am also in receipt of an interim report from the RCMP which makes certain recommendations as to improvements in the way that microfiche security procedures should be implemented. These are under study with a view to being implemented soon.


CANADIAN NATIONAL RAILWAYS
Mr. Len Hopkins (Renfrew-Nipissing-Pembroke):: Mr. Speaker, my question is directed to the Minister of Transport. In a recent document, Canadian National Railways included two and one-half pages of railway lines in eastern Ontario and western Quebec that it wants to close down. This would have a tremendous financial impact on employers and employees throughout the Ottawa Valley, from Montreal to North Bay, and throughout many communities in the Province of Quebec. Is the Minister prepared to guarantee to Canadians that he will not abandon the regions of this country in favour of the large urban areas and the coffers of the CNR?


Hon. John C. Crosbie (Minister of Transport):: Mr. Speaker, that is a guarantee that any Member of this House would be pleased to give. I certainly give it. My guarantee is
December 16, 1986

that whether it is CN, CP, BCR or any other railway, they will not be allowed to abandon any rail lines, branch lines, main lines, any line or anything with iron upon which a train runs, without going through the proper procedures, without applying to the Canadian Transport Commission and without going through every last letter of the law.


Leonard Donald Hopkins: He should be serious because we are quite used to those procedures.


Some Hon. Members:: Oh, oh!


REPORTED ABANDONMENT OF EFFORT TO ATTRACT NEW TRAFFIC
Leonard Donald Hopkins: Mr. Speaker, in the same document Canadian National told its senior people: "Any effort to attract new traffic on these sections is to be abandoned immediately". It is discouraging business.
How can the Government support this hypocritical move to try to decrease traffic on those lines so that Canadian National can return some months or years later to tell the Canadian Transport Commission that these lines are not paying and it would like to close them down? What will he do about such an internal private request within the CNR?


John Carnell Crosbie: Mr. Speaker, the hon. gentleman should get some new lines because this matter was raised and put to Doctor LeClair in the Standing Committee on Transport. He said he would look into the matter and that he was chagrined at being faced with it. The hon. gentleman asks if I support that kind of statement. The answer is that I do not support that kind of statement and I do not know anyone in political life who would support that kind of statement. Therefore, that statement is unsupportable.


Mr. Speaker:: I want to advise the Hon. Member for York South-Weston that, after some consideration, I hoped he would have time to ask a single question today. However, I believe my earlier suggestion will have to remain because we are out of time. I will recognize the Hon. Member tomorrow.


PRIVILEGE
[Stage Direction]
Hon. Warren Ailmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, I rise on a question of privilege with respect to the Prime Minister's (Mr. Mulroney) suggestion during Question Period that my colleague, the Hon. Member for York Centre (Mr. Kaplan) should approach me regarding
Privilege
the question he put to the Prime Minister relating to Robert Shea. I must advise the House that I knew absolutely nothing about this matter and the matters that have been raised in the House until I read about them in the newspapers yesterday. I would ask the Prime Minister to withdraw his statement-
Mr. Speaker:: I do not want to cut off the Hon. Member, but I find it difficult to see a question of privilege. Perhaps the Hon. Member could explain just how his privilege has been infringed?


Mr. Ailmand:: I believe the Prime Minister tried to implicate me in something with which I had nothing to do. He tried to avoid answering the question-


Mr. Speaker:: Order. I think the Hon. Member would have to agree that some of the questions asked were clearly trying to implicate somebody. I do not think that is a question of privilege.



Mr. Blaine A. Thacker (Lethbridge-Foothills):: Mr. Speaker, I rise on a question of privilege. It relates to the comments by the Hon. Member for Burnaby (Mr. Robinson) who, in my absence during Question Period, asked a question of the Prime Minister and noted my absence. I drew the inference from the question that I was somehow neglecting my duty by not being here. I want to assure the Member opposite and you, Mr. Speaker, that I was in attendance with Mr. Jack Williams and Mr. Ron Hierath from the Province of Alberta at a legitimate meeting with respect to western grain producers.


Mr. Speaker:: The Hon. Member has a complaint, but it is very doubtful whether it is a question of privilege. I notice that the Hon. Member for Burnaby (Mr. Robinson) wants to make an intervention and perhaps settle this.


Svend Johannes Robinson: Mr. Speaker, I just want to clarify that in putting my question to the Prime Minister I was merely indicating that had the chairperson of the Standing Committee been present I would, in fairness to him, put the question directly to him. Certainly, I know he has other responsibilities. There was absolutely no intention on my part to in any way comment on the absence of the Member from Question Period. I know that he had good reasons for being absent. It was for that reason that I put the question to the Prime Minister.

December 16, 1986
Income Tax Act PRIVILEGE


ALLEGED SUPPORT OF CLOSURE OF EMBASSIES
Mr. Howard McCurdy (Windsor-Walkervilie):: Mr. Speaker, in responding to a question by one of roy colleagues, the Secretary of State for External Affairs (Mr. Clark) indicated my fulsome support for the closure of the Canadian Consulate offices and embassies. By doing so, he inadvertently misled the House. The fact is that I indicated that most closures could be justified on economic and functional grounds, except the closure of the Helsinki office.


Mr. Speaker:: Order. I think the Hon. Member has made his point, which is not a question of privilege but debate.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Hockin that Bill C-14, an Act to amend the Excise Tax Act and the Excise Act, be read the third time and passed.
Mr. Speaker:: When the House rose at one o'clock, the Hon. Member for Thunder Bay-Nipigon (Mr. Epp) had the floor. Continuing debate.


Some Hon. Members:: Question.


Mr. Speaker:: Mr. Hockin, seconded by Mr. McKnight, moves that Bill C-14, an Act to amend the Excise Tax Act and the Excise Act, be read the third time and do pass.
Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.
Motion agreed to and Bill read the third time and passed.


INCOME TAX ACT
[Stage Direction]
The House proceeded to the consideration of Bill C-23, an Act to amend the Income Tax Act and a related Act, as reported (with amendments) from the Standing Committee on Finance and Economic Affairs.
Mr. Deputy Speaker:: There are 18 report stage motions on today's Notice Paper in amendment to Bill C-23, an Act to amend the Income Tax Act and a related Act.
I would like to thank Hon. Members for their co-operation in submitting their motions so promptly and, particularly, I wish to thank the Hon. Member for Ottawa Centre (Mr. Cassidy) for his helpful suggestions in relation to the grouping of his motions.
The Chair has examined all of the motions and finds them to be procedurally acceptable.
Motions Nos. 1 and 16 will be grouped for debate and voted on separately.
Motion No. 2 will be debated and voted on separately.
Motions Nos. 3 and 6 will be grouped for debate and voted on separately.
Motions Nos. 4 and 5 will be grouped for debate and voted on separately.
Motions Nos. 7, 8, 14 and 15 will be grouped for debate and voted on as follows:

An affirmative vote on Motion No. 7 will obviate the question being put on Motion No. 8. A negative vote on Motion No. 7 will necessitate the question being put on Motion No. 8.
An affirmative vote on Motion No. 14 will obviate the question being put on Motion No. 15. A negative vote on Motion No. 14 will necessitate the question being put on Motion No. 15.
Motions Nos. 9 and 10 will be grouped for debate. An affirmative vote on Motion No. 9 will obviate the question being put on Motion No. 10. A negative vote on Motion No. 9 will necessitate the question being put on Motion No. 10.

Motions Nos. 11, 12 and 13 will be grouped for debate and voted on separately.

Motions Nos. 14, 15 and 16 have been dealt with above. [Translation]
Motions Nos. 17 and 18 will be grouped for debate. An affirmative vote on Motion No. 17 will obviate the question being put on Motion No. 18. On the other hand, a negative vote on Motion No. 17 will necessitate the question being put on Motion No. 18.

The Chair will now proceed to proposed Motions Nos. 1 and 16.


Michael Morris Cassidy: Mr. Speaker, I have to apologize for a certain unfamiliarity with the process of grouping. I would simply like to say that I am quite happy with the grouping proposed by the Chair. However, with respect to Motions 5 and 6, in particular, it is ruled that the questions will not be put in the case of a negative vote on the previous motion. I would ask if it is possible to have separate votes in those cases because it is clear
December 16, 1986

to me, at any rate, that in certain cases a Government amendment, for example, may be desirable if the whole section is going to be adopted. Members of my Party may wish to accept the Government amendment while at the same time voting to negative, if they have the chance, the entire concept of that particular section.
I do not think it causes any problem in terms of additional time and, if it is possible, I would appreciate it.


Mr. Deputy Speaker:: The Chair will look into the matter immediately. In the meantime we will proceed to proposed Motions Nos. 1 and 16.


Michael Morris Cassidy: Motion No. 1.
That Bill C-23, be amended by deleting Clause 2.
Motion No. 16.
That Bill C-23, be amended by deleting Clause 57.
He said: Mr. Speaker, Motion No. 1, which refers to Clause 2, provides for a total removal of the current $3,500 limit on deductible contributions to pension plans, thus executives and other high income earners who now have to pay a portion of their pension contributions out of tax paid income will be able to benefit from a very rich deduction. Generally the people who benefit will be those with very high incomes and who therefore have a high marginal rate.
It is perhaps not normal to speak of these things, but the other day, at the instigation of the Government, Members of Parliament agreed to forego $1,000 of their income allegedly as a means to help to overcome the deficit. However, Clause 2 of the Bill will allow Members of Parliament who currently contribute about $5,500 per annum to their pension plan to take an additional deduction. The additional deduction will be in the order of some $2,000 a year, and I am speaking in round figures, and the consequence will be that Members of Parliament, if they are at a 50 per cent marginal rate, will have a tax saving of $1,000 because of this particular provision. That will go on in perpetuity, whereas the $1,000 cut they are taking in their salaries will come out of income before tax and, therefore, the cost to them is about $500 in terms of taxed income. I find this bizarre.
Of course, this is not just a matter for Members of Parliament, although I think there is a certain contradiction there, but is a matter which touches on all high income Canadians. The Government may say this clause and the clause relating to RRSPs is something which is desirable because it wants to encourage savings. I do not know if people want to necessarily discourage savings. The fact is that if people would spend a bit more in the country right now we might have a few more people back at work.
Motion No. 16 deals with Clause 57 of the Bill. Clause 57 raises the limit of contributions to an RRSP, a Registered Retirement Savings Plan, from the current $5,500 to $7,500 and the Government intends ultimately to raise this to $15,000. Once again this is a concession directed to middle and
Income Tax Act
upper income earners because 80 per cent or more of Canadians do not contribute to RRSPs and it is estimated that only 17 per cent or 18 per cent are in a position where they can contribute. Of those Canadians who contribute to RRSPs, a very large number currently do not have the resources to put in $5,500, let alone $7,500 or $15,000. Moreover, the contributions are going to come as a deduction from taxable income and there will be a limit on the proportion of one's income one can put into RRSPs. Once we get to the ultimate of $15,000, one will need an income of around $80,000 a year, I believe, in order to be able to take advantage of the full deductibility.
Let us look at that in terms of the tax expenditures involved. If someone puts aside $15,000 a year, and that is a deduction, and if they are at the top marginal rate, that means that other taxpayers will have to come up with $7,500 to make up for that person's tax saving because of this particular exemption, once it reaches the full limit announced by the Minister of Finance (Mr. Wilson). This is not just a single kind of tax saving. If one puts $15,000 into an RRSP, one then receives the income on that RRSP, tax free, year after year after year until such time as the funds are withdrawn or begin to be used as retirement income. If one receives $1,500 a year on the income from the money one puts in and $15,000 has been put in, that means a tax saving for someone at the top marginal rate of $750 a year, again not in perpetuity but over five, 10 or maybe 25 years in which they will benefit from that particular tax saving. Frankly, I think that is too much.
I believe we are being unjust and unfair to ordinary Canadians when we ask them to pay through the nose for tax savings which in these two motions are being directed to upper income Canadians, whether they are contributing to pension plans or RRSPs. In addition, I would draw to the attention of the House the report of the select Committee on Pensions. That committee of the House of Commons strongly proposed that deductions for pension contributions, and presumably for RRSPs as well, should be in the form of a tax credit. However, that particular proposal has been ignored by the Government. That means that someone earning $20,000 a year who puts a few dollars aside into a pension plan or an RRSP will receive the equivalent of perhaps 20 per cent or 25 per cent of that money back because of the tax saving, because that is all their marginal rate is and all the deduction is worth to them, whereas someone at the top will receive far more. That seems to me to be unfair.
I would like to ask the Minister if he can respond to these points and tell us whether the Government would now be prepared to reconsider these clauses, particularly in light of our tax reform where we are trying to broaden the base and lower the rates. Here we are narrowing the base and, therefore, inevitably increasing the rates again on ordinary Canadians.
f Translation]


Mr. Raymond Garneau (Laval-des-Rapides):: Mr. Speaker, exactly what is the House supposed to be doing? We are now proceeding with clause by clause consideration of a Bill. There

December 16, 1986
Income Tax Act
is no Minister of Finance (Mr. Wilson). There is no Minister of State (Finance) (Mr. Hockin). There is no parliamentary secretary. What kind of debate is this? About the amendments, although I do not agree with everything the NDP Member from Ottawa just said, still, if we are supposed to discuss a committee report and there is no one on the Government side to rise in the House and say they disagree, what's the use? This makes a mockery of our whole parliamentary and democratic system.
Mr. Speaker, that being said, I would like to comment on the two motions before the House today, and I would be tempted to think along the same philosophical lines as the Member who just spoke.
I have said repeatedly here in the House and in committee that as far as pensions and deductions for Registered Retirement Savings Plans are concerned, it would be far more useful to use tax credits instead of the present deductions because with tax credits, all taxpayers are given the same tax treatment, whether they are rich or poor, whether they can save a lot or just a little. The benefit would be the same and would not be more than the tax credit allowed. This would of course be in line with what the Minister of Finance indicated last July, when he referred to the Government's intention to follow the example of the United States with their tax reform. The U.S. tax reform is very limited in its application and applies only to middle- and low-income taxpayers. Under the new measure they may set aside certain sums of money, tax free, for their retirement plan, what we in Canada call Registered Retirement Savings Plans.
However, we are not considering a Bill on tax reform. We are merely considering the proposals made in the February 1986 Budget. It is rather unfortunate that the Bill comes at the end of a session. It was introduced in the House only a few weeks ago. In any case, it is not a Bill on tax reform. These are just a number of amendments which will be temporary, I imagine, until the Government finally decides to introduce more comprehensive tax reform measures.
If we were to accept the motions presented by the Hon. Member for Ottawa Centre (Mr. Cassidy), which are now before the House, I must say that, although I tend to agree with his philosophy, this would create an imbalance in the present Income Tax Act, because it would be necessary to adopt amendments that would be consequential on a number of other Acts, and I do not see how we could do so at this time.
Are we supposed to stop and greet people as they come in, Mr. Speaker? I'm not sure I approve, but let it pass, Christmas is almost here, and perhaps now we can get on with some serious debate.
Mr. Speaker, since the amendments proposed in Motions nos. 1 and 16 would throw the Tax Act off balance since there would only be two or three retirement plan provisions that would be concerned with income tax credits while the remainder would be dealing with exemptions, I feel this would not be very consistent. This is why, even though I agree with the idea
behind the proposal in Motions nos. 1 and 16, I am going to suggest to my colleagues that they oppose it for technical reasons, for reasons of consistency with the whole of the Tax Act. Under a more general tax reform, however, I think it would be appropriate to examine closely the suggestions contained in those two motions that I did introduce during discussion in committee.


Simon Leendert de Jong: Mr. Speaker, we have proposed these amendments to introduce some fairness into the tax system. It is not that we want to discourage saving. In fact, we want to encourage those who cannot participate in company pension plans, such as professionals and small business people, to save. But this is surely a question of fairness.
The proposals made by the Government, both in Bill C-23 and in later announcements by the Minister of Finance (Mr. Wilson), will allow the more well-to-do individuals in our society to deduct up to $15,000 per year as a result of RRSP contributions. It does not take too many brains to figure out that those in the higher income levels will benefit more than those in the lower and middle income levels. In fact, those in lower income levels will be further restricted by the amount of contribution they can make to an RRSP. That is because the legislation provides that only a certain percentage of taxable income can be contributed to an RRSP. For middle and low income Canadians as opposed to those in higher income brackets this means a smaller contribution.
Let us consider someone with $20,000 in taxable income. That person is in the 20 per cent to 30 per cent income tax range. Thus, in essence, their contribution is matched through the tax system at around 20 per cent to 30 per cent. A person who is in the 50 per cent income tax bracket has one-half of the contribution paid for by the Government through the tax system because of the decreased tax that individual will have to pay.
Thus we Find ourselves in a situation in which wealthy Canadians are able to have one-half of their pension plans paid for by the public because of tax savings. Low income Canadians will not have that same opportunity. They will find that only 20 per cent of their pension will be paid for by the public through the tax system. This is a basic and glaring unfairness. It tilts the system to the benefit of the wealthy at the expense of the poor.
What we are proposing is not a radical, new proposal at all. It is a proposal that has been made by a standing committee of the House of Commons which considered the matter of pensions and which recommended that a certain amount of deductions be no longer allowed as tax deductions per se but as tax credits. This would provide a fairness to the system so that a person with $20,000 in taxable income would have the same effective tax reduction because of his RRSP contributions as an individual who is in the $50,000, $75,000 or $100,000 taxable income range. What we are doing through these
December 16, 1986

amendments is trying to introduce an important measure of fairness into the tax system.
The Government and the Minister of Finance, in several of his speeches, have made a strong commitment to tax reform. We welcome everything he has said in this regard so far. He seems to be giving us an indication that he is serious about tax reform. He seems to be saying that it will not just be windowdressing and that, indeed, he will make a serious attempt to rewrite the basic tax structure and operations of the country so that we will have greater fairness.
This is the opportunity for creating fairness in the system and for correcting an unfairness that now exists. I urge Hon. Members to accept our amendments.


Michael Morris Cassidy: Mr. Speaker, will the Minister help me out? I am looking through the documents that were distributed in February-


Mr. Deputy Speaker:: Order, please. The Hon. Member for Ottawa Centre (Mr. Cassidy) has already spoken and needs unanimous consent to make a short statement. Is there unanimous consent?


An Hon. Member:: No.


Mr. Deputy Speaker:: Is the House ready for the question?


Some Hon. Members:: Question.


Mr. Deputy Speaker:: The question is on Motion No. 1 standing in the name of the Hon. Member for Ottawa Centre (Mr. Cassidy). Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


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


Some Hon. Members:: Yea.


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


Some Hon. Members:: Nay.


Some Hon. Members:: On division.


Mr. Deputy Speaker:: In my opinion the nays have it. I declare the motion lost.
Motion No. 1 (Mr. Cassidy) negatived.


Mr. Deputy Speaker:: Is the House ready for the question?


Some Hon. Members:: Question.
Income Tax Act


Mr. Deputy Speaker:: The question is on Motion No. 16 standing in the name of the Hon. Member for Ottawa Centre (Mr. Cassidy). Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


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


Some Hon. Members:: Yea.


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


Some Hon. Members:: Nay.


Michael Morris Cassidy: On division.


Mr. Deputy Speaker:: In my opinion, the nays have it. I declare the motion lost.
Motion No. 16 (Mr. Cassidy) negatived.


Mr. Deputy Speaker:: Motion No. 2 is to be debated and voted on separately.


Michael Morris Cassidy: Motion No. 2
That Bill C-23, be amended by deleting Clause 6.
He said: Perhaps the Minister could comment on this particular case. This is the rather curious business where the Government has decided that the various granting councils should go out and set up their stands and try to find funds from outside in order to raise the increased funding, rather than have it come from Government.
The problem which the committee addressed directly is the fact that there is prejudicial treatment given to one of these three granting councils. As Members know, the three councils are the Natural Sciences and Engineering Research Council, the Medical Research Council, and the Social Sciences and Humanities Research Council.
As the Budget Papers indicated, beginning in 1987-88 the Government intends to match dollar for dollar increased private sector contributions received by the granting councils to a certain annual maximum increase.
The Budget Papers state, and I quote:
A consequential income tax change will be made to ensure that the private sector participant will be entitled to research and development tax treatment for his contribution-
Then it goes on, and this is the catch-22:
-for his contribution to the extent that the contribution finances research and development which is related to his business, and the results are available to him for use in his business. Other contributions to such councils will be treated as gifts to Her Majesty and as such will be deductible in computing the donor's taxable income.
That means that certain types of contributions to the Natural Sciences Council and the Medical Research Council will be treated as R and D expense and, therefore, will get

December 16, 1986
Income Tax Act
favoured status, whereas in general no contributions that were gathered in this way by the Social Sciences and Humanities Research Council will receive that favoured status at all. That means that if the three councils are out beating the drum in order to raise funds, as they are now being told that they should do by the Government, the Social Sciences and Humanities Research Council will be at a particular disadvantage in seeking funding because industrial contributors will ask, "Why should our firm contribute to your council when all we get is a deduction from income? Whereas if we contribute to one of the other councils, we will get a bonus over and above the contribution, therefore, the after tax cost is considerably less".
The Finance Committee found itself in a difficult situation because Members from all sides felt that there was injustice and prejudicial treatment with respect to the Social Sciences and Humanities Research Council.
I have met people in the social sciences and know the degree to which a great deal of academic excellence in this country hangs on the work and the funding of that particular council, and the degree to which there is a dearth of other funding alternatives for areas like the humanities, the social sciences, and many areas such as psychology and sociology which are extremely important in terms of understanding where we are going as a country. I suspect that linguistics and other things that are important to a bilingual country are not covered in other ways at all. But these are areas which inevitably will be left to starve some more because of the prejudicial treatment.
Since the Finance Committee could not respond directly and amend the Bill, we have referred this out to our researchers. We have not yet produced a report, but I think the Minister of State for Finance (Mr. Hockin) is aware of the fact that the sense of the committee was that we believe that this is wrong. We wish to see the Government accept changes in this area so that that bias against the seeking of outside funding-and it is not an ideal principle at all-but the bias against the seeking of outside funding for the Social Sciences and Humanities Research Council will come to an end.
Perhaps the Minister has some comments.


Thomas Hockin: Mr. Speaker, I wish to reply to the Hon. Member. A couple of weeks ago his colleague, the Member for Regina East (Mr. de Jong), has also expressed his concern about the same matter a couple of weeks ago. Having been a professional social scientist, I am concerned about the very topic that the Hon. Member raises.
The Member for Ottawa Centre (Mr. Cassidy) is quite right, a contribution made to the SSHRC can now be deducted, but the SSHRC is finding that it is difficult for it to be eligible for this matching grant formula because the definition of R and D is not defined in such a way as to be hospitable to the types of research that the SSHRC and social scientists do.
If we broadened the definition further, we would find that we had so extended the definition of research and development
that it had lost all meaning. We would be in great trouble defining what it meant at all. I wish to assure my hon. friends in the House that I want this matter to be explored carefully as we go through tax reform in the next two or three months. I believe that we should try to find a way whereby social science research could be defined in such a way as to be included. But we have to find a way of doing it in order not to broaden the definition of R and D in such a way that it becomes almost meaningless.


Simon Leendert de Jong: Mr. Speaker, I sympathize with the difficulty that the Secretary of State for Finance (Mr. Hockin) has mentioned in terms of defining research and development to include the social sciences and humanities, but not to open it up in such a way as to allow all manner of abuses to occur.
My mind then goes to the next situation where he illustrates the difficulty of conducting social and economic policies through the tax system. In part, that is what tax reform is all about. The tax system should stop being used for social, economic and scientific purposes and programs. But the Government is telling the funding councils to go out and find more money from the private sector. It helps them in the task by giving special tax considerations to those companies and individuals donating the money to NSERC, medical sciences, and the social sciences and humanities by attempting to get more private money into the sciences and finds it difficult to do because of the very thing that the Minister had mentioned in the house. That is why the social sciences and humanities councils particularly have been telling the Government not to go down this path but to stick with the funding formulae as they exist. Let it not offer tax incentives and concessions but, rather, let it give straight grants. If you give the humanities, the social sciences NSERC, and the medical sciences straight grants and stop the nonsense of the tax credits and deductions, the money saved by closing those tax deductions would allow the granting agencies to receive the money directly that they need to do their work.
I sympathize with the Government, and I sympathize with the Minister. In order to get a definition of research and development that would be tight enough to prevent abuse, the conclusion will have to exclude the humanities and the social sciences. That is why I urge the Government to change its policy and its direction, and fund more directly the granting councils and not tell them to go out and find private money through some tax scheme. The tax schemes have not worked.


Thomas Hockin: Mr. Speaker, by way of a very brief reply-


Mr. Deputy Speaker:: Is there unanimous consent for the Minister to make a short reply?


Some Hon. Members:: Agreed.


Thomas Hockin: The purpose of the matching grants was to do something badly needed in the country. It was to bring
December 16, 1986

research closer to the private sector, that is, the private sector defined broadly. I am not only referring to private enterprise. I am referring to the private sector outside Government, the whole private sector. It was an attempt to bring research closer to the private sector; that was its purpose. It was a good purpose. Probably it is overdue. That was the intention behind it, and I stand by it.
I know the Hon. Member would like to see it done through grants from the Government. We are trying a new approach. Hopefully it will bring research not just closer to the marketplace but closer to the private sector in general.


Nelson Andrew Riis: Mr. Speaker, I should like to make a few comments about Motion No. 2 and to direct them to the Minister. There is another concern if we are to use the matching approach or the private sector approach in terms of raising funds for research and development in the hard sciences or pure sciences as opposed to or as well as in the social sciences and humanities. There is a certain ring of regional discrimination.
I will simply speak as a westerner, but I could make the same case if I came from another region of Canada other than central Canada. If we are looking for research and development to take place through the private sector, presumably decisions will be made by supporting firms which tend to have their head offices in central Canada and tend to be concentrated geographically there. If we are looking at matching funds from the corporate sector for research or at research being tied through the private sector, it will have a natural bias toward being focused in central Canada as opposed to the regions.
It is not a major issue. I do not want to suggest it is. I do not want to suggest either that it will be a major effort toward discrimination or that there is any intentional discrimination. However, inadvertently and because of the reality of Canada and its industrial heartland or where the private sector tends to be headquartered, it would result in a certain bias in research being done in such a way that it would discriminate against the far West. Would the Minister agree with those comments?


Mr. Deputy Speaker:: Is there unanimous consent to allow the Minister to make a short reply?


Some Hon. Members:: Agreed.


Thomas Hockin: Mr. Speaker, that is an interesting question. It is true in the world today, in terms of research, that we often cannot produce world-class research without a critical mass of researchers. Very often this means, when we talk about the research side, that much research is concentrated in certain places. For example, medical research clearly has certain homes in Canada. I quite agree that it is not widely distributed across the country. However, that is sort of the nature of research.
I remind the Hon. Member of the nature of the private sector. Let us take western institutions, for example, in the interior of British Columbia or in the Canadian Prairies.
Income Tax Act
Saskatoon has a very interesting and critical mass of space research. The co-operatives and other parts of the private sector are strong and important in certain parts of British Columbia and Alberta. We also have the oil and gas industry, potash, and so on. Perhaps researchers have not gone to these people and said: "We can do some research of use to you to strengthen your infrastructure". Maybe this would encourage them to do it, and that is why I support it. When it comes out in the wash, it could be that it is not totally balanced. That is the point of the Hon. Member. Perhaps it is a reason for us to examine it carefully in the future and see how it evolves.


Raymond Garneau: Mr. Speaker, the motion now under discussion in fact has to do with agencies in the social field, the so-called political and social sciences, which have a hard time getting funds that should come from businesses because donations for funding their research and development work could hardly be viewed as connected with the operations of the firm making such donations.
In other words, the reason for this debate is, taking the example of any type of business, let us say a bank for instance, a large Canadian bank that would like to support the Faculty of Social Sciences at the University of Toronto by making a major donation to research and development. In order for the Royal Bank to consider that as funding for research and development, it would have to prove that the research done by the University of Toronto's Faculty of Social Sciences can help the operations of the donor or of the person who wants to invest in the research and development field. This is extremely difficult.
This is why all university groups, universities and departments that are involved in research in the area of economic and social sciences, in a political and social sense, have a hard time getting their research projects funded. The goal is therefore to ask the Government to find the appropriate formula.
In his answers, the Minister stated earlier that if we open up the definition, because in my view we could solve the problem by way of regulations rather than by way of the legislation itself.
For the reasons mentioned I am prepared to accept clause 6 as it is, but we create a problem in the sense that it will be even more difficult to finance research in economic and social sciences departments.
In response to one of my colleagues the Minister said a moment ago that it might become extremely difficult to establish the criteria concerning the limits of the tax field which the Government is prepared to abandon for this kind of research and development.
Mr. Speaker, I would suggest that the Minister exaggerates to a certain extent because companies do not actually go out of their way to hand out millions of dollars just to get a tax exemption worth many hundred dollars. Indeed there are

December 16, 1986
Income Tax Act
operating costs and, to my mind, these would act as a natural check likely to prevent some of the abuses the Minister mentioned.
All things considered and given the field of activities which make it more difficult to come up with an acceptable definition, I think we might have at Government level-either the Department of the Secretary of State which looks after higher post-secondary education grants, or the Department of Finance, or other Government sectors-a committee or an assessment board which would rule and authorize donations as being directly or indirectly related to the operations of a company prepared to invest in research and development.
I would think we can find a way to devise a solution without necessarily resorting to legislation. Perhaps the Minister might consider the matter and amend the regulations, or even the legislation if it comes to that. Still I think there is a way to overcome this difficulty.
I remind the Minister that we have received strong representations from university circles, and I suspect he did too. As I see it, the problem is serious enough to be worthy of his consideration.
Having said this, Mr. Speaker, I do not see how I can support Motion No. 2 because by doing so I might be making it easier still for tax evaders in the field of research and development.
This is why I will vote against the motion now before the House because it will not achieve the basic objective. Still I urge the Minister to consider very carefully every opportunity there might be to solve the problem of research in the field of social affairs without actually incurring huge tax losses, at least no higher than the tax expenditures related to clause 6 as it is now drafted.


Mr. Deputy Speaker:: Is the House ready for the question?


Some Hon. Members:: Question.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: On division.
Motion No. 2 (Mr. Cassidy) negatived.


Mr. Towers:: Mr. Speaker, 1 just wanted to make sure that the last motion was defeated on division.


Mr. Deputy Speaker:: It was.
Motions Nos. 3 and 6 will be grouped for debate and voted on separately.


Simon Leendert de Jong: Motion No. 3
That Bill C-23, be amended by deleting Clause 12.


Michael Morris Cassidy: Motion No. 6
That Bill C-23, be amended by deleting Clause 35.
He said: Mr. Speaker, I am sorry for being late. The difficulty is in trying to be in the committee and elsewhere at the same time. This motion relates to the flow-through clauses. The Government announced in the Budget that its intention was to make use of these shares easier and, among other things, to remove the possibility of third party liability from individuals. Elsewhere certain rules relating to limited partnerships are being somewhat tightened, but in this case the use of flow-through shares is being eased.
Once again we get into the situation where there is effectively an enormous tax expenditure involved, and despite the fact that tax reform is on the horizon, the Government does not appear to have questioned whether it should now begin to tighten down in areas where it is being quite generous. The rules allow a 100 per cent write-off against taxable income of Canadian exploration expense, a 30 per cent per annum writeoff of Canadian development expense, and a 10 per cent per annum write-off of Canadian oil and gas property expense. That means that if the investment is made in the flow-through shares and if the corporation then renounces the deduction for its own purposes and passes it back or flows it through back to the investor, a wealthy Canadian tax filer whose marginal tax rate is in the 50 per cent bracket can then invest $10,000 in flow-through shares in a small mining or oil company and get an immediate write-off against taxable income for that whole amount if the company spends that amount on exploration within the tax year or within 12 months. The tax saved in this case would be about $5,000.
When we are talking about tax saving, we are talking about somebody else paying that amount. If that amount is not paid by the taxpayer, then we are all going to pay it, as we have been reminded on many occasions by the Government, through the means of an increased deficit and through paying interest over many years because of a concession such as in this case. Tax savings are only in the minds of the people who receive them, and those are normally wealthy Canadians. 1 do not think there are many people in my constituency who are in a position to sink $10,000 in an oil, gas or mining exploration with flow-through shares. There are a few. They live in certain parts of my riding. Some of them even vote for me, I guess, but most of the people in my riding do not have that kind of situation. Even if they did and were able to put $2,000 or $3,000 into one of these investments and gain certain benefits, the tax benefits they would receive are a lot less because this is a deduction from taxable income and, therefore, the higher the bracket, the more the people of Canada will be called upon to share in that particular investment.
The pages of The Globe and Mail and The Ottawa Citizen and business pages of other newspapers across the country are
December 16, 1986

jammed at this time of the year with various types of tax dodges and tax shelters. The Minister of Finance (Mr. Wilson) at every Budget says: "We are doing away with MURBS, limited partnerships and with these means by which tax is avoided". Yet I picked up a paper last night and read that for a mere $1,000 or $2,000 I or somebody else could generate tax losses in the first year of $23,000. I do not know how it is done.
I almost admire the creativity of the people who devise these kinds of schemes at the same time as I deplore the twisted distorted priorities of a society where somebody who has a big tax bracket and $1,000 or $2,000 to put aside can get $23,000 in tax losses and save $11,000 or $12,000 in taxation in one year while at the same time there are hundreds if not thousands of people in my constituency who do not have enough food to get themselves to the end of the month every month. People are having to go to food banks and the food banks are running out of food. These banks cannot serve the needs. The Government sees that its priority is to put more products, as the financial industry calls them, into place to allow more wealthy Canadians to avoid tax. The Government will then turn around and tell us that we need a business transfer tax or we need a higher rate of taxation on ordinary Canadians in order to provide these tax loopholes, these legal tax avoidance mechanisms, such as the one contained in Clause 35.
When we were devising the amendments in this area we had a choice. We could have tried to change, amend and improve the various measures being put forward by the Government. I decided, and my colleagues accepted, that where you have a measure which should fundamentally be re-thought, which is far too broad for the declared purpose, which is to get some needed exploration expense and activity going in the northern parts of my province, that is, Quebec, the oil and gas areas and so on, rather than simply saying there is a bit of good here and there is a lot of bad, we should simply tell the Government to stop it, take the measure away, start all over again, and strike out the loopholes. Then, if the Government has to have targeted measures in the form of tax credits, grants or other means to encourage certain types of desirable activity, for goodness' sake let it do it that way, but let it not do it in the broad brush kind of way which is being proposed here.
This is a related subject. It will not be debated directly here, but I mention it briefly. The Government purports to have reduced the use of limited partnership with the clauses elsewhere in the Bill. I want to say to the Minister of Finance and his deputy that already the high priced help in Bay Street, in St. James Street and probably Wall Street as well, are now looking at means by which they can avoid that, even by taking advantage of the new provisions which are put into this Bill. If you provide loopholes, inevitably the loopholes will be used. We have to have a commitment which I am afraid I do not see yet from the Government. If it is really intent on tax reform, it should not fiddle around at the edges with something like this. The Government should not increase some pension deductibility and say, "Well that is just temporary". The Government should be serious about tax reform from now until the end of
Income Tax Act
the mandate in 1988 or 1989 and systematically ensure that every measure that affects the tax system is a strong step forward to tax reform rather than taking two steps forward and one a half backward, which is the record of the Government right now, or one and a half steps forward and two back.


Thomas Hockin: Mr. Speaker, let me reply to the Hon. Member because his points were wide-ranging and I think it is important that I do reply. I think the Hon. Member knows that flowthrough shares and the tax arrangements for them are not designed for the riding of Ottawa Centre. They are designed, as the Member knows, for northern Ontario, northern Quebec, the Northwest Territories, the Yukon and northern Manitoba, Alberta and so on. As a matter of fact, it is the northern parts of our provinces that are the most neglected parts of our society economically and in every other sense. We must do something for those parts. That is what is behind the flowthrough shares.
I want to assure the Hon. Member that we cannot stand still while looking at tax reform. We have to govern. However, quite frankly, flow-through shares have been very effective in creating very meaningful economic activity in a neglected area of Canada. How do you do it except through private investment? The Hon. Member is asking Government to do this exploration. Government is not designed to be a risk taker. It is not designed to make the tough decisions about what risks should be taken. That naturally belongs to the private sector. If you are going to ask the private sector to invest, you have to ask those who have money to invest. This policy is not aimed at helping the wealthy of Ottawa centre. It is aimed at helping the people in northern Canada and making sure that risk decisions are not taken by Government but by the private sector.
The second point deals with limited partnerships and the deductibility of losses. That is part of the question of tax reform, but let me ask the Hon. Member this question. If someone incurs a large loss which cannot be written off in one year, should they be prohibited from writing it off over a couple of other years? What if a farmer, a logger or a small businessman is caught in some terrible catastrophe? What if they do not have enough income to write it off in one year? You should be able to write it off in other years as well, but the Hon. Member would remove that right with his amendment. Therefore I am very firm in my conviction that this motion should be defeated because it goes against the very heart of what we are trying to do.


Raymond Garneau: Mr. Speaker, I have trouble understanding the reasoning behind the motions presented by the Members of the New Democratic Party. When the Liberal Government introduced these measures, as a stimulus to economic development in the mining areas of Quebec and Northern Ontario, the results were extremely positive.

December 16, 1986
Income Tax Act
Not long ago, I was visiting the Val d'Or area, where I met people who do research and development in the mining industry. I spent most of the afternoon talking to them to find out about the impact on the local economy of what are known as flow-through shares and what the positive impact had been of this tax remedy introduced by the Liberal Government at the beginning of the eighties or around the middle of the seventies. I asked whether they felt it had made a positive contribution.
I must say, Mr. Speaker, that the economic activity generated by this tax provision has had a considerable impact. This is true in Northern Quebec but it also applies to the mining industry in Ontario and to the mining, gas and petroleum industry across this country. The results have been particulary positive for people who are prospecting for gold, because the price of gold and the extremely high cost of research and exploration.
In Northern Quebec, this tax provision, which became more widespread over the years as taxpayers realized the kind of benefits it could bring and also as mining companies realized how they could finance certain activities related to the development of their resources-this provision has had a considerable economic impact.
When I met with the mining prospectors, I was told about certain economic impact studies. The prospectors claim that they can show, with the statistics to prove it, that the benefits of the tax concessions granted by the Government during the last few years to promote investment in the mining sector have greatly exceeded the cost of these measures for the state.
This is why I find it hard to understand how the Hon. Member of the New Democratic Party can claim that these measures are only designed to help people with high incomes.
Mr. Speaker, these tax provisions deal with situations where there is a risk. If you purchase flow-through shares and the prospecting company finds nothing and cannot find any mineral whatsoever, this will mean a total loss and the investor will lose his money. There is therefore a risk and it is because this risk is great that it is compensated by tax benefits. I do not understand why the New Democratic Party attacks remote regions such as the Abitibi and Northern Ontario, which need practical support to develop their economy. I can assure you that, in those regions, if flow-through shares were completely eliminated tomorrow, it would mean the loss of thousands of jobs created because of the tax benefits brought in by the Liberal Government a few years ago and maintained by this Bill.
1 also find it hard to understand the attitude of the NDP in wanting to remove these two sections. This goes against their own arguments as the purpose of these provisions is to close the loopholes and better define how these tax benefits will apply so that there will be less danger of abuse. The members of the NPD are fully entitled to disagree about the objectives we were trying to meet a few years ago by bringing in flowthrough shares to help mining prospection, but they will
certainly not meet their objectives if the two motions before us are passed. On the contrary, it would make it completely impossible to apply the law because we would be removing two provisions which are at the centre of the legislation. This is why, since flow-through shares have contributed a lot to the development of Northern Quebec, Northern Ontario and other mining regions in Canada and since the two motions now under consideration would make it virtually impossible to apply our tax laws, I shall have to vote against these motions.


John Alexander Frances MacDougall: Mr. Speaker, I find it shocking-I guess that is the only expression to use- that the NDP would try to eliminate something that has done so much for so many Canadians. Why eliminate something that has developed so many jobs over the last number of years and has brought so much to the economy of the northern part of Canada? The members of the NDP have always said they fight for the little guy. I must say this proves they do not. They are more interested in making political points in the House of Commons than in looking after the people who send us here to do a job for them. This just shows they are more interested in Bay Street than they are in the grass roots. I find it deplorable that the Hon. Member, a former Leader of the NDP in Ontario, would not reflect on what he knows has benefited northern Ontario for many years.
I urge Members to continue with what has been beneficial to each and every one of us over the last number of years. Flowthrough shares have helped develop many small businesses, whether it be the corner grocery store, a diamond driller, prospector-developer, or junior mining company. There is only one way to get the needed investment and that is through flowthrough shares. I do not think that since I have been elected I have had more correspondence on any other subject than I have had from people who were concerned that we were going to remove the concept of flow-through shares. I hope each Member of the House rejects this outrageous proposal put forward by the Hon. Member for Ottawa Centre (Mr. Cassidy).


Guy St-Julien: Mr. Speaker, I wish to join with my colleagues the Hon. Member for Timiskaming (Mr. MacDougall) and the Hon. Member for Laval-des-Rapides (Mr. Garneau) concerning this amendment as well as the flowthrough shares. And as I stated in the House on November 19, I was telling representatives of the Canada mining industry that our prospectors in Abitibi-Temiscamingue, in Chapais and Chibougamau were firmly demanding both the Canada and Quebec Governments to maintain the flow-through share system in the mining exploration industry. I have been fighting for several months for the Government to maintain this program, because it is important for the Northern Quebec area and all the other areas in Canada-and when I say all the other regions of Canada, I mean Northern British Columbia as
*
December 16, 1986

well as Nothern Ontario, both great regions, as well as Saskatchewan, the whole North and especially the great mining areas represented by Hon. Members. I must tell Members of the New Democratic Party who are trying to do away with benefits in those large regions, that in those regions we have no Star War spinoffs, no F-18 spinoffs, no spinoffs from shipbuilding for the Government of Canada. The only spinoffs we have in those regions-the Abitibi, Temiscamingue and all the other regions in Canada, especially in the North- come from mining exploration-flow-through shares have been an efficient incentive in many of those regions. We are aware of the current renewal, especially in Quebec, and recently the Quebec Association of Prospectors produced a $100,000 study that was funded both by prospectors and the Quebec Government, an economic impact study on mining exploration funding through flow-through shares and limited partnerships.
1 can tell you that in that report-but let me quote a few examples, a few lines from it. The study on various flowthrough provisions used in Quebec deals covers the period from 1980, starting date for the Quebec Government, through 1985. Some $315 million had been invested by 1985 by Quebec taxpayers over that period. An examination of each public issue floated produced data on the amounts that went to fund exploration in Quebec. The latter total was figured out by the study team to be $269 million. On the other hand, during 1984-85, a total amount of $61 million was gathered all across Canada and outside Quebec, and may I repeat outside Quebec, that is in Canada and in that province, for a total of $330 million. The Quebec tax cost is based on $315 million invested by Quebecers, while economic spinoffs and the federal tax cost were based on $330 million in 1985 spent in Quebec.
If I may go on, Mr. Speaker, in view of that preamble, the tax cost for both levels of Government is estimated at $239.5 million in 1985, that is $104.25 million for the federal Government and $135.2 million for the provincial Government. The program's financial and tax spinoffs are expressed under two different headings-first, spinoffs from exploration expenditures themselves, both direct, indirect and induced, and second spinoffs from mineral discoveries, their development and future mining operations. It is obvious that this last measure basically remains in the assessment of the program, because the entire program is aimed at improving on the mineral reserves in Quebec generally and in Canada as a whole.
As I said, with respect to the flow-through shares, either in Northern Ontario or in the Temiscamingue area, either in Northern Saskatchewan or throughout the provinces, the message is as follows: Even as far as our Minister of Finance is concerned, the flow-through shares should be kept at 133 1/3. And we know that as recently as last week, the Quebec Government has maintained some flow-through shares at 133 1/3. They are at the same rate as at the federal level.
Before concluding, Mr. Speaker, I should like to mention some discoveries that were developed in Quebec.
Income Tax Act
The 8 discoveries retained for financial and fiscal purposes will require during the forthcoming two years investments of about $300 million for their development and they will yield a production worth $2 billion during a 10-year period. We may be sure that some of those discoveries will yield revenues beyond that 10-year period, but the task force has found it advisable to be more conservative and to set that 10-year period.
Moreover, we have figured out in 1985 dollars the entire future economic impact so that after 10 years, the actual value of a $1 dollar investment is next to negligible.
Mr. Speaker, I agree with my colleagues the two previous speakers who dealt with flow-through shares, that is the Hon. Member for Laval-des-Rapides (Mr. Garneau) and the Hon. Member for Timiskaming (Mr. MacDougall). Flow-through shares are important for large areas.
I know that many Members in this House represent urban areas but I also know that if the Hon. Member for Laval-des-Rapides comes from an urban area he is more concerned about larger remote areas.
Mr. Speaker, I will vote against that motion.


Simon Leendert de Jong: Mr. Speaker, I would like to clarify a few things. The Hon. Member for Timiskaming (Mr. MacDougall) stood up and huffed and puffed himself into great indignation. In no way are we suggesting that the mining and exploration operations in the northern regions are essential. In no way are we suggesting that the flow-through provisions have not been of significant assistance.


Guy St-Julien: I rise on a point of order Mr. Speaker.


Mr. Deputy Speaker:: Order. The Hon. Member for Abitibi (Mr. St. Julien) rises on a point of order.


Guy St-Julien: Mr. Speaker, while I was concluding my comments a while ago, perhaps it was as a result of my deep feeling for my Abitibi constituency, but I should like to say that I am against the motion.


Simon Leendert de Jong: If I may continue, Mr. Speaker, we are not questioning how the flow-through provision has been helpful. In fact, when the NDP task force, of which I was a member, toured the country we asked a pretty standard question of witnesses across the country. We asked them to give one example of a tax expenditure that was beneficial. The only example we were given was the flow-through provision, and we heard that in various parts of the country.
We are flagging this for the attention of the House in order to begin the debate on tax reform. If memory serves me right, the Department said that it cost Canadian taxpayers $450 million for this particular item. In other words, there are $450 million in uncollected taxes because certain individuals and

December 16, 1986
Income Tax Act
investors availed themselves of this opportunity. I am not saying that that is a bad investment. Perhaps it is a good investment. Perhaps we will indeed get out of it $450 million plus economic activity. I think it is worth considering.
Surely if we are going to study a tax reform proposal we will have to consider this provision as well and ask whether the public is getting $450 million worth of benefits from it. Can the benefits of this provision be delivered in another way? These are questions which the Finance Committee, the Government, the Department of Finance and this Flouse will have to ask. That is the type of debate we are hoping to initiate here and now through our amendment. We are not questioning the benefits of the flow-through provision as they have occurred. Let me repeat that we are attempting to begin the discussion to determine whether we did receive $450 million worth of benefits. My request is no different from what the Minister of State for Finance stated in his comments earlier when debating this amendment. He admitted that if we are going to go through tax reform we will also have to ask these questions about the flow-through shares. The Government must admit that this item will also have to be scrutinized within a tax reform regime.
We must consider whether there is another way in which these benefits can occur to northern mining and exploration without necessarily costing the taxpayers $450 million. Is there another way to engender greater public accountability and scrutiny?
We must remember that this is an inducement in which the public takes half the risk. Those in the 50 per cent tax bracket who risk $100,000 or $10,000 on an investment will receive 50 per cent of it back on their taxes. In other words, the public is subsidizing those economic activities by 50 per cent, depending on the taxpayer.
There are Hon. Members, particularly those in the Conservative Party, who believe in the free enterprise system. They believe that those who take risks and are successful should not be taxed to death but allowed to accumulate wealth that way. If their investment fails, they should also face the consequences. However, it is not quite so simple because according to this provision, half of the risk is covered by the taxpayer, which undermines that philosophy of risk taking. Since half the risk is covered by taxpayers, we are interested in a little more public accountability in this area.
I am somewhat disappointed by the reaction of Conservative Members who enjoy taking political potshots at this amendment.


Mr. Epp (Provencher):: At your inconsistencies.


Simon Leendert de Jong: I remind the Minister of National Health and Welfare (Mr. Epp) that within six months his Government will have to ask these same questions and enter into very much the same debate if tax reform is going to be a serious exercise. I
invite those Hon. Members to join in some serious debate now, or look like fools in six months when they will have to address these questions at that stage. If those Members and the Minister had any understanding of tax reform, they would not be ridiculing this debate.


Arthur Jacob (Jake) Epp: It is a ridiculous discussion.


Simon Leendert de Jong: It is a discussion that will take place if there is to be a serious exercise in tax reform. We will have to ask some difficult questions about our tax system, some of which may not be politically advantageous. We will have to consider seriously some of the "holy cows" in our tax system. In order to have a serious tax reform exercise in this country, we must be able occasionally to ask some politically difficult questions. That is what we are attempting in this amendment, and I am disappointed that government Members in particular have not seen fit to enter into this debate and seriously discuss the issues involved. Rather, they have been more concerned about making some cheap political points. I suggest that if there is a serious debate about tax reform in six months, those Members will be embarrassed because the questions we are raising today will be the ones raised by the Department of Finance and the Finance Committee.


Mr. Dave Nickerson (Western Arctic):: Mr. Speaker, my, how they slither and squirm over there in the New Democratic Party. We saw the spectacle of the Hon. Member for Ottawa Centre (Mr. Cassidy), a gentleman who has never seen more than two blocks from the city centre, get up to say that we must get rid of flow-through shares. They do not care what effect it will have on Abitibi, Timiskaming, northern Quebec or elsewhere.
The Hon. Member for Regina West (Mr. de Jong), however, does know a little-I stress "little"-so he is trying to back down from that position, saying that they did not really mean it but were just flagging the question for future debate.
The people of Canada and those who rely on the exploration and development industry for their jobs know what would happen if we had a New Democratic Government. They know what would happen to their jobs if, God forbid, that ever happened. They will take the right precautionary measures at the next election to make sure that it never happens.
I will not dwell at length on this because my colleagues have already stressed the importance of the flow-through shares to the minerals industry.
Mineral exploration is very susceptible to taxation. One only need consider what happened in the late 1960s when the Liberals began imposing capital gains tax on the prospectors' once-in-a-lifetime find. That brought about a decline in mineral exploration. Fortunately, the Liberals saw the errors of their ways and, while they cannot go back to correct the situation, they did introduce flow-through shares. That is what this Government is continuing. It helped to mobilize those funds again in mineral exploration, providing many jobs and
December 16, 1986

many opportunities in parts of the country like that which 1 represent.
In my opinion, in the present state of affairs, taking into account the low value of many mineral commodities, it would be disastrous if the flow-through shares were to be taken off, as advocated by the NDP. Therefore, I am in complete support of the Minister of State for Finance (Mr. Hockin) and those of my colleagues who have spoken on this subject. We want to maintain the status quo with respect to flow-through shares, at least for the forseeable future.


Mr. Deputy Speaker:: Is the House ready for the question?


Some Hon. Members:: Question.


Mr. Deputy Speaker:: The question is on Motion No. 3 standing in the name of the Hon. Member for Ottawa Centre (Mr. Cassidy). Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


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


Some Hon. Members:: Yea.


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


Some Hon. Members:: Nay.


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


Mr. Deputy Speaker:: Pursuant to Standing Order 114(11), the recorded division on the proposed motion stands deferred.


Michael Morris Cassidy: Mr. Speaker, is it possible to start the vote? We can do it now.


Mr. Deputy Speaker:: I must take the vote on Motion No. 6. We have dealt with Motion No. 3, I will now deal with Motion No. 6. The question is on Motion No. 6 standing in the name of the Hon. Member for Ottawa Centre (Mr. Cassidy). Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


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


Some Hon. Members:: Yea.


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


Some Hon. Members:: Nay.


Mr. Deputy Speaker:: In my opinion, the nays have it.
Income Tax Act
Motion No. 6 (Mr. Cassidy) negatived.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: It is my duty, pursuant to Standing Order 66, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: The Hon. Member for London East (Mr. Jepson)-Capital Punishment-Timing of Parliamentary Vote; the Hon. Member for York East (Mr. Redway)-Narcotics-Government Action to Combat Drug Abuse; the Hon. Member for Cochrane- Superior (Mr. Penner)-The Economy-Northern Ontario Recovery Package, (b) Regional Development Inquiry.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of Bill C-23, an Act to amend the Income Tax Act and a related Act, as reported (with amendments) from the Standing Committee on Finance and Economic Affairs.
Mr. Deputy Speaker:: Motions Nos. 4 and 5 will be grouped for debate and voted on separately.


Dave Nickerson: Motion No. 4.
That Bill C-23, be amended in Clause 34 by striking out lines 39 and 40 at
page 62 and substituting the following therefor:
"the area in respect of'.


Michael Morris Cassidy: Motion No. 5.
That Bill C-23, be amended by deleting Clause 34.


Dave Nickerson: Mr. Speaker, it is a shame that these two motions, which are really quite different- one deals with a technical amendment to Clause 34 and the other would get rid of Clause 34 completely-are grouped for debate because I would like the opportunity to speak for 10 minutes on both issues. Of course, Sir, I am a supporter of Clause 34. It brings into legislation something for which northern Canadians have been fighting for many, many years. It will enshrine in the Income Tax Act the non-taxability of certain benefits which are frequently provided for people who

December 16, 1986
Income Tax Act
work and live in remote northern areas. It is evolutionary in a way in that most of what is incorporated in this Bill-


Mr. Deputy Speaker:: The Hon. Member for Abitibi (Mr. St. Julien) on a point of order.


Guy St-Julien: Mr. Speaker, we are not getting French interpretation, only English. May I have French interpretation?


Mr. Deputy Speaker:: We will see to that immediately. [English]


Dave Nickerson: I was saying, Mr. Speaker, that it is evolutionary in that much of what is incorporated in this Bill was already incorporated into previous remission orders made under the Financial Administration Act.
I have been involved in this matter for many years as have many other Hon. Members on this side of the House. The former Minister of Indian Affairs and Northern Development, the present Minister of National Health and Welfare (Mr. Epp), has been very active in this area. The Minister of State for Science and Technology (Mr. Oberle) has been very instrumental over the years in having this Bill brought in.
This measure finds considerable support in the northern region because it is something they have wanted for a long time. In particular, the union movements, the NWT Federation, the Yukon Federation of Labour, the Steel Workers Union, the Teachers Association and Public Service Unions have always been very active in support. I Find it very difficult to understand why the New Democratic Party has gone against the wishes of the labour movement. In fact, it was the Canadian Labour Congress which was very instrumental in putting pressure on the Minister of Finance (Mr. Wilson) to make these necessary changes. Therefore, why on earth would the NDP go against its supposed friends in the Canadian Labour Congress?
I want to offer some congratulations to all the many people, whether they be in the labour movement, the territorial or municipal Governments or in the private sector, who have worked so hard to make this day possible. Those are my comments on Motion No. 5 moved by the New Democratic Party.
I would now like to be specific about Motion No. 4, moved by myself, which deals with Section 110.7(d) of the Income Tax Act as it will be after this Bill is passed. The motion is in respect of the travel deduction. The new Section 110.7 (d)
states:
In computing the taxable income-there may be deducted
(d) an amount received, or the value of a benefit received or enjoyed, in the
year by him in respect of his employment in the area by a person with whom
he was dealing at arm's length in respect of travelling expenses incurred by
him, to the extent that-
The effect of my amendment would be to remove the words "-by a person with whom he was dealing at arm's length-".
If we leave that in, it creates a great difference between employees of Government-of which there are many in the North because it is the greatest industry in the North, unfortunately-those employees of major concerns, say, mining companies, and small businesses and their employees, on the other hand.
Small businesses have always been at a disadvantage, especially in the North, as they try to compete for employment services. They have had to compete with wealthy Governments and corporations to get good employees. In the case of a small company, a painting outfit, for example, one very often finds that one of the employees in a three-person outfit might be the brother-in-law of the proprietor and the third person might be someone off the street, so to speak. The way this section is worded, the employee off the street would be able to take advantage of the new amendments to the Income Tax Act but the proprietor's brother-in-law would not. That does not really make too much sense. I have received quite a bit of correspondence on this issue, especially from the Yukon. I would like to quote a few paragraphs out of a letter I received from Designers North Ltd. of Whitehorse, Yukon, which explains the necessity for the amendment I have introduced probably better than I could myself. It reads:
The proposed provision has been drawn to preclude a deduction for such travel expenses where the individual is not dealing at "arm's length" with the person providing the benefit. Thus, sole proprietors, partners in partnerships, employees of companies they control and employees of any of the foregoing who are related-within the meaning of Section 251 of the Income Tax Act-to such sole proprietors, such partners or the controlling individual or controlling group of such companies are not allowed this deduction.
In meeting with the Yukon Committee for Fairness in the Taxation of Northern Equity Payments (the "Committee") your Department indicated that "self employed" persons would not be entitled to this deduction. As a result, the Committee was operating under the perception that the deduction would only not be available for sole proprietors and partners in partnerships and only until such time as these persons incorporated. As the foregoing indicates, such is not the case. Incorporated or not, this deduction would not be available. "Self employed" is thus an incorrect term to be used in describing who would not be entitled to this deduction.
And what is the justification for discriminating against small businessses and small business people in this manner? In the meeting referred to above, your Department purported to justify this exception on the basis that "self-employed" persons could expense such travel. This justification does not hold water. No business or businessperson can expense non-business related travel for himself or herself much less for his or her family. The type of travel that is involved here is, by definition, not business travel.
In allowing such a deduction your Government is recognizing that people who live in the north or other isolated areas have higher travel expenses and require a tax subsidy in that regard. It also reflects your Government's policy to encourage development of the north. This reasoning is equally applicable to small business and small business people.
Nor, with the limits on the cost of such travel and the number of trips allowable in any one year, can this deduction be abused by small businesses or small business people. There is little doubt that it is not your Government's intention to limit this deduction in this manner.
There are a couple of other points I wish to place on the record. In my reading of what we have before us, the travel allowance would also apply to family members of the taxpayer and not necessarily to the taxpayer himself. My interpretation
December 16, 1986

of a phrase such as "travelling expenses incurred by him" is that if my wife were to travel and I were to pay for her ticket, then that would be a travel expense incurred by me as a taxpayer. If the Minister of State for Finance (Mr. Hockin) has an opportunity to speak on this matter, then I would, of course, like his confirmation that that is indeed the fact and that family members of taxpayers can take advantage of these proposed provisions.
Another comment I have to make relates to intra-territorial travel. Prior to this advantages were given only to people who travelled from the remote areas of the North to a southern location. It is now my interpretation that people who travel within the Territories can take advantage of the new provisions.
I see that my time has expired, Mr. Speaker. Thank you very much indeed.


Michael Morris Cassidy: Mr. Speaker, I have several points I wish to make on this subject. I have met with the Committee for Tax Fairness, which is a broadly representative group, and we talked about this issue about nine or ten months ago during the course of our tax probe tour. The rules of the House make it a bit difficult to bring a matter to the attention of the House where it is appropriate at the report stage of a Bill. Had I known that the Hon. Member for Western Arctic (Mr. Nickerson) would raise his amendment, then that would have allowed me to make the points I will now make.
What I have to say may sound somewhat curious. However, since Motion No. 5 is to be voted on separately, and I have raised a point with you about that, Mr. Speaker, then I ask Hon. Members to join with us in voting against it. The motion is for the deletion of Clause 34. Therefore I support the clause as it stands even though I have substantial reservations about it, which I will now express.
I wish to pay some credit to Members from northern Canada who have worked hard to bring about the recognition that this is a substantial improvement on what now exists. As I understand it, if an employer provides subsidized or free housing, or air trips, they do not enter into taxable income and are therefore essentially tax-exempt. However, an individual who is running a small business or who works for a small business, for example, native people, do not generally benefit from the same tax provisions. Therefore it is inequitable and biased, to some extent, toward people from southern Canada and against native northerners or people who have sunk their roots into northern Canada and who have no intention or desire to move back south. So in that sense this measure is positive.
The problem with it is that it benefits more those with higher incomes. That is the major point I wished to raise. As I have said, we will not oppose the passage of this Bill although the clause is included in it. We will ask Members not to support the motion to delete Clause 34.
Income Tax Act
I have done some calculations which show that a married employee with a $20,000 income living in Whitehorse, Yellowknife or some other northern community receives a tax savings of about $1,000. That employee's supervisor, or the general manager of a large company in the North, who has an income in the $50,000 range will receive a concession that is valued at about $2,700. I believe that this is inequitable, particularly given the living costs in northern Canada, with which the Hon. Member for Western Arctic is well familiar. The worker with the modest income who has a tough time meeting the costs of housing, food, clothing and of other goods and services receives a deduction which is worth about 40 per cent of the deduction that is given someone earning two and a half times as much. In other words, the measure works backward. If anything, I think that the concession should work in the other direction. I recognize that for people who are not organized, and for native people, this is an important step forward. I point out as well that because a tax credit is not used for the employee on a modest income who wishes to fly out of the North with his or her spouse on one occasion, perhaps at Christmas to spend time with family or to take a holiday in some warmer part of the world, the cost of the trip is only subsidized in terms of tax savings to the tune of about 15 per cent. The tax cost of the trip for the high income employee is subsidized to a greater extent. The high income employee, if he does not have air travel arrangements as part of his contract, is better able to pay for tickets and take trips than an employee who receives a modest income and who may not be able to cough up the money in the first place to get out of northern Canada even one or two times every year.
The final point I wish to raise is one which I believe is being addressed by the Department of Finance. I wish to put it on the record now because it was clearly a concern of people in Yukon. My colleague from Yukon who is not here now, although I am sure he has made this point previously, suggests that in many communities in northern Canada there is no rental market. There is no way by which one can judge what the rental value of a particular house should be. If there is, it will be saying that such and such a residence cost $150,000 to construct and therefore the rent should be based on the capital value of the property. This yields very high values on imputed rent. I wish to suggest that this measure can be extremely unfair to northern people. I believe this matter is now being addressed by the Finance Department. However, to be fair, where there is not an active and representative local rental market, as may conceivably exist in places such as Yellowknife and Whitehorse-and I am not even sure about that-then I think we have to agree that where shelter is being provided as a part of a contract, then the imputed value of that shelter should not be put at such an extraordinary price that, effectively, the employee will have to pay tax on an imputed value well above the $450 per month deductible that is in place. I point out to the Minister that the $450 is in itself not that great when one looks at the rental costs of housing, even in places such as Toronto, Edmonton or Ottawa. Nonetheless, if people are being told that the accommodation which they

December 16, 1986
Income Tax Act
have, which may be quite modest, as a great deal of accommodation is in northern Canada, will have to be charged to them at $1,000, $1,200 or $1,500 a month, then they literally might not be able to afford to stay. Clearly, that would not be the intention in this case and that would definitely be unjust.
We have a situation where a number of the employees who were affected, including the trade union members referred to by the Hon. Member for Western Arctic (Mr. Nickerson), have previously benefited from tax free housing. It was not entered into their taxable income, they received it for free, and did not have to pay tax on the benefit. Of course, it was unfair that they received that free and others who had to pay their own rent did not get some equivalent concession. That is being addressed right now.
But if the housing in Pine Point, or in some other mining property in northern Canada is now to be valued at a very high level, these employees may find that they are worse off than if this present situation had prevailed. We have gone from being unfair to people who did not have a trade union contract, to being unfair to people who do have it and have traditionally had housing provided as part of their union contract. I would ask the Minister to address that particular point.
I agree with the point raised by the Hon. Member for Western Arctic in his amendment. I do not recall that was brought before us in the committee, where it may have had a good chance of being accepted before it came here. I hope that the Government in good faith would accept the points made by the Hon. Member for Western Arctic.
We will support Motion No. 4. I wish to put it to the Minister that the Department and the Department of Revenue Canada can surely accept the good faith of northerners and accept the fact that we are not talking about the business conditions and the size of business organizations that exist in southern Canada. After three or four years if it is found that there is some abuse taking place, then at that point some necessary measures can be taken. I suspect that the Hon. Member for Western Arctic would accept that. I believe that his approach is to begin on a good faith basis rather than to begin by suspecting that everybody who works for his brother-in-law is out to fiddle the tax system.
For those reasons, I would ask people to support Motion No. 4. Now that we have had an opportunity to address the general problems of Motion No. 5, I would support opposition to Motion No. 5 even though it was my colleagues and I who proposed it.


Mr. Deputy Speaker:: Is the House ready for the question?


Some Hon. Members:: Question.


Mr. Deputy Speaker:: The question is on Motion No. 4 standing in the name of the Hon. Member for Western Arctic (Mr. Nickerson). Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


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


Some Hon. Members:: Yea.


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


Some Hon. Members:: Nay.


Michael Morris Cassidy: On division.


Mr. Deputy Speaker:: In my opinion, the nays have it. I declare the motion lost.
Motion No. 4 (Mr. Nickerson) negatived.


Mr. Deputy Speaker:: The question is on Motion No. 5 standing in the name of the Hon. Member for Ottawa Centre (Mr. Cassidy). Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: No.


Mr. Deputy Speaker:: All those in favour please say yea.
I declare the motion lost.
Motion No. 5 (Mr. Cassidy) negatived.


Mr. Deputy Speaker:: We will now deal with Motions Nos. 7, 8, 14, and 15, which will be grouped for debate and voted on as follows.

An affirmative vote on Motion No. 7 will obviate the question being put on Motion No. 8. A negative vote on Motion No. 7 will necessitate the question being put on Motion No. 8.
An affirmative vote on Motion No. 14 will obviate the question being put on Motion No. 15. A negative vote on Motion No. 14 will necessitate the question being put on Motion No. 15.

This was the ruling that the Speaker made a few minutes ago. After the ruling, the Hon. Member for Ottawa Centre (Mr. Cassidy) made additional arguments concerning this particular grouping, even though at first glance the argument by the Member for Ottawa Centre did made some sense. However, unfortunately they are ruled unacceptable for procedural reasons. Therefore, the proposed grouping as originally suggested does stand.


Raymond Garneau: Motion No. 7
That Bill C-23, be amended in Clause 39
(a) by striking out line 40 at page 67 and substituting the following therefor: "section (3) for the 3 taxation years"
December 16, 1986

(6) by striking out line 25 at page 68 and substituting the following therefor:
"section (3) for the 3 taxation years".


Michael Morris Cassidy: Motion No. 8.
That Bill C-23, be amended by deleting Clause 39.


Raymond Garneau: Motion No. 14.
That Bill C-23, be amended in Clause 51 by striking out line 33 at page 96
and substituting the following therefor:
"110(2), 110.4(1) and 110.6(2)".


Michael Morris Cassidy: Motion No. 15.
That Bill C-23, be amended by deleting Clause 51.


Mr. Deputy Speaker:: The Chair recognizes the Hon. Member for Laval-des-Rapides (Mr. Garneau).


Raymond Garneau: Mr. Speaker, the motions standing in my name deal with the alternative minimum tax. We have been advised in this House by the Minister of Finance (Mr. Wilson) that the Government's purpose in introducing this Bill providing for an alternative minimum tax was to ensure that all taxpayers assume their fair share of the tax burden. In other words, each taxpayer-it is going to be extremely complicated-will have from now on to file in a regular income tax return, have a taxable income and pay so much income tax. If he has no income tax to pay, he will have, after submitting his return duly completed, to prepare another extremely complicated form to know whether he should pay an alternative minimum tax.
Mr. Speaker, for a Government which wanted to simplify our tax legislation, I can assure you that this Bill is a flop.
The fact remains that on this side of the House, we were and still are in favour of the principle of a minimum income tax as suggested by the Leader of our party during the election campaign. We thought that the Government was serious about wanting to make sure that no one, especially people on high incomes, would be able to get away with paying hardly any income tax to the federal or provincial governments.
Mr. Speaker, that was the objective, and we were all for it. However, Bill C-23 which introduces this minimum tax includes provisions with so many loopholes that no one will have to pay the minimum tax. For instance, a person who has to pay a minimum income tax of 17 per cent will be able to recover that amount over the next seven years if during that time, his regular income tax is high enough to preclude his paying a minimum tax. In other words, a person who has to pay minimum income tax has seven years in which to recover the extra amount paid. I don't see why it is necessary to make our tax system so complex, if the initial objective was to levy a minimum income tax.
Mr. Speaker, the purpose of Motion No. 7 is to reduce the recovery period from seven to three years. We think this is far
The Senate
more reasonable and that if the Government accepted our motion, it would have a minimum income tax with teeth. Otherwise this is going to be a pretty toothless proposition, and no one will feel the bite. In a number of articles written by tax experts, I found one author who said-I'm not sure whether I can find the exact quote-that the only good thing that could be said about the minimum tax was that in the final instance, no one would have to pay because of all the loopholes, and I think that if the Conservative Government is at all responsible, it should at least go along with Motion No. 7 and reduce the recovery period from seven to three years. Otherwise, this will just be a big joke.
The other motion, Motion No. 14 which has been regrouped with No. 7 for the purposes of debate, will remove a small subsection, Sub-section (3) at Clause 51, by striking out line 33 at page 96 and replacing it with more or less the same thing except for the number three in brackets. This is another loophole we want to close. Mr. Speaker, the Conservative Government has introduced a minimum income tax in an attempt to catch all the tax loopholes and tax shelters and tax evasion. The only exception will be capital gains.
I think it is grossly unfair to have this double standard for taxpayers. If we want to impose a minimum income tax, it should apply to all tax loopholes and not just to a few. I therefore recommend that these two motions be adopted, Mr. Speaker.


Mr. Deputy Speaker:: Order. It being five o'clock, the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.


PRIVATE MEMBERS' BUSINESS-MOTIONS   THE SENATE SUGGESTED EQUAL PROVINCIAL AND TERRITORIAL ELECTED REPRESENTATION
Mr. Gordon Taylor (Bow River) moved:: That, in the opinion of this House, the Government should consider the advisability of introducing the appropriate measures to abolish the Senate and create a new Senate composed of Senators elected by the people of Canada on the basis of equal representation for each province and territory, and to initiate discussions to that end with provincial and territorial Governments at the earliest opportunity.
He said: Mr. Speaker, I have great pleasure in moving the motion before the House. What the motion wants is an efficient Senate elected by the people, with equal representation from each province and territory.
The report of the Special Joint Committee of the Senate and of the House of Commons on Senate Reform dated January, 1984 called for an elected Senate. The first statement in the report, Chapter 1, reads as follows:

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The Senate
We have concluded that the Canadian Senate should be elected directly by the people of Canada.
An appointed Senate no longer meets the needs of the Canadian federation. An elected Senate is the only kind of Senate that can adequately fill what we think should be its principal role-the role of regional representations.
Because of the limited time allowed, I will deal only briefly with the matter of electing a Senate. However, I want to point out that the House of Commons is elected on the basis of population. Consequently, Ontario and Quebec, the two central provinces, will for a long, long time have a majority in the House of Commons. This is proper as representation in the House of Commons should be and is based on population. "Rep by pop" was fought for and won. It is an accepted rule for electing Members of Parliament.
When it comes to the Senate, however, there is no reason at all why the number of Senators should be based on population. Senators appointed now, whether for service to a political Party or on the basis of merit, may feel responsible to the Prime Minister (Mr. Mulroney) or to the Government which appointed them but they are really accountable to no one. Our contention is that Senators would be elected by the people, so they will be responsible and accountable for their actions to the people who elected them.
The second requirement of the motion is that an equal number of Senators be elected from each province. I suggest five, with two from each territory until they attain provincial status. Each province would be divided into the appropriate number of regions or the Senators could be elected at large, and nominations would proceed according to the Elections Act.
While the Special Committee on Senate Reform recommended that Senators be elected, it then suggested that the Senate should be increased from 104 Members to 144 Members, with Quebec and Ontario retaining 24 Senators each. Assuming my recommendation of five Senators being elected from each province and two from each territory, the distribution as it is now, as it would be with 144 Senators and with equal representation from each province, would be as per the table included in my notes.
Taking the table as read-and I hope it will be included in Hansard-let us analyse the recommendations of the joint committee with regard to distribution. First, the distribution is at least partly based on population. For example, Prince Edward Island is given six Senators, while the other maritime provinces and the four western provinces get 12 and Ontario and Quebec retain 24. Surely P.E.I. being a province it is entitled to the same benefits as other provinces. The report rationalizes this by saying that if P.E.I. was given 12 Senators, then five provinces with as little as 13.4 per cent of Canada's population would have a majority of seats if they had the support of the territories. It is strange.
The House of Commons generally has 60 per cent of its Members from the Provinces of Ontario and Quebec, with only 28 per cent from the West and the North and about 12 per cent from the Atlantic provinces. That appears okay, but population should not be a factor at all in selecting Senators.
The selection should be on the basis of having the status of a province. The distribution of Senators by the special committee would really retain the status quo and would solve nothing. It might just a well stay as it is if all we are to accomplish is more expenditure from the people. Reform would be meaningless with Quebec and Ontario retaining 24 Senators and all other provinces with fewer seats. Ontario and Quebec already have a majority of Members in the House of Commons. Why should they also control the Senate? This motion will be fair to all provinces; each and every one will have equal power, with none having more power than any other.
However, how much would people have to pay for all this? The 144 Senators would increase the cost of the Senate in wages plus the tax-free allowance from about $6 million per year to almost $9 million. On the other hand, by having five Senators elected from each province, with two from the Yukon and two from the Northwest Territories, it would cut the cost in half and bring it down, in wages and cost of living, to less than $4 million, to say nothing about the tremendous reduction in the cost of offices and office expenses for staff, travelling, et cetera. If money means anything-and it means a lot to Canadian taxpayers-the triple E Senate would save millions. In addition, the real benefit and advantage would be that Senators would be accountable to the people who elected them, not to the Prime Minister nor the Goverment which appointed them.
An elected Senate, at least to start with, should continue to have the power extended to it by the Constitution Act, 1867. It should be noted that the absolute veto over legislation presently in effect has not been used once during the last 25 years.
I will now deal briefly with some concerns arising out of changes which will have to be made to the Constitution Act, 1867. Will huge sums of money have to be paid to present Senators allegedly because of dismissal? The Constitution Act, 1867 sets out the method of selection, the retirement age, and certain circumstances under which a person who is summoned to the Senate is disqualified from membership. An amendment would be necessary when the Senate is either abolished or a new method of selection is implemented.
Some may argue, as did the report of the joint committee on Senate reform, that there is some constitutional commitment by the Government to those Senators appointed for life or until age 75. When the Constitution was amended to change the senatorial term from life to retirement at age 75, legislation then gave an option to those in the Senate who had reached the age of 75 years either to continue or to retire with a pension. This option was given, but it could have retired them all over or under the age of 75.
In terms of compensation, why would Senators not be treated the same as other Canadians who lose their jobs or retire? Pensions are earned through contributions which persons make to a fund, as in industry. Senators who have spent some years in the Senate would secure a pension based on their years of service and their contributions. It would mean that they would secure the amount which they had properly
December 16, 1986

earned under the Act under which they worked, as do workers under UIC and workers under Canada Pension. It is the same for Members of Parliament who are defeated in an election or retire. Why should Senators be treated differently from other Canadians?
Section 42(l)(b) of the Constitution Act, 1982 specifically states that any change in the powers of the Senate must be accomplished by means of the general amending formula. However, this could be done without the consent of the Senate. Presumably such an amendment would simply repeal Section 26 which gives the Government the right to appoint additional Senators in order to break a deadlock in the House of Commons. The section dealing with retirement at age 75 would be dropped as well. The constitutional amendment would provide the method of election, and the mechanics would be left to be inserted in the Canada Elections Act.
If the Senate refuses to pass such an amendment, does the House of Commons have any recourse? A constitutional amendment which would either abolish the Senate or change the method of selection to popular election would have to be accomplished by the utilization of the general amending formula, which allows approval by the central Government and two-thirds of the provinces. This being the case, Senate approval is not required if within 180 days of the amendment being first passed by the House of Commons the Senate refuses to act or acts in a negative fashion. The matter is simply re-enacted by the House of Commons.
I submit that if the Senate is not reformed, it may well mean that the Canada we love may not for long be the Canada we know and have today. In other words, the salvation of Canada as we know it, with its varying climates, its varying regions, and its many people, is tied in to a large degree with providing protection for all regions, which in turn requires this fundamental reform of the Senate. A new Senate responsible to the people will take a sober second look at legislation to ensure that every part of Canada has an opportunity to grow and to retain its culture and language. It will also ensure that every region is treated fairly and that people in every part of the country have an equal chance to enjoy the benefits of our nation.
The bottom line in the discussion of the motion is fairness to all parts of Canada. By passing all stages it will tell Canadians that the Government of Canada and the House of Commons have listened and are acting on their message and that every region will be treated fairly, whether it be the far East, the far South, or in the centre.
I urge all Hon. Members to support the motion. The failure of the motion to pass could mean a shocking catastrophe.


Some Hon. Members:: Hear, hear!


Hon. Lloyd Axworthy (Winnipeg-Fort Garry):: Mr. Speaker, I find myself in the strange but certainly welcome position of totally agreeing with the Hon. Member for Bow
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River (Mr. Taylor) and complimenting him on his resolution. Let me say to him that we are prepared to lend our support to an important and worth-while initiative.
I would like to point out to the House that at the recent national policy convention held some three weeks ago, delegates overwhelmingly supported this proposal to include an elected Senate that was equal and had additional powers granted to it so that it could become a Chamber of substantial weight and effectiveness in representing regional interests in Canada. To my knowledge, it is the only time that a major national Party in Canada has gone on record fully endorsing and supporting the concept of an elected and equal Senate. I have no problem in putting forward that notion.
I would like to talk about why it must be done and why Members of this House have an opportunity at this time to show some real leadership in responding to an egregious sense of grievance in many parts of Canada and to recognize that in effect our constitutional system is incomplete. We have the only federal system in the world that does not have a second Chamber that effectively represents regional interests on the basis of democratic accountability. It is not my job to second-guess the wisdom of the confederation of our forefathers. By making the decision as they did at that time to have a Senate that is an appointed body and having that tradition maintained has resulted in a situation that while the Senate does useful work-and there are some very fine people in the Senate-it does not carry the heft, the leverage or the balance within the system of making decisions required to ensure for people in regions not concentrated with high levels of economic or political power that they will get a fair deal. As a result, there are too many examples over too much of our history where decisions have been made not on the basis of fairness but on the basis of political weight.
I recall the famous statement of Napoleon who once said to the Pope: "Where are your battalions?" That is too often a question raised in our system of decision making. The counterbalances we have, the Cabinet system and the federal-provincial conferences, are not in themselves sufficient to give the kind of forum for debate and discussion and the sense of security and confidence on the part of individuals in places like western Canada and the Atlantic to be heard effectively.
There is no doubt this issue of an elected equal Senate has gained a great deal of importance and an incredible sense of urgency because of the recent decisions by the Conservative Government on the CF-18 matter. I can think of no matter, certainly in my living memory, which has struck so deeply into the consciousness and psyche of westerners than that decision. People saw by all the reasonable rational criteria that an important contract should have been awarded to western Canada but was not because of interference in the system. One can only judge by statements made by Ministers of the Crown opposite that it was done purely to meet some political requirements in central Canada. That is not acceptable. Westerners will not continue to accept that situation. I do not say that partisanly because these situations can happen with

December 16, 1986
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all Governments. I think westerners have had it with CF-18 decisions. They will no longer accept that kind of bias and discriminatory decision-making. Westerners want to be sure that they have an equal chance to have their voices heard and an equal chance to ensure that there is political balance.
A week or so after the CF-18 decision was announced I happened to be in my home riding of Winnipeg watching the congressional election returns coming in from the State of North Dakota. It was intriguing to see the President of the United States having to pay as much attention to the election of Senators from North and South Dakota as he did about an election of a Senator from California and New York. There is no question that the calculation going into the political process in the United States must be duplicated here in some way.
I think the Hon. Member for Bow River has illustrated the various ways in which the so-called technical problems can be overcome. I am not saying that I adhere totally to the position he has put forward in terms of the exact model, but this motion represents a first step in this House of Commons in coming to grips with the issue.
I decry in part the reaction that we had in this House a year or so ago when the then Minister of Justice brought in a Senate Bill that was about taking the powers of the Senate away. It was supported by the New Democrats who said they wanted to abolish the Senate, therefore totally depriving the regions of any fair degree of representation. This is a chance to redress that kind of silliness and show people in the other parts of the country that we mean business.

Mr. Speaker, I think it is imperative that all Members from all regions of Canada understand and support this motion, because it is a very important initiative which attests to the interest of all Members from coast to coast in extending fair treatment to people in western Canada and the Maritimes. This is a great opportunity to show unity in this country.
I urge my colleagues and other Members to support the motion of the Hon. Member for Bow river (Mr. Taylor).

I rise because I think this is one of the most important debates and one of the most important resolutions that has ever been presented in this House. I think the Member for Bow River put it correctly that unless Members of Parliament take this kind of initiative, unless we show some leadership in this very crucial issue, there will be an increasing sense of alienation, scepticism and an increasing sense that the system does not work for large sections of the country. We see that situation increasingly where the economy of this country is becoming a split level economy. As we shift from a commodity resource base into an industry that is based upon services, information and research, the concentration of economic power becomes more consolidated in southern parts of Ontario and the St. Lawrence mainland. The only way one can provide a counterbalance to that is through the political system. The only way you can ensure a fair distribution of the economic
gains in this country is to ensure it through the distribution of the federal system. If the federal system is flawed and if there is a major weakness in that system, if structurally it is not able to ensure the balance wheel constantly in operation, then there will not be that sense of confidence about being able to receive a fair deal and a fair reception of the growth and prosperity of Canada. We are in danger of having a split-level society, a country that finds itself divided.
I can only say that while this is not the total panacea, symbolically and in a very conscious way, this is an important demonstration of the willingness of the country to take a good look at itself, to realize that the evolution of our Constitution is not by any means over, and that the kind of good, honest outpouring of feeling exhibited in this House in the past to our colleagues from Quebec when they had grievances on language and culture must now be demonstrated by our colleagues from Quebec and Ontario on this issue that is so crucial and important to the West and the Maritimes.
There have been times when this House has shown an incredible generosity of spirit in recognizing that there has to be some limitation on one's rights in order to better the rights of others. That is how a civilized society operates. This House has demonstrated that in the past when we were threatened with separation over questions of language and culture. We now have the same kind of threat in the form of unfair distribution of economic and political power.
I suggest to you and all other Members of this House that this resolution provides an answer to that problem. It therefore deserves a proper review by this House. That will demonstrate that we are not blind to the difficulties we face, that in fact we are prepared to look at them collectively because we realize that the House of Commons has a responsibility to all of Canada.


Mr. Reginald Stackhouse (Scarborough West):: Mr. Speaker, like the previous speaker, I want to commend the Hon. Member for Bow River (Mr. Taylor) for his initiative in introducing this subject in the House. As it is now constituted, the Senate has no place in a democracy. My reason for saying that is that we have a legislative Chamber without a mandate from the people. That, in the 20th century, is the only basis for legislative authority. We no longer recognize divine right, aristocratic superiority or any other consideration in a democracy except one, that of a mandate from the people in a free and democratic election.
Without calling into question the personal virtues or merit of members of the other place, we have to face the reality expressed in that sorry, inexcusable vacuity of authority because of which the Senate is unable to function as a true legislature. It has become a kind of legislative refinery whose chief positive role is to improve this or that feature of a Bill sent to it by the House of Commons. It has ceased to function as a legislature in the way originally intended. It is for that reason that opinion on all sides of the House over the years has
December 16, 1986

supported the intent of this motion before us. For example, in 1965 the Hon. Stanley Knowles told the House:
We ought to ask ourselves whether there is any place in our parliamentary institution for a group of people who are not responsible to the electors.
That is the key. If you would be a legislature today, you must be accountable to the electors. You must receive from them that confidence which gives us authority to act. Another member of the other place, Senator Michael Pitfield, said:
As an appointed Chamber it simply does not carry the credibility to perform the role in this day and age.
That is the point. We need to have an elected Senate if it is to justify its position as an upper House.
Regardless of the quality of the people who comprise it, and there is no question about that in this debate, it cannot, as an appointed Chamber, function with the full scope of an elected House. It does not usually initiate Bills of its own. It seldom dares to veto Bills from this House. It almost never goes beyond the function of refining something by rubbing off this rough edge or polishing up that dullness. However, that is surely not enough to justify it being the upper House of this Parliament. It purports to be an upper House but it lacks that essential without which it cannot function as an upper House.
The Hon. Robert L. Stanfield, with the great wisdom and perspicacity with which we associate him, has said:
We should do whatever is in our power to increase its credibility, and that has to come basically through reform of the appointment process.
What better reform than to make it an elected Chamber? Some 25 years ago the need for some such solution was signalled in the words of the Right Hon. Leader of the Opposition (Mr. Turner) when he said:
The Senate, in terms of current facts, no longer plays a part in the government of Canada.
That is the view of the Leader of the Liberal Party. The Senate no longer plays a part in the Government of Canada. The Hon. Member who introduced this motion identified the reason. It is not because individual members lack ability or dedication. It is because they lack a mandate from the people which only an election can give them.
I submit that the question is: Do we want an elected upper House? Or, do we want a single Chamber Parliament? There is no place in the 20th century for an appointed upper House. Democracy around the world demonstrates that there is a place for an elected upper House. The variations found in such democracies as West Germany, France, the U.S., Italy and Australia, to name only a few, demonstrate that. Therefore, I join with those who support this motion to bring before the people of Canada and their representatives the need for a profound transformation in the character and structure of the upper House of this Parliament. In that way it can perform its function in a way appropriate to this century and the one which lies ahead.
I would ask that the mover of the motion consider some emendation of the second part of his motion. I am thinking of the assumptions that underlie the call for equal representation
The Senate
of every province and territory without regard to population. The difficulties are obvious. We all know we have one province with only 125,000 people, another province with over six million people, and a third province with more than 8.5 million people. We must consider not removing the disproportionate character of this country and what that requires simply by saying we have provided for it in the House of Commons. We do not remove it by pointing to the way in which the U.S. Senate has equal representation for each state, whether it be Rhode Island or California. Doing that ignores the proportion of population among the regions and divisions of Canada. Ontario represents 35 per cent of the people of this country. There is no state in the Union that represents 35 per cent of the people of the U.S. If there was, it would have a population of 75 million and include not only California with its 25 million but most of the states west of the Mississippi River. If a state like that existed, then you would begin to see what it means to say "we only have two Senators from California". The same thing applies to the Province of Quebec in proportion, indeed every province. I am not asking for representation by population in the Senate such as we have in the House. We should have something which is uniquely Canadian and not a simplistic attempt to duplicate what they have in the U.S.
In this country, in addition to provinces and territories, we have four or five recognizable regions. We should think in terms of allotting each of those regions a more or less equal representation so there would be a strong voice from the underpopulated parts of Canada such as the Atlantic Provinces and the Prairies. We would have a strong voice from the North out of proportion to the number of its people, but we would not have the hopeless and, I submit, unacceptable situation of having equal representation from each province and each territory.
I do not suggest this simply to speak against the motion but, rather, to raise a question. When this motion proceeds, as I hope it will, and is considered by the Government and again by the House in the form of a Bill, I ask that we consider the problem which I have identified and which I believe requires careful reflection by committee and the House. The motion before us is meritorious and requires further reflection by Parliament and, ultimately, action by us all.


Mr. John Parry (Kenora-Rainy River):: Mr. Speaker, I am very pleased to join today's debate on the motion introduced by my colleague from Bow River (Mr. Taylor). If I may continue along the lines of the remarks made by my colleague from Scarborough West (Mr. Stackhouse), I would say we have before us a motion which is full of good ideas and which points the way towards a future which will be more progressive and more democratic than our present institutions. Still, Mr. Speaker, my Party and I can see the shortcomings of this motion.

December 16, 1986
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We are talking about a non-democratic institution-as others have described it-at the very core of our democratic legislative process. In other words, there is an obvious contradiction in terms with our legislative institutions and this very Parliament.
Mr. Speaker, we now find ourselves in a situation where we have a House of Commons elected by the people, where every sitting Member was given a mandate by his or her electors. But we also have the other place-like my colleagues I would not want to criticize those who sit there now-we have in the other place a House where the right to sit comes only and exclusively from this Government. To put it another way, the present Government could use the Senate to reward its friends and, in light of what is now going on, to reward those who have been the good and faithful servants of the country, but especially those who belong to the Government Party.
And I myself, Mr. Speaker, have friends in the Senate. There are senators whom, I say it frankly, I admire, but what the Senate institution stands for is the patronage system that is imbedded in the Government, and the Government is always tempted to use that system despite its past protests, to try and turn it to its own purposes. And that kind of Senate subservience, that kind of departure from the concept of a true Senate as it should be, along the lines of the Roman model, and that deterioration started under the previous Government, the Trudeau Liberal Government. It was during that time that the nefarious practice of using Senate appointments to set up an election team, an election planning team within Parliament itself, a team that is there for the one and only purpose of partisan politics.
This is a corruption of the Parliamentary system for which our friends on the Liberal benches should apologize to the nation, and even for having corrupted the senators. Unfortunately, that system of corruption kept on under this Government, which has used not all but some appointments to install its own election committees at the Senate level. Therefore, Mr. Speaker, this is an ill-prepared legislation, involving a mere improvement on matters of detail over the present Senate. There are serious gaps in a proposal that would replace the present Senate by an elected Senate. I say it quite frankly, Mr. Speaker, I am a one-Chamber man myself, and our party's policies adopted in convention are for one chamber only. We believe that a single chamber is the choice of the majority of Canadians themselves. I know I will probably be repeating what has been said by the Hon. Member for Scarborough West (Mr. Stackhouse).
The main gaps in the concept of an equal, elected, efficient Senate, as it is often mentioned in the headlines, is that of course proportional representation exists in the House of Commons, but that is a proportional system that is based of course on the size of the various constituencies. Electoral boundaries have been changed according to history, tradition. There is that imbalance on which everyone will agree. There are, for instance, in Ontario constituencies, and I believe that
even includes Scarborough, that have a larger population than the whole of Prince Edward Island. There were constituencies in other provinces that were larger for instance than my own, larger than the whole of Germany, 30 times larger geographically speaking than Prince Edward Island, but with only one Member to represent them, while there are now four in the example I am using. It is obvious, Mr. Speaker, that if we had agreed to the principle of an equal, effective, elected Senate, some people would have requested a reform of our system of representation in this House so that Members of Parliament could be elected strictly on the basis of the same number of people in each of our constituencies, which would naturally be against the legitimate interests of my constituents, who live in vast rural regions where there can be about 100 villages of which 30 cannot be reached by road. This means that if this Bill is passed, we shall have to consider changing our system of representation in this House.
As I have just said, Mr. Speaker, I am myself a unicameralist. I think that we should look at the examples before us. Many provinces began with two Houses, a non-elected Senate and an elected Chamber. Today, those provinces all have one Chamber, and I would even go as far as saying that those provincial Governments work better than the federal Government and are better able to meet the needs and aspirations of their voters. We also have the example of our large municipalities, some of which represent over 10 per cent of our population, and which are always unicameral. There are difficulties in implementing this Bill which must be mentioned, Mr. Speaker because, ever since the adoption of the Canadian Constitution we have had a consultation process which should come into play before this kind of measure can be passed.
Then there is the fact that our native people represent the two major immigration races or, as someone said, the founding nations.
On what basis would a triple E Senate represent the great concept we have of our founding races and our native people?
Naturally, Mr. Speaker, I may be somewhat disappointed to see that the motion of my colleague from Bow River (Mr. Taylor) has been chosen as a votable item instead of mine which was picked first.
Once again, Mr. Speaker, I must conclude that the real solution, the solution which meets the needs of all Canadians, is the unicameral solution where there is no room for a Senate.


Mr. Charles Hamelin (Charlevoix):: Mr. Speaker, I am pleased to speak to this motion introduced by the Hon. Member for Bow River (Mr. Taylor) urging the House to endorse a proposal to abolish the existing Senate and create a new Senate-elected this time-where provinces and territories would have equal representation.
I take this opportunity to point out that the Hon. Member for Bow River will soon be celebrating his 40 years as an elected politician-elected, I repeat-and I should think this is the appropriate time in this debate to quote the great principle
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which prevailed when the United States of America were founded, the famous words of Thomas Payne:
One cannot tax people without being duly elected. And 1 think the House will agree that one of the few people who today would be worthy to belong to the Senate is our hon. friend from Bow River who has been re-elected for forty years.
Imagine! He has been elected so many times there would be every justification, no offence intended, to give him a seat in the Senate without the benefit of election. And I would have no trouble supporting such a proposal. He has successfully faced the electorate so many times, both in the provincial legislature and in the House, that I think he and other people like him should be the first to be given a seat in the Senate.
"No taxation without representation".

That is the basic principle behind this motion to abolish the Senate, which, it has to be said, is a bit of an anachronism. I may recall that last year, our hon. friends in the other place obstructed the passage of Bill C-11 for several weeks. This was a Bill to provide borrowing authority for the new Government, a Government that had been elected with an exceptional and indeed historic majority. And the Senate obstructed this legislation. Why? In any case, the Liberal Senators were opposed to adopting and ratifying a Bill that constituted a major borrowing authority, the result being to create uncertainty on the financial markets and even raise doubts internationally, at a time when our dollar was more or less sagging. This situation was created by people who were not elected and who were taking this opportunity to ridicule the elected Members of Parliament who had been unanimous in adopting this Bill.
So we have the whole contradiction of this second Chamber that is applying a kind of veto, theoretically at least, but in this particular case a very real veto, to the decisions of the elected representatives of the people of Canada.
I and many of my colleagues find the situation particularly unacceptable. I may recall that the issue of the legitimacy and accountability of members of the Senate has been raised before in the course of history and as recently as last year, with these important people who, being appointed, are responsible to no one, and I tend to agree with the Hon. Member for the New Democratic Party whom I wish to congratulate on addressing the House in French, thus enhancing the francophone presence in this Chamber, and I would say that the Hon. Member is making a very valuable contribution in this respect, and I was going to say that the Hon. Member stressed the patronage aspect of these appointments, and so forth.
I would not go that far. I believe there are senators who are doing exceptional work here in Ottawa. Most of them, Mr. The Senate
Speaker, are hard workers and are active on various committees, and they express views that reflect their wisdom and experience. But they still have this major drawback that they are not elected and are accountable to no one.
And when they decide-as was the case of the Liberal senators-to obstruct the decisions of a Government that was elected with such a broad majority by the Canadian people, it is time to start asking some very serious questions. And perhaps we should take this proposal by the Hon. Member who has such broad parliamentary experience as an opportunity to review this issue.
I may recall that in 1907, the House of Commons of Great Britain adopted legislation in this respect. When faced with obstruction by its own Senate-


Don Boudria: Quote it!


Charles-André Hamelin: Yes, I'm quoting verbatim, my friend-
To accomplish the will of the people as expressed by their elected representatives, the power of the other House-
-you see, they are not very respectful: "the other House"-
-to amend or vote against Bills adopted by this House-
-the House of Commons, of courseis to be limited by legislative means so that as far as the powers of Parliament are concerned, the final authority rests with the Commons.


Don Boudria: In other words, it is up to the House.


Charles-André Hamelin: Well, a bitter struggle followed, perhaps something like the one the Hon. Member would like to have with me, and the House of Lords, whose powers with respect to financial measures were finally reduced in 1911 by statutory means, has only a very short time to consider such legislation, and its absolute veto with respect to other kinds of legislation has been reduced to a minor and temporary veto.
Well, enough said about Great Britain, I will get back to this place and repeat what my colleague said a while ago: Why should we not innovate? It seems to me this is the time, if ever we are to entertain the possibility of revamping our Senate from top to bottom. As my colleague pointed out earlier, if we choose not to abolish it we should at least consider an elected institution, perhaps a form of septenate to give senators a wider perspective. Seven years would be an interesting challenge. It might be ten years, but it does not matter much. Those people would not have to face their electors quite as often, they might be less concerned over strictly political considerations in the short term, but they would be able to look forward to a somewhat longer and guaranteed parliamentary tenure.
As to the powers that might be vested in the new reformed Senate, we would have to make sure that the two Houses would not work at cross purposes, as was the case recently. Senators could have more extensive and specialized advisory powers to be in a position-something along the line of the motion of our colleague-to represent provincial aspirations and those of certain other groups. I think this suggestion and

December 16, 1986
The Senate
this debate can lead to challenging and worthy considerations. Given the new climate in this House and the parliamentary reform as a whole, I have the impression that in a more serene atmosphere we might convince ourselves that senators should indeed participate actively in Canadian affairs, as a matter of right, fact and fairness, if they were elected in the first place and given specific mandates in fields of jurisdiction which would be clearly defined. The least we can say about the proposition of our colleague- as was the case of others in the past-is that it raises basic issues. We sincerely hope this new climate will make it possible for all Canadians, all Members here, and perhaps even senators to give serious consideration to a more functional and more enlightened bicameral system which would show new respect for all Canadians.


Don Boudria: Mr. Speaker, it gives me pleasure today to rise in the debate on the motion of our colleague for Bow River (Mr. Taylor). The same motion has been introduced on numerous occasions in the past, perhaps not in this specific form, but at least in its general principle.
First, Mr. Speaker, I must explain my own position. I am in favour of an elected Senate. Second, however, I disagree with the suggestion that there should be an identical number of representatives from each province in the other Chamber. In my opinion, there should be an equal number of representatives from each region. Naturally, we would then have to decide whether there would be four regions, five regions, or whatever. We shall come back to this later.
I really take objection to the view of some Hon. Members that Canada should have a unicameral federal Parliament. I totally disagree with that idea. I just cannot understand why we would ever threaten the other House with abolition even when we disagree with it. It has been stated often that we do not need a second legislature. I believe that to suggest that is wrong and does not recognize some of the history of our country.
At Confederation there were really two roles identified for our Senate. The first role was to review the legislation. I think most people would agree that the Senate has done that job reasonably well. The second role of the upper Chamber, as I understand it, is to represent the regions of our country. At that time there were three regions; Canada East, Canada West-later to be called Quebec and Ontario-and the Maritimes. It was the wish of the Fathers of Confederation that one third of the Senators would come from the Province of Canada East or from the Province of Quebec. The reason for that was to recognize the principle of the two founding nations. That is why it is important to keep an upper House and to keep it representative of the regions of our country. The Senators, of course, presently represent their respective provinces except the Senators who represent the Province of Quebec, who are also, of course, representatives of a given
area, a Senate riding, if you wish, or a seigneurie, based on the historical antecedents prior to the active union of 1840 and, indeed, in large measure prior to the Constitutional Act of 1791.

Mr. Speaker, the Conservative Government elected in 1979 did not have enough elected Members in this House to represent effectively the Quebec population. Under the circumstances, one of the founding nations could have run the risk of not being represented at all in that government. Fortunately, at the time, there was a Senate. The Prime Minister of the day, who is now Secretary of State for External Affairs (Mr. Clark) went to the Senate in search of people whom he deemed competent to represent the region of Quebec and the founding nation made up of francophones and managed to appoint a Cabinet which included representatives of that group.
Let us imagine an assembly made up of a single House facing the same situation! Naturally, we would have had a Cabinet with very few Quebec or francophones representatives in the Ministry, if at all, because we know that there were only two PC Members out of 75 representing Quebec, and only one a Francophone. That did not represent the group.
If I am saying that, it is because an NDP Member said a while ago that he was in favour of a single House; I feel such a proposition could not apply to our country, because it is important to have an assembly or Parliament made up of two houses.

To the extent that we must continue to have a bicameral House, I agree with the Hon. Member opposite. To the extent Senators should be elected, I agree. To the extent that each should represent a given area of our country, I also agree. I suppose the only point I disagree with is that the Hon. Member opposite is saying they should be elected in exactly the same number for each province. I say that that idea does not recognize the two founding nations principle of our country and it does not recognize certain historical antecedents.
As stated by the Hon. Member for Scarborough West (Mr. Stackhouse), the formula that the Hon. Member for Bow River (Mr. Taylor) is using resembles the American formula, with the same number of Senators per state. However, in the United States there is not one state, one province or one jurisdiction which has 35 per cent of the population. In this country there is such a province.
I am not saying that the Senate should have a number of seats which is proportional to its population, because then effectively we would have areas of our country which would be almost totally devoid of representation. I do not think we should use the representation by population principle nor the identical number per province principle, but, rather, a marriage of both, which is effectively what the regional principle is. In other words, the division of the total number of Senators should be based on various regions of our country. I
December 16, 1986

know there is still debate going on as to whether our country has four regions or five. Mr. Yurko, the former Hon. Member for Edmonton East, addressed that subject extensively in the past. We have had a lot of constructive debate, but the issue has not been totally solved.
With that I will end my remarks and say that in my view the motion of the Hon. Member has a great deal of merit. I congratulate him for bringing it forward. I hope that if it goes to committee we can amend it somewhat in order to reflect the principle that I have outlined. I hope that the day will come soon when we will stop talking about reforming the Senate and actually do it.


Mr. Deputy Speaker:: Order please. The hour provided for the consideration of Private Members' business has now expired. Pursuant to Standing Order 36(2), the order is dropped to the bottom of the order of precedence on the Order Paper.