1987-02-20

Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, it seems to us on this side of the House that it is time for the Government to come to its senses, to stop beating around the bush and to explain where it is going on acid rain with the United States.
The Prime Minister (Mr. Mulroney) should be gracious enough to recognize that the envoys' report is not working in Canada's favour as he had originally hoped. Having done that, the Prime Minister should tell President Reagan when he comes to Ottawa on April 5 that Canada wants to see a substantial cut in American air pollution crossing over the border into Canada. At the very least the Prime Minister should try to secure from the President a commitment not to oppose the acid rain control legislation currently before Congress.
Emission reductions, not further research, are the message the Government of Canada should give to the United States. The first public opportunity to do so will emerge right here in Ottawa on April 5 when the Prime Minister and President Reagan will meet.


THE BUDGET
Mr. Felix Holtmann (Selkirk-Interlake):: Mr. Speaker, the Budget is great news to steel producers and steelworkers all across Canada. The withdrawal of the general preferential tariff on most specialty and carbon steel mill products will give our steel industry a much needed boost and will stimulate
greater production levels and more jobs throughout the country.
The people in my constituency of Selkirk-Interlake are extremely pleased with this Budget. The Town of Selkirk is the steel capital of Manitoba. The people of Selkirk are pleased that the Government has seen fit to strengthen the steel industry further and that, as a result of the Budget, job security in Manitoba's steel industry is also strengthened. The Budget is good for Selkirk, it is good for Manitoba, and it is good for all of Canada.



Mr. John Parry (Kenora-Rainy River):: Mr. Speaker, yesterday the Government tabled its third Budget in the House of Commons. It is a Budget which has done nothing to improve fairness for average families, families who have been looking to the Government to provide honest and straightforward leadership.
Not only has the Budget failed to introduce tax reform to ease the burden of average families but it has actually raised their taxes for the third straight year. For the residents of northwestern Ontario, this Budget has not allocated one penny to relieve the region's official 9.7 unemployment rate, a figure that we know is fudged because it fails to include residents of Indian reserves. In fact the Conservatives have chosen to ignore even those regions less fortunate than my own.
The only exception to this has been the Government's constant desire to raise the price of gasoline. Once again it has hosed northern consumers at the pumps. It is about time the Government realized that northerners already face the highest gasoline prices in Canada and they must rely upon their trucks and cars to travel the vast distances between and sometimes within communities.
Next year or shortly after, the Canadian public will pass judgment on this and on previous Budgets. No more will there be Conservatives to put the boots to average taxpayers or the unemployed people of northern Canada.

February 20, 1987


AGRICULTURE
Mr. Gabriel Desjardins (Temiscamingue):: Last Tuesday, February 17, Mr. Speaker, a food production development agreement was signed in Quebec City.
The Ministers involved, particularly the Canadian Minister of Agriculture (Mr. Wise), are to be commended for this timely initiative to grant $35 million for food production development in Quebec over the next five years.
These funds will be expended for research and development, technical innovations, new initiatives, as well as soil conservation and quality improvement.
Mr. Speaker, agriculture is one of the major economic sectors of my region, and I would urge all Abitibi-Temiscamingue agricultural institutions, organizations and businesses to take full advantage of this agreement. This is a unique opportunity for the Abitibi-Temiscamingue region to play a leading role in Quebec's food production development.


GASOLINE PRICE INCREASES ANNOUNCED BY PETROLEUM COMPANIES CONDEMNED-REQUEST FOR INQUIRY
Mr. Jean-Claude Malepart (Montreal-Sainte-Marie):: Yesterday, Mr. Speaker, Shell Canada followed the bad example of the Conservative Government which, for the fourth time, has increased the tax on gasoline by one cent a litre. Shell Canada has hiked gas prices by two cents a litre with the result that, in a single day, the price of a litre of gas went up from 49.7 cents to 52.7 cents.
As you may recall, Mr. Speaker, Ultramar led the way last November 4 with a two-cent-a-litre increase in the price of
gas.
We are all aware of the Shell-Ultramar shady deals which highlighted the closure of the Montreal East Gulf refinery.
1 would urge the Government to make an inquiry to find out whether these two companies might be colluding. One month Shell management announce their decision to boost gas prices, followed in turn by Ultramar the month after.
Mr. Speaker, I would suggest that all Members of the House bring pressure to bear on the Minister of Energy, Mines and Resources (Mr. Masse) to make sure that the oil multinationals are not using Canada's frigid climate as an excuse to increase heating oil prices.


PROPOSED NATIONAL SPACE AGENCY
Mr. Bill Tupper (Nepean-Carleton):: Mr. Speaker, the Speech from the Throne announced the creation of a National Space Agency, an initiative I fully support because it will help bring Canada into the 21st century. I believe the agency should be established in the National Capital region. Some 80 per cent of the persons likely to be part of the agency are already located here. To move or replace them would be expensive, inefficient, and disruptive to the national space effort. Furthermore, any loss of this skilled resource could set our space program back three to ten years.
The agency will co-ordinate the space activities of government Departments, space laboratories, and test facilities, most of which are in Ottawa, and develop linkages with other international space organizations and Governments. It will also have a major contract awarding function. This is a national agency involving all parts of the Canadian infrastructure. The arguments in support of locating the agency in the National Capital region are substantive.


REVENUE CANADA
Mr. Vic Althouse (Humboldt-Lake Centre):: Mr. Speaker, Revenue Canada, with the Minister's approval, has decided that it knows farm machinery prices better than the farm machinery market and is attempting to rewrite contracts made in 1983 and 1984 in a way which will reduce the investment tax credit allowed, reduce the capital gain on the trade-in, and reduce the capital cost allowance to the farmer, by arbitrarily changing the contract and the value of the trade-in.
Why has the Minister decided to intervene by retroactively changing the values on contracts that were arrived at competitively and at market prices? We do not know and the Minister has not explained. Since the procedure being used by Revenue Canada was abandoned before, can the Minister tell us why he has decided to intervene and, in effect rewrite the contracts to suit the Department rather than reflect real life? More important, under what specific section of the Income Tax Act does he think he finds this authority to intervene retroactively? Surely taxpayers have a right to consistent, fair, and legal practices when the Minister and his Department decide to conduct a review.
February 20, 1987


COPYRIGHT
Mr. Bill Attewell (Don Valley East):: Mr. Speaker, on Monday, February 23, I am meeting with Morris Zbar, Chairman of the North York Public Library Board, and other members of the executive. They have expressed concern about the probable implications for libraries of some proposed amendments to the Copyright Act which, incidentally, has not been revised in over 50 years.
They request that the right to importation clause be retained. They want clarification of the role of public photocopiers in libraries. They also want the proposed exhibition right deleted. They support the Canadian Library Association's suggestion that all libraries be considered institutions entitled to claim educational exemptions. Lastly, they consider it essential to have library associations consulted and given further information before the final decisions are made.


ENVIRONMENTAL AFFAIRS
Ms.. Sheila Copps (Hamilton East):: Mr. Speaker, once again we see the Conservative Government has completely forgotten the City of Hamilton in its Budget. Not a penny has been set aside for the environment there at a time when the Windermere Basin has been described by the International Joint Commission as one of the most polluted bodies of water in North America. Unfortunately it ranks up there with the St. Clair blob and the Niagara River, and seagulls are dying in the Windermere Basin because of PCBs which the federal Government refuses to help clean up.
[DOT] (ms)
We are asking for only $1.25 million from the federal Government. The provincial Liberal Government made its commitment last September. The City of Hamilton made its commitment last year. The regional municipality made its commitment last year. We are asking for $1.25 million to save the seagulls, the people of Hamilton, and the drinking water of nine million people around Lake Ontario. It is a critical situation. I call upon the Minister of the Environment (Mr. McMillan), the Prime Minister (Mr. Mulroney), and the Minister of Finance (Mr. Wilson) to take care of Hamilton's environment in this Budget.


THE BUDGET
Mr. Gabriel Fontaine (Levis):: Mr. Speaker, as I said before in the House, every morning, the Leader of the Opposition and Leader of the NDP are waiting to read the first edition of the Globe and Mail before they put questions to the Prime Minister (Mr. Mulroney) and his Cabinet. However, I always knew the editorial page was too serious for their kind of reading.
Today, I challenge the Leader of the Opposition and his NDP colleague, if he understands what it is all about, to comment on every single line of the editorial appearing in the Globe and Mail this morning on February 20, 1987. It says that our Government, notwithstanding international constraints has managed to adjust as best it could in the circumstances. It has managed to control spending, protect the neediest, and involve Canadian owners of small- and mediumsized businesses in the development of this country.
Mr. Speaker, it is really too bad that the Leaders of the two opposition Parties have nothing positive to say about this Budget. They are not fulfilling their opposition role. With the in power-hungry teams, they have become back-alley demagogues, Mr. Speaker.


NATIONAL PARKS
Mr. Jim Fulton (Skeena):: Mr. Speaker, the Minister of the Environment (Mr. McMillan) speaks for Canada on matters relating to national parks. He has made it clear that the Conservative Party and the Government support the total inclusion of Lyell Island in the proposed South Moresby National Park.
Conservative MPs from B.C. are, unfortunately, being twofaced about this issue. With some groups they claim to be fighting to include Lyell Island in the national park, and with other groups they claim to support the complete logging of the area. This kind of hypocrisy makes a lot of Canadians feel sick because it is fundamentally dishonest and sleazy. No cabinet Minister is on record in this House supporting further logging on Lyell Island. If they are, let them say so today.
B.C. is poised to allow the clear-cut logging of Windy Bay and much of Lyell Island. Yesterday Canada made clear that Lyell must be part of the park or there will be no park. The Prime Minister (Mr. Mulroney) must now show support for his Cabinet and pay B.C. for Lyell Island, because that is all that is holding it up. Mr. Speaker, I know you agree.

February 20, 1987
Oral Questions


REGIONAL DEVELOPMENT
Mr. Bill Gottselig (Moose Jaw):: Mr. Speaker, in July of 1984 our Party held a major policy conference in Prince Albert, Saskatchewan. A review of our record shows that over two-thirds of the Prince Albert declarations have already been implemented. In addition, we have undertaken many other initiatives which support the west.
The Budget presented by the Finance Minister on February 18 reinforces that support. The Government has taken action to restore fiscal responsibility by reducing the deficit and slowing the growth of the national debt, mainly by expenditure restraint and good management. After 15 years of rising deficit we have brought about the first consecutive three-year decline in deficit in three decades.
Effective February 19 the excise tax on motor fuels will be increased by 1 cent per litre but will not apply to farmers. The tax applies to gasoline, diesel fuel, aviation gas and jet fuel, but the existing fuel rebate for off-highway fuel use by farmers will be increased by 1 cent per litre effective February 29, 1987.
Comments made by the President of the Canadian Federation of Agriculture as well as the President of the Canadian Federation of Independent Business indicate that this Budget was good news for all Canadians.


CAPITAL PUNISHMENT
Mr. John Nunziata (York South-Weston):: Mr. Speaker, Amnesty International recently initiated a world-wide campaign against capital punishment. To begin this campaign Amnesty produced a major report on capital punishment in the United States. The report says the death penalty in the United States has become "a horrifying lottery" in which politics, money, and race could decide whether a defendant is executed.
The Amnesty report also deplored the fact that several people executed or awaiting execution in the United States were mentally ill or were under the age of 18. Executing minors is a violation of the International Covenant on Civil and Political Rights and the American Convention on Human Rights, both signed by the United States in 1977. Since 1980, of eight confirmed juvenile executions, the United States is responsible for three, Pakistan two, and Bangladesh, Barbados, and Rwanda were responsible for one each. There have been unconfirmed reports of teenagers being executed in Iran.
Race also plays an important role in determining who gets executed in the United States. Nearly 90 per cent of the
prisoners executed between 1977 and 1986 were blacks convicted of killing whites.
With a debate on capital punishment soon to take place in the House, I would urge every Member to take the opportunity to read the Amnesty report.



ORAL QUESTION PERIOD


Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, four million Canadians are living below the poverty line. Those Canadians and millions of other middle-income Canadians in the country are waiting for the Prime Minister to fulfil his commitment to child care funding. Quality child care should not be the privilege of a few but should be available to all who need it. Why was there not a single new dollar for child care funding in his Budget?


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, the Right Hon. Leader of the Opposition refers to those who are living below the poverty line. He knows full well that 263,000 fewer families ere living below the poverty line as a result of action taken by this Government and the changes in those statistics that were announced at the end of last year.
With respect to child care, the Leader of the Opposition knows that we are now proceeding with consultations with the provinces which have a very major responsibility in the provision of this particular service. He also knows that a parliamentary committee will complete its work shortly and will be making recommendations. I am sure he would not want us to prejudge the results of both areas of consultation because he has expressed his own concern many times that the Government should continue the very good work it has been doing in consulting with interested parties throughout the country.


John Napier Turner: Canadians feel that no further consultation is needed on this subject. This issue of child care has been consulted to death and Canadians want the Prime Minister to fulfil that commitment.


REASON FOR BUDGET PROVISIONS
John Napier Turner: Mr. Speaker, the Minister knows that there is a chorus of protest about his Budget coming in a non-partisan sense from all regions of the country. His Budget has been unanimously condemned in the regions of Canada.


Some Hon. Members:: Oh, oh!


Mrs. Maiily:: That is not true.
February 20, 1987


John Napier Turner: I want the Minister to recognize that the cries coming from the regions of Canada are non-partisan in nature. They represent the voices of Canadians who feel neglected by an uncaring Government. Why did the Minister of Finance not bring in a Budget for all Canadians?


Michael Holcombe Wilson: Mr. Speaker, I think the Right Hon. Leader of the Opposition has it wrong yet again. I have to remind him, because his memory or his attention span is very short, that we have introduced the Atlantic Enterprise Program, the Atlantic Opportunities Program which is generating $600 million worth of new purchasing from the Government of Canada into Atlantic Canada, and the Cape Breton Special Investment Tax Credit. The regional investment tax credit has been maintained. We have the ERDA agreements with all the provinces of Canada.
I encourage him to read The Globe and Mail editorial today which talks about the extensive support that the Government has given to the Western Grain Stabilization Program, to the Wheat Board through the Farm Fuel Tax Credit, and through the changes in the measures that we have made to support the energy industry. The last paragraph states:
-the present Government does not have a failing grade.
It would be nice to see some fair recognition of the facts.
In the interests of fairness, surely the Hon. Leader of the Opposition can recognize that.


John Napier Turner: I want to tell the Minister of Finance that he not only tested my attention span, but the whole country's during his budget speech.


COMMENTS MADE BY PROVINCIAL REPRESENTATIVES
John Napier Turner: May I cite Premier Brian Peckford: "We don't see anything here which encourages us to look at 1987 in a positive way ? How about the Hon. Dick Johnston, the Treasurer of Alberta: "In Alberta we are extremely disappointed with the reaction of this Budget"? How about the Hon. Yvon Poitras of New Brunswick: "It does not address regional disparity"? That is the kind of opinion we are receiving.


Michael Holcombe Wilson: The Hon. Leader of the Opposition is very much aware of the processes which are now under way. The Prime Minister has a report coming to him to review the various regional development programs in Atlantic Canada with a view to establishing an agency which will be located in Atlantic Canada to deal directly with those problems, and we are discussing them with the New Brunswick Government as well as with the other Governments in the Atlantic Provinces.
The Deputy Prime Minister has work under way dealing with the problem of western ind-strial diversification to ensure
Oral Questions
that we can make changes which address the problems which are faced by western Canada on a permanent basis.
We have decided it was not appropriate to rush these reports just to get them in in time for a budget. Those decisions will be taken within the context of the fiscal plan to deal directly with the problems to which the Hon. Member has referred.


FINANCE
Mr. Raymond Garneau (Laval-des-Rapides):: Mr. Speaker, last Wednesday the Minister added another cent to the tax on gas, which means a total increase of four cents since this Government came to power, the equivalent of 18 cents per gallon. Yesterday, Shell announced its decision to increase the price of a litre of gas by two cents.
My question to the Minister is as follows: Does the Minister believe that the Canadian economy and Canadian consumers can absorb a three-cent increase in the price of a litre of gas in just one week? And does he believe that our regions, that the neediest regions will be able to absorb this kind of increase without a corresponding increase in unemployment?


Michael Holcombe Wilson: Mr. Speaker, I think the Hon. Member would agree that when we came into office the price of gasoline in his own province was 60 cents. I am advised now it is something in the order of 50 cents or 51 cents. That is quite a drop and is one of the reasons there has been good growth in the Quebec economy.
I have some quotes here, but I don't want to embarrass the Hon. Member.


Some Hon. Members:: Go ahead!


Michael Holcombe Wilson: There are quotes here. All sorts of doom and gloom have been rained down upon us every time we have come forward with an Economic Statement or a Budget, saying 50,000 jobs and 100,000 jobs and 150,000 jobs would be lost. The Leader of the New Democratic Party has made it up to 200,000 jobs in one of his predictions. In the face of that, 677,000 jobs have been created, and this growth is going to continue into the next year.


Raymond Garneau: Mr. Speaker, the impact of this Minister's economic policies has been such that over the last 12 months, 12,000 jobs have been lost outside Ontario, across this country. In other words, there has been a net loss outside Ontario.

February 20, 1987
Oral Questions


PLEA THAT MINISTER HELP MOTORISTS
Raymond Garneau: Mr. Speaker, to get back to my question, I would like to ask the Minister once again: Does he or one of his Cabinet colleagues intend to stand up to the oil multinationals and protect the consumer, the drivers who will have to face a three-cent increase in the price of a litre of gas in just one week?


Michael Holcombe Wilson: Mr. Speaker, I think that if the Hon. Member is keeping his ears open he will know there are some oil companies which have said three cents a litre. Other have said they want to increase gasoline by one cent a litre. I think the consumer has a lot of power in his hands here by just ignoring those companies which are raising gasoline by three cents a litre, proving through the marketplace that the consumer has a very strong voice and can teach them a lesson by going to the companies which have only increased their price by one cent.


THE BUDGET
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, my question is for the Minister of Finance. Yesterday I asked the Minister why it was too soon for the Government to have corporate tax reform but not too soon to increase taxes on the ordinary family. Also yesterday, in talking to some journalists outside the House, the Minister pointed out that as a result of the last Liberal Budget there is a hangover of some special corporate tax breaks that are in the value of a number of billions of dollars. Will the Minister now tell the House how much the Treasury is losing on an annual basis, how many millions or billions of dollars are we losing as a result of this special category of corporate tax breaks?


Michael Holcombe Wilson: Mr. Speaker, I think the Hon. Leader of the New Democratic Party has mixed and matched some of the things that I did say in my luncheon with journalists yesterday. What I said is that there is a loss overhang related to the capital cost allowances that were built up during the capital investment boom leading up to the 1981-82 recession. Those credits, in addition to the losses that were endured during the major recession in 1981-82, have resulted in this loss overhang.
The problem that I referred to, and that I refer to on many occasions in the House, is that people are trading these losses from a loss company to a profitable company so that the taxable income of the profitable company can be reduced. We found this offensive. We have made a number of changes, not the least of which have been changes that we made earlier this year to address this problem. I also said in the Budget that we
will put in a general avoidance rule to address the problem, as well as deal with it on a more permanent basis in tax reform.


REQUEST FOR CORPORATE TAX REFORM
John Edward Broadbent: Mr. Speaker, this Government will always deal with these issues at some point in the future. I would like to quote the words of the Minister from what he said not in the current Budget or in last year's Budget but in 1985 when he had this to say about the same category of break:
the existence of the large banks of unused losses has been a continuing source of instability in the tax system. The possibility of large reductions in government revenues has led to frequent and complex change. These measures have a cost to taxpayers-
Since in the Minister's own words corporations continue to save millions-indeed billions-of dollars, and since other taxpayers have to make this up by paying too much, why can we not have the tax reform in the corporate sector now instead of down the road?


Michael Holcombe Wilson: Mr. Speaker, the Hon. Member said we are not acting. I do not know where he has been for the last two-and-one-half years. We have removed the scientific research tax credit which the Liberal Government brought in and which cost us about $2.5 billion. We changed the rules on limited partnerships. We changed the Little Egypt Bump about which the Hon. Member was quite interested. We changed the seeding that oil companies were using. We changed the carve-outs. We changed a number of provisions that were helping high-income Canadians finance hotels and yachts. We brought in a minimum tax.
We have been dealing with this problem on an ongoing basis. I said-and I repeat my answer of a minute ago-we are going to deal with it further in tax reform. I hope that the Hon. Member will get off his chair and give us some support for what we are trying to do.


Some Hon. Members:: Hear, hear!


John Edward Broadbent: Mr. Speaker, I have no intention of giving support to a Government that increased taxes on individuals by 52 per cent but had a net reduction of corporate taxes by 18 per cent. That is what the Government has done.


Some Hon. Members:: Hear, hear!


LARGE CORPORATIONS-REQUEST THAT GOVERNMENT INTRODUCE TAX REFORM NOW
John Edward Broadbent: My last question is as follows: Because of these loopholes in the corporate tax system, individuals have to pay more than their fair share. Why not introduce changes now to reform the corporate tax system?


Michael Holcombe Wilson: Mr. Speaker, I have said several times in the House that we have been examining this problem since September 1984. We changed the rules on tax avoidance, and in our tax report, we intend to
February 20, 1987

make changes on a permanent basis, changes that will reduce the tax burden on individuals and increase taxes for large corporations.


LEVEL OF PERSONAL INCOME TAX
Miss Aideen Nicholson (Trinity):: Mr. Speaker, my question is for the Minister of Finance. It concerns his escalator taxes. Measures built in from previous Budgets go on increasing income tax invisibly so that this year a family with two wage-earners and two children with a total family income of $30,000 will be paying an additional $1,000 in income tax. Will the Minister not admit that he is the author of the problem of high personal income taxes which he now seeks to reform?


Michael Holcombe Wilson: Mr. Speaker, what I can say the Government is the author of is a very substantial number of jobs that have been created during this whole period of fiscal management over which we have presided. We have seen interest rates drop four percentage points, the lowest level in about 10 years. With respect to mortgage rates I remind the Hon. Member that in the Budget I said that the cost of a $50,000 mortgage will save the average taxpayer something in the order of $1,500 a year in after-tax income. That has changed since September of 1984. Those are major, major changes which have resulted in major, major increases in the spending power of Canadians.


REQUEST FOR REDUCTION OF INCOME TAX
Aideen Nicholson: Mr. Speaker, the Minister did not answer my question. My supplementary question is the following. When the Minister has finished taking Canadians for a ride on his escalator will he return the incomi tax to the point where he started, or does his talk of reform mean something different, maybe half-way back?


Michael Holcombe Wilson: Mr. Speaker, what tax reform will do is it will result in a fairer tax system, a less complex tax system, a tax system which will increase job capability. That will increase incentive in the economy and lead to a healthier economy, an economy that will create more jobs and be more competitive with the rest of the world. Those are the objectives that we want to achieve in tax reform. Those are our objectives that find a great deal of support right across the country.


IMMIGRATION
Mr. Dan Heap (Spadina):: Mr. Speaker, my question is directed to the Minister of Employment and Immigration. He
Oral Questions
said there is an agreement with American immigration officials to the effect that they will not deport Salvadorans or Guatemalans waiting for their immigration inquiry to take place in Canada.

Can the Minister assure us that there is a firm and legally reliable agreement on this matter with the United States? Will he table that agreement in the House today?


Hon. Benoit Bouchard (Minister of Employment and Immigration):: Yes, Mr. Speaker, I indicated during this morning's press conference that Canada-and this dates back to some time-has an agreement with the United States of America which provides, particularly in this case, that people who apply for refugee status in Canada and whom we are unable to process immediately will not be deported by the United States. As I said, these agreements are not recent, but we did reconfirm them. We are exchanging correspondence, but I see no point in tabling documents today. I repeat, nobody has been deported by the United States, and I have been assured that none will be.


PROCESSING OF REFUGEE STATUS APPLICATIONS
Daniel James Macdonnell Heap: Mr. Speaker, as the Minister knows, the agreements have been entirely informal and not binding.
My supplementary question to the Minister is this. Since he has refused to respond to the fair and quick system for deciding refugee status in Canada that was tabled in Parliament 15 months ago by the Standing Committee, and is now backed by the churches, the Canadian Bar Association, the Canadian Jewish Congress, and the New Democratic Party, why did he choose instead to overload the system of immigration inquiry, which is already jammed up with six-week delays, by adding hundreds more each week to its work-load by his order today?


Benoît Bouchard: As I see it, Mr. Speaker, our first priority was to set up control measures to enable us to protect or admit genuine refugees. As the Hon. Member is suggesting, we simply had to do something to restrict the influx of people who are not bona fide refugees. All applicants will now go through the normal process, and we have resorted to stricter standards because we want to reduce the number of cases still pending.
I agree with him concerning the legislation and I can assure the Hon. Member that within a few weeks we will table a legislative measure which, among other things, will enable us to eliminate once and for all the cumbersome procedure which has always been followed and which has led to a huge backlog of applicants waiting for refugee status determination.

February 20, 1987
Oral Questions


PRESENCE IN GALLERY OF BADEN-WURTTEMBURG MINISTER OF ECONOMY
Mr. Speaker:: I wish to draw to the attention of Members the presence in the gallery of the Hon. Martin Herzog, Minister of Economy from Baden-Wurttemburg, of the Federal Republic of Germany.


Some Hon. Members:: Hear, hear!
*
* *


CHILD CARE
Ms. Sheila Copps (Hamilton East):: Mr. Speaker, in the absence of the Prime Minister my question is directed to the Minister of Finance. Last year the Prime Minister thought the issue of child care was so important that at the First Ministers' Conference he made a promise that the federal Government would bring in substantial funding. Given the Prime Minister's word on this issue, why is there not a single penny in this Budget for what the Prime Minister claimed was a crisis in Canada?


Michael Holcombe Wilson: Mr. Speaker, 1 have answered this question on a number of occasions. If the Hon. Member would look carefully at the early part of the Budget, we said that there are a number of initiatives that are in train where discussions are taking place, in this case with the provinces, and with the private sector, that have not reached fruition yet because those discussions are still ongoing. We will be able to make announcements on these initiatives, and child care can be one of these, at the appropriate time. The funds are available within the fiscal plan to meet those obligations.


ACCESS TO DAY CARE SERVICES
Sheila Maureen Copps: Mr. Speaker, dare I say that there are many families in Canada who are reaching fruition and do not have time to wait for the Minister to come up with his funding proposals in the future.


Some Hon. Members:: Hear, hear!


Sheila Maureen Copps: The Minister did not wait to introduce an antifamily tax on family allowances.
[ Translation]
He did not wait before launching an attack against family allowances, he did not wait for more studies. The day care issue affects all Canadian families, and they are entitled to ready access to nurseries. Why does he always want to wait?
Why must Canadians be kept waiting for an answer to this very serious question?


Hon. Jake Epp (Minister of National Health and Welfare):: Mr. Speaker, I am pleased that the Hon. Member has changed the comments that were attributed by her colleague yesterday to the Prime Minister. Yesterday her colleague had said that the Prime Minister when he was in Vancouver had said that it would be in this Budget. Today the Hon. Member used the correct term where the Prime Minister indicated that there would be substantial commitment from the Government of Canada in order to take that through. That is why I have had the obligation to meet with provincial counterparts, and other people interested in child care, as well as the parliamentary committee, for the purpose of putting forward a national plan which we have said very clearly we can announce outside the Budget. In fact, in the past there has been criticism that social policy was incorporated in the Budget and that it should stand alone. That is exactly what the Finance Minister has followed, and we intend to follow that up exactly as we have outlined to the provinces and to the country.


FINANCE
Mr. Simon de Jong (Regina East):: Mr. Speaker, my question is directed to the Minister of Finance. As the Minister knows, there are over four million Canadians living below the poverty line. The Budget Speech did not once mention the word "poverty". Instead, the Budget removed half of the sales tax credit from the very poor through new taxes. Why did the Government not increase the sales tax credit to compensate for this new round of taxes on snack food, granola bars, and a slew of other items? Why did the Government not increase the sales tax credit in this Budget?


Michael Holcombe Wilson: Mr. Speaker, the Hon. Member is quite aware that we have been making progress. There are 263,000 fewer families-not individuals, families-that are now not below the poverty line as compared to when we came into office. The Hon. Member has asked why we have not increased the refundable sales tax credit. I have clearly indicated that that is an integral part of tax reform, and we will be clearly demonstrating to him at the time of the release of the discussion paper on tax reform how we wish to augment this very progressive initiative that we took at the time of last year's Budget as part of tax reform.


INCOME TAX RETURNS-INFORMATION SOUGHT FROM WELFARE RECIPIENTS
Simon Leendert de Jong: My supplementary question is directed to the same Minister. The Minister did not wait to increase taxes on the poor, yet he is asking the poor to
February 20, 1987

wait for his tax reform. Since the Government has come into power, it is now taxing people who have taxable incomes of $10. No Government has ever hit that low. The Government is now requiring poor people to report their welfare payments on their 1986 tax form. Why is the Government now requiring welfare recipients to report their welfare benefits on the tax form? When is the Government going to stop nickel and dimeing the very poor?


Arthur Jacob (Jake) Epp: Mr. Speaker, on the one point that the Hon. Member makes, there have been discussions with Revenue Canada on that issue, and that is well in hand. For example, I wish to tell the Hon. Member that the Government has brought in employment initiatives, and $100 million for social assistance. This matter was first raised 13 years ago at a federal-provincial meeting, and this Government has delivered on that. There have been programs for older worker adjustments, employment equity, the refundable sales tax credit which the Minister of Finance has mentioned again-


Simon Leendert de Jong: You took half of it away on Wednesday.


Arthur Jacob (Jake) Epp: -the increase of the child tax credit, the advancement of the child tax credit, the changes to the Canada Pension Plan. Would the Hon. Member ask the Manitoba NDP Government why it took away disability from the very poor when we passed it here in this Government?


Some Hon. Members:: Hear, hear!


PRIVACY
Mr. David Daubney (Ottawa West):: Mr. Speaker, in the absence of the President of the Treasury Board my question is directed to the Minister of Finance. Yesterday the Privacy Commissioner reported that the Privacy Act is currently being violated by Treasury Board requirements that public servants report on all outside activities and investments directly or indirectly related to their official responsibilities. The Commissioner also noted that public servants' privacy was endangered because supposedly confidential information required of them in compliance with conflict of interest regulations may be obtained by third parties under the Access to Information Act. What actions will the Government take to amend Treasury Board reporting requirements to ensure the confidentiality of personal information reported in good faith by public servants?


Michael Holcombe Wilson: In the absence of the President of the Treasury Board I will make a preliminary response to the question that the Hon. Member has just placed. The President of the Treasury Board has received this
Oral Questions
report from the Privacy Commissioner. It has always been the intention of the Government to respect the provisions of the Privacy Act. Once the President of the Treasury Board has had an opportunity to review the report with his officials, he will then be in a position to determine what modifications should be made in the reporting provisions and other elements that affect public servants as may be deemed fit.


THE BUDGET
Mr. Alfonso Gagliano (Saint-Leonard-Anjou):: Mr. Speaker, my question is directed to the Minister of Finance. After slapping a tax on drugs for the sick, on dog food and on ice cream and candy for children, the Minister of Finance is going to reach into the pockets of small-business people with 20 employees. Does the Minister realize that by requiring small businesses to make payments every two weeks, he is adding to the paper burden and thus indirectly affecting their profits?


Michael Holcombe Wilson: Mr. Speaker, I think the Hon. Member has this one wrong. It will only affect larger companies. It will not affect companies that have 20 employees.


Alfonso Gagliano: For the Minister's information, Mr. Speaker,
I did a calculation on 20 employees in Quebec. But if we go across Canada where the federal Government collects provincial tax, it is more.


EFFECT OF BOOKKEEPING REQUIREMENTS
Alfonso Gagliano: I have a supplementary question, Mr. Speaker. The new paper burden is a paper-thin excuse to cover the Minister's missed deficit projections on the backs of small business. Will the Minister raise the ceiling to exclude small business from his sneaky bookkeeping methods?


Michael Holcombe Wilson: Mr. Speaker, I think that the Hon. Member knows that we have been very supportive of the small business community. We have structured this particular provision so that I think it is something like 1.2 million businesses out of 1.3 million will not be affected by it.

February 20, 1987
Oral Questions FINANCE


CORPORATE TAX BREAKS
Mr. Mike Cassidy (Ottawa Centre):: Mr. Speaker, I have another question for the Minister of Finance. It relates to the overhang of corporate tax breaks which, according to recent reports, may be over $30 billion. Can the Minister explain why no action has been taken in the Budget to curb the use of these tax breaks when his own figures indicate that there was a $1.2 billion short-fall of corporate tax revenues in 1985-86, a $2.3 billion short-fall this year, and he is anticipating another $2.3 billion short-fall in 1987-88? When are you going to stop this kind of short-fall of corporation tax revenues which is being paid by average Canadians?


Michael Holcombe Wilson: Mr. Speaker, I do not know where the Hon. Member has been. We have been taking action regularly from the time that we came into office and, most recently, just prior to this Budget. Some people have asked me why I took this action just prior to the Budget and not in the Budget. It was for a very good reason. If we had taken the action in the Budget there would have been great anticipation. A lot of these tax avoidance schemes would have been completed just prior to the Budget in anticipation of being shut off in the Budget, so we took action before that. We anticipated the action and saved the taxpayers some money.
We have taken action in this Budget. I responded to his Leader I believe on this question yesterday and today. That answer still stands.


INQUIRY WHY GOVERNMENT TOLERATES TRANSFER OF TAX RESPONSIBILITY FROM CORPORATIONS TO INDIVIDUALS
Michael Morris Cassidy: Mr. Speaker, a Minister of Finance should be judged by what he does and not just by what he intends to do.
Could the Minister explain why the projected revenue from corporate taxes for 1987-1988 dropped from $12 billion to less than $10 billion? This means an additional $2 billion that must be paid by the average taxpayer. Why does the Minister tolerate this transfer of corporate responsibility to the individual?


Michael Holcombe Wilson: Mr. Speaker, one reason for that drop in revenues is that certain industries in Canada have been suffering quite severe drops in profits over the last year. The energy sector is obviously what I am thinking of. A substantial drop in revenues has been experienced in that sector. Therefore, the tax received will drop off.
I have acknowledged quite clearly that there have been quite a number of tax avoidance schemes of which corporations are taking advantage. We have stopped these on a regular basis as they are brought to our attention.


Michael Morris Cassidy: You are still losing revenues.


Michael Holcombe Wilson: We have also indicated clearly in this Budget that we are going to bring in a general tax avoidance rule which is designed to get at this problem in a broader way. Finally, in tax reform, we are going to reduce a number of the preferences for corporations. The profitable corporations particularly, which are not paying taxes, will find that they will be paying taxes after tax reform.


REFUGEES
Mr. Sergio Marchi (York West):: Mr. Speaker, my question is directed to the Minister of Immigration. My Party and all Canadians believe very strongly that false refugee claims should be clearly refused and eliminated. However, measures cannot be put in place whereby individuals feeling real torture and facing certain death would be jeopardized.
Given that the Minister removed a list of 19 non-deportable countries, meaning that a Ukrainian refugee can now be deported to the Soviet Union, is the Minister prepared to live with the fate facing such refugees in all parts of the world? Can he table an analysis from the External Affairs Department which justifies the Minister deporting individuals to parts of the world which, as of yesterday, were deemed to be dangerous, immoral, and inhuman?


Benoît Bouchard: Mr. Speaker, the Hon. Member misread his documentation, as usual, because this morning I announced the abolition of list B-l, a list of 18 countries to which we do not deport people. People from those countries will continue to be assessed on a case-by-case basis. However, considering the specific example he mentioned, a number of countries, especially countries in Eastern Europe, are subject to a special policy for individuals seeking asylum, and this includes the Soviet Union. These individuals are given very special treatment. So I think that should reassure the Hon. Member. In fact, I wish he would join me in giving all Canadians, and especially those who came to Canada from Eastern Europe, the assurance that we shall continue to give these cases special treatment and that these people can expect to be as well received in Canada as they have been in the past.


REFUGEE DETERMINATION SYSTEM
Sergio Marchi: Mr. Speaker, before we would not deport anyone to the Soviet Union. Now if people are not deemed to be refugees by their applications, this Minister will put them on the first plane back to the Gulags.


Some Hon. Members:: Not true.
February 20, 1987


Sergio Marchi: I remind the Minister that on August 19 the Prime Minister said "If we err, we will always err on the side of justice and on the side of compassion". The Minister has just changed the tune of the Prime Minister's song.
Given that the only solution to our refugee policy is a refugee determination system which is new and separate from our immigration structures, when will the Government, instead of governing by temporary trial balloons, issue refugee legislation which the Minister's three predecessors have been promising for the last three years? The evidence is in. Stop procrastinating.


Benoît Bouchard: Mr. Speaker, I will make an exercise for my friend. What does he call a country that receives over 120,000 immigrants every year and is ready to increase that level? What does the Member call a country that receives over 15,000 refugees from refugee camps across the world? What does he call a country that is ready to receive all genuine refugees who need the protection of Canada? Does the Member call Canada an unfair and a non-equitable country?


Some Hon. Members:: Hear, hear!


EMPLOYMENT
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, my question is for the Minister of Finance. I have here some figures from the Canadian Jobs Strategy to be in the Main Estimates that the Government will be tabling in a few days or a few weeks' time. According to these figures, and in light of high regional unemployment, I want the Minister to explain to this House why spending under the major components of the Canadian Jobs Strategy will be about the same in Quebec next year as this year, about the same in Atlantic Canada next year as this year, and why will there be a cut-back in this program of some $2.8 million in western Canada where we have high regional unemployment? Can he explain why this insensitivity on the part of the federal Government toward regional unemployment will be in the Estimates in a few days' time?


Michael Holcombe Wilson: Mr. Speaker, the Hon. Member has got to broaden his sphere of thinking. There are many ways that the problems of regional disparities can be addressed. One is in direct job creation, for instance, that part of the Canadian Jobs Strategy where we are trying to help Canadians get trained so that they can obtain permanent jobs. It is not the old make-work short-term dead-end job policies which the previous Government brought about.
In addition to that, the Deputy Prime Minister is heading up a task force within the Government to look at areas of western
Oral Questions
diversification. The Prime Minister has a study under way to look at ways of improving job possibilities through the various programs we have introduced in Atlantic Canada. I already enumerated these programs to the House during Question Period yesterday. If the Hon. Member wishes me to remind him of them, I would be happy to do so again.


REGIONAL DEVELOPMENT-GOVERNMENT FUNDING
Lorne Edmund Nystrom: Mr. Speaker, the Minister still has not said why there will be cut-backs in these major components of the Canadian Jobs Strategy in the Estimates the Government is about to table. Perhaps he could answer that question as well as tell us why the federal Government continued the $3 billion per year cut-back in regional development spending in the Budget. Three billion dollars per year, now in the third year, amounts to $9 billion across Canada. Why are those major cut-backs occurring? Why is the Minister so insensitive to regional unemployment in Canada?


Michael Holcombe Wilson: Mr. Speaker, I am glad the Hon. Member raised that particular question because I am happy to have the opportunity to talk about it. The reasons for the drop in actual spending in the economic and regional development envelope are the following: the $3.6 billion in energy was the result of the dismantling of the National Energy Program, the PIP grants, the COSP, the CHIP and all the various programs that were part of that. A number of capital spending projects have been completed since 1984-85 and that is another reason. A third reason is that $450 million of new equity has gone into Crown corporations since 1984-85. The sale of Canadair to de Havilland is an example of that. We have privatized those companies because we feel they are more effective in the private sector-


Mr. Speaker:: Order. The Hon. Minister obviously has a very long and detailed answer. Perhaps he could send his notes over to the Hon. Member.


AGRICULTURE
Mr. Maurice Foster (Algoma):: Mr. Speaker, my question is directed to the Minister of Finance. The Minister knows that the grain summit held in San Diego this week was a complete failure and that the price wars over grain in international trade will continue and will drive down prices by at least 25 per cent this year. We know that last year the Government only provided assistance to farmers because of the election in Saskatchewan. Why is there nothing in the Budget to assist farmers in the new crop year, farmers who are facing low grain prices? Is it because there is no election planned in Saskatchewan?

Oral Questions


Michael Holcombe Wilson: Mr. Speaker, I know you wanted me to cut short my answer last time. There was more about which I wanted to talk that related specifically to the question the Hon. Member has just raised. Estimated spending on agriculture related programs in 1987-88 will be about $4 billion, and that will be more than double the spending in 1984-85 which was SI.9 billion. That is the answer to the Hon. Member's question.


FARM CREDIT CORPORATION
Maurice Brydon Foster: Mr. Speaker, the Minister should know that the farm debt crisis is much worse this year than it was last. Actually, FCC mortgages in arrears are up by 30 per cent. Fully 25 per cent of all mortgage accounts of the Farm Credit Corporation are in arrears, many of them for up to two years. Thousands of farmers face the loss of their farms. Why is it that there was no additional money in the Budget for the Farm Credit Corporation to keep young farmers on their farms?


Michael Holcombe Wilson: Mr. Speaker, there is a review under way of the financing capacity of the Farm Credit corporation. In addition, I am sure the Hon. Member would want me to remind the House that the Minister of State for the Wheat Board has initiated a number of discussions with his colleagues in the major grain exporting countries. The first meeting of these Ministers was held here in Canada. There was one such meeting held in San Diego quite recently, and there will be another one. The Prime Minister, the Secretary of State for External Affairs and I have personally raised this matter on a number of occasions with the international community. Finally, I would draw to the Hon. Member's attention the fact that the balance of the $1 billion Special Grains Program will be spent in this current fiscal year-next year.


CANADA POST CORPORATION
William (Bill) Gottselig: Mr. Speaker, my question is for the Minister responsible for Canada Post. There is a mixed signal coming from Canada Post regarding the future of rural post offices. Will the Minister indicate to the House, to my constituents and to all Canadians the direction of the corporate plan and if there will be meaningful consultations with Members of Parliament and communities before any action is taken with a view to continuing to provide service to rural Canada?


Hon. Harvie Andre (Minister of Consumer and Corporate Affairs):: Mr. Speaker, I would like to assure the Hon. Member and the House that that is certainly my intention. There is a moratorium on the plans now. I am working with the Post Office to come up with a clear indication so that it is
February 20, 1987
clear to the Hon. Member's constituents what the plans are and how reasonable they are. Equally important, we are doing this so that it is clear to members of the Opposition so that they will no longer have an incentive to run around the country scaring people unnecessarily with wildly exaggerated claims about what will happen.


REFERENCE TO POSSIBLE USE OF MILITARY IN CASE OF POSTAL STRIKE
Mr. Rod Murphy (Churchill):: Mr. Speaker, my question is directed to the same Minister. Talking about raising fear across the country, would the Minister take this opportunity to explain government policy with regard to using the military in the event of a postal strike? Most Canadians want to ensure that there is no postal strike. Will the Minister rise in the House to make a statement which will take effect away from the remarks of the Hon. Member for Winnipeg-Assiniboine which only poisoned the climate of negotiations?


Harvie Andre: Mr. Speaker, like the Hon. Member, I certainly do not want to see a strike. As the Minister responsible for the Post Office, I want to do everything I can to ensure that the parties stay at the bargaining table and reach an agreement. I do not want to give them any cause to think there is an easy way out. As Acting Minister of National Defence, let me say that the military are fully occupied fulfilling our obligations to NATO, NORAD and UN peace-keeping forces.


REVENUE CANADA
Victor Fredrich (Vic) Althouse: Mr. Speaker, my question is directed to the Minister of National Revenue. The Minister has initiated a series of investigations of farmers who purchased machinery in 1983-84. I wonder if he could tell the House in what section of the Income Tax Act he thinks he finds the power to, in effect, rewrite machinery trade-in values arrived at in the competitive market of those years, and to do so retroactively?


Hon. Elmer M. MacKay (Minister of National Revenue):: Mr. Speaker, I welcome the opportunity to assure my hon. friend opposite that this audit is not targeted at western farmers and is not pursuant to any particular special section in that regard. It is designed to investigate only those cases where there may be blatant abuses of the investment tax credit or capital cost allowance. It is extended right across the country in a phased way. As a matter of fact, when it comes to the farm community, out of approximately 250,000 farmers there are only approximately 1,000 farmers across Canada at whom we are looking seriously and then only in cases where we suspect that there are blatant abuses of the system.
February 20, 1987


CONSORTIA
Jean-Claude Malépart: Mr. Speaker, my question is directed to the Minister of Consumer and Corporate Affairs, but in his absence, I will direct it to the Deputy Prime Minister or the Minister of Finance.
Yesterday, Shell followed the bad example set by the Conservative Government and decided to put a two-cent increase on the price of a litre of gas, after the Government had announced a one-cent increase, so that the price at the pump will now be 52.7 cents per litre. On November 4, Ultramar announced an increase of two cents per litre, and we may recall the complicity of these two companies in the shutting down of the Gulf refinery in Montreal East.
Could the Minister or the Deputy Prime Minister ask the Minister of Consumer and Corporate Affairs to enquire whether there was any complicity between the two companies, since after one company announced a price increase, the other company announced an increase a month later?


Michael Holcombe Wilson: Mr. Speaker, I think the question would be more effectively dealt with by the Minister of Consumer and Corporate Affairs but I-


Mr. Boudria:: He was right there.


Michael Holcombe Wilson: I appreciate that he was there but he is not there now. I will bring that question to his attention and he will get an answer back to the Hon. Member.


HEATING OIL PRICE INCREASE-REQUEST FOR GOVERNMENT INQUIRY
Jean-Claude Malépart: Mr. Speaker, I have a supplementary. I spoke to the directors of Shell, and in addition to the increase in the price of gas, there will also be an increase in the price of heating oil, which the company has decided to increase by 1.5 cents. We know others will follow suit. Since January, this is the second increase in the price of heating oil we have had in Canada. Could the Minister also find out whether the oil multinationals are not taking advantage of the cold weather we are experiencing now to increase the price of heating oil, which will have a severe impact on thousands of Canadian families who are living in poverty?


Mr. Speaker:: I am sure the Hon. Minister will take notice of the question. This will be the last question. The Hon. Member for Don Valley East.
Committee Reports FINANCIAL INSTITUTIONS


REACTION TO NEW DIRECTIONS FOR THE FINANCIAL SECTOR DOCUMENT
Bill Attewell: Mr. Speaker, my question is directed to the Minister of State for Finance. On December 18, 1986, the Minister tabled a document in the House of Commons entitled New Directions for the Financial Sector. The document was widely applauded especially by members of the life insurance and trust and loan industries which have been waiting decades for modern reforms. Since two months have now passed could the Minister summarize the type of feedback he has received, and when will he be bringing legislation to this House?


Hon. Tom Hockin (Minister of State (Finance)):: Mr. Speaker, the Hon. Member's question is most welcome. I am very happy to tell the House that the reaction to the framework we announced on December 18 has been very positive, not only from the industries he has mentioned but across the spectrum. Because of the constructive, thoughtful, and supportive advice I have been getting we are now in a position to move forward with legislation. We hope that when we return to Parliament after the break the supervisory section of the Bill will be tabled. That will be followed three or four weeks later by Bills C-8 and C-9. Then, before too long and into the spring, hopefully we can have the final part of the legislation brought before the House.



ROUTINE PROCEEDINGS


Mr. Doug Lewis (Parliamentary Secretary to Deputy Prime Minister and President of the Privy Council):: Mr. Speaker, pursuant to Standing Order 106(8), I have the honour to table, in both official languages, the Government's response to petitions Nos. 332-462, 332-478, 332-683, 332-684, 332-702, 332-705, 332-707, 332-708, 332-710, 332-711, 332-713 to 332716 inclusive, 332-718, 332-719, 332-722, 332-736 to 332-744 inclusive, 332-749 to 332-761 inclusive, 332-769 and 332-772 to 332-789 inclusive.


[Stage Direction]
PRESENTATION OF SECOND REPORT OF Si ANDING COMMITTEE
William Tupper: Mr. Speaker, as Chairman of the Standing Committee on Research, Science and Technology, I have the honour to present in both official

February 20, 1987
Petitions
languages its second report to the House, to which, pursuant to Standing Order 99(2), the committee requests a comprehensive response.
In accordance with its mandate under Standing Order 96(2), the Standing Committee on Research, Science and Technology conducted an examination of the Study Team Report to the Task Force on Program Review entitled Major Surveys. The committee invited witnesses, each with demonstrated expertise in one or more of the natural resources- environment surveys, to comment on the Major Surveys report. The committee framed its analysis of the report around the three principle issues identified by the study team: (a) The creation of a single federal ministry for surveys; (b) The separation of research from data collection; and (c) The possible savings to be achieved by the federal Government if all of the study team's recommendations are adopted.
Following the hearings and after consideration of the testimony the committee reached a number of conclusions and from them formulated recommendations to address each of the three principal issues. With regard to the question of the creation of a single federal ministry for surveys, the committee concluded that while the appointment of a senior Minister to head a department of surveys has symbolic value, a drastic restructuring of the major surveys system does not seem warranted. The committee therefore recommends that the federal Government not accept the study team's proposal to create a surveys ministry but instead create a national survey council with a five year mandate to examine Canada's national surveys in depth.
The committee has further concluded it would not be advisable to separate research from surveys since in many instances it is the research scientist who actually performs the survey or is an integral part of the activity. Concerning the possible savings engendered by the implementation of the study team's recommendations, the committee feels the study team had insufficient time to elicit the necessary details to substantiate the savings figures presented. The proposed national survey council should be charged with collecting the detailed information which is currently lacking, and this should be done before any changes to the present system are considered.



PETITION


Don Boudria: Mr. Speaker, it is my honour and duty to present petitions today signed by another 478 residents of Glengarry-Prescott- Russell. These are in addition to the 2,445 who have signed similar petitions in the past, for a grand total of 2,923. All of these constituents of mine want Canada Post to restore full postal service and not proceed with cut-backs and closure of
1700 post offices, and the privatization of 3,521 other post offices. They also want abandonment of the supermailbox plan. I am sure they do not want gun-toting mailmen either. These people are residents of Hawkesbury, Saint-Eugene, Ste. Anne de Prescott, Bainsville, Plantagenet, Alexandria, Dalkeith, Chute A Blondeau, Alfred, Sarsfield, Embrum, and St. Albert in the great constituency of Glengarry-Prescott- Russell.



OPPOSITION TO PROPOSED CHANGES TO PATENT ACT

Maurice Brydon Foster: Mr. Speaker, I have the honour to present two petitions concerning changes to the Patent Act. These changes will increase the price of drugs, increase the burden on provincial health care schemes, and be a real hardship for low income families across the country. The petitioners are from Massey, Ontario, areas along the north shore of Lake Huron, as well as a number of other communities throughout Manitoulin Island, including Mindemoy, Tehkummah and Kagawong.



JUDGES ACT, FEDERAL COURT ACT, TAX COURT OF CANADA ACT MEASURE TO AMEND

Harvie Andre: for leave to introduce Bill C-41, an Act entitled an Act to Amend the Judges Act, the Federal Court Act and the Tax Court of Canada Act.


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.


Philip Derek Lewis: Mr. Speaker, there are two motions which have been discussed among the Parties and I think you will find there is a disposition to put them to the House and have them passed. The first one is as follows:
That, notwithstanding the special order relating to Private Members' Business adopted on December 18, 1986, and pursuant to the third report of the Standing Committee on Elections, Privileges and Procedure presented to the House on February 12, 1987;
February 20, 1987

When a Member has given at least 24 hours written notice that he or she is unable to be present to move his or her motion under Private Members' Business on the date required by the order of precedence, and if that item of business is not one which has been designated "votable" by the Standing Committee on Private Members' Business, the Speaker, with the permission of the Members involved, may arrange for an exchange of positions in the order of precedence with a Member whose motion or Bill in the order of precedence has not been designated "votable";
That, in the event that the Speaker has been unable to arrange an exchange, the House shall continue with the business prior to Private Members' Hour pursuant to Standing Order 39(2), provided that there shall be no extension of the sitting pursuant to Standing Order 9(4), and any division on a debatable motion shall be deferred until 6 o'clock p.m. on the next sitting day.
For the purposes of this section, Standing Order 13(5) relating to deferred divisions on a Thursday shall apply; and That this order shall expire Wednesday, April 15, 1987, at the ordinary hour of adjournment.


Mr. Speaker:: Does the Hon. Parliamentary Secretary have the unanimous consent of the House to move the motion?


Some Hon. Members:: Agreed.


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


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

Philip Derek Lewis: Mr. Speaker, the second motion is as follows:
That, the Standing Committee on Consumer and Corporate Affairs be authorized to travel to Vancouver, British Columbia, from March 5 to 7, 1987, inclusive, in relation to its mandate under Standing Order 96(2) to hear witnesses on the subject of food irradiation and that the necessary staff do accompany the committee.


Mr. Speaker:: Does the Hon. Parliamentary Secretary have the unanimous consent of the House to move the motion?


Some Hon. Members:: Agreed.


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


Some Hon. Members:: Agreed.


Mr. Riis:: Mr. Speaker, we certainly do agree. I would like to take this opportunity to indicate my appreciation of my colleagues' assistance in the House of Commons yesterday in my absence. I appreciate the co-operation which Members showed yesterday.


[Stage Direction]
Motion agreed to.
Questions on the Order Paper POINT OF ORDER

Sheila Maureen Copps: Mr. Speaker, in keeping with the Standing Orders I am taking this earliest opportunity to raise an issue arising from Question Period. It deals with the unparliamentary language of the Minister of Finance (Mr. Wilson). I would like to serve notice that I would like to raise this as a point of order. Since the Minister is not here, I would prefer to wait until he is in the House and has a chance to withdraw his remarks.


Mr. Speaker:: The Chair has heard the intervention of the Hon. Member for Hamilton East (Ms. Copps). The Chair will take that as notice and it can be dealt with at an appropriate time.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Philip Derek Lewis: Mr. Speaker, the following questions will be answered today: Nos. 54, 60 and 68.


Mr. Malepart: 1.	Since September 4, 1984, did the Prime Minister and/or Mrs. Mulroney hold any official or private receptions paid for from public funds at (a) 24 Sussex Drive (b) Harrington Lake (c) any other location (i) in Canada (ii) outside Canada and, if so, in each case, what was the total number of receptions?
2.	For each reception, what was the (a) date (6) number of guests and their names (e) total cost (d) proposed menu (e) total cost for food (/) cost of flowers (g) type of flowers (h) supplier of the flowers?


Mr. Len Gustafson (Parliamentary Secretary to Prime Minister):: 1. & 2. As Head of Government, it is a longstanding practice for a Prime Minister and/or his wife to give hospitality or to hold receptions in honour of diplomatic guests and distinguished Canadian citizens.
The specific details requested in this question and the costs associated with this practice are not readily available and in many cases not identified or recorded separately.


Mr. Boudria: 1.	Did the Prime Minister travel to Alberta in September, 1986, at public expense, for the purpose of participating in the by-election in the constituency of Pembina and, if so (a) was there any other purpose to the trip (6) what was the total cost?
2.	Was the entire trip paid from public funds and, if not, what portion was paid by the (a) Government (6) Conservative Party of Canada?

February 20, 1987
The Budget-Right Hon. Mr. Turner
3.	Was the Prime Minister accompained by any member of his staff and, if
so, in each case, what was (a) his/her name (A) the mode of travel (c) the cost
(rf) the airline carrier involved (e) the hotel cost?
4.	Were any automobiles or limousines hired and, if so (a) how many (b) in
each case, what was the (i) cost (ii) name of the supplier?


Leonard J. Gustafson: 1. The Prime Minister travelled to Edmonton on September 25-26, 1986 for the purpose of participating in an agricultural meeting and, at the same time made an appearance in the constituency of Pembina at no additional cost to the Government.
2., 3. & 4. In light of the above, there should be no need to answer these parts.


Mr. Althouse: Is the Government committed to the construction of the Animal Research Centre in Nepean Carleton, Ontario and, if so (a) when will construction commence (b) what is the current target date for completion of this project?


Hon. John Wise (Minister of Agriculture):: (a) The
construction of the Animal Research Centre in Nepean- Carleton has been deferred pending a review of the animal productivity research program.
(b) This, together with resource restraints, make it unlikely that the project will go forward until 1990.


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


The Acting Speaker (Mr. Paproski):: The questions enumerated by the Parliamentary Secretary have been answered. Shall the remaining questions be allowed to stand?


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
financial statement of the minister of finance
The House resumed from Thursday, February 19, consideration of the motion of Mr. Wilson (Etobicoke Centre) that this House approves in general the budgetary policy of the Government, and the amendment of Mr. Garneau (p. 3594), and the amendment to the amendment of Mr. Cassidy (p. 3604).
Philip Derek Lewis: Mr. Speaker, with respect to the debate today there is a disposition in the House that the Chair recognize the Right Hon. Leader of the Opposition (Mr. Turner) followed by the Hon. Leader of the New Democratic Party (Mr. Broadbent). In the event that their remarks are not completed by one o'clock p.m., the
House will be content that the Chair do not see the clock until they are finished.


Don Boudria: Mr. Speaker, there have been consultations on this topic. Of course, our Party is quite agreeable to that.


Mr. Speaker:: I take it that there is agreement. It is my pleasure to give the floor to the Right Hon. Leader of the Opposition (Mr. Turner).


John Napier Turner: Mr. Speaker, I rise on this very important occasion to debate the budgetary propositions of the Government. Parliament was created out of our British tradition to test the power of Governments in a free country to tax and to spend. At one time these occasions were high theatre. Due to the focus of an electronic age, we find the House as we do this morning. I can remember, too, when Prime Ministers were in the House to listen to the Leader of the Opposition and the Leader of the other recognized political party. I hope the Prime Minister (Mr. Mulroney) can hear us from West Palm Beach this morning.
I can also recall when Prime Ministers participated in budgetary debates. When I had the honour of holding the high office which the current Minister of Finance (Mr. Wilson) now holds, my Prime Minister was present and did speak. Nothing is more important to a free people than to have the right to challenge a Government on how it taxes and how it spends. Therefore, it is the role of every Member of Parliament, led by the head of Government, to attend and participate.
I wish all Members of the House had been here yesterday to listen to my colleague, the Hon. Member for Laval-des-Rapides (Mr. Garneau). He gave the budget speech which the Minister of Finance should have given on Wednesday afternoon. The Minister is to be judged, not by what he did, but by what he did not do. With 1.25 million unemployed in Canada the Minister did not attempt to create a single job.

Instead of acknowledging the monumental mistakes it made in its first two Budgets and showing consideration for the urgent needs of millions of Canadians, the Government is trying to make them believe they will benefit by the measures announced Wednesday by the Minister of Finance (Mr. Wilson).

This is another cynical attempt to manipulate public opinion, as if we did not already have enough cynicism in the country arising from recent events.
This third Budget represents phase three of an all-out attack on low and middle income Canadians. It widens the gap between the rich and poor and also between the have and have-not regions of the country. These three Budgets, with their economic approach to government, gave us the largest tax
February 20, 1987

increases in modern Canadian history. They have gouged $22.8 billion more out of individual taxpayers. That is an average of $2,000 per taxpayer during the tenure of the present Government. Compared to that, over the same period of time corporations are taxed $2 billion less than they were when the Government took office.
Is that fair? Is that the type of justice the Minister of Finance was talking about? Is that the fairness which he has in mind? Is that the equitable style of taxation which he wishes to deliver to the country? Because of deindexation most of the increases have been not only massive, but automatic, cumulative, hidden and sneaky. As my colleague, the Hon. Member for Trinity (Miss Nicholson) said so eloquently this morning, it put the Canadian taxpayer on an escalator. These taxes move forward without abatement.
The Minister was not frank with the House. He tried to give us and the country the impression that there were no new taxes of substance, certainly no new personal income taxes. However, those taxes are already built in, in the first two Budgets, and they carry forward with ever-increasing effect during this year and the next.

Mr. Speaker, we are not going to thank the Minister, because for Canadians on low incomes, the tax increases and the surtax included in the first two Budgets continue to be in effect, since they are automatically extended in the present Budget, and they are just as unfair and just as sneaky as they were at the time they were introduced.

I believe the country deserves a little illustration so that my meaning can become clear. The cumulative effect of these three Budgets, including the one we are debating now, is that during the four-year term of the Government a family with two children earning $15,000 a year will have a cumulative tax increase of 53.1 per cent. A family earning $30,000 a year will have a cumulative tax increase over four years of 18.3 per cent, and those earning $100,000 a year will have a cumulative increase over four years of 6.9 per cent. That is $15,000 a year with a 53.1 per cent increase compared to $100,000 a year with a 6.9 per cent increase. We ask whether that is fair, just or credible to the people of Canada.
The Minister of Finance asks us to support him in controlling the public finances of this country. He will not be able to do that unless Canadians believe the burden is being imposed fairly and justly so that everyone is paying their fair share.
People who are filing their tax returns know that they are paying more. When we study the current guide published by Revenue Canada, we see how much more tax one owes. The guide used to have three columns, but now has four, the fourth of which we will call the "Wilson surtax column". Even if one's taxable income is as little as $550 per year, one is liable for a surtax.
The Budget-Right Hon. Mr. Turner
People are receiving their T4 forms now and looking at their income. They are suddenly recognizing that they are paying much more to the Government in taxes. They are seeing an extra $100 or $200 tacked on by way of surtax, in addition to the higher sales taxes and higher tax rates. They are asking why. Where is the money going? Is it going to help pay off the deficit? Is it going to help the less advantaged areas of Canada? Will it help to feed the starving in the Third World, to whom we owe some help as human beings? The answer to all those questions is no. People might understand having to pay more in taxes if their money was going to those causes. But for what is the money being used? It is partially to offset a lifetime $500,000 capital gains tax exemption for the wealthy. It will help bring down tax rates on large corporations.

If we analyse the percentage paid by individuals in Canada and the taxes paid by companies and corporations, Canadian taxpayers are paying $22.8 billion more in income tax since the Conservative Government came to power. However, corporations have seen their taxes drop by $2 billion over the same period. In other words, the individual taxpayer is paying on average $2,000 more in income tax, while corporations are paying $2 billion less. Is that what the Minister calls fiscal fairness?

I do not believe that a single mother in Toronto who is trying desperately to raise her family, clothe and feed them while holding down a job, will thank the Minister for making her life harder. If she is in the $15,000 income range, the impact of the Minister's three Budgets is that she will be paying $321 more during this Government's tenure of office.
I do not believe the elderly widow in Vancouver Quadra, trying to live on $15,000 a year, will thank the Minister either for increasing her taxes by $423 with these three Budgets.

I don't think young couples in Montreal who are trying to save for their first home will thank the Minister for depriving them of money they could have saved for that purpose. If their annual income is about $30,000, they will pay $966 more in income tax.

What is really disgraceful is that those in the lowest income brackets who are earning poverty level wages are, for the first time, being hit by substantial tax hikes. As Ken Battle of the National Council of Welfare points out:
The federal Government is dipping further and further below the poverty line to get taxes.
This is not acceptable.
What about high income earners? The special 5 per cent and 10 per cent surtax on their income ended on December 31, 1986. It was removed, and once again the wealthy and the rich get the tax breaks while all that the poor get are broken promises.

February 20, 1987
The Budget-Right Hon. Mr. Turner
Commentators may say that the Minister was treading water with his Budget, but with the extra burden he has already placed on the Canadian taxpayer during his last two Budgets, thousands of Canadians are literally drowning in taxes. The Government simply does not care. The taxes brought in in the last two Budgets are automatically imposed every year. The country is on an escalator. Taxes will go up year after year without any public announcement, any public debate, or any parliamentary discussion.

For example, the indexation which protects all Canadians by guaranteeing that tax deductions and tax brackets are geared to the inflation rate has been limited just in case the annual inflation rate might exceed 3 per cent. Such underhand and clandestine de-indexation represents the most massive and heavy tax increase in Canada's history. It will cost Canadians billions of dollars.

Sneaky, hidden, silent and automatic. Rather than an upfront progressive approach, the Government chose to increase the sales tax also. On Wednesday the Minister said in the House, as reported at page 3578 of Hansard'.
The federal sales tax is unfair and inefficient. It is a silent killer of jobs,
Why did he increase that tax not once, twice, but three times since he came to office? When the Tory Government came to power the sales tax in this country was 9 per cent. It is now 12 per cent. Furthermore, the Government broadened the base of the tax, putting the burden on even more products. It is a regressive tax which hits hardest on those who can afford it the least; low and middle-income Canadians.
[ Translation]
The sales tax is practically invisible. In his previous Budget statement the Minister had said that this Budget would be hard but fair. To him, it means being hard on low and middle income Canadians, and fair with well-to-do people.
In this Budget the Minister goes as far as raising the price of snack foods given to children.
The Government also increased the tax on gasoline, Mr. Speaker, and this after promising that it would never do such a thing. The gas tax went up 2 per cent a litre in 1985, one cent more in January this year, and yet another cent in this Budget. In other words, working people will have to spend more just to get to work.
These gas tax increases, since the Minister took office, work out, coincidentally, to 18 cents a gallon. The only person in this place who could be happy about that 18 cents a gallon is the Minister's predecessor in the Government of the Right Hon. Member for Yellowhead (Mr. Clark), the now Minister of Transport (Mr. Crosbie), "Mr. T," as he is known throughout the Atlantic Provinces. It took a long time to get back to that
18 cents but the Minister of Finance has done it for him. Boy, he must be feeling proud.
Again, those who can afford it least, get hit the hardest, making it more expensive for those fortunate enough to have a job to get to that job.
[ Translation]
The Minister is talking about imposing a business transfer tax, which means he would extend this regressive tax to services, and making sure the Government would collect billions of dollars in additional revenues at the expense of people who can least afford to pay.
Ever since this Government took office, indirect taxes have risen by 25.2 per cent in 1985-86, by 25.6 per cent in 1986-87, and they will be up by another 8.6 per cent in 1987-88-all told 70.8 per cent in less than three years.

These are invisible taxes which consumers do not see, just pay. In 1986 Canada had the worst inflation record of all the G-7 countries except Italy. The reason for at least half that 4.2 per cent inflation rate was due to the sales tax and excise tax increases by this Government. Even more serious, the Government has gone out of its way to widen the gap between the rich and the poor. It is a gap which has been growing under this Government and which has resulted in the unparalleled growth of soup kitchens and food-banks. Men and women are forced to publicly stand in line in our major cities to get a package of food for themselves and their children. They face that humiliation and there was not a line, not a dollar, in this Budget either to promote joint funding with the provinces or to eliminate the need for food-banks in Canada. If it were not for our churches and volunteer agencies, thousands of Canadians would be starving in the large cities of Canada. This is a disgrace for the country, and the Government is responding inadequately and in a way which makes me ashamed to sit as an Hon. Member of this House.
I have illustrated the figures which show that the gap between the rich and the poor is being enlarged by the taxation policy of the Government, but there is also a widening gap between the have and have-not regions of Canada. Let us look at the impact the Government has had on the disadvantaged regions. That was another of the Prime Minister's "Holy Grails". Dare I say the words "sacred trust"? It was to be enshrined in stone that there would be equality of opportunity no matter where one lived in Canada. There would be equal treatment and equal opportunities. But what did the economically depressed regions of this country get in this Budget? How does the word "zero" sound to you, Mr. Speaker?
The recovery from the 1981-82 recession was slower in the regions than it was in central Canada. While the Minister boasts of recovery, the statistics are hollow because the recovery has been unevenly shared. Unemployment rates in Atlantic Canada, in rural Quebec, in northern Ontario, in Alberta, British Columbia and in the Territories, are unacceptably high. In fact, as my colleague, the Hon. Member for
February 20, 1987

Laval-des-Rapides, pointed out yesterday, unemployment in the disadvantaged regions of Canada has risen since the worst year of the recession.
Here are the figures. In Newfoundland in 1982 the rate of unemployment was 16.8 per cent; in January of 1987, 19.2 per cent. In Prince Edward Island in 1982 it was 12.9 per cent; in January 1987, 14.6 per cent. In Nova Scotia in 1982 it was 13.2 per cent; in January 1987, 14.3 per cent. In Alberta in 1982 it was 7.7 per cent; January 1987, 10.8 per cent. In British Columbia in 1982 it was 12.1 per cent; January 1987, 13.6 per cent.

How does the Government react to this worsening crisis in the regions? Instead of helping them get through the crisis the Government makes the problem even worse. Funds earmarked for regional economic development went down from $14.9 billion in 1984-85 to $12 billion in 1987-88, a decrease of 20 per cent.

The rural areas of Canada are suffering. There was nothing for the farmer in this Budget. The Minister refers to other programs. I remember when a Budget was the time when the Government stood before Parliament and set out the programs for the farmers, fishermen, consumers and the disadvantaged. We have a crisis on the family farm which the Hon. Member for Algoma (Mr. Foster) has just outlined. Farmers are facing bankruptcy. We have the lowest prices for the next crop year since the depression, since the 1930s, of which you are well aware, Mr. Speaker. The International Grain Conference, where there was a hope we would receive some rationalization in the anarchy on international grain markets provoked primarily by the European- American confrontation in San Diego, was a shambles. It was a disaster. Yet the family farm gets nothing from this Minister.
The Tory message to Canadians living in the Atlantic Provinces, in western Canada and in northern Canada is, "If you don't like it. Tough. Move". I tell you, Mr. Speaker, that is not the Liberal view. We are not going to lead a country where we have to tell, or would dare tell, Canadians who cannot find a job in the Atlantic Provinces, in western Canada or in the northern parts of our country, "Move to Toronto; move to Montreal". No, sir, we believe in a country where there is equality of opportunity from one end of the nation to the other.
I suggested yesterday to the Minister that perhaps he did not understand how this country is put together, from the Atlantic to the Pacific to the Arctic, and that failure to understand, that attitude, displays a sad and dismal perception of the nature of Canada. It also portrays that this Government has no agenda, no plan and no projects to bring about some equality, some equilibrium in the economic advantages of the country. I have heard the Prime Minister, but regional equality is just rhetoric to this Government, and Canadians cannot serve their families rhetoric for dinner.
The Budget-Right Hon. Mr. Turner
The Minister has a beautiful hedge here, tax reform; something that is not on the table before Parliament. "Wait until spring". That used to be a reverse advertisement in Canada. We could see the Minister's ears perk up last year when the Congress of the United States finally passed its tax reform. Sweet sounds came out of Washington, and a reduction of rates. The Minister of Finance could not resist the bandwagon. It was too good to be true. Who could argue? Lower taxes sound wonderful; but I am afraid the Minister jumped on the bandwagon without understanding the music. He said he had a plan. He said he had an agenda. He led us all to believe that he would be following the United States with major changes and major improvements in the tax structure.


Raymond Garneau: He said that?

It is true, he said so in July.


John Napier Turner: Apparently he said that, Mr. Speaker. Am I right?


Raymond Garneau: Quite so.


Mr. Kaplan:: That is indeed what he said.


John Napier Turner: Indeed, the Minister of Finance (Mr. Wilson) said last year that he would have specific tax reform propositions to make in his next Budget, that is in this Budget. Where are these propositions, Mr. Speaker? The Minister is asking us to wait until spring.

Although we will distance ourselves from it this morning I suspect we as Members of Parliament may be party to a massive fraud on the Canadian people, encouraged and perpetrated by the Minister of Finance of the Tory Government. Let me explain why. Fairness has not been the watchword or the overriding principle in this Government's approach to taxes in its previous Budgets. Why should Canadians trust the Minister now? Why should Canadians believe the Government now? Why should Canadians feel that the Government will be fair in tax reform? The record does not give us any encouragement.
What the Government is not talking about is the other side of the coin. What exemptions and deductions will be eliminated in order to allow those basic tax rates to come down? I think the Minister assumes that to be credible tax reform, it has to be fiscally neutral. Will the basic personal exemption be cut? Will the exemptions for senior citizens, for dependent children or RRSPs be cut? Only the Minister knows the answers to these questions, and he is not talking. He gives us a hint here and there. The press shared a sandwich with him yesterday and he threw out another little teaser. Maybe we will know more in the spring. Maybe that paper will not hit us until the summer.

February 20, >
987
The Budget-Right Hon. Mr. Turner


Raymond Garneau: I wouldn't bet on that.


John Napier Turner: Maybe that paper will not hit us until the fall. Quite frankly, I do not believe that the Government has any commitment to making real hard and tough choices, to make any changes which will make an impact on those who are wealthy enough and well-organized enough to resist the changes that will really result in tax reform in the country.

Yesterday, the Hon. Member for Laval-des-Rapides (Mr. Garneau) clearly explained our position on tax reform. The Government is always expecting us to come up with options and alternatives. Well, the option was crystal-clear in my hon. friend's speech, and we feel that his proposals should be included along with tax reform and the strengthening of our social programs. Any changes in the tax system must be firmly grounded in the principles of justice, equity and effectiveness. There are a number of tax breaks and tax expenditures that no longer do the work they were intended to do. In my view, if the system is fair, many of these tax breaks will no longer be necessary.

It is the same cynical ploy. On issue after issue the Minister hints strongly at tax reduction but at the same time he is considering a business transfer tax to hammer the Canadian consumer. The Minister should at least have the courage to tell us what is the plan. He should have the courage to tell us what his intentions are rather than hiding behind delays and studies. There is continued confusion, confusion and instability over the direction in which the Government wants to take the Canadian economy. We do not know where tax reform is, and of course there is added confusion, and the Minister did not deal with it at all, except in one line in his Budget, as to the status of the free trade negotiations with the United States.


Michael Holcombe Wilson: One line?


John Napier Turner: Perhaps in one paragraph.


Michael Holcombe Wilson: A pretty strong paragraph. Read it again.


John Napier Turner: The Minister re-endorsed the free trade negotiations.


Michael Holcombe Wilson: With punch!


John Napier Turner: I think it was the
flabbiest punch that has been thrown since the latter days of Joe Walcott when he could hardly get into the ring.


Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: Where do you stand on this? Do you agree with the statement or not?


John Napier Turner: I will tell the Minister. I am glad I have him as a captive audience. I appreciate his courtesy in hearing us out.
The Prime Minister announced the free trade negotiations with the United States at the great Shamrock Summit. So far the only winner on March 17 has been St. Patrick-Canadians certainly have not gotten much out of these negotiations. The decision of the Prime Minister could dramatically alter almost every aspect of our economy in the next few decades. It could have a profound effect on the way we live, on the way we do business, on our standard of living, on our independence and certainly on our national sovereignty. Yet it received only a passing reference in the Minister's Budget-an endorsement.
The issue of free trade would not be discussed in the House of Commons at all if it were not for the opposition Parties. We once got 15 minutes from the Prime Minister. In fact, we have only had three speeches from the Prime Minister since this Parliament began in November of 1984. We had one on each Speech from the Throne and 15 minutes on free trade.
My colleague, the Hon. Member for Oshawa (Mr. Broad-bent), and I believe that the important debates of the country need the leadership of the Parties we have the honour to represent. We are here in the House of Commons despite an electronic age. This is the forum of the nation. This is where the Prime Minister ought to be.


Some Hon. Members:: Hear, hear!


John Napier Turner: We in the Liberal Party have always favoured, and we still favour, liberalization of world trade and Canadian trade. We favour lowering trade barriers. We favour dissipating and lowering protection. We prefer to do it on a world-wide basis. Canadians have always done better in negotiations with the United States within the GATT negotiations and within multilateral trading partner negotiations. We have always done better with the United States that way than we have on a head-on approach with our American friends.
The United States is our largest and most important customer. That is agreed. The United States is not our only customer or trading partner. I will have to take the Minister through this very carefully and quietly so that he will understand.


Mr. Dingwall:: You'd better repeat it a couple of times.


John Napier Turner: I say that because he did not deal with the subject of the international scene in the depth he ought to have done in a major budget speech. As a matter of fact, that speech was so thin I have had gruel at one of these food banks that is thicker, and that is thin enough.


Michael Holcombe Wilson: You weren't in the House to listen to it.


John Napier Turner: I was here.
February 20, 1987


Mr. Mazankowski:: You were out doing your interview.


John Napier Turner: We in this quarter of the House do not accept the initiative of the Prime Minister. We believe it has been ill-conceived. We believe it has been ill-managed and poorly negotiated. We believe it was ill-timed. The homework has not been done. The preparation was not done. There was no public debate. There was no mandate from the Canadian people. There has been no debate in Parliament. Not once have we had a debate in Parliament on this issue. The provinces have been inadequately consulted. Yesterday we heard the Premier of Quebec reasserting what he believes is his right to have a veto on these negotiations, or on the result. The Premier of Ontario has taken the same position. I must say that I do not know where the new Premier of British Columbia stands on this particular point.
For sure, the United States is our principal partner. We desperately need access to its markets in terms of competitive ability, market share and so on. But there is a rising protectionist sentiment in the United States. The newly-elected Democratic Congress, a Democratic Senate and a Democratic House of Representatives has accentuated that sentiment of protectionism. The Government was naive in thinking that the very fact of beginning negotiations with the United States would, by itself, dissipate that sentiment of protectionism in Canada's favour and would eliminate or exempt Canada from it. Of course that was naive, and of course it has not happened.
I believe we have to examine that naive assumption. I believe Members of the House must put a question to themselves. Is the United States really after free trade, or fair trade, or managed trade? Is the United States using the cover of these negotiations to extract a series of managed trade deals from Canada?
I do not know whether the Minister has had the opportunity to personally examine or be briefed on the new United States Trade Bill which was introduced in the United States Senate and supported by 52 or 53 Democrat and Republican Senators. That is not a free trade operation. That is a managed trade operation. That is not a fair trade operation. The Minister states that it is worse than that, and it is.
I am proud to sit in the House, but in terms of a legislative chamber the U.S. Senate is a pretty good deal. There are no administrative responsibilities, only debate and analysis. Those Senators love it, and it is a great club. They call it a level playing field. Fair trade is a level playing field. I love the expression "level playing field" because every time I have seen an American negotiate on that basis what he really means is "it is our field, it is our referee, we draw the lines, it is our goal posts, and it is our ball". Now we have the United States Trade Bill.
I believe that we should now reassess the negotiations with the United States. We should ask our American friends what are the real objectives. Is it free trade, or is it a managed trade
The Budget-Right Hon. Mr. Turner
arrangement? Are these negotiations being used by the United States to extract from us deal after deal. There was 15 per cent on the export of softwood lumber. What is next? Pulp and paper, steel, potash, oil or gas, hydro?

Recently, I had the honour of speaking with Premier Bourassa, and I said: Watch out, Mr. Premier, if it's 15 per cent today on softwood lumber exports, watch out for your pet James Bay project. Thanks to the pitiful negotiating by this federal Government, the Americans will be tempted to make us put a 15 per cent tax on our hydro exports as well. They see those guys in Ottawa as rank amateurs. The way we were set up by the United States on the softwood lumber issue will be repeated, and next time, it could be on just about anything.

When the Deputy Prime Minister (Mr. Mazankowski) telephones the Prime Minister this afternoon, ask him how the weather is, would you? Tell him that when he is down there to pick up the phone to his friend, the President of the United States. I know that the President is a little distracted and wondering what is in the computer bank. But in any event, call him and say, "Look, Mr. President, the boys, the Members, the girls-


Donald Frank Mazankowski: Which group, you or Axworthy?


Michael Holcombe Wilson: Sheila will not like that, John.


John Napier Turner: No, no, I was trying to find the right word. The persons, the Members, the people. Equality is so rampant in the Liberal Party that we no longer have distinctions.


Some Hon. Members:: Hear, hear!


John Napier Turner: Ask the President what are the real intentions of the Congress. We ought to know. We would like to have a statement from the Prime Minister, not the Minister for International Trade (Miss Carney). We have seen her final offer after final offer after final offer. We wish a statement from the Prime Minister stating at what stage are these negotiations, where are we going, what is on the table, and what is not on the table. We must start to dissipate the uncertainty, and the business uncertainty in Canada in order to know where the country is going.
The Chief United States Negotiator, Peter Murphy, stated that everything is on the table. The former Speaker of the House of Representatives, Tip O'Neill, was up in Canada at $25,000 an hour and told us that he liked Canadians, but in these negotiations you have to give a little. I have not met Tip O'Neill for a long time. I did like him. When I next see him, I will say, "Tip, give a little? We have given already on FIRA, it is gone; the National Energy Program is gone."


Donald Frank Mazankowski: You were against it, too.
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February 20, 1987
The Budget-Right Hon. Mr. Turner


John Napier Turner: "You have half of our book publishing industry. There is a drug Bill in Parliament, you do have our lumber. What is next? Tip, you ought to know what is going on, and perhaps you could tell us. What does the United States really have in mind, and what does the Congress and the Senate have in store for us?"


Michael Holcombe Wilson: What do you really have in mind?


John Napier Turner: Well, I have told you. Let me be very specific for you.


Michael Holcombe Wilson: I hope you will be.


John Napier Turner: The Minister of Finance is a surprisingly good listener today.


Michael Holcombe Wilson: Absolutely. I always listen.


John Napier Turner: On a trade agreement with the United States, we have a Party view that has been expressed on several occasions, and it meets the consensus of every person in our caucus.


Some Hon. Members:: Hear, hear!


John Napier Turner: My personal view is that I do not believe there will be a comprehensive free trade agreement with the United States. I will tell you why. I do not believe that any Canadian Government, and the Government has not been clear about it, can afford to dismantle our agricultural programs, can afford to put the Auto Pact on the table, can afford to sell off our cultural industries, and can afford to abandon our regional economic programs. I know that, my Party knows that. The Government has not come clean and told us what is on the table and what is not on the table.
I also say to Hon. Members sitting across the way, led by the estimable Deputy Prime Minister, that any Canadian Government that attempted to yield on the fronts that I have described and others would be politically dead. We are not talking about a comprehensive free trade agreement, we are talking about some type of agreement.
Deep in the psyche and consciousness of every Canadian there is a concern and a worry that the Government is a lousy negotiator.


Some Hon. Members:: Hear, hear!


John Napier Turner: The Government is selling us out. The Government has not got the fibre to work out a good deal. There is a very deep underlying feeling in the country that whatever happens in these negotiations, we want to emerge from them as a country with independence, sovereignty, pride, uniqueness, and a distinctness. I wish to tell the Deputy Prime Minister that we admire our American friends, but we like it here. We are proud to be Canadians, and
we are not going to be party to any agreement that in effect makes us the fifty-first state of the United States.


Some Hon. Members:: Hear, hear!


John Napier Turner: The United States Congress has given us a warning that they will not yield on countervail. They did not yield on countervail in the free trade agreement with Israel. I have said in the House and elsewhere that any agreement with the United States that did not have some meaningful restriction on countervail would not be worth the paper it is written on. What will we get? I wish to make a prediction. We will receive some type of dispute mechanism from these negotiations. We will receive a joint arbitration board. We will not receive any yielding on countervail. We will not receive any substantive measures. Whatever we get will be far short of the bravado and the blarney of the Shamrock Summit, and it will be far less than a comprehensive free trade agreement. It will be a limited agreement, probably with a dispute mechanism, and the Government will stagger away from the table and cry victory. That is my prediction. I am glad both Ministers are present to hear it.
What will we do in the future? I believe that we need a more focused approach to these negotiations with the United States. We need it within an international cover, and with a central focus. I do not think we are going to get-


Thomas Hockin: Look at the forest and not the trees.


John Napier Turner: That is exactly what the Hon. Member said, although he said it in more elegant French than I can muster.
There has been tremendous uncertainty caused by these trade negotiations with the United States. Business capital expenditure projections are way down. The Minister will admit that. I think a good deal of the hesitation of business to commit to capital projects, plant or equipment arise from the fact that business does not know where these negotiations are going or what the result might be. Business does not know where to put the plant or when.
Talking about an international outlook, Mr. Speaker, I would have hoped the Minister might have given us his views on some of the risks that affect Canada. We do not have his view on the United States dollar and what it might mean for this country. I wonder, and I think many Canadians wonder, how low that dollar will go. U.S. Secretary of the Treasury, James Baker, has been talking it down. He has been trying to talk it down to make the United States more competitive with Europe, and Japan particularly, to try to work out the trade deficit. He is not succeeding either, because those other countries are lowering their prices or because the so-called J-curve and the delay in working those dollar prices through has not yet taken effect. In any event, we are now at a stage where we wonder how low that dollar will go and I believe we have a vulnerable situation.
February 20, 1987

The United States has been financing its trade deficit, now in the range of $130 billion to $150 billion, and its fiscal deficit in the range of $180 billion to $200 billion, by foreign money, primarily Japanese. As a matter of fact, you could say that Japan is virtually the banker of the United States at the moment. In three or four years from becoming the largest creditor nation in the world, the United States by the end of this President's term will be the largest debtor nation in the world at about $500 billion U.S. dollars. The United States is now vulnerable like the rest of us in currency movements. If the U.S. economy falters, or if world confidence is shaken in the American economy and that money is pulled out to finance both of those deficits, interest rates from the federal reserve will have to go up and we will have the beginning of a very serious world crisis. We have no views from the Minister of that. We have no views-

-concerning our international system of payments and banking operations, because I believe this situation as well is very precarious. Indeed the international debt amounts to $1 trillion, which is more than the total assets of western banks. Developing countries in Latin America and Eastern Europe do not have enough trade to meet the interest payments on their debts. The problem is made even worse by the current geopolitical situation in the Middle East and in other strife-torn countries. We would have liked the Minister to tell us where he stands with respect to these questions. What is Canada doing to help stabilize the exchange rates? What is Canada doing to encourage the reconciliation or reorganization of the international bank debt? We are not isolated, we are not immunized. These situations are contageous. But the Minister does not confide in us, he does not share his thoughts with us.
The Minister proudly states that our deficit is now proportionally identical to that of the United States.

That is a real big deal and a great target. In the words of the Minister, reducing the deficit is the priority; to quote him, it is "right on the top of the heap". But how come he is back to square one? The deficit is roughly at the same level it was when he took over in September 1984, and my colleague, the Hon. Member for Laval-des-Rapides, has explained that very carefully. How did the Minister keep the deficit where it was? Not by expenditure cuts, but by raising taxes on the middle class of this country, slashing regional development spending, dramatically cutting EPF transfers to the provinces, slashing funding for research and development-


Some Hon. Members:: No.


John Napier Turner: -firing our scientists, letting our best brains go to the United States and elsewhere.
While I have the Minister trapped here in the House of Commons, can I say one thing to him through you, Mr. Speaker? Try to get the accounting straight in this country.
The Budget-Right Hon. Mr. Turner
Investment in research is less a current expense than an investment. It is a capital expense in the future of our country. It is the best investment we can make. Treat it that way in the public accounts.
What has been the impact on the public debt of this Minister? I do not want to stop him burnishing his reputation with his friends, many of whom I know, by the way. But the total public debt has gone up since this Government took over. It will have gone up by an astounding 67 per cent to $294.8 billion by the end of the fiscal year 1987-88. The Minister inherited a public debt on September 17, 1984 of about $175 billion. He has run it up to $300 billion. Forty per cent of the total public debt of Canada has been incurred by a Conservative Government.


Donald Frank Mazankowski: Big deal.


John Napier Turner: The Deputy Prime Minister says "big deal". Presiding over a Government like this, he knows what a big deal is.


Some Hon. Members:: Oh, oh!


Donald Frank Mazankowski: We know the big legacy you guys left us.


John Napier Turner: The Deputy Prime Minister has been courteous to me and has been listening. Let me now give him a plain and simple fact. It comes from the Minister of Finance's own budget calculations. I want to give tribute to the Minister that this record of public debt is unequalled by any other Minister of Finance in the history of our country. I believe a fitting epitaph to be printed on the tombstone of this Government should be carved this way, "Here lies the Tory Government sunk by the weight of its own hypocrisy".
Despite all the rhetoric there has been very little substantial movement on the deficit and no progress at all getting at the expenditure side of the Government. In his last Budget we saw, "In every case we are spending smarter and making better use of scarce resources". I believe those were the Minister's words. That statement falls a little flat in the face of the facts. The $500,000 capital gains tax exemption will cost $800 million this year. The Canadian Commercial Bank and the Northland Bank fiascos cost another $1.6 billion. I am sorry that "billion-dollar Barbara" is not here to listen. The Gulf-Reichmann deal cost $1 billion. The Hong Kong takeover of the Bank of B.C. cost $200 million. Those are just some of what the Minister of Finance used to call the big ticket items.


Donald Frank Mazankowski: Are you against that?


John Napier Turner: We want to explore why that $200 million was necessary, but we are not against the sale. We would like that $200 million examined by the committee. I do not have time to explore the prison in Port Cartier, nor do I have time to explore the public relations campaign to sell free trade. I am not invited along on the

February 20, 1987
The Budget-Right Hon. Mr. Turner
Prime Minister's travels with the butler and the maid. What about the home movies and the shadow jets?
You have been patient and our friendship goes back a long time, Mr. Speaker. This Budget is part of the cynical selfserving approach of the Government. I will tell you why it is cynical and I will tell you why I believe it is a fraud. Here is the time-table. I will lay it out for the benefit of Canadians. When the Deputy Prime Minister is on the telephone to West Palm Beach this afternoon, this is what he ought to say.
Step one of the timetable was for huge tax hikes to be brought in with the first two Budgets in 1985-86. Over $16 billion more was taxed against individuals and 90 per cent of the taxes in the first two Budgets was on individuals while only 10 per cent of the taxes was on corporations. In the current Budget, the ratio is about 95 to five.
Here we are at step two in 1987. The Minister says, "Make a few minor adjustments but do not tell the people that those earlier massive tax increases are automatic, hidden, escalated, deindexed and working through the system". By the end of this year, $22 billion will be taxed against individual taxpayers, $22 billion that they otherwise would not have had to pay. We are now living through step two.
Step three is to wait until spring when there will be a White Paper on tax reform. It may be in the spring, it may be in the summer or it may be in the fall. Step four, 1988, will occur just before an election. The Government will bring in the good news Budget containing personal reductions on the side of tax reform and close a few loopholes. The Government will give what is due to our regions in some better measure than it has before. Step five is to call an election. Step six is to return after the election to oppose the biggest, most massive consumer business transfer tax designed to balance the books this country has ever seen.
I do not want to head the Minister off from the disaster course he has obviously set for himself, but there are two flaws to that schedule. The Minister should listen closely. The first flaw is that Canadians see through it, and the second is that the Minister will not be back after the election.


Some Hon. Members:: Hear, hear!


John Napier Turner: Canadians have seen the solemn commitments of the Tory Government broken so many times that it has gotten down to a question of trust. Canadians do not trust this Government. Canadians do not trust this Government in honouring its promises. Canadians do not trust this Government in negotiating the trade arrangement with the United States. Canadians do not trust this Government in the fish treaty with France. Canadians do not trust this Government in the style of public morality that it displays. Canadians do not trust this Government in the way it handles the
provinces. Canadians do not trust this Government in protecting our sovereignty. And, Mr. Speaker, Canadians do not trust this smug, manipulative Budget.


Some Hon. Members:: Hear, hear!


Donald Frank Mazankowski: Mr. Speaker, I rise on a point of order. We listened to a lot of inaccuracies in the speech-


Maurice Brydon Foster: Name one.


Donald Frank Mazankowski: As a matter of fact, I will. 1 am sure the Right Hon. Leader of the Opposition (Mr. Turner), who is a fair man, inadvertently misled the House when he suggested in his opening comments that when he was Minister of Finance his Leader not only spoke in the Budget debate but was present when the Leader of the Opposition participated. I have just had a chance to look at the record of the Budget of June 23, 1975. The Right Hon. Member's Leader did not speak and there is no evidence to suggest that he was present when the Leader of the Opposition spoke. As a matter of fact, when the Leader of the Opposition spoke on June 26, 1975 he led off by saying that he was sorry that the Minister of Finance was not in the House-


The Acting Speaker (Mr. Paproski):: That is not a point of order, it is a point of debate.
Before I recognize the Hon. Member for Oshawa (Mr. Broadbent), may I have unanimous consent to let the Hon. Member for Oshawa have the same amount of time to speak as did the Leader of the Opposition (Mr. Turner)?


Some Hon. Members:: Agreed.


John Edward Broadbent: Mr. Speaker, I would begin by expressing my appreciation to my Conservative and Liberal colleagues for their unanimous support to extend time to allow me to speak. It will probably be the last time we are all in agreement today.
I would like to get right to the Budget that the Deputy Prime Minister (Mr. Mazankowski) is exercising himself about, and I can well understand that because most Canadians are very exercised by this Budget indeed.
At a time when Canadian families have had a greater increase in taxes than in any other period in the post-war years, the Government has once again increased the tax burden on families. I would remind the Minister of Finance (Mr. Wilson), who is present, that at a time when unemployment in seven of the 10 provinces is as bad or worse than it was in the depth of the recent recession of 1981-82, there is no improvement in regional development programs. At a time when, in the Minister's own words, Canadian corporations have not been paying their fair share of the tax burden, there is no change at all toward more equity in corporate taxes. Finally, at a time when, as the Minister of Finance has pointed out, sales taxes are very unfair and the most regressive kind of taxation, the Government has put additional taxes, not simply on gasoline but on peanuts, popcorn, popsicles and almost
February 20, 1987

anything else one could mention. In short, whether we are thinking of families, of regions, of the corporate share of taxes or of children, at a time when Canadians were looking for more fairness from the Government at last, we got once again just the opposite. I say that enough is enough and it is time to get fair.
In my comments today I do not want to deal with a whole range of matters. The finance critic for the New Democratic Party did that very ably yesterday. In my comments I want to restrict myself to two concerns that, it would seem to me, a Budget in a modern society, whether in Canada or in any other democratic society, ought to have as its central focus. One is the question of the fairness of the tax burden between various elements in society and principally, in a modern industrialized world, the distribution of the tax burden between corporations and individuals. Then I wish to say something about regional development and regional inequities and how they are addressed, or, more correctly, how they are not addressed in this Budget.
I would first like to deal with the question of tax reform and tax fairness as it relates to individuals on the one hand and corporations on the other. What is the reality of the Government's record? I will not provide for the House a great many statistics. I have a pretty strong hunch that most Canadians know what they are by now. The next two or three statistics I will mention are perhaps the most revealing about the inequitable burden of taxation in Canada.
I would remind the people of Canada that one of the reasons this Government was elected in 1984 was that by 1984 Canadians had become sick and tired of the unfairness with which they had been treated, particularly in the last years of the Liberal Government, and they wanted a change. I see that the Minister of Finance has just stepped out for a moment. I know that he will be back.
When this Government first came to power I was one of those, although I happen to lead another Party, who felt that it was good to have a change in Government and that it was good for the democratic process for one Party not to remain in power for 20 odd years but to have a new team of men and women bringing a new set of concerns to the political agenda. I did say as well that I expected some improvement. I regret that when I, along with the rest of the people of this nation, look at what has happened in the last two and a half years, not only have we had no improvement, if anything, things have gotten worse.
I want to spell that out. With the three Budgets from that Minister of Finance taxes on individuals have gone up over 50 per cent. Quite apart from the increasing burden on the average family, the other thing that ought to concern us is that the burden is being increasingly shared by those who are well below the poverty line. Right now you can be only half way up the mark with respect to statistical calculation, with an income half way to the point of poverty, the break even point, where
The Budget-Mr. Broadbent
you are no longer deemed to be at the poverty level, and still you are going to be paying taxes. If there is one thing which ought to be at the top of our agenda, as it has been in Scandinavia and in many other places, it is that people at the poverty level ought not to be paying taxes.
Since 1984 some $14 billion in additional taxes have been placed on the families of this nation. That is what the Conservatives have done. On the one hand we have this increased burden by way of personal income taxes or a whole series of what the Right Hon. Leader of the Opposition (Mr. Turner) has correctly called sneaky indirect taxes. At the same time the share paid by that other major source of revenue, corporations, has gone down by about 18 per cent since the Conservatives were elected.
Then we see in the press today that the Minister of Finance sat down with some journalists over coffee. I do not know who was paying. He talked about, as he is wont to do every third or fourth day, corporate tax reform. He puts a new wrinkle on it each time he talks about it. In his chat yesterday he talked about Marc Lalonde's last Budget in 1983 when a special set of corporate tax exemptions were extended. He pointed out again, I am sure with great earnestness and seriousness, how this is really disturbing the fiscal flow of the federal Government and we really have to do something about it. We have to come to grips with it. I am sure he said to himself, "I have not done anything about corporate taxes in the Budget, in fact I have increased taxes on individuals, but if I talk to journalists now maybe all the newspapers tomorrow will say I am really concerned about corporate taxes and how we have to reform them". Sure enough, he got his stories across Canada that he, the great friend of the corporations, is once again expressing his deep concern that they are not paying their share.
It is one thing to be somewhat facetious and kid about this kind of thing, but apart from standing back and looking at it analytically, as the Minister of Finance is wont to do, the real meaning of this maldistribution of the tax burden ought to be understood. If it is the case that corporations are not paying their share, and I say to the Minister that corporations, like the rest of us, benefit from national highways, nationally financed research and development programs and a whole range of expenditures by the federal Government, that share is being paid by pensioners, farmers, people on unemployment insurance, indeed, by every other Canadian. I say to the Minister it is time to stop talking about corporate tax reform and start acting.
Why is he not doing this? As I understand the Minister, and I want to take his word for it now and give my own interpretation in a few seconds, he is working up to reform. It is a complicated situation. I must say to my friend, the Right Hon. Leader of the Opposition, given the vast range of loopholes introduced by the Liberals I know it can take some time to get rid of them all. I know it presents some kind of challenge. Yet the Minister of Finance, if I remember correctly, first started talking about corporate tax reform late in the fall of 1984. In the Budget of 1985 he had some carefully documented reasons

February 20, 1987
The Budget-Mr. Broadbent
why we ought to be concerned about tax reform and the loss of revenue it means. In 1986 he wound up the corporate tax reform rhetoric once again just before Christmas. Then we see nothing in this Budget about tax reform, but there he is on The Journal after the Budget, and did he talk about the Budget? No, not at all. He talked about corporate tax reform.
Then he was asked a question by the journalists, and I hope he will clarify this. The poor journalists have a worse time with him than we do in trying to get the agenda. They were sort of saying to the Minister, "will you clarify this for us? Does this mean you are going to bring in a White Paper in the spring or maybe the fall, and does it definitively mean that by at least 1989 we will have corporate tax reform"? The Minister of Finance's definitive answer is,"well, no, I cannot guarantee it". He started in 1984, went through 1985, picked it up in 1986, gets on television on budget night in 1987 still talking about corporate tax reform. I say to the Minister that we are all getting sick and tired of it. Quit talking about it, do it, Mr. Minister of Finance.

The other matter which concerns Canadians throughout the country is fairness in regional development programs. Mr. Speaker, equal opportunities for all Canadian men and women is one of the basic principles of Confederation. Instead of preserving this principle, the Conservative Government is jeopardizing it by cutbacks to programs aimed at correcting regional disparities. This year, the Government will spend $3 billion less than in 1984 for regional economic development. This decrease has been aggravated by major cutbacks to programs in the areas of transport, fisheries and agriculture. Equalization is also essential to achieve equity among the regions. The Conservatives have continued the process of cutting back federal transfers to the provinces initiated by the Liberals in 1982.
The changes made by the Conservatives to the equalization formula have resulted in lower payments for six out of ten provinces this year. For instance, Mr. Speaker, in the case of Quebec, these changes will have cost $97 million last year and will have amounted to a cumulative loss of $2 billion when the financial arrangements expire in 1992.
The Minister of Finance (Mr. Wilson) is turning a deaf ear to the claims of Quebec in spite of threats to bring the matter of the federal cutbacks to equalization payments before the courts.
Is court action finally the only way to get some action out of Ottawa? That is not an acceptable solution and the New Democratic Party finds such results unacceptable.
Mr. Speaker, it is time for the Conservative Government to deal with the problems of families in regions where unemployment is still unacceptably high. It is time for the Government to listen to the grievances of the unemployed worker in eastern Montreal, of the jobless Kootenay miner, of the laid-off Fort McMurray clerk, of the virtually bankrupt Prairie farmer and of the Newfoundland fisherman.
Mr. Speaker, it is time to put an end to the cutbacks and to see to it once and for all that regional equity stops being a dream and becomes a reality. Instead of emphasizing regional disparities, instead of abdicating its responsibilities to the regions, the federal Government must show some leadership and demonstrate that it is possible to work together as a nation to correct regional disparities.
I would like to make a couple of concrete points in this vein. As the Minister of Finance very well knows, we now have a series of federal-provincial regional development programs negotiated between the federal Government and each of the provinces. Since the last Throne Speech we have established the Atlantic Canada Opportunities Agency for our easternmost provinces. Third, although nothing has yet been done about it, there was a commitment originally made at the First Ministers' meeting, subsequently discussed at Finance Ministers' meetings, and referred to in the House, to establish a program which would bring greater economic diversification to western Canada. Therefore, we have an Atlantic agency, a commitment to diversification for the west, and very specific regional development agreements negotiated between the federal Government and the provinces.
As I said, the Government has done nothing about this at a time when unemployment in most of the regions of the country remains as bad as it was at the depths of the recent recession. We need some action. Unemployment is high in most areas of the country and the federal Government should be showing leadership to turn that around.
I would like to make a couple of concrete suggestions about what could be done if we had a Government which believed that there is an activist role for a Government to play. In all candor, one of our fundamental problems is that the Minister of Finance, albeit intellectually honest, is a man of the 1930s instead of the 1980s in his thinking. Through his own personal commitment to market mechanism he can stand back and watch almost all of the economic growth, as well as the resulting jobs, take place within 100 miles of the centre of Toronto, because that is where the continental market forces have led. The Minister well knows that that is where virtually all the growth has been. It has been mostly in the automotive sector, and most of that, although not exclusively, has been due to stimulation from the U.S. market. If you leave this country to the North American market mechanism, that is the type of thing which will happen.
If, in a different time, there is a great demand for our resources due to circumstances outside of our nation, we could have stimulation for the export of our resources, but zero impact in our manufacturing core, resulting in a downturn in the area around Toronto when we could have expansion elsewhere. If you believe, as this Minister does, that the task of government is just to sit back and watch things happen, that is what will happen.
February 20, 1987

In the reality of 1987 it is unacceptable to the New Democratic Party for the Government to use such phrases as the Minister of Finance used in his budget speech the other day. He said that we have to put our house in order. For us, the Canadian house has many rooms. Among those rooms are Atlantic Canada, western Canada, northern Ontario and parts of Quebec, not only the industrial core. A Government which is concerned about the whole house cannot just stand back and watch things happen. In the thinking of some people there may have been justification for that until the 1930s, but I thought we had learned something since then. We would like a commitment to an activist government.
I would like to make a couple of particular suggestions. With regard to corporate loopholes, it is obvious that a number of financial incentives for corporations are appropriate if they have the appropriate effects on research and development, job creation, and so on. We are talking about the useless kind to which the Minister himself has referred. We are talking about the kind to which the Auditor General has referred which simply cost the taxpayer money without having any spin-off effect for the nation. If the Minister had, in this Budget brought in the corporate tax reform which is necessary now, he could have taken tax revenues from corporations which are now making a profit and channeled that money into regional development funds to create jobs elsewhere in Canada. That is one approach which would be followed by a Government which believed in an activist role of government in the economy and had a solid commitment to ensure fair development in all the regions of Canada.
Regardless of which part of the country we are from, we all have deep concerns about the extraordinarily rapid decline in economic opportunities in the Province of Alberta and part of Saskatchewan associated with the petroleum industry. There has been a catastrophically quick decline related to circumstances over which the people of Alberta and Saskatchewan had no control and, ultimately, over which the Canadian Government had no control, namely, international prices of petroleum which are primarily established in the Middle East. There is a crisis in that part of Canada which requires action rather than a Government which says that it will deregulate the economy and hope for the best, as this Government has done. We have not seen the best, we have seen the worst. Our energy critic made a very sensible suggestion in his reply yesterday, which I will repeat. The Government has seen fit to increase taxes on gasoline by 1 cent a litre. That would increase our incoming cash flow by about $450 million. What better way to use that money than to recognize the need in the oil sector, to recognize that the benefit from the change in the PGRT has gone to big oil companies and that the people who are really suffering and could be providing jobs are the small Canadian producers? Why do we not use the $450 million which will be generated by all Canadians paying for an increase in the price of gasoline for job creation in Alberta where it will be effective now?
The Budget-Mr. Broadbent
These are but two illustrations of the general point I want to make of my concern, as Leader of the New Democratic Party, about the unfairness in regional opportunities at this time. We built into the Constitution of Canada just a few years ago a commitment to the principle of equalization. As a social democrat, it was a commitment that I was very pleased to see supported in principle by all Parties at that time. It recognizes the principle that a young boy growing up in Cape Breton ought to have the same expectation of opportunities to do what he wants in life as a boy at Dundas and Yonge Streets, or a young girl in Saskatoon who wants to go to university. If she wants to receive an education she should have the same expectations for that as a young girl in Vancouver. There ought to be no difference in medical expenses from coast to coast. In short, equalization ought to be a fundamental concern of any national party. At a time when we see the great disparities in terms of employment opportunities in our regions, the federal Government ought to be putting more money rather than less into regional economic development.
I do not want to take more time of the House today. I have mentioned two aspects of budgetary policy in my speech. One is the notion of fairness in terms of tax burden between individuals and corporations. I have suggested that the Government has failed in this respect. It has failed in its basic commitment to fairness. I have talked about the importance of coming to grips with the growing inequalities between our regions. The Budget completely fails to deal with that issue.
In conclusion, Canadians voted for a change in 1984. They expected to get a little more frankness from the Government, and a little more fairness. I regret to say that they received neither. The Government now is at a low standing in the political polls. I will not be glib about that because all of us here have had enough experience in political life to know that there is considerable ebb and flow in party standings. The Hon. Member opposite knows that as well as anyone. However, I want to say that if the Government wants to regain some credibility and move back up to gain the respect of at least a substantial share of the population of Canada, it will have to come to grips with its own failure to deliver on fairness. If it begins to deliver on fairness it will deserve to get increased support. If it does not, it deserves to be booted right out of office.


Philip Derek Lewis: Mr. Speaker, I rise on a point of order. There have been some informal discussions among the Parties. If you were to inquire, I believe you will find there is agreement in the House not to see the clock and continue debate through until 5 p.m.


Mr. Speaker:: There being agreement to the suggestion, as indicated by all Parties, I recognize the Hon. Member for Calgary West (Mr. Hawkes).


Mr. Jim Hawkes (Calgary West):: Mr. Speaker, it is a great pleasure to enter this debate following the gloom and doom

February 20, 1987
The Budget-Mr. Hawkes
twins, tweedledum and tweedledee. We remember how the doom and gloom boys stood in the House after the first Budget of the Minister of Finance (Mr. Wilson) and said that the Budget will cost the country 100,000 jobs, with 100,000 more people in poverty. However, they admit today that his Budgets have resulted in 675,000 more people working in Canada and fewer families living in poverty.
Now what do they do? They talk about equality and the fact that we should be concerned about growing inequality in the regions. The easiest thing in life to share equally, without argument, is nothing. Ten people or 100 people can have an equal share of nothing.
We all admit that there is some sense of growing inequality in the regions. 1 come from the west where people feel some sense of increasing inequality. However, I point out that every region is growing. That is the difference between what we inherited in 1984, when every region of the country was in decline. Two and one-half years later, jobs are growing and the economy is growing in every region.
Federal Budgets are designed to be tools to produce growth, create jobs, reduce poverty and provide a better standard of living for Canadians. I believe we would have difficulty in not recognizing that the Minister of Finance is an absolute genius with budgets. In 1979, I sat in this Chamber to hear the Hon. Member for St. John's West (Mr. Crosbie) present his Budget. The country was in difficulty at that time; people were living in poverty and unemployment was growing. We presented a Budget to straighten out that situation and jobs began to be created in anticipation of that Budget. The Canadian Council of Welfare said that the Budget was the fairest in the decade of the 1970s. The Budget was designed to deliver money to the poor people who needed it, it would reduce their costs, increase shelter and create jobs at better than 30,000 a month.
The Libera! Party and the New Democratic Party, tweedledum and tweedledee, threw the Budget out during that crisis in our country. They stood in this Chamber to say they could not approve this Budget. They threw the Budget out because they were playing politics with the lives of Canadians. As a result, for four long years Canada was in great trouble. Canadians should not forget the 22 per cent and 23 per cent interest charges on their mortgages. Canadians should not forget that farmers were going bankrupt by the boatload and small businesses were going belly-up.
In my Province of Alberta in 1979 there were employment opportunities for young people from across the country. They came from Newfoundland, British Columbia and Yukon to get good solid jobs and a start in life in our province. However, through the budgetary policies of those Parties who are now in opposition, who get together to destroy the nation whenever there was a crisis, took that 4 per cent unemployment rate and increased it to 12 per cent. That unemployment increase was not a result of falling international prices but deliberate public policy. Those of us who were in the House during that period should never forget that. When one lives in a community where crime increased, family violence increased and suicides
increased as a result of deliberate public policy, one should never forget it.
One should never trust the architects of that kind of public policy to be in charge of the financial affairs of this country ever again. I do not claim that the New Democratic Party was deliberate in supporting that kind of policy. I think the Liberal policies were deliberate. However, one cannot go on being a child bride all one's life. Sooner or later the NDP has to grow up and make its policy choices public. It cannot be on every side of the fence. It must recognize the consequences of what it supports.


Mr. Keeper:: Is that the voice of experience?


Frederick James (Jim) Hawkes: That is the voice of years of experience in this Chamber. I have seen Budgets which do what Budgets are supposed to do, keep stability and confidence in the country, keep inflation and interest rates down and keep employment up. I have seen two Budgets which worked and two days ago I think I saw the third. In each and every case these Budgets came from the current Minister of Finance. The current Minister of Finance is the only one in my eight years as an Hon. Member who has had a chance to demonstrate what a good Budget can do. But we will not hear the Opposition stand up and say, maybe we will support this one, at least in part, because it is the first time in 30 years that a deficit has gone down for three years in a row and interest rates are the lowest they have been in a decade.
I heard the Leader of the New Democratic Party stand in this Chamber and bleed for the Province of Alberta. What a laugh. But I did not hear his voice in this Chamber bleeding for the Province of Alberta and the people who live there as our unemployment went from 4 per cent to 12 per cent. I did not hear one scintilla of evidence in what he said in this Chamber that he comprehends the province, the people in it or the current situation. There are 23,000 more people working full time in the Province of Alberta today than there were in September of 1984. We are hurting. We have a lot of unemployed people, we would like a lot more jobs, and we are working hard to provide them. However, by every economic criterion, in the face of low world oil prices and low world agricultural prices, the economic situation in Alberta today is better than it was when this Government was elected in September 1984. The failure of the Leader of the NDP to mention that, to even allude to it, and I suggest to the House, to be knowledgeable about it, tells us perhaps more clearly than anything else that he is playing politics. He does not care. He does not know. He is simply playing politics. Someone gives him a press clipping, someone deep in the bowels of his research organization gives him a line to read, so he reads it, but does he understand Alberta? Does he care? Is he the captive of the labour leaders of the big powerful unions? Or are they the captive of the Leader of the New Democratic Party?
February 20, 1987

We have a simple legislative committee looking at the issue of protection of intellectual property, some protection for the inventors of this country so they do not have to sneak across the United States Border in the dark of the night to patent their inventions, so they can actually patent them in Canada, so they can produce them in Canada, creating jobs and sharing in the wealth of Canada. That was fought by the New Democratic Party and the Liberals together, the child bride and the mature adult.
You should listen to the members of the New Democratic Party in committee, Mr. Speaker. You should listen to the phrasing of the questions they ask, the repetition of the questions, and then listen to the union witnesses they bring into committee. They use the same words, the same set of ideas, the same phraseology and the same emphasis. Which is which? Which is the political Party and which is the labour organization? It is getting increasingly confusing.
Powerful unions donate a lot of money to the NDP, but they should not really be surprised to occasionally see a conflict in an Hon. Member's mind and actions. Doing what is best for the big, powerful, rich union may not be the same action one should take if one is really trying to do one's best for Canada and Canadians. Why does the NDP always choose the big unions? What about the little unions which exist in my community and the communities of all the other Hon. Members? Why just the big unions with the special arrangements for severance pay and special arrangements for paid vacations? Does the really rich union movement run the NDP or does the NDP run the unions? All we can really tell is that the money comes from those rich unions to the NDP and the speeches of members of the NDP are the same as the union leaders, the same words, the same ideas, the same evidence time after time.
To vote NDP is a dream. Some people better start to look before they make a mistake. They had better start to look at who they are voting for and what they are voting for. Sometimes one can wake up in the morning and say last night I made a mistake, and that could be the voters if they were to sort of stay asleep and simply, because they do not know anything about the NDP, perhaps vote for that Party just to get a change. I will tell you, it would be a change, Mr. Speaker. Half the people with jobs today would not have them tomorrow. That would be a change. They would not like that change, I suggest. Who would be naming the people? What set of principles would we have for the selection of people who were to get the jobs? Would an NDP Government take over all the means of production and therefore control all the jobs? Would it be its friends with the best jobs?
I find it a bit alarming at the committee studying intellectual property protection. A Deputy Minister for Consumer and Corporate Affairs for the Province of Manitoba appeared before the committee the other night. He was going to tell us what was wrong with the legislation of the Parliament of Canada in the protection of intellectual property. One of the members of the committee asked, "I listened to your words.
The Budget-Mr. Hawkes
Are you sort of active in politics? Are you a politician or are you a civil servant drawing a pay cheque from the taxpayers of your province"? I am informed that with a great deal of pride, this so-called civil servant, in public testimony before a parliamentary committee said, "I am a socialist and proud of it". That is the crew which does not have a problem with conflict of interest. There is no conflict because those who are elected own all the money and can give it to whomever they please. If that is the view of the world, how can there be a conflict? The definition of a Conservative conflict would be a competition. That is a conflict. There would be three, four, five or six groups bidding and the best bid would get it. The other five would have been in a conflict that they lost-one was in a conflict and won. If one draws a political ideology, a way of thinking, which gives unit control over people's lives and the means of productions and on and on and on, then there cannot be a conflict because there can never be a contest. In that case there is never a winner, just a whole lot of losers.
As I said earlier, the country was in trouble when those of us who are still here came back after 1979. The NDP and the Liberals kicked out a Budget that would have gotten us out of trouble, and got us into four more years of trouble. We have had two-and-one-half years of less trouble since coming to power. We will have another couple of years of increasingly less trouble and more good news.


Cyril Keeper: And then good-bye!


Frederick James (Jim) Hawkes: We will then go to the people of the country and say, take a good look at the speeches that have been made in the House over the last four years. In those speeches you have been told not to worry about the deficit. Every time a member of the Opposition makes a speech in the House he or she tells you that we must spend more and cut taxes. You are told that taxes should not be increased on anything. Is there a Canadian, a single Canadian six years of age or older anywhere in the country who does not understand that when one borrows money one pays it back with interest? If one borrows enough money then every penny one has goes to pay the interest. If it goes to pay the interest then one cannot buy a chocolate bar, a popsicle or a package of potato chips because one has nothing left with which to pay.
When I arrived in the House in 1979, some 83 cents out of every tax dollar went to programs, programs which would help people. We had 17 cents with which to pay interest. By the time we took office in September of 1984 we had but 64 cents of every dollar to spend on new programs and 36 cents with which to pay interest. We had 83 cents in 1979. We went down to 64 cents, and the figure is dropping like a rock. Before too long it would have been 50, then 40, then 30, and then 20. And then what? There would be no more money for pensions. There would be no more money for policing or for national defence. There would be no money for science and research. There would be no money for health care or education. There would be no money for anything.

February 20, 1987
The Budget-Mr. Hawkes
That was the path that we were on, led by Tweedledee and Tweedledum, the doom and gloom twins of the Liberal and NDP partnership. That is what that was all about. We see it every day during Question Period. We hear it every day in their speeches.
Those members of my Party who are a little concerned about the polls need but one simple strategy. It is this. We should arrange a 40-minute speech by the Leader of the New Democratic Party and the Leader of the Liberal Party of Canada every day in the House of Commons so that Canadians can really get to see them. In this way Canadians will really get to know them and understand what is on their minds. Our Budget will soon look better and better. We may even have to invent a new law to provide some type of Opposition after the next election because we may have every seat in the country.


Some Hon. Members:: Hear, hear!


Don Boudria: Mr. Speaker, I listened with great attention to what I was going to call the speech of the Hon. Member, but perhaps I should not call it that. Needless to say some of his statements were not totally, 100 per cent, accurate. I could describe them otherwise, but Your Honour would probably not allow me to do so.
I wish to ask the Hon. Member a question, he who has just spoken of so many things, particularly of the need to increase revenues for the Government. He said that in his view this would give the Government more to give out in terms of programs and so on. Does he feel that the ability of the Government to deliver on these programs is increased by giving out a $500,000 lifetime capital gains tax exemption to be used on such things as selling off one's horse in Kentucky or one's condominium in the Cayman Islands or other such investments? Perhaps I should wait until the young Minister, or is it the Minister of State for Youth (Mr. Charest), finishes briefing him on his answer and then ask him the rest of my question. As much as I hate to interrupt the Hon. Member's tete-a-tete, which he is having with the Youth Minister, could he reply to my question?


Frederick James (Jim) Hawkes: Mr. Speaker, I wish my university professors had treated me so easily with their questions. It would have made school a lot more fun and a lot less anguish.
I think there is a basic human characteristic, that most of us like rewards. We like praise. We like achievement. We are born that way. It can be seen in an infant as it can be seen in an adult. It is the willingness to make an investment, to put one's money on the line, to risk winning and losing, to risk gaining that reward or to risk not gaining it that lies at the heart of job creation. In November of 1984 we said yes to the capital gains tax exemption. We believe that it will create more jobs. We believe that reward mechanisms are powerful. It did create jobs. The Liberals and the New Democrats said that it would not create jobs. They took it away and the jobs
went with it. We put it back in place and the jobs came back. We will keep it in place since it creates jobs.


Mr. Langdon:: Mr. Speaker, it is amazing to listen to the normally careful and measured tones of the chairperson of a committee that has done quite interesting and useful work with respect to refugees suddenly come out with this bizarre diatribe which bears no relationship to the facts at all. Of course there are some good things in the Budget. There is the elimination of the stupid mistakes of the past, such as the tariff on books and Christmas trees which even Conservatives had to fight against.
I wish to ask the Hon. Member three questions. If this country is in such great shape, and if Alberta is in such great shape, then why is it that according to the latest statistics from Statistics Canada there are unemployment rates in different regions of Alberta well over 12 per cent? At the moment the seasonally adjusted unemployment rate in Alberta is 12.8 per cent. We are not talking about this being the result of the impact of Alberta's winter or anything like that. It is 12.8 per cent in different parts of Alberta. Why is that the case if Alberta is in such great shape?
Second, why should it be that the country's growth rates in every single year since the Conservatives took power have declined? Why should that be the case if the country is in such great shape? In 1984 the rates were 5.5 per cent. Each year since the Government has been in power they have gone down and they are projected for next year to be only 2.8 per cent. Why should that be the case?
Finally, I ask if the country is in such superb shape, and if the Government knows how to get along with the business community, and if it knows how to put our house in shape, why is it that the investment rates in the country-not for houses, not for co-operatives-but the investment rates for private business have been decreasing? They are not lower than they have been, but they are actually physically decreasing. According to the Budget Papers they decreased this fiscal year by 1.2 per cent. So much for the great success of Conservative economics. It is no wonder that the Member had a tough time in his university courses. In view of that, I wish he would be a little more careful and in the future stick to the subject of refugees and immigration.


Frederick James (Jim) Hawkes: Mr. Speaker, I could not help thinking that Alberta receives 8 per cent of the job creation funds today. Under the previous Liberal-NDP alliance they received less than 1 per cent. That was in the middle of the recession. By the time that came about in September, 1984, when the Government was finally chucked out, the unemployment rate in Alberta was 12.1 per cent. Lately it has gone back. Last month it was at 10.8 per cent. It started at 12.1 and went back to 10.8. Is this an economic catastrophe for my province that our unemployment rate is 1.3 per cent lower?


Steven W. Langdon: It hurts a lot of people.
February 20, 1987


Frederick James (Jim) Hawkes: Is it an economic catastrophe for the nation that unemployment today-


Ms. Mitchell:: Why don't you ask your constituents that?


Frederick James (Jim) Hawkes: -unemployment today has been reduced 20 per cent?


Steven W. Langdon: It is three points higher than the United States.


Margaret Anne Mitchell: Not across the country it has not. It is 27 per cent in Vancouver.


Frederick James (Jim) Hawkes: It has decreased 20 per cent in two and a half years. Is that an economic catastrophe? Growth can be measured by aggregating dollars. If it is full of inflationary dollars at 15 per cent, and if there is 15 per cent growth, then we stand still and do not go anywhere. It is real growth that we are after. We wish real reduction of expenditure, and we have that. Taxpayers do not donate money to the federal Government. The Government has the legal power to rob them, and to steal the money out of their pockets. That is what a democracy is all about. That should not be entered into lightly, and that money should not be wasted. It should be targeted and well used. That is the responsibility that we accept when we come here.
It is difficult to sit in this Chamber and listen to the two opposition Parties, member after member say, spend, spend, spend. Create debt, create debt, create debt. Pay interest, pay interest, pay interest. Canadians do not have jobs, they do not work hard and create money for themselves to give it to Government to pay interest. There is $23,000 of federal debt owed for every household in this country. That is the legacy that we will correct. Give us two or three more Budgets and it will be going back the other way.


The Acting Speaker (Mr. Paproski):: Questions and comments are now terminated. On debate, the Hon. Member for Trinity (Miss Nicholson).


Aideen Nicholson: Mr. Speaker, what the Government brought down this week was not a Budget. Canadians deserve better than what they got. It was a thin, insubstantial package of vacuous rhetoric, fancy bookkeeping, and mean-minded tax increases. There was no commitment, no initiative, no creativity, and no vision. Instead of calling it a Budget, the Minister might have issued a press release and tabled a Ways and Means motion.
We have a right to expect that in a budget we will see what goals the Government has set, what measures it proposes to reach those goals, and a forecast of how effective the proposed measures will be. This Budget has no projections at all. In this hollow, disappointing exercise that we were put through on February 18, which the Government is calling a budget, we had documents which are long in rhetoric and short in substance. There are no economic forecasts, nothing to indicate the future impact of the few proposals made in this
The Budget-Miss Nicholson
Budget, which should more properly be called an Economic Statement. I question the need for going through this charade at this time. It is a Budget that offers so little to so few, while we are told to wait a little longer, the magic of tax reform is coming.
In November, 1986 the Minister of Finance (Mr. Wilson) promised that tax reform would be the centre-piece of his next Budget. I believe it was his second promise that tax reform was coming soon. A few weeks ago he backed away from that. He postponed the introduction of his proposals for tax reform until some nebulous date in the spring. He offers the rather lame excuse of wanting to give careful consideration to the submissions that he has received on the subject. I think we can translate this as meaning his Cabinet cannot come to any agreement.
Canadians were offered this self-serving mockery of a Budget. Indeed, there is so much self-congratulation in it that one wonders why many of the papers were not published by the Conservative Party instead of by the Government of Canada.
Apart from the petty nickel and dime tax increases in this Budget, taxpayers may have breathed a sigh of relief not to have been the targets of yet another onslaught of new taxes and tax increases such as those imposed in the Government's first two Budgets. In fact, those tax increases, many of them hidden tax increases, are still very much intact and are only beginning to have the insidious cumulative effect for which they were designed.
As they prepare to file their tax returns, taxpayers are realizing how much of their income is being eroded by the individual surtax, the deindexation of tax brackets, family allowances, and personal tax exemptions. These changes have created built-in tax increases and will result in higher taxes year after year, quietly and automatically long after the initial changes were made. That is why I call these escalator taxes. It raises the question, as the Minister keeps promising tax reform, and promises lower personal income taxes after reform, lower than what? How far up will he take us on his escalator before he introduces reform? Will reform bring us back to where he started, or to some midway point?
Middle and low-income Canadians paid more tax in 1986 than in 1985 and will pay yet more in 1987. A married couple with one wage earner and two children paid $630 more in taxes in 1986. In 1987 the same family will pay $930 more than before these measures were introduced. Elderly couples with a joint income of only $15,000 a year paid $45 more in 1986 and will pay $130 more in 1987.
On the other hand, the family with two children and one wage earner earning $100,000 a year will have its tax burden lightened by nearly $500 in 1987. We must remember that a family at this income level is also in a position to take advantage of measures which low-income families cannot, such as RRSPs for tax deferral, and might also be able to avoid some

February 20, 1987
The Budget-Miss Nicholson
tax by using the half a million dollar life-time capital gains exemption. This is a Government that talks about fairness yet its tax measures are increasing the gap between the haves and the have-nots.
Sales and excise taxes were raised dramatically in the first two years of the Government's mandate. These taxes are paid by everyone, regardless of ability to pay. Sales taxes were raised by 3 percentage points and the sales tax base was considerably broadened. Excise taxes on gasoline have now been increased by 4 cents a litre since the Government came to power. Our transportation companies complain that they are being put at a competitive disadvantage with American companies. Our tourist industry complains, but apparently the Government is unconcerned about the loss of Canadian jobs as a result of the tax measures.
Billions of dollars in tax revenue each year have been added to the Government treasury. Personal taxes are up $14 billion since the Conservatives came to power, $5.5 billion in this year alone. Sales and excise taxes are up $8.7 billion since the present Government took over, $2.2 billion of that in this year alone. Those figures are from the Budget Papers, the Government's own figures. These increases are targeted to individuals and families. More than 90 per cent of this additional tax burden is being carried by individuals as against a very small amount by corporations. Of the individuals bearing the brunt of this tax load, most are people of modest means. One could also add that the surtaxes of 5 per cent and 10 per cent on high income earners were temporary surtaxes which ended at the end of December last. But the 3 per cent surtax affecting everyone is still in effect with no end in sight. With all these new taxes and tax increases in place, eating away at the disposable income of the Canadian taxpayer, bringing in billions of dollars to the federal Treasury each year, one must ask why the deficit is still over $30 billion and why the Finance Minister had to resort to gimmickry and fancy bookkeeping to make the numbers look better than they really are.
We all remember that at the time of the 1986 Budget there was a lot of hype about a magic number, a lot of pressure on the Government from its business friends to come up with a deficit projection under the $30 billion mark, which the Finance Minister did. He projected a figure of $29.5 billion, only to reverse himself six months later and set a target of $32 billion. Now we are told that, in spite of all the belt-tightening imposed on those who can least afford it, by March, 1988 the Finance Minister expects to have come full circle to meet the goal he set last year. It is no wonder that 60 per cent of Canadians polled recently felt that the Government is doing a poor job of handling the economic situation. The 80 per cent who felt that tax increases would have little or no effect on reducing the deficit are quite correct in their assessment, as it turns out, because the Minister's projection of a $29.3 billion deficit which he has set for March, 1988, depends upon a couple of slick manoeuvres, which are unworthy of this particular Minister of Finance.
The Minister proposes to garner an extra $1.2 billion in fiscal year 1987-88 by requiring major employers to remit Government deductions, such as Canada Pension Plan and Unemployment Insurance, fortnightly rather than monthly as is now the case. The additional payment is a bookkeeping entry of $1.2 billion. Without that he would not have made his projection of $29.3 billion for the deficit, and he would be over his magic figure of $30 billion.
A second measure to help the appearance of next year's deficit figure is the Minister's proposed deferral of $200 million in defence spending. These funds will not be spent next year as scheduled, but in the following year. It is a gimmick. It is the shuffling of figures and paper and it shows, apart from all the other broken promises, that the Conservative Government is failing in the one goal it set for itself, and that is to bring down the deficit.
The deficit has barely been reduced and the public debt is continuing to rise. In the last full year of the previous Liberal Government, the deficit stood at $32.4 billion. Under the Conservatives four years later, in fiscal 1986-87-and let me stress those were four years of economic recovery-the deficit according to the Finance Minister is $32 billion. Despite raising taxes by $6 billion, despite cutting Government programs and services, despite the introduction of user fees, service charges and the like, the deficit has barely been reduced. The public debt is rising dramatically.
Just before the 1984 election the Conservatives expressed great shock and horror at the $180 billion Government debt which they calculated as a $16,500 debt owed by each taxpayer. Today, the figures put forward by the Minister of Finance himself in the Budget Papers show that by the end of the next fiscal year that debt will have grown to $26,700 per taxpayer. That is an increase of 67 per cent in two and a half years. So much for management of the economy.
We have seen how the Tories spend money. Millions of dollars on an inquiry concerning a Minister's alleged conflict of interest.


Mr. Charest:: Who asked for that?


Aideen Nicholson: The Member opposite asks who asked for that inquiry. The Minister himself asked for it. We on this side asked for the matter to be referred to the Committee on Elections, Privileges and Procedure. We did not ask for millions of dollars to be spent on legal fees for the Minister, his secretary and heaven only knows who else.


Jean J. Charest: As was done for previous Liberal Ministers in inquiries.


The Acting Speaker (Mr. Paproski):: There will be an opportunity for questions and comments after the Hon. Member has finished her speech. The Hon. Member for Trinity (Miss Nicholson).

February 20, 1987


Aideen Nicholson: Planes follow planes when the Prime Minister (Mr. Mulroney) travels. He must have a separate plane to carry video equipment. Almost $2 billion has been wasted on failed banks as a result of poor judgment and a Government acting hastily without troubling to get the facts. The litany goes on and on. With this kind of management, with the kind of policy and tax punishment Canadians have received at the hands of the Government, we are certainly in need of tax reform, if only to restore the balance and equity that disappeared as a result of the three Budgets produced by the Government.
My colleague, the Hon. Member for Laval-des-Rapides (Mr. Garneau), spoke very eloquently yesterday on the Federal-Provincial Fiscal Arrangements which are not even mentioned in this Budget. The current arrangements are due for renegotiation at the end of March this year, and the Budget was as silent on that as it was silent on a host of other vitally important issues.
Where does the Government stand on nationhood? My colleague also pointed out that although the national figures for unemployment have improved somewhat, they have become worse in several areas of Canada. The Government is also cutting back on transfers to post-secondary education and health care, so in effect it is transferring the deficit from the federal level to the provinces.


Philip Derek Lewis: That's a good idea.


Aideen Nicholson: The Hon. Member opposite said that is a good idea. Perhaps that is a statement of the intentions of the Government in the upcoming federal-provincial negotiations. If so, the Government should tell us. The Government is being very silent on its intentions for the provinces.
The list of government critics grows. I have quotes but I will not bother to put them on the record. It is sufficient to say that three provincial premiers, all Conservative, are all unhappy with the present arrangement.
What is the Government doing to make a better future for Canadians? This Budget offers no answers and proposes no solutions. It is a non-Budget. It helps no one. It merely increases taxes a little. At the height of the brutal world recession in 1982 Canada's unemployment rate was 11 per cent. In January 1987, after four years of economic recovery, it is 9.7 per cent. This is totally unacceptable in our circumstances. It is a far cry from pre-recession unemployment levels of 7.5 per cent with which none of us were completely satisfied. Yet this Budget offers no help, no hope. The Government is content to pass the buck to market forces.
The number of Canadians falling below the poverty line is increasing year by year. Almost four million Canadians are now living below the poverty line. The Government offers no help for them, but instead turns the screws a little by imposing
The Budget-Miss Nicholson
a few more nickel and dime measures to wring a few more tax dollars from our poorest citizens.
If one were to look at this year's income tax form, one would see that those applying for tax credits are now instructed to report their estimated incomes from sources such as welfare and workers' compensation. This is not a new requirement, just a little fine tuning aimed directly at the poor to ensure that the Government can keep a tighter hold on and better control of its tax credits. The Government is making sure the poor do not receive anything to which they are not entitled, but we are not seeing similar vigilance directed at wealthy Canadians.
The Government also continues to make its major announcements outside of the Budget. We learned through an announcement made by the Minister responsible for youth that there will be much less money for summer jobs this year. Money for post-secondary education is being cut and the money to help young people get jobs is being cut. The screws are being turned on student loans. Government policies are making it difficult for young people to get an education or to get a job. What has happened to the Canadian concern with equality of opportunity? How can one have equality of opportunity without having access to higher education? Is higher education to be the preserve of those with wealthy parents? Is that the kind of country we are to anticipate?
Speaking of the young, we see nothing in this Budget for child care. In fact, the most disturbing omission in this so-called Budget is its lack of leadership. The Government seems to have abdicated completely and to have put the future of Canada into the hands of the so-called market forces rather than leading, governing and making decisions as it was elected to do. Canadians deserve better.


Jean J. Charest: Mr. Speaker, first I would like to make one small, unpretentious, uneditorialized comment. I would like to go through the unemployment figures of September 1984 and compare them with those of today. That has been a matter of concern, brought up not only by the Hon. Member for Trinity (Miss Nicholson) but also by her colleague, the Hon. Member for Laval-des-Rapides (Mr. Garneau).
When we came into power in September 1984 the unemployment rate in Newfoundland was 23.8 per cent. It is now 19.2 per cent. In New Brunswick it was 16.2 per cent in September 1984 under the Liberal administration. Under our administration, it is down to 13.9 per cent. In Quebec, under a Liberal administration, it was 12.9 per cent in September 1984. Under our administration it is down to 10.8 per cent. Under a Liberal administration the level of unemployment in Ontario was 9.4 per cent, and under a Progressive Conservative administration it is down to 6.6 per cent. Under a Liberal administration the unemployment rate in Manitoba was 9 per cent. Under our administration it is down at this time to 7.9 per cent. Under a Liberal administration the unemployment rate in Saskatchewan was 8.7 per cent. Under a Progressive Conservative administration it has gone down to 7.3 per cent. In Alberta under a Liberal Government the unemployment

February 20, 1987
The Budget-Miss Nicholson
rate in September 1984 was 12.1 per cent, but under a Progressive Conservative Government it went down to 10.8 per cent. In British Columbia, in September 1984, under a Liberal administration the unemployment rate was 15.1 per cent, and under this Government it has gone down to 13.6 per cent at this time. In Canada generally, under a Liberal administration in September 1984, the unemployment rate was 11.7 per cent. It has gone down under this Government to 9.7 per cent.
Does that mean that this Government is satisfied, contrary to the attitude developed under the previous administration? Of course not-never. Even with those numbers we are not satisfied. We think they are too high and that is why the projection for next year, according to the Minister of Finance (Mr. Wilson), is for a lower unemployment rate. Is it any surprise to the people of Canada? I suppose not. It may be a surprise for the Hon. Member for Trinity, for the Liberals and for the NDP because they are disappointed.
I would like to say to the Hon. Member for Trinity that I am very, very disappointed in the speech she made today. I personally felt a little hurt. I have Keard the Hon. Member for Trinity speak on numerous occasions. She is obviously a very credible Member of the House, but today she was reading someone else's speech. I do not understand. I am sure the Hon. Member will want to take this opportunity to rise in her place and try to redeem herself a little, just a bit. In that way, before we leave this House today, we will have a little hope in our hearts that she is not completely lost among the group who jump on tables, yell things, and who are just very depressing over all.
The Hon. Member commented about inquiries and the fact that this Government paid some legal fees. I hope she will admit, in the spirit of justice and equity, and notwithstanding the stories, that her Government also did that when it ordered inquiries. Her Government paid fees for Liberal Ministers. I think she will admit that.
The other thing she could do to redeem herself a little and try and preserve some credibility, as well as helping us maintain the hope that she will remain a very respectable Member in our hearts, is to acknowledge that unemployment has gone down and that Canada generally is better off today under this Government than it was under a Liberal Government.


Aideen Nicholson: Mr. Speaker, the difference between the Minister's figures and mine is that the Minister makes a comparison between figures from September 1984 and today. I am making the comparison between 1982, at the depth of the recession, and today when we are four years into recovery. Unfortunately the Government has frittered away much of the advantage it had because it came in at a point when recovery was under way. I believe the figures I gave are correct. In Prince Edward Island in 1982, at the depth of a particularly cruel world-wide recession, unemployment was 12.9 per cent. It is now 14.6 per cent. In Nova Scotia the 1982
figure was 13.2 per cent and today, four years into the recovery, it is 14.3 per cent. In Alberta it was 7.7 per cent in 1982 and it is 10.8 per cent today. In British Columbia it was 12.1 per cent in 1982 and 13.6 per cent today. The figures stand. After four years of recovery the result is poor.
The Minister talked about other Governments paying legal fees for Ministers. That may very well be so, but I know of no case in the 12 years I have been in this House where a Minister accused of a conflict of interest asked for and got a judicial inquiry paid by the Crown, rather than taking his chances with the Standing Committee on Elections, Privileges and Procedure. There may have been such a case but I do not remember it.


The Acting Speaker (Mr. Paproski):: I have a number of questioners. I will recognize the Parliamentary Secretary to the President of the Privy Council (Mr. Lewis), the Hon. Member for Gander-Twillingate (Mr. Baker) and then the Hon. Member for Essex-Windsor (Mr. Langdon). I believe that will be just about it.


Philip Derek Lewis: Mr. Speaker, my question will be very brief. It is my understanding that the Province of Ontario under a Liberal Government paid the legal fees of the Hon. Elinor Caplan, Treasurer of Ontario, when there was a conflict of interest inquiry concerning her. Would she care to compare the two situations?


Aideen Nicholson: I do not know what the arrangements were but, naturally, if the Parliamentary Secretary tells me that is the case I accept his word.


Mr. Baker:: Mr. Speaker, I have to congratulate the Hon. Member for the very fine speech she delivered. I do not know if she is going to be able to answer my questions, but perhaps she could inform the House and the Canadian people whether she is investigating the matter.
Under this Budget the Government of Canada is now going to tax potato chips. I think everyone is wondering whether there are any exemptions. Are barbeque, salt and vinegar or sour cream chips exempt? The Government is also going to tax corn and cheese based puffs. Does the Hon. Member know if that will include Cheezies? There is quite a difference between the puffs and the Cheezies, you see. The Government is also going to tax brittle pretzels under this Budget. What about the soggy ones? It is going to tax salted nuts for the first time. What about unsalted nuts? It is going to tax popcorn. Well, what about corn that is not popped? It says granola bars and frozen snacks packaged in single servings are going to be taxed. To my knowledge granola bars come in a large container in grocery stores, not by the single serving. The same thing applies to frozen snacks in grocery stores. The Budget says that popsicles and ice-cream bars are going to be taxed as well. Does that include polar bars and fudgesicles?


Felix Holtmann: That is a difficult question.
February 20, 1987


Aideen Nicholson: Yes, it is a difficult question. However, I would just say to the Hon. Member that the Budget Papers show the Government is expecting to reap $60 million from this kiddy tax.


Steven W. Langdon: Mr. Speaker, I want to move from the subject of popcorn and ask a serious question, if I could. The Hon. Member has suggested in her critique, and I agree with her, that the Conservative Government has dealt with the question of the deficit in this Budget in a manipulative way. Would she have preferred an increase in the deficit resulting from this Budget in order to achieve some of the economic and social goals which she and other members of her Party have talked about? Or, would she have, as seems to be the implication, accelerated the decrease in the deficit given the great deal of concern with which she addressed it in her speech.


Aideen Nicholson: Mr. Speaker, although I am quite prepared to do so, my comments did not deal with whether the deficit could or should be further reduced. My comments were directed to the fact that the issue was not clear. The only promise the Government made concerning management of the economy was to get the deficit below $30 billion. That will happen in March, 1988, through the devices I spoke of, those being the $1.2 billion which is derived from changing the timeframe in which companies can remit the compulsory payroll deductions, and by deferring certain other expenditures. My criticisms were directed at the fact that we had been told the deficit would be reduced. This was the only promise they made. In fact, the deficit has not been reduced in a straightforward way.
As for the rest, the policy of the Liberal Party for many years now has been to reduce the deficit incrementally as we came out of the recession, insofar as that could be done without cutting programs, choking off recovery or hurting people.


The Acting Speaker (Mr. Paproski):: There will be two more questioners, the Hon. Parliamentary Secretary and the Hon. Member for Ottawa West (Mr. Daubney). I hope they will be very succinct.


Mr. Della  Noce@: Mr. Speaker, I shall be brief, because my colleague the Hon. Member for Sherbrooke (Mr. Charest) has presented a very good summary. There are, however, a couple of points which I should like to make. My hon. colleague from Trinity (Miss Nicholson) was visibly delighted to be able to report that the price of gasoline had increased by 4 cents a gallon. She was right, but she overlooked the fact that it was over a three year period. Under the Liberals, with Mr. Lalonde's energy policy, there were increases every four months.
She forgot also to mention that there was a tax decrease when we got rid of the Canadian ownership charge of nearly
The Budget-Miss Nicholson
one. That is when she really got me, for I had investigated the situation in 1986. When the price of gas went down 12 to 13 cents because of the world price following the removal of the National Energy Program, at a time when Mr. Lalonde expected a price of $85 for a barrel of oil which is now at $24 a barrel. It is a dream come true where 1 cannot follow her ... I hope she didn't try to deliberately mislead the House, for what she said is very serious. She said that some transportation companies are hurting and will have to lay-off people. Where are those transportation companies which are increasing the price of their services because the higher cost of gasoline has increased? Now that it is 12 cents lower, none of them are charging less for their services. The buses which people-

Every time there was a little increase in gasoline, the tickets were printed during the night and the next day people had to pay the increase. This year alone there has been a 12-cent a litre decrease, which is equal to 65 cents a gallon. I have not noticed any decreases in bus fares. My child asked for $25 for his bus pass this month for which I usually pay $20. How can you say that these companies are in trouble? Where do we see the results of the 12-cent decrease they received? What the Hon. Member said is false.


Aideen Nicholson: The figure which I gave for the increase in the excise tax on gasoline is accurate. My statement that transportation companies complained last year that the first increase would put them at a competitive disadvantage with American companies is also true. The letters and briefs which 1 received from transportation companies were sent to many Members of Parliament. I believe the member opposite must have seen them as well.


David Bruce Daubney: Mr. Speaker, I have a great deal of respect for the Hon. Member and, therefore, like the Minister of State for Youth (Mr. Charest), was somewhat disappointed in her remarks. She spoke of poor Canadians and suggested that we were essentially putting the screws to them. That is not the case at all. She will know that in the tax reform which has taken place thus far-and there is more to come-hundreds of thousands of low income Canadians have effectively been removed from the tax rolls.
I would like to ask the Member about the improvements to the Canada Pension Plan which the Government brought in effective January 1 of this year, particularly those with regard to disabled Canadians. We increased the benefits payable under that plan by $150 a month to benefit over 150,000 disabled Canadians. Yet, the Liberal provincial Government in Ontario, the Liberal provincial Government in Prince Edward Island, the Liberal provincial Government in Quebec and the NDP Government in Manitoba deducted that $150 from the income of those disabled Canadians in receipt of social assistance programs. I would like the Hon. Member to comment on that from her point of view of fairness and concern for low-income Canadians.

February 20, 1987
The Budget-Mr. Charest


Aideen Nicholson: Mr. Speaker, the Hon. Member spoke about previous tax reforms which have relieved low income people of the need to pay taxes. I have not seen that. My understanding is that the Government is in fact reaching down lower and taking taxes from people who have not been required to pay them before. If my understanding is wrong, of course I am subject to correction.
The second matter which the Hon. Member raised is a longstanding problem. When the Government of Canada makes an improvement in one of its programs it requires careful negotiations to ensure that the provinces will respect or match it. If the Government failed to do its homework with the provinces, if it failed to give them advance notice to ensure that people would not lose at the provincial end what they were gaining at the federal end, that is too bad. I hope that will be corrected.


The Acting Speaker (Mr. Paproski):: The time for questions and comments has expired.


Jean J. Charest: Mr. Speaker, first of all, I would like to take a few moments to say a few words to the Hon. Member for Trinity (Miss Nicholson) who spoke before. In a question I put to her, I asked her to be a little more specific, because that would leave us with some glimmer of hope as to the attitude of the Opposition in the months to come. In answering my question the way she did, however partisan that may have been, she managed to leave us with some hope that from now on the Opposition Parties will be a little more reasonable.

Before I begin to debate specifically the Budget put forth by the Minister of Finance (Mr. Wilson), I would like to invite Members of this House and Canadians generally to reflect on the situation which existed when we came into power in September of 1984. We tend to forget that when we came to power in September of 1984, the finances of the country were completely out of control. The spending was out of control. The deficit was out of control. That is why, on September 4, 1984, Canadians from one end of the country to the other decided that they had had enough of that irresponsible administration of the country. Things had gone far enough and it was time to clean house and bring in people who would administer their taxes in a sane manner.
The Budget put forth by the Minister of Finance is the result of two and a half years of very serious administration by the Government. I will give only one example which is worth pointing out. The previous Government actually lost money running a lottery. I will repeat that. I know it is hard to believe and I will repeat it for the record because I am sure those looking at the "blues" will say there was an error. It is true. The previous Government lost money running a lottery. It could not run a bingo, but it was running the country. That is the type of mess we were called upon to repair. What is the situation two-and-a-half years later?
Let us begin from the time when we took over. In November, 1984, the Minister of Finance came into the House and told Canadians exactly how it would be done.

At the time, on November 8, 1984, I believe it was my colleague, the Parliamentary Secretary to the Minister responsible for Multiculturalism, the Hon. Member for Duvernay (Mr. Della Noce), who was there, the Minister of Finance (Mr. Wilson) informed Canadians that we were going to operate on the basis of four fundamental principles. Perhaps we could review those principles, Mr. Speaker.
Our first principle was to bring the increase in the national debt below the rate of our economic growth by 1990. It sounds simple. Well, Mr. Speaker, in 1987-88, the rate of increase of our national debt will be down to 11 per cent. This is less than it was, because I am sure that at this very moment you are thinking: Good heavens, 11 per cent is a lot! Well, just to give you an inkling of how disastrous the situation was in November 1984, it is less than half the rate posted when we took office, Mr. Speaker. I think it was around 24 per cent. Hard to believe, but a national debt growth rate of 24 per cent. Obviously the rate is still too high.
But to be frank, by any standards, anybody, any reasonable citizen who is listening to us now from whatever part of the country will tell you that this is significant progress. Canadians will admit that. We do not expect Members opposite to admit it, but Canadians will.
The second principle was to put a stop to the ever rising federal deficit and set it firmly on an ascending trajectory. You see, Mr. Speaker, in fact we have very little pretension. We did not want to make Canadians believe that we would do miracles or come up with easy answers. Very simple yet quite essential things.
When we took over the deficit had gone over the $38 billion mark and was still rising, but during our first year in office we managed to bring it down to $34.4 billion.
Last September the Minister of Finance said that the expected deficit for this year would be $32 billion and sure enough-as you know this is an uncommon occurrence at the federal level-we have reached our objective and, between now and the end of next year, 1987-88, the Government will have lowered the deficit to less than $30 billion, down to about $29.3 billion.
In other words, Mr. Speaker, and this is a major difference between the previous Government and this one, after fifteen years of an increasing deficit, our Government has been able, not only to arrest that trend, but also to reduce the deficit for three years in a row, and this for the first time-listen to this-and I should perhaps turn myself this way because this is hard to believe, for the first time in 30 years. However, according to what we have heard from the other side, we are
February 20, 1987

close to the end of the world. That is not quite what the facts indicate.
The point is, Mr. Speaker, that we know where we are going. Our third objective was to reduce substantially each year the financial requirements and borrowings of the state. In September 1984, public requirements, excluding exchange requirements, amounted to $29.8 billion. We are now estimating financial requirements for the coming fiscal year at $21.3 billion, or 28.5 per cent less, and all this within three years.
Mr. Speaker, this means that the state will pay less interest on the money it needs to finance its activities, and the state includes everyone, in other words, all ordinary Canadians who go to work every morning and who see part of their pay cheque taken away from them every Thursday. It means that these people will have less to pay.
Mr. Speaker, our fourth and last objective was to accomplish the major part of our financial improvements through expenditure restrictions and a disciplined management of taxpayers' money. You will say that this is obvious and that it was needless to include such an objective in the management principles of our Government. However, Mr. Speaker, we had reached a point when this had to be said because Canadians were no longer used to hearing such things or at least to seeing this principle applied by their Government.
When we came to power, public expenditures were increasing by nearly 14 per cent a year since the early eighties. What exactly is different under our Government? Public expenditures have increased by an average of 2.8 per cent a year, which is lower than the rate of inflation. In other words, Mr. Speaker, program expenditures have decreased in real terms. The reduction of the deficit in relation to the economy represents over 60 per cent of the reduction in our own expenditures.
That is not all, Mr. Speaker. All this had to be accomplished in a difficult context. Our country is made up of regions and there was pressure from everywhere to satisfy the various groups and Canadians at all levels of society who are facing a number of problems. If we look at the general situation, what is the conclusion after two and a half years? What do we find? That is the most important consideration for us today.

I will not even try to enter into a partisan debate with members of the New Democratic Party or Liberal Party. I will simply try to give the facts and let them speak for themselves, because if there is one thing Canadians understand, it is the cold hard facts in this case. Since September, 1984, when we took control of matters, the real growth of Canada's economy has averaged some 3.5 per cent a year. We were only second to Japan in the industrialized world. Consumer confidence has risen to a very high level in Canada.
The improving Canadian economy has created 675,000 jobs. In comparison to the rest of the world, employment growth in Canada has been stronger than in any other major industrialized country. That has been our performance.
The Budget-Mr. Charest
One may think that we cannot do much better than that and we might as well go home. If you were a judge, Mr. Speaker, and this was a court, you would say "case closed", because this is irrefutable evidence of our case.
However, the facts do not stop there. Short-term interest rates are at their lowest levels in nearly a decade. It does not even stop there. Five-year mortgage rates have fallen by more than three per centage points which, in real terms, is equivalent to a reduction in interest costs of $1,360 a year on a $50,000 mortgage. Housing starts are at their highest in eight years. That has been the performance of the Government. What must we do in the future? In that sense we realize that the prospects for the future are probably as good as the ones I have given you today.

In fact, Mr. Speaker, we have clearly made remarkable progress, but if we turn to the future, we realize there is much hope for Canadians. Canada should enjoy 2.8 per cent production growth in real terms, making this the second longest post-war economic recovery. Canada should again post the best employment growth of all industrialized nations. The unemployment rate, with some luck and co-operation, should keep on declining to 9 per cent towards year's end. Interest rates should remain stable, consumer confidence should keep on fueling growth, inflation should settle below 4 per cent on average, and international conditions should improve for Canadian exports thanks to the recent decline in interest rates, the foreign exchange market realignment and the firming up of commodity prices.
Mr. Speaker, such on the whole are Canada's future prospects-there is a big difference between a healthy, a genuine administration and a Government that found it difficult to balance the fund when it managed lotteries.
There has been a lot of talk from Hon. Members opposite on different subjects. The Minister of Finance gave a very unpretentious speech on Wednesday. He pointed to the fact that tax reform is on the way and there is going to be a major change for Canadians. He said that the tax reform would have as its objective to make the system fairer for the ordinary man and woman who pays taxes. My colleague, the Hon. Member for Duvernay (Mr. Della Noce), who is sitting next to my colleague, the Hon. Member for Nanaimo-Alberni (Mr. Schellenberg), who comes from a great part of British Columbia, says it is about fairness. Of course it is, because that is what governing is all about. That is why we are here, to be fair. Of course, those who sit in the Opposition cry: "Why do you not bring in tax reform right away? Do it now".


Nelson Andrew Riis: It was promised three years ago.


Jean J. Charest: Perhaps that is the way it used to work under the other administration. If that administration wanted

February 20, 1987
The Budget-Mr. Charest
something, it did it right away. However, this Government does things right. When the Minister of Finance projects his deficit for the next year, he is bang on the number.


Nelson Andrew Riis: How about last year's projection?


Jean J. Charest: I hear mumblings from the New Democratic Party saying that last year's figures were not right. To be fair, I think the Hon. House Leader for the New Democratic Party would acknowledge that I also said that in September the Minister of Finance revised his projections to $32 billion.


Nelson Andrew Riis: He will do it again this year, probably.


Jean J. Charest: That was because of the situation of the oil industry and the situation in agriculture. I think all ordinary Canadians understand that. If the House Leader cannot, I suppose that is his problem. Let us take another figure.


Nelson Andrew Riis: Take unemployment.


Jean J. Charest: Let us take the figure for expenditures. That is a good figure to play with because that is what we have in our pocket. That is the figure over which we have direct control.


Mr. Della  Noce@: Money.


Jean J. Charest: The money we are going to spend. How much did we say we would spend? Was it $89.4 billion? How much did we spend? It was bang on that figure.


Nelson Andrew Riis: Tell the foreign banks how much you spent on them.


Jean J. Charest: I know the member of the New Democratic Party has problems with that because it is very unusual. It is foreign to his own experience in this House that the Minister of Finance was right. That has never happened before, but it is starting to happen now. When the Minister of Finance rises in his place and says that tax reform is about fairness, it will happen. When members of the Opposition point to regional disparities, I hope they are not insinuating we should have higher interest rates, and that would help the regions.


Nelson Andrew Riis: You are absolutely right. I support you 100 per cent. We would not be saying that.


Jean J. Charest: I hope the Opposition is not implying that, because I am sure it knows that this is not the case. When Hon. Members opposite say there is no interest in the disadvantaged, I presume it is because they have forgotten about the employment initiatives for social assistance recipients. They must have forgotten about the program for older worker adjustment. Did they forget about the refundable sales tax credit? Four million low income families and individuals are now receiving refundable sales tax credits of up to $50 per adult and $25 per child. Have they forgotten the prepayment of child tax credit? That must be the one they forgot. One million low income individuals in November of 1986 received $454 per child. I have it, they must have forgotten the increase
in child tax credit. Over three years the child tax credit has increased by 36.5 per cent, or $140 per child, from $384 in 1985 to $524 in 1987. Perhaps that is not the one they forgot. It must have been the extension of spouses' allowance for 169,000 widows aged 60 to 64 years who are in need. They are eligible to receive the spouses' allowance in 1987-88. Maybe those Hon. Members forgot the extension of tax deduction for disability for 185,000 people. Perhaps the House Leader for the NDP can tell us whether it is the increase in value of tax deduction for disability that he forgot. Or was it the tax rebate discounting Act amendments? Perhaps it was the Hon. Member for Essex-Windsor (Mr. Langdon) who forgot the veterans' benefits increase. That is, I suppose, because they are on the other side of the House. Members of the Opposition tell us we are not fair with respect to corporations and in the taxing of individuals. We keep telling them that that is what the tax reform is all about, that is where it is going to happen.


Nelson Andrew Riis: It is one-sided, though, is it not? It is a one-sided tax reform.


Jean J. Charest: The Opposition says we have not done anything. Why wait until later? I guess it is because it forgot the action we took on the limited partnership at risk rules to prevent taxpayers from claiming tax benefits disproportionate to the amount put at risk. It must be that. Or it may be the phase-out of the 7 per cent and 10 per cent investment tax credits which primarily affects corporations. Perhaps we did not tell Hon. Members opposite about that often enough. Perhaps it is the elimination of the 3 per cent inventory allowance that the Opposition forgot. Perhaps it is the reduction of the dividend tax credit rate it forgot. Perhaps it is the deductibility of accrued but unpaid bonuses being restricted. That is what they forgot.


The Acting Speaker (Mr. Paproski):: Is there unanimous consent for the Hon. Minister to carry on?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


The Acting Speaker (Mr. Paproski):: I am sorry, the Hon. Minister's time has expired. Questions or comments?


George Baker: Mr. Speaker, I would like to ask a question of the Minister who represents youth. I asked the previous speaker somewhat the same question, but I would like to hear an answer from a member of the Cabinet. Perhaps he has not examined the Budget as well as he should have. I would really like to know why there was a tax put on potato chips and whether the tax on corn and cheese based puffs means that a tax is also put on Cheezies. Does the brittle pretzels tax apply to pretzels which are not brittle, the large packages of pretzels which are not brittle? There is the salted nuts tax. What about the unsalted nuts? There is the popped corn tax. What about the popcorn? Does it apply to popcorn? There is the tax on granola bars and frozen snacks packaged in single servings. What about those that are not packaged in single servings?
February 20, 1987

Could one not get away with this great tax evasion if one bought four or five in a box?
Finally, can the Minister explain whether or not, when popsicles and ice-cream bars are referred to, fudgesicles are also covered? Young people want to know the answers to these questions. These are new taxes imposed by the Government. There are a great many young people around who want to know the answers. Perhaps to some people these are the most important items in the Budget. Will the Minister tell us why the Government is picking on those items which we see young people going into stores to buy? Perhaps they are spending the only bit of money they have, their recess money, which will now go to pay federal tax for the first time on some of these items. Why is the Government of Canada picking on these items?


Nelson Andrew Riis: Make the kids pay.


George Baker: The kids will pay for the great national debt that the Conservatives are talking about.


Nelson Andrew Riis: Let them eat unsalted nuts.


Jean J. Charest: Mr. Speaker, I can see why my colleague from the Liberal Party objects to the Government taxing nuts. In the financial situation in which the Liberals find themselves it means that a lot fewer people will give them money. People who usually fund their Party will have less money in their pockets. That gives one an idea of where the Party stands, which was the last point I covered in my speech. Where does the opposition Party stand? That is the biggest unanswered question of the last two-and-a-half years.
I remember watching the Liberal Leader of the day on television. Fie was reconfirmed at at least five different conventions. When the Liberals get together they have to reconfirm him each time. At the time he was saying: "We will reduce the deficit in half in seven years". Since then we wonder where they stand. Every time they have a convention they come up with another policy on trade.
I am glad the Hon. Member brought up the recess aspect. The recess is over for the Liberal Party of Canada. It is time the Liberals started to stand up for something. The youth policy of the Liberal Party, as stated once by the Hon. Member for Shefford (Mr. Lapierre) who sits in front of the Hon. Member for Gander-Twillingate (Mr. Baker), was to reduce the entry age of the Senate because it was discriminatory toward young people. He got up in the House and said that. That was the Liberals' youth policy. It is on record. It is in the debates. Now the Hon. Member for Gander-Twillingate hits on the subject of food. There may be a connection between the Senate and food and youth. Some people will see a connection. We can take it from now that the youth policy of the Liberal Party of Canada is not to tax candy for young people since that does not help them. Maybe my colleague who sits behind
The Budget-Mr. Charest
me is right. He said spontaneously, to paraphrase Marie Antoinette: "Let them eat fruit".


Margaret Anne Mitchell: Mr. Speaker, I am sorry that I was not here to hear the entire speech of the Hon. Minister. I have a serious question which I would like to ask of him if he could concentrate on it for a moment, please.
In Vancouver East the unemployment rate for young people is 15 per cent. For young men it is 17.5 per cent. That is the official unemployment rate. It is not the unofficial rate, which means there are many others whose names are not in the computers who are also unemployed and who would like to be working and have some sort of future. I do not see anything in the Budget at all that will help these young men and women. As the Minister of State for Youth and as an advocate for these young people I want to ask him what he will do about this situation. What does he think should have been done about it in this Budget?


Jean J. Charest: Mr. Speaker, that is a good question. It is a question which gives me the opportunity to point to the real, fundamental bottom line-


Margaret Anne Mitchell: I am going to mail out your reply, so be careful.


Jean J. Charest: I have had the opportunity of travelling around the country and talking to people in all walks of life who are concerned about the problem of youth unemployment and youth generally. I have told them that it is a little tough to put out any type of policy, whether it be for youth, older people or middle-class people, when interest rates are running at 18 per cent.


Nelson Andrew Riis: They're not 18 per cent now.


Margaret Anne Mitchell: So you'll just write them off, will you?


Jean J. Charest: There is a basic premise that if one wants to get things working one has to start at the beginning.


Margaret Anne Mitchell: They will be senior citizens by the time you get finished.


Jean J. Charest: That is exactly what the Government has done.


Margaret Anne Mitchell: What? It's done nothing.


Jean J. Charest: In Vancouver and in other places in Canada we are very sensitive to the fact that youth unemployment is too high.


Margaret Anne Mitchell: What are you doing about it? What will you do about it?


Jean J. Charest: It has gone down in the last two years-not enough, and we concede that. It has dropped by about four per centage points across Canada.

February 20, 1987
The Budget-Mr. Riis
The other thing I wish to add is that members of the Opposition should get out of their folkloric way of thinking. These problems have not appeared overnight and they will not leave overnight. Their thinking is that this problem can be dealt with single-handedly by the Government. It will require a joint effort on behalf of the federal, provincial and municipal Governments, and it will require fundamental changes-


Margaret Anne Mitchell: So you're writing young people off.


Jean J. Charest: -which we are in the process of engaging in.


The Acting Speaker (Mr. Paproski):: Questions and comments are now terminated. On debate with the Hon. Member for Kamloops-Shuswap (Mr. Riis).


Nelson Andrew Riis: Mr. Speaker, I must say at the outset that I was somewhat disappointed when the Minister of State for Youth (Mr. Charest) had virtually nothing to say when the question was put to him with respect to the extremely high levels of youth unemployment in Vancouver, British Columbia, and right across the country. The fact is that when one looks at the Budget one notices that there is not a single mention of what the Government plans to do, or is even thinking of doing, to assist young people who are out of work. I assumed that when the Minister of State for Youth rose in his place to participate in this debate he would have outlined many of the programs he was planning to introduce. Having taken that opportunity one can only assume that he has no plans. We can assume that the Government is prepared to let young people hang out to dry, ignoring the plight which they face. I find that completely unacceptable. Quite frankly, I do not find many things in the Budget which are acceptable. I do not say that there is nothing good in it at all. I will come to the good parts in the last two or three seconds of my presentation.
I wish to comment on what I feel are the very serious shortcomings of the 1987 Budget. There is an old adage that says that if one cannot stand the heat then one must get out of the kitchen. I guess that is what the Prime Minister (Mr. Mulroney) felt when, the day after the Budget, he jumped into a plane and headed for West Palm Beach. He is getting out of the country. Just like the time when the heat came on with all the scandals and he slipped away out of the country.
He is not here during what has to be a critical debate. When he promised to stand in the House and make a statement on South Africa he has not made one. He has not made a statement on South Africa yet. I believe that he will not make a statement on South Africa. I ask Hon. Members to wait and see. Again, we have had promises and promises but when the heat comes on, out he goes out of the country.
I ask Hon. Members to cast their minds back to when the Minister for International Trade (Miss Carney) was negotiating what is probably the most important agreement that Canada will negotiate in this decade regarding the forest industry. She was holidaying on the beaches of Maui. She could not even be here for the final critical and crucial
negotiations. That is the kind of Government we have. When Members of it cannot stand the heat then they get out of the kitchen. Not only do they get out of the kitchen, they get out of the house-they get out of the country. I suspect for a great many Canadians the polls indicate that they would just as soon that the Prime Minister stayed out of the country. I believe 22 per cent is the last official barometer reading with respect to the number of people in Canada who, when the question was put with respect to whether or not they would support the Government, said yes. The other 78 per cent said no. That is a pretty damaging comment when one considers that it comes just two-and-a-half years after the public gave the Government the largest mandate ever given a Government in Canadian history.
The Prime Minister explained why the people of Canada are feeling as they are. A few days ago on February 11, 1987, the Prime Minister said:
These are difficult moments, obviously. We will be judged by the manner in which we responded.
That is exactly what is going on. The people of Canada are judging this Government on the way it is responding to some very critical economic problems that are facing Canada.
When I listened to the Minister of Finance (Mr. Wilson) delivering his Budget Speech, I was left deadened by the impact. There was nothing in it. As some people said, it was a "do nothing" Budget. We were expecting some leadership, direction and initiative by the Government during difficult economic times, and there is none of this in the Budget. The Minister of Finance could have issued a short press release, put it in the mail, and announced the two or three tax increases that will affect every Canadian, and that would be it.
However, in looking at the Budget, an appropriate term to call it would be a "fudge-it" Budget. There is a great deal of fudging going on today. For example, the Government states that unemployment is coming down. The Minister of Finance has said dozens of times in the last few hours that unemployment decreased last year. Technically that is true, because a year ago today the unemployment rate was 9.8 per cent. Now it is now 9.7 per cent. So over 12 months the unemployment rate has decreased one-tenth of 1 per cent. Surely to goodness that is nothing to brag about. As a matter of fact, I would expect the Minister of Finance to be embarrassed for suggesting that they have been successful as a Government and have brought down unemployment. I am certain there is no person in the House who would say that decreasing unemployment one-tenth of 1 per cent over 12 months is appropriate, and is at all acceptable. We are led to believe that unemployment is coming down. Well, it is, but by an infinitesimal amount.
When we listened to the Minister of Finance talk about economic growth, we heard him state that it is on course and on target. What course is it? What target is it that the Government is looking at? When I look at the figures put out
February 20, 1987

by Statistics Canada, I find that the growth rate in 1984 was 5.5 per cent when the Government took over the administration. In 1985, it dropped to 4 per cent. In 1986, it dropped to 3.3 per cent. The Minister of Finance projects that in 1987 it will be 2.8 per cent. In other words, while the Conservative Government has been in power, the growth rate has been dropping year after year, and the Minister of Finance predicts it will drop again this year. He states that they are on target, that the growth rates are what they have been working towards. One assumes that they must be improving, but the facts are that the growth rates are declining year after year.
I could go on in terms of this "fudge-it" Budget. In the last Budget the Minister of Finance predicted that the deficit for last year would be $29.5 billion. In the Budget the other day the Minister of Finance said that it was not $29.5 billion, it was $32 billion. In other words, the Minister of Finance did not come close to what he projected 12 months ago. The assumption in the country is that the deficit is going down year after year. The Minister of Finance's projections were out by $2.5 billion.
If the Government is on course, its programs are on course and its strategy is on course, then it begs the question, on course for whom? Who is benefiting from this course that the Government is on? In looking at who is paying for what, it will be noticed that since the Conservative Government has taken power, corporations have actually paid $2 billion less. In other words, corporation taxes collectively have gone down. The corporate sector has done and is doing extremely well when it comes to taxes. But when you look at people and personal taxes, the situation is dramatically reversed. While corporations have had a $2 billion drop in taxes over the life of this administration, people have paid an extra $22.8 billion in increased personal taxes. That is a serious increase, which averages out to $2,000 for every man, woman and child in Canada. That is incredible. I do not expect that there is a time in Canadian history that over a two-and-a-half-year period the federal Government has managed to drop corporate taxes and increase personal taxes so much. It has been accomplished by the Government.
We heard earlier in today's debate that the slogan now will be, "Make the kids pay". Make the kids pay additional taxes. Widen the tax base to include the snack foods that young people tend to buy, and raise an extra $60 million year after year. On top of that, we have seen the sales tax increase once, twice, three times. When the Conservative Government took over power, the sales tax across Canada was 9 per cent. Today it is 12 per cent. That is an increase of 3 per cent in less than three years. It is not only an increase one, two, three times, but it is also a broadening of the tax base to include all types of things that hitherto had not been federally taxed. As a result of this most recent Budget we now include snack foods that young children tend to use.
In terms of the "fudge-it" Budget the assumption is that there is some equality in the Government's programs. But when you look at the facts as they are applied to our tax
The Budget-Mr. Riis
system and the taxes that have been levied by the Government, you find that they are extremely discriminatory against people and in favour of corporations. They favour upper income earners and are against low and middle income earners.
When the Prime Minister was speaking in Quebec before the Budget, he mentioned that money for regional economic development will be very thin. I am afraid that he was wrong. Money for regional economic development is non-existent and has been reduced. The question that must be asked is, have the Minister of Finance and the economic Ministers in the Government travelled around Canada? Have they been outside of Metropolitan Toronto?


Thomas Hockin: Yes.


Nelson Andrew Riis: Have they been out to northern Alberta?


Thomas Hockin: Yes.


Nelson Andrew Riis: Have they been out to British Columbia?


Thomas Hockin: Yes.


Nelson Andrew Riis: Have they been to Atlantic Canada, and visited parts of Newfoundland where the unemployment rates are 35 per cent? Have they visited central British Columbia where the unemployment rates are close to 25 per cent? If they have, why did they not do something about it? Why do they accept the human tragedy that is unfolding as a result of the extremely dramatic high levels of unemployment in the regions of Canada?
What I think has to be the most alarming, shocking, astounding figure that I have read in the last number of weeks is regarding the number of real jobs that were created in Canada in 1986. The net number of jobs created in Canada in 1986 was 137,000. To some people 137,000 new jobs is a reasonably impressive record. The critical point is that out of those 137,000 new jobs created in 1986, 132,000 were created in Ontario. In other words, 96 per cent of the new jobs created in this great country were created in one single province. They were not even equally spread out in that province. The lion's share of those jobs occurred in Metropolitan Toronto and the surrounding area. They were by and large tied to the automotive industry which the Government is now failing to support. That is an incredible statistic.
When the Government talks about the jobs that are being created, when it talks about its success at job creation, does it mention to the representatives from the Northwest Territories, western Canada, Atlantic Canada, northern Ontario, and Quebec where those jobs were created? Do they explain to Canadians that virtually all the jobs created last year were created in a very small portion of Canada, mainly in the greater Toronto area? Yet people talk about the initiatives that this Government is taking in regional economic development.

February 20, 1987
The Budget-Mr. Riis
I think it is appropriate to read into the record some very important statistics that point out just how effective government policies have been. We all remember only too vividly the depths of the recession, and in many parts of Canada the depression-like conditions that existed in 1981-82. Then the unemployment rate in Newfoundland was 16.8 per cent. Today it is 19.2 per cent. Things have worsened in Newfoundland. In Prince Edward Island during the depths of the recession the unemployment level was 12.9 per cent. Today in P.E.I. it is
14.6	per cent. In Alberta, part of the world that you know well, Mr. Speaker, the unemployment levels in the depths of the depression and recession were 7.7 per cent, and today they are 10.8 per cent. In British Columbia, during the depths of the recession the unemployment rates were 12.1, and today they are 13.6 per cent. I have mentioned only four provinces. I could mention them all because the situation is virtually duplicated across Canada. In seven provinces today the unemployment levels are higher than they were during the deep recession of 1981-82.
For most Canadians the situation has actually worsened. There are 1,342,000 people who are officially recognized as being unemployed, men, women and young people in search of work. You and I know that this figure could be inflated significantly because these are the official statistics. The number is down by 5,000 from last year. We are very happy that some jobs were created across Canada meaning there were 5,000 fewer unemployed than in January, 1986. But that is only 5,000 out of 1.3 million. At this rate, if we were going to accept it as the approach to fighting unemployment, we would have to wait 270 years before we actually obtained full employment.
The unemployed and under-employed across Canada were certainly not impressed with this Budget. I cannot find a single thing in the Budget that will result in a single job being created anywhere in Canada. I can find a number of areas that will likely result in job loss. When you add more taxes on gasoline, diesel and aviation fuel, on airline travel, on food that people purchase on a weekly basis, on alcohol and tobacco, we have calculated that all this would amount to about $70 a family each year in additional taxes. And that results in job loss. It means that $60 million in the snack food list alone will not be there for circulation in the economy.
We are very concerned that the Minister of Finance did not see it appropriate to even mention the word poverty in his Budget Speech. There are four million people in poverty, which is a tragic figure-


Margaret Anne Mitchell: One in every five children.


Nelson Andrew Riis: The Hon. Member for Vancouver indicates that one in every five children lives below the poverty line, not at the poverty line but below it. By our own statistics as a Parliament we find that four million people live below that line. While the Government spends days and days and weeks and weeks talking about banking centres, the food banks
continue in the major cities and smaller communities across Canada. Thousands and thousands of men and women in 1987 have to line up to obtain a package of food to take home for their families.
With that situation occurring in Canada, how can the Government stand passively by and raise taxes and take no specific initiative? This is why some of us felt that we were betrayed as Canadians by the lack of action in this Budget. I have not mentioned the gas tax and the impact that this will have on the ability of our tourist sector. I did not mention the fact that the gas tax is discriminatory against the regions of Canada. After all, which regions use aviation, diesel fuel and gasoline more than others? The western, the eastern and the northern regions of Canada do so. The gas tax is a discriminatory tax.
In spite of repeated promises by the Prime Minister to improve child care across Canada and to provide adequate funding for the development of child care, no mention was made of it. I have not had a chance to say much about what I call the abandonment of the family farm and ranch. There were no provisions to ensure that long-term low-interest money was made available to the family farm and ranch across Canada. Again, I did not hear anything about any special western or eastern development fund. I remember hearing from the Liberals about the famous Western Development Corporation that never saw the light of day.
In summary, all the Minister of Finance has promised us, after promising it to us in 1984, 1985, 1986 and now in 1987, is that he will eventually get to tax reform in whatever form that might take. I do not hold my breath when that comes from the Minister of Finance who failed to close off the $500,000 capital gains exemption to all loophole, with the exception of farmers, homeowners and small businesses. We are the only country in the world that has exemption on that carte blanche basis.
In closing let me say that it is time we had a Government that put full employment at the top of its agenda as its goal and introduced strategies in the regions right across Canada to ensure that every man and woman would have an opportunity to be fully and meaningfully employed at a job that would contribute to the benefits of Canada, see Canada grow and ensure that our sons, daughters, grandsons and granddaughters will have the same opportunity.


Mr. Thacker:: Mr. Speaker, I have a personal question for my friend opposite. It relates to the people standing in soup lines, something we all believe to be atrocious. Would the member support a Bill that would take away from himself and myself-making $75,000 a year while people are standing in soup lines-the family allowance? Is he prepared to give up the tremendous benefit of the personal deduction for himself, his spouse and his children in order that people in soup lines can get more?


Nelson Andrew Riis: Mr. Speaker, the Hon. Member will know that if we had a proper tax system in the country that reflected an
February 20, 1987

honest, fair and just tax collection system we could have a universal program and those who did not need to have family allowance would have it taxed back.
Let me say to my hon. friend for Lethbridge-Foothills (Mr. Thacker) that year after year corporations such as Shell Oil, Hudson's Bay Company, the Bank of Montreal, the Royal Bank of Canada, Nova Corporation-I could go on and list 79,000 profitable corporations-have not paid a single penny in tax. If they were to be properly charged under the tax system, if they were not to pay excessively but just their fair share or, in some cases, if they were to pay anything, we would have more money than we would need to take care of those people in soup lines and at food banks. It is immoral for a country that is obviously the richest in the world to have food banks and soup kitchens in 1987.
To return to the Hon. Member's original question, if we had a decent tax system, his question would be irrelevant. He would know that once one reached a certain level of income, one would be properly taxed and we could maintain universal programs without having to hire legions of bureaucrats to monitor how people would shift incomes during the year or from one year to another to ensure that they would not be collecting family allowance if they did not actually deserve it.


George Baker: Mr. Speaker, I have a brief comment to make about soup kitchens. There must be something wrong with our social security safety net if those are necessary. Of course, each province has a different social security safety net. How much money one can actually get on which to stay alive depends upon which province one lives in. This is incredible. Certainly there is something wrong with having completely different systems right across the country. Yet the Government of Canada would move to pay off unsecured depositors of a bank, individuals who had more than $60,000 in the bank. These individuals got paid their $60,000 or more and the Government of Canada, through the taxpayers of Canada, decided to pay off the rest. Yet this Government is now taxing popcorn.
I would like to ask the Hon. Member a question which I have only asked twice in this Chamber. Hon. Members rose after I did and said they wanted to ask serious questions. This question on the Budget is perhaps the most serious one. It is a real question.
Can the Hon. Member understand why the Government of Canada decided to collect $50 million or $60 million on the backs of children who want to buy popcorn? Does the Hon. Member understand whether or not Cheezies are being taxed as well as cheese based puffs, and whether or not fudgesicles are being taxed as well as ice-cream bars? What does the Hon. Member think of children having to pay probably an extra 15 cents for recess?


Nelson Andrew Riis: Mr. Speaker, actually it is a serious question and I appreciate the seriousness of it. Rather than providing an
The Budget-Mr. Riis
answer directly, I will provide one indirectly. Last night, both of my two sons had a view on this matter. As a matter of fact,
I think one of my sons shares a classroom with one of your daughters, Mr. Speaker. When I got home last night, they said to me: "Dad, how low can the Government go?"


Jean J. Charest: Come on, now, don't bring your kids into this.


Nelson Andrew Riis: I suspect people do not believe that that is what happened. I will guarantee that that is what did happen. As a matter of fact, I have heard from a number of my colleagues from both sides of the House who have young children and some not so young who said: "Isn't this the living end?"
As my friend, the Hon. Member for Gander-Twillingate (Mr. Baker), has indicated, when international banks, including Wells Fargo, the Bank of Japan, the Bank of Hongkong, the Bank of Dubai and the Bank of Kuwait, had millions of dollars on deposit that were uninsured, the Government could come up with a thousand million dollars over a weekend to bail these uninsured depositors out. This is something which has never happened before in the history of banking, but we did it. To make up this difference, the Government has to dig up some more money, so it has gone to the children. It has imposed a tax on children. "Make the kids pay" is the new slogan of the Minister of Finance.
As a quick response to my friend I will say that, although I do not think it was appropriate, but perhaps what is most telling of all is that both of my sons, Jon and Nils, asked me how low the Government could go in terms of taxing the people of Canada.


Jean J. Charest: Mr. Speaker, I had the opportunity of rising after the Hon. Member for Trinity (Miss Nicholson) made her speech on the Budget. At that time, I said that I was disappointed in her and I said that I did not think that she had read her own speech. She rose after that to give us a little hope. There was frankness in her answers and we appreciated and acknowledged that.
In the case of the Hon. House Leader of the New Democratic Party, we are not disappointed. His speech was everything we expected it to be. In fact, I think he re-read what he said during the Budget Speech of 1985 or of 1986, because it was just about the same thing. I am sure that if he re-read his 1985 speech, he could use it again today.
I am sure that in 1985, the Hon. Member said, as he did today, that thousands of jobs would be lost. Did he not do that? I think I heard him say that. In 1986, I think I heard him ask the Minister of Finance (Mr. Wilson) how many thousands of jobs would be lost. Did he not do that? I think he did.


David Bruce Daubney: Yes, I remember that.


Jean J. Charest: Some other Hon. Members also think he did. Was he wrong? Yes, he was wrong. Will he admit that today? We do not expect him to do so. We do not expect him to admit he was wrong because we have heard from him before and we

February 20, 1987
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know that he would not reach that point. That is why he can give us the examples he gave.
The Hon. Member read statistics about the unemployment rates in Canada. I will do the same thing only I will draw a distinction between the unemployment rates when this Government took office and the unemployment rates now, and we will see what has happened.
Let us start with Newfoundland. In September, 1984, the unemployment rate was 23.8 per cent. That was under a Liberal Government. Under a Progressive Conservative Government, the unemployment rate is down to 19.2 per cent. In New Brunswick, under a Liberal Government in September, 1984, the unemployment rate was 16.2 per cent. It is now-


Mr. Benjamin:: Mr. Speaker, I rise on a point of order. I am happy to listen to my friend, the Hon. Minister of State for Youth (Mr. Charest), but that is exactly the same document from which he read in his speech and when he was questioning a speaker from the Liberal Party. Do you think it is proper that he should repeat the same thing again for the third time this afternoon, Mr. Speaker?


The Acting Speaker (Mr. Paproski):: I do not know if it is the same document or not. I would like to hear the Minister. I am sure the Hon. Minister will enlighten us.


Jean J. Charest: Mr. Speaker, I would like to thank the Hon. Member for his compliment. For him to make an intervention in an attempt to stop me obviously says a lot about what is going on here. Now, to get back to business, where were we? I think we were in New Brunswick, were we not?


Leslie Gordon Benjamin: Where you were an hour ago.


Jean J. Charest: Under a Liberal administration in September, 1984, the unemployment rate in New Brunswick was 16.2 per cent. Under a Progressive Conservative Government, it has gone down to 13.9 per cent. In the great Province of Quebec-

-Mr. Speaker, under a Liberal administration, the unemployment rate was 12.9 per cent on September 4, 1984. Under a Progressive Conservative Government, it has declined to the current 10.8 per cent rate as of January 1987.

In Ontario, the unemployment rate was 9.4 per cent in September, 1984. It has now gone down to 6.6 per cent under a Progressive Conservative Government. In Manitoba, under a Liberal administration, the unemployment rate was 9 per cent. Under a Progressive Conservative Government, it has gone down to 7.9 per cent. In September, 1984, under a Liberal administration, the unemployment rate in Saskatchewan was 8.7 per cent, but under a Progressive Conservative Government, the unemployment rate went down to 7.3 per cent. Would you guess, Mr. Speaker, that in your own Province of Alberta, under a Liberal administration in September, 1984,
the unemployment rate was 12.1 per cent? Yet under a Progressive Conservative Government it is down to 10.8 per cent. In British Columbia, the home province of the NDP House Leader, it was 15.1 per cent under the Liberals in September of 1984. Under our Government it is down to 13.6 per cent. In Canada as a whole, the unemployment rate was
11.7	per cent in September, 1984-I think the Hon. Member for Gander-Twillingate (Mr. Baker) fell asleep.


George Baker: No.


Jean J. Charest: Perhaps I could speak a little louder. It was
11.7	per cent under the Liberal Government in September, 1984. Under this Government it is down to 9.7 per cent.
I am going to add a caveat and tell the Hon. NDP Member that this does not mean we are satisfied. He knows that. We have to work harder. However, in no way can he get up in this House and say that there has not been progress under this Government.


Nelson Andrew Riis: Mr. Speaker, I have to admit that the Hon. Member has a point.


Some Hon. Members:: Hear, hear!


Nelson Andrew Riis: A very small point. The unemployment rate in 1984 was excessively high. The people of Canada saw it that way and decided there was a need for a change in government. They swept out the Liberals and replaced them with a new group. This new group says they are making gains, and the Minister of Finance says he plans to stay the course. He is not going to change anything. I have to admit there was a downward movement in unemployment statistically. However, people in British Columbia, more specifically in Kamloops- Shuswap, take cold comfort when he tells us things are improving. There is literally no recognition of that. There is no question that in some parts of Canada there has been improvement, mainly in downtown Toronto. To be fair, last year the unemployment rate in Canada was 9.8 per cent. This year, 12 months later, it is 9.7 per cent. When you add up all the jobs, there were actually 5,000 fewer people on the unemployment insurance rolls after one year of that Government in office. At that rate, as I reminded the Hon. Member, it will take 270 years to eliminate unemployment. The Hon. Member might feel he can stay the course with a reduction like that, but we do not accept it. The people of Canada did not accept it when the Liberals were in government, and the polls indicate they do not accept it now that the Conservatives are in government. The solution is obvious, people have to vote for the NDP at the first opportunity.


The Acting Speaker (Mr. Paproski):: One very short question and a short rebuttal, please.


Mr. Della  Noce@: Mr. Speaker, I want to stick to one particular point. The Hon. Member asked how low the Government can go. I ask him, how low can the NDP go?
February 20, 1987

They are saying that a one cent increase in the price of gasoline will hurt many people. Since February, 1986, we have had a drop of 12 cents a litre or 65 cents a gallon. Where are these guys who are crying that one cent will put them out of business? Where are these people who are increasing their prices and, for one reason, the price of gasoline. It was not always true but that is what they said to us. 4 The price of gasoline went up so the cost of our service is going up".
Did the Hon. Member check the price of oil today? It is $24 a barrel. Under Mr. Lalonde it would have been $85 a barrel. Thank God we were there to save this country. If Mr. Lalonde's National Energy Program were still in place, gasoline would be sold today for at least $1.20 a litre or about $5.40 a gallon. I must tell my hon. friend that today it is 44 cents a litre, and that is better than a $1.20. When I hear the Hon. Member say that one cent is the end of the world, I am wondering what the consumer would do at $5.40 a gallon. We would all be walking. There would be no cars left. I tell the Hon. Member that there has never been as much use of gasoline as there has been since we came into power. The price of gasoline went down, and I do not think he should say that one cent a litre is a disgrace.


The Acting Speaker (Mr. Paproski):: Short rebuttal.


Nelson Andrew Riis: Mr. Speaker, not a rebuttal but a very short explanation of the situation for the Hon. Member. I do not recall anyone ever saying that a one cent a litre increase is going to wreak havoc on the Canadian economy. It is a very simple calculation to add up four cents a litre or 18 cents a gallon in three Budgets to find what it really means. It adds up to $1.8 billion in additional costs for the transportation sector. We live in the second largest country of the world where transportation of all kinds plays a critical role in our ability to compete economically. When you add that much to the cost of doing business, I say it has a very severe impact on the economy of Canada.


The Acting Speaker (Mr. Paproski):: Questions and comments are now terminated. Debate.


Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, I think it is well understood that I am the last speaker in the debate before our recess next week. I want to speak to the many people across the country who are asking parliamentarians what is going on. I do not intend to get into this high school debate over numbers. It does not explain anything to them at all. I want to put down, in terms most of us can understand, what is going on, not only in our country but in many others as well.
There is no question that many countries of the world in the early 1970s proceeded on a course which we can only describe now as a mess. In Canada the mess started by 1972 and corresponded to the high increase in metal prices that year and oil prices in 1972 to 1973. Not only our country but all countries seemed to go mad trying to spend more money. Every time there was a problem, money was thrown at it. As a
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result, we have the situation we are in now. I do not see any way where people of intellectual honesty and integrity can see an end to it for at least 10 years. Even then there will still be remnants. If you think we are in serious trouble, take a look at the country to the south of us and the horrible mess they are in in Europe.
It is passing strange, is it not, given that all these industrialized countries were so strong a few years ago, that little Canada happens to be leading the slow race back towards recovery? That is because this Government, knowing it could not solve all problems, quickly stated its intentions in a statement in this House in November, 1984, of moving slowly to get at these problems, with consultation and all the rest of it. No one wants to pretend that we are racing ahead to a great future. All we are doing is clawing and scratching to stop the mess from continuing. From now on I hope it will turn slowly and will begin to go down.
This debate has been going on among the intellectuals of the world for the last 40 years, but it has not moved into the legislatures of the world. In the western world in the last 50 years we have believed in a religion known as the Keynesian consensus. That is the consensus that in order to get a country going you simply pour more money out. It is associated with a lot of other theories, including monetarism. I ask my colleagues in the House to put their minds, for the time that we are in our positions as Members of Parliament, to trying to improve on what we have been doing for the last 30 or 40 years through the lessons of the past.
I am going to take two or three facts and develop them a little bit. In 1961, a young President of the United States was facing a deficit in the Budget of the United States and was persuaded not to raise taxes, which was the orthodox way of balancing the Budget, but to reduce them on the things people needed. He took that advice in 1961, but we did not know the result until about 1963. His Budget reduced taxes by about $10 billion in the United States. That was a lot of money in those days. As a result, there was a surplus of $10 billion at the end of the two-year period. Kennedy did not live much longer than 1963, but the new President saw the evidence that by reducing taxes they got more money and were able to do all the things people wanted and to fight the war in Vietnam as well.
In the Reagan Budget of 1981, 20 years later, he too reduced taxes and got more money back in. As you know, the Americans went on spending. The Budget of 1979 in Canada, which we refer to as the Crosbie Budget, won world acclaim among thinkers, but was laughed and voted out of this House by the Liberal-NDP alliance. I know there were Members in both the Liberal and the New Democratic Parties who tried to stop that madness. They wanted to defeat the Government on this issue which they had laughed at, and the Liberal Party destroyed itself. When they went to the country they won the election and had to face their own mess. The Liberal-NDP

February 20, 1987
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alliance of that period, with its policy of spend, spend, spend, created the mess which we have in Canada today.
There are people who are trying to see their way through the mist. One different philosophy comes from a Canadian by the name of Mundell. I have mentioned this in the House before and will refer to it again. Long after the Crosbie Budget was defeated a magazine called The Public Interest described that Budget as the dissolution of the Keynesian consensus. The article was written by James W. Dean, another Canadian from British Columbia. He said:
On December 13, 1979, the government of Canada fell. For just six months the Conservatives had governed with a parliamentary minority, and they were defeated on a vote of no confidence. The issue was their first budget-a budget that rejected Keynesian economic policies, replacing them with radically different recommendations. Unemployment and slow growth were to be fought not by increasing the federal deficit but by reducing it.
I think that is enough of the facts. There were people in 1979 and 1980 who saw through the mist that one government in the world had learned a little from the experiences of Kennedy and from what Mundell was preaching.
What is this theory? I am not going to go into it in great detail. I am going to quote one of the editorial writers for The Wall Street Journal in 1982. Judy Steed, a Canadian reporter, or pundit if you want to call her that, described Mundell in The Globe and Mail of Saturday, April 24, 1982. I hope you will listen to this rather exaggerated judgment. She said:
The Mundellian thesis, according to Mr. Wanniski-
-he was the editor of The Wall Street Journal at that time-
-is "truly revolutionary." It upsets the monetarist and Keynesian models that have vied for supremacy among economists for the past 40 years. In the world according to Keynes, government intervenes in the marketplace, spreading money around (through taxation and services) to make sure buyers can spend. Consumer demand is what counts.
Mr. Mundell turns the demand model inside out. Supply creates demand, he argues. "A necessary condition for employment is that you have a sufficient number of employers. But if you tax employers excessively, you won't have much employment." Hence taxes must be cut to give producers sufficient incentives to create more supply.
That, in a paragraph, gives one part of the Mundell hypothesis. I repeat that this Budget is not out of harmony with what the Minister did in 1979. The only trouble was that we did not know he had done it. It is not out of harmony with the statement of 1984. I think that members of all Parties and Canadians who love their country should admire the Minister of Finance (Mr. Wilson) for hanging firm and giving us a Budget which continues the tendency, gentle as it is, toward coping with the business of spending money as opposed to the idea of getting more employers out working and providing jobs. It is a slow route, but we have taken the first step in a long journey. I hope the people of Canada understand that. That is more important than all the childish prattle we hear about the per centage of employed and unemployed. The mere fact that there is unemployment is enough of a challenge.
Let me turn to interest rates, a subject that I am sure Members will understand is very dear to me. During the 1984
election campaign we pledged to bring down interest rates. That was the first priority of all the promises we made. This was addressed in the statement of November, 1984 and dealt with again in the 1985 Budget. Slowly, interest rates are beginning to stabilize, but I can still think of five major areas that need to be addressed. However, the fact is that interest rates have declined by some three points.
I will not be satisfied until interest rates are at their proper level. At best, the interest rate should be at 3 per cent, but that will never happen because of the inflationary factor.
All western countries have been guided by a group of experts who believe in the doctrine that all one's faith should be put in a single theory such as the spending theory of Keynes or the monetarist theory.
While there is truth in those theories, one should re-evaluate the progress of such a theory if it collapses. I hear Members from all Parties in the House call for expenditures on various items. While it is necessary to make some expenditures, we should remember that we can only make progress if we have a solid platform on which to proceed.
Let me give some examples. During the last 40 years, and particularly the last 20 years, we have been told that the way to stop inflation is to raise interest rates. That theory was forced on the Government when I was a Minister in 1958. Now I am in all the books as having been the stupid one who fought Coyne. However, 25 years later, the facts are out. We were told that interest rates should be kept high in order to stop consumers from buying too much, and that higher interest rates would maintain the dollar at a higher level.
Let us consider what has happened in the last two months. The United States, Canada and Europe have been dealing with interest rates, and when they declined, the dollar went up to 75 cents and is holding. How can those who preached that doctrine for 40 years continue to do so?
A committee of the House met on this subject in 1979. We asked the Governor of the Bank of Canada for the evidence behind his claim that interest rates must be raised to keep inflation down. He said that he did not have evidence but just believed it was the proper action because all the experts supported that. We asked for evidence to show that high interest rates would keep the dollar up, since it was declining during the entire time interest rates were being raised. As I said, in the last two months interest rates have gone down and the dollar has risen.
All of the charts, going back to the Dana-Porter report of 1961, I believe, show the same truth. However, when will the experts in the Department of Finance and the Bank of Canada read the charts and figures and see the reality?
We must face our responsibility, collect the evidence, of which there has been much in the last two months, and proceed on the basis of that evidence. We do not know any better theory; we only know what we see and that we should not proceed on the basis of something that does not work. We
February 20, 1987

should let common sense prevail while we attempt to make the country run better.
I do not believe there is a complete answer to this question, nor does anyone pretend that there is. The economists confessed 30 years ago that they did not know where they were nor where they were going, but they still make a living and make the same predictions today. I have met most economists over the years and have had full and formal discussions with them.
While we all enjoy partisan discussions across the floor of the House of Commons, I believe the one thing we must have in common is the realization that none of us know the final answer. We should encourage the Government to keep moving forward slowly with small improvements in the hope that the economy will improve. If we attempt to correct the situation in a rush, by pouring money in to solve the problem, we will be faced with the same dilemma that the Keynesian conclusions forced upon Canada.
In 1985, an article in the local paper contained a headline, which perhaps would not have enticed many readers. However, it is very true. The headline reads: "Presto! The new economic molecule". In this article, in which the author talks about economists and the economy, he made the following conclusion:
Rigid orthodoxy is absolutely dead.
This is the final point I wish to leave with the House. We will all be dead if we only worship single doctrines. We cannot conduct our affairs by making rigid guidelines. With our rapidly increasing knowledge, it is not correct to place politics over facts. We must peer into the mist and try to move steadily toward a sensible goal. While there are many other problems, the interest rate problem is the greatest because it affects everything else. The theory about the molecule in this article is a reflection of what is happening.
Since there are many factors which affect these indicators, those who follow one doctrine will not succeed. While it is sometimes difficult to accept, it is much better to make slow and steady progress than to rush backward and forward.


Blaine Allen Thacker: Mr. Speaker, the Hon. Member for
Qu'Appelle-Moose Mountain (Mr. Hamilton) has many years of experience in the House. I want to seek his wisdom on this question of corporation tax. There are some who feel that corporation taxes should be increased dramatically because corporations are not paying their fair share. On the other hand, there are those who say that corporate taxes are essentially regressive because they are passed straight on to the consumer. Will he share his wisdom on this question of corporate tax?


Francis Alvin George Hamilton: Mr. Speaker, I answered that question in general in my speech. When talking about corporations, politicians are simply using that title as a buzz word. We are working together to better appreciate corporations.
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The corporation today, politically, is the flogging horse, but as one thinks through it, one finds that whether the corporation is large or small, whether it is a farmer or a householder, one has to have money before one can pay taxes. In other words, we have to have profit. And if we have to have profit, then we had better make certain that our tax level will allow us to make a profit. That is why the tax reforms in the United States which were announced a year ago, and the tax reforms I expect will be announced here, will show, I am sure, a rich decline for corporations, applying to all levels. I predict, from the experience of the Kennedy reductions and the Reagan reductions, and others I could mention, that if we can get the rate of taxes down, the amount of money will increase. Therefore, we should quit thinking of the corporation as a bogeyman that we have to clobber politically. We must think of a way of how to get that horse working. The only thing corporations have been able to do this last 20 or 30 years is to go into mergers to take advantage of the tax law, not producing any new goods at all. However, whether the corporation is large or small is not the point. The fact is that we have to give the producer some form of profit on his labour and work.


Bill Attewell: Mr. Speaker, I would like to thank the Hon. Member for certainly one of the best speeches I have heard during this budget debate. He gave us a special type of perspective, and I want to thank him for that. It sure beats the hollow, rancorous kind of comments coming from the other side of this House, not just from the Liberal Party but from the New Democratic Party as well. I sometimes wonder if those Hon. Members have been on another planet during this last decade.
I would like to ask the Minister to comment on a couple of things. I do want to underscore how correct he was in stressing the importance of interest rates. I agree with the Hon. Member that if I could single out one factor which needed to be highlighted as far as getting our economy going again is concerned, it would have to be interest rates. That was done by this Government through a few different steps. We had to dismantle the national energy policy, which was a tragedy for the oil industry. FIRA was another negative approach as far as new investments were concerned. That has been replaced, not just in name but in the approach that we certainly welcome investment into this country. I think it was touched on earlier today that most Canadians would welcome the Budget of the Hon. Member for St. John's West (Mr. Crosbie) of 1979 in which we had a relatively minor increase in gasoline tax. But thanks to the coalition on the other side, Canadians were plunged into another four years of record-setting deficits. Thanks to this particular Government and thanks to the leadership of the Hon. Member for Etobicoke Centre (Mr. Wilson) we have finally turned the corner.
My specific question concerns the Hon. Member's theory on deficits. No country can go on forever without having some deficits. What does the Hon. Member think about the fact that
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under the Liberal Government a record was set of 11 successive years of deficits? I think there might have been at least one or two good economic years in that period. Should the Liberal Government have been setting those deficits even in good times?


The Acting Speaker (Mr. Paproski):: The Hon. Member for Qu'Appelle-Moose Mountain (Mr. Hamilton) has only one minute left for a succinct answer.


Francis Alvin George Hamilton: 1 can answer in one sentence. The answer is no. The deficit is simply a measuring device on how much one is behind at a particular time. It is not dangerous in itself but the accumulation of those things eventually ruin you.


The Acting Speaker (Mr. Paproski):: I regret but the Hon. Member s time has expired. The period for questions or comments has terminated.
It being 4.45 p.m., it is my duty, pursuant to Standing Order 84(6) to interrupt the proceedings and put forthwith the question necessary to dispose of the amendment to the amendment now before the House. Mr. Cassidy, seconded by Mr. Murphy, moved:
That the amendment to the motion of the Minister of Finance be amended by adding immediately thereafter the following words:
"and this House further condemns the Government for introducing a budget that tolerates the existence of 1,250,000 unemployed Canadians and fails to show fairness to the average Canadian family and regions that continue to feel the burden of economic recession with respect to employment and income;
for failing to introduce a system of universal child care that would assist families and create jobs;
for failing to demonstrate to the average Canadian taxpayer a genuine commitment to tax reform by eliminating in this budget some of the worst excesses in the tax system, such as the erosion of the corporate tax base begun by the Liberals in 1983;
February 20, 1987
for failing to even give mention in the budget to the tragedy of four million
Canadians living in poverty; and
for failing to make full employment the first priority of the federal
government.
Is it the pleasure of the House to adopt the amendment to the amendment?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


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


Some Hon. Members:: Yea.


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


Some Hon. Members:: Nay.


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


The Acting Speaker (Mr. Paproski):: Pursuant to Standing Order 13(5), the recorded division stands deferred until 6 p.m. on Monday, March 2, 1987.
It being 4.47 p.m., pursuant to Standing Order 4, the House stands adjourned until Monday, March 2, 1987 at 11 a.m., pursuant to Standing Order 3(1).
Have a nice break.


[Stage Direction]
The House adjourned at 4.47 p.m.
[Stage Direction]


Monday, March 2, 1987
[Stage Direction]
Prayers