1986-01-21

[Stage Direction]
The House resumed from Friday, January 17, consideration of the motion of Mr. Hnatyshyn that Bill C-84, an Act to amend the Income Tax Act and related statutes and to amend the Canada Pension Plan, the Unemployment Insurance Act, 1971, the Financial Administration Act and the Petroleum and Gas Revenue Tax Act, be read the third time and passed.
Mr. Speaker:: Order, please. Resuming debate with 17 minutes remaining, the Hon. Member for Davenport (Mr. Caccia).


Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, I noticed with some degree of curiosity the fact that in this debate Tory Members of Parliament and the one who preceded me, the Hon. Member for Richelieu (Mr. Plamondon), carefully tiptoed around the bad news in Bill C-84. It is very curious to note that they hardly mentioned, in the course of the debate, the existence of a measure which was introduced whereby the personal deduction, the one that we are all allowed to deduct on our income tax form every year, will be seriously affected.
Some 10 years or 15 years ago, that amount was roughly $1,100 per person in Canada. It was the Liberal Government then which introduced the concept of indexation in order to protect the purchasing power of individual taxpayers in light of inflation, and therefore introduced the idea of indexing the personal deduction. Over the years that deduction has risen. Last year, when we filled in our income tax forms, it was $3,960. This year it is $4,140 per person. However, from now on, things will change; the personal deduction will not rise with inflation. Therefore, the capacity of Canadians to maintain or keep pace with inflation will be diminished. In this Bill-and this is what is so surprising about Tory MPs being so thoughtful in not mentioning it to their electors-only anything above 3 per cent will be permitted.
Let us suppose that 4.4 per cent is the inflation rate this year. In the calculation next year of personal income tax deductions, 3 per cent will be deducted and it will allow for an increase of 1.4 per cent in that deduction. Taxpayers will remain behind in their capacity to keep up with the erosion caused by inflation. If we take a period of five years and
suppose that in the next five years we will have an accumulated 20 per cent inflation, because of the budget proposal allowing for only anything above 3 per cent, instead of keeping up to the tune of 20 per cent or so, taxpayers will only be allowed 5 per cent in their personal deductions. Every household will be affected by this measure. It means paying more income tax, and not in relation to one's ability to pay. It will be harder on those with lower and middle incomes.
The examples, as provided to me by the research bureau of our Party, speak for themselves. In the case of a single working mother with three children and an income of approximately $27,000 per year, that mother will have to pay 53 per cent more in income tax in 1990 than she paid in 1985. Let us look at it from another angle. A single pensioner with an income of $8,500 per year will lose $420 in purchasing power from 1986 to 1989. This loss will primarily be due to partial deindexation of personal income taxes. Are you surprised, Mr. Speaker, that the Tory MPs are not including this feature in their speeches?
Another aspect of the Bill about which the Tories have been strangely silent is the cancellation of the Registered Home Ownership Savings Plan. It is a unique measure for everyone who wants to save tax money and to put aside a little sum yearly until there is enough for the downpayment on a house. Many Canadians have made use of this measure, which was introduced in the seventies by the then Liberal Government. This savings plan is gone, compliments of the Tory Government. Here is another dismantled feature of which the Tories can be strangely proud in their blind determination to dig their own political grave. How pathetic it is, Mr. Speaker, to remove saving incentives from people planning to buy a house and who therefore stimulate, directly or indirectly, the housing industry and therefore help in the maintenance and creation of jobs. It takes a special Tory cunning to devise such backward tax legislation. No wonder the Tory Government is slipping so badly in the polls.
What is the cumulative effect of these and other budget measures? Well, I am told that by 1990 the direct tax on the individual taxpayers of Canada will have gone up by some $5 billion. Thus, Mr. Speaker, this Bill and the Budget takes money from the pockets of the Canadian consumer and imposes taxes on the same person when he or she is a buyer. More money will have to be paid by the average consumer on gasoline, certain health care products, soft drinks, candy, pet food, and woodburning stoves. Then, because the federal tax imposed on other goods has been increased, the Canadian consumer will have to pay more taxes on construction goods,

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cable and pay TV services, alcoholic beverages and tobacco, to mention a few.
We, the Official Opposition, pay a lot of attention to the deindexation of old age pension and on taxes aimed at the elderly and the disadvantaged. We take pride in having been instrumental in forcing the Government to lift taxes on health care products and remove the deindexation of old age pensions.
Let me come back to Bill C-84 again. There is another measure that is quite revealing, that is, the $500,000 bonanza on capital gains, which is, in plain terms, a tax break for those who make a gain in their capital assets for up to $500,000. 1 ask you, Mr. Speaker, how can a Government so devoted, at least in words through its speeches and election statements, to reducing the deficit, come up with such a measure and justify it? All of a sudden the need to reduce the deficit is forgotten and this measure is introduced, which means reduced revenue to the Government and therefore a reduced capability of reducing the deficit that the Government is so worried about. How very strange, Mr. Speaker.
1 find it rather amusing to read in today's news a statement by the Canadian Council on Business and the BCNI, urging the Government to lead the charge in the fight against reducing the deficit. Did you, Mr. Speaker, hear anything from the BCNI complaining about the $500 capital gains tax? I did not. That has gone unnoticed by the very people who are asking the Government now to reduce its expenses and be tough with the deficit. In the opinion of this very same institution it is all right to pursue these tax breaks. It is perfectly legitimate, therefore, to favour capital gains anywhere in the world, be it on your yacht in the Bahamas, a condominium in Florida-


An Hon. Member:: Or a farm in Saskatchewan.


Mr. Caccia:: -or on foreign securities or properties abroad. It is so diffused that we would like, as the Hon. Member is interjecting, to see it focused, and not only on capital gains made in Canada, because he is quite right in what he has just said, but also focused in a manner that would permit the measure to be linked to economic growth and possibly to the creation of jobs.
Then we, on this side of the House, would look at that measure with great interest and we would not be critical of it because it would make sense. It would then be a form of tax incentive that would have an economic growth purpose, and it would then bring us closer at least to a desired goal that we all share, namely, the maintenance of existing jobs and the creation of new ones.
Bill C-84, therefore, has negative features in it that have not been highlighted enough. I do not blame Members opposite for not having written home about its negative features, because obviously they do not want to upset the population. I am saying to you that not until the effects of this measure will be felt, and only some of them will be felt in the future but some have already been felt, will Canadians appreciate it. They will not like the idea of being denied the features to which they have become accustomed over the years, namely, to see their personal deduction on the income tax form increase every year
as inflation increases. That is a feature that has become part of our economic and social structure. It has been supported by Canadians at large and in a way it makes sense. That removal is a serious setback, and it falls more heavily, I submit, on people in the low and middle-incomes brackets than on those who have higher incomes and, therefore, can afford this type of initiative and not suffer under it as badly.
The impact of the measures, of course, has to be seen, not just by looking at them one by one, as I have tried to do, but by looking at the other Bills. When you put together the totality of the picture and you begin to see what is happening to gasoline prices, certain health care products, what is happening to the removal of the tax shelter for the Registered Home Ownership Savings Plan, the deindexation of family allowances, you see a picture that is emerging here indicating that what is happening is a massive shift in the tax burden. It is most unfortunate that this Government chose to shift this burden on to the low and middle-income Canadians in an attempt, which is contradictory in itself, to reduce the deficit, on the one hand, and, on the other, to allow certain measures like the personal capital gains tax exemption. Those measures are in conflict with this highly proclaimed desire to reduce the deficit. The two simply do not jibe. They are in conflict with each other. While the Government introduces a tax break on the one hand for those who are already doing reasonably well in society, it is coming down heavily on those who may be on fixed incomes or struggling between the lower and middle-income ranges and who do not see the fairness and equity in this kind of taxation policy.
I realize the political necessity for Conservative back-benchers to tiptoe around these negative measures which are bad news back home. This morning I have been offered an opportunity to bring them to the attention of the House and I am glad to do so because I think that Canadians are not well served by taxation policies that put out contradicting signals and place an unfair burden evenly on everyone, regardless of capacity to pay.


Mr. Gormley:: Mr. Speaker, I would like to comment on the remarks made by the Hon. Member for Davenport (Mr. Caccia) and his assertion that Bill C-84 is being dealt with in a sneaky fashion by the Government. I would also like to comment on his second assertion that Government Members are somehow avoiding or tiptoeing through the matter. As one who has never been accused of tiptoeing through anything in my life, I would like to comment on one particular point the Hon. Member raised.
Regarding the Registered Home Ownership Savings Plan, I found it paradoxical that this particular Hon. Member who served as a member of the previous Government would mention the removal of the RHOSP as a tax shelter and make some very misplaced comments regarding the benefit to the economy involved in freeing up RHOSP funding. It strikes me as being paradoxical that when Liberal Members have a good idea but do not have time to implement it and when a new
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Government logically follows up on that and initiates that good idea, it somehow becomes very wrong.
1 am conscious of the rule of relevancy, but just by way of illustration, I just returned from the de Havilland hearings before a committee of which I am a member. The Hon. Member for Vancouver Quadra (Mr. Turner), the Hon. Member for Saint-Maurice (Mr. Chretien) and even the Hon. Member for Saint-Henri-Westmount (Mr. Johnston), who is in the House today, spoke during the Liberal leadership campaign about not underwriting millions of dollars for de Havilland and about selling these things. The Hon. Member for Saint-Henri-Westmount said that if that is a neo-Conservative notion, anyone who says it is a neo-Conservative notion has lost his marbles. The Liberal Party had a clear idea then.
1 would like to illustrate the distinction between the Liberal Party having a good idea for cutting de Havilland loose and the new Government carrying through with it and being vilified by this very Party. Let us deal with the RHOSP.


The Acting Speaker (Mr. Paproski):: Order, please. 1 appreciate that the rule of relevancy exists. 1 know the Hon. Member will now get to the point.


John Kenneth Gormley: 1 will indeed, Mr. Speaker. The RHOSP, a savings vehicle which was tax sheltered until now, was not originally designed in the 1970s to be something that would go on in perpetuity. It was a tax-saving measure which encouraged young people to save for a first home. However, this Government, quite rightly, found itself in the position of having a very positive opportunity to unleash no fewer than $2 billion into the Canadian economy through a consumer-driven recovery as part of the Government's plan.
I return to the very strong indications that the last Liberal Government was inclined to do away with the RHOSP but, because quite rightly the Canadian people threw the Government out on its ear, it did not have an opportunity to do so. I am very surprised that with two former Cabinet Ministers in the House this morning, Cabinet Ministers who were no doubt privy to the discussions regarding doing something with the RHOSP, Liberal Members would vilify the proposal that will partly lead to the consumer-driven recovery and will be to the benefit of the Canadian economy.
Not wanting to tiptoe, something which 1 never do, 1 wanted to bring this to your attention, Mr. Speaker. I know Hon. Members of the House are most interested in hearing of the benefits of this proposal and the rather inconsistent approach taken by the Opposition.


The Acting Speaker (Mr. Paproski):: Since there was no question, perhaps the Hon. Member could take another question and then answer it.


Mr. Duguay:: Mr. Speaker, I would like to make one or two comments with regard to the RHOSP program and the allegation of the Hon. Member for Davenport that the former Liberal Government had brought this measure into effect in order to stimulate the housing industry. In May of last year,
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being very interested in this matter, I asked officials of Canada Mortgage and Housing who were appearing before committee their view of the RHOSP program and in particular 1 asked about the original objectives of the program, the reason for its implementation and the history of the program including its effect on housing starts as compared with its tax shelter implications. The answer given by officials of CMHC who were present at the time the former Government brought in the RHOSP was rather revealing.
As I understood it, the answer indicated that by 1974, there was a lot of pressure on the housing market. One of the purposes of the RHOSP was to try, in the short run, to cool off the demand for housing by encouraging people to save and purchase a house in the future. With regard to the effect of the program, CMHC officials indicated that over a 10-year period, RHOSP had not had a significant impact on the level of housing starts and that the desire for home ownership remained very, very strong. It was thought that that desire would swamp the impact of setting funds aside through the RHOSP. Over a 10-year period, RHOSP would not have had a large impact on housing starts.
Finally, with respect to reasons for the termination of the program, by and large it did appear that RHSOP was more of a tax shelter or a way of sheltering income than a stimulus to housing. A number of industry associations have commented that RHSOP in its current format was not an effective instrument.
When the Hon. Member for Davenport (Mr. Caccia) tells Hon. Members on this side of the House that we are not putting out all of the facts about some of the changes that will occur because of Bill C-84, he should recognize fully that his Government brought in this plan for purposes that he now ignores. He is making believe that we are changing it for other purposes that never existed. I think the Hon. Member owes his constituents and mine the integrity of at least referring to the real reasons his Government brought this measure into force.


Charles L. Caccia: Mr. Speaker, it was very amusing to hear those two interventions. Evidently, the tongue has to be active when the teeth are hurting. Those two Hon. Members feel very much at ease when they engage in this strange exercise of shadow-boxing with the past. They were not here when the measure was introduced. They were simply quoting some officials who said that the RHSOP was perhaps not greatly stimulating the housing industry. That is debatable. The fact is that it was a measure that was picked up gladly by young families wanting to buy homes. It did have some effect on the housing industry. The question of whether the effect was great or small can be debated at the right time and in the right place.
In my experience, in Toronto where there are a great many people engaged in construction and the housing industry, the RHOSP was considered to be a good measure by the entrepreneurs, both small and large. As well, it was considered to be a good measure by the families who made use of it. I fail to see these two interventions as being relevant to the substance of the issue that is before us. The Hon. Members are simply

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Income Tax Act, 1986
trying to engage in a nice game of smoke and mirrors. They are trying somehow to create the impression so as to make people believe that this is a good measure. The plain fact of the matter is that this is a bad measure. It will be one for which the Tory back-benchers will be asked to account when their turn comes in the next election.


Mr. McDermid:: Could I ask one short question, Mr. Speaker?


The Acting Speaker (Mr. Paproski):: The Hon. Member for Scarborough West (Mr. Stackhouse) rose in his seat prior to the Hon. Member for Brampton-Georgetown (Mr. McDermid).


Mr. Stackhouse:: I was going to make a comment.


The Acting Speaker (Mr. Paproski):: There is time for a short question by the Parliamentary Secretary to the Minister of Energy, Mines and Resources.


John Horton McDermid: Mr. Speaker, I want to ask the Hon. Member for a clarification, if I might. From what he said I understand that the Liberal Party would support the $500,000 capital gains tax exemption if it were to pertain entirely to gains within the borders of Canada. Is that what the Hon. Member said this morning?


Charles L. Caccia: Mr. Speaker, I would be glad to elucidate the point for the Hon. Member for Brampton-Georgetown (Mr. McDermid) who is famous for catching things halfway but not fully.


John Horton McDermid: You are famous for presenting them that way.


Charles L. Caccia: What I said is that if the measure were of such a nature as to focus on creating economic growth and jobs in Canada, then we would look at the matter probably in a supportive manner. I cannot speak for my Party's critic, but having read his speeches I believe there are grounds to believe that the matter would be looked at in a positive light.
The fact is that this measure is diffused to any form of capital gains anywhere in the world, which does not generate economic benefits to the Canadian economy. Therefore, we are not moving in the right direction. I went on to say that this measure flies in the face of the Government's declared determination to reduce the deficit. One does not reduce the deficit by providing a $500,000 capital gains tax exemption in 1985, or any other year for that matter.


The Acting Speaker (Mr. Paproski):: I regret to advise Hon. Member that the time allotted for questions and comments has now expired. The Chair recognizes the Hon. Member for Kenora-Rainy River (Mr. Parry) on debate.


Charles L. Caccia: Hear, hear!


Mr. John Parry (Kenora-Rainy River):: Mr. Speaker, I appreciate the applause of the Hon. Member for Davenport (Mr. Caccia), even though it might have been intended for one of his colleagues.


Mr. Penner:: I will give you some applause, too. We expect a good speech now.


John Edmund Parry: Mr. Speaker, in examining Bill C-84, which is before us today for its last day of debate at third reading stage, I would like to take a few moments to go back and recount a little of the process which has brought us to where we are today. I think that by any objective analysis or measure it is a process which is seriously flawed, a process that is deserving of much more attention by this House and by this Government than it has apparently been given.
Of course, traditionally, the Bill is a large one, and this year's Bill is no exception. After all, the Bill consists of amendments with respect to the Income Tax Act and related statutes, the Canada Pension Plan, the Unemployment Insurance Act, the Financial Administration Act, and the Petroleum and Gas Revenue Tax Act. The list of titles should give Hon. Members one initial clue, at least, as to the complexity of the task which is being undertaken. It should also give us some clue to enable us to ask questions as to why the process should be so complicated and so lengthy.
The Bill includes 235 pages of revisions to the Income Tax Act and related statutes. I believe that the time which should have been given to the examination of a Bill of this size in committee was completely out of proportion with the very niggardly amount of time which was eventually allowed to the committee. The belief that Members of Parliament can knowledgeably and with a full mastery and understanding of the topic and the facts review and, if necessary, revise a measure of length and complexity in one week of committee hearings flies in the face not only of common sense but of parliamentary tradition and everything for which that tradition stands.
There were witnesses who would have been happy to appear before the committee and who were not asked to appear even though they offered to do so. There were witnesses who, frankly, were just not allocated enough time to expound on their points of view. We had a process which saw minimal participation from members of the Government. With the 210 Members which is at its disposal many of the committee hearings proceeded with only one or two government Members, more than the combined members of the Opposition. The Canadian Bankers' Association asked to appear before these hearings but was not invited. On a complex Bill such as this we were given only one week of hearings. The committee meetings were hurried, with little advance notice of the meetings being given.
I would like to contrast that very compacted, intense and demanding schedule with the schedule the Government followed between the presentation of its Economic Statement in May and the tabling of this Bill in November. After all, that represents a period of approximately six months. At committee we were assured by the Assistant Deputy Minister that his
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staff were fully engaged all of that time and that they were working lengthy hours. He told us that there was extended cross-checking, drafting and redrafting taking place. Given the objectives laid out in the Economic Statement, he assured us that his people could not possibly have produced the legislation, mountainous as it was, in a lesser period of time than the six months which they had. I do not think that 1 should be disputing these assertions of the Assistant Deputy Minister because I have some understanding of the complexity of the legislation which they were being asked to review and revise. Rather, I think we should look at the endemic afflictions in the Income Tax Act and in the process of Government, and, in particular, the way that this Government handles that legislation. We should ask why those things were allowed to exist, have been allowed to continue to exist, and why the six months was necessary to prepare legislation which Parliament was asked, in committee, to review in the period of a single week.
I identified two causes for this breakdown in the legislative process. The first cause is, of course, the complexity of the existing Income Tax Act. I would like to quote from a letter which was sent to the Minister of Finance (Mr. Wilson) by The Canadian Institute of Chartered Accountants on March 29, 1985. On the front page of the letter, in bold type, doubled-sized, it states: "The Problem: The Tax System is too Complex". That is a pretty forthright and plain statement which should be completely comprehensible to members of the Government. The letter is from an organization which certainly could not be accused of being hostile either to the Government's philosophical viewpoint or, inherently, to its legislative program.
The Canadian Institute of Chartered Accountants goes on to state in the letter:
-simplicity must be a key component of an effective self-assessing system . .. The dramatic growth of commercial tax preparation services bears testimony to the fact that more and more taxpayers are finding individual tax returns too complex to complete themselves.
As a prime cause of the delay we have the length of time taken in the drafting and the complexity of the income tax system. The Canadian Institute of Chartered Accountants goes on to list some 50 recommendations aimed at simplifying the income tax system in order to make it more comprehensible to the average Canadian and easier to administer, thus, I would assume, making it more efficient in the collection of taxes. The Institute puts its ideas under the following headings:
-Simplifying Compliance for the Ordinary Taxpayer -Directions for Change in the Taxation of Ordinary Taxpayers -Complementary Directions for Change in Corporate Taxation
-Changes in the Style in Which Tax Legislation is Drafted.
Heaven knows, it shows an artistic tolerance to refer to the drafting of the Income Tax Act as having style.
In a 20-minute speech, it is impossible to cover these individual proposals for simplification, as it is equally impossible to cover my own ideas or those advanced by professionals and experts in this field. Let us say, Mr. Speaker, that having
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gone into this process fully aware of complexity of the Income Tax Act, knowing the difficulty and the length of time taken to draft revisions in a consistent and arcane but understandable form, the Government took it upon itself to double its task and to compound the initial error by the second major factor in the length of time taken. 1 refer to the institution of the $500,000 capital gains exemption.
This is an exemption on which the Government has already been, and very deservedly so, rebuffed by professionals. When I spoke to this Bill at second reading I quoted the comments of Canadian tax professionals. The comments were almost unanimous and were widely supported in the industry. It was pointed out that the $500,000 exemption was alone responsible for well over half the drafting work required to bring this Bill to the House. Therefore, by a simple division we can calculate that if the Government had not persisted in this flawed initiative, if the Government had not pressed on, regardless, with its idea of giving a major break to the wealthy, and if the Government had not decided that its top priority in the revision of the Income Tax Act was the satisfaction of those interests whose support it saw as essential, it could essentially have given Parliament another three months and a far more workable, manageable and practical schedule for the revision of the Income Tax Act and a thorough review of those proposals at committee.
It is not my purpose today to go into a detailed examination or analysis of the capital gains tax regime as it previously existed and as it will exist now. I will, however, pose some fundamental questions. I will make some observations that I believe are highly pertinent to the whole question of capital gains taxation or, as we are going to have it, the tax free status of those capital gains. The oft canted phrase that capital gains taxation inhibits job creation is essentially an unproven hypothesis.
The level of capital gains taxation was in itself reduced compared with the level of taxation of other forms of income. The whole belief that in some way the presence of capital gains tax in Canada was leading peole not to invest in small business because in some way they greatly feared they might make a profit at it and be able to sell it at a gain, defies common sense, and no analysis has been produced to prove or even to strongly support such a hypothesis.
The capital gains taxation as it was, and the tax free status that it will enjoy, flies in the face of the recommendation by, I believe, the Benson Committee that "a buck is a buck is a buck" and that all forms of income should be subject to taxation on a more or less equal basis.
It is a fact taken from the tax statistics published by the Government that 63 per cent, nearly two thirds, of all capital gains go to those people who have incomes of $50,000 and over. They make up only 4 per cent of the population. We do not see what is accomplished by this tax free status the Government proposes. We do believe that there is certainly room for favourable treatment of capital gains aimed at keeping business capital in operation, and aimed at conserving, shall we say, a pool of business capital for the support of

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existing and future operations. But the idea of this blanket exemption, I would emphasize, applies to a capital gain whether made inside the country or outside. We do not see how this capital gain tax exemption is accomplishing the purpose which the Government states it has. What we do see is that the exemption is rewarding a group which the Government knows is its supporter.
May I return for a moment, since I notice the Hon. Member for Scarborough West (Mr. Stackhouse) is in the House, to the process of the six month hiatus and then the introduction of Bill C-84.
1 would like to quote the Hon. Member's words to him. In doing so I would like to say that I naturally make allowance for optimism-that, after all, is a failing we should encourage in all of us-and naturally I make allowance for a certan degree of hyperbole generated by his loyalty to his Party. He said:
I am sure that with the Hon. Member's seniority in the House-
He is referring to my colleague, the Hon. Member for Kamloops-Shuswap (Mr. Riis). Let me continue:
-he is aware that when this legislation passes this stage in the House of Commons it will go to committee for a very thorough study in which I hope the Members of his Party will participate.-The debate in which we are now engaged is certainly not the last opportunity for critical assessment of this legislation, as the Member knows.
It would have been nice if the Hon. Member for Scarborough West had been at committee to see the supposedly "thorough study" which he predicted when he was speaking in the House. I can assure him that that was really not the way it went.
Under this capital gains tax exemption, the investor can benefit from untaxed gains on a wide range of capital property. It could be a condominium in Florida, which I gave as an instance in my first speech on this Bill, or it could be foreign securities, really any assets on a world-wide basis. We do not see the benefit that this will bring to the small business sector and to job creation in the business sector in Canada.
There are some good points to this Bill. I will make brief mention of them. One is the proposal to allow a tax credit of $700 to an individual investing in a labour-sponsored venture capital organization. That, with the relatively simple and short drafting process it entailed, is going to do a great deal more for investment in small and medium sized businesses than the plethora of clauses which were needed to institute the capital gains tax exemption.
My Party is in support of the surtax on upper incomes. What 1 would say is that it appears that all the things we see in this Budget as being in any way in support of fairness or equity are temporary, and all the things that hit ordinary middle and lower income Canadians seem to be permanent. That is a telling criticism to which the Government should pay some attention.
It amuses me to hear my colleagues in the Liberal Party, those who were responsible for the abolition of marginal tax rates above the present level, talk about tax fairness. One of
the things we in the New Democratic Party will be doing in the coming weeks is travelling to centres in Canada with Tax Probe '86, a commission which will be chaired by my colleague, the Hon. Member for Kamloops-Shuswap.
1 would like Hon. Members of the Liberal Party to reflect on the difference between the taxes paid by upper-income earners under the present regime, which of course the Government has not changed, compared with those payable under the tax regime abolished in 1981.
One of the things we are going to be doing in Tax Probe 1986 is of course looking for examples of unfairness, inconsistency, incoherence and uneven application in the tax system. Since we have the medium of television available, 1 would like to say to all those who may be watching that we welcome their participation in bringing forward any such instances they can find.
Turning again to Bill C-84, it is best summed up as the legislative concretion of an insider's Budget. It was a Budget designed to reward the few without overly aggravating the many. We found out-and I say more power to Canadians because of it-that the many were indeed prepared to be aggravated when they saw manifestly inequitable measures being introduced. This Bill is the homage that the Progressive Conservative Government is paying to its supporters, and it appears that that homage shows a certain disdain for the ordinary taxpayers of Canada.
The National Council on Welfare, commenting on the changes to child benefits, said that after the various changes are phased in, raising the child tax credit, lowering the turnover point for the child tax credit, reducing the children's exemption, and partially deindexing all family benefits, even the poorest parents-and I underline those words-will receive less than they would from the existing child benefit scheme. Contrast that with the Government's $500,000 capital gains tax exemption. That is not the sort of sum the average low-income person is able to earn in a working lifetime. That is a sum completely beyond the bounds of the imagination of the poorest 20 per cent of Canadians. The fact that we have that kind of an exemption in a Budget which is taking from the parents of poor children will stand as a telling indictment of this Government and its legislative priorities.
To cover a couple of more points before 1 reach the end of my time 1 would like to refer to the deindexation of personal income tax brackets. Although we have to go back a long way before we find something to give the Liberal Government credit for, we can give it credit for having the sense to introduce indexation to ensure that the Government did not profit from inflation. That was a laudable objective. Now we see the Progressive Conservative Government removing the first 3 per cent of that indexation, making sure that in future the Government will get its pound of flesh from the operation of inflation on our monetary system.
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The Acting Speaker (Mr. Paproski):: 1 regret but the Hon. Member's time has expired. Questions or comments?


Mr. Johnston:: Mr. Speaker, 1 listened with interest to some of the comments of the Hon. Member for Kenora-Rainy River (Mr. Parry). He made reference to some of the actions of the previous Government. I do not intend to be an apologist for actions of past Liberal Governments-


Mr. Jepson:: There is not enough time.


Donald James Johnston: -because I myself have criticized our tax system in the past. There is room for substantial reform and I hope that the NDP travelling road show will confirm some of the points I have already made concerning the tax system. When we are in Government and bring forward tax reform measures I hope the NDP Members will see fit to support them with the enthusiasm they have manifested here this morning.


James Kenneth (Jim) Jepson: They will all be retired by then.


Donald James Johnston: Indeed, many of the Tory Members will be retired by then.


James Kenneth (Jim) Jepson: Don't count on it.


Donald James Johnston: The Hon. Member made reference to marginal tax rates. In 1981, the Liberal Government reduced the top marginal rate to 50 per cent, for reasons which were fully debated and explained at that time. The Hon. NDP Member suggested in his remarks that marginal rates should be much higher. Having made that statement, I think it behooves him to tell us what he views as being the marginal rates in excess of 50 per cent that the NDP might like to see applied. Would it go to 60 per cent, 70 per cent, 80 per cent, 90 per cent, or perhaps 100 per cent at some point? Would he be able to give us some response to that?


Mr. Boudria:: How much do you want to increase taxes?


John Edmund Parry: Mr. Speaker, I would like to assure the Hon. Member that rather than evade the substance of that sort of question I would like to meet it head-on.
I do believe that changes to the marginal rates would have to be carried out in consultation with the provinces. I make no judgment as to the process when marginal rates were reduced. I point out to the Hon. Member that the present top federal tax rate of 34 per cent does not take effect until the average person in that bracket reaches an income in the region of $70,000 to $75,000 per year. If there were a change to the marginal tax rates to bring them back to where they stood previous to 1981, they would likely not impact on any taxpayer whose gross income was under $100,000. So we are talking about a decidedly high income segment of the population.
I would also like to say that this Party would certainly not envisage a tax regime in which, for example, marginal rates reached those that, for example, prevailed in Britain after the war, something which I am familiar with and which I can speak to. I personally do not believe that any marginal tax rate
Income Tax Act, 1986
which resulted in an effective tax rate above 65 per cent would be supported by a future NDP Government. I do not think it would be supported by the provincial Governments, some of which of course might at that point not be NDP Governments.
However, to reduce the top marginal tax rate to between 51 per cent and 55 per cent, as it is today, is to allow those people who have incomes over $100,000 to escape paying their fair share of taxes which they are perfectly well able to do.


Reginald Francis Stackhouse: Mr. Speaker, I just want to say a few words in response to the Hon. Member's reference to a statement I made in a previous debate on this Bill. I thank him for the quotation. Every knock is a boost and I always appreciate free publicity from the NDP. I want to respond directly to the quotation because it refers to the limited time which there was for the Finance Committee to examine the particulars of the legislation relating to this capital gains tax exemption. I joined him in regretting the limited time, as 1 am sure every member of that committee did. I was there the night that it was introduced, although he seems to have forgotten that.
However, the reason was obvious to us all, namely, the tardiness of the officials of the Finance Department in bringing the recommended legislation before us. Whatever the justification for the long delay, that was the reality. The committee had no option but to give priority to the rights of the taxpayers who had based their investment policies on the budget proposals, which they had every reason to believe would be adopted, and to act accordingly.
The real concern which the House should have with respect to the capital gains tax exemption is whether or not it has benefited the people of Canada. The record shows that this budget proposal, and many other proposals in the 1985 Budget and other economic legislation and programs of the Government have combined to fulfil the election commitment of the Government to renew the economy. Every economic indicator for months and months has supported the fulfillment of that renewal. The number of jobs which have been created and the number of people who have found renewed hope for themselves by getting back to work indicates the effectiveness of the economic policies of the Government, of which the capital gains tax exemption is a part.
The real purpose of that exemption was not to give a benefit to particular investors, but to stimulate the economy and increase the number of jobs that private investment would produce. The result is there. It is true that you cannot identify a particular job and say that the capital gains tax exemption produced it, any more than you could deny it. However, taking the picture as a whole, we see encouragement to the private sector and investment, and the obvious positive results.
In conclusion, the reference to this budget proposal being in favour of supporters of the Progressive Conservative Party has a strong ring of truth to it. The fact is that we are the Government because of the very large number of supporters that we have. This Budget has been in their favour and, if the

Income Tax Act, 1986
New Democratic Party had as many ordinary Canadians supporting it as we do, it would be here and we would be where it is.


The Acting Speaker (Mr. Paproski):: I will recognize the Hon. Member for Kenora-Rainy River (Mr. Parry) for a very short rebuttal.


John Edmund Parry: Mr. Speaker, we all, of course, anticipate that day.


Reginald Francis Stackhouse: Hope springs eternal.


John Edmund Parry: 1 thank the Hon. Member for his intervention. He is, of course, a living demonstration that when one gets to around the age of 60 one does not necessarily have to be appointed to the Senate or as a high court judge in order to get a job.
1 thank the Member for the implied criticism of the Government. If the Minister of State for Finance (Mrs. McDougall) had not stepped out, I am sure the Hon. Member for Scarborough West (Mr. Stackhouse) would have gotten one of the famous glares that can be received in this House.
Very briefly, Mr. Speaker, the Hon. Member knows that he cannot attribute job creation to the presence of the capita! gains tax exemption. That is entirely too speculative or hypothetical for even such an optimist as himself to sustain.


Mr. Gabriel Fontaine (Levis):: Mr. Speaker, I welcome this opportunity today to discuss the legislation proposed in the Bill to amend the Income Tax Act and related statutes and to amend the Canada Pension Plan, the Unemployment Insurance Act, 1971, the Financial Administration Act and the Petroleum and Gas Revenue Tax Act.
Mr. Speaker, three important events have taken place since 1917 with regard to our tax system. In 1917, the Income Tax Act was adopted and tax measures introduced. In 1971, the capital gains tax became a reality, and today, in 1986, we are about to amend the capital gains tax legislation.
Mr. Speaker, this Bill is further to the Notices of Ways and Means tabled on May 23, 1985 and November 21, 1984. The proposed legislation is part of a comprehensive strategy aimed at providing for durable economic growth, creating jobs, creating a climate of confidence, and providing a durable and consistent framework for economic recovery. The strategy is already working, and as a result, since September 1984, 420,000 Canadians were able to obtain employment. This means 420,000 new jobs since September 1984.
Through this legislation we are proposing to introduce a $500,000 capital gains tax exemption. Our purpose is to make this country more investment-oriented.
Mr. Speaker, I shall, if 1 may, go back to what was said in Hansard of June 18, 1971, by the Hon. E. J. Benson, Minister of Finance, who moved, and I quote:
That this House approve in general the budgetary policy of the Government.
Some Hon. Members said "hear, hear!"
And I wonder what they were cheering about. Those were Liberal Members, and they were cheering the inflation that was to result from one of the measures that would prove most destructive to economic renewal and economic development: the taxation of capital gains. They were cheering a measure that slowly but surely would prove to be destructive and devastating, as insidious as getting small but regular doses of arsenic in your food. They cheered, and look what happened. If we set the value of the dollar in 1971 at 100, today, fifteen years later, as a result of this measure it now takes $306 to buy the same amount of consumer goods you could buy for $100 in 1971. Mr. Speaker, I call this a Liberal hold-up when Canadian men and women who thought they had managed to accumulate a certain capital, have seen their dollar become a thirty-five-cent dollar in fifteen years. That is what the Liberals were cheering about!
And all this cheering led to an increase in interest rates, up to as much as twenty-three per cent in 1981. So much for their cheering! And it all paved the way for one of the worst recessions in forty years. That was something to cheer about. As a result, many of our businesses have disappeared. Our developers no longer had any incentive. And what happened then? The State was forced to put Canadians on the dole because there were no developers left and nobody felt like opening a business. Anxious to hang on to office for years and years, the Liberals began to redistribute the money borrowed by the State, not its wealth nor its taxes. These days 40 cents of every tax dollar collected are set aside to pay the debt run up by the Liberals.
Taxing capital gains had to be the worst decision ever made since Confederation. Mr. Benson stated that it has been the most significant tax reform since 1977. It was the most significant indeed, in the sense that it also proved to be the most devastating. He was not aware of its full impact, as 1 have just described it.
To quote him, this measure was intended "to broaden the income tax base through the capital gains tax". The Hon. Member for Glengarry-Prescott-Russell (Mr. Boudria) was not there at the time, but in a moment I will name some of the Liberal Members who were there.
I am referring to the Hon. Member for Davenport (Mr. Caccia) who was in the House a moment ago and who made statements to which I want to respond. The Hon. Member for Davenport had to leave. He should have waited to hear me out, he said something about capital gains and, in 1971, he was one of the Members who voted in the House-
January 21, 1986


The Acting Speaker (Mr. Paproski):: Order, please. The Hon. Member for Glengarry-Prescott-Russell (Mr. Boudria) on a point of order.


Don Boudria: Mr. Speaker, I wish to draw your attention to something you are certainly aware of, and I am sure you will remind the Hon. Member that referring to the absence of a Member is contrary to the Standing Orders of the House.


The Acting Speaker (Mr. Paproski):: I appreciate what the Hon. Member is saying. I do not believe that I heard that remark but 1 am sure the Hon. Member realizes that we should not mention the absence of any Member from the Chamber. The Hon. Member for Levis (Mr. Fontaine) has the floor.
[ Translation]


Gabriel Fontaine: Well, Mr. Speaker, I might point out that the Hon. Member for Cochrane-Superior (Mr. Penner) is in the House, yet he does not seem to have anything to say about Bill C-84. The Hon. Member for Cochrane-Superior was here to vote in 1971, and now he should apologize for having driven Canada into such a precarious economic situation. The Hon. Member for Vancouver Quadra (Mr. Turner) was here in 1971, as was the Hon. Member for Saint-Maurice (Mr. Chretien). Also present then were the Hon. Members for York Centre (Mr. Kaplan), Hull-Aylmer (Mr. Isabelle), Saint-Jacques (Mr. Guilbault), Windsor West (Mr. Gray), Algoma (Mr. Foster), and Notre-Dame-de-Grace-Lachine East (Mr. Allmand). There were 13 Liberal Members who in 1971 supported the capital gains tax and they are still here now. It is unfortunate that they are still here. All I can wish for them is that after the next election we no longer see them here.
We heard earlier the Hon. Member for Kenora-Rainy River (Mr. Parry) dealing with capital gains. This Member of the socialist party from Western Canada was discussing capital gains with a flagrant misunderstanding of what it all means.
Mr. Speaker, he suggested that failing to tax capital gains would reduce Government revenues. Well, that is because he never understood anything about free enterprise, and Canadians are well aware that his Party never did understand and that is why there were never more than 22 per cent of the population who ever had any degree of confidence in this Western Canadian socialist party.
We also heard earlier the Hon. Member for Davenport (Mr. Caccia), a former minister in the previous Government, suggesting that the measure would deprive this Government of tax revenues. Mr. Speaker, is this sheer unthoughtfulness, or is it a blunder on his part? He should realize that the immediate aim of exempting the first $500,000 from capital gains is simply to give business an incentive, a reason to invest more, and this would increase tax revenues.
Income Tax Act, 1986
Mr. Speaker, when 1 hear the Hon. Member for Davenport suggest that this measure will deprive us of considerable tax revenues, frankly, I wonder what he understands about economic principles. It is because of that kind of people who do not understand anything about economic principles that $200 billion were sunk into our deficit. Because of people who failed to understand anything about the economy and who borrowed money for redistribution our country has reached a level where we can no longer borrow. It was at that point that we came to power and we are going to pull this country out of the chaos in which you put it.
Mr. Speaker, what did the 1971 decision prevent? It took incentives away from the free economy, from people who wanted to build up a new heritage. People need to build up a heritage during their lifetime but this is no longer possible within the taxation structure that was set up by the Liberals. So, what did people do? Instead of investing, those who had a bit of money loaned it. They loaned it to businesses, to the Government, and this is why we accumulated a deficit and stopped creating jobs, because nobody was investing any more.
Mr. Speaker, who borrowed the money available because of the depressed situation which had been created for our promotors and business people? It was the Liberals, Mr. Speaker. For whom did they borrow? They borrowed for the Liberals. How much did they borrow, Mr. Speaker? They borrowed $200 billion.
Mr. Speaker, they borrowed so that they would be able to appoint Mr. Ivan Head, a former staff member of ex-Prime Minister Trudeau, to a position at the International Development Research Centre. They borrowed to appoint Mr. Romeo LeBlanc to a Government position. They borrowed to appoint Perry Anglin, from the Office of the Minister of Consumer and Corporate Affairs, Deputy Minister of Revenue Canada.
They borrowed to appoint many of their friends, for instance Mr. Jean Fournier, from the Office of Mr. Jean Chretien, who was given the position of Deputy Minister of Finance. They borrowed to appoint another one of their friends from another Minister's office, Mr. William MacEachern, to the Aviation Safety Board. They borrowed to appoint another one of their friends, Mr. Bob Rabinovitch, to another important Government position. It was with these borrowings that they appointed their friends. And there are still many people who protect them at the upper echelons of the Government.
Mr. Speaker, we have been through a long and progressive recession since 1971. We have witnessed continuing inflation as $1 now equals 35 cents. It now takes $3.08 to purchase what you could buy for $1 in 1971. The Liberals increased the interest rates. Canada went from being an exporter of manufactured goods to being an exporter of raw materials. The Liberals so discouraged investment and initiative that foreign interests were the ones who decided to invest in this country, and the Liberals then created FIRA to stop them. What inconsistency on the part of the previous Government! They

January 21, 1986
Income Tax Act, 1986
tried to screen foreign investments with FIRA. Mr. Speaker, the Liberals sold Canada on credit.


Don Boudria: As for you, you gave the country away.


Gabriel Fontaine: Fifteen years have gone by since 1971. We must now applaud the courage of the Minister of Finance (Mr. Wilson) and of the Minister of State for Finance (Mrs. McDougall) for having been willing to implement the capital gains exemption. It is one of the most, if not the most, effective initiative for economic recovery. Contrary to what some would say, this initiative is not designed for the wealthy and the multinationals. For them, $500,000 is not a significant amount. This is another initiative for ordinary taxpayers, for our business people. Nowadays those who purchase shares from brokers and who are interested in investing in Canadian companies do so because they want to make a profit. Formerly, when they made for instance a $1,000 profit on their investments, they had to pay income tax on 50 per cent of this amount, namely $500, at a tax rate of maybe 40 per cent. Which means that they had to pay $200 in income tax on that $1,000. On the one hand, they had less money to reinvest and, on the other hand, they lacked incentive.
Mr. Speaker, people involved in small businesses will also benefit from this because they will be able to find in their own environment, in the area where they do business, people eager to invest in their businesses, for they will know that they will be entitled to tax-free profits. That is how our 750,000 small and medium-sized businesses will grow. There will be more investors and these investors will be able to rely on their neighbours, the working people all over the country. Those who do not invest their money will lend it. They used to lend it and to purchase foreign goods with their income, so that we had developed as a nation of consumers instead of a nation of builders.
This legislation will also liberate small businessmen who had transmission problems. What was the use for our small businessman of starting businesses when they knew quite well that in the end they would have to reassess the value of their businesses and pay income tax? Then they lacked incentive; now, with this $500,000 exemption from capital gains tax, we are giving them back incentive.
This way, Mr. Speaker, the firms will remain the property of our businessmen, will make it possible for our 750,000 administrators, developers, owners of small- and medium-sized businesses to hope again to show a profit, and that is the only way in the western world to encourage economic development. The fact of the matter is that since our Party came to power on Parliament Hill, we have managed to create 415,000 new jobs, including 130,000 in the Province of Quebec.
Since we came to power, our country has had the best record for job creation among the summit countries. We have
managed to reduce interest rates by three per cent. The unemployment rate has gone down, and this year, the rate of inflation his its lowest point since 1971. This is important to people who have savings, because savings are very sensitive to inflation. Now, we are going to make sure their money maintains its value.
Our plans and programs have the support of the Canadian Chamber of Commerce. We enjoy the support of local Chambers of Commerce and the Canadian Federation of Independent Businesses and business associations. It must be said that the Liberal Party exhausted this country's resources. It made us borrowers and consumers of credit. Mr. Speaker, the Liberal Party, and this is a serious thing, looked on business as the exploiting class. It discouraged business through the tax system. It destroyed the ambition of our business people. That is what this party did in 1971 and 1984. The Liberal Party forgot that the role of the state is essentially to distribute part of the wealth, wealth which must first be earned. It decided to borrow that wealth, and today we have to do something about this situation. We are going to reduce borrowing and take steps to develop our economy.
Mr.iSpeaker, in concluding I might say that we are among the richest countries in the world. We have coal and oil on three oceans. We have our fresh water resources, hydro-electric power, wheat and lumber. Our population consists of one-third Francophones, one-third Anglophones and one-third-the ideal mix to exploit these natural resources, but first, Canadians must be given a framework within which they can become free and develop their resources, a framework that the Liberals dismantled. This must be said. The Minister of Finance (Mr. Wilson) is giving Canadians, our human resources, a chance to exploit these resources. Let us do so, and meanwhile, my last message to the Liberals is: Keep quite and repent your sins! 1 would even say: Admire what we are doing!


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


Don Boudria: Mr. Speaker, the arrogance of the Conservative Government is obvious when a Conservative Member suggests to the House that Opposition Members should not be allowed to exercise their right to speak. They are expected to remain silent, lost in admiration before a Government that is sinking fast in the polls. This Conservative attitude is becoming increasingly flagrant.

1 suggest that the Hon. Member should consider seriously changing his speech-writer; I think he definitely needs a new one.

I have a question for him, he mentioned the value of the dollar. I noticed he said he wants the dollar to maintain its

value. Can the Hon. Member tell us how come during the last election campaign the Conservatives handed out what they called a "One Liberal dwindled dollar", a cardboard dollar with a quarter of it missing, representing 75 cents. How do they explain that since then the dollar has dropped below 75 cents, another piece of it is gone and it is worth only 71 cents under this Conservative administration? In his reply, would he also indicate, concerning his reference to savings-


Léo Duguay: Mr. Speaker, I rise on a point of order. The Hon. Member is fond of calling others to order for naming Members in the House. I am sure he knows full well that props are not allowed in the House.


The Acting Speaker (Mr. Paproski):: The Hon. Member is right, but I did not see the prop.


John Horton McDermid: He needs a prop to prop him up.


The Acting Speaker (Mr. Paproski):: I will take that under advisement. The Hon. Member for Glengarry-Prescott-Russell (Mr. Boudria) has the floor.


Don Boudria: Mr. Speaker, I note that Hon. Members who always read their speeches simply will not let us read a document in the House. 1 also take notice of this Conservative approach, it is like all others.
Finally, the Hon. Member said that Canadians keep too much money in savings accounts, a sure sign that they lack confidence to invest in the private sector. If that is so, why would the Hon. Member tell us we must change registered retirement savings plans and raise the ceiling, which would only increase savings, when he has just contradicted himself in his remarks? How can he make such a statement when the Budget contains measures which are altogether contrary to what he is saying? In fact, is that not one more proof of the fact that he ought to get himself a new speech writer?


Gabriel Fontaine: Mr. Speaker, in answer to the two questions and the remark of the Hon. Member for Glengarry-Prescott-Russell (Mr. Boudria), I can assure you that anything I say here in the House of Commons comes from me. I do not read speeches written by others, I can draft my own and I am very proud of it.
When I say that I get involved in Government policy, it is a matter of personal belief, my friend. You may have been trained to read speeches written by your Ministers, even though they may even have been unable to draft them properly, but that is not the way we operate.
To reply to your question about inflation, I said that a dollar was worth $1 in 1971 and that it now costs $3.06 to do the same things, whether we are talking about buying a car, food, or housing, or building roads.
Income Tax Act, 1986
Your thinkers, and I did say yours, systematically implemented a system which provoked this inflation and unfairly took away the savings of Canadian men and women by reducing their purchasing power. You were not honest with the Canadians who had savings in the seventies and eighties. Their money is now worth only one third of its value in 1971.
Terms to describe what you did to them are not allowed in the House of Commons, but I think that everyone should be told about it. In case you did not understand, that is what inflation means.
Second, you speak about savings. It is very clear that you, the Member for Glengarry-Prescott-Russell (Mr. Boudria), do not know the difference between an investment and a loan. Our tax proposal will promote investment. For your information, investment means the money that is put into a business as equity, as shareholder assets, as owner equity, and this is what gives the business the means to develop.
As for you, you told the Canadian people: Invest in loans of the Government of Canada. You paid up to 22 per cent for Government of Canada loans. You told Canadians: Bring us some money, we need it to redistribute among our friends. You do not know the difference between an investment and a loan and you never did. That is why you are not even able today to comment the speech and the tax proposal of our Minister of Finance (Mr. Wilson). As for me, I can both comment and defend them.
I trust that we shall eventually stop talking about this issue and go on to other things which are also important for Canada. Stop trying to delay these initiatives!


Mr. Marchi:: Mr. Speaker, the Hon. Member for Glengarry-Prescott-Russell (Mr. Boudria) indicated that the Hon. Member for Levis (Mr. Fontaine) was approaching the issue with some arrogance. It is not only that; the Hon. Member for Levis was approaching the whole issue with a very selective process of misleading the Canadian public. He suggested that this side of the House was giving confused signals and messages to the Canadian public. The Hon. Member had the audacity and temerity, a word which his Prime Minister (Mr. Mulroney) likes to use, to suggest that this particular piece of legislation, together with the other pieces of legislation flowing from the Budget introduced last May, was somewhat fair and just to Canadians.
Did the Hon. Member for Levis explain to his constituents that people earning $15,000 will be expected to pay 36 per cent more in taxes by 1990, compared with a $100,000 earner who will have to pay 4 per cent more or a $200,000 earner who will have to pay 2 per cent more? Did the Hon. Member portray the reality of the Budget to his constituents? Does he feel that those figures to which I just referred coming from the documents of the Minister of Finance (Mr. Wilson) are reality and are in fact fair? Why was that schedule imposed rather than a more equitable balance between all Canadians from all

January 21, 1986
Income Tax Act, 1986
parts of the country, not just the gulf that is certainly getting larger between rich and poor under this administration?


Gabriel Fontaine: The Hon. Member for York-West (Mr. Marchi), as usual, and like his colleagues, is going to dwell on details as he does every day, during Question Period for instance, anxious as he is to have Canadians forget we created 430,000 jobs. During the Summer of 1984, Canadians understood our message on a balanced budget. This is what we are giving them today, Mr. Speaker. So they understood our message and now they are thanking us. They are telling us: "Carry on, you are doing well". We have the support of people who know about the economy, people like you, people in Chambers of Commerce, businessmen's organizations, economists, consumers in general, business people who trust us, who invest, who have hired 430,000 people. That is our message, Mr. Speaker, and that is our performance. Therefore, I do not have to answer questions about details that they keep asking to victimize this Government.


The Acting Speaker (Mr. Paproski):: Questions and comments are now terminated. The Hon. Member for Cochrane-Superior (Mr. Penner).


B. Keith Penner: Mr. Speaker, 1 did my best to try to follow the arguments of the Hon. Member from Levis (Mr. Fontaine). I suspect that perhaps what he was trying to do today was to launch a new school of economic thought. If that is the case, I would suggest to him that, other than himself, I doubt that anyone else would be interested in enrolment.
I have spent some time on Bill C-84 and done some analysis of it. I have come to one inescapable conclusion, and that is that Bill C-84 takes what has been in this country a snail's pace movement towards tax reform and it has slammed that into reverse.
When the Minister of Finance (Mr. Wilson) introduced his Budget on May 23 he told the House of Commons that this Budget was going to be tough and it was going to be fair. 1 have to agree that this Budget is tough. It certainly is very tough on lower income Canadians and on middle-income Canadians. Members who support the Government must be feeling a little awkward, a little uncertain of themselves when they contemplate the figures that were mentioned by the Leader of the Opposition (Mr. Turner) and repeated by the Hon. Member for York West (Mr. Marchi) that a man or a woman earning $15,000 is going to face, over the next four years, a cumulative tax increase of 36 per cent. To earn $15,000 is to have a person hovering around the poverty line. To face an increase like that is very, very difficult for Hon. Members to justify. So it is a tough Budget, it is tough on lower and middle-income Canadians, and it does provide some
nice fat, juicy fare for the well-to-do. I will come back to that a little later on.
I do want to give the Minister of Finance some credit. The Minister of Finance must be given some credit for assisting his Party and assisting his Government to slip so significantly in the public opinion polls. Now he cannot take all the credit, he is getting some help from his colleagues in the Cabinet, and he is certainly getting quite a bit of help from his Prime Minister (Mr. Mulroney).
During the recess of Parliament when I was in my constituency I spoke to a citizen for whom I have great respect and he made an interesting comment. He said, "You know, I am not a person who has studied political science or even economics". He was in another important field of endeavour, but he said, "It occurred to me that if I were the Minister of Finance and I were preparing a Budget for the nation, 1 would certainly not attack or move against either senior citizens or children".
You know that the senior citizens of this country fought back and they won, and no more needs to be said about that except that there is a lingering suspicion in the minds of many Canadians, because of that error made by the Minister of Finance, that the Conservative Party that now forms the Government wants to erode the social security system that has been built up over a long period of time. Even though the senior citizens did win their battle, the children of this country continue to be the losers. Thanks to the family allowance measure that went through the House yesterday, children are going to get an additional one cent a day in 1986. I want to say that they will get one cent a day, but if those same children were to buy one or two confectionery items then this Government is going to reach into the blue jeans of those tykes and take out all of the loose change.


An Hon. Member:: The dentists think it is wonderful.


B. Keith Penner: Surely the Conservative Party is not now going to dictate what people shall eat or what they shall buy. Surely the Member who has just spoken is not saying that in this measure the Government wants to move against the confectionery industry.


The Acting Speaker (Mr. Paproski):: On a point of order, the Hon. Member for The Battlefords-Meadow Lake (Mr. Gormley).


John Kenneth Gormley: I have been listening with great interest to this Member. I heard him refer to Bill C-70, I heard him refer to other ways, means and motions. 1 am wondering if he is going to come to the point and discuss Bill C-84 at some point before his time expires.


The Acting Speaker (Mr. Paproski):: 1 know the Hon. Member, he is a colleague of mine from the class of '68. I know that he knows what relevancy is in this House. I am sure he is getting to the point.
January 21, 1986


B. Keith Penner: I hope that unnecessary intervention will not be subtracted from my time, Mr. Speaker. I will say something about Bill C-84. 1 would like to concentrate my attention on three objectionable aspects of Bill C-84. First, there is the partial deindexation of the tax system. Second, there is the reintroduction of an exemption from taxation of capital gains. If time allows, 1 would like to say something about the effects of Bill C-84 on the tourist industry.
I have mentioned in this House before, with respect to the indexation of the tax system, that this idea was first brought into the precincts of Parliament by no less an outstanding Canadian and parliamentarian than the Hon. Robert Stanfield. At that time the Minister of Finance, who is now the Leader of the Opposition, engaged in a national debate across this country about whether indexing the tax system was valid. He played the role of devil's advocate and gave some speeches to the contrary, but Canadians convinced him that it was a fair reform measure in our tax system. Parliament subsequently introduced it in a Budget that he brought in.
To do away, even partially, with the indexation in our tax system, to deindex it partially is, I believe, to take that slow tedious process of tax reform and to put it into reverse gear. The Leader of the Official Opposition has called this measure a sneaky one. I do not think that is unparliamentary, Mr. Speaker, because if you take a look at what it does, you will find that it is actually rather sneaky, because in 1985 what you have with this measure is just a small tax bite. You take out $80 million out of taxpayers' pockets in 1985, and in the year in which we are now that tax bite gets a little larger because the amount goes up to $635 million. From the calculations which have been done for us we note that by 1990 what began as a tax bite becomes one huge tax grab. Somewhere close to about $5 billion will be taken from the taxpayers' money.
Regarding this measure, one commentator has said that in the future, there will be a cloudburst of tax increases, and another described it as being a time bomb built into our tax system. After looking at Bill C-84, the Consumers' Association of Canada stated that the tax changes introduced by this measure will create a new kind of poverty in Canada, the middle-income poor.
Most Hon. Members will know that about one-half of Canada's economic growth was directly due to consumer spending on goods and services. With millions of dollars, soon to be billions of dollars, being taken from consumers' pockets, do Hon. Members who are supporting this Bill not think that there will be a setback in the economic recovery that they said they would encourage if they were elected to office? There is bound to be a setback.
The purchasing power of middle-income earners, because of Bill C-84, will be eroded. True, this erosion will begin slowly but it will increase as we move through the 1980s and into the 1990s. That is my first strong objection to this Bill. I am glad my colleague, the Hon. Member for Saint-Henri-Westmount (Mr. Johnston), moved to have the deindexation clause in Bill
Income Tax Act, 1986
C-84 removed in order to retain what is a very strong reform measure in our tax system designed to protect taxpayers against inflation so that the Government is not able to live off the avails of inflation. If the Hon. Member for Levis were here, he would be interested in hearing my comments.
My second objection has to do with the reintroduction of the capital gains tax exemption.


Mr. Vincent:: Order.


B. Keith Penner: Don't get too excited, he is the one who raised the issue.


Pierre H. Vincent: On a point of order, Mr. Speaker. I think the Hon. Member knows very well that reference should not be made to the presence or absence of Members in this House, and I find it very unfortunate that we have to call that to their attention almost every day.


The Acting Speaker (Mr. Paproski):: I believe the Hon. Member realizes that, and I do not think it will happen again.


B. Keith Penner: The Hon. Member for Levis had drawn me into the debate and I was anxious to reply to him. I neglected to note that he had left the Chamber. 1 apologize.


Some Hon. Members:: Oh, oh!


B. Keith Penner: All Hon. Members who follow requests for changes in our tax system will know that in the business community and in financial publications, there has been for a long time now a request for the ending of the capital gains tax. In speeches and in various publications, business leaders have said that this particular form of taxation ought to go, and in arguing that it ought to go, they have presented a rationale or justification for it. I would like to summarize briefly that justification.
The rationale is that if we were to abolish the capital gains tax, there would be a higher level of personal investment and risk capital formulation. If we removed the capital gains tax, we would encourage Canadians to rethink the way in which they invested their money, a way which tended to be primarily through term deposits or Canada savings bonds. Rather than using those instruments for investment, the abolition of the capital gains tax would encourage people to put their money into private or public equity, more risk taking would be encouraged, and the flow of investment capital into areas of the economy that would show the greatest promise of job creation would be enlarged. That is the justification for that measure. However, there are those who counter these arguments. I refer specifically to Professors Brooks and Peltomaa who, in 1979, wrote a publication entitled Canadian Taxation. On page 7 of that publication, they said:
The tax reform process in Canada clearly reveals that even the most ludicrous of ideas, if supported by business interests, are often acted on by the Government.

January 21, 1986
Income Tax Act, 1986
They went on to argue that it is difficult to justify the exemption of capital gains from taxation. 1 will not repeat all of their arguments because I do not want to spend all of my time quoting. However, let me bring Members of Parliament up to date.
Immediately following the May 23 Budget, The Globe and Mail reported that it had in its possession a document from the Department of Finance that argued that changes in capital gains taxation might well have only a small effect on the ability of corporations to obtain new equity financing. That argument was not made by members of the Opposition but by an analysis done within the Department of Finance itself.
Many tax experts argue that the removal of the capital gains tax will do no more than encourage a great deal of speculation in the real estate market and that that speculation will drive the price of land up. If an increase in the price of land is coupled with the abolition of the Registered Home Ownership Savings Plan, a program which helped young couples save money, how are we going to help young people to acquire the homes they believe they have a right to acquire at some point in their lifetimes as Canadian citizens?
In my view, the capital gains tax exemption is nothing more than a generous windfall for the rich of Canada. It does not require the rich to invest any further if they do not see fit to do so. Within Bill C-84, there is not even a minimum requirement that the capital should come from Canadian investment within Canada. One tax analyst from Coopers & Lybrand said that he was surprised that Ottawa made the exemption so wide open rather than aiming it toward investments in Canada that create jobs. He went on to reflect further and said that he did not think that we could solve Canada's unemployment problems by exempting capital gains from taxation in any event.
I believe we must conclude that the capital gains tax exemption is a very special gift from the Government to its well-to-do friends and supporters. Of course, the Government has the right to do that. I do not argue with that. However, I believe that that is the way this measure is seen by the public. The Hon. Member for Kenora-Rainy River (Mr. Parry) drew to the attention of the House the fact that, according to the 1982 statistics, 63 per cent of the capital gains tax exemption will accrue to people who are earning $50,000 per year or more, about 4 per cent of the tax-paying population.
I would argue that a fair, just and equitable tax system should be based on the ability to pay. That is not very profound, but I believe that that is what a fair taxation system should be. All sources of income which increase the economic power of the recipient, including capital gains, should be recognized in determining the tax base. If that sounds familiar, it is because that was a statement that was made by the Royal Commission on Tax Reform, the Carter Commission. Hon. Members will know that the Carter Commission was set up during the Government of the Right Hon. John G. Diefen-baker and reported during the time Mr. Pearson was in office. Finally, some parts of the Carter Commission Report were incorporated into a White Paper, the so-called Benson White Paper. There was extensive debate in the country, and certainly a great deal of it in Parliament. As a new Member of Parliament at that time I remember being overwhelmed by all the lobby groups and special interest groups which wanted to protect their own special place within the tax system. Indeed, it was a very demanding period of time.
The tax reform measures which were finally introduced following the debate of the Benson White Paper can only be described as a partial tax reform. In no way was it complete. However, there were certain principles which were enunciated during that debate which I think are difficult to challenge. For example, it has long been accepted in Canada that a tax system should be based on ability to pay and that Governments should levy progressively more tax on higher income earners as compared to those who earn lower incomes.
We had a discussion earlier about marginal rates. It is always difficult to know where to draw the line between that which is fair and which must be done in order not to stifle initiative, innovation, and all of those other features which help a nation to grow and expand, and that which is unfair. We know that there is a strong concentration of capital gains in higher income tax brackets. Therefore, to bring back an exemption for those people runs directly contrary to the most basic principles of tax reform. I think we have taken a retrograde and regressive step in reintroducing this exemption. I regret it very much. It creates further inequities in our tax system. It adds more complexities to a tax system which my colleague, the Hon. Member for Saint-Henri-Westmount, has already described as unfair in many of its aspects and one which is certainly confusing to most taxpayers. After all, there is a whole profession out there of people who simply live off the income tax laws because only a very small handful have the time or the inclination to understand them as fully as they should.
I wish to come back to the Benson White Paper, which the Hon. Member for Levis mentioned in his speech. I admit that I was a supporter of this particular measure. I do not deny that for one moment. The White Paper expressed a great deal of sympathy with Mr. Carter's recommendations for the taxation of capital gains. I think it is probably a good idea to go back to that White Paper. Mr. Speaker, you know very well what a controversial document it was. Flere is what the document stated in part, and I remind Hon. Members that it was stated in 1969:
A Canadian who is able to realize a substantial stock market profit or real estate gain clearly has an increased ability to pay; he is better able to pay for a new car, or to pay for stocks and bonds, or to pay income taxes, than is his neighbour who has not had such a gain. At present, Canada does not tax this ability to pay. As a result, some very well-to-do Canadians pay far less lax than others with similar abilities to pay, and less even than others with much lower incomes (all because these particular Canadians receive a large part of their income as 'capital gains'). Moreover, it has been possible for the sophisticated to arrange their transactions in such a way that they receive as capital gains amounts that would have been income had the transaction been carried out in the normal manner.


The Acting Speaker (Mr. Paproski):: I regret to advise the Hon. Member that his time has expired. Are there questions or

comments? The Hon. Member for Champlain (Mr. Champagne).


Mr. Champagne:: As we know, Mr. Speaker, we had mild weather recently and January is the month for head colds. 1 am afraid my hon. colleague has a superior one considering that the Hon. Member for Cochrane-Superior (Mr. Penner) has just told us he is against capital gains. He just said we are offering hand outs to the rich-we as a Government-that they help only the rich. But the question I am going to ask him is this: How is it that the Hon. Member did not rise in this House, when he was in Government, to castigate the then Minister of Finance because there were more than 200,000 Canadians, the most affluent, who were paying no income tax? How can he reconcile that? He now opposes our allowing capital gains, he suggests that it is for the rich, but when in Opposition he failed to do his duty as a Member by not rising and telling his Minister of Finance: Make the most affluent pay, make the rich pay income tax. I believe, Mr. Speaker, that his head cold is at its worse and I hope the Hon. Member will take good care of himself.


B. Keith Penner: Mr. Speaker, apart from the personal comments, I would like to say that 1 never for one moment suggested that I was against capital gains. I do not remember saying that. What I said is that capital gains ought to be taxed.


John Horton McDermid: They are.


B. Keith Penner: They are now; but they will be exempted up to a total of $500,000 in the course of a person's lifetime. That really amounts to an interest-free loan from the Government. I am saying they ought to be taxed.
The former Liberal Government under Finance Minister Benson brought in a capital gains tax which was only partial in terms of reform, since capital gains were still taxed at a lower rate than was income. 1 do not know if the Hon. Member has experienced the following difficulty, but I know that I have. It is difficult for me to say to the man who carries a lunch pail to work and who works under very adverse conditions, let us say in a pulp and paper mill or in a mine in my constituency, that he must pay the prevailing rate on the income that he earns under those very difficult conditions. Many of the people who carry out those jobs find that by the time they reach their mid-fifties they are burnt out from working in the bush, the paper mills or the mines. It is not easy work at all. It is very difficult to say to such a worker: "If you have extra dollars and you could send them out to work for you, did you know that they would be tax-free?" It is difficult for me to justify saying that to a person who w'orks hard for his living.
I would like to deal with the second point about the minimum tax. The Hon. Member will know that in this Party we have not opposed at all the idea of a minimum tax on those who find that by using every aspect of the tax system they end
Income Tax Act, 1986
up paying no tax at all. However, if the Hon. Member will look at the history of that measure he will see that at the beginning there were few people involved in that category and that over the years more and more people were able to use the tax system to their advantage. Certainly through extensive investments in Canada and through the use of the dividend tax credit they have found that they now escape taxation altogether. We have had to face up to a problem. The problem is that every Canadian ought to contribute to the national well-being and should be taxed. No one is arguing to the contrary. However, it has only become a large problem with a significant number of taxpayers in recent years.


James Kenneth (Jim) Jepson: Mr. Speaker, I listened with interest to the Hon. Member for Cochrane-Superior (Mr. Penner). Over the last few months I have noticed a theme in the House whereby members of the Opposition have alluded to legislation being sneaky and less than truthful. They have a clear agenda to create a credibility gap between the Government and the people, which I think is disastrous to the people of Canada.
The Hon. Member for Cochrane-Superior was a member of a Government which, when in office, told the people of Canada that it would not increase gasoline prices by 18 cents a gallon. He was a member of a Government which told the people of Canada at voting time that it would not put in place wage and price controls and, yet, brought those measures in. I do not understand how people from the Hon. Member's Party can be in a position to judge as to whether or not a piece of legislation is sneaky. I think this does a great disservice to all Canadians. As we reflect on the school of economics adhered to by the Liberal Party, we see that it is a Party which left my Government a $200 billion deficit, with some $22 billion on an annual basis. I understand why members of that Party do not understand the progressive legislation which is before the House.


The Acting Speaker (Mr. Paproski):: Before I call it one o'clock, I would like to advise the Hon. Member for Cochrane-Superior (Mr. Penner) that five minutes remain in the time for questions or comments.
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.
[Stage Direction]
January 21, 1986


Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, in 1909 we signed the Boundary Waters Treaty with the United States. Article 4(2) says:
That boundary waters and waters flowing across the boundary shall not be polluted on either side to the injury of health and property on the other.
The same principle, Mr. Speaker, should apply to air. We need a treaty on transboundary air pollution. The first step in this direction took place in 1980 when the United States signed a memorandum of intent with us. The acid rain envoys chose not to build on the memorandum of intent and thus made, in my view, a serious mistake.
Today, and every day, because of the prevailing winds, the United States is still causing transboundary environmental interference. Every day the United States is still causing serious economic damage to Canada. Despite the progress of science and technology it is not possible to change the direction of prevailing winds. We are thus the recipients of sulphur dioxide emissions from the United States, millions of tons per year.
Next March the Prime Minister (Mr. Mulroney) will meet the President of the United States again. Thus the action on acid rain shifts to the top. The Prime Minister chose this course of action, and we wish him well. We will applaud him if he succeeds with a reduction plan of substance. If he does not, then he can blame the prevailing winds or, to be consistent with his statement Sunday, he can always blame the media.



INCOME TAX ACT


Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, to date the Government has failed to act on its promise to simplify the tax system so I can only conclude that the Minister of Finance (Mr. Wilson) understands Section 127 of the Income Tax Act which reads:
In applying Subsection (9) in respect of
(a) a qualified property or qualified transportation equipment acquired after November 16, 1978 or qualified construction equipment acquired after April 19, 1983, the references in paragraphs (a) and ib) thereof to "5%" shall be read as references to "7%", the references in paragraphs (a. 1) and (b.l) thereof to "5%" shall be read as references to "13%" and the references in paragraphs (a.2) and (b.2) thereof to "2.5%" shall be read as references to "3%";
(h) a qualified expenditure incurred by a taxpayer after November 16, 1978 and before his taxation year that includes November 1, 1983, or a qualified expenditure incurred by him in that taxation year or a subsequent taxation year if he deducted an amount under Section 37.1 in computing his income for the year,
(i) where the expenditure was incurred by a Canadian-controlled private corporation in a taxation year of the corporation in which it is or would, if it had sufficient taxable income for the year, be entitled to a deduction under Section 125 in computing its tax payable under this Part for the year, the references in paragraphs (a) and (6) thereof to "5%" shall be read as references to "25%" and the references in paragraphs (a.I), (a.2), (b.l) and (b.2) thereof-


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



FISHERIES


Mr. Lawrence I. O'Neil (Cape Breton Highlands-Canso):: Mr. Speaker, I rise today to highlight once again the economic damage to the East Coast fishery being inflicted by the gray seals.
Proliferation of seals and seal worms has been a major concern over the past few years. To outline the gravity of this situation, the following points must be made. The seal population along the Nova Scotia coastline is approximately 100,000 animals; one gray seal consumes 3,200 pounds of fish annually; total consumption of fish by seals along the Nova Scotia coastline exceeds 200 million pounds annually; the Sable Island herd will increase by 12,000 in 1986, and an immediate control kill is required to reduce the seal population.
A major policy decision must be made to decrease the size of the herd and place controls limiting future growth. With the push for quality enhancement, it is difficult to achieve high quality without addressing this problem.
In addition, extensive damage is being done to fishermen's gear by the seal population. Nets and traps are being destroyed by these animals.
I commend the Minister of Fisheries (Mr. Siddon) for his recent comments to the effect that he is prepared to address this problem, and I encourage all Members of the House to support the Minister in this respect.
This problem threatens the viability of the Atlantic fishery and therefore the backbone of the Atlantic economy. It is time for all of us to acknowledge-


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



CANADIAN BROADCASTING CORPORATION


Mr. Bob Pennock (Etobicoke North):: Mr. Speaker, last Thursday I made a statement concerning the CBC's irresponsibility in broadcasting a song with the theme that it is "neat to be dead", in which children expound on the virtues of death. In

light of the program's morbid content I asked for an apology or at least a retraction from the CBC. I thought it would end there, but this was not to be. What happened? The song was broadcast in its entirety again yesterday at approximately 8 a.m. on CBC Radio in Toronto.


Some Hon. Members:: Shame!


Robert Pennock: Most Canadians can put this song in perspective. My concern is with the one child who cannot, the one child who is having difficulty at school, the one child who listens to the radio talk about death this way: "It's fun to croak! Oh, boy, it's cool, it sure beats school, it is ever neat!"
Does the CBC realize that one-third of all suicides in Toronto last year were committed by children under the age of 19? This is no joke. A serious social problem exists when children and teenagers not only attempt suicide but contemplate suicide as a viable way to get around the pressures of today's society. I ask the CBC was it really worth it? To broadcast this song again was not only irresponsible but outrageous.
My final remarks are directed to one Canadian, the President of the CBC, Mr. Pierre Juneau: Your accountability to the people of Canada is no different from that of a Minister of this Government in that-


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


Robert Pennock: -you owe it to the people of Canada to do the honourable thing and resign.



HUMAN RIGHTS


Mrs. Sheila Finestone (Mount Royal):: Mr. Speaker, yesterday the United States celebrated a new federal holiday commemorating the fight for equal rights for American blacks spearheaded by Dr. Martin Luther King. By creating this statutory holiday, Americans underscore the right to equality of opportunity and equality of rights for all citizens. This is a human rights day. But Mr. Speaker, we are sadly aware that these freedoms do not exist the world over.
It is important that all nations join the fight for universal respect of individual human rights. Canada and Canadians are in the forefront in taking up this global challenge. The task is not easy, but the challenge is a worthy effort. Canada, this young nation of ours, can stand proud in the world of nations for we are a role model, although still not perfect. Although still not perfect, we can be proud of the Charter of Rights and Freedoms in our Constitution which accords to all Canadians the fullest spectrum of freedoms. Canada is not only a signature of the Helsinki Accords, but speaks out for its principles, of particular note in the interests of Soviet jewry.
Just recently our Parliament declared Raoul Wallenberg Canada's first honorary citizen. This will ensure that his name and deeds in the interests of human rights and decency will forever be a part of our country's history. It also allows us to seek information as to his whereabouts. You, Mr. Speaker, graciously hosted a reception to mark our new honorary citizen. The President of the United States received Coretta King to mark Dr. Martin Luther King Day. Both acts are encouraging in the fight for world-wide respect of individual human rights.



FOOD AND DRUGS


Ms. Lynn McDonald (Broadview-Greenwood):: Mr. Speaker, 15 years ago an all-Party committee of this House recommended unanimously that tobacco advertising be banned. Since then some 300,000 Canadians have died from tobacco-related diseases. In short, tobacco use has been responsible for more deaths than all the wars, car accidents, epidemics, and illegal drugs in all of Canada's history. Yet, instead of legislating an advertising ban, the Liberal Government of the day permitted tobacco companies to adopt a voluntary code of advertising.
Violations of the code, such as sports sponsorship and advertising near schools, have been rampant, and there are no penalties for violations. Today the Non-Smokers' Rights Association released a study of the extent of these violations. To me the worst is advertising directed to children. While adult men, including some Hon. Members, are wisely quitting smoking, the tobacco companies are going after the youngsters, and the age of the onset of smoking is now down to 12.
The request of the Minister of National Health and Welfare (Mr. Epp) to the companies that they ban the most flagrant abuses has simply been very politely ignored. The tobacco companies know that children smoke the most advertised brands. It is time that the Minister take the advice of every medical association and health advocacy group in the country and bring in legislation for a complete ban on tobacco advertising.



ADMINISTRATION OF JUSTICE


Mr. Sid Fraleigh (Lambton-Middlesex):: Mr. Speaker, today a blow was struck for the justice system in Canada. I want to express my appreciation, and that of the great majority of Canadians, for the decision of the Minister of Justice (Mr. Crosbie) to return a convicted killer, Joseph Kindler, to the United States where he will meet with the consequences of the crimes he committed in that country. I am sure the

January 21, 1986
Canadian public will support the Minister's decision to ensure that Canada does not become a haven for those who have committed murder in another jurisdiction. Since the crime was committed in the United States, the laws of the United States should apply.
With his decision the Minister of Justice has shown Canadians that our system of justice is prepared to take difficult decisions to ensure that those pursuing criminal activities in other countries will not have Canada to turn to in an attempt to escape the consequences of their actions. 1 join with many Canadians in thanking the Minister of Justice for reaffirming our faith in the principles of law and order that exist in our country.



QUEBEC CARNIVAL


Mr. Marcel Tremblay (Quebec East):: Mr. Speaker, the headquarters of the Quebec Carnival are situated in my fine riding of Quebec East. Believe me, there will be a lot of action there within the next few days!
Quebec Carnival is known internationally and 1 am proud of its slogan C'est chez nous que (a se passe!
As has been the case over the past 32 years, there will be activities for all tastes and all categories within our society. Quebec Carnival, with its hundred of thousands of volunteers, has shown the Quebecers joie de vivre as well as their spirit of tradition, sharing and popular participation.
It is a great opportunity for all Canadians to get to know one another and to share this great event with millions of our American friends who will be there to take part in the various activities or who will watch us through the miracle of TV broadcasting. For the first time, Mr. Speaker, the ABC network will broadcast its Good Morning America program from the Old Capital!
I raise my hat to all the businessmen who are involved in this event. 1 congratulate most sincerely the duchesses who through their charm, personality and talent, will show a facet of the true Quebec life. Best of luck to all of them as they compete to be queen of the Quebec Carnival, something I would not miss for the world.
From Parliament Hill in Ottawa, I wish every success to good old Bonhomme Carnaval, to Carnival president Gilles Savard, and his great team. The Quebec Carnival is another proof that volunteers have a place in our community. Volunteering pays, Mr. Speaker!

A warm welcome to all Canadians to Quebec's capital-


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



PUBLIC SERVICE


Don Boudria: Mr. Speaker, during the 1984 election campaign the Leader of the Conservative Party sent a letter to the public servants of Canada. 1 will read to you one such letter that was sent to Mr. Jack Donegani, President of the Professional Institute of the Public Service of Canada. It says in part:
A PC government will negotiate directly with public service unions and associations toward the establishment of an improved collective bargaining system based on the provisions of the Canada Labour Code.
It says further:
We will pursue joint bargaining as a means of achieving greater fairness and efficiency in the collective bargaining process.
What a difference a year makes, Mr. Speaker. During the year 1985 some 2,464 employees of the Public Service of Canada were declared surplus to the Government's need. The Government went out of its way to tell the public servants of the country that it would help them to relocate and find other jobs within the Public Service. As of January 3, 1986, 1,999 of those employees had yet to be relocated. The failure rate of the Government in terms of relocating public servants to other jobs within the Government has been in the order of 80 per cent.
It is a disgrace. Perhaps the Minister of Justice (Mr. Crosbie) said it best during the election campaign when he said to the people of Canada and to the media: "If the people of this country knew what the Progressive Conservatives wanted to do, we would never get elected".



THE ECONOMY


Mr. Gordon Taylor (Bow River):: Mr. Speaker, workers in Canada know that if they continually spend more than they make they will end up in the poor house. Businessmen who spend beyond their income, even though the expenditures are for good purposes, will go bankrupt and lose everything they have. For many years the Government, under the Liberals, and aided by the NDP, spent millions of dollars that it did not have, and now $1 out of every $3 collected in taxes goes to pay the interest only, without reducing the debt that was built up through their extravagance.
If this borrowing continues, the interest will increase until we are paying $2, then $3 out of every $3 collected, and then $4, until our credit is ruined and we cannot borrow any more and we can't pay our bills. We will have to cut out donations for worthy causes and we will have to cut pensions for the
January 21, 1986

aged, pensions for the crippled, and family allowances. That is why millions of people in Canada elected the PC Government with a mandate to cut the deficit and to live within our means. Yet every time we make a cut the Liberals and the NDP yell their heads off.
The Prime Minister (Mr. Mulroney), the Minister of Finance (Mr. Wilson), and the PC Party have a vision of a prosperous Canada, not a bankrupt nation. We can make sacrifices now and reduce the principal and interest and eventually eliminate the debt and build a nation, or we can go on in Liberal and NDP fashion and borrow ourselves into oblivion.


Some Hon. Members:: Hear, hear!



PRESENCE IN GALLERY OF MINISTER OF INDUSTRY, PRINCE EDWARD ISLAND

Mr. Speaker:: May 1 indicate the presence in our gallery today of the Minister of Industry for Prince Edward Island, the Hon. Wilbur MacDonald.


Some Hon. Members:: Hear, hear!



ORAL QUESTION PERIOD

['I have the honour to inform the House that the petitions, with the exception of eight, presented by Hon. Members on Monday, January 20, 1986, meet the requirements of the Standing Orders as to form.\nCertain petitions presented by the Hon. Member for Ottawa-Vanier (Mr. Gauthier), one petition presented by the Hon. Member for Saint-Jacques (Mr. Guilbault), and one petition presented by the Hon. Member for Winnipeg North Centre (Mr. Keeper) do not meet the requirements of the Standing Orders as to form.\nThe petition presented by the Hon. Member for Victoria- Haliburton (Mr. Scott) by filing with the Clerk of the House also meet the requirements of the Standing Orders as to form.\nI am also in a position to respond to a point of order raised by the Hon. Member for Hamilton Mountain (Mr. Deans) on Tuesday, January 14, 1986.']
Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, I had a question for the Minister of Energy, Mines and Resources who, I was advised, will be in the House. I will wait until she gets here.



Mr. Russell MacLeilan (Cape Breton-The Sydneys):: Mr. Speaker, my question is directed to the Deputy Prime Minister. The Minister of Fisheries and Oceans is being sued by Kristan Seafoods International Inc. for issuing a licence, against the advice of his senior bureaucrats, to Mother Snow's Fine Foods Ltd. for a test clam fishery off the coast of Cape Breton Island.
Were the Minister and the Government not aware, when this licence was issued, that three of the five principals had outstanding judgments against them, and in fact two of the principals themselves are being sued by Kristan Seafoods for representing themselves as working for Kristan Seafoods while
Oral Questions
gathering information for their own licence application and leaving Kristan Seafoods high and dry?


Hon. Erik Nielsen (Deputy Prime Minister and Acting Minister of Fisheries and Oceans):: Mr. Speaker, that is quite a statement by the Hon. Member. 1 will provide the answer as Acting Minister of Fisheries and Oceans. The short answer is that two licences of an available six were granted to Mother Snow's after the regional director had interviewed and received applications from three, I believe.
The regional director in Halifax issued those two licences.


Russell Gregoire MacLellan: Quite a situation indeed, Mr. Speaker.


ALLEGED POLITICAL PRESSURE
Russell Gregoire MacLellan: Mr. Speaker, Kristan's statement of claim against the Minister states that the Minister did know of the action against the two principals when the licence was issued by Fisheries and Oceans.


Mr. Speaker:: Order. Question, please.


Russell Gregoire MacLellan: Were not the Minister and the Government led to issue this licence because of political pressure, because one of the five principals is Richard Logan, former chief of staff to the ex-Minister of Defence, the Member of Parliament for Cumberland-Colchester?


Erik Nielsen: Mr. Speaker, those are definable only as allegations by the Hon. Member. I am surprised that he would make such allegations knowing, as he obviously does, that an action to which he has referred has been commenced in the courts by Kristan. It is totally improper for the Government or indeed any Member to be raising questions that are sub judice.


INCREASE IN PRICE OF GASOLINE IN VANCOUVER
John Napier Turner: Mr. Speaker, my question is directed to the Minister of Energy, Mines and Resources. Last March when she announced her Energy Accord, she told me, as reported in Hansard on March 29, that motorists would benefit from any decline in world oil prices. According to the figures from her Department, world oil prices have fallen from $28 U.S. a barrel when she made that announcement to $20.50 U.S. a barrel today.
In Vancouver, a city which both she and I have the honour of representing, motorists paid 47.3 cents a litre for gas in March. Today Vancouverites are paying 56.7 cents per litre; that is an increase of 20 per cent. Why are the people of Vancouver paying 20 per cent more to fill up their tanks when world oil prices have fallen 25 per cent in the same period?

January 21, 1986
Oral Questions


Hon. Pat Carney (Minister of Energy, Mines and Resources):: Mr. Speaker, the Right Hon. Member has correctly indicated that oil prices have fallen from $28 per barrel internationally to $20 per barrel today, but he has neglected to say that that decrease took place only in the last few weeks. Actually oil prices rose toward the end of last year, and they historically stay high during wintertime. Therefore the decrease in the international price of oil which we are experiencing now will not show up at the pumps until a few months from now when the oil is moved to the pumps.


COMPARISON WITH UNITED STATES PRICES
John Napier Turner: Mr. Speaker, returning to the Minister's own figures, prices at the pump are down 2.8 per cent in Los Angeles over 12 months, down 3.7 per cent in Detroit, down 2.1 per cent in Seattle, up 14.9 per cent in Calgary, up 15.2 per cent in Toronto, and up 23 per cent in Saint John, New Brunswick. In view of the fact that the Canadian Government has raised taxes at the pump 58.1 per cent in those 12 months, the same period, why are Americans benefiting from falling oil prices while Canadian motorists are taking it on the chin?


Pat Carney: Mr. Speaker, the answer is that the Americans were lucky enough not to have a Liberal administration-


Some Hon. Members:: Hear, hear!


Some Hon. Members:: Oh, oh!


Pat Carney: -such as the one which left this Government with such a massive deficit that we need those taxes as revenues to pay it down.


John Napier Turner: I have been talking about the last 12 months, a period in which this Government has been in power. The Minister's bravado does not fool anybody, and the arrogance is becoming contagious along those front benches, absolutely contagious.


EFFECT ON TOURIST INDUSTRY
John Napier Turner: Mr. Speaker, does the Minister realize that in six months British Columbia ran up a $200 million tourist deficit, largely attributable to higher gas prices, and that the outrageous gas prices in British Columbia are jeopardizing the future of Expo 86?


Pat Carney: Mr. Speaker, it is so typical of a Liberal to be negative toward Expo 86, which will be the best thing that ever happened to our province.


Some Hon. Members:: Hear, hear!


Mr. Axworthy:: We built it.


Mr. Rossi:: You are on your way out, Pat.


Ms. Copps:: A cabinet shuffle.


Lloyd Axworthy: Talk about being full of gas.


Mr. Speaker:: Order, please.


INCREASED GASOLINE TAXES
Mr. Ian Waddell (Vancouver-Kingsway):: Mr. Speaker, my question is directed to the Minister of Energy, Mines and Resources. I would like to follow up on that line of questioning and ask is she aware that in her own riding of Vancouver Centre taxes have gone up 2.8 cents per litre over the period the Conservatives have been in power, and pump prices have gone up 3.4 cents per litre, so that gasoline prices have gone up over 6 cents per litre. Why did the Minister tell me yesterday that it was only federal and provincial taxes that were responsible for gouging the consumer?
Hon. Pat Carney (Minister of Energy, Mines and
Resources): Mr. Speaker, Governments do not set the price of gasoline. Possibly under a socialist Government they would set the price of gasoline, but under a market system the price of gasoline goes up and down with the market.


Mr. Tobin:: Then why has it not gone down?


Pat Carney: I point out again that the extra taxes imposed on gasoline were put on by this administration to help pay for some of the social services that Canadians want.


Ian Gardiner Waddell: Governments do not set the price of gasoline; six oil companies do that, and the Government should do something about it.


TIME LAG BETWEEN WORLD AND CANADIAN PRICES
Ian Gardiner Waddell: Mr. Speaker, my supplementary question is for the same Minister. If she continues to predict that world oil prices will go down, and therefore will be reflected at the pump, what will she do to stop this time lag to make the Canadian oil industry more competitive and prepared to react to world prices going down? Is she prepared to do something about the competition in the oil industry?


Mr. Deans:: A lack of competition.
Hon. Pat Carney (Minister of Energy, Mines and
Resources): Mr. Speaker, what I did was to bring in a new energy policy which would make the Canadian market much more responsive to world conditions.


Some Hon. Members:: Hear, hear!


Mr. Broadbent:: We are seeing what happened.


Lloyd Axworthy: Look at the result.


Mr. Blackburn (Brant):: It is going in the wrong direction.
January 21, 1986


PUBLIC SERVICE
Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, my question is directed to the President of the Treasury Board. We know that the public Service Employment Act does not contain any provision under which Government employees can negotiate lay-offs or job security. According to Government policy, 15,000 jobs are to be eliminated within five years, 5,000 this year and 10,000 in the following four years. We know that this would have serious and devastating consequences for public employees, their careers and their families. Would the Minister tell the House whether his Government will make sure that, in the future, collective bargaining will cover this important and necessary provision so that lay-offs and job security can be negotiable?


Hon. Robert de Cotret (President of the Treasury Board):: Mr. Speaker, 1 would like to emphasize the fact that we indicated in the May Budget that 15,000 person years would be eliminated over the next five years, including 5,000 during the next fiscal year. We have negotiated with all our unions a policy concerning employees who might be adversely affected by this program. As I indicated in my press release last Friday, most of them will be re-assigned either in their own Departments or in others. We have already reached agreement with the unions to deal with those employees who might be faced with the sad reality of being laid off during that period.


GOVERNMENT POSITION
Jean-Robert Gauthier: Mr. Speaker, the facts are that there are 2,000 public servants at this time who have been declared surplus by the Government. My question is: has the Minister lost control of the situation, the unions are talking about strike action-


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


Jean-Robert Gauthier: My question is: has the Minister lost control of the situation, unions are threatening strike action. Will the Minister not keep his word on the Government's commitment to public servants and allow negotiations to take place on security of jobs and on the question of designation. And I will say, Mr. Speaker-


Mr. Speaker:: Order.


Robert René de Cotret: Mr. Speaker, the reality is that the Member opposite has lost control of the facts and we set them out very clearly in the Budget last May, that there would be a reduction of 2 per cent in the coming fiscal year in the number of person years in the Public Service, and 1 per cent every year thereafter for four
Oral Questions
years for a total of 15,000 person years. I have said very clearly that we expect that 3,200 people will be placed or replaced within their own Departments, 1,100 will be replaced within other Departments, and that at a maximum 700 would be possibly laid off over the coming year. Those are the facts, and remember them.


TEXTILE INDUSTRY
[Stage Direction]
Hon. Edward Broadbent (Oshawa)*! have a question for the Minister of Regional Industrial Expansion. According to a report that the Minister received before Christmas, Canada is in danger of losing between 50,000 and 60,000 jobs if the quotas are not renewed in the clothing and textile industry. I want to ask the Minister now is the Government prepared to announce that it will be renewing these quotas, and second, in terms of whatever new arrangement is made with the United States concerning trade, will he assure the House that we will not lose the right as a nation to apply such quotas.
Hon. James Kelleher (Minister for International Trade):: Mr. Speaker, I assume that the Hon. Member is referring to an article that appeared today with respect to a Quebec study.


Mr. Clark (Yellowhead):: That was yesterday's question.


James Francis Kelleher: Mr. Speaker, if the Hon. Member is in fact referring to the release of a Quebec study 1 would advise the Hon. Member in the House that we are not aware of that report. We have not seen the report and are not in a position to comment on it until it comes into our possession.


STUDY UNDERTAKEN BY QUEBEC PROVINCIAL GOVERNMENT
John Edward Broadbent: Mr. Speaker, 1 do wish the cabinet Members would pay attention to the questions being asked. I asked the Minister responsible about a report, a copy of which I have and that he received some time ago. I would like to combine both. Since we now know from a federal Government report that 50,000 to 60,000 jobs are threatened by the absence of quotas and since we know, according to a secret study done by the Government of Quebec, about which there has been news in the last 24 hours, that 30,000 jobs in the Province of Quebec alone would be threatened by free trade, has the Minister obtained a copy of the Quebec report? Second, will he assure us that the quotas will be renewed?


Hon. Sinclair Stevens (Minister of Regional Industrial Expansion):: Mr. Speaker, obviously my colleague thought that the Hon. Member for Oshawa was at least current with the reports.
In answer to the Hon. Member for Oshawa, let me assure him, as I assured one of his colleagues yesterday on this subject, that we have this matter under review. We received
9996

Oral Questions
the report to which the Hon. Member is referring last December, and we find it helpful. I would point out to the Hon. Member that the main problem for the textile and clothing industry in Canada comes from such countries as Korea, Taiwan, and Hong Kong, the low-wage countries, and that our feeling is that that is perhaps where the negotiations have to take place to ensure that we will have that viable textile and clothing industry to which I referred yesterday.


EMPLOYMENT OF WOMEN-EFFECT OF IMPORTS
John Edward Broadbent: Mr. Speaker, since we have made no progress in terms of the answers to the specific questions with either Minister, 1 would like now to ask a question of the Minister who is sitting behind the Minister who has just replied, the Minister Responsible for the Status of Women. Considering that 64 per cent of clothing and textile workers are women, and considering that the Minister lectured his caucus colleagues and members of the Cabinet on the weekend about the need for the Government to be sensitive to major economic decisions which impact on women, I would like to ask the Minister if he has urged his cabinet colleagues to renew the quotas and to make sure we do not move into a free trade arrangement with the United States, an action which will release thousands of women onto the labour market.


Hon. Walter McLean (Minister of State (Immigration)):: Mr. Speaker, I would like to thank the Hon. Member for the question. The rather pathetic story is an indication of just how seriously the Government takes the matter. In fact I have had discussions with my colleague, the Minister responsible for trade, about the negotiations and about the importance of having within our negotiating team a unit specific concerns relating to the impact on women of any decisions that are made.


INSURANCE
Mr. Alfonso Gagliano (Saint-Leonard-Anjou):: Mr. Speaker, my question is for the Minister of State for Finance. A group of Canadian trucking companies have been negotiating a loan guarantee with the federal Government in order to acquire an insurance company that has gone bankrupt, but so far there have been no results. Can the Minister do something so that the trucking companies can acquire this loan to buy the company and get liability insurance before it is too late?


Hon. Barbara McDougall (Minister of State (Finance)):: Mr. Speaker, the truckers have been working very hard to come to a solution to their problem and I do commend them for it. We have been working with them on this.
The insurance company in question is in the hands of an Iowa regulator who is liquidating the company at the moment, and our regulators are in constant touch with him. Progress is
being made and we will be in touch with the truckers again on this matter.


REQUEST FOR ACCELERATED NEGOTIATIONS
Alfonso Gagliano: Mr. Speaker, 1 know that the Government has been negotiating but we found out that if, in a couple of days, no decision is reached by the federal Government, the trucking industry will be left without insurance. Could the Minister speed up the negotiations in order to assure that the trucking industry will be able to receive insurance?


Barbara Jean McDougall: Mr. Speaker, speed is not traditionally of the essence in this town, but it is something at which I am working as fast I can.

[ Translation]


CONSUMER AFFAIRS
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, my question is directed to the Minister of Consumer and Corporate Affairs.
The Minister is aware that Canada's Restrictive Trade Practices Commission is examining the circumstances of the sale of Gulf to Ultramar.
Mr. Speaker, my question is as follows. Could the Minister give the House the assurance that the Commission will examine the actions of Shell and Ultramar to find out whether threats made by these companies to close down their refineries in Montreal constitute a violation of Section 32 of the Combines Investigations Act?


Hon. Michel Cote (Minister of Consumer and Corporate Affairs and Canada Post):: Mr. Speaker, 1 believe I gave a satisfactory explanation last week. As I said before, the Canadian Restrictive Trade Practices Commission is responsible for deciding who should be heard when it decides to hold an inquiry, to conduct hearings and to receive testimony. 1 have no control over this Commission, so I have no comments on the subject.


REQUEST FOR PUBLIC HEARINGS
Lorne Edmund Nystrom: I have a supplementary, Mr. Speaker. Will the Minister allow public hearings to be held so that the consumer can be sure that Shell and Ultramar did not try to restrict competition in Quebec in order to increase oil prices and profits?
January 21, 1986


Michel Côté: Mr. Speaker, I merely want to point out that, as I said last week and as I said again yesterday, Quebec consumers have no reason to be worried about security of oil supplies, anymore than they should be worried about artificial price increases, because we are monitoring the situation very carefully.


ROYAL CANADIAN MOUNTED POLICE
Mr. John Nunziata (York South-Weston):: Mr. Speaker, my question is directed to the Solicitor General and concerns the very serious allegations of sexual harassment and sexism within the RCMP. The Solicitor General has initiated an internal investigation but that simply is not good enough. What is necessary is an independent investigation. Will the Solicitor General not agree that an independent investigation into the serious allegations is necessary in order to avoid the possibility of a whitewash and a coverup?


Hon. Perrin Beatty (Solicitor General of Canada):: Mr. Speaker, I suppose 1 have much more confidence in the integrity of the Commissioner and of the senior members of the RCMP than the Hon. Member does.


Some Hon. Members:: Hear, hear!


Henry Perrin Beatty: 1 have asked the Commissioner of the RCMP to look into the particular circumstances. One of the difficulties that we have is that an allegation has been made by people who have not identified themselves. We have done a search to see if there were specific grievances filed by female members of the force alleging sexual harassment. We have not been able to locate any. I can certainly give the undertaking that in any instance in which a member of the force comes forward with an allegation of sexual harassment, it will be fully investigated and, if it is found to be substantiated, then action will certainly be taken.


WOMAN CONSTABLE'S ALLEGATION
John V. Nunziata: Mr. Speaker, surely the Solicitor General is not serious. In September of last year he was made aware of a specific case, the case of Nancy Fehr, Constable No. 32359, who said in a report to the Equality Rights Commission-


Mr. Speaker:: Order, please. Is this a preamble? Just the question.


John V. Nunziata: Is he aware of the allegation made by this particular constable in her statement in the report, of which he should have been made aware, which is as follows:
We have to suffer silently the harassment for fear of being totally ostracized from the working peer group.
Oral Questions
Why was the Minister not aware of this allegation when it was made?


Henry Perrin Beatty: Mr. Speaker, what I indicated was that I am not aware of any grievance filed by members of the force. 1 have asked the Commissioner to investigate the report that 1 have from the RCMP indicating that they cannot find any official complaint received from any regular member. The other undertaking that I have given is that the Government is quite clear in terms of its opposition to sexual harassment in any form and in any instance-


John V. Nunziata: Prove it.


Henry Perrin Beatty: Let the Hon. Member come forward with an allegation by any member of the force. We will ensure that it is fully investigated, and if it is substantiated we will take firm action.


John V. Nunziata: It's right here.


Henry Perrin Beatty: However, rather than simply trying to smear the RCMP, the Hon. Member should be acting with some responsibility and should be undertaking to come forward with hard evidence.


EXTERNAL AFFAIRS
Mr. Jim Fulton (Skeena):: Mr. Speaker, my question is for the Right Hon. Secretary of State for External Affairs. Since George Shultz has now appointed Edgar Dewinski as his U.S. representative for discussions on the two British Columbia boundaries with the United States and since discussions have now taken place between Ottawa and Victoria on this issue, would the Minister be prepared to table in the House the four major components of the Strait of Juan de Fuca boundary and the Dixon Entrance boundary so the people of Canada can know exactly where the Governmenlt stands on this issue, so we do not get sold out like we did in 1903 by Wilfrid Laurier?


Charles Joseph Clark: Mr. Speaker, let me commend the Hon. Member on getting his question out.
I would like to advise him that even now he is a little bit ahead of himself. We are involved in some consultations with the Government of British Columbia to determine whether it would, in fact, be in Canada's interest to respond to the suggestion of the United States Secretary of State that there be preliminary discussions. If there are discussions preliminary to a negotiation, they will be to find out whether Canada s interest would be served by any such negotiation. Only if Canada's interest would be served would we enter into any such negotiation.

January 21, 1986
Oral Questions


James Ross Fulton: I was just reminded, Mr. Speaker, that dead Liberals are okay!


Mr. Hnatyshyn:: You are sitting next to 40 of them!


Some Hon. Members:: Hear, hear!


Mr. Speaker:: Order, please.


DIXON ENTRANCE BOUNDARY
James Ross Fulton: 
Charles Joseph Clark: Mr. Speaker, if dead Liberals are okay, 1 wonder if the Hon. Member could explain why his Party has spent so much of its time and energy in keeping them alive.


Some Hon. Members:: Hear, hear!


Mr. Speaker:: Order, please.


Charles Joseph Clark: Mr. Speaker, if the Hon. Member reads my first answer carefully he will see that I answered his question before he put it, even though he put it late.


AGRICULTURE
Mr. Geoff Wilson (Swift Current-Maple Creek):: Mr. Speaker, my question is for the Minister of Agriculture. It concerns the importation of Common Market beef into Canada. January 16 was the stated deadline for Revenue Canada to file a preliminary report on the dumping of subsidized EEC beef into Canada. Has that report been received? If not, why not?


Hon. John Wise (Minister of Agriculture):: Mr. Speaker, the Hon. Member will realize that on September 24 the Canadian Cattlemen's Association made a request to the Anti-dumping Tribunal to commence a countervail action. That action commenced on October 16 and a preliminary determination was to be issued on January 16. The Deputy Minister Customs and Excise has issued a 45-day extension. The 45-day extension does not mean a 45-day delay but, rather, that the Deputy Minister has requested an extension to seek and assess additional information. He has made a firm commitment to make a preliminary determination before the end of January.


ROYAL CANADIAN MOUNTED POLICE
Sheila Maureen Copps: Mr. Speaker, my question is for the Solicitor General. It deals with the sexist attitudes of the RCMP. I wish to ask him how he can expect the country to accept an internal investigation at a time when he ignores a statement made in a compendium to the report of the Committee on Equality Rights which clearly states on behalf of women in the RCMP:
In situations of harassment my female member friends and myself find that there is no one outside of each other that we can go to for support for fair treatment. If we tell anyone we are seen as crybabies or troublemakers... We have to suffer silently the harassment-


Mr. Speaker:: Order, please. The question has been asked.


Sheila Maureen Copps: How can the Minister-


Mr. Speaker:: The question has been asked.


Henry Perrin Beatty: Mr. Speaker, I will do my best to discern what the question was.


An Hon. Member:: He said it was asked.


Henry Perrin Beatty: It appears to be Liberal Party policy simply to attack the RCMP.
1 have had the opportunity to meet with a number of the female members of the force in my tours across the country. 1 must say that I am particularly proud of them. The force has recruited a tremendous group of female members.


Some Hon. Members:: Hear, hear!


Henry Perrin Beatty: It may very well be that the Hon. Member feels that under the Liberal Government not enough was done in terms of the recruitment of women, and I agree.


John V. Nunziata: This is not a partisan issue.


Henry Perrin Beatty: One of the commitments that we have made is to boost the recruitment of women and natives in the RCMP. It is a commitment which I personally make.


Ian Gardiner Waddell: Then look into this.


Henry Perrin Beatty: Further, 1 have indicated to the House of Commons that in any instance where a member of the force who is prepared to lay a charge of sexual harassment comes forward that we will ensure it is fully investigated. If it is found to be justified, stern action will be taken.


Sheila Maureen Copps: Mr. Speaker, the women of the country and the Liberal Party do not want to be patronized. We want action.


Some Hon. Members:: Hear, hear!


EMPLOYMENT EQUITY LEGISLATION
Sheila Maureen Copps: Mr. Speaker, if the Solicitor General is not prepared to listen to the recommenda-
January 21, 1986

tions of the all-Party Committee on Equality Rights, perhaps the Minister of Employment and Immigration is. I would like to address my supplementary question to that Minister.
The Minister knows that the proposed-


Mr. Speaker:: Order, please. This is now becoming a long preamble. Does the Hon. Member have a question immediately, please?


Sheila Maureen Copps: Yes, Mr. Speaker. Will the Minister of Employment and Immigration announce to the House that she will follow the recommendations of the all-Party committee and not exempt the RCMP and the Canadian Armed Forces from employment equity legislation which is before the House, since that specific exemption is in violation of the Canadian Charter of Rights?


Some Hon. Members:: Hear, hear!


Hon. Flora MacDonald (Minister of Employment and Immigration):: Mr. Speaker, I have been in this House now for almost 14 years.
I waited some 13 years sitting on the opposition benches for the Government of the day-in fact, pleading with it-to bring forward employment equity legislation. I am pleased and proud that this Government has finally brought employment equity legislation into being. I hope that Hon. Members opposite will see that it receives quick passage.


Some Hon. Members:: Hear, hear!


PUBLIC SERVICE
Mr. Mike Cassidy (Ottawa Centre):: Mr. Speaker, my question is directed to the President of the Treasury Board. It also concerns women workers and, in particular, women workers in the Public Service of Canada, clerks, messengers, and other support staff, who will be laid off by the Government by the thousands over the course of this year. The Minister will know that thousands of people were demonstrating across the country today for that very reason.
Is the Minister aware that the information collected by the union has led the Public Service Alliance to conclude that 3,500 federal employees will lose their jobs and be out of the Public Service by the end of this fiscal year? Will he explain how that can be reconciled with the figure of 700 which he gave last Friday?


Robert René de Cotret: Mr. Speaker, I think I have already responded to that question. It is quite clear from our manpower planning exercise that we will reduce the number of person-years in the Public Service, as we said in the last Budget, by 5,000 over the next fiscal year. We expect that 3,200 will be relocated within their existing Departments, 1,100 will be placed in other Depart-
Ora/ Questions
ments throughout the Public Service, and at a maximum 700 may be facing lay-offs. Those are the numbers.


REDUCTION BY ATTRITION
Michael Morris Cassidy: Mr. Speaker, is the Minister aware that his estimate amounts to only three-tenths of 1 per cent of the employees of the federal Public Service of Canada?


Ramon John Hnatyshyn: Are you aware?


Michael Morris Cassidy: Could he say why it would not be possible, if those cuts are to be achieved this year, to achieve them by attrition so that the Government can, in fact, guarantee federal public service employees, who do a fine job, the job security they seek?


Robert René de Cotret: Mr. Speaker, I repeat that we had lengthy discussionss with the unions last spring, to formulate a policy for redeployment in the work place to minimize the impact of any employment cutbacks that might occur. Listen, this is a serious matter. I think that we must show every consideration for people who might be displaced. A policy was agreed on with the unions to try and minimize the impact. As 1 said before, this impact will affect a maximum of 700 employees, and we are still trying to reduce that impact, and we hope to be able to re-hire these people in some way-


Mr. Speaker:: Order. The Minister may want to finish that answer under Statements. The Hon. Member for Western Arctic.


EXTERNAL AFFAIRS
Mr. Dave Nickerson (Western Arctic):: Mr. Speaker, my question is for the Secretary of State for External Affairs.
In view of the turbulence in South Yemen, could the Minister advise the House respecting the safety of Canadian citizens in that country and of any arrangements which might have been made for their removal?


Charles Joseph Clark: Mr. Speaker, as of noon today there was one Canadian in Aden, an employee of the UNDP Organization, who had requested to be left there who has now requested to be assisted in leaving. We are assisting in that leaving. There are 10 other Canadians in the country in the oil fields, far from the battle and violence. They are judged to be safe. If our judgment of

January 21, 1986
Oral Questions
that situation changes, we will act to help them leave South Yemen.


TEXTILES AND CLOTHING
Lloyd Axworthy: Mr. Speaker, my question is directed to the Minister of Regional Industrial Expansion.
We know that his department has prepared special studies on how free trade with the United States would affect the clothing and textiles industry.
Does the Minister intend to release these studies and the findings on the impact that free trade with the United States will have on Quebec workers?


Sinclair McKnight Stevens: Mr. Speaker, when I saw the Member rise and say he had a question for me, 1 thought he was going to comment on the 82,000 jobs that were created in the province of Quebec during 1985.


Some Hon. Members:: Hear, hear!


John Edward Broadbent: You really thought that, did you?


Sinclair McKnight Stevens: In answer to the specific question finally asked by the Hon. Member, I would like to inform him first that there is no special report that he refers to in our Department.
As far as the textile and clothing industry is concerned, it is something we have had under review. With the multifibre negotiations coming up this summer, we feel that Canada's negotiation posture must be identified as one that will ensure the jobs now being shared by Canadians in the textile and clothing industry will, in fact, continue.


Lloyd Axworthy: The Minister, Mr. Speaker, I know has been absent for a long time but his Department has prepared sectoral studies on the impact of free trade on the textile and clothing industry.


MINISTER'S POSITION
Lloyd Axworthy: Mr. Speaker, I would like to ask the Minister an important supplementary. Last May in an interview with The Financial Post he indicated that it was his intention in industries, such as textiles-


Mr. Speaker:: Order, please.


Lloyd Axworthy: -to guarantee 30 per cent to 40 per cent of the domestic market-


Mr. Speaker:: Order, please. The Hon. Member knows that I am trying not to allow-


Lloyd Axworthy: -I am asking a supplementary.


Some Hon. Members:: Sit down.


Mr. Speaker:: Order, please. Order. I am perfectly happy to let the Member put his supplementary but I am trying not to allow preambles to supplementaries. Just a question, please.


Lloyd Axworthy: Mr. Speaker, does the Minister intend to live up to the commitment he made last May to preserve 30 per cent to 40 per cent of the domestic market in textiles for Canadian manufacturers?


Sinclair McKnight Stevens: Mr. Speaker, the Hon. Member is, of course, taking something completely out of context. The reference he is making was a reference that I made in the article he has referred to in the context of the tremendous penetration which the previous Government allowed in the textile and clothing industry in Canada from foreign importation.


John Edward Broadbent: What are you going to do about it?


Sinclair McKnight Stevens: It jumped 20 per cent, 25 per cent a year. What the Member is now referring to is a comment 1 made that I thought the textile and clothing industry should be allowed to enjoy a fair share of the Canadian market in relation to the total domestic product.


Lloyd Axworthy: That is not what you said.


INSURANCE
Mr. Iain Angus (Thunder Bay-Atikokan):: Mr. Speaker, my question is for the Minister of State for Finance. This morning the Minister met with the Federation of Canadian Municipalities who came to her asking for federal leadership in what is a national crisis in the insurance industry.
Will the Minister indicate whether she is supportive of the request to have a full federal-provincial inquiry into the state of the insurance industry as requested by the Federation of Canadian Municipalities?


Barbara Jean McDougall: Mr. Speaker, as I told the Association, at this stage nothing is off the table if it helps us reach a solution.
We agreed, and I think they announced later at their press conference, to push forward with a co-operative investigation by the industry and by the Superintendent of Insurance, spearheaded actually by the Association of Canadian Municipalities, so that we can put a focus on exactly what the problem is.
January 21, 1986

What we are trying to do is roll up our sleeves, deal with the very specific problem, and come up with a quick solution.


MUNICIPALITIES' DIFFICULTIES IN SECURING LIABILITY COVERAGE
Iain Francis Angus: Mr. Speaker, will the Minister be as hard-headed in dealing with the problem of municipalities that she suggested in the House yesterday with respect to the sports governing bodies to ensure in the short term municipalities can get insurance at rates they can afford and the coverage they need in order to continue the programs they offer? Will she agree to do that?


Barbara Jean McDougall: Mr. Speaker, I think it is very important that the municipalities continue to offer their services to the public. To the extent that is affected by insurance, we are working with them toward a solution. I think the Hon, Member will find they said that we had a very positive meeting.


CANADIAN NATIONAL RAILWAYS
Brian Vincent Tobin: Mr. Speaker, my question is for the Minister of Transport.
This morning in Newfoundland Mr. Hubert O'Reilly of Cornerbrook, President of the United Transportation Union, issued a public statement contradicting the claim of the Minister of Transport yesterday in this House that the Government had consulted unions in Newfoundland on the future of the Newfoundland Railway. Mr. O'Reilly says he has never heard from the Minister or anyone in his Department. Why has the Minister misled the House of Commons with regard to this matter?


Some Hon. Members:: Oh, oh!


Brian Vincent Tobin: When will the Minister be undertaking the kind of real consultation that he purported yesterday in this House was under way?


Hon. Don Mazankowski (Minister of Transport):: Mr. Speaker, perhaps 1 might invite the Hon. Member to telephone Mr. Mike Walsh of BRAC. He will set the record straight for him.


MAINTENANCE PROGRAM
Brian Vincent Tobin: Mr. Speaker, that is the same kind-


Some Hon. Members:: Oh, oh!


John Edward Broadbent: Why don't you give him the telephone number?


Mr. Speaker:: Order, please. Just a supplementary question.
Oral Questions


Brian Vincent Tobin: Unfortunately the Prime Minister's style is rubbing off on the Minister of Transport. BRAC is not the same as the United Transportation Union. They have not heard from the Minister, and you misled the House yesterday-


Some Hon. Members:: Order.


An Hon. Member:: Next question.


Mr. Speaker:: I recognize the Member for just an immediate supplementary, and no more, please.


Brian Vincent Tobin: Mr. Speaker, is the Minister aware that Terra Transport in Newfoundland has cancelled its maintenance program in spite of the fact that 57 bridges on the line between St. John's and Port au Basques have deteriorated to the point where "Go Slow" orders of 10 miles an hour have been issued in order for trains to go over those bridges? Is the Minister aware of that?


Mr. Crosbie:: Make haste slowly.


Donald Frank Mazankowski: As 1 said yesterday, Mr. Speaker, we are examining the whole issue of transportation in Newfoundland. We are discussing it with the province, with members of the unions and other interested people. If the Hon. Member does not get a hold of Mike Walsh, he might try to get a hold of Fred Chancey who has also been involved in the discussions.


PENITENTIARIES
Mr. Alan Redway (York East):: Mr. Speaker, my quetion is for the Solicitor General. The Solicitor General is aware that he has been warned a number of times concerning the threat of serious violence at Kingston Penitentiary. Could the Solicitor General advise the House what steps he is taking with respect to this problem?


Henry Perrin Beatty: Yes, Mr. Speaker. One of the first prisons that 1 had a chance to visit as Solicitor General was Kingston Penitentiary. As the Hon. Member will appreciate, one of the serious problems we have there is a building that is extremely old which was severely damaged in a riot in 1971, and it is a protective care maximum security institution.
As a result of an incident that took place last fall, we had an investigation. A report was received by the Commissioner of Penitentiaries and myself just last week. We are taking a look at it at the present time. I had the opportunity yesterday to meet with Professor Hill of the correctional law projects at Queen's University. I am looking forward to meeting him in a few week's time to discuss the matter further.

Point of Order-Ruling of Mr. Speaker COMMUNICATIONS


BELL CANADA-REPORTED PLAN TO REPLACE FLAT RATE LOCAL TELEPHONE SERVICE
Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I would like to direct a question to the Minister of Communications. Is he aware that for three years Bell Canada has been actively planning to abolish the flat rate local telephone service, which led, as the Minister knows, to almost universal use in Ontario and Quebec, and planning to replace it with a pay-by-the-call system? This will cost local residents millions of dollars in extra charges. If the Minister is aware of the plan, what does he propose to do about this very backward step by Bell Canada?


Hon. Marcel Masse (Minister of Communications):: Mr. Speaker, like the Hon. Member, I read about this matter in the press, and it seems to me that the responsibility for defining and analyzing such policies lies primarily, as everybody in Parliament knows, with the CRTC.


CLERK OF PETITIONS' REPORTS
Mr. Speaker:: I have the honour to inform the House that the petitions, with the exception of eight, presented by Hon. Members on Monday, January 20, 1986, meet the requirements of the Standing Orders as to form.
Certain petitions presented by the Hon. Member for Ottawa-Vanier (Mr. Gauthier), one petition presented by the Hon. Member for Saint-Jacques (Mr. Guilbault), and one petition presented by the Hon. Member for Winnipeg North Centre (Mr. Keeper) do not meet the requirements of the Standing Orders as to form.
The petition presented by the Hon. Member for Victoria- Haliburton (Mr. Scott) by filing with the Clerk of the House also meet the requirements of the Standing Orders as to form.
I am also in a position to respond to a point of order raised by the Hon. Member for Hamilton Mountain (Mr. Deans) on Tuesday, January 14, 1986.



POINT OF ORDER


Mr. Speaker:: I have had the opportunity to review the representations made to the Chair on Tuesday, January 14, 1986, by the Hon. Member for Hamilton Mountain (Mr. Deans) and the Hon. Member for Windsor West (Mr. Gray) regarding the televising of the proceedings relating to the joint
address of the Prime Minister of Japan. May I say to the House that I have also had the last seven joint addresses to the House reviewed, going back to May 5, 1980, when Prime Minister Ohira addressed the House. The review demonstrates that all the joint addresses by visitors to this Chamber since 1980 were televised in the same style and format. In every instance there were a number of what I could call cut-away shots taking in the reaction of such persons as the Prime Minister, the Leader of the Official Opposition, the Leader of the New Democratic Party, the spouses of the visiting dignitaries as well as other dignitaries in the Chamber.
Whether this method of televising special events constitutes a breach of the guidelines and is therefore out of order is a difficult question. In the first place, when the existing guidelines for broadcasting were agreed to in 1977, the coverage of special events was not addressed. In the second place, the standard reference used in House Orders for such events is not as clear as both I and the Hon. Member for Windsor West had thought. The words of the Order are that the speech, and 1 quote, "be made available to the media for transmission in the usual way", by the House of Commons broadcasting system. I ask myself, is it the transmission that is available in the usual way or is it the method of broadcasting that is to be followed?
The Hon. Member for Hamilton Mountain is perfectly correct when he requested that the guidelines be followed or changed. On May 28, 1985, on a similar paint of forder I asked that the reform committee inquire into this matter. Again, I strongly urge the Standing Committee on Procedure and Organization to consider at least the specific question of what guidelines the Broadcasting Branch should operate under for special events such as joint addresses. I should indicate to the House that I intend to write to the committee on that matter.


BUSINESS OF THE HOUSE
Ramon John Hnatyshyn: Mr. Speaker, I wanted to announce the business for tomorrow of which I have already informed the Opposition House Leaders. The business tomorrow will concern Bills relating to amendments to the Divorce Act and ancillary legislation, including Bills C-46, C-47 and C-48. I hope we can make progress on those important items of legislation tomorrow.


Ian Deans: Mr. Speaker, I wonder if I might ask the Government House Leader whether it is still the Government's intention to prorogue early in February.


Some Hon. Members:: Oh, oh!


Ramon John Hnatyshyn: Mr. Speaker, the premise of the question is of course incorrect. It is a fiction of the Hon. Member's very vivid imagination which is manifested by a lot of white hair.
January 21, 1986



ROUTINE PROCEEDINGS


Nelson Andrew Riis: Mr. Speaker, it is my pleasure to table petitions signed by a number of individuals who oppose the recent increases in the excise tax on automobile fuel which has been levied to pay for the tax giveaways to the oil companies in the Western Accord.


Mr. Fernand Robichaud (Westmorland-Kent):: Mr. Speaker, it is my duty to table another petition today from people in a number of communities in New Brunswick including Moncton, Richibucto, Buctouche, Salisbury and Sussex. Mr. Speaker, these people are worried about the situation at the CN shops, and the purpose of their petition is to ensure that the Government understands how important the jobs in Moncton are.


Sergio Marchi: Mr. Speaker, I have a petition from residents of my riding as well as ridings across Metropolitan Toronto who protest the sale of de Havilland to Boeing. They urge the Prime Minister (Mr. Mulroney) and his Government to maintain an active and effective Canadian interest in such a vital area of our economic life.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Doug Lewis (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, I wish to advice the House that the following questions will be answered today: Nos. 407, 408 and 409.


Mr. Cassidy: 1.	For each year since 1970, what was the average annual real rate of interest that (a) was earned (ft) the actuarial valuation of the Public Service Superannuation Account (PSSA) assumed would be earned by the PSSA?
2.	By what amount were the actuarial liabilities of the PSSA for past service increased as a result of changes made in the valuation assumptions on the real rate of interest that would be earned by the PSSA?
3.	By what percentage of contributory payroll were employer PSSA costs for future service increased as a result of changes made in the valuation assumptions on the real rate of interest that would be earned by the PSSA?
Order Paper Questions
4.	Were representatives of PSSA contributors and pensioners consulted on changes made in the valuation assumptions on the real rate of interest that would be earned by the PSSA and, if not, for what reason?
5.	What are the corresponding answers to parts 1 to 4 with respect to the Canadian Forces Superannuation account and the Royal Canadian Mounted Police Superannuation Account?


Mr. Paul Dick (Parliamentary Secretary to President of the Treasury Board):: Public Service Superannuation Account (PSSA)
1. (a) Average Annual Real Rate of Interest Earnings
Year
Per cent
1971
1973
1975
1977
1979
1981
1983
3.9
0.8
0.9
-3.3
-5.8
-2.7
1.3
-2.0
-0.6
-1.7
-2.6
-0.3
0.8
6.0
7.1
(b) The real rates of interest assumed in were:
Year
1977
actuarial reports for the PSSA since 1970
Per cent
4.0 3.5
3.0
2 and 3. The 1972 PSSA actuarial valuation used a 4 per cent interest assumption. Rates of future salary increases and inflation were not projected.
The 1977 PSSA valuation used assumptions of 6.5 per cent for interest, 5.5 per cent for salaries and an implicit inflation rate of 3 per cent which means that the real rate of interest was assumed to be approximately 3.5 per cent. The effect of assuming a 6.5 per cent interest rate instead of a 7 per cent interest rate (which would have retained a real rate of approximately 4 per cent) was to increase liabilities by about $843 million and current service costs by 1.5 per cent of pay.
The 1980 PSSA valuation assumed a 6.5 per cent interest rate and an implicit 3.5 per cent inflation rate (i.e., about a 3 per cent real rate of interest). The effect of assuming 6.5 per cent instead of 7 per cent for interest rates (which would have retained about a 3.5 per cent real rate of interest) was to increase liabilities by approximately $1,009 million and current service costs by 1.2 per cent of pay.
4. Representatives of PSSA contributors and pensioners were not consulted about the change in real interest rate assumptions used to value the PSS Account. The benefits were not affected by the change in these assumptions. The assumptions were changed to enable realistic cost comparisons with private sector plans. Also, pensions are not negotiable with plan members.

January 21, 1986
Order Paper Questions
5. The real rates of interest earned by the Canadian Forces Superannuation Account (CFSA) and the RCMP Superannuation Account (RCMPSA) are the same as those shown for the PSSA in part 1 of this question.
The corresponding answers to parts 1 to 4 with respect to the CFSA and the RCMPSA are as follows:
(a) CFSA. The real rates of interest assumed in the actuarial reports for the CFSA since 1970 were:
1970	4.0per cent
1975	3.5 per cent
The 1970 CFSA actuarial valuation used a 4 per cent interest assumption. Rates of future salary increases and inflation were not projected.
The 1975 CFSA valuation used assumptions of 6.5 per cent for interest, 5.5 per cent for salaries and an implicit inflation rate of 3 per cent, which means the real rate of interest was assumed to be approximately 3.5 per cent. The effect of assuming a 6.5 per cent interest rate instead of a 7 per cent interest rate (which would have retained a real rate of approximately 4 per cent) was to increase actuarial liabilities by about $419 million and current service costs by 2.1 per cent of pay.
Representatives of Canadian Forces contributors and pensioners were not consulted about the change in the real interest rate assumption used to value the CFS Account. The benefits were not affected by the change in these assumptions. The assumptions were changed to enable realistic cost comparisons with private sector plans. Also, pensions are not negotiable with plan members.
(6) RCMPSA. The real rates of interest assumed in the actuarial reports for the RCMPSA since 1970 were:
1974	3.5 per cent
1979	3.0 per cent
The 1969 RCNPSA actuarial valuation used a 4 per cent interest assumption. Rates of future salary increases and inflation were not projected.
The 1974 RCMPSA valuation used assumptions of 6.5 per cent for interest, 5.5 per cent for salaries and an implicit inflation rate of 3 per cent which means the real rate of interest was assumed to be approximately 3.5 per cent. The effect of assuming a 6.5 per cent interest rate instead of a 7 per cent interest rate (which would have retained a real rate of approximately 4 per cent) was to increase liabilities by about $47 million and current service costs by 2.8 per cent of pay.
The 1979 RCMPSA valuation assumed a 6.5 per cent interest rate and an implicit 3.5 per cent inflation rate (i.e., about a 3 per cent real rate of interest). The effect of assuming 6.5 per cent instead of 7 per cent for interest rates (which would have retained about a 3.5 per cent real rate of interest) was to increase liabilities by approximately $80 million and current service costs by 2.0 per cent of pay.
Representatives of RCMPSA contributors and pensioners were not consulted about the change in economic assumptions used to value the RCMPS Account. The benefits of pensioners
were not affected by the change in these assumptions. The assumptions were changed to enable realistic cost comparisons with private sector plans. Also, pensions are not negotiable with plan members.
PSSA-valuation assumptions on real salary increases


Mr. Cassidy: 1.	For each year since 1970, what was the average percentage increase in real salaries resulting from salary revisions that (a) Public Service Superannuation Act (PSSA) contributors received (b) the actuarial valuations of the PSS Account assumed would be received by PSSA contributors?
2.	By what amount were the actuarial liabilities of the PSS Account for past service increased as a result of changes made in the valuation assumptions on the real salary increases that would be received by PSSA contributors from salary revisions?
3.	By what percentage of contributory payroll were employer PSSA costs for future service increased as a result of changes made in the valuation assumptions on the real salary increases that would be received by PSSA contributors from salary revisions?
4.	Were representatives of PSSA contributors and pensioners consulted on changes made in the valuation assumptions on the real salary increases that would be received by PSSA contributors as a result of salary revisions and, if not, for what reason?
5.	What are the corresponding answers to parts 1 and 2 with respect to the Canadian Forces Superannuation Act and the Royal Canadian Mounted Police Superannuation Act?


Paul Wyatt Dick: PSSA Contributors
1. (a) Annual increase in real salaries resulting from salary revisions.
Year	Per cent
1970	4.9
1971	0.8
1972	0.7
1973	-1.5
1974	0.6
1975	4.6
1976	5.2
1977	-4.0
1978	-1.2
1979	-0.8
1980	-0.1
1981	2.7
1982	0.8
1983	0.9
1984	0.2
(b) Actuarial valuations of the PSSA prior to 1977 assumed no real increase in salaries. The 1977 valuation assumed a 2.5 per cent real increase in salaries and the 1980 valuation was based on a 1.5 per cent real increase in salary assumption.
2 and 3. Changes in assumptions of real increases in salaries resulting from salary revisions produced the following changes in actuarial liabilities and current service costs:
Current Service Costs Liabilities	(%ofpay)

1977 valuation	1102 million	2.81980 valuation	- 759 million	-1.4
4. Representatives of PSSA contributors and pensioners were not consulted about the change in real increases in salary assumptions used to value the PSS Account. The benefits were not affected by the change in these assumptions. The assumptions were changed to enable realistic cost comparisons with private sector plans. Also, pensions are not negotiable with plan members.
January 21, 1986

CFSA Contributors
5. Annual increase in real salaries resulting from salary revisions.
Year	Per cent
1970	4.7
1971	6.7
1972	5.2
1973	-2.6
1974	-1.0
1975	4.6
1976	2.1
1977	-2.6
1978	-2.5
1979	-3.4
1980	-5.8
1981	3.2
1982	1.7
1983	1.3
1984	1.1
Actuarial valuations of the CFSA prior to 1975 assumed no real increase in salaries. The 1975 valuation assumed a 2.5 per cent real increase in salaries.
Changes in assumptions of real increases in salaries resulting from salary revisions produced the following changes in actuarial liabilities and current service costs:
Current Service Costs Liabilities	(% of pay)

1975 valuation	224 million	3.9
Representatives of CFSA contributors and pensioners were not consulted about the change in real increases in salary assumptions used to value the CFS Account. The benefits were not affected by the change in these assumptions. The assumptions were changed to enable realistic cost comparisons with private sector plans. Also, pensions are not negotiable with plan members.
RCMPSA Contributors
Annual increase in real salaries resulting from salary revisions.
Year	Per cent
1970	14.0
1971	6.0
1972	3.2
1973	-4.0
1974	4.1
1975	3.8
1976	3.0
1977	-2.1
1978	-2.7
1979	-1.8
1980	2.0
1981	0.2
1982	2.7
1983	1.4
1984	1.2
Actuarial valuations of the RCMPSA prior to 1974 assumed no real increase in salaries. The 1974 valuation assumed a 2.5 per cent real increase in salaries and the 1979 valuation was based on a 1.5 per cent real increase in salary assumption.
Income Tax Act, 1986


Mr. Cassidy: In each of the past 15 fiscal years, what amount of inflationary interest earnings on pensioner credits in the Canadian Forces Superannuation Account, the Public Service Superannuation Account and the Royal Canadian Mounted Police Superannuation Account, has been used to reduce government contributions and amortization payments to these Accounts?


Paul Wyatt Dick: Estimated Amounts of Interest Credits in Excess of Actuarially Assumed Rate Earned by Pensioner Assets
Public Service	Canadian Forces	RCMPSuperannuation	Superannuation	SuperannuationYear	Account	Account	Account$	$	$(000,000's)	1970-71	8.9	16.6	.11971-72	11.8	21.3	.21972-73	15.7	28.1	.21973-74	29.3	36.5	.31974-75	37.7	47.8	.41975-76	50.1	66.4	1.21976-77	62.3	79.8	1.51977-78	76.7	94.7	2.01978-79	98.8	111.1	.91979-80	118.0	126.9	1.21980-81	107.8	111.9	2.91981-82	115.4	103.3	4.51982-83	177.9	149.6	7.01983-84	214.4	178.1	8.91984-85	253.9	206.5	11.0[English]


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


Mr. Speaker:: The questions as enumerated by the Parliamentary Secretary have been answered. Shall the remaining questions stand?


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS

[Stage Direction]
Changes in assumptions of real increases in salaries resulting from salary revisions produced the following changes in actuarial liabilities and current service costs:
Current Service Costs Liabilities	(% of pay)
[Stage Direction]
1974 valuation	81 million	5.71979 valuation	- 67 million	-2.3
Representatives of RCMPSA contributors and pensioners were not consulted about the change in real increases in salary assumptions used to value the RCMPS Account. The benefits were not affected by the change in these assumptions. The assumptions were changed to enable realistic cost comparisons with private sector plans. Also, pensions are not negotiable with plan members.

[Stage Direction]
The House resumed consideration of the motion of Mr. Hnatyshyn that Bill C-84, an Act to amend the Income Tax Act and related statutes and to amend the Canada Pension Plan, the Unemployment Insurance Act, 1971, the Financial Administration Act and the Petroleum and Gas Revenue Tax Act, be read the third time and passed.
[Stage Direction]
January 21, 1986
Income Tax Act, 1986
Mr. Speaker:: When the House rose at one o'clock there were five minutes remaining in the question and comment period following the speech of the Hon. Member for Cochrane-Superior (Mr. Penner). I take it the Hon. Member for London East (Mr. Jepson) was in the middle of a comment. Is that right? No, he had finished. Therefore, we proceed to the reply by the Hon. Member for Cochrane-Superior.


B. Keith Penner: Mr. Speaker, I will reply briefly to the comments made by the Hon. Member for London East (Mr. Jepson). As I recall, he took exception to my reference to certain measures in Bill C-84 as being sneaky in nature. I was of course speaking about the partial deindexation of our tax system. I was pointing out that what begins as a reasonable tax bite in 1985 grows to a pretty significant chunk in 1986; going from about $80 million to $635 million. By 1990 it becomes not a tax bite but a huge tax grab of some $4.5 billion.
I have to be honest with the Hon. Member. I was a little reluctant to use the term "sneaky". However, it was difficult to find another term quite as appropriate. It seems to me that if the Government wanted to be very forthright and not open itself to charges of being sneaky or devious, then it should have said to Parliament that the Government needs additional revenue in 1985 and it was going to ask for a 3 per cent increase. Parliament could have dealt with it on the basis of what the needs were and then granted the money. We could have then looked at the situation in 1986 and the Government could have come back with another 3 per cent or 4 per cent increase, whatever was required, and it could have justified it to Parliament. Instead, the Government chose to remove from our tax system one of the most important reform measures that I think has ever been introduced into the tax system. It is a means whereby we protect taxpayers against inflation so that Governments cannot live off the avails of inflation, as I said in my remarks.
In order for the Government to get more money it has to be forthright and deal with it on a year-to-year basis. I did not like to use that word, as I said. I checked with the Speaker and you will recall that I looked at you quizzically, wondering whether "sneaky" was a parliamentary term. I did not see a negative shake of the head from you, and you and I have very good communication, having served together since 1968. so I was bold enough to carry on and use the word "sneaky". I must say that it is not a favourite word of mine and I was searching for some way to describe the scrapping of one of the most important reform measures in our tax system. I guess I fell a little bit below the line of propriety in calling it sneaky, but I really find it difficult to come to any other conclusion.


James Kenneth (Jim) Jepson: Mr. Speaker, while I appreciate the Hon. Member's penance here before the House, I think I counted sneaky about 20 times in his speech. Methinks thou doth protest too much.
I think it is clear that the people of Canada will not be fooled by this constant repetition of the word "sneaky" in an attempt to erode the credibility of a Government which has
been very forthright in bringing forth positive economic measures for the country which have resulted in unprecedented growth in employment, in a 3 per cent drop in interest rates, in mortgage rates coming down, in new housing starts going up by a significant 26 per cent, in an increase in consumer spending, and in a spirit of real economic confidence in the business community. We are seeing a revival in the country which is unprecedented in the last 20 years. I must confess that I do not understand why we do not have the co-operation of the Liberal Party when we bring such progressive measures before the House.


B. Keith Penner: Mr. Speaker, I certainly must agree entirely with the Hon. Member for London East that the credibility of the Government is on the decline. As a matter of fact, I think it is more than on the decline, I think it is now into a free fall.
I do not know what sort of radical measures the Prime Minister can take-


James Kenneth (Jim) Jepson: Mr. Speaker, I have a point of order.


The Acting Speaker (Mr. Paproski):: Gentlemen, the period for questions and comments is now finished, but I will recognize the Hon. Member on a point of order.


James Kenneth (Jim) Jepson: Mr. Speaker, I certainly did not say that the credibility of the Government was in decline.


Mr. de Jong:: He didn't have to.


The Acting Speaker (Mr. Paproski):: The period for questions and comments is now terminated. I will recognize the Hon. Member for Cardigan (Mr. Binns) on debate.


Mr. Pat Binns (Cardigan):: Mr. Speaker, I am pleased to rise today to speak on third reading of Bill C-84, an Act to amend the Income Tax Act as well as provisions in other Bills including the Unemployment Insurance Act.
Having mentioned unemployment insurance, Mr. Speaker, I will take just a moment to mention that when the budget papers were submitted to the House by the Minister of Finance (Mr. Wilson) he made way for two very important provisions which reflect on the kinds of initiatives the Government is undertaking with Bill C-84.
With regard to unemployment insurance, the variable entrance requirement would have meant that in June of 1985 all workers in Canada would have had to have a minimum of 14 insurable weeks before being able to file an unemployment insurance claim. Of course, that was established under the former Government. Our Government undertook to review that timetable and has, in fact, set the deadline back to the end of December, 1986. That, of course, was a recognition that all areas of the country have not experienced full economic recovery. In my own area in Atlantic Canada, in particular, many good developments have taken place and there is a move toward strong economic development, but many people have still not been able to obtain more than 10 weeks of work.
In the meantime the Government established the Forget Commission on Unemployment Insurance. I am pleased to say
January 21, 1986

that it has been travelling across the country to hear the views of Canadians. In the meantime, another initiative with regard to unemployment insurance which is being carried out by the Government is that the premium rates for employers and employees will remain constant in 1986 even though they were subject to change this year by the legislation of the former Government.
The Bill itself does represent a substantial component of the Government's program of economic renewal for Canadians. The Bill will ensure that economic growth is powered primarily by new initiatives in the private sector. Those kinds of initiatives will be supported, wherever possible, by the Government.
The Bill undertakes a number of amendments which provide important measures to ensure that our economy gets up and is moving in the way in which all Canadians would like to see. One of the most important measures is the lifetime $500,000 capital gains tax exemption provision. There is also a provision with regard to capital tax on larger financial institutions to ensure that large companies in the country pay adequate tax. There are modifications to the rules governing investment in small business by pension and other retirement income plans, on which I will elaborate more in a few moments. There are rules preventing taxpayers from splitting income among family members to reduce tax, again ensuring that the taxpayers of Canada all pay their fair share. There are changes to Revenue Canada's powers to audit and examine taxpayers' books and records, including its powers of search and seizure. These measures touch on a wide variety of issues including tax fairness, fiscal responsibility, taxpayers' rights, and efficiency of. Government programs.
I think that the $500,000 personal lifetime capital gains tax exemption is perhaps the most important and most significant measure in this Bill, simply because it sets the direction and character of the kind of tax system which the Canadian Government wants to encourage. It, of course, recognizes that our economy can be dynamic and productive when the successes of individual Canadians are rewarded.
It is an especially positive step with regard to Canadian farmers because it enables them to reap immediate benefits. Commencing in 1985, the full $500,000 capital gains tax exemption becomes immediately available when a farmer sells qualified farm property. Part of the objective of this particular provision is, of course, to spur investment interest in small and medium-sized businesses in Canada. It is the feeling of the Government that these measures will create new investment income because people have been able to realize those capital gains and are able to turn them into equity in new businesses.
Even in this year significant steps will take place with regard to that capital gains provision. In 1985, the exemption will have a cumulative limit of $20,000 in capital gains. That will increase to $50,000 in 1986, $100,000 in 1987, $200,000 in 1988, $300,000 in 1989, and $500,000 in 1990 and subsequent taxation years.
Another important tool in economic recovery in this Bill, Mr. Speaker, especially as it relates to some of the more
Income Tax Act, 1986
disadvantaged areas of the country, is the special investment tax credit. The fact that an investment tax credit of 50 per cent exists is encouraging new businesses to locate in my own area. I can think of companies that have located in our area specifically because that tax incentive is in place. 1 hate to point out individual companies, but one success story is that of a company called Wevea Canada which is now manufacturing harvester belts in Brudenell, P.E.I. That company exports throughout North America and around the world. 1 am sure that the 50 per cent investment tax credit had something to do with that location. This legislation extends this provision for another year. I am hopeful that other companies will take advantage of that extension in order to reap the tax benefits offered by this particular provision.
The Bill deals not only with economic initiatives, Mr. Speaker, but has taken into account many social needs as well.
It is important to recognize at least some of the inequities that this Bill overcomes. The Income Tax Act currently allows a special deduction to be claimed by disabled persons, but this applies only to those persons who are blind or confined to a bed or wheelchair.
As a result of the proposed changes in the Bill, the definition of disability is broadened to include many severely disabled people in the country who are not necessarily confined to a bed or wheelchair. I believe that this is an important initiative because it is estimated that some 185,000 Canadians will benefit from these expanded provisions in this amendment.
The Government's attempt to attract investment income for small business is also obvious in the changes to the Registered Home Ownership Savings Plan. The objective of the measure is to allow some $2 billion in funds to be injected into the Canadian economy. Individuals will be allowed to withdraw their funds tax free and use that money to stimulate economic growth in the country.
At the time of the Budget some $2 billion had accumulated in RHOSPs and the availability of these funds to Canadians on a tax-free basis, coupled with other incentives in the Budget, represent a very large pool of funds that can be used to support entrepreneurial job-creating investments and the purchase of consumer goods. The Government is considering what pools of capital are available in the country to be invested and thereby stimulate the economy and create jobs.
The Government has certainly recognized in the Bill that there are those in the business and agriculture sector who continue to face economic difficulties. It is for that reason that the small business bond development program has been extended for two years. That program has provided reduced interest rates for farmers and small businesses in financial difficulty, and the Bill will simply ensure that its provisions can still be utilized for the next two years. In fact, Bill C-84 introduces measures which will allow taxpayers who have borrowed under the program either to refinance existing loans or to obtain new loans at any time before 1988, when the borrowers are in financial difficulty.

January 21, 1986
Income Tax Act, 1986
In addition to the benefits to social programs and economic activity, the Bill also provides new provisions for charities. The legislation contains two measures of relevance to registered charities. The first measure permits charities, in 1985 and subsequent taxation years, to engage in non-partisan political activities that are ancillary or incidental to their primary charitable purposes or activities. Currently, the Income Tax Act requires a charitable foundation to be constituted and operated exclusively for charitable purposes and requires all resources of a charitable organization to be devoted to charitable activities carried on by the organization itself. The difficulty is that the common law meaning of charitable purposes or activities has not included political activities. Therefore, a registered charity which engages in such activities could risk losing its tax exempt status.
However, the amendment recognizes that it is appropriate for a charity to use its resources within defined limits for ancillary and incidental political activities in support of its charitable goals. This means that non-partisan political activity in support of the charity's organizational goals is acceptable and recognized in the Bill.
Another major consideration in the Bill is the change with regard to child benefits in the country. The child tax credit will rise by $70 in the 1986 tax year and $35 in each of the tax years 1987 and 1988. The income threshold above which the child tax credit is phased out will be reduced to $23,500 from $26,330. The child tax exemption for children under 18 will be reduced from $710 per child to $560 in 1987; $470 in 1988, and will equal the annual value of family allowance payments in subsequent years. These child tax benefit changes are another social consideration which the Government has included in this Bill.
All of these provisions address a fundamental problem which the Government inherited when it came to office. It is that the country is faced with a substantial deficit which, in the fiscal year ending March 31, 1985, reached $37 billion. The country spent $101 billion providing services and support to Canadians yet brought in revenues of only $64 billion. Not only is the $37 billion deficit unbelievable, it is escalating very quickly. In fact, I believe that the accumulated deficit as of March 31, 1985, reached $190 billion in magnitude. As was pointed out by an Hon. Member earlier today, the country will simply go bankrupt if this situation continues.
I believe the Government has taken the responsible course of action and attempted to reduce expenditures wherever possible while cutting back on government services which have been duplicated or been found unnecessary, as well as increase the cost of some fees where warranted. I believe these steps allow the Government to make a balanced attempt to bring the deficit under control. If we do not accomplish that goal, we will hear economic horror stories that the country has never before experienced.
It is unbelievable to most Canadians that a third of all tax dollars raised last year went to pay interest on the debt. Of course, that debt is a result of the wild expenditures of a Government that thought it could never run out of tax dollars.
Now we are suffering the economic consequence of that philosophy.
Many would suggest that the fact our dollar is not as strong as we would like is due to our large deficit. The Government's attempts at bringing the deficit under control is doing much to stabilize the value of the dollar, and I believe the Minister of Finance will have to continue that course of action.
One of my concerns as a Member of Parliament from Atlantic Canada is that the system used for deficit control is fair to everyone. We have special needs in Atlantic Canada, as do other regions of the country. This means that we must ensure that all new provisions are fair.
That is why I mentioned earlier that I was pleased to see the Forget Commission looking at the unemployment insurance system. If and when changes are made to that system, hopefully they will be fair to Atlantic Canada and other areas with high unemployment. I am pleased that the Government is taking its time to ensure that needless programs are not put in place and that the correct thing is done for all Canada.
It is obvious that I can support the provisions of Bill C-84. It places us on the right course, on the track to economic recovery. I am sure all Hon. Members of the House will want to join the Government in supporting it.


John Kenneth Gormley: Mr. Speaker, by way of a comment, I commend the Hon. Member for Cardigan (Mr. Binns) for his timely and well placed comments. I should like to add a few words in respect of the capital gains tax exemption. Bill C-84 includes the $500,000 capital gains exemption. I am very pleased that this day has come and that this capital gains tax provision will come to its final vote. It has been long awaited in the prairie agricultural community. However, I am disappointed that the Opposition, particularly the New Democratic Party, has attempted for as long as it has to delay passage of this capital gains tax provision. It is lamentable because the delay has added further uncertainty to the prairie agricultural community. Many accountants and tax lawyers have quite rightly had to tell elderly, retiring farmers to hold off because the Bill had not been passed. Despite assurances that it would be retroactive to January 1, 1985, because of the stalling tactics of the Opposition, these elderly farmers were very concerned and have in fact held off making major decisions.
It is with a great sense of pride and accomplishment today that we approach the final vote on this measure to bring the capital gains tax relief of $500,000 to prairie agriculture. It is also a great day for the small business community. This capital gains tax exemption is an act of confidence and of consideration by the Government for the small business people of Canada. I should like to add my further support to it.


The Acting Speaker (Mr. Paproski):: Would the Hon. Member for Cardigan (Mr. Binns) like to comment on the Hon. Member's comments?
January 21, 1986


Patrick George Binns: Thank you, Mr. Speaker. Of course the capital gains provision is one of the most important aspects of the particular Bill. It is something for which the farm community in Canada has been looking for a long time. It came as a surprise to many people in the business community that the capital gains provisions was not only provided for the farm community but in fact was extended to the business sectors of the country. That will have the kind of economic stimulus which the Government thinks Canadians want to see. It will give them an opportunity to see their money reinvested in new initiatives which will create work for Canadians. In fact, that is what the Government has been able to achieve in the last number of months. I think we have had something like 471,000 new jobs created since the Government took office.
In the Province of Prince Edward Island, the labour force last July reached an all-time record level with something like 67,000 people working in our economy out of the total population of soughly 125,000. More people have been drawn into the labour market. Employment has been at an all-time high level. Naturally we are still concerned about some of the high unemployment that still exists and will continue to work hard to see that we tackle existing problems. If the Government keeps on with the kinds of initiatives displayed in Bill C-84, we will see a rosier future.


Brian Vincent Tobin: Mr. Speaker, you are the finest man to have ever occupied the chair in this institution; I wanted to put that on record. I was somewhat surprised that the Hon. Member for Cardigan (Mr. Binns) rose in his place today to defend the tax changes being proposed by the Government. Normally that Hon. Member is one who is clear-headed, fairly intelligent, fairly representative of his region and one who is normally concerned. Perhaps the kind of Atlantic Canada in which he lives is radically different from the one in which I live, but I want to ask him how many people he knows who are jumping up and down in the streets, applauding the $500,000 capital gains provision, which the average citizen in Atlantic Canada cannot even begin to contemplate. It is a wonderful thing if one has millions to trade in the real estate market, in diamonds, in furs or in condominiums. I do not know how many farmers in Prince Edward Island-indeed, tobacco farmers in the Hon. Member's riding-are playing the stock-market or are trading in condominiums, diamonds or furs these days.
Does the Hon. Member agree with a tax regime which will mean, over five years, a 36 per cent increase for those earning $15,000 per year, which is the average in his riding and mine; which will mean a 4 per cent increase for those earning $100,000 per year, which is unheard of in his riding and mine; and which will mean a 2 per cent increase for those earning $200,000 per year, which is what our lucky cousins make on the mainland once in a while, in Montreal or Toronto? For those earning $200,000 per year it will mean a 2 per cent increase in taxes over five years, whereas for those earning $15,000 per year, the kind of people the Hon. Member and I know, the ones who sent us here, it will mean a 36 per cent increase in taxes over that period of time. Did I hear the Hon.
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Member correctly? Perhaps I did not. This is his chance to redeem himself, to beg forgiveness and to clarify the record.
Did l hear him correctly when he said that the budget measure would be good for the people of Atlantic Canada? Did 1 hear him correctly when he said that this was the kind of fair measure he would support and propose for the people of Atlantic Canada? Did I hear him correctly when he said that he represented a riding in Atlantic Canada? Could it be that the ivory tower and the splendour of the House of Commons has confused the Hon. Member? Could it be that the splendour, the carpet and the rich ornaments surrounding us in this place, have changed his mind and made him forget the reality of the people who live by the sea and off the land in Atlantic Canada? Could that be so?


Patrick George Binns: Mr. Speaker, it comes as a surprise to me that the Hon. Member from Newfoundland has not recongnized that many of his own constituents have worked hard over the years and have realized capital gains.


Brian Vincent Tobin: You live in a different world from the one in which I live.


John Horton McDermid: Everybody does.


Patrick George Binns: He suggested that no people in Newfoundland or in Prince Edward Island have in fact been able to gain assets such as a farm or a business operation, at which they have worked hard, day in and day out, over the last 20 years to 50 years. Our Government has simply recognized those people so that they can take their life savings or investments and realize a capital gain. Hopefully that money will then be reinvested in businesses for their sons and daughters. That is the kind of initiative which will get the country going again. If the Government simply takes away all the tax dollars from those people who have realized these gains, it will have simply done nothing to reinvest money in Newfoundland and in Prince Edward Island.
I am disappointed. I thought the Hon. Member recognized the kinds of advantages this provision will provide for his constituents. Perhaps Hon. Members on this side of the House will have to send some material to his constituents pointing out the advantages of this provision, because obviously he has not recognized them.


The Acting Speaker (Mr. Paproski):: If there are no further questions or comments, we will continue with debate.


Sergio Marchi: Mr. Speaker, I feel very honoured to speak on Bill C-84. However, I feel a responsibility as the Member of Parliament for York West to rise in my place and address what is basically a series of inequities. It struck me, as it struck my other colleagues, as very odd for a Member from Atlantic Canada, the Hon. Member for Cardigan (Mr. Binns), to rise in his place and say the things he did. However, I think that has been par for the course, throughout the debates that we have been listening to today. Basically there are two sides to this financial equation that we find, not only in Bill C-84 but in other pieces of legislation such as Bill

January 21, 1986
Income Tax Act, 1986
C-80 and other documents flowing from the Budget that was introduced by the Finance Minister back in May.
Between now and 1990, nearly $37 billion in additional taxes will be collected. It is the largest single tax increase in the history of this country hitting the working and middle-class Canadians, those who can least afford another increase in their taxes. On the other side of the financial equation is that this legislation is allowing the wealthy to get wealthier, and the larger corporations to get even larger through tax gifts in the way of tax exemptions.
In the budgetary measures, for instance, the Minister of Finance (Mr. Wilson) together with the Conservative Government will allow $8.4 billion to go to oil companies before the end of the decade, starting with $124 million this year and ending up in 1990 with more than $2.5 billion. Couple that with the capital gains exemption that was briefly discussed only moments before. By 1990 this will amount to a $4.8 billion gift without any guarantee.
The Hon. Member for Cardigan said that somehow, this exemption is going to be reinvested into the economy, that smaller and medium-sized businesses and companies will prosper from that investment. He knows, and Canadians know that that is simply not true. There are no guarantees in the legislation that if someone shows a capital gain that that money will once again be channelled back into Canada, back into a Canadian company, a Canadian community. The Member for Cardigan and his colleagues did not mention that if someone shows a capital gains increase of some $200,000 there is nothing stopping that person or that corporation from going south of the border and investing in a Florida condominium or in European art. If they do that and money flows out of the country, how is it going to help the riding of the Hon. Member for Cardigan in Atlantic Canada, or those in British Columbia or in my Province of Ontario?
The other interesting aspect that this Government failed to tell Canadians is that with respect to the capital gains exemption, 63 per cent of the benefits from such a piece of legislation go to 4 per cent of Canadians. Yet we have this Government with the temerity to that it will benefit the entire country, that this is going to benefit thousands upon thousands of Canadians. If we look at past statistics, Mr, Speaker, what they are really talking about is 4 per cent of the Canadian population. How more specific, how more elitist can a Government become?
By looking very quickly at the facts and the figures, if you add the gift to the oil corporations and companies and you add the capital gains exemptions, it totals over $ 13 billion in gifts to the wealthier element of Canadian society. It is no wonder then that the Government is making this deficit up by increasing the taxes to over $37 billion by the end of the decade; $11 billion to come directly from the deindexation of personal tax exemptions, as well as removing the $50 tax credit that was available to every single Canadian. That is a shameful movement.
When you have a tax grab coupled with tax incentives for the rich, Mr. Speaker, I ask you, and Canadians are beginning to ask this Government, is that financial equation fair? Of course, you cannot say that it is fair or equitable because if you look at the other provisions you see very simply and very practically the unfairness of the tax measures and the direction that this Government says is an economic recovery.
It was mentioned by my colleague only a few moments ago in terms of the different tax ratios to various elements in our society that if you earn $15,000, by 1990 you will pay 36 per cent more tax. If you earn $30,000, you will pay 15 per cent more tax. If you earn $100,000, you will face a 4 per cent increase. If you are lucky enough to earn $200,000 or more, your increase is limited to 2 per cent. Is that fair, Mr. Speaker? Is it equitable that those individuals earning over $200,000 will face a miniscule increase while the earner with a family who is bringing home $15,000 is being told by this Government: "Listen, Mr. Joe Smith, you will have to salt away 36 per cent more tax by 1990"? Is that fair? Are Canadians going to accept that? I think not.
Look also at partial deindexation of the family allowances that was passed only yesterday, despite opposition from coast to coast and despite vocal opposition from Parties in the House of Commons. By the year 1990 this will amount to $400 million. The Government is removing $400 million from families which rely on that monthly cheque which is a social contract that they have with this country. Look at the pettiness. It is prepared to give the oil corporations $8.4 billion, and yet it moves in the family allowances deindexation area. How shameful. It could have at least given the oil companies only $8 billion and not deindex the family allowance.
We can look at the attempt at deindexation of the senior citizens' pensions as well. The Member across the aisle is upset, and I would be upset too to listen to the truth and see the facts as they are, Mr. Speaker. Our senior citizens were asked to take less money. The Member for Cardigan said that somehow we have to get the deficit under control. No one disagrees with managing our affairs in a proper way. What Canadians are not accepting and do not accept is the fact that some people are paying more of the share. The working class, the disadvantaged and the middle class are being asked to pay for those differences rather than their rich friends, their rich cousins, the rich corporations, the rich multinationals. All Canadians, whether they be poor or middle class, are prepared to shoulder the weight and do what they can in their own areas to help the Canadian economy. What they do not accept is being asked to do more than the wealthier elements in our society. That is unacceptable.
Look at the elimination of the RHOSP, a program that allowed families, particularly the younger families in our country, to salt away a few dollars each year in the hopes of buying that dream home. Well, the Tories took that away. Somehow they said: "No, you can't have those moneys, we have to eliminate the program so you can reinvest into the Canadian economy". Well, you just cannot have it both ways. You cannot expect the people to buy the homes and the
January 21, 1986

consumer products and then take away a program that would allow younger couples to afford a home. This legislation is drawing away consumer power from Canadians. It is taking away money from those who can least afford to give it up and is making their pockets much emptier while making wealthier pockets fuller. This is helping to widen the gap between rich and poor, between haves and have-nots.
Over the Christmas break, results of an interesting study undertaken by Maclean's in co-operation with Decima Research were published. One of the major findings in that national study was the fact that a significant number of Canadians are growing more concerned about the differences between the rich and the poor. Simultaneously, they are concerned that there is coming into being a well defined stratification of different socio-economic classes. They are equally concerned that the Conservative Government cannot bridge that gap. The Conservative Government is seen as the one that is widening the gap and playing to its special constituencies. I would suggest that in the years to come, the perception highlighted by that study will be dominating discussion in the House.
In the past, we may have had our differences when it came to provincial issues, regional issues and even linguistic issues. However, what we have not seen and what we should not see in the future is a debate based upon the classification of economic wealth. We seen in other parts of the globe well defined class struggles and Canadians fear that this is beginning to take hold in Canada. One can see why that fear is beginning to be felt by Canadian families. That reason can be shown by the examples I outlined a few moments ago.
If we begin to increase the taxes paid by a family earning $15,000 per year by 36 per cent and the taxes of a family earning $200,000 per year or more by only 2 per cent, of course there will be a backlash. Of course there will be protests from those earning $15,000 annually who will not be able to take it any more and will not be able to shoulder the Government's deficit reduction plans by themselves. We need the help of all Canadians to shoulder the weight of the Government's economic renewal, if that is in fact what it is doing, and I think it is not.
The Government Party promised Canadian prosperity and economic renewal. What Canadians forgot to ask is economic prosperity for whom. Where are the provisions in this legislation that indicate that we as the Parliament of Canada are honestly looking at the interests of all Canadians and of all regions? We cannot say that we are.
We could go to any constituency and ask the senior citizens what they thought was fair about the attempt at deindexing their pensions. We could ask any individual earning $15,000 per year whether he thinks it is fair that he should shoulder an increase in tax payments of almost 40 per cent. We could ask any Canadian mother who is receiving a monthly cheque whether or not she would like to continue to receive the entire amount. We could ask any Canadian family if it should be
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prepared to pay more than its own fair share and more than the energy corporations that are receiving $8.4 billion bonanzas are paying. The answers are very obvious.
We cannot talk of equity and fairness when talking in terms of the numbers to which I have referred. That is the message Canadians are sending the Government. That is why we saw a serious slippage in the Government's popularity in the latest polls. That was not surprising.
Government Members went across the country, constituency to constituency, region to region, promising every interest group its fair shake during the election campaign. Of course, members of the middle and working classes decided to give the Conservatives a try. However, what has been delivered to them? What are they faced with? They are faced with inequity. They are faced with a Conservative Government which is historically preoccupied with the exact constituency to which this piece of legislation delivers. This is proving the old saying that Tory times are tough times. They are not tough times for the multinationals or for those who can afford to benefit from the capital gains tax exemption but for the majority of average working Canadians who put in eight-hour days and ask themselves if they are going to make it this month.
There is going to be a tremendous revolt in this country. I am not trying to sound alarmist. I am simply trying to follow the trends that are emerging. There is going to be a tremendous revolt if the Government continues in the economic direction it is taking because it is a perverse direction. It is a direction that alienates and ignores the majority of average working Canadians. The Government points out that 400,000 jobs have been created since it took office. I would like to see the real statistics. The bulk of those jobs are part-time jobs, jobs without any benefits and short-term rather than long-term jobs.
The real problem with the Government and with this piece of legislation is that average Canadians perceive themselves as being hoodwinked. If the Government were to say that we are in tough times and that in the next five to six years, we will all have to make sacrifices and work together in order to secure a healthy and prosperous future, that would be fine. That would be acceptable not only by the Government but by opposition Members whose role it is to ensure effective and proper Government. That is a language that Canadians would not only understand but would be prepared to accept. However, they are not prepared to accept a message from the Government indicating that the poor, working and middle classes are going to be taxed more and that those who already have a lot are going to get more. That is not a partnership. That is not collective action. That is an elitist, regressive and historically Conservative approach to the economic woes of Canada. It is not an approach that will make things better.
The Government may try to cover up in the short term but I assure the Government that that is not a long-term solution and it is not a solution that bodes well for the socio-economic forces in Canada. If the Government continues to move in this direction, it will fuel the fire of unfairness. There will be more class struggles, something that we have been able to proudly

January 21. 1986
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ignore while seeing on television these class struggles occurring in other parts of the world, including Great Britain. 1 fear that if the Government is given more latitude through this kind of legislation, we will not only see class struggles on our television sets but we will see them very clearly and vividly on our own Canadian streets.
You are indicating that my time is up, Mr. Speaker. Despite its absolute majority which can defeat any motion or win any vote, the Government should be prepared to pay attention to the views of Canadians who are saying that this piece of legislation and others are unfair and inequitable and they will not tolerate them.


The Acting Speaker (Mr. Paproski):: Are there questions or comments? The Hon. Member for Edmonton East (Mr. Lesick).


Mr. Lesick:: Mr. Speaker, I have been listening to the Hon. Member for York West (Mr. Marchi) go on and on and on with his gloom of doom and doom of gloom. I sometimes cannot believe everything 1 hear because it is no different from what we are saying. If the Hon. Member had listened carefully to the speech of the Hon. Member for Cardigan (Mr. Binns), he would have heard him outline very carefully the purposes of Bill C-84. He set out the advantages to the country and how we have to share the goodness while shouldering the problems which we have. There is equity in this measure.
With respect to the $500,000 capital gains tax exemption, it is a measure primarily for the small and medium-sized businessman. In some cases it is for the ordinary working man who manages to buy a second home and who makes a little money after he sells it. Would the Hon. Member deprive an ordinary working man of that capital gain? He spoke of some people going to the United States. Yet, he has not mentioned one person who supposedly received this mythical amount in capital gains.
He mentioned that the oil companies were receiving all of this money. They are just getting back the money which his Party took away as a result of the National Energy Program. We have simply righted a wrong. Is the Hon. Member aware that when the oil companies were doing well so were tens of thousands of people in Alberta, Ontario and Quebec? They were successful. The oil companies made money and they paid taxes. Does the Hon. Member know that after the National Energy Program was introduced some 25 per cent of businesses went bankrupt in one small city with a population of 30,000? Does the Hon. Member understand what that meant? It meant alcoholism, family break-ups, unemployment, and problems of all sorts. The Hon. Member said that we should not give them money. We all shared in this. However, the Hon. Member has to realize that.
Over the 18 years the Liberals Party was in power the economy came to a stumbling and bumbling halt. In 1985, the debt per person per year was $ 1,000. That is for every person
in the country. In 1968 it was only $75. 1 ask the Hon. Member: Who will pay for that?


Sergio Marchi: Mr. Speaker, the Hon. Member for Edmonton East (Mr. Lesick) says that I bring him doom and gloom. The central premise of my argument comes from a Tory polling firm, Decima Research, which has indicated there is a serious concern in the country in that some 35 per cent of Canadians are worried about the gulf which has been created between the rich and poor since the Conservative Government came to power. They are concerned that there is a stratification of a class system taking place in the country. They are concerned that the Government will not be able to bridge that gulf, or that it will not have the courage or determination to do so. Those are the concerns of Canadians. They are the concerns of individuals who may have voted for the Hon. Member from Alberta, for myself, and other Members of the House. 1 would like to ask the Hon. Member why his Government refuses to pay attention not necessarily to him, or any other Member in the House, but to the concerns of Canadians. If he accepts that premise, then he ought to accept the issues and difficulties which we are articulating with some degree of responsibility on behalf of our constituents.
The Hon. Member also mentioned that the capital gains tax exemption would be enjoyed by every average working Canadian. In that case 1 would like to ask him why the statistics with respect to capital gains over the last five years show that nearly 65 per cent of those gains are attributable to only 4 per cent of the population. Why was it not attributable to 50 per cent, 70 per cent, or even 85 per cent? If that were the case, then 1 might give him some credit-1 would not have said the things which I said.
The Hon. Member points out that oil companies have paid their taxes, have worked hard and are now benefiting. Is he suggesting that other working Canadians have not paid their taxes?


John Horton McDermid: They were not taxed in the same way.


Sergio Marchi: What members of the Conservative Party are really saying is: "Look, we are now giving a break to the oil companies". Canadians are paying for that break because the whole tax grid is completely unfair.


John Horton McDermid: You don't know what you're talking about.


Sergio Marchi: If one considers a family which earns $50,000, then it is unfair. It is gross and perverse for that family to pay 35 per cent more tax when the rich in society are getting away with paying only 2 per cent.
1 might have knocked over a glass of water, and Hon. Members might be laughing, but Canadians are not laughing because those are the facts. The facts show that the situation is unfair and inequitable. Whether in 1987, 1988 or 1989, this Government will pay the consequences of not listening to the aspirations of Canadians. We will then see who will be laughing.
January 21, 1986


Mrs. Sparrow:: Mr. Speaker, I believe the Hon. Member for York West (Mr. Marchi) mentioned in his opening remarks the handing over of some $8 billion to the oil companies.


John Horton McDermid: What a crock!


Herbert O. Sparrow: 1 wish to set the story straight. We did not hand the oil companies $8 billion. It seems to me that in about 1980 or 1981 the Government of the day brought in the National Energy Program which instituted a form of double taxation. It imposed a well-head tax called the Petroleum and Gas Revenue Tax which, in effect, taxed oil and gas companies, resource companies, from 16 per cent down to 12 per cent on gross revenues. Then, this amount in taxation was not allowed to be deducted when the corporations computed their income tax returns. In effect, it was a form of double taxation.
During the three years following 1980, I wish to point out to the Hon. Member that the unemployment situation in Alberta went after 3 per cent to 13.5 per cent. We lost drilling rigs. We lost people who either went south of the border, to other countries, or who simply went belly-up. I wish to tell the Hon. Member that we can actually prove that 90,000 jobs were lost in the Province of Ontario due to the National Energy Program. Mr. Speaker, coming from that good province of Alberta, you are well aware of that point. We did not hand the oil companies $8 billion. What we did is correct an injustice. We have taken national reconciliation upon ourselves. We have developed economic renewal. As a result of the new energy policies brought in by the Minister of Energy, Mines and Resources (Miss Carney) some 25,000 jobs have been created in the energy sector. There will be spin-off jobs created for people living in Ontario and Quebec. Every automobile we buy comes from either Oshawa or Windsor. We buy cable and steel pipe from Hamilton.
I just wanted to correct what the Hon. Member for York West had to say. We have put people back to work. We have brought national reconciliation to the country.


Some Hon. Members:: Hear, hear!


Sergio Marchi: Mr. Speaker, I have every respect for the Hon. Member for Calgary South (Mrs. Sparrow). However, I just cannot believe that she can rise in her place and say that this Government has brought about national reconciliation.


Herbert O. Sparrow: You bet we have!


Sergio Marchi: Where and when? Members of the Conservative Government should take a hard look at the message being sent out by Canadians.


John Horton McDermid: Take a look at the Atlantic Accord and the Western Accord.


Sergio Marchi: They can have special caucus meetings every single weekend for the next year to see how to patch up their deficiencies. It is a crock for Hon. Members to tell me and this House that they are under way with national reconciliation and economic renewal.
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I would like Members opposite to address the workers, the poor, the families, women and senior citizens, and ask them if they think this country is under a form of economic renewal and reconciliation.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: It is my duty, pursuant to Standing Order 46, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: The Hon. Member for Davenport (Mr. Caccia)-Environmental Affairs-Niagara River pollution (a) United States clean-up proposal, (b) Government position; the Hon. Member for Bow River (Mr. Taylor)-National Parks-Wildlife poaching- Harsher penalties; the Hon. Member for Spadina (Mr. Heap)-Energy (a) Refining capacity in Quebec-Government position, (b) Request for combines investigation.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Hnatyshyn (for the Minister of Finance) that Bill C-84, an Act to amend the Income Tax Act and related statutes and to amend the Canada Pension Plan, the Unemployment Insurance Act, 1971, the Financial Administration Act and the Petroleum and Gas Revenue Tax Act, be read the third time and passed.
Mr. John R. Rodriguez (Nickel Belt):: As a matter of fact, Mr. Speaker, I was not here four years ago but I can tell you, the Member points to himself and says: "I was"


John Horton McDermid: Yes.


John R. Rodriguez: I want to tell you, Sir, without reading Hansard for the last four years, that he made speeches just like I heard from the Hon. Member for York West (Mr. Marchi). I am positive he made speeches like that.
It is six of one and half a dozen of the other. We call them the Bobbsey Twins of Bay Street but I think they are Siamese twins. Here the Tories are the Government and they do exactly

January 21, 1986
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the same thing that the Liberals did when they held Government.


Donald James Johnston: Come on, John.


John R. Rodriguez: I heard the Member for York West, but am I hearing correctly in this place? Is something wrong? I listened to debate of report stage of Bill C-84. The Liberals brought in an amendment that said the $500,000 lifetime capital gain should only apply if you earned it with Canadian speculation, that is, if you bought a Canadian racehorse or the Group of Seven paintings and made profits on Canadian condominiums. The Government made this beautiful argument that you have to Canadianize profits. That is a new one on the national list. The Member for York West said just a little while ago that the capital gains tax is a give-away to the wealthy and it contributes to developing class structures. He is absolutely right.


Donald James Johnston: Mr. Speaker, I rise on a point of order. I realize that 1 have a moment to ask a question subsequently, but what the Member said is a complete and utter distortion on the amendment which was brought into this House.


James Ross Fulton: That is a fact.


Donald James Johnston: Which, incidentally, allows-


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


Donald James Johnston: I would point out to the Hon. Member that our Party brought-


The Acting Speaker (Mr. Paproski):: Order, please. I am sure the Hon. Member will have an opportunity during the questions and comments period to correct the Hon. Member. The Hon. Member for Nickel Belt (Mr. Rodriguez) has the floor.


John R. Rodriguez: Mr. Speaker, listen to the sensitivity. Tommy Douglas, former Leader of this Party, said whenever you see a pack of coyotes, you always know when you hit one because they start yowling and howling.


Mr. Guilbault (Saint-Jacques):: We do not expect you to understand the amendment.


John R. Rodriguez: 1 did not think we had pay dirt on that one. The Hon. Member's intervention was as clear on this amendment on capital gains as his position was on free trade.


Some Hon. Members:: Oh, oh!


John R. Rodriguez: I want to make my intervention and comments on Bill C-84. You know that I always try to make my comments relevant to the issue at hand, Mr. Speaker. I have discovered over the time I have been here that a Budget portrays the priorities and the philosophies of a Government. It has always been thus. What does the Government consider important? Where does the Government see the country going? What is the Government trying to achieve?
We went through the campaign of 1984. We heard it all. We all tuned in to hidden Crop detectors. We know three quarters was "b.s.". Most of it was "b.s.", Brian's statements. We understand that and the people understand it. We heard it from Liberals before. We were going to have participatory democracy and the just society. We heard about how the land was strong and that Liberals were there to try to raise the class differences to create a more egalitarian society.
The Tories did not go that far. They have no commitment to egalitarianism. We know where the Tories stand.


John Kenneth Gormley: You are talking through your hat.


John R. Rodriguez: How can a Government bring in $500,000 capital gains give-away-statistics show that 4 per cent take advantage of it-and claim that creates jobs? There is no evidence that a capital gain ever created a job. How can the Government tell Canadians that we have to cut the deficit because ordinary folks are living off the hog of the land? We have to pay at the pump, we have to pay at the store and even when you pay for pet food the Government is nailing you. Everybody knows sales and gas taxes are the most regressive taxes in any society. They are no respectors of income. Everybody pays whether they can afford it or not.
I accuse this Tory Government of taxing the poor while giving the rich generous tax breaks and the $500,000 capital gains exemption. We are now the only industrialized country in the western world that does not have a capital gains tax. Every industrialized country in the western world has some form of capital gains. I challenge the Tories to show evidence which I am prepared to accept if they can prove that by allowing capital gains it creates employment. There is no evidence of that whatever, Mr. Speaker.


John Horton McDermid: Do you deny it to the farmers?


John R. Rodriguez: Our position has always been, and it is consistent, excepting the farmers. They have been excepted.


Some Hon. Members:: Oh, oh!


John R. Rodriguez: That has been our position. We dragged the Tories kicking and screaming into the 20th century on that issue and now they want to take credit for it. 1 have never seen anything so bold faced in my life. First we have the spectacle of Liberals stealing good NDP policy, and putting it into legislation and calling it their own. Now, the tories are starting to do it. At least give credit, for heaven's sake.


Some Hon. Members:: Oh, oh!


John R. Rodriguez: Our position has been that the captial gains tax does more to exacerbate class distinctions in Canada. It does not create employment. We said that only those who are wealthy can afford to take advantage of the capital gains.
It seems to me to be unfair. 1 have said before in the House that a tax system ought to be progressive, fair and be distributive in its nature. Capital gains is indefensible absolutely. At the same time the Government is chiselling the children and
January 21, 1986

women out of the family allowance. Here we have 31 cents a month. The Government is chiselling the children of Canada. What we have is one cent a day per child.
The Tories attempted to chisel senior citizens out of their full indexation. What happened? They found out that that did not wash, and they backed away. The National Council on Welfare noted in "Giving and Taking: The May Budget and the Poor" that in 1982 while those earning $50,000 and over accounted for only 18 per cent of total tax filers, they accounted for 63 per cent of the total benefits accruing under the capital gains provisions. Those are not the ordinary Canadians most of us represent who are in Atlantic Canada, in northern Ontario, Manitoba, northern B.C. and in the prairie provinces. Those are not the ordinary Canadians. Some of these people have earned over $50,000 and paid no income tax at all.
What about the corporations? The other day I toured the Falconbridge mines. They just bought the Kidd Creek mines for $650 million. The President, Bill James, was boasting that Falconbridge has not paid a penny of federal or provincial income tax in the last three years. He was proud as punch to tell me that. Does everyone not have a responsibility to support the country? Does everyone, including the Government, not have the responsibility to ensure that everyone in society pay according to their ability? That is a good socialist principle: From each according to his ability and to each according to his needs. That seems to me to be as applicable today as it was when it was first uttered.


Mr. Clark (Brandon-Souris):: What was their taxable income?


John R. Rodriguez: Oh, of course, after you gave them all these generous write-offs, depletions and tax expenditures! Do you want to talk about the tax expenditures? Take a look at this.


John Carnell Crosbie: You were written off yourself.


John R. Rodriguez: All you have to do is collect what should be collected and you would not have a deficit. Why do you have to keep taking it out of the hides of ordinary Canadians through all kinds of sales taxes? Why not collect what you are supposed to collect?


John Carnell Crosbie: Where is it going to come from, you turkey?


John R. Rodriguez: There is a biggest turkey I ever heard, the Hon. Member for St. John's West (Mr. Crosbie).


John Carnell Crosbie: The hon. gobbler from Nickel Belt. You were written off yourself; now you are recaptured depreciation.


John R. Rodriguez: Here is the moccasin lad whose Budget-


John Carnell Crosbie: Don't try and hurt my feelings.


John R. Rodriguez: *-was rejected by this House and who caused his friend, the Secretary of State for External Affairs (Mr. Clark) to go down in ignominy.
Income Tax Act, 1986


John Carnell Crosbie: They are bound to find you there, wherever that is.


John R. Rodriguez: There he is, the near leader of the Conservative Party.


Walter Leland Rutherford (Lee) Clark: Which side were you guys voting on then?


John R. Rodriguez: Mr. Speaker, here are the kinds of-


John Carnell Crosbie: It was the reds leading the dead.


John R. Rodriguez: -tax give-aways which really structure the inequalities in the system. This is from an advertisement in the Vancouver Sun. It says that this is Canada's last great tax break. If your annual taxable income is over $70,000 you can deduct up to $165,000 over four years and own an income producing hard asset with 100 per cent borrowed funds.
Here is another one. It is called a tax shelter. It asks why you should buy a vacation vehicle tax shelter. Because each $1,000 of initial investment can generate $2,640 in first year tax savings and up to 43 per cent first year write-offs. That is the vacation vehicle tax shelter. It tells you to act now and receive a 60 per cent tax write-off in 1985. You can get a condominium in the Harbourfront Hotel limited partnership. 1 do not know any folks in Nickel Belt who would be able to play fast and loose with these kinds of tax evasion schemes. Yet it has all been legalized. I do not see the Tory Government, which is so concerned about a fair tax system, moving to change any of that sort of give-away.
1 accuse the Government of discriminating against lower-income Canadians. An example of that is the RRSP and the RPP.


Nelson Andrew Riis: Isn't that to help ordinary Canadians?


John R. Rodriguez: Yes, these are non-taxable contribution limits. In 1986 it will be $7,500, in 1987 it will be $9,500, in 1988 it will be $11,500, and $15,500 in 1990. We oppose this because we believe that it will benefit upper-income Canadians to the detriment of lower-income Canadians. I accuse the Government of using the same rules but different laws with respect to this particular item and unemployment insurance and I will give an example. The Government made a change in the Unemployment Insurance Act which says that pension income will be considered earned income for UIC purposes. That became effective January 1, 1986. Yet in the RRSP provisions the Government says pension income is not earned income. That means a pensioner cannot set up a spousal RRSP because according to one law it is earned income and according to another it is not. Under tax law it is not earned income for setting up a spousal RRSP, while under the Unemployment Insurance Act pension income is earned income. You can't suck and blow at the same time.


John Carnell Crosbie: You can!


John R. Rodriguez: You cannot have it both ways.


John Carnell Crosbie: You are doing it now.

January 21, 1986
Income Tax Act, 1986


John R. Rodriguez: There is the greatest sucker and blower of all time, the Hon. Member for St. John's West. We know how he does it. He does it on Screech. I accuse the Government of making no effort whatsoever to reform the tax system so that it will become more progressive, fairer and-


Walter Leland Rutherford (Lee) Clark: What about the minimum tax?


John R. Rodriguez: Our Party is very concerned about that. We made it one of the issues in the campaign. Once again we forced the Leader of the Conservative Party, now the Prime Minister (Mr. Mulroney), into admitting that we ought to do something about a minimum tax. Because of our concern we set up a task force which will go across this country listening to what Canadians have to say about how we can make the system fairer. I know the Tories had a tax task force which went across the country, but what they were more interested in was the mechanics of collection. They were laying the blame on tax collectors. What we are attempting to do is to listen to thoughtful suggestions from Canadians about how we can make the tax system fair. In the long run, if the people under the yolk of the tax system get to a point where they believe that the tax system is very unfair, they are going to kick up their heels. It is most unhealthy for a democracy to have a tax system so burdensome on people that it causes them to do things not in accordance with a free and open society and forces that society to react in a way which limits our freedoms.
Look south of the border. There is a country which has a national debt of how many trillions? I cannot imagine how much a trillion is. You can count 24 hours a day without sleeping or eating for 300,000 years before you would reach a trillion. The U.S. is a country similar to ours, a democratic and open society, and it is faced with this trillion-dollar debt. What are they doing with their tax structure at the moment? They are cutting taxes for ordinary Americans. What are we doing? We are going the other way. We are adding taxes. The Japanese have deficits but no one has mentioned that. They deal with that by borrowing from their own people and they pay it back.


John Carnell Crosbie: What does it matter where you borrow it from, you have to pay it back.


John R. Rodriguez: There is nothing here you have that-


The Acting Speaker (Mr. Paproski):: I regret to interrupt the-


John Carnell Crosbie: Are you suggesting we do not pay it back?
The Acting Speaker (Mr. Paproski:) Order, please. I regret to say that the Hon. Member's time has expired. Questions or comments.


Sidney Arthur Fraleigh: Mr. Speaker, 1 would like to take this opportunity to try to teach the Member for Nickel Belt (Mr. Rodriguez) a few lessons in basic economics.


John Carnell Crosbie: Impossible.


Sidney Arthur Fraleigh: Never having done anything to generate a job in his life, I hope he will listen. To generate jobs in this country it takes entrepreneurs who are willing to invest their money, something that is hard for a socialist to understand. The only thing that creates jobs is people who are willing to take some risks, spend their money, and create those jobs. The Member may have a hard time understanding that.


Nelson Andrew Riis: Like Dome Petroleum?


Sidney Arthur Fraleigh: That is a fact of life.


Nelson Andrew Riis: I think Dome Petroleum is a good example for you to use.


Sidney Arthur Fraleigh: If the Members would just listen, although 1 know it is hard for them. I know the socialists have a real problem in understanding this. Entrepreneurs invest their money if they know they are going to be allowed some return on that investment. However, the great socialists want to tax the entrepreneur to death so that he gets nothing in return for the risks he takes. Just listen and I will tell you about it. You never generated a job in your life, any of you.


James Ross Fulton: You're pathetic.


Sidney Arthur Fraleigh: Address those problems. I want to tell-


Nelson Andrew Riis: Aren't you wonderful? You are absolutely fantastic, aren't you? Just sit there and lecture us. You created all these jobs. You're wonderful. We're saying that you are wonderful. Please tell us more.


Sidney Arthur Fraleigh: I want to assure the Members of one thing. I made every dollar I ever got.


Ian Gardiner Waddell: How do you know we never generated a job? You're an asshole. You don't even know.


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


Ian Gardiner Waddell: How do you know that?


The Acting Speaker (Mr. Paproski):: Order, please! We only have another seven minutes.


Nelson Andrew Riis: You're a bloody insult.


Ian Gardiner Waddell: That's an insult. I have had three businesses and two professions, so don't give me that crap.


The Acting Speaker (Mr. Paproski):: I will recognize the Hon. Member for Nickel Belt (Mr. Rodriguez).


John R. Rodriguez: Mr. Speaker, 1 think the Member has generated a lot of hot air in a short period of time.


Nelson Andrew Riis: He's a brilliant orator.


John R. Rodriguez: I would like to point out to him all the great entrepreneurs who took risks with the Canadian Commercial
January 21, 1986

Bank and the Northland Bank and then came running to the taxpayers. I think of the football club, the Calgary Stamped-ers, which, when it gets in trouble, comes to the public trough for a bail-out. I think of Inco and Falconbridge which received all kinds of tax concessions over the years, and yet the jobs have gone down the tubes.
I would like to put on the record that a study by the Department of Regional Industrial Expansion in February of 1985 shows that small and medium-sized businesses had a net job growth of about 375,000 between 1978 and 1982. In contrast, large businesses show a net job growth of less than
50,000.	However, the tax and profit situation for the corresponding period, 1977 to 1981, gave the exact opposite picture. It was large businesses that saw their share of total corporate tax breaks increase from 64.5 per cent in 1977 to 71.9 per cent in 1981. They also saw their effective federal tax rate fall from 18.2 per cent to 14.3 per cent and their after-tax profits increase by 107.5 per cent over the same period. So don't talk to me about risk-taking and job creation.


Mr. Ravis:: Mr. Speaker, I was hoping to speak to Bill C-84 this afternoon but, unfortunately, we are running out of time. However, I do have some comments and questions. It is interesting to hear the Member for Nickel Belt (Mr. Rodriguez), the same old NDP destructive machine, making nothing but negative comments. I am beginning to wonder whether I have ever heard anything positive come out of the ranks over there. The reason that an NDP member is not representing my constituency in the House of Commons at this time is because my constituents got tired of it. They wanted to turn the country around and to hear something positive for a change. They were tired of the constant wailing that everything is negative about the world and that we should destroy it. That is not our way. We want to turn things around and we are making some very good progess.
How does the Member for Nickel Belt feel about the last 16 years of the great socialist experiment that this country went through? How good was that for the country? Why are we in the mess that we are in right now? I have a copy of the report of the OECD, a very well-respected international agency. They have placed Canada in much better light than it was in before. When I was running for election, Canada was "tail-end Charlie" with regard to many of the key economic indicators. Canada's growth today is ahead of that of the United States. The only country that is ahead of us in that regard is Japan on the Pacific rim. We are ahead of our fellow industrialized nations in the western world.
I would like the Member for Nickel Belt to respond to many of the accomplishments made by the Government in the last while. Why does he want to go back to the old socialist ways practised by the Liberal Government in the country? I will give the Member a chance to be positive for a change. Does he expect all of these things to happen overnight? What kind of time frame is he putting this in? We gave the other fellows 16 years. We have been here only 16 months, and look at the accomplishments that have taken place. I would like the Hon. Member to answer that honestly by telling us how he feels we
Income Tax Act, 1986
have been doing in the last 16 months in terms of the number of people who have got back to work, the economic confidence in the country, and the number of people who have intentions of, not only making investments, but hiring people in the coming months.


John R. Rodriguez: Mr. Speaker, I have a better model than the 16-month reign of the Tory Party at the federal level. The better model that I would choose is the Government of Manitoba which has-


Some Hon. Members:: Oh, oh!


John R. Rodriguez: Just listen and be informed. The Province of Manitoba has the highest rate of private capital investment per capita with the lowest unemployment rate in the country. I think that is the model, Mr. Speaker. I can refer back to the 17 years that Tommy Douglas governed the Province of Saskatchewan. When former Premier Blakeney left office in Saskatchewan the Budget was balanced and he had a heritage fund with bucks in it. What has happened to the heritage fund? It is a "zilcho". The Tories with Devine have blown it. What happened to the deficit? It has gone up, up, and away.


Gordon Edward Taylor: Why did the people kick him out?


John R. Rodriguez: Tories and Liberals have run Canada for the last hundred-and-some-odd years and look at where we are today.


John Carnell Crosbie: Yes, just look.


John R. Rodriguez: I remember when the Leader of the Liberal Party was here. When he left and went into private law practice, because he could not get along with his Leader, the Tories were scratching around for a leader. The rumour was that the Minister of Regional Industrial Expansion (Mr. Stevens) went down to Toronto and they had lunch at Winston's. He tried to convince the Leader of the Official Opposition in the House to be the Leader of the Tories. We have to put a sign up here: "Crossing. Beware".


Nelson Andrew Riis: "Tory crossing".


John R. Rodriguez: They can go back and forth.


John Carnell Crosbie: What about your buddy up in the Senate, Hazen Argue? What about him?


The Acting Speaker (Mr. Paproski):: I regret that the period for questions and comments is now terminated. I will recognize the Hon. Member for Saint-Henri-Westmount (Mr. Johnston).


Donald James Johnston: Mr. Speaker, I have only a few minutes until the end of debate to make my comments to the House.

January 21, 1986
Income Tax Act, 1986

Bill C-84 is the very centrepiece of the Minister's Budget. That Budget took nine months to produce. We had no Bill until November. Then, of course, it was pushed through the Elouse and through committee. If there is one railroad that is operating well in this country it is certainly the one operated by Tory Members in the House of Commons.
I draw your attention to the comments of the Chairman of the Standing Committee on Finance, Trade and Economic Affairs, the Member for Mississauga South (Mr. Blenkarn), who last week had the candour to admit in the House that: "Unfortunately, in the rush to put the Bill through and complete it during the day the detail with respect to several clauses were omitted". That is what we have been up against. The Bill has been pushed through quickly and we now only have a few minutes left to comment on it.
1 note that there are a number of intelligent Tory Members in the House this afternoon. I see that the Minister of Justice (Mr. Crosbie) is here. The injustice of this Bill must be very evident to him, as a former Minister of Finance.
How is this Budget and this Bill to be described? My Leader, the Right Hon. Leader of the Official Opposition, has described it as a sneaky Budget because it taxes in an indirect way by changing the indexation provisions of the Act. We pointed out during the report stage that the amendment to the indexation provision on personal income tax will, by 1990-91, add over $4 billion to the federal treasury in one year alone. It is a direct assault on the pocket-books of the working men and women of this country. Indeed, it is sneaky.
The supply siders, of whom there are many in the House, regarded this Budget as a wonderful supply side Budget with its trickle-down effect. The House will recall the old horse and sparrow economics of John Kenneth Galbraith: "If you feed the horse enough there might be something left over for the sparrows". The thrust of that was the 3500,000 lifetime exemption.
Of course, it is not even a supply side Budget because it attacks the sparrows. It puts an avalanche of taxes on the low and middle-income groups of this country. It is not even a trickle-down Budget, but it might better be described as a dribble-down Budget.
I think I could best go back to that great Conservative parliamentarian, Sir Winston Churchill, and use the description he gave of Russia in 1939 to describe this Budget. It is a riddle wrapped in a mystery inside an enigma. I find this Budget incoherent, without direction and complex. The great mystery is why our Conservative friends not only want to shoot themselves in the foot, but directly in the head with these provisions.
The purpose of a riddle is to test the ingenuity of the person to whom it is put. I had a number of riddles I wished to put to my Conservative colleagues this afternoon. In the little time I have available I will put some for their consideration as they
rise and vote like so many sheep to support what is clearly a bad piece of legislation.
Why does the Minister of Finance (Mr. Wilson) want to encourage Canadians to invest outside Canada? That is the result of the combination of the proposed capital gains exemption, which is completely unfocused and can apply to a condominium in Puerto Rico or a boat in the Caribbean, with the proposed alternate minimum tax which penalizes people who receive dividend income from Canadian corporations. It is a clear signal to invite Canadians to invest outside the country. That is the first riddle.
Why does the Minister of Finance tell the House that he wants tax simplification but produces one of the most complex, convoluted and confused pieces of tax legislation that has been seen in this House since the early 1970s? Why does he intend to compound that error with an alternate minimum tax which further complicates a system when he should implement basic tax reform or at least produce a simplified version of a minimum tax? Why does the Minister of Finance tell us that he wants to reduce the deficit and at the same time forgo $4.5 billion on capital gains exemptions by the year 1990?
Why does he bail out banks at a cost of billions of dollars? Why does he give tax rulings which run into the billions of dollars to permit takeovers such as the Gulf Canada assets by Canadian concerns? Why does he even go so far as to buy retail gas stations, many of them in the very province you represent, Mr. Speaker?
I would like to leave you with that riddle this afternoon. I realize that my time has expired and I thank you for your indulgence.


The Acting Speaker (Mr. Paproski):: I regret that I was unable to hear the rest of the Hon. Member's speech this afternoon.
It being 4.45 p.m., it is my duty, pursuant to Order made on Friday, December 20, 1985, to interrupt the proceedings and put forthwith every question necessary to dispose of the third reading stage of the Bill now before the House.
The question is the following one. Mr. Hnatyshyn (for the Minister of Finance) seconded by Mr. Epp (Provencher), moves that Bill C-84, an Act to amend the Income Tax Act and related statutes and to amend the Canada Pension Plan, the Unemployment Insurance Act, 1971, the Financial Administration Act and the Petroleum and Gas Revenue Tax Act, be read the third time and do pass. Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


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


Some Hon. Members:: Yea.
January 21, 1986


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


Some Hon. Members:: Nay.


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


The Acting Speaker (Mr. Paproski):: Call in the Members.


Mr. Speaker:: I declare the motion carried. Bill read the third time and passed.


PRIVATE MEMBERS' BUSINESS-PUBLIC BILLS   CANADA ELECTIONS ACT MEASURE TO AMEND
John R. Rodriguez: that Bill C-246, an Act to amend the Canada Elections Act (leave of absence), be read the second time and referred to the Standing Committee on Privileges and Elections.
He said: Mr. Speaker, the purpose of Bill C-246 is to amend the Canada Elections Act to allow employees covered by Part III of the Canada Labour Code to have extended leave of absence provisions if they are candidates running in a federal election campaign and are successfully elected as a Member of the House of Commons.


The Acting Speaker (Mr. Paproski):: Order, please. This is your Private Members' Hour.


John R. Rodriguez: Mr. Speaker, there is a reason why I brought this particular Bill to the attention of the House for debate. I would hope that Members of the government side would not engage in their usual practice of talking out private Members' Bills. I believe that this Bill involves a very serious principle. The Bill goes to the very core of a democratic society which is open, free and egalitarian in most respects. We have the kind of society in which the citizens elect those who will govern them. The freedom of citizens to elect those who shall govern them is the very hub of a democratic society. There-

January 21, 1986
Canada Elections Act
fore, 1 believe the means by which that happens should be open and available to all citizens.
It seems to me that the House of Commons is composed mostly of Members who were self-employed or professionals. In this House of Commons, there are very few working-class people sitting as Members of Parliament. I believe one of the reasons for this is that there are too many impediments for working-class people to become Members of Parliament. The greatest impediment involves financial and employment security beyond the time when the electors may turn them out or they may step down from office for one reason or another. It seems to me that the federal Government should make sure that a vehicle exists to remove that particular impediment.
Part III of the Canada Labour Code only deals with those who fall under the jurisdiction of the federal Government. Therefore, my remarks are directed toward those who are covered by the Canada Labour Code. If it is agreed that this Bill should go to committee and pass, I am hoping that it will become an example for the provincial Governments. That is the kind of leadership role I hope the federal Government will play.
Part III of the Canada Labour Code allows employees, on application, and on approval by the Public Service Commission, to become candidates in a federal election. However, if they are successful and are elected, there is no provision for leave for the time they are Members of Parliament. They must resign their jobs. That has been the experience at this level over which the Parliament of Canada has jurisdiction. I believe that is a consideration which colours the decision of many people who are covered by the Canada Labour Code.
I have checked into the experiences of employees at other levels across the country. For example, union leaders who work for banks are given leaves of absence without question while accumulating seniority but only to carry out duties as union leaders. That provision does not extend to becoming a Member of Parliament. If successful in an election, they must give up their jobs.
Teachers fall under provincial jurisdiction but in most cases, if the particular school board does not have policy with respect to leave of absence for becoming a Member of a provincial legislature or a federal Parliament, the teacher must resign. In the private sector, INCO gives leaves of absence for public officials who are elected provincially or federally. No seniority accumulates while the person is on leave. Falconbridge Nickel Mines provide leaves of absence as well.
According to the UAW-General Motors master agreement, any elected official shall be granted a leave of absence for the first term and additional leaves may be granted upon written application by the employee. However, there is no guarantee the employee will be granted such leave of absence. These provisions usually contain words like "may grant" or "should grant".
It seems to me that the limitations with respect to employment that are placed on an individual who is thinking of becoming a candidate prevent that individual from exercising
his fullest rights as a citizen. I consider the greatest service that I can give my country is to be here in the House of
Commons.


Some Hon. Members:: Oh, oh!


John R. Rodriguez: I see Members opposite think that is a big joke. Obviously, they do not consider what they do here a service to the people of Canada. Why are they laughing? They think this is a big joke. In fact, it is a service paid to the country. Outside of defending one's country in time of war, in peace time the greatest service one can give to society is to be here participating-


John Horton McDermid: Oh, oh!


John R. Rodriguez: The Hon. Member for Brampton-George-town (Mr. McDermid) says: "Oh, oh". If Hon. Members opposite come to this place with that view, it is no wonder they have no motivation to bring about creative measures in order to make things better for the country.


John Horton McDermid: I will deal with you in a minute.


John R. Rodriguez: Yes, you will. You will talk this Bill out.
In a democratic society we encourage our citizens and teach our children that it is necessary to exercise their franchise. As a citizen it really bothers me that in considering municipal elections, for example, we see that less than 50 per cent of eligible voters actually go out to elect municipal councils. In some cases, 16 per cent of eligible voters go out to elect school boards. Surely it is important for us to think that that is not right. Surely it is not right for us to think that there are not qualified people to run as candidates. In terms of motivation, commitment and understanding, exercising one's franchise is one of the greatest responsibilities which a citizen has. Therefore, people cannot exercise their franchise if there are not people who are willing to put themselves up to be chosen. That, too, is a worthy exercise. When one does that one is saying: "I want to be a part of this. I have some ideas and I would like to have the opportunity to put them into effect because I think I can help build a better Canada". Because of the present limitations, the widest possible range of candidates who may be elected to the House of Commons is actually prevented from seeking office.
In a survey which I saw of Members of Parliament in respect of their backgrounds I noted that less than 2 per cent were formerly what is called blue collar workers. Parliament should reflect the widest possible range of the Canadian population. Not everyone has a profession. If someone should decide to run, and wins, and is defeated after one term, then he just cannot go back into his law firm, accounting practice, medicine, or whatever it might be, and pick up where he left off. People who are in the public sector just would not have a job to go back to. I am asking the Government to show some leadership in terms of the public sector. People with families
January 21, 1986

have that to consider when thinking about entering themselves as a candidate for election.
I think my proposed amendment is reasonable, appropriate and timely. The Government would show a great deal of leadership if it were to allow this Bill to go to committee and eventually pass. It is the type of leadership which would nudge provincial Governments to legislate in their own jurisdictions. It would certainly go a long way toward contributing to the development and building of a truly democratic society.


B. Keith Penner: Mr. Speaker, I commend the Hon. Member for Nickel Belt (Mr. Rodriguez) for bringing to the attention of the House an amendment which is required to the Canada Elections Act. I think that Part III of the Act recognizes the principle established by the Hon. Member but that it stops too soon. If Hon. Members had listened carefully to the Hon. Member for Nickel Belt, they would have heard that he was making a valid argument and one which ought to command the attention of the House.
He established the rationale for his amendment deeply in the principles of democracy itself. That is to say that all sectors of the community, or all sectors of the nation, those from all walks of life, ought to be legitimately and properly represented in the House of Commons. To my knowledge, there is not a ruling class in Canada. There is not a group of people from which it is appropriate to draw Members of Parliament to the exclusion of other groups of people. The wider the representation of the community of Canada in the House of Commons, the better the Government we will have. However, that is not now the case. There are a large number of people in our society who are reluctant to come forward as candidates for the political Party of their choice in order to seek election. It is not that they fear the democratic process of being elected. They fear what the future may hold for them if they take this very dramatic and drastic step.
I do not think I need to remind Hon. Members that to seek to become a Member of Parliament is, in fact, a high risk endeavour. It is a high risk enterprise and a gamble. In a sense, what one is gambling is one's life-one's very self. It is quite different to put yourself before your fellow citizens to seek election to come to the House of Commons as a Member of Parliament than to go to Las Vegas, Atlantic City, or Nassau. In a sense, it is to gamble with your entire being, your economic long-term well-being, your own psychology and your own sense of self-worth. In terms of self-worth it goes up if elected but can be decimated if one is defeated. As the Hon. Member suggests, those who seek office are dealing with long-term security. They have to deal with their security in terms of their own place in society. The legislation which we have in place states that a leave of absence can be granted for those who come under the jurisdiction of the Canada Labour Code to be nominated as a candidate to seek election. However, there is no requirement in law to hold that place open while that Member is here in the House of Commons.
Therein lies the problem. We know what can happen if at the end of a term one retires for one reason or another. It could be because of health or the fact that one has not felt any
Canada Elections Act
degree of self-fulfilment or self-actualization in terms of being a Member of Parliament. There may have been frustration or disappointment involved, or one could have been defeated. Then, where is that person who sought to be elected? We know where that person stands. That person becomes an outcast. He or she can well feel despised and rejected. As the Hon. Member has pointed out, it is far more serious for some than for others. I do not think it is easy for anyone, Mr. Speaker. We should never gloss over that. We can always say that one can return to the practice of law. I have spoken with many former Parliamentarians who were lawyers and it is not that easy. You just do not pick up that quickly. It is difficult.
Some school boards can be very generous. They can grant a leave of absence, sometimes beyond one term, sometimes going into a second but there is no consistent policy. The law in Ontario, I might remind Hon. Members, says that if one is a qualified teacher in the province and you serve in the House of Commons or in the Legislature of Ontario, the years you serve in the Legislative Assembly, federally or provincially, may count as years of teaching experience when you go back to the class-room. All you are obliged to do is to make up your superannuation payments. They can count as years of experience toward the required years for your eventual requirement. That is a very generous principle. I think it has allowed quite a number of people from the class-room to consider going into the House of Commons for a period in their life. It has attracted teachers as much as this place in the past used to attract lawyers to a very extensive degree.
Let me come back to the basic principle of having as many people from as many walks of life as possible in the House of Commons. I believe because we have restricted it narrowly to those who feel they have an opportunity because of the privileged position they have in society, because it is less threatening, they run for public office and are elected. I think as a result of that, because the range has been too narrow, we have created a gap. I consider it a serious gap between the real community that we purport to represent and the precincts of Parliament itself.
Would it be possible-I do not want to be assertive here- that that is why the process of parliamentary reform has been so retarded, so slow to get moving? Is that why? It may be, I do not know. I do know that if we opened up the opportunity to serve in the House of Commons to other sectors of society, to other walks of life, and those people were able to hold their place during that term, or even seek a second term and then return, those sectors in society would benefit greatly when people came back. They would have experienced Parliamentarians, and I can see that almost all sectors of society would benefit from having the person come back by holding his or her place by way of a leave of absence.
If this practice were followed and if this amendment were accepted and the practice became an example for other sectors of society, imagine how the business community would benefit from having someone return to the community having been a

January 21, 1986
Canada Elections Act
Member of Parliament. Over the years 1 have been amazed at how little understanding the business community has of the workings of Parliament and of Government and how much wasted effort there is as it seeks to influence Parliament in one way or another for what that sector deems is good for it. What I say about business would apply to industrial workers, to organized labour and to professional organizations.
I believe that there needs to be a greater linkage between the real community and the parliamentary process. The British have come to recognize this. It is not exactly the granting of a leave of absence by various sectors. It points to the need to establish a linkage between the work of Parliament, the work of Government and the greater community beyond these precincts. I am arguing, Mr. Speaker, that that linkage could be forged if we allowed more people in greater varieties of occupations and callings to come here. There is another way in which it could be done as well.
In 1977 in Great Britain a trust was established known as the Industry and Parliament Trust. This trust offers to Members of Parliament of both Houses and all Parties an opportunity to gain direct experience of business by spending up to five weeks learning firsthand how a business operates, how Government impinges on a business and with what effect, and how labour relates to that company. The aim has been to help legislators to judge better the effect of possible actions by Government and to help them make better choices among alternative ways to pursuing the Government's purposes. You will be interested, Mr. Speaker, that within the first five years of that program, over 125 British Members of Parliament had completed a program with one of the participating companies. The acceptance of the program has been so great that there are now similar programs in Sweden, Norway, Denmark, the Netherlands and France.
If the Hon. Member for Nickel Belt were allowed to have this amendment adopted, he would be following that same basic principle, that is, the linkage, let me call it, between the real world and the parliamentary world, and the parliamentary world would be immeasurably strengthened and improved.
Let me throw in a personal note. 1 worked for a school board at the time I sought election that was generous enough to do exactly what the Hon. Member for Nickel Belt is proposing. I had not realized what the situation was at the time and it never even occurred to me until after I won the nomination for my Party and then returned to my job for the remaining months before the election and met a dear and delightful colleague, now deceased, who made the comment to me and said: "How can you possibly do what you are doing?" I was puzzled by her question. She said: "You are going out at the end of a limb and you are inviting your fellow citizens to saw off that limb, and then where are you?" Reality then set in. 1 established contact with the chairman of the school board and inquired about a leave of absence. It was granted, and it was granted on a second occasion in 1972. The curtain was drawn after that, and that was fine. If it can be done in that particular profession, why can we not extend this, first of all, by way of law? If it is established by way of law, then it can be
established by way of example to involve and incorporate other members of society in other walks of life.
My Party would like to see this Bill go to committee for further study and analysis and to have other witnesses from the community express views on it.


Philip Derek Lewis: Mr. Speaker, I am pleased to have an opportunity to make a contribution to this debate and to outline some of the other viewpoints that might be taken with respect to the question of whether or not one's job should be left open ad infinitum-some might say ad nauseam-while one serves in this House.
First, 1 could not agree more with my friend, the Hon. Member for Cochrane-Superior (Mr. Penner) with respect to the gamble, the precariousness of our position and the stress one has when one leaves a job or business or profession to become a Member of this House. We all enjoy our participation here. We all know the demands, and we all know that there are no guarantees. That is a given. 1 am in complete agreement with those stresses that my colleague outlined.
I want, however, to spend a bit of time dealing with some of the comments of my friend, the Hon. Member for Nickel Belt (Mr. Rodriguez) who made some errors as a result of probably not having access to the library in the basement of the building we share. Let me review for the Chamber the occupations of some of the Members of this House. My friend suggested that most Members of the House were professionals. I think that is in error. The House will be pleased to know that some 40 Members of this Party are either school directors, teachers or professors. The fact that we attract this type of person shows the scope of the Progressive Conservative Party. Approximately 15 per cent of our Members come from that profession and 1 think that speaks well for the Party. Unfortunately, the Liberal Party has no school directors and only four of its Members are teachers or professors. The NDP has done much better there.
We have talked about the risk of leaving your business to serve in this place. Our Party has 55 Members who are described as businessmen, businesswomen or business executives. The House will be distressed to know that not one Member of the NDP classifies himself or herself as a representative of business. The NDP likes to say that it represents business, but when it comes right down to the hard facts they just do not have anyone from that background. That speaks to the narrowness of their point of view on several occasions. Fortunately we have four accountants in our Party who have come here to serve. We also have administrators. The NDP seems to have a big gap in that profession. In fact, they have none. That speaks to the way they operate. 1 just wanted to be fair and point that out.
A lot of people would say we are fortunate to have 39 lawyers. My colleague from Simcoe South says we are fortunate that number is coming down and he hopes it will continue
January 21, 1986

to go down. 1 would tell my friends across the way that we are also fortunate to have in our Party the only psychiatrist in the House. He told me the other day that he has nothing to do so I suggested we would be pleased to have him assist my friends on the other side. 1 think all of this is indicative of the experience, background, indeed the diversity our Party brings to the House of Commons. The people of Canada knew when they sent us here in September, 1984, that they wanted a respresentative group of people and we are very fortunate to have such a broad background of experience in our Party. I think it is reflected in the legislation we bring forward.
I know that what I am about to say is not exactly pertinent to the Bill but I want to get it out. During the last two elections in that great democracy to the south only about 53 per cent of the voters got out to the polls. In this country on September 4, 1984, because of the great interest in the election and because the people wanted to send Members with a broad background of experience to the House of Commons, we had a 75 per cent turn-out. That speaks to the fact that we in this country are very aware of the democratic process.
With specific reference to the Bill, what my friend is trying to do is extend the present provisions in the Canada Elections Act which speak specifically to that period of time when one is declaring oneself as a candidate for a nomination, running for the nomination and then running for election. 1 think we all agree with the provision presently in place. There is no question that every candidate should have the freedom to run for a seat in Parliament without the threat that his or her job would disappear for any reason whatsoever while doing so. We all agree with that because we all know what we went through when we ran for election. The last thing in the world you need is for someone to be saying: "I just moved into your job yesterday; what will you be doing if you do not make it?" No one needs that kind of grief along with all the other things we have to contend with in an election.
The question then becomes whether or not this provision should be extended in an open-ended fashion as my friend suggests so that the job is there forever. 1 suggest that would be an untenable extension of this provision. I would also suggest that the Canada Elections Act is pretty generous. I pay tribute to those who passed that Act originally, no matter what Party they represented. I think it speaks to democracy in that it allows anyone who wants to the opportunity to contest a nomination and run for a seat in this House. However, should employers be forced to keep that position open while that Member stays in the House of Commons? It could be for 10 or 15 years. Should the employer have to promote people and tell them that there could be a general election next year and if so-and-so does not make it, they will be right back in his job? Should employers have to do that? More important, perhaps, should employees be forced to operate in that iffy situation? They would not know whether the job to which they have been promoted, one in which they are working hard, will be taken back by someone after an election defeat. Perhaps it would not even be a defeat, simply that the Member decided to retire.
Canada Elections Act
I suggest we might bring some criticism down on ourselves if we were to vote such a provision into law. We receive enough criticism as it is concerning our positions as Members of Parliament. Ask yourself if you want to put yourself in the position of guaranteeing that a job stay open and run the risk that criticism will fall on all of us henceforth. I think it would do an injustice to the other employees of a limited number of enterprises to which this provision applies, since they have the right to expect a promotion and advancement on the basis of their service and experience. To have someone else then come back and insert themselves in their career path could be seen as unfair.
1 would also suggest that quite reasonable steps have been taken to ease the return of Members of Parliament to a job or professional occupation after we leave here. We all support this. It is not easy to defend yourself in this area because no one likes to talk about how much they make and those kinds of things. However, being politicians our salaries and other benefits are public knowledge. The House will know that after six years of service Members become eligible for a pension. They pay for this pension during their service in the House. It helps to ease the transition to another job or occupation.
Now, I would like to go back to what I said to my friend from Cochrane-Superior. There is no question that there are some risks in the practice of law. My former partners keep telling me: "Lewis, you have changed all the laws on us. The place is confused. The practice of law is not what it used to be". By inference I would have a great deal of difficulty catching up. I know that my client base has gone to other lawyers in my former firm and to other professionals in the City of Orillia. I know that close relationships with business contacts other than clients are gone because, being here five days a week, one cannot maintain that same relationship.
I know that it is not possible to pick up where you left off when practising law. The same applies to so many of the professions or occupations. 1 say this not only on the basis of keeping the job open, but also on the basis of the individual. How many of us would expect to step back into our previous occupation or profession at the same level of competence and familiarity? I think we would be kidding ourselves if we said we could. I think we all realize that we would lose something. No matter how good we were when we left that position, after five or 10 years here we would be kidding ourselves if we said that we could go back and pick up all the traces without missing a few steps. I think it is unreasonable from that standpoint also.
The Management and Members' Services Committee has recently tabled a report which looks after the same thing as the pension which 1 referred to is looking after. That is, it suggests that there be a salary paid for a period of six months after a Member ceases to serve in the House. 1 think that is understandable too. I, personally, would support that as a severance pay which would give one a chance to say: "Yes, 1 worked hard for my riding right up to the day of the election and then

January 21, 1986
Canada Elections Act
I set about looking for a job. I did not say that, since an election has been called for some time next year and I have decided to retire, I will start looking for a job right now and let my responsibility to my riding fall down while I look after myself'.
I appreciate my colleague bringing this Bill forward so we can have some debate on it. I know he brings it forward on a well-intentioned basis. I can understand why he is doing it. I think that the provision which guarantees every Member an opportunity to run for office is perfect. There is no question but that that should be there. I have a difficulty, however, with forcing that extension to the career of the Member. I have difficulty for the employer and the employee, and I would have difficulty looking anyone in the eye and saying that any Member could step right back into that position and do the type of job that the employer would expect. For that reason, Mr. Speaker, I am speaking against the Bill and will vote against it at such time as it comes to a vote.


John Horton McDermid: Mr. Speaker, I appreciate the opportunity to speak on this Bill. As the House is fully aware, I always enjoy debating with my hon. friend, the Member for Nickel Belt (Mr. Rodriguez). I very rarely agree with him, but we do have some warm exchanges and we will probably have one today. I want to tell him that I understand perfectly why he is bringing this Bill forward. I was in the same position myself, being a provincial civil servant when 1 decided to seek public office. 1 won a nomination and got a leave of absence to run in the election, which I won.
Unless it has changed in the intervening seven years, in the provincial legislature there is the possibility of an individual being allowed, for five years, to return to the position, but not to the exact job, which he or she held when they ran for the first time. In other words, they could apply for a job for a period of five years in the category that they were in when they left. Once that five years was up, you are on your own. That basically meant that if you served one term and got defeated within five years, you could apply for a job at that level and would be given first consideration for the first opening that came along. I believe that is the way it is worded, unless it has been changed in the intervening seven years.
This is open-ended. I think the citizens of the country could rightly criticize us for taking care of ourselves forever. I just do not think that that is proper. We do make sacrifices to come into the House. The Hon. Member made reference early in his speech to there being no greater service to a country than to be a Member of Parliament, other than perhaps fighting to defend one's country. I took some exception with that. That is not because I am not proud of being a Member of Parliament, and not because I am not motivated for the job, because I am. I enjoy it very much and I plan to continue with it as long as the people of Brampton-Georgetown desire to have me as their Member of Parliament. However, I thought that that statement was rather arrogant and a rather inflated opinion of oneself.
People who work with the unfortunate in the country, at great sacrifice, are contributing to the country in a very meaningful way, no more and no less than a Member of Parliament. This is one way of serving the country, but there are so many other areas in which people make sacrifices to serve their country or their community, whether here or abroad. Therefore, although I respect very much the position that I hold here, I do not feel that there is no greater service in this country, because there are so many others that serve so well.
If the Member presented a more reasonable Bill which was not so open-ended, it would be worth while taking a very close look at it. However, I am concerned about this type of Bill that guarantees everything. What risk is there in running for Parliament? What sacrifice are you making? With these provisions one could say: "I should not worry about it. I am not serious about running. I can run and will be guaranteed my job. If I serve for 10 years and get a Member's pension 1 can return to my job and it will be there for me". What about the employer who must have that position available around every election time? That is quite a responsibility to place on an employer. I would not want to ask an employer to keep a position open in that way.


John R. Rodriguez: That's not what I said. You didn't read the Bill. Why don't you read the Bill?


John Horton McDermid: Do we do that for the people in the communications industry, for example?


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



PROCEEDINGS ON ADJOURNMENT MOTION

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

Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, on October 17 last year, Mr. Lee Thomas, the head of the United States Environmental Protection Agency, met with Canada's Environment Minister (Mr. McMillan) to discuss an action plan for the cleaning up of the toxic waste dumps along the Niagara River. The Minister of the Environment would not discuss at the time the contents of the plan with the public or the House, even though the releasing agency, namely, the
January 21, 1986

United States Environmental Protection Agency, considered this to be a public document. We were told to be patient.
Six weeks later, on November 28, I asked the Parliamentary Secretary to the Minister of the Environment (Mr. Gurbin) if he could shed any light on the contents of the Niagara Action Plan. Were all sites to be cleaned up? How much money was allocated? What was the schedule for clean-up? Would the waste be destroyed or just contained?
On that day the Parliamentary Secretary said that the proposals for specific clean-up plans were being narrowed down and would be released by the beginning of the year. Now it is the beginning of the year and still nothing has been released. Five million Canadians and some 24 million people, Canadians and Americans, who depend on the water are still no wiser as to the security of their water supply in the future. Why is there this foot dragging? Why will the Minister not practice the open Government so often alluded to by his Party? Therefore, when will the action plan be announced?
At the end of October last year, Occidental Chemicals reached an agreement with New York State and EPA officials to deal with the toxic wastes in the Hyde Park dump. The plan called for Occidental to spend $17 million to contain the chemicals that are buried there. The plan was released for public comment and the Environmental Protection Agency in the United States is receiving comments until February 25 of this year. It will take them into consideration and submit to the judge any alterations to the plan before it is signed as a court order.
It seems to me that this is an opportunity for the Canadian Government to make strong representations to the EPA on the necessary to excavate and destroy rather than to contain, and to comment on the progress of clean-up of all dump sites, not just Hyde Park.
My second question to the Parliamentary Secretary is: Are we taking advantage of this opportunity and, if so, how?
Finally, the St. Clair River is another piece in this toxic chemical jigsaw of the Great Lakes. The gravity and scope of the situation there is not yet fully known but could present the Ontario and Canadian Governments with a problem on the scale of the Niagara toxic dumps in New York State.
According to the "Pollution of the St. Clair River-Situation Report", released by Canada and Ontario in November, 1985, there are 18 deep wells which have been injected with wastes and seven land Fills within Lambton County. If it is determined that wastes are leaking from the storage sites just mentioned, the consequences could be grave. It is therefore imperative that the Government make it clear from the outset that the St. Clair River situation will be dealt with in the manner which the Minister of the Environment and others have demanded from the United States in the Niagara area, namely, that toxic wastes must be destroyed. Attempts to contain leaking dump sites are not good enough, because it would be a repetition of the mistakes along the Niagara River.
Adjournment Debate
In conclusion, it seems that the Canadian Government has an opportunity to show leadership in the cleaning up of the St. Clair River. We have to provide this leadership through our own actions, as Liberal Governments have done on so many other environmental issues in the past, and to demonstrate to our American neighbours that we are prepared to do on our side of the border what we are asking them to do on their side.
1 have outlined the reasons for my intervention tonight. 1 would be grateful if the Parliamentary Secretary would kindly answer the questions.


John Horton McDermid: Mr. Speaker, I looked forward to replying to the Hon. Member because, as some people know-not too many-the action carried out by the Ministry during his brief tenure as Minister of the Environment was negligible. He knows full well that the Government has been working extremely hard on trans-border pollution problems, has privided more action and has got more interest in both this country and south of the border than the previous administration. He knows that the Government has made a very strong commitment to address the problem of toxic contaminants in the Niagara River basin. Also he knows of the very rapid, firm action of the Minister of the Environment (Mr. McMillan) on the St. Clair problem. He should be applauding the Government for the action it took, the speed with which it took it, the competence in which it took action and the results of that action. I assure him on behalf of the Minister of the Environment that every precaution will be taken to ensure safety and good water in the Great Lakes by thee Government.
I should like to tell the Hon. Member that there are negotiations and ongoing work right now at a very hectic pace within the Ministry of the Environment with our neighbours to the south. A working document was provided to the Minister of the Environment and to Mr. Thomas of the United States EPA when they met in Ottawa last fall and put together the draft action plan.
I think the Hon. Member understands-I forget how long he was the Minister, but he knows that in order to have a good working agreement and to ensure that we take care of and attack the problem it is necessary to have mechanisms which ensure effective meshing of the various efforts on the Niagara. Of course that would pertain to the St. Clair as well. We are confident that this will be achieved as it is at the core of a comprehensive action plan to reduce the amount of toxic contaminants in the river.
It is the intention of the Minister and Mr. Thomas to have a co-ordinated, four-jurisdiction plan-and we are talking about four jurisdictions now-in accordance with the commitments made last May. We expect to announce the details of the four-party plan in the coming weeks. I assure the Hon. Member that every effort-and we are working very diligently on this-is being made to this end.
In conclusion, I reiterate the Minister's commitment to the reduction of toxic pollution in the Niagara River and Lake

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Adjournment Debate
Ontario in order to improve the quality of these waters and, most important, to protect the health of Canadians who use them.


NATIONAL PARKS-WILDLIFE POACHING-HARSHER PENALTIES
Gordon Edward Taylor: On Wednesday, December 4, I asked the Hon. Minister of the Environment (Mr. McMillan) what steps he was taking to deal with the problem of poaching in Banff National Park. I have no quarrel with the Minister's reply but the time limitations prevented the whole story being told. The Minister said in part:
Poaching, especially underground organized poaching, is becoming a serious problem in our national parks right across the country. Dozens of our big game species are being slaughtered, largely by non-Canadians for trophy purposes. For example, a bighorn sheep head will command about $50,000 on the black market. To meet the problem head on, we intend to change the Fine, which is now only $500 and as such is not a deterrent but a licence, to $150,000 maximum. And we intend to include six-month jail sentences as a further deterrent.
The majority of trophy hunters are Americans and Europeans. To hunt legally as non-residents they must pay $7,500 to $10,000 for a guided ram hunt in British Columbia, Alberta or the Territories. Since one-half of these hunts are successful, a hunter can reasonably expect to pay $20,000 plus travel expenses before taking a animal. The chances of taking a trophy animal or the ultimate goal, a record trophy animal, are even lower, and thus the real value of a trophy ram to the hunter exceeds $20,000.
The current black market value of a ram's head ranges from $10,000 to $30,000. In such a market the risk of a $500 fine is of little consequence to a determined trophy hunter convinced his chances of taking a trophy animal are significantly higher in a national park. Trophy animals are becoming scarce in more accessible areas where they can be hunted legally.
As an example of what happens, in 1981 an elk was shot in Banff National Park and a bighorn sheep was shot in the Jasper National Park. As a result of a six-month investigation, an international poaching ring was broken and a B.C. guide outfitter was found guilty of poaching wildlife in both parks. His combined fines totalled $5,000 and he served a three-month jail term. He lost his B.C. guide outfitter licence and the right to sell his hunting territory, valued at more than $70,000. The application of the National Parks Act alone would have resulted in only $1,000 in fines.
The American hunter in the above case pleaded guilty in the U.S.A. court to illegally importing an elk head from Banff National Park and two eagles from British Columbia. He faced a maximum fine of $20,000 and five years in jail. He was fined $13,000 and sentenced to 40 days in jail. Canadian arrest warrants remain in effect for charges under the National Parks Act should he ever return, but if he does he will only be faced with a maximum fine of $500. This ring was broken up by our wardens and our RCMP.
In addition, there is an illicit trade going on in wildlife organs and body parts. For instance, the organs and body parts
of a grizzly bear are valued in the aphrodisiac, jewellery and charm trade. The hide and skull range in value from $2,000 to $7,000 and claws sell for $50 to $125. Elk antlers are highly praised as an aphrodisiac and velvet antlers sell for $2,000 a pair.
In addition, organized poaching, in association with trophy hunting, is becoming a common practice and criminals are using advanced radio communications, night scopes, telemetry equipment and tranquilizers to increase their chances of success and reduce the chances of being detected. Law enforcement is only one of the several duties of the RCMP and a warden's job and consequently the poachers think they can get away with these trophies.
In addition, in the past decade there have been numerous cases of assault of wardens apprehending poachers. In 1983, two wardens in Riding Mountain National Park were robbed at gun point of their horses and radios by a poacher packing out six hind quarters of elk and moose meat. The poacher was later arrested by the RCMP in Winnipeg and convicted of armed robbery. Increased use of violence may be one negative aspect of higher penalties for poaching. On the other hand, better training, particularly in self defence and better equipment will hopefully counter this trend. The Minister, in increasing the fines and providing a jail term, I believe, is on the right track, and I hope we will be successful in saving the animals in our national parks. I also recommend that the RCMP and wardens be provided with weapons and equipe-ment at least comparable to that used by the criminals and poachers so they can properly deal with this illegal work.


John Horton McDermid: Mr. Speaker, when one has the responsibility of speaking during the Late Show, one sometimes is very fortunate in having the opportunity to reply to a comment by the Hon. Member for Bow River (Mr. Taylor), a Member who represents probably one of the most beautiful ridings in all of this great country. It is a riding in which I spend a lot of time in order to enjoy its abundant wildlife.
When we speak of poaching, my heart breaks. This is so for anyone who has experienced the sight of young children seeing animals in the wild for the first time. I can recall my first experience with bighorn sheep. I was so close to them that I could almost touch them. When I hear about poaching I am saddened. I feel badly about it.
Quite frankly, I was amazed to learn the price people can receive for trophy heads. This price ranges between $10,000 and $50,000 on the black market and I understand that the $500 fine of which the Hon. Member spoke has been in place since 1919. An increase in the penalty is long overdue.
I can tell the Hon. Member that people go to a lot of trouble to poach. It takes a lot of work and a lot of planning but it is worthwhile if it pays off in the long run. Why go to the expense and trouble of taking a trophy animal legally when the National Parks present such an inviting alternative? We
January 21, 1986

intend to provide poachers with a good answer to that question: the prospect of facing a fine of $150,000 and six months behind bars.
As the Hon. Member mentioned, the poaching problem does not stop there. He spoke of the retail prices of red meat, fish and poultry. These prices have made the poaching of meat increasingly attractive. This is particularly true of moose, deer and salmon. The black market value of a moose carcass ranges from $400 to $1,000. Again, a very small fine has been imposed for this kind of poaching. However, we intend to introduce a maximum fine of $2,000 for other offences under the National Parks Act, offences which include the poaching of meat.
Creating a deterrent is only part of the solution to the problem. There are currently 250 wardens in the system. That may sound like a lot of wardens but they have to enforce 140,000 square kilometres of parkland and they must cope with the highly organized poaching activities, the more sophisticated poaching techniques and the increased use of violence by individuals that are apprehended. Clearly, we cannot rely on the patrols and surveillance operations of the wardens to keep pace with poaching. We must have better equipment, better training and inter-agency co-operation between wardens and the police. As well, I think we as individuals who use the parks have a responsibility to report any undue activities we see occurring in the parks in order to help those who are trying to protect nature at its finest.


ENERGY-REFINING CAPACITY IN QUEBEC-GOVERNMENT POSITION. (B) REQUEST FOR COMBINES INVESTIGATION
Mr. Dan Heap (Spadina):: Mr. Speaker, last week during Question Period, 1 asked the Prime Minister (Mr. Mulroney) how he plans to protect the Montreal jobs and the oil consumption prices of Quebec consumers from the consequences of the shutdown of the Gulf refinery which was permitted by the Government, throwing hundreds of people out of work and creating a daily deficit of 50,000 barrels a day of refined products in Quebec. He gave no serious answer to the question. I asked again specifically whether he would take action under the Canadian Combines Investigation Act. His response was quite evasive. That is just not good enough.
To review the main facts briefly, Ultramar bought the Gulf refinery and closed it. It is the fourth refinery in recent years to be closed in the east end of Montreal. The policy of this Government continued the policy of the previous Government in allowing the refining capacity of Quebec to be reduced so that now there are only three refineries left. There are a total of 1,700 men and women out of work and Quebec lacks 50,000 barrels a day in its capacity to refine petroleum products. It is very clear that with the Government's knowledge and foresight Ultramar bought the Gulf refinery for the purpose of closing it and keeping it closed. It refused to resell it to Gaz Metropolit-ain which would sell refined petroleum products in Quebec.
Adjournment Debate
While Investment Canada was studying the sale, Ultramar publicly threatened the Government of Canada that if the federal Government took action to keep the refinery open Ultramar would close its Quebec City refinery. Shell made the same threat regarding the closing of its own Montreal refinery. In other words, they blackmailed the Government into shutting down and helping them to keep the Gulf refinery closed for the use of the Quebec people. The Government bowed to their threats.
Now the three refineries which have been operating at three-quarters capacity will be able to operate at maximum capacity. Of course, they will have a great increase in profits. They will be able to squeeze the small retailers, the independent retailers, out of business. According to what we learned from the O'Farrell Report, as it has been leaked under the Combines Investigation Act, this will mean price gouging against the people of Quebec. There will be a monopolization of prices, or a cartelization of prices, that forces them up. However, the mysterious thing is that the O'Farrell Report does not make clear whether it is investigating the particular practices of Shell and Ultramar.
Today, the Hon. Member for Yorkton-Melville (Mr. Nystrom) asked the Minister of Consumer and Corporate Affairs (Mr. Cote) whether the O'Farrell investigation which is continuing will go into the practices of Shell and Ultramar. The Minister refused to give an answer. He would not say yes or no as a fact. Instead, he dodged, making the excuse that he cannot interfere with the work of the investigator. He was not asked to interfere; he was asked simply for a statement of fact which he studiously avoided giving.
Is he afraid to tell the truth? Is it intended by this Government that the O'Farrell investigation, under the Combines Investigation Act, will go in there with its eyes closed so that it will not see any facts embarassing to this Government? Mr. Speaker, we need a much more thorough investigation than it seems this Government yet wants.


John Horton McDermid: Mr. Speaker, over the last several weeks there have been numerous questions raised about the closure of the Gulf refinery in Montreal east and the emergence of somewhat conflicting data, from a number of sources, relating to the impact this closure would have on refining capacity in Quebec.
The closure of the Montreal refinery brings to 13 the number of Canadian refineries closed since 1976-four of them in Montreal-as a direct result of the dramatically reduced demand for oil products in the country; 1 might say not only in this country but around the world. I met with 21 Energy Ministers last summer and they all talked about the rationalization of energy in their particular areas. Quebec has done a magnificent job of reducing its dependency on oil. It has reduced its oil share for energy use within the province from some 63 per cent down to 45 per cent in six years. The Quebec Government's goal is 40 per cent by 1990 and it will probably reach that goal. There is a dramatically reduced demand.
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Adjournment Debate
The capacity of the remaining three Quebec refineries is approximately equal to the 1985 Quebec demand. Moreover, demand in Quebec for petroleum products is projected to decline over the next few years, as I have said. Any requirement for temporary additional supply could be met by other means: exchanges, inventory drawdown, product imports from offshore or other provinces.
Furthermore, there is no reason that a particular region or province must be self-sufficient in petroleum products. Other provinces, such as P.E.I., Newfoundland, Manitoba, and certain regions in the United States-New York with a population of 15 million people-do not have refineries and rely completely on supplies from external sources.
The Minister of Energy, Mines and Resources (Miss Carney) remains firm in the view that current and future petroleum product supply projections for Quebec are accurate. But, as with any economic analysis, there will be differences.
When initially responding to this question in the House, the Prime Minister (Mr. Mulroney) stressed that the Government of Canada is committed to protecting the interests of Quebec consumers at all times. I want to reiterate that commitment. However, I would also like to impress upon the Hon. Member that no shortage exists.
Furthermore, the Hon. Member can be assured that with reduced petroleum product demand in Quebec, and Quebec's improved access under deregulation to competitively priced offshore product imports, the province is well supplied now and for the foreseeable future. In addition, the deregulation of natural gas and the abundance of electricity in the province of Quebec ensure that Quebec's energy future is secure.
[ Translation]


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


[Stage Direction]
The House adjourned at 6.28 p.m.
[Stage Direction]

Wednesday, January 22, 1986