1987-03-10

Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, under the provisions of Standing Order 106, I have the honour to present two petitions. One petition is signed by a number of fishermen who point out to Parliament that in July, 1985, there were 1,093 fishermen collecting unemployment insurance, and by February, 1986, there were 29,847 fishermen collecting unemployment insurance. Obviously, this indicates the need for fishermen to receive unemployment insurance. Therefore, the petitioners are asking Parliament to ensure that the Minister of Employment and Immigration (Mr. Bouchard) reject any recommendation that would deprive fishermen of their right to collect unemployment insurance, and asking the Government of Canada to enter into consultations with all representatives of fishermen in Canada to ensure that improvements are made to the program that is offered to fishermen.


Nelson Andrew Riis: Mr. Speaker, it is my privilege to present a petition on behalf of a number of western Canadians who are concerned about the Government's proposal to change the Patent Act relating to prescription drugs. They believe that these changes will severely increase drug prices for Canadian consumers, and restrict the ability of average Canadians to buy the necessary prescription drugs. The petitioners are asking Parliament to reject proposals which will increase these drug prices for Canadians.


Mr. Gordon Taylor (Bow River):: Mr. Speaker, I have great pleasure in presenting a petition on behalf of 130 Canadians who are mostly from the Province of Alberta. The undersigned petitioners humbly pray and call upon Parliament to restrict the Department of National Defence from using, utilizing, purchasing, leasing, or in any way establishing a military base
on the eastern slopes of the Rocky Mountains of Alberta, particularly in the Highwood River Valley area abutting the Kananaskis Provincial Park. As in duty bound your petitioners humbly pray.


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I have the honour to present three petitions from residents of Winnipeg, and towns in Manitoba such as Starbuck, Sanford, and Oakville. The petitioners state that the federal Government proposal to change the Patent Act relating to prescription drugs will increase drug prices for Canadian consumers, and will severely restrict the ability of average Canadians to buy necessary prescription drugs. Therefore, the petitioners humbly pray and call upon Parliament to reject these proposals which will increase prescription drug prices for Canadians.


Mr. Jim Manly (Cowichan-Malahat-The Islands):: Mr. Speaker, I have the honour to present a duly certified petition from a number of Canadians who are concerned about unemployment insurance for fishermen. They point out the great dependence of fishermen on unemployment insurance. The petitioners fear that the Government is contemplating removing the right to collect unemployment insurance. The petitioners wish to see the unemployment insurance program for fishermen improved. The petitioners call upon Parliament to ensure that the Minister of Employment and Immigration (Mr. Bouchard) rejects any recommendation that will deprive them of their right to collect unemployment insurance, and further to enter into consultations with representatives of fishermen to improve the unemployment insurance program for fishermen.


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


Mr. Speaker:: Is it agreed?


Some Hon. Members:: Agreed.

March 10, 1987
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[DOT] (mo)



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Monday, March 9, consideration of the motion of Mr. Wilson (Etobicoke Centre) that Bill C-40, an Act to provide borrowing authority, be read the second time and referred to a legislative committee.
Mr. Simon de Jong (Regina East):: Mr. Speaker, I wish to start off debate today on Bill C-40 which requests greater borrowing authority. We have heard much in the House from both members of the Conservative Party and of the Liberal Party about the deficit. When we start discussing borrowing authorities, it generally boils down to a debate concerning the deficit. Historically opposition Parties criticize the Government for not managing its affairs better and thus producing the type of deficit we have today. Then of course the Government justifies it by claiming that it was the previous administration which caused inefficiencies in government, and that it is doing everything possible to alleviate the deficit. Thus we end up involved in this type of discussion on the deficit.
It surprises me when I hear spokespeople from the Liberal Party during this type of debate. It was not too long ago when they formed the Government and laid the groundwork for the type of deficit we are facing today. It is also surprising when one hears the comments of Conservative government Members. Their justifications in this debate were quite different than when they were in Opposition. In fact, a sort of flip-flop occurred.
The Conservatives today are taking the same line which the Liberals took just a few years ago, and the Liberals are taking the line which the Conservatives took just a few years ago. In essence, nothing has changed.
It is true that the policies of the former Liberal Government are a great part of the reason for the deficit today, but not necessarily the type of spending which that former Liberal Government undertook. When the Conservatives were in Opposition-and they still believe it as the Government-they claimed that the reason for the deficit was Governments had been living beyond their means, and Governments had spent too much on human and social programs.
However, let us look at the figures in industrialized nations or in OECD countries of the world. We begin to realize that what we as a country spend as part of our Gross Domestic Product on social programs is below that of almost all other industrialized countries. We spend less on old age pensions, education, family allowances, and social programs such as unemployment insurance and housing than do Holland, Germany, England, Italy, Sweden, and Denmark. What we as a country spend on social programs is less than what almost all other industrialized countries spend on social programs.
Compared with other industrialized countries, Canada is not spending more on social programs. In fact, as a country we spend less. In part that is understandable.
Given the resources of the country and given the relatively young age of our population, there should be no reason that we in Canada should not have full employment and more opportunities for Canadians to find meaningful work with an adequate income to supply the basic necessities and needs.
When I hear Conservative Members telling us and the Canadian public that the reason for the high deficit is that we have lived beyond our means and our social programs have been too rich, I say balderdash. The facts do not support that contention.
Let us take a close look at the cause of the deficit. The real reason for it is that Liberal Governments and Conservative Governments have not been collecting the taxes they should have collected, mainly from the corporate sector. If there is a free lunch in Canada today it is one enjoyed by corporations. When we look at the statistics we begin to realize that the total number of profitable corporations which paid no taxes in 1983 was 79,196. Almost 80,000 profitable corporations did not pay a cent of tax. Their profits were roughly $13.3 billion. In other words, $13.3 billion in profits were not taxed at all. Those corporations did not contribute a cent to the operations of the country. That is a free ride and a free lunch.
If we break down that figure, we begin to realize that the number of profitable financial corporations which paid no taxes in 1983 totalled some 28,000. Their profits were $7.2 billion. Not a cent of tax was collected from the 28,000 financial institutions which had profits of over $7 billion. The number of corporations with profits of over $25 million which paid no taxes in 1983 was 64. In other words, 64 companies with profits of over $25 million did not pay a cent of tax. That is another free lunch, and the figures continue.
When we talk about the deficit and the reason for it, let us not be fooled by propaganda which claims that our old age pensioners are on a free ride, that we pay too much to mothers and fathers to raise their children, that our unemployment insurance system is too rich, that our welfare system is too rich, or that we spend too much on education, hospitals, and other health services. No, that is not the reason for the deficit. The reason for the deficit is the free ride enjoyed by large corporations.
I think the Minister of Finance (Mr. Wilson) finally recognizes the problem facing Canadians. In the last month we heard statements from him suggesting that corporations have been on a free ride a little too long. He is now beginning to say that they should be paying their fair share. It has taken some time for a Minister of Finance to awaken to what is happening, and well he should.
When we look at the Minister's statements during his budget presentation and at the documents which he tabled at the time, we begin to realize why his deficit projection from the previous year was out by several billion dollars. The
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Minister rose and said that the reason for it was the $1 billion contributed to agriculture, most of which is going to western agriculture. That is a red herring. It is not $1 billion out of last year's finances, it is only $300 million, and $700 million will be coming out of the 1987-88 year.
We begin to realize why the projections of the Minister of Finance for deficit reduction were off when we look at the Budget Papers and see that the projections for corporate income tax for the 1986-87 year were off by some $2,260 million. In other words, we find that some $2,260 billion in tax dollars the Minister expected to raise from corporations were not raised. His projections for 1987-88 are off by some $2,325 billion. Again, the revenues the Government was expecting to raise from corporations will be down by over $2 billion in this financial year. That is why the deficit projections were off and why we have the type of deficit we have today. It is not because average Canadians are on a free ride with Government largess, it is because the corporate sector has not been paying its fair share.
We see the same story told again through other tables presented in the Budget Papers. The Minister of Finance expects that corporate profits will increase over 20 per cent this year while revenues from the corporate income tax will only increase some 3.9 per cent. Profits will go up by over 20 per cent but public revenues from corporations will only go up 3.9 per cent. That is why we have the problem with the deficit, Mr. Speaker. There are folks out there who have been earning a lot of money who have not been paying their fair share.
Who are the people who have been taxed? When you look at the statistics, you begin to realize that it is the middle and the lower-income Canadians who have been carrying the burden of deficit reduction. An average two income family with two children whose income was $15,000 will have its tax increased over 90 per cent. These people are living well below the poverty line, Mr. Speaker, yet that family's income tax has increased over 90 per cent.
It is not just higher income tax that families are paying, they are also paying more in sales taxes. The Government has dramatically increased the amount of taxes Canadians are paying through sales taxes. Not only is the Government now taxing manufactured goods, it is taxing granola bars, frozen yogurt, pop, vitamins, other pharmaceuticals and a whole host of items that were never taxed before. The major burden of that tax falls on lower income Canadians because a higher percentage of their income must go to the basic necessities of life.
Since this Government came into power, people earning $15,000 a year are now paying 90 per cent more in taxes. People living at the poverty level earning $20,812 a year have seen their taxes increased by 35 per cent. The middle-income person with an average income of $42,000 a year has seen his income tax increased by 32 per cent. However, the individual
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earning over $100,000 a year has been helped by the Government. It has offered the individual earning over $100,000 a year all sorts of new tax loopholes. These individuals will only see their income tax increased by 2 per cent. Here we have a person living well below the poverty line, a two-income family with two children, earning $15,000 a year whose income tax has increased by 90 per cent while another family earning $100,000 a year has seen its income tax increased by 2 per cent. Is this fair, Mr. Speaker? That is the major question we have to ask today.
Take the case of a single pensioner in Vancouver with an income of $9,312, that is the old age security and the maximum CPP. After deduction-his or her taxable income is $2,521 and the tax payable is $273 federal tax and $4 in individual surtax, This single pensioner is trying to eke out a meagre existence on $9,000 a year, which is well under $1,000 a month on which this individual tries to exist paying tax. But, what else is there?
We find that TransCanada PipeLine in 1980 on $102.5 million in profits and in 1981 on $154 million in profits did not pay one cent of tax. In other words, $256 million in profits from TransCanada PipeLine did not yield one cent of tax. With a tax rate of just 25 per cent, we would have been able to reduce our deficit by $64 million, had TransCanada PipeLine been paying 25 per cent tax on the millions of dollars it has earned. But no, the TransCanada PipeLines of this world can go through life and not pay any tax. Meanwhile, the single pensioner in Vancouver on a meagre existence of $9,000 a year ends up paying tax. Is it fair, Mr. Speaker? We in the New Democratic Party say it is not fair and it is about time that this unfairness was corrected.
Let us look at a family of four with one earner, one dependant spouse and two children, with an income of $22,500-on the poverty line. This family lives in Toronto. That earner will pay $2,329 in federal tax and $35 in individual surtax. This family does not earn very much, well below $2,000 a month, and is trying to raise two children in Toronto with high housing costs and is expected to pay and contribute over $2,000 to reduce our deficit.
Let us take a look at trust companies. The Guaranty Trust Company of Canada paid no current taxes in 1978, 1979, 1980 and 1983 and a current tax rate of only 1 per cent in 1984 on profits totalling $32 million. With a tax rate of 25 per cent, the Guaranty Trust Company would have paid $8 million in taxes. One could go on with a list of trust companies that did not pay one cent of tax. Yet somehow the Government considers it fair that that family who is living on the poverty line in the City of Toronto trying to raise two kids is expected to pay over $2,000 in taxes while trust companies do not pay one cent.
The Liberals and Conservatives justify these tax breaks because they claim investment is the engine of growth. Give the corporations a tax break and their profits will create jobs. With an unemployment rate that continues, and with the hundreds of billions of dollars in lost revenues from corporations because of tax breaks, surely that theory has proven to be

March 10, 1987
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non-workable. We in the New Democratic Party believe that the real engine of growth is people. If people have enough money to spend on the basic necessities of life, on a roof over their heads, some food on the table and clothes on their backs, that will create jobs, Mr. Speaker. The dollars they spend will create the domestic demand that will surely allow Canadians to work.
We in the New Democratic Party will be opposed to this Bill because we do not believe that the strategy of deficit reduction followed by this Government and the previous Liberal Government has worked. In fact, it has only supplied a free lunch and a free ride to the wealthy of Canada.


James Douglas Manly: Mr. Speaker, I would like to commend my colleague for what I think was an excellent presentation of some of the basic economic and moral problems this country faces today. Someone earning over $100,000 a year will be facing a tax increase of approximately 2 per cent a year while someone living on the poverty line earning around $15,000 a year will be facing tax increases of 90 per cent. This indicates very clearly that there is a direct line between the wealth of the rich and the poverty of the poor and that direct line is the tax system. It is an unjust tax system and even the Government has finally recognized that.
The Government has promised tax reform and has talked about it for a number of years. We expected it would be here with the present Budget, but of course it has now been postponed. We do not know exactly what will be in the tax reform, but I would like to ask my colleague if he could indicate to the House what hopes he has for the proposed tax reform the Minister of Finance (Mr. Wilson) will bring in.


Simon Leendert de Jong: Mr. Speaker, we all wait with bated breath the Minister of Finance's tax reform proposals. I believe it is important to the Government from a political point of view to bring in tax reform. The American tax reform proposal has seen top individual tax rates being reduced to some 28 per cent. I believe that around $130 billion of extra revenue will be taken out of the corporate sector in the United States just by plugging up loopholes. Many individuals will benefit from that. Whether this Government will do the same, I am not certain. We will have to wait and see.
Politically, it would seem that this Government could very well use tax reform as a method of attempting to get itself reelected in the next election. That is why I personally believe the Government keeps postponing tax reform. It is something it should have given indications of in 1984, and certainly tax reform or at least steps in that direction should have been included in the 1985 Budget. The Government has kept postponing it and postponing it. I suspect we will see tax reform around the time the next election will be called as a political ploy.
I also suspect that through the tax reform package, personal income tax will drop, and will perhaps drop substantially.
However, I am afraid that the Government will take back the extra tax savings of Canadians through a new type of business transfer tax or a tax on consumption. The Government will put dollars into our front pockets but will take them back out of our back pockets. The Government will take the dollars back through a value added or business transfer tax which is a hidden tax, a sales tax, a tax Canadians will not see and will not be aware of when they pay it. In essence, tax reform could very well be a shell game; now you see the pea, now you don't, now you see your tax dollar, now you don't.
It is unfortunate, but I do not believe that the Government is philosophically committed to the notion that it is people, the meeting of human needs, that should be the engine of growth in Canada. I believe the Government, like the Liberal Party, is committed to the notion that if the guys at the top do well, eventually those benefits will trickle down and at some stage there will be more employment. It is called the trickle-down theory. In essence, it means that if we feed the horse a lot of oats, eventually the sparrow will get some. The oats will pass through the horse and the sparrow will be able to get the horse's droppings. This trickle-down theory has not worked.
I would also like to point out to my colleague and to the House that a cruel joke has been played on the poor of Canada. The poor are the victims, the casualties of the fight against inflation. The House will recall that in the mid-70s when inflation was raging at 12 per cent and up, there was a national and, in fact, an international resolve to wrestle inflation to the ground. The causes of inflation were many but essentially it was human greed, the greed of the oil industry, the greed of OPEC and the greed of primary producers. Those in the market-place who had the strength got on the bandwagon and there was this inflationary effect. Governments decided to wrestle inflation to the ground through a restrictive monetary policy. This meant that a great many people lost their jobs, including industrial workers, white-collar workers, lawyers and accountants. These people are still without jobs and they are the ones who have been been taxed by the Government ever since it has come into power.


Mr. Ravis:: Mr. Speaker, I was beginning to think that the Hon. Member's entire presentation was about the trickle-down effect and droppings. I would like to follow up on the question put by my colleague, the Hon. Member for Cowichan- Malahat-The Islands (Mr. Manly), about waiting for tax reform with bated breath.
I can assure you, Mr. Speaker, that I too am waiting for tax reform with bated breath, but I am waiting for it with a positive attitude about what will come from the Minister of Finance (Mr. Wilson) who, in 1984, brought forward a very realistic economic agenda. Now that we are two and a half years into our mandate, there are some very impressive performance indicators showing that we are on the right track.
Having been here for two and a half years, I am convinced that if one holds something up to a member of the NDP, even if it is the best piece of legislation in the world, he or she will
March 10, 1987

show us how it can be ripped apart. Members of the NDP feel that there must be something wrong with it, that there must be a negative side to it. They wonder how it could possibly be good. I would ask the Hon. Member for Regina East (Mr. de Jong) if members of the NDP will take that attitude when the tax reform package comes down. Will they say that there must be something wrong with it and that there is nothing good about it? I think people across Canada, and I have been speaking to many of my constituents in Saskatoon and other parts of Canada, are getting very tired of the negative aspect of the House of Commons which does not appear to be working in the best interests of Canadians.


The Acting Speaker (Mr. Paproski):: There is another Hon. Member who has a question so I would hope that the Hon. Member for Regina East (Mr. de Jong) would make his answer very succinct.


Simon Leendert de Jong: Right, Mr. Speaker. First, this Party has been talking about tax reform and the unfairness of our tax system for decades.


Donald Paul Ravis: And we're doing something about it.


Simon Leendert de Jong: I would claim that if it were not for the New Democratic Party and the fact that we have made this an issue, the fact that we have done research and the fact that we have risen in the House to point out the corporations that have not been paying their fair share, it would not have been an issue today. As a Party we are committed, and that became one of our priorities after the 1984 election, to focusing public attention on this issue and to making it a public issue for public debate. We have done that and we hope the results will be positive. When the Minister of Finance (Mr. Wilson) announced that he was going to introduce tax reform my Leader and other members of the Party, including myself, were hopeful and optimistic. We welcomed that announcement. I hope that after the recommendations for tax reform have been worked through the Finance Committee in a non-partisan way we will produce a fair tax system we can all be proud of and for which we can all take credit.


Mr. White:: Mr. Speaker, I listened with interest to the Member's comments. He spoke about Liberals and PCs justifying the tax breaks and the hundreds of millions of dollars of lost revenues. He mentioned many times that members of the NDP do not think that is fair. In fact, he used the words "cruel joke" on one occasion.
The Government of Manitoba spoke in similar terms about the Scientific Research Tax Credit. At one point the Minister of Finance there called it "legalized theft". It was discovered later that there were two Manitoba cabinet Ministers who had invested and made money in that program. Therefore, the cruel joke is the NDP's assertion that it has the market cornered on social conscience. Does the member understand
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the concept that you can have no social justice without economic stability?


Simon Leendert de Jong: Mr. Speaker, of course you need economic stability in order to have progress and social justice. That is why the New Democratic Party talks about economic planning and having an economic strategy.
The Hon. Member made a point about individual members in the Manitoba cabinet. What individuals do and what the Party policy is are two different things. Second, if the law of the land allows certain things, can we blame individuals for taking advantage of it? They were only taking advantage of the law which was put in place. The Scientific Research Tax Credit was an open invitation for a raid of the Treasury. It was introduced by the Liberals and continued by the Conservatives until it became so outrageous that they finally had to shut the whole show down.


The Acting Speaker (Mr. Paproski):: I regret that the period for questions and comments is now terminated.


Mr. John Reimer (Kitchener):: Mr. Speaker, I am pleased to add a few comments to the debate on Bill C-40, an Act to provide borrowing authority for the Government. Simply put, this Bill would provide the Government with the authority to borrow an additional $3 billion for the 1986-87 fiscal year and $21.3 billion for the 1987-88 fiscal year.
There can be no doubt that the timing of the Bill before us is appropriate. The Government is following the pattern for an improved budgetary process which was set out in a paper tabled by the Minister of Finance (Mr. Wilson) in May of 1985. The same pattern was followed with the last borrowing authority Bill. One of the suggestions presented in that paper, which the Government has been actively pursuing, was that parliamentary approval for borrowing authority for each upcoming fiscal year should be sought at the same time as the Budget is presented.
The logic behind this proposal was that the budget presentation in February would set out the financial information for the new fiscal year for parliamentary study. This course of action has now been followed for two consecutive years. Therefore, this debate on borrowing authority has a complete picture provided by the Budget and the spending Estimates as we consider this request for borrowing authority.
The $24.4 billion total figure mentioned in this Bill is comprised of the projected financial requirements of $21.3 billion, as I indicated, plus a $3 billion reserve to provide flexibility to meet contingencies such as fluctuations in the level of Canada's international reserves. This is very prudent in light of recent exchange market developments. For example, in the months of January alone about $2.5 billion in borrowing authority was used as a result of exchange market operations. The proposed $3 billion reserve will provide the Government with the on-going flexibility which is needed to rebuild its cash balances. While the $21.3 billion for the fiscal year 1987-88 is

March 10, 1987
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an enormous amount of money, it compares favourably with the necessary amounts borrowed since we have taken office.
The fact that these figures are trending downward reflects the very welcome fact that over the past three years the Government will have reduced financial requirements by 28.5 per cent, from $29.8 billion in the year in which we took office to $21.3 billion in 1987-88. This is the lowest level in six years. Relative to the size of the economy, financial requirements have fallen from 6.7 per cent of the gross domestic product to a projected 3.9 per cent. This steady reduction in the demands made by the Government on the nation's savings is one of the most important factors underlying our steady economic growth and advance.
Yesterday I listened to the debate of the Hon. Member for Trinity (Miss Nicholson) as she put forward some of her Party's opinions on this borrowing authority Bill. Since she is a member of the Standing Committee on Finance and Economic Affairs, I decided to listen carefully to what she had to say. She said that we must spend more, tax less, and reduce the deficit, all at the same time. She castigated the Government for its various spending cuts. She then zeroed in on the incentive bonus which was provided for senior civil servants if they effectively ran their departments and controlled spending within those departments. I cannot understand why someone would criticize another for doing a good job. The only thing which is appropriate when you do a good job is incentive to do a better job next time. Does that mean that Liberals want to reward incompetence? That is what it sounds like. I am glad 1 am on the side of the House which rewards efficiency and discipline in the controlling of government spending.
The Member's answer with regard to what we should be doing was to increase training, increase spending, and increase transfer payments while at the same time reducing the deficit.
I must ask what fairyland school of economics that Hon. Member attended. I saw in her biography that she attended the London School of Economics. We all know that it has a leftist bent, but I am sure that they did not teach the fairyland, hypocritical type of economics which we were hearing yesterday.
At the end of the Hon. Member's comments she had the audacity to say that we should let actions speak rather than words. Well, let us do that. Let us look at the actions of her Government and her Leader, when he was the Minister of Finance, and compare those with the actions of the present Government. Let us allow the actions to speak rather than the words.
From 1972 to 1975 the Right Hon. Leader of the Opposition (Mr. Turner) was the Finance Minister. Let us examine a few indicators of what took place during those years. When the Right Hon. Leader of the Opposition became the Finance Minister he had a $481 million annual surplus rather than a deficit. In three years he turned that $481 million surplus into a $4 billion deficit. Under his leadership spending rose by an average of 23 per cent a year. The gross national debt grew by 50 per cent and deficit costs grew by 85 per cent. The inflation
rate doubled from 5.1 per cent to 10.6 per cent. That is not surprising. When someone says that we must spend more, tax less, and yet somehow reduce the deficit, the only option left is to print money, and that is exactly what that Minister of Finance did. It is not surprising that inflation went up.
During his tenure as Minister of Finance the Bank of Canada rate rose by 4.25 percentage points. Under his leadership unemployment rose by 1 per cent and the youth unemployment rate rose by 2.5 per cent. From 1980 to 1984, when the Hon. Member for Trinity was on the Government side and was obviously voting for these kind of measures, interest rates went as high as 23 per cent. The unemployment rate reached almost 13 per cent. Inflation rose about 12 per cent. Many small businesses went bankrupt. Some families lost their homes because due to high interest rates, they were unable to meet mortgage payments. The deficit rose from $13.3 billion to $38.3 billion, almost tripling in size during those four and a half years.
Let us now look at what has taken place since September, 1984, to the present. Since September of 1984 interest rates have fallen by 4.8 per cent. On a five-year, $50,000 mortgage that means a saving of $132 a month or $1,584 per year for the home owner. Unemployment has fallen from 11.7 per cent to 9.7 per cent today. Youth unemployment has fallen from 18.3 per cent to 14.4 per cent. Inflation has remained in the 4 per cent range for two and a half years. That is the most stable price environment we have enjoyed since 1971. On a seasonally adjusted basis housing starts are up 67 per cent since September of 1984. In my riding some construction companies are having difficulty finding workers because the demand for new houses is so great. When we took office the deficit was running at $38.3 billion. That is now down to a projected $29.3 billion for the fiscal year 1987-88. We have had a decline in the deficit for three years in a row for the first time in 30 years. That is a very significant achievement given the size of the deficit when we took office. We also have to remember that interest has to be paid on the deficit. When you cut the deficit from $32 billion to $29.3 billion you are also cutting the amount of interest you have to pay. Looking at the amount of interest we have saved also indicates the tremendous progress we have made. We still have a long way to go, but at least we have made an excellent start.
During the 1980-84 Liberal Government, spending grew by an average of 15.1 per cent. Even before the recession Liberal Government spending rose, in 1980-81, by 14 per cent. The Liberals cannot use the excuse of an increase in spending because of the recession. They were already doing it before the recession started. From September, 1984, to the present this Government has cut the spending increase to an average of 3.9 per cent or just under the inflation level. Therefore, for the first time in 14 years, public debt charges are growing more slowly than the economy.
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In summary, I believe the Main Estimates tabled on March 2 represent a further significant contribution to the Government's record of expenditure management. This is the third consecutive year that the growth rate in the Main Estimates has declined. This year's increase is the lowest in a quarter of a century. In 1987-88 the size of the Public Service will be at its lowest level since 1980-81. This track record clearly reflects this Government's strong commitment to sound management and to the operation of an efficient and effective Public Service while maintaining and even expanding some programs which serve the real needs of Canadians.
I say we should look at the facts and look at the record. Rather than listening to an NDP spokesman, a Liberal spokesman or even myself, let us look at what the Auditor General has said about the control of spending throughout these years. For the period 1972 until 1975, the Auditor General commented on the last year that the Right Hon. Leader of the Opposition was Minister of Finance. He was deeply concerned that Parliament and, indeed, the Government had lost or was close to losing effective control of the public purse. Financial management and control in the Government of Canada was grossly inadequate. That was the record established by the Right Hon. Leader of the Opposition and the Liberals, and that is the kind of financial situation they want to bring back should they become the Government.
Now let us look at what the Auditor General said this past October. In tabling his report he said that his sense was that there is an interest in better accountability and better management. He went on to say that he believed Members of Parliament and the taxpayers of Canada should be heartened by the genuine improvements. That is our record. We have seen the Liberal record and now we have seen our record over the last three years. I would put our record on the line any time. It speaks for itself and the comments of the Auditor General then and now support that record 100 per cent.
I have to say to the Hon. Member for Trinity, or any opposition Members, but particularly those in the Liberal Party, that I challenge them to tell it like it is. Let us hear all of the facts, not just the things they want to talk about. Let them not speak out of all sides of their mouths at the same time. They cannot do it. How can they say spend less, yet add to existing programs, increase training and transfer payments, and at the same time reduce the deficit? That cannot be done. I ask Hon. Members in the Liberal Party to start telling it like it is, given these facts. If they want to be critical, let us have some constructive criticism. Let them tell us what they would do if they were in our position today. I think they would find our approach is working extremely well.
Look at the economic indicators, the spending controls put in place by this Government, and the deficit reduction. Look at what is happening in the economy. Look at what outsiders are saying about Canada. The Japanese sent a study group here in 1976 and they were very disheartened. They could not recommend investment in Canada. However, last November they were here again and they said things have changed. This
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Government has brought spending under control. It now makes sense to invest in Canada. Therefore it is not just government spokesmen saying that. The Auditor General said it, the facts say it, and outsiders are saying it.
I ask members of the Opposition to get their act together and give us some constructive criticism in harmony with the facts. They will find that what we are trying to do goes in the right direction. Sure, we might cut less in one area and more in another. I am willing to look at that and debate it. However, we can start being honest about the facts. Let us stop playing politics with the Canadian taxpayer and the Canadian economy and start telling it like it is.
Therefore I commend this Bill for speedy passage.


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


Mr. Hopkins:: Mr. Speaker, after that tirade one wonders whether one should even question the self-righteous in this House. Canadians are not totally convinced that this Government is all perfection, as the Hon. Member says. I do not think they will turn those thoughts around very quickly. Can the Hon. Member explain why the Minister of Finance (Mr. Wilson), in August of 1984, in Toronto, went on the record saying that a Conservative Government would reduce the deficit by cutting government expenditures and not by increasing taxes. Canadians know that individual taxes have gone up 53 per cent since the Government took office. Everyone knows that the cuts in spending have taken place in important organizations and government institutions in Canada. The Government is even putting the long-term energy future of this country at stake. There have been drastic cuts in the field of science and technology. However, during the 1984 election campaign the Minister of Finance said his Party would not increase taxes to pay the deficit, but would cut government expenditures in order to reduce the deficit.
The Hon. Member concluded his remarks with great oratorical rhetoric. I want to tell him that the rhetoric he used at the end of his speech is the rhetoric Canadians are becoming used to from the Government. I will let the Hon. Member respond to that important question. I will ask him a second question if I have the opportunity.


John Henry Reimer: Mr. Speaker, there are two or three elements to the Hon. Member's question. The first concerns the reduction of the deficit without taxation and the second deals with some of the cuts. I noticed the Hon. Member watching me toward the end of my remarks when I said that we can debate whether cuts in one area are more or less appropriate than cuts in another area. I agree that it is fine to debate the appropriateness of specific cuts in certain areas. However, at the same time it must be agreed that we should make progress in reducing the deficit. I assume that is what the Hon. Member meant and, therefore, was following my suggestion to

March 10, 1987
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be constructive in looking at some of these issues and where cuts are made.
Let us consider the question of deficit reduction. The Minister of Finance said in his Budget Speech, as reported at page 3575 of Hansard:
When we took office, government spending on all programs was growing by almost 14 per cent a year-
An average of 15.1 per cent from 1980 to 1984. He went to
say:
Since then, program spending has grown on average by only 2.8 per cent a year, well below the rate of inflation. Spending on government programs is being reduced in real terms and relative to the economy. About 63 per cent of the decline in the deficit relative to the size of the economy will have been achieved by reductions in spending.
The fact that 63 per cent of the reduction in the deficit is through cuts in spending shows the way in which we are attempting to reduce the deficit. Through that method we have achieved 63 per cent of the reduction in the deficit to date.


James Douglas Manly: Mr. Speaker, the Hon. Member boasted that the Government's policy has been able to reduce the unemployment rate some 2 per cent. The Hon. Member obviously comes from southern Ontario. What advice would he give, not only to me and opposition Members for our constituents in British Columbia, but to his Conservative colleagues from British Columbia where the unemployment rate in January this year was 15 per cent? What advice would he give his Conservative colleagues from Newfoundland when the Forget Commission report said that if the people of Newfoundland had the same participation in the labour rate as they do in Ontario there would be 38 per cent unemployment in Newfoundland? What advice would he give his Tory colleagues in seven provinces across Canada where the unemployment rate today is higher than it was at the height of the recession in 1981-82? What advice would he give his colleagues from other parts of Canada when they realize that of the 137,000 jobs that were created between January, 1986 and January, 1987, all but 5,000 of them were in Ontario? Surely the Hon. Member must realize that the growing disparity among regions should receive government attention in its budgetary process and that the borrowing authority should be directed toward more job-creation and eliminating this growing disparity amongst regions? Will he address that question?


John Henry Reimer: Mr. Speaker, there is no question that the benefits from the figures I have been using are being enjoyed more in southern Ontario than anywhere else in Canada. However, that does not make the figures inaccurate.


James Douglas Manly: It makes them irrelevant.


John Henry Reimer: It does not make them irrelevant either. They simply point out the situation on a national basis. There is no question that there are regions in Canada in great difficulty. The Minister of Regional Industrial Expansion (Mr. Cote) and the Government are dealing with that through measures such as those to assist people in the steel industry in Cape Breton.
We are working on this serious problem, but that does not make any of the figures I have used invalid.
I welcome the Hon. Member's comments because it appears he is beginning to support our trade talks with the United States. British Columbians tell me that it is essential to have this trading agreement with the United States so that rather than trade wars and countervailing duties there is a system whereby we can secure and enhance our present trade. I welcome the Member onboard in supporting these trade talks with the United States so that all regions can begin to enjoy the benefits that southern Ontario is enjoying today.


Donald Paul Ravis: Mr. Speaker, I want to compliment my colleague because I believe the figures he has cited accurately represent the story as it is. The most frequent message I heard prior to the 1984 election was to come to Ottawa to deal with the horrendous spending and borrowing and bring about some semblance of economic recovery in this country. I heard that message many times and I am surprised that Liberal Members are not prepared to recognize that the situation is beginning to improve.
I say to the Hon. Member for Cowichan-Malahat-The Islands (Mr. Manly) that it is disappointing in some parts of the country, but surely he must recognize that a much stronger southern Ontario today is helping all Canadians by sharing the costs.
How do the constituents of my colleague, the Hon. Member for Kitchener (Mr. Reimer), view what is happening today? For instance, there have been some increases in taxes. An economist from the University of Saskatchewan told me that he would like governments to begin asking people to pay the increase in taxes today rather than in the future, and pay for a deficit in the same year. How do people from Kitchener feel about sharing the burden of turning the economy of the country around? The Government must shoulder some of the load, but surely taxpayers must shoulder some of the load as well.


John Henry Reimer: Mr. Speaker, I have constituents in different situations who give different responses. Some constituents are encouraged by our attack on the deficit. Other constituents are pleased with our control on spending in general terms. We have attempted to implement these measures by cutting government spending on some programs. We have improved other programs to make them more specific, such as jobtraining through the Canadian Jobs Strategy. Some of my constituents are praising the success of some aspects of those changes.
However, we must also be honest. I indicated that 63 per cent of the reduction in the deficit has been achieved by controlled spending. That means that 37 per cent has been achieved by increased taxes. No one wants to increase taxes. There were increased taxes in the last Budget. None of us want that either. I think the Minister of Finance at least chose the few areas which are probably the least destructive of all increases in taxes in general. So I commend the Minister of
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Finance for that. I do not like having to pay one cent a litre more for gasoline. I am sure no one does. However, we have to raise taxes to meet the debt problem and we have to continue to do so, controlling Government spending at the same time. We have to continue to work in that direction.
Another very important part of the Budget of the Minister of Finance was the promises made with respect to tax reform which will begin to meet the problems our people at the lower and middle end of the wage scale are facing. Much of the debt load over the past 15 or 20 years has been through the personal income tax route, therefore Canadians are heartened by that promise. I am sure we are all looking forward in anticipation for the results of that initiative.


Mr. Johnston:: Mr. Speaker, could the Hon. Member for Kitchener (Mr. Reimer) comment on the change the Minister of Finance (Mr. Wilson) is proposing in terms of payroll remissions? As you know, Mr. Speaker, he is recommending that employers basically remit twice a month instead of once a month. The purpose of this seems to be to move $1.2 billion from 1988-89 back to 1987-88, which has the effect of reducing, at least superficially, the deficit to $29.3 billion in 1987-88. Would the Hon. Member tell us whether he approves of that kind of creative bookkeeping in order to reduce the deficit, of which his constituents, he tells us, are very much in favour? Does he not think this places an undue burden on small and medium sized businesses, which is really not warranted, simply to get the deficit down artificially in this fashion?


John Henry Reimer: Mr. Speaker, in the short time I have to respond let me say that I was talking to an accountant in Kitchener and I asked what that would do. His comment was that, yes, it would create some hardship for some but he did not think it would in all cases. It would depend on how they were looking after this need in the first place. I can acknowledge that if small business has to send this money in that much more quickly, all of their procedures will then have to be changed so that this can be done. They must do it. They have no choice. So, yes, I can acknowledge some hardship. However, this accountant, and I have only talked to one, at least gave me the impression that it was possible. They could do this, although it would create a little extra burden on them.
Again, it is the same theme we have been exercising throughout. That is, that all sectors of the economy must assist in bringing this huge deficit under control. We must show progress each year to reduce the deficit. Therefore, I would say to the Hon. Member that, yes, every new way to collect tax has some imposition upon people, as does this measure, but we must continue to work at it because of the huge debt left to us by the Party of the Hon. Member.


Mr. Deputy Speaker:: We will have one more question or comment from the Hon. Member for Winnipeg North (Mr. Orlikow) and then we will resume debate.
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David Orlikow: Mr. Speaker, I have a question directed to the Hon. Member. The Government is so determined to reduce the deficit, as the Hon. Member has said, that as part of its program to do so it has cut the transfer funding to the provinces. It has changed the formula for EPF payments so that the payments to the provinces to help pay for the costs of health care and post-secondary education will not be increased as they would have been under the old formula. The Government has also cut the equalization grants. The results have been, and I will just mention the Conservative provinces, that the Province of Saskatchewan announced a few days ago that it would have a deficit of $1.2 billion and would have to lay off
2,000	public servants. Alberta has a deficit of over $1 billion. British Columbia announced yesterday a huge deficit. The Atlantic Provinces, which have always had deficits, have even greater deficits now. Therefore, I ask the Hon. Member if that is what the Government meant when it talked about reducing the deficit? It is a bookkeeping thing. It is transferring the deficit from the federal Government to the provinces, and particularly to the have-not provinces which have the least ability to meet the costs of the basic needs of their people.


John Henry Reimer: Mr. Speaker, the reduction in the transfer payments is a reduction in the increase of the transfer payments. It is not that they are reduced, in that sense. It is the increase which is reduced. Let us be sure we are saying the same things.
The Hon. Member mentioned the deficits of the Provinces of Saskatchewan and Alberta as two examples. I would say that is not due to the lower increase in the transfer payments. That is due to the problems with low grain prices and in the energy sector. It has very little to do with the reduction in the increase in transfer payments. I would suggest to the Hon. Member that he look at what is really causing the difficulties and not bring up something which is not contributing to those provinces' deficits in any significant way.


Leonard Donald Hopkins: Mr. Speaker, I just want to say that the Hon. Member for Kitchener (Mr. Reimer) did admit in his remarks that the Minister of Finance (Mr. Wilson) was wrong to have made those commitments in August of 1984 when he must have known full well that he could not carry them out. I hate to put him in the position of having to apologize for that incident, but it is true that the Minister of Finance-


John Henry Reimer: Mr. Speaker, I rise on a point of order. The hon. gentleman in the beginning of his remarks said that the Minister of Finance was wrong and I admitted it. I did not say that. I think the Hon. Member is going to have to change his choice of words. Perhaps he will want to express that in another way.


Mr. Deputy Speaker:: I think that is a matter of debate. The Hon. Member for Renfrew-Nipissing-Pembroke (Mr. Hopkins) has the floor.

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Leonard Donald Hopkins: Yes, it is a matter of debate, Mr. Speaker. As the Hon. Member should understand, debate goes both ways across this Chamber. The Hon. Member certainly admitted that taxes had to be increased, and that is exactly what I said. The Minister of Finance stated in Toronto that he would not increase taxes in order to pay for the deficit, and the Hon. Member for Kitchener has just admitted in this House that the Government had to increase the taxes in order to do that very thing.
But are they doing it, Mr. Speaker? Again, we hear a lot of rhetoric about the great accomplishments with respect to the deficit, which seems to be continually on the minds of the Government backbenchers. The Minister said he was not going to increase taxes. He should apologize to every Canadian today because individual taxes have increased by 52 per cent to 53 per cent. Taxes on high income earners are on the decline at a time when they are on the increase for lower and middle-income earners. The Government now has the nerve to talk about tax reform. It is building an unfair system first and will then tear it down a bit the year before the election and say, "What great people we are". That is the farce going on in this country today in the field of finance.
1 do not want to see Hon. Members on the Government side, or those who have borrowed seats on this side, tell us they plan to be here after the next election in their usual places. Because if they do, they should not go on at great length promising all these things. Goodness knows, we had enough promises during the last election campaign which have never been met. The Government promised 6 per cent real increase in defence spending. If inflation goes beyond the 4 per cent limit, the Government is going to have a minus factor in the real growth of the defence budget. Yet it thinks that it is the great prince on a white horse, the great friend of the defence community of this country. The fact is that the Government has misled that community, and it has not kept its commitments. It has not even kept the 3 per cent commitment with the NATO Alliance. The Government says it will increase the budget, and at the same time this year there may well be a minus growth in that defence budget.
I wish to comment on the suggestion that there is tremendous growth in employment. My goodness, when listening to the speeches from the Government side, one would not think there was no problem in the country. Maybe the Members do not go home and visit their constituents enough. This morning I checked with employment offices in eastern Ontario, and I know what the figures are there. When people talk about growth of employment in Ontario as compared to the rest of Canada, let us get down to the particulars of that statement. Ontario's growth in employment does not relate to the growth of employment in northern or eastern Ontario because the growth is not in those regions. What is being talked about is the golden horseshoe of the Province of Ontario, and I wish to make that straight. There was a job increase of 127,000 in Ontario in 1986. In the country as a whole there was a 115,000 job increase. The Government brags about that. If there were
127.000	jobs created in Ontario, and 115,000 in the country as a whole, that must mean that in 1986 there was a net loss of
12.000	jobs in the rest of the country.
When we talk about the regions let us include northern Ontario and eastern Ontario with the other regions of the country where those job losses took place.
The Minister of Finance comes from Toronto, and he can stand and brag about the golden horseshoe, without mentioning it, of course, and say what tremendous growth has taken place there. He may well be right. But let us not forget that when Bill Davis and Leslie M. Frost, and the other great Tory Premiers led the Province of Ontario, they used to take all the credit for the growth of employment in the Province of Ontario. I guess it is only fair then that in the good Tory tradition of Tory Premiers of the past a Liberal Premier can step out front and say that it is because of his Government in the Province of Ontario that all the jobs have been created, it is certainly not because of the manner in which the Government in Ottawa is operating.
It has been mentioned in the House today that the deficit the federal Government is trying to cope with has been passed on to others. That is quite true. That is another item that unfortunately the Member for Kitchener forgot to mention. There have been added expenses passed on to the provinces because of the actions of the Government. That is not paying off the debt. That is passing the buck. Some of the provinces are not in a position to pay. If the provinces are not in a position to pay, then the people in those regions of Canada receive less services than those who live in the wealthier parts of the country. That is not in keeping with the 1940 Rowell-Sirois Report, which was a very good in-depth document that went into the financing at the federal-provincial levels.
The equalization programs have been attacked in order to help the Government reduce the deficit. We have to ask whose deficit is it at the provincial level? Is it the federal deficit that is being passed on to the provincial deficit? What about the municipalities of the country? What about the taxpayers at the municipal level? The whole thing seeps down to the municipal taxpayers.
I wish to comment on some of the other famous cuts that we have been hearing about. In science and technology there have been severe cuts in the National Research Council. On many occasions in the House I have raised the matter of the Algonquin Radio Observatory, one of the greatest telescopes in the world. It will soon be closed down, supposedly to save $1.1 million in the Budget. But did the Government save this money? How many millions went into the famous prison in the riding of the Prime Minister (Mr. Mulroney)? The great institution that is the Algonquin Radio Observatory telescope would be able to continue operating for a further 30 years on the money that was wasted on the prison in the Prime Minister's riding. The Government then brags about all it is doing for science and technology in Canada. If that is not the reverse gear of science and technology, Canadians are wondering what is.
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When the Minister of State for Science and Technology (Mr. Oberle) was asked about this in the House he said that he would appoint a task force to look into the matter, and have it bring back a report, particularly since the cuts that had been made troubled a number of people because they may have interfered with the health of basic research in the country. The Minister appointed the task force, and after the task force reported back to the House, we found that the Government had hogtied the task force on the National Research Council cuts, and that the task force was to report only on the health aspects of the cuts at NRC. The task force could not talk about it in wide terms. Indeed, that is said in the report. On page 2 of the report the task force stated:
You first asked us to consider whether or not the decisions made by the National Research Council and recommended to the Government in our opinion endangered either the health or the safety of the Canadian public.
It is our view-
They then state their decision. On page 8 the task force states the following:
We have not attempted to interfere with with actual management decisions made. This would be inappropriate in our view.
Well, that is what all the questions were about, the actual cuts in science and technology.
The task force further stated:
-we have not been asked to comment on the broader governmental policy decisions which resulted in these reductions and we consider that such comment would be equally inappropriate.
In other words, the task force was not asked to do it, therefore, it cannot be put in the report. After the report came out with those narrow guidelines to go on, the task force practically gave the Minister a clean bill of health on his decisions. As a matter of fact, the task force was not asked to do the specific things that we wanted to see it do when we questioned the Minister in the House. The science community is rightly angry because it has not had its day in court on this decision. Members who represent many high-tech and science-oriented installations in this country are perturbed.
It was sloughed off to a minor scale task force which did not meet the crunch of the bad decisions of the Government respecting science and technology and the future of the country. It was no wonder that the press indicated that the Minister of State for Science and Technology was dead wrong to claim that his task force report on the National Research Council vindicated the cabinet ordered budget cuts at the NRC. The article went on to indicate that it did no such thing, that the task force passed over the most important issues raised by the Government's assault on the NRC and that the narrowness of the group's mandate was the excuse cited by the three-member board. They admit that the Government did not allow them to go into the issues raised on the floor of the House of Commons, because it knew very well what would be the answers.
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I should like to refer to a large telescope in Algonquin Park which weighs over 900 tonnes. It was programmed to be upgraded and polished, to become one of the three most famous installations of its kind in the world. As a result of a combined project by France and Germany, there is one in Spain, and there is a second one on a mountain in Japan. The Government, which pretends to be interested in science and technology and space, killed the very project in Canada that gave the most information about space itself. Not only did it give Canadians information on space, but people from many countries came here to conduct experiments and use it. In fact, Americans came up here because it was a better facility than those available in the United States. It is the old adage-if something is working well, kill it. That is what is happening with the Government.
Let me refer to what this means to Canada. It is the loss of the largest fully steerable telescope for astronomy in North America. Its value in terms of scientific research in Canada, in North America, and in Europe is incalculable.
Let us take the Post Office, for example-


Mr. Bradley:: Please.


Leonard Donald Hopkins: 1 hear a Tory Member saying "please". Is it any wonder? It does not matter what answer government Members give on the question of post office closures in rural Canada. The fact of life is that no one out there is listening to them because no one believes them any more. They talk about small community Canada, and the Minister says that any changes will only result through "natural opportunities". Is that not a wonderful term? The natural opportunities include things such as resignation. I am sure the resignation of an individual does not have much to do with whether or not there is a need for a postal service in a community. Also they include retirement. What relationship is there between someone's retirement and the need for postal service in a community? Also there is the promotion of a postmaster. Will everyone feel so glorious about the promotion of the local postmaster that they will say, "Now that he has been promoted, we do not need any postal service in this community"? Also there is the loss of the post office site. If the post office closes up or if it is sold, what does a real estate sale in a community have to do with the requirements for local postal service? That is the kind of logic which has caused trouble for the Government.
The Conservative Government says that rural post office closures and other changes in rural mail service will be concentrated in communities where these natural opportunities happen. We in the Liberal Party feel that postal service belongs to communities and that retirements or the sale of buildings have nothing to do with the continuing postal service needs of people.
It has been said that the national deficit should not be attacked on the basis of income tax alone, and that is quite

March 10, 1987
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true. However, why does the Minister of Finance condone the raising of taxes, particularly for low and middle income people? The Budget does nothing for agriculture. It does nothing for forestry. In fact, we have seen cuts in the forestry sector, in the compiling of statistics about forestry resources in various provinces. We have also seen a 15 per cent tax applied to softwood lumber on this side of the border. This is why Canadians are convinced that the Government is not strong enough to handle the foreign and trade relations of Canada, which will become a greater problem in years ahead.
We have had the announcement of an ice-breaker three times. One of these days they will get around to getting it on stream.


Donald Paul Ravis: Thick ice.


Leonard Donald Hopkins: Indeed it is thick ice. I think it is also a lot of red tape and a pretty thick layer of politics. It will be rather interesting to see what comes out of it.
However, the slick Budget of the Minister of Finance is simply a reflection of the policies of the Government and of its attitude to difficult national and regional problems. For all the great speeches we have heard about the reduction of the national deficit, here we are in the middle of a debate about the Government wanting to borrow $28 billion. We have seen all the government cuts and tax increases. We have also heard the statement of the Minister of Finance that reductions in the national deficit would take place by cutting government expenditures, not by raising taxes.
I will rest my case there, because it could not be more clear.


Donald Paul Ravis: Mr. Speaker, I listened to the Hon. Member for Renfrew-Nipissing-Pembroke (Mr. Hopkins). I returned to the House this week with a different attitude about the Chamber, mainly because I had spoken with many people who are feeling very frustrated about what goes on in the House. I listened to the Hon. Member for Kitchener (Mr. Reimer) who laid out in a non-partisan way, as I said earlier, some of the facts about where the country is at today. The Hon. Member for Renfrew-Nipissing-Pembroke talked about why we are debating today the borrowing of $28 billion. Surely to goodness the man must start being honest with himself and with the rest of his colleagues. Why don't we forget for the moment that we are Liberals and Conservatives and look at this issue in terms of what the circumstances are in Canada today. I hate to bring these things into the Chamber, but the Member quoted from an article. We can all do that, we can all zero in on little items and make the Government look bad or make the Opposition look bad. I want to quote Geoffrey Simpson of The Globe and Mail. He wrote about "limits to spending" as follows:
The Liberals, they are wont to forget, sent Canada on a spending spree which, coupled with the decline in the government's revenue base, brought on an enormous deficit confronting the new Government.
You do not have to be a journalist or an economist to figure that out. Those are the facts. How can the Hon. Member for Renfrew-Nipissing-Pembroke challenge the Government and say it is raising taxes and it is not dealing with the situation as it should be? I cannot figure out what else one can possibly do. No matter how much we cut we will still be facing a very difficult situation in years to come. Cutting Government spending and raising taxes will still not solve the problem. I would like the Member to be honest and just tell us what the Liberals are doing to face up to this issue. They got us into this mess in the first place.


Leonard Donald Hopkins: Mr. Speaker, the Hon. Member said, "I want the Member to be honest". I want to tell him that I am honest with my colleagues in this House and I do not think he is in a very good position to stand up in this House and insinuate that another Member is dishonest.


Donald Paul Ravis: I did not say that.


Leonard Donald Hopkins: He brought that factor in twice. We are facing a great self-righteous attitude. Do you recall what the Hon. Member said, Mr. Speaker? He said that it is time for us to forget about being Liberals and Conservatives. Yet the Hon. Member for Kitchener carried on a tirade against the Hon. Member for Trinity (Miss Nicholson). Asking his question, the Hon. Member for Saskatoon East (Mr. Ravis) carried on a tirade against the Liberal Government. You do not ask someone to be mutually neutral and then lambaste them. It does not bother me because I have heard this great philosophy for a number of years and I know from whence it comes.


T.A. Bud Bradley: The Liberal Party.


Leonard Donald Hopkins: The Hon. Member must remember my point that the present Minister of Finance stood before the people of Canada in 1984 and made promises that the Government cannot keep today.


T.A. Bud Bradley: Not true.


Leonard Donald Hopkins: I will give the Tories the credit that they were smart enough to know better, Mr. Speaker. The Tories made that commitment but they are not carrying it out. They talk about annual deficits as though they are total debts. They talk about interest rates. The national debt today has increased by leaps and bounds in the last three years that the Government has been in power. The amount that has increased is certainly not just interest.


T.A. Bud Bradley: It has not increased by leaps and bounds.


Leonard Donald Hopkins: The Hon. Member shouts. If he wants to stand on his feet he will have his chance to say a few words. The Hon. Member better realize that the day is coming when the Government will have to answer to all Canadians for Government assets, Crown-owned assets, which it is selling off
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in order to pay the deficit. The Government is still not able to cope, not even with the Minister of Finance e statement.


T.A. Bud Bradley: Because you left it too long.


Leonard Donald Hopkins: The Government is still increasing taxes by 52 per cent for the average Canadian.


Donald Paul Ravis: Who got us in this mess?


Leonard Donald Hopkins: The Hon. Member is self-righteous again. If you are in a mess, the Government is continuing the mess because it is continuing to increase the debt year after year.


T.A. Bud Bradley: Not true.


Leonard Donald Hopkins: Do not start the nonsense that you are pure over there. Canadians do not believe that.


Donald Paul Ravis: We are not pure.


Leonard Donald Hopkins: The Tories are grappling with something they say they are succeeding at, but they are not succeeding at it. They might as well admit it. The only alternative is to say, "We are going to increase taxes by 52 per cent to 53 per cent for the average individual, and we are going to lower taxes for the wealthy people and lower taxes for large business corporations. Then we will give you tax reform just before the election".
The debt has been added to in the years since the Government has been in power as a result of mismanagement. It has been selling off assets owned by Canadians. The Tories say that the Government is making great strides. Let us be honest about this and say that the present Government is adding to the debt by leaps and bounds and it is not all interest. Do not try to tell us that.


Mr. Hudon:: Mr. Speaker, 1 am not likely to forget there are Liberals and Conservatives here in the House, considering what we have just heard. We have been hearing the most incredible nonsense. First of all, the Hon. Member opposite doesn't know what he is talking about. When he says we are going to reduce the deficit by $28 million, 1 think this should be $21.3, and we are talking about billions, and we are talking about $7 billion which will go directly to servicing the national debt.
Mr. Speaker, perhaps my colleague would tell us what party let Canadians dream about a telescope for so long, since he mentioned the telescope a while ago. I think we should not forget which political party skewed reality for Canadians by giving them the illusion that all our society needed was Canada Works projects. People would work 26 weeks and draw unemployment insurance for 52 weeks. Which political Party set up Petro-Canada? Which Party introduced the National Energy Program? Which Party brought up the subject of sports lotteries? Remember all that? Sport Select and the whole bit? Which Party established FIRA? Which Party gave us the F-18? Which Party increased the tax on gas by four times what we had asked for in the Budget brought down by the Conservative Government that was in power for eight months? Which Party put a ceiling on indexation of Old
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Age Pensions at the beginning of the eighties? Which Party let interest rates rise to 20 per cent?
1 think it takes unconscionable nerve to tell the House we are increasing the deficit. Under the Liberals, Mr. Speaker, and 1 think they were in power in 1967-68, the operating deficit was $712 million, and by 1984, it had grown to $38.3 billion. Today, Mr. Speaker, the deficit is $29 billion. We brought the deficit below $30 billion. You can hardly expect Canadians to believe they got a raw deal in September 1984 and that we increased the deficit.
1 just wanted to say that under the Liberals, between 1967 and 1984, public spending as accounted for in the various Budgets increased not by 100 per cent, not by 200 per cent but by 862 per cent, Mr. Speaker. The Hon. Member just said we increased the deficit, a deficit that is now below $30 billion. Under the Liberals, in 1984, the last year they were in power, it was $38.3 billion. I fail to see his point.


Leonard Donald Hopkins: Mr. Speaker, 1 have certainly got them going on this one. It is quite obvious that Members opposite are very anxious to placate themselves and to try to tell the public what a tremendous job they are doing. The Hon. Member says the Government has reduced the deficit by $30 billion. The Hon. Member for Kitchener just finished saying that the deficit for 1987-88 alone would be $29.3 billion. That is being added to the national deficit.


T.A. Bud Bradley: The national debt.


Leonard Donald Hopkins: Sure, the national debt. How can one member rise to say it is being reduced by $30 billion and another member rise to say it is going up by only $29.3 billion? They do not really agree among themselves over there.


Jean-Guy Hudon: Speak about the telescope, it's better.


Leonard Donald Hopkins: The Hon. Member mentioned the telescope which is world famous and serves not only our own nation but many others. It has put us in the forefront of technology. The Hon. Member asked what Government created that. That was originally started on a smaller scale by the Diefenbaker Government, and the large telescope was built by a Liberal Government. There was a great plea a while ago for total unity between Liberals and Conservatives. 1 must say that Mr. Diefenbaker, whom 1 knew very well and with whom 1 got along very well, was the one who started it but, like always, anything Tories start the Liberals have to finish. We operate the large telescope for $1.1 million annually. At the same time, we did not turn around and waste $40 million somewhere else on a prison in our Prime Minister's riding as the Government of the Member. I just got finished saying that if the Government really wanted to save money it could have run that great telescope for 30 years with what the Prime Minister wasted in one fell swoop.

March 10, 1987


Mr. Deputy Speaker:: It is unfortunate that we cannot continue the question and comment period. I know the Hon. Member for Kitchener (Mr. Reimer) would like to ask a question. However, we must resume debate with the Hon. Member for Winnipeg North (Mr. Orlikow).


David Orlikow: Mr. Speaker, during the election campaign, the Prime Minister (Mr. Mulroney), who was then Leader of the Opposition, said that the real! major issue, in fact the only issue in the election campaign, the issue on which the public should judge the political Parties, was jobs, jobs, jobs. Despite the promises of the Prime Minister, and despite the claims that his Government has created hundreds of thousands of jobs, the fact is that there are still a million and a quarter Canadians unemployed. The fact is that in the Budget Papers which accompanied the Budget presented by the Minister of Finance (Mr. Wilson) some weeks ago, it is predicted that unemployment for the next few years will continue at the unacceptably high rate of 9 per cent.
What has happened? Instead of concentrating on the Prime Minister s election promise of jobs, jobs, jobs, the Government has concentrated on its determination to reduce the deficit which it claims has had such a disastrous effect on Canada. Along with the deficit, the Government has talked about the tax changes it will bring in, tax changes which will give us a simpler and fairer tax system.
Let us look at the record of the Government. The Government has now presented three Budgets and a financial statement. We have seen that deficit reduction has been its real priority for three years running. Tax reform to this Government is something for the future, something which we may get, and even that I doubt. I doubt that tax reform will give us a fair tax system under which those who can afford to pay and should pay will pay their fair share, instead of having poor and middle-income people who have for so many years over-paid continue to pay the unfairly high share of taxes they have paid.
There have now been three Budgets and a financial statement which have had the effect of increasing taxes for ordinary Canadians. Every Budget brought forward by the Minister of Finance increased income tax rates, sales taxes and excise taxes and imposed a host of fees and charges for services provided by the federal Government to meet the needs of the Canadian people. We have estimated that the increases brought in by the Government in the last three years will cost the average Canadian family $1,350 this year. Not only have costs to the ordinary Canadian risen, virtually all social programs, including one to which the Government said it was firmly committed, child care, have either been cut back or put on hold.
The Government has ignored the very real momentum which has built up in the feeling of need for a major reform of the tax system. The Prime Minister realized that the feeling for that was made clear in the debate which took place between the Leaders before the election. At that time, the
Prime Minister promised a minimum tax so that no Canadian with an income which should be taxed would not be taxed. Many Canadians with high incomes had been able to avoid paying any income tax at all for years. That promise has been largely ignored until now.
The Government has shifted a considerable amount of the federal Government's debt onto the provinces because of continued reductions in federal expenditures. It has changed the formula for transferring funds under the Established Programs Financing through which the federal Government pays its share of the cost of post-secondary education and health care. The Government has also cut back on equalization grants and various forms of regional development spending. As a result, we have seen a sharp increase in the deficits of most of the have-not provinces. The Province of Saskatchewan announced a few days ago that it would have a deficit this year of $1.2 billion and that it would cut services and lay off 2,000 employees. Alberta has a huge deficit and the Province of British Columbia has a deficit of over $1 billion. The Atlantic provinces, which are so dependent on the federal Government for financial aid and which are among the most have-not provinces in Canada, have seen their deficits skyrocket again. That is one of the most unfair methods used by the federal Government to reduce the deficit which it says is so detrimental to the country. May I call it one o'clock, Mr. Speaker?


Mr. Deputy Speaker:: It being 1 p.m., I do now leave the chair until 2 p.m. this day.
At 1 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.


Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, the Conservative Government reduces the National Research Council budget by tens of millions of dollars because, first, it wants to invest $824 million in Canada's space program and create a Canadian space agency.
Second, it privatizes Teleglobe Canada, the only Canadian international satellite communications company.
Third, the Tory Government negotiates with Lavalin and Bell Canada to transfer to the private sector the mapping and remote sensing services of the Department of Energy, Mines and Resources, a deal allegedly worth $55 million.
Given the fact that the $824 million earmarked for the space program include $247 million for remote sensing and $207
March 10, 1987

million for telecommunications, and that the Government has privatized the federal services responsible for such activities, we must conclude that the Canadian space agency will be nothing more than a purveyor of contracts to the private sector because the federal services which might handle them will no longer exist.



IMPOSITION OF TARIFF ON CORN IMPORTS FROM UNITED

Mr. Elliott Hardey (Kent):: Mr. Speaker, the Canadian Import Tribunal made its final assessment last Friday and upheld the countervailing duty applied by the Government of Canada to imports of grain corn from the U.S. The final figure is $1.21 Canadian or U.S. 84.9 cents. Corn producers in Ontario who initiated the action are pleased even though it does not bring them totally out of the doldrums of poor market conditions.
What is important, however, is that Canada has proven that it is deficiency and subsidy programs which have devastated the farmers of Canada. We have made a stand against the injurious effects of the U.S. Farm Bill and this stand has been noted around the globe. Moreover, it is important that Canadian corn growers get more out of the market-place and less from government assistance in order to protect our stabilization programs.
The world must soon accept the futility of subsidy wars. Perhaps this action by Canada will help drive that point home. The Ontario Corn Producers Association should be congratulated for its effort.



REFUGEES


Mr. Dan Heap (Spadina):: Mr. Speaker, 1 call on the Government to give Victor Regalado a fair hearing. In 1982, Mr. Regalado, a Salvadoran journalist, sought refugee status in Canada and was found by the Minister of Employment and Immigration to be a bona fide refugee. However, he was detained and ordered deported because the Minister of Justice and the Minister of Employment and Immigration signed a security certificate against him. His deportation was stayed because Canada would neither send him back to El Salvador nor back to the U.S. which, as the then Minister of Employment and Immigration said, has a policy of not accepting refugees from that country and of sending them back. Now the present Government, following its new policy of deporting
some Salvadoran refugee claimants, has scheduled a reopening of Regalado's immigration inquiry for next Monday for the purpose of deporting him. To send Regalado back to likely imprisonment, torture or death, on the basis of an unknown accusation against him which he has never been allowed to defend himself against, would be a horrible crime. I call on the Government to cancel Monday's inquiry and find a more humane and just solution.



REVENUE CANADA


Mr. Lee Clark (Brandon-Souris):: Mr. Speaker, as someone who has been expressing concern about Revenue Canada's investment tax credit to the Minister for well over a year, I was pleased to hear him announce last week that he had ordered a pause in that audit until he could explore the problem more fully. I also applaud the Minister for his willingness some three weeks ago to meet at very short notice on this same issue with both representatives of Keystone Agricultural Producers and some of us who represent Manitoba constituencies.
Having said that, I now urge the Minister to inform his officials that they must devise an audit which distinguishes between those few farmers who may have deliberately set out to abuse the investment tax credit, and the vast majority of farmers who have simply filed a tax return according to the instructions in the Farm Tax Guide. Unless Revenue Canada officials can make that distinction, many Canadian farmers who have no idea of what wrong they have allegedly committed will be unfairly caught in a web which appears to have been woven retroactively.



CONGRATULATIONS EXTENDED TO PIERRE HARVEY

Donald James Johnston: Last Saturday, Mr. Speaker, Pierre Harvey, an outstanding athlete from Saint-Lambert-de-Levis, became the first Canadian ever to win the world's cross-country ski cup. At the end of this race of only 30 kilometres he crossed the finish line more than a minute ahead of his closest competitor, a practically unbelievable margin of victory.

He described his victory as the greatest day in his skiing career. It was also a great day in Canadian skiing history. Harvey is a modest person and appears to shun publicity. However, all Canadians should be aware of this spectacular

March 10, 1987



*S'. O. 21

[Stage Direction]
achievement and proud of this superb athlete and fine representative of Canada,
[Stage Direction]
Congratulations, Pierre Harvey, and good luck!
1 think it is our responsibility, as doctors concerned about preventive medicine, to speak out in favour of mandatory rear seat shoulder restraints in all newly manufactured automobiles.
It behooves us to encourage our government to make rear seat shoulder restraints mandatory on Canadian built cars.... Most importantly, we must encourage our patients to "buckle up" themselves and their family.


Mr. Felix Holtmann (Selkirk-Interlake):: Mr. Speaker, today within my constituency of Selkirk-Interlake, South African Ambassador Mr. Glenn Babb will visit the Peguis Indian Reserve to view living conditions there. Canada is a free country and the Chief of the Peguis Reserve has every right to invite Mr. Babb to visit, without a special card.
Canada does not pretend to have dealt adequately with Indian, Inuit, and Metis people. We have held a series of constitutional conferences with native leaders and we will be back at the conference table at the end of this month. Blacks in South Africa have not seen such commitment.
It is to be hoped that the Chief of Peguis will tell Mr. Babb that Indians on reserves are protected by the same fundamental constitutional rights as are all people in Canada, that native people receive free health services, education, housing, and unemployment insurance, have freedom of assembly and mobility, have freedom to work and access to a free press, are exempt from paying income taxes and federal sales tax, and have the right to vote. Why, native people can even take elected representatives to court. Mr. Speaker, Canada does not have any lessons to be learned from the Government of South Africa about the treatment of aboriginal people.
* *
*



ROAD SAFETY


Mrs. Therese Killens (Saint-Michel-Ahuntsic):: Mr. Speaker, my intervention is with regard to the need for Governments to make rear seat shoulder belts mandatory in all cars manufactured in Canada. I have a letter signed by Dr. Blair of the Children's Hospital in Vancouver. It is addressed to the President of GM Canada, the President of Chrysler, the President of American Motors, and the President of Ford Canada. It says:
The CBC, on their program The Fifth Estate, recently aired a piece on the horrendous injuries that can occur with lapbelt-only rear seat automobile restraint.
Any of us who have dealt with automobile accident victims can-speak-of the lap-belt syndrome -spinal injury, internal abdominal injuries-



THE MEDIA


Mr. Gabriel Fontaine (Levis):: Mr. Speaker, every day our society receives an ever growing mass of information. Media professionals have a significant and increasing influence on the way citizens think.
One of these days, Mr. Speaker, perhaps we will experience the following hypothetical situation:
The official in charge of communications at the office of the Prime Minister (Mr. Mulroney) advises the media that a unique and extraordinary event will take place in a few days: the Prime Minister of Canada will walk across the water of the Rideau Canal.
On the appointed day the Prime Minister arrives near the canal and, closely watched by cameras, newsmen and hordes of curious people, he crosses the Rideau Canal by simply walking on the water.
A unique event in 2,000 years! Just read the media headlines: "Brian Mulroney can't swim!"



VIA RAIL


Mr. Howard McCurdy (Windsor-Walkerville):: Mr. Speaker, Windsorites have more in common with the west than prairie grass, and much more in common with the Atlantic provinces than a gregarious people, that being the unceasing insensitivity and often incompetence of the foci of decision-making in central Canada. Let us consider VIA Rail. VIA Rail, on the route from Windsor to Toronto, has been a study of inconvenience and a source of unremitting complaints almost since its inception.
Along the busiest rail thoroughfare in the country, with a market of thousands of potentially Toronto-bound passengers cultivated by promotion and in love with Canada, no malevolent design could have contrived to discourage travel by VIA Rail as has the management of this corporation. Ride on a GO Train, a train with no heat in winter and no air-conditioning in the summer; buy a ticket and find no room on the train; get on
March 10, 1987

the train and wait two to four hours to leave, and then perhaps complete the trip by bus; stay hungry but healthy by avoiding the food. Then hear the answer to your complaints by the enlightened management of VIA Rail-cut costs by eliminating trains which are, after all, now "only lightly used".



POLITICAL PARTIES


Mr. John A. MacDougall (Timiskaming):: Mr. Speaker, what a sorry state the Liberal Party finds itself in with no clear policy stance on anything and no direction from its Leader. At no time has this been more evident than yesterday when this House voted on a matter of international importance, an issue which required a clear Canadian statement, and the Liberals were unable to present the public with a policy. They were even unable to agree within their own Party.
In the vote yesterday, four Liberal Members opposed the so-called official Party stance. But the House and Canadians know that there are others within their ranks who are at odds with their party policy.
With all this confusion the Liberals have begun to resemble a horse with two heads, tearing at its middle in an attempt to run off in every direction.
To top it all off, for a decision as significant to the nation as was made here yesterday, the Leader of the Opposition (Mr. Turner) was not even present to stand in his own line of fire.



SUPPLY AND SERVICES


Leonard Donald Hopkins: Mr. Speaker, the Minister of Supply and Services (Mrs. Vezina) has an internal document in her Department that requires all federal contracts over $25,000 in six eastern Quebec ridings to be reported to her office for announcing purposes. One of these ridings is her own and one is that of the Prime Minister (Mr. Mulroney). But the document also asks for all information at least 48 hours in advance.
It goes on to say: "If no response is heard from the Corporate Relations Board", which is her officials, "-award can proceed in the normal fashion". This smacks of political interference. It goes on to say: "If there are inquiries and a request is made to delay the award, the responsible procurement officer shall inform management immediately of the situation". We know that the Prime Minister wants to make
many announcements these days, but the truth of the matter is that this political meddling system that has been set up by the Minister of Supply and Services has nothing to do with regional economic disparity but a lot to do with the regional political disparity of the Government.



ENVIRONMENTAL AFFAIRS


Mr. Alan Redway (York East):: Mr. Speaker, the signing of an abatement agreement this morning between the Canadian Government and the Province of Ontario is more solid progress in the fight against acid rain.
In 1984, when our Government took office, the Prime Minister (Mr. Mulroney) made the clean-up of the environment and acid rain in particular a top priority. For the first time ever, the problem was discussed face to face by a Canadian Prime Minister and the President of the United States. Essential to our getting the U.S. to take action was the need to get our own house in order by reducing our own acid rain emissions.
In 1985 the seven provinces east of Saskatchewan agreed orally to cut acid rain emissions in half by 1994. Today and yesterday, formal agreements to that effect were signed with Ontario, Newfoundland, and Prince Edward Island. Hopefully all seven provinces will sign before the April meeting between the Prime Minister and President Reagan so that we can show that Canada is united in the battle to eliminate the environmental scourge of acid rain.



ABORIGINAL RIGHTS


Mr. John Parry (Kenora-Rainy River):: Mr. Speaker, I have with me a policy memo of the Department of Intergovernmental Affairs in Ontario which I feel all aboriginal people in Canada would be interested in. The briefing paper states that Ontario's position in the upcoming First Ministers' Conference should: "-oppose any suggestion that Indian treaties are nation-to-nation agreements or that aboriginal peoples retain any element of sovereignty or inherent rights implicit in the treaty approach".
The Leader of the federal Liberal Party (Mr. Turner) should refute that position and state publicly that the Liberal Party does recognize that Indian treaties provide inherent rights.

March 10, 1987
Oral Questions
The Liberal Premier of Ontario will hold a unique veto power at the First Ministers' Conference, and the aboriginal people of Canada expect Ontario to take a lead in these talks, as indeed the province has in the past.
The Premier of Ontario was well advised to fulfil the provisions of the NDP-Liberal Accord in that province. He is now showing Canadians that, when left to itself, his Government back-peddles. Yesterday it was revealed that 84 per cent of Canadians support the right to aboriginal self-government. I say to Mr. Peterson: "Wake up", and I say to the Leader of the Opposition: "Speak up". Prove to Canadians that you can have a united position on aboriginal rights.



PENITENTIARIES


Mr. Ross Belsher (Fraser Valley East):: Mr. Speaker, many of the inmates in Canadian prisons today cannot read or write. They are functionally illiterate. In the past this has meant that they were unable to read, write, and do arithmetic above a grade 5 level. This has now been raised to a grade 8 level, which is more realistic in today's computer age.
The Solicitor General (Mr. Kelleher) recently announced the establishment of a new adult basic education program to increase the functional literacy of federal penitentiary inmates. In my riding of Fraser Valley East, Fraser Valley College has just been granted an extension from Correctional Services to increase the services that it now provides to over 100 inmates in seven federal institutions through its literacy and life skills programs.
This is an important move taken by a Government that recognizes a silent problem and works to solve it. Colleges such as Fraser Valley are committed to helping Canadians achieve a strong sense of self-worth and to make them more productive members of society. I know that the teachers and staff of the Fraser Valley College welcome the stand taken by the Solicitor General in making literacy a number one priority for inmates.
I for one cannot imagine a life without books. Can you, Mr. Speaker?



IMMIGRATION


Mr. David Berger (Laurier):: Mr. Speaker, when the Minister of Employment and Immigration (Mr. Bouchard) got back from Florida, he said that he failed to understand how refugees who had spent only three or four days in a country
could protest against the laws of that country. He was referring to the Chileans who are on a hunger strike in Montreal. I would like to inform the Minister that these refugees are not protesting against the law. The law has not changed. They are protesting against the repressive measures taken by the Minister on February 20 that closed this country's doors. I can also inform the Minister that these persons are not alone. While he was in Florida, people started to react.
Last Tuesday night in Montreal, 400 people met to protest the action taken by the Minister of Employment and Immigration. There were representatives from various churches, including the archdiocese of Montreal and the Anglican, United, Mennonite and Presbyterian Churches. There was a rabbi and the President of the Canadian Jewish Congress. There were union representatives. The Minister has seen only the beginning of a vast protest movement that will not cease until these repressive measures have been repealed.



ORAL QUESTION PERIOD


Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, in the absence of the Prime Minister my question is directed to the Deputy Prime Minister. I say to him that I disagree with the views of senior Ministers of his Government about Petro-Canada. I believe firmly that Petro-Canada has a policy role to play in this country and that Canada should never again be held hostage by OPEC. Does the Deputy Prime Minister not believe that Petro-Canada has a vital and crucial role to play in the exploration and development of oil and gas, particularly on the frontier? And does he not believe that that is important and vital to the self-sufficiency of this country in the future?


Hon. Don Mazankowski (Deputy Prime Minister and President of the Privy Council):: Mr. Speaker, I think the Prime Minister dealt with that question quite completely yesterday. He clearly pointed out the fact that Petro-Canada was a candidate which was being examined. I am interested in the comments of the Hon. Leader of the Opposition because we are not really sure what his position is in terms of the rest of his Party. His colleague, in his book Up the Hill, complained very bitterly about the fact that Canadians invested billions of dollars in this particular institution and that there were strong suggestions it should be divested.


Some Hon. Members:: Oh, oh!
March 10, 1987


GOVERNMENT POLICY
John Napier Turner: Mr,
Speaker, my question is again directed to the Deputy Prime Minister, since he and his colleagues have the responsibility for this Government.
Is the Prime Minister or is the Deputy Prime Minister depending on the foreign multinationals to guarantee Canada's oil self-sufficiency? Is he depending on the multinationals to do the necessary exploration to develop our resources on the frontier? Does he not he understand that Petro-Canada should be used also to compete with the multinationals? Is this not part of the present Government's policy?


Hon. Barbara McDougall (Minister of State (Privatization)):: Mr. Speaker, in the view of this Government it is not necessarily public ownership which determines the viability of the frontier of this land. Petro-Canada made an announcement about which we were very pleased regarding frontier exploration and it was a decision taken by the company on a straight commercial basis because the company, privately or publicly owned, has faith in the future of Canada and in the energy industry.


POSSIBLE SALE OF CORPORATION
John Napier Turner: Mr. Speaker, I want to ask the Deputy Prime Minister why it is that his Government wants to sell Petro-Canada to Canadians. We own it already, don't we?


Barbara Jean McDougall: Mr. Speaker, my colleague, the Minister of Energy, Mines and Resources, said this morning that he owns our share of Petro-Canada and that if Canadians own this directly they will still have a stake in the future of the energy sector, even more so than they do if it is owned by the Government. We do not think, as the Hon. Member appears to do, that government ownership solves every problem.


CORPORATION'S ROLE IN EXPLORING FOR OIL
Mr. Russell MacLellan (Cape Breton-The Sydneys):: Mr. Speaker, my question is directed to the Deputy Prime Minister. The Government seems to want to destroy Petro-Canada for no apparent reason. Does the Deputy Prime Minister agree with the comments made by the Minister of Energy, Mines and Resources this morning on Canada AM that Petro-Canada has completed its vital job of exploring for oil in Canada?


Barbara Jean McDougall: Petro-Canada will not stop exploring for oil should it go into the private sector. The Hon. Member is suggesting that it will lie down and die. It will not. Our view of privatization is
Oral Questions
that we intend to strengthen Canadian companies through the privatization process, and give Canadians a direct stake in it.


FUNDING OF EXPLORATION
Russell Gregoire MacLellan: Mr. Speaker, subsequently in that same interview this morning on Canada AM, the Minister of Energy, Mines and Resources said that the reason the Government wanted to sell Petro-Canada was to raise more funds to be able to continue with exploration. Now, which is it? If the Government will receive the funds for the sale of Petro-Canada, who will do the exploration? The CBC, or Fitness and Amateur Sport? Who?


Barbara Jean McDougall: This morning my colleague said that Petro-Canada will need to raise money from some source in order to further its exploration. The Government can control Canadian corporations in four ways: it can tax, it can spend, it can regulate, or it can own. Ownership is not the final answer to whether exploration is done in this country.


GOVERNMENT PLANS
Mr. Ian Waddell (Vancouver-Kingsway):: Mr. Speaker, my question is directed to the same Minister. I am from British Columbia, and I am tempted to send my BCRIC shares to the Minister. She can paper her cottage with them, and see how much they are worth.
I wish to ask the Minister a question with respect to the Government's privatization plans. Will the Minister confirm that plans are under way to privatize Petro-Canada by selling 20 per cent of the company for approximately $700 million? If the Minister cannot confirm those figures, will she at least confirm that the plans are to make Petro-Canada part private and part public?


Barbara Jean McDougall: No, Mr. Speaker, I cannot confirm that. The company is under review at the moment, and no decisions have been taken on whether or not Petro-Canada will be privatized and, if so, how it will be privatized. We are examining the possibility very seriously. I have said that before, my colleague the Minister of Finance has said it, and the Prime Minister has said it. It was a campaign commitment that we would look at Petro-Canada. That is exactly what we are doing.


Ian Gardiner Waddell: All of this was supposed to happen in the Government's second term. Given what the Government has done, maybe it will not have a second term, so it is doing it now.


Some Hon. Members:: Oh, oh!


Mr. Speaker:: I know that the Hon. Member wants a second term.


Ian Gardiner Waddell: I will try not to fly by the seat of my pants, Mr. Speaker.

March 10, 1987
Oral Questions GOVERNMENT POLICY


Ian Gardiner Waddell: My supplementary question to the Minister is this. Given that the Government has been sabotaging Petro-Canada for the last two years by cutting high-risk expenditures, by cutting research and development, by hosing consumers at the pump, by taking dividends out of the company and not putting any equity back in, is it any wonder then that there is no public policy set by the Government for Petro-Canada right now?


Barbara Jean McDougall: Mr. Speaker, the Government has said all along that it would examine the need for any public policy. My hon. colleague, the Minister of Energy, Mines and Resources, has already answered this question. The issue is under serious review. When the people of Canada elected us, they knew that we were interested in privatizing companies that we thought had no public policy purpose. The reason that it does not have a public policy purpose is that there are other ways in which we can encourage exploration and development, and we have done that.


ENERGY CRISIS CONTINGENCY PLANS
Ian Gardiner Waddell: Is the Government aware that in 1973 during the first energy crisis the British Government told British Petroleum, of which it owned a 50 per cent share, that it had to meet British energy needs first before other energy customers, and that British Petroleum refused?
Given that there would be minority shareholders who, under our law would have an interest, how does the Government propose to direct that kind of privatized Petro-Canada to ensure energy security, exploration, and development to meet the energy crisis of the 1990s?


Barbara Jean McDougall: Mr. Speaker, the Hon. Member keeps asking the same question in different ways. I have already pointed out that there are other ways to encourage exploration and development and Canadian self-sufficiency. The Government has other powers besides the power of ownership. A privatized company in the hands of Canadians could help to fill the interest of Canadians in self-sufficiency and in Canadianiza-tion.


DEVELOPMENT OF TERRA NOVA OILFIELD
Mr. Brian Tobin (Humber-Port au Port-St. Barbe):: Mr. Speaker, my question is for the Deputy Prime Minister. Yesterday the Minister of Transport and the Minister of Energy, Mines and Resources announced in St. John's, Newfoundland, Petro-Canada's decision to drill two new wells at the Terra Nova oilfield. Also the Ministers in question announced the mode of production to be employed if Terra Nova is to be brought into commercial production. Both the
decision to drill two new wells and the decision on the mode of production were taken without the advice or the consent of the Government of Newfoundland. Why did the Government of Canada break its legal commitments to the Province of Newfoundland under the terms of the Atlantic Accord passed in the House only a few weeks ago? In describing the agreement, the Prime Minister said that it was an accord which makes the Province of Newfoundland a full and equal partner in its own offshore development.


Hon. Marcel Masse (Minister of Energy, Mines and Resources):: Mr. Speaker, the decision made by Petro-Canada was a business decision, and the announcement was made in an entirely appropriate manner. If and when a development plan is submitted, depending on the results of geological testing, it will be submitted as agreed to the Canada-Newfoundland Offshore Petroleum Board.


TERMS OF ATLANTIC ACCORD
Brian Vincent Tobin: Mr. Speaker, the terms of the Atlantic Accord make explicitly clear the equal role of the Government of Newfoundland in the development of the Newfoundland offshore. Yesterday, the Minister who just spoke and his colleague from Newfoundland, in a fit of pique in the middle of a cat fight with the Premier of Newfoundland, made unilateral announcements without respecting the terms of the agreements contained in the Atlantic Accord. Will the Deputy Prime Minister stand on his feet and apologize to the people of Newfoundland for that unilateral action which made a mockery of the Prime Minister's commitment to the people of Newfoundland and of the Atlantic Accord? When the Prime Minister announced the Atlantic Accord, he said: "We have believed firmly in the principle of equality-equality in terms of joint management-", Where is the equality today?
[ Translation]


Marcel Masse: Mr. Speaker, first of all, we certainly have no apologies to make for the decision by Petro-Canada. In fact, we are delighted. Second, the process that led to the decisions and the announcement made by Petro-Canada were quite normal and appropriate.


LAY-OFFS IN MONTREAL EAST-GOVERNMENT POSITION
Mr. Robert Toupin (Terrebonne):: My question is directed to the Minister of Energy, Mines and Resources. Last week I stated that the Conservative Government was gradually setting the stage for the privatization of Petro-Canada-apparently this has since been confirmed-a move which would lead to the closure of the Montreal East Petro-Canada refinery. There are regular lay-offs: 21 workers lost their jobs and none was offered alternative employment. I asked the question lask week but did not get an answer. What does the Minister intend to do
March 10, 1987

to save these 21 jobs in Montreal East and do justice to these former employees?
Hon. Marcel Masse (Minister of Energy, Mines and
Resources): Mr. Speaker, Petro-Canada management make their decisions on a commercial basis in what they believe to be the interests of society and all Canadians.


GOVERNMENT'S INTENDED MEASURES TO SAVE JOBS IN MONTREAL
Robert Toupin: Mr. Speaker, Petro-Canada answers to the Conservative Government. Is the Minister of Energy, Mines and Resources a Minister without resources, without energy so it would seem? Can the Minister give a specific answer to the question and tell us what he intends to do to save these jobs in Montreal East?
Hon. Marcel Masse (Minister of Energy, Mines and
Resources): Mr. Speaker, the Hon. Member will have to learn that the best way the Minister of Energy, Mines and Resources can serve the House is to read the Petro-Canada Act first. The Hon. Member ought to do the same thing, for he would realize that under the provisions of the Petro-Canada legislation the Minister of Energy, Mines and Resources is expressly forbidden to intervene in the day-to-day trade activities of the corporation. The House so decided and that is the way the legislation reads.


DEPARTMENT OF ENERGY, MINES AND RESOURCES FUTURE OF BRANCHES-DISCUSSIONS WITH LAVALIN CORPORATION
Jean-Robert Gauthier: Mr. Speaker, my question is for the Deputy Prime Minister. On Friday the Minister of State for Forestry and Mines told me:
We have never at any time discussed the privatization of a department or function of the Government to this date.
1 repeat: "We have never discussed the privatization ..." We know that Lavalin met with Treasury Board three times at Treasury Board's request. We know they discussed the privatization of certain departments working in the field of cartography. Will the Government come clean and tell us what it intends to do with these essential services? Will the Government tell us the truth and tell us what is going to happen to the 1,300 employees who are involved in this very essential service?


Hon. Robert de Cotret (President of the Treasury Board):: Mr. Speaker, I will try to answer, once again, the same question from my hon. colleague. It was very clear in my answers yesterday, I believe yesterday, that there were
Oral Questions
exploratory discussions on a make or buy policy, which is not privatization. Those discussions were preliminary in nature. They had to deal with a number of corporations to follow up on a recommendation by the Task Force on Program Review, a task force that was composed of public sector, private sector, and labour representatives. And in order to give up a thorough follow-up to those recommendations, we did discuss the potential for a make or buy policy. Obviously this topic was raised. These were exploratory in nature. There were no negotiations, no offers sought, no offers made, and no bids received.


GOVERNMENT POSITION
Jean-Robert Gauthier: Mr. Speaker, in that case, I contend that the Minister of State for Forestry and Mines misled the House. On Friday he said, and I quote:
We have never at any time discussed the privatization of a Department or function of the Government to this date.
We are talking about three of the Government's essential services, and the Minister just admitted that he started talks with Lavalin and Bell about privatizing these services.
Would someone please tell us who in this Government is telling the truth?


Robert René de Cotret: Mr. Speaker, we are not talking about privatization. We are talking about a make or buy policy.
Mr. Speaker, speaking of getting our act together, 1 wish the Hon. Member for Ottawa-Vanier would consult with his colleague from Shefford, who said on CHLT in Sherbrooke last Saturday, if I am not mistaken-


An Hon. Member:: Last Friday.


Robert René de Cotret: Excuse me, last Friday. He said: "Frankly, 1 have no problem at all with the concept of privatization." Actually, that is not the right word. "I have no problem at all with the concept of privatizing Government services. 1 know that in a similar case, this was done for the provincial institute of cartography. It did not create any problems, so far as I know, although we would have to look at all the details and conditions. In any case, the concept is certainly not one that 1 would reject out of hand."
So, I wish the Opposition would get its act together.


FUTURE OF EMPLOYEES
Mr. Mike Cassidy (Ottawa Centre):: Mr. Speaker, you may agree with me that the Liberals are confused about privatization but so is the Government on what it wants to do.


Some Hon. Members:: Oh, oh!


Michael Morris Cassidy: My question is for the President of the Treasury Board and deals with the same issue. 1 would like the

March 10, 1987
Oral Questions
President of the Treasury Board to explain to me what will the 1,300 employees of the surveys and mapping and the other two branches concerned do? What services will they provide and on what basis, if any, will they gain their income if the Government decides it is going to buy the mapping services from the joint company run by Bell and Lavalin? If this service is contracted out, is the Government not talking about privatization by pink slips as far as the employees of the Government of Canada are concerned?


Mr. Blackburn (Brant):: They are blue slips.


Robert René de Cotret: Mr. Speaker, if I am not mistaken, there are three ifs in the Hon. Member's question. If this, if that, and if the other thing. All I can say, once again, is that there were general discussions, very initial discussions on the over-all question of a make or buy policy for the Government of Canada following the Task Force on Program Review. No negotiations were ever entered into, no bids were sought, no offers were received, and no decision on the issue has been made. How can I answer a hypothetical question of that nature?


GOVERNMENT'S CONTRACTING-OUT POLICY-IMPACT ON PUBLIC SERVANTS' JOBS
Michael Morris Cassidy: Mr. Speaker, I would like to put a supplementary to the President of the Treasury Board. How many more public servants will be affected by the Government's determination to start discussions with the private sector, to transfer services that are now provided by employees of the Public Service of the Government of Canada? Is that what the President of the Treasury Board meant in his statement, that there would be discussions with a number of companies in the private sector to arrange for transfers of jobs in a way similar to what would happen by privatizing the mapping division?


AIDS DISEASE-CONTENT OF ADVERTISEMENTS
Ms. Sheila Copps (Hamilton East):: Mr. Speaker, my question is for the Minister of National Health and Welfare. We now know that the Canadian Telecasters Committee has hypocritically rejected three of the four ads designed to fight AIDS in this country, the three ads that happen to use the word condom. Now that these ads have been rejected, can the Minister tell us what specific strategy his Department has in place to get out the message to every Canadian household about this killer disease?


Hon. Jake Epp (Minister of National Health and Welfare):: Mr. Speaker, in response to the Member's question, I believe, and I think most objective people who have seen the ads feel that the ads conveyed the situation. I believe it was a balanced message. I fully appreciate that in the area of sexuality there will be different points of view.
I would hope in connection with the ads which the Canadian Public Health Association developed, and which the Department of Health and Welfare through taxpayers' money bought, that the telecasters would reconsider the position they took. The CPHA had a press conference at approximately one o'clock this afternoon in which that same message was put forward. I would hope that the telecasters upon second thought would look at those ads. I do think that they reflect not only a general approach, which I think is fair to the attack on AIDS, but also which is in keeping with what I think is proper and decent.


REQUEST FOR DOOR-TO-DOOR MAIL CAMPAIGN
Sheila Maureen Copps: Mr. Speaker, the Minister will know that his Department is not going to spend a single penny to get this message out over the airwaves, door-to-door, or in any other fashion. Given that the Minister's colleague from St. John's West can find the money to distribute brochures to every household in Newfoundland about a fishing agreement, does he not think that at the very least his Department should be considering a door-to-door brochure on the issue of AIDS across Canada?


Robert René de Cotret: Mr. Speaker, the Hon. Member for Ottawa Centre is implying that the Government should never have discussions with the private sector to try and identify the best way to spend taxpayers' money. We are trying to improve efficiency and productivity in the public sector. To do so, we are having discussions with the private sector. I think that is only normal. We are also having discussions with the labour unions. We are continuing these discussions in order to give Canadian taxpayers across this country the assurance that the money they put into the federal Treasury is spent with their best interests in mind.


Mr. Crosbie:: Do you want me to send condoms with them as well?


Arthur Jacob (Jake) Epp: Mr. Speaker, the point which the Member puts forward as the basis for her question is not accurate. We have put forward money, public money, for brochures. We have brochures in doctors' offices, universities, and colleges where Canadians can pick up those ads. We have put forward money to various groups which have support groups for AIDS patients. I have said, as the campaign is launched, that if more is needed we will have a look. In a very difficult situation in which we must bring forward the best and most accurate information, I do not
March 10, 1987

think we serve anyone by putting forth either sensational points of view or views that are simply not accurate.


AGRICULTURE
Mr. Mel Gass (Malpeque):: Mr. Speaker, my question is directed to the Minister of Agriculture. At this time the Department of Agriculture is washing every vehicle that leaves Newfoundland in order to stop the spread of potato warts and golden nematodes to the mainland. These diseases could wipe out the potato industry in P.E.I. and the rest of Canada as well. In order to save money the Department is thinking about the option of discontinuing the washing of vehicles leaving Newfoundland. Will the Minister advise the House and the Canadian potato industry what is being done to ensure the continuance of this very essential program?


Hon. John Wise (Minister of Agriculture):: Mr. Speaker, I appreciate the Hon. Member's interest in the subject and I appreciate the Hon. Member and his colleagues from P.E.I. and Newfoundland bringing this matter to my attention. I would like to allay their fears by indicating that indeed, as far as the Department is concerned, no final decision has been taken but I have instructed the Department to put a full and complete hold on that operation. Indeed, it should continue to function in the future as it has in the past. I will also be holding a meeting either Thursday or Friday morning with my colleagues from those two provinces. We will sit down together to map out, in co-operation and in concert, a future course of action on that problem.



Mr. Stan J. Hovdebo (Prince Albert):: Mr. Speaker, my question is also directed to the Minister of Agriculture. For some time now and particularly in the last couple of weeks, the Government has clearly indicated that special assistance will be provided to grain farmers in the 1987-88 crop year. Taking the Government at its word, can the Minister confirm that he will not be announcing any details whatsoever about the 198788 special assistance program before spring planting, and possibly not even before harvest?


John Wise: Mr. Speaker, I appreciate that question as well. Indeed, the Hon. Member, the House and the industry will, I am sure, take some satisfaction in the fact that my colleague, the Minister in charge of the
Oral Questions
Canadian Wheat Board, and I met some 55 farm leaders last Thursday. They joined with us in a joint press release which sent a very sensible signal to the industry that indeed Canadian grain and oil-seeds farmers should not plan their 1987 cropping pattern based on the formula of distribution of the Special Canadian Grains Program, nor should they base their 1987 cropping pattern on the expectation of continuing government assistance.


CANADIAN WHEAT BOARD
Stanley J. Hovdebo: Mr. Speaker, as the Minister has just indicated, he is aware of the great difficulty farmers are having in deciding what to plant in the spring. Since the Minister will not confirm a special assistance program, can he tell us if he will be announcing the 1987-88 initial payment details this month or will he simply be announcing the initial payment level for the top grades? Will he be announcing any details at all about initial payments?


Hon. Charles Mayer (Minister of State (Canadian Wheat Board)):: Mr. Speaker, after much discussion and consultation with farmers and farm groups, it is the opinion of the Government that we should go ahead and announce initial payments at the normal time which traditionally has been in the middle of April.
The Hon. Member will also know, being a farmer, that initial payment announcements are not necessarily accompanied by the spreads. They are announced at some time later.
I think last year the spreads were not announced until some time toward the beginning of June. We will probably be looking at announcing the spreads at a later date than we have in the past, but we intend to announce initial payments at the normal time which would be some time in the middle of April.


FINANCE
Mr. Raymond Garneau (Laval-des-Rapides):: Mr. Speaker, in the absence of the Minister of Finance I will direct my question to the Minister of State for Finance. In the February Budget, the Government, by changing the method of collecting gasoline taxes, effectively increased the operating costs of independent service stations. This has had the effect of reducing competition in the market-place. I met with members of the association involved and they asked me to ask the Minister the following question. Why has the Government decided to hit small Canadian-owned independent gasoline marketers while at the same time helping large multinational

March 10, 1987
Oral Questions
oil companies which have, in the final analysis, increased the price of their product at the pump for all Canadians?


Hon. Tom Hockin (Minister of State (Finance)):: Mr. Speaker, the question of retail prices of oil and gas is one that goes beyond the premise of that question. I cannot agree with the premise of the question. In fact, the market is shaped by a host of different factors and not just the ones pointed to by the Hon. Member.


IMPACT OF PAYMENT OF GASOLINE TAX BY INDEPENDENT DISTRIBUTORS
Raymond Garneau: Mr. Speaker, it is widely acknowledged that independent distributors do stir up market competition to a certain extent, and the fact that they can no longer collect the tax and are forced to pay it themselves even before selling a drop of gasoline creates a cash flow problem for them. This is why again I am asking the Minister why the Government has decided to end the tax collection arrangement and why, even before making a sale, independent distributors have to pay the gasoline tax which has just been increased by the Government? This cuts down their opportunities to be more competitive. Why did the Government do that?


Thomas Hockin: Mr. Speaker, the Hon. Member knows why the Government made that change. It was to ensure that we did not have any more problems with the collection of revenues when there was a clear leakage in revenue collections. It had nothing to do with the premise he is alleging.


DEPARTMENT OF ENERGY, MINES AND RESOURCES PERFORMANCE OF SERVICES FOR PUBLIC
Mr. David Daubney (Ottawa West):: Mr. Speaker, I have a question supplementary to those asked earlier this afternoon of the President of the Treasury Board. Does the Minister not recognize that there are certain services in any self-respecting sovereign and developed nation that are properly performed by the Public Service and not by the private sector, including those three branches under discussion in this case?


Robert René de Cotret: Mr. Speaker, once again I only have to respond-


Jean-Robert Gauthier: Tory split. Get your act together, guys.


Mr. Allmand:: I thought they were all united over there.


Mr. Speaker:: Order.


Some Hon. Members:: Oh, oh!


Robert René de Cotret: Mr. Speaker, following extensive studies of the Task Force on Program Review, we are trying to pursue all the avenues suggested to see if there are efficient and productive ways to spend taxpayers' money better. That is what we did in this case. There have been discussions in a number of instances with private enterprise. That is the sum total of what we are doing. We are trying to spend taxpayers' money better than the previous Government did for over 20 years.


PENSIONS
Mr. John R. Rodriguez (Nickel Belt):: Mr. Speaker, my question is directed to the Minister of Employment and Immigration and has to do with Government action with respect to the inclusion of pensions as earned income.
Last December 5 the Minister said that changes would be made to the regulations concerning retirees. Mr. Speaker, three months have slipped by and those people still do not know where they stand. How much longer will these retirees have to wait before the Minister clears up this confusion and introduces legislation to reimburse them?


Hon. Benoit Bouchard (Minister of Employment and Immigration):: Indeed, Mr. Speaker, in December I announced two specific measures, including one concerning beneficiaries retiring after 1986. We said at the time that we would take requalification into account. As to others who retired before 1986 we set up guidelines for employment centres but we had to reconsider them because they were extremely complicated and difficult to apply. We are now reviewing these guidelines and a Bill will be introduced at the earliest opportunity.


REQUEST FOR RETURN TO PREVIOUS SITUATION
John R. Rodriguez: Mr. Speaker, confusion reigns supreme at local unemployment insurance offices where thousands of early retirees have gone to collect what was rightfully theirs. The Minister has created more confusion with his announcement. Will the Minister cut out all the flimflammery and jiggery-pokery, stand up in this House, and clear up the confusion right now? Why does he not simply say we are going to go back to the situation as it was before January 5, 1986?


Benoît Bouchard: Mr. Speaker, if the Hon. Member expects me to say that we will go back to the pre-1986 situation, it is quite out of the question. I have been very clear about that. People
March 10, 1987

who retired after 1986 must requalify before we consider them to be eligible for unemployment insurance.
Now then, with respect to those who retired before 1986, I said and I repeat to my colleague that we are now reviewing the policy and the moment we are ready to unveil it, Mr. Speaker, we will do so. There is no flip flop.


UNEMPLOYMENT INSURANCE
[Stage Direction]
Hon. Warren AUmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, my question is directed to the same Minister. On December 5, he rejected one of the few Forget recommendations which were any good, which was to cancel the cut in unemployment insurance for early retirement pensioners. At the same time he promised to reimburse some of those claimants. At first he prepared a questionnaire to assist the process, and then cancelled it. When will he stop the procrastination, this stop and go administration, and remedy this cruel and unjust policy?
Benoît Bouchard: Mr. Speaker, I just answered the Hon. Member's colleague on the other side. In fact, I could give him more or less the same answer, although the Hon. Member for Nickel Belt at least did not have the impudence to refer to the Forget Report. Are you for or against the Forget Report? You will have to make up your mind some day. Instead of evading the issue, why not get to the point and say whether you are for or against the Report?


William Warren Allmand: Mr. Speaker, that is one of the most ridiculous statements I have ever heard. The Minister has already rejected one of the Forget recommendations. Does that mean he is going to reject all of the Forget recommendations? Otherwise why delay his statement to May 15? There was never any question of rejecting or accepting all the recommendations.


REQUEST THAT MINISTER LISTEN EVEN MORE TO PUBLIC
[Stage Direction]
Hon. Warren AUmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, more than 50,000 Canadians were treated unfairly as a result of these cuts.
When will the Minister decide to listen to the many groups and individuals protesting against this policy, including his
Oral Questions
advisory council, the Forget Commission and even members of his own caucus, and cancel these cutbacks immediately?
Benoît Bouchard: Mr. Speaker, yesterday we saw that even people in the Hon. Member's Party do not always vote the same way, which did not keep them from sitting in the House today.
What I want to say to the Hon. Member is simply that on January 5, we made commitments with respect to people who retired before 1986. We are going to introduce a Bill, but only when the Government is ready to do so.


PUBLIC SERVICE
Mr. Jim Fulton (Skeena):: Mr. Speaker, my question is directed to the President of the Treasury Board. Earlier in Question Period he was crowing about better spending of taxpayers' money. If the Government learned that an official in one of its Departments purchased a 15-pound brass tombstone for the burial of his wife's cat using public funds from his Department, would the Government request that person's resignation?


Robert René de Cotret: Mr. Speaker, I was not aware of it. If the Hon. Member would like to give me the facts I will be happy to give him an answer at a later date.


James Ross Fulton: I am sure that if Erik Nielsen were sitting there I know the answer he would give. The cat's name was Boobnik.


PROPRIETY OF EXPENDITURE
James Ross Fulton: Mr. Speaker, my supplementary question is directed to the Deputy Prime Minister. Does he believe that public funds should be used to buy tombstones for cats? Or should those who do this kind of thing be better employed in the private sector?


Donald Frank Mazankowski: Mr. Speaker-


Mr. Speaker:: Order. I am sure the Hon. Member has an important matter to raise but I have to advise the Chamber that the Minister is really not in a position where he must reply to that question. The question is probably out of order. If the Minister wants to try to shed some light on this mystery he can do it.

March 10, 1987
Oral Questions DISARMAMENT


VISIT OF SOVIET AMBASSADOR TO OTTAWA
Donald James Johnston: Mr. Speaker, the Secretary of State for External Affairs advised us during his comments on Friday that Paul Nitze, the senior adviser on arms control to the President of the United States, was here and met with the Prime Minister, the Minister of National Defence, and the Secretary of State for External Affairs. At the same time Ambassador Karpov, the most senior Soviet official involved in arms control issues, was in Ottawa but did not meet with any government Ministers. I ask the Deputy Prime Minister why the Government did not seize this historic opportunity to meet with Mr. Karpov to discuss the forthcoming arms negotiations at Geneva.


Hon. Pat Carney (Minister for International Trade):: Mr. Speaker, the Secretary of State for External Affairs is in Washington today meeting with Mr. Shultz at their quarterly summit. I do not know what his schedule was for Friday so I will have to take the question as notice and get back to the Hon. Member.


GOVERNMENT'S POSITION
Donald James Johnston: Mr. Speaker, I cannot believe that the Ministry was not aware of the presence in Ottawa of Ambassador Karpov. I hope the Minister will take steps to correct this situation, whether it is in the Minister's office or at the Department of External Affairs. The Government has missed a major opportunity to get a briefing from the senior Soviet arms negotiator. Does she agree, and will she do that?


Pat Carney: Mr. Speaker, of course I will do that. I do not think it is necessary to assume that no one in the Department of External Affairs met with the Ambassador or was briefed. I am simply saying I am not aware of the schedule of the Minister on Friday. I will look into it and get back to him.


SOCIAL SECURITY
John Henry Reimer: Mr. Speaker, my question is directed to the Minister of National Health and Welfare. Is he aware that approximately 12,000 Guaranteed Income Supplement pensioners in the Kitchener-Waterloo-Elmira area did not receive their GIS renewal applications? If he is aware of that, would he inform the House what steps are being taken to prevent these recipients from being cut off in April?


Arthur Jacob (Jake) Epp: Yes, Mr. Speaker, I am aware a number of people serviced by
those offices did not receive the GIS renewal form which they are obligated to complete at this time of year. We have issued or are in the process of issuing new forms, and I want to tell the Member and his constituents that none of them will lose any funds for which they are eligible should there be any delay whatsoever.


AIDS DISEASE-EDUCATION OF ARMED FORCES PERSONNEL
Howard Douglas McCurdy: Mr. Speaker, my question is directed to the Deputy Prime Minister. As he knows, the Government's education program regarding the deadliest virus ever known consists of one television ad which is not shown in prime time because the Government refuses to pay for it. Is it part of the Government's anti-AIDS program that the Armed Forces have no AIDS educational program which would be accessible to the people in the military?


Arthur Jacob (Jake) Epp: Mr. Speaker, what the Hon. Member said with respect to that being the only program is not the case. I have already replied in the House today regarding the four ads which the CPHA prepared and which I hope telecasters will reconsider broadcasting, at least three of them. With respect to the Canadian Armed Forces, I will check into that. I appreciate his raising it with me and I will see what is being done and what more should be done. I thank him for bringing it to my attention.


INCIDENCE OF AIDS IN FORCES PERSONNEL
Howard Douglas McCurdy: Mr. Speaker, in finding out the details about the lack of an AIDS educational program in the military, will the Minister of National Health and Welfare also find out what the incidence of AIDS is in the Armed Forces of Canada and what provisions have been made to protect members of the Armed Forces when they are exposed to circumstances in which the possibility of infection with AIDS may be very serious and devastating?


Arthur Jacob (Jake) Epp: Mr. Speaker, I do not want the Hon. Member to be misled by my first answer to believe that there is nothing being done in the Armed Forces with regard to AIDS and protection against the illness. I believe some work has been done with regard to what the incidence of the illness is, but I do not have it right at hand. I will find out. Whatever information I have I will make available to him as I have to everyone on the AIDS question. Obviously, if more work needs to be done to bolster the program, I am open to that as well.
March 10, 1987


Mr. Speaker:: I will recognize the Hon. Member for Trinity for the last question.


CANADA DEPOSIT INSURANCE CORPORATION
Miss Aideen Nicholson (Trinity):: Mr. Speaker, my question is for the Minister of State for Finance and is with regard to the $275 million payment from the Canada Deposit Insurance Corporation to the Alberta Government to finance that province's bail-out of two ailing trust companies. Since the Corporation has a deficit of over $1 billion and has no mandate to give grants to provincial Governments, why did the Minister approve the payment?


Thomas Hockin: Mr. Speaker, I was very happy to approve the payment because it was the best solution for the CDIC to minimize its exposure and to minimize what it would have to pay out, as well as solving the problem of those financial institutions in Alberta. There is room for that payment. However, CDIC will have to have its funds replenished very soon if it is going to continue to make payments of this sort.


USE OF TAXPAYERS' MONEY
Aideen Nicholson: Mr. Speaker, I am questioning the Government's apparent manoeuvering to use taxpayers' money for a $275 million gift of a bail-out without consulting Parliament. Will the Minister not agree that it looks furtive and that there should be more openness and accountability for an unusual arrangement of this kind?


Thomas Hockin: Mr. Speaker, this is not a gift and it is quite wrong to call it a gift. The CDIC received all the indemnities it wanted. The CDIC proceeded in this instance, as it always has, by making its understanding public, and it will continue to do so.


PRIVILEGE
Mr. Speaker:: I advise all Hon. Members that there was a question of privilege raised yesterday. It was agreed that it would be continued today when the Minister was here.


Robert René de Cotret: Mr. Speaker, at the end of Oral Question Period yesterday, the Hon. Member for Nickel Belt (Mr. Rodriguez) informed the House that he had given the Chair written notice of his reasons
Question of Privilege-Mr. Rodriguez
for raising a question of privilege about an interview I gave to the press as reported in The Globe and Mail last week.
Mr. Speaker, you suggested adjourning the matter and I want to thank you for doing so.

As a first point, Mr. Speaker, I noticed that in the intervention of my hon. colleague in this House he stated that I had been quoted as having said, or had apparently said, or words to that effect, certain things. While he may question the accuracy of the media in this respect, I can say that the media truly reflected what I said on this very important issue. The media report was indeed accurate.

Mr. Speaker, I shall, if I may, expand somewhat on the statement I made to the press and thus comment on the question of privilege which, in my opinion, is not well founded.

Essentially, Mr. Speaker, I took the opportunity of a general press conference to make what I thought was a very important point, that we have in this country a competent, able, and hard-working Public Service which is doing an excellent job for the country. I stand by those statements. I would like to have been able to convey that message personally to the Public Service critics in the opposition Parties.

Mr. Speaker, the Hon. Member for Nickel Belt (Mr. Rodriguez) claims that I am imputing motives or comments to members of the Committee. I would like to repeat what the Hon. Member said as reported at page 3967 of Hansard, and I quote:

He is suggesting that the members of the committee thought that Mr. Lussier was a liar and that is why the committee was putting him under oath to give testimony.

Without going over the full proceedings of the Standing Committee on Labour, Employment and Immigration of last January 28, Mr. Speaker, I think that a reading of the report on that meeting makes it quite clear that the question of swearing in the witness stemmed from the obvious concern of certain committee members who wanted to be sure they would get correct answers to their questions. I do not question the authority of the House of Commons or the authority of one of its committees to order witnesses to be examined under oath, as set forth in Beauchesne's Citation 635.
Mr. Speaker, my remarks to the press related first and foremost to the relevancy of such a request by the committee under the circumstances. Let me explain this.
Mr. Speaker, we all agree that in a parliamentary system the Minister is responsible for providing information to Parliament and its committees. Such is the basic principle of ministerial responsibility in a democratic parliamentary

March 10, 1987
Question of Privilege-Mr. Rodriguez
system. Ministers are responsible to this House for action taken on their behalf. On the other hand, public officials have the obligation to support their Minister in his relations with Parliament. In keeping with a long-standing tradition, Mr. Speaker, public employees must not express their views nor make speeches on the options being considered by the Government, but they must help the Minister convey to this House and its committees factual and objective information related to the management of programs under the jurisdiction of the Minister involved.
Mr. Speaker, no one ought to question the integrity and professionalism of public servants. No one ought to question the respect which public servants have for our democratic institutions. Therefore my remarks to the press expressed my astonishment at the extraordinary and uncommon request that a senior official be sworn in, something which has very seldom been heard of in the parliamentary records of this House. As a matter of fact certain committee members, the Hon. Member for Nickel Belt among others, did acknowledge this during the committee proceedings.
Mr. Speaker, the fact remains that public servants have always been very heedful of the expectations of Parliament, ever respectful of ministerial responsibility and our parliamentary traditions. This relationship between public servants and parliamentary committees has always been based on mutual confidence and respect, and I know, Mr. Speaker, that all Members of the House are anxious to maintain and strengthen this tradition.
Mr. Speaker, I am surprised that my remarks should be misinterpreted. I cannot imagine how the Hon. Member can allege that, and I quote:
The Minister shows disrespect for... Parliament by counselling the Deputy Minister to ignore a standing committee of the House.
First of all, I never did counsel any Deputy Minister, this one or any other, to ignore a standing committee of the House. On the contrary, I always encouraged them to give frank and honest evidence, and to divulge any information sought by Hon. Members of this House. All I wanted to do, Mr. Speaker, was to recall our principles and our parliamentary traditions.
The remarks I made during the Globe and Mail interview reflected my concern about a procedure which I deem inappropriate and unnecessary, and which, I might add, may very well undermine the climate of confidence and cooperation required for the smooth operation of Parliament and the Government machinery.


Mr. Jim Hawkes (Calgary West):: Mr. Speaker, as chairman of the committee in question, I want to make a brief statement. To some extent it is incumbent upon me to make it clear that, after spending many hours together, it is my understanding from committee members that if the action taken at the meeting in question in any way brought the
loyalty and good work of the public service of Canada into question we would like to apologize for perhaps leaving that impression. That was certainly not the intent of the committee. We join with the Minister in applauding the efforts of the Canadian public service which does valuable work for Canadians.
The record of that meeting shows that four people were sworn in on that occasion. They were commissioners of the Unemployment Insurance Commission. Technically it was not the Deputy Minister who was being sworn in but a commissioner of a Crown agency who happened also to be a Deputy Minister. However, it was in their capacity as commissioners of the Unemployment Insurance Commission that these people were sworn in.
Finally, I understand that this incident has caused a great deal of discussion, at many levels of the public service as well as within Cabinet, among the Clerks at the Table, Members of Parliament and other committee chairmen. The dilemma is when it is appropriate to swear in witnesses. Indeed, Beau-chesne provides the power for committees to be masters of their own destiny. Therefore, I submit that in the final analysis the choice must rest with the committee and its members on any given occasion.
I believe some of the concern raised by the Hon. Member for Nickel Belt (Mr. Rodriguez) and other Members, particularly one Member from Montreal who serves as vice-chairman of our committee, deals with the issue of rights of committee members to compel people to attend committee meetings and be witnesses before those meetings. There was a suggestion in the article in question that it might have been wise for a civil servant, when faced with a request from the committee to be sworn in, to leave the meeting.
Before you rule on this matter, Mr. Speaker, I suggest that you may wish to reflect upon that. If the committee has advertised a meeting with witnesses, and those witnesses have agreed to appear, would it indeed be wise for them to leave when they are asked to be sworn in, or would that almost compel the committee to report to Parliament on the issue of whether or not that particular witness was in contempt of Parliament as a result of that unwillingness to be sworn in when Beauchesne enables committees to swear witnesses? If that would lead one to conclude that contempt of Parliament would be shown, it would lead to a situation more serious than the present situation. I urge you to reflect upon that principle before responding to the issue.


John R. Rodriguez: Mr. Speaker, I welcome the remarks by the Chairman of the Standing Committee on Labour, Employment and Immigration, on which I sit. It is unfortunate that other chairpersons of Standing Committees are not here to participate in this question of privilege.
I listened to the Minister. He admitted that the press report is accurate. He went on at some length about the competence of senior civil servants, their loyalty and so on. That is not in
March 10, 1987

question. I happen to have known this individual, the Chairman of the Unemployment Insurance Commission, for some years. I concur with what the Minister said. However, that is not the question.
Regardless of whether the Minister or the witnesses agree, a motion was properly put to take testimony under oath. The committee chose to vote for that motion and put those witnesses under oath. I was on that committee that day and voted for the motion to put the witnesses under oath. The Minister can surmise and guess what the committee had in mind if he wants. In fact, he said, "The committee is really saying he's a liar". The Minister is accusing the committee of calling the Chairman of the Unemployment Insurance Commission a liar. No such thought occurred in my mind, and I will tell the Minister right now that I certainly did not say that. I did not think it.
As I said, for whatever reason, the committee decided to put the witness under oath. The Minister is responsible for civil servants. He is not an ordinary Minister but the President of the Treasury Board (Mr. de Cotret) in charge of the various statutes that govern civil servants. The Chairman of the Unemployment Insurance Commission happens to be the Deputy Minister of Employment and Immigration. The Minister said, "I would have liked to see Gaetan Lussier walk right out of the room".
I did not say in my remarks yesterday that the Minister was mocking the committee. However, I believe he was counselling disrespect for the committee and ultimately disrespect for Parliament. I sit on that committee, as do all other members who sit on the committee, as a representative of Canadians.
It may be irrelevant, but let me point out that the committee member who moved the motion to put witnesses under oath was a Conservative member, one of the majority in the committee.
I believe there is a prima facie case of privilege. When a Minister of the Crown, the big cheese of the mandarins advises them to disregard a decision of a committee of Parliament, he is telling Mr. Lussier and Mr. Edwards-


Robert René de Cotret: No. That is false.


John R. Rodriguez: You said it here. You said the report is accurate. It states, "I would have liked to see Gaetan Lussier walk right out of the room". What is Mr. Lussier to take from that? When it happens again Mr. Lussier will walk out of the room.
I believe there is evidence that the Minister has breached the privileges, not only of myself but of other Members of the House. You can chuckle and put your books down on the desk in disgust, but the fact of the matter is that there is clear advice to civil servants and I say it is a breach of privilege.


Mr. Speaker:: I hesitate to interrupt the Hon. Member for Nickel Belt (Mr. Rodriguez). Those watching might think that the Chair had done something with its books to show disgust. I just want it completely clear that the Hon. Member was not
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referring to the Chair. The Chair is listening very carefully to this matter. I invite the Hon. Member to complete his remarks.


John R. Rodriguez: Of course, Mr. Speaker, there is no reflection on the Chair. You were listening intently. I was referring to the way in which the Minister threw his paper down and appeared somewhat disgusted when I said he was counselling disrespect for Parliament. I did not give the interview. He gave the interview and he admitted it was accurate. Any senior civil servant reading this report could only take one conclusion from it, that the Minister is behind them if they walk out on the next committee meeting of Parliament where a motion is passed to put the witnesses under oath.
Finally, Mr. Speaker, I believe there is prima facie evidence of a breach of privilege and if the Chair so finds, I am prepared to move the appropriate motion.


Mr. Speaker:: I want to thank the Minister for moving so quickly to return to the Chamber and, take part in this important matter. I also want to thank the Hon. Member for Calgary West (Mr. Hawkes) for his intervention. I think I should advise Hon. Members that the Hon. Member for La Prairie (Mr. Jourdenais) raised a question of privilege on this exact matter. I think perhaps there was a slip-up somewhere but it was understood he would be notified when the matter returned to the Chamber. Today, unfortunately, the Hon. Member for La Prairie is in his constituency doing the job he has to do and, as a consequence, I am going to adjourn this matter once more to give the Hon. Member for La Prairie (Mr. Jourdenais) the opportunity to intervene if, indeed, he feels it is necessary.
Again I want to assure the Minister and the Hon. Member for Nickel Belt (Mr. Rodriguez) that I have listened very carefully to their words on the matter. I want to thank all Hon. Members again for their clear interventions. The Chair will consider the matter very carefully. However, as I say, I will not prepare any judgment on this matter until I hear from the Hon. Member for La Prairie, which should be soon.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Wilson (Etobicoke Centre) that Bill C-40, an Act to provide borrowing authority, be read the second time and referred to a legislative committee.
David Orlikow: Mr. Speaker, the net result of the federal Government's determination to reduce the deficit has been that we have not actually substantially reduced the deficit but have in fact transferred most of it to
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March 10, 1987
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the provinces. The combined deficits of the 10 provinces on a national accounts basis rose last year from $4.9 billion to $8.2 billion. Thus the over-all net reduction in federal-provincial deficits was $4.2 billion. For that deficit reduction we paid a very stiff price. The stagnation of regional economies anywhere outside southern Ontario resulted in only 5,000 jobs being created in 1986. In the western and Atlantic Provinces the unemployment rates remain at very near the same levels as they were when the Conservatives took power in 1984.
Other things which have happened as a result of the Government's determination to cut the deficit is that vital programs such as post-secondary education and health, which are financed partly by the federal Government and by the provinces, will see a reduction of $2 billion in funding between now and 1990-91.
My Province of Manitoba has done a relatively good job in terms of job creation. The unemployment level in Manitoba has fallen despite the cuts in federal support. However, the province now faces a number of very unpleasant choices. It can cut its programs, it can opt for a higher deficit, as have many of the other provinces, or it can increase provincial taxation. We are told that at some point in the future this determination to reduce the deficit, for which there has been so much retrenchment, will lead to the position where the promises made by the federal Government in 1984, prior to the election, will be redeemed.
One of the promises the Government made was that it would reform the tax system. It would make the tax system simpler and fairer. I have already referred to the fact that in the three years the Government has been in office it has increased income tax, sales tax, excise tax and taxes on fees for services so that the average family is paying $1,350 more in taxes now than in 1984. The Government has done nothing about plugging the loopholes for the wealthy in terms of personal income tax or for many corporations which have been quite profitable.
To illustrate, let me to point to the fact that in 1976 there were only 24 persons paying no income tax on incomes in the top tax bracket. By 1983 there were 259 Canadians who paid no tax on incomes over $200,000. From inquiries I made I discovered that in 1981 the average income of the 239 persons that year who paid no income tax was an astounding $615,000. Let us compare that with the fact that there are many people living below the poverty line who are still required to pay income tax. This is the unseemly free ride that minimum tax rates were supposed to stop.
We are told again and again that at some point in the near future the Government is going to bring down a White Paper and explain how it is going to give us a fair tax system. However, what the Government has done is open the flood gates to the wealthy with, for example, the $500,000 capital gains exemption and the increase in the amounts which can be contributed to RRSP plans to which the wealthy can contribute up to $15,500 in the year in which they would not have to pay any income tax. These are examples of the kinds of things
the Government has done to make us believe it is not serious and that we will not receive any real proposals to make the tax system fairer.
Not only has the Government let the wealthy off in terms of them paying a fair share in the form of income tax, it has let the corporations get away with murder. In 1950, federal corporate income tax and personal income tax accounted for equal shares of the revenue received by the federal Government. Today we see individuals paying almost 45 per cent of the federal Government's revenue and the corporate share dropping sharply to below 20 per cent. We also see the taxpayers' share increasing by 15 per cent and the corporate side not increasing at all. Yet the Government is not forcing the corporate sector to pay its fair share of taxes.
Preferred shares which are now very popular with many corporations still go untaxed. We continue to see tax deductible interest on takeovers, which take massive amounts of borrowing without producing any new employment. The Government tells us how it stepped in to cut the scandal of the scientific research tax credit while at the same time it permitted those who had already made application to receive that tax credit. We lost, not $1 billion but over $3 billion in taxes which these companies should have paid. The Government wants to present a hopeful picture today. But it is short of revenue and it is reluctant to find or create more revenue. In order to try to deal with the deficit, it sells off profitable and useful Crown corporations such as Teleglobe. There are thousands of Crown corporations at the federal and the provincial level. Crown corporations were not a product of the imagination of some wild-eyed socialists. Ninety-five per cent or more of the Crown corporations at the federal and provincial levels were established by Conservative, Liberal, Social Credit, and PQ Governments. These Governments established Crown corporations because they saw a need which had to be met. The private sector was not willing to meet these needs, so Governments created those Crown corporations. Now these Crown corporations are being sold without any thought as to the reasons for which they were established and the benefits which they bring to the country.
I have talked about how the federal Government has transferred debts to the provincial Governments, which have accentuated the regional stagnation, which is further compounded by the Government's failure to produce a workable regional policy. There have been a number of concrete and worthwhile suggestions of things which need to be done. Because of its fear of increasing the deficit, the Government has rejected these suggestions out of hand.
The Federation of Canadian Municipalities made a very useful proposal when it pointed out that in most Canadian cities the infrastructure in the core area is falling apart. We need to begin to rebuild the services and to rehabilitate the older parts of Canadian cities. We need to start to rebuild the roads, sewers, bridges, and drainage systems which are falling
March 10, 1987

apart and rapidly wearing out. The federation estimated that it would cost $14 billion to renew these facilities before we become caught in a cycle of expensive schemes of temporary repairs. The federation called for a federal, provincial, and municipally financed joint program.
That proposal was rejected out of hand by the federal Government, despite the fact that there were obvious benefits. New construction would mean job creation, which would be a socially useful expenditure and money would be targeted to areas that need it most, particularly in the inner cities.
It was a former Conservative Government headed by Mr. Diefenbaker which inaugurated that type of program with its Winter Works Program. Instead of accepting that proposal, we have the Minister of Finance (Mr. Wilson) rejecting it, and the Minister of the Environment (Mr. McMillan), who should know better, talking about under-priced water supplies to Canadians provided by the cities. Of course, he wants them to pay rather than the federal Government. We are seeing very little innovation from the Government on the expenditure side.
I wish to deal briefly with a couple of other problems. Despite the fact that unemployment is still running over 9 per cent, the Government has cut funding for job creation by $100 million. It has also taken money away from the governmental non-profit sector, and given a substantial part of the job creation money to the private sector. The result is that there has been little in these programs to help those who need it most, native people, the handicapped, or women.
I wish to comment briefly on what has happened to research funding. When the Conservatives were in opposition they said that if elected they would move rapidly to equal what other countries are doing in the way of funding scientific research and development, that they would move to a point where 2.5 per cent of the Gross National Product would be allocated to those efforts. In fact, we are now doing even worse in Canada than we did when the Liberals were in power. Less than 1.5 per cent of the Gross National Product is being spent for scientific research and development now.
The Government puts its hope in the idea that the private sector will put in substantial amounts of money into research and development. I have yet to meet a scientist who believes that the private sector will do that. If the private sector does not invest, it means that we will fall further behind in the objective of moving toward an adequate expenditure in the field of scientific research.
The Government has failed in its promise to give us a fairer tax system. It has put increased burdens on ordinary Canadians. It has made it easier for the wealthy and the corporations which are profitable to avoid paying their fair share of taxes.
For all those reasons, I and other NDP Members of Parliament propose to vote against this borrowing authority proposal.


Mr. Lesick:: I have been listening with keen interest to what the Hon. Member for Winnipeg North (Mr. Orlikow) has said
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this afternoon, specifically with regard to problems that we have had with the inequities of income tax in 1976 up to 1983, and how the figures had increased from 20 to over 200 for those who were not paying any income tax whatsoever. The Hon. Member said that corporations were paying a much lesser amount of money than private citizens on a percentage basis. The Hon. Member then mentioned the $500,000 that people can save by selling off their assets.
The Hon. Member should realize that all of these figures that he has given us and all of the items that he has enumerated date back to the time when the Liberals, together with the NDP, formed the Government. Therefore, the Hon. Member should accept some of the responsibility, because he was a Member of the Parliament at that time and he was responsible for part of the problem that we are facing today. It is only farmers who are receiving $500,000 rather than any person in Canada and, as the Member mentions, just the rich. That is not so. It is that coalition that has caused the problems that we have today. It is that coalition that has allowed the previous excessive spending.
Why does the Hon. Member not admit to being a party to the inequities of the income tax? Why does the Hon. Member not admit to being a party to the extra expenses which the people of Canada are asked to pay? They are the victims of the incompetence of this coalition. It is not the present Government that has caused this problem; it was a previous Government of which at times the Hon. Member for Winnipeg North was a part.


David Orlikow: There is one statement which the Hon. Member for Edmonton East (Mr. Lesick) made with which I agree, and that is that the basic faults in the tax system, both in terms of personal and corporate income taxes, were established during the years when the Liberal Party formed the Government. I can agree with that, although I point out to the Hon. Member that it is his Conservative Party which has been in office since 1984 that made these loopholes even easier for both individual taxpayers and corporations. I say to the Hon. Member that he is wrong and that he has not looked at the record when he suggests that we supported the Liberals on those tax measures.
Since the early 1960s, ever since Parliament received the taxation recommendations of the Carter Commission, the commission appointed by former Conservative Prime Minister Diefenbaker, the New Democratic Party has called for implementation of most of its proposals to plug the loopholes. We criticized the Liberals, just as we are criticizing the present Conservative Government, for not dealing with the problem.
Let me say something about my criticism of the $500,000 capital gains exemption. I do not have the time to go into the details today, but we have made clear that there should be an opportunity in the tax system for farmers and small business people to transfer their land and businesses to their children or

March 10, 1987
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relatives without being required to pay heavy taxes on supposed capital gains. My criticisms on behalf of the NDP are obviously felt by many people.
If the Hon. Member has not looked at recent polls, he should look at them to see how far support for the Conservative Party has fallen all across the country, but particularly in western Canada and especially in Alberta, a province which during recent elections elected 100 per cent of its members from the Conservative Party. I also ask him to look at the recent provincial election and what happened in the City of Edmonton where 16 NDP Members of the Legislature were elected. The people of the country are dissatisfied with what the Government has done. They are showing that dissatisfaction quite clearly, and they are very justified in doing so.


Russell Gregoire MacLellan: Mr. Speaker, I am pleased to participate in the debate on Bill C-40, an Act to provide borrowing authority, and to try to determine what the Government is doing and where it is going in respect of its financial policy. The borrowing Bill will allow the Government to borrow $24,300 million by the end of March 1987. The difficulty is that we are no wiser about where the money will be spent.
Certainly the Budget did not provide us with any indication of that, if it can be called a Budget. It was completely undecided about what route the Government would follow. It did not even tell us whether it would reduce the deficit. The deficit reduction, for which the Minister of Finance (Mr. Wilson) took many bows, was in the order of $200 million. He certainly did not deal with the very serious financial problem, as he termed it.
I should like to focus particularly on the energy sector and what was missing from the Budget for that important industry. Government Members said that they did not know how they would finance assistance to the energy sector. They said that as recently as the fall of 1986. They did not know whether they would give assistance to the energy sector, whether they would finance the assistance with increased sales and excise taxes, or whether it would be from consolidated revenues or whatever. However, they decided to increase the excise tax in the Budget by one cent per litre. As a result of this one cent per litre increase, they will raise $450 million. They also decided to equalize the excise tax on leaded and unleaded gasoline, from which they will raise another $30 million. Through the Budget the Government is to raise $480 million. What will that do for the energy sector? It will do nothing for that sector.
This is the same Government which said that it was interested in self-sufficiency and security of supply. It said that it wanted to maintain a strong energy sector. In the last federal election it received complete support from the energy producing areas of the country. It has completely let down the people who had every reason to expect that something would be forthcoming.
What is going on with the Government? The energy sector lost over 50,000 jobs in 1986. In Calgary it lost another 6,000
jobs in the month of January 1987. Because of the decline in the energy sector, to the end of January 1987 the country has lost at least 56,000 jobs. It is a very serious problem. It is not only a western Canadian problem; it is a Canadian one. However, the Government refuses to recognize the seriousness of it. It is walking away not only from the problem but from its responsibility as a Government.
Obviously there is complete disagreement in the Government on how to handle the situation. The Minister of Finance is doing absolutely nothing. He came out with a Budget indicating that funds would be raised from gasoline sales, but it did not indicate that anything would be put into the energy sector. On the day the Budget was released, a press release by the Deputy Prime Minister (Mr. Mazankowski) was circulated in western Canada. He indicated that the Budget was not intended to be a vehicle for announcing specific measures to assist specific sectors or regions.
What is the Budget supposed to do? What is its purpose? It is not helping the regions. It is not bringing forward any kind of financial planning.
The press release went on to indicate that the Government had another way of helping the energy sector through what it called a western economic diversification strategy. It indicated that in this strategy measures would be implemented to assist the energy industry during this period of severe difficulty. To which period did it refer? The downturn in the energy sector has been going on since January, 1986. The press release talked about a strategy which would help the energy sector for a period which had no beginning or ending. However, more important, it completely ignored the period of difficulty which has now lasted for 14 months.
The Government has absolutely no solution to the problem or no idea what it will do to help the energy sector. The Government should be honest with western Canadians. It did not say that it had no idea or that it would do nothing to help the energy sector. It said that it would come forward with a western economic diversification strategy but did not give any period of time as to when the strategy would be implemented or what it would contain. It merely tried to pacify western Canadians and let them think that the Government was interested in doing something for them.
Also the Deputy Prime Minister indicated in his press release that investments in energy exploration and development, which are so important to Canada's future energy security of supply, would be encouraged and assisted. Why cannot that be done now? Why do we have to wait for a strategy which has not been formulated or has not been given any definition? It may not even be a strategy which the Government fully intends to bring forward. Why tell western Canadians that they cannot have something now when they are at the height of economic difficulty? Why tell them that they have to wait for the Government to get its act together and come to grips with the problems faced by western Canada at the present time?
March 10, 1987

The release went on to indicate that the federal Government would co-operate closely with the provincial Governments and industry to examine appropriate measures to accelerate nonconventional oil projects. That is complete hogwash, Mr. Speaker. The Government is not co-operating with the provincial Governments. I believe in consultation. It is important to have consultation in the energy sector, as with all sectors. The Government has talked with the provinces and they have told the federal Government what they want, but the federal Government is no longer communicating with the provinces. The federal Government is backing away from its responsibility, and particularly the Minister of Energy, Mines and Resources (Mr. Masse).
There is a blatant disregard for the problems in western Canada. What is going to happen? What has been happening? The Government says that the market should dictate what takes place. The market should determine what exploration takes place, what development takes place and what gasoline is sold for at the pump. Let me refer first to exploration.
This Government has placed as one of its pillars of energy policy security of supply. It said that that is very important, but the Government does not say that all the time. The Prime Minister (Mr. Mulroney) says it all the time, but the Minister of Energy recently denounced security of supply and said it was not important. But this is the same Government, the same Prime Minister and the same Minister of Energy who say that the private sector will do it. The Minister of National Health and Welfare (Mr. Epp) is making too much noise. If he is not interested in what is happening in western Canada I would ask him at least to sit quietly.
Let me tell you what the private sector said this morning at the meeting of the Standing Committee on Energy, Mines and Resources. Imperial Oil was appearing, and its witness said:
Spending a lot of money to find and develop whatever undeveloped oil and gas reserves Canada might have strictly for the sake of self-sufficiency makes little sense.
That is what Imperial Oil Limited's Vice-President, Bob Peterson, said today. He went on to say:
-that ensuring Canada has a secure supply of energy won't help the country much if there is another oil crisis. Canada is more likely to be hurt by the economic impact of such a crisis on its trading partners than by the impact the crisis has on Canadian energy prices and consumption.
Who will help us develop security of supply? We are telling Canadians that there is no security of supply, that there is no policy of security of supply by the Government and the Government has abandoned its role. The private sector will not pick it up. You cannot expect the private sector to spend money at a time when oil prices are low in the interest of having some supply when oil prices are high if the industry does not know when those oil prices will be high. The industry can get a cheaper supply of oil from other sources. The bottom line is profits. There are large reserves of old oil from which companies can get quite a profit. For instance, companies will
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not spend money on upgraders in western Canada which cost a great deal of money.
Where are we going? We are going nowhere because the Government does not know where it is going. It has no idea. It says the Budget is not the place for a significant policy for energy in western Canada. But that has changed now. On March 4, the Minister of Energy, Mines and Resources was in Calgary. A newspaper article reported:
Faced with growing hostility in Alberta's depressed oil patch, federal energy Minister Marcel Masse has given his support to a potential $80 million tax break for the industry.
That is a complete change of policy. The Minister said in Alberta that he did not have the details but that the Minister of Finance would be there on Saturday, March 6 and would tell them what it is all about. The Minister of Finance visited Calgary on March 6 and had absolutely no details for the energy sector. He just told them that the Government would come out with a strategy at a later date and that people should be patient. But these are people going bankrupt and who have lost jobs. They wonder how they will look after their families, and all the Minister of Finance told them was to be patient. Even more galling was the remark of the Minister of Energy when he told reporters:
That the issue of the depletion allowances, which would cost the federal Government about $80 million a year in lost taxes, "was not directly related" to the Budget.
Here is a tax policy granted to the mining sector which the oil and gas sector now wants but the Government is stalling. It will not make any commitment at all on earned depletion for the oil and gas industry. The Minister of Energy had the gall to say that it did not relate to the Budget. What does relate to this Government? What will make this Government concerned about the economy? What will make the Government be concerned about the problems in western Canada?
The Government is now planning to privatize Petro-Canada, the corporation which led exploration in the offshore and in areas where the private sector was not too interested in exploring and drilling. The Government, because it has a successful Crown corporation that has done what it was supposed to do, is going to get rid of it. That makes sense if you are that Government because that is what the Tory Government does. When something works it gets rid of it.
The Minister of Finance says, with respect to Petro-Canada, that it does not have any public utility role at all. The Minister of State for Privatization (Mrs. McDougall) says that she cannot think of one benefit that Petro-Canada has provided. The Minister of Energy said this morning on Canada AM that Petro-Canada has completed its role in exploration in Canada. Later on in the same program he said the Government wants to sell Petro-Canada because it can get more money to carry out exploration.
How in the name of heavens can you rationalize those statements? If the Government sells Petro-Canada and receives a fee, who will do the exploration? Petro-Canada will not be there to do it. A private sector corporation will have to

March 10, 1987
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do it. But will the Government give the money to the private sector corporation, over which it has absolutely no control? This is the same Government that says Petro-Canada should not be an arm of public policy, in direct contrast to the Restrictive Trade Practices Commission, which said in its report on competition in the petroleum industry concerning the downstream area of the industry:
Petro-Canada gives the Government the opportunity to reduce the competitive restraints and associated public cost of that market, not only without having to pass special laws, but in ongoing pervasive ways that could not be achieved by laws.
Everybody is telling the Government that Petro-Canada has a role. Even the strongest foes of Petro-Canada in western Canada, if they were to be honest with you, would tell you that Petro-Canada has provided some benefit to the energy sector and to the economy.
I think we have a rather frightening situation. We do not know what is going to happen. The situation has not changed in the energy sector in western Canada. The situation is the same: there is still a downturn in the oil and gas industry. This downturn has reduced activity considerably and has reduced the number of wells drilled in 1985 from 12,000 to half of that in 1986. The forecast for 1987 is that the number of wells drilled will be reduced yet again.
The outlook is not encouraging. One of the reasons it is not encouraging is that the people do not have any confidence in the Government. They feel as though they have been betrayed. They supported the Government in the belief that it understood and would bring forward policies that would be helpful to them. They have been completely frustrated and led down the garden path by this Conservative Government.
This is true not only of the situation in western Canada but of the situation in Atlantic Canada as well, and not only with respect to the energy sector. Because there is to be a byelection in St. John's East, the Government has now told Petro-Canada that it wants activity in Terra Nova and the Avalon Basin. This same company, which is not supposed to be an arm of public policy, which is supposed to be completely independent, flew the two Ministers to Newfoundland where they made an announcement of two delineation wells to be drilled. This raised the hopes and led the people of Newfoundland to believe that there would be development of the oil reserves at the Terra Nova site. That is just complete speculation, because this Government does not believe in doing anything in the interests of Newfoundlanders or of any other Canadians. It will be devastating if the Government does not fulfil that commitment, yet Petro-Canada is completely backing away, except, ironically, where the Government has told it that it has to announce activity.
Regional development in Canada is a complete misnomer under this Government. The Government has no policy of regional development. The only regional development in which this Government believes is the strengthening of the muscles
on its behind. The Government has completely forgotten about the needs of Atlantic Canadians and Canadians in have not regions. The Government throws out a fund every now and then, but nothing is ever done with it. There is no commitment to ensure that funds succeed and that economic disparities are corrected.
This Government has developed an arrogance one would not have believed possible in just two years. It is completely disinterested in people and has a complete lack of concern for the problems of Canadians.


Mr. Henderson:: Mr. Speaker, I would like to thank my colleague, the Hon. Member for Cape Breton-The Sydneys (Mr. MacLellan) for making a very excellent speech. He outlined very clearly his position on the oil industry and how the Government is failing in its attempt to help the oil industry. Clearly, the Budget and the borrowing authority Bill with which we are dealing today did not address the needs of the oil industry.
I would like to follow up on the Hon. Member's final remarks on regional disparity. The Hon. Member is from Cape Breton and I think he clearly understands that the Government has been a total failure when it comes to job creation in Atlantic Canada. The programs that were announced were programs in name only. There was no substance to them.
In my own Province of Prince Edward Island, we had the highest rate of unemployment in January, 1987 since 1982. Unemployment is now up to 14.6 per cent, but the Hon. Member knows full well that that is not the true picture. These figures are seasonally adjusted and do not take into consideration those who are employed in the fishing industry and others who are drawing UIC benefits.
I would like to point out to the Hon. Member the Government's lack of funding for post-secondary education and have him comment on that. Students from my province have come to me to express their tremendous displeasure at the Government's funding for Established Programs Financing. The University of Prince Edward Island's tuition fees are among the highest in Canada. Last year, tuition fees were $1,480, plus other mandatory fees and book costs. When you add to that living expenses together with the lack of employment for students in the Atlantic provinces, the situation is almost such that the ordinary young person in Atlantic Canada is being held back by the Government's lack of funding. The Government is not investing in one of the best areas I know of to invest in, and that is, the future of young people.
We in Atlantic Canada have been totally let down in the area of post-secondary education as we were in many other areas. I heard some government Members speak this morning about lowering the deficit from $32 billion to a projected $29.5 billion. However, looking at it very carefully, one finds that the reduction is mostly as a result of tax increases and not of any savings that I can see. I see the Government as being penny wise and dollar foolish. It has the largest Cabinet ever, although every week or so one or two cabinet Ministers fall for
March 10, 1987

one reason or other, but they continue to be reappointed. I could go on and on about the way the Government is wastefully abusing the taxpayer while cutting back in ways that will be detrimental to the long-term future and viability of Canada, and particularly cutting back on programs that affect the education of young people.


Russell Gregoire MacLellan: Mr. Speaker, the young people of Canada and particularly of Atlantic Canada are being left singularly without hope. As my colleague, the Hon. Member for Egmont (Mr. Henderson), has said, not only are opportunities slim but the morale of young people is low and is eroding even further. It is becoming more and more apparent that it is the Government's intention that only the wealthy should be able to go to university and that assistance for universities should be reduced to such an extent that young people who cannot find summer jobs or get assistance from their parents will not be able to attend university regardless of how well they do in school.
With respect to jobs, the picture is equally bleak. The job base in Atlantic Canada is eroding as the Government tends to centralize all its activities in the larger centres. Young people are being trained without having opportunities to find jobs in their fields of expertise. It is a concern for them and for their parents and it is a concern for the future of Atlantic Canada. I think it should be a concern for all Canadians.


Mr. Gagnon:: Mr. Speaker, we really do not have to take any lessons from the Liberals on how to look after an energy policy. They brought in a National Energy Program, they brought in the PGRT, and they brought western Canada to its knees. If any divisive program was brought in by the Liberals, it was the NEP, aided and abetted by the NDP. That stands for the No Down Payment group. All they believe in is spend, spend, spend. They are fiscally irresponsible. If you do not have fiscal responsibility, investors, foreign or Canadian, will lose confidence. That will cause a run on the dollar. That happened at this time last year and it caused higher interest rates. Last year interest rates were 4 per cent higher than they are today. People have said that it is not Canadian policies which cause higher interest rates. I say to them, look at Australia. The prime rate in Australia is 18.25 per cent. Ours is 9.25 per cent. We must be doing something a little better than they are doing.
My friend from the Liberal Party was talking about Petro-Canada. That company received $4.25 billion from the taxpayer. What we got back was $50 million. We should have received 10 times that amount every year, not just a one-time payment, for the last seven years. He talks about all this fantastic exploration on the frontier by Petro-Canada. He also forgets that on top of the $4.25 billion that company received from the Government, it was also reimbursed for 80 per cent of its exploration costs through PIP grants. Another hand-out.
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The Hon. Member talks about competition. Some of the marketing companies which have disappeared into Petro-Canada are Supertest, BP, Canadian Fina, Pacific 66, Gulf, Royalite, and Purity 99. Those are seven that I can think of at the moment. If you wonder why we do not have competition in the market-place, it is because Petro-Canada has gobbled up all the competitors. When you have competition, you have a fair market price. I can point to Regina which has a co-op refinery, or Calgary with a Turbo refinery. Does my Liberal friend still believe that Petro-Canada is a good instrument for Canadians?


Russell Gregoire MacLellan: Mr. Speaker, my hon. friend says the Government does not have to take any lessons from the Liberal Party. To give you an indication of the stubbornness and stupidity of the Government, the lessons are there but it refuses to take them. The Hon. Member implies that because of the NEP we were decimated in western Canada. His Government is now compounding the problem by not having any policy at all. It then wonders why it is not going over well in western Canada. The Tories wonder why the people of western Canada are completely disgusted with them. Not only is there not an unpopular policy, there is no policy at all. The Government has not even tried to find something that would help. It just backs away and snubs those people. That is the worst affront of all.
The Hon. Member says the Liberal Government brought the oil and gas industry to its knees. His Government is not only doing that, it is kicking the industry when it is down. It is incredible that the Government and the Conservative Party do not understand what they are doing. They ask, why is Petro-Canada important? Why did the Minister of Energy, Mines and Resources and the Minister of Transport (Mr. Crosbie) fly in a Petro-Canada jet to Newfoundland to announce two delineation wells if Petro-Canada is not important? If Petro-Canada is such an nonentity, why is the Government using it to try to bolster its pathetic position in St. John's East? I do not have to repeat what Petro-Canada has done for this country. The Government, through its Ministers, is demonstrating that daily.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: It is my duty, pursuant to Standing Order 66, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the Hon. Member for Scarborough West (Mr. Stackhouse)-Banks and banking-Chartered banks' interest rates-Spread between bank and prime rate; the Hon. Member for Winnipeg North (Mr. Orlikow)-National Research Council-(a) Future of

March 10, 1987
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Algonquin radio observatory (A) Use of observatory equipment; the Hon. Member for York East (Mr. Redway)- Revenue Canada-Disappearance of microfiche records- Result of investigation.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Wilson (Etobicoke Centre) that Bill C-40, an Act to provide borrowing authority, be read the second time and referred to a legislative committee.
Derek Nigel Ernest Blackburn: Mr. Speaker, I am happy to participate in the debate this afternoon on Bill C-40, an Act to give the Government borrowing authority. As in the past, this kind of Bill is usually very bland with not much flesh or detail except that it will give the Government $24.3 billion in this fiscal year. Therefore, I think it would be very irresponsible of us on this side of the House not to rise in our place and ask what it is for. Like any other big business, big Government has to borrow money, very often in advance. However, I think we should have the right to demand to know, not only why the Government is borrowing that amount of money, but for what specific purposes. We also have to ask it to justify those huge expenditures. If I am not mistaken and if my memory serves me correctly, that is what this place is all about. That is why Parliament began in England some 700 years ago, to force the Government to justify the spending of taxpayers' money.
To get an answer to this question we have to cast our minds back to the Government's last Budget. That is hard to do because there was little in that Budget to make it memorable. In fact, one could sum up the most recent Budget in just four words: More of the same. I have a partisan political temptation to stop right here and just say, go ahead. After all, the Government has been good to the NDP. Looking at the recent poll results one could make the case that the Conservative Government is the best thing ever to happen to the NDP. However, I cannot do that. My conscience, my mail and my contacts with my constituents remind me daily that this country is hurting.
The fact that so few approve of the Government is not to be celebrated, it is a cause for concern. There is a feeling, even in my own constituency in southwestern Ontario, that somehow the recession is behind us, that we have overcome the great obstacles such as very high interest rates and massive unemployment, and that the country is back to work, the unemployment problem is solved, and much lower interest rates are benefiting everyone from coast to coast. However, all one has to do is to travel beyond about 200 miles from the City of Toronto in southwestern Ontario, with the possible exception of Montreal and certain parts of southern Quebec, to find out
that Canada has not bounced back from the recession of 198182. Indeed, there are greater regional disparities today than there were then. There are higher unemployment rates in seven provinces today than there were in 1982. Let us not fool ourselves that the Government's fiscal and monetary policies have somehow led us out of recession or depression and brought us back into the warm sunshine of advancement and development. Such is just not the case.
We have to skip the first half of the last Budget, which was just self-congratulations or breathing space. We then get to the meat of the Government's proposals in the February Budget. However, in this case maybe bare bones is a better way to describe it, because the Government only proposes to raise a few taxes and even those proposals hit hardest at low and middle-income earners. Of course, that has always been the case. Those who make up the largest single segment of our wage-earning population, the men and women in the so-called middle income group, have been hit again.

The first tax increase comes at the gas pumps. The ordinary guy who drives to work is asked to pay another one cent on every litre of gas. The Government clearly hoped that everyone would just shrug at another penny tax. However, even that slim hope faded when the big oil companies decided to tack on a few cents for themselves. That caused an uproar. I hoped that the Government would step in to stop such a blatant price gouging. After all, the oil companies were hoping to pin the rap for this increase on the Government. However, the Government could not muster enough courage. Instead, the Minister of Finance (Mr. Wilson) told Canadians not to buy the gas if they did not like the price. Truly spoken like a man who gets driven around in a limousine. If he had to get to work and his tank was empty the day after his Budget, his answer might have been a little different.
Gas was not the only thing to be taxed. The Government also broadened the sales tax to include snack food. This is a small measure which might have been overlooked in a more substantial Budget. However, the sales tax extension, albeit small, was a perfect illustration of the Government's philosophy. Instead of getting its money by making sure that every individual and corporation is paying its fair share, it chose to implement a regressive, indirect tax which hits the consumer hardest. I would have preferred to see tax reform, and I will return to that later.
Sales taxes are, by definition, regressive taxes. It does not matter whether you are a millionaire or on a fixed retirement income, you pay the same tax on the same article. That is just not fair. A loaf of bread is the same price for a person raising a family on $15,000 a year as it is for the rich person raising a family on $150,000 a year. Sales taxes are very, very regressive.
There was also a 4 per cent hike on the excise tax on tobacco products. This is a traditional sin tax which everyone expects to see in Budgets. We have seen it in virtually every Budget for
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the last 20 years. However, it ignores a crying need. This is no time for another mindless revenue grab from tobacco. The Government should realize that this cash cow is dying. I represent an area with a large number of tobacco growers who desperately need help to convert their operations into other products which will give them a decent return on their investment.
I would like to spend a couple of minutes to repeat a few things I have said in this Chamber on other occasions. When those hard-working tobacco growers started growing tobacco 50 or 60 years ago in the tobacco belt of southwestern Ontario they took a great risk. They went into an economic wasteland, the backwater of southern Ontario which was not much good for producing anything else. Through hard work, worry, borrowing, and paying their taxes year in and year out they fashioned for themselves a decent standard of living while building up some very viable family farms. For a number of years they prospered. However, in recent years, due to many different obstacles, not the least of which is the health factor, the tobacco industry is now on the decline. Judging by the predictions of most of the experts, the tobacco industry will continue to decline in this country.
It is very easy for us to say that people should stop smoking, that we should stop advertising tobacco products, and that we should bring in every kind of regulation and law imaginable to encourage people to quit smoking. I am a living example of a person who smoked cigarettes for 30 years and finally quit. I am happy I quit. I got scared. I knew that the writing was on the wall and that smoking was a dangerous habit to indulge in.
However, on the other side, we must look at the tobacco industry and the tobacco producers in particular. Is it fair to pull the rug out from under them and say that not only has their product been scientifically proven to be dangerous but that we do not care about them any more, that we will let them fend for themselves other than putting $15 million in the kitty to help them get out of tobacco and into something else? Tobacco farmers need about three years of good prices and then will not need government assistance to get out of tobacco. They will be able to leave with dignity, independent of government aid. They will have enough money to set themselves up in another industry or business or to enter a trade.
Unfortunately, both the federal Government and the provincial Government of Ontario are doing very little other than saying a lot about what should be done rather than putting a meaningful program into place to assist the tobacco growers. It is a shame that because of the health factor some 20 townships in southwestern Ontario will suffer drastically in terms of their tax base. The families of tobacco growers are going through tremendous adversity, depression and anxiety because their livelihood is literally being taken away from them. I hope that the Government will put together a program to assist these people in a dignified way which will allow them, of their own volition, to move into another kind of business.
While so many farmers are going bankrupt and their land is falling out of production, no government aid has been
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announced. The Government has an opportunity to tell those farmers that they are not alone. The Government could have said that this year's tax hike on tobacco would be directed exclusively to developing alternative crops, researching new markets, and providing assistance to convert tobacco farms to other kinds of production. That opportunity was missed. Tobacco farmers found out what other Canadians learned the hard way, that they cannot trust the Government to fund fairness.
By looking at what is not in the Government's fiscal plan you can see the real curdle, if I can use that expression, of this Budget. There were no plans to create jobs. There were no new plans to help farmers. There were no new plans to correct regional economic problems, and there was no tax reform. Each of these glaring omissions says something about the Government. The Government tells us something with each studied silence. If you do not have a job, the Government says "tough". If your farm is in trouble, the Government says "sell out". If you live in a depressed part of the country, the Government says "move". If you want a fair tax system, the Government says "wait until election time".
These issues should be addressed when the Government lays out its plans for the coming year. I know the Government will argue that job creation is part of its over-all plan. It will point with pride to the number of jobs created since it came to office. That is fine if you live in or around Toronto. Of these new jobs, 95 per cent were created in Ontario, but even in Ontario jobs are not being created equally. The region I represent has unemployment of approximately 11 per cent. That is about 4 points above the provincial average in one of the most prosperous areas of the country. Imagine the despair in Atlantic Canada, in the West, and in the North. There should have been a clear target for lowering unemployment, especially in depressed regions of the country.
There should also have been some attempt at tax reform. I will not repeat the tax increases which have been heaped on the average Canadian family in the last two and a half years. They have been put on the record again and again. The federal taxes of the average family have increased by approximately $1,350 a year since the Conservatives came into office. Canadians were looking forward to this year because they had been promised tax reform. Indeed, that was supposed to be the main attraction of this year's Budget. We would have welcomed the closure of loopholes such as the capital gains exemption. Perhaps I should not call that a loophole. It was simply a special tax concession given to investors. Canadians would have been happier with a simpler tax system where every individual and corporation paid a fair share. Instead, it was put off. I expect the Government wanted the delay so that the new system could be announced closer to the next federal election. However, every day that the Government delays will cost it dearly, because it is another day that Canadians are forced to endure an unfair tax system. If there is one thing that Canadians want today, it is a fair tax system. They do not

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want to hear another promise of fairer taxation during the next election campaign.
1 suggest it would be in the interests of the Government, which is currently so low in the polls, to bring forward real tax reform well in advance of the next election if it hopes even to form a minority government after that election.
There are other areas where fairness might have been advanced. The framework and the timetable for implementing a national system for child care might have been proposed. Long-term solutions to the crisis in Canadian agriculture might have been suggested as well. However, while there has been a lot of talk, none of these areas has seen any action. Borrowing billions of dollars for more of the same is sadly inadequate.
I have outlined some of the glaring deficiencies in the Budget on the one hand and addressed very briefly the Government's intention to borrow some $24 billion on the other. It is time that the Government came clean with the Canadian people and that it brought forward meaningful tax reform. That is what the Prime Minister (Mr. Mulroney) was forced to promise in the last election campaign during that great national debate on television in the summer of 1984. Over two and a half years later we are still waiting for even a White Paper or Green Paper on tax reform.
The tax system is at the very heart of a fair and equitable society. Historians will look back and judge the Government on how fairly it treated Canadians. One of the criteria on which they will base their judgment will be how fair the tax system was.
We all know that in the past our tax system, as in the United States, has always been used and indeed, one might cynically suggest, written as an instrument for the few to avoid paying taxes rather than a broad simple approach in which everyone pays his or her fair share in personal and corporate tax.
I want to refer to corporate taxation. There is no question that unless corporations pay more in income tax in this country individuals will have to pay more and more. It is most regrettable that the balance is so much in favour of the corporations and that individual taxpayers in Canada are having to pay such an inordinate amount of money from their hard-earned income.
Finally, I want to talk about the plight of our farmers. I sincerely hope that part of the money from the $24.3 billion that the Government intends to borrow in the fiscal year will go to a program that is not simply words but represents action to assist not only tobacco farmers but all farmers in this country so they may get their finances in order and make a decent living. Unless there is a decision that is based on the political will to preserve the family farm in this country, it will be lost. We will be at the mercy of offshore prices and will pay the same for bread, milk, cheese and other commodities as do
Norway and Sweden which must import such products. We must ensure that we can export our surplus products so that the farmers can make a decent income.


Mr. Deputy Speaker:: Questions or comments? Resuming debate.


Mr. Alfonso Gagliano (Saint-Leonard-Anjou):: Mr. Speaker, this afternoon the debate centres on a Bill authorizing the Government to borrow in order to meet its financial commitments, and if we look at the Budget brought down last month, I am sure a private company would have trouble getting a loan on the basis of the accounting methods used by the Minister of Finance (Mr. Wilson).
The Minister reduced the projected deficit by $1.2 billion without increasing revenue or reducing spending. He used an accounting trick which he referred to as "accelerated remittance of source deductions". This is just another example of Conservative sleight-of-hand.
Since the federal election in September 1984, Canadians have become resigned to unacceptable tax increases. Everything is taxed again and again and again. This year, the Conservative Minister of Finance brought down a Budget that is not worthy of the name. However, even in this document he still managed to raise taxes. He raised the tax on gas by one cent a litre, which means that since the Conservatives came to power, excise tax on gas has increased by a total of 18 cents per gallon, which reminds me of the 18-cent tax per gallon-


Jean-Guy Hudon: Less than the increases you brought in.


Alfonso Gagliano: -which the Minister of Finance in the Clark Government announced in his 1979 Budget, a proposal that was rejected by this House. Canadians voted this decision down in a general election in 1980, by electing a Liberal Government, and in 1984, the Conservatives returned to power. They failed to learn from their 1980 experience, because now they are bringing in the same 18-cent tax again, Mr. Speaker.
The Conservative Government, and especially the Prime Minister (Mr. Mulroney) and the Minister of Finance, say that these taxes are necessary to reduce the deficit.
Barely a year ago, in February 1986, the Minister of Finance, with a masterful stroke of the pen, cut spending by $500 million so that the deficit forecast for 1986-87 would be less than $30 billion. In other words, he projected a deficit of $29.5 billion, but now at the end of this fiscal year, it looks more like a deficit of $32 billion, a difference of $2.5 billion.
This year, in the so-called Budget he brought down on February 18, 1987, he projected a deficit of less than $30 billion. He managed to get the deficit down to $29.3 billion by using accounting tricks like the accelerated remittance of source deductions, which will raise $1.2 billion by taking money out of the operating capital of our businesses, especially certain small businesses.
March 10, 1987

He also managed to prune a few hundred million dollars from the National Defence budget. Mr. Speaker, we are asking Canadians to do their share to help resolve our financial problems. We are asking Canadians to be honest with themselves and with the Government. And now we see the Minister of Finance of this country using hardly acceptable accounting methods to give the impression he is reducing the national deficit, while in reality, his imaginative forecast is misleading.
Mr. Speaker, after three budgets featuring astronomical tax increases, we will end the year 1986-87 with a deficit of about $33 billion, roughly the same as the deficit incurred during the last full year of the Liberal administration in 1983-84, $32,399 billion. If we add to that the nearly $7 billion tax increases plus the money the Government got for selling Crown corporations we might say today that the Canadian Government would have run up a deficit of approximately $40 billion. Such is the financial picture of the Conservative Government, Mr. Speaker. Where is the deficit reduction we were promised?
With the Conservative Government in power, everyone agrees that the rich and the corporations feel a smaller tax bite than the poor. From the budget documents we can see that Ottawa will take from individuals in the coming fiscal year, which begins on April 1, $43.3 billion or 48 per cent more than in 1984-85, the year the Government was elected. These documents also revealed that corporations will pay an estimated $10,135 billion in federal income tax in the coming fiscal year or 4.3 per cent more than they paid in 1984-85. These figures do not include a 62 per cent increase in federal sales tax and excise tax over the same period.
Not only has the federal sales tax been increased four times by the middle of this year, it has repeatedly been extended to a variety of products previously not covered. The latest victims are candies and ice-cream for kids. These increases, along with other excise tax increases on tobacco, alcohol and gasoline, have added to the tax take of the provinces.
A report last month prepared by the Welfare Council, a federal advisory group, states that a two-income two-children family earning $15,000 paid $407 in federal income tax in the calendar year 1985. This year the same family will pay $770 or a 90 per cent increase. A family earning $20,112, the poverty line for a family of four in a city of 500 or more, paid $1,290 in federal income tax in 1985. This year that same family will pay $1,736 or 25 per cent more.
At the average income level of $42,000, the federal income tax bite this year will be $6,102, an increase of 32 per cent or $1,487. In contrast, the income tax take from a couple earning $100,000 will have increased by $319 or 2 per cent for the same period. Federal income tax for a family earning $80,000 will have risen 8 per cent or $1,056. These figures are very disturbing. These figures are telling us that the gap between rich and poor in Canada is increasing rapidly and dangerously
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and the Government is not doing a thing about it. In fact, the Government is helping to make it larger.
Since it took office, the Government has promised fiscal reform, but we are still waiting. How long do we have to wait? In his Budget, the Minister of Finance promised we would have a White Paper in the spring so we can know the intentions of the Government. I hope that in the next Budget he will act on tax reform. How can Canadians trust the Minister of Finance or the Conservative Government that they will not, with the excuse of a tax reform, increase taxes? After all, the present Minister of Finance said in the House of Commons on March 6, 1984, that if a Conservative Government were elected "we would cut spending. We would not raise taxes. Tax levels in Canada are already too high", and later in the same speech he said: "If we raise taxes, we provide funds for politicians and bureaucrats to spend". But in his three Budgets, he has increased taxes. Canadians have never experienced such increases since the last World War. How can Canadians today trust the Minister of Finance, the Prime Minister and this Conservative Government that they will not take advantage of tax reform to dig more deeply into the pockets of low and middle-income earners in order to give presents to their friends as they did in the past when they allowed tax concessions to multinationals and high income earners?

Mr. Speaker, the Minister of Finance keeps on talking about the tax reform, making us believe he will deliver the goods as he promised in his February 18, 1987 Budget Speech. We will be waiting impatiently for this famous White Paper to find out what the Government intends to do.
On several occasions the Minister of Finance indicated to the House that if the Opposition had any worthwhile suggestions to make we ought to give him our ideas just so he might come up with a tax reform which all Canadians could live with.
Mr. Speaker, since we are debating economic issues 1 should like to take this opportunity to offer a few tax-related suggestions to the Minister of Finance so that we might design a fair, equitable and simple tax system for all Canadians.
For starters, the Government must not seek ways to increase taxes if it wants its tax reform to be respected and appropriate. Should the reform lead to higher taxes, the Government must promise to reimburse taxpayers through tax credits or otherwise so as to create a climate of confidence in our tax system.
Mr. Speaker, it stands to reason that a tax reform calls for higher taxes. But then people will protest and the tax reform will lose its objectivity. It is therefore imperative that the tax reform address the problems inherent in our very complex legislation. It should be aimed at eliminating such complexities, everything which Canadians no longer understand and which even some experts find baffling.

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Mr. Speaker, this is not new, and I am sure you and the Members of this House will agree, and in fact Canadians all agree they have had enough of Government red tape. If we want the tax reform to be objective and feasible and fair, it should provide us with a simple system that can be understood by everyone. Our tax system should be aimed at one specific purpose: to finance our programs, both economic and social, in a manner that is non-discriminatory.
Mr. Speaker, another bit of advice I would like to give the Minister of Finance concerns his so-called business tax, his new sales tax that could well lead to a tax revolt in this country. I must say that Canadians are ready for a revolt. It has happened before, and people from the general area around Montreal Island who know something about municipal taxes ... If the Minister of Finance proposes a new sales tax that will take even more money out of the pockets of Canadian taxpayers, we are going to have some very violent demonstrations.
To avoid this, and to make tax reform acceptable, the Minister of Finance should indicate in his White Paper the goal of this new tax which should be objective and not penalize small businesses.
The important thing is that as soon as his White Paper is published, the Minister of Finance should make it clear how he intends to exempt small businesses from this new tax system.
Mr. Speaker, today, and the Minister of Finance said so himself so we agree on that, only one third of our businesses are subject to federal sales tax. If the new sales tax applies to everyone, Mr. Speaker, this means that the majority of small businesses that are not subject to federal sales tax will be subject to the new tax and will therefore have to cope with an enormous paper burden. They will not accept this, and there will be protests, and we will lose the whole objective aspect of this federal sales tax which could be part of a fair and equitable tax reform.
Mr. Speaker, bearing in mind that small businesses create most of the jobs in this country, a tax system that would be unfair to this sector would increase unemployment and defeat the purpose of the tax reform the Minister of Finance intends to propose and which everyone agrees is badly needed.
Mr. Speaker, although the Opposition is often accused of being negative, I have just given the Government and the Minister of Finance a few constructive proposals. We all realize that tax reform is complex. We realize the Minister of Finance will have trouble reconciling all these aspects within his caucus and his Department. However, considering the Minister has been promising tax reform ever since this Government came to power two and a half years ago, it is high time the Minister of Finance released his White Paper and told the Canadian people what this Government intends to do about introducing a truly Canadian tax reform that is sensible, fair and just.
Mr. Speaker, I would like to caution the Minister of Finance by suggesting that the methods he has been using up till now to
reduce the deficit are misleading and that nobody is deceived by such a tactic. Can you imagine, Mr. Speaker, someone going to the bank to apply for a loan and submitting a balance sheet that would show inflated revenues to embellish his financial situation. And after reviewing that, the bank manager would discover that the applicants' revenues and expenditures are fictitious, and that he submitted a fake balance sheet, that does not reflect the company's true situation. This is exactly what the Minister of Finance has attempted to do with his budget last month, to show a deficit that was lower than $30 billion by resorting to unacceptable accounting trickery.
Mr. Speaker, he asked businesses to remit tax money every other week, instead of once a month. This automatically will mean twice the paperwork, because instead of filling forms and computing, and balancing payroll accounts once a month, they will have to balance them every other week.
The Minister of Finance in his budget speech suggested this would only affect larger corporations. Again he miscalculated, because any building contractor with 20 employees will be affected, Mr. Speaker. And in my calculations, I only used the Quebec income tax deductions, which of course do not include the Canada Pension Plan nor the fact that provincial income tax is collected. Therefore, if I do the same calculations for the other provinces, the number of employees for a business required to make the accelerated remittances will be less than 20. Therefore, Mr. Speaker, if really we are to initiate a tax reform for the main purpose of reducing paperwork, I think the Minister of Finance is going the wrong way about it. He is increasing the paperload and not reducing it. In conclusion, Mr. Speaker, I submit that Canadians are aware of the deficit problem, which to a large extent was due to a recession.
Canadians are willing to pay their share to reduce that debt, but the Tory Government must prove its good faith. Up until now, they have been doing the opposite, increasing taxes while not reducing the deficit, and the public debt is increasing. Unbelievably, Mr. Speaker, the national debt has increased from $180 billion to $295 billion, an increase of about 60 percent within three years. Well, I hope Canadians will see their taxes decreased and not increased, with a proposed new tax system that will be adequate for our economic and social development, that will reduce unemployment, and especially reduce the gap between the rich and the poor, all of which would help us establish a just society which our children could inherit.


Stanley J. Hovdebo: Would the Hon. Member give us some indication of the cost to a small business of making submissions to Revenue Canada every two weeks rather than once a month? As far as a small business is concerned what is the extra cost?
March 10, 1987


Alfonso Gagliano: Definitely, the first cost that a small business will incur is that it has to send $15,000 to the Government 15 days earlier than it is presently doing. Therefore, it will incur operating expenses. Today the majority of businesses operate with an open credit margin, and automatically there will be the interest expense every 15 days that it presently does not incur because the money is submitted once a month. Cash flow will be affected, and there will be an interest expense.
Second, submitting the money every two weeks will double the bookkeeping or accounting expense because it will be twice a month that the accountant has to balance the payroll book. The accountant cannot just write a cheque and say, "Here is so much for federal income tax, and so much for UIC". The payroll has to be balanced and the employer contribution has to be calculated. Therefore, with the accelerated deduction at source created by the Minister of Finance, it doubles the paper work for a small construction business with 20 employees.
As I previously said in my speech, that calculation was done for the Province of Quebec. If the same calculation is applied to other provinces where the number of employees may be 15 instead of 20, the federal Government collects Canada Pension Plan and provincial income tax. The new Wilson rule is based on the total remittance by the year, and not what is in the remittance. In provinces other than Quebec, a small business has to be small, in other words, instead of 20 employees, it may have 15 employees.


George Roland Henderson: I wish to comment not only on this Budget and the Hon. Member's views, but on the previous Budgets introduced by the Government since 1984. As a Member of Parliament from Atlantic Canada, I find that regional disparities are becoming greater. While there certainly is a turn in the economy, it is concentrated in Ontario, mostly in Toronto and southern Ontario.
At the meeting of the House of Commons Standing Committee on Finance and Economic Affairs the Minister of Finance (Mr. Wilson) said that western Canadians are prisoners of the international economic forces and there is not much that the federal Government can do about it immediately. That quotation appeared in the Thursday, March 5, 1987 edition of The Ottawa Citizen. He has certainly recognized the problem of disparities, as was indicated in the news release, but there was nothing in the Budget which attempted in any way to relieve the situation.
Over the last two years to three years we have seen the progression of even a greater gap between have and have not areas. I wonder whether the Hon. Member would comment on that.


Mr. Deputy Speaker:: I regret that there will not be time.
It being five o'clock the House will now proceed to consideration of Private Members' Business as listed on today's Order Paper.
Automatic Headlight System


PRIVATE MEMBERS' BUSINESS-MOTIONS   MOTOR VEHICLES SUGGESTED REQUIREMENT FOR AUTOMATIC HEADLIGHT SYSTEM
Mr. Arnold Malone (Crowfoot) moved:: That, in the opinion of this House, the government should consider the advisability of introducing a measure which would require that all motor vehicles manufactured and sold in Canada or imported into Canada be equipped with an automatic system which would cause headlights to be turned on whenever the motor vehicle is in operation.
He said: Mr. Speaker, the use of daytime running lights is intended to increase the visibility of vehicles so that they can be seen before collisions occur with another vehicle or with pedestrians. Protection is facilitated by the increase in contrast between a vehicle and its background. The use of daytime running lights is effective in increasing vehicle visibility both at night and in the daytime regardless of the background and environmental conditions.
This initiative would be the most important safety feature since the introduction of the wheel brake. It has been demonstrated to result in less accidents than any other safety advance in the automotive industry.
Nearly 45 per cent of all road accidents occur because of recognition errors, including both perception and comprehension. The lack of vehicle visibility is the major cause.
We have evidence before us to establish clearly and factually that daytime running lights in the use of automobiles is a safety factor which brings very positive results. In Sweden, the use of headlights at any time has been compulsory since 1977. It is estimated that there is a 95 per cent participation rate in that country. Multiple daylight accidents have decreased in urban Sweden by 20 per cent and in rural areas by 17 per cent. Summer accidents where the days are longer have decreased in urban areas of Sweden by 12 per cent.
In Finland, the use of daytime running lights inside built up areas in the winter has been compulsory since 1972. The participation level is high, and daytime multiple accidents have decreased by 32 per cent since 1974.
Greyhound Bus Lines in North America conducted a test project which involved 100 per cent participation in the use of daytime running lights. It was observed that daylight collisions decreased by 24 per cent in Canada and by 12 per cent in the United States.
American Telephone and Telegraph also conducted a test project. The drivers of its vehicles across the United States were asked to have their headlights on at all times, both daytime and at night. In the first six months multiple daylight accidents decreased by 32 per cent. After two years of the experiment it was noted that the accident rate had decreased by 45 per cent.

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Automatic Headlight System
Clearly there is evidence to establish that visibility increases with the contrast created by the use of daytime running lights. It is an inexpensive and extremely effective measure by which we might decrease automobile accidents.
We do not need to turn to Greyhound Bus Lines or Nordic countries to note examples of the effectiveness of this measure. Since 1966, the daytime use of headlights on motorcycles has been compulsory in Canada. It should be noted that since the introduction of that safety feature, there was a 40 per cent decrease in motorcycle accidents. In 1982, Canada had more than 800,000 motor vehicle accidents wherein 4,169 persons died. Estimates predict that with the use of daytime running lights approximately 120 lives per year would be saved and 11,000 injuries, together with $200 million in related costs, would be eliminated. Total accidents in Canada would decrease by 4 per cent to 5 per cent with use of universal daytime running lights and fatal accidents would be reduced by about 3 per cent.
Merrill Allen of the University of Indiana found that drivers did not seem to know under what conditions they should turn on their headlights. A study done by Transport Canada found that at dusk oncoming unlighted cars were visible to one another only if they were within 500 feet of each other. However, a full 1,500 feet is required for safe passing. At dusk a masking effect occurs if an unlighted car is preceded or followed by a lighted car. The unlighted car in effect becomes invisible.
It was further found that drivers judge a lighted vehicle to be closer than it really is and therefore passing is discouraged. In Canada daytime running lights usage is less than 14 per cent. Thus, full participation in the use of daytime running lights would produce an estimated 10 per cent to 20 per cent reduction in daytime multiple vehicle collisions. This would equate to a 3 per cent to 6 per cent reduction in over-all annual accidents.
A retired engineer and lighting specialist for General Motors indicated that such lamps on automobiles would require an energy equivalent of about eight-tenths of a gallon of gas per car per year. As original equipment on cars, daytime running lights would cost about $15 per vehicle. This recommendation is practical, workable, and responds to a demonstrated need. It is a very economical way in which to reduce accidents, save lives, decrease property damage, and provide a very worthwhile service for Canadian drivers at very little cost.
Owners of existing automobiles would have the option of either switching on their headlights while driving or installing an automatic switch system which would allow their headlights to come on at low beam. Vehicles could be modified, if the owners so wished, to install one of the less expensive options and link it to their ignition systems. The study by Transport Canada indicated that the benefit to cost ratio would be about two to one.
In conclusion, let me say that the use of daytime running lights in Canada on motorcycles has resulted in a 40 per cent
reduction in motorcycle accidents. In Sweden and Finland there has been the clear demonstration of a significant reduction in accidents because of the use of daytime running lights. The American Telephone and Telegraph Company has noted extremely positive results, as much as a 45 per cent decrease in accident rates with its experiment. There are similar statistics for the Greyhound Bus Corporation in Canada and the United States. The evidence is there. It is clear for all to see. It is inexpensive. It can save lives and prevent as much as 11,000 injuries a year. Canada ought to adopt this simple but effective system for protecting its citizens. I hope the Bill will be allowed to pass in the House of Commons.
[ Translation]


Hon. Andre Ouellet (Papineau):: Mr. Speaker, it gives me pleasure to speak today on the motion of the Hon. Member for Crowfoot (Mr. Malone) asking that the Government introduce a measure requiring that all motor vehicles manufactured and sold in Canada be equipped with an automatic system which would cause headlights to be turned on whenever the motor vehicle is in operation.
I wish to commend the Hon. Member for this proposal which I find quite constructive. I hope that Government authorities, especially the Minister of Transport (Mr. Crosbie), will give it favourable consideration. I am not certain that the Minister will act quickly, but I hope that the Hon. Member will use his influence with the Government to speed up the process.
Indeed, such a measure could reduce considerably the number of front-end collisions on Canadian roads. In addition, it could reduce the number of accidents causing fatalities or serious injuries. I therefore believe that this is a very important proposal which deserves to be not only considered, but also implemented by the Government.
It is attractive from many aspects, but I believe that the Government should consider some of my comments before putting it in effect.
Indeed, I find this motion quite appropriate since an increasing number of drivers keep their headlights turned on all day. In Ontario, there are now road signs saying:

"Keep your lights on at all times for greater safety". Indeed, many people going to work early in the morning or returning at the end of the afternoon are using their lights even on a sunny day. They use their lights for greater safety.
I think it is a useful and a valuable recommendation of the Hon. Member. However, there is a caveat. Under closer scrutiny, under a more careful analysis going beyond the principle to the application, the motion does not look totally attractive unless some provisions are embodied in the initiative.
March 10, 1987

1 would like to enumerate some conditions that should be attached to such a recommendation in the motion.

First, as I said earlier, we in the Liberal Party believe that this proposal is valid since studies clearly show it would have a positive impact on the number of road accidents.
However, we believe that implementing such a measure could cost thousands of dollars to Canadian drivers because it would inevitably overload the electric system of motor vehicles. We believe that any measure introduced for the purpose suggested by the Hon. Member for Crowfoot (Mr. Malone) should take into account the problems of implementation. Obviously, Mr. Speaker, a headlight system designed to stay on only 10 per cent of the time is not a complete and proper system. Car manufacturers should therefore develop a different system which would enable all Canadian cars to be equipped with permanently turned on headlights. Otherwise, consumers could find the maintenance costs for their headlights rather expensive.

I am sure that for garage or automotive parts manufacturers such an initiative, if it is implemented without proper preparation by the automakers themselves, could become a very lucrative market. I would not want the consumer to pay unnecessary costs just to make such a motion valid.

I think that there are other costs which Canadian motorists would have to assume and I suggest that the Government should carry out an in-depth study of this matter before going ahead. Of course, we are talking about the additional cost resulting from the installation on a car already built of the necessary special equipment, as well as the cost resulting from its installation on an imported vehicle, not to mention those resulting from the changes to be made to the assembly line.
Those of us who are following more or less closely the evolution of car design all know that an increasing number of cars are provided with so-called pop up headlights. The purpose of this design is to enhance cars not only esthetically, but to make them more streamlined.
One can easily imagine that this design would lose a great deal of its streamlining effect under a legislation such as that proposed this afternoon by the Hon. Member for Crowfoot. These cars would have to run all day long with their headlights popped-up, which would certainly result in increased gas consumption.
Another potentially dangerous aspect of the legislation introduced by the Hon. Member is its impact on the auto pact.
What would be the consequences of a legislation which, not being reciprocated by the American Government, would de facto create a non tarif barrier on the North American car market. In fact, a car built in the United States and meeting U.S. standards could not be driven in Canada without first undergoing some expensive changes.
Automatic Headlight System
Finally, Mr. Speaker, I want to emphasize that notwithstanding the few reservations I have just mentioned, we in the Liberal Party support the spirit of the motion moved by the Member for Crowfoot. We certainly believe that the implementation of such a measure would have quite a positive impact by reducing the number of car accidents on the highway, thereby increasing highway security.
If such a measure could only spare one life, the Hon. Member for Crowfoot should be commended for his initiative.
I conclude by saying that the Government should take the necessary steps as soon as possible and call upon all car manufacturers to incorporate such equipment in the design of their cars without any additional cost being passed on to Canadian consumers.


David Orlikow: Mr. Speaker, I rise to support this motion although it does seem to us that the announcement made by the Minister of Transport (Mr. Crosbie) for a daytime running light system effective December 1, 1989, may make much of this proposal superfluous. The Minister has proposed that all vehicles manufactured in or imported into Canada must be fitted with a daytime running light system as of December 1, 1989, and as of September, 1988, any new vehicle manufactured with a daytime running light system must meet technical specifications under federal regulation. The Minister goes on to specify these regulations.
1 can support this motion because of the toll taken by automobile accidents and the tremendous pain, suffering and cost flowing from them. More than 4,000 men, women and children died in highway traffic accidents in Canada in 1985, and it is expected that the 1986 count will not be much different. As well as the 4,000 people who died as a result of highway accidents, there were tens of thousands of people who were involved in traffic accidents which did not result in death but did result in injuries, many of which were of a permanent nature and as a result of which there were tremendous ill effects on the health and well-being of the victims, high hospital costs, lost income and effects on family members of those who were injured.
I would like to take a moment to remind the Hon. Member for Crowfoot (Mr. Malone) that the Governments of Sweden, Norway and Finland, which are far ahead of us in doing the kind of thing the Hon. Member for Crowfoot has suggested, have been for many years social democratic Governments. We socialists can sometimes do the right thing.
Only in Saskatchewan does there exist a voluntary system such as the one the Hon. Member is advocating. The only complaint about what is done in Saskatchewan is that the use of night lights can dazzle some drivers. Some feel that a retrofit for pre-1989-built cars should be made available so

March 10, 1987
Automatic Headlight System
that we may enjoy the benefits of the program sooner than if we waited for cars that will be produced in 1989.
Automobile accidents have resulted in a catastrophic toll, a toll which calls for major advances not only along the lines suggested by the Hon. Member for Crowfoot but in vehicle design and operation, driver education, police enforcement and highway construction. We know, for example, that a high percentage of accidents are the result of young drivers. We should have a much better system for educating young drivers. We need to have a much better system in fact for educating all people about the dangers of driving while under the influence of liquor. Our highways need to be improved and we need better police enforcement of the law. For 12 months of the year, we should have programs such as those that are put into place in many cities and provinces at Christmas and New Year's when more people than usual get involved in drinking. Much of what I have suggested is long term and requires considerably more research than that which has been done until now. However, there are areas in which the federal Government could do more.
It could be said that rather than doing more, we are going backward. For example, the federal Government is moving to deregulate interprovincial trucking. As a result of that deregulation, there will be no enforceable safety codes. Standards for the amount of time a driver can drive a truck will not be governed nationally but will effectively be governed by each province. Thus, interprovincial transport will not be regulated effectively. There is plenty of evidence to suggest that once the trucking industry is deregulated and we have the competition to which deregulation leads, truck drivers going long distances will drive for longer and longer hours in order to cut costs. They will probably take drugs which will supposedly help to keep them awake and that is-


Mr. Benjamin:: Won't matter if their lights are on or not.


David Orlikow: My colleague has said that it will not matter if their lights are on or not. That is a prescription for more and bigger accidents.
Further, the Ministry of Transport is backing away from areas over which it has direct responsibility. Whenever a car-train accident occurs, it is because the car tried to beat the train at a level crossing. We should move as quickly as possible to get rid of level crossings. That would not only save lives and cut down on accidents but would permit trains to move much faster as they do so successfully in Europe. Instead of getting rid of level crossings and making both rail and automobile travel safer, the federal Government, in its desire to save money, has put a hold on the elimination of level crossings and has chosen to implement a program on the cheap. In other words, there will be a billboard campaign designed to promote level crossing safety.
Surely there is much to do to promote automobile safety. This motion is a small step that is already under way. Some other steps which could be taken are improving education, redesigning and improving our highways and cracking down on
drinking and driving. We could probably do a better job controlling those few automobile drivers who insist on exceeding the speed limit by anywhere from 10 to 25 miles an hour.
If the Canadian experience with daytime lights for cars matches that of the Scandinavians, multiple vehicle collisions will fall by 10 per cent to 20 per cent and there will be a saving of up to $200 million a year in medical and property damage costs. If those figures are correct, and I think the estimate is on target, then it seems to me we should not just be talking about it but we should be investing some money in the short run which would pay tremendous benefits in the long run.
As I have indicated, we are going to support the motion and I commend the Hon. Member for bringing it forward.


William Lesick: Mr. Speaker, it is my honour and pleasure to speak in support of the motion proposed by my colleague and neighbour, the Hon. Member for Crowfoot (Mr. Malone). With very little reservation speakers from both opposition Parties agree with the spirit and intent of the motion. That indicates the importance and validity of the motion which the Hon. Member has been endeavouring to present to the House for a great length of time.
More than 20 years ago my wife and I travelled into Saskatchewan and we saw oncoming cars with their lights on. I blinked my lights a few times to indicate to them that their lights were on in case there was a problem. However, they did not respond and I soon learned the error of my ways and the correctness of theirs. The moral of that story is that I could see the oncoming cars very readily. That is why this motion is so important. I am not suggesting that the Hon. Member was promoting this idea as long as 20 or 25 years ago, but he certainly had a great interest in it for many years and has been endeavouring to promote greater safety on our roads.
Each year in Canada there are approximately 700,000 collisions involving motor vehicles, pedestrians and bicyclists. These collisions, which we mistakenly refer to as accidents, claim roughly 4,000 lives and produce more than 200,000 injuries year after year. I do not believe this year will be any different unless we do something along the lines proposed by the Hon. Member. When you consider that half these collisions are caused by the failure of the driver to see the other vehicle, it becomes important to identify methods of improving the visibility of vehicles on our roads. The use of lights during the daytime is considered to be the most effective method of achieving that objective. Canada recognized that fact as early as 1974 when it became the first country to mandate automatic light systems for new motorcycles. Since then a number of studies have not only confirmed the fact that lights reduce motorcycle crashes, they have also confirmed the value of using daytime running lights for all motor vehicles. As a consequence, a proposed motor vehicle safety standard was
March 10, 1987

published on July 12, 1986. It would apply to all new passenger cars, trucks, buses and multi-purpose passenger vehicles. The final technical specifications were announced on December 29, 1986, and the regulation is expected to be ready for approval by the first quarter of 1987.
The figures 1 have given indicate how important this motion is. We should all take them into very serious consideration. I commend not only the Hon. Member but all government and opposition Members who agree with the motion's intent. It is my pleasure to say that we should heartily support the motion and I am looking forward to its speedy passage.


Donald Paul Ravis: Mr. Speaker, I am also delighted to speak on this motion for a number of reasons. First, and probably most important, I come from Saskatchewan where we have had a voluntary program like this in effect for some time.
I want to begin by saying that Private Members' Hour is a very special time when Members can put forward very worthwhile Bills and motions such as this. It is a time when Members from all Parties can choose to agree or disagree. From what I have heard so far today I gather there are a number of Members who support the motion and I want to assure the House that I feel the same way.
The Hon. Member has been working on this idea for six or seven years. He did not come up with it just a few months ago. He has been pressing very hard on the issue, and I think his constituents should be very proud of a Member who brings this kind of motion to the House.
It may appear to be very obvious, but I can tell you that in Saskatchewan hundreds of lives have been saved because of the program I referred to earlier, and I believe the province is in the process of doing a full evaluation of its effect. The program, called Lights on for Life, has been in place for about five or six years and about 50 per cent of all vehicles on the highway comply with it. I have to admit that my reaction, much like that of the Hon. Member for Edmonton East (Mr. Lesick), was that someone must have forgotten to shut his lights off. However, you soon begin to realize just how much quicker you notice oncoming traffic when cars have their lights on. I believe it is in the neighbourhood of 10 seconds to 12 seconds sooner. Of course, some people even leave their lights on while driving in the cities, and while I believe that has a certain application it is probably not as useful as it is on the highways.
The point I want to make about this motion is that it will save lives and lower insurance rates. The cost of insurance is something a lot of people complain about. It will also keep a lot of people at work rather than at home suffering from the results of an accident and having to ask for assistance from either Government or some other agency.
In conclusion, the Hon. Member for Crowfoot (Mr. Malone) deserves the hearty congratulations of all Members of this House. I urge the Department officials and the Minister of Transport (Mr. Crosbie) to move quickly on this motion.
Automatic Headlight System


Leslie Gordon Benjamin: Mr. Speaker, I just want to say to my hon. friend that we think this motion is fine, although it is slightly deficient. However, on the assumption that the House will pass the motion, it will be incumbent upon the Government to bring in appropriate legislation.
I also want to say to my friend who just finished speaking, the Hon. Member for Saskatoon East (Mr. Ravis), that as usual Saskatchewan led the way. We are still working on getting Alberta to do something about seat-belts, however.
Let me point out where the motion is slightly deficient. My good friend, the Hon. Member for Edmonton East (Mr. Lesick), pointed out that 20 years ago he flicked his lights on when he drove into Saskatchewan to remind oncoming motorists that their lights were on. It is about that far back that we started a campaign which said at dawn and dusk put your lights on and leave them on. That is when the lights on campaign started. However, while there was no problem in putting the lights on, the towing companies and cab drivers were really happy about boosting batteries because you forgot to shut them off. The motion says, "-would cause headlights to be turned on whenever the motor vehicle is in operation". My hon. friend, the Member for Crowfoot (Mr. Malone), should have added "-and automatically turns them off when a vehicle is no longer in operation". The technology has been available for years to do that. As long as four or five years ago you could order the special equipment to do that. We agree that that should be standard in every vehicle manufactured in Canada or imported into Canada. There is no argument on that score.
The Parliamentary Secretary and I have been working for some time on getting into place a national highway code and a board with representatives from the provinces, the territories and the federal Government. The code and the board would deal with driver training, qualifications, vehicle standards, maintenance and repair. As my good friend, the Member for Winnipeg North (Mr. Orlikow), so aptly pointed out, if a driver who has been on No-Doze pills for eight, 10, or 12 hours finally zonks out, it does not matter a damn whether his lights are on, he will be in the ditch or will have run into somebody else. All these other things must be put in place at the same time.
I hope the Government will agree to withhold proclamation of the legislation currently before the House until all these other measures are in place. We must have the inspectors, the training, the board and everything else in place before we start messing around with other parts of transportation law. It is a given that those things should be in place first, because it is unanimous among all Parties that safety takes priority over everything else, even if it increases the cost of transportation. The public agrees that safety takes priority and that if it increases the cost modestly for every one of us, so be it. This is just one of several dozen steps which must be taken.

March 10, 1987
Automatic Headlight System
We support this motion, even with its slight error of omission. I am sure that the House will pass this motion. Perhaps we can let this motion carry and call it six o'clock.


Mr. Joe Reid (St. Catharines):: Mr. Speaker, I, too, support the motion of the Hon. Member for Crowfoot (Mr. Malone). I hope it will be given passage. However, I have a rather dry and technical comment to make in connection with the requirement of the Treasury Board to make a cost-benefit analysis of such a regulation.
A lot of people question the cost and apparent waste in relation to the apparent benefits of daytime running lights. I would like to present a summary of the likely costs that will be incurred by the introduction of a regulation requiring daytime running lights on all new passenger cars from, for example, the model year 1990 onward. I will then make a comparison of those costs with the anticipated benefits accruing from daytime running lights. In so doing, I hope to give some of the answers to the questions raised by the Hon. Member for Papineau (Mr. Ouellet) in his comments earlier this evening.
Federal government Departments are required, in accordance with Treasury Board guidelines, to undertake such an analysis of cost-benefit. Cost-benefit analyses are, at best, approximate due to the assumptions necessary. In addition, because the manufacturers' response to a performance standard may vary from company to company, it is not always possible to forecast accurately the costs. In this case estimates have been made of the costs that would be incurred in vehicle equipment modifications and operating expenses for several possible systems that are most likely to be introduced in response to the regulation. These have been compared to the social benefits, expressed in dollar terms, which would accrue from the reduced accidents which we anticipate, using estimates of the minimum social value of accident losses.
In making these comparisons a suitable timeframe has to be selected. In this case the suitable timeframe selected was the average life of an automobile. In developing the cost-benefit comparison, a number of options were considered. Cars and light trucks might use reduced intensity headlamps, regular intensity low-beam headlamps, increased intensity parking lamps, modified turn signals, or separate special purpose running lamps. The regulation requiring daytime running lamps emphasizes that only the daytime running lamps need be turned on automatically. The options for heavy trucks and buses are generally similar to those for cars.
It is generally easier in road safety cost-benefit comparisons to establish costs. The cost to manufacturers of the vehicle modifications were based on analyses of production vehicle component costs. These estimates have been amended accordingly. The additional maintenance costs were based on the manufacturers' minimum specification for lamp bulb lights and surveys of market prices for replacement bulbs. The extra fuel required to run these systems over the life of a vehicle was estimated from projections of the additional electrical load combined with the engine operating efficiency. The cost of the
extra fuel was based on estimates of market price. These factors were all combined to produce a lifetime cost for vehicles. The modifications imposed by the regulation for small motorcycles and snowmobiles are expected to be so small that they were not included in the cost-benefit analysis.
With regard then to the passenger motor vehicle, the lifetime estimated costs of the most likely systems for a passenger vehicle are as follows: reduced intensity high beams, $40; reduced intensity low beams, $150; higher intensity parking lamps, $80; modified turn signal lamps, $60; and special purpose lamps, $70.
In comparison to the present habit of using the existing headlights, which is estimated to cost $350 over the lifetime of a vehicle, these costs are reasonable. The higher cost of this option, which the regulation will not exclude by reason of its safety factors, mainly results from the fact that using headlamps at normal intensity wears them out much more frequently than would the reduced intensity lamps permitted in the regulation. It is anticipated that vehicle manufacturers will normally choose one of the options using only front lights to minimize the extra electrical load and bulb replacement. Lifetime daytime running light costs for trucks and buses of the front light options are estimated to range from $40 to $370. These costs compare to those of the passenger cars.
Let us go back and look at the benefit side. The effectiveness of daytime running lights in avoiding accidents has been the subject of several major studies. The best evidence comes from Sweden, as the Hon. Member for Crowfoot has already mentioned. Several other shorter term studies have already been made in the North American market. That increase in light use was accompanied by reductions in multi-vehicle daytime accidents of between 11 per cent and 13 per cent. The reductions took place on all types of roads, in all seasons, and involved all road-user types. Based on this Swedish experience and other smaller-scale studies, it appears evident that we should be moving in a direction suggested by the motion.
Based on these estimates, total fatal accidents may be reduced by 1.8 per cent to 4.2 per cent, and accidents involving personal injury by 3.8 per cent to 6.2 per cent, and accidents involving only property damage by 3.1 per cent to 5.6 per cent. By applying minimum dollar values to these accident reductions over the lifetime of the total Canadian vehicle fleet, lifetime savings estimates can be developed, which can then be compared with the costs. On a per vehicle basis, it is estimated that the lifetime savings can range from $65 to $430, depending on the scenario adopted. Of course, the estimated savings with respect to buses and heavier motor vehicles are equally comparable.
Of these savings, health care cost savings make up about 5 per cent, 30 per cent are from losses of productive work, and the remaining 65 per cent in savings is from property damage costs. When one develops the average lifetime motor vehicle
March 10, 1987

cost for the Canadian fleet, it is estimated that Canadians will have a potential benefit savings of over $100 million per year.
Therefore, the motion of the Hon. Member for Crowfoot (Mr. Malone) is subject to approval and should be passed.


Mr. David Kilgour (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, I intend to comment very briefly on the motion presented by the Hon. Member for Crowfoot (Mr. Malone). I strongly support this motion, and I believe all other Members of this House would agree with me.

I will ensure that I sit down before the time expires so that the motion can be passed. The Hon. Member for Crowfoot (Mr. Malone) has worked on this matter for some six or seven years, as pointed out by the Member for Saskatoon East (Mr. Ravis). He has promoted the matter by writing letters and doing all those things required of a good Member of Parliament. He would be too modest to say that his idea was stolen by the Department and announced recently as being an initiative of the Minister of Transport (Mr. Crosbie), who 1 am sure would want it noted clearly that the Member for Crowfoot is the one who has pushed for this measure, in the best tradition of a Private Member in the House.
If the Members we heard today, including the Member for Crowfoot, the Member for Winnipeg North (Mr. Orlikow), the Member for Papineau (Mr. Ouellet), the Member for Edmonton East (Mr. Lesick), the Member for St. Catharines (Mr. Reid), and the Member for Saskatoon East could work together every day on matters like this it would be a joy to be a Member of Parliament.
I hope the Member for Crowfoot will take up the issue of shoulder straps if we can agree that the evidence is increasingly strong that safety belts without shoulder straps are not a deterrent. If the member takes this issue on with the same tenacity, hopefully the day will quickly come when the Department will demand that motor vehicle manufacturers include shoulder straps as well as seat belts. There is an indication that a child wearing a seat belt without a shoulder strap may be better off not wearing a seat belt at all. If that is true, hopefully shoulder straps will become a policy as well.
As was indicated by the Member for Edmonton East, there are approximately 700,000 collisions every year in Canada involving motor vehicles, pedestrians, and bicycles. Those collisions which we mistakenly call accidents, claim about 4,000 lives a year and produce more than 200,000 injuries. The fact that many of these accidents occurred because someone has not seen another vehicle seems to make the case overwhelmingly for supporting the motion before the House today.
It has also been made clear that Transport Canada is in the process of issuing a regulation that will require daytime running lights on all new passenger cars, buses and trucks from
Business of the House
the 1990 model year onward. If that had been done seven years ago when the Member began pushing for this measure, how many lives and injuries may have been saved?


Jean-Robert Gauthier: Mr. Speaker, I want to say just a few words in support of this motion and I certainly do not intend to take up the rest of our speaking time.
I just want to join all the Members of this House in commending the Hon. Member for Crowfoot (Mr. Malone) for his initiative. I adopted this practice myself some years ago, and now I always have my lights on when I travel by car. As far as I am concerned this is absolutely essential and a very good idea from the point of view of safety. The Hon. Member and the Government are to be commended for introducing this proposal which, if I understand correctly, will be compulsory next year for vehicles built and sold in Canada.


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


Some Hon. Members:: Question.


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


Some Hon. Members:: Agreed.
Motion (Mr. Malone) agreed to.


BUSINESS OF THE HOUSE
Donald Frank Mazankowski: Mr. Speaker, I rise on a point of order to indicate to the House that tomorrow will be designated as an allotted day.
Furthermore, I think you will find unanimous consent to agreeing to the following proposal:
That, notwithstanding any Standing or Special Order of the House:
On Thursday, March 12, 1987, at 4.45 p.m., the Speaker will interrupt any proceeding then underway and put, forthwith and successively, without amendment or debate, all questions necessary to dispose of every stage of both Bill C-40, an Act to provide borrowing authority, and Bill C-3, an Act to amend the Radio Act; provided that, no later than 3.45 p.m. the Government will call the Order for resuming the adjourned debate on the motion for third reading of Bill C-3.
And, that, when the House adjourns on Thursday, March 12, 1987, it shall stand adjourned until 11 a.m., Monday, March 16, 1987.


Mr. Deputy Speaker:: The House has heard the terms of the motion presented by the Hon. Deputy Prime Minister (Mr. Mazankowski). Is there unanimous consent?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.
[Stage Direction]
March 10, 1987
Adjournment Debate

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

David Orlikow: Mr. Speaker, on November 3 I asked the Minister of State for Science and Technology (Mr. Oberle) to explain why the Director of the Herzberg Institute which operated the telescope at the Algonquin Radio Observatory had notified 25 permanent employees that because of the cut of over $1 million in its budget the observatory would be closed next year and their jobs would be phased out. I asked the Minister to explain what was happening. He said, as reported at page 1006 of Hansard'.
There is a reduction in the program which has been announced. However, the decision on the long-term future of the observatory has not been decided.
The Council is looking for alternatives.
That was a strange reply by the Minister because the people who work at the Algonquin Radio Observatory now know that the observatory will close on May 31 this year. The team of 19 persons who operate and maintain the observatory will lose their positions.
My point was that the decision had been made and 25 positions were to be sacrificed from the Herzberg Institute. The decision was that since the Algonquin Observatory was not to be upgraded, then it was to be closed. What are the costs of that decision? A S40 million to $50 million facility is being mothballed when it could have been upgraded and made a world-class facility which others would have used. The expertise of the team, which has been lauded by people in the field from one end of this country to the other and by experts in many other countries, has been lost to the nation forever. Canadian astronomers will be forced to go to the United States, in Massachusetts and West Virginia, to use their facilities. In other words, we will become users of another country's facilities rather than suppliers for ourselves and for others.
Canada is now negotiating with Great Britain to buy time on its telescope in Hawaii as we go from being a provider to a buyer of these kinds of facilities. That is just one illustration of what the Government's misconceived and improper approach to scientific research is leading to. When the Conservatives were in opposition, they and we listened to the criticisms of members of the scientific community, the private sector, the universities and Government laboratories who repeatedly pointed out that while other industrialized countries belonging to the OECD and Japan were spending between 2 per cent and 2.5 per cent of their Gross National Product on scientific research and development, Canada was spending just about
half that percentage. We were repeatedly told by those who were knowledgeable that this would lead to a long-term decline in Canada's ability to meet its needs over the next 25 years and to meet competition from other countries which are moving ahead so rapidly in this period when so many scientific discoveries are being made.
The Prime Minister (Mr. Mulroney) promised that a Conservative Government would move rapidly toward the magical goal of allocating 2.5 per cent of the Gross National Product to scientific research and development. He did not say that this would happen only after we had dealt with the deficit, which is much too great. The Conservatives won the election. They formed the Government with the largest majority any Party has ever had, but what do we see happening? We are now spending less as a percentage of our Gross National Product for scientific research and development than we did when the Liberals were in office. If we look at what the Government is proposing, we see that from now until 1990 the Government is not proposing any increases unless the private sector substantially increases its investment in scientific research, and then the Government will match it.
As a result of this policy, the NRC has been gutted in order to make funds available for deficit reduction and the space program. Cutbacks have been made to the granting councils, to funds for universities as well as to departmental research. Yet the Prime Minister makes speeches about the importance of research and development for Canada, knowing full well that we are no closer to reaching the 2.5 per cent target for research and development as a percentage of our Gross National Product which he promised.
My question to the Government is simply: How can the Prime Minister and the Minister of State for Science and Technology continue to make these statements when such institutions as the Algonquin Radio Observatory and the Bedford Institute of Oceanography in Halifax are now history?


Mr. Gordon Towers (Parliamentary Secretary to Minister of State for Science and Technology):: For some reason, mostly attributed to the Opposition, there is a great deal of misinformation and concern with respect to this particular item. I welcome this opportunity to set the record straight. I trust that all who are concerned over this issue will listen carefully.
The NRC's mandate includes the responsibility to "operate and administer any astronomical observatories established or maintained by the Government of Canada". At present, NRC operates three facilities; radio telescopes in Algonquin and Penticton, and an optical telescope and computation centre in Victoria. NRC also contributes to the Canada-France-Hawaii optical telescope in Mauna Kea, Hawaii, in return for 40 per cent of the operating time. These instruments are available to and heavily used by university researchers from Canada and other countries, although NRC has many fine astronomers in
March 10, 1987

its own right. Dr. Herzberg, who continues to work in this field, is an example of the quality of this work.
The Algonquin Radio Observatory has a 46 metre fully steerable parabolic reflector. This reflector was constructed over 20 years ago, and it needs major refurbishment which will involve replacement of the steel reflecting surface of the instrument with a more precisely manufactured surface. The upgrade would have made the telescope capable of operating at millimetre wavelengths instead of centimetres. The telescope is expensive to operate.
Two decisions have impacted on the telescope. First, the estimated cost of the refurbishment rose from $7.9 million to $11.7 million. This excludes the engineering design study which has already been paid for. Refurbishment would also increase the cost of ongoing support. Thus, at this time the plans have been cancelled to refurbish the telescope. Second, NRC management allotted a significant budget reduction to its astronomy division, the Herzberg Institute of Astrophysics. This reduction will affect about 21 people working with the Algonquin Radio Observatory.
NRC management reviewed this decision with the Associate Committee on Astronomy, and other representatives of Canadian users of astrophysical facilities. Further to recommendations from these groups, NRC held discussions with a U.K.-Netherlands group which is completing the construction of one of the world's best sub-millimetric telescopes on the summit of Mauna Kea in Hawaii. This facility will be called the James Clark Maxwell Telescope. Mauna Kea, a 4,300 metre mountain in Hawaii, is one of the world's best astronomical sites with very dry and stable atmospheric conditions. For this reason, a growing number of major telescopes operate there at visible, infra-red and millimetric wavelengths. This allows a beneficial sharing of facilities and expertise.
NRC has now reached a preliminary understanding which would allow Canadian astronomers to buy 25 per cent share of the JCMT in exchange for a contribution of approximately $10 million spread over 10 years.
The JCMT will be operational in June, 1987. By buying a share of this world-class millimetric telescope, Canada will give its astronomers immediate access to one of the most exciting new areas of research in astronomy. Refurbishing the ARO would have required another five years of difficult and more expensive technical work.
This decision is expected to be strongly endorsed by the Canadian scientific community.


BANKS AND BANKING-CHARTERED BANKS' INTEREST RATES- SPREAD BETWEEN BANK AND PRIME RATE
Mr. Reginald Stackhouse (Scarborough West):: Mr. Speaker, I wish to return to the subject that I raised some weeks ago during Question Period, namely the spread between the bank rate and the prime rate. The bank rate set by the Bank of Canada is the rate that it will charge for supplying
Adjournment Debate
money; the prime rate is that which is set by the chartered banks for their most favoured customers. Over the years, traditionally there has been a three-quarter per cent difference between those two rates.
Today we find that the Bank of Canada rate is set at 7.54 per cent and the prime rate at 9.25 per cent. Thus there is a spread between the two rates of 1.71 per cent. I have asked to debate this point again for reasons I will outline in a moment. However, at this point I should like to indicate how the situation has steadily deteriorated over the past several years, to the point where it has now reached critical magnitude.
For example, the spread is now 31 per cent higher than it was for the 1986 average monthly spread. It is 82 per cent higher than it was for the average monthly spread during
1985.	Now it is more than double what it was for the 1984 average monthly spread.
In February 1978 the bank rate was 7.5 per cent, which was very close to today's bank rate of 7.54 per cent. At that time the prime rate was 8.25 per cent or a full percentage point lower than it is today. Because interest rates have come down, especially in recent months, we appreciate that related rates have been brought down, such as mortgage rates, consumer loan rates, and the rate charged businesses seeking more capital.
However, we should ask the following question: How much more benefit would there be to Canadians seeking more capital if we closed some of the gap between the bank rate on one hand and the prime rate on the other? It is not of much value if, through the initiative of the Government and the soundness of its economic policies, the bank rate comes down unless the full benefit is passed on to the consuming public. That is not the situation today. Certainly much of the benefit is passed on to the public, but not the full benefit. That is the point of the question I raised and why I asked that we return to it today.
If the spread were to be closed, perhaps mortgage rates would be a full percentage point lower. There would be opportunities for small business people to obtain capital at a rate one percentage point lower than they must now pay. There would be increased benefit to the persons who receive employment opportunities through the spinoff from raising capital and initiating enterprises. I believe it is one of the critical economic questions which must be asked.
What is the answer? I hope the Government and Parliament has some influence with the chartered banks and the other lending institutions in Canada. I hope we could raise questions with them about why in 1978 we could have a prime rate of 8.25 per cent and a bank rate of 7.5 per cent whereas now we have a prime rate of 9.25 per cent and a bank rate of 7.54 per cent.
Some people suggest that the Canadian consuming public is being asked to help the banks faced with the instability of $25 billion in loans to the Third World, and that the banks must

March 10, 1987
Adjournment Debate
look for resources in this country wherever they can find them, one of them being a higher prime rate. It may be justified, but it is not justified for the Canadian public to be unaware of why it is being asked to accept higher interest rates than are justified.
This question has come before Parliament in Oral Question Period, and I bring it before Parliament again in this Adjournment Debate. The answer needs to be given to the House and to the public.


Mr. Pierre H. Vincent (Parliamentary Secretary to Minister of Finance):: The Hon. Member in his question has asked about the differential in the bank rate and the chartered banks' prime lending rate. As the Minister of Finance (Mr. Wilson) noted in his initial reply, the spread tends to vary with market conditions. Over the past 10 years, the Canadian economy has experienced differentials ranging from 0.25 per cent to over 2.5 per cent. Historically, spreads tend to become greater in times of declining interest rates and smaller in times of increasing interest rates. This reflects the caution exercised by our financial institutions in assessing changes in the market-place. The Government is, of course, pleased that the general level of interest rates has declined over the last several months.
While there is undoubtedly a linkage between the bank rate and the chartered banks' prime lending rate, I would like to note that it is not an exact or inflexible relationship. The spread reflects developments in a number of different markets, such as the commercial loan market and the commercial money market. Each of these markets is subject to its own influences, and a change in one rate, such as the bank rate, does not automatically warrant a change in another rate.
When the Hon. Member posed his question at the end of January, the spread was 1.76 per cent. Since then, Hon. Members should note that the spread declined to 1.58 per cent on February 12. Although the spread has again widened to the current value of 1.71 per cent, the brief experience of the last one and a half months has shown how spreads can change.
While the prime rate is one factor in over-all borrowing costs, Hon. Members should also look at other rates to determine the impact of recent developments. Spreads have generally narrowed and there has been significant competition in other aspects of the mortgage agreements. For example, mortgage rates have dropped significantly. The major lenders now offer a wider range of prepayment options and are more flexible on the transfer of mortgages.
As Hon. Members know, on December 18 the Minister of State for Finance (Mr. Hockin) tabled the policy paper entitled New Directions for the Financial Sector. One of the major objectives of that paper is to increase competition in the financial markets. The proposals will allow more players into the market-place, which will benefit not only borrowers but also savers who provide funds to financial intermediaries. The
Government will introduce legislation during the course of 1987 to bring these changes into effect.


REVENUE CANADA-DISAPPEARANCE OF MICROFICHE RECORDS-RESULT OF INVESTIGATION
Alan Redway: Mr. Speaker, this is income tax time again. I do not know whether that makes you feel very happy but it sure does not make me feel very happy. It is the time of year when you have to get out that income tax return, get all your papers together, try to sort them all out, fill in the return and file it before the tax deadline.
The first problem I always have is finding the income tax return itself in order to fill it out. This year I suspect I will have even more problems than I have had in the past. Usually the Department of National Revenue sends me an income tax return. I am not sure whether the Department of National Revenue has done that this year. I usually prepare my own returns. They are not prepared by a tax preparer. By now I should have received my return. If filing a return prepared by somebody else, I understand that this year, to save money, the Department will send only a label. Some of my constituents tell me that is probably just as expensive as sending the return itself. They wonder whether the Government is saving any money with that procedure. Other people tell me that even though they do not have a tax preparer prepare their returns, they still have not received returns from Revenue Canada. Perhaps they are in the same spot as me. I am not very happy about it at this time of the year.
The next thing I have to do is try to find the T-slips, the T-4s and T-5s. I always understood that by February 28 all T-4s and T-5s are supposed to have been sent out. For some reason or other, in the last few years, I seem to get more and more T-slips weeks after February 28. I do not know if that is because of a problem with Canada Post or with National Revenue, but it does not make me very happy.
Usually when I am making out my tax return, I look around to see how many tax deductions I can find. I suspect that perhaps you do so as well, Mr. Speaker. This year I heard about the former Liberal Government having put in the tax laws something called the scientific research tax credit. I have heard that people have been saving millions if not billions of dollars in taxes this way. I suspect that when I go to fill out my tax return, I will not have a scientific research tax credit to try to use.
I heard as well that the former Liberal Government had something called a tax remission. In fact, something like $400 million worth of tax money that was supposed to come from Dome Petroleum and from Hudson Bay Mining and Smelting was given away. I suspect that when I go to fill out my tax return this year, there will not be any tax remission for me and I will be very surprised if there is a tax remission for you, Mr. Speaker. I see that you are nodding your head and I know you agree with me.
March 10, 1987

As if all of this was not bad enough, I heard this year that one of the employees of Revenue Canada apparently walked out with some of my private records. In fact, this employee had walked out with the microfiche records of something like 16 million Canadian taxpayers. That to my mind is a real shocker.
We have heard of things disappearing from government records and files before. In fact, it seems to me I heard that the mould for the dollar coin had disappeared. As a matter of fact,
I understand it disappeared when it was on its way to Winnipeg through the mail or a courier service. As a result of that, when I go to spend a dollar coin in the future, it will apparently not have a voyageur on the back of it but it will only have a Canadian loon. I can understand things like that disappearing and I know the Hon. Member for Scarborough West (Mr. Stackhouse) can understand that too.
Then I heard about government documents disappearing. I suppose you have probably heard about those as well, Mr. Speaker. Before the Nielsen task force report on the Department of Indian Affairs and Northern Development was released, someone else seemed to have it before you and I saw it, Mr. Speaker. The Forget Commission report seemed to have been made public before it was supposed to have been released. This fellow at The Globe and Mail, Victor Malarek, seems to have every confidential record of the Immigration Department before the Minister of State for Immigration (Mr. Weiner) has seen them. I suppose these things do get out into the public that are not supposed to but it does bother me.
It is particularly bad to see this happening to private business records of members of the public. It is particularly bad when it happens to something like the microfiche records of the Revenue Department affecting the lives of 16 million Canadians. To my mind, that is just a downright breach of the public trust.
I would hope that the procedures of the Department will be tightened up and explained to us. I hope the Parliamentary Secretary will be able to explain to us why, for instance, there were 180 different sets of these microfiche records floating around Canada and why they were located in as many as 60 different places. What sort of supervision is there? I expect that you and I should get some answers on that tonight and I expect the Parliamentary Secretary is going to assure us that this sort of thing is never going to happen to private citizens of this country again.


Mrs. Jennifer Cossitt (Parliamentary Secretary to Minister of National Revenue):: Mr. Speaker, it is a pleasure to respond to my hon. colleague on the question he raised December 16 of last year.
The Minister has been informed of the results of the RCMP investigation into the disappearance and subsequent recovery
Adjournment Debate
of microfiche data on taxpayers. A Revenue Canada employee has been charged with theft, possession of stolen property, and breach of public trust. The matter is now before the courts. The Department has taken appropriate action in respect of all the individuals involved in this unfortunate chain of events. In addition, I wish to assure the House that significant steps have been taken to strengthen microfiche security procedures in the Department. A 100 per cent check of the inventory of all microfiche in the Department has been done. This revealed only minor discrepancies, all of which have been effectively dealt with. A complete review of the number of sets in our offices has been conducted and resulted in a significant reduction.
Telex instructions were issued immediately following knowledge of the disappearance to highlight microfiche security policies and remind staff to adhere strictly to them. Daytime cleaning has been instituted in sensitive locations. Strengthened employee screening procedures are now being implemented. Further improvements are being made as a result of the independent RCMP review of the Department's security arrangement for microfiche. The Hon. Member will appreciate that it would be counter-productive to elaborate on the specifics of any of the Department's security measures. However, the House should rest assured that real improvements have been made and that Revenue Canada is striving to prevent any similar occurrences in the future.
I must stress that the Minister's goal is to provide a balance between service to taxpayers and security of confidential information. 1 want to remind all Hon. Members that while the Department is extending improved and stringent measures to protect the confidentiality of taxpayers' financial records, it is at the same time entering the annual filing season. At this time of year we have very direct contact with more than 16 million taxpayers through the mailing of individual tax returns and guides, through the telephone inquiry service provided at district offices, and in the temporary tax assistance centres. I do not want this House to lose sight of the importance the Department places on providing service to the 16 million people who will file tax returns by April 30.
I believe that this effort to improve service should not go unnoticed. A new no-calculation option has been introduced on the T-l special tax return for those who file to claim a child tax credit or the federal sales tax credit. Instructions in the general guide have been made clear and more readable with larger print and more space. These changes, coupled with improvements to our telephone inquiry service, will help all of us when we face the annual task of filing our tax returns. I believe we must keep the problems in perspective as we remember the continuing efforts of this Department to meet the needs of those it serves while protecting the confidentiality of the taxpayer.

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[ Translation]


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


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The House adjourned at 6.29 p.m.


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SECOND SESSION-THIRTY-THIRD PARLIAMENT 35-36 Elizabeth II

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Wednesday, January 28, 1987
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Prayers