1987-03-03

Mr. Rod Murphy (Churchill):: Mr. Speaker, pursuant to Standing Order 106, I have the honour to present petitions signed by residents of my riding in the communities of Flin Flon, Nelson House, Lynn Lake, Thompson and The Pas?
The petitioners point out their concern with the federal Government's attempt to change the Patent Act. They believe this will increase prescription drug prices and restrict the ability of average Canadians to buy necessary prescription drugs. It will unfairly hurt those whose health needs requires the purchase of prescription drugs on an ongoing basis. They say this is yet another example of the Canadian Government's concessions to the U.S. in an attempt to resolve the free trade negotiations at the expense of ordinary Canadians. The petitioners humbly pray and call upon Parliament to reject those proposals.


Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, under the provisions of Standing Order 106, it is my honour and pleasure to present a petition on behalf of a number of western Canadians. They suggest that the federal Government's proposals to change the Patent Act with respect to prescription drugs will increase drug prices and severely restrict the ability of average Canadians to buy necessary prescription drugs. They point out that this will unfairly hurt those Canadians whose health requires the purchase of prescription drugs on an ongoing basis and they call upon the Government to stop this Bill.



FINANCIAL INSTITUTIONS AND DEPOSIT INSURANCE SYSTEM AMENDMENT ACT


Hon. Barbara McDougall (for the Minister of State for Finance) moved: for leave to introduce Bill C-42, an Act
respecting financial institutions and the deposit insurance system.


Mr. Speaker:: Is it the pleasure of the House that the Hon. Minister shall have leave to introduce the Bill?


Some Hon. Members:: Agreed.


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

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Doug Lewis (Parliamentary Secretary to Deputy Prime Minister and President of the Privy Council):: Mr. Speaker, question No. 72 will be answered today.
[ Text]


Mrs. Finestone: 1.	For each year 1985-86, 1986 to date, what was the total sum of money raised from the 8 per cent federal tax paid by cable television subscribers across Canada?
2.	Was the total sum paid to the Government and, if not, to whom was it paid and what were the amounts?
3.	For the same years, what amount was paid by the Government to (a) the Broadcast Program Development Fund (b) Telefilm Canada?


Philip Derek Lewis: I am informed by the Department of National Revenue, Customs and Excise and the Department of Communications as follows:
1.	The 8 per cent federal tax on telecommunication programming services is levied on cable television and related companies, not directly on the cable television subscribers in Canada.
April 1, 1985 to March 31, 1986	$52,361,582.31
April 1, 1986 to December 31, 1986	$53,899,261.06
2.	This revenue was paid by cable television and related companies under the Excise Tax Act, directly to the federal Government.
3.	The following amounts were paid by the Government, in thousands of dollars:

The Budget-	-Mr. Axworthy	
	1985-86	1986-87
		(as of Dec. 31/86)
la) to the Canadian Broadcast Program Development Fund:	$64,418	$36,602(b) to Telefilm Canada:	$73,185	$59,216


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


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


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS

[Stage Direction]
[ Translation]

[Stage Direction]
The House resumed from Monday, March 2, consideration of the motion of Mr. Wilson (Etobicoke Centre) that this House approve in general the budgetary policy of the Government, and the amendment of Mr. Garneau (p. 3594).
Hon. Lloyd Axworthy (Winnipeg-Fort Garry):: Mr. Speaker, I welcome this opportunity to speak to the amendment moved by the Hon. Member for Laval-des-Rapides (Mr. Garneau).

During the parliamentary break last week I and several of my colleagues from the Upper House had the occasion to tour the four provinces of western Canada as part of a caucus investigation into the economic problems and opportunities for development there. That opportunity to visit, immediately upon the heels of the Budget, revealed clearly to us the very serious gap between the hard economic reality of western Canada and the total lack of commitment or response by the Government of Canada to those new realities.
We began by meeting with groups of farmers in the Province of Manitoba. These people, who had been in the farm business for 30 or 40 years, had one basic message, that they had to leave their farms. They can no longer make money. Their sons and daughters do not want to take over the land. A farmer who has 900 to 1,000 acres of good production land was talking about walking away from it this fall because each year he experiences a shortfall of $12,000, $15,000 or $20,000. Although the grain payment has been loudly trumpeted in this House as the solution to the problem, the farm community of western Canada sees no solution in sight. Farmers are terrified
March 3, 1987
by the changes in the international market, the lack of security for the future, and the escalation in costs.
We also spoke to a number of university students. They are facing quotas, for the first time in the history of public universities in western Canada; controls on the number of students able to attend. As the restrictions grow, due to budget restraints, universities will no longer be a channel for mobility for working class young men and women. They will in fact become elitist organizations because of the restrictions. That is to say nothing of the cut-backs in research. The faculty of engineering at the University of Manitoba, a well respected major faculty which is trying to be at the forefront of research and development, has an operating budget of $1 million a year.
We met with people from the oil industry in Alberta who perhaps presented the most glum and most desperate set of circumstances that one could possibly imagine. In 1985 there were 12,564 wells drilled. In 1987 they expect just a few more than 3,000 to be drilled. Their message was that Canada, under the present low level of investment in the oil and gas sector, will no longer be able to maintain its reserves. It will increasingly be forced into a position of dependency on imported oil and gas because no capital investment is going into the oil and gas sector, even to maintain our level of reserves.
We talked to the business community of British Columbia. Mr. Makin came before us. He said that in 1981 capital investment in British Columbia was at $12 billion. By 1986 it had fallen to $8 billion and was decreasing even more.
These people basically suggested that the economy of western Canada is not in a healthy state. Commodity resources are suffering from the depression of world-wide prices. The business community is not getting the investment it needs to generate new production. The universities and research centres are being cut back from opportunities to develop new products and innovation. We kept being asked where the leadership of the federal Government is to provide answers to these problems. When they read the Budget papers they found no answer. The Budget was not a document, economic blueprint or agenda for change. At best, it was a chartered accountant's tote sheet and, at worst, simply a public relations exercise. There was nothing in there which would provide basic political decisions upon which economic decisions could be made.
I believe this demonstrates that the Government has lost the fundamental Canadian requirement to have a political economy recognizing the interchange between political decision-making and economic decision-making. This country was not built by the free flow of market forces, but by a series of political decisions setting out investments, guidelines and directions in which the market-place could operate.
We no longer have a Government which believes in a political economy. We no longer have a Government which recognizes that it shares the responsibility to provide signals to the market-place, to compensate where the market-place is not operational, and to provide a direction and thrust to the
March 3, 1987

economy, whether by building a railroad, providing signals in the energy area, or attempting to deal with incredible changes on the international market-place. There is nothing in the document, absolutely no reflection that there is a hard, tough economic reality facing Canadians and that the federal Government must accept some responsibility for providing leadership in that area.
We received close to 100 representations from a wide variety of interest groups. Through those, certain messages began to come through about the structural changes taking place in the Canadian economy. Perhaps the most frightening for western Canadians, as it would be in other parts of Canada, is the decoupling between the resource economy, the commodity markets of Canada, and industrial production.
According to all the economic textbooks, there used to be an interrelationship between prices, growth, employment and between commodity markets and industrial markets. That is no longer the case because it has been severed. The depression in commodity prices, the slow-down in production and the retardation in employment in those areas that are based on the resource economy has not affected the industrial economy. We know that at least one part of the economy, southern Ontario, is experiencing some growth, but it is somewhat of a condemnation of the theory that a coupling of the national economy is taking place. There is no effort to stitch that national economy back together and provide for the stability or the investment in the resource economy to respond to that growth.
It is also clear from the representations we have received that there is a greater gap between new production and investment, and employment. Perhaps the harshest judgment that must be levelled against the Budget is that after four years of a growing economy the unemployment rate in this country is still near 10 per cent. In spite of the ability to recover from the world-wide recession that affected this country in the early 1980s, Canada has been one of the slowest countries to recover its employment base. There are still many people unemployed even though there have been four years of economic growth above 3 per cent or 4 per cent.
I suggest something is fundamentally wrong when the Government has only increased employment by 1 per cent or 2 per cent after four years of recovery. This problem is most directly impacting the regions of Canada rather than the central heartland, as shown by the pathos we see in places which had a booming economy but are now facing 15 per cent unemployment. Again, the Budget provides no answer to this situation.
In fact, the Estimates that were tabled yesterday reveal that there is close to $200 million in cut-backs in the job-creation programs of the Government, including cut-backs on programs for student hiring, DRIE grants of investment in those regions and even cut-backs in the commitments of the previous Government for development in those areas. This is at a time
The Budget-Mr. Axworthy
when the economies of the regions are experiencing a serious downfall.
That fact alone should warn the Government that the unemployment rate is not responding to the growth rate, but is responding unevenly by decreasing in one region, at best, while increasing in other regions during a time of so-called recovery and economic growth. Surely the Minister of Finance (Mr. Wilson) and his colleagues should have given Canadians answers to those questions, but the Budget was silent on that matter.
Another example we learned from the weeks of hearings we held is that the international economy is directly affecting the Canadian economic reality, with debt crises in third world countries, increasing prices of commodities, loss of capital flows, and other serious influences. Yet, there is no ability to respond to those influences because the Government is too obsessed with the Canada-U.S. free trade talks. One would be led to believe from reading the document carefully that we are not part of an international economy, because it did not take into account the incredible fluctuations taking place in capital markets, the fact that our trade balances in all other parts of the world are declining, and that we are losing markets in Asia, Latin America and Europe.
There has been no effort to develop new markets and new products for those areas. Western Canadians who are involved in agriculture and industry believe they can do so, but being small business people, they do not have the huge corporate budgets for those new markets and product development. They tell us that they need assistance to transfer technology, that they need science centres to test new products and develop and open new markets, and need to increase value added products in order to respond to that demand. Yet again, the Budget provides no response to that. It is no wonder that western Canadians are deeply frustrated and disappointed with this Budget.
I am sure Conservative Members have had an opportunity to read recent public opinion polls. They know that one of the important political stories in Canada today is the incredible crumbling of the Tories in western Canada. In my Province of Manitoba, for example, the Conservatives have fallen from 50 per cent support of voters to 20 per cent in a matter of a year. While I should be happy that we are leading with 44 per cent of support, the fact is that it does not reflect the fumbling performance of the Prime Minister (Mr. Mulroney) or the scandals involving the Government. The Conservatives are losing support because western Canadians are seriously disappointed that the Government is not responding to the economic crisis in western Canada. It has been unable to provide economic leadership to the problems facing Canadians.
Westerners want some assistance to meet the affects of the U.S. Farm Bill that has driven agricultural prices down 25 per cent in the last year. The Minister of State for the Canadian Wheat Board (Mr. Mayer), the Minister of Agriculture (Mr. Wise) and the Minister for International Trade (Miss Carney) only say that the problem will be solved seven or eight years

March 3, 1987
The Budget-Mr. Axworthy
from now. Those producers want a clear signal that there will be a program of deficiency payments to keep our farmers in business and, at the same time, tell the Americans and Europeans that they cannot force us out of markets.
Western Canadians want a clear commitment to research and development in western Canada, rather than its withdrawal. Let me give an example from yesterday's Estimates. An ERDA agreement in the Province of Manitoba was signed in 1983, designating that province as the centre of development for urban bus research and development and manufacturing. This was identified by the province and the federal Government as an area of potential export markets. The agreement was signed for $21 million over a five-year period, but, according to the Estimates, the Government spent $17,000 in the first three years of that agreement. In other words, the Government had an opportunity to give a western province the potential to develop a new technology in an export market that is growing around the world by assisting manufacturers in that area to develop new products. Instead of using that agreement, the Government snuffed it out.
Similarly, another agreement on communications and culture was signed with Manitoba. It was designed to develop that area as a potential export market for that province. The agreement represented a $22-million commitment, but only $6 million has been spent with one year left in the agreement.
It is clear that the Minister of Finance and his colleagues are cutting back on cash flow in order to meet their deficit targets. They are cutting back on investment, jobs and potential economic development that would create new tax dollars and new revenues which would be far more productive in reducing the deficit than these mealy-mouthed, niggardly and cheap reductions we see now.
The fundamental problem facing the Government is that there is no sense of political economy which reflects the philosophy that the driving force in the economy should be full employment. We hear these great panegyric and rhetorical displays about lowering the deficit. Rather, the Government should be aiming at full employment which is the best answer to deficit reduction. The best way to deal with the fiscal framework in this country is to employ far more people. The difference between a 9.7 per cent unemployment rate and a 5 per cent unemployment rate is a 50 per cent reduction in the Government deficits and a substantial increase in opportunities for Canadians. The fact is that the Government does not have a commitment to full employment. It has not built into its decision-making process any concept that full employment must be the primary objective and goal and, therefore, the economic decisions it makes are not geared or driven by that particular purpose or judgment. That is the fundamental flaw of its whole budgetary process.
There is no concept of political economy in this case and no sense that political decisions will make a difference, just a
reliance upon this kind of laissez-faire market-place, the end result being that growth takes place only in one region and the rest of the regions suffer a serious recession to the point where they are in danger of losing their fundamental ways of making a living. That is our objection and the reason we have introduced a non-confidence motion with respect to this Budget. It is not an economic blueprint. It provides no economic leadership. It does not deal with the problems of structural change. In fact, it has no sense of goal or purpose which will give a direction to those parts of our national economy which are looking for some kind of assistance.
As long as we continue in this way, the disparity and gaps will grow wider and the sense of desperation and frustration will grow even more extreme. We can only hope that within the next 18 months to two years the Government has left to continue this absence of economic leadership, conditions will not get so bad that when we become government we will not be able to rescue it.


Mr. Fred King (Okanagan-Similkameen):: Mr. Speaker, I was rather interested in the Hon. Member's comments about agriculture in the west and deficiency payments, and so on. Not too long ago the Hon. Member sat on this side of the House. His Government had a Minister of Agriculture who refused to honour an application for assistance under the Stabilization Act for Okanagan fruit farmers for 1983-84 soft-fruit crops and the 1984 apple crop. I wonder why the Hon. Member has chosen to change his tune now that he sits on the other side of the House? The Minister of Agriculture at that time told me as a result of my questions in the House: "We are not going to pay the Okanagan farmers any stabilization payment. Let them go to the province or some other place. We are not going to help them out". The Hon. Member has now a great heart for Canadian farmers. Is it just Manitoban farmers he is interested in? How does the Hon. Member account for this sudden change in attitude? It certainly was not demonstrated when he sat on this side of the House and had the ability to do things for farmers. He slammed the door in their faces.


Lloyd Axworthy: Mr. Speaker, I welcome the question because, as the Hon. Member might know, I had the occasion last Thursday to be in the Okanagan and to speak at a public meeting in Kelowna, very close to his home town. We had occasion at that time to engage in some interesting debate about the comparative interest in the Okanagan of the Hon. Member's Government and the Government I represented. I would suggest to the Hon. Member that he would be much better to spend his time doing something to get his Government to change its mind about its decision with respect to the West Kootenay Power and Light Company rather than listening to past history, because there are 12,000 consumers in that district who are just about ready to skin the Hon. Member alive because his Government, through Investment Canada, has approved a decision to sell out a public utility which the consumers of that region think is fundamental to their growth.
March 3, 1987

They do not believe they are receiving the kind of representation from their existing Member of Parliament to get that decision changed.
I would also point out that at the same meeting it was brought to my attention that the Government the Hon. Member represents is also engaged in negotiation on free trade which puts at risk the entire horticultural industry of the Okanagan.
I would like to finish because the Hon. Member asked me a question and I am very happy to answer it. I want to tell him what the people in his riding are saying. I spent some very interesting evenings there.


Frederick John King: You do not need to do that. 1 know what they are saying.


Lloyd Axworthy: What they are saying is that the Hon. Member and his Government are selling them out through that negotiation. As we know from the announcement last Friday, the Government has put those things on the negotiating table and is going to wipe out a triple million dollar industry because, once again, the Government is flying in the face of economic reality. It does not realize that the horticultural industry in British Columbia, Ontario and the Maritimes cannot withstand that kind of across-the-board level playing field negotiation that the Prime Minister has got us into. It seems to me that that is a far more terrifying prospect for the farmers, as they spoke to me last Thursday evening, than some past history the Hon. Member is trying to gouge up. The Hon. Member would be far better advised to deal with the present and the harsh reality the farmers are facing now than try once again, in typical Tory fashion, to live in the past, because 1 will tell you, Mr. Speaker, that is what is going to defeat them.


Frederick John King: Mr. Speaker, I was very interested in the Hon. Member's comment. 1 happened to fly to Toronto last night with the president of the British Columbia Fruit Growers' Association. We had to spend an hour and a half in Toronto because our plane to Ottawa was delayed. We sat with a member of the other place, a Liberal Senator from British Columbia, who asked the president of the British Columbia Fruitgrowers' Association if he had any concerns about the free trade talks which are ongoing in Washington. The answer was: "No, we already have free trade in apples back and forth. There will be no difference whatsoever". I do not know who the Hon. Member was talking to, but I would imagine it was the fringe element of the fruit industry who share the convictions of the Hon. Member opposite that anything which has any element of contact with the United States should be avoided.
I am not impressed by the visit of the Hon. Member to Kelowna. I read the news items. In fact, I was able to use the accounts of the Kelowna meeting in four of my townhall meetings and received great response. I refuted the evidence the Hon. Member raised in Kelowna. It is a very easy matter to counter arguments which are sort of light weight.
The Budget-Mr. Clement Cote


Lloyd Axworthy: Mr. Speaker, talking about light weight arguments, I think we have had the model set for us by the Hon. Member. All I can say is that it is not only the Premier of British Columbia who lives in fantasy land, several Conservative Members of Parliament occupy that same space. The fact is that I am surprised that a Member of Parliament who represents an area so vital to the national economy, which has major vineyards and a large horticultural industry, is so totally oblivious to the impact which an across-the-board comprehensive trade arrangement will have. If the Hon. member is castigating those people I met with as somehow "fringe elements", I would say to him very clearly that it is time for him to get back to his constituents. They represent farmers who have been in the business for 30 or 40 years, several generations, and they have all said without any equivocation that they are deeply concerned about the possibility of agriculture being negotiated as part of those deals, because they realize the kind of cost-cutting and competition it will generate.
[DOT]	(1140)
The Hon. Member has alluded to the President of the British Columbia Fruit Growers' Association. If the Hon. Member is so confident, will he get up in the House and say that he recommends that the seasonal quotas be taken off? Is that the position he will now take in the House? That measure was brought in as a way of ensuring that the horticultural industry, and others, would be able to withstand that type of competition. Is that the Hon. Member's position? If so, I would like to know, and I am sure the people of the Okanagan would like to know. If he has any guts, and if he says that his arguments are so weighty, then he should get up in the House right now and say that that is his position.
[DOT]	(1150)


Mr. Deputy Speaker:: Resuming debate. The Hon. Member for Lac-Saint-Jean (Mr. Cote).


Mr. Clement M. Cote (Lac-Saint-Jean):: Mr. Speaker, it is an honour for me to take part in the debate on this budget, because once again, our Government has shown that it knows how to keep its promises and that our desire to put the economy on a sound basis is not wishful thinking. About two weeks ago, the Minister of Finance (Mr. Wilson) brought down a budget that augured well for Canada. He has shown once again that the determination and firm attitude of this Government has helped to put the economy back on the right track. The message has been clear and consistent since September 1984. We must restore this country's fiscal responsibility and good fiscal management. The national debt must be taken in hand, the deficit brought down and Government spending brought under control.
In the third budget brought down since this Government was sworn in, these objectives have been achieved once again. For the third consecutive year, the deficit is down. We must

March 3, 1987
The Budget-Mr. Clement Cote
not forget why this politically suicidal decision to reduce the deficit was made and why we were not afraid to implement that decision. The reason was that Government involvement in the economy was about to paralyze our economic growth. Layers of regulations distorted investment decisions and business practices. Fifteen straight years of budget deficits had swollen the national debt to $200 billion. The rapid increase in the public debt made Canada's future economic prospects increasingly uncertain. It was a malaise that fed on itself. The more distortions the Government produced, the more it had to produce. The more it subsidized, the more it had to subsidize. The more it regulated, the more it had to regulate. The more it spent, the more it was given to spend, in an unceasing spiral that was making our industry inefficient and non-competitive and undermining our prospects for economic prosperity.
Mr. Speaker, Canadians know perfectly well, and it doesn't take a degree in economics to realize, that it doesn't really pay to get a subsidy of $1,000 if the subsidy has to generate $1,500 in taxes for the same year. Taxpayers know their arithmetic, and that is why in the last election they did not ask the Liberals to help them out of the economic mess we were in. When it came to power, the Government was firmly resolved to put an end to these destructive policies.
We made a clear statement of our objectives in November 1984 in our agenda for economic renewal. And now, two years later, we have made substantial progress in achieving these objectives. The results are eloquent proof that good management pays.
Mr. Speaker, good management means good government, and good government means that a government, instead of being part of the economic problem, starts solving that problem. At this point, perhaps 1 could illustrate the Government's emphasis on controlling operating and administration costs, always with a view to bringing down the deficit. Just to indicate how effective the Government's measures have been, in 1987-88, net operating costs will be essentially the same as in 1984-85. Now that, Mr. Speaker, is good management.
By reducing the deficit, which is not an end in itself, we increase employment, stimulate economic growth and expand the opportunities available for all Canadian men and women. The results are impressive. Since our Government came to power, the Canadian economy has produced 675,000 new jobs, because we created an economic climate favourable to economic growth and job creation. This record number of new jobs represents, for Quebec alone, 163,000 jobs created in less than 30 months, whereas the Liberals took 55 months to create 40,000 jobs. Since we first came into office we have therefore created four times as many jobs a month as did the Liberals. These are the figures which our forgetful colleagues opposite are trying to hide from the people. But I am confident, Mr. Speaker. And if one of the provinces so proudly displays the motto "Je me souviens", it is to remind members opposite that it was not born yesterday.
In addition, inflation has levelled at around 4 per cent. Real growth in the economy has averaged out at about 3.5 per cent,
a better achievement than that of the United States, second only to Japan among major industrialized nations. Interest rates have never been so low in almost ten years. Canadians would never have been able to enjoy such economic prosperity had the Conservatives not been at the helm. What this means is that a $50,000 five-year mortgage now costs $1,500 less a year than in 1984, a saving of about $125 a month. We are rightfully proud of these results, for they show that the less the Government interferes and the more it acts as an economic lever, the better private sector interests can achieve the goals they have set for themselves.
For instance, before we took office my riding, like so many others in Quebec, was in the doldrums. Unemployment was at an all-time high, prospects for improvement were dim, and the few small businesses which managed to survive were finally forced to close down after years of sustained efforts because nothing had been provided to help them. Thousands of new businesses have opened their doors and created new jobs, a fact which reflects growing confidence among both Canadians and foreigners alike. People know that Canada is again open for business. Statistics attest to that. Our national debt is a mortgage on future generations and we are successfully getting a handle on it. In terms of the economy, the deficit has dropped from 7.4 per cent a year when we took over to 5.1 per cent this year. Where it used to represent one and a half times the American deficit, on a proportional basis, both are now practically the same.
These are no longer projections or promises but facts, Mr. Speaker, and the world community has acknowledged that these results are the best posted by an industrialized nation. In addition, they were achieved without losing sight of our sense of responsibility and discernment.
Sixty-three per cent of our declining deficit with respect to the Gross National Product can be traced back to lower expenditures and sound management, but too often our friends opposite would rather forget that.
Rather than seeking only public political popularity and playing to the gallery, our Government preferred to emphasize good management even though this approach may antagonize some people. When we took over we decided to act responsibly and learn to live within our means. The Speech from the Throne delivered last October made it clear what the priorities of the Government would be in this parliamentary session and, within the constraints of our financial plan, they will be implemented over the coming months.
Unlike the previous Government, we have shown we can set our priorities and responsibly allot our resources to achieve these objectives. We have increased the agricultural gas tax rebate, something which the Hon. Member for Winnipeg- Fort Garry (Mr. Axworthy) conveniently forgot to mention earlier today. Finally, we have implemented a $1 billion special assistance program for Canadian grain producers. Moreover, we have done so without exceeding the expenditure objectives set in the 1986 budget.
March 3, 1987

There are hundreds of farmers in my constituency, so I find these measures particularly interesting and important. They are not aimed at helping small groups, but major sectors which are often put at a disadvantage. We shall pursue this disciplined and responsible action within the limits of the financial framework outlined in the budget.
The new refundable sales tax credit implemented in 1986 will provide assistance to lower income Canadians. We have also improved the child tax credit and developed a new benefit system to allow the neediest taxpayers to obtain prepayment of the credit each November.
A complete reform of pension mechanisms will promote retirement savings while improving pensions for all Canadians. Part-time workers and women will benefit particularly from the changes in pension standards.
As far as new initiatives are concerned, this budget represents a pause before we introduce our comprehensive tax reform proposals this spring. Mr. Speaker, we are continuing to work at the initiatives announced in the Speech from the Throne, including tax reform, and I know that you will find our proposals consistent with our program and good for Canada. Indeed, we have already initiated the reform process by introducing a minimum tax for high income Canadians. 1 wish to emphasize that we, the Conservatives, were the ones to introduce this tax.
Even my socialist friends opposite lacked the wisdom to support it, on the grounds that Bill C-23 was not strong enough. But the fact remains that the NDP, that third party, that champion of the widow and the orphan, has refused to support a minimum income tax provision for the rich.
We have gone a long way these last two and a half years. This budget shows our economic renewal program is bearing fruit and remains effective. We are on the right track. We must go on building a stronger, more aggressive, more flexible economy, for the benefit of every Canadian.


Mrs. Pepin:: I have a question for the Hon. Member. 1 listened to him earlier as he praised the favourable repercussions of the budget, and I would like him to state where he thinks his Government will get the money for women-targeted programs, especially child care? Where is that money in the budget?


Clément M. Côté: Mr. Speaker, I thank the Hon. Member for Outremont (Mrs. Pepin) for her excellent question. She listened to one part of my speech, as she just indicated. As you know, Mr. Speaker, when we came into office in 1984, we took over a business whose economic vehicles had nothing but flat tires. We had to repair several of them and change others, within our means. So, if this can reassure the Hon. Member for Outremont, she probably had an opportunity last night to see our Prime Minister (Mr. Mulroney) before a women's group. He repeated that child care would be a priority for this Government. But as I said earlier, you know what little flexibility we had in reducing the
The Budget-Mr. Clement Cote
deficit. And the results, as I described them, are ample proof that Canadians made the right choice in 1984.
We remain convinced that as soon as the Liberals have finished digging into what I would like to call-and if my language is unparliamentary Mr. Speaker, you will certainly call me to order-I mean, into sceptic tanks, they will return to a somewhat more reasonable policy and will think more about Canadian men and women, including mothers-I say that to please the Hon. Member for Outremont-who need a more adequate child care system, as she had clearly demonstrated and as was previously stated. As soon as they realize the economic reality of this country, I am convinced that Canadian men and women will maintain these Hon. Members and this Government in their positions, Mr. Speaker.


Mr. Deputy Speaker:: The Hon. Member for Outremont (Mrs. Pepin) on a supplementary question.


Lucie Pépin: I should like to reply to my Hon. Conservative friend and ask him to explain to me why Canadian women were right to support a Government such as his. I should like to know also, because we are talking about the economic contribution of all Canadians, why we are not mentioning the significant contribution of Canadian women to the Canadian economy. When dealing with the overall impact of a budget, this is an aspect which we may have overlooked. 1 simply want to give him another opportunity to say what Canadian women have contributed to the economy and why they were right to support his government.


Clément M. Côté: Mr. Speaker, I think that the question itself provides the answer. Why were Canadians, particularly women, right to get rid of the former Government and have confidence in ours? Quite simply because the former Government was not leading them anywhere but towards a deficit and out-of-control indebtedness.


Lucie Pépin: Tell me about women. You have cut several programs.


Clément M. Côté: As much as men, Mr. Speaker, women were aware of this unbearable situation, and why? Because they simply could no longer have confidence in them.


Mr. Prud'homme:: 1 must say that I listened very carefully to the excellent speech made by the Hon. Member, certainly more so in form than in substance. I can see the speech was very well prepared, but I must admit that I am less enthusiastic about the answers to the questions. These must be made directly and off the cuff, and the Hon. Member attempted to lower the debate by suggesting that Liberal Members ought to be less concerned about septic tanks. That gave me a clear idea of where he wanted to drag us.
The only question I have for him is that, first he did not answer the questions asked by my colleague from Outremont (Mrs. Pepin) concerning all those cut-backs in retraining centres and so on. She expressed her own views. I would like to ask the Hon. Member who again made a speech that was very

March 3, 1987
The Budget-Mr. Ernie Epp
well prepared-1 don't agree with the substance but I certainly admire the form, and you can tell there must be something new going around, when we have all these polished speeches, and we all know how the system operates in the House-but in any case, I would like to ask the Hon. Member whether he thought it was really necessary to have a budget at this time, since aside from a few additional taxes, the budget contains absolutely nothing. Couldn't this have been done in the form of a statement by the Minister, leaving the real budget until later this spring? Now we have to waste six full days on a Budget Speech we cannot really consider as such. Would the Hon. Member care to explain why he thinks it was really necessary to have a budget at this time?
Mir. Cote (Lac-Saint-Jean): Mr. Speaker, I want to thank the Hon. Member for his good words about the style and preparation of my speech. I would like to take this opportunity to give him a few words of encouragement, and his party as well, since as he said just now, he knows how the system operates. Since that is the case, and the Hon. Member has been able to see for himself that in addition to having good speeches, we can also have good policies and a good program and act on that program, I would urge the Hon. Member to get his colleagues and his leader to use the same system to give us a good set of alternative policies that is, if they have any, because they have been doing nothing but criticize.
To get back to the kind of answers I gave, Mr. Speaker, I would like to say that my answers were as good as the questions, which means that the quality of the answers was in direct proportion to the quality of the questions.


Mr. Ernie Epp (Thunder Bay-Nipigon):: Mr. Speaker, I appreciate the opportunity to take part in the debate on the Budget presented by the Minister of Finance (Mr. Wilson) on February 18. The Budget presented that day was a sorry disappointment. One cannot, in debating it, but speak critically of what the Government put before us and speak with regret at the opportunities which are being lost.
The Minister of Finance spoke of the Budget from the standpoint of new initiatives, as representing a breathing space. 1 am far from the only person in the country who saw the Budget as a "do-nothing" Budget, as a Budget of lost opportunities, as a failure to recognize that there still were very serious problems facing Canadians in many regions of the country. The Minister of Finance was prepared to allow the forces that have favoured him up to this point to carry the country onward, in the hope that there would be a continuing gradual improvement of the sort which some regions of Canada have known.
Being realistic about the situation, I recognize that there has been one very happy feature of the situation over the last few years, though it is not a feature for which I think the Government deserves any credit at all. I am referring to the fact that
interest rates have fallen from the incredible levels which we knew in the early 1980s. Interest rates were at outrageous levels at the time, thanks to international action, chiefly by the Federal Reserve Board of the United States, which drove interest rates beyond 20 per cent and taught us all a useful lesson. If people thought before then that we could no longer have a depression, we all know these days that if we maintained interest rates at that point for a year or 18 months the globe would in fact experience a depression. There is no assurance these days that we are out of the woods at all as far as that is concerned.
The action taken by the Brazilian Government just last week in indicating a three-month moratorium on interest payments to the large banks which have lent so much to that country was an indication of how deeply we are still in the morass. However, I recognize that interest rates in Canada have fallen to more sensible levels, thanks to the good sense which has prevailed in other countries. As a result we have seen an increase in housing which has had the usual effect upon unemployment, with construction workers happily employed, paying taxes and no longer requiring unemployment insurance. That has represented some improvement in the economic situation.
In Thunder Bay in the last couple of weeks we have had the problem of variable entrance requirements being affected by some decline in interest rates resulting in people previously eligible for unemployment insurance at 10 weeks finding themselves out of luck because 16 weeks is now the requirement. In northwestern Ontario that seems to be a highly ironic thing to do at a time of still significant levels of unemployment above 10 per cent, and at a time when it is difficult to get work in the depths of winter. That kind of action should not be taken. It reflects the kinds of policies the Government carries on which were inherited from the previous Government and which the Conservative Government has done nothing at all to improve. I am speaking particularly of the variable entrance requirements which were designed to reduce the draw on the unemployment insurance fund in the late 1970s, but produced hardship for many Canadians.
The fact remains if there has been some improvement in a few places, but in many parts of Canada there remains much to be done. If we consider the unemployment insurance figures as they existed in January of this year we find Ontario's rate generally is set at 6.6 per cent. I have already indicated that we in northwestern Ontario are looking at 10 per cent plus. That is one indication, within a large province, of regional disparity.
Let us look at some of the other provinces. In British Columbia the unemployment rate is 13.6 per cent, on the Prairies, 9.4 per cent, Quebec, 10.8 per cent and in Atlantic Canada, 15.3 per cent. That was not a situation on which a Finance Minister should have been resting on his oars.
March 3, 1987

The Finance Minister does not just rest on his oars in these budgets, he socks it to Canadians in the way of increased taxation. We got some of it in this Budget. The decision to lay still more taxes on Canadians should provoke an outcry, a tax revolt, and I think it will as we approach the next election when Canadians recognize what is being done to them.
The Toronto Star published a story which appeared in Quorum yesterday. The figures it provides are fascinating. The Executive Director of the Social Planning Council in Toronto, Mr. Pennington points to two studies. The one noted at greater length is the one provided by the National Council on Welfare. As it happens the Fraser Institute in Vancouver, a very conservative think tank, has been providing figures that fit right in. What does Mr. Pennington tell us:
-he was astonished to learn that two such radically different groups as the National Council on Welfare and the Fraser Institute-reached the same conclusion in studies released last month.
The studies show that individual Canadians face federal tax bills in the next fiscal year that will be 48 per cent higher than those they paid in 1984-85-
That is, when the Government obtained its mandate.
-while corporations will face only a 4.3 per cent increase over the same period.
And they show that an urban family of four living on the poverty line with a $20,812 annual income faces a 35 per cent tax hike over what they paid in 1985, while a couple earning $100,000 will see only a 2 per cent increase.
That is fairness in taxation from a Conservative Government, Mr. Speaker? The article goes on:
The National Welfare Council study shows that a two-income family of four, earning a total of $ 15,000,-
Clearly below the poverty line.
-faces a 90 per cent increase over what they paid in 1985.
"I'm jolted," said Barb Couchman, Executive Director of the Family Services Association-
I would think that Conservative back-benchers might also feel jolted by what their colleague, the Minister of Finance has done to the Canadian people. What we have here is the most rank unfairness in taxation, laying the burden of Government on the people. It is fine to talk about assisting those most in need, as the Minister of Finance and the Minister of National Health and Welfare (Mr. Epp) likes to do, but after you lay taxes like this on Canadians, on the poor, it will be very, very difficult to recover.
The result of these actions, which for the average Canadian family of four means a tax increase since the Government came into office of about $1,380, has had one very important economic effect. It transfers money to the Government which the people of Canada should have to spend at a time of high unemployment in most of the country and at a time of very real need to support economic activity, production and sales. Because disposable income has been lost to Canadians, demand has been very weak.
Economic depression begins to affect other parts of the country other than the resource industries which have been battered in case after case. Just look at the mining, the oil and gas and the farming sectors which are disaster areas of the
The Budget-Mr. Ernie Epp
Canadian economy. This is an important reason why unemployment rates are at the present level, that they are and yet we have a Minister of Finance refusing to recognize it. Sure, he says in the Budget speech, the benefits of our strong economic performance have not been evenly shared across the country. Some regions are hurting. My God, most of the regions of Canada are hurting, Mr. Speaker. Only southern Ontario has anything to be very happy about in these circumstances. Of course, a Finance Minister from Bay Street may be quite content with that, but most Canadians are not, and it is a situation with which the Minister of Finance has refused to come to grips.
In the area of regional disparity spending, about which the Minister should be doing something, he has reduced spending significantly. Three years ago the regional development spending totalled $14.85 billion. By the coming fiscal year that will have dropped almost $3 billion to $11.95 billion. With that kind of decline of over one-fifth, it is not surprising that very little happens in the various regions of Canada.
I want to focus on one particular aspect of the Minister's taxation principles to underscore how he is refusing to take opportunities to improve the situation of the Canadian people and create employment. This Minister of Finance in his very first Budget reduced the capital gains tax for those who are lucky enough to have the money to get in on it. This was a $500,000 tax holiday. That tax holiday was interesting to some people but, of course, Canadians who have $15,000 or $20,000 in annual income will not be able to make use of it. In the same Toronto Star report to which I have referred we are told people are spending $12,000 of their annual income in Toronto just covering rent. People like that will not be able to take advantage of that $500,000 capital gains tax holiday. The Minister of Finance thinks he is going to lose $850 million this coming year in taxes as a result. That is very interesting, Mr. Speaker, because he admits the loss.
The Government talks about child care. The Prime Minister (Mr. Mulroney) yesterday was promising again that there would be some activity in this area. If the Finance Minister had not given this money away and instead spent less than one-half of it, namely, $320 million on improved child care he would have helped all those middle-income families who desperately need it. At the moment they are forced to spend their own hard-earned money, which they would like to put to other uses, ensuring that their children are properly cared for. This would have provided about 25,000 additional spaces for children and could well have created 5,000 jobs. There is money which the Minister of Finance could have taken in, which may not create a single job in Canada. But, after all, one can have condominiums in Florida or other places, buy art works or deal in antiques or whatever.
There is no assurance of any improvement in employment. The Minister of Finance passed up a splendid opportunity to create additional employment. That failure is a splendid

March 3, 1987
The Budget-Mr. Stackhouse
example of the short-sightedness of the Minister and his Government in giving away money to the wealthy, taxing corporations only a little bit more, while socking the poor and middle-income earner with an incredible burden.
As a Member of Parliament from northwestern Ontario, I want to address the issue of regional development. I have already made reference to the decline in total spending on regional development from almost $15 billion three years ago to under $12 billion today. That points out that there is less concern about regions today, although Lord knows it was bad enough before that Government was elected.
When the Department of Regional Industrial Expansion was considering the assistance it might provide, we in Thunder Bay found ourselves in the odd position of being lumped in with the City of Toronto. I suppose it is nice to be included in the prosperous half of the country statistically, but the people in my region do not think of it as having anything like the economic strength which characterizes the area known as The Golden Horseshoe, where Asian companies are building automobile assembly plants these days. We just do not have the resources or attractiveness of southern Ontario. Yet the staff at our DRIE office has been cut back and there is precious little taking place in the way of regional development.
There were of course other programs and the Government, by reducing spending, has damaged regional development in that way as well. I can cite several examples. When I visited the Canadian Forestry Service Centre in Sault Ste. Marie last fall I was told that reforestation spending through the Canada Employment Commission was being cut and likely to disappear entirely. The Government is proud of the Canadian Jobs Strategy. I am sorry to say that in our region there is concern among those who are trying to assist women in obtaining training because the Canadian Jobs Strategy has weakened those programs almost fatally.
Another example is that of our local advisory council. We considered Challenge '87, another program the Government is proud of. Quite frankly, I found it shameful that in the third season of a summer employment experience development program organized by the Government the situation of deadlines, late release of application forms, and so on, was just about as bad as it was the first year. I could understand it happening in the first year when changes were being made in order to produce a better plan. However, it seems to me completely shameful that this continues in 1987. In particular,
I cannot understand how the Government can do this to the private sector, the small businesses it wants to take part in the program. It is simply not fair to give people just a couple of weeks to come up with projects, fill in and file the applications. It is most certainly not fair to students to receive approval as late as the middle of April, and only then be able to hire other students.
Those are only some of the shortcomings of the Government in regional development. We very badly need the Government to recognize the action it needs to take. We need to recognize that resources have to be provided. I have watched the
Government fail in its efforts at co-operative development for months now. It has worked quietly, we are told, on a response to the task force on co-operative development. We still have not had any public statement. Here we have a report which has been before the Government from the beginning of its mandate and there has not been a response.
As well, we in the NDP are very critical of an economy which is shot full of government incentives. However, I can understand the co-operative financial institutions, such as credit unions, seeking something of the same sort for themselves. Yet again the Minister of Finance has refused to do anything. Here is a potential for community-based economic development to be encouraged, yet the Government has blown it entirely. It is playing around with things like community futures committees. However, I do not see any substantial assistance or support for community-based development. People talk about potential for some special kind of training. I expect there will be consideration of relocation in some communities. However, there will not be the kind of financial assistance which is not seen as a subsidy. The Minister of Finance always thinks in terms of subsidies but it ought to be seen as an investment in the community. The Government is incapable of seeing things that way, and that is why it will be turfed out in the next election, and why the people of Canada are going to turn to the NDP which wants to encourage community-based economic development in order to produce prosperity and employment from coast to coast.


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


Mr. Reginald Stackhouse (Scarborough West):: Mr. Speaker, my remarks in this budget debate will focus on the announcement by the Minister of Finance (Mr. Wilson) that we can soon expect major reform of the income tax system. He certainly deserves the congratulations of every Member of this House for having the vision, courage and foresight to see that the jerry-built, ramshackle, out-moded system he and the rest of us inherited can soon be replaced by a rational, planned, contemporary system.
In his budget address the Minister committed himself to reform which would reduce income tax rates, achieve greater equity for taxpayers, and inspire economic growth. In my remarks I want to focus on one reform which can contribute to all those objectives. For half a century income tax has been administered as a kind of legal larceny. I say that without reflection on the integrity of any Minister or public servant. They have all operated within the law. The fault lies with the law itself and what it has legitimized. It lies with a system which has permitted Governments to reach in the pockets of all income taxpayers and seize what has rightfully belonged to them for themselves.
I make that claim on a premise that a democracy should not make the assumptions of a totalitarian state. By that I refer to the opinion advanced half a century ago by Harold Joseph
March 3, 1987

Laski who wrote that in the 20th century governments have extended their power over more and more of life to a point where governments assume that they have a right to control all of it and should they refrain from controlling some area, it is because they have chosen to refrain. At no point does a government today, Laski suggested, recognize that it has no right to extend its control over that area.
My remarks are based on the conviction that a democracy does not make that assumption as a totalitarian government does, that in a democracy there are recognized limits to the legitimate authority of governments, that there are areas of life which belong to people on their own without intrusion by government. I ask the House today to focus on what that belief can mean for tax reform.
I submit that it means that governments will respect that a person has a responsibility to provide for himself and his dependents and, consequently, has a right to the income required to fulfil that responsibility. My thesis is that a person has what can be regarded as a human right to the income required to fulfil the natural responsibility to support oneself and one's dependants.
If we agree on that principle, I ask the House to go one step more with me and agree that persons should have that basic income free from tax. It should be respected as the person's basic income and should, therefore, be free from any trespass by a government.
I recognize that some Members might see that as a radically innovative and radically unpractical point of view. However, I submit it has already been recognized in principle by the personal exemption granted taxpayers, spouses and dependants. I am aware that many understand such exemptions simply as being tax deductions, that is tax avoidance provisions which governments have allowed and which governments can take away. However, I am arguing that that is precisely what they are not. They are essentially different from what are called deductions, should not be considered tax avoidance, and should not be subject to the changes and chances of government policy.
The term "exemption" itself suggests another meaning. It can mean that part of a person's income is respected as rightly exempt or free from taxation because it is income which the person needs to fulfil this natural responsibility to provide for himself and his dependants. I submit that income tax should be collected only on the surplus income, that being surplus in the sense of being what remains after a person has earned and retained what is needed for human existence.
If that can be recognized, or at least implied, in the present tax system, why speak of it today? I have two reasons. One is that the current exemption is too small to meet the need. The other is that as small as the exemption is there are those who want to take it away. The present exemption can be defended if it is no more than an arbitrary figure chosen to give the taxpayer another way of reducing taxable income. It is, however, indefensible if the exemption means that the tax
The Budget-Mr. Stackhouse
collector respects this natural right to a basic income free from the tax collector's eager grasp. The current exemption would not provide for the existence of any human in today's Canada. It does not even keep pace with inflation. The 1986 exemption, for example, was $4,180, up only $40 over the previous year, even though that meant an increase of less than 1 per cent to cope with inflation of 4 per cent.
Canadians need a personal exemption which more approximates what they need for basic human existence; not for luxury, not for comfort, not even for security, just for existence. I submit that that amount should be seen as exempt from the tax collector. It should be respected as the natural right of the person, upon which the Government has no right to intrude. I would like to think that tax reform would bring us a system in which we might conceive of an invisible sign on an invisible fence around a very visible income. The sign would read, "Personal, Private, Tax Collectors Keep Out". This belongs to the person as a natural right for his natural existence.
I said that there are those who would eliminate this personal exemption, small and inadequate as it is. I understand the motives and respect the arguments. One argument is that the exemption offers more tax benefit to the middle and upper income earners than it does to the lower income earners. With respect, I can argue that that critique shows that such persons insist on equating the personal exemption with any other deduction and with any other tax avoidance provision. I ask them to see that the exemption respects that all of us, regardless of income level, have a common humanity for which each of us must provide. We all have a common humanity which requires each of us to accept the responsibility to provide for our own existence and those who depend on us. Therefore, each of us should have a basic income which is exempt from taxation.
1 recognize, as does every Member of this House, that low income persons and families need assistance which others do not. Justice demands that they receive it. However, I submit that the income tax system is not the way to provide it. That system should be seen for what it is, a method of raising revenue. It should not be a program for redistributing the wealth. The strong should assist the weak, but the income tax system is not the way to do it. That should be the work of the Department of National Health and Welfare, not the work of the Department of Finance.
I therefore urge that the forthcoming income tax reform retain personal exemptions and make them adequate to meet a rising cost of living. We ought to take very seriously the great pressure on individuals and families, certainly in large cities such as Scarborough from which I come, to cope with the rising cost of living, so frequently on limited resources. An individual trying to be self-supporting on $12,000 a year today is a person who is struggling. A family of four trying to maintain themselves on an income of $20,000 a year today is certainly struggling. We must ask ourselves whether the income tax system should put another burden upon those

March 3, 1987
The Budget-Mr. Stackhouse
people. Should we demand of them yet another challenge to be faced? Can we think in terms of lifting at least some of that burden, removing some of that challenge, so that they can have the dignity of self support, the self worth of maintaining themselves without the country making that almost impossible for them?
I recognize that whenever we talk about raising exemptions or improving benefits we are talking about either a loss of revenue or an increase of government expenditure. We must address ourselves to the question of how to meet the need. The fact is that although there is an amazingly large number of Canadians earning $12,000 a year or less, the amount of tax revenue coming out of that large number is proportionately small, about $650 million. The number of individuals and families coping with the cost of living on incomes of $20,000 or less is larger and the tax burden is correspondingly larger. It is about $4.5 billion. We are now beginning to talk about big money.
As we contemplate the forthcoming tax reform we must keep in mind the possibility and, indeed, the absolute requirement that the corporate sector contribute a much more just and rational portion of the income tax revenue of the Government. It is shocking to read the report entitled "Road Map to Tax Reform" issued by the Economic Council of Canada and to learn, according to this document, that the corporate income tax is riddled with a variety of tax credits, allowances and deductions. In any recent year, about one-half of all corporations paid no tax at all. In some cases, the report states, this was because the corporation had experienced real losses. We must not fly with flights of fancy to think that all the needs of the country can be made up from the corporate sector, but the report goes on to say that in other cases the fact they paid no tax was due to the provision of the corporate income tax legislation and to the competence of the accountants and legal experts.
When we are talking about a corporate sector which pays income tax just under $10 billion and we learn that that represents taxation paid by no more than half the corporations of this country, we see that one dimension that our forthcoming income tax reform must explore is the possibility of a more rational and more just contribution by that sector to the life and well-being of this country.
I submit that by that reform, along with others, it will be possible to give some further respect to individuals and families who are trying to cope with their natural responsibility to support themselves and their dependants on very limited incomes. I submit that for years they have been unjustly, irrationally, and unnecessarily forced to suffer further by the Government intruding upon that which should be regarded as theirs.
What I have described today can be called tax reform from below, in contrast to what I will label tax reform from above. The kind of tax reform that we read about in the United States
can be fairly described as tax reform from above, for one of its priorities has been the reduction of income tax brackets, and the reduction of income tax rates very often at the top level of income. There is an argument to be said in favour of that, but I would plead for some further recognition in this country for a tax reform that will do justice to those who are striving to meet the challenge of human existence with limited resources.
I would plead that this Parliament, in undertaking this historic reform which can be before us within the next few months, will give a priority to tax reform from below and that we will try for a tax reform that will bring justice from the bottom up, rather than privilege from the top down. That alone will satisfy the demands of democracy.
The reason I have asked for the attention of the House today is that, more than anything else, a tax system expresses the values of a society and expresses the real principles upon which a society is based. We can see in the kind of tax reform to which I have referred the opportunity for a democratic system such as Canada has not enjoyed for many days.


Abram Ernest Epp: Mr. Speaker, I am always interested in listening to a radical in the Conservative ranks discussing what might be the best of all possible worlds, but not of course, as it is made by the present Minister of Finance. The Hon. Member referred to a tax system as a means of expressing the values of a society. Will he clearly characterize the values that prevail in the Budget of the Minister of Finance who increases taxation on the poor so sharply while guarding the corporations? In light of the Hon. Member's vision of society, it is strange that one can have such a sound and democratic vision which has not been achieved by the Government.


Reginald Francis Stackhouse: Mr. Speaker, I thank the Hon. Member for this opportunity to extol further the merits of the Budget and the virtues of the Minister who presented it. Let me add a few ways in which the needs of lower income people have been met by the Government and this Budget.
When we took office, one of the problems which confronted many Members, including myself, was the spectre of widespread unemployment. In the community I represent, I find more frequently that there are signs saying "Help Wanted".


Abram Ernest Epp: That is Toronto.


Reginald Francis Stackhouse: The Hon. Member says Toronto. I remind the spokesman for the NDP that Toronto is part of Canada and I am shocked that the NDP is not aware of that.
A second way in which the Government and its Minister of Finance have contributed to the well-being of ordinary Canadians has been by slashing interest rates. It has been decades since we have seen such a home building boom in this country as we have witnessed in recent years. This is primarily because of the lower interest rate policy.


An Hon. Member:: He is building a new house.
March 3, 1987


Reginald Francis Stackhouse: I congratulate him. He will know what Government to credit for it. These are indications of the way in which our Government is progressive and conservative at the same time. We are progressive in opening opportunities for people as a way of conserving the fundamental values upon which this country is based.


Mr. McCrossan:: Mr. Speaker, the Hon. Member made a very good point about trying to have an effective layer of tax exempt income which would be very much higher than the basic $4,000 that exists now. He also suggested that this layer could be as high as $12,000.
However, if there was a $12,000 tax exemption, over three-quarters of the benefit would flow to the very highest income Canadians. Does he not believe that a better way to proceed would be to have a tax credit so that the tax paid by the first $12,000 for someone who is earning $12,000 would be refunded or credited to them, rather than increasing the exemption, so that the money went to the people who need it most?


Reginald Francis Stackhouse: Mr. Speaker, I thank my friend and neighbour for this significant question. It gives us an opportunity for an all too brief debate on the issue raised in my remarks and in his question. It is a fundamental issue which requires more debate than we can afford today, and I hope we can return to it.
We are not talking only about benefiting the low-income person. We are talking about respecting the right of every human being to a basic income to meet the needs of a human existence, which the middle-income person has and the upper-income person has. We are saying that each of us, having a common humanity, has a need for a basic income which is common to us all. That is the first point.
Second, if we had a larger exemption similar to what I have described we would be able to totally remove many people from the income tax rolls who are now on those rolls. Some of the income they are now paying to the Government would be returned to them.
Third, many people who are unable to cope with their needs because of low income or family responsibilities, regardless of how they manage their income, require some supplementation by society. I do not see the income tax system as a way of doing that. I would rather see that coming through forms of payment which Parliament would authorize and the Government would administer. That is my approach to the issue. I recognize that the Hon. Member has raised a valid and important question and I hope he and I can debate it again at a later time.


Mr. Nystrom:: Mr. Speaker, I have both a comment and a question. First, I commend the Hon. Member for Scarborough West (Mr. Stackhouse) for the positive mention in The Toronto Star this morning. I think it shows he is a dogged
The Budget-Mr. Stackhouse
Member of Parliament who pursues his ideas and sees them through to fruition. I would like to solicit his support on another idea.


Reginald Francis Stackhouse: I was hoping for your support.


Lorne Edmund Nystrom: That is no problem at all in terms of credit cards and interest rates, so we can do a trade off here. The Hon. Member mentioned that some Members of the New Democratic Party do not realize Toronto is part of Canada. Toronto has done very well. In fact, about 90 per cent of the jobs created in this country in the last year have been in Toronto, primarily because of the auto industry. Does the Hon. Member have some ideas on how we can spread some of that affluence across the country? I look at western Canada and I see tremendously high unemployment rates. I see Albertans who are very discouraged about what is happening. I look at northern Ontario and see an unemployment rate around 15 per cent. In some places in Atlantic Canada unemployment rates are as high as 20 per cent.
I look at western Canada in terms of the farm economy and find that our farmers are receiving prices now which in some cases are worse than they received in the 1930s. Even with the $1 billion deficiency payment, the maximum price a farmer can now receive for his bushel of wheat is $3.50. The Minister of Indian Affairs and Northern Development (Mr. McKnight) knows well of what 1 speak because he is a farmer in western Canada. The deficiency payment is 48 cents a bushel and the maximum price is $3.50 for a bushel of wheat for the Canadian farmer. The American farmer meanwhile, because of subsidies, receives a minimum of $4.80 U.S., which is about $6 Canadian.
What do we do to spread some of this wealth around? I am very happy for Toronto. Toronto is very much part of Canada. We are not all Torontonians and we all deserve to receive a fair shake. The Hon. Member did say that there should be a minimum amount of Government. I am paraphrasing him, but he said that sometimes there is too much government. However, is it not one of the roles of Government to try to divide more equally the national pie so that the Saskatchewan farmer and the Newfoundland cod fisherman can receive a more fair share? I wonder if I have the support of the Hon. Member opposite to help us in this very worthy cause of getting more money into regional development, more money for people like fishermen and farmers in order to give them a better chance to be competitive in terms of having a fair share of the national pie? We do not all want to be Torontonians, but we all want the same opportunity which Torontonians now have. We all want to ensure that there are jobs for people regardless of whether they live in Toronto, Yorkton, St. John's, or even Calgary, where my friend to my left knows there is considerable unrest because of growing unemployment.


Reginald Francis Stackhouse: Mr. Speaker, I appreciate once again the New Democratic Party giving me the opportunity to review the positive achievements of the Government in addressing the kind of problem he identifies. In terms of regional disparity, I
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March 3, 1987
remind him of the $1 billion award for prairie farmer assistance and the announcement made just yesterday in Vancouver by the Minister of Transport (Mr. Crosbie) of a major ship construction contract. I also remind him of the announcement a few weeks ago of a major undertaking by the Government to make possible continuing the steel industry in Cape Breton Island. Those are positive initiatives across the country, from one region to another. We find positive and constructive actions taken by the Government to address the very problem the Hon. Member identifies.
What I would say to the Hon. Member, as he asks us to do more, is that he consider supporting the general financial policies of the Government which have as an objective, among others, the increase of wealth in this country. One of the things the New Democratic Party must be realistic about is that we cannot spend what we do not have. We have been doing that as a country to our detriment and disaster. If we are going to spend more to lift the level of life in this region or that region, we have to increase the production of wealth. This wealth generation has to come by stimulating the economy and businesses which have an opportunity for growth. The Hon. Member mentioned the auto industry. That is one. I wish he would be conscious of the house construction industry which is another. It has a tremendous spin-off effect in making work for so many. Therefore, I would suggest to the Hon. Member that he take very seriously what the record around the world shows, that the needs of people are best met when a private enterprise economy is given adequate stimulation.


Mr. Deputy Speaker:: Resuming debate.


Mr. Johnston:: Mr. Speaker, I am in your hands but, in view of the time, I would suggest we call it one o'clock and resume debate after Question Period.


Mr. Deputy Speaker:: Is that agreeable?


Some Hon. Members:: Agreed.


Mr. Deputy Speaker:: It being one o'clock, 1 do now leave the chair until 2 p.m. this day.
At 12.55 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.


Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, in exactly two days the Prime Minister (Mr. Mulroney) will meet with
Premier Vander Zalm while loggers are beginning to cut timber in Windy Bay on Lyell Island. This is a unique forest ecosystem with beautiful spruce and cedar trees, the streams are filled with salmon and trout, and the sky is criss-crossed by all kinds of birds.
Canadians from coast to coast recognize the immense value of the South Moresby archipelago, and of Lyell Island in particular, and want this heritage protected for the enjoyment of this and future generations. We urge the Prime Minister to impress on Premier Vander Zalm that the preservation of South Moresby is of national and international importance. The Prime Minister should ask the Premier to stop the logging, avoid further confrontation between the Haida Nation and the loggers, and negotiate a national park that would cover only 0.2 per cent of B.C.'s forests. This is the kind of leadership Canadians expect from their Prime Minister.



ADMINISTRATION OF JUSTICE


Mr. Leo Duguay (St. Boniface):: Mr. Speaker, 60 per cent of single-parent families headed by women live in poverty. This is not only the result of low incomes earned by female family heads, but also because enforcement orders are often not enforced. Poor single parents and their children often receive no support from the other financially secure parent.
The Family Orders Enforcement Assistance Act which the Government passed in June, 1986, will allow the attachment of moneys under federal jurisdiction. Yesterday's Estimates gave Revenue Canada $627,000 to implement a computer system to nab spouses who are defaulting on support payments. Their refunds will be withheld until they meet their support obligations. Some 30,000 Canadians who last year ripped off their spouses, their families and their children, will find that this callous disregard for their families will not go unchecked. The Government intends to ensure that they live up to their obligations.



POLITICAL PARTIES


Mr. Derek Blackburn (Brant):: Mr. Speaker, I was very interested to read a press release from the Liberal external affairs critic that called on the Government to stop testing the Cruise missile. After all, it was the Liberal Government that signed the Cruise testing agreement to begin with. He was obviously following the example of the Liberal defence critic. He is also practising that fine Liberal tradition of saying one thing to get elected and doing the opposite in office.
March 3, 1987

But wait, Mr. Speaker, it seems that these two gentlemen forgot to check with their leader. He says that these critics do not speak for the Party-another contradiction! The Hon. Member for Saint-Henri-Westmount (Mr. Johnston) says: "I'm the critic, you know." But is he? After yesterday's fiasco maybe he should check that with his Leader, too.
Will these critics find a Party? Will the Liberals ever agree on a policy? Will the Leader of the Opposition (Mr. Turner) get his house in order in time for the next election? Stay tuned. "As the Liberals Turn" appears daily-right next to Mary Worth and Rex Morgan in the comics section of The Globe and Mail.



FUNDING OF AIDS DISEASE RESEARCH AND EDUCATION

Mr. William G. Lesick (Edmonton East):: Mr. Speaker, recent reports have stated that an estimated 1,200 people in Edmonton are infected with the deadly AIDS virus. AIDS is spreading at such an alarmingly rapid rate in Canada that it is time for all Canadians to become serious about AIDS education. Our Government has scheduled an AIDS education program to begin this March and has pledged $3.7 million toward that goal. This is only part of a total of $39 million for AIDS research and education.
We must all accept the reality of AIDS in our society and educate all Canadians, both young and old, on the far-reaching effects of this disease. We should support full public information in the communities, in the school systems and through the media. It is only through such measures that we will be able to combat this disease in a realistic manner.
I commend the Department of National Health and Welfare for its commitment of funds and its dedication to conquering this plague.



CANADA POST CORPORATION


Mr. Alfonso Gagliano (Saint-Leonard-Anjou):: In Quebec City, Mr. Speaker, Canada Post Corporation has introduced the polyvalence or interchangeability clause whereby French unilingual technical representative positions will be replaced by positions identified as being bilingual imperative, and people who have been doing this work for years will be declared surplus.
If Canada Post management are really anxious to promote bilingualism in Canada, Quebec City is the wrong place to
begin because the need and urgency are definitely not a priority.
Would it be that Canada Post is intent on cutting jobs to the detriment of bilingualism?
If the Crown corporation believes in bilingualism, why not make it possible for its employees to become bilingual, and why not offer them adequate training instead of declaring them surplus?
This provoking approach on the part of Canada Post management certainly does not help improve working conditions and service to the public.



KNIGHTS OF COLUMBUS


Mr. Guy St. Julien (Abitibi):: Mr. Speaker, we have in Canada an organization which is doing outstanding work in our contemporary society. I am referring to the Knights of Columbus in all provinces.
In Abitibi the 10,000 members are under the direction of district 08 representative Yvon Marchand of Val-d'Or. Barraute, Rochebaucourt, Champneuf and Lamorandiere Local 3490 can be cited as an example. It is under the direction of Mr. Jean-Claude Chevalier, great knight third degree, and Messrs. Denis Collins, Robert Lefebvre, Roger Jobin, Marcel Piche, Onesime Boucher.
Every year these 300 members put in thousands of hours of volunteer work to help young people and senior citizens. Their major achievement in 1987 will be the purchase of an ambulance for the region.
Mr. Speaker, Canada's Knights of Columbus draw inspiration from four great principles: unity, fraternity, charity, and patriotism.



RAILWAYS


Mr. Stan J. Hovdebo (Prince Albert):: Mr. Speaker, some time ago the Technical Committee of the Senior Transportation Committee made recommendations to the Minister of Transport (Mr. Crosbie) regarding the rehabilitation of branch lines on the Prairies. The committee gave number one priority to putting heavy steel rails on the Blaine Lake subdivision.

March 3, 1987
The answer came back from the Minister's office deleting and downgrading the Blaine Lake subdivision, and instead putting in the Bromhead subdivision from the Assiniboine District. The lines do not compare in the amount of grain that they move. The grain companies, the railways, and the farmers are objecting.
I call upon the Minister of Transport to reinstate the technical committee's recommendations, and to assure the House and the people of the Prairies that political intervention and interference will not be the basis upon which future rehabilitation will be established.



STATUS OF WOMEN


Mr. Don Ravis (Saskatoon East):: Mr. Speaker, at the First Ministers' Conference last November, the Prime Minister tabled "Dimensions of Equality: A Federal Government Work Plan for Women". This document specifies the measures our Government is undertaking to promote women's achievement of equality.
As we approach International Women's Day it is appropriate to review the many initiatives that our Government is pursuing to improve the status of women. These include work in the area of pensions, family violence, child care, women's health, sports and fitness, and issues related to women's employment. The Government is committed to addressing the particular needs of farm women, aboriginal women, disabled women, immigrant women, and visible minority women.
In short, we are determined to create the conditions that will enable all Canadian women to pursue their ambitions on an equal footing with men, and to realize their full potential in society.



THE BUDGET


Mr. Jean-Claude Malepart (Montreal-Sainte-Marie):: Mr. Speaker, yesterday, the Main Estimates tabled by the President of the Treasury Board (Mr. de Cotret) were one more indication that Quebec is being penalized by this Conservative Government.
Despite an unemployment rate of 11 per cent, Quebec has seen no change in the level of its transfer payments. Ontario, on the other hand, with an unemployment rate of 6.6 per cent, will receive $550 million more in transfer payments, an increase of 7 per cent. As for the social welfare component,
Quebec's share of transfer payments will go down 7.6 per cent, from $1.26 billion to $1.16 billion for this year.
Mr. Speaker, when we get to the point where a provincial Minister of Finance threatens to sue the federal Government because of its fiscal management, we can assume the province in question is not getting fair treatment. It should come as no surprise today that the Progressive Conservative Party enjoys only 10 per cent of the public support among Quebec voters.
This morning, the newspaper La Presse contains an article on the Estimates, under a headline that speaks for itself: "Quebec feels the pinch".
Mr. Speaker, I urge all Conservative Members from Quebec to wake up and make sure their Conservative Government is giving Quebecers a fair deal.



HARBOURS AND PORTS


Mr. George Henderson (Egmont):: Mr. Speaker, once again the federal Government has ignored the worsening state of our harbours and wharfs. The budget for small craft harbours is simply a drop in the bucket. Dependable and well maintained harbours and wharfs are absolutely essential.
The Government's neglect is a threat to the safety of Canadian fishermen and boaters. While the Government bails out banks and squeezes low and middle-income taxpayers for every last cent, the real needs of Canadians are ignored. In my own constituency fishermen in West Point, Tignish, Fishing Cove, and Alberton are kept waiting and waiting.
I urge the Government to fulfil its responsibilities and to allocate some badly needed assistance to our harbours and wharfs.



SHIPBUILDING


Mr. Gerry St. Germain (Mission-Port Moody):: Mr. Speaker, I rise in the House today to commend our Prime Minister (Mr. Mulroney) for once again demonstrating his commitment to improving the economy of western Canada and to creating jobs in every region of our great country.
Yesterday, in Vancouver, the Minister of Transport (Mr. Crosbie) announced our Government's intention to negotiate a contract with Versatile Pacific Shipyards to construct a Polar
March 3, 1987

8 ice-breaker. This ice-breaker, which will be the largest of its type in the world, will be vital to preserving our sovereignty in the northern reaches of our country.
The Polar 8 project is worth hundreds of millions of dollars and will create 1,000 person-years of employment for the British Columbia shipbuilding industry. This means prosperity not only for B.C. but for all of Canada.
On behalf of all British Columbians, I must tell the Prime Minister how pleased we are with this clear and decisive action to address the issue of regional disparity. The future of western Canada is a top priority with our Prime Minister and our Government.
 * *



INDIAN AFFAIRS


Rodney Edward Murphy: Mr. Speaker, 1 am sure the previous Conservative Member who spoke on behalf of western Canada did not speak on behalf of the Province of Manitoba.
The Budget presented a week and a half ago and the Estimates tabled yesterday have one glaring omission, that is, there is no significant increase in capital funding for the building of schools on reserves.
My own riding is a great example of the problem which exists across the country. We have schools in terrible and deplorable condition. People cannot even obtain a feasibility study for the next five years to see whether or not they can build a new school. The condition of federal reserve schools is deplorable. The education received by students is inadequate. The Government's neglect is shameful.
I call upon Parliament, in the study of the Estimates, to ensure that there is adequate funding so that native children have a chance and opportunity our the country.



SHIPBUILDING


Mrs. Mary Collins (Capilano):: Mr. Speaker, yesterday was a very special day in British Columbia, particularly in North Vancouver and Victoria. As the Minister of Transport (Mr. Crosbie) announced that the Government of Canada intends to proceed with the design and construction of the Polar 8 icebreaker at the Versatile Pacific Shipyards, at a total cost of $328 million in 1985 dollars, he provided a new and a secure future for the shipbuilding industry of British Columbia.
Many people were involved in making this decision. I appreciate the support of cabinet colleagues and members
from across the country who supported the bid from British Columbia for this most important project.


Some Hon. Members:: Oh, oh!


Mary Collins: 1 am sorry the Liberals and New Democrats do not seem to support it.
I also want to mention, particularly, the work of the Greater Vancouver Shipbuilding Coalition, a unique coalition of industry representatives, union representatives, and municipal politicians who made the case clearly and persistently about the expertise and capability of British Columbia shipyards.
The impact of the project means a certain future for West Coast shipyards for many years to come and, most important, certain employment for hundreds of shipyard workers.
1 also anticipate a renewed sense of pride and international recognition which the workers and all those involved will receive as they build the biggest, the most powerful, and the best ice-breaker in the world.
I have on occasion been accused of being a cheer-leader for the Government. On this occasion 1 want to give three cheers for the Government.

[DOT] (MIS)



HOUSING


Mr. Alex Kindy (Calgary East):: Mr. Speaker, for the first time in 20 years Canadian homeowners are offered a five-year mortgage for less than 10 per cent. This will not only allow people to afford their own homes but will further stimulate the lumber, construction, and housing industries. The Government's achievements in economic growth brought the inflation rate from a high of 12.9 per cent in the summer of 1981 to 3.9 per cent today.
Interest rates in 1981 reached an ultimate high of 21 per cent. We have not seen a five-year mortgage of 9.8 per cent since 1973. This, Mr. Speaker, is further proof that the Government's strategy for increased economic development is really working.



THE ADMINISTRATION


Mr. Don Boudria (Glengarry-Prescott-Russell):: Mr. Speaker, in August, 1985, the Tories had problems. Boy, did they ever have problems. So they called upon super Dalton

March 3, 1987
Oral Questions
Camp to the rescue at a cost, so the Estimates tell us yesterday, of $250,000 a year for an aide to the Government to get it out of trouble. What has happened since, Mr. Speaker? The Government has taken a virtual nosedive since the day Dalton Camp set foot on Parliament Hill.
What is the Prime Minister (Mr. Mulroney) going to do now? Is he going to call upon the big blue machine? Is he going to call upon super Norman Atkins, or is he going to call upon someone's chauffeur to help him? Nobody knows for sure. The ship is sinking fast and soon it will be gone, completely submerged. Who will help the battered Tories next, Mr. Speaker? Certainly not I.



STATUS OF WOMEN


Mr. John Oostrom (Willowdale):: Mr. Speaker, Ottawa is hosting the International Women's Week, a conference designed to focus on the role of women in society. The conference which has received government funding of $15,000 annually for the past four years has applied for a $20,000 grant this year to help defray costs. There is no reason whatsoever for these moneys not to be granted except that the conference does not represent all the views found in Canadian society.
The conference will have seminars conducted by Norma Scarborough, President of the Canadian Abortion Rights Action League, and over 10 lesbian groups will be sponsoring seminars. Yet the Secretary of State (Mr. Crombie) stopped payment of an $8,000 cheque for the Alberta Federation of Women United for Families, which is an anti-abortion group, and the conference has excluded REAL Women who represent a pro-family viewpoint. Why is a double standard being applied by the Secretary of State? The views of pro-life groups are far more important than the anti-life lesbian rights. Prolife deals with life and this fact supersedes all others. To paraphrase George Orwell in Animal Farm, it seems some people are more equal than others.



ORAL QUESTIONS PERIOD


Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, yesterday the Secretary of State for External Affairs announced that the Polar 8 ice-breaking contract would be granted to Versatile Shipyards of British Columbia. I have long been a supporter of that ice-breaker being built in British
Columbia, and I welcome the announcement. But the announcement was tentative at best. It was an announcement, as I read the document, of an intent to negotiate.
If I might quote from the proposed letter of intent issued yesterday by the Government, it reads:
This letter is not to be construed under any circumstances as creating:-(b) any obligation to proceed with any aspect of the Polar 8 project; (c) any agreement to award any contract-
Will the Secretary of State be good enough to clear up the confusion? Does Versatile have a contract or not?


Hon. John C. Crosbie (Minister of Transport):: I hope, Mr. Speaker, the hon. gentleman will not mind if I attempt to clear up his confusion rather than the Secretary of State for External Affairs. In the first place the document and the proposition presented to Versatile yesterday are certainly far more firm than anything that was done by our predecessors who let 20 years go by without taking any action on the Polar 8 ice-breaker.


Some Hon. Members:: Hear, hear!


Nelson Andrew Riis: Big deal. So what?


Some Hon. Members:: Oh, oh!


John Carnell Crosbie: I will come to you. If you have guts enough to ask a question-


Mr. Speaker:: Order, please. The Hon. Minister.


John Carnell Crosbie: Mr. Speaker, there has been a process under way for five months in which the Minister responsible for DRIE made the necessary arrangements to assist the parent company Versatile in connection with its Quebec operations which have now been sold, and where he helped resolve the situation in western Canada with their farm implement company. Yesterday we gave them a firm proposal. So long as they are able to meet the financial and technical requirements, it is a firm proposal under which they will have a contract to build the new world class Polar 8 ice-breaker. It is not tentative but is quite firm so long as they can meet conditions which protect the Canadian public and taxpayer.


John Napier Turner: 1 am glad we finally got the Minister's attention. His interpretation of that document, the proposed letter of intent, is a little more generous than he would have given it had he still been Minister of Justice.


CANADIAN DESIGN INQUIRY
John Napier Turner: Mr. Speaker, I want to direct a further question to the Minister, since he responded. He suppressed the Bruneau task force report which unanimously recommended that a Canadian design be used for the ice-breaker. The reason was obvious. This would ensure Canada's leadership in ice-breaker technology. Will the Minister or the Prime Minister order that the
March 3, 1987

report be made public so we can see its terms in full, and will they assure the House that the Canadian design group will be used for the ice-breaker?


John Carnell Crosbie: Mr. Speaker, the Leader of the Opposition, who represents a district in Vancouver although he has given up his residence there now-


Some Hon. Members:: Oh, oh!


John Carnell Crosbie: I am glad to see he is concerned about the design group. This is going to be a Canadian design with the design done in Canada. There are a number of Canadian designers and design companies located in Canada to do this design who are interested in doing the design work. We have asked Versatile to put together a design team which will be subject to our approval. Construction will involve $320 million in 1985 dollars, which means the dollar of 1985 with inflation protection. The Hon. Leader of the Opposition might not grasp what that concept means. It is 1985 dollars. Some $8 million will be spent on the design-


Mr. Speaker:: Order, please.


CANADIAN TECHNOLOGY AND SOVEREIGNTY
John Napier Turner: Mr. Speaker, if we can peer through the bombast, the Minister has told us there is no contract, just a proposal. As well, he has not confirmed that the Canadian design is going to be used.
Yesterday, his colleague, the Secretary of State for External Affairs, said in the House that one of the purposes of building the ice-breaker was to protect and enhance Canadian sovereignty. Is the Minister of Transport suggesting he will allow our lead in ice-breaker technology to go to our competitors, including countries not currently members of NATO? Is that what he is telling us?


John Carnell Crosbie: Mr. Speaker, one wonders whether the Leader of the Opposition is supporting the Polar 8 ice-breaker at all. By the way, he should read the book "Two Years Before the Bombast".
The original design of this ice-breaker was done by German & Milne. As a result of the Bruneau committee it will be redesigned to save $100 million as the committee recommended could be done. That is what the next design team will have to do. It will be a Canadian design and the work will be done in Canada. I can assure the House of that. We will all be proud in 1993 when we sail through any part of the Arctic archipelago on this new Polar 8 Conservative ice-breaker.
Oral Questions
[ Translation]


FINANCE
Mr. Raymond Garneau (Laval-des-Rapides):: Mr. Speaker, my question is directed to the Minister of Finance. This morning, the Quebec Minister of Finance released a letter to his federal counterpart on the subject of equalization payments and established programs financing. In the letter, the Minister said, and I quote:
Finally, the Government of Quebec cannot accept your Government s decision to let health and post-secondary education programs deteriorate and refrain from correcting the substantial deficiencies pointed out in the equalization program. Nor can it tolerate the unfair way it is being treated in this respect.
My question to the Minister of Finance is as follows: Why, in an attempt to balance its Budget, did the federal Government decide to transfer part of its deficit to the provinces by refusing to pay them the amounts provided under the agreements, which in Quebec's case, according to the Minister's letter, means $857 million in foregone revenue for the period from 1986 to 1990?


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, the equalization programs and established programs financing are among the federal Government's biggest programs. We have increased funding for the two programs by more than 5 per cent. 1 think that in a period of restraint for the federal Government, we have treated the provinces quite well if we consider all the Government's other programs.


FUNDING OF POST-SECONDARY EDUCATION
Raymond Garneau: Mr. Speaker, as a result of the 1986 mid-decade census, the federal Government will recuperate a windfall gain of nearly $600 million from its equalization payments to the provinces, and for postsecondary education and health care. Is the Minister prepared to use part of the federal Government windfall to compensate for the heavy losses the Maritimes, Quebec, and Manitoba will suffer?


Michael Holcombe Wilson: Mr. Speaker, I would like to point out to the Hon. Member that there was a misuse of figures in Question Period yesterday. The figures which were used by his colleague were only cash payments. They omitted tax transfers. The Hon. Member is shaking his head, but his colleague did use those figures incorrectly. The increases in both cases are in excess of 5 per cent when the tax transfers are included. That is the correct way of looking at this, as the Hon. Member knows.


Mr. Broadbent:: Oh!

March 3, 1987
Oral Questions


Michael Holcombe Wilson: I would be very happy to debate this at any time with the Leader of the New Democratic Party.


FEDERAL-PROVINCIAL FISCAL ARRANGEMENTS SIZE OF FEDERAL PAYMENTS TO PROVINCES
John Edward Broadbent: Mr. Speaker, since the Government is supposed to be introducing new legislation on equalization soon, the Minister will have the opportunity to have that debate.
Will the Minister now confirm that when the Government gets around to publishing the figures they will show that many of Canada's poorer provinces will have a net reduction next year in the amount of money they are getting through equalization payments? Specifically, will he confirm today that Newfoundland will get $28 million less, Manitoba will get $40 million less, and the Province of Quebec will get $97 million less?


Michael Holcombe Wilson: Mr. Speaker, I do not know where the Hon. Member got those figures. If he cares to give me their source, I may be able to respond to the question accurately.


INQUIRY WHETHER GOVERNMENT IS LISTENING TO CANADIANS
John Edward Broadbent: Mr. Speaker, I put the question to the Minister and his responsibility is to answer yes or no. If he has the figures it is his responsibility to give them to the House of Commons today. Here is my question: The Governments of the poorer provinces are not alone in expressing their opposition to this new approach of the Conservative Government, so do other people like Chambers of Commerce in the Province of Quebec, as well as union members in Quebec and the Maritime Provinces. My question is simply this: Does the Government listen to the people of this country?


Michael Holcombe Wilson: Yes, Mr. Speaker, 1 heard quite clearly. Under the equalization program last year we made additional payments to all provinces, although the federal Government was not legally bound to do so, but we did give due consideration to the difficulties experienced by the poorer provinces. This year and next year we will have increased the payments twice each year through technical changes in the equalization payment program.


CONSTITUTIONAL POSITION
John Edward Broadbent: Mr. Speaker, my last question is directed to the Prime Minister. The Minister of Finance knows very well that when he produces the equalization legislation many of Canada's poorer provinces will have a net reduction in equalization payments. Since the Constitution makes provision for equalization, is it the view of the Government that equalization must be achieved through means now being pursued by the Government of Quebec and some Governments in Atlantic Canada which have indicated that they may take the federal Government to court? Does the Prime Minister believe that the way to obtain national reconciliation is to force the poorer provinces to get just equalization by taking the federal Government to court?


Right Hon. Brian Mulroney (Prime Minister):: Mr. Speaker, last year, without obligation, the Government of Canada proceeded to pay supplementary equalization payments to the provinces that were less well off because we strongly believe in the concept of fairness and ensuring equalization in real terms to all regions of the country. Clearly Canada has been unsuccessful not only in the last decades but over the last number of months. We are working very hard to correct the areas of serious economic imbalance and, of course, equalization is one of the main instruments to achieve this. However, that process has a formula and a series of criteria that have been agreed upon historically and reinforced by Members of the House.


Rodney Edward Murphy: Imposed by the Liberals.


Martin Brian Mulroney: I invite my hon. friend to reflect upon the action taken unilaterally by the Government last year which I think brought very considerable benefit to the provinces he has mentioned. That is our track record. We hope to continue working with the provinces and being helpful in these areas.


FEDERAL FUNDING OF POST-SECONDARY EDUCATION
Miss Aideen Nicholson (Trinity):: Mr. Speaker, my question is directed to the Minister of Finance. It concerns the Government s plan to cut $14 million this year from its support to provinces for post-secondary education. Does the Minister agree that well trained and educated young Canadians have the best chance of getting jobs in our society, and if so, how does he justify this kind of cut which removes access to postsecondary education?


Michael Holcombe Wilson: Mr. Speaker, the Hon. Member did not hear my response to her colleague. She is on misusing those figures and she knows it. She knows that the EPF formula includes both cash transfers and transfers of tax points. If she does not know that, she should go back and do her homework. If you include the post-secondary education tax transfers you will see that there is a 10.9 per
March 3, 1987

cent increase, for a total increase in transfers on post-secondary education from $4,803 billion to $5,053 billion. That is a total increase of 5.2 per cent. Those figures are from the Estimates and it is very-I am not quite sure of the word I should use, Mr. Speaker-


Some Hon. Members:: Oh, oh!


Mr. Speaker:: Order. I am very grateful to the Hon. Minister for indicating that he was not sure of the word he might have used. If other Hon. Members would follow suit, it would make the task of the Chair much easier.


GOVERNMENT POLICY
Aideen Nicholson: Mr. Speaker, the Government's Budget and spending estimates indeed paint a very discouraging picture for Canadian families. There are escalating taxes, cuts in job-training, cuts in funding for education, and no response to the crisis in child care. How does the Minister expect a regime such as this to produce a better life for Canadians?


Michael Holcombe Wilson: Mr. Speaker, let me remind the Hon. Member of what the Government has done in the past two and one-half years. We have seen the creation of 677,000 jobs, we have increased the Child Tax Credit, we have accelerated the payment of the Child Tax Credit, we have introduced a refundable low-income Sales Tax Credit, we have increased the pensions to veterans, the spouse's allowance has been increased, there has been $100 million a year for programs that will be provided to those people who are on welfare to help provide training to get them back in the job market. I can go on, Mr. Speaker, but I see you are signalling that I complete my answer. That is the record.


Some Hon. Members:: Hear, hear!


PETRO-CANADA PRICE OF GASOLINE-REQUEST THAT CORPORATION BE DIRECTED ON PRICING POLICY
Nelson Andrew Riis: Mr. Speaker, my question is directed to the Minister of Consumer and Corporate Affairs. He will know that motorists from Halifax to Victoria are fed up with the way oil companies, including Petro-Canada, are gouging the consumers at the pumps. My question relates to the Minister's comment yesterday when he said that the Petro-Canada Act states quite specifically that the Government may give policy direction to Petro-Canada. Will the Minister or his colleague, the Minister of Energy, Mines and Resources, issue a directive to Petro-Canada insisting that the new policy of Petro-Canada be that it act to bring down to as low a price as possible the cost of gasoline at the pumps for Canadian consumers?
Oral Questions


Hon. Harvie Andre (Minister of Consumer and Corporate Affairs):: Mr. Speaker, the Hon. Member is correct. In fact, it is Clause 7(2) of the Petro-Canada Act, which makes it very clear that policy direction is only in writing from the Governor in Council. This implies very clearly that there should not be political interference in the day-to-day operations of Petro-Canada. If the New Democratic Party is suggesting that the Government should get involved in the day-to-day operations, perhaps we should consider whether Petro-Canada should be a Crown corporation at all, which implies arm's length, but should be brought in as a Department of Government. I am sure that will satisfy the socialists, but it is contrary to good sense.


REQUEST FOR MINISTERIAL ACTION
Nelson Andrew Riis: Mr. Speaker, the Minister should be aware that Petro-Canada is not Exxon, Texaco or Mobil. It is a Canadian oil company owned by the people of Canada to serve the people of Canada directly. We are not suggesting day-to-day interference. Price-setting is a policy decision and the Minister has identified that the Government, through Order in Council, may set policy for Petro-Canada. Why does the Minister not stop being an apologist for the oil companies and begin taking action to protect the consumers and motorists of Canada?


Harvie Andre: Mr. Speaker, I think I am probably the last person in the House to be accused of apologizing for Petro-Canada. The fact is that constitutionally the federal Government cannot get involved in price-setting. It is in the Constitution. I did not write it. The Hon. Member is suggesting that we do indirectly what we are precluded from doing in the Constitution.


John Edward Broadbent: Utter nonsense. You don't know what you are talking about.


Harvie Andre: The Leader of the New Democratic Party would hear better if he kept his mouth closed.


Some Hon. Members:: Hear, hear!


Mr. Speaker:: I think the Hon. Minister has answered and has done his best to make his point.


SCIENCE AND TECHNOLOGY
Donald Paul Ravis: Mr. Speaker, my question is directed to the Minister of State for Science and Technology. The Polar Class 8 ice-breaker announcement yesterday by the Secretary of State for External Affairs is welcome news for millions of Canadians who want to see the reaffirmation of our sovereignty over Arctic waters and islands. Is the Minister

March 3, 1987
Oral Questions
prepared to convince his cabinet colleagues that there should be an allocation of sufficient resources in order to establish a research platform on that particular vessel?


Hon. Frank Oberle (Minister of State for Science and Technology):: Mr. Speaker, I am pleased to tell the Hon. Member that the decision is already made. Science and research development activities will be a very important part of the vessel's mission. In fact, there will be a research platform for the Government s hydrographic and oceanographic research. It will help us to develop agreements with foreign countries. It will be a very important component of the mission.


REFUGEES
Mr. Sergio Marchi (York West):: Mr. Speaker, my question is directed to the Minister of State for Immigration. The Government's refugee policy is drowning in a sea of confusion. It has an outdated system, a special administration review initiated last May, temporary changes made two weeks ago, pending new legislation promised, and now we have media reports suggesting that the Government has approved a second administrative review or amnesty. Will the Minister tell the House and Canadians whether in fact the Government has approved or is planning a second administrative review? And when will the bureaucratic nightmare come to an end so that Canadians can have one clear, comprehensive policy which they can understand and in which they can have some degree of confidence?


Hon. Gerry Weiner (Minister of State (Immigration)):: Mr. Speaker, this Government has not granted an amnesty to refugee claimants. It is not the intention of this Government to grant an amnesty. Those cases which were in the backlog prior to May 21 have been handled in an administrative case-bycase review based on humanitarian and compassionate guidelines and family, social, and economic criteria. That is not an amnesty. Very soon we will be bringing forward the new refugee determination process, the amendments to the Immigration Act.


Sergio Marchi: Mr. Speaker, the Minister's policy is beginning to resemble a train with two cabooses on either end going nowhere. That is what it looks like to Canadians.


Some Hon. Members:: Oh, oh!


Mr. Speaker:: The Hon. Member is seeking to ask a question and certainly, I am sure, all Hon. Members would want to hear it.


CABINET POLICY
Sergio Marchi: Mr. Speaker, in documents advancing an administrative review-not an amnesty- why did the Cabinet issue specific written orders not to keep this in the public domain? Was it the strategy to have a backdoor policy for refugees while promoting a front-door get-tough policy for all Canadians? Was that the strategy?


Gérard (Gerry) Weiner: Mr. Speaker, our policy is very clear that real refugees who come to our door will always be provided with a haven and settled here. We have not caved in and we will not cave in to what the Hon. Member is trying to indicate. With respect to the administrative review of the people in the backlog which is under way, there has been an approval rate of 80 per cent or 85 per cent. Fifteen per cent to 20 per cent are being refused. That is not an amnesty, in my opinion.


POTASH EXPORTS TO UNITED STATES-ANTI-DUMPING INVESTIGATIONS
Lorne Edmund Nystrom: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. Yesterday the U.S. Department of Commerce decided to begin anti-dumping investigations against Canadian potash producers. This morning the U.S. International Trade Commission held hearings regarding injury to U.S. potash producers. I would like to know whether or not the Secretary of State for External Affairs can tell us exactly what the Canadian Government is doing now, and what it plans to do in the future, to fight these outrageous allegations by the U.S. potash industry against the Canadian potash industry and to protect jobs here in Canada, particularly in Saskatchewan and New Brunswick.


Hon. Pat Carney (Minister for International Trade):: Mr. Speaker, the answer to that question was given yesterday. We have been meeting with the industry involved. We have offered to do all we can to aid the industry against this claim. We have also made our views known to the American administration, that we consider this inappropriate.


CANADIAN POSITION
Lorne Edmund Nystrom: 
Right Hon. Joe Clark (Secretary of State for External Affairs):: Mr. Speaker, we will not wait that long. I will raise it when I meet with Secretary Shultz next week.


EMPLOYMENT
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, my question is directed to the President of the Treasury Board. In the Estimates tabled yesterday, expenditures for job creation were cut by $153 million. This is at a time when unemployment has increased to 9.7 per cent nationally and is over 11 per cent in six provinces, all with serious difficulties. Why will the Minister not recognize that the so-called recovery is not happening in these provinces, cancel these cuts, and authorize new employment programs for these hard hit regions?
Gérard (Gerry) Weiner: Mr. Speaker, we have restored confidence in our community. Real jobs have been and are being created in industry. Look at the figures in the youth sector in particular where unemployment is down 4 per cent in January, 1987, versus January, 1986. To me, that is a commitment to real jobs.


Mr. Allmand:: Mr. Speaker, what he says may be true in Ontario but-


Some Hon. Members:: Oh, oh!


Some Hon. Members:: More, more.


Mr. Gauthier:: He said "may be".


Mr. Speaker:: The Hon. Member started off his question by saying to the Minister that what he says may be true, and that is a considerable improvement on the preface to some questions.


William Warren Allmand: Mr. Speaker, I said what he says may be true about Ontario but it is not true in six or seven provinces of this country.


PUBLIC CONCERN ABOUT UNEMPLOYMENT
William Warren Allmand: In a Gallup poll published yesterday, 41 per cent of Canadians-60 per cent in Atlantic Canada-said that unemployment was their greatest concern. How can the Minister ignore this cry for help from so many Canadians? Why does the Government not show some political will and do something about it?


Gérard (Gerry) Weiner: Mr. Speaker, mortgages are at a 20-year low. Interest rates are down again. Jobs created since September, 1984 are; 34,000 in
Oral Questions
Atlantic Canada; 164,000 in Quebec; 356,000 in Ontario, and 119,000 in the West, and more can still be done.


NARCOTICS
Mr. Bill Blaikie (Winnipeg-Birds Hill):: Mr. Speaker, my question is directed to the Right Hon. Prime Minister. The Prime Minister will recall that last September he indicated that in his judgment there was an epidemic of drug abuse in Canada. If there is indeed an epidemic as the Prime Minister described it, could the Prime Minister tell us why, in the Estimates which were tabled in this House yesterday, there are no new resources or moneys allocated for drug enforcement, education, or other drug related initiatives on the part of the Government?


Hon. Jake Epp (Minister of National Health and Welfare):: Mr. Speaker, I am glad the Hon. Member asked the question because it gives me an opportunity to indicate to him-


John Edward Broadbent: What about the epidemic?


Arthur Jacob (Jake) Epp: Drug use is not very funny, Mr. Broadbent.


Some Hon. Members:: Oh, oh!


An Hon. Member:: Answer the question.


Arthur Jacob (Jake) Epp: Many Canadians take drug abuse very seriously. The Prime Minister takes it very seriously. The Cabinet takes it seriously. What we are saying in terms of the Estimates, coming directly to the Hon. Member's question, is that one does not have to put an issue which is still under discussion within the Government and with the provinces into the Estimates which were tabled by the President of the Treasury Board. What it can be, very clearly, is a policy announced as a stand-alone within the fiscal framework.


William Alexander (Bill) Blaikie: It seems to me, Mr. Speaker, if something is an epidemic, that at least within six months of declaring it to be an epidemic, some action might be forthcoming on the part of the Government.


PRIME MINISTER'S REFERENCE TO EPIDEMIC
William Alexander (Bill) Blaikie: Does the Prime Minister still think we have an epidemic? If he does, why is there no action forthcoming right here and now on this issue? Or was the Prime Minister just doing one of his more famous imitations of his friend south of the border?


Martin Brian Mulroney: Mr. Speaker, I am surprised that my hon. friend, who constantly asks us to run down south of the border to solve environmental

March 3, 1987
Oral Questions
problems, now chooses to trivialize what we view as a very important matter.
In September I indicated that in my judgment the abuse of drugs in the country had reached epidemic proportions. That view was sustained, although I know people disagreed with it. But I remember the Chief of Police of Edmonton and the Chief of Police of Metro Toronto, and many other leading authorities in Canada, saying that drug abuse had indeed reached epidemic proportions. As a result, we have begun intensive consultations-


Ms. Jewett:: So do something.


Martin Brian Mulroney: -and 1 realize the NDP seems to choose to trivialize this very important issue-


Pauline Jewett: Don't be silly.


Martin Brian Mulroney: -that is so debilitating of our families and the young people of Canada. We began intensive consultations with all of the police authorities throughout the country, with international authorities, with all agencies of the federal Government and with leading groups across the country. We will be introducing a policy which reflects our determination to be helpful to the people in the families of Canada in ridding the country of this scourge for all of us.


Some Hon. Members:: Hear, hear!


FERRIES
Mr. George Baker (Gander-Twillingate):: Mr. Speaker, three days ago, on Saturday, CN Marine, a branch of Transport Canada, announced the cancellation of the night ferry crossing from Newfoundland to Nova Scotia. For the first time since Confederation, and for this entire month, it will take three days from the time one gets off the bus at Port aux Basques until one gets on the train at North Sydney. I ask the Minister of Transport what he has done about this. He was informed of it on Friday. Has he been too busy boasting about his big Polar 8 that he claims will run over the Americans if they get in the way? Has he had a chance to run over his own Department, and CN Marine which is responsible for this schedule change?


John Carnell Crosbie: Mr. Speaker, the Hon. Member is living in the past. There is no CN Marine. That company is now known as Marine Atlantic.


Some Hon. Members:: Oh, oh!


John Carnell Crosbie: The Hon. Member has sown confusion throughout Newfoundland and Labrador on this matter. What happened is this. The Sir Robert Bond, which is on the crossing now, is unable to do very well in ice and has had considerable delays. Thus a decision was made to carry passengers only on the Cariboo. The Cariboo is doing very well in ice. There is early ice this year. In fact, it is two weeks early. The hon. gentleman would not understand that, I suppose.
What happened was that there had to be some changes because the Sir Robert Bond was doing better than it had been scheduled to do so the lay-offs were cancelled. The Atlantic Freighter was brought on and 18 more people were hired. The result is that six more people are employed today-


John Edward Broadbent: Six?


John Carnell Crosbie: -12 more employees are employed today than were employed last week. The hon. gentleman is completely wrong. He has cooked up confusion.
With respect to what I propose to do with Marine Atlantic, if it cannot keep this situation clarified for the Hon. Member I will make them tingly.


Some Hon. Members:: Hear, hear!


Mr. Speaker:: I know that all Hon. Members are anxiously awaiting the conclusion of this difficult exchange. The Hon. Member for Gander-Twillingate.


ICE CONDITIONS-CANADIAN SOVEREIGNTY
George Baker: Mr. Speaker, ice-bound Canadians are wondering now, after listening to the Minister, whether it is worth it to have to construct the world's largest ice-breaker to make up for the incompetence of the Government to protect our sovereignty. Does the Minister of Transport not agree that what we do need are more icebreakers to break the ice, to end the isolation of tens of thousands of Canadians at this time of the year and not just one big daddy up north? Send up the Minister of Transport. He has enough hot air to melt the entire Arctic.


Some Hon. Members:: Hear, hear!


John Carnell Crosbie: Mr. Speaker, I cannot be expected to match a geyser like that. Too many bakers spoil the broth.


Some Hon. Members:: Hear, hear!


John Carnell Crosbie: The new Polar 8 is a new super world-class icebreaker. In addition to the construction of the Polar 8 to establish our sovereignty even more firmly in the Arctic- which nobody else had done anything about in the last 20 years we have established baselines around the outer perimeter. We have enhanced military surveillance. There are more over-flights and there is increased naval activity. The Secretary of State for External Affairs is mano a mano with the United States. We introduced the new Canadian Laws
March 3, 1987

Offshore Application Act last April, which I hope the House will pass soon to show that it is backing us up.


Some Hon. Members:: Hear, hear!


FISHERIES
Mr. Jim Manly (Cowichan-Malahat-The Islands):: Mr. Speaker, my question is for the Minister of Fisheries and Oceans. This week representatives of fisheries workers from across Canada are in Ottawa. They want to meet with the Minister. Will he commit himself now to meet with these representatives? In particular, will he commit himself to meet with representatives of the Star-Kist plant and of the community of St. Stephen, New Brunswick, where 400 workers are unemployed and have no prospects? Will the Minister meet with these people?


Hon. Thomas Siddon (Minister of Fisheries and Oceans):: Mr. Speaker, the Hon. Member need not have asked that question in the House. He might have asked my staff to determine that, of course, we are very concerned with respect to the situation of those workers from the Star-Kist plant who will be arriving in Ottawa tomorrow. I certainly do intend to meet them.


James Douglas Manly: Mr. Speaker, I am sure that they will be glad to meet with the Minister and have an important agenda.


HERRING-ROE FISHERY-LEASING OF LICENCES
James Douglas Manly: Mr. Speaker, my supplementary question is this. When the Minister has known for four years about the problems and hardships caused by double-licensing and leasing of licences in the herring-roe fishery in British Columbia why has he not acted already? Will he commit himself to stop this unjust practice immediately?


Thomas Edward Siddon: Mr. Speaker, again, the Hon. Member should know, or could have found out from my office, that I did meet with representatives of the United Fishermen & Allied Workers Union on Sunday to hear their concerns about this matter which affects some 400 fishermen. These fishermen are particularly anxious to fish this year because of the much larger quotas and the higher prices being paid for herring-roe. However, this represents only one-tenth of the people who will be engaged in that fishery. The Herring Industry Advisory Board did not recommend changes for this year. The fishery is already under way and I have promised changes for next year.
Oral Questions


ENVIRONMENTAL AFFAIRS
Mr. Alan Redway (York East):: Mr. Speaker, 1 have a question for the Deputy Prime Minister. Yesterday the Deputy Prime Minister met with Premier Peterson to discuss the use of low-sulphur western coal to cut acid rain emissions in Ontario. Will the Deputy Prime Minister advise the House if the Premier is now prepared to order the provincial Crown corporation, Ontario Hydro, to cut acid rain emissions immediately in the same way that he would be prepared to do with private industry?


Hon. Don Mazankowski (Deputy Prime Minister and President of the Privy Council):: Mr. Speaker, I would like to advise my hon. colleague that I did have a very productive meeting with the Premier yesterday. He clearly expressed the desire, along with the co-operation of the federal Government and the producing provinces, to increase the utilization of western coal in Ontario.
He assured me that for additional capacity requirements that would be forthcoming after 1990 coal would be considered as a viable feedstock for the generation of future electricity. To that end, we agreed to establish a committee composed of himself, myself, and representatives of the producing provinces, the Premiers of the producing provinces, in an effort to facilitate and to encourage its utilization in a combined, coordinated, and co-operative fashion. 1 think this is an excellent example of federal-provincial co-operation that will assist in cleaning up the environment and provide tremendous spinoff benefits both in Ontario and in western Canada.


CAPE BRETON DEVELOPMENT CORPORATION
Mr. Dave Dingwall (Cape Breton-East Richmond):: Mr. Speaker, my question is directed to the Minister of Regional Industrial Expansion. 1 wish to thank the Minister for taking the opportunity yesterday to meet with members of the United Mine Workers of America to discuss the deplorable unemployment situation in Cape Breton. The Minister will know that they are operating without a collective agreement. Negotiations have come to a halt. Four hundred and eighty jobs are in the process of being terminated. Yesterday we learned that $40 million had been slashed from the capital expenditure program of the Cape Breton Development Corporation. Will the Minister explain the fairness of this particular action, and what he is prepared to do to rectify the situation for one of Nova Scotia's most important resource industries?

March 3, 1987
Oral Questions


Hon. Michel Cote (Minister of Regional Industrial Expansion):: First of all, Mr. Speaker, I should like to correct the statements of my colleague. First, there is no cut-back in the regional industrial expansion estimates, indeed the increase is close to 4 per cent, which goes to show that the Government is aware of regional disparities.
Second, Mr. Speaker, funds had been set aside last year for certain programs related to Devco operations, mainly with respect to projected losses of about $18 million and to new capital expenditures of about $33 million. Since these funds were not used, they no longer appear in this year's estimates. That, Mr. Speaker, is an example of sound management and good administration.


REGIONAL DEVELOPMENT
David Charles Dingwall: Mr. Speaker, my supplementary question is directed to the Deputy Prime Minister. Several months ago I asked the Deputy Prime Minister a question with regard to the utilization of coal from eastern Nova Scotia and New Brunswick. At that time the Deputy Prime Minister took it as an advisement. Will the Deputy Prime Minister explain to the House what discussions he has had with the Premier of Nova Scotia and the Premier of New Brunswick with regard to the utilization of coal from that region in the Province of Ontario? Are we in Atlantic Canada going to receive the same treatment as you are trying to bestow upon the people of western Canada?


Mr. Speaker:: I hesitate to interrupt the Hon. Member. In the last few days there has been a tendency to use the word "you". I know it is involuntary and Hon. Members do not mean to do it, but I would ask that Hon. Members put their questions through the Chair.


Donald Frank Mazankowski: Mr. Speaker, I am sure that the Hon. Member knows that at the present time Ontario Hydro is purchasing something in the order of three million tonnes of coal from western Canada. Ontario Hydro is an ongoing customer. As a matter of fact, in discussions yesterday with the Premier, we did raise the prospect of using coal from other sources. It will certainly be a matter for consideration.
I should indicate to the Hon. Member that with the nuclear generating facilities that are currently coming on stream, the additional capacity will not be required until some time after 1990. It is the considered view of Ontario Hydro and of the Government of Ontario that coal can be utilized as a feed stock for the generation of future electricity as their demands increase. I can only indicate to the Hon. Member that yes, the
matter was raised, and I would also be glad to discuss it with the Premiers of the Atlantic provinces.


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


CHILD CARE
Ms. Margaret Mitchell (Vancouver East):: Mr. Speaker, my question is directed to the Prime Minister. Government Estimates show that there is a $301 million reserve fund in the social development envelope. Will the Prime Minister designate these funds now for the first stage of the development of a comprehensive, flexible, affordable system of quality child care? Will he make his promises real with federal bucks for kids?


Martin Brian Mulroney: Mr. Speaker, yesterday I indicated that the Government was awaiting the report of the parliamentary task force in regard to child care. I have also indicated on past occasions that the commitment of the Government, and I hope Parliament, to the establishment of a national comprehensive child care program is real. The Government of Canada shall, even in difficult circumstances, find the resources necessary to do our share in making a child care program a national reality. If we believe in economic equality for women, we must believe in this type of proposal, and this Government shall support it.


CANADIAN WHEAT BOARD
Mr. Arnold Malone (Crowfoot):: Mr. Speaker, my question is directed to the Minister of State for the Canadian Wheat Board. I wish to ask him if he will give consideration to advising individual farm producers, at the time of the receipt of their final payment, of the costs that were deducted from world price, such as demurrage charges, transportation, handling, and port charges, so that they, on an individual basis will be able to help rationalize the transportation and handling system to lead toward a more orderly manner in which we can market grain in the tough competition of the international market?


Hon. Charles Mayer (Minister of State (Canadian Wheat Board)):: Mr. Speaker, this issue has been raised many times in the past. The Hon. Member has taken a specific interest in it. Everybody should have as much information as possible on which to base decisions. We will certainly look with interest at that suggestion, as far as information going out from the
March 3, 1987

Canadian Wheat Board is concerned. It would also be useful to encourage grain companies to put that information on cash tickets, so that producers can then have a look at it. I thank the Hon. Member for his suggestion. We will look into it, and see what can be done in a year from now when the final payment is made.


Mr. Speaker:: The Hon. Member for Algoma, one question, please.


REVENUE CANADA
Mr. Maurice Foster (Algoma):: Mr. Speaker, my question is directed to the Minister of National Revenue. In his absence, I will direct it to the Deputy Prime Minister. At a time when western farmers are facing the worst crop and grain prices since the 1930s, why is the Government revaluing the regular commercial transactions on farm machinery that were made by thousands of farmers in Manitoba and Saskatchewan in 1983 and 1984? Why has the Government embarked on this witch-hunt or harassment of farmers?
Can the Deputy Prime Minister tell us if the 403 extra investigators and auditors outlined in the Estimates yesterday will be used to go through the income tax files of thousands of Canadian farmers?


Hon. Elmer M. MacKay (Minister of National Revenue):: Mr. Speaker, I have seldom heard a question from a member whom 1 respect so highly filled with so many fallacies and inaccuracies. First, it is not a witch-hunt that the Hon. Member refers to. It is a very orderly and necessary audit that is being done in many sectors across the country only to correct the more blatant abuses of capital cost allowance and investment tax credit utilization. For the most part, the extra investigators to which my friend refers are used to provide services for taxpayers, not to audit. For example, they assist with services such as tracking down maintenance evaders, and things of that nature. Again, Revenue Canada is being miscast in a role that was never intended.


Mr. Speaker:: The Hon. Member for Nickel Belt, one short question, please.
 * *


NATIONAL DEFENCE
Mr. John R. Rodriguez (Nickel Belt):: Mr. Speaker, my question is directed to the Minister of Defence. Last week the United States Air Force announced that high speed and low
The Budget-Mr. Johnston
level B-52 jet bombers will start flying in a corridor between Sault Ste. Marie and North Bay. Will the Minister tell the House why an environmental impact study was not undertaken before permission was given by the Government for these low-level flights to take place?


Hon. Perrin Beatty (Minister of National Defence):: Because it is simply the reactivation of a route which has been in place for some 14 years.


Mr. Speaker:: The Hon. Member for Mackenzie with the last question.


FARM CREDIT CORPORATION
Mr. Jack Scowen (Mackenzie):: Mr. Speaker, this pertinent question is directed to the Minister of Agriculture. My constituents and I wish to know what is happening in the Farm Credit Corporation regarding reducing interest rates. What contingency plans are in place to help save young farmers, so that the Government does not end up owning all the land?


Charles James Mayer: The Minister of Agriculture has just stepped out. I will certainly take the Hon. Member's question as notice and see that he is provided with an adequate answer from the Minister.
 * *


BUSINESS OF THE HOUSE
Philip Derek Lewis: Mr. Speaker, I rise on a point of order. I wish to take this opportunity formally to advise the House that the Government is designating tomorrow as an allotted day.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Wilson (Etobicoke Centre) that this House approve in general the budgetary policy of the Government, and the amendment of Mr. Garneau (p. 3594).
Mr. Speaker:: When the House took recess at one o'clock, the Hon. Member for Saint-Henri-Westmount (Mr. Johnston) had the floor.

March 3, 1987
The Budget-Mr. Johnston


Donald James Johnston: Mr. Speaker, I welcome this occasion to speak in the Budget debate. This is the first opportunity that I have had since the Minister delivered his quite extraordinary Budget. My reaction to the Budget was one of surprise. Perhaps one could even say astonishment or as we say in Quebec-

-I was speechless when 1 read the document.
I asked myself in the lock-up which preceded the delivery of the Budget why we needed to be locked up all afternoon to look at such a skimpy proposal. Why a Budget or, more important, why call the document delivered by the Minister of Finance (Mr. Wilson) a Budget?

Granted, they had to introduce a few taxes, and I will have a word to say about that this afternoon. He said it was necessary to reduce his deficit. I will have a word to say about that as well.

In a few moments 1 will come to the shameful exercise, how he attempted to get the deficit down. A simple statement by the Minister and a tabling of a Notice of Ways and Means in the House would have been sufficient. It would have been the appropriate thing to do, given the kinds of proposals the Minister brought to us that evening a week and a half ago.
Apart from the rhetoric in the document, which I think can be best described as self-congratulatory claptrap, what has the exercise we witnessed accomplished and what was it intended to accomplish? Was it simply to tell us once again, for the third time, that we would have tax reform in the future? Was that the purpose of the exercise? I will also have a word to say about tax reform.
I would admit-and I think most Hon. Members would agree-that the Minister by and large has enjoyed a reputation as a straightshooter, or perhaps as one of a few stars in a galaxy of black holes, or perhaps as a beacon of hope shining across a sea of incompetence if not corruption. 1 fear that with the Budget the Minister has set about to destroy that reputation by engaging in fiscal flimflam at best. He has allowed himself to be used as a decoy, probably to draw fire away from the flock of wild turkeys which surrounds him on the government benches.
Why has the Prime Minister (Mr. Mulroney) done this to the Minister of Finance? Why has the Minister of Finance permitted this to be done to himself? 1 suspect that some public relations genius-perhaps Dalton Camp or probably Dalton Camp-saw a Budget, even a Budget totally devoid of substance, as a good diversionary tactic to get the Opposition and the media off the problems of scandals, incompetence, and
corruption which have plagued the Government. In fact, they have hobbled the Government and have brought the Government to the lowest level of public support or public esteem since Gallup began taking polls on popular support in 1942. Indeed that is a deserving mark of historic achievement.

But what a public relations disaster, Mr. Speaker. What is particularly clear from the speech by my hon. friend, the Hon. Member for Laval-des-Rapides (Mr. Garneau), who responded to the Minister's Budget speech, is the Government's and the Minister s record on the economy and especially on taxation. That is crystal clear.

Not only did the Minister act as a decoy, as I suggested, but he has quite properly added himself to that flock of turkeys and has become a prime target, and deservedly so. He is guilty of complicity in this public relations exercise scheme because he in fact did not have a bona fide Budget to deliver.
The Government simply rolled out the Minister to the centre of the national stage. He is their own Mr. Clean. They regard him as a white knight, a Sir Galahad, but he had nothing with which to defend himself. He had no Budget. He had no real proposals. His attire was skimpy and resembled more that of Lady Godiva than that of Sir Galahad. Like her, he has been totally exposed in the course of this exercise. For example, his budget documents show us in stark terms the failures of his policies to date.

To recall a few highlights of this record, Mr. Speaker, I suggest we look at the direct taxes paid by Canadian taxpayers since this Government came to power and since the present Minister of Finance was appointed.
1 am referring, Mr. Speaker, to the Minister's own "Budget papers". On page 21, we find table 3.6, "Budgetary Revenue Projections". We see that between 1984-85 and 1987-88, there was an increase of $14 billion in personal income tax collected under the Income Tax Act, an increase of 48 per cent. Shame!
If we look at sales and excise taxes and duties, which are also paid by Canadians, by individuals, by consumers and their families, all these taxes have increased from $14 billion to $22 billion, which means $7.5 billion more or an increase of 53 per cent.
However, despite these increases, this year's deficit, that is, the deficit for 1986-87, will be the same as at the end of 198384. What a record. I may remind you, Mr. Speaker, that 198384 was the last full year under this country's previous Liberal administration.

Next year the Minister can do no better. He is forecasting a deficit of $29.3 billion which is only $200 million less than he forecast last year for the current year. So much for the Minister's projections! More important-and this is where I say the Minister has engaged in fiscal flimflam or in a shell
March 3, 1987

game-he has achieved this reduction in a manner which, in my judgment, leaves his credibility in tatters. The single major revenue initiative found in the Budget is to require employers to remit twice monthly instead of once monthly the taxes which are held from employees.
The Minister calls this, accelerated remittances of source deductions. For me it is a transparent example of very creative bookkeeping. It creates a false impression and is intended to create a false indication of the true deficit position.
Let me explain, Mr. Speaker. This additional burden which is being imposed upon Canadian employers has the effect, in terms of the deficit, of moving one payroll date back from April of 1988 to March of 1988. That is estimated to bring an additional $1.2 billion into the 1987-1988 year. Of course, it removes $1.2 billion from the immediate following months in the 1988-1989 year. What kind of image of sound financial management does that project, Mr. Speaker? Does the Minister seriously think that borrowing from Paul in 1988-89 to pay Peter in 1987-88 fools anyone? Frankly, I regard it as an irresponsible manipulation of the Government's cash flows to meet a deficit objective. Imposing that additional paper burden, additional hardship and additional loss of interest on small Canadian businesses, municipalities and employers right across the country simply to meet an artificially established deficit objective is irresponsible, and I say shame! I expected much more from this Minister of Finance than that kind of fancy bookkeeping footwork. If he puts the amount where it should be, without this change and accelerated cash flow in 1988-89, the deficit becomes $30.5 billion.
I never thought that we would have to scrutinize the Minister's actions on issues of this kind. Previously I must admit I did see the Minister as a tinkerer in many respects. Now he has become "Wilson the accelerator". How far will he carry that acceleration, Mr. Speaker? Now that he has discovered this magic recipe to accelerate payments, can we count on him to limit the damage or are we going to find more distortions in future budgets? I hope we can count on the Minister to limit the distortion to this one exercise. Even then I say it is totally improper.
The Minister of Finance may have discovered a recipe and in future demand prepayment of future years taxes. Who knows? I understand that that practice has been followed in some other countries. Prepaying taxes for future years would quickly reduce the deficit but give a totally false perception and create a false reality in the country's financial condition.
I know that you suffered through the Budget speech yourself, Mr. Speaker. You know that it devoted a great deal of time to the issue of tax reform and what wonderful tax reform is planned. As I said, this is the third time we have been told about tax reform, which we have yet to see.
The Budget-Mr. Johnston

What is interesting, however, Mr. Speaker, is the fact that all his initiatives as Minister of Finance to this date and the tax increases which I have just mentioned are in direct conflict with the objective of the tax reform he is now proposing. Such a reform would be in conflict with the tax measures he has taken to date, including the most substantial increase of individual taxes in Canadian history. Now, the Minister wants to initiate a tax reform to correct his own mistakes. In his paper, he points out that the key to tax reform is to reduce the tax rate of individual taxpayers, even though he has just increased individual taxes for all Canadians.

Having created this extraordinary burden, this mess in terms of the fiscal system, not the least of which was the capital gains tax exemption which he stubbornly refuses to recognize is an error and should correct, he now seeks the way out of this dilemma through tax reform. This would be humorous I suppose if it were not so serious for Canadians.
Let me return to my point. There is no Budget here. There is no fiscal plan. How can one have a Budget in this country without a fiscal plan? It was the Royal Commission on Financial Management and Accountability, the so-called Lambert Commission report, that told Government that one should have a five-year fiscal plan. To give the Minister of Transport (Mr. Crosbie) credit, when he was Minister of Finance briefly, rightfully, back in 1979, one good thing he did was to include a five-year fiscal plan which was continued by the successive Liberal Government. This Government has refused to deliver a proper fiscal plan since it has been in office. It has delivered no fiscal plan at all, just simply projections for the next year. The public and parliamentarians are entitled to know what the fiscal plan is that the Government has in its own possession in the Department of Finance. We know that the information exists. We are entitled to see it and the Government should be obliged to give it to us.
If the Minister is not going to produce a fiscal plan, and if there is no more than this self congratulatory clap-trap that I have described, and there is no more than the imposition of a few taxes, again I say why a Budget? He did remove the ill-conceived taxes on Christmas trees.


Mrs. Finestone:: And books.


Donald James Johnston: You will recall the tax we placed on ourselves, Mr. Speaker, to get back at the Americans for the tax they imposed on shakes and shingles. We told the Minister at the time that it was fiscal suicide by self-immolation. He did not agree. Finally the Minister has accepted our advice and has wisely withdrawn that tax. He did not do it with humility. He said the circumstances had changed. Of course, the circumstances have not changed at all and the other tax is still in place. He simply recognized the stupidity of his own actions and those of his Government, but he incorporated it in his speech as if it were some quite remarkable achievement that

March 3, 1987
The Budget-Mr. Johnston
had been brought about by the imposition of those taxes in the first instance.
Then the Minister puts a tax on airline tickets, Mr. Speaker, which hurts the regions of this country. The Minister tells us that that particular tax was recommended by his colleague, the Minister of Transport, which I thought was indeed remarkable. Nonetheless, again we have this marked insensitivity to the distant regions of Canada.
In that same vein, the Minister has imposed a fuel tax which once again, apart from the hardship on individuals and the increased tax at the pump, is a tax on distance. It hurts tourism, trucking and it hurts the consumer, especially the consumers in the regions. The tax has to be passed on. It has been passed on before and it will be passed on again. This is a direct tax on distance, a direct slap, as I say, at the regions.
In an address last fall in Toronto I noted the Minister stated that one of the difficulties in trying to match U.S. tax rates in Canada would be due to the higher cost in our economy as a result of geography and demographics. If he believed that, why would he simply turn around and again add to those costs in his Budget by putting a tax on transportation fuel?
We do need a Budget. We now need a real Budget, not this public relations exercise, not this self-congratulatory statement with taxes that are not neutral but harmful. We need a Budget that deals with the problems facing the country:

the environment, employment, the regions, senior citizens, women, housing, research and development, education, small businesses, transport and tourism. All those issues are forgotten in the budget recently tabled in this House.

Where is it? Where are the solutions to these problems? When will we see them? After this exercise that, as I say, we suffered through with great anticipation, and the media from all over the country gathered in Ottawa to listen to the great pronouncements from our Minister of Finance, I am not convinced that this Minister can deliver the goods with respect to this list of problems which I raised, this list of concerns which haunt Canadians in every walk of life from coast to coast, in every region, hamlet and village. These are the real problems. When is the Minister going to address them?

When is the Minister going to deliver? When will he address the real problems of Canadians? When will he give us something concrete about the tax reform, which is supposed to improve our tax system, to provide equity, to stimulate economic development, to encourage the regions and to protect the neediest members of our society? When are we going to have this tax reform?
Mr. Speaker, we in the Opposition are very disappointed at the performance of this minister. He has really ruined his reputation with his little game. He has played a dirty trick on
us.


Mr. Deputy Speaker:: Questions or comments. Debate. The Hon. Member for Bonavista-Trinity-Conception (Mr. Johnson).
Resuming debate with the Hon. Member for Bonavista- Trinity-Conception.


Mr. Morrissey Johnson (Bonavista-Trinity-Conception):: Mr. Speaker, it is a great pleasure to take part in this debate and support the third Budget my colleague, the Minister of Finance (Mr. Wilson), has produced. It is a Budget which clearly demonstrates that the Government has successfully met the challenge of maintaining a sound and steady management of both the fiscal and economic situation of Canada since assuming office two and a half years ago this week.
Last week at home in my riding of Bonavista-Trinity- Conception most of the constituents I met expressed to me their satisfaction with the way the economy has been managed. While they are of course unhappy that unemployment is not lower, as am I, the vast majority are pleased with the progress the Government is making. They know that better economic performance is the key to providing more help to the disadvantaged regions of the country. They know that the better economic performance since September, 1984, has allowed this Government to increase assistance to those in need.
Before reviewing the many actions this Government has taken to assist disadvantaged Canadians wherever they live, I would like to reflect for a minute on the dismal situation which existed before we assumed office. At that time the need for economic renewal was pressing. Some 15 straight years of budget deficits had swollen the national debt to $200 billion, a burden of almost $23,000 on every Canadian family. The national unemployment rate was almost 12 per cent and interest rates were far too high, discouraging both investment and consumer confidence. Finally, after almost 12 years of Liberal mismanagement the people of this country said they had had enough and overwhelmingly elected a responsible Government to administer their hard-earned tax dollars in a responsible manner.
In November, 1984, this Government set out its philosophy of responsible economic management in an agenda for economic renewal. Restoring fiscal responsibility was the starting point. We set out to get our fiscal House in order by reducing the deficit and slowing the growth of the national debt. This Government has restrained spending and managed its affairs more efficiently than our Liberal predecessors could have imagined, let alone accomplished. However, the Government's program for economic renewal has meant much more. We have introduced policies and programs which provide a better framework for growth and job creation, and which are less of an obstacle to change and innovation. They contribute as well to improving Canada's competitive position world-wide.
March 3, 1987

We have adopted policies which help small business and foster entrepreneurship and risk-taking. Yet for the new policies to succeed we knew they had to be fair and consistent with the basic sense of compassion, tolerance and justice which are characteristic of Canadians. That was the challenge and here are just some of the achievements.
Canada has enjoyed real economic growth averaging about 3.5 per cent during the last two and a half years. This is second only to Japan among the major industrial countries and it surpasses the growth of the U.S. Short-term interest rates are at their lowest level in nearly a decade and it is interesting to note that some articles appearing in the newspapers are saying this Government is on the right track.
Too bad that the Hon. Member who just spoke did not read some of those statements in today's paper. He would have seen that mortgage rates are down to their lowest level in the past 10 years. As a result, housing starts are up to an eight-year high. In my own Province of Newfoundland, the value of building permits in 1985 alone was 19.5 per cent higher. That represents an additional $30 million in construction activity. In the first 10 months of 1986, the value of building permits increased by another 13.5 per cent, representing an additional $18 million in construction activity. Nationally, inflation has been lowered to around the 4 per cent range. In Newfoundland, the inflation rate of 2.9 per cent is below even the national average. Nationally, the unemployment rate has dropped by two percentage points, and in Newfoundland it has fallen by 4.6 percentage points since this Government's election, from 23.8 per cent to 19.2 per cent. As I said at the beginning of my remarks, I am not very happy that the unemployment rate remains so high in my province but at least it has not increased by 9.9 percentage points as it did between February, 1980 and September, 1984, when the Liberals were last in office.
Finally, I would like to mention the important progress we have made in reducing the deficit. When this Government took office it inherited a deficit of $38.3 billion. Last year the deficit fell to $34.4 billion. This year we will further reduce the deficit to $32 billion. In our third year the deficit will be down to $29.3 billion. As some of my colleagues who spoke before me stated, this is the first time in 30 years that the deficit has declined for three consecutive years. I apologize to the members in the Opposition because I know that it pains them to hear this good news.
Clearly the Government's economic renewal program is working. It is delivering more growth, more jobs and more opportunity for Canadians now. The outlook for 1987 is proof of that. Canada's employment growth is expected again to beat all other major industrial countries. Canada should enjoy real output growth of 2.8 per cent, making this economic upturn the second longest of the post-war period. Inflation is projected to average less than 4 per cent.
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Earlier I referred to the measures the Government has taken to assist disadvantaged Canadians. The Opposition would like the low income people of the country to believe that the Government does not care about their needs. Such individuals know that this is clearly not the case for they are benefiting from the Government's actions including the prepayment of the child tax credit of $454 per child. One million low-income people received this prepayment in November, 1986. Four million low-income families and individuals are now receiving the benefit of a refundable sales tax credit of up to $50 per adult and $25 per child. The child tax credit has been increased by 36.5 per cent or $140 per child, up from $384 in 1985 to $524 in 1987. The Government extended the spouses' allowance. Now 169,000 widows aged 60 to 64 who are in need receive this assistance. The Government extended the tax deduction for disability for 185,000 people.
These and other measures by the Government to assist low-income Canadians will be complemented and strengthened when our tax reform proposals are introduced in the spring. The Government is committed to increasing the number of low-income Canadians who do not pay personal income taxes. The Government is committed to making the tax system fairer and simpler for the benefit of average Canadians. In other words, more Canadians will pay less tax.
Finally, Mr. Speaker, I would like to comment specifically on the Government's economic record as it relates to my Province of Newfoundland. As I said at the outset, Newfoundlanders are pleased with the federal Government's performance in controlling federal spending, reducing interest rates, and continuing good financial management. The Government has already taken a number of steps to help address the concerns of my province. The historic Atlantic Accord treats Newfoundland as an equal partner in offshore development and creates the $300 million Canada-Newfoundland Development Fund. I am pleased that Bill C-6, an Act to implement the Canada-Newfoundland Atlantic Accord, passed third reading yesterday.
The Government has signed multimillion dollar economic and regional development agreements with Newfoundland, including $112.5 million for highways, $38.5 million for the pulp and paper industry, and $33.6 million for forestry resource development. For Atlantic Canada as a whole there is up to $1 billion in loan guarantees and low interest rates for certain investments in the region through the Atlantic Enterprise Program. Companies in Newfoundland are taking advantage of this program. On Friday I had the opportunity to announce benefits which two companies in my own riding will be receiving from this program.
In addition, $600 million in federal procurement provided to the region through the Atlantic Opportunities Program will also have a positive impact. For example, in my riding Terra Nova Shoes is, for the first time, now supplying footwear to the Department of National Defence. It is interesting to note

March 3, 1987
The Budget-Mr. Hovdebo
that the 9 per cent federal sales tax on fuel used by fishermen which had previously been removed has not been reinstated.
All these initiatives and others are part of a continuing effort by the Government to increase assistance to Atlantic Canada. One of my colleagues in the Opposition says that the sales tax on fuel has increased by 1 per cent. I remind him that that 1 cent is not applicable because fishermen and loggers, as well as the farmers of the country, will receive a rebate of that 1 per cent which is an excise tax. 1 was talking about sales tax.
It is true that we have come a long way in two and a half years, but it is true as well that we have a long way to go. This Budget shows that our agenda for economic renewal is working and will continue to work for the benefit of all Canadians.


Stanley J. Hovdebo: Mr. Speaker, 1 am pleased to have the opportunity to speak immediately after a member of the Conservative Party who spent a good portion of his time suggesting that the new Budget will show lower income people how well off they are. In fact, the Fraser Institute, a very conservative-thinking institute, has suggested that the only two areas which managed to escape taxes are large corporations and the very rich. It looks as though the aim of this Budget is to increase taxes in the lower and middle-income areas without increasing taxes in the other areas. Higher income individuals and corporation taxes increased only very slightly. For instance, a couple with two children earning $15,000 paid only $407 in federal income taxes in 1985. In 1986-87 they will pay $770 in taxes. That is a 90 per cent increase. The taxes of those earning $20,000 was increased from $1,200 to $1,700, a 35 per cent increase. The federal income taxes of those earning $42,000 rose to $6,102, an increase of 32 per cent or $1,487. Those figures are an indication of how the Budget will affect lower income earners.
Let us look at higher income earners. The taxes of a couple earning $100,000 will only increase by $319 compared with the couple earning $15,000 whose taxes will increase from $407 to $770. The couple earning $100,000 will have only 2 per cent increase compared to the 90 per cent increase experienced by the couple earning $15,000. In fact, as a result of this Budget, taxes went down approximately 5 per cent for those earning $80,000, and decreased by 1 per cent for those earning $50,000. The Hon. Member who attempted to explain whose taxes were increasing has not read the Budget thoroughly to determine the levels of taxation. Those earning only $7,000, which is below the poverty level, face an increase of 148 per cent, which is the largest increase in the Budget. This Budget is not intended to help lower income Canadians but to help the very rich and the big corporations.
The Budget is not intended to eliminate the deficit but forms the centre piece in preparation for tax reform. While this Budget represents a monstrous tax grab of approximately $1 billion from people in the lower income areas of Canada, it is only the centre-piece on which the Minister of Finance (Mr. Wilson) and the Government intend to implement tax reform in the next year or two.
Let us examine what has been happening with our tax system in the last two and a half years. The Government has increased taxes on lower income people through direct income tax as well as indirect taxes through increased excise sales tax on almost every item. In fact, the Minister of Finance proudly stands up to say that he will broaden the base of taxes on goods and services. Theoretically, the income tax base is as broad as it can be, but the Minister indicated that since it is unfair that 40 per cent of goods and services in this country are not taxed at all now, all goods and services will be taxed. Direct taxes on goods and services is regressive because those with low incomes will have to pay the same as those earning high incomes.
The tax structure in this country will impose very high taxes on the majority of middle class and lower income Canadians. The Government will introduce tax reform in which it will broaden the base by taxing goods and services while lowering income tax. Those who will be the most affected by tax reform that will increase in the tax on goods and services will be those who are living below the poverty line and earning less than $7,000 and do not pay any income tax.
Perhaps the Government hopes that just before the election Canadians will notice that their take-home pay is suddenly larger as a result of reduced income tax, but will not recognize that the total tax they have paid in the previous three years has risen by several hundred per cent.
The crisis in agriculture today has developed in the last number of years. However, it has been emphasized this year by the low commodity prices. There are two methods by which to increase the income of people who earn their living from resources which depend upon commodity prices. One is to increase the price of the commodity directly, and the other is to decrease the input cost of that item. The problem facing agriculture is that the sale of the commodity no longer covers the cost of production so that today even farmers who have no debts find themselves in a position where they can no longer make a profit.
While this situation was happening before the Government took office, in the last two and a half years that it has been in office it has not only been unable to increase the price of the commodity to help the situation, it has increased the input costs considerably. Today, inspections and government services which have been available to farmers for many years are no longer free. The Government has implemented a user-pay structure that is eroding the already small profits farmers have been making. The situation is such that there is now a story about the farmer who has won a million dollars in a lottery. When asked what he would do, he said that he would keep farming for a couple of years to get rid of the money. That is the situation facing farmers on the Prairies these days.
One of my neighbours told me that he has no debts but his net worth this spring will be $75,000 less than it was last year.
March 3, 1987

If this situation continues we will lose a whole generation of farmers. This Budget did not nothing to alleviate the problems farmers are facing. It did nothing to assist them to get over the hump. Therefore, more and more farmers can be expected to go under, either registering bankruptcy or being foreclosed in some way, or even walking off their farm and leaving what they have there. In fact, the Government, not necessarily in this Budget alone but over a period of time, has increased the burden the farmers must carry. For many farms to survive, the farmer or his wife must leave the farm to work in order to bring in some extra income to meet the costs of running the farm. This is becoming the norm for a larger and larger proportion of the farm population. In fact, more than 50 per cent of farms now have outside incomes which are the same as, or even more than, the farm income.
When this Government was elected back in 1984, it promised it would do something about those farmers who must get money from somewhere else in order to keep their farm operating. Section 31 of the Income Tax Act restricts the amount of outside income a farmer can use to keep his farm going. I know it is not right that a farmer should have to go and work at a job someone else could have, but in many cases that is the only way he can keep the farm going. The Government promised it would do something about Section 31 which allows the farmer to write off $1,000 against farm losses. A committee of this House unanimously recommended that that amount be raised to at least $10,000. The Government promised it would eliminate the limit entirely. Nothing was done. Therefore, farmers who are valiantly attempting to keep the farm going by working off the farm and using the money to pay their farm debts are being discriminated against by the Government.
Lately a number of farmers have had their income tax reviewed because at some time during the last 10 years they have purchased machinery and taken an investment tax credit at a level which the Government considers to be a little higher than they should have. If you had gone through one of these deals, Mr. Speaker, you would realize that what the farmers are doing is taking advantage of a tax law which is in place and which is legal. They turn in their old machinery, buy new machinery and receive a tax credit. They are now being blamed for making the best possible deal they could. It is not illegal. In fact, it is probably a very good Conservative philosophy. But these farmers are being questioned and many of them are being told they will have to repay some of the tax credits they have received over the years.
Tax reform seems to be the centre-piece of this Budget. The Government is increasing income tax and other taxes so that when the tax reform comes in, it will already be taking such a large portion of the incomes of middle and lower wage earners that they will be very happy to get some relief in that area.
There is nothing in the Estimates for the ice-breaker which was promised. There is nothing for the drug relief program
The Budget-Mr. Hovdebo
which was also promised. There is no money identified in these Estimates, or in the Budget, for child care. There is a lot of money provided for advice from people like Dalton Camp but there is no money for the main promises the Government has made over the years. There is nothing in the Budget to attack unemployment and nothing for regional disparities. There is nothing to help out those areas which have a large unemployment problem. This Budget is for the very rich and for the large corporations. The poorer among the population are feeling the results of the Government's philosophy, which is all in preparation for some fanciful tax reform, and if the plan works, as it has in the past, the burden of taxes on the lower wage earners will only increase.



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 York West (Mr. Marchi)-Refugees- (a) Changes in Government regulations (b) Refugee determination system; the Hon. Member for York East (Mr. Redway)- Canada Mortgage and Housing Corporation-Funding of cooperative housing.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Wilson (Etobicoke Centre) that this House approve in general the budgetary policy of the Government; and the amendment of Mr. Garneau (page 3594).
Mr. Thacker:: Mr. Speaker, I have a question for my colleague and friend from Prince Albert. I wonder if the calculations he gave from the Budget with respect to the percentages paid by the poor and so-called rich take into consideration the alternate minimum tax. As I gathered from his speech, they do not. I can tell from my riding that that alternative minimum tax is having quite a dramatic effect on the number of dollars people are paying in 1986. Can he tell me whether his figures reflect that?
Second, is the Hon. Member arguing in favour of, for example, a combine which would originally sell for $90,000 being sold for $140,000 just so the farmer could get the larger tax credit? Of course, that in effect means that the rest of us as taxpayers end up having to pay a lot more. Surely that is the same type of deal as the practice of some of these huge

March 3, 1987
The Budget-Mr. Thacker
companies which use the tax loopholes, which were originally an incentive, in an artificial way, which hurts the public's good.


Stanley J. Hovdebo: Mr. Speaker, first, the figures I quoted on taxation were the figures which were presented in a brief by the Fraser Institute and also by the Federal Advisory Council on Welfare. Both groups are funded to some extent by Government. The brief shows the effect of federal income tax increases on those particular groups.
As far as the tax credit is concerned, many of the farmers who use those tax credits recognize them as wrong in some way. However, they were put there by the tax structure and, in most cases, the farmer accepted the deal which was given to him by the machine companies. I do not think it should have gone on. I am glad the Government is doing something about it. However, to go back 10 years and have these farmers repay these credits is creating a hardship which many of them will not be able to survive. It will force them into bankruptcy. What has happened in the farming community in the last few years is that many large farms have become over-extended to the extent that they have large debts which they are now unable to finance. If they are further burdened by the reclaiming of these large portions of tax, which are taxes not against them but which were within the law at that time, then they will be put into a situation which will not help the farming community as a whole in any way at all. I am suggesting not that we leave the tax credit but that we not go back and try to collect the tax from those farmers in the way that appears to be happening now.


Blaine Allen Thacker: Mr. Speaker, I am glad that we now have the New Democratic Party on record vis-a-vis action against farmers who took advantage of the tax credit for the purchase of machinery. This is a very serious situation in western Canada. The fact of the matter is that some machine dealers and some farmers knew exactly what they were doing. They artificially elevated the price of machinery. I know of some examples in which prices were elevated from $90,000 to $140,000. They knew that this was wrong. It is questionable as to whether the law should be ignored when it comes time to enforcing it. At any rate, I am glad to see the NDP onside with respect to that particular question.
I wish to offer my congratulations to the Minister of Finance (Mr. Wilson) on his third Budget. In terms of yearly Budgets he has clearly formalized the process. It has now been made easier for us by having the Estimates and the Budget at the same time. In this way we can more effectively question the Minister of Finance with respect to spending and how the money will be raised. It also makes the system much easier in terms of the response of provincial Governments. They now know what they will be receiving.
There are a number of reasons why I think this is a good Budget. There is no doubt that, in general, the economy has improved dramatically over the course of the tenure of the
Minister of Finance. One of the reasons for this is that Canadians exercise their sovereignty and change their Governments. The first Budget of the Minister came out with an economic plan to cover the next four or five years. It gave a degree of certainty to business, something for which members of the business community asked. In this way they can make their plans, something that the first Budget allowed them to do. The two subsequent Budgets have kept on that track.
Some 677,000 new jobs have been created by Canadians as a result of increased confidence. This is a significant contribution to Canada and its well-being. It means that more revenue will be derived from income tax. It also means that fewer people will be on welfare and collecting unemployment insurance benefits. Unemployment has gone from well over 10 per cent to 9.7 per cent this year. It should be at 9 per cent by the end of this year. That is very significant. Everyone should be thankful that it is occurring. TThese are results which do not always occur just because of a change in federal Government or because of the actions of Government. They happen as a result of people having confidence in their country.
There is no doubt that the problem of regional disparity is serious. Even though I come from the west, I am thankful that Ontario is doing well. I am thankful that jobs are being created in Ontario. The Province is manufacturing jobs, which means that we can export more material. This helps our current account. It helps pay revenue into our tax coffers and it means less unemployment. I ask Hon. Members to imagine where the country would be if Ontario were having the same set-backs that we are having in the west. These setbacks are not as a result of government action but as a result of international commodity prices. If Ontario were in the same condition as the west, then we would see some two million to three million people unemployed. As a result, our social programs would not be worth the paper on which they are written. I think the nation should rejoice that Ontario is doing well rather than being envious.
In the late 1970s I could not understand the antipathy toward the west when we were doing so well. Young people from other parts of the country were moving into Manitoba, Saskatchewan, Alberta and B.C. To my mind that was good for the country. We were hot at that time. We were able to pay more money to help the disadvantaged regions. The same is true today. I can say without hesitation that I am thankful that Ontario is doing well. It bodes well for the country.
Interest rates are at their lowest in 10 years. That is very significant. It is not something which has occurred simply by happenstance or by accident. It is a major historic event for Canada. I lived through the period of time when interest rates were around 21 per cent under the Liberal-NDP coalition. Those interest rates killed people. Indeed, they are still killing people literally and figuratively today because of bad economic policy.
It costs us less to service the national debt when interest rates are down. The individual businessman who almost always takes out loans from his bank now has more money in his
March 3, 1987

pocket because of lower interest rates. A family with a $50,000 mortgage now has $125 to $130 more in their pockets each month than they would have had if the Liberals and the NDP were in power. This gives families more disposable income. It gives them more freedom to decide how they will spend their money as opposed to a financial institution taking it away from them in terms of high interest rates or in terms of the Government of whatever political stripe deciding how to spend it for them.
I now wish to refer to a part of the Budget which has not received any coverage in the media which, in my judgment, is of historic significance. In terms of program expenditures and tax revenues the deficit is down by $1.3 billion. When we came to power, the deficit to service the national debt was huge, but program spending under the Liberals and the NDP reached the level of being several billion dollars more than tax revenue. Once we are into the next fiscal year we will see a surplus between our tax revenues and our program expenditures. Once we have balanced Budgets in terms of programs and revenues we can then truly work on the national debt and solve that problem because our economy is growing. The national debt will then make up a smaller and smaller percentage of the gross domestic product.
I would like to say a few words about the social dimensions of the Budget. I think one has to consider them as a package. There is no doubt that when we get to the end of the five years-and indeed we are at that level today-the people who are poor will have more cash in their pockets than if we had remained under the Liberal-NDP coalition. The tax credit and the refundable sales tax program in tandem, for example, mean that a single mother raising a child has something in the order of $44 more in her pocket as a result of the last Budget than she would have had under the status quo. That is a principle which I fully support.
I am prepared to argue with anyone at any public forum across the land with respect to this subject. The theory of the previous administration, and certainly the idea of the Liberals and the NDP, was that social programs should be available to everyone. Then, presumably because of a progressive tax system, the cost of them is taxed back from the rich. That has never been the case. The tax system never brought in 100 per cent of the funds needed to cover these programs. Therefore, whether we consider family allowances or old age security, we find the rich getting richer and richer because of the Liberal-NDP philosophy. Our philosophy is that those who are genuinely poor should get cash. Those of us who are earning beyond a certain threshold do not need to have family allowance or old age security, and, therefore, they ought not to be paid.
When there are limited dollars they should be applied where they are really needed. I must say that I stand embarrassed in the House when I hear Members of Parliament arguing for a
The Budget-Mr. Thacker
continuation of the family allowance to be paid to those of us who are Members and receive a basic allowance of $57,000.
I want to deal with the argument that the NDP raised that magically somebody else out there is much richer than those of us who are Members of Parliament. The facts do not show that. I wish to read into the record data from the summary of income tax returns prepared by Statistics Canada. A person who earns $15,000 in total income is in the 55.42 percentage group. That means that only about 45 per cent of the people earn more than $15,000. I am talking about the people who file tax returns. A person who earns $25,000 is at the 78 per cent level. That means that fewer than 22 per cent of taxpayers earn more than $25,000. Many people in the country earn approximately $35,000. A person who earns $35,000 is at the 91.62 percentage level. Fewer than 9 per cent of taxpayers earn more than $35,000. A person who earns $50,000, which is a little less than MPs, is at the 98.18 percentage group of tax filers. Fewer than 2 per cent earn over $50,000.
The fact of the matter is that there is no mythical rich person that the NDP harp about whose taxes we can increase and thus reduce the deficit or for whom we can provide new programs. It has to come from you and me, Mr. Speaker.
The Government and the Minister of Finance deserve universal support and credit for the fact that now people have clear in their minds the relationship between program expenditures and taxes. When a new program is offered, we also offer a tax to the people. 1 hope that that is fixed in their mind so that when the Liberals and the NDP offer all types of rich programs they will also say to people that the tax rates will have to go up, ladies and gentlemen. Which do you choose? If the question were put to the people in that manner, they would often say that the program is not needed. We would prefer to keep the money in our own pockets and decide how to spend it rather than give it to the Government to decide.
In terms of agriculture from a western perspective, 1 have to say that never has a Government allocated so much money to one sector, and particularly that sector being western Canada. Spending in agriculture is up by some 62 per cent from the previous administration. That does not include the $1 billion expenditure that is coming up. The sugar-beet producers in my riding would have been forced out of the industry had there not been government help. They received $10 million or $11 million allocated under the tripartite stabilization program, and it saved that industry. I hope that we can come up with an even better program once the Canadian Tariff Board brings in its recommendations or the options that will be available. Contrast that with what was done by the previous administration when the sugar-beet industry in Ontario went down the tube. The previous administration was not there to help that industry when it was needed. But the Conservative Government was there when that industry in Manitoba and Alberta needed help.

March 3, 1987
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In terms of farm fuel, when my relatives fill their fuel tank it now costs them $40. Under the Liberal administration it cost them $115 to fill their tank.
I have to say with some regret that the population in western Canada does not genuinely appreciate the significance of the removal of those taxes on the oil industry. The reason is that they feel that the taxes were put on improperly and that we have righted a wrong. We are not receiving the political credit, but even without it the population in western Canada has to appreciate the fact that when the Government puts on taxes it is very seldom, if ever, that they are removed. I am not aware of one tax that has been removed, including the temporary income tax that was put on to finance the First World War. It has never been removed.
The natural gas and liquids tax, the incremental oil revenue tax, the Canadian ownership special charge, the crude oil export charge, the petroleum compensation charge were all charges on the oil industry that were put on by the previous administration as its policy which it claimed was the National Energy Program. Of course, it was not that. It was the western oil and gas taxation program, which benefited the rest of the country. A national energy program may well be necessary. But if it involves taxes, it should be a tax that applies across the country on a Btu basis so that the energy would be picked up whether it is solar or electrical energy from Ontario or Quebec, or western petroleum energy. That would be a true national energy program, and it may well be needed in the future.
Let us not forget, and I hope that westerners will not forget, that the six or seven taxes were removed. That is a significant event. The difference in revenues is that under the Liberals approximately $5 billion from these taxes were withdrawn, and now it is under the general program where we all pay a few taxes, particularly on profits, amounting to about $500 million. That is a substantial benefit. The money is left in western Canada and is applied by these companies and people as they decide rather than as Ottawa decides.
I have a short comment to make with respect to gasoline. No matter what province it is, the provincial Governments are now pulling far more taxes out of gasoline than the federal Government. Therefore, the people of Ontario and Quebec who pay a lot of money for their gas should be looking to their provincial Liberal Governments that have imposed high gasoline taxes. There is nothing to say that those Liberal Governments could reduce the provincial gas tax. It is not the resource that is being taxed. It is a way of raising money from the people. If the Governments truly wish the people to have cheaper energy, they should remove those taxes.


Don Boudria: I feel a question coming on.


Blaine Allen Thacker: My colleague opposite should realize that there is no tax in terms of energy in the Alberta Government, at least to this point. Who knows what future Budgets may hold. Because of the hard times that are now hitting, I suspect that there will have to be some tax increases. But it is a free
choice by the provincial Governments whether or not to put a tax on gasoline. Rather than complaining about the federal Government and its role in taxing gasoline, they should be looking to reducing the provincial taxes.


Mr. MacLellan:: I wish to direct a question to my hon. friend. He is right in assuming that many people in western Canada feel that the PGRT was a tax that should not have been imposed. By its removal, the Government was merely righting a wrong. I also listened to the list of taxes which the Hon. Member said had been removed. As I mentioned yesterday in Oral Question Period, that is old news. I do not think western Canadians are impressed by the actions of the Progressive Conservative Party in respect of the National Energy Program. They are very concerned about the energy situation in western Canada. They want to know whether the Progressive Conservative Government will honour its commitments. They want to know whether the Conservatives will honour their election promises or whether the Prime Minister (Mr. Mulroney) will honour his commitments and do something. To date nothing has been done, and they feel betrayed.
What purpose is served in trying to portray western Canadians as being concerned or in a state of euphoria over a reduction or a removal of those particular taxes? Western Canadians are concerned about what the federal Government will do to help their energy sector.


Blaine Allen Thacker: Mr. Speaker, I have no doubt in agreeing with my friend that we are not getting any political credit for having taken off those taxes. That is absolutely true, but frankly I think it is wrong.
Western Canadians should be thankful that they have been removed. Had they not changed Governments, those tax rates might have been juggled a bit but they would still be there. We have taken off those taxes. We have actually eliminated the statutes so that if a future Government of whatever stripe tried to put those taxes back on, it would have to submit fresh legislation. Of course in that event we from the West would fight it and let the bells ring, as we did when the last piece of legislation was brought in.
Within the fiscal restraints, which the Hon. Member realizes still involves a deficit of some $32 billion, and hopefully dropping to under $30 billion next year, there is a question about how much can be done. Is it the position of the Liberal Party that the Government should increase the deficit to give help to oil companies? Is it its view that we should put taxes on the entire Canadian population and then transfer money to the oil companies?
My own view is that for 50 years oil companies searched for and found oil. They produced it, sold it, paid higher than average salaries, and made a profit at $2.35 per barrel. That went on from the 1930s-1940s until recent times. Then in the late 1970s prices skyrocketed with OPEC prices up to $35 to
March 3, 1987

$36 per barrel. Now it is down to $20 to $24 Canadian per barrel.
The fact of the matter is that the input costs of everyone, including the oil companies, were too high in that big bubble. They put up large office towers. There were expensive contracts, subcontracts, and farming agreements. They paid too much for their land. They had to rachet down, and they have done it. From here on there is no reason that the oil companies cannot do quite well. When they start to do well, so does the service industry.
If my friend was talking about the service industry, I agree that they are the people at the front lines. When the Liberals were in power, we said that the program would not hurt large multinational companies. We said that it would ultimately hurt tiny Canadian producers. Our prediction was absolutely correct, to the enth. We told people that they would suffer because an artificial market was being created by the previous administration. Unfortunately our predictions have come true.
The adjustment process is almost over. We have a base from which we can build into new prosperity in the future.


Mr. McKenzie:: Mr. Speaker, I have a few comments to make with regard to Liberal hypocrisy. 1 listened to them talk about the price of gas. What unmitigated gall. I can recall the 1980 election, lying to the Canadian people that they were going to give them cheap gas. Between 1980 and 1981 gas went up 60 cents per gallon under the Liberal-NDP coalition.
The Grits and the Socialists were not the least bit interested in getting cheap gas for Canadians. They allowed it to go up 60 cents per gallon. Look at them now; they ridicule us because it goes up a few cents. Gas is a lot less today than it was when the Liberals were in power.
I congratulate the Hon. Member for Lethbridge-Foothills (Mr. Thacker) who talked about agricultural problems. 1 have listened to much rubbish and nonsense today in the debate about the Conservative Party having written off the west, that nothing is going into the west. I could spend two hours this afternoon reading off what is going into the west-programs beyond belief. They have the gall to say that nothing is going into the West. I do not understand why the media do not do a job on the Liberal Party.


Russell Gregoire MacLellan: Mr. Speaker, 1 rise on a point of order. If the Hon. Member made a motion to allow him to spend two hours reading the benefits bestowed by the present Government upon western Canada, I think Hon. Members on this side of the House would be agreeable.


Mr. Deputy Speaker:: The Hon. Member for Winnipeg- Assiniboine (Mr. McKenzie) may continue with his question or comment.


A. Daniel McKenzie: Mr. Speaker, perhaps the Table Officers could assist in this motion. I would most certainly be agreeable to doing that. I might have been a little short on my time; perhaps I should have said three hours or four hours. If it
The Budget-Mr. Thacker
could be arranged, I would be only too glad to accommodate the Liberal Party.
The Liberals mentioned that we were doing nothing for western farmers or for agriculture. I should like to give one example. CIDA is to spend $450 million on Canadian food products, according to a recent announcement in Winnipeg. The projects funded by CIDA include $310 million to the World Food Program for the next two years; $89 million worth of canola oil and technical assistance to India over the next five years; $13 million worth of canola oil as food aid to Pakistan this year; and $40 million over the next three years to support the activities of the Winnipeg based Canadian Foodgrains Bank, in addition to $8 million already donated this year. The list goes on and on.
Turning to more aid for agriculture in the West, a program of $1 billion of assistance is being formulated to supplement the cash flows of grain farmers affected by the drop in world wheat prices. Through a series of rebates, all federal sales and excise taxes have been removed from farm fuels. Farmers now receive a full exemption of up to $500,000 from capital gains realized on the sale of farm property. This is to assist them with retirement, but the Liberal Party and the New Democratic Party are opposed to farmers having pensions. They have made that quite clear on numerous occasions.
Legislation has been passed to create farm debt review panels. The Government has made a record pay-out of $580 million under the Western Grain Stabilization Program. The Western Grain Stabilization Act has been amended to provide interim payments to farmers so that they can receive much needed cash in time for spring seeding. Grain farmers received $150 million in assistance for crop damage caused by drought and grasshoppers. Livestock producers received $48 million.
Interest rates are at their lowest level since 1979, saving farmers millions of dollars. We have doubled the maximum payments to farmers for storable crops under the Advance Payments for Crops Act. Farmers who have no choice but to leave the land will now be eligible for transition and training assistance under the new Rural Transition Program.
The Government has brought in commodity based mortgages and the shared risk mortgage program to assist western farmers. We have concluded new grain deals with the U.S.S.R., Brazil, and Egypt. The WGTA producers' freight rate has been maintained at the 1985-86 crop year level, saving farmers over $40 million. Action has been taken to reduce European beef imports into Canada by 55 per cent. A new long-term dairy policy has been announced. Sugar-beet producers will receive stabilization help as a result of a new federal-provincial-producer program.
I see that my time is up, Mr. Speaker. If it could be arranged for me to read this information into the record-and I will contact my office to get the rest of the material-I would say that three hours would cover about half of it.

March 3, 1987
The Budget-Mr. Boudria


Don Boudria: Mr. Speaker, I am pleased to have the opportunity this afternoon to participate in the debate on the Budget. After listening to speeches from some Tory Members across the way, particularly the Hon. Member for Winnipeg-Assiniboine (Mr. McKenzie), who disguised his questions to the Hon. Member for Lethbridge-Foothills (Mr. Thacker) in such a manner that he was really delivering a speech instead of asking a question, one has to wonder whether the Member was talking about the same Budget that we are talking about. We are talking about the slimmest budgetary document ever introduced in this House in recent years. We are talking about a Budget that had very little in it, not only very little in terms of content but very little in terms of substance. 1 know that does not bother the Tories in this House. Not to have substance suits them just fine, as we all know. Is there anything so bad about having a Budget with nothing in it, some Tories have asked? Maybe there isn't, but then why bother presenting one? Why didn't the Minister just present a press release and a Ways and Means motion, I ask you, Mr. Speaker? Perhaps Tory Members who are wondering what is wrong with a Government without a vision would then know the answer. The mere fact that they ask suggests and tells me why the Government is in serious trouble.
Let us talk about the Government. Since it came to power in 1984, the public debt has risen from $175 billion to $300 billion. That is a $125 billion increase or a 40 per cent increase in three and a half years. Forty per cent of the debt of the country has been generated while the present Minister of Finance (Mr. Wilson) has been in that position. Maybe Tory Members can make copies of my speech and give them to their constituents. Constituents have a right to know about this kind of activity. We should remember that the Government is talking to us about what it claims is lowering the deficit. I have some difficulty with the way Tories define lowering the deficit. First they take over and the deficit is supposed to be $34 billion. Immediately after that they say the deficit is supposed to be $38 billion, then they lower it to $36 billion and tell us they have saved some money. I have a hard time with that, and I am sure you do too, Mr. Speaker, being the non-partisan person that you are. The deficit was then lowered, according to the last Budget, to $29 billion. But the Government changed its mind and said no, it could not deliver on that. The deficit will be $32 billion. When the Tories could not meet that, they introduced the next Budget and said the deficit would be under $30 billion. We will have it at $29 billion some odd. Do you know how the Tories can achieve this, Mr. Speaker? They will do it in two ways. First, by selling off Crown corporations.


Mr. McDermid:: Good.


Don Boudria: A Member opposite said good. Selling off the furniture to pay the rent is Tory economics. Let the record show that the Tories across said good to selling off the furniture to pay the rent. Second, the Tories are accelerating
remittance procedures so that businesses and municipalities have to remit twice a month. I am sure the Hon. Member for Brampton-Georgetown (Mr. McDermid) is concerned about this. I will repeat it slowly so that he will understand. Municipalities will now have to remit twice a month. This will cause major disruptions to municipalities and to large businesses. It will create one extra payment at the end of the year, which is the only reason that the Government will be able to get the deficit below the infamous $30 billion, something it has been striving for.
Let us talk about gas taxes. In the great constituency of Glengarry-Prescott-Russell, having an automobile is not a luxury. I represent a rural riding, Mr. Speaker.

In a riding such as mine, which is about 100 kilometers long from east to west, a car is no luxury. As you know, Mr. Speaker, because you do have the opportunity to drive through my riding when coming to Ottawa-and by the way I would encourage you to make frequent stops in my riding and spend all the money you like. This is good for the local economy. However, for my constituents, owning a car in order to move around, to go to work, as some of my constituents who are present today and are following this debate would know, having a car is important for earning their livelihood. Indeed it is important for my electors because they cannot use any public transit system.


Sheila Finestone: Why not?


Don Boudria: The Hon. Member for Mount Royal (Mrs. Finestone) asks why. I know she knows the answer, but I will give the answer because the Tories probably do not understand and I am glad she asked me to explain. Obviously the Minister of Finance thinks the whole country is served by the TTC. He is wrong. There is no Toronto Transit Commission in the riding of Glengarry-Prescott-Russell. If you want to travel from one end of the riding to the other, you have to use your car. If you go to work, you have to use your car. Those people have the same right to live as does anybody else even though they do not have the TTC the way the Minister of Finance thinks we all do.
What has happened since the Conservatives have taken over? Since the Minister of Finance and the Prime Minister (Mr. Mulroney) have taken over, gas taxes have increased by 4.5 cents a litre. I say to the Hon. Member for Brampton- Georgetown very slowly again, that is 18 cents per gallon.


John Horton McDermid: And how much tax came off?


Don Boudria: Eighteen cents a gallon may remind him of something. A preceding Tory Government was turfed out of office because of an 18 cents a gallon gas tax, and the same thing will happen to this Government.


John Horton McDermid: How much tax has been taken off?
March 3, 1987


Don Boudria: Let me talk to you about the regions of the country. Again the riding of Glengarry-Prescott-Russell has been well served by the Canadian Industrial Renewal Board.

The CIRB program, Mr. Speaker, was beneficial to my constituency; we were given grants to modernize our textile industry, our footwear industry, so it could better compete with foreign industries. What happened? As soon as this Conservative Government came to power, against all those promises they made during the election, bang!, Mr. Speaker, the grants were cancelled. The CIRB program was abolished by the Minister of Finance (Mr. Wilson). And I am certain Hon. Members from Quebec, Hon. Members from eastern Ontario and from areas where there is a textile industry know there was a lot of work to be done. I, for one, and my constituents were hoping that in their last Budget he would have something to say, that the Minister of Finance would say that yes, it was worthwhile trying to save the footwear industry, that yes, the textile industry should be maintained. It was not to be so. Instead, we had a very hollow document, as hollow as Tory policy.
I would now like to say a few words about poverty, Mr. Speaker. There are now four million Canadians living below the poverty line. There is no reference to those Canadians in the budget I have here. Not a single word. And this is unacceptable.


Mr. Lanthier:: Not words, but action.


Don Boudria: Tonight, Mr. Speaker, when you and I, as well as the Hon. Member for LaSalle (Mr. Lanthier), the Hon. Member for Ville-Emard, the Hon. Member for Cote-Saint-Paul and others across the way, go home tonight, we will think of the 8,000 Canadians who are homeless. None of these 8,000 Canadians will be helped by this budget, something we all should remember, Mr. Speaker.

In the Budget there is what some Canadians now know as the kiddie tax. What is it? It is a tax on granola bars, of all things. Yes, tax the kids. That is Tory strategy.


John Horton McDermid: They are full of sugar.


Don Boudria: That is Tory policy. What did the Tories do with the tax? Did they put the money toward day care or toward helping single parent families? Absolutely not, Mr. Speaker. I will tell you in two minutes what the Government has done with the money.
Let us talk about the municipal infrastructure. I had the opportunity to represent the people of my constituency at all three levels of government in Canada. I started with a seat on municipal council, then I was elected to the provincial legislature, and now I have the honour and privilege of representing the people of Glengarry-Prescott-Russell in the House of Commons. Speaking of municipalities, they are very worried by the fact that their infrastructure has decayed.
The Budget-Mr. Boudria
It is getting old and they need funds to upgrade. They made representations to the federal Government and the Minister of Finance asking for assistance to review and renew their infrastructure. What happened? They were hit with the accelerated remittance requirement which I referred to a while ago. The Federation of Canadian Municipalities issued a press release on February 19 entitled "Tax provisions hit municipalities. Door ajar on infrastructure". It says, very briefly, that the new procedures for revenue collection announced by the Minister of Finance will cost Canadian municipalities tens of millions of dollars every year. The municipalities asked the federal Government for help, and they got whammed across the head and had their pocket-books ripped off by the Tory Government. That was the help they got from the Tories.
Mr. Speaker, I would like to describe briefly those who will have to carry the tax burden. It is a fact that ever since the Progressive Conservative Party assumed power, Canadians, as individuals, have had to bear a greater share of the tax burden. Since 1984-85, according to the official estimates provided by this Government, personal income tax has increased by 52.5 per cent. I repeat, 52.5 per cent, while corporate income tax has decreased by 18.1 per cent. Here is the question I ask Hon. Members opposite: Is that Conservative justice? Is this the kind of justice Canadians from my riding of Glengarry- Prescott-Russell and other areas of the country have to expect? Well, I can assure you that this is not my idea of justice.

Much has been made recently about tax reform. During the last election campaign the Tories promised tax reform. In February of 1986, the Minister of Finance said there would be tax reform at an early date. In October of 1986, he said there would be tax reform in his next Budget. On January 30, 1987, he said, "Sorry, folks, I kind of goofed. I can't put it in the next Budget. We will have it in the spring." Then on February 18, the Minister brought down his Budget and said that we will have tax reform some time in the future.


Sheila Finestone: Good thing you were not holding your breath.


Don Boudria: Yes, it is a good thing. That is a very astute remark on the part of the Hon. Member for Mount Royal (Mrs. Finestone).
Let us talk a bit about research and development. Many of the constituents I represent, particularly those in the western end of the riding near Ottawa, are employed in research and development. Last fall I received numerous phone calls from people working at the National Research Council. They were very upset by the fact that they were about to lose their jobs. They saw the NRC budget drop from S520 million in 1984 to $398 million in 1986, a decrease of $122 million. As if that was not bad enough, on October 9, 1986, the Minister of State

March 3, 1987
3784_________________________________________
The Budget-Mr. Boudria
for Science and Technology (Mr. Oberle) cut another $20 million from the NRC's budget. Flow does that coincide with the promises made by the Conservative Party during the last election campaign? I know the Tories want to forget about the last election campaign and the promises they made to the people of Canada, but I am not going to allow them to forget. I have here the book of 338 Tory promises which I think I may have brought to your attention once or twice before. The book says very clearly on page 25 that the Government would double its R and D effort to 2.5 per cent of the Gross National Product in its first four years in office. That came from sources in the Conservative Party. As a matter of fact, it came from the book Pocket Politics 1984. Do you remember that little book? I am sure you would not have seen it, Mr. Speaker, because you are non-partisan, but you must have heard about it. It was a small book given to Conservative candidates. They used to stick it in their pockets. It contained instant answers and promises to make to the people of Canada, methods by which they could con the people of Canada into believing the Tories wanted to do good things for this country. We all know differently now and the public opinion polls tell us how different it is.
In any case, in that 46-page policy booklet there is a specific promise to increase research and development to 2.5 per cent of the Gross National Product. What has happened? There have been massive cut-backs in R and D. 1 tell you, the people of the National Capital Region, those employed in that field, people who have worked hard all their lives, are very upset with the Government. They are not bound to give them their support again.
If you think i am perhaps being unduly partisan, which 1 know of course is probably the furthest thing from your mind,
I want you to know that I am not the only one who feels that way.
[ Translation]
I would like to call your attention on an article published this morning in the Journal de Montreal and entitled: "Tories: Free fall". Allow me to read a few excerpts, Mr. Speaker:
Brian Mulroney's Conservative party can only be sure of 10.7 per cent of decided votes in Quebec, before distribution of undecided votes, which does not make any sense or is hardly believable.
A reduction which is described as unbelievable, Mr. Speaker.
I note with much regret that my time is about over. I should like to deal for a few minutes with the issue of agriculture. As you certainly know, the main industry in the riding 1 represent is farming.

Just going back to the year 1985, the United States passed the United States Food Security Act, 1985, now commonly referred to as the U.S. Farm Bill. Under that Bill a system of $70 billion in subsidies was established. It was specifically designed to displace the markets of other countries, including Canada. The Government of Canada never raised a little
Finger to fight that. No lobbyist was ever hired. No one made representations, that I know of, except perhaps a few dedicated people at our embassy in Washington. Of course they were so badly outnumbered there was very little they could do. What we needed was a major effort on the part of the Government, but it has so badly kowtowed to the Americans after the Shamrock Summit of 1984 that of course it was completely powerless to do anything.
I would have a lot more to say about this Budget, but suffice it to say that the people of Glengarry-Prescott-Russell do not like it. I do not like it either. The public opinion polls tell me and everyone else that the Government had better clean up its act here and now, otherwise it will be turfed out of office.


A. Daniel McKenzie: Mr. Speaker, after the remarks of the Hon. Member we have to get a number of facts and figures straightened out. Canadian people are entitled to an honest explanation of who is responsible for starting the uncontrolled spending and who is the king of deficits. The Right Hon. Leader of the Opposition, the Member for Vancouver Quadra (Mr. Turner), took over as Minister of Finance in 1972. At that time there was a surplus of $700 million in our current account. When he left in 1975 there was a deficit of almost $5 billion. The trend continued and we inherited a $38 billion deficit generated by the kings and queens of deficit, the Liberal Party.
If we had left everything that we inherited in place, if we had changed absolutely nothing, the debt for 1986 would have been $42 billion. We have reduced the debt by $10 billion, which is an excellent start. If the Liberal Party had been allowed to continue its policies, this country would have been turned into another Argentina or Mexico. That is the route we were taking.
The Hon. Member across the way mentioned something about Crown corporations selling furniture. I would like to give some statistics on the success story of de Havilland. Over the last decade the taxpayers of Canada watched $830 million of direct federal assistance poured into de Havilland to help keep it alive. Today, under the management of Boeing, sales and employment have increased. The Liberal and New Democratic Parties have said that if we sold de Havilland to Boeing it would collapse and everyone would lose their jobs. This has not happened. It has been the success story of the year. They have recent contracts which will increase employment by 250 jobs throughout Canada, 100 of which will be in Winnipeg. That should infuse about $11 million into the Canadian economy.
We know all about the Liberal Party's philosophy on Crown corporations. They did not even know how many Crown corporations they had when they were in power. They could not tell us the number of Crown corporations. After about six months of hammering away we finally got a count and found out that there were over 400 Crown corporations. What on earth did we need 400 Crown corporations for? The Liberal
March 3, 1987

bureaucracy could set up a Crown corporation on its own. It had a free hand to do anything it wanted to. We are going to get rid of a lot more unnecessary Crown corporations. We are going to sell excess land and buildings. We are making an honest and concentrated effort to reduce the deficit, which would have reached $42 billion this year.
Those are a few facts which should be on the table with regard to who created this huge deficit. We did not create it. We inherited it and are dealing with it. Every federal Government Department is reducing expenditures and cutting out waste and mismanagement. For the first time in the history of the Auditor General's report he has commended us for making an honest and concentrated effort for eliminating waste and mismanagement within the Government. We will receive more glowing reports from the Auditor General.


Don Boudria: Mr. Speaker, that was pretty hard to take. We heard a Tory saying that selling off Crown corporations is always the right thing after they sold Teleglobe for something like six times the earnings. Those people who pretend to be the friends of business and to know what they are doing in the business world sold a Crown corporation for five or six times its earnings. That is really a bit much to take. It is also difficult to listen to Tories pretending to be such able managers. They forget to tell us that the only two banks to have collapsed in the last half a century collapsed under the administration across the way with two Ministers of Finance looking on. They have no lessons to teach on this.
The Member for Winnipeg-Assiniboine referred to the deficit king and talked about waste and mismanagement. I want to talk a little bit about waste and mismanagement too. I was not going to, but I have been provoked so I will have to. The Government instituted the $500,000 capital gains exemption, which will cost $800 million and will benefit the rich. It bailed out two banks at a cost of $1.6 billion. It gave $200 million to the Hongkong Bank of Canada and spent $41 million to create a monument in Port-Cartier which is euphemistically called the Port-Cartier prison. It spent $2.3 million on the so-called Stevens inquiry, $1 billion for the Gulf-Reichmann deal, and $2.7 million for new uniforms for the Armed Forces. Those are the uniforms that smell. Remember those, Mr. Speaker?
The Government is spending $10 million a year for three years for Mr. Reisman and free trade, which will probably lead us exactly nowhere. It spent $12 million on advertising to convince us that surrendering our sovereignty to the Americans is in our best interests. That is Tory politics. The Government has put $15.1 million in the Budget for cabinet Ministers' staff which has doubled since the Government has been in office. It spent $2.6 million on the Shamrock Summit so we could hear the Prime Minister and Ronald Reagan singing to us on TV. My television has not worked the same since. The expense for an office for the Prime Minister's wife is $100,000 a year.
The Budget-Mr. Boudria
We are paying $250,000 a year for the salary of Dalton Camp who was hired in September of 1986 to straighten the Government out, and it has been in a nosedive ever since. I want my money back for that Dalton Camp nonsense and so do the taxpayers of my riding. If there is a king of mismanagement, deficit and improper financing, it has to be the Conservative Government across the way.


Mr. Jepson:: Mr. Speaker, I listened with interest to the Member for Glengarry-Prescott-Russell (Mr. Boudria). I heard him speak of government waste, and I think it is important that we make clear to the Canadian people the extremely difficult circumstances we found ourselves in when we came to office a brief two years ago. We were faced with interest payments on the debt we inherited and payments for a social net which absorbed 83 per cent of all our revenue. We were left with roughly 17 per cent of discretionary spending cuts with which to pare our deficit down.
To the credit of the Minister of Finance (Mr. Wilson), he has done a remarkable job in little over two years. He has pared the annual deficit down by 24 per cent and is continuing to do an excellent job on that. We are seeing the results of that sound fiscal management reflected in the market-place. We are seeing increased investor confidence and the creation of 25,000 jobs per month since we were elected. It is important to remember that of the 25,000 jobs, 70 per cent are long-term. The record of the previous Government was the creation of 7,500 jobs a month in its last term, 83 per cent of which were short-term, or 24-week wonders, to allow people to earn unemployment benefits and leave them frustrated.
I urge the Hon. Member for Glengarry-Prescott-Russell (Mr. Boudria) to consider the impressive record of the Government. Mortgage rates are down to below 10 per cent for the first time in 17 years. Interest rates are down 4 per cent. We have the fastest growing economy of all OECD countries, including Japan, and the fastest job-creation of all OECD countries, including Japan. While much has to be done, it is like a breath of fresh air when we reflect on the record of this Government in such a brief period, considering the morass we inherited.


Don Boudria: Mr. Speaker, the Conservatives always refer to this morass. If we were to believe all of this, we would probably abolish every social program in order to justify eliminating the deficit. Perhaps the Tories basically want to cut off many of those programs that we established. As a matter of fact, the House will recall that they tried to deindex senior citizens' pensions. I will not repeat what Solange Denis said on the steps of Parliament Hill because you would not allow me, Mr. Speaker. But most Canadians know well the true Tory agenda.
Let me deal with the so-called job-creation of the Tories since they have been in power. We are told that 115,000 new jobs have been created. We also know that 127,000 new jobs

March 3, 1987
The Budget-Mr. Harvey
were created in Ontario, primarily in the southwestern part of that province. This means there is a deficit of 12,000 jobs for the rest of the country, including the area I represent. They should not talk to me about job-creation when there is 14 per cent unemployment in Hawkesbury in the riding I represent.


Lorne Edmund Nystrom: Mr. Speaker, I am sorry that the Member for Winnipeg-Assiniboine (Mr. McKenzie) has departed. He talked about these great deficits and how the Conservatives brought them under control. The Conservatives do not have a monopoly on deficit control in this country.
The Hon. Member has returned and perhaps he is interested in knowing that in Saskatchewan, between 1944 and 1964, the CCF Government of Tommy Douglas and Woodrow Lloyd had a balanced budget and often had a surplus. That continued between 1964 and 1971 under Ross Thatcher, a Liberal Premier. During Allan Blakeney's term as Premier of that province between 1971 and 1982, there never was a deficit. Since the Conservatives under Grant Devine took office in 1982, there has been a massive deficit in that province amounting to hundreds of millions of dollars a year.
I say to my hon. friend from Winnipeg that in Saskatchewan, in terms of deficits, Tory times are tough times. In terms of deficits, Tory times are tough times as they were in the 1930s under R. B. Bennett. If he wants to see patronage, if he wants to see wild spending, and if he wants to see incompetence, he can come to Saskatchewan and talk to Grant Devine. He is a walking expert on the subject.


Don Boudria: 1 thank the Hon. Member for Yorkton-Melville (Mr. Nystrom)-


A. Daniel McKenzie: Your colleague.


Don Boudria: Our colleague. The Hon. Member does not have to be quite so partisan. We are all colleagues here. I thank the Member for Yorkton-Melville for bringing that to the attention of the House. He eloquently mentioned Ross Thatcher, a Liberal Premier and another Premier of a different political persuasion. We know that Mr. Thatcher came from another political Party and it is very likely that it was the enlightenment which came upon him from joining the Liberals that made him such an able manager.


Mr. Deputy Speaker:: We shall resume the debate with the Hon. Member for Chicoutimi (Mr. Harvey).


Mr. Andre Harvey (Chicoutimi):: Mr. Speaker, I thank you for giving me the opportunity to address this House and all my fellow Canadians to comment on the budget brought down by our Government. This budget easily proves in my opinion that Canada has become the best country in the world in the space of only two and a half years.
We promised two and a half years ago that a Conservative Government would take Canada from one of the last among industrialized countries to the head of the pack.
I think that we can be proud of the fact that, after two and a half years, whatever the Liberals might say, the closest competitor of Canada as far as economic performance is concerned is Japan. This is no dishonour for a newcomer among countries with positive economic indicators since Japan has an outstanding performance.
Mr. Speaker, before speaking directly about the budget itself and our continuing objective to make Canada the best country in the world and to maintain it at its present level, I would like to try to show, based on the record of the Liberal Party and its stated intentions for the future, that it is absolutely impossible to have any confidence in the comments made by the Official Opposition about this budget.
Afterwards, I shall try to outline, not the record of the New Democratic Party, but its true intentions, show the way it contradicts itself on many issues and prove that these people cannot have our trust or our support.
When we look at the record of the Liberal Party, we find that, after 12 or 15 years under a Liberal Government during the last two decades, the debt had increased to $23,000 per family. This means interests of $70 million a day which Canadians must pay, or $3 million in interests an hour because of the wasteful spending of the Liberals.
Right now, the Grits, the Official Opposition have all the answers. The Liberal Opposition have among other things the solutions to the serious economic problems this Government is now overcoming.
It is important, if we are to analyse the credibility of their statements, Mr. Speaker, to check on what the Leader of the Official Opposition (Mr. Turner) stated in 1974-75. He had this to say: "We must do everything-he was then Minister of Finance-we must do everything possible to stop the increase in Government expenditures. As in the past, we will endeavour to reduce wages, limit Public Service growth, and approve only the most important of new programs."
So far so good. But what 1 find interesting, Mr. Speaker, is that the year after that statement was made, the federal deficit had increased 150 per cent. In other words, such a performance was no great shakes.
One only has to read the pre-budget statements of the Leader of the Official Opposition-and I will spare you, Mr. Speaker, the statements made by former Liberal Prime Ministers-to quote once more from the Leader of the Official Opposition, some 10 years later. His speech has not changed.
There is program duplication, while other programs are not viable. Some Government activities are wasteful. All this, Mr. Speaker, from the Official Opposition. We have programs which no longer serve any purpose, which are no longer useful, and I will put the axe to them. That was in 1984.
March 3, 1987

I was listening a few minutes ago to my Liberal colleague who had doubts as to whether we had changed their programs.
I could spend two hours speaking about program changes this Government has made. We could speak about the Canadian Jobs Strategy, that great program that is based first and foremost on the private sector. Instead of providing subsidies which remain fruitless and never create jobs, most of our programs are aimed at small- and medium-sized businesses whose main purpose is to create permanent jobs.
All this to say that when the Official Opposition formed the Government they showed arrogance and contempt towards everyone, including Parliamentarians and members of provincial and municipal governments. My honourable friend mentioned his political contribution to levels other than federal and I could tell him a thing or two myself about it. I might have an opportunity to do so later on.
Mr. Speaker, 1 find unfortunate that the opposition should refer to opinion polls at every opportunity. As a matter of fact, we are likely to have about 20 more of them before the next election. Personally, I trust the Canadian people, when the time comes, to know how to differentiate between demagogy and achievements and between lying and telling the truth.
I will not deprive myself of the pleasure of quoting Mr. Gilles Baril who served his fellow citizens with distinction at the provincial level and who has made an analysis which I feel fully deserves to be conveyed to all my fellow Quebecers.
"Federal Liberals, these clever masters of institutionalized patronage, for 20 years put their friends in charge of various federal departments. From the ordinary village Post Office through the CBC, the Crown corporations, the RCMP, the Civil Service and the great Deputy Minister, they all belonged and still belong to the Liberal family. Canadians have quickly forgotten the red cliques, their gimmicks, their faked projects such as the Canada Works-"
-which, by the way, no longer exists, Mr. Speaker. The Canada Works Program was abolished by our Government, Mr. Speaker.
"-in which the uncle, the aunt, the cousin or the organizer of the Liberal candidate campaign was involved."
-Make work programs which never amounted to anything and never created permanent jobs.
"Canadians, according to Mr. Baril, have quickly forgotten the "Louix IX" style of the former Prime Minister, his trips and parties, the fact that his country was ruined by high interest rates, high inflation and high unemployment. They have also forgotten that Liberals have been the champions of public fund waste and dilapidation, causing Canada to fall from the third to the seventeenth rank among industrialized nations."
Mr. Speaker, we brought it up from the seventeenth to the second place. This is quite a record in two and a half years; we could have made that promise two and a half years ago, but we would have been accused of being over optimistic, but indeed the facts are there. International organizations maintain that at present Canada is the best country in the world after due consideration of all economic parameters. This is obviously
The Budget-Mr. Harvey
exasperating for the Grits. I am telling them not to be that nervous because we will not harm them. We will continue to take action on basic issues.
Of course, Mr. Speaker, we must carry on with our policies in spite of the fact that demagogy-and I think that it will be short-lived-is now more popular than the achievements of this Government. We must not despair because there is an increasing number of responsible individuals.
I have here an editorial from Le Devoir blaming the Liberal Party, especially their Leader, for not having been bold enough in their decisions on certain economic issues. 1 will come to it in a few minutes, Mr. Speaker. They lack boldness because they want to play politics. Here are some examples. Can you, Mr. Speaker, define the position of the Liberal Party on free trade? Can you show me a statement indicating a consensus in the Liberal Party between the Hon. Member for Winnipeg- Fort Garry (Mr. Axworthy) who is the spokesman for his Party and the Hon. Member for Saint-Henri-Westmount (Mr. Johnston) who has been removed as the Liberal spokesman on trade issues because he agrees with the Government? He said that there was no choice, that we had to negotiate. It is to ensure a better future for Canada. Could you show me one single document, Mr. Speaker, where the leader of the Liberal Party has stated in any constructive way the position of his party on free trade? Absolutely not, Mr. Speaker. And 1 dare the Liberals to come up with any coherent document on which they all agree concerning our free trade policy, which is now endorsed by all the organizations in this country which care for the future prosperity of Canada. With regard to this issue, Mr. Speaker, we must not underestimate the importance of Canada as an economic partner for the United States. You can be sure that the United States are able to grasp the importance of this trade agreement as a model for multilateral negotiations which are a part of GATT. Here again, the Liberals have no policy.
On the Constitution, Mr. Speaker, how can you expect Quebecers to trust the proposals of the Liberal Party after having been put in their place and scorned by the previous Government? To think that the Liberals, at a recent convention, took position on the Constitution. One can hardly refrain from smiling at such news, but it is also somewhat sad. It is somewhat sad to hear the Liberals expound their views on the Constitution after having given us the brush-off for 15 years and having left us out in the cold in 1982.
Some say our Government has not conceived constructive policies for young people. I remember that in the spring of 1985, the Hon. Member for Montreal-Sainte-Marie (Mr. Malepart), the defender of the disadvantaged, attacked us as a Government saying we did not have any program for students, for the young. Yet, youth unemployment has dropped several percentage points. Why? Because we have put forward the best programs, not one but seven programs with Challenge '86, Challenge '87 and Challenge '88 where we got unexpected and unbelievable success. Those programs are significant. They are very successful. Why? Because we appealed to the true

March 3, 1987
The Budget-Mr. Harvey
partners the Government can trust, those in the private sector. Our money, our programs are helping businesses, small and even big ones to create challenging jobs for young Canadians, jobs that are also relevant, and it is important to save our young people from being told when they graduate that they lack experience equivalent to their degree of training. But it is true, we have not heard anybody say anything about our programs for youth. In that area as in others, our performance has probably been exceptional.
For a laugh, Mr. Speaker, to help you understand and see the unbelievable void of the Liberal Party in all areas, you should read once more its resolution on the need for Canada to withdraw from the Atlantic Alliance. The Liberals who wasted so much public money, are telling us, in their resolution, that we should get out of the Atlantic Alliance in order to save money, when we know full well that neutral states spend much more on defence than members of the Alliance. This only means, as it was pointed out by the editorialist in Le Devoir, that the Grits programme is pure political opportunism. There is nothing the Grits will not do to get elected. But what is important to us is that the Government stays on the right track.
There is another major issue for Quebec, that is Bill C-22 on drug patents. Let us look at the position taken by these defenders of the needy, in particular that of the Hon. Member for Montreal-Sainte-Marie. You know that the pharmaceutical industry is located mostly in Quebec. This is not a drawback, we are here to defend Quebec interests and, consequently, the interests of the whole country. What is the position of the Grits on that Bill about pharmaceuticals? They do have a position. However, judging by what they said ... the Hon. Member for Papineau (Mr. Ouellette) said, in 1983, on Bill C-22: "that a series of amendments is actually under consideration, but the industry will have to accept some form of price control in order to protect the consumer".
That is what this Government has done. You should check the position of the Liberals on Bill C-22, concerning drug patents which give minimum security to companies that discover new products in Quebec. This will generate SI00 million in investments. Again, this is a blatant contradiction and I ask them to officially state their position. Ours as a government is clear.
Mr. Speaker-much has been said about tax reform. In case the Grits, the Official Opposition, do not know, the tax reform is already under way. It began with Bill C-23 which was passed before the Christmas recess. I do not make any unwarranted statements. I asked my colleagues to check which way the Official Opposition voted. Bill C-22 which was passed before the Christmas holiday provides for a minimum tax for the rich.
I therefore feel that in their new role as champions of the have-nots, Liberal Members could at least have congratulated the Government for that stance. They have voted against the collection of a tax on millionaires, on wealthy people.
I shall deal with the New Democratic Party in a few minutes, Mr. Speaker. There again, things are rather comical.
What I wish to say, Mr. Speaker, is that I could easily illustrate the record of the Liberals as regards their regional development policy. My region in particular has suffered deeply from never-ending federal-provincial disputes. There are some issues, Mr. Speaker, on which two, three, four or five electoral campaigns were run in my region and that we settled within two years. I have no lesson to take on regional economic development. People will tell me that our Government is neglecting regional economic development even if the estimates provided under that item in the budget have been increased by 4 per cent and even if the example which I will give shows quite well our concern for remote areas. I ask you to listen carefully.
Do you know that the last agreement signed by the Liberal Government provided for $1.4 billion spread out over 10 years? We have signed one providing for $1.6 billion over a five year period. And we are told that Quebec is losing $77 million one day and $97 million the next day. We are told that Quebec is also unfairly treated under our regional development policies.
All I want to tell you, Mr. Speaker, is that I am sure slander and lying will only last so long.
Unfortunately, you are signalling that I have only two minutes left. It is really not enough.
With respect to the policies of the New Democratic Party, Mr. Speaker, we should ask them to tell us today why they want to keep the Auto Pact when a few months or a few years ago they advocated its review every five years? This is what I would like to know.
I am also eager to know the position of the New Democratic Party on the constitutional issue in Quebec, its exclusive rights on language matters. We will follow that very closely.
I would also like to know the official position of the New Democratic Party on Bill C-23 on a minimum tax and a sales tax credit to the underprivileged as well as on Bill C-22.
All this to say, Mr. Speaker, that this Government must maintain its thrust, maintain its direction, even though temporarily, it hurts of course to have the polls against us. But I suggest that if this country has been run by polls during the past 75 years, it is now time to stop governing by polls. Personally, I am not interested in wasting public funds because the polls are not good. This will not happen. I prefer to maintain the economic performance of this Government, a responsible Government, and see a 24 per cent reduction in deficit growth within three years. This is definitely a record, it is incredible. This is why all the international agencies that have economic expertise say that Canada is doing an extraordinary performance, that investment in this country also is extraordinary. And of course I am pleased with that. I would need two hours, Mr. Speaker, to speak to them quite calmly. I
March 3, 1987

do not want them to be nervous. I will not hurt them. But it is a good thing that they should hear the truth, because what is being peddled around is a bunch of lies, Mr. Speaker. It is not the truth, and I invite them to come to our regions. I could illustrate this with an example, Mr. Speaker. I invite them to come to the Saguenay-Lac-Saint-Jean area and defend our regional issues, and also in the Beauce area, and all across Quebec for that matter.
Having said that 1 will add that concerning regional development, 1 am ready to compare this Government's performance over the past two and a half years, and you may rest assured that it is considerably better than the 25 years of Liberal mismanagement. And the results are there to prove that jobs are being created everywhere, in remote and other areas, where of course this is more difficult than in large industrial communities. The policy of our Government has revamped the old Liberal programs which existed solely for the purpose of fostering and encouraging patronage. Our whole strategy is bearing fruit, which is quite extraordinary, Mr. Speaker. I will have the opportunity to get back to this. I had to skim over some of the stands taken by the New Democratic Party which is making gains just now on the basis of its economic and constitutional contradictions. Its members do not know which way to vote on interesting Bills. Mr. Speaker,
1 want to thank you for allowing me these few minutes and I will have the opportunity to deal again with this within the next two years.


A. Daniel McKenzie: Mr. Speaker, I would like to congratulate the Hon. Member for Chicoutimi (Mr. Harvey) on a well-researched speech. However, I think I have to correct him on one issue.


Lorne Edmund Nystrom: Only one?


A. Daniel McKenzie: He said that the Liberal Party does not have a position on trade. It has all sorts of positions. One has just to take their pick. The Leader of the Official Opposition has two positions on it. He is for it and he is against it.
I would like to ask the Hon. Member whether he supports the Government's advances in research. There have been a great number of false and misleading statements about our being against research. Nothing could be further from the truth. I would like to point out to the Hon. Member that federal funding for science and technology in 1986-87 increased to an estimated $4,223 billion from last year's estimated level of $2,748 billion. With an increase such as that I do not know how anyone can stand on his feet and say that we are against research. The problem with research is that the Liberal Party had a policy of dishing out money to anyone who had a little pet project. We are not dishing out the money. We will not pay for waste and duplication, for programs that are being researched elsewhere.
I wish to ask the Hon. Member if he agrees with the new policy in place in the Department of Employment and
The Budget-Mr. Harvey
Immigration. It is called the increased interview activity program. Under this program the Department calls in the unemployed to try to find out why they do not want to take jobs which are available. The Minister of Employment and Immigration (Mr. Bouchard) has called in over 75,000 people so far and we have placed 25,000 people in positions. A great many Canadians are not coming in for their interviews because they know why we are calling them in-we want to put them to work.
We know the Liberal Party destroyed the work ethic in Canada. There are all sorts of statistics which show that firms cannot find people to fill positions which they have open. One example I have here is with respect to Leeson Electric Canada which wanted to hire people to help out with the youth unemployment crisis. They advertised for truck drivers, shippers, receivers and trainers to learn the rewiring of electric motors. What happened is that they could not find anyone to fill those positions. With one million unemployed there is something radically wrong. We are dealing with this issue. I think we will have to continue to remind Canadians that the Liberal Party destroyed the work ethic in Canada.
We have another problem with the labour unions. The heads of the labour unions have told the people not to take these jobs. They have told the people to stay on welfare. Many of the companies are offering more than the minimum wage. For example, where the minimum wage is $4 they are offering $6, $8 and $10, and they still cannot find people to fill these positions. However, we are dealing with this situation.
I want to know the opinion of the Hon. Member for Chicoutimi in terms of whether he supports the Government's program to restore the work ethic in Canada which calls the unemployed in for interviews and which places them in jobs.


André Harvey: Clearly, Mr. Speaker, for my friend the Hon.
Member for Winnipeg-Assiniboine (Mr. McKenzie) to ask me to understand the policy of both the Official Opposition and the New Democratic Party is clearly asking me for the impossible. If I may, I should like to read what is the Liberal philosophy according to a former Liberal member. "To be a Liberal is first and foremost to be a Member of the House of Commons. And in this context, everything can be justified". It is not a Conservative member who is saying that but a Liberal. "If the development of Canadians as individuals can be achieved through socialism, the Liberal Party can be socialist. If the development of Canadians as individuals can be achieved through a change of direction to the right, by greater emphasis on the private sector, the Liberal Party can be a party of the right". I must continue, for you have not heard the worst yet. "If, to develop, the Liberal Party deems necessary to become communist, we will become communist. This is what being a Liberal means". I shall refrain from giving the name of this former member, but I shall perhaps have another opportunity to do so later.
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March 3, 1987
The Budget-Mr. Harvey
In my humble opinion, when the Liberals speak about research and development, do you know what they have in mind? They figure out the amounts allocated to research and development only on the basis of what the Government does. As for us, our philosophy is that, if we want research and development to be effective and aimed at productive sectors, capable of generating employment, it must be carried out mostly by the private sector. What is our strategy, Mr. Speaker? It is not to have direct subsidies and direct Government research, but to provide incentives in the form of investment credits, and this has had marvelous results, even for our small businesses.
I am convinced that the Liberals have still not read all about our programs. Many small businesses in all the Liberal constituencies are carrying out research and development thanks to Government subsidies, but after two and a half years, the Liberals have still not had the time, with their demagogy, to read about our programs even though it is much better to provide research incentives than to throw money away since this is much less likely to promote productive research. No one is better able to decide in what sector research should take place than private enterprise.
The second area of criticism for the Liberals is employment. However, if we look at the record of the Liberals between 1979 and 1984, we find that they created 1,255 jobs a month. As for us, we are creating 25,000 jobs a month, but we are not taking full credit for this and saying that it is only because of the Government. The fact remains that, because we have inspired confidence to the private sector, there has been an outstanding performance at that level and this is due to our main partner the private sector which is there to create jobs. We must not forget that the investment climate in this country has never been so promising, particularly for foreign investors. I would suggest it is the result of this Government's sound management policy which, despite the demagoguery and falsehoods of the Official Opposition and the NDP, is bearing fruits outside our borders. We have a good credit rating in this country, Mr. Speaker, and it is nice to be told that Canada-in any case I am proud to be told that Canada is the best country in the world. It took us two and a'half years to reach that level, so imagine what it is going to be like after four years.
Our main competitor was Japan, and I am proud because we can give an example of entrepreneurship, of work dedication, and of things well done. We mention Japan. Canada now ranks second after Japan and two years hence the Japanese will say: We ought to be able to do better than the Canadians. This is why our Government, through the Prime Minister, does not lay open to pettiness and reactions full of meanness. Our Prime Minister still has his national reconciliation objective in sight and signs regional economic development agreements, something which the Liberals did not even know-$1.6 billion in ten Quebec sectors. I am certain that the majority of the Liberal Members are not even aware of it.
Second, Mr. Speaker, the proof is made, economic recovery is a fact. As for social justice, Mr. Speaker, there will soon be daycare services and tax reform.
The Reds would like us to proceed more quickly with the tax reform. They had 75 years to do so themselves. Why should we not take another four months to think about tax reform? The income tax of all individual taxpayers will go down, Mr. Speaker, including corporate taxes. Those who have not paid any taxes in 75 years will have to pay some within a few months. In fact, the rich already have to pay a minimum tax. Our Government had to come to power to initiate this reform.
Our fourth major principle, and we must not go against our four major principles, about which we are making substantial progress, is international recognition for our country. Canada has to be seen as a country which is not afraid to negotiate throughout the world. We played a major role at the disarmament conference. Our positive contributions have enabled Canada to play a very interesting role in this regard. I am certain that, now that Canada is part of the Group of 7, which was not the case previously-once more, it needed our Prime Minister, who, by working intelligently, not with contempt for everyone and arrogance, but by negotiating intelligently-


Mr. Deputy Speaker:: I am sorry to interrupt the Hon. Member, but his time has expired. The Hon. Member for Yorkton-Melville (Mr. Nystrom) for debate.


Lorne Edmund Nystrom: Mr. Speaker, this afternoon I wish to say a few words on behalf of all of us here in the Opposition who are present-at times one feels like a tiny minority.
The budget debate gives the House a unique opportunity to talk about the general direction in which we think the country should go. It is a little like the Throne Speech debate which also gives us that flexibility. It gives us a chance to speak on behalf of our particular constituency or region, because we all come from different realities. I come from a part of the country that is suffering economically. My constituents ask the question, "Where is Canada going as a nation?" During the parliamentary break last week I had a chance to have public meetings in my riding, in the village of Stenen, the towns of Norquay, Buchanan, Springside, and Mikado. All are very small communities.
The question that most people are asking is, "Where are we going as a country?" This is a country with tremendous wealth and potential, yet in the last 20 years our living standard has dropped from number one or two in the world to down to about tenth, eleventh, twelfth, or fifteenth position depending on how it is measured. They ask the question, "Where are we going as a nation? I think that we have a choice. We can either be a leader, or a follower; for much of our history, we have followed the American economy wherever it goes, or we can just get out of the way. Recently we have been getting out of the way as we
March 3, 1987

are pushed on shakes and shingles, on the U.S. Farm Bill, on softwood lumber, and starting yesterday on the question of potash. I do not believe it has to be that way. I believe that we can have a dream of a better tomorrow for ourselves, our children, and our grandchildren. I believe we can be a leader in the world. 1 believe that we can be a model for the rest of the world to follow. I believe that we have the potential, the intelligence, and the human spirit in this nation that if we had leadership, we could lead the world and be a model in the world of tomorrow.
I am concerned that the Budget does not provide that type of leadership. It has been described by everybody as a stand pat Budget, a safe Budget, a Budget that continues in the same direction. I am afraid that with that type of Budget we will not lead the world. I believe that we can modernize our economy. More money can be spent on research and development. We can specialize in certain areas. We can support our basic industries like farming, fishing, forestry, and resources. We can become a world leader if we have the dream and the vision.
As well, we lack a national spirit which unites us. All too often we are fighting, region against region, group against group, sector against sector. I do not see any evidence in the Budget brought down a couple of weeks ago that this will change.
As a matter of fact, the Minister of Finance (Mr. Wilson) and the Prime Minister (Mr. Mulroney) have said time and time again that the economy is healthier now, that jobs are being created now, and that there is a great spin-off creating wealth from one part of the country to the other. That is just not the case. In most parts of the country there are more people unemployed and in desperate straits now than there were seven years ago, back in 1981.
I should like to refer to an article which appeared in The Globe and Mail on February 28. It indicated, for example, that in the last year-and I think Canadians would be interested in this information-more than 95 per cent of the additional jobs in Canada were located in the Province of Ontario. I may add that even Ontario development has not been very balanced, because 15 per cent of the people in northern Ontario are unemployed. Therefore, 95 per cent of the jobs created last year were created in southern Ontario, primarily because of the stimulation provided by the automobile industry which is going very well.
Between January 1986 and January 1987, the total number of jobs in the country rose by 137,000 according to Statistics Canada, but only 5,000 of those jobs were located outside the Province of Ontario. Another way of looking at it would be that 40 per cent of the people working today are working in Ontario and Ontario has only 36 per cent of the population of the country.
The Budget-Mr. Nystrom
If we look at the net number of people who are working, there are 2,000 fewer jobs outside Ontario today than there were a year ago on a seasonally adjusted basis, according to Statistics Canada. Therefore, 2,000 fewer people are working in nine provinces today than was the case a year ago, according to Statistics Canada.
When people in my part of Canada hear the Prime Minister or the Minister of Finance saying that there has been a creation of jobs, that there is new wealth, that there is a golden opportunity in the land, and that things are going well, they become very angry because it is not happening in Saskatchewan. It is not happening in western Canada, in Quebec, in the Atlantic provinces, or in northern Ontario. There is tremendous inequality in development in the country today. I do not see any evidence in the Budget to correct that tremendous imbalance. If it is not done soon, we will have growing regional inequities and regional alienation.
Last Friday a poll was published in The Globe and Mail which indicated that support in Manitoba for the separatist Confederation of the Regions Party had grown from 3 per cent to 7 per cent since October. Manitobans are feeling more and more alienated from not just the Government of Canada but from the national institution of Parliament and other Canadian institutions. This is a very serious issue.

I just heard the Hon. Member for Chicoutimi (Mr. Harvey) suggest in this House that everything is going fine now in the Canadian administration, thanks to this Tory Government. However, Mr. Speaker, would you take a very close look at the unemployment rate figures in Canada? A parallel can be drawn between the years 1981 and 1986. Everywhere in Canada unemployment rates are now higher than six years ago. And in provinces like Newfoundland, where six years ago there was a 13.9 per cent unemployment rate, the current rate is 20 per cent, a 6 per cent increase. And in Prince Edward Island, it went from 11.3 to 13.6 per cent. And in Saskatchewan, six years ago, there was 4.7 per cent unemployment and now the rate is 7.7 per cent. In my riding and in that of the Hon. Member for Assiniboine, the unemployment rate has almost doubled over the past six years.
A still more extreme example, Mr. Speaker, British Columbia had a 6.7 per cent unemployment rate six years ago, but now the rate is 12.6 per cent. And things are still worse in Alberta, where six years ago the unemployment rate was 3.8 per cent, as against 9.8 per cent now, Mr. Speaker. It is easy to see that we need a new regional development policy for Canada, because the only region in this country where everything is going right is southern Ontario. I have nothing against Ontario and Toronto men and women. I do not live in Toronto. There are other regions in Canada where the unemployment rate is much too high now.

Another concern is the sectoral problems. Canadian farmers are in great difficulty nowadays. Resource industries are in

March 3, 1987
Adjournment Debate
great difficulty. One needs only to talk to my Conservative colleagues from Alberta about the oil industry to understand the tremendous problems of that industry because of the fall in the price of oil around the world. We have the same problem in potash. To make things even more complicated, the American Department of Commerce decided yesterday to begin investigation of the anti-dumping petition in the United States. Just this morning the American International Trade Commission held hearings about whether or not there was injury to two New Mexican potash mines because of supposed subsidies in Canada, primarily by the Government of Saskatchewan.
Our resources are under attack by growing protectionism in the United States, yet we have a Budget which does not try to redistribute opportunity and money in any serious way to the regions of Canada which most need it.
I think they are making a big mistake and running the serious risk of not only the Government itself being defeated but of deepening regional alienation and division within Canada. I am very concerned about the possibility of a rise in western Canada of a western separatist Party which feels alienated from our system because western Canadians are not getting their fair share.

The same thing goes for Quebec. Five years ago, a referendum was held on Quebec's independence. For quite a while in that province, there was a movement towards independence, and now we have a Government with 57 Quebec members which, according to the most recent polls, has the support of only 14 per cent of Quebecers. There is certainly a major alienation from the federal Government in Quebec.
| English]
Then we have Newfoundland where the cod issue, in terms of the sell-out to France, has made Newfoundlanders so angry that they called open line shows questioning whether or not they should have joined Confederation in the first place and talking about the future of their province within the country. The issue has so angered Newfoundlanders that a Conservative Premier-and we all know how important is Party solidarity in Canada-is leading a crusade and a virtual war on his federal colleagues in Ottawa and against the great codfather, the Minister of Transport (Mr. Crosbie).
These things do great harm to Canada. I am afraid about the future of the country. As I said in the beginning, 1 think we have tremendous potential in Canada. If we had a vision, we could lead the world in terms of economic development. We could be a world leader in transportation, in the resource industries, in agriculture, in fisheries, and in forestry. However, we are not doing that. It is not Canada which comes up with new and innovative ideas, machines, and high technology. Instead, we import most of those things from Japan, the United States, and western Europe.

Forty years ago, during the Second World War, Germany, France and Japan were practically destroyed, but today, their economies are stronger than our own.
Mr. Speaker, it is six o'clock, so I will continue either tomorrow or whenever we resume debate on the budget.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Sergio Marchi: Mr. Speaker, I am pleased to take up questions that I had the occasion of asking the Right Hon. Prime Minister (Mr. Mulroney) yesterday in the House of Commons and followed up today with the Minister of Employment and Immigration (Mr. Bouchard). They dealt with the whole question of Canada's refugee policy. Essentially Canadians are getting confusing signals from the Government. On the one hand we have a system that is outdated with the present phenomenon facing Canada and facing the plight of refugees.
A special administrative review was put in place last May 21 by the former Minister of Immigration. Then the Government tinkered with the present parameters of that policy and announced changes some two weeks ago. It is promising legislation to set aside the system, creating a new independent refugee determination system. Today in media reports we learn of the Government's plan, already approved by the Planning and Priorities Committee, to usher in a second administrative review, or what The Globe and Mail and other newspapers refer to as general amnesty.
Canadians and refugees who are seeking asylum in Canada wish to know what kind of system we have. Over the last two years we have been trying to advocate bringing in a new, separate independent system apart from immigration, recognizing that an individual applying for landed immigrant status is pushed by certain criteria and that refugees seeking asylum are pushed by completely different motives and circumstances. That debate started with the Standing Committee on Immigration which submitted an umbrella report.
Rabbi Gunther Plaut provided a landmark report. Churches, organizations and immigrant aid societies across the country have given their input. The evidence is in. It clearly points toward the new system, yet we still have a Government that prefers to procrastinate. It is one that tinkered with the system a certain mode two weeks ago and then, as evidenced by this
March 3, 1987

amnesty or special administrative review, is tinkering with it in another way.
We are sending out two sets of signals. We have a front door policy and a back door policy. As I explained earlier, the policy is beginning to resemble a train with two sets of cabooses and which is going nowhere because each caboose is pulling in separate directions and each is playing one against the other. When we have a disorderly system and an inconsistent policy there is chaos. Chaos does two things. First, it allows greater abuse and allows those individuals who are making fraudulent claims to get away with them. Second, and more important, legitimate refugees are suffering as a result of the chaos, disorder and delay. We have individuals and families who have been waiting two, three and sometimes four years to get their lives determined. We need a system that is expeditious and fair.
The Prime Minister said on August 19 of last year when he was referring to the plight of refugees that "if we err, we will always err on the side of justice and on the side of compassion." Yet, as a result of changes made last week on which the Government hangs its hat, it is against fraudulent claims and false refugees. The entire country is, Mr. Speaker. Every Member of Parliament is against abuse in the refugee system or any other portion of our federal domain. We are not suggesting that we are in favour of fraudulent refugees, we are suggesting that there is a way of dealing effectively with the fraudulent refugee. Second, we are saying that we should not do the first to the detriment of legitimate refugees trying to normalize their lives and the lives of their families.
Because of the changes, rather than leaving the system as it is, imperfect as it is, people should know the rules of the game until a brand new system is in place and we have the gospel for this country's refugee policy. Instead we have one layer of bureaucracy on top of another, and the policy is being tinkered with every second or third day. In the end no one knows the direction the Government is taking, and certainly the refugees are getting conflicting signals.
By removing the B-l list, in theory at least we may be deporting people to countries which we, just 10 days ago, deemed dangerous because of real persecution. We are jeopardizing those people. We are driving people to protect themselves through hunger strikes. We are stranding people at airports.
Canada has had a tradition of helping refugees in their plight. We cannot take everyone. We cannot open our doors wide enough for all the world's refugees. No one is saying that. However, we have a role to play. Yet that role is becoming fuzzy simply because we are sending confusing signals, which in turn is because the system is not working well. We have the ability to eliminate the backlog and take care of those seeking refugee status and at the same time give Canadians confidence that the system has a degree of integrity and consistency and will protect their interests as well.
Adjournment Debate
What we in the Opposition are trying to say is, stop tinkering with the system. Stop sending up trial balloons and leave the system as it is until we can bring in a new and permanent system. I look forward to the Government agreeing with that principle and telling us when we can expect such a policy.


Mrs. Pauline Browes (Parliamentary Secretary to Minister of the Environment):: Mr. Speaker, I am very pleased to respond to the Hon. Member for York West (Mr. Marchi) concerning this very important issue. Last week, while the House was in recess, we had an opportunity to be in our ridings. It is not often that we get comments in our constituency offices about things which have been done well. However, the announcement made by the Minister of State for Immigration (Mr. Weiner) concerning changes in the refugee determination process was most positively received by the Canadian public.
I want to point out how welcome those changes were in my riding of Scarborough Centre. The changes were made to be fair to both the people coming into this country and those who live here now. Certainly we encourage refugees coming to Canada. The compassionate and humanitarian nature of both Canadians and this Government have never been questioned. The Nansen Medal which was awarded to the Canadian people is a great tribute to that compassion.
To specifically reply to the Hon. Member's comments, I wish to emphasize that the Government is satisfied that the current arrangement with the U.S. Government is providing the necessary protection against removal of a potential refugee claimant to a country where he or she alleges they will be at risk. The arrangement with the U.S. Government is that there will be a case-by-case review of each refugee claimant. Where there is no danger of immediate removal from the U.S., an immigration inquiry will be scheduled and the individual will remain in the U.S. until then. Where U.S. immigration indicates an individual is under deportation order and subject to immediate removal, the person will be allowed to enter Canada immediately to await the inquiry. Since those measures have been initiated there has been almost daily contact between the U.S. and Canadian officials at border crossings. There is evidence that American officials are cooperating to ensure that no potential refugee claimant will be removed from the U.S. prior to the date of the Canadian immigration inquiry.
I want to say to the Hon. Member that the administrative review was not an amnesty. Some 80 per cent of those reviewed have been allowed to stay in Canada. Some 20 per cent have not. That is not an amnesty. We are considering each case separately. We are not planning an amnesty as reported in The Globe and Mail. The Minister spoke very clearly about that in the House today. The fact is that we have not had an amnesty and are not planning one. Each case will be decided upon separately. I want to emphasize that Canada and the Government will treat each real, true refugee in a compassionate and humanitarian way, as is the Canadian way.


Alan Redway: Mr. Speaker, if you ever drive up Dawes Road in my constituency, you will see apartment buildings on both sides of the street, some of them high-rise and some of them low-rise. Those apartment buildings have been there for approximately 20 years. Some of them are well looked after and some are not so well looked after. One particular complex of buildings which is well looked after is the Chadwick Towers complex on Dawes Road. That is a co-op housing complex. The residents own the complex. They pay a maintenance fee and share in the maintenance and management of the complex. However, when the residents sell their property they cannot sell it at a profit.
As you well know, Mr. Speaker, this is excellent housing for low and modest income people, for middle-income people, for single family parents, and for young families. It is a great type of housing facility. I am proud that co-op housing is in my riding in Chadwick Towers. I am proud that that is not the only co-op housing development in my constituency. On Glenburn Avenue there are the Glenburn Apartments, which was a poorly maintained building. We were always having problems with this particular building. The then tenants got together with a co-op housing movement, bought the building, gutted and rehabilitated it, and turned it into a co-op. It is now a credit to our community.
I was hopeful that we were going to have another co-op housing development in our community, the Todmorden. Unfortunately, it was recently discovered that there is methane gas on the site where they were going to build this complex. They are, therefore, looking for another site on which to build it.
The co-op housing concept is a great one for providing housing for modest and middle-income people. I know you will recall, Mr. Speaker, that the former Liberal Government decided a couple of years ago to cut back on the number of units allotted for co-op housing. In reaction to that, the co-op housing movement came forward with a new concept called the index-linked mortgage. They convinced Canada Mortgage and Housing that the index-linked mortgage was a good idea.
Last year Canada Mortgage and Housing, proceeding for the first time under the index-linked mortgage concept, decided to allot 5,000 units to co-op housing. That was based on the fact that the index-linked mortgage could be obtained at a 4 per cent rate. Later it turned out that these mortgages could not be obtained for better than 5 or 5.5 per cent. Because of that, the 5,000 units of co-op housing were not produced. In fact, CMHC cut back to 3,300 units of housing. That is quite a shortfall from what had been allocated and promised originally. Furthermore, CMHC promised that 30 per cent of those 5,000 units originally would have shelter allowance and there would be some subsidization for low-income people. As a result of the cut-back in the number of units, the shelter
Our Government has done a great job in housing. There were more housing starts in the past year than there have been for many years. With interest rates falling and the economy beginning to move again, there will be even more housing starts in the coming year. When we consider the new social housing policy and all of the funds being directed to those in need, we will be able to produce with the same money in the social housing field about twice as many social housing units as we did in the past. We have been doing a good job in housing, but not in social housing altogether.
We need more rental housing, more shelter for single people and families, and we need more co-op housing. Members will recall that the co-op housing allotment by CMHC for 1986 was less than in 1985. In fact, it was the smallest number of units allocated in any year for the last 10 years or more.
The former Liberal Government let the co-op housing field down and let Canadians down by allocating fewer and fewer co-op housing units each year. That was an election issue. In fact, the Progressive Conservative Party promised during the 1984 election that there would be more co-op housing units produced under a Progressive Conservative Government. The Progressive Conservative Party is committed to co-op housing and I know that you, Mr. Speaker, are committed to co-op housing. Tonight, I hope that we will hear from the Parliamentary Secretary that the Government will keep that promise, that it will produce more co-op housing units this year and there will be a major allocation to co-op housing. If that does not happen I will be disappointed. In fact, I will be furious with the Government if I do not hear that from the Parliamentary Secretary tonight.


Claude Lanthier: Mr. Speaker, I welcome this opportunity to respond to the points raised by the Hon. Member for York East (Mr. Redway) on December 11 last year, about the supply of rent geared to income housing and the co-operative housing program.

Let me reassure the Hon. Member that the concerns he expressed tonight about co-op housing and low rental housing in his riding are the same concerns expressed in the riding of LaSalle which I represent. We have the same problems that were caused by the former Liberal administration and we are trying to correct them.

Our Government's success in this field is a source of intense pride for us all and especially for the new Minister responsible for the Canada Mortgage and Housing Corporation, the Minister of Public Works (Mr. Mclnnes). I welcome this
March 3, 1987

opportunity this evening to give some additional information on these programs.
In 1985, when government guidelines and housing programs were being reviewed, one of the guiding principles was to channel public funds to those who were most in need.
That is exactly what we have done. Now that a new set of programs, many administered jointly with the provinces, are being implemented, more truly needy Canadians are able to take advantage of Government assistance in obtaining affordable housing.

To help moderate income Canadians, those on the margin of ownership, a new co-operative housing program was developed to provide co-op members security of tenure through more effective use of public funds.

Furthermore, all housing co-ops must allocate a certain number of units for subsidized housing. Federal-provincial shared cost programs provide for rent geared to income in about 30 per cent of housing units for low-income Canadians.
Still on the subject of co-ops, if operating costs exceed market levels for rents, a subsidy is applied to make up the difference. Subsidies paid in subsequent years are normally indexed to the real rate of inflation. During the program review, the Co-operative Housing Foundation urged the Canadian Government to adopt an experimental mortgage instrument that had been used for some time, with considerable success, in Denmark. I am referring to an indexed
Adjournment Debate
mortgage loan, fully guaranteed by the mortgage loan insurance plan under the National Housing Act, which has been available for about six months.
The real interest rate hoped for by the Foundation did not materialize, unfortunately. Capital costs have soared, and last year's budget was not as flexible as the co-operative housing sector would have wished.
The Government of Canada continues to support the co-op form of tenure as an alternative for Canadians, and is watching with great concern the acceptance of this experimental mortgage instrument.

Our Government remains committed to channelling its limited resources to Canadians who are most in need.

That is to say our Canadian Government continues in its resolve to target its limited resources to helping those Canadians in greatest need in York East and in LaSalle.


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).


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

Wednesday, March 4, 1987
[Stage Direction]
Prayers