1987-02-19

Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, under the provisions of Standing Order 106, it is my honour and pleasure to present a petition which calls upon the Government to reconsider its decision to proceed with the changes to the Patent Act.
The petitioners believe that these changes would result in the cost of prescription drugs being significantly increased, thereby making it very difficult for average Canadians to buy necessary prescription drugs.


Mr. Rod Murphy (Churchill):: Mr. Speaker, I have the honour to present a petition which has been signed by a number of residents in my riding from the communities of Flin Flon, Leaf Rapids, Gillam, Thompson, and The Pas.
In their petition the undersigned express their concern with the federal Government's intention to go ahead with Bill C-22. They urge the Parliament of Canada to reject the changes to the Patent Act. They believe that they will increase the prices of prescription drugs for the average Canadian consumer and will severely restrict their ability to buy necessary prescription drugs. They also believe that Bill C-22 will unfairly hurt those Canadians whose health care needs require the purchase of prescription drugs on an ongoing basis.


Mr. John R. Rodriguez (Nickel Belt):: Mr. Speaker, I have the honour and privilege to present a petition from residents of the communities of Sudbury, Hanmer, Val Caron, Lively, Levack, Capreol, and Dowling in the riding of Nickel Belt.
The petitioners call upon Parliament to withdraw Bill C-22, because they believe that the changes to the Patent Act would result in much higher prices for prescription drugs than they are at present.
They indicate that in fact it is another example of the Canadian Government's concession to the United States at the expense of average Canadians in the free trade negotiations. They humbly pray and call upon Parliament to reject these proposals and to withdraw Bill C-22.



COMBINES INVESTIGATION ACT


John R. Rodriguez: for leave to introduce Bill C-248, an Act to amend the Combines Investigation Act (promotional coupons and savings stamps).


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


Some Hon. Members:: Agreed.


John R. Rodriguez: Mr. Speaker, the purpose of this Bill is to prevent a person or corporation from offering food items on a basis of coupons for reduced prices. It is to prevent this nation from becoming a nation of coupon clippers where food is concerned. The Bill clearly states that any discount on food should be direct, clear and above board and should not depend on whether or not you have clipped the coupon.


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


John R. Rodriguez: for leave to introduce Bill C-249, an Act to amend the Bankruptcy Act (priority of claims).


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


Some Hon. Members:: Agreed.


John R. Rodriguez: Mr. Speaker, the purpose of this Bill is to change the priority of payment of claims in case of bankruptcy. It would place the salaries and pension plan contributions of an employee at the top of the list when a bankruptcy takes place.


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

Committee Reports CANADA PENSION PLAN

John R. Rodriguez: for leave to introduce Bill C-250, an Act to amend the Canada Pension Plan (survivor's pension).


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


Some Hon. Members:: Agreed.


John R. Rodriguez: Mr. Speaker, the purpose of this Bill is to amend the Canada Pension Plan Act to remove the discrimination on the basis of age which presently exists with respect to survivors. If the survivor is under the age of 35, he or she is ineligible to collect the survivor's benefits under the Canada Pension Plan Act. This Bill of mine would remove that discriminatory provision.


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


John R. Rodriguez: for leave to introduce Bill C-251, an Act to register lobbyists.


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


Some Hon. Members:: Agreed.


John R. Rodriguez: Mr. Speaker, this Bill is to provide for the registration of lobbyists. The Bill clearly states that the people of Canada are entitled to know who is doing what to whom and for how much. It is most apropos at this particular time in our political history.


[Stage Direction]
Motion agreed to, Bill read the first time and ordered to be printed.
Mr. Speaker:: It has been brought to the attention of the Chair that there is a committee report to be introduced this morning and, with the consent of the Chamber, I would like to recognize the Hon. Member for York Centre (Mr. Kaplan).



REGULATIONS AND OTHER STATUTORY INSTRUMENTS


Hon. Bob Kaplan (York Centre):: I thank you and my
colleagues for the consent, Mr. Speaker.
I have the honour to present the third report of the Standing Joint Committee on Regulations and Other Statutory Instruments in both official languages. This report contains a proposed motion pursuant to Standing Order 44 to revoke the fruit, vegetables and honey regulations, Chapter 875 of the Consolidated Regulations of Canada, a copy of which is attached.
[Editor's Note: See today's Votes and Proceedings.]


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


Mr. Speaker:: Is it agreed?


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Wednesday, February 18, consideration of the motion of Mr. Wilson (Etobicoke Centre) that this House approves in general the budgetary policy of the Government.
Mr. Raymond Garneau (Laval-des-Rapides):: Mr. Speaker, yesterday, in the few minutes following the financial statement of the Minister of Finance (Mr. Wilson), I was able to make some initial comments which I may recall for the benefit of the Members of this House.
First of all, I felt this was a statement without vision, a Budget that failed to address any of the real problems which Canadians have to face, especially in our various regions, and that contained no forecasts and no plan of action. The Budget brought down yesterday did not tell us how the Department of Finance, the Minister of Finace and the Government expects the Government's expenditures and revenues to evolve in the years to come. I also said that because of this, yesterday's exercise was an exercise in futility and that the Minister


should have issued a press release and tabled some Ways and Means motions instead of putting us through the process of the lock-up, with the press, and putting the CBC and other television stations to a lot of expense for nothing.
In any case, Mr. Speaker, before I start my speech, and since I realize that any criticism we make will be branded as partisan, the Opposition always being against the Government,
I would like to offer three samples of reactions reported in the press this morning. First, from the business world, and if I may, I will read to you from this morning's La Presse, which said the following:
The business world gives Michael Wilson a "D", D as in disappointment.
The President of the Canadian Federation of Independent Businesses calls the Wilson Budget dull and insignificant. "It is soporific and lacks sex appeal", added the Director General of the Federation in Quebec, Pierre Lauzier.
That is what business had to say.
Mr. Speaker, I would like to refer to comments by a well-known columnist, Don McGillivray, whose column, which is popular in financial circles, appeared in the Ottawa Citizen under the following headline:
-"This fiscal trickery shames Wilson". The column reads in part:
Michael Wilson's junk food budget won't do much to nourish Tory hopes for a political turnaround-
One trick is getting employers to send income tax twice a month instead of once a month. This allows Wilson to borrow $1.2 billion from the 1988-89 fiscal year. But for this, the deficit would have been $30.5 billion.
The old Mike Wilson, the straight arrow who ran a clumsy but honest campaign for the Tory leadership in 1983, would have scorned such a trick.

Mr. Speaker, after comments from the business world and from a political observer, with emphasis on the Budget's financial orientation, I would now like to quote what was said by the Quebec Minister of Finance. I think this is the first time a Minister of Finance has threatened to sue the Canadian Government. I read the following in this morning's Gazette:

Quebec Finance Minister Gerard-D. Levesque said yesterday he's considering suing the federal Government because its budget ignores the problems of transfer payments to the provinces.
Ottawa should live up to its "legal, moral and constitutional obligation"-
"I was expecting-I was hoping that somewhere in the budget, there would be an indication of fairer intentions with regard to Quebec," Levesque said.

Mr. Speaker, three comments from three different groups indicate how, through the eyes of responsible people, Canadians perceived the Budget that was brought down yesterday.
Mr. Speaker, in his Budget Speech yesterday the Minister of Finance mentioned that the economic situation in Canada was, to borrow his expression, sound, and in many ways enviable.
The Budget-Mr. Garneau
However, if we look at the situation in the regions, and we see the growing gap between rich and poor, between the Maritimes, the West and Central Canada, we must conclude that as far as our economic policy is concerned, the Conservatives have failed miserably. The situation is certainly not as rosy as the Minister would have us believe, and that is what I intend to demonstrate in my speech today.
First of all, I will discuss regional disparity. I will talk about the growing gap between rich and poor. I will analyse the tax increases contained in this Budget as well as the hidden increases resulting from previous Budgets. I will deal with tax reform and I will make a number of suggestions to the Minister in this very important respect. I will comment on federal-provincial relations and subsequently give an analysis of our trade policy, especially as it concerns the United States, and in concluding, I intend to move a motion condemning the Government.

As Charles Dickens wrote in A Tale of Two Cities, "It was the best of times, it was the worst of times". I would respectfully suggest that these words, which have echoed through the centuries, have a special significance to many Canadians today. The election of this Government on September 4, 1984, was to be the dawning of a new golden age. However, it has become in reality a time of shattered dreams and broken promises. It has become a time when the Government chose to give to the privileged few, and take from the many.
History will record that this Government turned its back not only on the regions, but also on the most disadvantaged in our land. In short, this Government's economic policy, and more particularly the last three Budgets, including yesterday's, are the Tory tale of two Canadas, one Canada composed of the haves and one Canada composed of the have-nots.
Let us look first at unemployment in Canada. At the height of the world recession of 1982, the worst one since the Second World War, the unemployment rate in Canada was 11 per cent. In January, 1987, last month, it was 9.7 per cent, a decrease of 1.3 per cent. Is it from this figure that the Minister of Finance (Mr. Wilson) draws his pride?
After four years of world-wide economic recovery, Canada is still far from the 7.5 per cent pre-recession unemployment rate. From January 1986 to January 1987, Canada has produced a net increase of only 115,000 new jobs. However, a closer examination of even this low number would show an extremely alarming trend. Last year in Ontario, 127,000 new jobs were created. This means that in the rest of Canada, there was an over-all net loss of 12,000 jobs. I would repeat that there was a net loss of 12,000 jobs in all of the provinces outside the Province of Ontario and, I should say, outside the Golden Horseshoe.
You may well ask, Mr. Speaker, why we have created so few new jobs in relative terms. The answer is simple. It is largely due to the Government's misguided economic policies. The Canadian economy is now suffering from the effects of the


The Budget-Mr. Garneau
Tories' huge tax increases which, as predicted, have put the brakes on a nation-wide economic recovery, which was well under way when this Government took office in September, 1984. We on this side of the House warned the Minister of this. I made a speech telling the Minister that the huge increases in taxes would have an effect in 12 or 18 months, and this is what we are now experiencing. The huge tax increases have taken money away from the consumers' pockets. Now they have less money to spend and we see the effects of this on the economy and particularly on job creation.
Let me be more specific. Looking at Canada's regions, the unemployment rate in Newfoundland at the height of the 1982 recession was 16.8 per cent, and it is now, as of January, 1987, 19.2 per cent. This is a significant increase in unemployment, not a decrease as the Government would have us believe.
If we look closely, we see this pattern repeated in many regions right across Canada. In Prince Edward Island, unemployment has risen from 12.9 per cent in 1982 to 14.6 per cent in January, 1987. That is not a decrease, it is an increase. In Nova Scotia, the unemployment rate went from 13.2 per cent to 14.3 per cent in the same period of time. In Alberta, it went from 7.7 per cent to 10.8 per cent. In British Columbia, as I am sure my Leader knows very well, unemployment has risen from 12.1 per cent, at the time of the economic crisis of 1982, to 13.6 per cent. In other words, unemployment in both the East and the West is worse today than it was in 1982 during the height of the world-wide recession.
Let us be honest. Canadians living in St. John's, Charlottetown, Halifax, Quebec City, Calgary and Vancouver know that the regions of Canada are today experiencing a recession which is as bad as the one Canada and the world faced in 1982. The Minister told us in his Budget that everything was fine because one area of Canada, the Golden Horseshoe, is doing well. Is this the Tories' version of "what is good for General Motors is good for the United States"? The situation calls for action, not for more empty promises.
It is imperative that the Government address in a much more serious manner the problems facing our regions, things such as the plight of our hard pressed farmers, fishermen, sawmills and our energy industry. We Liberals believe in equality of opportunity, wherever you may live in this great land. We believe that Canada is only as strong as its most disadvantaged region, and thus we believe that Canadians expect the Government to do much more.
Let me examine the disastrous record of the Government in the crucial area of regional development. The first thing the Prime Minister's Government did when it came to power, after conveniently forgetting most of its election promises, was to cut the budget for regional development. First action. In 198485, funds allocated to the economic and regional development spending envelope totalled $14.9 billion. This year the spending envelope would have been as low as $9.1 billion if it were not for the inclusion of the grain subsidy program which
the Government had already announced. Nevertheless, the total economic and regional development spending envelope, including this, has been slashed from $14.9 billion to $12 billion. That is a drop of nearly $3 billion in less than three years of Conservative Government. Considering the desperate needs of the regions, the Government has a lot to answer for to all Canadians.
That is not the only thing the Government has done to help cripple the regions. You probably remember that in his previous Budget the Minister of Finance phased out the incentives provided by way of investment tax credits to the regions, with the one exception of the Maritimes. In other words, the Government, without prior consultation or full public debate, has dismantled both major components of Canada's regional development strategy which were put in place by previous Liberal Governments. Has the Government replaced those with another and better strategy? No, the regions have been left out in the cold. This lack of government strategy for regional development can be summarized in two cold words: laissez-faire.
The Government trusts that market forces will overcome all regional disadvantages. Let us look at the result of that policy as it affects investment in the private sector. According to a survey conducted by the Department of Regional Industrial Expansion which was published on January 12, 1987, the investment intentions of Canadian businesses will barely increase in 1987 after declining in 1986. It is clear that we have not even recovered to the 1985 business investment level. It is thus difficult to understand how market forces are going to redress regional economic imbalances.
I would like to examine the regional picture for business investment intentions more closely, as they are even more disturbing. In Newfoundland, businesses expect to reduce their investment by 23 per cent, having already reduced it by 20 per cent in 1986. In Nova Scotia, businesses expect to reduce their investment by 16 per cent, having reduced it by 15 per cent last year. The outlook for the Northwest Territories is dismal. After spending $388 million in 1985, major businesses will invest only $59 million in 1987. This is certainly not a rosy outlook, and it means the regional economies will have to muddle through again this year without gaining much help from the Government.
What about the energy sector? The Government shamelessly increased taxes on gasoline by another cent a litre. Yet there is no program to support our energy producers. It is clear to me, as it is to my colleagues and all Canadians, that this laissez-faire policy of the Government is not working, in that it is only a pretext for inaction by a dogmatic and heartless Conservative Government.

Mr. Speaker, poverty is another problem which worries a good many Canadians. Bread lines have become a common occurrence under this Government and it does not seem to realize the impact it has on society, particularly in urban


centres. According to the National Council on Welfare, 3,916,000 Canadians were living under the threshold of poverty-almost 15 per cent of the entire population.
These people were living below the level of poverty, Mr. Speaker, so what did the Government do? It had the bright idea of taxing people whose family income was as much as $8,000 and $9,000 lower than what is called the poverty level, people earning $10,500 who now have to pay taxes as a result of the Budget of Conservative Governments.
Mr. Speaker, I emphasize that, according to figures released by the National Council on Welfare, one out of five children lives in poverty. This is quite unacceptable and I fail to understand why the Minister of Finance (Mr. Wilson), confronted with such a situation, did not honour the commitment he made in his February 26 Budget speech last year to revamp social programs so as to correct this situation.
Mr. Speaker, the same figures reveal that 51 per cent of Canadian families now need the incomes of both father and mother to be able to live above the poverty level. Canadians were hopeful that the 1987 Budget would include concrete measures to relieve needy families. The Minister of Finance himself made that promise last year when he stated, and I quote his own words:
In my next Budget, I intend to propose further measures to reform our system of social expenditures and related tax provisions.
Mr. Speaker, we have reached the point where the contents of the Budget speech barely mirrors the commitments made by a politician during an election campaign. We can understand that an electoral program may very well be implemented over four or five years. Sometimes a man may get carried away by enthusiasm. All politicians have been known to resort to fancy rhetoric now and again, but as a rule a Budget speech reflects Government policy and gives Canadians an idea of what the Government intends to do with respect to various programs.
The Minister of Finance has failed to keep any one of the three promises he made in his Budget last year.
So what does the Government now propose in what is pompously called a Budget speech which, as far as I am concerned, the Minister would have been better advised to deliver before his Etobicoke Conservative association? With respect to the reform of social programs, nothing, absolutely nothing, Mr. Speaker. Once again the Conservatives have blatantly ignored their own commitments. Does the inaction of the Minister of Finance stem from the fact that the Conservatives or most of them-I believe the Minister is somewhat more sensitive than many of his colleagues, and I would have hoped he would have shown evidence of his moral authority in this case-but I must conclude that the inaction of the Minister can only be traced back to the fact that most Conservatives consider social programs as shackles or a burden the State must carry around year in and year out. Are these Conservatives still dreaming about putting the axe to these social programs? If that is the approach of the Conservatives I
The Budget-Mr. Garneau
will tell you right now, Mr. Speaker, that it is not my approach nor that of my colleagues on this side of the House.
Indeed, the social programs established by our Party over the past twenty years may and must be reviewed if only to make them more attuned to new conditions. I am not afraid to say openly that time has come-and then some-to set up a guaranteed annual income system.
In fact, the Liberal Party passed a resolution to this effect at its convention last November. We believe that an annual income formula can be developed and coordinated with the provinces in the interest of sound financial management. We also maintain that a guaranteed annual income formula would be more satisfactory as it would be more effective in encouraging people to remain and get back in the labour market. It is time to guarantee an adequate annual income to Canadians because the cumulative effect of the recent Conservative Budgets has been to widen the gap between the rich and the poor.
Mr. Speaker, when we speak of the gap between the rich and the poor in Canada caused by the three Conservative Budgets, we also have to consider the position of our young people. There is absolutely nothing in the Budget to meet the needs of the young unemployed. Nothing is said about meeting the commitment made by the Prime Minister of Canada in Vancouver last fall at the First Minister's Conference when he promised to implement a child care program.
-child care program.
As a result of the budget speech yesterday the Government gave the impression that taxpayers may breathe easier for a while. The Minister of Finance gave the impression yesterday that there would be no new personal income tax increases this year. I strongly disagree with that. Let us look at the true tax picture for Canadians. In the previous two Budgets, the Government literally built hidden tax hikes into the system in such a way that taxes will go up each year without any new public announcements and with no debate. The end result is that taxpayers are paying much higher taxes in each successive year, long after the initial legislative changes were made and forgotten.
The most important of these hidden built-in tax increases are the partial deindexing of the old tax system, the deindexing of the complete child benefit family package and, in 1987, the 3 per cent surtax which was only in effect for six months last year. Because of these and other measures, a married couple both of whom work and earn a total of $30,000 and have two children will pay close to $1,000 more in taxes in *987. This is an increase of $376 over last year ,.nd is due to the built-in hidden tax increases and the new taxes introduced by the Conservative Government yesterday.
I do not know whether any other Minister of Finance in Canada has imposed close to the $1,000 of new taxes which


The Budget-Mr. Garneau
the present Government imposed on families earning $30,000 in the last three Budgets. I suggest that these are indeed new tax increases, and the assurances of the Minister of Finance yesterday that there are no new tax hikes this year are simply false. Instead of increasing taxes openly, he crept in the back door when he hoped Canadians were asleep. I have news for the Minister. Canadians were not asleep and they know exactly what he is up to.
[ Translation]
Mr. Speaker, if we add the new direct and indirect taxes introduced to this date by the Government and then subtract the amounts redistributed to taxpayers, more particularly the better-off in view of the $500,000 capital gains tax exemption, we realize that Canadians will be paying $7.6 billion more in taxes in 1987. Mr. Speaker, this means about $250 for each man, woman, child and senior citizen in Canada. For a family of four, it means an average of $1,000. It is a fair question to ask whether these tax increases have been equitably distributed among taxpayers. Have corporations paid their fair share? Have the rich paid more than the poor? The answer to these questions is no, Mr. Speaker, as I shall attempt to demonstrate.
According to the figures tabled by the Minister of Finance himself, in 1986, over 90 percent of new taxes have applied to individuals and something under 10 percent to corporations. Is such a distribution of the tax burden between individual taxpayers and corporations fair? This is what happened last year. Under the new Budget, in 1987-88, because of the removal of the oil and gas revenue tax, corporations will pay $2.1 billion less in taxes than in 1984-85. This represents an 18 per cent decrease in the total amounts paid by corporations over a three-year period. What about individual taxpayers? If we add personal income tax increases and sales taxes paid by individual consumers, we get a $22.8 billion increase for the same period, which means a 53 per cent increase for individuals compared with an 18 per cent decrease for corporations. Is this fair?
The Conservative Government has used its first two years in power to increase the sales tax three times. A first increase of 1 per cent came into effect on October 1, 1984, a second 1 per cent increase on January 1, 1986, and a third increase on April 1, 1986. This Budget will extend the sales tax to all sorts of snacks. Have you ever eaten snacks, Mr. Speaker? The Budget states that snacks will now be taxed. As the newspapers have said, even children are being taxed to help the Government make ends meet.
The tax on gasoline has also increased. It went up a first time by 2 cents a litre on September 3, 1985, a second time by 1 cent a litre on January 1, 1987, and, with this Budget, by 1 cent more a litre beginning last night. Within three years, the federal tax on gasoline will have increased by 4 cents a litre, from 1.5 cents a litre to 5 cents a litre. Mr. Speaker, 4 cents a litre means 18 cents a gallon. Those who were in this House in 1978 and 1979 will remember this figure of 4 cents a litre or 18 cents a gallon. This was the amount of the tax that the
former Conservative Minister of Finance, the present Minister of Transport (Mr. Crosbie) wanted to impose in 1979. The Conservatives are certainly consistent in their attack on motorists. It took them seven years, but they have succeeded in imposing their tax of 18 cents.
Mr. Speaker, we heard reactions to this Budget this morning. The Trucking Association is asking who will pay their cost increase. For them, costs are not going up by 1 cent, but rather by 4 cents in a very short period. And the Trucking Association stated that it takes between 15 days and one and a half months to get provincial jurisdiction authority to increase their user rates. Who is going to pay for the Minister's tax increase during that period? Truckers, who are already hit by the deregulation bill and will be losing on the value of their licences, in which they invested up to tens of thousands of dollars. What about municipalities? They were hoping for and expecting this government's assistance to renovate their infrastructures-not only has nothing been done for municipalities, but the tax has been increased. And on top of that, the Minister of Finance, according to Mr. McGillivray's statement I read earlier, played a little trick in his Budget. He borrowed $1.2 billion from next year, by forcing businesses to make remittals twice a month. This does not include large corporations only. Any construction employer with 20 employees will have to fill all those forms twice a month. So will municipalities. Municipalities are hit by the fuel tax increase. They are losing interest on their cash flow, because the Minister will get income tax payroll deductions on the first and the fifteenth of each month, and they will be left with a still more acute financial problem.
The conclusion is, Mr. Speaker, that this Government raised taxes at the beginning of its mandate, in 1985 and in 1986, and it has incorporated in the fiscal system automatic, hidden tax increases; it has pushed individual income taxes much higher, while lowering corporate ones; it has increased the tax burden of middle-income earners to a much higher degree than those of high-income earners; and to loop the loop, it has substantially raised indirect taxes that are hidden and more regressive than direct taxes. Such is this Government's record. And after that, Mr. Speaker, they have the gall to suggest they are considering some kind of tax reform that will remove inequity from the system, the same inequity the Minister himself created in his three budgets.
These tax increases must be put into context. During the last election campaign and immediately following the September, 1984 election, the Prime Minister (Mr. Mulroney) and the Minister of Finance promised not to increase personal income taxes in order to reduce the deficit. The Minister said in the House on March 6, 1984, as reported at page 1827 of Hansard:
We would cut spending. We would not raise taxes. Tax levels in Canada are already too high.
February 19, 1987__________________________________COMMONS
Later in the same speech he said:
If we raise taxes, we provide more funds for politicians and bureaucrats to spend.
After the election and his appointment as Minister of Finance, he increased personal income tax and all personal taxes by $22.7 billion. Can there be a more clear case of irresponsible promises, and promises on which the Government has not delivered? They were promises only to please the electorate. Is it any wonder that people now view the Prime Minister's Government so cynically?
Let us remember that when the Conservatives took power they claimed that the most urgent economic problem was the federal national debt. In his November 1984 Economic Statement, the Minister of Finance said:
Our immediate goal is to reduce the deficit through expenditure reductions and not through major tax increases.
I have cited two quotations from the Minister, one before the election and one after the election. The Minister did not deliver on either of his promises.
Not only does this constitute a broken promise, the deficit has barely been reduced and the debt is still rising. Let us consider the facts. The deficit for the last full year of Liberal administration was $32.4 billion. Four years later, in fiscal year 1986-87, after four years of economic recovery, the deficit will be $32 billion, despite the Government's having increased taxes by $6 billion, and despite its sale of Teleglobe in great haste in order to reduce artificially the budget deficit that otherwise would have been higher than in 1983-84. Although there has been $6 billion in new taxes, the deficit is at the same level as it was in 1983-84.
Where has all the money gone? What happened to the $6 billion of new taxes introduced by the Government in 1986? Did it go to uninsured depositors? Did it go to the prison in the Prime Minister's riding, or to large corporations as a $1 billion tax write-off? Did it go to pay for the $500,000 lifetime capital gains exemption for the privileged few? Was it for extravagant foreign trips by the Prime Minister? The list keeps growing.
Let us consider the debt. On July 9, 1984, a few months before the last election, the Prime Minister said: "(The Liberals) must answer for four years of financial management that has tripled the annual deficit and raised the net government debt to $180 billion, an amount that equals $16,500 owed by every taxpayer". What are the numbers today? According to the Minister of Finance's forecasts, the public debt at the end of fiscal year 1987-88 will be close to $300 billion. That is equivalent to approximately $26,700 owed by every taxpayer. In two years the Tories will have added approximately $10,000 in additional debt on the shoulders of every Canadian taxpayer.
Since mid-September, 1984, the date the Tories took power, the public debt has grown by approximately $125 billion. The public debt has increased by 67 per cent in the two and a half years since they took office. That increase is greater than any
DEBATES	3589
The Budget-Mr. Garneau
experienced during the term of any previous Minister of Finance.
It is not surprising that the discontent of Canadians toward the Government's administration is so clear.

Mr. Speaker, I would now like to turn to federal-provincial relations. In a Budget Speech that states Government policy, it is difficult to understand why there was no reference to financial agreements between the national government and provinces, because those five-year agreements terminate on March 31, 1987.
Mr. Speaker, unhappiness with the Federal Government is also reflected in federal-provincial relations because on a few occasions, the Minister of Finance succeeded in dumping part of his deficit into the provinces' laps. Mr. Speaker, the Prime Minister (Mr. Mulroney) boasts of having improved the federal-provincial climate. The honeymoon-the love-in as they called it at the time-is definitely over. Witness the announcement in this morning's papers by a provincial minister of Finance that he is sueing the Federal Government for not paying its dues. Mr. Speaker, we only have to look at the recent agreement on French fishing in Canadian waters, which was reached without previous participation by Newfoundland, to realise that the Atlantic provinces, like all other Canadians, are questioning this Tory Government's judgement and good faith in the area of federal-provincial relations. But there is another area on which federal-provincial relations are at daggers drawn-transfer payments from the Federal Government to provinces.
As you no doubt remember, Mr. Speaker, the previous Liberal Government enshrined in the Canadian Constitution the very principle of equalization payments. That principle that is now sacred is one of the cornerstones of national unity. By unilaterally reducing the growth of payments to provinces, this Tory Government is threatening the very integrity of the system. It is not by bluntly transferring its deficit to provinces that the Tory Government will improve the relations climate. Those cuts are happening at a time when provinces have taken often radical steps to contain their own deficits.
Let us look at the facts. Unilaterally, one year before fiscal agreements with provinces were to end, the Tory Government reduced the growth rate of its health and post-secondary education payments to provinces. This means provinces will be getting $8 billion less than expected from the central government over the next six years. And this at a time when needs are increasingly glaring as a result of ageing population, development of medical technology and increasing training needs for our young people. Yet, before the election, the Minister of Finance made a statement as recorded in Hansard of March 6, 1984. Some of my colleagues who were then sitting in the House of Commons may remember that speech made by the Minister of Finance. This is what he said in March 1984:


The Budget-Mr. Garneau
We made it quite clear that we will not cut spending on medicare. In fact, my colleagues have said that we would increase the commitment that we have made to medicare. Referring to education, as I indicated in my remarks earlier, upgrading of our human resources, education, training and retraining are key priorities, so no, there would be no cuts there.
That was in March 1984. You will remember that Mr. Wilson did not keep his own word and refused to hand over to Quebec $66 million as provisional equalization payment. Yet the Minister of State (Finance) (Mrs. McDougall) had stated in the House on April 18, 1985:
What the government is doing in this Bill is giving Manitoba, Quebec and Nova Scotia the benefit of this 95 per cent floor-
Quebec is the only province which did not benefit from such commitment that the Minister of State (Finance) (Mrs. McDougall) had officially reiterated in the House. Why the double standard? The shortfall for Quebec, if it was granted the 95 per cent floor promised by the Minister of State (Finance) in this House . . . those $66 million should be paid. The federal governement refuses. This is no doubt why the Quebec Minister of Finance is prosecuting the federal Minister of Finance to obtain what is due to his province.
You will also remember that more recently, the Minister of Finance decided to spread over a 2-year period the $175 million of supplementary assistance which he had promised to provide in a single payment to the five provinces most seriously affected by the changes; contrary to his promises, he is spreading the payment over two years. And we know that the agreement on equalization will be renegotiated this year. I do not know what surprise the Minister is saving up for the provinces, but I hope that past events will not be repeated because the provinces will end up with a still higher deficit and this on account of the Mulroney government. In his negotiations with the provinces, the federal governement must recognize a fact: the federal deficit is not caused by transfers to provinces. The size of those transfers as a percentage of the GNP has remained relatively and strikingly constant.
I urge the Minister of Finance (Mr. Wilson) to be fairer and to refrain from piling up his deficit on the back of the provinces.
I would also like to draw to your attention at this particular time, Mr. Speaker, the Government's shocking record with respect to the crucial area of adequate funding for research and development. In the Budget Speech of May, 1985, the Minister of Finance stated: "It is an ongoing priority of this Government to encourage a much improved research and development performance in Canada". That was the promise. Let us review the action. Since coming to power, the Conservatives have cut the budget of the National Research Council from $520 million in 1984 to $398 million in 1986. As announced in October, a further $20 million in cuts will be taken from the National Research Council budget next year. So much for Tory priorities and promises.
Canadians know that a healthy Canadian economy in the next century will depend on a strong research and technological base, and thus we are calling upon the Government to reverse its short-sighted research and development policies. Surely we owe at least this much to future generations of Canadians.
I would like now to address another issue which is a very crucial one for all Canadians, that is, tax reform. In his Budget Speech of February 26, 1986, the Minister of Finance gave a clear indication that he would table at an early date a concrete proposal on tax reform, more precisely, on the concept of a business transfer tax. A year has gone by and we are still waiting for the White Paper on the business transfer tax. On October 23, 1986, the Minister made another promise to the House, and I quote:
As the next step in the tax reform process, I intend to issue specific directions for change at the time of my Budget.	,
The Minister's time is up. The Budget has been brought down. But all we were given on January 30, 1987, and repeated yesterday, was yet another postponement to a vague date later in the spring. However, if people believe that the tax reform will take effect this spring, it is a false hope because the Minister said there would be a long consultation process. How are we to take seriously today's proposals, if yesterday's promises are broken?
By again postponing comprehensive tax reform, the Minister has made a mockery of his budget commitment. It makes nonsense of detailed and prudent planning if taxes, and therefore incomes and expenditures, cannot be accurately predicted, not only for every Canadian in business but also for the operations of the Government of Canada. Worse, it creates a climate of uncertainty. The Minister has excused his waiting game by talking about consultation. Consultation on what, thin air? How can groups and companies offer intelligent opinions if they have no tax reform proposals to which to refer? How can they plan ahead if the Government cannot surmount the political courage to table concrete proposals? Instead of constructive consultation, we have confusion, which is certainly not contributing to a stable economic environment.
Let me outline some of my thoughts on tax reform. First, I believe that tax reform must, at the outset, be revenue neutral in its effect in such a way that taxpayers know their Government is not trying out another gimmick just to squeeze still more tax money out of them. The primary objective of any tax reform must be to design a fairer and more equitable tax system.
Second, tax reform must do away with the greatest possible number of tax shelters. This is not to say that all tax shelters are wrong. On the contrary, some are necessary to stimulate growth in those areas and sectors of the economy which most need it. For example, with respect to the mining industry, the flow-through share is a type of tax measure which can be implemented by a Government which wants to help the mining industry in some regions of Canada. That is why I would strongly support that this be kept in the tax reform, even


though the Minister and the Government might think, after seeing some exaggerations, that they must close some gap, or put in some regulations to ensure better control than the way this tax scheme is currently implemented.
Third, a logical and balanced tax reform proposal must reconsider all deductions and exemptions to see whether it would not be fairer that these be replaced by appropriate tax credits. I agree with what the Minister of Finance said yesterday in his Budget Speech. I made the same proposal on many occasions at the Standing Committee on Finance and Economic Affairs over the last few months. When I was Minister of Finance for Quebec, I moved in the same direction.
Fourth, a balanced proposal for tax reform must also consider the way in which individuals contribute to pension funds. If the Government's proposals on pension reform are enacted, the richer one is the more one will benefit from registered retirement savings plans. I suggest that the Government re-examine carefully the proposed changes to the RRSPs so as to bring as much fairness as possible into their implementation.
Fifth, tax reform will have to end the current $500,000 lifetime capital gains exemption. If the ultra-conservative Reagan administration has found the courage to tax fully practically all capital gains, then Canada, with a $32 billion deficit, should close that Tory tax loophole immediately.
Sixth, it strikes me that any tax reform proposal will have to deal seriously with the question of corporate taxes. Whilst we all recognize the need for a strong and profitable corporate sector, we must also be concerned with the many stories in recent years of corporations which, through tax loopholes, are not paying their fair share of taxes. Among other things, the Minister of Finance must look carefully at the way that the dividends earned and paid on term preferred shares are treated fiscally. Most of the time the actual system has been used by corporations not only to avoid paying taxes, but also to concentrate power in fewer hands.
Seventh, the Government has proposed on a number of occasions replacing the federal sales tax with a business transfer tax or a value added tax. Since the mechanism of such a tax is very complex, and no specific information has been forthcoming, I urge the Government to table its business transfer tax proposal, or a White Paper, forthwith, so that taxpayers will be able to understand clearly what the Government has in mind.
It is only reasonable that Canadians withhold their comments until they see more of the Government's proposal, particularly in view of the administrative headaches and costs that would be created for small businesses, farmers, home owners and the service industries. Let me state here and now that if the Government implements such a business transfer tax, then the sales tax credits introduced last year would have to be substantially increased so that lower income Canadians
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will not be further penalized by the Government. By its regressive nature, the business transfer tax hits hardest at those on small fixed incomes, those with the least ability to pay.
Finally, tax reform should maintain the over-all progressiveness of the tax system. The United States now has a personal tax system with only two rates. I feel that this is insufficient. A progressive system, in which the rich pay relatively more as a proportion of their income than the poor, is the key to a fairer system.
To summarize, let us have an approach to tax reform which is open, all-encompassing, and which has as its objective the lowering of marginal rates which will eliminate the lowest income Canadians from the tax rolls, and which will reduce the ever-increasing tax burden on middle-income Canadians. Let us have tax reform which is equitable and just, and which re-establishes equity between the rich and the poor. Up until now the net result of the last three Budgets has been to widen the gap between those who have and those who have not. This is not the Canadian way. We also need a better tax balance between the individual taxpayer and the corporate taxpayer. Full tax reform is essential to ensure that every partner in the Canadian economy-each and every taxpayer-knows that his or her tax dollar is being levied and spent in the fairest and most efficient way possible.

Mr. Speaker, I should like to deal now with the issue of our trade relations with the United States. The Budget Speech provides all Parliamentarians with a unique opportunity to examine some aspects, in fact all aspects of the Government's economic policy.
Under the present circumstances, how can we not raise the important issue of international trade with a special emphasis on our trade relations with GATT member countries generally, but more specifically our current negotiations with the United States to achieve global free trade?
Ever since this Conservative Government has been in power, it seems to have favoured the ad-hoc approach in the area of trade policies. It is a government without a sense of direction. A government which is more concerned about individual trees than about the whole forest.
Mr. Speaker, it is imperative that a government's action should be determined by its vision of the country. Its policies should be coordinated within the framework of a global strategy. This Conservative Government under Mr. Mulroney seems to have no plan of operation. Trying to do too many different things at once, it behaves as though all of Canada's ills and remedies originate in the United States.
From that premise, this Conservative Government has made a series of serious mistakes, but the most serious by far has been to assume that if Canada did not insist quite so much on the United States respecting its political sovereignty, economic benefits would ensue from that which in turn would make it


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possible for us in the end, so they say, to recover our full political integrity.
Mr. Speaker, this mistake has resulted in the following compromises: The United States could operate their Polar Sea ice-breaker in our waters without our permission or even disapproval.
Also, the Conservatives have abolished the Foreign Investment Review Board.
The Conservative Government has adopted a very conciliatory attitude in connection with Canada's participation in setting up Star Wars technology.
Under pressure mainly from the United States, the Conservative Government has dismantled the National Energy Policy.
Following his Shamrock Summit with President Reagan in Quebec City, the Prime Minister, without previous consultation, without Parliamentary debate, and without consultation with the provinces, has involved Canada in global free trade negotiations with the United States.
Finally, unable to deal with the stubborn attitude of the Americans over the lumber issue the Government backed down. Instead of appealing its case to the GATT tribunal, it has decided to impose an additional 15 per cent tax on all our lumber exports to the United States. It is as though the Mulroney Government had chosen to beat up on the Canadian lumber industry instead of letting Washington do it.
This compromise of our political sovereignty has led to all sorts of consequences.
First, to meet the United States expectations, our country must review its regional development policy for fear of being accused of disloyal competition.
Second, to meet the demands of global free trade, it is compelled to deregulate transportation and trucking industries, to open our regions to American companies and accept de facto the principle of increased concentration of our transport industries in the hands of major American corporations.
Third, because of this compromise, Ontario and Quebec have felt the need to review their financial institutions regulations.
Fourth, the Federal Government, leading the way, has announced its own deregulation in this area, so that within the next few years, our brokers are likely to be controlled by the American giants or by some Canadian giant banking institutions.
If we deregulate the industry, if we deregulate banks and financial institutions, if we deregulate transport companies, in short if we let market forces be the sole determinants of our developement, do we not run the risk of bringing about considerable change in the pattern of economic activity in Canada? Little by little, will not our pattern of development necessarily adopt a North to South axis? What will become of East-West economic flows? In the conservative perspective of
laisser faire, what will remain of Canada tomorrow as a political entity? What political bond will be strong enough to withstand the economic pressures of market forces favoring North-South flows? Will deregulation result in the American giants controlling an ever increasing part of our economy?
Canadians who live in Quebec and who have fought for Canadian unity are wondering whether they have fought that battle only to see the Conservatives put forward an economic policy whereby the regions of Canada shall see their future as being almost exclusively in the South.
The policy of the Conservative Government is harmful not only in terms of its vision of our relationships with the outside world, but also in terms of fiscal and social policies and in the area of culture. That is because, sooner or later, the conservative postulate which I have mentioned will do away with the most fundamental elements ot the Canadian mosaic and the Canadian way of life.
The conservative postulate whereby any and all problems and solutions find their source south of the border has vast repercussions.
What is most distressing is that while the government has set the wheels in motion, inadvertantly perhaps, it has no overall plan of action, it has not analysed the consequences and it has not sought from the Canadian people a consensus to move in that direction.
I say to this Government that it had better measure the consequences of its policies before it is too late. I ask this government what kind of Canada it wants to build for the future. Does this government know?
Mr. Speaker, I am not anti-American, anti-French, antiEnglish or anti anything, I am pro-Canadian, and in raising this problem I am only carrying out my duty as a Member of Parliament who has pledged to defend Canada's interests. If the objective of political integrity for our country is an important value, if being free and independent Canadians means anything, everything else, our policies as well as our attitudes, must follow.
Mr. Speaker, I do not underestimate the extent and the difficulty of the option I put forward. It has great and important implications and involves sacrifices.
However, I am convinced it is an option Canadians have always been aware of and have always accepted as a reasonable price they had to pay to be and remain free and independent citizens. The Liberal approach invites Canadians to meet the North American challenge in a way that differs considerably from what the Conservatives suggest.
For Liberals, the integrity of political sovereignty is a fundamental, unquestionable and non-negotiable value. Because our major premise differs from that of the Conservatives, inevitably our policies and approaches also differ. Hence our cautious approach on free-trade negociations with the United States. Hence the importance for us of east-west economic links, as well as national policies supported by


regional development programs. Hence the importance also for Liberals of preserving our cultural industries. Hence the importance for us, the Official Opposition, to secure the protection of our environment, our lakes, our rivers, our forests and our parkland. Hence, the importance for us of a viable agricultural industry which will require, in order to survive, the marketing mecanisms developed over the years. Hence, finally, the importance for us Liberals of protecting our social programs, that is medicare, hospital insurance, social welfare, and so on.
Our approach, Mr. Speaker, is not negative. Liberals do not refuse all form of bilateral negotiation with the United States. On the contrary! However, we say that such talks should be held under the umbrella of more comprehensive rules, negotiated at the international level. That is the process Canada has always used and it served us well up to now.
Mr. Speaker, a Liberal is, in principle, in favor of dismantling tariff and non-tariff barriers, because a Liberal believes in individual and trade freedom as well as in the free movement of goods and people. However, a Liberal also believes that a country has the right, and indeed the duty, to protect and enhance national sovereignty.
Mr. Speaker, what I have just said is not new. I said it in an article published in the magazine De Novo, more than a year ago. I would like to repeat the main points I developped in that article.
The real challenge in Canada today is to protect our competitive capability, but that challenge must be met by all Canadians, male and female. It is them who will have to make, by themselves and for themselves, the necessary democratic decisions.
If we want to maintain a competitive economy, our companies must have, among other things, sufficient profits to finance their own research and development. This means that those companies which are not at the present time viable, will have to adapt, modernize or disappear. It also means a greater reliance on automation of production lines. The salary levels of some groups of individuals might be adversely affected by such changes, and that is why we, in the Liberal Party, are advocating the creation of special programs of employment support and regional development, to act as buffers between the old economy and the new one.
Canada must meet the challenge of international competition, and I am convinced it can do it, but it will require a lot of change. If we enter a global free trade agreement with the United States, the pressure of U.S. markets, of Washington, will force us to adjust. If we want to compete with Japanese, Korean or European products and services, the pressure from these markets will force us to adjust. Adjustments will be necessary if we are to keep our markets in Europe, in the Pacific Rim countries or in the United States.
I think the present Government is wrong when it tries to put all our eggs in the U.S. basket. He should not have acted in the dark, without any preparation, without any comprehensive
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plan and without having received a clear mandate from Canadian men and women, not only a mandate on the substance of this initiative but a mandate on the way to take this step.
Instead of proposing Canadians to increase our competitiveness, instead of proposing readjustment programs developed here in Canada for Canadians, the Mulroney Government decided to ask Washington to discipline us. Unlike the Conservative postulate, the Liberal strategy is similar to the one contained in the interim report of the Joint Committee of the Senate and of the House of Commons tabled in September 1985.
Canada must exert pressures on its European, Japanese and American trade partners if multilateral negotiations are to be successfull. In its negotiations, Canada must consider not only the matter of tariffs barriers but also the question of non tariff barriers. It is in multilateral talks that the independence of Canada is least threatened.
Successful negotiations at that level would allow a better integration of the Canadian economy into the world economy without affecting our political sovereignty. Those negotiations which will last for a few years will give Canada and the provinces, in conjunction with the industry and unions, time to implement necessary and appropriate programs to make the transition between the old and the new economy easier.
Mr. Speaker, trade, taxation, tax policies, regional development policies are all but tools that a country uses to achieve more comprehensive goals about which a consensus has developed with time through the democratic process. That is a prerequisite to all talks with our neighbours to the south. I feel that for a lack of concern, inadvertently or by ignorance, the Conservatives have departed from the national consensus and Canadians are aware of it as shown in the polls.
Of course, outrageous patronage partly explains why the Conservatives have lost public support but that dramatic fall in popularity of the Government must be considered in a broader context. Surely the Canadian people reject so strongly the Conservatives today (we were told this morning that only 22 percent of Canadians support the Conservative Party) because they feel that they are breaking up the national consensus which has developed for the last forty years. I also feel that Canadians realize that the Mulroney Government has no action plan that has been well thought-out and democratically decided upon. Everything that is on the table is an impossible puzzle. We move pieces around, we put them here and there, without any notion of the final picture.
The Minister of External Affairs (Mr. Clark) travels around the world like a pilgrim looking for his luggage, but what Canadian message is he delivering? What policy is he conveying?
The Minister of International Trade (Miss Carney), for her part, is carrying along in her briefcase an all-purpose mandate from the Prime Minister which allows her to negotiate, to be


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tough at times but to give in whenever the pressure gets too hard.
As for the Minister of Finance (Mr. Wilson), he must follow a bad score and improvise in turn a budget policy, and a tax reform which he has delayed time and time again.
Mr. Speaker, each minister has a few pieces of the puzzle in hand, and takes care of his own business but there is no conductor to really give the tempo, to coordinate initiatives and indicate to the Canadian people the direction of Government action.
I would like to conclude by returning to the underlying economic approach of this Government and this Budget.
Everything is not okay, far from it. Canadians do not believe in the concept that "I'm all right Jack". They care about the hardships facing their neighbours and the regions of Canada.
We expect the Government to show much more leadership in attacking the growing gap between the rich and the poor and between the have and have not regions of the country. It is simply not good enough to leave Canada's future only in the hands of market forces.
This country had a national dream, a dream of equality of opportunity no matter where one lives. We Liberals will not let this dream die.


Some Hon. Members:: Hear, hear!


Raymond Garneau: Canadians expect nothing more, and they will accept nothing less.

Mr. Speaker, I now wish to move:
That the motion of the Minister of Finance be amended by deleting all of the words after "that" and by substituting the following:
-This House condemns the government for:
-presenting a budget that increases taxes on individual Canadians for the third year in a row, totalling billions and billions of dollars;
-widening the gap between the rich and the poor by their ill-advised and heartless fiscal policy;
-cutting the crucial Regional Economic Development Budget, for the third year in a row;
-once again delaying the long promised essential Tax Reform program thereby postponing any attempt to create more fairness to our tax system which is being eroded under the present conservative administration.


Mr. Deputy Speaker:: We shall resume debate on the amendment with the Hon. Member for Ottawa Centre (Mr. Cassidy). But first, the Hon. Member for Kamloops- Shuswap (Mr. Riis), on a point of order.


Nelson Andrew Riis: Mr. Speaker, I rise on a point of order. There have been discussions among the Parties. I think you will find, as is the usual tradition, that there is unanimous agreement to permit the first speaker for the New Democratic Party to have, if necessary, the same time as the first speaker for the Official Opposition.
May I suggest that, since the hour is getting on, the Hon. Member's speech be heard and the question and answer period be held until perhaps after three o'clock.


Mr. Deputy Speaker:: What the Hon. Member for Kamloops-Shuswap (Mr. Riis) has just said is, in fact, a tradition of the House. Is there unanimous consent to that effect?


Some Hon. Members:: Agreed.


Mr. Mike Cassidy (Ottawa Centre):: Mr. Speaker, I have had 20 years of experience in watching Budgets both as a journalist and as a politician in both this Chamber and in the Ontario Legislature. I venture to say that this is the emptiest and the most insignificant Budget that I have seen in all those 20 years of experience.
Since the Minister of Finance (Mr. Wilson) decided to defer the tax reform to be fair to all Canadians, there was a challenge in the Budget that he be frank with Canadians in recognizing the situation that many Canadians face. There was a challenge that the Minister of Finance provide real leadership in managing the economy in ways which every Canadian would benefit from. Unfortunately, the Minister was not fair. He was not frank and he has failed to provide the leadership we need. This was a Budget of lost opportunities from a Minister of Finance who has demonstrated that he fails to understand how most Canadians perceive how the economy is progressing and how the actions and economic policies of the Government affect them.
The Minister was so busy patting himself on the back yesterday that I thought his arm was going to fall off on several occasions. There is something seriously wrong with his perceptions because the Minister and his Government speak of Canada having a strong economic performance, yet the recent Gallup poll, not this morning's but the one of a month ago, indicates that more than 60 per cent of Canadians think otherwise. They think that the Government's record in economic management is weak. Are 15 million Canadians wrong, Mr. Speaker? Or is the view that the Minister of Finance has acquired, either from the top floor of the Ministry of Finance or from the riding of Etobicoke, somehow different from what most Canadians are experiencing?
Let me quote the Minister. He said the following both in French and in English:
If I had to choose just one message for Canadians today, it would be this: Our economic renewal program is working. It is delivering more growth, more jobs and more opportunities now. It is building new confidence at home. By changing our image abroad, it is helping to attract the investment that Canada needs.



Those were the words of the Minister of Finance.


Mr. Jelinek:: Those are the facts.


Michael Morris Cassidy: That is not what 60 per cent of Canadians perceive. If you judge from today's Gallup poll, Mr. Speaker, I would venture to say that that is not what 78 per cent of Canadians see. We are seeing a situation where the ratings of the Conservative Party's popular support are running across the unemployment figures in the Province of Newfoundland.
When I look at how things are now, I find that 15 million Canadians are right, and it is the Government and the Minister of Finance that are out of touch with what is happening to average Canadians and their families today, five years after the recession of 1981-82 is meant to be over. If those Canadians had one message for the Minister of Finance it would be this:

The Minister's agenda for economic renewal is not working yet for us. It is not providing the growth and the jobs our region needs. Our confidence is starting to wane. We don't know about our image outside the country, but we think it is time jobs were created for us, for our neighbours and our children. And now is the time to start.

That is the message, Mr. Speaker, that many Canadians will be giving to the Minister of Finance, not just today but in the coming weeks.
I spoke to my friend, the Hon. Member for Kamloops- Shuswap (Mr. Riis), last night. I asked him what the reaction was in Kamloops-Shuswap. As he will say in the debate later today, the reaction from the interior of British Columbia is one of shock that the Minister of Finance could have done so little when the Budget is a once a year opportunity to set an economic direction for the country.

It is the same in the Chicoutimi area. There is nothing for people in the Saguenay-Lac-Saint-Jean area, nothing at all, except for assurances by the Minister of Finance that all is well if you happen to be within a certain radius of the CN Tower, in Toronto.
In Etobicoke, the Minister's riding, the unemployment rate is about 5 per cent. This points to a good rate of growth for people in the Toronto area. It does not reflect the situation in the rest of the country. It certainly does not reflect the situation in the riding of the Right Hon. Prime Minister (Mr. Mulroney), where the unemployment rate is 15 per cent, compared with 5 per cent in the riding of the Minister of Finance.

What do we do about two economies in the country where people within view of the CN Tower in Toronto are experiencing some growth, some economic revival, which is good for
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that part of the country, even though there are still people homeless and standing in lines at soup kitchens in Metropolitan Toronto? Some progress is being made there, but here in Ottawa the unemployment rate has been around 9 per cent, in Windsor it is around 9 per cent, and in most parts of the rest of the country the unemployment rate is much higher than that. The message, Mr. Speaker, is that the economic renewal program is just not working.
The Finance Minister said, and I quote:
And we have only begun to see the results that we as a nation can achieve if we stay the course.
Given the fact that unemployment today in certain provinces is higher than it was at the height of the recession in 1981-82,
I am not really sure what the Minister of Finance means. Does he mean that, given some more time, he can raise the unemployment rate more in certain parts of the country? Is that the program of the Minister of Finance? Surely not. Yet we have to judge a Government not just on the basis of its words but also on the basis of its deeds. I suggest that it is time for the Government of Canada to show the leadership Canadians want and need. We got very little in this Budget.
What we got in the Budget was a new target for the deficit, a bit of flim-flam in order to bring the deficit down below $30 billion. We got some deferral on defence, and a very unfortunate decision to defer $150 million in expenditures on Canada's program of aid to the Third World. We got an acceleration of tax payments by larger employers, which will affect the cash flow of the private sector to the benefit of the cash flow of the public sector. We got the withdrawal of the retaliatory tariff on Christmas trees, American books and on computer parts, tariffs which should never have been put in place. On top of that, we got a $650 million further tax increase on ordinary Canadians. However, that is all.
As I said last night, I wonder for what on earth we all came together. I am worried about the trend this Budget is setting because of my constituents in Ottawa Centre. Traditionally, year after year, they provide hotel services, restaurants and taxis for the army of analysts, stock brokers, lobbyists, journalists, pundits and observers who flock to Ottawa in order to participate in the annual ritual of the Budget. Between the marvellous amount of telecommunications and the emptiness of the Budget the Minister of Finance gave us, those people will not come to Ottawa every year just after Winterlude. There will be an economic slump in my riding because the Budget contains nothing at all.
The Minister had a unique opportunity, but it is an opportunity which he has in fact blown. He could, and I think he should, have looked across Canada in the mid-term of this Government to set a direction for Canada for the 1980s and 1990s. Everyone who observes politics knows the degree to which the Conservatives have fallen in public esteem. It is not just the scandals which have led people to that conclusion, although that has been the icing on the cake. There has been a


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basic feeling that there is a lack of competence, a lack of vision, no sense of direction and a lack of leadership on the part of the Conservative Government, beginning at the level of the Prime Minister (Mr. Mulroney) and going right down through the Cabinet and the whole Party. That is bad for Canadians. As one Member of Parliament and as one citizen of Canada, I regret to see a Government that is behaving now as though it has been in power for 10 or 15 years and has totally run out of ideas. The difference is that this gang ran out of ideas before its first term had even come to an end.
A number of thoughtful commentators have been saying, I think justifiably, that if the Conservative Party intends and wishes to stay in power after 1988 or 1989, it will have to mend its ways in a very serious way. Conservative Members will have to take steps really to understand what is happening in Canada and to show Canadians they care about the situation, not just in downtown Toronto, not just in the Golden Horseshoe but in the interior of British Columbia. They must show that they care about what is happening to lumber producers in northern Quebec, to fishermen and women in the Maritimes and the Atlantic provinces, and about the fact that the oil industry has collapsed in much of Alberta and very little has been put in its place. That is the kind of caring we will have to see from the Government, and that is why this Budget is such a lost opportunity.
People in the Ministry of Finance maintain that the reason the tax reform has been deferred relates to the technical problems involved in putting it all together. I do not know whether or not that is true, although again I believe the Minister must be accountable for the fact that once again we have promises in tax reform but not performance. Tax reform has been delayed once again. With tax reform as the centrepiece of this Budget out of the way, there was the opportunity for some thoughtful reflection on Canada's direction and on what the Government intended to do about it. It was a time to reflect on the situation faced by average Canadians.
Over the past two years, middle and low-income Canadians have faced growing financial strains. The average family has borne tax increases under this Government of $ 1,350 per annum, and will face another $65 to $100 increase with this week's Budget. The vast bulk of Conservative tax increases have been borne by average families, whereas the burden of corporate taxes has continued to fall. This is an aspect of the situation we face which people are telling the Government they believe is unjustified.
Let me be more specific. According to the figures in the Budget Papers, taxes on individuals will have risen by 52 per cent between the year the Conservatives took office in 1984-85 and 1987-88. That is an extremely heavy burden at a time when people are struggling to get out from under after bearing the consequences of the recession. What is happening on the corporate side? In that same period, corporate taxes have dropped by 18 per cent. What kind of justice is that? The Government has promised tax reform, but it has raised taxes
on individuals by 52 per cent and cut the tax take from corporations by 18 per cent in that period of time.
Perhaps I can put it in another graphic way. The Minister of Finance has said that tomorrow, the day after or sometime in the future, he will increase taxes on corporations. Since his Party took power, the share of federal government revenues coming from corporate tax has dropped from 13.2 per cent of total revenues to 10.5 per cent of total revenues in 1987-88. At the same time, personal income tax revenues have risen from 41.5 per cent of government revenues to 46.4 per cent of government revenues. Not that long ago, about a generation ago, personal and corporate taxes provided an equal share of federal government revenues. It has now got to the point where four and a half times the revenues come from the personal sector. The Minister of Finance has tolerated a $2.5 billion shortfall in corporate tax revenues in 1987-88 over what he was forecasting just a few months ago.
The Tory rhetoric about tax reform touches all the right bases, but their practice shows what the Government really believes. When we go to the hustings in 1988 or 1989, we will judge this Government not just on the basis of its rhetoric but on what it will actually have achieved. I suggest that all the evidence shows it will have achieved damned little for ordinary Canadians in the way of tax fairness, and for that I think we are all the sorrier because there was some real promise. The Minister of Finance takes pride in inching the deficit down below $30 billion this year, a target he missed in 1986-87. I predict he will probably miss that target again in the forthcoming fiscal year. We are asked to share his pride in the reduction of interest rates, although they are still two points above those of the United States. We are asked to share his pride in the steadiness of the inflation rate, although it is two points above that of the United States. We are asked to share his pride in the fact that unemployment rates have on average come down from their peak and fell by almost 1 per cent between 1985 and 1986. Sure, I am glad that occurred, but in 1987, while Canada may be doing better than most of the rest of the industrialized world, we are being told that our unemployment rates will stay above 9 per cent nationally.
According to Finance Department officials to whom we talked in the lock-up yesterday, the average unemployment rate in 1987-88, up to March 1988, will be 9.2 per cent. That is a reduction of less than half a percentage point from the average rate that prevailed in 1986-87. That is a measure of how much the Government has given up on its target of jobs, jobs, jobs which propelled the Prime Minister and his Party to office in September 1984.
I grant that Canada is doing better than other countries in terms of job creation and those things, but we must do that because the demographics of Canada are far different from those of West Germany, The United Kingdom or most other OECD countries. We have to run very fast in order to stay ahead. What the Government is doing now is essentially treading water rather than getting us ahead and coming to


grips with the unemployment problem and the problems of unfair regional disparities that continue to persist in Canada.
The Minister of Finance is the Dr. Pangloss of Canadian politics. Everything is for the best and the best of all possible worlds. There is barely a cloud to be seen in the sky. If any poverty still exists in Canada, one would hardly know it from the Budget Speech. In fact, the word "poverty" is not even mentioned. There is no reference to the situation experienced by four million of our fellow Canadians, men, women and children, I regret to say, who live in poverty. That must have come from orders from above because during the Throne Speech, which I presume was authored by the Prime Minister, poverty was not mentioned either. Somehow the Government is blind to the plight of 20 per cent of our fellow Canadians.
If the free trade talks are stalled and our economic relations with Washington are getting increasingly obstreperous, the Minister did not appear to have noticed. In fact, he seems to have forgotten those golden words, "free trade", because they do not appear in the speech either. The cod war with France which has the Atlantic provinces aflame rates barely a mention. Canada has quietly withdrawn the tariffs on books, computer parts and, thank goodness, Christmas trees, with which we fought our little trade war with the U.S. over shakes and shingles. We have found other ways to make our point, and U.S. consumers wound up paying the extra cost of the 35 per cent tariff. That is mentioned in the speech but as someone-

who is concerned about the situation, especially in Quebec and in my own province of Ontario, I find it strange that there is no reference to the 15 per cent tax on softwood lumber that will have a devastating effect on the future of the lumber industry in the province of Quebec, in the Atlantic provinces and the province of Ontario. Mr. Speaker, there is no reference to a tax that will have a very serious impact on employment in many regions in these two provinces. The Minister of Finance mentioned the good news but ignored the bad news which is the situation in which most Canadians in our regions find themselves.
So if you are practically blind to the situation or the problem, then you can only perceive the situation in Canada in a rosy context which, unfortunately, does not depict reality.
Indeed we now have two economies in Canada-one as the Minister of Finance sees it the other which most Canadians know through personal experience. There are two kinds of people in Canada, Mr. Speaker, the rich and the poor. Prosperity can be seen mostly in a small region of the country, around the riding of the Minister of Finance, in southern Ontario. You need only travel to the extremities of Ontario and Canada to get a totally different picture.
Before coming to the House today I had a look at the most recent unemployment figures, and I found the situation appalling, Mr. Speaker. From January 1986 to January 1987,
137,000	new jobs were created in Canada, a net increase of
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137.000	jobs. Now if we look where these jobs are we find that
132.000	of them are in Ontario, mostly in southern Ontario, and the others throughout the rest of Canada. In other words, from January 1986 to January 1987 only 5,000 new jobs were created in the rest the country, which means Quebec, western Canada, the Atlantic Provinces and the territories.
That, Mr. Speaker, is what is going on in our country. The greatest part of Canada is still living in a state of recession and depression, yet the Minister of Finance does not have any answer to offer. The unemployment rate in seven of our provinces is now higher than at any time since the 1981-82 recession. And even though average economic indicators have improved, most Canadians have yet to pull out of the recession.
I listened to my friend, the Hon. Member for Laval-des-Rapides (Mr. Garneau), as he went through a number of unemployment figures which I will mention as well because they are important and telling. However, I want to remind my hon. friend, a former provincial Minister of Finance, that when he cites the high levels of unemployment prevailing in most parts of Canada today, let him and his Party not forget that those rates came about when the Liberals were in power. The economic crisis we face in Canada today began when the Liberal Government was in power. The tax concessions to, and tax expenditures for, corporations, which have cost Canadians so much and contributed so heavily to our $29.5 billion deficit, began when the Right Hon. Leader of the Opposition (Mr. Turner) was the Minister of Finance in the early 1970s. He began a trend which has cost Canadians billions of dollars in increased taxes to pay for those gifts to corporations. The Liberal Party of Canada may sound progressive when in opposition, it may decide to take on a number of the points and policies advocated consistently over the years by the NDP, but let us be clear about one thing: Liberals are progressive in opposition but they behave exactly like Conservatives when they are in power. We have 20 years of experience to prove it.
Let me read into the record just how hard people are still being hit by unemployment. Last year in Newfoundland unemployment averaged 20 per cent. It had reached 16.8 per cent at its peak in 1982. Unemployment in Prince Edward Island climbed to 13 per cent in 1982. Last year the average was 13.6 per cent. Somehow these facts seem to have escaped the Minister of Finance. In Nova Scotia the unemployment rate was 13 per cent. Last year, after two years of Conservative economic stimulation and renewal, the average rate was 13.5 per cent. In New Brunswick, it averaged 14.6 per cent last year, one-half per cent higher than in 1982. In Saskatchewan, the 1986 unemployment rate was 7.7 per cent, 1.5 per cent higher than during the recession. Unemployment in Alberta last year averaged 9.8 per cent, 2 per cent higher than 1982. Unemployment in B.C. last year averaged 12.6 per cent and has climbed to 14.6 per cent since the end of Expo. In 1982, it was 12.1 per cent.
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Let me put it in another way. The Government told us in the Throne Speech last year, with some pride, that the average income of Canadian families rose in real terms in 1985 for the first time in five years. Good for us. The averages are encouraging. However, I am reminded of the economist who drowned in a pond the average depth of which was 7.5 inches. That is the situation for an awful lot of Canadian families. Averages made by people who tool around the streets of Etobicoke in BMWs and Jaguars do not put bread on the table for a lot of average Canadians. In 1985, the average family income in Ontario was 541,765. That was 40 per cent higher than the average in Newfoundland and most other Atlantic provinces. In other words, we have the contrast between the rich and the poor in this country and the Government does not feel it is worth looking at.
The Government has to deal with regional disparities. If the Throne Speech is any indication, the Government is aware of the problem. I remember responding positively when I heard the Governor General read the Government's words in the Throne Speech, and I quote, "that regional disparity remains an unacceptable reality of Canadian life." Somehow it seems that the Government's position is the same; it is unacceptable but it is not going to do anything about it. It is not just the fact that unemployment rates are intolerably high in seven or eight of our provinces, it is the fact that the Government has done so little to try to correct those disparities and to provide leadership and a sense of hope in many parts of our country.
Between the year the Government came to power and this year, far from increasing its commitment to combating regional disparity the Government retreated in the face of regional disparities, and between 1984-85 and the forthcoming fiscal year it is cutting $3 billion or something like 25 per cent from the budget of the Department of Regional Industrial Expansion and other regional and economic development programs. That is a tribute to Tory economic policies. The Government says regional disparity is an unacceptable reality, but its actions perpetuate those regional disparities. The Prime Minister told his constituents in Sept-iles last weekend that the Budget was going to be thin on measures for regional development. We know he is often prone to hyperbole and I accuse him of that in this case. This Budget was not thin in what it did for regional economic development, it was nonexistent.
You cannot maintain that any kind of meaningful economic recovery is taking place outside of Manitoba under an NDP Government, in southern Ontario where the NDP have also had a substantial influence, and in the region around Montreal. How quickly is that situation going to end? What is the Government going to do about it? What did it mean when it said that regional disparity was unacceptable? When I talked to Department of Finance officials, they said, "we are not going to do anything much because unemployment is going to stay at 9.2 per cent. In January of this year-you are motioning, Mr. Speaker, concerning extending the hour?


Mr. Deputy Speaker:: The Hon. Member for Kamloops- Shuswap (Mr. Riis) asked that the Hon. Member for Ottawa Centre (Mr. Cassidy) be given time equal to that given to the member of the Official Opposition. That was granted by the House. We also agreed to proceed with the question and comment period after Question Period. However, does the Hon. Member for Ottawa Centre wish to obtain unanimous consent to continue his speech at this time?


Michael Morris Cassidy: I would hope to have consent to continue at this time, Mr. Speaker.


Some Hon. Members:: Agreed.


Mr. Deputy Speaker:: Very well. The Hon. Member for Ottawa Centre.


Michael Morris Cassidy: Thank you for giving me the opportunity to resume what I was saying. I will give a final statistic. There is a danger of going too heavily into statistics, but this one is telling. In January, 1987, there were 1,342,000 unemployed across Canada. That was a reduction of 5,000 from January, 1986. If every year we manage to eliminate 5,000 people from the unemployment rolls, were the Government given the time, which it will not be, in a mere 270 years we will succeed in wiping out unemployment in Canada. That is not in our lifetime, and it is certainly not good enough for average Canadians. Canadians want and deserve more than that. We cannot stay the course for 270 years, and no one wants to stay a course like that.
In vast areas of Canada in the future, more than 10 per cent of our workforce will be unemployed at any one time. Fifteen to 20 per cent of our young people are out of a job. I recognize that perhaps 10 per cent of the people unemployed today will be unemployed in a year's time. However, one family in four will have someone unemployed during the next 12 months. Half of us will likely have a close friend, a close relative or a neighbour who will be unemployed. Unemployment is becoming a pervasive fact of life which touches almost every Canadian home. It influences almost every decision. It undermines people's confidence, dignity, sense of worth, sense of purpose and ability to get on with their lives which, after all, is what the economy is all about.
Canadians say they want fairness. They say that it is not fair that corporations and rich Canadians get tax breaks while taxes keep increasing for the average family. They know it is not fair when Finance Ministers wring their hands but do nothing while chronic unemployment continues to blight the lives of 1.25 million Canadians. That is how many Canadians will be unemployed well into the 1990s with the economic policies of the Government.
Canadians do not accept the excuse that it is all right to have high unemployment because sometime in the future we will start to do better. That is very clear from the polls today


which put the Government a the lowest level of any Government in power in Canada during the last 40 years. The Government has fallen to these unprecedented levels of popular support, not only because of a web of scandal, but because of its failure to manage the economy effectively.
I will return for a moment to the question of poverty, which was not even mentioned in the Budget Speech. The Economic Council's annual review last year had this to say about poverty in Canada: "Fifty years after the great depression the sight of line-ups at soup kitchens and voluntary food depots cannot but raise feelings of outrage at the senseless intimidation of human dignity and ability among despairing men and women who would prefer to be productively employed".
Those soup kitchens are to be found not only in the Mari-times or western Canada. I have them in my constituency. People working in my riding office are helping in the Dalhou-sie food bank because people whom I represent as a Member of Parliament cannot get enough food, they do not have enough income in order to make ends meet. Four million Canadian citizens are living in poverty. Is there any sense of outrage from the Government? Does the Minister of Finance feel that there is something wrong with that situation? I guess he does not, Mr. Speaker. He does not want to talk about that at all.
I suggest that it is time we had a Government which is outraged about poverty. It is about time we had a Government which is outraged and concerned about the need for child care which is acceptable to all Canadians. It is about time we had a Government which was more honest in recognizing the situation faced by our farmers and other ordinary Canadians from coast to coast rather than selectively editing the record in order to come up with good news and no bad news at all. It is about time we had a Government which will come clean about what will happen as a result of the equalization Bill, which I understand will come before us in a week or two and will probably once again victimize the provinces, particularly the Province of Manitoba.
I think it is time that we had initiatives and leadership from the Government to combat the very high rates of unemployment among young workers. Rather than boasting about the science-based industries which we have in Canada, it is time the Government decided to admit its failures in terms of supporting research and development and the need for real action on the part of Canada to put the country back in the forefront with research and development entering into the industrial policy in a very major way. It is time that we have a Government which will begin now to bring back fairness in terms of tax policies.

Canadians want a fair fiscal policy, but it is not what they see in this Budget. Last January, the Minister of Finance (Mr. Wilson) informed us that his tax reform would again be delayed. It is now expected to begin iij April or May, after which there will be discussions at the Committee on Finance
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and Economic Affairs, a bill in the fall, and finally perhaps a piece of legislation which will not come into effect before 1988 or maybe 1989.
We have had promises instead of action as concerns tax reform. Mr. Speaker, in my opinion, the Government should have given some indication that it is firmly committed to an effective tax reform.
Unfortunately, we have had another series of announcements and promises, but without any substance, and while taxes are increasing for ordinary Canadians, the wealthy are getting more concessions, such as the privilege of arranging for an RRSP with an investment broker instead of a trust company.
This means that people will be able to manage their RRSP's as though they were dealing with their own investments.
Mr. Speaker, the financial policy of this Government has been given a dramatic direction, but it has also been reactionary and regressive instead of progressive. Between 1986 and the new taxation year, taxes paid by individuals will increase by 13 per cent while corporate taxes will decrease by one-tenth of 1 percent. Is this based on the capacity to pay? Certainly not, Mr. Speaker, since corporate profits will increase by 20 percent and corporate taxes decrease, while individual incomes will increase by 4 or 5 percent and individual taxes by a higher percentage.
We estimate that, by 1990, the Conservatives will have increased individual taxes by up to $35 million while corporate taxes will have increased by under 1 percent of this amount. In each of their Budgets, the Conservatives have penalized average Canadians and omitted to impose real taxes on corporations. Where is the justice in this? Where is the credibility of the tax reform project of the Government? The answer is that there is no justice or credibility.

Effectively it promises jam tomorrow but never jam today, tax reductions tomorrow but never tax reductions today. Canadians will pay a cent a litre at the gas pumps to compensate for the removal of the PGRT. The average family will pay $65 to $100 on top of the $1,350 in tax increases they have already received in two previous Budgets from the Government. The average family will pay the 3 per cent surtax which was applied in the middle of last year to all Canadians. Meanwhile, on July 1 the tax rate of corporations will come down.
We were looking for the Government to send a signal to the average taxpayer that it is ready to eliminate the worst excesses of the tax system. We were looking for a signal as well that the Government will now start to collect the revenues which are available from tax reform both to create jobs and to start reducing the deficit. An important example of that kind of tax change would start with the totally unjustified exemption on capital gains, which was a giveaway in the 1985


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Budget. That $500,000 capital gains exemption will cost $850 million because the Tories wanted to pay off their friends. Is it creating new jobs? Perhaps it is creating jobs in Florida, but the evidence is that in most regions of Canada it is not creating jobs at all. It is embedding unfairness in the tax system. There have been lots of rumours that there were going to be changes, but no action was taken.
The New Democratic Party tax probe pointed out a year ago that there were some 80,000 profitable Canadian companies which pay no tax at all. That figure is remarkably consistent year after year. It averages 75,000, 79,000, 80,000 companies per year, which means more than 25 per cent of companies do not pay tax. But did the Government move to make sure they will pay taxes this year? No, it did not. Did it indicate it even intends to do so? No, it did not. Again, there was no signal given.
We suggested that measures could have been taken which would have closed up the RRSP loopholes through the topping up which was brought in last year. The Government could have brought in revenues by closing off or by capping the tax exemption on capital gains. It could have begun to close the corporate tax loopholes not next year, but now. Was it done? No, not at all. That step was not taken. Instead, we are told that in 1987, we are going to lose $2.3 billion in revenues from corporations because of loss-carried-forwards and other fancy dodges which have enabled the corporations once again to pay less than their fair share of tax revenues.
I would now like to speak about the question of leadership. Leadership is what we looked for in a very real sense in this Budget. However, what we received from the Government this week has rightly been called a "do nothing" Budget. The economic and social challenges we face do not allow us the luxury of caretaker budget-making. Canadians have traditionally looked to their federal Government when there were major national problems to overcome, and that certainly applies now. That will not change. This country would not exist if it were not for the leadership of Sir John A. Macdonald in seeing that the Canadian Pacific Railway was built in order to link us from coast to coast.
The leadership of Conservative Governments, for example, has given us Air Canada, the Bank of Canada, and the Canadian National Railways. Many of these things came when Conservative Governments were in power. However, the neo-conservative doctrines from south of the border seem to have taken hold, and the need for that kind of leadership seems to have escaped the present Minister of Finance. I indicated the kind of leadership that we hoped to see in the area of tax fairness, but I think we need some other signals as well.
The Government should have given us a clear signal that it is committed to a real program of national child care with the federal Government helping to provide the resources with which this important program could be launched. My New Democratic colleague, the Hon. Member for Vancouver East (Ms. Mitchell), has been working hard for the last year in order to ensure that the Special Committee on Child Care does
in fact recommend what we New Democrats have been calling for for a long time, which is that Ottawa initiate a national program of affordable and accessible child care. It will cost about $320 million to launch that program. I suggest that that program and those expenditures are long overdue. We are concerned about job creation and we estimate that that program could create 50,000 jobs across the country in very short order. We certainly have a slack in terms of unemployed Canadians to meet those needs for workers, and I suggest that in terms of social justice, justice for families, for women, for both sexes, this is a program which is long overdue.
The kind of leadership we do not need is what my hon. friend, the Hon. Member for Yorkton-Melville (Mr. Nystrom), referred to the other day when he exposed the shabby plans of the Government to bring in a western initiatives program, trying to dress it up as something new. As my colleague pointed out, the sum total of this new regional initiative for the West appears to be the money it will cost to change the shingles on the offices of the Department of Regional Industrial Expansion in Saskatoon, Edmonton and Vancouver, as well as moving a few DRIE employees to a new office in Winnipeg. This kind of thing used to occur when the Liberals were in power. I do not know why the Conservatives have to copy-cat everything that was done by the Liberals when they were in power. When people talk about open Government, they are looking for something a lot more honest and substantial than that.
I want to talk now about the farmers who are concerned, and rightly so, about this Budget. In 1987-88, we will have a payment to farmers of $700 million, with the $1 billion payment, to compensate them for the disastrous economic situation into which they were plunged by the grain wars between the EEC and the United States in the 1986 crop year. What will happen with respect to that is that we have an ad hoc program for one year and no guarantee of consistency or continuation. Effectively, those farmers are not guaranteed in any way that they can pull through with the 1987 crop year. We need some openness and anticipation on that front.
I will come in a moment to a few specific proposals for economic development in our regions, but I suggest it is now time to make a fundamental change in our economic policy and in how we define our economic objectives. It is time for the Government to adopt a policy of full employment and to make the policy of full employment a centre-piece of economic strategy for the Government of Canada, not just in 1987 but in 1988, in 1989, and for the next decade, or whatever time it takes us to get there. I suggest in fact that within four or five years, we should be able to get to full employment, not just the 6 per cent the economists tell us is now the non-accelerating inflation rate of unemployment. We should be down to the unemployment rates which are experienced now in countries like Sweden and Austria and that we in this country experienced back in the 1950s and early 1960s. It should be possible to aim for rates of unemployment as low as 3 per cent or 4 per cent in Canada. I believe it is is possible and realistic


to talk about reducing our unemployment rate by 2 per cent per annum, that is, by reducing the number of our unemployed Canadians by 250,000 per annum year after year until we get down to a level of unemployment which is in fact tolerable and acceptable to all Canadians, not just to the financiers and investment analysts on Bay Street who seem to provide the Minister of Finance with most of his advice.
The facts about unemployment in Canada are very clear. All the projections tell us we will continue to have 1.25 million unemployed Canadians for the foreseeable future. Through no fault of their own, they will live in idleness wondering what they did wrong in order that the economic system can continue to function and so employees are assured of a docile labour force which will not make too many waves.

Mr. Speaker, when opinion polls are taken, Canadians say that unemployment remain their most important concern. As the Youth Commissioner in Ontario, Mr. Ken Dryden, the former goal tender for the Montreal Canadiens, recently stated in his report: Canadians believe that unemployment is the main problem but the government does not respond. Governments act as they please and do what is possible but unemployment remains at an unacceptable level. If unemployment remains at an unacceptable level, it is too bad for the government. Mr. Speaker, in spite of the social cost of unemployment, in spite of the impact of unemployment on workers who find their life senseless and feel that they are being edged out of society, we are still tolerating an excessive unemployment rate.
Mr. Speaker, apparently social consensus to reduce unemployment is inexistent but it would be advisable to have one. And this is what I am advocating for the New Democratic Party. It is high time for us Canadians to start thinking seriously about our future and follow the lead of countries such as Norway, Sweden, Austria and, up to the 70, West Germany, who decided that a full employment policy is as important as any other objective in terms of political economy.
That is what I am suggesting we should be doing now. Like other countries, we should go beyond the prevailing situation where unemployment is systemic in Canada and somehow accepted as part of the system. We must change the system and plan for progressive reduction of unemployment to levels that are acceptable and tolerable. I suggest that 9 per cent unemployment across Canada is intolerable, with 13 per cent unemployment in many of our provinces and 19 per cent unemployment in Newfoundland. That is intolerable and the Government must make a commitment now to change that.
I suggest to the Minister of Finance that we are not only talking in abstracts. That may be the way his officials and advisers on Bay Street advise him, but the 1.25 million unemployed are real people.
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Anyone who has visited a region of high unemployment knows that the whole community is affected. There is a sense of loss of opportunity, loss of mobility, and loss of dreams. There is no question that the high pool of unemployment that exists today helps to strengthen employers over employees, which can lead to unhealthy situations, to put it mildly, and can also adversely affect our productivity.
There is an intense sense of loss for the unemployed person because our society does not appreciate someone who is unemployed. Work is a major element in most people's lives because it gives them dignity, meaning, income, security, success, and self-esteem. In many ways, it is a major way for them to structure their time and provides a source of friends and social activities. It is difficult to hold up one's head when one does not have a job or know what to do, regardless of whether being unemployed is helping the over-all economic situation in the abstract.
I am sure most Members of Parliament from all Parties have shared my experience of being visited by unemployed people who have told how they feel depressed by that experience. For example, I advertised a job in my riding office a few months ago, for which 180 people applied. That is not an unusual number, and I believe that half of the people who applied were qualified and would have done a good job in the riding office for me and my constituents.
Often, employers do not answer letters from unemployed people. They feel harassed by a requirement in the unemployment insurance regulations by which they must go to a dozen job interviews every week in a depressed region, when they and the unemployment insurance officials know that there are barely a dozen employers in that area and there is no point in continually knocking on the doors if there are no jobs available.
While more humane treatment may help, it is not the answer. The real answer is to have fewer unemployed in our country. We should make the commitment now to lower our unemployment rate to levels that prevail in Europe. I admit that it will not be easy. I also grant that the New Democratic Party will come under close scrutiny for our economic policies in the coming months because of our position in the polls and that we will be contending as a major party in the forthcoming federal election. I will put before the people of Canada our commitment to full employment next to the commitment of the Minister of Finance to reduce the deficit. I believe Canadians will say that if they have a choice, they will choose full employment over whether the deficit is $28 billion, $29 billion, or $30 billion. The experience in countries like Sweden is that the measures that are used to achieve full employment are a good deal less traumatic than the initial commitment to achieve that.
I say honestly that I do not believe that a New Democratic Government can guarantee that every person who is employed will have a job working on a bank of computer terminals with which they control world-wide communications for some multinationals, or that they will have a job devising some new


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technique by which psychiatric care is brought to people who are previously helpless. While I hope that occurs, many of the jobs will be just that, a job. However, many people who are unemployed would choose that over their current situation.
Many people, particularly young people, begin their careers with jobs that may not be outstanding but that provide experience on which they can progress. That essential growing experience is being denied them now. That very important commitment to full employment must come first. That will not be achieved without the Government's commitment to work with the provinces and municipalities, big and small businesses, the voluntary sector, and the labour movement in Canada. This will require a change of attitude that will influence all of our policies. It may require a review of tax policies that favour capital investment, which can cost jobs, and a consideration of tax policies that may help to create jobs rather than destroy them.
We must develop a co-operative approach in which all elements of society work together to achieve the goal of full unemployment, both at a national level and in every region and corner of Canada.
We need a sense of greater openness from employers in this country. I suggest that there are employers in Canada who still operate in the days of the great trusts of the 19th century in terms of their understanding of labour-management relations. They should open their books and reveal the situation to their employees. They should enlist their support, but make sure they benefit along with their sisters and brothers, their children and communities. I would like to see employers work together to create jobs rather than destroy them. I believe that men and women workers across the country will respond to that kind of challenge. The leadership for such an approach could and should come from the Government.
It is time to begin our journey on that long road toward full employment.

When I travel in Quebec, I am sometimes amazed by the steps taken by the former PQ Government which was quite progressive in several of its economic policies. For instance, for the various targetted regions and industries in the province of Quebec, there exist consultation panels made up of representatives from the various municipalities, regions, companies, unions, labours, volonteers who work together looking for means to reinforce the industries which may be threatened by Government policy changes or competition changes.
As recently as last year, I took part in Montreal in a conference which was really a huge consultation panel to try and develop a strategy for the futur of the city and region of Montreal for the next twenty years. Everybody was around the table. The participants had spent months preparing for that meeting. Mr. Speaker, you are well aware of this effort and how it was constructive in terms of planning, strategy, consensus as to what had to be done.
Mr. Speaker, if this approach has worked effectively in Quebec, it could also work effectively elsewhere in Canada.
Mr. Speaker, I feel this is good and should be copied.

Let me give an example of exactly how that approach is working effectively with an NDP Government in another corner of Canada. In Yukon, which my friends there call the top left corner of Canada, the New Democratic Party has been in government for approximately one and a half years, with a majority government in the last few weeks. When they came to power, the unemployment rate in Yukon was approximately 16 per cent to 19 per cent. Today, that rate has been cut to 9 per cent, below the national average, and is still decreasing. That Government has functioned with policies which my friends describe as a combination of John Maynard Keynes and Fritz Schumacher. There has been a careful analysis of where Yukon was losing jobs and how jobs could be created by import subsidies and other measures, while working very constructively to gain a consensus from all elements of Yukon society. One of the most exciting things occurring in the Yukon is a program called Yukon 2000. It is a program of cooperative planning for the future of the Yukon up to the year 2000.
In just over one year the Yukon has used far more local wood and timber for the construction of government buildings than it did before. That wood creates jobs locally; the steel that was imported did not. The people of the Yukon will be burning wood waste in a central heating plant to be built in downtown Whitehorse. This means that they will be using local resources and creating local jobs rather than having to pay in exports of products from the Yukon for imported oil that comes from southern Canada.
There are many other examples of what the Government of the Yukon has been doing in a few short months, which suggests to me what we could be doing nationally. The Yukon is not Canada. The population there is less than 25,000. If the lessons there were to be applied to the rest of the country, I suggest that if every region and municipality, be they populated by 25,000, 100,000 or 250,000 people, were to get together and plan in the same way perhaps we could see some of those results as well. But that would require leadership on the part of the Government.
I wish to make a few specific suggestions in terms of helping to resolve the injustices of regional disparity in our country and provide the leadership that we lack in the Budget. We have been told by the Finance Minister that these initiatives should no longer be taken in Budgets. For God's sake, when will it all come together? I do not know the answer to that question. I do know that the forthcoming tax reform will not in itself have economic impacts that can be relied upon in terms of getting the economy back to work. That was the experience in the United States, and it will be the experience here.


We need action that is now, action that is dedicated to moving Canada to full employment and bringing down the rate of unemployment among younger Canadians. I wish to make a number of suggestions in that area. First, the Government of Canada should be co-operating with the provinces in which lumber is an important industry to ensure that there is a major program of reforestation in all those provinces. I regret the circumstances and the decision of the Government to impose the lumber export tax, and my Party has made our position clear on that particular question. Those tax revenues, if they are coming in now, should be used to protect and enhance a major resource so that we can leave it to our children and our grandchildren, as opposed to destroying it in this generation. That would be a major source of employment in one-industry towns in rural regions of Canada. We need programs for agriculture that will ensure government participation on more than an ad hoc basis to maintain the agricultural economic base in western Canada in light of what has been happening with the suicidal grain wars between the European Economic Community and the United States.
It is time that the Government of Canada, and it could have done it in this Budget, announced that it will definitely award the contract for the Polar-8 ice-breaker to shipyards in British Columbia where Versatile has, I believe, won the bidding, and that that be undertaken now as a job-creating initiative. It would be a sovereignty-defending initiative for all Canadians. I suggest that the design for the project be carried out using the Canadian experience and technology that was gained in the Beaufort Sea. I suggest that the Government should not thoughtlessly put to one side the experience that was gained in the Beaufort by Alberta companies by allowing a foreign shipbuilder to design the Polar-8 at costs which I understand will be much higher.
In terms of agriculture I say, on behalf of my friends from western Canada, is it not time we got Canagrex back in operation in order to ensure that we can effectively market Canadian agricultural products around the world? It should be reinstituted not just for our grain products but for our meat products as well. Is that not something that is a priority? I think that it should be. The child care proposals which I just put forward would create an estimated 50,000 jobs. In British Columbia and in the Atlantic much more can and should be done in the area of fisheries enhancement and experiments with fish farming to make that resource into a permanent source of revenue and of jobs.
During 1985 my colleagues and I travelled across the country conducting a task force on jobs. We found that the potential for job creation and economic development at the local level was far greater than many people in Ottawa in the federal Government's advisory forces comprehend. We concluded that Governments at all levels should be initiating programs of community-based economic development. This would involve municipalities and regional bodies, small businesses, co-operatives, trade unions and caisses populates, not just grants to big business.
The Budget-Mr. Cassidy
The Government of Canada should be engaging in long range economic policy planning with different regions and different municipalities. We need and should have an economic diversification fund for single-industry towns. We need advance notice of plant closures as a matter of legislation so that communities, in conjunction with the federal and local Governments, can plan for plant closures by trying to avoid them or by trying to redeploy resources in other forms of employment before those jobs are lost.
I suggest it is time to put into place a program for social housing that will increase social housing units to 50,000 per year. Too many Canadians just cannot afford the houses that are now being built. This measure would create tens of thousands of jobs at an expense which is affordable to the Treasury.
Because we have in mind the problems of the deficit and so on I also suggest that at the national and regional level many of the approaches to full employment need not necessarily be costly. I will give one specific suggestion. The Economic Council of Canada has been making some suggestions about people being able to bank a certain amount of their income in order to take it out at other times, enabling them to manage their incomes over time a bit better. I suggest there are many Canadians who would like to take a course, take a trip, spend a year with a young child who has just come into the world, or for some other reason they would like to take some time out of the workforce without losing their attachment to a job. I suggest that legislation to permit that should be seriously considered as a part of the Canada Labour Code. I also suggest that people who wish to do that should be able to put aside and shelter from taxation a certain amount of their income for perhaps two or three years in order that they can draw the income out and maintain an income stream when they have taken time off for their sabbatical year, their trip, to paint that painting or to take that course or whatever it is they plan to do.
We need to look at labour market policies in general in order to see whether there are means by which work can be shared more effectively or the obstacles to work-sharing can at least be re-examined to ensure that they are not unrealistic and do not force people to choose either to work full-time or not to work at all. The latter means that they must work full-time rather than lose their attachment to the labour market.
Canada's municipalities have been pressing for federal cooperation in terms of getting their economies moving and in terms of renewing the infrastructure of roads, hospitals, water and sewage works and other municipal services. That is a demand which would help to create 50,000 jobs if answered. I suggest that that, too, is something which should be responded to positively by the Government.
Finally, it is time that the Government of Canada, in conjunction with the provinces, acted vigorously in showing initiative with respect to the problems of youth.


I just quoted from the report of the Ontario Commissioner of Youth, Mr. Ken Dryden, who recommended a program of initiatives that would allow young people to start their lives at work or to get the training courses they need to enter the labour market. But indeed, Mr. Speaker, that report has been ignored.
My colleague, the Hon. Member for Windsor-Walkerville (Mr. McCurdy) proposed the same kind of initiative with Opportunities for Youth, that could provide young people between 18 and 22 with two years of experience in the form of training, in the form of a grant to become entrepreneurs, in the form of life experience or in the form of a grant for postsecondary education.
It is a tragedy, Mr. Speaker, we have half a million of our young people who are now unemployed, and certainly the Canadian Government should act, to ensure that all young people in this country can enter the labour market.
{English]
These are just a few ideas that I wanted to put before the Government. It seems that it has run out of ideas, which is why I will come in a moment to our amendment to the amendment to the motion of the Minister of Finance.
I am urging that we reorient our economic priorities. We cannot afford a "do-nothing" Budget. A Budget is not just an exercise at which to yawn; it is an exercise to give a sense of leadership, frankness, and fairness to all Canadians.
We acknowledge that there are problems with the Government's fiscal position. We are in a precarious state if the American economy, which has brought us up, turns downward. However, full employment policies do not only cost money. They bring in returns in terms of lower payments on unemployment insurance, lower payments on welfare, higher tax returns from corporations, higher tax returns from individuals who are back on the job, as well as higher returns in well-being and social cohesion in the common purpose of resolving our difficult problems.
This is why I believe we can face the scrutiny to which we will be put over the course of the coming months, now that the New Democratic Party has entered new grounds in terms of public support and is in fact a Party which will be vying for government at the time of the next federal election.
It is time that we made these commitments now. The Government must stand scrutiny for the fact that it has ignored the plight of most of Canada and has kept its vision blinkered. It has looked at the two economies and has seen only one, that is, the one of the rich, the one of the people around Bay Street and around southern Ontario, not the one of average Canadians across the country.
That is why I would like to move, seconded by the Hon. Member for Churchill (Mr. Murphy):
That the amendment to the motion of the Minister of Finance be amended by adding immediately thereafter the following words:
"and this House further condemn 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;
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.
That is our amendment. I hope it has the support of all Members of the House. I know, not just from the Gallup poll but from all other indications, that it has the support of far more Canadians than those who support the economic policies of the Government and of the Minister of Finance as announced yesterday.


Mr. Deputy Speaker:: We will proceed with the period for questions and comments after Oral Question Period. It being 1.47 p.m., I do now leave the chair until 2 p.m.
At 1.47 p.m. the House took recess.


[Stage Direction]
AFTER RECESS The House resumed at 2 p.m.

[Stage Direction]
[ Translation]

Mr. Fernand Robichaud (Westmorland-Kent):: Mr. Speaker, the Budget speech delivered in the House yesterday has hit the tourism industry head on. Once again the Minister of Finance (Mr. Wilson) has decided to boost the price of gasoline, the excise tax has gone up one cent a litre, and this adds up to a 350 per cent excise tax increase since this Government came to power. The Minister has also raised the air transportation tax by $4 per ticket.
Why did the Minister choose to trip the tourism industry, an industry which employs 600,000 people and could indeed create quite a number of new jobs?
Mr. Speaker, this Budget proves that the Government has no consideration whatsoever for the tourism industry, nor for all those Canadians who must drive their car to work.


CHARTER OF RIGHTS
Mr. Bob Corbett (Fundy-Royal):: Mr. Speaker, in 1981 I spoke during the Constitution debate and urged that the rights of the unborn child be included in the Charter of Rights and Freedoms. I still believe that an unborn child must be accorded every right to protection as accorded those who can speak in their own defence.
Undoubtedly there are instances where the life of the mother is at risk, and I believe that her right to life must be given priority. However, the killing of an unborn child as a method of birth control is unacceptable to me and to a great number of Canadians. I urge the Government to take the appropriate action to include the rights of an unborn child in the Charter of Rights and Freedoms.


POLITICAL PARTIES
Mr. Bill Blaikie (Winnipeg-Birds Hill):: Mr. Speaker, the Liberals have now had their first meeting of the Committee to Look at the New Democratic Party. It is called the first meeting and, therefore, presumably there will be others, despite the denials of the Hon. Member for Hamilton East (Ms. Copps) that NDP watching is now going to be one of her favourite pastimes.
We in the NDP are considering striking a Committee to Look at the Liberals, but we would hold such meetings in public where both the public and certain prominent Liberals would be invited to appear. The Leader of the Opposition (Mr. Turner) this morning on Canada AM said he knows where the tax loopholes are. He could explain that he knows because he created many of them when he was Finance Minister. Judy Erola, the new paid spokesperson for the drug multinationals, could be invited to explain the real Liberal policy on generic drugs. Or the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy) and the Hon. Member for St. Henri-Westmount (Mr. Johnston) could be invited to explain the Liberal view of free trade. Referees would be invited to this meeting.
Actually, Mr. Speaker, there was a committee that looked at the Liberals. A committee of the whole country looked at the Liberals in 1984 and threw them out of office. That same committee is now getting ready to throw out the Tories and, instead of going back to the Liberals, is looking to the NDP as the only genuine choice for a hopeful political future. That is why the Liberals are meeting, Mr. Speaker, but no amount of meetings will make the choice between Tweedledum and Tweedledee any less unattractive than it already is.


STATUS OF WOMEN
Mr. Gordon Taylor (Bow River):: 
THE BUDGET
Mr. Alfonso Gagliano (Saint-Leonard-Anjou):: Mr. Speaker, the Conservative Government is now going to take it out on children. Yesterday afternoon the Minister of Finance (Mr. Wilson) announced that, as of July 1, 1987, granola bars, ice cream and so many other candies and snack foods which children like so much will be taxable.
In this document which does not deserve to be described as a Budget, there is nothing for families, the elderly, and young people.
As of today, however, car drivers pay one cent more for a litre of gas, a total increase of four cents. Ever since the Conservatives and the Mulroney-Wilson tandem took over, all Canadians have been held hostages through these tax increases on fuel and the lack of energy policy of the Government.
Smokers have again been the victims of this Government which taxes, taxes, and taxes again.


Canada's tourism industry has also been hard hit by the Government. Air travel is becoming ever more popular, so the Minister raises the federal tax on this means of transportation to the tune of $4 a ticket.
In a previous Budget the Minister of Finance had promised less red tape for businesses. Today he announces that, twice instead of once a month, employers will be expected to remit source deductions on wages, thus making the administrative load that much heavier. This measure will seriously affect certain sectors of small- and medium-size businesses.


ENVIRONMENTAL AFFAIRS
Mr. Gabriel Desjardins (Temiscamingue):: Mr. Speaker, as a Member of the Special Committee on Acid Rains, I deeply regret the attitude of the Quebec Minister of Environment who, on January 28, 1987, refused to appear before our committee.
Since February 5, the Environment Ministers of Manitoba, Newfoundland, Nova Scotia, New Brunswick or their representatives, have appeared before our committee. The Ontario Minister of Environment did as recently as this morning.
Mr. Speaker, knowing that the second worst polluter in North America is found in Rouyn-Noranda, and knowing also the polluted state of our lakes, forests, and maple groves in Quebec, I feel that the Quebec Minister of Environment should have agreed to come before our committee to discuss this situation and seek appropriate remedies.
Mr. Speaker, I therefore urge the Quebec Minister of Environment to reconsider and to decide to appear before our committee.


HISTORIC EVENTS
Miss Aideen Nicholson (Trinity):: Mr. Speaker, each year Canadians of Estonian origin gather to mark the anniversary of February 24, 1918, the day Estonia proclaimed its independence as a free and democratic republic. For this small nation whose people have survived adversity and oppression without ever losing their desire for freedom, the hard-won period of independence was all too short. It ended in 1940 when the Soviet Union forcibly and illegally annexed the three Baltic States of Estonia, Latvia, and Lithuania.
At this time when the Baltic States commemorate their days of freedom, it is appropriate to reflect on the precious gifts of democracy and freedom which Canadians are privileged to enjoy but which are denied to citizens of other countries. I know all Hon. Members will join me in reaffirming the hope we all share that our efforts will one day bring about the restoration of freedom and basic human rights in Estonia.


EXTERNAL AID
Mr. Jim Manly (Cowichan-Malahat-The Islands):: Mr. Speaker, two days ago, Stephen Lewis, Canada's Ambassador to the United Nations, said that Africa will be in a state of endless poverty unless the international community increases its financial assistance. Lewis criticized the United States and the Soviet Union for cutting aid budgets and said that there has been a retreat from good faith on the part of several western countries.
Yesterday Canada's Finance Minister (Mr. Wilson) gave the developing world a bad-faith Budget. He juggled figures to save $150 million in cash payments, and still pretends to contribute .5 per cent of our GNP to development. It does not work. When the juggling is over and the balls have fallen to the ground there will be $92 million less for development. That money is urgently needed in the developing world. Once again the Government has welshed on the needs of the Third World.


TARIFFS
Mr. Lawrence I. O'Neil (Cape Breton Highlands-Canso):: Mr. Speaker, yesterday the Minister of Finance (Mr. Wilson) outlined the outstanding economic accomplishments of the Government. Lower interest rates and a growing national economy are the most important ingredients of regional development. Grants alone do not work. My riding is benefiting like never before because of this progress.
The Minister also lifted the tariff on Christmas trees entering Canada from the U.S. The tariff served the purpose for which it was imposed and brought home to the U.S. Congress that trade barriers can be imposed by the Government of Canada as well. Because it has been lifted, the Christmas tree growers of Nova Scotia will be relieved. They were concerned about possible U.S. retaliation.
This is one clear example of why we need a stable and secure trading relationship with the U.S. It is shameful that


the Opposition are opposed to securing that kind of a stable and secure trading environment with the U.S. Our Government's record is clear. It means better times for all Canadians in all regions. The Prime Minister (Mr. Mulroney) is showing what can be accomplished with strong leadership and sound management. All Canadians will continue to benefit.


SUPPLY AND SERVICES
Mrs. Suzanne Duplessis (Louis-Hebert):: As a woman, Mr. Speaker, I certainly want to congratulate the Minister of Supply and Services (Mrs. Veniza) on her recent decision to cancel a call for tenders because the bidders had failed to respect employment equity regulations. This demonstrates our Government's firm determination to do everything in its power to ensure a better integration of Canadian women in the labour market. This is another promise we had made during the last election campaign and which has been kept.
On behalf of all Canadian women, I congratulate the Hon. Minister on this wise decision.


AUTOMOTIVE INDUSTRY
Hon. Herb Gray (Windsor West):: Mr. Speaker, earlier this week the Minister of Regional Industrial Expansion (Mr. Cote) said he and his Conservative Government would not compel the new Japanese and Korean assembly plants in Canada to meet Auto Pact content requirements because to do so would discourage Japanese and Koreans from investing here. He also said he doubted that Canadian parts manufacturers could produce parts of the quality required by these new plants. Those statements shocked and dismayed Canadians because of what they showed about the lack of knowledge and support for this key Canadian industry by the Government.
We must insist that the Government immediately adopt a policy requiring all those who wish to sell cars in the Canadian market to play by the same rules and meet the Canadian content requirements. To do otherwise would put at risk tens of thousands of jobs. That may be the intention of the Government but that is not what Canadians want. We must insist that the Government understand and support the cornerstone of the Canadian economy, the Canadian auto industry, and the hundreds of thousands of Canadian jobs connected with it.


HISTORIC EVENTS
Mr. William G. Lesick (Edmonton East):: Mr. Speaker, on February 24, 1918, Estonia was proclaimed an independent democratic Republic. The country worked hard to establish itself under the harshest of post-World War I conditions. However, its freedom was short-lived. In June, 1940, the Soviet Union invaded that young country and shattered the dreams of a freedom-loving nation. Last December the Soviets had the gall to state that the people of Estonia joined voluntarily. That is nothing more than a deception. The democratic nation of Estonia was forced to give up its hard-earned independence and become a Soviet satellite.
Many people had to flee their homes and settle in other countries, including Canada. Every February 24 Canadians of Estonian origin remember their brief freedom as an independent nation. Let us join with them in commemoration of the anniversary and reflect on the importance of individual rights. We must never forget how precious freedom can be, and we must strive to ensure that democracy continues as our way of life.


THE BUDGET
Mr. George Henderson (Egmont):: Mr. Speaker, yesterday was a dark day for Atlantic Canadians. The Minister of Finance (Mr. Wilson) once again totally ignored them in his Budget. He ignored the plight of the unemployed, farmers, fishermen, and stopped the growth of our tourism industry dead in its tracks by adding another 4 1/2 cent-a-gallon tax on gasoline and diesel fuel.
Why is the Government treating Canadians in the poorer regions of the country this way? Is it because the Minister of Finance does not understand Canada? If so, what are Conservative MPs who also represent constituencies in Atlantic Canada doing? Why are they not speaking up in their caucus? Why are they not informing the Minister of Finance that Canada's financial house contains 12 rooms: 10 provinces plus the Yukon and the Northwest Territories, and that every room in the house needs some economic repair, not just the plush recreational room which houses the rich?
If the Conservative back-benchers are not delivering the message to the Minister of Finance, they are derelict in their duties as MPs. It is no wonder that they and the Government have lost the confidence of the Canadian people.


ADMINISTRATION OF JUSTICE
Mr. John Oostrom (Willowdale):: Mr. Speaker, it is becoming clear that our criminal justice system is on the verge of disaster. Last week in Toronto a convicted criminal who is serving a four-year penitentiary sentence for bombing his own disco was back in court to face additional federal charges of fraud. While he waited for his preliminary hearing he was allowed to roam freely because of a court order which allowed him to pay the cost of being driven by sheriffs officers each day between Beaver Creek and Toronto.
Does this mean that we have two classes of criminals, that those who can afford to pay can buy special treatment? All prisoners in his predicament are confined to the Don Jail for the duration of preliminary hearings. If the individual feared for his life, protective custody should have been implemented.
One cannot help but be amazed that this individual, a convicted bomber, was within three months transferred from Millhaven, a maximum security penitentiary, to Beaver Creek, which is known as the Muskoka Hilton. I urge the Government and the judiciary to extend no special treatment to those who break society's rules by committing criminal acts.


LABOUR CONDITIONS
Nelson Andrew Riis: Mr. Speaker, yesterday's do-nothing Budget was a cold, cynical betrayal of the hundreds of thousands of Canadians who are unemployed and under-employed.
Wake up, Mr. Minister of Finance (Mr. Wilson), and recognize the tragedy existing on Vancouver Island with 15 per cent unemployed, in the B.C. interior with 16 per cent unemployed, southern British Columbia with 20 per cent unemployed, the Kootenay region of B.C. with 17 per cent unemployed, northern B.C. with 13 per cent unemployed, western Alberta with 13 per cent unemployed, northern Alberta with 13 per cent unemployed, northern Ontario with 15 per cent unemployed, northern Quebec with 15 per cent unemployed, southeast Quebec with 15 per cent unemployed, the Gaspe with 23 per cent unemployed, Labrador with 27 per cent unemployed, Cape Breton with 23 per cent unemployed, New Brunswick with 14 per cent unemployed, Nova Scotia with 15 per cent unemployed, Prince Edward Island with 17 per cent unemployed, western Newfoundland with 27 per cent unemployed,	northern	Newfoundland with 26	per	centunemployed,	southern	Newfoundland with 25	per	centunemployed,	the south	shore of Quebec with 15	per	centunemployed,	the north	shore of Quebec with 14	per	cent
unemployed, northern Nova Scotia with 20 per cent unemployed, southern Nova Scotia with 16 per cent unemployed,
and Brant County with 10 per cent unemployed, et cetera, et cetera.


EQUALIZATION PAYMENTS
Mr. Jean-Claude Malepart (Montreal-Sainte-Marie):: Mr. Speaker, yesterday, the Quebec Government, through its Minister of Finance, Mr. Gerard D. Levesque, announced it was very disappointed in the Budget brought down by the federal Minister of Finance, and especially in the lack of any statement about refunds in terms of federal tax transfers and equalization payments.
Mr. Speaker, I would urge all Members of this House and especially the Conservative Members from Quebec to put pressure on the Minister of Finance and the Prime Minister, in order to ensure that the province of Quebec is given a fair deal in the equalization dossier and that the federal Government refunds as soon as possible the amounts being claimed by the Quebec Minister of Finance.


REGIONAL DEVELOPMENT
Mr. Dave Dingwall (Cape Breton-East Richmond):: Mr. Speaker, Canadians in this region are both disappointed and outraged at the failure of the Government to take concrete and specific actions with regard to rectifying the regional inequalities in the country. "Wealth not evenly spread" says Prime Minister (Mr. Mulroney); "Programs to reflect regional need", said the Prime Minister in August; and "East Coast, West to get special aid" said the Prime Minister. Then in his great Throne Speech, the Prime Minister says: "regional disparity remains an unacceptable reality of Canadian life".
I call upon the Government to stop talking through both sides of its mouth and to provide some economic aid to those poor regions of this country. You have $5.8 billion from the regional economic development envelope. You have added $5 billion in excess taxes to Canadians. I call upon the Prime Minister-


Mr. Speaker:: Order. I want to remind all Hon. Members that in this Chamber we do not say "you" when addressing questions to the Government or when the Government is


responding. I know the Hon. Member will be very careful not to do that.


David Charles Dingwall: Thank you, Mr. Speaker. I call upon the Right Hon. Prime Minister and the Minister of Finance (Mr. Wilson) to change their economic policies and address those economic disparities in this country. The Minister of Finance ought to know that unemployment in the regions of the country is unacceptably high. He has failed to address those very needs in the Budget. I wish the Government would exercise some political will and try to address the situation in order to provide economic stability to regions of our country.



ORAL QUESTION PERIOD


Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, my question is directed to the Minister of Finance. I think it is tragic that I have to remind him that there are hundreds of thousands of poor people in Canada. Why were the unemployed young people of our country forgotten in his Budget? Why were those who must line up publicly at soup kitchens and food banks forgotten in his Budget? Why were single mothers forgotten in his Budget? Why were the people of Atlantic Canada, the west and the northern part of our country forgotten in his Budget? Why were so many Canadians forgotten?


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, the Right Hon. Leader of the Opposition has it all wrong. They were not forgotten. I made specific reference to the problems that have existed in the regions of our country for some time now. For example, in western Canada we have addressed the problems in the oil and gas industry. We have addressed the problems with the farmers. We still must address those problems.
In Atlantic Canada there is the Atlantic Enterprise Program, the Atlantic Opportunities Program, and the Cape Breton Special Investment Tax Credit. We have maintained the regional investment tax credit. We have addressed these problems in many ways and we are seeing specific results.
The Hon. Member just referred to youth unemployment. When we came into office youth unemployment was 18.3 per cent. In January, 1987, it is 14.4 per cent. That is real progress.


Some Hon. Members:: Hear, hear!


TAX INCREASES-NATURE OF FISCAL REGIME
John Napier Turner: Mr. Speaker, I have another question for the Minister of Finance.
Oral Questions
Why should a single-parent family with an annual income of $15,000 pay $321 more than it did in 1984 when the present Government came to power? And why should a couple with two children and an income of $30,000 pay $1,020 more than in 1984? Why should Canadians trust this Government when the Minister of Finance himself has given them a tax system that is unfair and inequitable?


Michael Holcombe Wilson: Mr. Speaker, I do not like to remind the Hon. Member of how this began. We got started on this because we had to deal with a $38.3 billion deficit. That deficit began in 1972 when he was the Minister of Finance. Spending began to get out of control. During his time in office as Minister of Finance spending rose at an annual rate of 23 per cent and in the final year it was 29.8 per cent. That's a fact.


Some Hon. Members:: Hear, hear!


John Napier Turner: Mr. Speaker, I want to remind this Minister of Finance, just for the record, that when I left the high office he now holds, the public debt of this country was $25 billion. Next year he is going to leave it at $300 billion. I am also going to remind him that the last two surpluses in Canadian history were brought down when I was Minister of Finance.


Some Hon. Members:: Hear, hear!


John Napier Turner: That also happens to be a fact.


FUNDING OF REGIONAL DEVELOPMENT PROGRAMS
John Napier Turner: would like to remind the Minister of Finance that this country stretches from the Atlantic to the Pacific, up to the Arctic, and that a Budget ought to be a Budget for all Canadians.


Some Hon. Members:: Question.


John Napier Turner: I am going to put the question. Unemployment in Newfoundland, in Prince Edward Island, in Nova Scotia, in Alberta and in British Columbia is higher now than it was in the depth of the recession in 1982. I therefore ask the Minister why is it since his Government came to power it has slashed over $3 billion from the regional development programs of the country?


Michael Holcombe Wilson: Mr. Speaker, this Government came into office determined to deal with the problems. We are dealing with the problems. The Right Hon. Leader of the Opposition mentions the economic and regional development envelope. That was because there was $3.1 billion worth of spending because of the National Energy Program which has been removed. Is the Hon. Member, who is speaking out of both sides of his mouth on this one, saying we should go


Oral Questions
back to the National Energy Program or is he saying we should-well, he is shaking his head. He does not know which way he stands on that.


Some Hon. Members:: Oh, oh!


Michael Holcombe Wilson: Let me tell you, Mr. Speaker, just what we have done to deal with the problems of people who are in low income brackets. We have introduced employment initiatives to help those people get a job, to get the training. There has been $100 million devoted to that. We have a program for older workers to help them get back into the labour force. We have a refundable sales tax credit for those in low income brackets. We have the increase in the child tax credit and the acceleration of the payment of the child tax credit. These are all things which have been done to help those people and there is-


Mr. Speaker:: Order. I think we might observe that there are going to be some days of debate on the Budget and there is probably a more appropriate place to exchange all of these statistics.


TRUE SIZE OF DEFICIT
Raymond Garneau: Mr. Speaker, my question is directed to the Minister of Finance and concerns the sleight of hand we witnessed in yesterday's Budget. Yesterday, the Minister of Finance said that next year the deficit would be $29.3 billion.
If the Minister had not resorted to the subterfuge of making businesses increase their paperwork and submit their source deductions twice a month, the real deficit for 1987-88 would be $30.5 billion.
My question is as follows: Why is the Minister trying to cover up the real situation, and when is he going to admit that the actual deficit is still above $30 billion?


Michael Holcombe Wilson: Mr. Speaker, the record which was set out in the Budget stands on its own, and I think it is a record which is well appreciated by people who are students of this and who compare it to the record which the Leader of the Opposition presided over when he saw a $481 million surplus turn into a $4 billion deficit in three and a half years. Spending rose by 23 per cent per annum. The national debt grew by 50 per cent. The debt service cost grew by 85 per cent. These are matters that can be labelled on the man who sits beside the Hon. Member. The inflation rate doubled during that period of time. Unemployment increased by 164,000-


Some Hon. Members:: Order, order!


Michael Holcombe Wilson: -and the bank rate doubled.


Some Hon. Members:: Hear, hear!


PERSONAL AND CORPORATE TAXES
Raymond Garneau: Mr. Speaker, the Liberal Party was defeated and a new Government was elected in 1984-


Some Hon. Members:: Hear, hear!


Raymond Garneau: -with promises. The Government came to power promising to solve the problems of the deficit. After three years of economic recovery the deficit is at the same level that it was in the last complete year of the Liberal Government.
Why are the Minister of Finance and his Government trying deliberately to hide from the public the fact that individual Canadians will be paying more than $7.6 billion extra in taxes for 1987-88 while at the same time corporations will be paying $30 million less? Does the Minister think that is fair?


Michael Holcombe Wilson: Mr. Speaker, I think I addressed that very clearly last night. We have recognized that there is a problem in the corporate tax system. That is one of the reasons for tax reform. We have acted regularly, starting in October of 1984, when we stopped the scientific research tax credit abuses and when we changed the rules on the use of limited partnerships. We stopped carve-'*'uts, as well as the O&Y use of the tax system, something which the Right Hon. Leader of the Opposition brought in when he was the Minister of Finance. We have stopped all of these things.
We have also said that it is important to develop a general tax avoidance rule. These measures are designed to address the problem of the tax system. We are acting. We are not just talking about problems; we are acting on them.


Some Hon. Members:: Hear, hear!


CORPORATE TAX REFORM
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, my question is for the Minister of Finance. Yesterday afternoon the Minister presented a Budget which increased taxes on the average family once again, making the cumulative increase for individuals in Canada some $1,500 since the Government came to power. The Minister then went on television last night and said two things. First, he said that there are many corporations out there that are profitable but which are not paying taxes. Second, he said that it is too soon for corporate tax reform. My question is simply this. Why is it too soon for corporate tax reform but not too soon for the Government to soak the average family when it comes to taxes?


Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: Mr. Speaker, I could repeat the answer to the question I just answered. We are acting on this. We have acted in a number of ways over the


last two-and-a-half years to deal with these instances as they come up. We will do it further in a tax reform discussion paper which will be brought forward this spring. I hope this will gain the support of the Hon. Member and his Party.
Let me comment on the effects on individuals. The unemployment rate is down. Some 677,000 more Canadians have jobs. Short-term interest rates are down. People who are buying homes today will find that it will cost them on a $50,000-


Some Hon. Members:: Order, order!


Michael Holcombe Wilson: I know that the good news hurts over there.


Some Hon. Members:: Hear, hear!


John Edward Broadbent: Mr. Speaker, the news is that since this Government has come in corporate taxes have gone down 18 per cent, individual taxes have gone up 52 per cent, and unemployment in seven of the ten provinces is as bad or worse than when the Government was elected. That is the reality.


Some Hon. Members:: Hear, hear!


REDUCTION OF FUNDS FOR EQUALIZATION PAYMENTS AND REGIONAL DEVELOPMENT-GOVERNMENT POSITION
John Edward Broadbent: Mr. Speaker, today the unemployment rate in seven out of ten provinces is as bad as it was five years ago. Considering this fact, why does the Minister want to cut funds for equalization and regional development in this Budget?


Michael Holcombe Wilson: Mr. Speaker, both the Leader of the Opposition and his cell-mate have been using this statistic on the unemployment figures. In Newfoundland in September, 1984, the unemployment rate was 23.8 per cent, while in January, 1987, it was 19.2 per cent.


Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: In New Brunswick the unemployment rate was 16.2 per cent in September of 1984; it is currently 13.9 per cent. In Quebec the figure was 12.9 per cent in 1984; it is 10.8 per cent at present. In Ontario in September of 1984 the rate was 9.4 per cent; at present it is 6.6 per cent. The figure for Manitoba was 9 per cent in 1984; it is currently 7.9 per cent. In Saskatchewan it was 8.7 per cent in 1984; it is currently 7.3 per cent. In Alberta it was 12.1 per cent; it is now 10.8 per cent. In British Columbia it was 15.1 per cent; it is currently 13.6 per cent. Those are the facts from Statistics Canada. There are only two provinces in which the unemployment rate is higher, and it is just by a very small amount.


Some Hon. Members:: Hear, hear!
Oral Questions


REQUEST FOR CORPORATE TAX REFORM IN ORDER TO HELP REGIONAL DEVELOPMENT
John Edward Broadbent: Mr. Speaker, the reality is with respect to the comparisons between the depth of the depression and now. I can tell the Minister that he can go to most regions of the country and find that Canadians will tell him that unemployment is at a totally unacceptable level. That is what he will discover.


Some Hon. Members:: Hear, hear!


John Edward Broadbent: Mr. Speaker, I want to ask the Minister this, and I hope instead of rattling off statistics he will give
us-


Some Hon. Members:: Oh, oh!


Mr. Clark (Yellowhead):: Poor guy doesn't like the truth.


Mr. Speaker:: Order, please. The Hon. Member will
complete his question.


John Edward Broadbent: The third Party over there is having a little
difficulty today.


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!


Mr. Axworthy:: The fourth Party.


John Edward Broadbent: That is right; they are behind the undecid-eds.
I wish to ask the Minister this. Since the Minister pointed out last night that there are many profitable corporations which are not paying taxes and since he knows that there are many regions in Canada in which the unemployment level is unexceptionally high-


Charles Joseph Clark: Unexceptionally?


John Edward Broadbent: -unacceptably high, why did he not bring in corporate tax reform now and use the money from that for regional development in those parts of Canada that need it?


Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: Mr. Speaker, as a casual observer of the political scene I might say that the Hon. Member is not wearing his fleeting success very well.


John Edward Broadbent: That's really witty, Michael.


John R. Rodriguez: Strike one!


Mr. Keeper:: You know what you're talking about.


Mr. Nystrom:: Bring back Crosbie.


Mr. Speaker:: I ask Hon. Members to put their questions succinctly. Ministers, when questions are put succinctly, will deal with them in a succinct way. The Hon. Minister.


Oral Questions


Michael Holcombe Wilson: Mr. Speaker, the Hon. Member has raised the question of regional disparities. This is a question that I very clearly addressed in the budget statement in two instances. We have been acting on this, as I indicated in response to the Right Hon. Leader of the Opposition, and there are further steps to be taken.
The Prime Minister has asked for a report on regional problems in Atlantic Canada which will be forthcoming shortly. The Deputy Prime Minister has a working group under way within the Government to deal with the problems of western diversification. There are other measures being taken in relation to problems in northern Ontario and northern Quebec.
As I indicated in the Budget, decisions will be made and announcements will be made at the appropriate time. But there is clearly a record of achievement by the Government. There is clearly a sense of direction as to how we will address this problem and see some real solutions.


SALES TAX EXTENSION
Aideen Nicholson: Mr. Speaker, my question is for the Minister of Finance who, in his budget speech yesterday, denounced sales taxes as unfair, inefficient, and silent job killers, while at the same time he added yet more sales taxes, for a total increase of $8.7 billion in the sales and excise tax loads since the Government took power. Will the Minister tell the House why he continues to depend so heavily on a form of taxation which hurts people and which he himself claims to find distasteful?


Michael Holcombe Wilson: Mr. Speaker, the Hon. Member has quite rightly pointed to problems in the sales tax system about which I have been talking for some while now. The sales tax system is a silent killer of jobs. We have evidence in recent months where companies have closed down and moved to the United States, in part because of the impact of the sales tax system. I would hope, as we progress into sales tax reform, that she will understand and recognize that this is a problem and will look objectively and supportively at the reforms we will be proposing.


TREATMENT OF POOR AND UNEMPLOYED
Aideen Nicholson: Mr. Speaker, the Minister's rhetoric is good, but the fact remains that the Government is now stooping to wring nickels and dimes out of individual taxpayers who will be paying $7.6 billion in sales tax and income tax this year. What concrete assurance can the Minister offer today to the poor and unemployed who were left out of his Budget yesterday?


Michael Holcombe Wilson: Mr. Speaker, the poor and the unemployed have been well treated by the Government in the sense that 675,000 jobs have been created, which is the best way I know of getting people out of poverty,
off the soup lines, and into the workforce where they have jobs. We have also addressed very clearly-and we have addressed it in all parts of the country-the problems of low-income Canadians, with the refundable sales tax credit. I see an Hon. Member across the way laughing at the refundable sales tax credit. I do not think that the people in her riding are laughing at that. I think they are quite appreciative that the Government is addressing a problem with action, not the rhetoric that she comes out with.


FINANCE
Michael Morris Cassidy: Mr. Speaker, my question is for the Minister of Finance. There is a credibility problem. We have heard all sorts of promises about tax reform and about what the Minister will do next year. I want to ask him if there is any justice in the fact that, since his Government has come to power, taxes on individuals have increased by $23 billion while corporate taxes have gone down by $2 billion Is this fair?


Michael Holcombe Wilson: Mr. Speaker, Governments are here to deal with problems. We are dealing with this problem. I have said clearly that the problems which the Hon. Member has raised in relation to the corporate tax system are valid concerns. We are dealing with those concerns. We have shut down a number of the tax loopholes which corporations had been using regularly, during the 2.5 years we have been in office.
I announced last night that there would be a general tax avoidance rule which, again, is supposed to deal with corporations that are making excessive use of these tax avoidance schemes and to get profitable corporations paying tax. We have also said that in tax reform there will be a reduction of tax preferences which corporations can use. All these things are designed to deal with that problem. As I have said before, I hope the Hon. Member will support us when we get to that element of tax reform.


CORPORATE TAX REVENUE
Michael Morris Cassidy: Mr. Speaker, the latest unemployment figures show that, outside of Ontario, in the last year only 5,000 new jobs have been created since January, 1986. The Minister's own figures show that corporations are paying $2 billion less in taxes in 1987-88 than they were paying at the time the Government came into power. Why don't you take that $2 billion from corporations, which they should be paying, and get some jobs across the rest of the country?


Some Hon. Members:: Order.


Mr. Speaker:: Order, please. There has been a little slippage lately on the use of the word "you". Hon. Members know that that leads to disorder in the Chamber. I would ask Hon. Members to co-operate. The Hon. Member has put his question. It has been heard. We will hear the Minister.


Michael Morris Cassidy: Thank you, Mr. Speaker. I apologize-


Some Hon. Members:: Oh, oh!


Mr. Speaker:: The Hon. Member had completed his question. I ask Hon. Members to stay within the rules. The Hon. Minister will reply.


Michael Holcombe Wilson: Thank you very much, Mr. Speaker. I think Hon. Members of the House are quite used to the statistics which the New Democratic Party has used. Back in May, 1985, the Leader of the NDP said: "The effect of this is a net loss of 50,000 jobs this year and an additional 100,000 jobs next year". That is a very clear statement from Hansard. Since May, 1985, we have created
9.000	jobs in Newfoundland, 18,000 jobs in New Brunswick,
86.000	in Quebec, 222,000 jobs in Ontario, 25,000 jobs in Manitoba-


Some Hon. Members:: More, more!


Mr. Speaker:: The Hon. Member for Humber-Port au Port-St. Barbe.


THE BUDGET
Mr. Brian Tobin (Humber-Port au Port-St. Barbe):: Mr. Speaker, my question is for the Minister of Finance. Yesterday the Minister of Finance brought down a Budget, and today every youngster in the country is down in the basement looking for a secret place to stash their piggy banks in an attempt to keep their pennies from a Minister of Finance who wants to tax their granola bars, cream puffs, and other snacks. If the Minister were living in the real world, he would know that 1.25 million Canadians are unemployed, including 150,000 in Atlantic Canada, and that a kiddy tax is not the answer. Why were there no measures in the Budget to help the unemployed mothers and fathers, brothers and sisters of the nation?


Michael Holcombe Wilson: Mr. Speaker, what is the answer is lower interest rates. Interest rates have come down 3.5 percentage points from the time we took office. They had another drop again today, and we will probably see that trend continue because of the strong confidence in the Government and the way-


Some Hon. Members:: Hear, hear!
Oral Questions


Michael Holcombe Wilson: In specific answer to what we have done to address the problems of regional disparities in Atlantic Canada, I remind the Hon. Member that we have the Atlantic Opportunities Program-$600 million of federal purchasing will be directed toward Atlantic Canada. We have the Cape Breton investment tax credit. We have the special investment tax credit which is special for all Atlantic Canada. We have the Atlantic Enterprise Program. We have had ERDA agreements with each of the provinces. All of these are designed to address the problems of regional disparities and unemployment in Atlantic Canada. Things are starting to work.


CAPITAL GAINS TAX EXEMPTION
Brian Vincent Tobin: Mr. Speaker, the only way in which Atlantic Canadians were special in the Minister's Budget is that we were especially ignored. Not since Marie Antoinette said "Let them eat cake" has such an uncaring answer been given by a Minister to the poor and unemployed. How can the Minister continue to fatten the privileged few with a capital gains tax exemption worth $800 million this year, at a time when so many Canadians are doing without a job or a decent meal?


Michael Holcombe Wilson: Mr. Speaker, 1 think the Hon. Member has forgotten why the capital gains tax exemption was brought in. It was to help farmers. It was to help small businesses. It was to help give people the incentive to take money out of Canada Savings Bonds and put it into a new business which would create jobs. That is the reason we did it. I believe 475,000 jobs have been created since May 23, 1985, when that measure was brought in. That is the reason we brought in the capital gains tax exemption.


EQUALIZATION PAYMENTS-QUEBEC-GOVERNMENT POSITION
Mr. Robert Toupin (Terrebonne):: Mr. Speaker, my question is for the Minister of Finance. The have-not regions lost more ground yesterday as regional development expenditures have increased only by 1.7 percent, which is very little, and the Budget says nothing about equalization in spite of the fact that the changes made to the equalization program have resulted in a loss of about $100 million for Quebec.
My question is this: Can the Minister of Finance tell this House whether he plans to correct this unfair treatment for Quebec as soon as possible?


Michael Holcombe Wilson: Mr. Speaker, Quebec is not being treated unfairly, anymore than any other province. We have implemented a program to increase federal-provincial transfers and we have had a 5 percent rate of increase for equalization payments and a 5.3 percent rate of increase for education and health, I believe, and over the next five years, transfers to the provinces will increase from $65 billion to $90 billion. This is a major increase.


Oral Questions


QUEBEC'S INTENTION TO SUE FEDERAL GOVERNMENT
Robert Toupin: Mr. Speaker, this is not the opinion of the Quebec Finance Minister, since he is considering taking legal action against Ottawa to obtain justice in this matter.
Mr. Speaker, are court actions the only way for Quebec to obtain justice and to urge this Government to act?


Michael Holcombe Wilson: Mr. Speaker, the Minister of Finance in the Province of Quebec is free to hold his own opinions. 1 believe that increasing the rates of equalization by more than 5 per cent per annum last year, this year and next year, is the right way to go. We are fully in accord with our responsibilities under the Constitution. We have said we are going to increase the equalization next year and the year after under technical changes in the equalization formula, and I think that this indicates clearly the commitment of the Government toward assisting the provinces that are less well off.


STATUS OF WOMEN
Mr. Sid Fraleigh (Lambton-Middlesex):: Mr. Speaker, my question is directed to the Minister responsible for the Status of Women. The Canadian Advisory Council on the Status of Women is sponsoring a conference on the family, and for that I commend them. Once again, however, we see discrimination rearing its ugly head. REAL Women, who are perhaps one of the strongest advocates of the family, have been refused an invitation. The flimsy excuse being used is that they were invited last year and, due to the lack of space-


Mr. Speaker:: The Hon. Member is using a lengthy preamble to set the tone for his question. I think that the preamble has set the necessary requisites and I would ask the Hon. Member to put his question.


Sidney Arthur Fraleigh: Can the Minister offer an explanation for this apparent discrimination?


Hon. Barbara McDougall (Minister of State (Privatization)):: Mr. Speaker, let me say that I am very much looking forward to this conference which is being sponsored by the Advisory Council on the Status of Women. Seventy-five groups will attend from all across Canada, with regional and cultural diversity. There are over 1,000 groups from which they pick the 75, and some 30 per cent of those are turned over every year.
I might point out to the Hon. Member that among those attending are the Canadian Federation of University Women, the Canadian Nurses Association, Federation des Femmes du Quebec, the Federation of Junior Leagues of Canada. It will be a very fine conference in which there is no discrimination.


THE BUDGET
Mrs. Lucie Pepin (Outremont):: Mr. Speaker, my question is directed to the Minister of Finance.
After insisting on several occasions on the importance of the family, of employment equity, on the urgency and priority of child care, last night in its Budget the Government totally ignored these matters.
I should like the Minister of Finance to indicate to us what funds we allocated in last night's Budget for child care services? Why is there no funding provided in the Budget, contrary to what the Government had promised?


Michael Holcombe Wilson: Mr. Speaker, I think the Hon. Member is well aware of the process set in train in Vancouver last November at the First Minister's Conference where the Prime Minister asked the provinces to work with the federal Government in trying to develop the standards for a national child care program. That is under way right now. There will be reports coming back to the First Ministers whereby we can co-operate with the provinces in dealing with this important initiative. At that time we will be able to take decisions on how we can proceed with the funding.
In the budget speech I have said that processes such as this must continue, and at the appropriate time we will be taking the right decisions. There is opportunity to do so within the fiscal framework.
[ Translation]


ADHERENCE TO COMMITMENTS-GOVERNMENT POSITION
Lucie Pépin: My supplementary question is directed to the Prime Minister. Indeed, Mr. Speaker, at this Federal Provincial Conference which was held in Vancouver, the Prime Minister promised that there would be new money in the Budget for child care services. I should like the Prime Minister to tell us if he agrees with his Minister of Finance that there should be no funding in the Budget for child care services. Has the Prime Minister decided that child care services are no longer a priority for his Government? You made a commitment, Mr. Prime Minister. You stated publicly that funding would be provided for child care!


Michael Holcombe Wilson: That is not the
case, Mr. Speaker. I believe that I have responded to that question on the part of the Government. I have said very clearly that there is a process under way. When the recommendations are in from the consultation going on right now-


Lucie Pépin: There was a promise.


Michael Holcombe Wilson: I think that the Hon. Member should give me the courtesy of listening to my answer. I listened very carefully to her question.


Ms. Copps:: The Prime Minister made a promise.


Michael Holcombe Wilson: The process is under way right now. We are going to be able to make those decisions and provide funding within the context of the fiscal framework when those recommendations come forward.


Lucie Pépin: The Prime Minister said there would be money in the Budget.


CHILD CARE FUNDING
Ms. Margaret Mitchell (Vancouver East):: Mr. Speaker, my question is also on the subject of lack of any support for child care and families in the Budget. Canadian families with young children do not need a breathing-space kind of Budget. What they need is assistance right now. We have had this confirmed over and over again. We have a crisis.
Can the Minister of Finance tell us why the Government is stalling on child care promises? We have it documented that a promise was made by the Prime Minister of substantial support. Is the Government stalling to wait for the provinces because the Government has a cop-out? Is that what the Government is trying to do? The Government wants to cop-out on this altogether. Why aren't you-


Mr. Speaker:: Perhaps the Minister has heard the question and can deal with it in his answer.


Hon. Jake Epp (Minister of National Health and Welfare):: Nobody is copping out, Mr. Speaker. The Prime Minister gave a very clear commitment from the Government of Canada, in Vancouver.


Mr. Benjamin:: He is hiding.


Arthur Jacob (Jake) Epp: He is not hiding. None of us is hiding. Maybe you should hide behind your ignorance.


Some Hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. I am sure that if there is ignorance here, the Hon. Minister would wish to enlighten us all. The Hon. Minister.
Oral Questions


Arthur Jacob (Jake) Epp: Mr. Speaker, the Ministers of Health, the Ministers of Social Services along with the Minister responsible for the Status of Women very clearly-


Raymond Garneau: The Minister of Finance?


Arthur Jacob (Jake) Epp: The Minister of Finance is totally in agreement with it. The Prime Minister has given a direction. The Hon. Member is a member of a parliamentary committee and she doesn't have the report. She keeps talking here day after day. I ask that she give me the recommendations and then we will have the program complete so that by the end of the first half of this year the program can be pronounced by the Prime Minister at that time.


REQUEST FOR FUNDING
Margaret Anne Mitchell: Of course, the Finance Minister agrees, Mr. Speaker, because he does not want to spend any money on child care. This Party has presented recommendations to the Finance Minister-


Mr. Speaker:: I would ask the Hon. Member to put the question. This has been a very active Question Period and we are starting to run out of time. I am sure the Hon. Member can put her question directly.


Margaret Anne Mitchell: Mr. Speaker, if the Minister of Finance received the letter outlining our position on emergency funds for child care, and he did, why will he not take a leadership role and provide funds now? Will he reconsider at all?


Arthur Jacob (Jake) Epp: Mr. Speaker, the Hon. Member is putting forward a plan which was only accepted or put forward by Manitoba. None of the other provinces wanted to go that route. I wish the Hon. Member would start to understand that approximately 8 per cent of Canadians accept that route. Surely we must have an option and surely we must have different plans for different Canadian families. I wish the Hon. Member would move away from her approach which is that only she knows while the rest of us do not know anything about families and the needs of children.


THE BUDGET
Mr. Russell MacLellan (Cape Breton-The Sydneys):: Mr. Speaker, my question is directed to the Minister of Finance. The Government has been trying to decide how to finance assistance to the energy sector, whether it be through tax increases, the Consolidated Revenue Fund or perhaps depletion allowances. It has come down to the one-cent-per-litre increase on gasoline taxes and the equalling of the taxes on


Oral Questions
leaded and unleaded gasoline. However, the Government has forgotten one thing. It has forgotten to give assistance to the energy sector. Without any assistance to the energy sector, why is there this tax grab against Canadian motorists?


Michael Holcombe Wilson: Mr. Speaker, I think I said two or three times in the Budget Speech that we have acknowledged that the energy industry is going through some difficult times today. We have also acknowledged that one of the ways we can address this problem is through tax reform. We can address the problem in the energy industry in a more permanent way through tax reform. We have also said that as projects come forward in which there could be a role for the federal Government, we want to discuss them very carefully with the provinces and the elements of the industry involved to see if there is a role for the Government to play. These are things we want to do, and we will continue addressing these matters on an ongoing basis.


MINISTER'S POSITION
Russell Gregoire MacLellan: Mr. Speaker, honourable mention in the Minister's Budget will not help the energy sector. Why is the Minister using lower world oil prices to gouge Canadian motorists constantly?


Michael Holcombe Wilson: Mr. Speaker, I do not want to embarrass the Hon. Member by reminding him of what happened to gasoline prices during the period between 1980 and 1984. They went up quite significantly, and today they are down below the level of September, 1984. The Hon. Member should be quite aware of the record of the Government with which he was involved and of our record today as a Government.


SMALL OIL INDUSTRY COMPANIES
Mr. Ian Waddell (Vancouver-Kingsway):: Mr. Speaker, I wish to follow that up with the Minister of Finance. This morning I spoke to some representatives of the small petroleum exploration service companies in Alberta. They told me that they are simply dying and that the removal of the PGRT helped the big boys but did not help them at all. You raised $450 million by hosing the consumer again for one cent a litre-


Mr. Speaker:: Order. Let us try to concentrate.


Ian Gardiner Waddell: You are absolutely right, Mr. Speaker. I am sorry. I am losing my riding so that should concentrate my mind a bit.
The one-cent-per-litre increase means $450 million. Why does the Minister not put that into a special fund and earmark it for aid to small Canadian producers in western Canada?


Michael Holcombe Wilson: Mr. Speaker, I think we have indicated quite clearly by our actions last year, when we quadrupled the small producer tax credit and made changes retroactively to help those people who were providing funding through royalty income to the small producers, that we have responded clearly to those concerns. As I just said in response to a previous question, there is still more that might be done. We want to address this clearly and on a permanent basis through tax reform. I would appreciate the support and recommendations of the Hon. Member as we get closer to that date.


Mr. Speaker:: I will try to recognize a few more Hon. Members but-

-but I would ask Hon. Members to limit themselves to only one question. The Hon. Member for Montreal-Sainte-Marie (Mr. Malepart) has the floor.


THE BUDGET
Jean-Claude Malépart: Mr. Speaker, my question is for the Minister of Finance. The Minister is aware that in 1985 there were in Canada some four million men and women living below the poverty line. He is also aware that in every town and village in Canada, non profit organizations have to set up clothing and food banks, better known in Montreal as "La soupe". He will know also that the lineups in front of these food banks are getting longer every day.
Could the Minister indicate to Hon. Members as well as these four million people on what page of his Budget they are likely to find a way out of their poverty?


Michael Holcombe Wilson: Mr. Speaker, I think that for Canadians the best way out of poverty is through employment. We have created 675,000 jobs. In the province of Quebec, we have created eight times more jobs than the previous Government.

In addition to that, I have outlined clearly with the refundable sales tax credit, with the acceleration of the child tax credit and with the increase in the child tax credit, that all these are designed to help those below the low-income cut-off line. The results show that 263,000 fewer Canadian families are below the low-income cut-off line. That is progress.


CANADA PENSION PLAN
Mr. David Daubney (Ottawa West):: Mr. Speaker, my question is for the Minister of National Health and Welfare. In January the Government increased disability payments under the Canada Pension Plan by $150 per month. This benefited over 150,000 Canadians. However, 20,000 of the poorest disabled Canadians have found that this increase has been erased by a reduction in provincial welfare payments. In light of the fact that these federal increases were designed to help precisely those disabled Canadians in the poorest category, what action will the Minister take to ensure that increases in federal disability payments are not effectively cancelled by provincial government reductions?


Arthur Jacob (Jake) Epp: Mr. Speaker, the change in the Canada Pension Plan disability benefits of a maximum increase of $150 per month is something we were hoping we could pass right through to those who are disabled. A number of provinces have decided, either through municipal welfare programs or provincial welfare programs, not to pass through the full amount or to retain some of the amount. Prior to the effective date of the legislation, I had written that it would be my hope that the passthrough would take place and would include drug cards and that type of thing.
There is a problem in the Canada Assistance Plan and I believe we have to address that, but I want to see those benefits passed through. I should say that when I have talked to companies about every case that has come to my attention, I found that companies have passed through the entire amount this Parliament gave in increases through the CPP.


Mr. Speaker:: It is with regret that I must advise the House that the Oral Question Period is now over. The Hon. Member for Charlevoix (Mr. Hamelin) rises on a question of privilege.


PRIVILEGE
Mr. Charles Hamelin (Charlevoix):: Mr. Speaker, I would like to raise a question of privilege concerning my rights as a francophone Member of Parliament and the rights of anglophone Members in this House. Mr. Speaker, as I pointed out to you, when some doubt arose as to whether the Official Languages Act of this country applied to Parliament, the law clerks of the House of Commons and the Senate were asked for a legal opinion. In fact, since 1981-


Mr. Speaker:: I'm sure all Members are very much aware of the subject the Hon. Member is raising. It is a difficult and
Privilege-Mr. Hamelin
very important matter, and for that reason, I would ask all Members to listen with some-
I would ask all Hon. Members to quieten their discussions because the point the Hon. Member is making is an important and difficult one and deserves the attention of the Chamber.


Charles-André Hamelin: Mr. Speaker, this question is indeed very important because, as I said before, four legal opinions have been drafted since 1981: on June 5, 1981, by the Law Clerk of the House of Commons, Mr. Maingot; in November 1981 by the Law Clerk of the Senate, Mr. Raymond L. du Plessis; on June 4, 1986 by the Law Clerk of the House of Commons, Mr. Marcel L. Pelletier; and recently, on February 16, by the Law Clerk of the Senate, Mr. du Plessis. These legal opinions all concluded that the Official Languages Act of Canada, adopted nearly twenty years ago, does not apply to this Parliament.


An Hon. Member:: Shame!


Charles-André Hamelin: Imagine, Mr. Speaker, this fundamental legislation does not apply to the Senate, to Parliament or its components. This conclusion is justified on the basis of the terms used in Section 2 of the Official Languages Act, namely, "all the institutions of the Parliament and Government of Canada". In fact, Parliament is governed only by the Constitution of this country and cannot be subject to the jurisdiction of the courts unless it specifically so decides in the Constitution. And that apparently is not the case. Furthermore, the terms "institutions of the Parliament of Canada are not specific enough to mean Parliament itself, since there is a distinction between the institutions of Parliament and its constituent parts, the institutions being those created by Parliament, including the Library of Parliament and the parliamentary committees, while under Section 17 of the Constitution Act, 1867, Parliament consists of three components, namely the Queen, the House of Commons and the Senate. This distinction between the institutions and the constituent parts of Parliament is sufficient reason to conclude there was no specific intention on the part of Parliament to be bound by Section 2 of the Official Languages Act.
The conclusions of all three law clerks are quite clear in this respect, and to quote Joseph Maingot: "The Official Languages Act is so unspecific with respect to the House of Commons that I can say that in law, one cannot give it that interpretation". I would now like to quote Mr. Pelletier, Law Clerk of the House of Commons: "In concluding, I may repeat with even greater emphasis than the previous Law Clerk that the Official Languages Act does not apply to the House of Commons nor to its officials in the performance of their duties". And now, Mr. du Plessis:


Privilege-Mr. Hamelin

"Therefore, because of the imprecise nature of the language as used in the Official Languages Act when it refers to Parliament, the Act cannot be held to apply to the administrative offices and staff of Parliament."

Finally, as concerns the status, rights and privileges of Canada's official languages under Subsection 16(1) of the Canadian Charter of Rights and Freedoms, they are enounced nearly word for word in the same terms as in Section 2 of the Official Languages Act, including the words "in all institutions of the Parliament and government of Canada". The Canadian Charter of Rights and Freedoms adds nothing to the status, rights and privileges of English and French in Parliament itself, or its constituent bodies. This explains the following comment of the House of Commons law clerk, Mr. Pelletier: In my opinion, the Charter says nothing about the language in which the Houses of Parliament must serve the public and the working language of their employees.
I could continue, Mr. Speaker, but I shall stop here. I have given you a document on this matter. However, I find it rather uncomfortable, and that is an understatement as I could say ridiculous or even crazy, for this Parliament to have established a Standing Joint Committee on Official Languages in Canada and for Parliament itself to be exempt from the law.
We, the members of the committee, which includes representatives from the Senate, the opposition and the Government, must remonstrate with federal institutions, agencies and departments, while we ourselves are above the law.
I find this completely ridiculous. As co-chairman of this committee, I look silly remonstrating with parliamentary institutions, departments or agencies when my own House of Commons and the Senate seem to be above the law. I find this completely ludicrous. I am ashamed of the fact that the law still fails to recognize the basic right to linguistic duality in Canada. Does the sovereignty of this Parliament put it above the law? I do not think so, Mr. Speaker. I hope, and this is my appeal to the Government, that the Official Languages Act, which is to be amended in the near future, will contain specific provisions saying that Parliament, its constituent bodies and its institutions are directly and necessarily bound, as they should always have been, by the Act as amended.
Mr. Speaker, in view of what you said earlier in my intervention, I rely on you to guarantee my rights as a Frenchspeaking parliamentarian so that, with you and within these walls, I may truly live the linguistic duality of this country.
I would like to add, Mr. Speaker, and I shall close on this point, that, under the law, our translators could leave and we could have our the debates in English only. I repeat that, under the law-


An Hon. Member:: The debates in French!


Charles-André Hamelin: -or the debates could be in French only. Imagine in what a ridiculous situation this place us.
Mr. Speaker, I am relying on you and on the Government to see to it that this montrous anomaly is corrected as soon as possible.
Thank you for your attention, Mr. Speaker.


Philip Derek Lewis: Mr. Speaker, I want to compliment my colleague on his argument and the effort he has made to research it. I have not had an awful lot of time to try to put my thoughts together on the matter, so in trying to address the question of whether or not the language of Parliament was either English or French I took for my instruction the Constitution Act and referred to the same section my hon. colleague referred to in which it says:
16. (1) English and French are the official languages of Canada and have
equality of status and equal rights and privileges as to their use in all
institutions of the Parliament and government of Canada.
My hon. colleague argues that since the Official Languages Act was passed some 20 years ago and does not specifically refer to Parliament, that leaves us in sort of a conundrum. It seems to me that the Constitution Act takes care of that matter in Section 16 and makes French and English, on an equal basis, as it obviously should be, the working language of Parliament. We see every day in the institutions of Parliament, that is the buildings, the committees, and the various ways in which we function, that both languages have official status and can be used interchangeably. I listened to my colleague's comments on the legal opinions of persons probably more learned than I in constitutional law. However, I still refer to Section 16.
While this is an interesting point, I am not sure that it is a question of privilege because the right of my colleague to use either French or English-and he uses both very well in this House-is enshrined in Section 16 of the Constitution. In my opinion, in no way is my hon. colleague or anyone in this House restricted in the use of either language. Translation is provided in the House of Commons thanks to the Right Hon. John Diefenbaker who instituted it and thanks to all of us who make sure that translation services are available at every committee meeting. I believe that the House of Commons, the Senate, and the other institutions which together form the Government of Canada, are in fact living Section 16 of the Constitution every day.
I submit, first, that the use of both languages is provided for in the Constitution. Second, I submit, not to diminish the point which my hon. colleague makes, that it is not a question of privilege because his right to use either language is protected in this House and all the institutions of Parliament.


Lucie Pépin: Mr. Speaker, I should like to ask you to give serious consideration to the request of the Hon. Member for Charlevoix (Mr. Hamelin). As assistant critic in the field of the official languages I know that the Hon. Member for Ottawa-Vanier (Mr. Gauthier), who is responsible for this question, would want to express strong support for the request made by the Hon. Member for Charlevoix. I think it is very important to give careful consideration to this request.
I also have another favour to ask you. When you study the request concerning the official languages, I would like you to consider the feminization of words, for every time we ask that a report be written in French we are invariably told that there can be no question of feminizing words because this is not covered by the Standing Orders of the House and, as it happens, it is up to the Committee on Official Languages to enforce it. Since we now seem to be experiencing some difficulty with respect to the official languages in the House, the time might be appropriate to consider this other issue as well. I should think that it has now become common to use feminine words when referring to Canadian women and, in my opinion, the House of Commons should be up to date in the presentation of its reports and documents.
So I would urge you to give serious consideration to the request of the Hon. Member for Charlevoix with respect to the official languages, but to consider as well the feminization of words in all House of Commons reports.


Mr. Jacques Guilbault (Saint-Jacques):: Mr. Speaker, I would like also to make a few submissions in order to assist you in dealing with the matter at hand, the question of privilege, since you will have to determine later on whether the privileges of the Hon. Member for Charleboix have been breached, as he has submitted.
The matter he is raising, that the Official Languages Act may not apply to Parliament, is not new. It has been raised on a number of occasions in this House, for instance by the Hon. Member who usually sits next to me, the Hon. Member for Ottawa-Vanier.
I also had an opportunity to read legal opinions submitted by Mr. Maingot, Mr. Pelletier and others.
However, I would remind Your Honour that they are just that, legal opinions, and indeed only the courts could rule whether the Official Languages Act applies to Parliament, the House of Commons and the Senate. It is ironic that the application of the Official Languages Act to the House of Commons is being debated, because certainly this is the most bilingual of all federal institutions. All documents here are published in both languages. All debates here can be held in both languages. We have here simultaneous translation, both in the House, in Commitee of the Whole and in our standing committees. However, this is the point the Hon. Member for Charlevoix (Mr. Hamelin) chose to rise just the same.
Privilege-Mr. Hamelin
I respectfully submit, Mr. Speaker, with the purpose of assisting you in reaching a decision, that the Hon. Member's privileges have not been breached, because this would have required something to have happened here in this House, within this Chamber, or in one of our committees or in one of our offices, through which the Hon. Member would not have been served in his own language, or would have been deprived of the right to use the language of his choice-something like the absence of simultaneous translation that would have prevented the Hon. Member or some of us from understanding in their own language. But this has not happened to my knowledge.
I think what the Hon. Member is attempting to do is indicate he is not satisfied with the fact that in his view the Official Languages Act does not apply to Parliament. Therefore, this is rather a point of debate as to the interpretation of the Act that he is rising, and in my view he cannot content, as far as the Standing Orders are concerned, Mr. Speaker, that the privileges of a Member have been breached, since Members can speak in the language of their choice, and receive all the documents in both official languages.
In order to pursue his worthwhile goals, and I commend him for that, the goal is to ensure, and I also agree with that, that the Official Languages Act apply to Parliament, the House of Commons and the Senate. At that point, what should be done is this-an amendment should be introduced here, to clarify whether the Act applies to Parliament. The Hon. Member did not do that. Rather, he chose to raise a question of privilege, and I submit that in so doing he erred.
I feel that the Official Languages Act should be amended. I would invite the Hon. Member to do so. If he does not intend to do it, I myself will introduce an amendment in this House, because it should be clear that Parliament must be subject to bilingualism. Even if in effect Parliament has always respected both official languages, it is clear to me that the Official Languages Act should apply here beyond a reasonable doubt. But as far as privilege is concerned, it is my view that Your Honour should not rule there is a prima facie case, because there is none.


Mr. Speaker:: The Hon. Member for Charlevoix (Mr. Hamelin) on the same issue.


Charles-André Hamelin: Mr. Speaker, I have listened carefully to the argument of my hon. colleagues. However, I wish to explain that for me, it is not a matter of customs, or a matter of services which are effectively . . . Just now, in the House of Commons, we are quite properly provided with services in both official languages. I feel it is a matter of right. I am not asking for a handout as a parliamentarian; it is a matter of right which is not based on customs. Does this Parliament, the Senate and its components recognize bilingualism as a right the Canadian reality of this linguistic duality which is essential to this country? I feel as a parliamentarian that my right has been denied.


Privilege-Mr. Hamelin


Mr. Prud'homme:: If I may, Mr. Speaker, I should like to deal for a few moments with this basic issue raised by the Hon. Member for Charlevoix.
You will remember Mr. Speaker, and so will Hon. Members who were here before 1984, the determination and dedication with which the Hon. Member for Ottawa-Vanier (Mr. Gauthier) pursued this matter. He showed tremendous courage at the time because a great many people were wondering what he was talking about whenever he raised the issue of bilingualism in Canada. Perhaps the Hon. Member wants to refer to the imprecise nature of the language used in the Official Languages Act. The Hon. Co-Chairman of the Committee on Official Languages is aware of it, because he co-chairs the committee with the Hon. Member for Ottawa- Vanier whom he has known since he was elected in 1984. I congratulate him for his dedication to this important cause. We are not asking for favours but, for what I consider our basic rights. The Hon. Member for Charlevoix knows full well that, after his election, the Hon. Member for Ottawa-Vanier recognizing his interest in this issue, joined forces with him and they became friends of sort.
Before you reach any decision today, I submit, Mr. Speaker, that because this is a basic and non-partisan issue- The Hon. Member for Charlevoix has proved it. The Hon. Member for Outremont (Mrs. Pepin) has brought in new elements. My colleague and Acting Leader in the House, the Hon. Member for Saint-Jacques (Mr. Guilbault) commented on the matter. But it is the whole matter which has always been questioned. One day, we will have to reach a conclusion: Does the Official Languages Act apply to the House of Commons and the Senate, yes or no? We believe that it does. But others say no. This is a legal matter. I know that the Government is about to introduce major amendments to the Official Languages Act. It is a golden opportunity. Before Your Honour deals with this issue any further, he might want to get in touch with my colleague the Hon. Member for Ottawa-Vanier who, for the first time since 1984-it is rather exceptional, a coincidence, I am sure, but is away today on official business. You are well aware, Mr. Speaker, of how attentively he has approached this question in the past, as I mentioned earlier, and before the Chair takes this matter under advisement over the next two weeks I am sure that the Chair might be interested in convening jointly the Hon. Member for Charlevoix and the Hon. Member for Ottawa-Vanier since this is in fact an issue which goes beyond party politics.
If I may at the same time, as your president for Members' Services, avail myself of the opportunity-and a golden one it is for me-which the Hon. Member for Charlevoix has given us, I would like to raise the whole question of bilingual services for Members. I am here as a Francophone. First and foremost,
I am here as a Canadian.


George Albert Proud: I am here as a Canadian first. I have always said that, in both languages.

But I am a Quebecer and French is the primary language I have been using for the last 23 years. However, for reasons that have to do with the reality of Montreal, with the makeup of my own riding and with the membe ship of all committees, I am obligated to function in both languages, along with a minority of Members.

Some of us must face that daily. I have always asked Members, who I believe are reasonable and may use only one language, to understand, if they have difficulty functioning in one language and are recognized as first class Members of Parliament, how difficult it is for those of us who must function in both languages daily. I believe I am one of those Members. The law requires that I serve my electors in both languages and I like to attend every committee where both languages are used. While there is not a great percentage of Members who must do so, I feel that we are at a real disadvantage when we offer these services because we have the same staff and same background.
Your Honour and your predecessor were kind enough to acknowledge that there was a certain class in the House for services. I was pleased to recommend to you and your predecessor, Mr. Speaker, that we have certain services under the heading "territorial". My district is small, but I must use every language in the world. The Minister of State for Multicultur-alism (Mr. Crombie) knows that every language is used in my district. However, we came to an agreement that some Members should receive supplementary services under the heading "territorial". Some Members have many more electors than others. In Toronto, for example, those Members may have two to three times as many electors as I. The committee would decide that since I can walk in my constituency, in which I have the average number of electors, I would receive a certain amount of money and not be a candidate for supplementary services. However, I have the additional difficulty of the fundamental requirement for bilingualism. In this respect, some Members are at a real disadvantage.
I am sure the Hon. Member for Charlevoix (Mr. Hamelin) will not press you for an immediate answer. While Your Honour is reflecting on this question, may I humbly submit that you should also consider the fact I have just brought to your attention publicly. I was going to do so privately, but since this is a non-partisan issue, I can raise it in public as well.


Mr. Don Boudria (Glengarry-Prescott-Russell):: Mr. Speaker, I want to take a few minutes to speak on this very important issue. First, we all recognize that the topic raised today has been brought to the attention of the House on several occasions as a result of interventions by the Hon.


Member for Ottawa-Vanier (Mr. Gauthier) who has often stated in the House that in his opinion, and in the opinion of others, a law appears to be deficient in terms of its application to the House of Commons.
I believe there are two necessary elements required when one raises a question of privilege. First, we must be speaking of the privileges of the House itself, and second, there must be at least an allegation that the privileges have been breached. I do not believe that inquiring as to whether a statute of the Parliament of Canada is binding on the House of Commons is a question of privilege in itself.

However, I would like to say, Mr. Speaker, having expressed the opinion that this is not a question of privilege, that it might be appropriate to enquire as to whether this legislation supports the Standing Orders of this House, not necessarily the privileges of this House but the Standing Orders.

In other words, while there may not be a question of privilege, an interesting question could be raised on a point of order if one of the services that is customarily available, according to the Standing Orders of the House, was suddenly not available to a Member of Parliament. The Member could then make a case that there would be a point of order.

Let me explain, Mr. Speaker, that according to the Index of our Standing Orders, Standing Orders 59, 70, 77, 96, 77(2), 110 and 135 specify what procedure is to be followed or what rule concerning official languages in this House is to be enforced.
Therefore, I think that if at a given time the Hon. Member for Charlevoix found out that some services available or which should be available to the members of this House under our Standing Orders are unavailable to him, he could then rise on a point of order rather than on a question of privilege.
This is why I would like to make a distinction, because as I said earlier, inquiry about our Standing Orders or about whether an Act of Parliament applies to this House would not be a question of privilege per se. On the other hand, as far as services available to this House are concerned, under the Standing Orders, this would be, in my humble opinion, a point of order rather than a question of privilege affecting this House.


Mr. Dave Nickerson (Western Arctic):: Mr. Speaker, what you have to decide is whether, in fact, according to the narrower rules of the House, a prima facie case of privilege exists. You are not called upon to find whether it is good, bad or indifferent that the Official Languages Act may or may not apply to the Parliament of Canada. I would suggest that if the Hon. Member for Charlevoix (Mr. Hamelin) feels strongly that that Act should apply then, of course, he is quite free to
Privilege-Mr. Hamelin
pursue that through the normal channels, to try to effect the necessary, in his opinion, change to that particular statute.
I would point out, Your Honour, that there are several other statutes of otherwise general application which exempt Parliament from the full force of that particular statute or part thereof. One which immediately comes to mind is, of course, the Canada Labour Code. I would suggest that it is incumbent upon the Hon. Member to demonstrate that some actual and not some hypothetical breach of privilege has actually occurred.
Even if the Hon. Member was able to demonstrate that in some way his ability to act as an Hon. Member of this House has been taken away from him because, like myself, he is only able to properly function in one of the official languages, the remedy for that might be through the normal rules and practices of this House rather than by a change or amendment to the Official Languages Act. Therefore, as much sympathy as I might have for the point made by the Hon. Member, I would suggest that no actual breach of privilege has been demonstrated and, therefore, there is no prima facie case.


George Albert Proud: Your Honour, I thought we could leave that to you, but if the Hon. Member brings in new argument, of course, I think I am bound to answer some of his argument.
I did not expect it, I must admit. I would prefer though, not to open up debate yet on the Official Languages Act, but Your Honour may find-and I do not want to go that way-that there is indeed a prima facie case of privilege. Perhaps Your Honour will look into it and be of the opinion that the Hon. Member for Charlevoix is right. That may present an anomaly.
Your Honour may say that indeed you have discovered, to your surprise, that to the best of all legal advice the Official Languages Act does not apply technically or legally to the House of Commons. The Hon. Member for Ottawa-Vanier (Mr. Gauthier) year after year wanted to present a special Bill on this question. Your Honour may come to the conclusion that indeed the Official Languages Act does not apply to the House of Commons so, therefore, the Hon. Member was right to raise the question. The Hon. Member would be then satisfied that Your Honour has said, no, it does not apply. Then the Hon. Member will know which other course he would have to follow.
Therefore, I would prefer to leave this for the reflection of the Speaker. If the Chair says there is no prima facie case of privilege, well, then we can find arguments not to contradict, but so that we may not leave the Chair on the one track we would not like it to take.


Mr. Speaker:: I think perhaps the Chair should consider the comments made by each Member. The Hon. Member for Charlevoix (Mr. Hamelin) had some very interesting things to


Business of the House
say, and I agree this is indeed a serious matter. Now, it may or may not be a question of privilege.
I think I will need time to consider all the points made by Hon. Members, but in any event, this may be an anomaly, and it certainly is a rather extraordinary and even bizarre situation, because in practice, at the House of Commons we provide every opportunity for every Member, anglophone and francophone, to speak and work in both languages. Obviously this is not the exception but an ongoing and normal practice in this House as it is in the committees and everywhere else on the Hill. Apparently, however, we have a legal opinion, a very intelligent and enlightened opinion, that has concluded that for a variety of reasons, the Official Languages Act does not apply to the House. If this opinion is correct, we have a situation that is quite extraordinary.
For the time being, I intend to defer my ruling, but I am most grateful to the Hon. Member for Charlevoix (Mr. Hamelin) and to the other Members, the Hon. Member for Glengarry-Prescott-Russell (Mr. Boudria), the Hon. Member for Saint-Denis (Mr. Prud'homme), the Parliamentary Secretary, the Hon. Member for Western Arctic (Mr. Nickerson) and the Hon. Members for Saint-Jacques (Mr. Guilbault) and Outremont (Mrs. Pepin). And I think it would also be appropriate for me to recall the views held by the Hon. Member for Ottawa-Vanier (Mr. Gauthier), who unfortunately is engaged elsewhere today. This is a subject that is very important to the Hon. Member for Ottawa-Vanier as well. In any case, the Chair feels that the best thing would be to adjourn debate so that we will have a chance to consider all the arguments and comments we have heard. Consequently, I shall defer my ruling. I want to thank all Members for their comments. The Hon. Member for Charlevoix (Mr. Hamelin).


Charles-André Hamelin: Mr. Speaker, I just want to thank you-


Mr. Speaker:: I hope this is not on the same question.


Charles-André Hamelin: Mr. Speaker, I simply want to say that I greatly appreciate your very receptive attitude to this subject and I want to thank you on behalf of the Francophones of Canada.


BUSINESS OF THE HOUSE
Don Boudria: Mr. Speaker, I merely want to ask the Deputy Government House Leader (Mr. Lewis) the traditional business question of the House as is customary on this day every week,


Philip Derek Lewis: Mr. Speaker, there have been discussions among the Parties and this evening
at six o'clock when the vote on the amendment of the Hon. Member for Broadview-Greenwood (Ms. McDonald) is taken, we would immediately thereafter call the vote at second reading. That would mean that tomorrow we would call the Budget for the second day.
On March 2, when the House reconvenes after one week's recess, we will be tabling the 1987-88 Main Estimates. We will then move to consideration of Bill C-6, legislation concerning the Atlantic Accord, followed by Bill C-39, the Canada Shipping Act. That will be followed by Bill C-12, the Prairie Grain Advance Payments Act.


Don Boudria: Mr. Speaker, indeed, there has been consultation among the Parties in the House and there is agreement to proceed with both votes at six o'clock, as I understand it from my House Leader.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed 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.
Mr. Deputy Speaker:: It was understood this morning that we would now proceed to the question and comment period on the speech of the Hon. Member for Ottawa Centre (Mr. Cassidy). The Hon. Member for Kamloops-Shuswap (Mr. Riis).


Nelson Andrew Riis: Mr. Speaker, I have a short question for the Hon. Member for Ottawa Centre (Mr. Cassidy). Regarding the whole matter of tax reform the Hon. Member clearly indicated that he had some questions with respect to whether or not the intent of the Government to introduce serious tax reform in fact reflected justice, fairness and equity in our tax system. He went on to make the point that the Government had the opportunity in its most recent Budget to eliminate the open-ended capital gains tax exemption, while recognizing that it is an appropriate exemption for family farms, small businesses and family homes. To have it apply widely to capital gains obtained in Canada from any and all sources is one thing, but to have it apply to capital gains obtained from sources outside Canada, sources in Florida, Hawaii or the Caribbean is another matter.
The fact that income derived from capital gains obtained in those foreign jurisdictions is not subject to any tax in Canada is something I do not think one would find in any country of the world. Even Mr. Reagan, the President of the United


States, as part of his tax reform realized that not to tax capital gains was unjust, inappropriate and unacceptable to his administration. Yet the Minister of Finance (Mr. Wilson), when he had the opportunity in his most recent Budget to close off what has to be the most obvious tax loophole in our system, did not do it.
The fact is that the Minister of Finance failed to act on this obvious and major loophole which every tax expert in the country has identified as being just that, as well as being unfair and unjust. Does that not jeopardize the whole approach to the Government when it says that it is interested in tax reform? Can one really have faith that the Government means business and is serious about a just and fair tax system when it fails to take advantage at such an appropriate time to close off this loophole?


Michael Morris Cassidy: Mr. Speaker, I thank my hon. friend for his question. I want to comment very briefly on it. Yes, it does jeopardize the integrity of the tax reform process. Since the Conservatives came to power in 1984 the increase in taxes on persons has been about 50 per cent while at the same time the decrease in taxes on corporations has been about 18 per cent. What we are being told is that despite that the Government will mend its ways and that, in fact, we will see a reduction in personal taxes and an increase in the corporate tax load on profitable corporations. What I think will happen is that the people, having had their heads bashed against a brick wall for two-and-one-half years, will find that there may be some modest decrease in personal taxes but nothing close enough to compensate for the increases in taxes that have taken place under the Government since September of 1984.


Mr. Hockin:: Mr. Speaker, I would like to tell the Hon. Member for Ottawa Centre (Mr. Cassidy) that I listened carefully to what he said this morning. I would like to ask him a few questions. First, can the Hon. Member remember back to November 9, 1984, when his colleague, the Hon. Member for Yorkton-Melville (Mr. Nystrom), predicted that when the Government decided to cut $4 billion from the deficit-he said that he had been told this by economists-as many as
100,000	people could lose their jobs because of these cutbacks. Does the Hon. Member for Ottawa Centre stand by his colleague's prediction, given that 675,000 jobs have been created instead of 100,000 being lost?
I also want to ask the Hon. Member what his approach is to corporate tax reform in the context of other jurisdictions which have lower corporate tax rates. He argued for more revenues from the corporate sector. Is he also arguing for higher marginal rates? I want to get this clear. If he is, then how would he handle the relationships with other jurisdictions if they had lower rates?
In listening to the Hon. Member's remarks I tried to keep a list of the many things that he promised his Party would do if it formed the Government. Although a number of these measures will be announced in different ways in due course during this fiscal year by the appropriate Ministers, has the
The Budget-Mr. Cassidy
Hon. Member added up what his programs would cost and what the deficit would be if he were Minister of Finance?


Michael Morris Cassidy: Mr. Speaker, the Minister of State for Finance (Mr. Hockin) might have mentioned that the growth rate in the economy has declined year after year since his Government came to power. One of the reasons for that has been the very heavy burden of taxation which now amounts to about $1,400 to $1,500 on the average family. That has oppressed the ability of people to spend. It is also having an effect in terms of the reduction in the personal savings rate as people dig into their savings in order to try to maintain their standard of living.
If the growth rate in terms of the economy declines, what that means is that, yes, we are losing jobs that could have been, and would have been, otherwise created. The Government insists on the figure of 675,000 jobs having been created. As I pointed out this morning, from January of 1986 to January of 1987 the total increase has been 137,000 jobs. That is an annual rate much less than what we had before. Only
5,000	of those new jobs were to be found outside of Ontario; the rest were to be found in the Province of Ontario. That is good for Ontario. It is my province and I am glad to see that happening now in the Golden Horseshoe. However, that renewal is not making itself felt elsewhere in the country.
If the Minister had been listening he would have noted that I said we need to make full employment a key priority of the Government. If one does that then there will be benefits in terms of the deficit, as well as in terms of costs. I think the Minister is aware of that. There would be benefits in terms of lower rates on UI and lower expenditures on the Canada Assistance Program and higher tax revenues that come both from individuals and from the corporate sector, if corporate taxation is fair.
With respect to the question of corporate tax reform, the Minister should realize, and I am sure he knows this and would not have asked the question if he did not know the answer, that in the United States there has been a transfer of about $110 billion of tax burden from individuals to corporations as part of the tax reform package that has taken place in that country. As my friend from Kamloops-Shuswap noted, it is significant that in the United States there are now no concessions provided for capital gains. When we suggest that apart from the farming sector and small business sector we should close up that loophole on capital gains, we are being consistent with what is happening in the United States.
I suggest that the concept of broadening the base and lowering the rates is one that is effective, but that the problem in Canada has been that the share of revenues coming from the corporate sector, far from increasing as it has in the United States, has been systematically decreasing. It has gone down from 14.5 points to 10.5 points of total federal revenues just in the last three years.


The Budget-Mr. Cassidy


Thomas Hockin: Mr. Speaker, I have a supplementary question. I think the Hon. Member is agreeing with two of my three premises. He agreed that 100,000 jobs were not lost, as was predicted by his Party in 1985, in that he acknowledged that
675,000	jobs were created. In his third last sentence he agreed with the notion of lowering corporate rates and broadening the base, which is very close to what the Minister of Finance is saying.
Perhaps he would like to answer the question concerning what happens when neighbouring jurisdictions have lower marginal corporate rates than us. Is this something which concerns him?


Michael Morris Cassidy: Mr. Speaker, I thank the Hon. Minister for his question. I have no problems in terms of talking about corporate tax reform which at the same time plugs up loopholes, brings in more revenues, broadens the base, and brings in lower marginal rates. All those things are possible. That is in fact what has occurred in the United States.
What I fear is the record of the Government. Since 1984 it actually allowed corporate tax revenues to decrease by some $2 billion. It then turned around and complained about the fact that it could not get the deficit down to the level which it believed would be comfortable. The Government must turn to its own friends in the corporate sector and point out to them that one of the reasons the deficit is not down to the targets it set is precisely because of the favours which are being given to the corporate sector.
In respect of tax comparisons between the two countries, the Hon. Minister knows that over many years Canada has had nominal rates which from time to time have been higher than those in the United States. One must look at the whole package of depreciation and at other treatments of investment and other matters affecting the net rates of corporations, not just take the marginal rate. I, for one, refuse to be stampeded by suggestions that we must have exactly the same rates as those in the United States.
On the personal side, for example, there are enormous expenditures on social security and on private medicare plans which average Americans have to pay, which are essentially not matched in this country, and which far more than account for a difference in marginal rates.


Jean-Claude Malépart: Mr. Speaker, it is with a bit of sadness that I rise today in the debate on the Budget of the Minister of Finance (Mr. Wilson). This is his third Budget. There is a simple way to sum up the three Budgets of this Conservative Government and of this Minister: taxes, taxes and more taxes; tax increases, tax increases and more tax increases; de-indexation, de-indexation and more de-indexation! The impact of the three Budgets of
the Conservative Government clearly shows the position of that Party. The position of that Party is to favour the rich, make the poor even poorer, and attack the middle class to make sure that it too will become poorer.
Let us consider the consequences of these three Budgets on elderly Canadians. For openers, the Government has yet to take action to eliminate its own discrimination concerning older people who are single, separated or divorced, people aged 60 to 64. As you may recall, we expressed our agreement when the Minister of Finance announced that widows and widowers would be eligible for the spouse's allowance, but we wanted the Government to make it possible for single, separated or divorced people who are in the same financial situation to benefit as well from the spouse's allowance, a program of the old age security pension.
At the time, Mr. Speaker, the Minister of Finance had told us that, according to the estimates, roughly 85,000 individuals might benefit as widows and widowers, and that it would cost $325 million. In fact, 50,000 people are involved and the cost would be $200 million. In other words, there is a $125 million surplus in the departmental estimates and it has not been used. If we take into account the amounts saved in welfare payments by the Government, we can say that there was a surplus of about $150 million in the allocation for senior citizens. The public expected the Conservative Government and the Minister of Finance, who simply represents high finance, to announce yesterday to Canadian senior citizens that all those who are single, separated or divorced would be eligible to the spouses allowance. Instead, Mr. Speaker, this Government and this Minister of Finance decided to maintain the capital gains tax exemption which benefits the wealthiest and which cost $1.2 billion in the last two years, 1985 and 1986.
Mr. Speaker, I am concerned about another group besides our senior citizens. Older workers were expecting something, especially the 35,000 early retirees who had been eligible to unemployment insurance in 1985 and who had received benefits before the Conservative Government decided, the night before Christmas, as a Christmas and New Year's gift, that, beginning January 5, 1986, all amounts received as pension income with employer and employee participation would be taken into account and considered income, which would automatically result in reductions of unemployment insurance benefits. Mr. Speaker, 35,000 people in Canada, including 13,000 in Quebec, are waiting to be reimbursed for these amounts, which have been estimated at about $10,000 per person. This money belongs to these people, but the Minister of Finance did not announce anything for them.
As far as pension reform is concerned, we could have expected some kind of indexation for private pension plans, as well as improvements and increases in the benefits received under the Quebec and Canada Pension Plans to ensure that men and women will have adequate pensions to live comfortably after retirement. As concerns women, Mr. Speaker, on July 26, 1984, in Sherbrooke, the Prime Minister (Mr. Mulroney) and the Government made a commitment to find a


way to allow the 3 million homemakers in Canada to contribute to the Canada and Quebec Pension Plans. Still more promises, Mr. Speaker! All that we have are more and more taxes to pay, and there is nothing for ordinary Canadians.
Mr. Speaker, it is the same Government which had said it would never touch senior citizens' pensions. Hon. Members, especially those of the Progressive Conservative Party, will certainly remember the proposed de-indexation of Old Age Security Pensions. Without their vigilance and action, senior citizens would have been penalized again. But thanks to their pressure and to Mrs. Solange Denis who had said of the Prime Minister what the Canadian people generally think of him now-"Charlie Brown, that is not worth much!"-the Government had to back down.
But in spite of all that, thanks to the New Horizons Program which makes it possible to organize in every municipality, village, parish or riding, clubs for the Golden Age, senior citizens can choose a board of directors and organize cultural, sport and social activities, and thus continue to play an important role in society.
Mr. Speaker, this Government has even made cuts in the New Horizons Program, intented for senior citizens, reducing its budget by 27 per cent or nearly S3 million.
Mr. Speaker, I should like to deal now with the financial consequences of these cuts on our senior citizens. I am talking here in terms of income tax. A couple of senior citizens earning $15,000! This couple will have to pay $130 more in 1987. They paid $45 more in 1986.
Mr. Speaker, those people have made this land what it is. Honourable Members here are reaping the benefits of the work and dedication of that generation that laboured at a time when there were starvation wages, unacceptable conditions and exploitation by the rich because there were no labour unions. In return, the young generation here and the Minister of Finance (Mr. Wilson) keep on favouring the rich only, giving nothing to and showing no respect for those parents and the old generation.
Well, that population will remember. Already, today's survey indicated there is only 22 per cent support. And that was before the Budget, Mr. Speaker. I am convinced the trend will continue until there is nothing left of that group in society that is only here to favour the rich.
Let us look at the impact on families. Despite what we remember of the Throne Speech, that official document, that statement made by the Prime Minister (Mr. Mulroney) with its commitments, Mr. Speaker. What is the impact on Canadian families of the three budgets put forward by this Government? First, everyone will remember the 3 per cent cut on family allowance indexing. And still today, the Minister of Finance prefers to maintain the so-called capital gains exemption for the rich, because it favours the rich, rather than reinstating full indexing of family allowance.


Mr. Comeau:: You are speaking through your hat!
The Budget-Mr. Malepart


Jean-Claude Malépart: I can appreciate that a Tory Member says I am speaking through my hat, because he only owes money to the rich, or again there is patronage or corruption. But the people who are watching know that very well. Mothers know very well that since this Government has been in power, family allowance does not increase as it should. And they know very well that the better off-the rich-are getting more money from this Tory Government.
This year, Mr. Speaker, the Government will be snatching away $135 million from mothers. Last year it was $40 million, and the year before $15 million. This will go on until 1991. The Government intends to save $1.21 billion on the backs of Canadian families. While in 1985-86 only, the rich people's capital gains exemption cost $1.2 billion. I understand that the Conservative Member who shouted earlier is rich, there is something for his pockets. It is the sole reason for his being here but, Mr. Speaker, let me tell that Member that Liberal Members did not come here to fill their pockets. They came here to accomplish something for all the Canadian people.
Let us remember, Mr. Speaker, that this same Government decided to tax people's health by introducing a sales tax on drugs. This Government successively increased the sales tax on appliances generally, and I recall that for the fourth time yesterday, the Minister hiked the sales tax on fuel, thus increasing it by 4 cents a litre or 18 cents a gallon over two years and a few months.
Such is the record of this Conservative government, Mr. Speaker. And what are the consequences of those three budgets for our low and middle income families? A two children family with the head of the family earning an income of $15,000 will have to pay $490 more in income and indirect taxes for 1987 because of this Conservative government budget. A two children family where both parents work and earn $15,000 each, a family with two kids and a $30,000 income, will have to pay $966 more in income tax for 1987 because of the decisions made by this Conservative government in its three budgets.
Let us see, Mr. Speaker, what the impact will be on housing. Everybody knows that in each district there are senior citizens who will become entitled to what is called social housing, whether it be housing co-operatives or low rent housing, but waiting lists are very long in every municipality. As we remember, the government made huge cutbacks. This program is no longer working, and now there is nothing in the budget to remedy those injustices.
To recap, Mr. Speaker, there is absolutely nothing in this budget for senior citizens; there is absolutely nothing for Canadian families; there is absolutely nothing for housing. But can anyone tell me where in this Budget can we find anything likely to give confidence to the youth of this country and prove to them that this Government cares about them? We know that the Minister of Employment and Immigration (Mr. Bouchard) is going to announce cuts in the employment programs included in the documents later on. Nothing for our youth, nothing to replace the Katimavik program that was


The Budget-Mr. Malepart
abolished by this Government, nothing to replace any program; no action in favour of the farmers, the remote areas or anybody. But yes, there is something for the rich and the Tories, the only people with an opportunity to take advantage of the system and the generosity of this party.
Personally, I firmly believe that the Government could have taken some initiatives. While reducing the deficit, it could have first, instead of postponing the fiscal reform and the introduction of a monthly or annual guaranteed income, the government could have, as of today, with all the information already available, published documents at the same time for the purposes of consultation and review . What is being done? Contrary to the promise of the Minister of Finance and the Prime Minister, nothing has been introduced. Nobody has answered. Are these delays scandal-related? Is it a dissension in Cabinet that delays the long-awaited fiscal reform to mitigate the injustice of the tax system for the average family in comparison with corporations? Everything has been delayed. Is there a dissension in Cabinet or in the caucus? Nobody has answered that question. Why does the Conservative Government not table immediatly all documents concerning an open, sincere and honest consultation on tax reform?
Here are the questions we should ask about tax reform: Should we, as the Government did, keep the capital gains exemption which, I repeat, benefits only the rich? And it was even said that capital gains made outside of the country mean an income tax decrease in Canada and thus, translate into a tax increase for the middle income earners. When is the Goverment going to stop bleeding them dry? Before they have splipped their pay cheque into their pocket, the Government has already taken it back. Before you have time to slip it into your pocket, the Government, that is Michael and Brian, cut it in half. You have not even got that time! In the good old days, you could put it in your pocket, get home, get it out and pay your income tax. But not anymore! These days, the working man is seen as no more than a thief. No sooner has the boss given him his pay cheque than some Conservative pops up saying: "Hang on. Half of that is mine, just the rest is yours."
Shame, Mr. Speaker. The middle class has had it with this. In short, they are fed up. The minister says: "Corporations, we cannot change that, we will give them the scare, so they do not pay income taxes. But we do not scare individual taxpayers. We just hit them with all we have got." I understand the minister of Finance. All his buddies are rich people. They are not like the people I know. His friends told him to save their money bags. What the people I know back home are saying is: Help us survive. Let us live. All we are asking for is our fair share. But the minister of Finance has buddies who want their money bags saved. So far he has done a lot to oblige his money toting buddies, his friends in Canada who are rich. No wonder you rate 22 percent. There are scandals and there are scandals but no fraud or trickery is worse than what you are doing to the middle class. Those people are wondering-at this very moment, the workers in the labour force who are in their
forties are wondering what will happen when they retire, whether or not there will be any money left in the till for them.
The time was ripe for reform, for a real reform in the area of pensions. The time was ripe for making sure that private pension plans were indexed, to improve . . . Governments have already increased contributions to the Quebec Pension Plan and the Canada Pension Plan. But what people need are benefits.
Mr. Speaker, I see that my time has expired. One could talk for hours trying to bring this Government to understand and ponder but, after two and a half years, I have come to the conclusion, which is supported by public opinion, that it is no use, that they understand nothing, that all they care about is getting rich and catering to the rich.


Mr. Deputy Speaker:: The Hon. Parliamentary Secretary to the Minister of Agriculture (Mr. Champagne (Champlain)) for a question or a comment.


Mr. Champagne (Champlain):: No, Mr. Speaker, it is on debate.


Mr. Deputy Speaker:: Are there any questions or comments on the speech of the Hon. Member for Montreal-Saint-Marie (Mr. Malepart)? If not, debate will continue with the Parliamentary Secretary-


Thomas Hockin: Mr. Speaker, I thank my colleague.

Mr. Speaker, I am very happy to take part in this important debate and to support the budget of my colleague the Minister of Finance (Mr. Wilson).

This is a Budget that consolidates and extends the progress we have made in restoring the health of the nation's finances. It is a Budget that reaffirms the Government's commitment to carry through with a comprehensive program of action to strengthen the job-creating capacity of the Canadian economy.
The constituents in my riding of London West, like all Canadians, are pleased and confident that the economy is being well managed. That is important in my riding and I know it is important in all ridings across the country. The people are very happy to see the progress the Government is making.
This Budget points the way to a further major step in our program. It is absolutely historic that what is being proposed is a comprehensive reform of the nation's tax system. Today we have heard many suggestions from Hon. Members opposite on how the tax system can be improved. That, of course, is the next chapter.


This is also a Budget that confirms the solid economic results of sticking to our agenda for action. It is a Budget guided by a clear sense of direction and backed up by a record of proven success in managing the nation's economic and fiscal situation. To fully appreciate the progress we have made, we should recall the prediction made by the Hon. Leader of the Opposition (Mr. Turner) on November 9, 1984. At that time, he predicted that over 100,000 jobs would be lost as a result of the $4 billion cuts that were made in the first Budget. Not only did that not happen but 675,000 jobs were created.
To fully appreciate what this agenda has meant for women and youth, one need simply look at the number of jobs that have been created in those two categories. Youth unemployment is down significantly and jobs for women have been created at an unprecedented rate. To fully appreciate the progress we have made, it is useful to recall the situation that existed when this Government came into office.
Let us not forget that when this Government came into office, the economy was still feeling the after-effects of a severe recession that had ended almost two years earlier. Economic performance was very disappointing. Unemployment was still at almost 12 per cent. Interest rates were far too high and this was discouraging investment and consumer demand.
Two and a half years ago that was the situation. However, those were just symptoms of deeper, underlying problems faced by the economy. This Government felt that unless we began to deal with the deep-rooted causes of high unemployment and interest rates, the symptoms would only grow worse. One cannot fiddle with the thermometer, one must do something about the furnace. We moved from symptoms to causes and we did not have to look too far to find one of the most serious causes of Canada's economic problems; it was the Government itself.
Government involvement in the economy had become stifling. It was everywhere. It was unproductive and unhelpful. Layers of regulation were distorting investment decisions and business practices. All Parties could find parts of our regulatory system that had to be changed. All Parties could find things that had to be improved in order to free the economy to act with less government interference.
Fifteen straight years of Budget deficits had swollen the national debt to $200 billion. The rapid increase in the debt was harming Canada's economic future. We must remember, particularly since the Leader of the Opposition criticized the Minister of Finance (Mr. Wilson), that, as the Minister of Finance made clear today, it was during the tenure of the Leader of the Opposition as Minister of Finance that we moved from a surplus to a huge deficit, and we also experienced an inflation rate that jumped from just about where it is now to 10.6 per cent. I suppose that is what it would be if the Liberals formed the Government. Economic growth had slowed considerably. The bank rate during that period when the Leader of the Opposition was Minister of Finance rose by four and a quarter percentage points. Spending
The Budget-Mr. Hockin
doubled and the Public Service grew by 66,000 people in those years.
So that we do not forget, let me remind Hon. Members that, as a result of this, the Auditor General stated that Parliament had lost or was close to losing effective control of the public purse. That was the kind of fiscal leadership shown by the Leader of the Opposition when he was Minister of Finance.
The record of this Government in two and a half years with its fiscal management and the confidence it has built in the economy cannot be in greater contrast to the record of the two or three-year period from 1972 to 1974. The malaise that had begun then fed on itself, so that by the time this Government took over in 1984 it was absolutely necessary for us to intervene and to intervene vigorously. We found that the more the Government intervened in the economy in an effort to help, however, the more it aggravated the very problems it was trying to help. Rather than part of the solution, it became part of the problem. Subsidies led to more subsidies, as we all know. Regulation led to more regulation. Spending led to more spending. It was a continuing spiral that fed on itself, making industries inefficient and uncompetitive and driving down the prospects for economic prosperity. The Government of the day was bankrupt of ideas. It was caught in a spiral and did not look to the fundamental way out.
Earlier today the Hon. Member for Ottawa Centre (Mr. Cassidy) regretted the economic slump which he says might be caused by this quiet Budget of ours. Instead, he wants more subsidies, more regulation and more spending. He wants to get us back into the spiral that got us in trouble in the first place. He did not like this quiet Budget because he said it would hurt the economy of Ottawa Centre. People would not come to hear Budgets anymore because they would not be too interesting. I say that if we can deliver to this House every year a Budget with the kind of economic performance we have experienced, then we should not do a lot of fidgeting. We should not be putting on a spectacle just to attract people, which is what the Hon. Member wanted. We should be providing solid economic leadership and this Budget does that.
On taking office the Government was determined to call a halt to this destructive spiral. It set out its goals very clearly in the agenda for economic renewal in November, 1984. That document should be read again, because the extent to which this Government has fulfilled the promises in that document is impressive. We have made good progress toward all those goals. Economic performance is much improved because the economy is working better. The economy is working better because of the fundamental improvements which have come about through our economic renewal program. The Government has taken action to restore fiscal responsibility by reducing the deficit and slowing the growth of the national debt. We have done this mainly by expenditure restraint and good management. After 15 years of rising deficits we have brought about the first consecutive three-year decline in 30


The Budget-Mr. Hockin
years. That is remarkable and, let us not forget, unprecedented. When we talk about fiscal responsibility, that is what we are talking about; bringing the deficit down.
A number of Hon. Members opposite do not like to hear about fiscal responsibility. That reminds me of the comic strip from two Saturdays ago where a child received an allowance of $3 a week. She went to see her father and said, "I do not have any money, I want another $3 to get through the weekend". The father said, "We have given you a certain amount of money for the week, will you please show some fiscal responsibility and not ask for an extra S3"? The ten-year old child left the room and thought to herself, "I don't know what fiscal responsibility is but I sure don't like the sound of it".
Hon. Members opposite do not like the sound of fiscal responsibility but it has been responsible for the huge production of jobs and lowering of interest rates in Canada. It gave a tremendous burst to housing construction and has really meant the renaissance of our economy. Compare this economy with that of Australia which did not come to terms with its spending. Interest rates went up to 15 per cent or 16 per cent or higher, I do not know. The economy ground to a halt and that was inevitable. This Government, through fiscal responsibility, drove interest rates and the deficit down.
Look at the economic resurgence that followed. The deficit has fallen almost 24 per cent, from $38.3 billion in 1984-85, to a projected $29.3 billion in 1987-88. All of that was achieved primarily by controlling government spending. In real terms, program expenditures have fallen by an average of 1.1 per cent a year over the three-year period.

We have also taken measures to promote growth and job creation.

To foster entrepreneurship, risk-taking, promote innovation and a positive climate for new enterprise, the Government dedicated a number of programs to bring about all these changes in a fair and open way, and consistent with the sense of compassion characteristic of Canadian society. There has been substantial progress towards a new role for Government; not the same old role but a new role. The Government has brought forward a remarkable number and range of fundamentally important framework initiatives as part of its economic renewal agenda.
Public policy in any country is really two things. It is output, such as expenditures, or frameworks which set the context in which things are done. The framework side was often forgotten by previous Governments with their constant reliance on spend, spend, spend. We have moved towards a framework approach. Let me give you some examples.
Destructive program frameworks such as the National Energy Program have been abolished and replaced by market-oriented incentives. The regulatory framework has been revised in transportation and financial institution sectors. It
takes just a second or two to name each of the major initiatives which are leading to a new framework for business activity, but Members of this House know just how much is involved in each of these areas. For example, it would take me the better part of my time just to outline the main features in the goal of financial institution reform. This policy has been very well-received. The Hon. Member for Laval-des-Rapides (Mr. Garneau) complained it might lead to foreign takeovers in the financial sector. I commend the paper to him. He should read it again. It is silent on foreign participation except in the securities industry, and the whole program is designed to give our financial institutions, which are great job creators, world-class status, indeed a jump on our foreign competitors.
Privatization of Crown corporations is proceeding and the size of the Public Service has been reduced. What a contrast with what went on before. We have moved forward to remove obstacles to the growth of business and encourage investment. One of our first acts was to abolish the Foreign Investment Review Agency and replace it with Investment Canada. Instead of discouraging investment we began to encourage it. I am reminded that the Hon. Member for Laval-des-Rapides called for more consultation as we go into freer trade with the U.S. and in the GATT negotiations. In fact the NEP and FIRA were brought in with virtually no consultation with anyone. We are consulting. There is an elaborate network to help us in our bilateral negotiations with the U.S. and our multilateral negotiations through GATT. The consultation process is deep, profound and goes on daily. That is in marked contrast to the way the previous Government approached matters of this sort.
A new competition policy has been implemented. We are actively encouraging research and development, and tax measures such as the lifetime capital gains exemption are already working to create jobs in the small business sector, the engine of growth in our economy. The Hon. Member for Ottawa Centre spoke disparagingly of the lifetime capital gains exemption but it is very important for farmers and small business. The Investment Dealers' Association of Canada traces billions of dollars in new, permanent, job-creating equity investment directly to that particular provision. At the same time we have substantially strengthened our social safety net. The refundable sales tax credit in effect for 1986 will help those on whom the burden of consumption taxes fall most heavily. We have enriched the child tax credit and put in place a new delivery system so those who need help the most will receive a prepayment in November of each year. I was very proud to introduce that Bill and it has been enormously well-received. All of us heard about it when we returned home at the Christmas break.
Comprehensive reform of pension arrangements will encourage savings for retirement while improving pensions for all Canadians. Part-time workers and women will benefit particularly from the change in pension standards. Previous Governments never did anything of any importance regarding pensions, but we have acted. Since December, 1984 our


Government responded positively to two further challenges; first the challenge presented by growing competition and protectionism internationally.
The Member for Laval-des-Rapides was criticizing our initiative on bilateral trade with the United States. He said we are looking at the trees rather than the forest. In fact, that is what is wrong with his policy. The Liberal Policy on bilateral trade liberalization is to discuss individual irritants and hope the Americans will pay attention. They would like to discuss steel, potatoes, or whatever. In fact, that approach has not been working and will not work. The comprehensive trading umbrella under which we are talking to the Americans has them listening and will lead to the solution to the problems which we have been living with during the last 10 years. That is the comprehensive approach of addressing the forest rather than just the trees. It takes courage to do this and the Government is doing it.
There has been a challenge presented on regional disparity at home. We have taken action to deal with that. We have signed economic and regional agreements with most of the provinces. Let us not forget the abolition of the Petroleum and Gas Revenue Tax. It has provided a positive framework for energy development. To assist the Atlantic region we have signed the Atlantic Accord and the Nova Scotia Accords which were extremely well received. We have instituted the Atlantic Enterprise Program and are directing an additional $600 million in federal procurement to Atlantic Canada over a four-year period.
Western Canada is benefiting from the assistance given to farmers through the crop insurance program and the special drought assistance program. Our actions supporting grain transportation and the huge $1 billion special Canadian grains program announced in December are concrete actions taken to meet real needs. These things have been mandated by the Throne Speech and will be announced by Ministers at the proper time as the fiscal year unfolds.

Our tax system has become an obstacle to economic growth. It is too complex. The tax burden is very unjustly distributed among taxpayers. To improve the system is one of our priorities.

Much remains to be done to improve the tax system. The tax system has engaged the attention of most speakers today. I listened very carefully to the remarks of the Hon. Member for Laval-des-Rapides. His principles for tax reform are very general but, quite frankly, they are very similar to ours. However, we are being more specific. We are moving toward the harder decisions. We are consulting regularly and when we bring forward our proposals in a few months they will be much more carefully thought through than the level of generality which I heard from the Hon. Member opposite.
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On July 18 the Government announced that it would be developing a proposal for comprehensive tax reform designed to achieve those goals. Consultations have already been conducted on this by the Minister of Finance and myself with various groups. The work on this proposal is continuing with the benefit of advice and information which we are getting from Canadians in every region and every sector of the economy. We intend to bring forward a tax reform proposal which ensures that our tax system plays a positive role in the renewal of Canada's economy. Unlike the tax changes introduced in the MacEachen Budget, our consultations are thorough and careful in order to ensure that there are no rude surprises.
One of the most important issues of tax reform will be to strengthen Canada's economy and create new jobs and economic growth. That is why we want tax reform. The central objective is to reduce tax rates in all three elements of the tax system. We want to reduce personal and corporate rates and we want to change the federal sales tax system in order that it, too, will be lower but more broadly based. There can be no better incentive than lower tax rates for growth, investment, savings and job creation.
To get tax rates down we must reduce or eliminate a wide range of exemptions, deductions and tax credits which are now part of the system, having been put in by 10 or 20 years of previous Governments. So many of those exemptions and preferences are not useful and are not working. They have outlived their usefulness and resulted in very high costs to the Government. As the Minister of Finance said yesterday, tax reform would mean that those Canadians now making extensive use of tax preferences would pay more tax and those who have been making little use of tax preferences would pay less tax. With that approach we will be able to put forward a fundamental tax reform which will engage the interest and support of all Canadians.
Most Canadians want a fair tax system in addition to lower taxes. They want it to be less complex and more understandable. We are committed to that as well. We can achieve these goals by dealing with all three elements of the tax system together as an integrated package. We want a tax reform proposal which builds on the progress we have already made in improving our tax system.
In conclusion, our economic renewal agenda is working. More to the point, 675,000 more Canadians are at work today than in 1984. Inflation has fallen. Interest rates are down. This Budget and the action program it represents deserve the support of every Member of the House.


Mr. Johnston:: Mr. Speaker, I have one brief question of the Minister. Just after I came into the House he told, I suppose, an apocryphal story about a little girl who went to her father after she had spent her $3 allowance and he told her to exercise fiscal responsibility. Had the Minister of Finance (Mr. Wilson) been in that situation, on the basis of what we saw in this so-called Budget, he would have asked his father to


The Budget-Mr. Hockin
lend him some money from his allowance for next week. The Minister of Finance has effectively brought $1.2 billion from 1988-89 back into 1987-88 simply to get his budget deficit under $30 billion.
Would the Minister not agree that the analogy is very apt indeed? On the Minister's advice the little girl who ran out of her $3 and needed more should have gone to her father and asked for $3 paid in advance from the next week's receipts. That is one approach. Also, would he not agree with me that this manipulation of cash flow does not do one thing to improve the fiscal position of the Government other than to put in the window a deficit number which is under $30 billion in hopes, perhaps, of fooling those who are ignorant of the manipulation which in fact is taking place?


Thomas Hockin: Mr. Speaker, the analogy which the Hon. Member is trying to make to the comic strip story which I told does not work. The analogy is really that if the little girl was selling lemonade she should try to collect the receipts at least twice a month rather than once a month. That is what we are bringing in. We are bringing in a policy which allows better cash management. Cash management is needed in a household and also in the Government. As a matter of fact, in the United States this is done much more quickly than we do it here in Canada.
We are putting in place a system which is natural for an industrialized country. This twice monthly payment will only affect 35,000 to 40,000 businesses of the one million businesses which exist in this country. It will apply to the larger ones. They have the computer facilities to accomplish that quite easily. I believe this is an important cash management initiative. The Government of Canada has brought forward others, by the way, in response to the Nielsen Task Force and other studies and consultations. Proper cash management is something about which the previous Government did nothing. Many payments were tardy and there were prepayments of government obligations that did not make any sense. We have addressed that, and this is a prime example. If my daughter was selling lemonade, I would tell her try to collect the proceeds at least twice a month rather than once a month.


Donald James Johnston: Mr. Speaker, that is a very facile response to a serious question. Did the Nielsen Task Force Report recommend that there be an acceleration of employee withholdings so that, in other words, employees should be obliged to remit twice a month? If the Minister wants to carry his argument to its logical conclusion, surely there should be a remittance not twice a month but perhaps four times a month or even every day.
The fact is that it has been established in the law that it is quite appropriate that the remissions take place historically 14 days after the end of the month.
Furthermore, the Hon. Member's argument completely breaks down when we consider that in the year 1988-89 there is no better cash management because in the month of April
that year the Government will only receive $1.2 billion from the previous March and, in the following April, it will only receive $1.2 billion, making exactly the $4.2 billion it would have received in April had it left the matter alone. That argument is ridiculous and the hon. gentleman for whom I have a great deal of respect does not present a worthy argument to defend the indefensible.


Thomas Hockin: Mr. Speaker, we are not denying that after the $1.2 million it is a one-time budgetary revenue increase. The Hon. Member forgets that by hastening these payments at the provincial as well as the federal level, the whole time period is being moved up 15 days. That leads to a significant interest rate saving that will continue in the future. Simply because the figure is not $1.2 billion every year does not mean this acceleration should not be done. While I do not have the figure, it is substantial. The Government should take action to bring in more revenue if it can find ways to do so without increasing taxes.


Mr. Langdon:: Mr. Speaker, it is interesting to see the transition of the Member from the Chairman of the Joint Parliamentary Committee of which I was a part into a Cabinet Minister which tends to lead to inaccuracies and overstatements of fact. I believe the Chairman of the Committee might have been more scathing about that in cross-examining witnesses.
Let me deal specifically with the comments that were made with respect to the Hon. Member for Ottawa Centre (Mr. Cassidy) and his suggestion that the $500,000 capital gains tax exemption was a worthy candidate for elimination in the Budget. First, while it may have been unconscious, the Minister has distorted the position that was taken by this Party which exempts those small farmers and small businessmen to whom he referred from any such change. We are talking about a change in a system which not only encourages, through tax exemption, speculative investment by large companies, but speculative investment by people entirely outside the country. That is surely a worthy target for immediate change.
If the Minister is so certain that this introduction of the $500,000 capital gains tax exemption has brought vast increases in investment to this country, why do the Budget Papers themselves for the year in which this was first introduced, 1986, state at page 8: "In fact, business, non-residential investment decreased in Canada by 1.2 per cent"?
I note that the increase for next year is a measly 1.5 per cent, and anyone who has studied some economics, as I know the Minister has, will recognize that those are most devastating figures for investment in this country and, in fact, account for a good deal of the difficult economic growth prospects which we see ahead of us.


Thomas Hockin: Mr. Speaker, the Hon. Member and I come from a very fortunate part of Canada where unemployment is low and industrial production is at historic high levels. I can forgive the Hon. Member for overlooking the answer to his last


question, that the oil and gas sector has collapsed. There may be some activity in our region near Petrolia, but the Hon. Member will realize the billions of dollars of investment that has dried up because of the collapse of the oil and gas market. If that is set aside, he will see that there has been an enormous increase in investment. The Investment Dealers' Association has its figures, but the macro figures will also show it, if the oil and gas sector is excluded. It has worked.
We will look at everything in tax reform. I am not saying that the $500,000 capital gains tax exemption must remain. It will also be considered. The comments by the Hon. Member and other Members on this question are important because it forms part of the analysis. There is frequent mention of people buying yachts in Florida and writing it off under this capital gains program. However, the fact is that this program has helped small business generally and farmers in particular. Of course, any anomalies in the program should be reviewed.
I believe we should take into consideration one's incentives to work hard. Sometimes a person's incentive to work hard is to buy a bicycle, a painting, or to go on a trip. Is the Hon. Member saying that only certain kinds of incentives are appropriate in the lexicon of the NDP? I believe the Government should allow as much freedom as is reasonable in terms of incentives for Canadians.
I also remind the Member that the facts are indisputable that long-term common equity investment in small business has increased over $1 billion in the last fiscal year, according to the Investment Dealers' Association. They do not trace it to the tax changes in Quebec, but to this particular provision.


Steven W. Langdon: Mr. Speaker, let me begin my facing the difficult task of labelling this Budget. The Government has labelled it as a good budget. The Minister of Finance (Mr. Wilson) himself has called it a "stay the course" Budget. One newspaper today called it a "breathing space Budget". I suggest that it is perhaps more indicative of a government that is out of breath, rather than one that is taking a breathing space. It could also be labelled as the "pie in the sky" Budget because the promises on tax reform are supposed to be the great highlight of the Budget. Yet there is absolutely nothing which indicates specifics with respect to such tax reform. I think as I look at the Budget that perhaps the headline in the Montreal Gazette this morning "The Popcorn Budget" is the best description I have seen. It is actually one I have to say I came up with before the Montreal Gazette. It is a Budget full of hot air. It has an awful lot of buttery syrup mixed up with it, but the major proposals within this Budget are all in the category of that famous tax levied on popcorn.
I feel that I should actually be complaining to the Minister of Consumer and Corporate Affairs (Mr. Andre) about the false advertising in this Budget and suggesting that this Budget should be very strongly looked at by the authorities in the Department of Consumer and Corporate Affairs who look
The Budget-Mr. Langdon
at false advertising, because it contains a great deal of nonsense which is not accurate and not reflective of the real state of the economy.
I would like to now look at some of the good news which is supposedly contained in this Budget. I could take, for instance, the growth rates which one might have thought would be the heart of a good news Budget. What do those growth rates say? In the four budgetary exercises for which the Conservative Government has been responsible, starting with 1984, each and every single year the rate of growth in this country has declined and declined significantly. In 1984 it declined 5.5 per cent; in 1985, 4.0 per cent; in 1986, 3.3 per cent, and projected for 1987 is not an increase, not good news, but a further decrease to 2.8 per cent in terms of growth rates.
One could look at the unemployment rates. It is fascinating to find, if one looks carefully through the documentation- there was not very much provided so it was relatively easy to look through-the growth rates as compared with the United States and various comparisons with European countries, but we could not find a comparison of the unemployment rate now in Canada with that of the United States. The reason, of course, is that it is not good news. It is very bad news.
We have in this country a 9.7 per cent unemployment rate. The United States has an unemployment rate of approximately 6.9 per cent. We work on the basis of very similar comparisons and there is no question whatsoever that we have seen the government increase the gap in unemployment rates between the United States and Canada to one of the largest levels which has existed since the Great Depression itself. There is an almost 3 percentage point difference between ourselves and the United States. We are simply being outperformed by our closest trading partner.
I could look at investment rates, which I have just done in my question to the Minister. On page 8 of the Budget Papers we see again figures which show that in this past year there were great decreases in investment in this country. A tremendous Conservative pro-business government has taken power. It is supposed to be a great friend of the corporate community, but it ends up giving us a significant decrease in investment levels by private business. We can take for example the 1.2 per cent for business non-residential investment. That is not just a lower growth rate, that is an actual decrease, an actual decline, which this tremendous friend of business has managed to create.
We could look further at the forecasts for corporate tax, which are always a rather interesting reflection of what the Government thinks is going to take place with respect to the buoyancy of the economy itself. When we look at those statistics, which are found on page 22 of the Budget Papers, we see that the actual receipts were over $2 billion below what was forecast for 1986-87. For 1987-88 the forecasts, compared to last February's Budget, are even below the expectations which were put before the Canadian people at that time. So it is a bad news Budget, not a good news Budget.


The Budget-Mr. Langdon
It is a bad news Budget even for those who have some sacred belief in reducing deficits. The deficit which is now projected for the end of this coming fiscal year is $29.3 billion. Anyone who has some historical memory can go back and ask what the projection was which was made by the great Minister of Finance a year ago in February. His projection was that the deficit we would be facing, not in a year, but now, would be $29.5 billion. But it is $32 billion because of mistakes and because of increased tax loads on Canadians which have decreased economic activity and have brought down, as a result, a much higher deficit than was forecast. This is exactly what some of us predicted last year.
It is frankly a Budget which the Government has blown. Yet it has a magic trick which somehow is going to make it look good. It is the magic trick of accelerating income from taxes. By accelerating it, it will make a once and for all gain of $1.2 billion. At the end of next year, as a result, it will look as if it is lucky to have a $29.3 billion deficit. But that will be achieved only through trickery, only through playing with the figures, only through what is in essence a manipulation of a system of receiving income from employers which, of course, will significantly hurt those employers.
That is the supposed good news which is contained in the Budget. More important than that is the tremendous unfairness which exists in the Budget. It is an unfairness which shows itself in there being no action taken on regional development concerns, despite high unemployment levels in regions across the country. I am not just talking about provinces, I am talking about areas within provinces. Frankly, the statistics are frightening. There are parts of British Columbia in which the unemployment rate as of January was 19.6 per cent. There are parts of Alberta, that great area of Tory prosperity in the past, in which unemployment rates in certain areas are 12.8 per cent. There are parts of Saskatchewan in which unemployment rates are 10.7 per cent. The only part of the country which does not have an area, a region, with an unemployment rate of over 10 per cent is Manitoba, which is governed by a NDP Government.
If we consider places such as Ontario we see that in northern Ontario there is an unemployment rate of 14.6 per cent. These figures are direct from Statistics Canada. Recently in this debate someone noted that, surely, we are not questioning figures from Statistics Canada. Even in southern Ontario, which is supposed to be the heartland of prosperity, the unemployment rate in Brant County is 10.2 per cent. In areas such as the area around Montreal the unemployment rate is 12.4 per cent. In other parts of Quebec the unemployment rate is 14.5 per cent and 15.2 per cent. In Labrador it is 26.5 per cent, as it is in parts of Newfoundland. In Cape Breton it is 23.1 per cent. In Prince Edward Island it is 17.8 per cent. In parts of New Brunswick it is 16.2 per cent.
There is nothing, absolutely nothing, in the Budget to deal with those types of regional inequalities which cause tremendous damage to people and which result from these vicious levels of unemployment. All of us know that in fact those official statistics are often under-estimated by significant margins. We are talking about human tragedy.
I wish to talk about some of those human tragedies. For instance, I wish to talk about a woman in my constituency, Mrs. Hahn, who is retired. As a result of measures such as the increase in the gas tax she will no longer be able to visit her family in Toronto. I wish to talk about auto workers, such as Marcel Lemieux, who were looking for action in the Budget to protect the auto industry and to give a fair balance between those who are meeting 60 per cent Canadian value added in the Big Four and those who are getting a free ride in the Korean and Japanese companies which do not have to meet those goals.
I wish to talk about farmers in my constituency, farmers such as Claude Giroux, who has not only faced tremendous squeezes in terms of prices that he is paid against his costs of production, but who is being hit for back taxes. In this case he tried to keep his family and farm together by working off the farm.
I wish to talk about people such as Gloria Seale, a woman in one of the low-income housing projects in my constituency who was offered a job. She felt a tremendous sense of satisfaction to finally have a job made available to her. She found that she could not take the job because day care was not available since the Government has refused to act despite promises in the Speech from the Throne, despite promises from the Prime Minister (Mr. Mulroney), and despite promises from the Minister who deals with this subject. We have seen nothing in the Budget whatsoever with respect to day care, or anything else that might help the women of the country.
I also wish to talk about a friend of mine, Richard Kamau, who lives not in Canada but outside of Canada. He lives in Africa. As a result of the Budget and its attack on the weak he faces a cut, as we discovered this morning, because the money that CIDA will be able to spend on its projects has been cut by $92 million next year. We saw the details this morning, and they demonstrate that very clearly. What we have is a Budget that is hurting people, not just here in Canada but elsewhere in the world.
I recognize that it is a tough time economically, that we have difficult challenges in front of us. In fact, the previous speaker and I spent far too much time on the same committee. We came to complete agreement with respect to many of the problems that we face as a country. There is a need to rebuild our industry; a need to become competitive; a need to be much more dynamic and effective in our trade activity; and a need to push ahead in our resource sector. There is a need to build up from the bottom new community initiatives which will get people back to work and get the country moving again. The Budget does none of that.


I must say that the Minister boasted that there are no new initiatives in his Budget. Therefore, I say that it is a sick Budget from a sick Government, a Government which is staggering from scandal to scandal, a Budget in which inaction is made a virtue. It represents a sickness in the Conservative Government, and I deeply regret it.


Thomas Hockin: Mr. Speaker, in describing the Budget the Hon. Member referred to it as being pie in the sky, as popcorn, as hot air, or as something of no substance. Does he describe the following particular concrete achievements in the province in which we both live as pie in the sky or hot air? Some 356,000 jobs have been created in the Province of Ontario since September 1984; 62,000 jobs have been created in the Toronto area in the past 12 months; the value of building permits issued in 1985 was up 33.8 per cent or $2.1 billion compared with 1984; building permits in the first 10 months of 1986 were up 34.7 per cent; and, for the month of January 1987, there were 5,738 housing starts. The list goes on and on, and I have only referred to the Province of Ontario. Those achievements are not pie in the sky or hot air. They are reality. They have been created by the climate and physical responsibility put in place by the Government. Perhaps we are not supposed to talk with any pride about Ontario, but this is real and this is where we live. Does the Hon. Member call these things-and I could mention farm cash receipts increasing in 1986 by 7.2 per cent compared with 1985-pie in the sky or hot air?


Steven W. Langdon: Mr. Speaker, perhaps if the Minister had been listening a little more carefully he would have heard me refer to the pie in the sky aspects of the Budget in respect of tax reform. I indicated quite clearly that it was a Budget which had within it pie in the sky being promised, just as the Salvation Army used to do in the past, suggesting that tax reform would be brought in and that that would give us fairness and growth. That was the pie in the sky to which I referred.
Let me refer quite directly to the mass of magnificent statistics which the Minister read to the House. In his speech the Minister said that the problem which his Government faced in coming into office was that there had been too much government action, that Government was stifling the people of the country. It seems to me that that has led to a reversal, a retrenchment, or a Government which has been in retreat, for the most part, so far as economic initiatives are concerned since 1984. Certainly in respect of the Budget there is no new initiative of any kind, except for more taxes which fall upon the ordinary person.
With regard to the pattern within the country, I think that a Minister with the insight of the Minister who has just spoken would want very much to say that the over-all picture is crucial and that that picture shows, as I indicated in my speech, that growth rates have fallen in each year since the election of the Conservative Government.
The Budget-Mr. Langdon
Also I think that the Minister would want to recognize that the auto industry in his part of the country and in my part of Ontario has been a major, possibly overwhelming factor in respect of the tremendous expansion that has occurred in many parts of Ontario. Yet, that auto industry is presently being put at risk in terms of the Auto Pact, duty remission schemes, and the whole set of issues which is being bargained about in the free trade arrangements.
Unfortunately the Minister has not proven his point. Instead, he has demonstrated my point, that across the country we have seen economic devastation in many respects. In our part of the country we have seen gains, and those gains have come out of an industry which the Government is putting directly at risk.


Don Boudria: Mr. Speaker, I am sure the Hon. Member for Essex-Windsor (Mr. Langdon) remembers the election campaign of 1984. However, I wonder whether he remembers a particular document commonly referred to as "Pocket Politics, 1984". I have been told that the document was given to Conservative candidates. It was a 46-page policy manual authorized by the PC of Canada Fund, according to what is written on it, as registered agents for the Progressive Conservative Party of Canada.
In any case, one thing Tory candidates were supposed to say was that a Conservative Government would double research and development effort to 2.5 per cent of the GNP in the first four years in office. I know the Hon. Member comes from the academic world and is obviously very concerned, as am I and many other people, about the research and development efforts or lack thereof of the present Government. Does he think, as do I, that it is difficult to consider this particular campaign to have been fulfilled? The budget of the National Research Council was cut from $520 million in 1984 to $398 million in 1986? In addition, the Tory Government across the way cut a further $20 million on October 9, 1986. Does the Hon. Member agree that the Tories very badly breached this particular promise and failed to deliver in the popcorn Budget which was brought down yesterday?


Steven W. Langdon: Mr. Speaker, I thank the Hon. Member. One is almost tempted to say "colleague" because we share the back-benches, but one must think of all with whom we share the back-benches, and it is a little questionable.
I think the point which he made was a crucial one for two reasons. First, there is no question that the economies of the future, the countries which will do well, the countries which will expand free trade, see accelerated growth rates, and keep their people at work, are the countries which invest in research and development, as we in Canada should be doing.
Second, I must say with regret that the failure to meet a promise when a Government is elected, especially a promise as direct and as concrete as the one to which the Hon. Member referred, leads to unfortunate cynicism about politics as a whole, to which the Government has contributed more than its share in recent weeks.


The Budget-Mr. Langdon


Mr. Deputy Speaker:: I will recognize the Hon. Member for Ottawa West (Mr. Daubney) on a short question or comment, and then we will resume debate.


David Bruce Daubney: Mr. Speaker, I listened with care to the remarks of the Hon. Member for Essex-Windsor (Mr. Langdon) for whom I had, or at least until today, a certain amount of respect. Having heard his remarks I felt I should quote from the article which I have just read in this month's Saturday Night, the headline of which reads:
Steven Langdon, the NDP critic on industry and free trade, knows everything about the economy except how to make it work.
That has a certain ring of accuracy to it. Let me quote a brief excerpt from the article which is written by Robert Fulford for Saturday Night, a journal which is not known to support the Conservative Party:
The major problem of Langdon and his fellow New Democrats-is that their party's political culture remains profoundly anti-business. They live in a society whose wealth depends on business, yet they take no pleasure or satisfaction from the success of business.
The Budget we heard last night talked about the success of business and the success of the economic management which the Minister of Finance (Mr. Wilson) has brought to this nation's affairs. Does the Hon. Member not realize that his constituents rely on that success, that the people in the Windsor area need the kind of economic leadership the Government is giving them? Does the Hon. Member not realize that he does not speak for the people of Essex- Windsor when he speaks in his kind of trivial, anti-intellectual and very disappointing way about the Budget. The Budget is an important document. It is an important record of a very successful two and a half years of economic management.


Steven W. Langdon: Mr. Speaker, I take it that the hon. gentleman did not enjoy the speech. Let me say two things in response. First, this was a speech about the Budget which I fear-perhaps the Hon. Member has not had a chance to read it yet-not only has nothing in it but was boasted about by the Minister of Finance because it has nothing in it.
With respect to the second point and our supposed antibusiness philosophy, I make only the point that what we have been saying about this Budget and its do-nothing character is precisely what my friends in the business community have been saying as well. When we chatted outside last night at the scrum we each looked for words which could be more perjora-tive with respect to a Budget which came in and did not, at a time of tremendous difficulty for the private sector as demonstrated by those decreased investment levels, do anything to try to pick up this country up, to put more money into the hands of the ordinary person and get Canada moving again, very much with the support of business, but very much with the leadership of Government.
[ Translation]


Mr. Deputy Speaker:: Resuming debate. The Hon. Parliamentary Secretary to Minister of Agriculture (Mr. Champagne).


Michel Champagne: Thank you very much, Mr. Speaker. At last, I could say. First of all, before getting into the gist of my remarks, I want to say that my hon. colleague from Ottawa-West (Mr. Daubney) is perfectly right when he says that our New Democrat colleague knows nothing about the economy, and that the Hon. Member next to him does not understand anything either. Anyway, I wonder to what extent a Member of the NDP can understand the Canadian economy because he has no idea of what it is to be in power. NDP members know nothing at all. The only think they can do- yes, it's true, Mr. Speaker, they are good at one thing: criticism, criticism, criticism. It is about the only word they know and I encourage them to keep on in that direction because then they will always be in the opposition.
Mr. Speaker, unlike my colleague from Montreal-Sainte-Marie (Mr. Malepart), I am very proud to rise today to take part in the debate on the budget that was tabled yesterday by out excellent Minister of Finance, the Hon. Michael Wilson. Mr. Speaker, this is first and foremost a budget that is one more step in the direction that the Progressive Conservative Government has taken since it came to power on September 4, 1984, a budget that essentially deals with the economic and social future of Canada through the creation of permanent jobs, lowering of interest rates, reduction of deficit, control of inflation and national reconciliation.
Mr. Speaker, since September 4, 1984, we are talking about these goals and we are achieving them. We are achieving them because our Government, under the enlighted direction of our Prime Minister, has been listening to the Canadian people, has given to our Minister of Finance (Mr. Wilson) a clear and specific mandate to put the Canadian economy back on its feet. If you look at statistics, they speak for themselves, and I do not think this is partisanship.
If you look at interest rates, they were at 12 percent in 1984 when our Party took power. They are down to about 7 percent today. That is moral responsibility shown a by Progressive Conservative Government.
As for inflation, we were able to keep it at about 4 per cent. This has increased the purchasing power of many Canadians and particularly the less privileged. Here again, our Government has shown political and moral responsability.
The people in my riding of Champlain know what mortgage rates mean. They suffered enough when these rates reached a level of 20 to 22 per cent in the 80's. Do you realize how disastrous these rates were for our economy and for hundreds of thousands of families who had to sell their houses, to give up their hopes to buy one or even stopped contributing positively to the Canadian economy because of a lack of financial means? This immoral situation was created by a Liberal


Governement with an unrestrained arrogance towards Canadians in general, and taxpayers in particular. Mr. Speaker, they learned the hard way on September 4!
Mr. Speaker, this morning, I was very surprised to see, sitting side by side, the Hon. Member for Laval-des-Rapides (Mr. Garneau) who fatherered the Quebec deficit and the Leader of the Opposition, the Right Hon. Member for Vancouver Quadra (Mr. Turner) who fathered the federal deficit. They were chatting about the Budget!


Mr. Hudon:: An expanding vacuum!


Michel Champagne: Yes, an expanding vacuum, as my hon. colleague for Beauharnois-Salaberry (Mr. Hudon) says. The Hon. Member for Laval-des-Rapides was saying almost word for word: This morning I picked at random a few editorials reflecting the harmful impact of the Conservative Budget. Then I realized to what extent Liberals were indulging in demagogy and had a very short memory. This is why I checked some papers and I shall quote, as did my colleague for Laval-des-Rapides, from an article published on February 16, 1984 in Le Droit, the day after the last Liberal Budget. It says: "Business and labour groups are disappointed with Mr. Lalonde's Budget. The President of the Saint-Jean-Baptiste Society, who made very harsh criticisms, considers that Budget as an electoral and partisan exercise of Liberal propaganda."
This afternoon, I heard the Hon. Member for Montreal- Sainte-Marie (Mr. Malepart) say that the Government had neglected the workers and the unemployed. Mr. Speaker, on February 16, 1984, the day following the last Liberal Budget, the Ottawa daily Le Droit was saying in large characters: "Lalonde ignores the unemployed. The federal budget presented last night in the Commons contains little to help the unemployment situation, and the rate is expected to remain at around 11 per cent next year."
Mr. Speaker, this came from an irresponsible Governement. It came from a Liberal Government. We have seen the results.
In La Presse of that same day, February 16, 1984, Mr. Speaker, the columnist Laurier Cloutier wrote: "Mr. Lalonde's Budget paves the way to a new recession. The budget presented by the federal Minister of Finance, Marc Lalonde, will cause a new increase in inflation and interest rates within a year, and a new recession at the end of next year. Several spokesmen for the business community, after a first evaluation of yesterday's budget, said they feared new economic problems in the short term ..." That was all about the last Liberal budget.
Fortunately, Mr. Speaker, on September 4, 1984, the Canadians rejected the Liberals, otherwise, we would have had a recession in 1985. We would be going through an economic slump, because of an irresponsible Government which knew only how to spend, and not how to manage wisely the Canadian economy.
The Budget-Mr. Champagne (Champlain)
Mr. Speaker, I will mention again that 1984 Liberal Budget, because the Hon. Member for Laval-des-Rapides (M. Garneau) was saying this morning that the "opposition was disappointed and skeptical", but this time I will quote the leader of the New Democratic Party who said that "the unemployed will not profit from all the talk about recovery, as more than 80 per cent of the tax cuts contained in the Budget are targeted to people in higher income brackets."
Mr. Speaker, looking at the leader of the Opposition and the leader of the New Democratic Party, I realize one thing: since 1984, and even 1980 for the latter, the only thing they can say is that it is inequitable and unfair. Mr. Speaker, it is precisely then that we realize that two opposition parties are not able to renew themselves, to contribute actively and positively to the development of the Canadian economy, when we see them, particularly the New Democratic Party recently, sit in this House, prevent the normal course of the business of the House, keep us here until 3 o'clock a.m. on matters of paramount importance for the Canadian economy, that we see to what extent the sheer partisan attitude of those two opposition parties prevails over the rational pursuit of economic and social development for the well-being of Canadians.
Mr. Speaker, we heard about regional problems this morning. I heard my colleague the Hon. Member for Laval-des-Rapides (Mr. Garneau) say that the federal Government had done nothing to help the regions. I would like to remind him of one thing: federal-provincial agreements have been signed, particularly with Quebec, and it should be stressed; we signed agreements on forestry. We signed federal-provincial agreements on mining, on agriculture this week, on economic and regional development under ERDA. We signed agreements which at last enable Quebec, with the help of the federal Government, jointly and constructively, to ensure that our economic development, our creation of permanent jobs, that the hope to give young people a good and stable future now materialize, because there are two responsible governments, one being the federal Government. It was a Progressive Conservative Government which was not afraid to sit down with the provinces and negotiate to see exactly what they wanted. Of course, under the Liberal Government, Mr. Speaker, this was not done because as we know . . . There are indeed some Liberal members who are gentlemen but I can say to you, Mr. Speaker, that the arrogance of the Liberal government was such that the Quebec premier was told that he was just a hot dog eater. I remember that there were 74 Quebec members in this House who after years of negotiations with Quebec were on the verge of signing a constitution which allowed us to be proud of our country; but they turned around and knifed them in the back and kept them apart from the rest of the country. Such was, Mr. Speaker, the Liberal government which the Canadian people defeated in September 1984.
Mr. Speaker, when we see a responsible government-


George Albert Proud: Responsible?


The Budget-Mr. Champagne (Champlain)


Michel Champagne: I would ask my colleague from Saint-Denis (Mr. Prud'homme) to listen closely to what I am going to say. When we see a responsible government which decides to take control of the Canadien economy and to cut its expenditures, over 63 per cent of the deficit reduction being on account of cuts made within the management of the State and not necessarily distributed among taxpayers as a whole as demagogically stated by the New Demoractic Party and the Liberal Party. Mr. Speaker, we have said, and we have the figures to prove it, figures provided by Statistics Canada and the Conference Board, that our Minister of Finance was right to put the Canadian economy on a new course, to restrict Government spending, to sit down with the provinces and consult and co-operate, in order to offer Canadians effective programs at a lower cost than was the case under the Liberals during their last term.
Mr. Speaker, I realize that at this point we can hardly expect the Opposition to support us, because it would have to say that we are an efficient and a responsible Government.
Mr. Speaker, this afternoon I was listening to the Flon. Member for Montreal-Sainte-Marie (Mr. Malepart), supposedly an ardent defender of the rights of widows and orphans, who was saying that the Progressive Conservative Government had betrayed Canadians who were most in need. Mr. Speaker, I would like to remind him of a few points which I am sure will embarrass him. In 1980, Mr. Speaker, in their election literature, the Liberals promised an allowance for widows and widowers between the ages of 60 and 64. It took a Progressive Conservative Government to make it all come true. The Hon. Member for Montreal-Sainte-Marie had nothing to do with it.


Jean-Claude Malépart: Mr. Speaker, on a point of order.


The Acting Speaker (Mr. Paproski):: Order! The Hon. Member for Montreal-Sainte-Marie (Mr. Malepart), on a point of order.


Jean-Claude Malépart: My point is that the Hon. Member involuntarily misled the House by saying the Liberals promised to do this. That was not what the Liberals had promised. They had promised better things.


The Acting Speaker (Mr. Paproski):: That is not a point of order. The Hon. Member will have an opportunity to ask a question or make a comment after the Hon. Member has finished his speech.


Michel Champagne: Mr. Speaker, this is where I realize to what extent he had a poor memory because I took this word for word from the pamphlet of the former Liberal candidate in the riding of Champlain in 1980. It was written word for word. They should consult one another before making statements which mislead the House.
Mr. Speaker, this reminds me of something else, and I see my colleague from Duvernay (Mr. Della Noce) who is sitting behind me. When the Montreal East refineries were closed down in 1981, the Hon. Member for Montreal-Sainte-Marie did not even get out of his office. He did not rise a finger to help the Texaco and other refinery workers who lost their jobs, Mr. Speaker, and that is called political immorality. He thought he should stick with his Party instead of helping workers who were having a hard time.
Today, Mr. Speaker, I just cannot understand now he sits in the Opposition, how he can say something which totally contradicts what he used to say when he was sitting on the Government benches. It is as though Liberal Members generally, and the Hon. Member for Montreal-Sainte-Marie (Mr. Malepart) in particular, are more anxious to score political points than to protect the rights of workers.


George Albert Proud: Mind your own business!


Michel Champagne: Mr. Speaker, I will reply to my colleague the Hon. Member for Saint-Denis (Mr. Prud'homme) that I am minding my own business, because the business of Canadians is my business. And to think that in 1979 and 1980, Mr. Speaker, the Liberals defeated our Government because we wanted to impose an 18 cents tax on a gallon of gas, while later on they had no qualms about increasing the tax by $1.15 a gallon! Mr. Speaker, when they did that in 1980, they showed a complete lack of political ethics. But they prefer to ignore it, Mr. Speaker.
Today, Mr. Speaker, the Hon. Member for Lavai-des-Rapides (Mr. Garneau) told us that a one cent increase in the price of gas was outrageous. I do not have words to express my feelings for the $1.15 increase which the Liberals themselves had imposed. There is no word to express that. I can only speak of total lack of political morality. That is the kind of things Liberals have shown us over the past four years.
Mr. Speaker, I should like to recall for the benefit of my colleague the Hon. Member for Montreal-Sainte-Marie (Mr. Malepart) that the retail price of gas in Montreal in 1984 was 60 cents a liter. Now, it is 50 cents a liter. Two and a half years after we came to power, the price is ten cents lower than what we had inherited from the Liberals. That, Mr. Speaker, is for me a sign that our Government and, above all, our Minister of Finance, is highly responsible towards every Canadian. I hope no Hon. Members opposite will cry over our shoulders, especially not NDP Members, claiming that one cent more will prevent a brother-in-law from visiting his sister-in-law. Those Members, Mr. Speaker, voted along side with the Liberals in 1980, when we were defeated over the 18 cents proposal. They share responsibility with the Liberals for what was done, for all the wrongdoing to the Canadian economy. They are hypocrits, Mr. Speaker.


Don Boudria: On a point of order, Mr. Speaker.


Mr. Deputy Speaker:: I will recognize the Hon. Member from Glengarry-Prescott-Russell (Mr. Boudria).


Don Boudria: Mr. Speaker, respectful of the rules as we all are, I do not believe you would want Hon. Members to be accused, indeed not the Hon. Member from Montreal- Sainte-Marie (Mr. Malepart), in the way the Member from Champlain (Mr. Champagne) just did, knowing it is against the rules to accuse anyone of being a hypocrit, this being said, Mr. Speaker, again in all due respect towards you.


Mr. Deputy Speaker:: I do not think that the Hon. Member from Champlain (Mr. Champagne) was accusing the Hon. Member from Montreal-Sainte-Marie (Mr. Malepart). No doubt his remarks were of a general nature.


Jean-Claude Malépart: He is speaking of Conservative Members who are hypocrits.


Michel Champagne: Mr. Speaker, it is too bad my
colleague for Glengarry-Prescott-Russell (Mr. Boudria) rose to speak, because as the saying goes, one should rather remain silent and look stupid than open up and prove it. That proof he just gave, Mr. Speaker.
Mr. Speaker, this morning and earlier today we heard the Hon. Member for Montreal-Sainte-Marie (Mr. Malepart) cry scandal. This is about the only thing which they can rely on right now, because as far as the economy is concerned, Mr. Speaker, everything goes well, very well indeed-676,000 jobs!
As far as social security is concerned, everything goes very well, Mr. Speaker. We maintained our social programs, we improved on them-widows' and widowers' pensions. And 1 know the Hon. Member for Montreal-Sainte-Marie, without being personal, agrees that we gave a supplement to Canadians widows and widowers aged 60 to 64.


George Albert Proud: We are half-way there.


Michel Champagne: I know he supports that and applauded us. Of course, I also agree with him that more will have to be done. However, Mr. Speaker, we have only been here two and a half years, and we have done a couragous and remarkable job of straightening up the mess created by the Liberals over the years.
Mr. Speaker, they accused us this morning, I mean the Hon. Member for Laval-des-Rapides (Mr. Garneau) said: 1 do not understand why the Minister of Finance did not table a Five-year plan to tell us where we are going. He has a short memory, Mr. Speaker. Very short indeed. The Liberals never reveal their true intentions to the Canadian people. During the 1980 campaign, they did not talk about the Energy Program, they did not say that they would reduce the VIA Rail passenger services by 20 per cent, they did not say that they would review the Crow rate. In fact, Mr. Speaker, during the electoral campaign, the Leader of the Opposition told everyone willing to listen that he would keep his new program secret until the day when he made a Speech from the Throne. You
The Budget-Mr. Champagne (Champlain)
can see how inconsistent the opposition party is. Everything is so clear that you cannot see where you are going.
Mr. Speaker, I was listening to the Hon. Member for Glengarry-Prescott-Russell (Mr. Boudria). I know that my allotted time is nearly over, but I would simply like to remind the Hon. Member that when he speaks about scandals-


Jean-Claude Malépart: One year and a half to go!


Michel Champagne: -we recall certain juicy contracts given to businesses managed by former ministers. We remember that, when he was asked by a reporter about the trips made by his family on certain airplanes, the former minister Gerald Regan, pointed out that such information is classified. We also remember the purchase of Petro-Canada. Since my allotted is nearly over, I would like to remind the Hon. Member of one thing, namely that one of the close friends of the former Prime Minister obtained the contract for the Washington embassy even though he was not one of the four people on the list for this contract.
Members of the Opposition speak about scandals, but since they are much worse than we are, I think that they should be saying: Do as we say, not as we do. In closing, Mr. Speaker, I would like to add that a responsible government took over the reins of the economy on September 4, 1984, and is now doing a great job of putting the Canadian economy back on its feet and of giving back to all Canadians the prosperity they deserve.


Mr. Deputy Speaker:: The Hon. Member for Montreal- Sainte-Marie (Mr. Malepart) on a question or a comment.


Jean-Claude Malépart: Mr. Speaker, it is the swan song, the cry of a desperate and defeated man, a man who is becoming aware that his short career here in Ottawa, with a rating of 22 per cent at the national polls, and of 13 per cent in the province of Quebec-


An Hon. Member:: What is his rating in Quebec?


Don Boudria: Did you say 13 per cent?


Jean-Guy Hudon: The management of polls!


Jean-Claude Malépart: -13 per cent in Quebec. And I am sure that in the Member's constituency, it is less than 10 per cent.


Don Boudria: There are more people who are undecided than there are Conservatives.


Jean-Claude Malépart: Mr. Speaker, this poor Member was really pathetic. The First year, people said it was because of inexperience; the second year, it was ignorance; but now it is incompetence. Mr. Speaker, as to his unfounded statement that the Liberals wanted to limit the spouse's allowance to widows and widowers, if he knows how to read-or if he does not know, instead of reading speeches prepared for him, he should ask his assistant-he can find that the Liberals were committed to giving the pension to all those in need, whether single,


Teleglobe Canada
separated, divorced or even married, aged 64 to start with, and then progressively down to 60 years old.
The House divided on the amendment (Ms. McDonald), which was negatived on the following division:


Some Hon. Members:: Why didn't you do it?


Jean-Claude Malépart: Mr. Speaker, the Hon. Member is not on track, he can talk about VIA Rail, he does not know which way to go. I would like to ask a question to the Hon. Member, who is boasting about the glorious achievements of his Government, who is so proud that his Government kept the capital gain exemption for the rich but denied payment of unemployment benefits to retirees, who was telling people in his riding-and I know some who disagree with the policy of his Governement-in 1985, that he was with them, when he was actually saying the opposite in the House. Here is what I would like to ask the Hon. Member.
First, he approved of the deindexing of Old Age Security and was humiliated when the Prime Minister bowed to the pressure from older people and Opposition Members and backed down. The Hon. Member at that time rose in the House and tried to have us believe that older people agreed with the measure, which was not true.
Second, does the Hon. Member agree with the fact that the capital gain exemption for the rich is being maintained, whereas Family Allowances are deindexed? Third-


Mr. Deputy Speaker:: I regret to interrupt the Hon. Member.
* *
*


TELEGLOBE CANADA REORGANIZATION AND DIVESTITURE ACT
[Stage Direction]
The House resumed consideration of the motion of Mrs. McDougall (St. Paul's) that Bill C-38, an Act respecting the reorganization and divestiture of Teleglobe Canada, be now read the second time and referred to a legislative committee, and the amendment of Ms. McDonald (p. 3435).
Mr. Deputy Speaker:: It being 6 o'clock, pursuant to Standing Order 13(4)(a), the House will now proceed with the deferred division on the motion for second reading of Bill C-38, an Act respecting the reorganization and divestiture of Teleglobe Canada. Call in the Members.
The question is on the amendment of Ms. McDonald (Broadview-Greenwood).
That the motion be amended by deleting all the words after the word "That" and substituting the following therefor:
"Bill C-38, An Act respecting the reorganization and divestiture of
Teleglobe Canada, be not now read a second time but that it be read a second
time this day three months hence".

(Division No. 65)
++YEAS
Members
Allmand
Althouse
Benjamin
Blaikie
Boudria
Caccia
de Jong
Dingwall
Finestone
Foster
Fulton
Gagliano
Garneau
Gray
(Windsor West) Grondin Heap
Andre
Attewell
Belsher
Bertrand
Bouchard
Bourgault
Boyer
Browes
Caldwell
Champagne
(Champlain)
Charest
Clark
(Brandon-Souris) Comeau Corbett Cossitt Cdte
(Lac-Saint-Jean)
Darling
Daubney
Desrosiers
Edwards
Epp
(Provencher)
Fennell
Ferland
Fontaine
Forrestall
Fretz
G6rin

Henderson Hopkins Hovdebo Johnston (Saint-Henri- Westmount) Kaplan Keeper Langdon MacLellan Malepart Manly McDonald (Broadview- Greenwood) Mitchell Murphy
++NAYS
Members
Gottselig
Graham
Gray
(Bona venture-iles-dela-Madeleine)
Hamelin
Hamilton
Harvey
Hawkes
Hicks
Hockin
Holtmann
Hudon
Jacques
James
Jardine
Joncas
Kelleher
Kempling
King
Lanthier
Layton
Leblanc
Lewis
MacKay
Mailly
Malone
Martin
Mazankowski
McCain
McKenzie
Nicholson
(Trinity)
Nunziata
Nystrom
Orlikow
Parry
Pepin
Prud'homme
Robichaud
Robinson
Rodriguez
Turner
(Vancouver Quadra) Young -41
McKinnon
Minaker
Nickerson
Nowlan
Oberle
O'Neil
Paproski
Peterson
Pietz
Plourde
Reid
Schellenberg
(Nanaimo-Alberni) Scowen Sparrow Stackhouse Suluk Tardif
(Charles bourg) Towers Tupper Turner
(Ottawa-Carleton) Van De Walle Vezina Vincent Weiner Winegard-81


Mr. Deputy Speaker:: I declare the motion lost.


Philip Derek Lewis: Mr. Speaker, it was agreed to earlier today that the House would immediately proceed to the recorded division on the second reading motion. I think you would find a


Teleglobe Canada (Division No. 66)
disposition in the House to apply the vote on the amendment, in reverse, of course, to the second reading motion, unless someone else has come into the House. The Hon. Member for Halifax West (Mr. Crosby) would like to be added to our Party and the Hon. Member for Saint-Jacques (Mr. Guil-bault) would like to be added to the Liberal Party.


Leslie Gordon Benjamin: Mr. Speaker, may I ask the Parliamentary Secretary if the all-Party agreement earlier was in writing or in blood?


Lorne Edmund Nystrom: Mr. Speaker, my understanding, even though my colleague, the Hon. Member for Kamloops-Shuswap (Mr. Riis) is not here, is that there has been no all-Party agreement. In case there is not an agreement, we certainly want to debate this matter further. It is a very important issue.


Mr. Mazankowski:: Mr. Speaker, I am not sure who is quarter-backing the New Democratic Party. I did discuss this matter with the House Leader and it was my understanding that there was an agreement. I did discuss it with the Hon. House Leader of the Liberal Party and he also agreed there was an agreement. I find this rather strange.


Herbert Eser (Herb) Gray: Mr. Speaker, I simply want to say that it has been my understanding that there was an allParty agreement that the vote would be counted on the motion for second reading, but in reverse. I am sorry the House Leader of the New Democratic Party is not here to clarify this matter. However, I just want to put on the record what my understanding is with respect to the arrangement between the three Parties.


Lorne Edmund Nystrom: Mr. Speaker, as I said, I have not had a chance to consult with my House Leader, but if there is an agreement we will certainly stick to it, and we will take the word of the Government House Leader and the Opposition House Leader on that.


Mr. Deputy Speaker:: The House has heard the representations from the Parliamentary Secretary to the Deputy Prime Minister to the effect that on the main motion the vote will be reversed, with the addition of the Hon. Member for Halifax West (Mr. Crosby) and the Hon. Member for Saint-Jacques (Mr. Guilbault).
++YEAS
Members
Andre
Attewell
Belsher
Bertrand
Bouchard
Bourgault
Boyer
Browes
Caldwell
Champagne
(Champlain)
Charest
Clark
(Brandon-Souris) Comeau Corbett Cossitt Cdte
(Lac-Saint-Jean)
Crosby
(Halifax West) Darling Daubney Desrosiers Edwards Epp
(Provencher)
Fennell
Ferland
Fontaine
Forrestall
Fretz
Gerin
Gottselig
Graham
Gray
(Bonaventure-lles-dela-Madeleine)
Hamelin
Hamilton
Harvey
Hawkes
Hicks
Hockin
Holtmann
Hudon
Jacques
James
Jardine
Joncas
Kelleher
Kempling
King
Lanthier
Layton
Leblanc
Lewis
MacKay
Mailly
Malone
Martin
Mazankowski
McCain
McKenzie
McKinnon
Minaker
Nickerson
Nowlan
Oberle
O'Neil
Paproski
Peterson
Pietz
Plourde
Reid
Schellenberg
(Nanaimo-Alberni) Scowen Sparrow Stackhouse Suluk Tardif
(Charlesbourg)
Towers
Tupper
Turner
(Ottawa-Carleton) Van De Walle Vezina Vincent Weiner
Winegard-82
++NAYS
Members
Allmand
Althouse
Benjamin
Blaikie
Boudria
Caccia
de Jong
Dingwall
Finestone
Foster
Fulton
Gagliano
Garneau
Gray
(Windsor West) Grondin Guilbault
(Saint-Jacques)
Heap Henderson Hopkins Hovdebo Johnston (Saint-Henri- Westmount) Kaplan Keeper Langdon MacLellan Malepart Manly McDonald (Broadview- Greenwood) Mitchell Murphy
Nicholson
(Trinity)
Nunziata
Nystrom
Orlikow
Parry
Pepin
Prud'homme
Robichaud
Robinson
Rodriguez
Turner
(Vancouver Quadra) Young -42
Bill read the second time and referred to a legislative committee.


Some Hon. Members:: Agreed.
The House divided on the motion (Mrs. McDougall) which was agreed to on the following division:


Mr. Deputy Speaker:: It being 6.30 p.m., the House stands adjourned until tomorrow at 11 a.m., pursuant to Standing Order 3(1).


[Stage Direction]
The House adjourned at 6.30 p.m.
[Stage Direction]

Friday, February 20, 1987